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DJ KR1 plc Interim Report for the Half Year Ended 30 June 2019

 
TIDMKR1 
 
30 September 2019 
 
                                    KR1 Plc 
      ("KR1", the "Company "or, together with its subsidiary the "Group") 
 
              Interim Report for the Half Year Ended 30 June 2019 
 
The Group is pleased to present its interim report for the half year ended 30 
June 2019. 
 
Chief Executive Officer's statement 
 
During a period of significant price fluctuations in digital asset markets, we 
are pleased that the first half of 2019 has seen our portfolio appreciate in 
value. Seeing a significant change in market character since December 2018, 
with Bitcoin bouncing off a low of $3,200 USD/BTC and peaking at over $13,000 
USD/BTC some six months later, our investments have performed well during this 
volatile period. As ever, there is a strong correlation with Bitcoin across the 
crypto markets and we've seen encouraging results from our portfolio in recent 
months, posting a profit of GBP4,567,975 for the half-year. This result was 
largely driven by the successful launch of the Cosmos network, one of our most 
successful investments to date. As announced previously this year, a part of 
our strategy is to 'stake' our Cosmos ATOM to produce a generous monthly 
staking yield, recognized in the revenue of GBP116,788 over the three and a half 
months period since Cosmos' launch on 14 March 2019. We believe Cosmos, 
Polkadot, Dfinity and other Proof-of-Stake blockchains are going to yield 
healthy cash flows to the business going forward to support operations and keep 
our cash balance strong. Similar to yields in traditional financial markets, 
the yields from digital assets are, of course, subject to the underlying 
assets' market prices. There are also encouraging numbers of new projects 
launching in the Polkadot and Cosmos ecosystem and we are fully focused on 
seeking out new investment opportunities in these areas. As such, we are 
getting involved with Commonwealth and Edgeware, which are building on Polkadot 
and have previously made investments in Althea Mesh and the Foam Protocol, 
which will be placed in the wider Cosmos ecosystem. 
 
The most significant area of blockchain attention and growth in the last few 
months has been and continues to be the area of 'Decentralised Finance' (DeFi). 
DeFi is an umbrella term for a group of projects on Ethereum that allow for 
lending, credit, exchange, storage and insurance. The excitement in DeFi stems 
from the 'composability' of these projects, where each separate project can be 
deeply integrated with each other, allowing processes that would have taken 
many months in the legacy finance world to be reduced to just a few 
transactions on the blockchain. Given the risk and immaturity of these markets 
and products, the DeFi space provides yields and rates not available anywhere 
outside of the sector. We are proud to have backed a few major projects in the 
DeFi space, namely Nexus Mutual, which provides smart contract cover, Argent's 
brilliant award-winning smart contract wallet and the Melon Protocol, which 
ultimately sits in the very heart of the whole DeFi space. All those projects 
are live and thriving with strong growth and interest. 
 
The wider blockchain space continues to innovate and evolve at a striking pace 
and we are seeing a resurgence in interest in the concept of DAOs 
(decentralised autonomous organisations), and a clear push towards more 
privacy-focused technologies. Our interest in privacy is reflected in our 
recent investment into the Nym Project, which is considered a forerunner in 
terms of research and implementation in decentralising and securing privacy. 
 
Moving forward, we expect to see renewed growth in terms of new blockchain 
projects launching and widespread adoption as more and more people and 
institutions recognise the profound importance of blockchain-based financial, 
social and trustless ecosystems. At KR1 we believe that our unique portfolio 
and reputation in the market positions us strongly to drive investor returns in 
this new cycle of the market. 
 
George McDonaugh CEO 
Date: 30 September 2019 
 
Group Statement of Comprehensive Income 
 
                                   6 months to 6 months to 12 months to 
                                       30 June     30 June  31 December 
                                          2019        2018         2018 
 
                                     Unaudited   Unaudited      Audited 
                                           GBP         GBP          GBP 
 
Income 
 
Unrealised profit/(loss)             4,292,325 (8,099,865) (12,075,829) 
Realised profit                        580,320   1,118,846    2,586,337 
Staking yields                         116,788           -            - 
Advisory fees                           19,036           -            - 
 
Gross profit (loss)                  5,008,469 (6,981,019)  (9,489,492) 
 
Administrative expenses              (386,313)   (380,190)  (1,368,420) 
 
Profit/(loss) on ordinary            4,622,156 (7,361,209) (10,857,912) 
activities before 
taxation 
 
Taxation                              (54,181)   1,472,242    2,519,393 
 
Profit/(loss) on ordinary            4,567,975 (5,888,967)  (8,338,519) 
activities after taxation 
 
Consolidated profit/                7.01 pence      (5.33) (6.95) pence 
(loss) per share                                     pence 
 
Group Statement of Financial Position 
 
                                    At 30 June    At 30 June  At 31 December 
                                          2019          2018            2018 
 
                                     Unaudited     Unaudited         Audited 
                                           GBP           GBP             GBP 
 
Current assets 
Debtors                                 52,290         2,040         819,247 
Investments                          3,598,106     7,514,839       3,958,177 
 
Digital currencies                   5,332,059     1,176,006       1,042,896 
 
Cash held on trading                   506,720     1,057,350         618,150 
platforms 
 
Cash equivalents                     1,116,503             -          99,320 
 
Cash at bank                           572,807        58,424          87,387 
 
                                    11,178,485     9,808,659       6,625,177 
 
Creditors 
Amounts falling due within           (464,574)   (2,135,282)       (508,172) 
one year 
 
Net current assets                  10,713,911     7,673,377       6,117,005 
 
Creditors 
Amounts falling due over one                 -             -               - 
year 
 
Total assets less current           10,713,911     7,673,377       6,117,005 
liabilities 
 
 
Capital and reserves 
Called up share capital                726,076       685,993         718,843 
Share premium account                3,056,444     2,163,649       3,034,746 
Profit and loss account              6,931,391     4,823,735       2,363,416 
 
Equity shareholders' funds          10,713,911     7,673,377       6,117,005 
 
 
 
Consolidated Net Asset Value        8.20 pence    6.95 pence      4.82 pence 
per share 
 
Interim report notes 
 
1.   Interim report 
 
The information relates to the 6-month period from 1 January to 30 June 2019. 
 
The interim report was approved by the Directors on 30 September 2019. 
 
The interim report has been reviewed by the group's auditors but has not been 
audited. 
 
2.   Basis of accounting 
 
a.            While the financial information included in this interim 
financial report has been prepared in accordance with the recognition and 
measurement criteria of Financial Reporting Standard 102 - 'The Financial 
Reporting Standard applicable in the United Kingdom and Republic of Ireland' 
('FRS 102'), this interim financial information does not itself contain 
sufficient information to comply fully with FRS 102. 
 
b.            These interim financial statements are the financial statements 
of the Group. 
 
c.            The financial statements are prepared under the historical cost 
convention except for the modification to a fair value basis for certain 
financial instruments as specified in the accounting policies below and are in 
accordance with applicable accounting standards. 
 
d.            These interim financial statements consolidate the financial 
statements of the Company and its subsidiary KRX Limited. 
 
e.            Investments 
 
i.      Investments are held as current asset trade investments and are valued 
at the lower of cost and net realisable value.  Foreign denomination loans are 
translated into sterling at the rate of exchange ruling at the balance sheet 
date.  For those investments listed on a recognised market, net realisable 
value is taken as mid-market price. Where the directors consider the market 
price of a company is likely to irreversibly fall, additional write downs in 
valuation to below mid-market price are made. 
 
ii.     The net realisable value of certain investments is not readily 
determinable by reference to a quoted market price. The directors have 
therefore made their own assessment of the net realisable value and adjusted 
the carrying value of the investment where it is considered less than cost. 
This estimate requires estimation techniques, which are reliant upon their 
experience and expertise. 
 
iii.    The Group accounts for digital currencies, which it considers to be an 
operating asset, at their initial cost and subsequently revalues the carrying 
amounts of the digital currencies held at each reporting date based on their 
current fair value using rates obtained from various exchanges, including Oanda 
and Coinmarket. The rates obtained from these sources represent a generally 
well recognised quote price in an active market, which market and database is 
accessible to the Company on an ongoing basis. Digital currencies which have 
not undergone their ICO (initial coin offering) at the reporting date are 
valued at cost and the directors have verified that this is in line with the 
opening prices at ICO post period end. The changes in fair value are recognised 

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September 30, 2019 09:01 ET (13:01 GMT)

DJ KR1 plc Interim Report for the Half Year Ended 30 -2-

in the Group's Statement of Comprehensive Income. 
 
f. The Group will report again for the full year to 31 December 2019. 
 
The Directors of KR1 Plc accept responsibility for this announcement. 
 
                                   --ENDS-- 
 
Contact Details: 
 
Stephen Corran 
KR1 Plc: 
Tel : 01624 676716 
Email : scorran@bridgewaters.co.im 
 
 
NEX Corporate Adviser 
Peterhouse Capital Limited 
Mark Anwyl 
+44 (0)20 7469 0930 
 
Market Abuse Regulation (MAR) Disclosure 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulation 
(EU) No. 596/2014. Upon the publication of this announcement via a Regulatory 
Information Service, this inside information is now considered to be in the 
public domain. 
 
 
 
END 
 

(END) Dow Jones Newswires

September 30, 2019 09:01 ET (13:01 GMT)