Risks Specific to the Group

The following sets out some of the risks relating to the Group’s business. If any of the following risks are borne out in reality, the Group’s business, financial condition or results of operations could be seriously affected.


All the Group’s clients’ ICANN applications for new gTLDs that have completed initial evaluation have passed ICANN’s technical evaluation of the Group’s registry services, and the Group holds ISO9001 and ISO27001 certifications in relation to IT security and quality management. The businesses of both registries and registrars are subject to the legal environment and consensus policies, which may themselves be subject to change, which may affect business outcomes. Both the ICANN gTLD registry and registrar agreements have not yet been published in their final forms, which when published may impact on the business outcomes of the Group. Both ICANN and the Group’s clients could be subject to legal challenges which could impact on the launch schedule of new TLDs, with an impact to the Group’s business.


The market for domains owned by the Group or for which the Group provides registry services may not be as large as expected or the new TLDs may not generate the revenue levels anticipated by the Board. In either case and the Group’s revenues and hence profitability may suffer as a result.

IT Security

If the Group does not prevent security breaches, it may be exposed to lawsuits, lose customers, suffer harm to its reputation, and incur additional costs. Unauthorised access, computer viruses, accidents, employee error or malfeasance, intentional misconduct by computer “hackers”, and other disruptions can occur that could compromise the security of the Group’s infrastructure, possibly exposing confidential information to unauthorised access by third parties and leading to interruptions, delays or cessation of service to the Group’s customers. Techniques used to obtain unauthorised access to, or to sabotage, systems change frequently and generally are not recognised until launched against a target, so the Group may be unable to implement security measures in time.

IT Systems and Contracts

The Group has a complex network infrastructure comprising of a primary registry system and associated databases supported by failover secondary systems to ensure that critical registry functions are available to end users, registrars and other stakeholders that must have access to those functions in the event any circumstance arises that materially impacts the operation of the primary registry system. A number of the servers used by the Group are either rented, leased or provided virtually by one of three key suppliers. While the Group has contracts in place with all three key suppliers these provide little contractual certainty. The Group intends to continue to seek to maintain close relationships with these suppliers which the Directors believe should reduce the risk of supplier loss however, any loss of one or more of the key suppliers could harm the Group's reputation and financial position.

Reliance on Third Party Hardware

The Group relies on third-party hardware that may be difficult to replace or could cause errors or failures of its service, which could adversely affect the Group’s operating results or harm its reputation. The Group relies on hardware acquired from third parties in order to offer its services. This hardware may not continue to be available on commercially reasonable terms in quantities sufficient to meet the Group’s business needs, which could adversely affect its ability to generate revenue. Any errors or defects in third party hardware could result in errors or a failure of the Group’s service, which could harm its reputation and operating results. Indemnification from hardware providers, if any, would likely be insufficient to cover any damage to the Group’s business or its customers resulting from such hardware failure.

Future Strategy

The Group may fail to execute its four pronged expansion strategy and therefore not be able to generate its expected revenues. This could happen as a result of a number of factors both inside and outside the Group’s control including: the Group’s current clients failing to secure ownership of gTLDs investments in new gTLDs being unsuccessful, the Group’s current clients entering financial difficulties and demand for domain names not increasing as projected in the Group’s targeted developing countries.

Currency risk

The Group reports its revenues and costs in British Pounds Sterling, whilst some of these revenues and costs may arise in currencies other than this. Fluctuations in exchange rates may adversely affect the Group’s reported profits, make its overseas contracts relatively less valuable.

Dependence on key personnel

The Group has a small management team and the loss of any key individual or the inability to attract appropriate personnel could impact upon the Group’s future performance.

Additional Working Capital

The Group may need additional working capital as it implements its strategy. Such funds may not be available on acceptable terms or at all, and, without additional funds, the Group may not be able to effectively execute its growth strategy, take advantage of future opportunities, respond to competitive pressures or unanticipated requirements.

General Risk Factors

Economic, political, judicial, administrative, taxation or other regulatory matters

In addition to the impact of the downturn of the world’s economies, the Group may be adversely affected by other changes in economic, political, judicial, administrative, taxation or other regulatory or other unforeseen matters.

Forward looking Statements

All statements other than statements of historical fact included in this Document, including, without limitation, those regarding the Group’s financial position, business strategy, plans and objectives of management for future operations or statements relating to expectations in relation to Shareholder returns, dividends or any statements preceded by, followed by or that include the words “targets”, “estimates”, “envisages”, “believes”, “expects”, “aims”, “intends”, “plans”, “will”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof, are forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group’s control that could cause the actual results and performance to be materially different from future results and performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future.

These forward looking statements speak only as of the date of this Document. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in the Group’s expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.

Areas of Investment Risk

The prices of publicly quoted securities can be volatile. The price of securities is dependent upon a number of factors, some of which are general or market or sector specific and others that are specific to the Group.

The Ordinary Shares will not be listed on the Official List of the UK Listing Authority and although the Ordinary Shares will be traded on AIM, this should not be taken as implying that there will always be a liquid market in the Ordinary Shares. In addition, the market for shares in smaller public companies is less liquid than for larger public companies. Therefore an investment in the Ordinary Shares may be difficult to realise and the price of the Ordinary Shares may be subject to greater fluctuations than might otherwise be the case.

An investment in shares quoted on AIM may carry a higher risk than an investment in shares quoted on the Official List of the UK Listing Authority. AIM has been in existence since June 1995 but its future success and liquidity in the market for the Ordinary Shares cannot be guaranteed. Investors should be aware that the value of the Ordinary Shares may be volatile and may go down as well as up and investors may therefore not recover their original investment.

The price at which investors may dispose of their Ordinary Shares may be influenced by a number of factors, some of which may pertain to the Group and others which are extraneous. On any disposal of their Ordinary Shares, investors may realise less than the original amount invested.


The attention of potential investors is drawn to paragraph 13 of Part VI of this Document headed “Taxation”. The tax rules and their interpretation relating to an investment in the Group may change during its life.

Any change in the Group’s tax status or in taxation legislation or its interpretation could affect the value of the investments held in the Group or the Group’s ability to provide returns to Shareholders or alter the post- tax returns to Shareholders. Representations in this Document concerning the taxation of the Group and its investors are based upon current tax law and practice which is, in principle, subject to change.

Current and potential investors are strongly recommended to consult an independent financial adviser authorised under FSMA who specialises in investments of this nature before making any investment decision in respect of Ordinary Shares.

Prospective investors are strongly recommended to consult an investment adviser authorised under FSMA who specialises in investments of this nature before making any investment decision in respect of the Ordinary Shares.

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Investor Relations Contact

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Phone: +44 (0) 20 7398 7700

Fax: +44 (0) 20 7398 7799


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