TIDMKR1
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 31,112,822 2,044,588
assets
Movement in fair value of financial
assets at fair value through profit and 227,713 (1,079,667)
loss
Total other comprehensive income for the 31,340,535 964,921
year
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 +44 (0)16 2467 6716
Simon Nicol simon@KR1.io
Peterhouse Capital Limited (AQSE Corporate
Adviser) +44 (0)20 7469 0930
Mark Anwyl
Allie Feuerlein
Nominis Advisory Ltd (PR Adviser)
Angus Campbell pr@KR1.io
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).
END
(END) Dow Jones Newswires
June 30, 2021 11:49 ET (15:49 GMT)
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