KR1 plc Audited Final Results to 31 December 2021

 
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                             [phone] 
Keld van Schreven 
 
Peterhouse Capital Limited (AQSE Corporate 
Adviser)                                     [phone] 
Mark Anwyl 
 
FTI Consulting LLP (PR Adviser) 
Laura Ewart                                  [phone] 
Gina Magnin                                  [e-mail] 
 
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)