Versarien Part 2 – A Deep Dive on Versarien’s business

This content is reproduced with the kind permission of the original author Mike Brenner and was originally published at Stockopedia

  • The Team
  • 2D-Tech – www.2-dtech.com
  • Cambridge Graphene Ink – http://www.cambridgegraphene.c…
  • Scalable VRS product technology and manufacturing
  • VRS Application and Product Development
  • End of life, Toxicity of graphene in products
  • Sales Distribution
  • Financials
  • Summary

Versarien Overview

Versarien plc (£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 five subsidiaries operating under two divisions:

Thermal and Hard Wear Products

  • Versarien Technologies Ltd. which produces thermal copper/aluminium and other aluminium products. www.versarien-technologies.co.uk
  • Total Carbide Ltd, a leading manufacturer in sintered tungsten carbide for applications in arduous environments such as the oil and gas industry. www.totalcarbide.com

 Graphene and Plastic Products

  • 2-DTech Ltd, which specialises in the supply, characterisation and early stage development of graphene products. www.2-dtech.com  (Spun out of the university of Manchester in 2015)
  • Cambridge Graphene Ltd, which supplies novel inks based on graphene and related materials, using patented processes and develops graphene materials technology for licensing to manufacturers. www.cambridgegraphene.com (Spun out of the University of Cambridge in 2017)
  • ACC Cyroma Ltd, which specialises in the supply of vacuum-formed and injection-moulded products to the automotive, construction, utilities and retail industry sectors

 A 2017 presentation at the SHARES conference by Neill Ricketts CEO giving a good background on Versarien and future graphene applications they are working on – https://www.youtube.com/watch?v=UTzntFw-EgU&t=1102s

… and here are some useful podcast interviews with Vox Market Podcasts where Neill Ricketts is interviewed a number of times around their interim results, collaborations they have announced and China JV https://www.voxmarkets.co.uk/company/VRS

Business Model

5a6ccb199f6f0business_model.png

The Team

VRS leadership are a very well-respected team – anyone can see from their profiles the huge amount of relevant experience and are well connected to the relevant industries for commercialising advanced materials  http://www.versarien.com/about-us/board-directors/. There is a lot more I could cover here about Ian Grey they chairman, Neill Ricketts the CEO and Chris Leigh the CFO, but it should come out over the next pages.

2D-Tech – www.2-dtech.com 

Based in Manchester, 2-DTech is a development company born from the group that first isolated graphene at the University of Manchester. 2-DTech provides world class graphene materials, characterisation services and consultancy into an exceptionally active market.

  • Versarien acquired 85% of 2-DTech in April 2014 and now working side by side with the University of Manchester, its mission is to commercialise graphene by integration into real world applications, creating significant socio-economic benefit.
  • A Feb 2015 presentation of the 2D-Tech business – lots of interesting detail https://www.youtube.com/watch?v=T0TfygrekXo

Background to the deal

  • Versarien did not go after the tech. 2D-Tech MD was run by Mark Shepherd the founder of £XAAR. On behalf of the University of Manchester he sought them out as a desired partner to take it to its full commercial potential.
    • The University of Manchester was under pressure by the UK government for failing to commercialise graphene. They struggled to find UK partners and had a major failed attempt with an international player:
      • Sept 2013 – Dr Chung Ping Lai, Chief Executive Officer for Bluestone Global Tech, One of the world’s largest graphene manufacturers agreed a £5m collaborative research partnership to open its European base at The University of Manchester http://www.manchester.ac.uk/discover/news/university-attracts-major-graphene-manufacturer-to-manchester/ 
      • University of Manchester physicist Andre Geim told the select committee that the company “burned US$50 million” trying to get graphene products to market and “went bust, essentially”. Lai immediately founded BGT Materials http://bgtmaterials.com/about.php and signed a contract to pay the University of Manchester £3 million for collaborative work. By mid-2014, however, BGT Materials was strapped for cash, and asked the university to exchange its debt for shares in the company. In 2015, the University of Manchester took an 18% share in the firm, which cleared the debt
      • Graphene Lighting, http://graphenelighting.co/#overview a subsidiary of BGT Materials that aimed to commercialize a lightbulb that uses graphene to carry heat away from a light-emitting diode (LED) to improve its efficiency. But the lighting firm was cold-shouldered by UK investors, eventually getting funding from investors in Canada. http://www.nature.com/news/uk-graphene-inquiry-reveals-commercial-struggles-1.19840#/casestudy
  • The University of Manchester know Neill and they knew what he is like, so they dragged him up there to convince him graphene was the way forward.
    • Once fully explained to them they thought it was a fantastic opportunity but were acutely aware of all the false rubbish out there which will have been explained to them by the University of Manchester hence why they haven’t made much noise so Versarien set about working on the tech and testing the end product before shouting about it. 
  • Proof 2D-Tech Graphene meets the new ISO standards – It may not have worked, until the process was complete they would not know so this is why Neil refers to “an excited team” in his RNS about 2017 results because it does work and they know with the ISO standards that 99% of graphene out there doesn’t and they can easily explain why to customers.
    • All these big names can see VRS have a graphene that transforms products, that they are experts and have the world leading graphene authorities and Universities backing them. 

Graphene Manufacturing

  • 2D-Tech can create all types of graphene via the 3 main production methods – mechanical exfoliation (grinding), sonification and chemical vapour deposition, and they can create all 4 forms of graphene however they have chosen to focus on the most commercially viable process
  • Why has 2D-Tech developed this technique?
    • Blue-chip clients have been looking to 2D-Tech to develop a process to produce graphene with a high chemical purity in as a few layers as possible.
      • Looking for the graphene to have all the intrinsic properties that the material is known for: super strength, exceptional conductivity and virtually no mass.          
      • Clients are very well aware of what this wonder material could potentially do for their products but are looking to 2D-Tech to provide them with a reliable and cost-effective source of raw material.
    • Working with many clients, from industries as diverse as military, medical and consumer products, requiring access to high quality, cost effective graphene
  • Major advance in scalable graphene production – Feb 1st,2017 https://www.nanene.com/news/major-advance-scalable-graphene-production/
    • 2-DTech, made a major advance in graphene platelet production, to accelerate potential commercial applications for graphene and graphene products.
    • Building on techniques originating from University of Manchester, refined by University of Ulster and 2-DTech, this patented process involves a mechanised exfoliation process in which a strong shearing force is applied to the surface of the graphene layers.
    • Versarien has now developed its own proprietary graphene production technique founded upon a licenced process from University of Ulster which offers numerous advantages over the conventional graphene manufacturing solutions currently on the market.
    • A fundamental step forward in producing graphene using a patented, commercially viable production method
    • This process is no more complex than existing production techniques thereby providing customers greater product flexibility. Parameters such as secondary processing and dispersion mediums and methods can be set to meet end-use application requirements e.g. composites to batteries. Different solvents can be specified, a wide range of concentration levels can be selected from, as well as different product forms either a liquid or powder.
    • Many different types of 2D and nano materials can be produced using this process such as Boron nitride with proof being the CPI tender win
    • To make it commercially viable 2D Tech had to undergo a radical rethink on how to go about things. This includes everything from manufacturing processes, product design, and creating new technologies that weren’t possible before.  They need to make sure that production capacity of the raw material is built in line with customer expectation and commercial viability, and this really comes down to having a reliable, repeatable and cost-effective method to produce it.
    • Tested by the Versarien team as well as by a number of independent testing houses e.g. National Physics Laboratory. 
  • Nanene – https://www.nanene.com/ – Versarien created their own brand of graphene to differentiate in the marketplace from all the graphene that didn’t meet ISO standards
    • The patented process that is used to manufacture Nanene produces high quality graphene nano-platelets with a majority of sub 10 layers and a significant number of sub 5 layers material.
    • This gives Nanene its incredible physical and mechanical properties performance benefits, the chemical properties gives it the ability to mix in other materials.
    • The quality of this process has been independently verified by several leading United Kingdom universities and Versarien has a portfolio of independent test results for applications they have created for partners
    • To quote the CEO in a recent vox market podcast about Nanene “the scale and opportunity is staggering,” and “this material will significantly impact society”
  • Use Cases for Nanene Enhanced Applications – This link to the Nanene trademarks gives an idea on the breadth of potential applications https://trademarks.ipo.gov.uk/ipo-tmcase/page/Results/1/UK00003199581  
    • Chemicals (industrial-); carbon; graphene; resins; graphite; natural graphite; pyrolytic graphite; expanded graphites; absorbent graphites; artificial graphite for industrial purposes; graphene for research and industrial purposes; carbon for research and industrial purposes; plastics, unprocessed; carbon and allotropes thereof; carbonates;  unprocessed and artificial resins; unprocessed plastics; carbon fibre composites; carbon fibre composite for use in manufacturing sports equipment; carbon fibre composite for use in 3D printing and apparatus for 3D printing; printing chemicals; fibre reinforced composites for use in manufacturing of sports equipment; graphene enhanced plastics for use in manufacturing of fibre reinforced composites; graphene enhanced adhesives; graphene enhanced heat transfer fluids; graphene enhanced heat transfer solids; heat transfer; heat transfer substances; chemicals for use in the semiconductor industry; semiconductor cooling substances; liquid cooling substances; liquid cooling materials.
    • Preservative against rust; hydrophobic coatings; abrasion resistant coatings; moisture ingress protective coatings; matrix additives for the purpose of surface protection; matrix additives for the purpose of hydrophobic properties at its surface(s); coatings for the purpose protecting the parent material by transmission of electrical energy along surface and not through parent material; anti foul coatings; hydrophobic materials.
    • Printing machines; 3D printers; 3D printing pens; printing apparatus and equipment; machine parts; machine tools; engines; engine drive shafts; marine engines; boat engines; airplane engines; aircraft engines; jet engines; gas engines; engine components; turbines; hydraulic turbines; sub-sea tidal turbines; wind turbines; gas turbines; turbine vanes; turbines for power generation; turbine blades; turbine shafts; blades for aircraft turbines; parts and fittings for the aforesaid goods.
    • Apparatus and equipment for heating and cooling; appliances for heating; heat  accumulators; heat collectors; heat exchangers; heat exchangers [for chemical processing]; heat generating apparatus; regenerators (heat-); solar heating apparatus; temperature control apparatus and equipment; thermal fluid  heaters; water coolers and heaters; cooling apparatus; cooling apparatus for liquids; cooling elements; water cooling apparatus; parts and fittings for all of the aforesaid goods.
    • Vehicles; motor vehicles; cars; bicycles; motorcycles; motor yachts; motor boats; motor homes; motor caravans; lorries; snow sleds; snowmobiles; trucks; helicopters; planes; fixed wing aircraft; engines for land vehicles; helicopter rotors; helicopter blades; tail rotors for helicopters; structural parts and components for helicopters; aeroplane rotors; aeroplane blades; fan rotors; fan blades; wings for aeroplanes; structural parts and components for aeroplanes; vehicle body panels; turbines for land vehicles; turbine vanes being parts of land vehicles; parts and fittings for the aforesaid goods.
    • Technical plastics; semi-processed plastics; semi-processed synthetic and natural resins; plastic compounds; carbon fibre; carbon fibre composites; carbon fibre composite for use in manufacturing sports equipment; carbon fibre reinforced synthetic resins for use in manufacture; 3D printing; semi-worked thermoplastic filaments used for 3D printing; semi-worked PLA filaments for use in 3D printing; semi-worked ABS filaments for use in 3D printing;  insulating material; insulating materials; cooling materials; heating materials; heat transfer materials; polymer resin fibres [other than for use in textiles]; sealing materials; gaskets and seals; semiconductor cooling substances.
    • Apparatus and equipment for training, sport, gymnastics, exercise, rehabilitation and fitness; gymnastic and sporting articles; sports equipment; balls for sports; sledges; sports bats; sports racquets; tennis rackets; frames for tennis raquets; frames for raquets; golf clubs; human input devices; touchscreens; cases and bags adapted for sporting articles or sporting equipment; playthings; toys; parts and fittings for the aforesaid goods.
    • Printing; 3D printing; manufacturing of graphene from its raw constituent materials; blending of raw materials to create graphene enhanced materials; information, advisory and consultancy services relating to the aforesaid.
    • Scientific and technological services and research and design relating thereto; industrial analysis and research services; research and development of chemical processes for obtaining chemicals and substances including graphene, carbon, carbon fibres and carbon composites; manufacturing of graphene from its raw constituent materials; blending of raw materials to create graphene enhanced materials; information, advisory and consultancy services relating to the aforesaid.
  • Protecting Nanene IP – Outside of usual legal agreements with partners, patents on their process to create Nanene and the ability to sue Versarien have a number of checks & balanced
    • The ionic liquid referred to in this article on the original patented process is the recipe / trade secrets that VRS hold and would provide to partners to manufacture with https://www.ulster.ac.uk/news/2012/january/revolutionary-breakthrough-by-ulster-scientists
    • The partner wouldn’t have the credibility of being backed by the University of Manchester and having any of the new applications / products approved by them – this stamp of approval matters!
      • A clever aspect of the China JV is to have collaborative research between the University of Manchester and the Chinese universities to explore graphene uses … adds a layer of international credibility that must be maintained to keep the open partnership working
    • Finally, Nanene is just one form of graphene that VRS can produce, and they have another 2000 2D advanced materials that are being developed and commercialised by the University of Manchester and University of Cambridge so they can stop all future access to offending parties.
    • An interesting couple of tweets from NR the CEO https://twitter.com/neillricketts/status/955048032353079296 makes me think that sharing their IP through licenses and JVs will help speed along innovation, creating greater and greater opportunities for graphene enhanced applications, which Versarien can realize by executing well. I think that NR is confident in Versarien’s ability to execute, has the unique flywheel (more later) and recognizes that patents slow them down as well as sharing the crown jewels once granted – today it’s a black box to competitors which is why they have a significant advantage. The more graphene enhanced applications in the market, means more overall opportunity for Versarien graphene products that they believe are the best in the market which makes Versarien more valuable.            
  • What Applications are 2D-Tech focused on?
5a6cce22e3e982D_Tech_overview.jpg

Vertical Integration with the University of Manchester & National Graphene Institute

  • 2D-Tech are a partner of the National Graphene Institute (NGI) at The University of Manchester. The University’s Graphene Business Director, James Baker, said: “The new production method that 2DTech have refined is an important step to producing high-quality graphene on an industrial scale. As partners of the National Graphene Institute, we are delighted to be supporting the advances 2D-Tech are making within graphene production and commercialisation. As partners, they have access to our critical mass of research expertise and work closely with us on how to take the commercialisation of graphene forward.” Versarien CEO Neill Ricketts commented: “Our technique is highly scalable, and we can also use our existing group resources to manufacture relatively large quantities of high quality graphene. We are now planning to commence production and by utilising our existing production facilities we expect to lower our graphene production costs.

Below are the wider research team who 2D-Tech and VRS are affiliated with as a commercial partner but their research is typically not ready for commercial adoption so limited VRS newsflow on their projects but if you dig you can find links.

  • Prof Sir Andre Geim – Professor of Condensed Matter Physics
    • Research focus: Graphene and other two-dimensional materials.
  • Prof Sir Kostya Novoselov – Professor of Condensed Matter Physics
    • Research focus: Graphene and other two-dimensional materials.
  • Vladimir Falko – Professor of Theoretical Physics, Director of the NGI
    • Research focus: Theory of the physical properties of graphene and 2D materials; Nanoelectronics.
  • Robert Dryfe – Professor of Chemistry
    • Research focus: Electrochemistry of graphene and related 2D materials.
  • Sarah Haigh – Lecturer in Materials Characterisation
    • Research focus: Studying the structure and properties of nanomaterials.
  • Cinzia Casiraghi – Professor in Nanoscience
    • Research focus: Investigating the electronic, vibrational and optical properties of two- and one-dimensional materials such as graphene.
  • Sasha Grigorenko – Professor of Physics
    • Research focus: Graphene for optical applications with emphasis on graphene metamaterials and hybrid graphene plasmonic devices.
  • Irina Grigorieva – Professor of Physics
    • Research focus: The physics of graphene, in particular, the magnetic properties of graphene and its derivatives.
  • Rahul Raveendran Nair – Professor of Materials Physics / Royal Society University Research Fellow
    • Research focus: Graphene-based membranes and coatings.
  • Roman Gorbachev – Royal Society University Research Fellow
    • Research focus: Experimental condensed matter physics.
  • Zhipeng Wu –  Professor of Materials Science
    • Research focus: Electronic properties and applications of graphene.
  • Bruce Grieve – Director of e-Agri Sensors Centre
    • Research focus: Sensors and ICT associated with agriculture and biotechnology.
  • Lin Li – Professor of Laser Engineering
    • Research focus: The use of graphene in welding.
  • Aimin Song – Professor of Nanoelectronics
    • Research focus: Nano-devices for energy harvesting and medical and security imaging.
  • Alan Brisdon – Senior Lecturer
    • Research focus: Fluorination of graphenes.
  • Thomas Thomson – Professor in Computer Engineering
    • Research focus: Magnetism in graphene and exploring the potential of 2D materials for spintronic applications.
  • Peter Budd – Professor of Polymer Chemistry
    • Research focus: Development of graphene-based membranes for a variety of applications.
  •  Ernie Hill – Senior Lecturer
    • Research focus: Low noise magnetic sensing devices, graphene spintronic devices and patterned data storage media.
  • University of Manchester also have a range of industry partners who fund research with the hope of creating commercial applications
    • Strategic partner – Circa £1m/year over 3-5 years. 2-3 collaborative projects of significant size. Dedicated lab space within the NGI.
    • Project partner – Circa £150k-£500k/year over 2-5 years. Collaborative project of varying size. Company to provide resource and have lab space in NGI.
  • Many of the well-known brands below will have spent £ millions researching applications before they work with 2D-Tech to commercialise them so when we hear about collaborations in many cases e.g. Unilever who’ve had a strategic partnership with University of Manchester since 2014, they are moving into testing manufacturing, rather than testing applications (this is an enormous difference to most other graphene producers who announce research collaborations all the time).

Testing Applications for Customers

  • Many graphene producers just sell a partner their bottle of graphene and then think their job Is done. What they don’t have is the complete operational set up to help partners to integrate graphene into their products and “prove” that they have the benefits
  • As Versarien are now vertically integrated right into the heart of the University of Manchester & National Graphene Institute their customers don’t have to spend £100’s of millions on equipment for testing and application research / characterisation as VRS have access to it and the experts that use it.
  • Before delivery of Nanene to a customer they have in the past had it certified via the University of Manchester & National Graphene Institute to show it is exactly what they say it is.
  • Then they can provide proof that their Nanene product works as well as any of the applications and functionalisation they create for customers to provide them with “proof” that their products have picked up the Nanene benefits.
  • Big companies value speed to market and competitive edge, so the risk of working with a graphene producer who can’t do this, and the end products not working means Versarien is now the global go to partner.
  • This is a huge part of VRS credibility in the marketplace and guarantees continued support from the University of Manchester over and above any other partners
  • The University of Manchester are very pleased with how things are performing – when due their cash payment said we want shares. They covered the outstanding payment at 19.14p per share when the share price was 10p. The University of Manchester are not daft they invented the stuff and know what it can do in the hands of VRS. http://ir1.euroinvestor.com/asp/ir/Versarien/NewsRead.aspx?storyid=13472620&ishtml=1

Shareholder relationship with the University of Manchester

The 2d-Tech team –  described here http://www.2-dtech.com/about-us/

  • Versarien have cherry picked the best talent to support them. You can also get a feel for what is coming and connecting the dots by what they specialise in!
    • Kaylie Smith – Polymere scientist focused on the development of a novel synthetic route to a range of Polyaryletherketone (PAEK), including materials design, process development and scale-up, which resulted in a number of patent applications. PEAKs can be processed using all of the typical thermoplastic processes, such as injection molding, extrusion, compression molding, and transfer molding
      • Applications from would include
        • oil drilling components, such as seals, compressor rings, valve parts, gears, bearings, and wire coatings,
        • chemical pump industry as it can stand temperature, stress, and has the corrosion resistance,
        • automotive industry to make gears and thrust bearings in transmissions.
        • medical devices like surgical implants, such as artificial hips due to its excellent resistance to hydrolysis because it does not break down when sterilized.  
    • Andrew Strudwick – Research scientist with strong backgrounds in graphene CVD production and characterisation techniques with experience in interfacing between industry and core research
    • John Benson – Process development engineer from Ulster Uni who developed the original patented process, to support manufacturing of Nanene at scale and is now working on enhancing the process
    • Arunprakash Arangaraju – Project Scientist. Has a PhD degree in Nanostructured materials in 2015 from the University of Manchester where the focus of his research was on production and applications of graphene and its composite. Strong background in the synthesis and characterisation of graphene-based nanomaterials and its polymer nanocomposites. During his time at 2-DTech, Arun has been involved in improving the production methods and developing new 2D material-based products, polymer nanocomposites, coatings and inks for various applications including aerospace, automotive, sport and printable electronics.

Cambridge Graphene Ink – http://www.cambridgegraphene.com/

Background to the VRS deal

  • 2D-Tech MD pre the Versarien take over was Mark Shepherd the founder of £XAAR (inkjet printing) https://www.linkedin.com/in/mark-shepherd-b802a36/ .
  • When Versarien took over 2D-Tech Mark went off to Cambridge to be CEO of Cambridge Graphene Ltd.
    • HIGRAPHINK resulted in the creation of a spinoff called Cambridge Graphene Ltd
  • Cambridge Graphene supplies novel inks based on graphene and related materials, using patented processes and develops graphene materials technology for licensing to manufacturers. 
  • Versarien get a call about a huge breakthrough on graphene ink so off the Cambridge they went as a known innovative company that would take the tech out of the Uni and keep the Uni involved so they benefit too. Versarien knew Manchester were struggling with ink so instantly recognised the massive breakthrough Cambridge had made.
  • HIGRAPHINK (Highly Conductive Graphene Ink) –http://cordis.europa.eu/result/rcn/209392_en.html
  • Originally, the roadmap of HIGRAPHINK (Highly Conductive Graphene Ink) consisted in demonstrating the viability of graphene as an additive for organic semiconducting materials, to drive proof-of-concept Organic light emitting diode (OLED) displays.
  • The project was so successful at creating graphene with previously unthinkable properties that the University of Cambridge, decided to stick to readying it for commercialisation.
    • HIGRAPHINK can now produce tens of thousands of litres per year where it could only hope for quantities in the range of milligrams daily before.
    • Just two and a half years after the project was launched, six months after its end, HIGRAPHINK has resulted in the production of a material with a 100 % exfoliation yield, as opposed to the mere 1 % that could be achieved before the project team started their work. The new ink has a mobility 10 times higher than that of inks currently being used in OLEDs.
  • Applications ranging from batteries to supercapacitors, displays, flexible electronics, optoelectronics, composites, coating or even medical devices.
    • One of the applications he particularly believes in is the ink’s integration into batteries. Thanks to this, enhanced batteries with higher storage density and recyclability may be produced. This integration process is in fact already on track: Although Prof. Ferrari says it’s too soon to give out more information, he has already obtained further funding to bring HIGRAPHINK’s production technique to batteries.

Acquisition of Cambridge Graphene / Shareholder relationship http://ir1.euroinvestor.com/asp/ir/Versarien/NewsRead.aspx?storyid=13516986&ishtml=1

  • Cambridge sold it for £170K cash, 1.45m shares in Versarien and kept a 15% share in the business.
  • This is possibly the commercial deal of the century, however in exchange they invested in Neill and the Versarien teams ability to deliver long term value
  • Versarien believes that the addition of Cambridge Graphene to its portfolio significantly increases the Company’s ability to advance its experience and expertise to commercialise the considerable market opportunities for graphene both in the UK and internationally. 
  • Material produced at both Manchester and Cambridge will be able to be used at either site in product development and for supply to customers and with both universities will be shareholders in the Company, positioning Versarien at the epicenter of the commercial development of graphene both in the UK and globally.

Business Focus areas

Supply proprietary Graphene inks and undertake development projects for customers in application areas including, but not limited to:

  • High performance inks for conductive applications – Printed conductive inks for flexible electronics, antennas and a range of new products. Graphene inks can be cheaper, flexible, printable and better for the environment than traditional circuit board solutions.
  • Graphene enhanced composites – Graphene has been shown to significantly modify the characteristics of composite materials. Exactly which form of graphene and functionalisation to use in specific applications is a development challenge for manufacturers. We undertake projects to define the recipe required for commercial products.
  • Supercapacitors and batteries – Increased processing power means increased energy usage. Graphene’s applications in battery and capacitor technology will deliver huge advances across the low-power device market.

Cambridge Graphene Ltd Team

  • Mark Shephard – MD: Over 25 years experience in the VC and angel backed technology start-up environment. He is joint inventor/founder of Xaar plc’s world leading ink jet technology, successfully led the technology’s early commercialisation through IP licensing and was involved in the Company’s listing on the London Stock Exchange in 1997. Prior to setting up Cambridge Graphene Ltd, Mark ran 2-DTech, a graphene technology spin-out from the University of Manchester.
  • Dr Stephen Hodge – Principal Engineer. A Postdoctoral Research Associate and Teaching Fellow in Graphene Technology in the Cambridge Graphene Centre (CGC) at the University of Cambridge and bye-fellow in Chemistry at Murray Edwards college. PhD in Nanomaterials Chemistry at Imperial College London in 2012, joined the CGC at the University of Cambridge. His research interests cover the large scale development of nanomaterial-based dispersions, inks, coatings and functional 2d and 3d architectures for their incorporation into flexible electronics, sensor applications and energy storage/generation devices.
  • Advisory Board – it is fair to say that after my research where the below stakeholders are talking about commercial graphene applications that its highly likely that Versarien are the partner via Cambridge Graphene Ink and or through their Nanene products as they collaborate closely with the University of Manchester
    • Professor Andrea Ferrari – Technology Advisor. Professor of Nanotechnology and Royal Society Wolfson Research Merit Award Holder. He is the Director of the Cambridge Graphene Centre and Head of the Nanomaterials and Spectroscopy Group at the University of Cambridge Engineering Department and Nanoscience Centre. He is Professorial Fellow of Pembroke College.
    • Dr. Felice Torrisi – Technology Advisor. University Lecturer in Graphene Technology, University of Cambridge and Schlumberger Research Fellow at Darwin College. Research interests cover the development of nanomaterial based dispersions, inks and coatings and their incorporation into polymer composites for printed flexible/stretchable and transparent (opto)electronics. Regular reviewer of major journals and invited speaker at national and international conferences in the field of printed/flexible (opto)electronics and nanotechnology. http://www.eng.cam.ac.uk/profiles/ft242
    • Dr Tawfique Hasan – Technology Advisor. University Lecturer in Electronic Materials and Devices and a Royal Academy of Engineering Research Fellow in the Cambridge Graphene Centre, the Nanoscience Centre, and the Nanomaterials and Spectroscopy Group of the Engineering Department. He is a Title A Fellow of Churchill College, Cambridge.-
    • Scan the 2014,15,16,17,18 publications in the links below to get an idea on new graphene applications coming to Versarien via the Cambridge Graphene Institute!
      • http://hne.eng.cam.ac.uk – Dr Tawfique Hasan’s Hybrid nanomaterials Engineering research group engineer nanomaterials for printed photonics, (opto)electronics, sensing and energy.
      • http://www-g.eng.cam.ac.uk/nms/overview.html – The Nanomaterials and Spectroscopy Group team is run by Ferrari and Torrisi and specialise in research into coating, optoelectronics and sensing applications. 

Vertical integration with the Cambridge Graphene Institute

Cambridge Graphene Ltd get access to the research and partnerships that they have to develop applications for graphene and the ink products. https://www.graphene.cam.ac.uk/partners/partners/industry

5a6cd0d7592c8CGC_Partners.png

Some special call outs as it relates to Cambridge Graphene Ltd and how are they going to get their graphene inks product to market by focusing on just 2 partners above.

Flexenable, Novalia and Cambridge Graphene Ltd have a very close relationship and are often seen presenting together e.g. At mobile world congress in 2016 http://www.eng.cam.ac.uk/news/graphene-takes-centre-stage-mobile-world-congress

  • The Graphene Pavilion includes live demos and prototypes of many different properties and applications such as printable touch sensors (by the Cambridge Graphene Centre and partner Novalia), flexible displays (by the Cambridge Graphene Centreand FlexEnable) and a number of different flexible near-field communication antennas, sensors and ultra-fast photo receivers (also produced in collaboration with the Cambridge Graphene Centre). Dr Stephen Hodge and Dr Nicolas Decorde will present several of the demos and interact with visitors and media throughout the week. 

Novalia

http://www.novalia.co.uk/ use ordinary printing presses to manufacture interactive electronics, which combine touch-sensitive ink technology and printed circuits into unique and cost-effective products … watch the ted talks here to have your mind blown away! http://www.novalia.co.uk/talks/

  • A low-cost, high-speed method for printing electronics using graphene and other conductive materials could open up a wide range of commercial applications. Oct 2015
    •  “We are pleased to be the first to bring graphene inks close to real-world manufacturing. There are lots of companies that have produced graphene inks, but none of them has done it on a scale close to this,” said Dr Tawfique Hasan of the Cambridge Graphene Centre (CGC), who developed the method. “Being able to produce conductive inks that could effortlessly be used for printing at a commercial scale at a very high speed will open up all kinds of different applications for graphene and other similar materials.”
    • Currently, printed conductive patterns use a combination of poorly conducting carbon with other materials, most commonly silver, which is expensive. Silver-based inks cost £1000 or more per kilogram, whereas this new graphene ink formulation would be 25 times cheaper. Additionally, silver is not recyclable, while graphene and other carbon materials can easily be recycled.
    • The new method uses cheap, non-toxic and environmentally friendly solvents that can be dried quickly at room temperature, reducing energy costs for ink curing. Once dry, the ‘electric ink’ is also waterproof and adheres to its substrate extremely well. The graphene-based inks have been printed at a rate of more than 100 metres per minute, which is in line with commercial production rates for graphics printing, and far faster than earlier prototypes. http://www.cam.ac.uk/research/news/new-graphene-based-inks-for-high-speed-manufacturing-of-printed-electronics
  • Scalable 100% Yield Production of Conductive Graphene Inks – Feb 2017
    • The new microfluidisation process to exfoliate graphene flakes from graphite converts 100% of the starting graphite material into usable flakes for conductive inks, avoiding the need for centrifugation and reducing the time taken to produce a usable ink. Inks produced using this method have already been commercialised via a University of Cambridge spin out company, Cambridge Graphene, which was recently acquired by engineering solutions company Versarien.
    • Conductive inks are useful for a range of applications, including printed and flexible electronics such as radio frequency identification (RFID) antennas, transistors or photovoltaic cells. The advent of the internet of things is predicted to lead to new connectivity within everyday objects, including in food packaging. Thus, there is a clear need for cheap and efficient production of electronic devices, using stable, conductive and non-toxic components. These inks can also be used to create novel composites, coatings and energy storage devices.
    • The inks are also supplied to Novalia, UK for use in their interactive touch-based printed electronic demos. Chris Jones of Novalia said “For viable marketable applications, the materials need to be cost effective, easy to handle and show consistent performance. We ran these inks on ordinary industrial screen printing equipment without modification and achieved consistent results, printing hundreds of interactive demonstrators for Mobile World Congress. This is a very exciting point – a critical juncture between the laboratory and the public.” https://www.graphene.cam.ac.uk…
  • Researchers have successfully incorporated washable, stretchable and breathable electronic circuits into fabric, opening up new possibilities for smart textiles and wearable electronics ranging from personal health and well-being technology, towearable energy harvesting and storage, military garments, wearable computing and fashion. Nov 2017
  • Demonstrated how graphene can be directly printed onto fabric to produce integrated electronic circuits which are comfortable to wear and can survive up to 20 cycles in a typical washing machine. The printed components are flexible, washable and require low power, essential requirements for applications in wearable electronics. The circuits were made with cheap, safe and environmentally friendly inks, and printed using conventional inkjet printing techniques
  • “Turning textile fibres into functional electronic components can open to an entirely new set of applications from healthcare and wellbeing to the Internet of Things,” said Torrisi. “Thanks to nanotechnology, in the future our clothes could incorporate these textile-based electronics, such as displays or sensors and become interactive.”http://www.cam.ac.uk/research/news/fully-integrated-circuits-printed-directly-onto-fabric
  • This is the pdf that shows Nokia testing Versariens Cambridge Graphene ink in Rfids – https://graphene-flagship.eu/Lists/Deliverables/D8.6.pdf
  • The timing fits in nicely with the Global Apparel Brand who announced a collaboration on 8thJanuary with Versarien on the incorporation of graphene into fabrics and assess its suitability for inclusion in high performance sportswear! CEO in Vox market podcast said it took 6 weeks from initial contact to collaboration! http://www.londonstockexchange…

FlexEnable – http://www.flexenable.com/

Pioneered an industrially-proven organic transistor technology platform for flexible displays and sensors on plastic that bring transformational advantages to products including shapeability, lightweight, thinness and durability while providing a path to low cost. There are huge numbers of applications from automotive, wearable and mobile technology, healthcare, biometrics and digital signage that the FlexEnable platform can support – http://www.hvm-uk.com/uploads/cgd15cain.pdf – See slides 13,14,15 for how graphene enhanced Flexenable applications

  • Flexenable spun out of Plastic Logic and focussed on the exploding markets for wearables, new mobile devices and distributed, flexible sensors for IoT applications. Flexenable is based on Plastic Logic’s full technology and patent portfolio, but will independently provide expertise, technology and products to system builders, device makers and product companies to enable innovative, volume products. They now seem to be scaling up to meet customer demand http://www.flexenable.com/newsroom/business-news/the-launch-of-flexenable/

§  Truly and FlexEnable sign License Agreement to bring low-cost, scalable flexible display production to China – http://www.flexenable.com/newsroom/business-news/truly-and-flexenable-sign-license-agreement-for-flexible-display-production/

§  FlexEnable collaborates with Merck to enable novel display shapes using conformable plastic LCDs – http://www.flexenable.com/newsroom/business-news/flexenable-collaborates-with-merck-to-enable-novel-display-shapes/

§  Plastic Logics owner is RUSNANO a Russian state owned company that invests a $4billion fund that implements state policy for the development of the nano industry in Russia, acting as a co-investor in nanotechnology projects, which have substantial economic or social potential. They invested $171m to take full ownership of the company. http://en.rusnano.com/about Novaled – owned by Samsung. Plastic Logic & Novaled Collaboration – 6 February 2014 – Plastic Logic, the leader in the development and industrialisation of flexible organic electronics, and Novaled, a leading company in organic electronic materials and technology for OLED applications, announce a partnership which will transform and accelerate the market for flexible and wearable displays. Novaled’s majority owner is Samsung Cheil Industries part of Samsung http://www.novaled.com/news_press/newsitem/plastic_logic_and_novaled_partner_to_demonstrate_a_world_first_for_displays_and_open_a_new_frontier/

Scalable VRS product technology and manufacturing

Versarien have also been clear that they would only build manufacturing capacity once the demand is there because depending on the type of application a customer needs, you may need a different graphene manufacturing process / fuctionalisation process to support it

  • CPI tenders – the tender was based principally on the quality and specification of the graphene to be supplied with additional marks awarded for price and delivery and there was 100% success by Versarien. CPI rejected all other graphene suppliers around the world many of whom couldn’t even meet the initial spec and went for Versarien graphene in every case applied. Versarien will be supplying up to 1.2 kilograms of graphene in a variety of forms, including the Company’s proprietary brand, Nanene, Graphene Ink and Boron Nitride (white graphene) to the CPI .http://www.londonstockexchange…

Cambridge Graphene

Uses a scaleable production process for its graphene ink, developed at the Cambridge Graphene Centre, University of Cambridge. The process allows for a range of ink formulations to be manufactured in order to meet the requirements of different printing methods and substrates. Currently, all Cambridge Graphene inks are aqueous, environmentally friendly and non-toxic.

  • At a shareholder presentation in May 2017 that a number of the ADVFN crowd went to (Superg1, Compoundup) Professor Ferrari claimed that for a modest investment we can do 100,000 litres per year (100 tonnes of ink).
  • The CEO mentioned that they were 6 months ahead of the game, well this funding from Innovate UK for £68k from July 2017 to do the following: Cambridge Graphene Ltd – Upscaling novel microfluidisation for repeatable, low-cost creation of quality graphene ink
  • This project aims to validate a pilot scale production of graphene ink from proven novel, repeatable, microfluidisation process at lab-scale. Inks produced to date show market leading sheet resistance, can be used in commercial printing processes at up to 25 times cheaper than metal alternatives. As production chamber size increases, the physics of the system alters (longer particle residency, travel time) delivering a challenge to repeating lab-scale outputs. Further research into novel feedstocks & improved outputs (larger flakes, lower sheet resistance, tailored viscosity) is to be investigated.https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/643693/Emerging_and_Enabling_Technologies_Round_2_-_Up_to_12_Months_-_Competition_Results.pdf

Unlike Nanene it feels like they are able to achieve high concentrations of ink in the manufacturing process, so may not need to do local manufacturing (with associated JV’s & licensing) and instead Versarien can control all manufacturing and shipping of inks to partners.

2D-Tech – Nanene

Versarien has been clever in buying Total Carbide that Neill knew from his previous job at Electron Technology (£EKT). Not only has he turned it into a more profitable faster growing business since he owned it, but he realised that their core manufacturing capability was “grinding (sometimes known as milling)” to create c. 30 tonnes of powder that they used in their hardware products. This knowledge has helped them to accelerate manufacture and functionalisation of Nanene which uses a patent‐protected, mechanised exfoliation process (often known as grinding).

Nanene needs to be produced locally where it is going to be incorporated into other materials & products. Due to its lightness 1 tonne of Nanene would fill 38,000 oil drums … you don’t want to compress it or you end up with graphite!

  • ‘The machine’ Versarien uses to produce Nanene means they can have a modular set up, thus set it up anywhere in the world in quick time.
  • They originally had a machine that could make 100 grammes per day. There are bigger machines than the tenfold version (1 kg per day) that they have purchased with the funds raised from the recent share placing in 2017.
  • If Versarien hit customer demand higher than 350 kgs in the next 12 months then it will be a fantastic problem to have e.g. if it sells for £25 per gram = £8.75 mill, £50 per gram = £17.5m so there is a fast payback
    • There are likely optimisations they can make on the amount of Nanene they can produce from a single machine e.g. double shifts but for now if we estimate 1kg of Nanene per day per machine we have room for upside
    • If a customer with really big demand comes needing loads they can potentially licence Nanene and do it themselves with royalties back to Versarien and just use many of the machines to produce more.

Now that VRS can manufacture Nanene and Inks at scale and are viable on costs a large customer can’t

  • block such a product by buying up all supply – (See example Apple buying all IQE VSCEL wafer capacity for next 2 years to have USP in marketplace with Face ID)
  • have exclusivity – there are over 100 companies chasing it desperate to get ahead of the game … and now whole countries
  • buy Versarien – I believe that this is off the table due to wanting to keep the Graphene Flywheel going and continued stakeholder support including the UK government which leads to JV and licensing deals (see China JV!).

What currently is the best way to gain competitive advantage for your company and products with graphene?? Get moving sharpish and get Nanene and Graphene inks into your products first! See China!!

International Manufacturing Expansion

LOI for China JV to manufacture Nanene

Versarien signed a Letter of Intent (“LOI”) to establish a graphene manufacturing centre in China with the Shandong Institute of Industrial Technology Fund, Jinan Qing Na Material Technology Co Ltd and Jinan Innovation Zone Administrative Committee with the view to establishing the “China-UK Jinan Graphene Industrial Park” in the Jinan Innovation Zone, Shandong Province, China

  • 1st stage the establishment of a 100,000 square foot manufacturing facility to produce and sell Versarien’s proprietary Nanene few layer graphene nano-platelets (this is roughly the size of two football pitches!). 
  • 2nd stage objective is the establishment of the first Chinese graphene industrial park, the “Jinan Graphene Valley” including a graphene research institute with funding coming from the joint venture partners.
  • The total project cost is £55 million
https://www.investegate.co.uk/versarien-plc/rns/planned-chinese-graphene-manufacturing-facility/201801150700048078B/
  • How it happened – Oct 2015 University of Manchester received president Xi of china – said wanted to collaborate with UK around graphene
    • Met Jinan team in November 2017 – had requirement they couldn’t fulfil (See DTI tender offer!), want to get into graphene in a big way, want a player with all due diligence, data reliability, verification all done = VRS
    • Presentation at University of bath, then dinner 2 days later, then official invitation to come out to China as guests of Chinese govt and Shandong province, then LOI 4 to 5 weeks from start to finish!
  • Govt official Chinese graphene market by 2023 worth $200 billion – Chinese govt running at hyper speed and can influence demand for graphene (See belt & road, Electric cars!)
    • Shandong want to create China graphene valley (the new Silicon Valley!)
      • Shandong contains large amounts of graphite resources
      • VRS at the centre, backed by Chinese govt and as a partner
  • Speed is key – VRS could have invested to create manufacturing, however time and money and risk
    • Chinese have done their graphene due diligence and found no local players that meet standards required, hence deal with VRS and Nanene
    • Need to establish manufacturing close to customers using it graphene doesn’t travel as so light 1 tonne = 38,000 oil drums!
    • VRS now under pressure to get operational and get live in July 2018 live producing Nanane in china!
      • Can meet Chinese demand as the manufacturing process is modular and each step up the kit ladder gives exponential growth for production very cheaply. Just repeat the modules that are known to work and multiply them, hence the production has no limit.
      • From the module point 100 tonnes is a walk in the park – A 100,000 square ft factory could have 250 of Versariens existing machines churning out graphene at 375 kg’s p.a each making 93.7 tonnes per annum … this is before they even test and launch the next scale up machine that could produce tens of KG’s or even tonnes per day (which they are already investigating)
  • JV set up
    • China invest to cover for all costs of building and manufacturing – The building is already built!
    • VRS have no costs and will be paid a royalty, profits would be split demanding on the percentage shareholding which is being negotiated. VRS will supply equipment (machines and chemicals) and either lease it or sell it to Chinese (and likely get them to pay upfront).
    • The negotiation setting up a JV is with a province not a commercial company per se. Could the JV ascribe all production and sales of Nanene to Versarien with the Chinese end responsible for sales? That way China gets the added benefit from lighter end materials and VRS gets all the profit from Nanene and dictates the price.
    • Business plan is being written by Chinese on amount they want to produce to meet local demand (huge opp with electric vehicles)
    • VRS changed it to a non binding LOI so they could fully digest the deal but as reported on Sky news, it looks like Versarien are ready to get it signed during Theresa May’s trip to China to meet the President w/c 29th Jan 2018!  https://news.sky.com/story/downing-street-races-to-clinch-deals-ahead-of-mays-china-visit-11222951
  • IP – do we trust Chinese?
    • Worked closely to choose right partners, Party secretary 2 down from president (his scientific advisor) and given categorical promise that IP protected. Several internal measures to protect them
    • Patent protection, company know how, supply of machines, chemicals, everyone wants to make it work.
    • Graphene great but another 2,000 2D advanced materials … research centre in UK, manufacturing next gen 2D materials, if we don’t like what we see then China won’t see other 1999 2D materials. Therefore VRS must work really hard to keep up with pipeline of new developments to keep interest.
  • Establishing Hong Kong base
    • License IP for similar deals in similar countries, so once set up its easy to replicate e.g. Japan, South Korea, Taiwan etc …
    • UK govt invested heavily in these technologies via University of Manchester, University of Cambridge and now VRS getting opportunities to export this tech and exporting globally
  • Impossible to quantify value of this deal at this stage to Versarien or UK PLC
    • Benefits: Export value, high quality, highly skilled jobs in UK, local manufacture but do outside UK where appropriate
    • Challenge: How to grow quickly, satisfy demand for these products
    • Status: Can satisfy demand in china with this deal – no shortage of money, or factories to manufacture Nanene to supply the demand in China domestic market where many of the worlds products are manufactured!

Background – Why do China want Graphene?

  • https://www.youtube.com/watch?v=YOvU5l9i2KU – Really good presentation to understand how China has grown to where it is via one off productivity improvements and mainly through the imitation of existing technologies. You will see on 14 mins that the key to maintaining china growth is to focus on innovation in new technologies hence the major Chinese govt investment to rebalance the economy and change in culture and global partnerships in relation to IP (Think Japan in the 1980s who went through a similar change).

Background – What types of demand do they have?

  • Belt and Road Initiative (BRI)
  • UK – China Fund
    • David Cameron is vice chairman of the UK-China Fund a $1bn investment fund set up to back China’s Belt and Road infrastructure initiative. The state-endorsed fund will be led by private institutions in UK and China. Douglas Flint, the former group chairman of HSBC, as the UK Treasury’s Belt and Road envoy, as well as the establishment of as new UK-led BRI expert board to guide investment.   
    • http://www.telegraph.co.uk/news/2017/12/16/david-cameron-set-750m-uk-china-investment-fund/
    • Having Cameron Lead the UK-China Fund Is Good for Britain and China – https://thediplomat.com/2017/12/having-cameron-lead-the-uk-china-fund-is-good-for-britain-and-china/
    • My Opinion – Cameron and Osborne had the determination to make sure the graphene breakthrough born in Manchester ended up with the Unis and the UK benefitting from it so they spent millions to build the National graphene institute (£60 million), funding research at UK universities, as well as engaging with a little known advanced materials company. This became especially important when the Chinese president visited the UK in 2015, as Neill Ricketts was at the NGI and met both him and Cameron to discuss their graphene progress … that is where the seeds are sown. Neill has since met DC a lot as well as grown very strong contacts in government … and now DC has a big cheque book!
  • We now know that CRRC Changchun Railway Vehicles, a leading Chinese train car maker, announced that it has developed a prototype of the world’s first subway train made of carbon fibre.
  • Chinese Bullet trains – May 2017
    • China is developing a new generation of trains capable of reaching 400 km per hour. The high-speed trains will be part of the so-called Belt and Road Initiative to boost economic ties with other countries.
    • “We will apply new materials in the research and production of the future high-speed trains, such as carbon fibre and aluminum alloy, which will help to reduce weight and enhance energy efficiency,” said Qiao Feng, a senior engineer at the CRRC Changchun Railway Vehicles, a subsidiary of China Railway Rolling Stock Corporation. He added the new trains would be able to reduce energy consumption per passenger by ten percent. They are expected to promote regional connectivity and create new businesses for China and overseas economies. http://www.chinadaily.com.cn/china/2017-05/03/content_29175985.htm
  • China-Britain Business Council (CBBC) is the UK Governments Department for International Trade’s chosen partner in China to deliver trade services – They advertised the below:
    • China – Graphene R&D and application technology wanted by a Shandong company – Expiry date 30 June 2017
    • A research company is seeking the expertise and technology from the UK, ideally in an advanced state close to industrial applications.
    • The company can offer R&D opportunities which will include other leading research and academic institutions in China.
    • It is a public company with multiple businesses.
    • https://opportunities.export.great.gov.uk/opportunities/china-graphene-r-d-and-application-technology-wanted-by-a-shandong-company
    • My Opinion – Note how the DTI act as a local lead generation for companies like Versarien … this spec feels a lot like  CRRC Changchun Railway Vehicles opp above?!
  • The Beijing Institute of Aeronautical Materials (BIAM) and the National Graphene Institute (NGI) at The University of Manchester will carry out a five-year collaborative research project which plans to deliver lighter, better performing aircraft and high-speed trains. http://www.manchester.ac.uk/discover/news/graphene-partnership-could-deliver-lighter-planes
  •  Professor Robert Young, who leads the research project at The University of Manchester, said: “BIAM have a rapidly developing research programme on graphene composites and we are looking forward to pooling our expertise with them to facilitate the use of these materials in aerospace applications”.
  • Graphene has been included in the latest Chinese five-year plan and the country is starting to develop its domestic civil aerospace industry and expect to improve their expertise on materials.
  • My Opinion – Professor Robert Young, is the guy that did the tests on Nanane in carbon fibre and was raving about the results (50% stronger with on 1% loadings). It sounds like the Chinese rail network and subway network is changing entirely to carbon fibre carriages and will use graphene to make them lighter and no corrosion and will likely to expand graphene to all plastic and composites within the train to make them lighter and stronger. This could be a big reason for the sudden interest by China in Nanene and the need to scale up graphene production so rapidly.

China is very serious about Electric Vehicles

  • China Government are driving graphene demand with their electric cars target
    • 22 Sept 2017, China’s Ministry of Industry and Information Technology (MIIT), which oversees the auto industry, proposed a Corporate Average Fuel Consumption (CAFC) and New-Energy Vehicle Credits designed to improve the fuel efficiency of traditional-fuel vehicles, as well as to promote the deployment of New Energy Vehicles (NEVs) in China. China’s proposal would require automakers to produce fleets with a Corporate Average Fuel Economy of 42 miles per gallon by 2020, and 54.5 mpg by 2025, with a goal of generating a market for more than five million new-energy cars in the 2016 to 2020 period.
    • Production quotas will be enforced through a credit-score system in which automakers earn super credits for the production of NEVs. Companies that fail to hit their targets will be compelled to purchase credits from companies with excess credits or be subject to MIIT-imposed penalties
    • In order to encourage the purchase of EVs, China’s Central Government currently provides subsidies of from $3,030 to $6,666 per vehicle, depending upon vehicle range. Most local governments add from 15% to 50% to that amount. For an EV with a range of 250 kilometers (150 miles) or greater, the subsidy in Beijing amounts to $10,000 per vehicle. In addition to subsidies, many cities provide favourable policies such as the assured issuance of a vehicle license and increased access to HOV lanes e.g. in Beijing in any given month, 3 million applications might be received for the 3,000 available new vehicle licenses, with the remainder going into a lottery pool. Buyers of Electric Vehicles, however, are exempt from this process and assured of receiving a license.
    • Subsidies scheduled to be phased out in 2021, therefore greater price parity between Electric Vehicles and internal combustion engine cars will be necessary. Because it is questionable whether battery costs will fall sufficiently to offset the loss of the consumer subsidy, automakers in China may be forced to lower prices — and profit margins — in order to sell the EVs they will be required to manufacture in China under the new rules.
    • Sales of EVs in China are forecasted to be 680,000 units in 2017, with a 46% increase projected for 2019. UBS, a global securities firm, estimates that global EV sales will reach 14.3 million units in 2025, with China accounting for 4.8 million of the total, so China is well on its way to meeting its EV targets.
    • https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/jackperkowski/2017/10/10/china-raises-the-bar-with-new-electric-vehicle-rules/&refURL=https://www.google.co.uk/&referrer=https://www.google.co.uk/
    • My Opinion – What this really means is the government has set the demand and the Chinese car manufactures will be desperate to not just enhance batteries (see below the wider progress Versarien have made here), but also the easy wins of using graphene enhanced composites to lightweight the NEV’s so it can travel further.
  • China: Huawei Announces Breakthrough In Its Research In Graphene-Assisted Li-ion Battery With Doubled Lifespan
    • The new graphene-based heat-resistant technologies allow Li-ion batteries to remain functional in a temperature 10 degrees Celsius higher than the existing upper limit. The lifespan of the graphene-assisted Li-ion batteries will also be twice as long as ordinary Li-ion batteries
    • Back in 2015, Huawei already announced its co-study program on the application of graphene with Manchester University, devoted to the development of a next-generation technology to consumer electronic products and mobile communication equipment’s. The graphene-assisted Li-ion battery will also enable electric cars to drive extra miles and drones to fly safely under high temperatures. http://www.mondaq.com/china/x/561872/Patent/Huawei+Announces+Breakthrough+In+Its+Research+In+GrapheneAssisted+LiIon+Battery+With+Doubled+Lifespan
  • A new solar highway in China perfectly captures its clean-energy ambitions
    • China is billing the project as the world’s first photovoltaic highway. The Jinan stretch is designed for both electricity generation and public transport and could handle 10 times more pressure than the normal asphalt variety and in a year generate 1 million kWH of electricity, which will be used to power street lights and a snow-melting system on the road. It’s also designed to supply power to charging stations for electric vehicles, should those be added in the future.
    • The road cost around 3,000 yuan ($458) per sq m, significantly higher than regular streets. Still, the project signals China’s solar-power ambitions. Last year the country became the world’s top solar-energy producer, boosting its photovoltaic capacity to around 78 gigawatts, and it’s aiming for 105 by 2020. https://qz.com/1166975/a-new-solar-highway-in-china-perfectly-captures-its-clean-energy-ambitions/

My Opinion – By connecting the dots the transformational opportunity for Versarien starts to makes sense.

  • This deal is at Government level as its monetising UK university IP, so any messing around with Nanene and they will have the door slammed shut on then for the other technology and 2000 advanced materials we are already working on.
  • Rather than fight China work with them and you can become very rich. The Chinese government need direct access to the coming advanced materials revolution and the UK is the lead. China want to be the innovative technology power with first mover advantage and not constantly 5 steps behind all the time making cheap low quality copies
  • This deal means that now that Versarien via their unique shareholder relationships with University of Manchester have access and knowledge of the breakthroughs going through then their JV partner China is now vertically integrated into the best facilities in the world for advanced material research and manufacturing.
  • The biggest disruptor in the world economy now has the most disruptive material enhancing all of the products that they create and sell to the world.
  • What will drive rapid growth for graphene and Versarien is disruption like China forcing all other counties, industries and companies to move fast or struggle when game changing products launch. The China JV example will be rolled out worldwide 

Which countries are next?!

Versarien are looking at doing other deals like this and have already met with key players as part of their world tour with the DTI throughout 2016

  • South Korea – VRS have strong links set up by DTI to Korea with Samsung
    • The Samsung Advanced Institute of Technology (SAIT) has successfully synthesized a now-patented “graphene ball” that can be used to make lithium-ion batteries last 45 percent longer and charge around five-times faster, it has been revealed. The SAIT has been behind a number of commercialized technological breakthroughs, including the development of the cadmium-free Quantum Dot materials that are being used in Samsung’s high-end—and flagship—QLED TVs. https://www.sammobile.com/2017/11/27/%E2%80%8Bsamsung-develops-patents-graphene-ball-speed-charging/
  • India, Japan and Mexico were all visited by Versarien with the Department of Trade & Industry on trips during 2017
  • USA –  Startup Europe Comes to Silicon Valley (SEC2SV) – Versarien were one of 2 UK companies invited out there with only 12 from Europe for that event. http://www.londonstockexchange…
    • Since then they have opened an office in Palo Alto in California, USA, in Nov 2017 to handle sales enquiries, but will be interesting to see how that develops with US government as they are significantly behind Europe with their graphene research and production capabilities.
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VRS Application and Product Development  

This is the key USP that VRS have in the marketplace and why the University of Manchester and University of Cambridge see such value in Versarien as they are proving that they can take things from the lab into the marketplace.

Versarien is rapidly establishing itself as the go-to supplier of high quality graphene and other potentially industry disruptive 2D materials as they can supply it anyway you like.

  • Have built a good portfolio of data to show global players and institutions
  • After lots of dedicated hard work they are now beginning to reap the benefits
  • Talk from position of authority and strength when talking to companies

Enabling and Dispersion Capabilities

Many Graphene producers don’t have any product development or dispersion techniques and can’t advise customers who are clueless on how to do it. They just provide the bottle! If their graphene won’t work in the customers application, then they can blame dispersion the techniques used by the partner.

  • VRS have the ability to manufacture their own products
    • Using Versarien’s existing graphene manufacturing capabilities, www.aaccyroma.co.uk (AAC) will have the ability to produce graphene-enhanced plastic products
    • AAC provides the option to produce whatever a customer needs to test / trial and perhaps a complete supply line. There are big costs involved and down time in setting up industrial production lines to fit something that may be under consideration.
    • AAC is simply an option supply actual parts should end users want it EG like JLR.
  • Provide the raw Nanene product for the partner to mix
  • If you don’t know how to disperse and mix it with your products they will simply use their unique research via University of Manchester, University of Cambridge to pre-mix in your desired master batch be it resin liquid or something else and then prove how it performs in your product / application.

 Depending on the type of application a customer needs, you may need a different graphene manufacturing process and enabling process to support it

  • 2D Tech in some cases don’t need enablers for Nanene and it mixes freely directly into products.
    • Many tech players in the graphene space claim that you need to use their “tech to enable” graphene before it could be used e.g. Haydale which is incorrect.
  • There will be cases where enabling will be need on the millions of combinations that exist for graphene. The costs involved to go through tests and time involved are huge and there may be no improvement.
    • Market Issue: Very limited data worldwide where producers or users actually show verifiable independent data to show how their graphene has enhanced a product.
    • VRS stands head and shoulders above the others right now as the data is out there that Nanene provides huge gains well beyond thought possible why would industry waste years at this time trying to tweak it. As a result the basic market right now is high quality Graphene that actually work which is what VRS are all about 

Versarien Product Capabilities  

VRS don’t talk openly about markets with huge potential like batteries and instead focus on which opportunities are going to produce cashflow fastest and at scale in near term to fund future expansion.

  • They have it all recorded in presentations on their strategy for what functionalisations they develop – Tier 1 being the here and now and reduced focus on Tier 3 future tech but keeping a finger on that pulse to keep an eye on opportunities.
  • They have a clear record of going after very large customers, but also look to de-risk timelines by working with smaller customers be it via the CPI or directly so that they can generate revenue and learnings.
  • http://www.versarien.com/files/3314/7879/4429/Mark_Dickie_-_AAC_091116.pdf

Below I’ve linked some of the research developments in those areas alongside commercial progress that Versarien have made with commercial applications. I have not found any other company with anything like this breadth and depth of commercial capabilities in relation to graphene (tell me if you find any!). For the RNS announcements, do refer to the Vox Markets Podcasts on Versarien as they hold very interesting additional information – https://www.voxmarkets.co.uk/company/VRS

CURRENT CAPABILITIES – Tier 1

  • 3D Printable Filament – ability to add Nanene compositions to 3D Printing of plastics. See the lovely robots that some shareholders have received and case study http://www.2-dtech.com/portfolio_page/3d-printing/
    • Collaboration with Absolute Engineering, a company at the forefront of carbon fibre inking technology for the printing industry.  https://www.nanene.com/collabo…
  • Fortune 100 Chemicals partner (Dow / Dupont)
    • Unique and far reaching implications. Use 2D materials in a wide range of products.
    • Transformational – dealing direct with their American HQ.
    • Packaging specialists and likely partner with Unilever for products required by packaging (See unilever tear down below)
  • Master Batch Pellets – premixed Nanene compositions that can be added economically during plastics manufacturing
    • 2017 they entered into agreements with Scafell Organics to develop graphene‐enhanced PEK‐type materials (https://en.wikipedia.org/wiki/… ), which show up to a 32% improvement in modulus at 3wt% loading, a 21% improvement in UTS of the polymer matrix at 0.5wt% loading and a 17% improvement in elongation to break at 3wt% loading. o          https://www.nanene.com/collabo…
    • This is what Total Carbide does today, so it will not be long before VRS manufacture graphene enhanced PEAK’s
  • Selective Laser Sintering Powders – another 3D Printing capability with an additive manufacturing (AM) technique that uses a laser as the power source to sinter powdered material typically used for nylon, composites & metals like steel and alloys in a 3D model, binding the material together to create a solid structure.
    • NR believes that aerospace is having a big take up in 3D printing but the limiting factor is material strength so major Nanene opp https://twitter.com/neillricke…
  • Composite Pre-Preg Materials – this is basically VRS manufacturing carbon fibre with Nanene already integrated so that customers can then use in their existing autoclave, press and oven curing manufacturing processes to create their products. This is a massive market that VRS enhanced carbon fibre will totally disrupt.
    • Bromley Technologies expertise in carbon fibre composite structures. Versarien will collaborate in the design and testing of a wide variety of graphene enhanced composite structures to enhance their skeleton and luge products https://twitter.com/nigellaugh… .
    • CT Engineering Group UK Ltd (“MOU”) to develop novel graphene enhanced composite components for the aerospace industry using Versarien’s graphene technology Nanene. Paul Chinnock, General Manager, CT Engineering Group UK, commented: “Our work with Versarien will allow us to develop a whole new generation of aerospace components with market leading material properties and performance levels.  The unique combination of CT Engineering’s position as a first tier supplier to Airbus Group specialising in advanced composite research and design, and Versarien’s proprietary graphene technology, will rapidly move this venture forward and produce a range of innovative products that will disrupt the current aerospace component market.” https://www.nanene.com/collabo…
    • Mclaren – My research suggests the sudden order there was because those involved went to the NGI trying to find graphene that worked because product they had tried sold as graphene didn’t. Versarien fulfilled a 1kg Nanene order for c. £100k to Mclaren in 2017. In interviews the VRS CEO says no comment when asked if it was Mclaren but also said a product had just been launched. https://www.nanene.com/news/si…
      • Jonathan Neale, Chief Operating Officer, McLaren Technology Group, added: “While Formula 1’s technical regulations prohibit the exploitation of some nano-materials for legitimate cost reasons, the development of materials, such as the graphene family of structures, provide an exciting and increasingly cost-effective solution to some of the sport’s most demanding challenges. We think the properties of graphene are pretty mind-blowing: some of the mechanical properties of graphene-enhanced composites can be improved by double-digit percentages compared to regular carbon-fibre composites. In engineering, we often talk about improvements in terms of fractions of a per cent; to suddenly introduce improvements of this order is incredible, but it gives you a very clear perspective on just how much we’re discovering about the properties of graphene, and just how much it’s re-defining our existing understanding of materials science.” McLaren, Richard Mille, and The University of Manchester’s National Graphene Institute are all learning and working together; we’re looking at a number of emerging technologies, including the 3D printing of carbon-fibre, nanotechnology and surface-coating technology.The graphene enhanced RM 50-03 Tourbillon Split Seconds Chronograph Ultralight McLaren F1 watch by Richard Mille https://www.mclaren.com/formul… 
      • The graphene in that watch is Nanene. If you check the watch launch you will find Robert Young from the University of Manchester Uni commenting who also carried out the tests on Nanene. The carbon fibre part of the watch was made by https://www.thinplytechnology…. for McLaren who also rave about the gains on their website.
      • What we don’t know is what the rest of the order is being used on. There were 75 watches in total that would only use up a few grams of Nanene at best with 1-3% loadings.
      • An observation is that Mclaren had a rubbish engine but made major gains in their chassis … would be a strange coincidence if this was due to using Nanene … 2018 with the new Renault engine could be very interesting! https://www.autosport.com/f1/n…
    • Israel Aerospace Industries – IAI is a world leader in both the defence and commercial markets, delivering state-of-the-art technologies and systems in the domains of: air, space, land, sea, cyber, homeland security and intelligence, surveillance and reconnaissance. IAI has agreed to purchase Nanene from Versarien, in a variety of forms, which will then be incorporated into composite panels for testing and evaluation, with a view to developing commercial applications for the technology that create stronger and multi-functional materials. Versarien are working closely with the teams at IAI and their suppliers to test and evaluate the benefits of adding graphene to a variety of composite structures. https://www.investegate.co.uk/…
    • INOV8 trainers – http://www.manchester.ac.uk/di… New rubber developed with the National Graphene Institute at The University of Manchester allows us to smash the limits of grip. Dr Vijayaraghavan adds: When added to the rubber used in innov-8 G-Series shoes, graphene imparts all its properties. Our unique formulation makes these outsoles 50 per cent stronger, 50 per cent more stretchy and 50 per cent more resistant to wear than the corresponding industry standard rubber without graphene. When you deform the rubber sole, the material transfers some of the stress into the graphene in the mixture, which stops it from wearing away so easily.
    • China – See China JV section on trains and cars opportunity
  • Thermal interface material – process used for the manufacture of thermal adhesives, glues and greases as well as providing thermal management solutions to disapate heat from electrical devices.
    • This is what http://www.versarien-technolog…  Versarien microporous copper foam does today … just by adding graphene and its lightness and thermal properties they now have a better product to take to market!

EMERGING CAPABILITIES – Tier2

  • Battery technology
    • WMG (“Warwick Manufacturing Group”) MOU to collaborate on the production of power storage devices such as batteries and supercapacitors using Versarien’s graphene nano platelets. Working with the SME team and battery specialists, Versarien will have access to WMG’s expertise and world leading facilities in the Energy Innovation Centre. Applications include conventional battery electrode materials , batteries that are lighter, more durable and suitable for high capacity energy storage, as well as shortening charging times.  In addition, the combined use of graphene enhanced batteries and graphene enhanced supercapacitors, which charge and discharge much faster than a battery, could yield substantial benefits in applications such as electric vehicles. http://www.2-dtech.com/portfol…
      • Jan 2018 – New research led by WMG, at the University of Warwick has found an effective approach to replacing graphite in the anodes of lithium-ion batteries using silicon, by reinforcing the anode’s structure with graphene girders. This could more than double the life of rechargeable lithium-ion based batteries by greatly extending the operating lifetime of the electrode, and also increase the capacity delivered by those batteries.https://warwick.ac.uk/newsande…
    • Cambridge Graphene Ltd HiGRAPHINK key applications is the ink’s integration to enhance batteries with higher storage density and recyclability. This integration process is in fact already on track: Although Prof. Ferrari says it’s too soon to give out more information, he has already obtained further funding to bring HIGRAPHINK’s production technique to batteries. http://cordis.europa.eu/result…
    • China – The recent JV LOI in China makes me think that they are very keen to accelerate applications, especially in relation to their booming domestic electric car marketplace
  • Supercapacitors
    • See above WMG as well as Cambridge Graphene Institute are heavily focused in this area through Professor Clare Grey’s research (won a recent £43m funding from the UK Faraday Challenge to do more battery and supercapacitor research) https://www.ch.cam.ac.uk/group…
  • Coatings – Functional coatings are applied to change the surface properties of the substrate, such as adhesion, wettability, corrosion resistance, wear resistance and more. In some cases, the coating adds an entirely new property such as a magnetic response or electrical conductivity and forms an essential part of the finished product.
    • Companies collaborate with The University of Manchester on development of new protective and anticorrosion coatings. “Graphene paint has a good chance to become a truly revolutionary product for industries that deal with any kind of protection either from air, weather elements or corrosive chemicals. Those include, for example, medical, electronics and nuclear industry or even shipbuilding, to name but the few.”http://www.manchester.ac.uk/di…
    • Sure to be a big one for China and their infrastructure requirements with Belt & roads
  • Printable Inks – Conductive inks can be used in various ways, including screen printing, flexographic or rotogravure, spray, dip, and more. Conductive inks can support many applications: electronics, sensors, antennae, touch screens, printed heaters and more
    • Novalia – partnership with Cambridge Graphene Ltd https://www.graphene.cam.ac.uk…
    • Distribution through Merck via their Sigma Aldrich catalogue to multiple end users
    • eTextiles. Graphene-based wearable e-textiles will dramatically change the textiles industry and have a variety of potential applications. Sensors can be incorporated into the fabric for monitoring physical activity such as bending/unbending, stretching/relaxation, and twisting/untwisting or you can incorporate flexible heating elements throughout an item of clothing, along with flexible supercapacitors to power them. https://edgylabs.com/how-will-graphene-change-the-textile-industry.
    • Global Apparel Brand – (99% sure its Under Armour NYSE: UAA) – http://www.londonstockexchange…
      • Note the additional detail shared here that ID’s its Under Armour – Printable graphene from Cambridge graphene ink into high performance smart clothing and sports goods, putting in sensors into everything we wear without needing another device, so you can track health, sleep, movement and fitness https://audioboom.com/posts/65…
      • Under Armour acquired MapMyFitness, followed by the addition of EndoMondo and MyFitnessPal and the launch of UA Record, making Under Armour Connected Fitness the largest digital fitness community in the world boasting more than 225 million unique users, attracting more than 25 million new users in 2017. The goal was to move from being a clothing business to a digital health and fitness community
      • Connected Fitness strategy stretches beyond individual connected shoes and clothing to an ecosystem of nutrition, sleep, activity and fitness. Under Armour is looking to create new wearables that are “less cumbersome” for consumers, so its easy for the user to incorporate into everyday life. Under Armour are getting rid of their wearables hardware and instead investing more in their connected health software platform. They have now over 500 engineers working on this as capturing health and diet data from registered users is critical to everything from research and development to brand segmentation. Under Armour will ultimately use its connected platform and the data it collects about customers to sell “more shirts and shoes” and more clearly define its global consumer target,”
    •  (Dow/Dupont) – to use Versarien’s proprietary Nanene, along with other 2D products manufactured by Versarien, in different potential applications.  http://ir1.euroinvestor.com/as…
      • Dupont are a partner of the Cambridge Graphene Institute and also the worlds largest provider of silver printable inks to enable eTextiles, but at 25 times the cost of graphene inks they are looking to ensure that they are the disruptor so will be a big potential distributor to the worlds biggest brands who they work with today.
  • Dental Prostheses – A huge $9.8b global market, but feels like to me progress is on hold until scientific studies confirming toxicology concerns for regulators
    • Evodental – the dental implant centre alongside 2-DTech, secured a £150,000 grant from Innovate UK to conduct research to improve false teeth in 2014. 2-DTech plans to use small discs of graphene to strengthen existing polymers used in false teeth without triggering reactions from the patient’s gums. ‘The combination of extraordinary strength and ultra-thin form means that graphene could be the solution to the problem of coping with the severe operational conditions posed by the human body. This could be the catalyst for the integration of graphene nanocomposites composites into wider array of medical applications such as orthopaedics and implantable electronics.’ https://www.managementtoday.co…
  • Packaging – Adding small amounts of graphene reduces the amount of plastic used in packaging by 50%
    • Global Packaging deal (Unilever) – Advanced negotiations with two of the world’s largest consumer goods groups, the Company has now started collaborating with one of them (the “Partner”) to enable both groups to work together on research, development and testing of Versarien’s proprietary Nanene few layer graphene nano-platelets in polymer structures. First Nanene purchase order to Versarien which will be incorporated into polymer structures, primarily for packaging applications, for testing and evaluation, with a view to improving material strength, moisture control and recyclability.http://ir1.euroinvestor.com/asp/ir/Versarien/NewsRead.aspx?storyid=13731431&ishtml=1 
    • Fortune 100 US headquartered global chemical (Dow/Dupont) – to use Versarien’s proprietary Nanene, along with other 2D products manufactured by Versarien, in different potential applications. Both groups will work together on research, development and testing of compounded materials, with the objective of replacing incumbent additives across different chemical variants to improve material performance. Specifically, evaluate and process samples for speciality packaging applications and barrier technology, as well as allowing both parties to better understand the future opportunities of further agreements. http://ir1.euroinvestor.com/asp/ir/Versarien/NewsRead.aspx?storyid=13740905&ishtml=1

FUTURE CAPABILITIES – Tier3  

  • Medical Research (Drug Delivery Systems) – http://2d-health.com/ will utilize selected unique properties offered by 2D materials and technologies and develop innovative solutions for specific unmet clinical needs including immunotherapeutics (relevant to targeted drug delivery systems to attack cancer cells). Key to taking fundamental research forward to benefit patients is industrial engagement and four major healthcare partners are also part of the project. Two specialist SME graphene companies, Versarien and Graphenea, will also collaborate with materials and industrial upscale expertise.
  • Electronics (Devices) –
    • Flexenable – A partner of Cambridge Graphene Ltd, and spun out of the multi billion $ Plastic Logic Pioneered an industrially-proven organic transistor technology platform for flexible displays and sensors on plastic that bring transformational advantages to products including shapeability, lightweight, thinness and durability while providing a path to low cost. There are huge numbers of applications from automotive, wearable and mobile technology, healthcare, biometrics and digital signage that the FlexEnable platform can support
  • Fuel Cells – Still in research phase by academics and a long way from commercial applications
  • Photovoltaics (Solar panels) – Still in research phase by academics and a long way from commercial applications however there are some mind boggling things being discovered!
    • Researchers at The University of Manchester have discovered another new and unexpected physical effect in graphene – membranes that could be used in devices to artificially mimic photosynthesis. This is essentially a new experimental system in which protons, electrons and photons are all packed together in an atomically thin volume. I am sure that there is a lot of new physics to be unearthed, and new applications will follow Professor Sir Andre Geim http://www.manchester.ac.uk/discover/news/proton-transport-in-graphene-shows-promise-for-renewable-energy/
  • Membranes –  graphene membranes can be used for water filtration, gas separation and desalination projects. Graphene coatings which are a single layer of atoms that can act as a perfect barrier has the potential to open up vast new markets and revolutionise countless industrial processes e.g.  food and pharmaceutical packaging can stop the transfer of water and oxygen keeping food and perishable goods fresher for longer. The removal of harmful carbon dioxide released into the atmosphere by power stations is not currently done on any scale, graphene membranes could change that.
    • http://2d-health.com/ will utilize selected unique properties offered by 2D materials and technologies and develop innovative solutions for specific unmet clinical needs in wound care and management (relevant to diabetes), tissue rehabilitation by electrical stimulation (relevant to dementia), cell therapeutics (relevant to cardiovascular disease), and immunotherapeutics (relevant to targeted drug delivery systems to attack cancer cells). Key to taking fundamental research forward to benefit patients is industrial engagement and four major healthcare partners are also part of the project. Two specialist SME graphene companies, Versarien and Graphenea, will also collaborate with materials and industrial upscale expertise. http://ir1.euroinvestor.com/asp/ir/Versarien/NewsRead.aspx?storyid=13470847&ishtml=1
    • Desalination technologies could bring fresh water to everyone. The University of Manchester have created scalable graphene oxide membranes with uniform pore size down to atomic scale which is a huge step forward, opening new possibilities for improving the efficiency – and lowering the costs – of desalination technology across the globe. Professor Rahul Nair “This is the first clear-cut experiment in this regime. We also demonstrated that there are realistic possibilities to scale up the described approach and mass-produce graphene-based membranes with required sieve sizes.” The developed membranes also have the potential to filter out ions according to their sizes, which could lead to developments in gas separation technologies.” https://www.manchester.ac.uk/research/beacons/breakthroughs/affordable-desalination/
  • Smart materials – There are over 2000 2D advanced materials that promise a range of their own applications but, in isolation, they are unlikely to offer the same remarkable properties as graphene itself. The most exciting developments by University of Manchester researchers was creating ‘atomic Lego’; stacking these atomically-thin materials in heterostructures and artificial materials so that the resulting properties can be controlled and manipulated. Such materials made with a single plane precision could not be made by any previously-known technique and the combinational structures have the ability to go beyond graphene’s long list of superlatives and create applications and devices which, until now, have existed only in science fiction.
    • Sir Andre Geim said: “I believe this new research field is going to be as big as graphene itself. It is already clear that graphene combined with other atomically-thin materials shows properties better or different from its own. Because of the amount of possibilities of combining these graphene-like materials together in heterostructures is practically unlimited, there must be new materials with unique properties no-one has even dreamed of as yet. We are spoiled for choice.”  http://www.manchester.ac.uk/discover/news/article/?id=10435
    • Graphene shows zero resistance to electrical current – Feb 7th,2017 Japanese researchers were able to make graphene a super conductor at very low temperatures. University of Cambridge scientists were able to make graphene a super conductor when coupled with other materials. https://www.nanene.com/news/graphene-show-zero-resistance-electrical-current/

The art of connecting dots with Versarien and working out who are their partners and what is the potentail opportunity – A case study with Unilever

Versarien RNS

  • Global Packaging deal – – Advanced negotiations with two of the world’s largest consumer goods groups, the Company has now started collaborating with one of them (the “Partner”) to enable both groups to work together on research, development and testing of Versarien’s proprietary Nanene few layer graphene nano-platelets in polymer structures. First Nanene purchase order to Versarien which will be incorporated into polymer structures, primarily for packaging applications, for testing and evaluation, with a view to improving material strength, moisture control and recyclability. http://ir1.euroinvestor.com/asp/ir/Versarien/NewsRead.aspx?storyid=13731431&ishtml=1
  • Fortune 100 US headquartered global chemical (There is only one – Dow/Dupont) – Use Versarien’s proprietary Nanene, along with other 2D products manufactured by Versarien, in different potential applications. Specifically, evaluate and process samples for speciality packaging applications and barrier technology, as well as allowing both parties to better understand the future opportunities of further agreements. http://ir1.euroinvestor.com/asp/ir/Versarien/NewsRead.aspx?storyid=13740905&ishtml=1

Can we connect these two announcements together to work out the brands in play?

  • The REFLEX (Recycling of Flexible Packaging) Project is a collaborative R&D project co-funded by Innovate UK. The project (complete in Nov 2016) aims to create a circular economy for flexible packaging.

Unilever Corporate Goals on Packaging & Waste

1. 100% of packaging recyclable, reusable or compostable by 2025

https://www.unilever.com/news/news-and-features/Feature-article/2017/towards-a-new-plastic-economy.html
  • Unilever purchase around 2.5 million tonnes of plastic packaging every year and 2 billion people use a Unilever product every day. https://www.unilever.com/sustainable-living/reducing-environmental-impact/waste-and-packaging/
    •  Focus on using lighter, stronger and better materials with a lower environmental impact
    • Return on investment is worth it when our innovations successfully reduce the packaging and waste impact in our value chain, and result in material cost savings and increased sales.

2. Reduce food waste at scale and contribute to tackling climate change and food insecurity

  • 1/3 of all food produced globally is wasted which is about 1.3 billion tonnes p.a at a value of US$940 billion each year. 
  •  Food waste contributes to climate change and if food waste was a country it would be the third biggest emitter of greenhouse gases (GHG) globally after China and the US. Reducing consumer food waste could save between US$120-300 billion per year by 2030; reduce GHG emissions by 1 billion tonnes CO2e per year; and increase incomes of smallholder farmers in the agricultural value chain. https://www.unilever.com/sustainable-living/reducing-environmental-impact/waste-and-packaging/reducing-food-waste/

What research has already been done?

  • The University of Manchester has today committed to a long-term partnership with Unilever in 2014
    • Unilever will support the University to carry out research across all four of its Faculties in areas covering sustainable consumption, process engineering, biophysics and systems biology, as well as aspects of inflammation, toxicology and hair biology. The landmark agreement between Unilever and The University of Manchester has the potential to translate cutting-edge science into solutions for sustainable products of the future accessed by billions of consumers across the globe. http://www.manchester.ac.uk/discover/news/university-and-unilever-sign-partnership-agreement/
  • The University of Cambridge has today committed to a long-term partnership with Unilever in 2015
  • Current research projects at University of Manchester and University of Cambridge suggest that graphene will appear in many packaging applications in consumer goods due to the number of benefits it gives and that it will be Versarien providing it.
    • If you look at 1% of the 2.5m tonnes of plastic that they use per annum as a guideline on the amount of graphene they would need to reduce plastic use by 50% due to graphene strength properties then you are looking at a rough need for 2.5 tonnes (2500 kgs) of Nanene at £25 per gramm (rough price for Nanene estimated with scale up production) you have a potential revenue opp of £62.5m … obviously this will be sliced down considerably to the areas of packaging that Nanene adds value but you get the idea that its material (note the Graphene inks opp below would be incremental!)
  • It’s not just about looking at the costs of packaging and reducing plastic use but the other vast savings that can be made as a consequence of the use of RFID sensors technology in the packaging
  • When you dig into the news you can start to connect the dots and see what future collaborations with which partners are coming. Cambridge Graphene Ltd owned by Versarien will be providing all of the graphene inks for the applications they are researching.
  • University of Bath potential Versarien IP or licensing of Nanene to support packaging applications
    October 2017 –  Some biodegradable plastics could in the future be made using sugar and carbon dioxide, replacing unsustainable plastics made from crude oil, following research by scientists from the Centre for Sustainable Chemical Technologies (CSCT) at the University of Bath. http://www.bath.ac.uk/research/news/2017/06/12/scientists-make-plastic-from-sugar-and-carbon-dioxide. A video of how biodegradable BPA-free drinks bottles could be made from sugar and fizz –https://vimeo.com/223101471
    • When you look at who are the industry partners of the Centre for Sustainable Chemical Technologies http://www.bath.ac.uk/csct/partners/  –  We have strong connections with industry, working with companies including: AstraZeneca, BP, GlaxoSmithKline, Mast Carbon, Kraft Foods, Proctor & Gamble, Nestle, Tetra Pak, Wessex Water, Unilever
    • Neill Ricketts in China visiting Jinan province with Steve Egan The Vice-President (Implementation) from the University of Bath who is responsible for catalysing institutional innovation and implementing University strategy and Jon Hunt Director of Research and Innovation https://twitter.com/nigellaughton/status/933799281730998278
    • If I was a betting man then VRS are looking to add their Nanene to the new “bio degradable plastics” from the Uni Bath on behalf of Unilever to make stronger biodegradable plastic type products

End of life, Toxicity of graphene in products

Graphene as a raw material is a new science and all implications not understood, so knowledge still in infancy. http://www.graphene.manchester.ac.uk/discover/video-gallery/what-is-graphene/how-harmful-is-graphene/   If you add it to other materials then due to the small amounts of graphene that are used, it takes on the properties of that material and its benign e.g. incorporated into plastic

    • Use cases for medial e.g. body parts, so they will have to work this out
    • VRS careful in handling graphene as part of manufacturing process
    • VRS doesn’t engage in this research but uses the University of Manchester and University of Cambridge to do the research to make industry partners comfortable it meets standards
    https://www.youtube.com/watch?v=UTzntFw-EgU&t=1200s – covered in questions of this presentation from 22 mins and 27 mins
    • Carbon Nanotubes are highly toxic
    • Evidence shows from research at University of Manchester is that graphene sheets are not toxic
  • This is definitely an area that needs to be kept an eye on

Sales Distribution

Its sometimes easy to forget what a small company Versarien are with all the progress they have made. Why have sales distribution? Well who do you think supplies products to the worlds largest companies?!

  • Key is speed to market – major chemical players are so desperate to get high quality graphene that they have partnered with Versarien, yet Versarien maintain control

European Distribution – Landsdowne Chemicals (part of OQEMA)

OEM’s

  • Developing advanced materials and enabling engineering exploitation by entering into collaborations with global OEM’s (manufacturers who resell another company’s product under their own name and branding).
  • Fortune 100 Chemicals Company (Dow Dupont) – use Versarien’s proprietary Nanene, along with other 2D products manufactured by Versarien, in different potential applications. 
  • Merck – Higraphink Flexenable

JV in Israel with Dimar

Versarien has announced it will form a 50/50 joint venture called DV Composites Ltd, with Dimar Limited (Shelomi, Israel), a leading global tungsten carbide tool manufacturer based in Israel, to focus on automotive, aerospace and marine sectors where Dimar currently sells to a number of global organisations in these sectors. Aim is to distribute into the fast-growing Israeli composite industry new graphene products alongside Tungston Carbide through our close collaboration with Dimar.” https://www.compositesworld.com/news/new-tooling-products-for-composites-from-dv-composites-ltd

  • Secured IAI deal

JV in China with Shandong Province will fulfil the same sales distribution to companies needing graphene in China

Financials

Versarien have demonstrated that they have strong capital allocation which bodes well for the future

1. VRS DO NOT spend cash unnecessarily.

  • The salaries of staff and executive team are very reasonable, and they have a very low cash burn considering the progress they have made
  • Versarien will not invest in scale up manufacturing until the type of demand is confirmed by orders
  • The US office will be to meet a demand not chase sales.
  • The university’s shareholding in Versarien represents one way in which they can monetise the outcome of their research. They are incentivised to forward enquiries for specific skillsets to the most capable supplier directly to Versarien especially as the team have demonstrated the ability to perform in a short timescale.

2. Run traditional businesses profitably to offset costs of Graphene business development

  • Neill Ricketts spends most of his time on the two graphene businesses acquired from the Universities
  • The traditional “turnover/cost/overheads/profit” companies has teams managing them and they provide the stable base for the investment by the shareholders in Versarien.
  • A pure graphene investment as ultra-high risk as an investment proposition.
  • Low cash burn and spend considering progress – Competitors are spending x10 with much less progress

3. Shareholder Deals with Universities

  • Minimal cash outlay, but maximimum stakeholder engagement and win – win value in the long term. Manchester even converted their cash owed into shares at a price 94% more expensive than listed!

4. Focus on Revenue

  • Early revenue and purchase orders the key objective. Lots of signed NDA’s, collaborations take time to work out application and manufacturing requirements. Can get slowed down by big global company legal teams, so mix of small and big companies to accelerate revenue generating process
  • Sales cycle dramatically shortening
    • IAI – 2 years from first contact as part of UK DTI trade mission
    • Apparel took less than 6 weeks from first contact. VRS having more leverage in conversations
    • China JV LOI took only 5 weeks!
  • Will only increase production capacity when the case for doing so is compelling (Purchase orders and applications are known)

Interim results for the six months ended 30 September 2017. Operational Highlights

  • Mature businesses showing improved financial performance Financial Highlights
    • Group revenues increased by 167% to £4.38 million (H1 2016: £1.64 million)
    • LBITDA* reduced to £0.43 million (H1 2016: £0.80 million)
    • Loss before tax almost halved to £0.77 million (H1 2016: £1.47 million)
    • Cash of £0.35 million at 30 September 2017
    • No exceptional costs (H1 2016: £0.47 million)
      • Fund raising of £2.8 million, net of expenses, to increase Nanene production capacity by a factor of approximately ten and provide working capital to enable graphene related collaborations to be progressed  

Fundraising announced post period end on 6 November 2017

  • Fund raising of £2.8 million, net of expenses, to increase Nanene production capacity by a factor of approximately ten and provide working capital to enable graphene related collaborations to be progressed  

The Quality Of The Graphene Affects The Price – Graphene prices per kg

  • Until bulk graphene prices drop below that of silicon, graphene will be slow to enter all markets now dominated by silicon, such as computing, chip manufacturing, sensors, solar cells, etc.
    • CVD graphene is the best but has huge costs to develop 1 gram. It’s only suitable for chips and then it’s very difficult to get it perfect. It roughly retails for $2000 per gramm so that’s $20 mill per kg hence its not commercially viable for 99% of use cases today.
    • Most companies selling this today are making little money by mainly selling it to universities and research labs for testing. I have seen no CVD graphene producer selling it in any volume (but happy to be corrected!!)
  • In the meantime, graphene will continue to be used for applications that other materials simply cannot support or to enhance the performance of existing materials (See Versarien tier 1, 2, 3 product development roadmap).
  • The whole Nanene and Ink’s manufacturing process is cheap for Versarien due to its low marginal cost (graphite and chemicals) and advances in technology are further reducing its price per kg
  • The bigger orders from partners will mean the price per gramm will come down.
  • Versarien have room to take Nanene way low on big orders but at the moment there is no need when the competitors graphene simply doesn’t work.
  • NR is cute on pricing and striking the balance between making profit and getting volume orders over the line
  • Big names like IAI, Unilever, Dow go through a cost matrix process before collaborating to see if it will work on costs before they waste money testing it.
  • Below are estimates on the cost of Nanene and potential profitability
Cost per gramm of NaneneReasoning1 x KG £1 x Tonne £*Estimate Profit per Tonne £
£100Mclaren£100,000£100m£99.5m
£58Tata£58,000£58m£57.5m
£25Estimate£25,000£25m£24.5m
£1Base£1000£1m£500k

*Estimated cost per machine £500k minus (see manufacturing section)

How can Versarien get big?

  • Great execution is always key but multiplying that execution via strategic partnerships with large companies is key
    • Neill Ricketts and team seem to be on track here.
  • Zero in on a narrow product (MVP) and a matching target market to achieve a good product-market fit and sell repeatedly into a minimum viable segment.
    • Versarien have done this with Nanene, and with their tier 1 and 2 target markets.
  • By engaging a larger company in a “Whole Product Strategic Partnership,” where Versarien complete a bigger company’s value chain by integrating Nanene and Graphene Ink into their products and with the huge performance benefits this entails then you can create a win-win scenario where you both go-to-market together.
  • For every £1  in revenue Versarien earns on a sale, the partner earns £10 in enhanced product benefits then you can then create a unique flywheel
  • If you have something this disruptive then partners come to you and Versarien have shown that they are picking and choosing who they work with!
    • In the Q&A after the AGM, Neill’s answer to the licensing is that he tells prospective licencees that there’s a non-negotiable entry fee of £125k before discussing further. Generally sorts out the genuine enquirers from the chancers.
    • Exclusivity: NR asks for a £6-figure fee. “This puts a lot of people off”.  

Its clear that Versarien are already benefits by partnering with key brands

  • Increased revenue – offer customers a fuller and more complete solution e.g. Flexenable 
  • Expanded reach and market share resulting from access to the larger company’s sales force and channels e.g. Dow.
  • A boost in credibility working with a firm with an established brand e.g. IAI
  • Faster time-to-market and reduced development costs to sell globally e.g. China JV!

Due to their research and independent data Versarien can make a partnership pitch and approach a company telling them how they are going to transform their products and business with Nanene and Graphene ink to ensure this is a must-have partnership for them.

I always ask myself with a blue-sky type share like this if I can see the current team turning it into a multi-billion £ company but at the same time protecting shareholders and not diluting shares or unnecessarily filling their own pockets!

  • I feel that the CEO Neill Ricketts is not motivated now about money for personal needs (it’s a given), but how he can change and improve society (bigger goals lead to bigger companies IMO!). This flows through in how he strikes win win deals with his partners, talks about his business, his shareholders and employees and how he looks to re-invest back into community 

Share Price & Marketcap

  • Shares in Versarien are held tightly between senior management, core fund partners (Miton, Herald) and I estimate that there are 50-75 private investors with major holdings of ½ million shares each or more.
  • Market managers have to play games to trigger supply to fill orders hence it’s a very volatile share and its also hard to buy stock in any quantity.
  • Typically recent stock gluts have come from a fund topslicing, employees redeeming shares and shorters driving down the price and weaker hands topslicing.
    • IMO Shorters fall into one of two categories:
  • They have spotted something (detrimental to the stock) that people who are long in a company have not
  • They don’t understand the company and why the price is where it is.

The problem is spotting which is which. I believe on the balance of my research it’s the latter … IMO they are probably right that it feels overvalued Vs revenues if they look back, however I believe that a share like this is valued on future opportunity, and in the case of Versarien it is unique, extremely large and very compelling.

Summary

Advanced 2D materials is a very very hot topic worldwide with all the big names. Versarien top-quality graphene and 2D materials will significantly impact on society.

 It is astonishing the progress that VRS have made in the last 3 years since they did the 2D-Tech deal and 10 months since the purchase of Cambridge Graphene Ltd and below are the key reasons why they stand out as an investment:

  • Unique position and shareholder relationships with University of Manchester, University of Cambridge – big advantage over any other player
    • Versarien are leading the next industrial revolution with the University of Manchester, University of Cambridge in commercialising graphene and are the go to company globally.
    • The brands they work with and JV partners like China, via Versarien, are now vertically integrated into the best facilities in the world for advanced material research and manufacturing.
    • Unique support from the UK government
  • Unique access to £1 billion of assets via
    • Universities of Cambridge & Manchester graphene research facilities adds massive credibility
    • Full access to UK Graphene Infrastructure E.g. National Physics Institute, Innovate UK, Centre for Process Innovation
    • Highly differentiated Vs competition and its highly valued by big players who want independent data and proof.
  • Multiple revenue streams from multiple sectors and products
    • Looked for product that can be used in multiple sectors and multiple products so now totally de-risked from the start
    • Huge progress in application development has opened up multi billion £ market opportunities
    • Lot of hype in sector which VRS now highly differentiated from other companies which resulted in China JV choosing to license Nanene
  • Can meet the new ISO standard  therefore “we have eliminated the competition”.
  • We have demonstrated traction in ability to produce high quality graphene in quantity that is commercially viable
    • ” Nanene ” – Their brand name!
    • Scalable and cost effective
      • Only company able to do this and is moving from producing Kilos then tonnes!
      • Costs matrix been shown to the global consumer group that when the volume goes up it’s viable. If it’s viable for packaging with the benefits Nanene delivers Vs costs, then it’s viable for just about anything. 
    • International expansion through JVs licensing– multiple locations selling same products
    • Graphene first of 2k materials in pipeline that could be created using this patented manufacturing process and could be sold to multiple products in multiple sectors
  • VRS always deliver on Announcements – Multiple deals, Transformational, Purchase Orders
    • Now reaping the rewards of years of hard work as they announce transformational deals
    • Won a major CPI tender recently against global graphene producers.
    • Global players come to VRS as default leader Pack leader in top quality Graphene –  All this global interest will now be self-fuelling
    • Can talk from position of strength as based on Independent data
    • Opportunities for the company are un-believable – Signing up company changing purchase orders with global companies
  • Skin in game with CEO being largest shareholder so closely aligned with other shareholders
    • CEO aware of importance not to dilute shares as the largest shareholder!
    • Raised capital to buy new machines to create capacity to deal with these global companies
    • China JV economics do not dilute sharesholders yet open up multi billion £ market
    • Many years of growth ahead 

Risks

  • Prioritisation and Execution risk – By far my biggest concern but it feels like Neill is laser focused on this, and brings it up in every interview as his no 1. Job
    • At the moment licensing and JV’s seem to be the game and way to scale, but Neill is clear that he sees a major manufacturing role for Versarien to play so wonder how much this has been put on backburner and if it adds to distraction?
  • CEO & Key people risk – if Neill Ricketts was to get run over by a double decker bus then I believe a huge amount of the energy, commercial skills and relationships would dramatically slow down.
    • Neill has said that he is keen to introduce the wider executive team to give shareholders comfort here. Key people like Will Batterick have left in the past and momentum doesn’t seem to have slowed
  • Market Cap – Versarien is turning over roughly £8m at break even with c.100 employees. There is nothing very significant in historic P&Ls for advanced materials – i.e. Nanene, graphene-based ink, boron nitride and others. If you look backwards then it doesn’t justify a market cap in the order of £160m.
    • There is also a lot of intangible but actual value in the relationship with University of Cambridge, University of Manchester, NGI etc. especially when it comes to access to capital equipment used in the development of the advanced materials.
    • How you value a pioneering company with tangible evidence of engagement with a good variety of large (huge) potential clients knocking on the door wanting the advanced materials is up to you?
    • If they were to IPO today what would they be valued at? In the USA?
  • Toxicity of graphene
    • This is definitely one to watch especially as a limiting factor in medical devices, however the CEO seemed confident that due to their vertical integration with the Universities of Manchester and Cambridge that they would be getting the best research into this risk so they had data to support clients concerns
  • IP Protection  – The risk is clear with their need to do local manufacturing and the balance of using patents, black box knowledge shared between employees so no-one knows full picture.
    • Future access to University of Manchester and University of Cambridge for 2nd generation materials R&D depends on the partners like the Chinese maintaining good behaviour.
  • Competition – It’s coming but its unclear how much of the market Versarien can capture before they arrive at scale.

 

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