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KR1 plc - Audited Final Results

PR Newswire

London, June 30

30 June 2021

KR1 Plc

("KR1" or the "Company")

Audited Final Results

We are pleased to present the audited final results of the Company for the twelve months ended 31 December 2020.

Chairman’s Report

At 31 December 2020, the net asset value of KR1 plc (“the Company”) was 28.97 pence per share as compared with 5.72 pence per share a year earlier, an increase of 507% in the year. The net asset value of the Company at 31 December 2020 was £37,866,475, as compared with £7,473,823 a year earlier. Moreover, the Company reported a profit for the year of £30,317,654 (2019: £1,156,256).

The Company’s Investment Team has, again in 2020, delivered to shareholders truly exceptional performance, further extending their outstanding track record of shareholder returns since the Company’s establishment in 2016.

On behalf of the Board of Directors, I thank all Shareholders for their support.

Sincerely yours,

**Rhys Davies

Chairman

30 June 2021**

Managing Directors’ Report

From KR1’s inception in 2016, the Company has continuously pioneered investing into digital assets as an emerging asset class with the mission to be Europe’s premium blue chip company for exposure to crypto in the public markets. Such a mission necessitates a long term view and requires building the Company in a sustainable way with a focus on making the most of the cyclical and volatile nature of the crypto markets to grow the quality of the Company’s underlying assets in the portfolio whatever the ‘weather’. The recent financial year was no exception to that with the Company achieving excellent returns on investments in several projects, growing the net assets on the balance sheet substantially to £37,866,475 at the year end (2019: £7,473,823) and strengthening the Company’s staking revenue stream with multiple ‘Proof-of-Stake’ enabled assets, in particular Polkadot (“DOT”). The Company has come a long way since its first investments in 2016, has achieved many milestones, steadily grown the shareholder and assets base and also built an exceptional reputation in the crypto ecosystem.

The past year saw the Company invest in many world class teams building exciting, innovative decentralised projects against a backdrop of extreme volatility events, both to the down- as well as up-side. Some of them have already come to market and seen incredible traction post year end, such as Swarm and Lido and projects such as Acala, Moonbeam, Plasm (recently rebranded to Astar) and HydraDX being highly regarded in the Polkadot and Kusama communities.

Digital asset markets moved in an encouraging way, picking up towards the end of 2020 after facing extreme turmoil in the early stages of the pandemic, which left the Company's operations and portfolio unaffected. Throughout the year, Bitcoin (“BTC”) moved from fluctuating around the US$10,000 mark to a year end close just shy of US$30,000 whilst Ethereum (“ETH”) saw a strong and steady increase from just over US$130 at the beginning of the year towards around US$750 by year end. One of the most influential drivers of the Company’s recent performance, Polkadot (“DOT”) had not yet started to gain full momentum by year end and was trading in the range of US$5 to US$7 while similarly, Cosmos (“ATOM”) was trading fairly flat around US$6 at that time. Post year end, there has been a staggering upsurge and even with the recent retracement it is a testament to the disruptive potential this technology carries for the global economy as we know it and illustrates the resilience of decentralised protocols confronted by the market panic from the pandemic. With digital assets reinforcing their wider ‘macro’ appeal in light of virtually unlimited quantitative easing across continents, the once fabled institutional money began to enter the space and has since been heavily allocating to, both, Bitcoin and Ethereum and, on occasions, ventured further out the risk curve. The recent pullbacks are, once again, prime examples that the crypto markets are not for the faint hearted, with narratives around bans in China reappearing time and time again and Elon Musk's partial, albeit confusing, reversal on his Bitcoin advocacy in light of the well-known ‘Proof-of-Work’ energy consumption.

More in-depth metrics also provide a very positive backdrop to the current market. Stablecoin issuance exceeded US$100 billion and while for many market participants this space is still very much in its infancy, one can only wonder how a global scale adoption of stablecoins or similar solutions could look in a few years’ time. Over the past year, Ethereum has seen incredible activity in on-chain transaction volume and transaction fees, which is a huge achievement for Ethereum and decentralised finance (“DeFi”) ecosystem. The utility and impact of many DeFi protocols is staggering, generating jaw dropping fees with one such example Uniswap leading the charge, generating trade volume and fees that exceeded volumes on some of the most prominent centralised exchanges. In the Ethereum ecosystem we backed MetaCartel Venture DAO, Lido and Swarm, which are all key projects supporting and benefiting from Ethereum’s growth over the past time period.

Focusing on other blockchains in the portfolio, it is our firm belief that, in time, further innovative decentralised networks such as Polkadot or Cosmos are going to become as important as Ethereum for the blockchain space and we have continued to support their respective ecosystems with several investments. Progress has been very strong in these projects with the teams hitting their milestones and deliverables on the roadmap. As a recent example, Acala has partnered with a FinTech company ‘Current’, integrating Acala’s DeFi services to more than 3 million users into their core banking product. We anticipate developments like these as the start of a growing ‘crypto crossover’ trend into mainstream financial services.

Polkadot’s sister chain Kusama has also recently hit a major milestone with the crowdloan and parachain systems kicking off as planned and allowing the application layer to form. With Polkadot soon to follow suit in the coming months, we expect to continue seeing an excellent pipeline of investment opportunities in this area and also great opportunities emerging from, both, Kusama’s and Polkadot’s parachain auctions.

Apart from the widely covered Coinbase direct listing, the ‘Netscape moment for crypto markets’, another recent impactful event in the Company’s portfolio was Dfinity’s (“ICP”) mainnet launching and a release of its tokens on the market, followed by some controversies around its market dynamics, which for the time being might overshadow the potential of the technology.

We believe the emerging digital asset ecosystem remains an investment opportunity without parallel, a revolution in two parts: Firstly, a new financial system being built out and secondly, decentralised technologies forming the base layer for a new and better internet. Much of the innovation inherent in the breakthrough that is the invention of digital scarcity is still to be uncovered. When Ethereum found its first few blocks in 2015 only few could possibly imagine how impactful composable decentralised finance services would get, which now are a core feature of the space.

As proven by our long-standing successful track record, we have navigated the cyclical crypto markets, continuously invested and actively managed a growing portfolio of assets. We have also built a sustainable revenue stream, alleviating the pressure to sell core investment assets for operations. All of this gives us the resilience we need for generating long term shareholder value and success into the future and enables us to be the premium choice in digital assets for public markets investors.

George McDonaugh and Keld Van Schreven, KR1

Managing Directors

Date: 30 June 2021

Statement of Comprehensive Income

For the year ended 31 December 2020


	2020	2019 Note 24
	£	£
Revenue
Gain on disposal of intangible assets	2,994,034	693,665
Investment income	978,639	241,633
Loss on disposal of financial assets	(273,951)	-
Advisory fees	-	180,748

Direct costs	(34,649)	(11,123)
Gross profit	3,664,073	1,104,923

Administrative expenses	(4,693,647)	(679,712)
Share options	(74,998)	(177,632)
Movement in credit loss provision	3,194	(32,466)
Operating (loss)/profit	(1,101,378)	215,113

Taxation on loss	78,497	(23,778)

(Loss)/profit after taxation	(1,022,881)	191,335

Other comprehensive income:
Movement in fair value of intangible assets	31,112,822	2,044,588
Movement in fair value of financial assets at fair value through profit and loss	227,713	(1,079,667)


Total other comprehensive income for the year	31,340,535	964,921

Total comprehensive income attributable to the equity holders of the Company	30,317,654	1,156,256


Earnings per share attributable to the equity owners of the company (pence):
Basic earnings per share	23.20	0.88
Diluted (loss)/earnings per share	(0.78)	0.15

The notes contained in the Company’s Annual Report form part of these financial statements.

Statement of Financial Position

For the year ended 31 December 2020


	2020	2019	1 January 2019
	£	£	£
Assets
Current assets
Intangible assets	41,073,202	6,577,037	3,202,487
Fixed asset investments	100	100	100
Financial assets at fair value through profit and loss	720,486	826,571	1,897,806
Cash and cash equivalents	332,535	279,373	705,537
Trade and other receivables	31,034	28,607	819,247
Total current assets	42,157,357	7,711,688	6,625,177

Total assets	42,157,357	7,711,688	6,625,177
Equity and liabilities Current liabilities
Trade and other payables	4,290,882	237,865	508,172
Net current liabilities	4,290,882	237,865	508,172


Equity
Share capital	720,076	720,076	718,843
Share premium	3,056,443	3,056,443	3,034,746
Revaluation surplus	33,796,760	1,298,868	661,053
Option reserve	252,630	177,632	-
Profit and loss account	40,566	2,220,804	1,702,005
Total equity	37,866,475	7,473,823	6,117,005

Total equity and liabilities	42,157,357	7,711,688	6,625,177

These are the Company’s first financial statements prepared in accordance with IFRSs. The accounting policies set out in the Company’s Annual Report have been applied in preparing the financial statements for the year ended 31 December 2020, the comparative information presented in these financial statements for the year ended 31 December 2019 and in the preparation of an opening IFRS statement of financial position at 1 January 2019 (the Company’s date of transition). In preparing its opening IFRS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with FRS102 (previous GAAP). An explanation of how the transition from previous GAAP to IFRSs has affected the Company’s financial position, financial performance and cash flows is set out in the Company’s Annual Report.

The notes contained in the Company’s Annual Report form part of these financial statements.

The financial statements were approved by the Board of Directors on 30 June 2021 and were signed on its behalf by:

George McDonaugh Simon Nicol

Director Director

The financial information set out in this announcement does not constitute statutory accounts. This financial information has been extracted from the audited full accounts of the Company for the year ended 31 December 2020. The Company does not declare a dividend for the period.

The full Annual Report of the Company will be available on the Company’s website: www.KR1.io.

The Directors of the Company accept responsibility for the contents of this announcement,

For further information please contact:


KR1 PLC George McDonaugh Simon Nicol	+44 (0)16 2467 6716 [email protected]

Peterhouse Capital Limited (AQSE Corporate Adviser) Mark Anwyl	+44 (0)20 7469 0930
Allie Feuerlein
Nominis Advisory Ltd (PR Adviser) Angus Campbell	[email protected]

ENDS

Notes to Media

About KR1 plc

KR1 is a leading digital asset investment company supporting early-stage decentralised and open source blockchain and DeFi projects. Founded in 2016 and publicly traded in London on the APX segment of the AQSE Growth Market (KR1:AQSE), KR1 has built a notable reputation for generating significant returns by investing in many key projects that are designed to power the decentralised platforms and protocols that are emerging to form new internet infrastructures.

www.KR1.io

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation EU 596/2014 as it forms part of retained EU law (as defined in the European Union (Withdrawal) Act 2018).