TIDMKR1
30 June 2022
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 2021.
Financial highlights
* Net assets of £185,030,165, +488.64% on FY20
* NAV per share of 122.68p as at 31 December 2021, +423.47% on FY20
* Income from digital assets of £20,959,934 +2,141.74% on FY20
* Total Profit of £143,743,931
Investment highlights
* Layer 1 (base-layer) blockchains: seed investment into Celestia (formerly
LazyLedger Labs), follow-on investment into Moonbeam
* Decentralised finance (DeFi): follow-on investment into Vega, early stage
investments into Exponent, Divergence and Interlay
* Infrastructure: seed-investment into Redstone, early-stage investments into
Automata and zCloak (formerly Starks Network)
* Polkadot and Kusama Parachain Auctions: major contributions to Moonbeam,
Acala and Astar
* Specialised fund subscriptions: Zee Prime II and Starry Night Capital
Strategic highlights
* New appointments to the Company's Board of Directors, including Rhys Davies
as Non-Executive Chairman, Mona Elisa as Non-Executive Director, and
(post-year end) Aeron Buchanan as Non-Executive Director, reflecting our
efforts to further enhance our corporate governance.
* Improved transparency and internal structures, including a new website with
enhanced Investors and Frequently Asked Questions sections, and the
establishment of a more robust and aligned long-term relationship between
the Company and the research team.
* Significant revenue stream from staking activities and Polkadot and Kusama
parachain auction rewards.
Outlook
* Although the current market sentiment may still prevail for some time, we
firmly believe that we will continue to see huge growth in the development
of the underlying technology.
* The current 'crypto winter' presents attractive opportunities for follow-on
investments in portfolio projects, opportunities in secondary markets and a
welcome adjustment of early-stage project valuations.
Detail on post-year end note regarding investment in Starry Night Capital
During the previous financial year, the Company subscribed to 5,000,000
securities designated as "Class Starry Night Shares of US$1.00 each for
November 2021" in Three Arrows Fund Ltd., which is managed by ThreeAC Ltd., a
member of the Three Arrows Capital group. On 27 June 2022, a notice of default
was issued by a subsidiary of Voyager Digital Ltd. to Three Arrows Capital for
default on a loan of 15,250 BTC and $350 million USDC. Further, on 29 June
2022, it was widely reported that a British Virgin Islands court ordered the
liquidation of Three Arrows Capital. The board of directors have decided to
take a conservative approach as to the valuation of KR1 plc's holding of 'Class
Starry Night Shares' in Three Arrows Fund Ltd. and have impaired the Company's
holding by 100% as at 31 December 2021 while continuing to monitor the
situation closely.
George McDonaugh and Keld van Schreven, Managing Directors of KR1 plc,
commented:
"2021 was a year of exceptional performance for KR1 in which we reported strong
growth in net assets under management and profit. We were excited to see and
participate in a strong influx of exciting, high quality and innovative
investment opportunities which have strengthened our portfolio. The year also
saw the continuation of the trend towards greater adoption of crypto and
decentralised technology, as well as growing retail and institutional interest
in the asset class.
Despite the current bear market for crypto, we believe that the interest in and
adoption of blockchain technology will continue and are firm believers in the
transformational opportunities that it will bring. As one of the first digital
asset investment firms, we have already experienced previous crypto winters,
and are well positioned to weather the current volatility. The current
circumstances present many attractive opportunities for investment, and we will
continue to seek out high quality projects in order to drive shareholder value
over the long term."
Chairman's Report
At 31 December 2021, the net asset value of KR1 plc ("the Company") was 122.68
pence per share as compared with 28.97 pence per share a year earlier. The net
assets of the Company at 31 December 2021 was £185,030,165, as compared with £
37,866,475 a year earlier. Moreover, the Company reported a profit for the year
of £143,743,931 (2020: £30,317,654).
The Company's investment team has, again in 2021, 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 2022
Managing Directors' Statement
2021 has been the best performing year in KR1 plc's history, bringing the
Company's net assets to £185,030,165 at the year-end (2020: £37,866,475). It
has also been one of the busiest years in terms of investments, in which the
Company was able to add a selection of impressive projects to the portfolio. In
parallel, the Company continued to strengthen its corporate governance, with
further additions to the board of directors as well as continuing to engage
with a broader set of professional service providers, with the results of much
of this work expected to come to fruition over the next year.
The past period has undoubtedly been a watershed period for crypto, with many
major technological advances and sustained heightened interest in the asset
class across mainstream media, institutional investors and, most certainly,
regulators. As demonstrated by the recent downturn, the crypto economy has once
again shown its volatile character, but the success of 2021 has placed KR1 plc
in a favourable position, and well prepared for a potentially lengthy period of
stagnant crypto markets. Despite the recent market turmoil, the Directors are
in no doubt that 2022 and the years to come will see the unstoppable growth of
this technology, some of which may be concealed under the shadows of market
uncertainty, drawing parallels to previous 'crypto winters'. It also seems
likely that there are going to be further high-risk projects or investors
finding that they may have rolled the dice one too many times. However, more
importantly, the Directors believe that projects and participants that have
firm structures and sustainable roadmaps in place will prove resilient to
market conditions. While the current market sentiment has impacted valuations,
the number of well-funded, innovative projects in the Company's portfolio is
stronger than it has ever been.
Bitcoin's recent record decline after topping out at just above £50,000 in
November 2021 has seen the sentiment change drastically and, as ever, with the
high correlation in crypto markets, many other crypto assets followed suit.
Understandably, this can be a difficult time to navigate for shareholders and,
if we judge the outlook on the basis of previous crypto winters, it may take
the market some time to return to a positive footing. As a Company, we will
endeavour to not only weather this latest storm, but continue to build on all
areas of the business, with the intention of emerging out of this period
stronger than ever.
KR1 plc's strong view is that decentralised technologies and 'Web3' are here to
stay and that these technologies will arise to form the backbone of a future
digital society and financial system. The Company will continue to build its
portfolio by seeking out the most attractive projects and opportunities that
decentralised technologies have to offer in order to drive shareholder value
over the long term. KR1 plc has always invested through the various market
cycles and the current circumstances present many attractive opportunities.
Some of the Company's 2021 investment highlights were further investments into
projects building 'base-layer' blockchains, decentralised finance products,
crypto infrastructure and privacy technologies. Another important activity of
the year was the Company's contributions to several Polkadot and Kusama
crowdloans, kicking off 'Dotsama' season alongside projects including Moonbeam,
Acala and many more. Our early exposure to investments such as Lido and the
emerging Polkadot ecosystem, combined with the positive market sentiment
towards crypto throughout 2021, led to significant growth of KR1 plc's balance
sheet.
Another component that has cemented itself firmly into KR1 plc's long-term
strategy is its revenue stream from staking activities, as well as from rewards
originating from contributions to Polkadot and Kusama parachain auctions. This
led to a total income from digital assets of £20,959,934 for 2021 (2020: £
978,639).
Just as 2021 saw an influx of investment opportunities, it also saw a growing
interest in the asset class among both retail and institutional investors,
demonstrated by the penetration of crypto assets into many of today's fintech
applications, brokerage accounts and large inflows of capital into funds and
financial products with crypto exposure. KR1 plc also had more investors
joining as shareholders, becoming one the most actively traded stocks on the
AQSE market with an increasing number of institutional investors and family
offices starting to participate.
KR1 plc remains at the very heart of the crypto ecosystem, fully focused and
taking advantage of the disruption that this technology will bring to society.
George McDonaugh
Keld van Schreven
Managing Director & Co-Founder Managing
Director & Co-Founder
30 June 2022
Statement of Comprehensive Income
For the year ended 31 December 2021
2021 202019
£ £
Revenue
Gain on disposal of intangible assets 20,758,540 2,994,034
Income from digital assets 20,959,934 978,639
Gain / (loss) on disposal of financial - (273,951)
assets
Direct costs (122,716) (34,649)
Gross profit 41,595,758 3,664,073
Administrative expenses (33,047,971) (4,693,647)
Share options 67,103 (74,998)
Movement in credit loss provision - 3,194
Operating profit/(loss) 8,614,890 (1,101,378)
Taxation on profit/(loss) - 78,497
Profit/(loss) after taxation 8,614,890 (1,022,881)
Other comprehensive income:
Movement in fair value of intangible 138,894,148 31,112,822
assets
Movement in fair value of financial
assets at fair value through profit and (3,765,107) 227,713
loss
Total other comprehensive income for the 135,129,041 31,340,535
year
Total comprehensive income attributable
to the equity holders of the Company 143,743,931 30,317,654
Earnings per share attributable to the
equity owners of the company (pence):
Basic earnings per share 106.39 23.20
Diluted (loss)/earnings per share 6.38 (0.78)
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 2021
2021
2020
£ £
Assets
Current assets
Intangible assets 207,786,430 41,073,202
Fixed asset investments - 100
Financial assets at fair value
through profit and loss 6,026,270 720,486
Cash and cash equivalents 3,488,421 276332,535
Trade and other receivables 103,305 31,034
Total current assets 217,404,426 42,157,357
Total assets 217,404,426 42,157,357
Equity and liabilities
Current liabilities
Trade and other payables 32,374,261 (4,290,882)
Total Assetscurrent liabilities 32,374,261 4,290,8827,473,823
Equity
Share capital 758,320 720,076
Share premium 6,505,061 3,056,443
Revaluation surplus 168,925,801 33,796,760
Option reserve 185,527 252,630
Profit and loss account 8,655,456 40,566
Total equity 185,030,165 37,866,475
Total equity and liabilities 217,404,426 7,235,95842,157,357
The notes contained in the Company's Annual Report form part of these financial
statements.
Statement of cash flows
For the year ended 31 December 2021
2021 2020
£ £
Cash flows from operating activities
Profit for the financial year 143,743,931 30,317,654
Adjustments for:
Movement in fair value of intangible assets (138,894,148) (31,112,822)
Gain on disposal of intangible assets (20,758,540) (2,994,034)
Loss on disposal of financial assets - 273,951
Movement in credit loss provision 100 (3,194)
Foreign exchange loss 17,354 (137,220)
Movement in fair value of financial assets 3,765,107 (227,713)
at fair value through profit and loss
Share option issue (67,103) 74,998
(12,193,299) (3,808,380)
(Increase)/decrease in debtors (72,271) (2,427)
Increase/(decrease) in creditors 28,083,379 4,053,017
28,011,108 4,050,590
Net cash inflow from operating activities 15,817,809 242,210
Cashflows from investing activities
Net sales/(purchases) of investments 4,422,383 765,557[CH1]
Net cash inflow from investing activities 4,422,383 765,557
Cashflows from financing activities
Proceeds from issue of ordinary shares 3,486,862 -
Net cash generated by financing activities 3,486,862 -
Net increase/(decrease) in cash 28,027,584 1,007,767
Cash and at the beginning of the year 332,535 279,373
Effect of exchange fluctuations on cash 17,458 8,845
Non-cash transactions (24,854,240) (963,450)
[CH2]
Cash and at 31 December 3,488,421 332,535
Represented by:
Cash at bank 3,163,061 292,192
Cash held on trading platforms 325,360 40,343
3,488,421 332,535
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
2022 and were signed on its behalf by:
George McDonaugh Keld van
Schreven
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 2021. 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)1624 630630
Keld van Schreven
Peterhouse Capital Limited (AQSE Corporate
Adviser) +44 (0)20 7469 0930
Mark Anwyl
FTI Consulting LLP (PR Adviser)
Laura Ewart +44 (0)7711 387 085
Gina Magnin KR1@fticonsulting.com
ENDS
Notes to Media
About KR1 plc
KR1 plc is a leading digital asset investment company supporting early-stage
decentralised and open source blockchain projects. Founded in 2016 and publicly
traded in London on the AQSE Growth Market (KR1:AQSE), KR1 has one of the
longest and most successful track records of investment in the digital assets
space by investing in decentralised platforms and protocols that are emerging
to form new financial and 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, 2022 11:57 ET (15:57 GMT)
Kr1 (LSE:0A9X)
Historical Stock Chart
From Apr 2024 to May 2024
Kr1 (LSE:0A9X)
Historical Stock Chart
From May 2023 to May 2024