1. Introduction

The project of APF DIGITAL AGRIFUND CR s.r.o. aims to combine the advantages of digital assets with the benefits of real investment in agricultural land. Given the stable development of agricultural land prices in the Czech Republic and market conditions, it offers clients a more conservative form of investment in crypto-assets, which is backed by the assets of the APF GROUP.

1.1 About us / project background

The company APF DIGITAL AGRIFUND CR s.r.o. belongs to the APF GROUP of companies engaged in investments in agricultural land in the Czech Republic.

The company has been registered in the list of persons carrying out asset management comparable to asset management within the meaning of Section 15(1) of the Investment Companies and Investment Funds Act, maintained by the CNB in accordance with Section 596(e) of the Alternative Investment Fund Act. Inclusion on the list does not constitute a business license and does not authorize the public to offer investments and collect money from the public for the purpose of investing it together. Neither the Company nor its activities are subject to the supervision of the CNB, the Company is not subject to any prudential or other rules of operation and the funds entrusted to it for management are not insured by law.

At the same time as the management of the funds entrusted to it as an alternative fund, the company has the ambition to enter the international cryptocurrency market with its own cryptocurrency APF Coin (APFC). The company is currently seeking to list APFC on a cryptocurrency exchange in a separate ICO. The issued cryptocurrency will be backed by the assets of the APF GROUP.

The funds entrusted to the Alternative Fund and the funds raised through the sale of the APF Coin cryptocurrency are primarily used to purchase agricultural land, and in accordance with the Alternative Fund's investment strategy, to invest in securities of companies operating in the agriculture, food and related industries and in cryptocurrencies related to projects within the agriculture sector.

1.2 Project timeline

March - Preparation and finalization of the concept, launch of the website, implementation of the wallet

April - Finalization of the smart contract and complete testing of the entire system.

May - Finalization of the marketing strategy. Initial public offering of coins - entry on HitBTC exchange.

2. Why to invest in agricultural land

2.1 General factors

Agriculture is an integral part of the primary sector of the national economy of the Czech Republic. Its importance is not only in the production of food and other agricultural products, but it is also of great significance for the preservation of the cultural landscape and in the context of an ecological approach to the environment.

All crops characteristic of the country's geographical and climatic location are grown in the Czech Republic. These include all the main cereals (wheat, barley, rye, oats and maize), sugar beet for sugar production, potatoes, oilseeds (rape), flax, hops, fruit, vegetables and vines. Livestock production in the Czech Republic is mainly cattle (for milk and meat), pigs and poultry.

The total area of the agricultural land fund of the Czech Republic is 4 269 000 ha (54,1 % of the total area of the country). Most of it is arable land, although its area is decreasing. On the other hand, the area of permanent grassland is increasing.

80 % of agricultural land is under agricultural lease. 75 % of landowners are individuals.

2.2 Development of market prices of agricultural land in Czech Republic

The agricultural land market in the Czech Republic is practically without major restrictions in the context of transfer of ownership to third parties. EU citizens can acquire agricultural land without restrictions. The fragmented ownership of land allows a large number of trades to be actively pursued even with a small area. All agricultural land intended for investment is leased to agricultural operators who farm the land. These operators are obliged to comply with legal standards relating to the protection of agricultural land reserves, the conduct of agricultural activities and compliance with environmental standards for sustainability and landscape development.

Agricultural land has a stable market price trend and is not subject to market price fluctuations like other assets (e.g. stocks, bonds, mutual funds, commodities, cryptocurrencies, residential and commercial real estate).

2.3 APF VENTURE CAPITAL CR s.r.o.

Sister company APF VENTURE CAPITAL CR (formerly Agrární půdní fond s.r.o., APF) was founded in May 2020 as a startup by a combination of an investor, a real estate broker and agricultural land traders in the Czech Republic. It is currently part of the APF GROUP, which primarily focuses on farmland investments.

APF is a real estate broker under the relevant Real Estate Brokerage Act with professional liability insurance of CZK 20 million.

APF has been entered in the list of persons carrying out asset management comparable to asset management within the meaning of Section 15(1) of the Investment Companies and Investment Funds Act, which is maintained by the CNB in accordance with Section 596(e) of the Alternative Investment Fund Act.

We started in 2015 as real estate brokers specializing in agricultural land with the largest real estate company in the country. We made our first investment in agricultural land through the current owner of the company in 2016 in the amount of CZK 550,000 and the gross return on this investment was 40%. Until the establishment of APF, the owner of the company traded only as an individual. Since the first trade, the owner has gradually raised equity capital of approximately CZK 11 million by investing in APF.

Based on our experience, knowledge and expertise, we are able to select suitable agricultural land for potential investment, determine the current market price, the future yield and thus the future market price and, of course, ultimately sell the land under the stated conditions.

The average gross yield is around 20% per annum. And because we can do this, and have confirmed it many times, we can afford to secure the future yield in the form of a forward purchase agreement.

Our current Portfolio Manager has been awarded the best real estate broker in the entire country by the largest real estate company in the domestic market in 2019 and 2020. To date, he has completed more than 1,400 client transactions with a total value exceeding CZK 800 million.

We have gained the most private clients from working for a real estate company, who started working with us based on client references. From these figures we derive "multiple" confirmed deals.

We work mainly with real demand in individual locations with predefined land parameters (type of land, area, climate zone, location, location in the cadastral area, lease agreement, speed of monetization).

We focus on the main agricultural production areas. We select land that is undervalued in terms of its current market price or its parameters, given our experience, knowledge and completed transactions. We consistently assess the terms of the lease. We aim for a stable return on portfolios (from 10% per annum) with an emphasis on market rent.

We then return the selected plots back to the market through a cooperating real estate agency. We do not anticipate or foresee any possible price increases in agricultural land. We react to developments through market demand or specific requirements of interested parties and, of course, we take into account changes in macroeconomic and legislative conditions in the Czech Republic.

Last but not least, we have knowledge of agricultural issues acquired by studying at the relevant university.

Due to our close cooperation with real estate agency, we have an extensive database of those interested in agricultural land, which we have created ourselves through active trading. All available marketing means of the cooperating real estate agency are used for the effective offer of land.

3. APF Coin (APFC)

APFC is an secured token created on the Ethereum Mainnet.

An electronic wallet based on MetaMask is used as a tool to hold and transfer APFC.

3.1 Distribution of coins

The total amount of coins issued is 250 000 000 pieces. The number of units available to the public at the initial coin offering (ICO) is 70% of the base, i.e. 175 000 000 units.

175M APFCs will be placed on the HitBTC crypto exchange through an ICO which will take place from May 2023. The initial price of 1 APFC is set at USD 0.2.

The remaining coins (75,000,000 units) represent the company's liquidity management reserve.

Direct retail sales of APFCs are not possible.

3.2 Coin utilization

The funds raised from the sale of APFC cryptocurrency are used primarily for the purchase of agricultural land within the Czech Republic. Holders are kept informed of the value of the deposit cover through the Company's website, where the Company's performance will be published on a regular basis.

4. Conclusion

APFC's main goal is to offer its customers a stable conservative investment based on modern technology. The purpose is to create easy and transparent investments with stable returns for its customers that preserve value even in times of rising inflation and interest rates. The whole concept of this project will continue to evolve. Therefore, the plans described in this document may be adjusted in the future as the project progresses, depending on the development of the cryptocurrency market and any legislative regulatory requirements.