LIvingstone - Whitepaper

The Greenest White Paper In The World Presenting the Livingstone Smart Food Business Solution for sustainable profitable high-tech horticulture

20 August 2018

Important Notice This White Paper is provided by Livingstone Greentec AG1 (“Livingstone”) for informational purposes only. Nothing in this White Paper shall be construed as an offer to sell or buy securities in any jurisdiction, or as a solicitation for investment, or as investment advice. This White Paper does not regulate any sale and purchase of Livingstone’s LIVIT tokens (as referred to in this White Paper). The purchase of LIVIT tokens is subject to the Token Sale Terms which, once available, will be published on the www.livingstone-greentec.com website.

This White Paper is not to be construed as a prospectus under the applicable law of any jurisdiction. The Terms of Token Sale (including its annexes) shall be exclusively binding.

Due to the retrospective nature of regulatory action or guidance, we make no guarantees regarding the legality of the Livingstone’s token launch (ITO, or Initial Token Offering) in any given jurisdiction. We must operate in accordance with the laws of relevant jurisdictions. As such, LIVIT tokens may not be immediately available in certain countries. LIVIT tokens are non-refundable and are not securities according to current Swiss law. They do not represent or confer any ownership right and do not entail a conversion right or other right, stake, share or security, or any equivalent right of participation in Livingstone Greentec AG other than the rights mentioned in the Terms of Token Sale. No promises of future performance or value are or will be made.

This White Paper describes Livingstone’s current vision, including its project-based subsidiaries in various countries. While we intend to realise our vision, please recognise that it is dependent on a number of factors and subject to risks (see Chapter 9 for an additional detailed list of risks). We do not guarantee or warrant any of the statements in this White Paper as they are based on our current beliefs, expectations and assumptions, in respect of which there can be no assurance due to various anticipated and unanticipated events that may occur.

This White Paper may be updated or altered, with the latest version of the White Paper prevailing over previous versions. We undertake no obligation to give any notice of this fact or the content of any changes. The latest version of the White Paper is available in English at the www.livingstone-greentec.com website.

While we make every effort to ensure that all information provided in the White Paper is accurate and up to date at the time each version is disseminated, the proposed White Paper is no alternative to obtaining an independent third-party opinion.

Blockchain, cryptocurrencies and other aspects of the technology used for this project are in their infancy and will be subject to many challenges, competition and a changing environment. We aim to update our community as things grow and change, but we undertake no obligation to do so.

1

in the process of being incorporated

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To the fullest extent permitted by any applicable law in any jurisdiction, Livingstone Greentec AG disclaims all liability towards the reader and all others in respect of the content of this White Paper, whether under any theory of tort, contract or otherwise, or in respect of direct, indirect, consequential, special, punitive or similar damages. Persons who intend to purchase Livingstone’s cryptographic LIVIT tokens set out in the White Paper should seek the advice of independent experts before committing to any action.

Table of Contents

Message from the Founders .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 4

1.

Executive Summary.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 6

2.

Horticulture Market Assessment.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 10

2.1 Total Market Size.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 11 2.2 Market Challenges Addressed by Livingstone.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 12 3.

Livingstone Horticulture Technology.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 16

3.1 GrowLab .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 16 3.2 FoodHub.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 18 3.3 IoT and Blockchain Applications.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 19 3.4 Key Benefits and Sustainable Development Impact .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 23 4.

Livingstone Go-To-Market Strategy.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 26

5. Roadmap .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 27 6.

Company Profile.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 28

6.1 History and Current Status.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 28 6.2 Corporate Structure.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 28 6.3 Management Team .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 29 6.4 Advisors .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 32 7.

Token Features and Offering.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 34

7.1

The Livingstone LIVIT Token Model.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 34

7.2 Token Allocation .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 36 7.3 ITO Process .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 37 7.4 Buying Procedure and Minting of LIVIT Tokens.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 38 7.5 Use of ITO Proceeds .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 39 8. Outlook.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..40 9. Risks .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 41 10. Annex.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 42

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Message From The Founders “Enabling the production of affordable and healthy food grown in a decentralised manner, using minimum resources”

is the motto and mission that we - Meindert Don and Stef Schreuder, founders of Livingstone Greentec AG2 in Switzerland – live by.

As experienced serial entrepreneurs, engineers and

We both have spent over 40 years setting up and

adventurers, we love turning our ideas into reality by

nurturing several business ventures in the horticulture,

creating viable and highly sustainable businesses to

renewable energy and IT-software industries. For the

address the challenges our world is facing.

past 10 years, we have focused on the implementation of new high-tech projects in the agri-food sector, working with an outstanding team of engineers, scientists, economists and doers.

What’s at stake The problem that our Livingstone Smart Food Business

in peri-urban areas, which will produce healthy and

Solution seeks to address is monumental: how to feed

affordable food in a decentralised and ecologically

the world in the future. By 2050, the global population

sustainable manner.

is expected to reach 10 billion. Roughly 70% will be living in urban areas and many will be displaced by

Despite its small size, our native country – the

wars and natural disasters. World food production

Netherlands – has been one of the world’s leading

will have to almost double, but how can this be done

food producers for decades. Home of the world’s top

without completely destroying our environment?

agricultural research institution Wageningen University3, the country has succeeded in achieving the highest

Livingstone believes that we need to create extremely

yields in agricultural production, hence becoming the

efficient high-tech “food growing factories” located

trailblazer in modern farming technologies.

In the process of being incorporated.

This Dutch university is located at the nodal point of “Food Valley”, a cluster of agricultural start-ups and experimental farms. In a manner analogous to California’s Silicon Valley, Food Valley sees Wageningen as emulating the role of Stanford University in merging academia and entrepreneurship (source: National Geographic Magazine, “This tiny country feeds the world”).

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3

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Higher crop yields are essentially driven by two

very difficult, as the input of theory and accumulated

factors: 1) technology and 2) education of farmers.

practical experience needed to do so are not

Exporting technology has proven to be relatively

available in many countries.

easy. Exporting knowledge, on the other hand, is

Our solution We propose the innovative Livingstone Smart Food

For our fundraising campaign, we have put in place

Business Solution that combines the latest research

a secure and transparent ITO deal structure which

in plant propagation and growing techniques with

protects Livingstone’s token holders at every stage

state-of-the-art equipment and other engineering

of the company’s development and during each

infrastructure. By integrating advanced information

project’s

and communication technologies, such as Internet-of-

achieve its strategic goals and remain fully compliant

Things (IoT) and blockchain, we can further improve

with applicable regulations.

agricultural

operations

and

transform

the

lifetime,

while

allowing

Livingstone

to

food

supply industry in its entirety. Using ultra-modern

We hope that your reading of our Greenest White Paper

greenhouses, our GrowLab and FoodHub systems

in the World will inspire you to participate in our impact

make it possible to grow top-quality non-genetically

business venture. With your support, we will be able

manipulated food better and faster in any climate,

to implement our vision of reinventing the food supply

using a minimal amount of space, energy and water.

industry and of leading our communities towards a shared prosperity, safeguarded environment and a

We solve the knowledge gap problem by reducing

better future.

the amount of knowledge required to operate a modern horticultural facility. To ensure successful long-term production, we involve local universities, providing them with our comprehensive training courses, offering internships and granting access to our laboratories, where we could perform joint R&D projects (e.g. breeding of new plant species). This promotes regional innovation as well as knowledge transfer to future generations.

Truly yours,

Meindert Don

Stef Schreuder

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1

Executive Summary

Company Livingstone Greentec AG (“Livingstone”) is a socially responsible Swiss-based provider of high-tech integrated food production systems. The core management team consists of seasoned experts in the fields of biology, ecology, engineering, management and finance. Additional support is provided by the horticulture specialists of the world’s top agricultural think tank, Wageningen University and Research, as well as by experienced professionals in blockchain, IoT and other software systems. We have also built strategic alliances with business partners who offer in-depth industry experience and cutting-edge technologies.

Technology Livingstone’s technological solutions rely on a unique combination of advanced plant propagation and growing techniques, as well as state-of-the-art equipment and software systems. Taken together, these solutions allow for the production of the best quality vegetables, soft fruit, plants, and even trees much faster than through conventional methods. The technologies and processes employed by Livingstone increase production yields, improve food quality and security, and assure transparency of the food supply chain by tracking and tracing both the plantlets and the harvests from farm to fork.

The main components of Livingstone’s Smart Food Business Solution include: • The GrowLab: tissue culture laboratory which produces plantlets on a mass scale using specific cells from the plant tissue for multiplication without any genetic modification and without reliance on seed companies or seedling growers. The crop can be harvested for various uses, ranging from fresh market food and superfoods to the reforestation of deserts, to medical grade phytopharmaceuticals.

• The FoodHub: a combination of a high-tech industrial greenhouse with a logistic and processing centre, including an optional facility for fish production. The FoodHub differs from a standard greenhouse in that its technologies and processes are aligned with local requirements. This flexibility guarantees optimal production in any situation, as crops can be easily adjusted to changing market conditions. The FoodHub is equipped with many internal and external sensors connected to an IoT software system, which uses sophisticated algorithms to control greenhouse temperature, humidity, lighting and other parameters, thus assuring the constant superior quality of the crop.

• The GreenZone Platform (currently under development): As of 2020 (expected), this online marketplace platform will directly connect local farmers with retailers and larger consumer groups such as hotel chains, hospitals, shopping malls, etc. Using the latest IT technologies, such as blockchain, it would streamline the food supply chain, thus dramatically reducing waste during transportation and storage. In addition, it would give local and international markets rapid access to fairly-priced, safe, high-quality food and other products (e.g. phytomedicine) that match demand.

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Business model The business activities of Livingstone focus on the

The

main

plant

construction and operation of integrated horticulture

auxiliary

facilities based on the “Build - Own - Operate - Transfer”

Dutch

(BOOT) principle. Each project is structured as a

EPC (Engineering - Procurement - Construction)

special purpose vehicle (SPV) company representing

contracts. Overall project management, equipment

a separate legal entity, with the ownership split

integration and process optimisation remains under

between Livingstone Greentec AG (80%) and a local

the responsibility of Livingstone. Using the “Dutch

partner (20%).

Technology Made Simple by Design” principle,

systems

growing are

manufacturers

on

equipment

supplied the

basis

by of

and

leading turnkey

local farmers are trained by Livingstone to operate During the first stage, Livingstone designs and builds

the production facilities efficiently, while the broader

the GrowLab and FoodHub facilities at its own cost

community also receives access to the latest

(including starting capital provided by the shareholders

horticultural knowledge through education at local

and contributions from the ITO) in combination with

universities.

leveraged credit financing, if needed.

Our business model is highly scalable. Livingstone’s During the second stage, acting as the project owner,

horticulture facilities can be built in practically any

Livingstone operates the facilities for three to five

country, regardless of climate. Furthermore, their

years while fine-tuning the growing processes and

production capacity can be increased over time to

equipment. In addition to expected annual dividends,

match market demand. It is also possible to set up a

Livingstone intends to charge its local subsidiaries a

stand-alone plant propagation lab (GrowLab) without

recurrent management fee amounting to 5% of the

greenhouses (FoodHubs). This approach reduces

revenue of each SPV.

the amount of immediate capital expenditures, while still generating a steady profit by supplying local

Eventually, when projects are fully operational with

farmers with high-quality, affordable plantlets. In the

rated capacity and steady high-quality end-product

future, through access to Livingstone’s GreenZone

output, Livingstone intends to exit the project SPVs

platform, smallholder farmers will have the possibility

through the sale of its equity stake at a fair market

to become part of a universal blockchain-enabled

value to its existing local partners or other third parties

electronic trading system for horticulture products

(e.g. industry incumbents or investment funds) in part

and benefit from direct connectivity, thus increasing

or in whole.

their sales opportunities.

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Sustainable development impact The public authorities in many countries have

Livingstone’s Smart Food Business Solution achieves

expressed interest in hosting Livingstone’s horticulture

many of the United Nations’ Sustainable Development

facilities, because the latter have a strong positive

Goals (SDGs), bringing tremendous direct and indirect

impact on the local agricultural industry, improve

benefits to communities, national economy and

food security and foster social development. Notably,

natural environment.

Figure 1: Our Impact FINANCIAL CAPiTAL INPUT

OUTCOME

• Co-financing modern agri projects • Job creation • Business partnerships

• Increased economic growth in the region • Increased farmer’s income • Less rural depopulation • Decreased economic migration

IMPACT

INPUT

OUTCOME

• 50% water saving • 80% less waste of plants • 80% less pesticides • 50% less fertilizers • 50% less energy

• Increased food production by 40% per m2 • Produce quality (1st grade) increased by 60% • Market dynamic production planning according to demand & trends • Sustainable use of natural resources (water, energy) for production • Reduced food waste • Reduced logistical distances, CO2 emissions

INPUT

OUTCOME

• International multi-access DLT trading platform for fresh produce • Market-dynamic production planning

• Decentralized food production • Redesigned, shorter and more direct food supply chain • Direct access to alternative markets • Fresh produce market price tracking

INPUT

OUTCOME

• Greenhouse technology • Grow lab technology • Breeding • Health & safety • Hygiene • English

• Employee development & retention program • Employee health & safety program • 90% of employees can speak English • 10% of employees are university educated • Equal gender participation • 60% of middle & higher management educated in the Netherlands • Access to latest horticultural R&D

HORTICULTURAL TECHNOLOGY IMPACT

BLOCKCHAIN TECHNOLOGY IMPACT

KNOWLEDGE IMPACT

ITO objective Based on initial feasibility studies, Livingstone has

investment communities will be highly interested in

prepared comprehensive business plans for several

participating in Livingstone’s ITO.

projects which are ready for immediate deployment.

In order to launch the first five projects included in our

Following a distributable profit decision and resolution

project portfolio and to accelerate the implementation

of the Annual General Meeting of Shareholders

of the Livingstone Smart Food Business Solution, we

(“AGM”), the holders of the 100 million LIVIT tokens

decided to execute the Initial Token Offering (ITO) of

shall receive a profit share amount equal to the

Livingstone’s LIVIT token. The latter – subject to receipt

dividend

of the Swiss Financial Market Authority’s (FINMA) non-

will jointly receive following the AGM resolution.

action letter - is intended to be qualified as a token

Livingstone’s distributable profits will stem from the

conferring profit participation rights, a so-called

following three intended income streams: (i) recurrent

IOU profit-sharing asset token under Swiss law. We

management fee (5% of gross revenue) payable to

foresee that, in particular, cryptocurrency and impact

Livingstone by all SPVs; (ii) annual dividends from

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amount

that

Livingstone

shareholders

SPVs; and (iii) potential gains from project/SPV exits, if

Livingstone’s entrepreneurial activities to financials, but

any (see also paragraph 7.1).

also promotes these activities in a sustainable way.

With a fundraising target of EUR 50 million, Livingstone

The founders of Livingstone prefer to scale the

will use the proceeds from the ITO to finance the capital

business in co-operation with local stakeholders

expenditures of its first five projects as well as to expand

at a pace they deem economically viable and

its team and organisation. Livingstone’s Smart Food

sustainable. For that purpose, a 20% minority equity

Business Solution will be deployed in countries that

stake is intended to be offered to local partners in

seek positive systemic change and that offer political

each project SPV. The shareholders are not seeking

and local community support for market entrance.

a quick return for themselves, but are motivated by

Livingstone’s goal is to involve and share benefits from

the aspiration of building a truly impactful business

its business activities with a large network of supporters

community that aims to solve one of our world’s

and contributors in a manner which does not limit

biggest problems.

Figure 2: Livingstone’s Profit Distribution

LIVIT

Livingstone shareholders

token holders

50%

50%

Net profits to be distributed (as decided by AGM)

Net profit of Livingstone Greentec AG (calculated based on anuual accounts)

Management fee (5% of SPVs revenues)

Annual dividends from SPVs

Adhoc gains from partial or complete exits from SPVs

Key advantages of Livingstone’s Smart Food Business Solution  The Livingstone Smart Food Business Solution is

industrial facilities in our current project pipeline

being implemented by a team of experienced

as well as by international expansion through the

entrepreneurs with in-depth knowledge of the

construction of new production facilities in other

horticulture industry and a track record of successfully

countries.

operating previous business start-ups.

 The LIVIT token is intended to be a so-called IOU

 Livingstone’s business relies on the most modern industry

proven

technologies

and

asset token under Swiss law, conferring profit

equipment

participation rights with real market value in line with

supplied on a turnkey basis by reputed Dutch

the allocation of a substantial share of net profits from

partners. The efficiency of business operations

Livingstone’s business operations to token holders.

will be further improved by integrating advanced

 The Livingstone Smart Food Business Solution has

blockchain-based solutions. There is a great demand

a strong social impact by providing employment

for the end-product – sustainably produced high-

opportunities for local communities as well as by

quality, safe, healthy and tasty food – on local and

collaborating with smallholder farmers in the region.

global markets. This guarantees sales of the total

Knowledge sharing and participative training foster

production with an attractive commercial margin.

innovation and increase awareness of sustainable

 The scalable business model allows the business to

horticultural practices, further safeguarding the

grow by increasing production capacity of existing

environment.

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2

Horticulture Market Assessment

Horticultural crops, which include fruit, vegetables,

result of micronutrient deficiencies. Healthy people

nuts,

plants,

are more capable of participating in economic and

represent a wide range of species that can be grown

social activities, improving their standard of living and

in diverse agro-ecological zones year-round. The

general wellbeing of entire communities.

herbs,

medicinal

and

ornamental

production of these commodities offers a strong potential to alleviate poverty, meet human nutritional

The production of horticultural crops further promotes

needs and stimulate economic growth.

ecological sustainability, contributes to local economic development and increases regional self-reliance

Integrating edible horticultural products into a daily

and food security. In times of geo-political conflicts,

diet improves health by minimising the potential

our food production installations play an important

loss of human cognitive and physical abilities as a

role as strategic assets at a national security level.

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2.1 Total Market Size By 2050, the global population is expected to reach 10

are a valuable instrument for agricultural development

billion people. The amount of horticultural production

not only because of their high economic and nutritive

required to feed this population will have to be almost

value, but also because of their ability to serve as an

double that of today. Close to 4 billion tonnes of

engine for agricultural and economic diversiďŹ cation,

fruit, vegetables and other horticultural products

in particular for smallholders who can adjust their

will need to be produced annually in a world of

production to speciďŹ c local or export markets.

increasing environmental pressures and decreasing land availability. Over the last decades, the growth in

Current market trends indicate continued growth in

horticultural production that of most other agricultural

horticultural production and trade. Meanwhile, major

commodities. The accelerated global production

world markets are subject to considerable competition

of fruit and vegetables has resulted in the near

and price protection. Though export markets are

doubling of the per capita supply of these products

potentially very lucrative, high transaction costs and

in developed countries and much of the developing

the lack of necessary technological expertise limit

world, with the notable exception of Asia, where per

the participation of many small and medium-sized

capita consumption has more than tripled.

producers. Hence, for much of the developing world, the greatest economic opportunity for horticultural

In the past years, most of the growth in horticultural

products remains in expanding local and regional

production has been achieved by increasing the size of

markets.

land areas devoted to these crops and by investment in inputs (irrigation and fertilisation). However, this

Considering that horticulture is a highly technical and

has led to only a marginal improvement in yields for

knowledge-dependent

most species. In comparison to the substantial yield

volumes will be contingent upon the adoption of

increases in cereal production, the low growth in

appropriate cultivars and equipment, the dissemination

horticultural yields mirrors the slow uptake of advanced

of best industry practices and an adequate level of

technologies and implies a tremendous untapped

investments in infrastructure. Therefore, by granting

potential for further yield improvements.

local farmers access to the necessary technologies

process,

future

production

and knowledge, Livingstone has practically limitless Amongst all agricultural sectors, the production of

possibilities to build a highly profitable horticultural

horticultural crops represents a particularly promising

production business that will bring multiple economic,

opportunity for income generation and food production,

social, health and environmental benefits to local

especially in developing countries. Horticultural crops

communities and to the entire planet.

Figure 3: Food supply quantity (Fruit & Vegetables) 250

Asia World Europe

200

Oceania America America Oceania Europe World Africa Asia

150 Africa 100

50

1960

1970 Asia

World

1980 Europe

1990 Oceania

America

2000 Africa

2010

2013

Source: www.fao.org/faostat

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2.2 Market Challenges Addressed by Livingstone While the global food market is affected by the drivers that shape all aspects of the world economy – technological development, digitalisation, urbanisation and globalisation - this sector also faces its own unique set of challenges.

Urbanisation Urbanisation is foreseen to continue at an accelerating pace, with an expected 70% of the world’s population living in urban areas by 2050. At the same time, per capita incomes in 2050 are projected to be a multiple of today’s levels. There is a consensus among analysts that market demand for food will continue to grow. Thus, the agricultural sector will have to produce more, while the rural population (and labour force) will continue to shrink. The production of horticultural crops is a valuable engine for diversification and economic growth in the agricultural sector – especially in developing countries that could use Livingstone’s solution as an effective means to retain their rural population.

Demographic factors The global population continues to grow at a rate of around 1.1% per year, adding more than 80 million people on the planet each year. On the other hand, an unprecedented 66 million people around the world have been forced from their homes, mainly due to wars, religious conflicts and natural disasters – a number which is only expected to increase. Clearly, there is an acute necessity to provide food and a revenue source to more and more people. Furthermore, changes in the labour market, including the expanded presence of women in the workforce, will amplify the demand for convenience foods (prepared salads, fresh-cut fruit, restaurant food, etc.) supplied by horticultural producers.

Food waste Roughly 30-40% of food production is currently being wasted4 due to sub-par logistics and poor consumer purchase planning. Food losses can be qualitative, such as reduced nutrient value and undesirable changes to taste, texture, or colour; as well as quantitative, as measured by decreased weight or volume.

In developing countries, waste is mainly attributable to the absence of an appropriate food supply infrastructure (e.g. absence of cold storage) and packaging. In contrast, pre-retail losses in the developed world are much lower, while those arising at the retail, food service, and home stages of the food chain have grown substantially.

At present, consumers are accustomed to purchasing foods of the highest cosmetic standards; hence, retailers discard many edible, yet only slightly blemished products.

The Livingstone Smart Food Business Solution, including its local production of superior quality food and GreenZone platform, will make a major contribution to minimising waste, as it offers consumers the possibility of direct pre-ordering and just-in-time delivery from nearby production facilities (within a 1,000 km radius).

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Source: Godfray et al., 2015. Food Security: The Challenge of Feeding 9 Billion People (www.sciencemag.org)

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Environmental issues Compared to other agricultural products, most horticultural crops demand high levels of inputs such as energy, water and agrochemicals. The inefficient use of natural resources and land mismanagement often has a detrimental effect on the environment. While the impact of climate change is already being experienced in the agricultural sector, Livingstone can, in principle, produce food in any climate in the world, with weather conditions having little or no effect on our business.

All of Livingstone’s projects pay special attention to environmental safeguards, assuring an optimal use of natural resources by reducing or eradicating the inefficiencies that currently exist within the food-waterenergy nexus. The amount of necessary inputs is minimised due to recycling and other advanced growing technologies, while energy consumption and CO2 emissions are reduced by shortening logistical distances.

Limited resources There are various constraints on food production: availability of suitable land and water supply, degrading soil fertility, diminishing profitability and a lack of applied easy-to-handle technology in horticulture. In the past, growth in horticultural production has been achieved by expanding the land areas dedicated to crops.

However, this kind of expansion cannot continue indefinitely. The effectiveness of global production will need to make a quantum leap in order to feed the world without destroying the environment. Our advanced technology and business model can launch this revolutionary transformation.

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Consumption trends Scientists see the increased intake of horticultural products such as vegetables, fruit and nuts as one of the most viable solutions to global food security. The constantly growing consumption of horticultural products is also driven by rising personal income and health awareness. In addition, food has become a health and wellbeing service, thus consumers are increasingly interested in traceable food which is produced sustainably, ethically and locally. This highlights the importance of communicating the production source and safety aspects of the fresh produce through consumer interface. The integration of horticultural products into daily diets, superfoods5, exotic horticultural products and phytomedicine is increasing the quest for higher food quality and diverse products. Livingstone’s Smart Food Business Solution is perfectly suited to addressing this demand.

Production trends Among developed countries, the U.S. continues to dominate the international trade of fruit and vegetables, ranking number one as both an importer and exporter. As a group, the European Union (EU) constitutes the largest player, with 15 additional export and import commodities contributing about 20% to the total fresh fruit and vegetable trade.

Within Europe, the Netherlands plays an important role in the horticultural business, technology development and physical distribution processes. In the Southern Hemisphere, Chile, South Africa, and New Zealand have become major suppliers in the international trade of fresh fruit commodities, although they remain insignificant in the vegetable trade.

Agricultural production is expected to increase at a rate of 3.2% per year for vegetables. However, this trend is not uniform worldwide: in developing countries, a lack of adequate infrastructure and technology constitutes a major obstacle to competition with industrialised countries. Meanwhile, most developing countries have experienced a sharp increase in vegetable production, particularly in China, Brazil and Chile. Asia is the leading producer of vegetables, supplying 61% of total volume output and showing a yearly growth of 51%. It should be noted that overall production is lagging behind demand, especially in developing countries. Hence, the establishment of local horticulture production facilities, as envisaged by Livingstone, will have a substantial advantage compared to imported food as it does not entail long-distance logistical costs and produce degradation during transportation.

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A food that is rich in micronutrient compounds (such as antioxidants, fiber, or fatty acids) considered to be especially beneficial for human health and wellbeing

14

Competition trends So far, the construction of horticulture facilities has been driven by buyer-seller relationships, in which local project developers were induced to obtain financing to purchase greenhouses and other equipment from foreign suppliers. It was always problematic to achieve maximum efficiency in crop production because local staff had an insufficient knowledge of growing techniques and process equipment. Livingstone aims to disrupt this practice by promoting an innovative business model which consists of building its own high-tech food production facilities in the vicinity of existing infrastructure and consumer markets, as well as sharing the technology and process knowledge with local smallholder farmers. This business model is unique, as it can transform potential competitors into our strategic partners: equipment manufacturers receive new orders from Livingstone for the construction of production facilities (FoodHubs), while local farmers get access to affordable top-quality seedlings and plantlets produced in our GrowLabs.

There are several other ITO projects which aim to introduce blockchain technologies in the agri-food sector. We are aware of these initiatives and consider them as positive developments which contribute to the creation of an industry trend and to the education of the incumbents (farmers, traders, consumers) about the key benefits of blockchain. Together, these activities are preparing a “fertile ground” for the deployment of our own blockchain solution. Furthermore, the experiences of other developers provide learning opportunities for our own project, allowing us to build the value-adding blockchain-based GreenZone platform more efficiently.

So far, we see the existing agri-food “blockchainization” projects as attempts to occupy the place of middlemen.

Without a deep knowledge of farming technologies and understanding of commercial mechanisms prevailing on this market, such projects risk spending investors’ and token holders’ money without any significant uptake by market players. Our approach is different. The GreenZone platform will be complementary to the business operations carried out through our own horticultural facilities. As they reflect the actual needs and solve real problems, they have a better chance of being adopted by all participants within the food production and supply chain.

15

3 Livingstone Horticulture Technology The aim of the innovative Livingstone Smart Food Business Solution is to grow top-quality plants faster, more efficiently and closer to regional markets. The solution includes three main technological components: (1) GrowLab – a plant propagation facility with associated infrastructure and services, already existing in practice and readily available for construction; (2) FoodHub – a high-tech industrial greenhouse with associated hardware and IT infrastructure as well as food processing and logistical services, already existing in practice and readily available for construction; and (3) GreenZone Platform - the blockchain-based commodity e-market, currently under development.

The integration of all components, together with a universal cloud-based IT monitoring and control system connected to a distributed digital ledger, will allow an unprecedented level of security, accountability, transparency and trust.

3.1 GrowLab The GrowLab is a laboratory for plant propagation that

The Tissue Culture plant propagation technique of the

uses the advanced Tissue Culture plant reproduction

GrowLab uses just a few cells from the best mother

technology in a closed, climate-controlled and sterile

plants to replicate identical new plants. Found to be

environment. The GrowLab technology includes a

the most successful micro-propagation method, it

specifically designed growing room to produce large

consists of growing plant cells in a specially designed

volumes of high yield disease-free plantlets, adapted

medium (gel or liquid). When placed in this medium,

to local conditions.

cells first form a cluster of disorganised cells and later form into small plants.

With an average investment cost of €3.5 million each, a GrowLab can produce nearly 5 million plantlets per year (based on 1 shift/day – which, in principle, could be increased to 2-3 shifts/day). Hence, even under very conservative assumptions, the cost of produced plantlets (< €1 per plant) will be 30-50% lower compared to other methods, which are labour-intensive, low in productivity and seasonal. It is also worth noting that plants propagated with the Tissue Culture technique

Livingstone’s approach to the production of plantlets is based on the combination of modular movable GrowLabs with the use of semi-closed biodegradable packaging. This mini-greenhouse container preserves the perfect growing conditions, in which crops are grown in a multi-layer system under LED lights. Because of the semi-closed containers, a minimum of water and fertilisers is required, and no pest control is needed.

Design features optimise energy usage, and the capture of rainwater can further reduce the demand for water supply. The GrowLab can be used for breeding, commercial production and R&D purposes.

16

are not Genetically Modified Organisms (GMOs).

Figure 4.

17

3.2 FoodHub The FoodHub is the combination of a high-tech

The essential aspect of the IGGS system is the

greenhouse with a logistics and processing centre. The

irrigation method it uses. Each plant has its own

flexible alignment of various equipment and software

biodegradable capillary substrate, which requires no

systems makes the FoodHub greenhouse different

power to operate, and which carries water, nutrients

from an ordinary one and guarantees optimal high-

and dissolved oxygen from the water channel to the

yield production under all circumstances, while the

plant. Meanwhile, waste water is kept separate from

crop choice can be easily adapted to the changing

the fresh feed water. The unique feature of the IGGS

market conditions or specific needs.

system is that growing plants can be moved forward, from front to end of the greenhouse, as their size

The primary function of the FoodHub is to produce

increases and growth stages are checked. When the

safe food year-round by controlling factors beneficial

fully-grown plants reach the end of the greenhouse,

to plant growth â&#x20AC;&#x201C; temperature, humidity, CO2 and

the produce is harvested.

sunlight â&#x20AC;&#x201C; while also protecting crops from adverse elements such as wind, cold, drought, rain, diseases

One of the core advantages offered by the IGGS

and pests that can be detrimental to plant growth. The

growing method is higher plant density: more

operation of the FoodHub also entails other activities

plants can be grown in a relatively small space.

such as logistics, financing and overall management.

The FoodHub greenhouse is equipped with many internal and external sensors connected to the IT-

The proprietary so-called Independent Greenhouse

based growth support system. All relevant data are

Growth System (IGGS) is planned to be used in the

sent to the online cloud storage, where the computer

FoodHub greenhouses. It relies on the Nutrient Film

algorithm decides what needs to be done in order

Technique (NFT), whereby crops receive all vital

to adjust the controlled parameters (e.g. temperature,

nutrients through oxygenated and nutrient-rich water.

humidity, lighting) to provide optimal conditions for

This hydroponic technology makes it possible to

plant growth.

fertilise crops in a very precise way.

18

3.3 IoT and Blockchain Applications Another unique feature of the Livingstone Smart Food

 Fast

and

secure

transactions:

Information

Business Solution lies in its holistic IT-based approach

is transferred in minutes (often less). Once

that combines all the elements of the food supply

transaction data has been validated, these are

chain from farm-to-fork. Recognising the advantages

duplicated on various network nodes to ensure

of blockchain technology, Livingstone decided to

legitimacy and security.

develop its own blockchain-based IT system for horticulture that would be accessible to all participants

 User collaboration: The information exchanged is

within the food supply chain – producers, suppliers,

verified by accredited users and can be referred to

food processing companies, distributors, retailers,

by producers, distributors, scientists and consumers.

regulation agencies and consumers – giving them authorised electronic access to reliable information

The underlying 24/7 Continuous Diagnostics and

on the origin and status of food products, allowing for

Mitigation (CDM) system built on the basis of a versatile

a more cost-effective real-time digital trade. This will

IoT platform monitors every step of the plants’ growth,

transform the existing food supply chain by delivering

resulting in the highest possible quality of produce

three key benefits:

for the Livingstone food label. All the data collected during the production and transportation process (i.e.

 Transparency: Data collected via many sensors

farmers’ ID tags, time stamps, agrichemicals used,

and devices at production sites are immutable,

environmental conditions, handling operations, etc.)

accessible to everyone and safeguard traceability.

are logged into the Distributed Digital Ledger.

Participants can record and retrieve data for each step in the process of growing a food product, from

A shorter supply chain due to local production,

its origin to its point of sale.

along with the possibility to track and trace supplies

Figure 5: Livingstone Smart Food Business Solution for Horticulture

Blockchain technology: Track and Trace - Smart Contracts - Tokenized financing 19

lead to cost effectiveness, higher food quality and

themselves in an advantageous position to access

increased consumer trust. The access to an e-market

local and international premium markets.

further optimises the commercial operations on both supply and demand sides through the availability of

As a farmer-centric IT solution, our Track and Trace

real-time verified information, electronic document

system allows for the recording of all product

interchange and self-enforcing self-compliant smart

interactions at the field level, even at the touch points

contracts.

of the smallholder farmers in remote areas with a low reception. For these purposes, the system uses a

Finally, the inherent cryptocurrency can be used by

mobile app which creates a unique ID code for each

farmers as a means of pre-financing to facilitate the

farmer with a number of attributes such as contact

purchase of input materials and third-party services

details, general farm and crop info, geolocation,

needed to produce new crops.

farming practices, available certificates, etc. The information related to the new crop (including variety,

The

Livingstone

Smart

Food

Business

Solution

date, area, quantity, fertiliser and other inputs) is

embraces two specific applications: the Track and

recorded using predefined forms and stored in the

Trace System and the GreenZone Platform.

online database. During the procurement process, this information associated with the farmerâ&#x20AC;&#x2122;s ID is

What the Track and Trace system does is capture and

retrieved and passed on to the buyer.

store all essential information related to the production and delivery of food products along the entire value

This system is scalable: it can be used by individual

chain, starting from the produce qualifying stages

farmers and small co-operatives just as well as

used in farming, through logistics up to commercial

by

outlets. Farmers who can verifiably prove that their

government agencies. Integration with the web server

produce has been grown following the best horticulture

makes it possible for accredited users to access all

industry practices using the top-quality non-GMO

relevant data in real time by scanning bar/QR codes or

plantlets sourced from Livingstoneâ&#x20AC;&#x2122;s GrowLab will find

RFID tags generated at each main step of production,

large

agri-food

corporations

Figure 6: Information Flow in Track and Trace System

20

and

agri-food

transportation and warehousing. This information is

 Peer-to-peer

exchanges:

removing

particularly useful for the quality assurance services

intermediaries in exchanges and transactions

of retailers and supervision authorities, as the built-

which can then reduce the risk of fraud and

in traceability function monitors compliance with

related transaction costs.

quality, environmental and other product and/or  Transparency with pseudonymity: visibility of

process attributes.

all transactions while maintaining the privacy of The use of Livingstone’s Track and Trace system connects

participants.

various types of users across wide geographical areas and contributes to the adoption of the “smart agriculture”

 Computational

logic:

automated

transactions

concept. It also incentivizes smallholder farmers to

in the form of smart contracts contribute to

embrace IT technology in order to increase their

transparency and fairness in trade operations.

production output and revenue. The real-time processing of information helps improve operational efficiencies and

A pilot proof-of-concept (PoC) of the horticultural e-trade

reducing transaction costs, while consumers benefit from

platform has already been developed by researchers

enhanced visibility and traceability of the food supply

at Wageningen University in the Netherlands, and

chain. Further interconnection of the Track and Trace

Livingstone intends to upgrade and customise it for

database with a blockchain-based distributed ledger

the needs of specific projects included in its business

creates a superior level of transparency and security,

portfolio. The pilot solution has demonstrated that it

facilitates trade operations and guarantees the supply of

is feasible to handle the information concerning the

sustainably produced fresh, safe and tasty food.

food products on blockchain with a permissioned distributed ledger and smart contracts. Compared to

Another key aspect of Livingstone’s Smart Food

the traditional approach with centralised databases,

Business Solution is the development of a blockchain-

the new blockchain-based solution ensures that

based marketplace for trading certified horticultural

different parties share the same layer of information

products.

on the validity and provenance of certificates that is

Our

platform,

GreenZone,

makes

all

production, trading and transportation processes

tamper-proof.

within the food supply chain more transparent, accessible and secure. The open-access approach

Here is an example of a typical use case on the

underlying

awareness,

GreenZone platform. A food product, such as a tomato

inclusion and fair trade in which no party, association

grown on a farm, has to be traded and transported

or institution is able to alter information unilaterally.

before reaching the consumer’s plate. There is a lot of

It is a true digital marketplace with a natural price

information that end-consumers (as well as traders and

discovery mechanism, accessible to everyone.

retailer) would like to know about the product to help

this

platform

promotes

them decide whether to buy this tomato. For instance, The following features make the GreenZone platform

where does it come from? How was it produced? What

particularly attractive for market participants:

quality class is it? Where was it packaged? How long did it spend in a cold storage? How long did it have to

 Distributed ledger: an encrypted list of transactions that is stored in multiple participating nodes

travel and how much CO2 emissions did this process generate? Are all these claims valid?

(computers or servers) rather than on a central ledger.

To address these questions and to facilitate trade, the pilot GreenZone e-trade solution implements the

 Immutability of records: records in blockchain

following procedure: in order to claim that the product

are kept in synchronised mode via peer-to-peer

has specific properties, e.g. organic or fair-trade, the farm

mechanisms and pre-agreed rules stipulating

needs the confirmation of this claim by a certification

what new records (blocks) can be added. The

authority approved by another accreditation authority.

records and entire history of records are tamper-

The certification authority approves the issue of an

proof. This contributes to the authenticity and

“organic origin” or “locally grown” certificate to the

integrity of data.

farm, enabling the farm to certify the individual boxes

21

Screenshot from PoC demo version of e-trade system showing transaction history of shipments of tomatoes it produces. These boxes of tomatoes are

The existing prototype has been built using Hyperledger

labelled using a unique identification number (e.g. a

Fabric and a reasonably complex smart contract

QR code). After certifying these tomatoes, they are

(â&#x20AC;&#x153;Chaincodeâ&#x20AC;? in Fabric terminology) which allows the

sold on the GreenZone platform, and then shipped to

relevant parties to update and query the data on the

a wholesaler or directly to a supermarket, where they

blockchain in accordance with their roles and access

are made available to consumers.

rights. The fundamental architecture common to all blockchain systems assumes a shared distributed

The platform has unique user interfaces for each group

ledger. Hyperledger Fabric is designed for permissioned

of participants (e.g. growers/suppliers, buyers and

blockchain systems and provides a membership

wholesalers) which allows online real-time execution

management module for adding members to the

of trades based on more transparent information.

blockchain. Members can be of different types, e.g.

All the parties are able to verify the validity of issued

end-users, peers, and validators. End-users are users

product certificates and other information by querying

that have permission to execute transactions on the

the blockchain. When the products change ownership,

blockchain. Peers are nodes that keep a copy of the

this is recorded in the blockchain as well, thus anyone

ledger. Validators keep a copy as well, but also validate

can check the provenance chain of the products. If

the incoming transactions and can participate in the

the farm has used an unauthorised pesticide, and this

consensus algorithm of the blockchain.

is discovered during an audit, then the auditor is able to revoke any certificate issued by the farm. This is

As a distributed ledger, all nodes (peers and

recorded on the blockchain, so anybody validating

validators) of the system have a complete copy of

the certificate is able to see it.

the whole blockchain. The basic architecture of the

Docker is a software technology providing containers, promoted by the company Docker, Inc. See details at www.docker.com/what-docker

6

22

PoC demonstrator was designed as a set of Docker6

the tracking of food certificates and the real-time

containers which interact with each other. An API

updating of information once there is any activity that

was developed allowing for easy integration with the

needs to be recorded (e.g. conclusion and execution

blockchain. End-users interact with the blockchain

of a commercial transaction through a smart contract

using a front-end application (see the screenshot

or changing a certificate’s validity). It showed that such

above). A significant advantage of this architecture is

a system can propagate data effectively between the

that it allows easy deployment and further upgrades.

participants using blockchain technology, providing

The source code of the PoC version of the blockchain-

necessary information to the relevant users while

based e-trade platform is publicly available at

keeping business confidentiality. Furthermore, it has

https://github.com/JaccoSpek/agrifood-blockchain.

proven that a medium-size server (e.g. on the cloud) could function adequately as a node for the purposes

The existing prototype confirms the conceptual

of this type of use case. There is no need for special

feasibility of using blockchain technology to solve

hardware, and all the software infrastructure is open

specific problems within the food supply chain, i.e.

source and free.

3.4 Key Benefits and Sustainable Development Impact The key benefits of different technology solutions implemented

within

Livingstone’s

Smart

Food

Business concept can be summarised as follows:

Advantages of the Tissue Culture plant propagation technique • Rapid: depending on the crop, 10-20x faster than traditional methods

Benefits of the GrowLab

• No seasonal limitations

• Livingstone’s GrowLab systems are small-scale,

• Cost-effective: minimum space requirements, high

moveable and delivered on a turnkey basis.

efficiency

They are easy to operate, and even based on a

• No seeds and pollination necessary

conservative single shift/day operating regime,

• Small amount of tissue required to produce

they reach their break-even point within a relatively

millions of replicated plants

short period (about two years, primarily due to the

• More robust plants

plants’ natural growing cycle).

• Multiplication of disease-free plants (virus, bacteria,

• GrowLab systems are available to farmers around the world, irrespective of their regional climate conditions.

fungi) is possible, e.g. sterile hybrids derived through sexual reproduction • Plant characteristics (e.g. disease resistance) can

• The market demand for high-quality seedlings and

be tested on cells, rather than plants

plantlets is substantial. The GrowLab can also be

• In vitro stock can be quickly proliferated

operated as a stand-alone facility serving the needs

• Better yields: more vigorous growth and less

of many external farmers/customers in the region.

• The pre-hardening step used in the GrowLab laboratory system reduces plant mortality by more than 45% during the first stage of growing.

• Food

losses

transportation

throughout and

distribution

the

production,

chain

can

be

reduced by up to 25% due to the higher quality of the end product.

• The ecological advantages of the GrowLab include

pesticides due to a disease-free start of the life cycle • Producing special varieties of top-quality seedlings year-round with the lowest risks and costs • Long-term storage of valuable gene plasma as well as the possibility to preserve rare, heritage species and varieties • Option to rejuvenate the genetic material of less common species.

50-90% lower water usage, less transportation movements and less waste (currently estimated at 30-40%) due to local just-in-time production.

23

Benefits of the FoodHub

GOAL #2: End hunger, achieve food

• More efficient production

security and improved nutrition and

• Almost no pesticides needed

promote sustainable agriculture

• No wastage of water and fertilisers

Livingstone uses advanced highly efficient and sustainable methods to

• Lower carbon footprint • Sensors-based IT infrastructure (CDM - Continuous

locally produce food (i.e. fruit and vegetables) which

Diagnostics and Mitigation) keep track of a

is of paramount importance in combatting hunger

multitude of plants and their different conditions

and nutritional deficiencies.

• The use of the IGGS system within a FoodHub allows plants to be harvested faster than plants

GOAL #3: Ensure healthy lives and

grown in a standard greenhouse.

promote wellbeing for all Besides growing safe and healthy food

General benefits of the Livingstone Smart Food Business Solution

products, Livingstone is also focused on producing phytopharmaceuticals

• The Livingstone solution is available globally to

all

governments,

institutions,

farmer

from medical plants which are considered an efficient complement to conventional medication.

communities and individual farmers who wish to derive economic and social benefits from these

GOAL

horticultural

equitable

innovations

and

their

versatile

#4:

Ensure

inclusive

quality

promote

and

education

applications; thereby serving local populations

and

lifelong

learning

by delivering sufficient produce and creating a

opportunities for all

source of income.

Sharing knowledge about state-of-

• It is a holistic solution, combining all elements of

the-art technologies used in modern horticulture is an

the food value chain: from the production of plant

essential component of Livingstone’s business model

propagation materials to growing ready-to-eat

which, among other activities, includes the organisation

food products, along with farm-to-fork tracking

of university courses and professional training.

and electronic trading of the end product.

GOAL #5: Achieve gender equality

• The Livingstone solution is blockchain-enabled, delivering a fair and secure arrangement of

and empower all women

trade and financing operations, fast and secure

One of the focal points of Livingstone’s

transactions

board is to keep a 50/50 gender

improvement

for in

farmers logistics,

and

a

significant

leading

to

cost

balance

within

the

management

effectiveness and food integrity with reliable food

team. The same applies to the composition of

labels and increased consumer trust as a result.

personnel in our local production facilities.

UN Sustainable Development Goals The

Livingstone

Smart

Food

Business

GOAL #6: Ensure availability and Solution

sustainable management of water

addresses the absolute majority of the 17 goals of the

and sanitation for all

2030 agenda for sustainable development7:

The

Livingstone

Smart

Food

production solution uses up to 70% GOAL #1: End poverty in all its forms

less water than outdoors production. If needed,

everywhere

effluent water is filtered before being released into the

By offering innovative solutions for the

environment.

local production of food, Livingstone contributes

to

the

economic

GOAL #8: Promote sustained, inclusive

development of rural regions, creating jobs and new

and sustainable economic growth,

sources of income for the poorest and most vulnerable

full and productive employment and

population of farmers.

decent work

https://sustainabledevelopment.un.org/content/documents/21252030 Agenda for Sustainable Development web.pdf

7

24

Livingstone contributes to the economic growth of

of adaptation to global climate change, especially

the countries hosting its facilities by increasing local

for the most vulnerable countries exposed to drought

production and substituting food imports. As a socially

and the other effects of climate change. Livingstone’s

responsible enterprise, Livingstone also strives to

GrowLab systems can also produce tree plantlets

ensure decent work conditions for all its employees.

which can be used for reforestation to mitigate the impact of climate change.

GOAL

#9:

Build

infrastructure, and

resilient

promote

sustainable

inclusive

industrialisation

and foster innovation Relying

GOAL #14: Conserve and sustainably use marine

on

state-of-the-art

horticultural technologies in combination with cutting-

the

oceans,

resources

seas

for

and

sustainable

development Livingstone

offers

the

possibility

edge software systems, such as IoT and blockchain,

to integrate fish farms into FoodHub systems that

Livingstone promotes innovation in the agricultural

reduces pressure on natural fish stocks. FoodHubs are

sector and fosters the transformation of traditional

also suitable for the production of algae that can be

rural enterprises into modern agri-food factories.

used as a source of Omega-3 fatty acids instead of using wild fish stocks.

GOAL #10: Reduce inequality within and among countries

GOAL

Livingstone’s localised Smart Food

promote sustainable use of terrestrial

Business Solution is an effective tool to

ecosystems,

prevent rural exodus. It also helps to

forests, combat desertification, and

promote economic growth in low-to-medium income countries (e.g. Macedonia, Georgia and Uzbekistan).

#15:

Protect,

restore

sustainably

and

manage

halt and reverse land degradation and halt biodiversity loss With a production yield up to seven times higher than

GOAL #11: Make cities and human

open-land farming, Livingstone’s FoodHub facilities

settlements inclusive, safe, resilient

can substantially reduce the land area required for

and sustainable

agriculture. GrowLabs are perfectly suitable for the

Livingstone is a proactive adherent of

propagation of endangered plant species, as well as

the 2000-Watt Society initiative which

for the production of large volumes of tree plantlets to

aims to reduce energy consumption to a minimum

combat desertification and land degradation.

through efficiency improvement, avoidance of energyintensive materials and processes, and greater

GOAL #17: Partnerships for the SDGs

reliance on renewable energy. All projects pursued

“Growing Together” is who we are in

by Livingstone are fully aligned with these principles.

our core, how we operate, and how we maximise our sustainable impact. We

GOAL

sustainable

collaborate with farmers, horticulture

consumption and production patterns

#12:

Ensure

and tech specialists, universities, governments and

Nearly 40% of food produced in the

all other stakeholders in the Livingstone Greentec

word is wasted. By setting up local

ecosystem. The design and implementation of each

production

GrowLab, FoodHub and GreenZone Platform reflect

facilities,

Livingstone

substantially reduces transportation distances, thus

our commitment to building partnerships.

reducing the risk of food spoilage.

GOAL #13: Take urgent action to combat

climate

change

and

its

impacts High-yield

food

production

in

greenhouses is an effective instrument

25

4

Livingstone Go-To-Market Strategy

The main business activities of Livingstone consist

more systematic market approach with specific criteria

of the construction and operation of integrated

like food demand, demographic developments and

horticulture facilities based on the “Build - Own -

the availability of agri-development subsidy programs

Operate – Transfer” (BOOT) principle. This means

that can identify the most promising opportunities

that Livingstone itself secures project financing and

for further business development in other countries

then builds the GrowLab and FoodHub facilities

in Central and Eastern Europe, the Middle East and

using proven technologies, equipment and services

Asia. In parallel, Livingstone will continue developing

of reputed Dutch contractors working on the basis

and deploying advanced blockchain-based solutions

of turnkey Engineering - Procurement - Construction

that can further enhance the efficiency of our

(EPC) contracts. Once the facilities are up and

business operations and provide additional benefits

running, Livingstone operates them as the project

to consumers.

owner, receiving revenue from the sales of end products on the local and export markets. In some

One of Livingstone’s goals is to create the conditions

cases, Livingstone intends to engage local partners

for transfer of a well-dimensioned, up and running

by offering them a 20-50% share in project equity.

system to local stakeholders after five to ten years

Once the designated production volumes and steady

of operation. For this purpose, local farmers will be

business operations have been reached, Livingstone

offered customised in-depth training programmes,

may seek partial or complete exit from the projects

which constitute a pre-requisite for utilising the

by selling its stake to industry incumbents or portfolio

improved

investors.

higher economic returns. Through implementing

production

technologies

to

achieve

equitable market arrangements, Livingstone aims to During the initial two or three years, our activities will

ensure a fair allocation of the benefits gained from

be focused on the implementation of the five specific

improved horticulture production, while at the same

projects in Switzerland, Netherlands, Macedonia,

time addressing social and economic imbalances.

Georgia and Uzbekistan for which Livingstone has

Domestic production creates jobs, resulting in greater

already prepared comprehensive feasibility studies

self-reliance and food security for local communities.

and selected reliable local partners who can ensure

By addressing these vital social issues, Livingstone

the necessary support and co-financing8. From the

will be able to gain notoriety and fulfil its strategic

second year onwards, Livingstone intends to follow a

mission: “Growing Together”.

Livingstone reserves the right to replace any of the projects included in its current portfolio if it becomes possible to implement a similar project in another country on more attractive conditions.

8

26

5

Roadmap

Past Milestones

Planned Milestones

27

6

Company Profile

6.1 History and Current Status Work on the idea of FoodHub started in 2005 with the intention to improve existing food production methods and promote sustainable development. A group of Dutch horticultural experts led by Livingstone co-founder Stef Schreuder defined a general outline of a pilot project containing all the elements that are now part of Livingstoneâ&#x20AC;&#x2122;s Smart Food Business Solution. The initial concept was fine-tuned over time through discussions with engineers and scientists.

In order to proceed with the implementation of the FoodHub concept in practice and to further develop all related technologies and IT solutions, Livingstone Ventures BV was incorporated in the Netherlands as well as a sister company, Livingstone Ventures AG, in Switzerland. The shareholders of both companies have in-depth knowledge and extensive experience in the areas of horticulture, renewable energy, engineering and business administration.

In 2017 and 2018, two subsidiaries of Livingstone Ventures were founded in Georgia and Macedonia, respectively.

In addition to the people working within the company, Livingstone is cooperating with over 50 highly qualified and experienced partners: companies, research institutes and subject matter experts. We use our extensive network to carry out detailed feasibility studies, to prepare business and marketing plans, and to provide support during the project construction and operational phases. In this way, we expand our knowledge base and human resources in order to achieve our goals in a timely and efficient manner.

6.2 Corporate Structure Figure 7.

28

6.3 Management Team Meindert Don

Founder, CEO and Board Member www.linkedin.com/in/meindert-don-54272175/ Meindert is a seasoned serial entrepreneur, engineer and adventurer who loves designing and turning out-of-the-box business ideas and concepts into reality as a viable business. Meindert started his very first company, a boating venture in the Netherlands, at the age of 17. Ten years later he invested his money in his first IT and

trading venture, followed by various subsequent Dutch, Swiss, German and

Hungarian business ventures in the IT and telecom sectors. The software developed by his companies has delivered key financial processes to Shell, Unilever, Heineken, and the Dutch Flower Auction with the so-called financial exchange server. The latter was a product derived from software delivered to FFM (financial facility management), a billing services company owned by the ING Bank.

Meindert is convinced that only innovation can solve the most acute problems of the planet like reducing carbon emissions and feeding the world population in a sustainable manner. In this spirit, Meindert got involved in the renewable energy business. With his partners from the Dutch IT company Priva, he worked on the co-development of the Ocean Ecopark Curaçao, a key initiative of the Delft University of Technology. In this project, Meindert particularly supported the start-up company Bluerise which developed innovative ocean energy technology. Now living in Switzerland, Meindert has built a network of highly competent experts and partner companies through Livingstone Ventures AG who can deliver turnkey solutions for local production of safe, healthy and affordable food, as well as organically produced phytomedicine and renewable energy.

Stef Schreuder

Founder, Chairman of the Board, Chief of Horticulture www.linkedin.com/in/stef-schreuder-12b360/

Stef studied horticultural engineering at the Horticultural University of Applied Sciences in the Netherlands and graduated in Horticultural Business and Technology. In 1988, he started his own business which became the most renowned company in Europe in the field of plant database software and garden design. Later, Stef worked as an independent consultant in international market development and as a researcher focused on international supply chains and marketing at Wageningen University. In 2007, he became director of Lucel, the largest extension service in the field of greenhouse farming in the Netherlands. In the meantime, Stef also became director of the Luxembourgbased Erasmus Investment International, a company involved in financing and designing large-scale agricultural projects. He co-founded Sunport Energy – a company that built the largest solar plant in the Netherlands – in 2014, and in the same year, also founded Livingstone Ventures BV to consolidate his long-term cooperation with the world’s top experts in greenhouse farming. Livingstone has developed projects in many countries and provided consultancy services on subjects of sustainability, water, advanced technologies and markets.

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Dianne Schepers Board Member

www.linkedin.com/in/dianneschepers/ A dedicated change-maker, Dianne is a seasoned legal/strategic commercial advisor, general counsel, partnership builder and board member who contributes her broad range of expertise in building businesses, corporate and investment transactions, strategic alliances and governance/compliance programmes and (re-)structuring, mainly in the ICT, financial services and investing industry. Since early 2017, she has also been involved in the blockchain space. Amongst others, Dianne has served as Global Head of Legal at one of the largest Dutch listed ICT-firms, as Manager/Attorney MandA at Arthur Andersen/ Andersen Legal, as Senior Management Member at various law offices, and as Deputy General Counsel Europe in Switzerland at a U.S. Nasdaq-listed investment corporation with 4,000+ employees.

Currently, Dianne is advising pre/post ICO-teams and other blockchain-related projects as a senior member of the MME Legal team in Switzerland. She will soon be joining the senior executive team of Input Output Hong Kong.

Dianne is a bridge- and alliance builder who is strongly engaging in the Crypto Valley ecosystem; she is amongst others Co-Chair of the Events Working Group, and the Initiator and Lead of the Blockchain4Good and Diversity Initiatives in Crypto Valley. Her social engagement and impact focus are reflected in her investments, memberships, activities and actions. Also, Dianne is the Founder/Chair of a Swiss charity which creates livelihoods for marginalised women in Jordan and South Africa. Dianne obtained a Dutch Master of Laws degree from Utrecht University and an MBA from the University of Twente.

Murat Jumadillayev

Board Member and Head of Business Development www.linkedin.com/in/murat-jumadillayev-7b2823164

Murat has nearly 20 years of experience working as a top manager of international companies involved in energy trade and logistics operations. In his current position of General Director of the Batumi Oil Terminal in Georgia, he has built strong business and personal relationships in this country, which is considered by Livingstone as one of the first five priority locations for hosting Livingstone GrowLab facilities (focused on the production of blueberries).

Operations in Georgia are also a stepping stone for further business development in the Caucasus and Central Asia regions. Murat is a graduate of St Michaelâ&#x20AC;&#x2122;s Catholic College in Vermont USA with a BSc degree in biology, a doctorate in medicine from the Almaty State Medical Institute, a degree in economics from the Kazakhstan State Academy of Management (KazGAU), and also holds an Executive MBA from the Institute of Oil and Gas Business.

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Ilona Kaiserova

Head of Ecosystem Development www.linkedin.com/in/ilonakaiserova/

Ilona has over 15 years of experience in business development, sales management and wealth consulting. She has worked as an adviser in various companies ranging from accounting boutiques up to multinational companies, consulting clients and businesses with complex financial needs across various international jurisdictions. Her interest in economics and monetary history has evolved to an appreciation of cryptocurrencies and blockchain technologies. Ilona is responsible for developing an awareness-based ecosystem which promotes the greater wellbeing of communities through an increased economic activity associated with local food production, e-commerce and education. She holds a Bachelor of Business from the Australian Catholic University and a Certified Financial PlannerÂŽ designation from the Deakin University, Melbourne.

Robert Neeleman Head of Investor Relations

www.linkedin.com/in/robert-j-c-neeleman-5853803/ Robert is a seasoned business coach and C-level manager. During his professional career spanning over 30 years, he has led many in-house and external consultancy projects focused on the design and implementation of major business transformation and turnaround programmes, reinventing the modus operandi, following strategic overhauls, organic growth and new business plans. With extensive experience in the oil and chemical, automotive and publishing industries, as well as in finance, IT and consulting, Robert has indepth competencies in structuring M&A deals, divestments, post-merger integration, realising the upside potential for back and front office, team coaching and multilateral negotiations. He holds an MSc degree in economics from the Erasmus University in Rotterdam and a BSc degree in Labour Market Politics from the Institute for Social Studies of the same institution.

Denis Bednyagin

Head of IT and Innovation

www.linkedin.com/in/denisswiss

Denis has more than 20 years of experience in the energy industry, investment management, consulting, and scientific research. Having an in-depth knowledge in engineering and economics, he has acted as an adviser to various start-up companies, medium-sized IT and engineering firms, large international utility companies, investment funds and governmental organisations, to which he contributed his expertise on project and corporate financing, business strategy, M&A deals, technology development and company setup. Since early 2017, Denis has been focused on the development of blockchain applications in the energy, supply chain, product security and data management sectors. Denis holds a postgraduate Masterâ&#x20AC;&#x2122;s degree in energy and a PhD in economics of innovation from the Swiss Federal Institute of Technology in Lausanne (EPFL) as well as a degree as an economist specialised in foreign trade and marketing from Moscow State University of International Relations (MGIMO).

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6.4 Advisors Meiny Prins www.linkedin.com/in/meinyprins/ Meiny Prins is the CEO and owner of Priva in De Lier (Westland, the Netherlands).

Priva develops innovative and sustainable solutions related to climate control, energy management and water re-use, and is a world market leader in greenhouse horticulture.

With climate control building management systems, Priva is also a market leader in commercial, public and industrial buildings in the Netherlands. Priva is active in more than 100 countries through a network of partners (installation companies). Meiny joined Priva in 2002. In March 2009, Meiny was proclaimed winner of the Prix Veuve Clicquot, and was awarded the title of Businesswoman of the Year for 2009. With Priva, Meiny won the first Cleantech Star of the World Wildlife Fund in November 2009.

Meiny devotes herself to promoting business sustainability and international developments of sustainable solutions in the horticultural and built environment sectors and is a much sought-after authority in this field. With her clear, inspirational message on sustainability, she bridges the divide between companies, governments and industries.

Meiny is Member of the Dutch Trade and Investment Board and member of the Committee for Entrepreneurship and Financing. In 2014, she launched the Sustainable Urban Delta initiative. Because of all these involvements she is regularly in contact with policymakers and ministers in the Netherlands.

Peet van Adrichem www.linkedin.com/in/peet-van-adrichem-03300b3b/

Peet has just finished building the World Horti Centre (WHC) in the Netherlands, within a yearâ&#x20AC;&#x2122;s time and within budget, marking the conclusion of a family project which he had begun years ago. This initiative brings together over 100 agricultural companies into a permanent exhibition â&#x20AC;&#x201C; thus, Peetâ&#x20AC;&#x2122;s work has brought him to the very centre of the Dutch agricultural sector. He is currently working with his sons at the A3 Technology company, developing new varieties of vegetables. By applying new fully automated hydroponic systems and incorporating a more automated system in the growing process, output will be increased and costs decreased.

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Alex Tselentis www.linkedin.com/in/tselentisalex

Alex is a Partner at Finex LLP in London. He is an experienced long/short equity manager with a focus on clean tech and the incorporation of environmental and social governance (ESG) factors into investment decisions. He is also active in the development of socially responsible investment frameworks for hedge funds. Prior to joining Finex, Alex worked as Investment Director at Odyssey Analytic SA (Switzerland) and Ithaca Capital Advisers. Alex holds an MBA degree from Henley Business School, an SII Diploma (Investment Analysis and Fund Management) from the Chartered Institute for Securities and Investment (London) and an MPhil degree in Future Studies from Stellenbosch University.

Bea Goldman www.linkedin.com/in/bea-goldman-4b18b8a1/ Following 15 years of working in the Intensive Care Unit, Bea is an MND (Motor Neuron Disease) Care Specialist, experienced educator and an expert in medical grade cannabis. Her interest in cannabis formed whilst caring persons who had reached the end of therapeutic options and for whom cannabis was the last chance to alleviate suffering. During her research, Bea has developed a unique extraction method of Cannabis Sativa to derive a Swiss medical grade formula magistralis.

Bea holds a Master of Science in Nursing Studies from Cardiff University and teaches at St Gallen University of Applied Sciences. She is currently founding a caregiver center in Zürich and also an inter-professional organisation (Verein) for patient medical cannabis counselling and knowledge dissemination for Professionals and Public in medical cannabis. She is supported by the Swiss taskforce for Cannabis as Medicine (SACM) and different patient organisations.

Blockchain Valley Ventures AG (ITO Advisors) http://www.bvventures.ch/ Blockchain Valley Ventures (BVV) is a new accelerator and venture capital firm offering investment, financing, and advisory services to blockchain-enabled businesses. The firm focuses on the incubation and development of – as well as investment in – business ventures in a number of industries that are utilising blockchain technology to facilitate growth and innovation.

Based in Switzerland’s Crypto Valley in Zug, the firm boasts Heinrich Zetlmayer, former Vice President and Country Leader of IBM Global Business Services in Switzerland and Lykke Corp. as its partners. BVV offers a broad array of services, including capital investments, through its own funds and/or investment vehicles, such as the Blockchain Investment Opportunities Note in cooperation with Vicenda AG, a global investment boutique with a focus on private debt investing. It also offers business, financial, ICO, and marketing support until projects reach a critical size and operate independently, as well as assistance in token technology design and creation, and the implementation of Lykke’s Open Source Technology in collaboration with Lykke.

33

Token Features and Offering

7 7.1

The Livingstone LIVIT Token Model

The strategy for the “tokenization” of Livingstone’s Smart Food Business Solution involves several steps. In the initial financing round, Livingstone will issue so-called IOU profit-sharing asset tokens called LIVIT tokens. These will entitle token holders to receive a share of net profits earned through Livingstone’s business operations.

Token Ticker

Token type

Total amount

LIVIT

ERC20

100,000,000 LIVIT tokens

LIVIT TOKEN

Hard cap

Sales price

€ 50,000,000

€ 1.00

per LIVIT token

(subject to time/ volume discount) The LIVIT token which will be issued by Livingstone Greentec AG (“Livingstone” or “the Company”) is expected to be qualified as an Asset Token under Swiss law according to the February 2018 guidelines published by the Swiss Financial Market Supervisory Authority (FINMA). The LIVIT token is intended to give the token holders a profit participation right equal to the dividend distribution to the Livingstone shareholders as defined by the Annual General Meeting of Shareholders (“AGM”), in accordance with the following procedure.

Figure 8: Profit Distribution Model of LIVIT tokens

34

 Once a year, following receipt of the audit report of

 Subsequently, after the completion of step 1 and

the previous financial year of each SPV/subsidiary

following receipt of the audit report of the previous

of Livingstone Greentec AG (“the SPVs”), the

financial year of Livingstone Greentec AG, and

shareholder (i.e. Livingstone Greentec AG) will

provided that the annual financial statement

decide on the amount of the profits of the SPVs,

of Livingstone Greentec AG states a profit, the

if any, to be distributed to the shareholder as

shareholders

proposed by the Board of directors of each SPV.

their annual general meeting of shareholders

of

Livingstone

Greentec

AG

in

(“AGM”) will decide on the amount of the profits of Livingstone Greentec AG, if any, to be distributed as dividends to the shareholders, as proposed by the Board of Directors of Livingstone Greentec AG.

IMPORTANT NOTE: In order for a profit participation right for the joint 100,000,000 LIVIT tokens to become effective, the following three cumulative conditions precedent must be fulfilled: 1) Livingstone Greentec AG (and its subsidiaries) make(s) a profit, 2) such profits are recognised in the annual financial statement of Livingstone, and 3) the Annual General Meeting of shareholders of Livingstone Greentec AG approves the distribution of profits and determines the amount of profits to be distributed.  A distribution of Livingstone’s profits, if any, to a specific amount as agreed by the shareholders of Livingstone Greentec AG at its AGM (“Amount X”), will be paid to its shareholders. The dividend payment resolution made during the AGM will subsequently trigger the obligation of the Company (i.e. Livingstone Greentec AG) to make a profit-sharing payment to all joint LIVIT token holders combined, equivalent to Amount X. Amount X will be converted into Ether and sent to the LIVIT token smart contract. The LIVIT token smart contract will evaluate the current LIVIT token holdings and distribute the respective relative profit share in the amount of Amount X to each LIVIT token holder in Ether.

IMPORTANT NOTE:  In determining the profits to be distributed, if any, the Livingstone Greentec AG Board and its shareholders will not only take financial results into account, but also the general financial health of Livingstone and each SPV before allowing the distribution of any profits. While the management and core team of Livingstone all also intend to become LIVIT token holders, we believe that the interests of token holders, shareholders and the companies are aligned.  In order to receive any profit-sharing pay-out, the LIVIT token holder must be registered (verified and accepted)

by Livingstone for Livingstone to comply with its KYC requirements and Swiss withholding tax regulations. Any LIVIT token holder who is not registered with its wallet(s) with Livingstone on the date of the dividend pay-out to the Shareholders and the profit participation pay-out to the LIVIT token holders by Livingstone will not be recognised as a LIVIT token holder, and such LIVIT token holder’s profit participation rights shall become void and irrevocably revert to the Company.  Unsold LIVIT tokens will remain with the issuer (i.e. Livingstone Greentec AG).

35

7.2 Token Allocation The majority (75%) of all the 100,000,000 LIVIT tokens will be allocated for private and public sale that will form the total circulating supply. The remaining 30% will be shared between Advisory and Bounty, the management team and early investors. These tokens will have a cliffed one year lock-up period defined in the LIVIT tokenâ&#x20AC;&#x2122;s smart contract. While the management and core team of Livingstone all also intend to become LIVIT token holders, we believe that the interests of token holders, shareholders and the companies are aligned.

Figure 9: Token Allocation Early Investors 10%

Management Team 10%

Advisors & Bounty 10%

Free float (tokens in circulation) 70%

36

7.3 ITO Process The price of LIVIT tokens is fixed in EUR (€). Both

in the beginning of the public sale, declining to zero

fiat and cryptocurrency (ETH and BTC) will be

by the end of the ITO period. Each purchaser entity

accepted as means of payment in the ITO process.

(i.e. a natural person or a company) can only buy

Cryptocurrency payments will be accepted in Ether

with one ticket in order to maintain a better overview of

(ETH) and Bitcoin (BTC) at the prevailing market

the contributor base and in order to keep the lock-up

exchange rate published daily on the ITO website. For

periods up-to-date.

token LIVIT purchases over €100,000, payments can be made through an escrow account or directly to

Fungibility of the LIVIT token will depend on its listing

the account of Livingstone via wire transfer. Separate

on licensed and legally compliant cryptocurrency

agreements shall be signed for the private sale and

exchanges which are allowed to trade asset-backed

the pre-sale.

tokens, if any, and to the extent possible. While Livingstone cannot commit to a precise timeline,

The LIVIT token is intended to be offered for sale

we will seek to list the LIVIT token within 2-3 months

worldwide, with the exception of investors prohibited

after the closing of our token generating event. The

from participation under the laws of their jurisdictions.

precise date and the intended exchanges will be

Within the EEA, Livingstone relies on exemptions

communicated to Livingstone’s token holders in due

under the so-called EU Prospectus Directive. The LIVIT

course. Prior to such listing, any peer-to-peer transfers

tokens held by investors will be locked up depending

of LIVIT tokens will need to be accompanied by a

on the time of investment. For private sale investors,

written assignment agreement that meets all legal

the lock-up period will be 6 months; and for the pre-

requirements under Swiss law, including wallet

sale, the lock-up period will be 3 months.

details, KYC documentation and checks of the assignee. The Company will need to receive a copy

During the private sale of LIVIT tokens scheduled

of this assignment agreement.

for Q3 2018, the contributors will be offered a 20% discount on the indicated sale price of €1.00 per token.

The full terms applicable to the ITO and the LIVIT

Once €10 million has been raised in the pre-sale,

tokens will be included in the LIVIT Token Sale Terms,

Livingstone will proceed with the pre-sale, subject to a

which will be published separately on Livingstone’s

15% discount. The main public sale of LIVIT tokens will

initial token offering website.

take place in Q4 2018 with a maximum discount of 10%

37

7.4 Buying Procedure and Minting of LIVIT Tokens

To

buy

LIVIT

tokens,

please

register

on

www.livingstone-greentec.com with your email and confirm the acceptance of the Terms of Token Sale.

By accepting and confirming the Terms of Token Sale, you represent and warrant, amongst others, that you are not a citizen or resident of a country whose laws and regulations conflict with the purchase of the LIVIT token and/or the participation in the token sale, and you explicitly confirm that you are not a resident of the countries mentioned in the Token Sale Terms (currently: the United States, China, Afghanistan, Central African Republic, Eritrea, Guinea, GuineaBissau, Haiti, Iraq, Lebanon, Libya, Congo, Russia, Somalia,

Sudan,

Ukraine,

Venezuela,

Yemen

and Zimbabwe) or a resident of a country where embargoes and sanctions are in force (currently: Iran, North Korea, Syria, CĂ´te dâ&#x20AC;&#x2122;Ivoire, Burma and Cuba). For further token sales restrictions, risks and representations and warranties made, please consult the Terms of Token Sale and the annexes thereto.

All our contributors will have to pass KYC and AML

conversion rate to fiat currencies is determined at

verification processes according to Swiss legislation.

the time of confirmation, in accordance with official

Assets will only be accepted after having successfully

exchange rates. The issuance of LIVIT tokens shall occur

passed the KYC/AML procedure published on the

at the end of our ITO. Therefore, the exact number of

Livingstone website. After the confirmation of your

LIVIT tokens distributed per investor is communicated

email address and completion of the KYC/AML step,

at the time of distribution of the LIVIT tokens.

the wallet holding the future LIVIT token is created.

As

payment

methods,

Livingstone

will

accept

The LIVIT tokens will be distributed no later than 30

cryptocurrencies Bitcoin and Ether and fiat currencies

days after the ITO has closed. Oversubscriptions of the

via credit card. The minimum contribution amount

entire token sale shall be returned to the participants.

has been fixed at (the equivalent of) EUR 500.

Upon sign-off of the distribution, every contributor receives an email with the binding number of LIVIT

In the next step, the payback addresses for possible

tokens that they receive, and the date and time of

oversubscription

the

distribution to their token wallet. For more information

payment details are communicated to you to deposit

on the procedure and regulatory and legal aspects,

the investment amount. An email is then sent upon

see the Token and Terms of Token Sale which will be

successful

published on www.livingstone-greentec.com.

38

payments

confirmation

of

are

added

your

and

payment.

The

7.5 Use of ITO Proceeds Figure 10.

The ITO proceeds are mainly intended to be used for the implementation of five pilot projects which are expected to generate steady cash flow for Livingstone’s token holders and shareholders. These projects are expected to demonstrate the advantages of Livingstone’s integrated technology solutions for horticulture and serve as a testbench for further improvement of Livingstone’s Smart Food Business concept using blockchain functionalities.

Some of the other purposes that will be covered by the ITO proceeds include: setting up Livingstone’s local offices and expanding the team; acquisition of agricultural land (if any) and other business development; market research and advertising; recurrent operational costs including, among others, the development and management of Livingstone’s community of supporters and the organisation of local educational programs; ad hoc R&D; as well as e.g. general legal, tax, communication, advisory, placement and IT costs related to the ITO.

39

8

Outlook

Once the initial capital requirements of Livingstone are covered through the first round of ITO financing, we will start the rollout of the pilot projects and the construction of the planned facilities. In parallel, Livingstone will pursue the development of its blockchain-based Track and Trace solution and the GreenZone platform. In order to operationalise these developments, we foresee the issuance of three additional tokens, namely: (i) Utility-type token allowing access and enabling transactions on Livingstoneâ&#x20AC;&#x2122;s GreenZone platform; (ii) Crop financing tokens conferred with asset property rights, to be used for the pre-financing of future crops production and facilitation of procurement operations; and (iii) Project financing security-type token with profit sharing rights, similar to the LIVIT token intended for deployment of the Livingstone Smart Food Business Solution in other locations around the world.

These ITOs are expected to take place in 2019-2020.

Livingstone will provide more information on these ITOs as soon as this is available on its website.

Since the co-founders and all token holders will have aligned interests and incentives, we are all in a positive-sum-game. We do not want to use the ITO as a speculative springboard, but as a way of funding innovation and truly changing the world of decentralised food production. Both founders, Stef Schreuder and Meindert Don, and the whole management and advisory team are fully committed to Livingstone and its strategic goals for the long term.

40

Figure 11.

9

Risks

The full disclosure of risk factors relating to the ITO,

Purchase decisions should not be made solely on

the Company, the LIVIT tokens and the projects is

the basis of the risk warnings set out by Livingstone,

provided on Livingstoneâ&#x20AC;&#x2122;s ITO website and in the

since such risk information does not purport to be

Token Sale Terms.

an exhaustive and comprehensive list of all possible risks associated with a purchase of LIVIT tokens.

Prospective

purchasers

of

LIVIT

tokens

should

Accordingly, the risks described in Livingstoneâ&#x20AC;&#x2122;s

consider these risk factors and consult with their own

documentation are not the only ones facing the

professional advisers before deciding to participate

Company. The sequence in which the risk factors

in our ITO. The risk warnings set out by Livingstone

are presented is not indicative of their likelihood of

cannot serve as a substitute for individual advice and

occurrence or of the potential magnitude of their

information tailored to the individual requirements,

financial consequences. Additional considerations not

objectives, experience, knowledge and circumstances

currently known or which are currently not deemed

of each prospective purchaser. In addition, prospective

material may also impair the Companyâ&#x20AC;&#x2122;s business

purchasers should be aware that the described risks

operations. The business, financial condition, results

may combine and thus intensify. In any such case,

of operations and prospects of the Company could

the market price of the LIVIT tokens may be materially

be materially adversely affected by any of these risks.

adversely affected and a purchaser could lose all or part of their original contribution.

Only prospective investors who are fully aware of the risks associated with the investment in the LIVIT tokens and who are financially able to bear any losses that may arise should consider investing in this ITO.

41

41

10

Annex

List of terms / acronyms and abbreviations used throughout this White Paper AML

Biodegradable

Anti-Money Laundering - a set of procedures, laws

Capable of being broken down by bacteria, fungi or

and regulations designed to stop the practice of

other biological means.

generating income through illegal actions.

Blockchain

Carbon footprint

A continuously growing list of records which are

The amount of greenhouse gases and specifically

linked and secured using cryptography. By design,

carbon dioxide emitted by something (such as a

a blockchain is inherently resistant to modification

personâ&#x20AC;&#x2122;s activities or a productâ&#x20AC;&#x2122;s manufacture and

of its data. It is an open distributed ledger that can

transport).

record transactions between two parties efficiently, verifiably and permanently.

CDM (Continuous Diagnostics and Mitigation)

Cryptocurrency

System of collecting and analysing data during

are used to regulate the generation of units of

plant growth, such as humidity, light, CO2 and

currency and verify the transfer of funds. It operates

Plantivity.

independently of any central bank.

Ecosystem

Farm-to-Fork / Field-to-Fork

A community made up of living organisms and non-

The entire food production process from the

living components.

beginning until the end, when it reaches the

A digital currency in which encryption techniques

consumer.

FINMA

FoodHub

Financial Market Supervisory Authority (Switzerland)

Part of the Livingstone solution consisting of a high-tech greenhouse with logistic and processing facilities for the production of high quality fruit and vegetables.

42

Food safety

Food supply chain

A scientific discipline describing the handling,

Food production, distribution and consumption

preparation, and storage of food in ways that prevent

configurations.

food-borne illness.

Globalisation

GMO

The process by which businesses or other

Genetically Modified Organism: an organism or

organisations develop international influence or start

microorganism whose genetic material has been

operating on an international scale.

altered by means of genetic engineering.

Go-to-Market strategy

GreenZone Platform

Plan of an organisation, utilising their inside and

A blockchain-based digital marketplace for the

outside resources to deliver their unique value

horticultural commodity trading and transportation

proposition to customers and achieve competitive

processes, offering all parties greater transparency

advantage.

and security.

GrowLab

Grow Support System (see also CDM)

Part of the Livingstone solution for multiplication

System of collecting and analysing data during

by Tissue Culture and pre-hardening in multi-layer

plant growth, such as humidity, light and Plantivity.

systems.

Hardening, pre-hardening

Hybrid plants

Process of adapting plants to a change in climatic

Plants that have been successfully cross-bred with

conditions, especially humidity.

other plants to take advantage of certain traits and get rid of other, less advantageous traits.

Hydroponics

ICO

The cultivation of plants by placing the roots in liquid

An Initial Coin Offering is a means of issuing new

nutrient solutions rather than in soil.

cryptocurrencies (â&#x20AC;&#x153;altcoinsâ&#x20AC;?) for crowdfunding.

IGGS system

IOU

The Integrated Greenhouse Growing System is an

A signed paper given as an acknowledgment of debt.

advanced technology developed by A3 (a partner company of Livingstone) to produce greenhouse crops by moving production plants into favourable environments during growth, flowering and fructification.

In vitro

ITO

Said of a process performed in a test-tube so as to

An Initial Token Offering is a means of issuing tokens

create a controlled biological environment.

for crowdfunding with cryptocurrencies.

43

Horticulture

KYC

In the context of Livingstone projects, horticulture is

Know Your Customer is the process of a business

the science and art of growing vegetables, fruit, nuts

identifying and verifying the identity of its clients. The

and plants, including plantlets and seedlings for

term is used to refer to the banking and anti-money

human consumption and use.

laundering regulations which govern these activities.

Multi-layer system

Nutrient Film Technique (NFT)

System for plant cultivation on beds in several layers

A hydroponic technique in which a very shallow

with special facilities for light and water.

stream of water containing all the dissolved nutrients required for plant growth is re-circulated past the bare roots of plants in a watertight gully.

Paradigm shift

Phytomedicine (phytopharmaceutics)

A fundamental change in approach.

The use of plants or plant extracts for medicinal purposes.

Plantivity

Plantlets

A combination of the words “plant” and “activity”

Young small plants.

referring to the measurement of plant activity such as growth, photosynthesis and respiration.

Post-harvest

Security token

Post-harvest handling is the stage of crop production

Any blockchain-based representation of value that is

immediately following harvest, which includes

subject to regulation under security laws. It includes

cooling, cleaning, sorting and packing.

tokens representing traditional assets like equity, debt, derivatives and real estate, and it also includes pre-launch utility tokens that are deemed securities by regulators.

Seedlings

Smallholder farms

Young plant developed from a seed or tuber.

Small farms (up to 10 hectares) normally supporting a single family, depending on family labour and using some of their produce to meet their own living needs.

Smart Farming

Superfood

Smart Farming represents the application of modern

Food that is rich in compounds considered beneficial

Information and Communication Technologies (ICT)

to health, such as antioxidants, fibre, or fatty acids.

into agriculture. It includes Management Information Systems, precision farming, agricultural automation and robotics.

44

Sustainable Development Goals (SDGs)

Sustainability

A universal call to action to end poverty, protect the

Process of change, in which the exploitation

planet and ensure that all its inhabitants enjoy peace

of resources, the direction of investments, the

and prosperity. These 17 Goals build on the successes

orientation of technological development and

of the Millennium Development Goals, while including

institutional change are all in harmony and enhance

new areas such as climate change, economic

both current and future potential to meet human

inequality, innovation, sustainable consumption,

needs and aspirations.

peace and justice.

Tissue Culture

Track and Trace

Growth of tissues or cells separate from the organism

Process that determines the current and past

via use of a liquid, semi-solid, or solid growth

locations of a unique item or property.

medium.

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CONTACTS Livingstone Ventures BV 123 Bosscheweg NL-5015 AB Tilburg Netherlands

Livingstone Ventures AG Blegistrasse 3 CH-6340 Baar Switzerland

Livingstone Greentec AG Seidenholfstrasse 14 CH-6003 Luzern Switzerland

www.livingstone-greentec.com Email LinkedIn Bitcoin Talk GitHub Reddit Telegram Slack Facebook Twitter

Member of Crypto Valley Association www.cryptovalley.swiss

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