Managing Directors' and Chairman's Reports for the Half Year 2025

The first half of 2025 marked a decisive phase of structural consolidation and regulatory advancement across the digital asset industry, underscored by two landmark developments in the United States: the passage of the Genius Act, which establishes a formal regulatory framework for dollar-backed stablecoins and the issuance of an executive order enabling a path towards crypto allocations within 401(k) retirement plans. In the UK, the Financial Conduct Authority followed suit by easing retail access to Crypto Exchange Traded Notes, reversing an earlier ban. These advances offer continued validation of KR1 plc’s long-standing thesis around public market exposure to digital assets and the decentralised ecosystem more broadly.

KR1 plc (the “Company”) generated £2.9 million in income from digital assets during the first half of 2025, with 98.6% attributable to staking income. This outcome is a direct result of the Company’s high-conviction allocation strategy towards proof-of-stake blockchains such as Ethereum, Polkadot and Celestia. The Company’s ongoing staking income remained resilient amid a relatively stagnant market in the innovation sector of the digital asset economy. These market dynamics reflect the Company’s strategic shift over the past years towards focusing on income through its staking activities and fewer but more selective early-stage investments (which often directly relate to staking activities).

In line with this longer-term commercial strategy, the Company is evaluating and has advanced plans to operate its own staking infrastructure through the launch of dedicated validator nodes on major Proof-of-Stake networks, including Ethereum, Polkadot and Celestia. Subject to final agreements, initial deployment is intended to complement existing third-party delegations and we will communicate further progress on this through a public announcement in due course.

As mentioned in previous Managing Directors’ Reports, alongside the broader strategic shift for the Company to expand and advance KR1 plc’s role in staking activities on leading Proof-of-Stake blockchains, the Board of Directors has taken steps over the past four years to position the Company for a more senior public listing.

Following extensive and constructive engagement and dialogue with the Financial Conduct Authority, we are pleased to report that the Company has made significant progress towards admission of the Company’s shares to the Equity Shares (Commercial Companies) segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange. As Managing Directors, we are confident the Company is now ready for a senior listing and, together with the Board, believe this represents a significant milestone in the Company’s development and will strengthen KR1 plc’s position in the London public markets as well as the Company’s roadmap and strategy over the long-term. A separate announcement on this matter will be released shortly. The direct costs associated with this process are itemised in the Notes to the Interim Financial Statements and will also be reflected separately in the Company’s annual results.

Several core networks within the Company’s holdings delivered meaningful milestones in the first half of the year. Ethereum continues to advance technically, with the successful deployment of the Pectra upgrade, which brings meaningful enhancements to scalability, developer tooling and overall user experience. Beyond protocol improvements, Ethereum’s dominant share of the roughly $250bn stablecoin market (as at June 2025) is reinforcing institutional engagement and driving market sentiment. We expect this dynamic to further catalyse attention and capital flows into adjacent innovation and growth areas of the market.

Polkadot continues its progress replacing its parachain architecture with JAM, a ‘trustless supercomputer’ that offers better composability and execution through the Polkadot Virtual Machine. This technical progress coincides with the return of Polkadot’s founder Gavin Wood (previously also co-founder of Ethereum) as CEO at Parity Technologies, alongside the launch of Hydration’s (formerly HydraDX’s) Hollar, a decentralised, USD-pegged stablecoin positioned as Polkadot’s native liquidity layer.

Celestia mainnet traction has grown significantly, with modularity becoming a leading design philosophy across emerging Layer 2 ecosystems. As of 30 June 2025, nearly 2.9 TB of data has been published on-chain, and over 56 rollups, including 37 on mainnet, are leveraging Celestia’s modular data-availability architecture.

We enter the second half of the year with continued conviction in the long-term trajectory of decentralised infrastructure. The institutionalisation of Ethereum, accelerating momentum in modular and interoperable network design and the rise of the staking economy, including early traction in Bitcoin-native staking protocols. All these indicators signal the maturation of decentralised networks in global capital markets. Regulatory clarity is improving, particularly following recent shifts in the United States and we await the introduction of the UK’s comprehensive digital asset regime from the FCA, anticipated in 2026. While broader macroeconomic conditions remain complex with central banks navigating a confluence of domestic and geopolitical pressures, we remain cautiously optimistic. Recent institutional inflows are challenging market sentiment relative to previous cycles and may signal a more durable integration of digital assets into the global financial system.

We would like to thank our shareholders for their continued support and conviction in our mission, as we work to reinforce KR1 plc’s position as the leading provider of credible, institutional-grade digital asset exposure on the London markets.

George McDonaugh and Keld van Schreven

Managing Directors & Co-Founders of KR1 plc

We are pleased to present the Unaudited Interim Report and Financial Statements for the half year ended 30 June 2025.

As mentioned in the previous Chairman’s Report as part of the Annual Results 2024, over the past years, the Company’s business model has evolved to that of a broader digital asset company focused on decentralised networks and, in particular, generating income from staking activities on proof-of-stake networks.

Since joining the Company in late 2020, I and the other members of the Company’s Board of Directors have taken steps to position the Company for a more senior public listing. Following extensive and constructive engagement and dialogue with the Financial Conduct Authority, we are pleased to report that the Company has made significant progress towards admission of the Company’s shares to the Equity Shares (Commercial Companies) segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange.

As the Board of Directors, we believe this represents a significant milestone in the Company’s development and will strengthen KR1 plc’s position in the London public markets as well as the Company’s roadmap and strategy over the long-term. A separate announcement on this matter will be released shortly.

For the half year ended 30 June 2025, KR1 plc generated £2,891,264 in income from staking activities as compared with £8,502,716 for corresponding half year 2024. The income from these staking activities represented 98.6% of the Company’s income from digital assets in 2025 as compared with 97.5% in the corresponding half year 2024.

Further, as at 30 June 2025, the net asset value of KR1 plc was 40.39 pence per share as compared with 78.76 pence per share as at 31 December 2024 and the net asset value of the Company was £71,490,802, as compared with £139,402,341 as at 31 December 2024.

In total, the Company reported a loss for the half year of £67,911,539 (HY2024 loss: £49,486,508).

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

Rhys Davies

Chairman of KR1 plc

Excerpts taken from the half year results of KR1 plc for the six months ended 30 June 2025, available as an announcement on the Company’s website.