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KR1 Plc (KR1)

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Friday 01 October, 2021

KR1 Plc

Revised Executive Service Arrangements

1 October 2021

KR1 PLC

(“KR1” or the “Company”)

Revised Executive Service Arrangements and Research Agreement

KR1 plc (KR1:AQSE), a leading digital asset investment company, is pleased to announce that the Company has revised its executive management arrangements and entered into an exclusive research service agreement with Reflexivity Research Limited (“Reflexivity”). This represents a more robust and aligned arrangement which reflects KR1’s commitment to enhanced corporate governance. 

Reflexivity is a recently formed company owned by George McDonaugh and Keld van Schreven, Managing Directors of KR1, and Janos Berghorn, the Company’s Head of Research (together, the “Executives”).

Reflexivity was established to become a research and consultancy firm focused on innovative decentralised technologies. As a standalone entity, Reflexivity is positioned to secure and retain industry-leading research talent with deep technical expertise and extensive personal networks within the digital asset ecosystem. 

The services of Reflexivity will be exclusively available to KR1 pursuant to the terms of an agreement entered into between KR1, Reflexivity and the Executives (the “Services Agreement”), for an initial term of seven years. Under the Services Agreement, Reflexivity has agreed to provide KR1 with the services of the Executives, who will continue to fulfil the same roles at KR1 as they currently do, with the same responsibilities, namely as Managing Directors, in the case of George McDonaugh and Keld van Schreven, and as Head of Research, in the case of Janos Berghorn. In addition, Reflexivity and the Executives have agreed that certain intellectual property which is currently owned by the Executives, and which relates to KR1 and the Company’s branding (including the Company’s domain name and various social media accounts) will be licensed to KR1, without charge, while the Services Agreement remains in force. The Services Agreement provides for Reflexivity to receive an annual fee equivalent to 1.9% of the Company’s Net Asset Value, if that Net Asset Value is below £250 million, and 1.7% of the Company’s Net Asset Value, if that Net Asset Value exceeds £250 million. All costs incurred by Reflexivity fulfilling its obligations under the Services Agreement, including the employment costs of the Executives, will be met by Reflexivity, not KR1. 

The Services Agreement also provides for Reflexivity as an entity, instead of the Executives individually, to participate in KR1’s existing Performance Incentive Scheme (the “Scheme”). Reflexivity’s participation will be on the same basis as previously enjoyed by the Executives up until 30 June 2021, after which the terms of the Scheme have been amended, effective from 1 July 2021, such that Reflexivity shall be entitled to receive an annual performance fee equivalent to 20% of any increase in the Company’s net asset value, above a previous high water mark, over a relevant period. Any performance fee awarded to Reflexivity under the revised arrangements will be satisfied entirely by the issue of ordinary shares in the Company (compared to only 80% awarded in ordinary under the current arrangements) with the issue price determined by the net asset value per Share at the end of a relevant period.

KR1’s Non-Executive Directors, Rhys Davies, Simon Nicol and Mona Elisa, believe that, as the Company matures in its operations, it is important to establish a robust and aligned relationship and that the new arrangements represent a sustainable and competitive agreement, securing the Executives and services of Reflexivity for the long term and allowing Reflexivity to expand its research activities without the overhead of being managed in a public vehicle. This will maximise the chances of continuing KR1’s success to date and aligns the interests of Reflexivity and the Executives’ future interests more closely with those of the Company’s shareholders and is therefore in the best interests of the Company and its shareholders.

Rhys Davies, Non-Executive Chairman of KR1 plc, commented: 

"These new arrangements mark a natural step in KR1’s evolution as we continue to grow and mature as a business, and reflect our commitment to enhancing our corporate governance. Reflexivity and the individuals involved are sending a strong signal as to the value they believe is embedded in KR1, while also demonstrating their long-term commitment to the company, which is firmly in the interest of our shareholders."

The Directors of KR1 plc accept responsibility for this announcement.

--ENDS--

For further information please contact:

KR1 PLC
George McDonaugh
Keld van Schreven
Simon Nicol
+44 (0)16 2467 6716

[email protected]
Peterhouse Capital Limited (AQSE Corporate Adviser)
Mark Anwyl
+44 (0)20 7469 0930
FTI Consulting LLP (PR Adviser)
Ed Berry
Laura Ewart
+44 (0)7711 387 085
[email protected]

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).


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