ICOrating

PAVOCOIN Rating Review (http://pavocoin.com)

ICO dates (12.04.2018 – 15.09.2018)

Web: icorating.com

Email: info@icorating.com

Twitter: @IcoRating

1. Rating 3

2. General Information about the Project and ICO 4

3. Description of the Services and Scope of the Project 6

4. Market Review 7

5. Team and Stakeholders 11

6. Token Analysis 13

7. Analysis of Factors Affecting the Future Value of the Token 15

8. Investment Risk Analysis 17

1. Rating

We have rated PavoCoin as “Stable+”.

PavoCoin is a blockchain platform designed initially for the cannabis industry but servicing

the entire general agricultural market. The PavoCoin team have developed their loT Ag-

Tech software in order to help producers (gardeners) increase crop yield and profit. It is

also designed to improve product quality and optimize the crop cultivation and distribution

process, as well as facilitate future supply planning.

All ecosystem participants will be using the PAVO cryptocurrency for transactions,

ensuring payment safety and security. The currency will also eliminate the risks

associated with termination of cannabis ecosystem participants’ bank accounts.

A fully-developed Pavo IоT Ag-Tech solution is now being tested in two indoor grow

houses in California. The company’s strategy is to expand horizontally across the indoor

farming market to service all vertical indoor farming crops. The team views IoT and

blockchain technology as a means to shorten crop cycle times and thereby increase

annual indoor farm yields.

PavoCoin’s team consists of experienced experts from various fields and with different

backgrounds. The team have been working together for several years, which is definitely

an advantage. Another undeniable perk is that the team are receiving cannabis-related

legal advice from Sideman & Bancroft. Walder Wyss Ltd (Switzerland) and Paul Hastings

LLP (the USA) provide their services to support the launch and management of the ICO.

The project has the following advantages in addition to those stated above:

• A sensible and well-thought-out marketing concept designed to attract new users

to the platform and ensure the success of Pavo’s IоT Ag-Tech solution in the

market. At the forefront of the marketing campaign is financial support for

installation and operation of Pavo IоT Ag-Tech.

• Stimulation of PAVO token usage by platform participants.

However, we wish to highlight several shortcomings:

• there are some factors that could lead to token price drop. Refer to the section

‘Analysis of factors affecting the token’s future price’ for a detailed description.

• there are some investment risks, i.e. the tokens might not be listed on exchanges,

the product might not be able to obtain the desired cannabis and agricultural

market share. Plus, there are some legal risks. Refer to the section ‘Investment

risks analysis’ for a detailed description.

2. General Information about the Project and ICO

The Pavo platform will be employing two blockchain frameworks: Ethereum and

Hyperledger Fabric. It is designed to be used in the agricultural business, in particular

the cannabis industry. The services and apps will operate on the Ethereum blockchain.

The Hyperledger Fabric blockchain will ensure IoT (Internet of Things) data access

control.

Pavo includes two main components:

A fee-based hardware and Software-as-a-Service (SaaS) platform for

growers;

A cryptocurrency for ecosystem participants.

Website

WhitePaper

Smart contract platform: Ethereum blockchain

Contract type: ERC20

Token: PavoCoin

Soft cap: $5,000,000

Hard cap: $30,000,000

Total token supply: 200,000,000

No additional emissions are envisaged.

Standard exchange rate: 1 PavoCoin = 1 USD.

Issued tokens allocation:

50 %

20 %

% 15

10 %

,5% 2 5 , 2

%

Token distribution

Available in Token sale

Controlled Reserve Fund

Team, Partners/Advisors/Contractors

Community Reserve

ICO Incentives and Bounty

Growers Reserve

Fundraising consists of three stages:

Pre-sale Phase 1:

Start date: April 12th, 2018

End date: April 26th 2018

Bonus: 33% for minimum $5000 purchase.

45% for minimum $10,000 purchase.

Minimum transaction: $5000.

Pre-sale Phase 2:

Start date: April 27th, 2018

End date: August 6th 2018

Bonus: 27% for minimum $500 purchase.

30% for minimum $1,001 purchase.

33% for minimum $2,501 purchase.

Minimum transaction: $500.

Token Sale:

Start date: August 7, 2018.

End date: September 15, 2018.

Bonuses:

From August 7 to August 18 – 25%

From August 19 to August 25 – 18%

From August 26 to September 1 – 11%

From September 2 to September 8 – 5%

Minimum transaction amount: Only if using fiat currency: $1000, otherwise none.

Accepted currencies: BTC, ETHER, LITECOIN, BITCOIN CASH, DASH, ZCASH, USD.

The funds raised during the token sale will be allocated as follows:

3. Description of the Services and Scope of the Project

The Pavo platform is designed to facilitate remote hi-tech automated crop production and

further distribution. The Pavo marketplace is intended for farmers, consumers and

suppliers of various agricultural goods. The team’s first priority is the cannabis industry.

Other domains include tree nuts, industrial crops, legumes, vegetable and grain crops.

As the white paper states, the team is using two indoor grow houses in California USA to

test and improve the fully-fledged IoT platform. The team has also deployed at one

outdoor almond farm in the Northern California Central Valley, with two more scheduled.

In the future, producers will have access to wireless sensors for lighting, air temperature,

soil moisture, air cooling, contamination, water quality parameters (ph, ORP, salinity), and

system performance sensors. As the founders explain, these sensors will be employing

LoRa and LoRaWAN technologies for data transmission.

Pavo’s developers have designed adaptors that can be integrated with multiple off-site

irrigation, lighting and cultivation systems. Platform users will be able to monitor and edit

sensor data via a web browser or mobile app. Producers will be provided, inter alia, with

analyses, reports and recommendations on crop cultivation and the optimization of

distribution, storage and supply. They will also be able to track their expenses and

employee productivity. All recommendations will be personalized. This is supposed to

help reduce expenses associated with power and water supply, consumables and

maintenance.

All production and transaction data will be processed employing blockchain. Each

producer will have a personal account with Pavo-certified goods that can be purchased.

The marketplace will be available both on desktop and a mobile app, thus users will be

able to buy goods wherever they like. Both buyers and sellers will be able to rate the

products and services.

Frowers will have to buy the equipment and pay a subscription fee to use the platform. All

participants will pay transaction fees. All smart contracts will be executed with Pavo

tokens. They will be automatically converted on the platform.

Blockchain, together with smart contracts, machine learning and AI technologies

employed on the platform may streamline and increase the efficiency of crop cultivation

and distribution processes for producers, as well as give fresh impetus to market

development. Buyers will receive all the necessary information on products and the

conditions they were grown in. Hyperledger Fabric will help reduce transaction times and

make sure the system is secure and manageable for each user. As per the roadmap, the

fully-fledged marketplace will be launched as early as the end of 2019.

4. Market Review

Global population and product consumption show annual increases, whereas actual

expansion of farming croplands is limited. This gives momentum to high tech companies

in the agricultural industry. As per the J’son & Partners Consulting report, over the period

between 2010 to 2016 the number of AgTech startups increased from 20 to 1300. This

segment also saw significant investment influx1.

The smart agriculture market alone is projected to grow from $5.18 billion in 2016 to

$11.23 billion by 2022, at a compound annual growth rate of 13.27% between 2017 and

2022.2

According to the Boston Consulting Group (BCG) survey3 more than 3/4 of a sample of

1500 executives stated that innovations were their top priority. Moreover, as per the J’son

& Partners Consulting report4, Goldman Sachs anticipate that by 2050, state-ofthe-art

technologies could help increase global crop yield by 70%.

The medical and recreational cannabis market is booming right now (annual growth rate

is more than 25%)5.

When the United Nations (UN) adopted the Single Convention on Narcotic Drugs on

March 30, 19606 and incorporated “cannabis, cannabis resin, extracts and tinctures” into

their Yellow List7, it was recommended to ban its use completely, except for medical,

research and production needs (industrial hemp fibers and grains).

Since the 1970s the US National Organization for the Reform of Marijuana Laws

(NORML)8 has been pushing for the decriminalization and legalization of recreational

cannabis. Since the 1990s, a lot of countries have been adopting more relaxed cannabis

laws.

For example, Israel (1994), Denmark (2011) Austria, Macedonia, Croatia, Romania,

New Zealand, Puerto Rico, Mexico, Turkey, and several other countries legalized

medical cannabis (it can be purchased in special pharmacies with a prescription).

The following countries have decriminalized marijuana: Spain (February 1992), Portugal

(July 1, 2001), the Netherlands (1972), Belgium (1998), Great Britain (2002), the Czech

Republic (January 1, 2010), Malta (2015), Ecuador (2008), Columbia, Paraguay, Brazil,

Argentina, Venezuela, Cambodia, Chili, Jamaica and Australia.

1 https://www.agweb.com/article/agfunder-names-top-10-agtech-deals-in-2017/ 2 https://www.marketsandmarkets.com/PressReleases/smart-agriculture.asp 3 https://forbes.kz/leader/bcg_reyting_samyih_innovatsionnyih_kompaniy_mira 4 http://json.tv/ict_telecom_analytics_view/internet-veschey-v-selskom-hozyaystve-agriculture-iot-aiot-

mirovoyopyt-keysy-primeneniya-i-ekonomicheskiy-effekt-ot-vnedreniya-v-rf-20170621045316 5 http://primevision.group/analiticheskij-otchet-po-industrii-medicinskogo-i-rekreacionnogo-kannabisa/ 6 http://www.unodc.org/unodc/en/treaties/single-convention.html 7 http://www.incb.org/incb/en/narcotic-drugs/Yellowlist_Forms/yellow-list.html 8

http://norml.org/

In December 2013 Uruguay became the first country to permit the purchase, selling,

growing and smoking of cannabis. Canada may become the second one, in July 20188.

Twenty-nine American states have legalized medical cannabis9. Nine of these states have

also legalized recreational cannabis10. At the same time, cannabis still remains illegal

under federal law11.

Over the past ten years attitudes towards cannabis have changed; medical and

recreational marijuana is becoming more and more popular all over the world. As per the

Brightfield Group report,12 this market will have a $31 bln yield by the beginning of 2021.

Cowen Washington Research Group is even more optimistic and anticipates a $50 bln

profit13. According to the Brightfield Group report14 right now the USA is the global leader

with 90% of market share, however this percentage will have dropped to 57% by 2021.

This is connected to the fact that cannabis is prohibited under federal regulations and the

recreational and medical cannabis market is facing an influx of startups from Latin

America, Canada, Europe, and Israel.

The number of companies involved in the production and distribution of cannabis has

increased dramatically over the last 10 years. The medical cannabis market is expected

to show 20% or even 35% annual growth over the next 5 years. Currently Canada and

the USA jointly have 1028 companies, whose average value is $4.1 mln.

8 http://www.cbc.ca/news/politics/marijuana-legal-bill-1.4069178 9 https://medicalmarijuana.procon.org/view.resource.php?resourceID=000881 10 https://marijuana.procon.org/view.resource.php?resourceID=006868 11 https://www.dea.gov/druginfo/ds.shtml 12 https://www.brightfieldgroup.com/plans/canada-international 13 https://www.forbes.com/sites/debraborchardt/2016/09/22/cannabis-attracting-mainstream-

researchanalysts/#1991c8c13123 14 https://www.forbes.com/sites/monazhang/2017/11/07/global-marijuana-market-31-billion-

investorscautious/#240e982f7297

MARIJUANA INDEX15

Marijuana Startups16

Competitor analysis

Initially, Pavo is planning to focus on the medical, industrial (hemp) and recreational

cannabis industry. After that the team plans to turn their attention to adjacent segments

and expand their presence in all the agricultural ecosystem markets.

At the moment there are plenty of AgTech companies in the agricultural market. Large

agribusiness corporations are also developing digitized and IoT-based farming

technologies.

Here are some of these companies:

Hortau17 is a wireless soil moisture monitoring and management platform. It is integrated

with Hortau wireless irrigation systems and simple cloud software. The company was

founded in 2002.

Pycno 18 offers wireless sensors and stand-alone systems for soil and environment

monitoring. The sensors have built-in solar panels. They collect weather data which is

further analyzed by the Pycno cloud solution. Pycno also uses local weather station data

and satellite images to improve analysis quality.

BrightFarms19 designs, funds and constructs hydroponic high-tech greenhouses in

cities and suburbs, employing IoT technologies in the vicinity of their sales outlets.

BrightFarms collaborates with Giant, ACME and Pick-n-save supermarkets.

15 http://marijuanaindex.com/

16 https://angel.co/marijuana

17 https://hortau.com/ 18 https://www.pycno.co/ 19 https://www.brightfarms.com/

Among other AgTech companies are MotorLeaf20, SciCrop21, Agrosmar and The

Yield; this is not the full list.

FORBES22 has named 25 of the most promising and innovative Ag-Tech startups. All of

the companies mentioned above are Pavo’s competitors.

We should also mention cannabis industry companies that employ blockchain. Here Pavo

has the following competitors (projects are at different development stages):

Fibonacci24 is a system designed for growing cannabis, herbs, vegetables and other

products at home. Fibonacci has integrated iOS and Android apps that enable its users

to monitor and manage farming processes.

Grownetics23 is a startup that has developed proprietary operating systems for

greenhouse farming. Its solutions include management software and sensors for

monitoring lighting, moisture, CO2 and other parameters. All of this is supposed to

improve product quality, maximize yield and minimize expense.

Pavo’s competitive advantage is that its team have experience in the development of

conventional almond, hazelnut and walnut monitoring systems for the European market.

Other strengths include an operating IoT platform now being tested in California, USA and

cultivation equipment to be integrated with the Pavo platform, plus a team of professionals

who have relevant backgrounds in the implementation of top notch technologies in the

field of IoT, SaaS, AgTech and blockchain. Furthermore Pavo, unlike any of their

competitors, provides an encompassing solution that integrates Software-as-a-Service,

(SaaS), IoT, Blockchain, and a corresponding cryptocurrency.

20 http://motorleaf.com/ 21 https://scicrop.com/ 22 https://www.forbes.com/sites/maggiemcgrath/2017/06/28/the-25-most-innovative-ag-

techstartups/#13b411864883 24 http://cannabisfarm.io/ 23 http://grownetics.co/

5. Team and Stakeholders

The PavoCoin team consists of 12 people. Information on the key members is provided

below.

Allan Young. Co-founder and Vice-Chairman

Allan Young founded TopLine Incubator, one of the largest high tech and startup

incubators in the East Bay. Since 2013 he has been a venture partner in Piedmont

Partners’ Group Ventures. Between 2012 and 2017 he founded another startup incubator,

Runaway, which is now one of the major incubators in the San Francisco Bay Area.

Erhan Cakmak. CEO & Co-Founder

Erhan Cakmak is the chairman of Agrotics INC board; this is a software and analytics

platform designed to help farmers. From 2012 to 2017 he was COO of N3N and Bright

Pattern Inc. Erhan has also held executive positions in such companies as General

Electric as Director for Central Europe, and at Aspect Software as General Manager for

Europe and South Africa.

Ari Gorman. CTO

Over the past 16 years Ari has been CTO of NovaTel Networks. There, Ari was

responsible for infrastructure design, planning, deployment, integration and management.

Dave Dabbah. CMO

Right now Dave holds the following positions: VP of marketing for Agora.io, CMO of

dabbah.io, and advisor to Stealth Start-Up. Dave is a marketing expert and has held

executive marketing positions in such companies as N3N, Hawq, Ephox, Lyris Inc and

EmailLabs over more than 15 years.

Atakan Cetinsoy. VP Product Management

Atakan Cetinsoy is VP of BigML, a machine learning cloud service platform. Before that

he was an advisor to the same company. From 2006 to 2011 he was VP of Strands and

then held the same position for Deem Inc. Ataken worked as a Business Intelligence

Manager and CRM architect for Apple. He has also worked as a product manager for

Yahoo and FedEx.

David Howard. VP Corporate Strategy

From 2016 to 2018 David was the Marketing & Sales Operations Director for N3N. David

also has significant experience in product and marketing management. He has worked at

such companies as Salesforce, Cisco Systems, Five9, UTStarcom and Alcatel SA.

Basir Momand. IT Sensor Engineering

Basir Momand has been call center general manager and IT and support infrastructure

director of CallSocket LP. Basir is involved in software development, call center

technologies and IT and tech support.

Mike Booker. Chief Cultivator

Since 2009 Mike, a Long Beach State and San Jose State university alumnus, has worked

at cultivating high-quality, organic, medical cannabis for his family, friends and

community. His interest in cannabis stems from the loss of three family members due to

complications and side effects from conventional cancer treatments.

The PavoСoin team has 22 advisors. Here are the most important ones.

Jeff Burton. Strategic Advisor

Jeff is cofounder of HolodeckVR as well as the chairman and CEO of Woodside Creek.

He is a strategic consultant for such projects as 0xcert, R3Sec, Cryptelo, Dragonglass

and BitDegree.

Before that he worked for Just Arrive for 7 years. From 1982 to 1989 Jeff was cofounder

and director of Electronic Arts (EA).

Keith Teare. Advisor

Keith is the Executive Chairman of Accelerated Digital Ventures, an investment platform.

He is a consultant to the following projects: Convergence of 4 Dimensions LLC,

Blockchain.aero Technology Consortium, Ponder, PATRON, R_Block and

SocialMedia.Market. Keith has been a member of the advisory team for ContextGrid,

Energi Mine, Crypterium, Fluz Fluz Global and ICOBox. From 2005 to 2016 Keith founded

and worked for Archimedes Labs.

Niсk Evdokimov. Advisor

Nick Evdokimov founded ICOBox, which has successfully completed more than 40 ICOs.

He has held the CEO position for such companies as Cryptonomos, Appintop Corp and

AdtoApp Corp.

The PavoCoin team are professionals with varied experience and backgrounds. It is worth

noting that there are marketing and technical experts both in the team and among the

advisors. It is positive that some team members, such as Erhan Cakmak, also have a

specific background in agriculture and cannabis (Mike Booker).

PavoСoin is collaborating with one Swiss (Walder Wyss Ltd) and two American (Sideman

Bancroft and Paul Hastings LLP) law firms.

6. Token Analysis

A smart contract repository is available on Github24:

Token name - PavoCoin

Symbol - PAVO

As the white paper states, PavoCoin (PAVO) is an ERC20 Ethereum

blockchaincompatible utility token. Ecosystem participants can use PAVO for the

following:

• mutual payments (tokens will be the only payment method)

• Pavo SaaS fee payments (other currencies are also accepted, but participants get

a 10% discount when paying in PAVO)

• payments for marketing and advertising on the platform (tokens will be the only

payment method)

• voting on incentive distribution and platform policy, as well as dispute resolutions

participant rewards and loyalty programs.

We think that the PAVO token could become popular with platform users, as it is a safe

and efficient fee payment method. Some services can only be paid for in PAVO (for

24 https://github.com/pavocoin/ERC20/blob/master/PAVO.sol

instance marketing and advertising on the platform). This will encourage different parties

to buy the tokens.

7. Analysis of Factors Affecting the Future Value of the

Token

The PAVO platform will be using the infrastructural PavoCoin token. Its appeal depends

on the volume circulating in the PAVO ecosystem. Currency circulation is determined by

the following factors:

• The number of active ecosystem participants

• PAVO product usage

• The introduction of additional PAVO services paid for with PAVO tokens.

An alpha version of the platform will become available in April 2018. Tokens will start to

circulate immediately after ICO completion because users will have to pay subscription

fees. Thus tokens may be in immediate demand.

The beta version of the PAVO platform using hyperledger will be released in the third

quarter of 2018. From this moment on, all growth cycle data will be stored using

blockchain. The platform will be able to confirm and host PAVO-certified products. At this

point, the improved sensors and services available on the platform are the optimal

functionality in the medium term. Launch of the fully-featured platform is scheduled for

the second quarter of 2019.

Increase in the number of functions and participants will result in higher token demand.

The PAVO team have payed special attention to methods for attracting new platform

users and helping to promote their equipment among cannabis growers. The team has

envisaged financial support for growers, i.e. they will be able to install and use the PAVO

IoT platform for free until 12 months after the ICO. This financial incentive, together with

the marketing campaign, aims to attract up to 1000 growers over the first year. In 12

months producers will be paying PAVO subscription fees themselves. This will increase

the volume of tokens circulating on the platform and make them more appealing.

The developers have foreseen other measures to stimulate token usage:

• An incentive of 10% discount for subscription fee payment

• Mutual payments and marketing fees require PAVO tokens

• Token rewards for participants who assist platform development the most.

Rewards will be allocated from the Community Reserve fund, where tokens are

blocked for six months.

• 80% of all tokens the team hold will be blocked for a year. After that they will be

unblocked monthly over the 2 subsequent years. 20% will be unblocked quarterly

within the first year, i.e. 1.5 mln tokens each quarter (0.75% of total issued supply).

The volume of tokens unblocked quarterly in relation to the total issued volume is

not large, thus it will not have any major effect on PAVO token prices.

However, there are some negative aspects that could affect Pavo token prices:

Firstly the pre-sale and ICO 33% bonus. The pre-sale requires a minimum transaction of

$5000, whereas the ICO has no such requirements but offers the same bonus. Identical

discount conditions could result in an influx of minor speculators and drive away more

serious investors from the early sale.

Secondly, the Controlled Reserve Fund, for which 20% of total token supply is allocated.

Despite the fact that this fund envisages a 6-month token blockage; after this they will be

unblocked and used for the company’s strategic objectives. These tokens might reach

the market and thus cause a token price decrease.

8. Investment Risk Analysis

The white paper states that listing on an exchange will only occur if, and when, doing so

makes sense for users and will not result in speculation in the token. Market speculation

is inevitable, especially when there is a 33% bonus and no minimum transaction

requirement. Such conditions might make the token listing process slower or even

prevent it from happening at all.

PAVO’s developers want their project to have 20% of the cannabis market share as well

as 10% of the agricultural market. This seems too ambitious because there are plenty of

other traditional and blockchain companies in the market already which have failed to

reach such a market share in the course of their lifetimes.

The cannabis market is inextricably linked with law enforcement. (The team stresses that

the company never takes possession of, and never touches, cannabis nor any other crop.)

Despite professional legal advisors on the team, we cannot ignore or eliminate

compliance risks. They become the primary concern in transactions between the USA

and countries where cannabis use and sales are banned or otherwise limited.

The information contained in the document is for informational purposes only. The views

expressed in this document are solely personal stance of the ICOrating Team, based on data

from open access and information that developers provided to the team through Skype, email or

other means of communication.

Our goal is to increase the transparency and reliability of the young ICO market and to minimize

the risk of fraud.

We appreciate feedback with constructive comments, suggestions and ideas on how to make the

analysis more comprehensive and informative.