When I first came across YEP soliciting a million in virtual shares, I pegged it as yet another MLM company engaged in securities fraud.
Looking into it further however, it appears YEP are selling virtual shares legally.
The problem is the numbers don’t add up. As far as I can tell it’s a
terrible
deal.
YEP’s virtual shares are being sold at 65 cents a piece
through NetCapital
.
This is being done through
crowdfunding exemption 4(a)(6)
, which requires YEP to
solicit no more than $1,070,000 over a twelve month period;
conduct the offering through an intermediary (NetCapital);
not be reporting to the SEC prior;
be a US company; and
provide potential investors with a business plan.
As far as I can tell YEP have adhered to these rules, so we can rule out securities fraud. At least based on surface impressions.
As part of the crowdfunding, YEP has to disclose
‘a discussion of the issuer’s financial condition and financial statements.’
They do this through filed financials, which are available to the public.
YEP, an abbreviation of “Young Entrepreneur Project”, launched in mid 2019.
The company is owned and operated by CEO and President, Jimmy Ezzell (right).
BehindMLM
reviewed YEP as YEP Tribe
in July 2021. We weren’t impressed with YEP’s travel subscriptions and $89 water bottles.
Turns out consumers haven’t been either. As I write this Alexa ranks YEP Tribe’s website at 8.5 million – which for an MLM company is dead.
In a FORM C filed with the SEC, we can see YEP lost $4.2 million in 2020.
Unfortunately we don’t have any quarterly data for 2021, as YEP isn’t required to file any.
In an attempt to turn things around, YEP has jumped on the CBD bandwagon.
This started off as an
extension to their $89 Flux water bottles
, but now appears to be a full-blown product offering under “Utopix” branding.
As per YEP’s NetCapital listing;
YEP, Inc. announces Utopix and CBDBrainIQ, a portfolio of plant based CBD Health and Wellness products focused on providing consumers around the world with Health and Wellness CBD products to compete and gain market share in the U.S. and emerging Asian markets.
YEP’s CBD Health and Wellness consumer product categories:
-Plant based CBD beverages
-Human and pet products
-CBDBrainIQ, CBD nootropic products for cognitive performance featuring clinically studied ingredients
That brings us to what YEP plan to do with their $1.079 million in crowdfunding investment;
YEP plans to expand UTOPIX featuring Micelle Nano technology, CBDBrainIQ, and FLUX Drinkables into highly coveted affiliate models through existing offices and partners.
Accelerate customer acquisition and secure additional, highly coveted distribution customers domestically and in growing Asian markets.
We plan to strategically invest in influencer marketing to scale the business and brands.
Marketing investments centered around driving performance based sales, securing high profit margins with a high level of brand exposure.
A si
🤖 Quick Answer
What is YEP's current fundraising situation?YEP, a company that lost $4.2 million in 2020, is seeking $1 million through virtual share offerings priced at 65 cents each via NetCapital. The crowdfunding uses SEC exemption 4(a)(6), requiring adherence to specific regulatory conditions including a 12-month solicitation cap and intermediary involvement.
How does YEP's virtual share offering comply with regulations?
YEP's offering adheres to crowdfunding exemption 4(a)(6) requirements: it does not exceed the $1,070,000 twelve-month limit, utilizes NetCapital as an intermediary, maintains non-reporting status with the SEC, operates as a US company, and provides investors with a business plan, thus avoiding securities fraud violations.
**Why might YEP's virtual shares represent a probl
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