Haydale Graphene Industr... Share Discussion Threads

[timbo003] 29/4/2014 09:10

The Directors of Haydale note the recent decline in the Company's share price and admit that they were too greedy when pricing the IPO. They now realise that they should have responded to feedback from potential placees and priced the IPO at a lower price/share to encourage more new investors and discourage less selling from existing investors.

The directors acknowledge that had they priced the IPO at a lower, more realistic share price, they would have raised the full £10M and the placing would not have been undersubscribed, furthermore, they would have had a more stable share price following the IPO. They now admit full responsibility for their actions and they have agreed to forfeit any bonuses due to them in the next 3 years as an act of attrition to make amends for this gross example of director avarice.

For further information please contact:

Haydale Graphene Industries plc 01269 842 946
John Knowles, Chairman
Ray Gibbs, Chief Executive Officer

Cairn Financial Advisers LLP (Nomad) 0207 148 7900
Tony Rawlinson
Paul Trendell

Hume Capital Securities plc (Broker) 0203 693 1470
Guy Peters
David Lawman

Hermes Financial PR 07889 153 628
Trevor Phillips

[edcrane] 29/4/2014 08:08

Response to press comment

The Directors of Haydale note the recent decline in the Company's share price
and the continuing press speculation concerning possible legal action against
Hume Capital Securities plc, the Company's broker. The Directors confirm that
they have no current intention of pursuing any such legal action.

[timbo003] 25/4/2014 11:56

Oh well, at sub 146p, that's the initial EIS tax benefit gone for IPO investors. With the benefit of hindsight, it would have been better to wait until now and buy unencumbered second hand shares at 140p or thereabouts, rather than new shares at 210p with the tax benefits.

I suspect one of the reasons for the fall has been share sales by ex-directors and ex-employees, who owned around 19% of the share capital prior to the recent fund raising (see slide 21 from the investor presentation slide set, dated March 2014).

The prospectus shows that most recent pre-ipo share issues (from June 2011 onwards) have been at 93p/share. Before June 2011 the issue price was 62p/share (both prices adjusted for bonus issue). Therefore there is still plenty of scope for pre-IPO shareholders (including ex-directors) to sell for a profit at the current price (circa 140p/share).

This section on page 38 of the prospectus is illuminating:

Competition risk

The Group may face significant competition from organisations which have developed competing products and which have greater capital resources than those of the Group and this might have an adverse impact on the Group. There is no assurance that the Group will be able to compete successfully in the marketplace in which it seeks to operate. The Directors believe that there is ample room in the market for competition should this arise and that any competition in fact enhances the value of the Company by validating its technology and market appeal.

Although all inventors of Haydale's patent applied for process have assigned their patent rights to the Company, any former directors or employees of the Group (one of whom, Mr Ian Walters, is listed on the patent applications as the inventor or co-inventor of these processes), or future leavers who are no longer bound by their confidentiality and non-compete restrictions could potentially, establish a competing business providing they do not infringe Haydale's process technology where patents are pending and providing they have access to sufficient capital and technical input in order to develop a reactor that is capable of functionalising nanoparticles.

The Directors believe that certain former director/employees may seek to compete directly or in directly with the Group. For example, one of the Company's former directors, Mr Ian Walters, was recently mentioned in an article in the Engineer Magazine published on 10 March 2014.

Whilst the Company is unable to verify the contents of the article, it states that "Ian Walters..... has since [founding Haydale] founded another [company called] Perpetuus Carbon Technologies, near Swansea. Perpetuus.... uses a top-down method to make GNPs. Powdered graphite.....is subjected to treatment with a plasma of high energy ions generated by UV light and a high voltage from a specific arrangement of electrodes."Whilst Haydale also uses a top-down plasma technology, its proprietary process would appear to differ significantly from that of Perpetuus Carbon Technologies, for example, in that it does not involve the use of UV light.

Additionally, since acquiring Haydale in 2010, major changes and improvements have been made to Haydale's equipment, process and procedures. The Directors believe that Haydale currently has first mover advantage in terms of business development including IP filings, commercialising the Group's activities and Admission.There can however be no assurance that others (including ex-directors and employees) have not developed or will not develop similar processing technology, duplicate any of the Group's technology or design around any patent applications held by the Group and that such competition may have a material adverse impact on the Company's business.

The Company is protected by post termination legal obligations owed by former directors/employees and the law generally and will, if necessary, enforce its legal rights in relation to patents, trade secrets and other confidential information.



A google search on Perpetuus, suggests that to be that they will compete directly with Haydale and they have a tie up with Gwent Group for some of their product line:





It would certainly be perfectly understandable for any former employees of Haydale, now working for Perpetuus, to use the IPO as an opportunity to dump their shares.

All things considered, I suspect that the shares will trade lower in the next few weeks, with the benefit of hindsight and a dig around, I believe the directors were too greedy (no doubt egged on by the nomad and broker who wanted to maximise their fees) and priced the IPO too high.

As a result, the IPO was undersubscribed and shareholders who subscribed for shares pre-IPO have understandably taken some profits. Sentiment cannot have been helped by an ex-director (and presumably other ex-employees) setting up in direct competition, they too might have been recent sellers of shares.

Pricing the IPO too high, is likely to come back and bite the directors in the derriere, they are now underfunded and they will have to raise further funds (next year?) against a back drop of a disappointing IPO and a share price way below the IPO price. The end result could well be that the directors may now face greater dilution, than they would have done, had they priced the IPO sensibly in the first place.

[grahamstown] 23/4/2014 12:47

Graphene: How to make the miracle material – using a kitchen blender - Science - News - The Independent

[timbo003] 22/4/2014 07:23

Article in today's Telegraph, Hume Capital seem like naughty boys, hope its all settled out of court.

[kickingking] 21/4/2014 23:43

Graphene is years away from being used and by the time this happens this company will have been shorted to nothing. Good luck to any shareholders.

[timbo003] 16/4/2014 08:08

malhashemi

Yes, I participated in the placing and picked up a few, I wouldn't have gone for it if it hadn't been for the EIS tax relief on offer.

With the EIS tax relief the effective entry price is 147p, with additional downside protection offered by income tax loss relief, should I sell for a less than 147p after 3 years. EIS also means no CGT liability should it turn out to be a multibagger.

I suspect they will probably need another fund raising after 1-2 years, as the IPO was around 30% undersubscribed, so it might be worth picking up just a few at some stage, if you wish to be eligible for any future EIS qualifying open offer.

[rob67] 16/4/2014 07:39

I think GRPH is a much better option.

[malhashemi] 16/4/2014 06:11

End of the markets bull run? Haydale is already below IPO price two days after listing. Anyone bought or looking to buy in this ?

[timbo003] 14/4/2014 07:18

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