INFORMATION NOTE ON THE OFFER OF REAL ESTATE DEBT TOKENS BY IMMOTOKENS REAL ESTATE A  BV

This document has been prepared by IMMOTOKENS REAL ESTATE A BV.

THIS DOCUMENT IS NOT A PROSPECTUS AND HAS NOT BEEN REVIEWED OR APPROVED BY THE FINANCIAL SERVICES AND MARKETS AUTHORITY.

15 April 2022

WARNING: THE INVESTOR RISKS LOSING ALL OR PART OF HIS INVESTMENT AND/OR NOT ACHIEVING THE EXPECTED RETURN.

THE INVESTMENT INSTRUMENTS ARE NOT LISTED: THE INVESTOR RUNS THE RISK OF HAVING GREAT DIFFICULTY IN SELLING HIS POSITION TO A THIRD PARTY IF HE SO WISHES.

Introductory information.

Immotokens Real Estate A (hereinafter the "Issuer") is a limited liability company under Belgian law whose main objective is the securitisation of real estate in order to allow investors to invest indirectly in real estate.

The Issuer realises this objective by raising capital from the public in order to acquire real estate with a view to leasing and transferring it. The capital is raised through the issue of "tokenised" debt instruments (the "Immo Debt Tokens").

Via these Immo Debt Tokens, potential investors (the "Token holders") offered an opportunity to invest indirectly in real estate. Although various opportunities to invest indirectly in real estate have been offered in Belgium for several decades, the Immo Debt Tokens offered in the context of this issue (the "Offered Immo Debt Tokens") the first debt instruments issued in the form of tokens created through DDistributed Ledger Technology (hereinafter "DLT"). DLT is a type of technology that allows the capture of encrypted data in a distributed ledger supports.

The structure of this offering is as follows: the Issuer will purchase a real estate property (hereinafter the "Real estate") purchases. For this Property, one series of Immo Debt Tokens will be issued, i.e. the Offered Immo Debt Tokens. The Offered Real Estate Debt Tokens relate exclusively to the Real Estate. Any subsequent issue of Immo Debt Tokens by the Issuer will always relate to another property, and will be strictly separated from this issue/the Offered Immo Debt Tokens. The different cash flows will be managed and reported by the Issuer through the platform.

Part I. - Principal risks inherent in the issuer and in the investment instruments offered and specific to the offer in question

  • Risk factors relating to the Issuer
    • Risks related to the Issuer's business
      • Risks associated with the concentration of the investment

The profits connected with the Offered Real Estate Debt Tokens depend exclusively on the annual rental income and/or realised capital gains resulting from the sale of the Real Estate (together the "Revenue"), which entails a concentration risk. Any (temporary) reduction or absence of rental income or a realised capital loss will also be borne exclusively by the investors who have subscribed to the Offered Real Estate Debt Tokens. Consequently, the income and risks of different properties are not pooled.

The aforementioned concentration risk means, inter alia, that if the rental income is disappointing, this may have an adverse effect on the return of the Offered Real Estate Debt Tokens. If the sale of the Property is accompanied by a loss in value, for example as a result of a general decline in property prices, each Token Holder can only claim a pro rata part of the sales proceeds.

The Token holder runs the risk of losing all or part of their investment if the underlying property does not perform.

The Issuer can under no circumstances be held liable for disappointing Revenues. The risk of missing/reduced Revenues and loss of value are fully borne by the Token Holder.

  • Risks related to a possible insolvency of the Issuer

There is a risk that as a result of the bankruptcy of the Issuer, the Token Holders would not be able to recover the amounts to which they are entitled, being the invested amount, any capital gains and the future rental income. In principle, it cannot be excluded that the Issuer is unable to fulfil its obligations. There is currently no objective information about the quality of the Issuer as a debtor and no historical financial information available.

In the event of insolvency, there is a risk of concurrence of creditors and Token holders of other series which may cause the Token holder to lose all or part of its deposit.

The token holder runs the risk of losing all or part of its deposit in the event of the Issuer's insolvency.

1.1.2.3 Risks related to the start-up phase of the Issuer

There is no proof of concept of the proposed activity, no track record and no historical financial information that could provide information on the progress of the investment.

The token holder runs the risk of losing all or part of his investment and/or investing in securities that do not perform as initially expected.

1.1.2.4 Risks associated with insufficient working capital of the Issuer

There is a risk that the working capital of the Issuer is insufficient to meet the needs of the next twelve months. This may lead to the insolvency of the Issuer as a result of which the token holder runs the risk of losing all or part of its deposit.

  • Risks associated with real estate
    • Risks relating to the Property

Due to its nature, the Property may age functionally and/or physically, which may cause it to lose its attractiveness. In this case, additional investments may be necessary, which may weigh on the Revenues.

Small, day-to-day investments (<10% of the acquisition value) are approved and executed by the external manager without the participation of the Token holders. The payment of these investments is deducted from the revenues. The Token Holders have no say in these decisions.

Large investments (>10% of the acquisition value) that are necessary to maintain the value of the Property are pre-financed by the Issuer through bank financing and deducted from the rental income. As a result, there is a risk that the Token Holder will not receive any income for long periods. The Token Holders can, according to the provision of the BAV, give their say in such decisions.

Other risks may include, but are not limited to, the destruction (whether complete or not) of the Property, soil contamination, expropriation, asbestos, natural disasters, war, terror, other calamities and non-covered damages or costs by fire or other insurers.

However, prior to the purchase of the Property, an appraisal report shall be carried out to avoid hidden defects. The valuation report shall be carried out by a recognised surveyor in accordance with these Form requirements. However, the appraisal report does not constitute an indemnification against a possible impairment. The valuation report can be consulted on the Platform at the start of the offering.

As a Token holder, a decline in value of the underlying property may result in a total or partial loss of capital and income.

  • Risks associated with the cyclical nature of the real estate market

The real estate market has a cyclical character that is particularly linked to the general economic situation, interest rates and the expectations of the main players with regard to economic growth and inflation. An economic slowdown, a recession or a crisis of regional, national or international scope may have a negative impact on the Revenues.

The Token Holder runs the risk of losing capital if the sales value of the property decreases. The Token Holder runs the risk of receiving less revenue than expected due to the reduction in rental income.

  • Risks associated with supply
    • Risks associated with the limited liquidity and value of Immo Debt Tokens

The Offered Immo Debt Tokens are not listed and will not be listed on any regulated market or MTF (Multilateral Trading Facility). The Issuer does not organise a secondary market. In addition, the Offered Real Estate Debt Tokens offer no protection against inflation or monetary erosion. Monetary erosion means that the real value of the amount invested in tokens at the time of repayment is lower, due to inflation, than the value at the time of issuance of the tokens.

The Token holder runs the risk that it would be difficult or even impossible to recover the invested amount during the long term. Due to inflation or monetary erosion, the Token holder runs the risk of getting back less capital than initially invested.

1.1.4.3 Risks related to loss of capital

There are significant risks associated with the purchase of these securities. The Token holder runs the risk of losing his entire deposit.

1.1.4.4 Risks associated with the lack of income and added value

The income paid out depends, inter alia, on the extent to which the Property is let and on the indexation of rents. The capital gain is uncertain and will only be known upon the sale of the Property.

The Token holder runs the risk of receiving less return than expected or displayed. The Token holder runs the risk of receiving back less than the original deposit when the property is sold.

1.1.4.5 Risks related to the cancellation of the offer

If the minimum amount of the offer is not reached, the Issuer may choose not to tokenise the Property and cancel the offer. The Token holders will receive a refund of deposit increased by an interest of 3% per annum.

1.1.4.6 Risks associated with cost increases

Costs that are specific to the property are deducted from the property income and therefore the return. An increase in these costs puts the Token holder at risk of a loss of return.

1.1.4.7 Risks related to the limited participation of Token holders

As an individual Token Holder, you have a limited say in the Real Estate as opposed to classic ownership of a property. The Token Holder only has a say to the extent that the BAV of the Token Holders is authorised. Furthermore, the Token Holder only has a limited say in his/her share and is therefore bound by the decisions of the majority.

  • Risks related to the use of the website

Technical malfunctions may occur in the use of the website where the Offered Real Estate Debt Tokens are offered such as, but not limited to, login, purchase or registration problems, server overload, cyber attacks (e.g. hacking, phishing).

This runs the risk of the Token holder being temporarily unable to use the website.

 

Part II. - Information about the issuer
A.      Identity of the issuer
1° Headquarters Engelhoekstraat 22B, 9800 Sint-Martens-Leerne
Legal form BV
Company number 0769.577.115
Country of origin Belgium
Web address www.immotokens.be (it "Platform")
  Founding date 14/06/2021
2° Description of the issuer's activities The Issuer's activity is to purchase real estate and to offer Immo Debt Tokens to potential investors in order to allow them to invest indirectly in real estate.
3° In so far as that information is known to the issuer or the person asking for admission to trading, the identity of the persons who own more than 5 % of the issuer's capital and the size (expressed as a percentage of capital) of the shareholdings they hold

Per 01/04/2022 the following persons own more than 5 % of the shares of the Issuer:

(i)              Warmoes E. property 100% of the capital

 
4°

In relation to the transactions between the issuer and the persons referred to in 3° and/or related parties other than shareholders:

- The nature and extent of any transactions which are material to the issuer, taken individually or in combination. Where transactions are not concluded at arm's length provide an explanation of why this is the case. In the case of outstanding loans including guarantees of any kind indicate the amount outstanding;

- the amount or the percentage that the relevant transactions represent in the turnover of the issuer.

During the last two financial years and the current financial year, the following significant transactions took place between the Issuer and the persons referred to under 3° and/or related parties other than shareholders:

- Entering into a win-win loan in favour of the Issuer with a value of € 60,000 and personal guarantee of Warmoes E.

- Entering into a subordinated loan for the benefit of the Issuer with the objective of purchasing real estate with a value of € 50,000 issued by EWS Consultancy Comm. V.

- Entering into a subordinated loan for the benefit of the Issuer with the objective of purchasing real estate with a value of €50,000 issued by Makses BV. 
5° The identity of the members of the legal management body of the issuer (indication of the permanent representatives in case of directors or managers who are legal persons), the members of the executive committee and the members of the bodies in charge of the daily management

Board of Directors

The Issuer is managed by one director, namely: Edgar Warmoes.

 
6° In respect of the last full financial year, total remuneration of the persons referred to in 5°, and total amounts set aside or accrued by the issuer or its subsidiaries to pay pensions or similar benefits, or an appropriate negative statement

The Issuer was incorporated on 14/06/2021. Thus, no compensation was paid, provided or booked for the persons referred to in 5°.

No amounts were set aside for pensions.
7° For the persons referred to in 5°, mention of any conviction as referred to in Article 20 of the Law of 25 April 2014 on the legal status and supervision of credit institutions and stockbroking firms, or an appropriate negative statement

In the past five years, no member of the managing body or executive board has been: (i) convicted of fraudulent offences; (ii) involved in bankruptcy, receivership or liquidation; (iii) sanctioned or officially and publicly accused by statutory or regulatory authorities (including recognised professional bodies).

None of the members of the administrative or management body has been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of the issuer in the past five years. The issuer is not involved in litigation and/or arbitration.
8° A description of the conflicts of interest between the issuer and the persons referred to in points (3) to (5) or with any other related parties or an appropriate negative statement. There are no family connections between the board members or the daily directors. There is no conflict of interest between the Issuer and the persons referred to under 3° and 5°, or other related parties.
B.      Financial information on the issuer
1° Insofar as the issuer was already active at that time, its annual accounts for the last two financial years, if applicable audited in accordance with Article 13, §§ 1 or 2, 1°, of the Act of 11 July 2018

The Issuer was incorporated on 14/06/2021 and therefore has no available financial statements yet.

The first financial year will close on 31/12/2022.

The expected publication of the first annual review is 01/06/2023.
2° Statement by the issuer that in its opinion the working capital is sufficient to cover its needs for the next 12 months or, if not, how it proposes to provide the additional working capital needed

In the Issuer's opinion, additional working capital is needed. The need for additional working capital is estimated at € 435,000.

Due to the purchase of Real Estate, there is a negative working capital. This is absorbed by bank financing with a term of 24 months (€ 235,000), subordinated loans (€ 100,000) and an additional financing round (€ 200,000).
3° Statement of equity and indebtedness (specifying guaranteed and unguaranteed, secured and unsecured indebtedness) as of 90 days prior to the date of the document. Indebtedness also includes indirect and contingent indebtedness

Condition on 01/04/2022

(i)              Shareholders' equity: EUR 55.000

(ii)             Liabilities with guarantee on:

a. EUR 60,000 to S. Warmoes. Personal guarantee E. Warmoes. Purpose support operation of the platform. Start date: 01/08/2021. End date: 31/07/2026.

b. EUR 190,000 to Belfius Bank NV. Real estate as guarantee. Purpose purchase of the Real Estate. Start date: 31/03/2022. Maturity date: 15/04/2024.

(iii)            Unsecured debts on:

a. EUR 80,000 to EWS Consutlancy Comm V. Purpose own contribution purchase of the Real Estate. Start date: 01/03/2022. No end date.

b. EUR 80,000 to MAKSES BV. Purpose own contribution to finance purchase of the Real Estate. Start date: 01/03/2022. No end date.

 
4° Description of any significant change in the financial or trading position that has occurred since the end of the last financial year to which the financial statements referred to in 1° above relate, or an appropriate negative statement

The Issuer was incorporated on 14/06/2021 and therefore does not yet have a final accounting year. In any case, no significant changes in the financial or trading position have occurred since its incorporation.

 

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Terms and conditions referral programme

  1. How the programme works

Invite a friend via your unique link. As soon as your friend creates an Immotokens account and invests for the first time, you will automatically receive double rental income for the next 6 months.

  1. A reference is

Only successful referrals count towards this promotion. A successful referral is a friend who creates an account, goes through the registration process and then invests. 

  1. Rewards and offers

For each successful referral, you will receive double the net rental income for 6 months. Suppose you are entitled to €2 net rental income, you will receive €4 net rental income. 

  1. Awarding rewards and offers

You will receive the double rental income for the first time with the next payment of rental income following the date of purchase of a real estate license from the friend. 

  1. Privacy

Any personal information collected and processed as part of this Referral Programme will be used in accordance with Immotokens Privacy Policy, available at https://www.immotokens.be/privacy-policy/. In accordance with applicable laws and regulations, Immotokens is responsible for the collection and processing of such personal information.

  1. General 

5.1. These referral conditions are published by Immotokens ("we", "us" and "our"). Our referral programme as displayed on our website www.immotokens.be and these terms and conditions constitute a binding agreement for both referring users ("you" or "your(s)") and people who receive our referral invitation.

5.2. This Referral Programme allows you to invite your contacts to participate in one or more Referral Program(s).

5.3. You may only invite personal friends, relatives, acquaintances and colleagues to this Referral Programme.

 

  1. Completed referrals and restriction

 

6.1. A completed referral occurs when a Referring User refers this Programme to one of their contacts. Subsequently, that contact enrolls, makes a purchase or completes any action defined as a referral above - and which has not been cancelled or challenged in accordance with subsection 3. 

6.2. A limit on the number of Referrals by Referring Users may apply. Or we may set a limit on the number of Completed Referrals that qualify for the benefits of this Programme.

6.3. All referred persons must be new and first-time Users. Existing Users cannot participate in and benefit from the Referral Programme.

6.4. You certify that all personal information provided by 100% is accurate and up to date. We may check your use of the Referral Programme or request your ID to verify your identity before issuing any rewards. 

  1. Restrictions

7.1. This Programme cannot be combined with other Immotokens referral programmes, discounts, vouchers, benefits or incentives. By participating in this Referral Programme, we may be limiting you from any other promotion, programme, discount, or voucher.

7.2. You understand and agree that you may not use any referral methods that are annoying to the recipients. In addition, your participation in the referral programme must not violate any applicable laws, including but not limited to anti-spam laws, that is, the mass distribution of unsolicited messages.

7.3. You may not publish our Referral Programme on sites or platforms that host Adult Content, Alcohol, Tobacco, Gambling, Games and Online Casinos, Political Content, and any form of illegal activity. 

7.4. You may not at any time invite or refer people who are unknown to you.

7.5. You may only use our Referral Programme for your personal use and refrain from using it for commercial purposes. 

 

  1. Termination and cancellation

8.1. This Referral Programme shall run until the date announced and that date may be extended or limited. We may also at our discretion notify Users that the Referral Programme has been terminated with immediate effect.

8.2. Any referral made before the end of the Referral Programme may still participate. However, we may at our discretion exclude referrals made after the end date.

8.3. We may terminate this Referral Programme at any time, including your participation or the availability of its benefits. 

 

  1. Exclusive relationship

9.1. You understand and agree that you are only the User of our services and/or products, and refrain from implying any other affiliation or legal relationship with us. 

9.2. You understand and agree that you are never authorised to legally bind our company. 

9.3. You must never create materials that contain our branding, trademarks, or any part of our corporate identity.

9.4. By participating in the Referral Programme, you may not hold yourself out as a duplicate, agent or intermediary of our company

 

  1. Privacy and information

10.1. You undertake to respect the privacy rights of the persons you invite to our Referral Programme and who direct you to our Website. 

10.2. When you refer other people, you must always inform them of the applicable terms and conditions and the privacy policy. You must do this before they join the Referral Programme, and leave their personal details.

  1. Changes

We may change the terms and conditions of our Referral Programme. We may offer and/or restrict additional incentives, benefits and programmes. As a result, additional terms and conditions may apply. You agree to be aware of these modified and additional terms and conditions.

  1. Violations and Termination

12.1. In the event that we suspect violations of these terms and conditions or otherwise tampering, fraud or unreasonable use of our Referral Programme, we may, in our sole discretion, cancel the distribution of any discount, benefit or payout. 

12.2. If you are a current or former employee, contractor or affiliate of our company, we may restrict your participation in the Referral Programme, and we may restrict or cancel your participation with immediate effect. 

12.3. You must comply with all applicable laws and regulations, and you must refrain from infringing any third party rights. These rights include any copyright, trademark or other proprietary rights.

  1. Disclaimer and indemnification

13.1. We offer our Referral Programme and its benefits only on an "as is" and "as available" basis. We may remove, modify and update the Referral Programme in our sole discretion. We will never make any promises or guarantees about the content and information of our Referral Programme. We decline responsibility for any information that is incorrect or contains errors. 

13.2. Our Referral Programme is based on our best efforts. You acknowledge and agree that we can never guarantee any benefit or result from participation in the Referral Programme.

13.3. You shall defend, indemnify and hold harmless [Customer Name] from and against all claims, damages, liabilities, losses, expenses and costs (including reasonable attorney's fees) arising out of your participation in the Referral Program.

  1. No Correspondence, Disputes and Refunds

No correspondence will be entered into regarding the distribution of discounts, vouchers, incentives, prizes, awards or other benefits. Furthermore, we will never accept a complaint or a dispute regarding the recommendation programme, and the aforementioned benefits. are provided "as is" and we will never refund or exchange such benefits. 

  1. Applicable law

The law of our place of residence shall apply and the court in that country shall have jurisdiction over any claim arising from these conditions.