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TECHNOLOGICAL RISKS
Versarien plc operates in an industry where competitive advantage is heavily dependent on technology. It is possible that technological development may reduce the importance of the Group’s function(s) in the market or render the patents and licences on which it relies redundant. The Group’s existing products may become obsolete or may be superseded by new technologies or changes in customer or end-user requirements.
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Versarien plc continually monitors the market in which it operates and has the resources to invest in new technology as appropriate. |
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COMPETITION RISKS
New competitive products, designs or solutions may enter the market with different benefits or using different technologies, making them equally or more attractive than the Group’s current range of products. Competitors may also be able to devote greater resources to the promotion and sale of their products, designs or solutions than the Group, which would give them a competitive advantage.
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The Group continues to provide resources with the aim of improving each generation of products it develops. If the Group is unable to compete successfully with existing or new competitors, it may have to reduce prices on products, which would lead to reduced margins.
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INTELLECTUAL PROPERTY PROTECTION RISKS
Failure to protect the Group’s IP may result in another party copying or otherwise obtaining and using its proprietary content and technology without authorisation. There may not be adequate protection for IP in every country in which the enlarged Group’s products are or will be made available and policing unauthorised use of proprietary information is difficult and expensive.
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The Group monitors products brought to market as far as reasonably possible and will take cost-effective legal action to protect its intellectual property. |
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DEVELOPMENT RISK
The rate at which the development of the Group’s technology is adopted by potential customers is dependent upon the rate at which those customers wish to progress.
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The Group mitigates this risk as far as possible by ensuring that it responds rapidly to technical changes that may be required
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ATTRACTION AND RETENTION OF KEY EMPLOYEES RISKS
The Group depends upon the continued service and performance of the Executive Officers and key employees and, whilst it has entered into contractual arrangements with these individuals with the aim of securing the services of each of them, retention of these services cannot be guaranteed. The loss of the services of any of the Executive Officers or other key employees could damage the Group’s business. Equally, the ability to attract new employees and senior employees with the appropriate expertise and skills cannot be guaranteed.
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Risk is mitigated by providing share options to key employees, together with significant opportunities for career advancement. |
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FUTURE FUNDING RISKS
It is possible that the Group will need to raise extra capital in the future to develop fully the Group’s business or to take advantage of future acquisition opportunities. No assurance can be given that any such additional financing will be available or that, if available, it will be available on terms favourable to the Group or to the Group’s shareholders.
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Risk is mitigated by maintaining relationships with more than one bank and by dialogue with its shareholders and prospective shareholders. |
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GENERAL ECONOMIC CONDITIONS RISKS
Market conditions, particularly those affecting technology companies, may affect the ultimate value of the Group’s share price regardless of operating performance. Market perception of technology companies may change, which could impact on the value of investors’ holdings and impact on the ability of the Group to raise further funds by an issue of further shares. General economic conditions may affect exchange rates, interest rates and inflation rates. Movements in these rates will have an impact on the Group’s cost of raising and maintaining debt financing.
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Risk is mitigated by seeking to expand the products and technologies for sale within the Group and by seeking to sell the Group’s products to wider geographical areas both directly and through distribution.
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COMMODITY PRICES RISKS
A significant amount of Versarien’s purchases are metallurgical powders. Consequently, exposure to movements in underlying commodity prices affects margins.
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Where possible we purchase from more than one source and manage our stock levels accordingly. |
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BREXIT
Versarien has relationships with the EU and the impact from Brexit could negatively affect trade regulations, people, contracts, IP and European Grants.
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The Company is monitoring events to determine what actions are necessary regarding its relationship with customers and the supply chain. Having Spanish operations, and the setting up of Versarien Europe SL which is a wholly owned subsidiary of Versarien PLC, ensures that any issues with our supply chain due to Brexit can be mitigated.
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COVID-19
The recent outbreak and global spread of Covid-19 may have a significant and prolonged impact on global economic conditions, and adversely impact our business.
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Whilst the Covid-19 pandemic brought risks and challenges, having a diverse product base enabled the Group to continue trading, and even expand its portfolio of graphene products. We continued to use the furlough scheme where appropriate, and benefited from a CBILS loan of £0.2 million.
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