Paragraf, a Cambridge University spin-out that calls itself a world leader in graphene electronics, is being sued by former shareholders of the American technology firm Cardea over its 2023 takeover of the company.
In a 49-page lawsuit filed in Delaware, the shareholders say founder Simon Thomas, 49, and other executives misled them about Paragraf’s ability to make graphene electronic chips. They allege the conduct amounted to fraud and deceit on the sellers of Cardea stock, and accuse the company of operating on a “fake it until you make it” basis through intentional misrepresentations, half-truths and material omissions. Paragraf said it did not wish to comment on an ongoing case.
The claimants say they accepted Paragraf shares presented as worth £29.8 million, a figure they now call grossly exaggerated. They put the shares’ actual value at £5.4 million and want the takeover reversed, including the return of Cardea’s intellectual property, or damages. The case is unusual in that a British technology company bought an American one.
They allege that during talks in November 2022, Cardea’s then technology chief, Brett Goldsmith, was given a stage-managed tour of Paragraf’s British factory, told to conceal his identity, kept out of the cleanroom where chips were made and refused access to production records. They also allege a pattern of active concealment, including blocking due diligence on production facilities because of a supposed risk of patent-infringement exposure.
The lawsuit claims Paragraf rented a warehouse for a second, larger foundry, ostensibly to produce volumes of products it did not know how to produce, and employed a large commercial team to sell at a scale it could not genuinely expect to deliver. Shareholders say they were told the company could manufacture graphene devices on an industrial scale and expected to make one million chips a month by the end of 2023, rising to 10 million by the end of 2024. Forecast revenue was put at £6 million in 2023 and £52.2 million in 2024; the investors say revenue was £750,000 and £300,000. They argue Paragraf remained, in substance, an early-stage research-and-development operation and lacked the scalable fabrication capability it was marketing. They also accuse it of shutting down much of Cardea’s operation after the deal, despite claiming the US firm had more advanced manufacturing processes.
Paragraf was founded in 2018 by Thomas and fellow Cambridge academics. It has raised more than £100 million from taxpayers and international investors, including Abu Dhabi’s sovereign wealth fund, and this year launched subsidiaries in China and the UAE. Ministers have described it as one of the next generation of UK industry titans. Conservative MP Ben Obese-Jecty, whose Huntingdon constituency includes the headquarters, has urged the government to consider the technology for Britain’s armed forces. The latest accounts show 2025 revenue of £506,000 against an operating loss of £21 million.
Graphene, a single-layer sheet of carbon atoms in a hexagonal lattice, was discovered at Manchester University in 2004. Thomas has said the material will change the world.