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Once I first got here throughout YEP soliciting 1,000,000 in digital shares, I pegged it as one more MLM firm engaged in securities fraud.
Trying into it additional nonetheless, it seems YEP are promoting digital shares legally.
The issue is the numbers don’t add up. So far as I can inform it’s a horrible deal.
YEP’s digital shares are being offered at 65 cents a chunk by NetCapital.
That is being carried out by crowdfunding exemption 4(a)(6), which requires YEP to
- solicit not more than $1,070,000 over a twelve month interval;
- conduct the providing by an middleman (NetCapital);
- not be reporting to the SEC prior;
- be a US firm; and
- present potential traders with a marketing strategy.
So far as I can inform YEP have adhered to those guidelines, so we will rule out securities fraud. No less than based mostly on floor impressions.
As a part of the crowdfunding, YEP has to reveal ‘a dialogue of the issuer’s monetary situation and monetary statements.’
They do that by filed financials, which can be found to the general public.
YEP, an abbreviation of “Younger Entrepreneur Venture”, launched in mid 2019.
The corporate is owned and operated by CEO and President, Jimmy Ezzell (proper).
BehindMLM reviewed YEP as YEP Tribe in July 2021. We weren’t impressed with YEP’s journey subscriptions and $89 water bottles.
Seems shoppers haven’t been both. As I write this Alexa ranks YEP Tribe’s web site at 8.5 million – which for an MLM firm is lifeless.
In a FORM C filed with the SEC, we will see YEP misplaced $4.2 million in 2020.
Sadly we don’t have any quarterly information for 2021, as YEP isn’t required to file any.
In an try to show issues round, YEP has jumped on the CBD bandwagon.
This began off as an extension to their $89 Flux water bottles, however now seems to be a full-blown product providing beneath “Utopix” branding.
As per YEP’s NetCapital itemizing;
YEP, Inc. proclaims Utopix and CBDBrainIQ, a portfolio of plant based mostly CBD Well being and Wellness merchandise centered on offering shoppers around the globe with Well being and Wellness CBD merchandise to compete and achieve market share within the U.S. and rising Asian markets.
YEP’s CBD Well being and Wellness shopper product classes:
-Plant based mostly CBD drinks
-Human and pet merchandise
-CBDBrainIQ, CBD nootropic merchandise for cognitive efficiency that includes clinically studied elements
That brings us to what YEP plan to do with their $1.079 million in crowdfunding funding;
YEP plans to develop UTOPIX that includes Micelle Nano expertise, CBDBrainIQ, and FLUX Drinkables into extremely coveted affiliate fashions by present workplaces and companions.
Speed up buyer acquisition and safe further, extremely coveted distribution clients domestically and in rising Asian markets.
We plan to strategically put money into influencer advertising to scale the enterprise and types.
Advertising and marketing investments centered round driving efficiency based mostly gross sales, securing excessive revenue margins with a excessive degree of brand name publicity.
A big alternative for YEP lies in performance-focused paid media.
Platforms similar to Fb, Instagram, and Google advert networks can be workhorses for our progress.
Concurrently, we’ll use regular PR and media pitching to drive demand.
Lastly, we’ll create high-quality content material to gas the whole advertising ecosystem, and extra importantly, present actual worth to shoppers striving to enhance their well being and wellness.
Principally it’s a advertising price range, though YEP’s “use of proceeds” downplays advertising to simply 20.6% of invested funds;
What’s actually curious right here is there’s completely no point out of YEP’s new Pushed buying and selling schooling providing.
In the event you’re questioning why, it’s as a result of YEP’s Pushed providing options an automatic buying and selling bot:
YEP not disclosing their buying and selling bot alternative to the SEC or potential crowdfunding traders is securities fraud (and we’ve come full-circle).
Regardless of soliciting as much as $1497 after which $147 a month in membership charges, YEP have to this point did not disclose something about their “automation commerce administration software program”.
That in itself is a possible violation of the FTC Act. What I’d be extra involved about nonetheless is the securities fraud angle.
Registration exemption 4(a)(6) sees traders restricted by their annual revenue and internet price:
What I’m caught on is why?
YEP misplaced a ton of cash final yr, most likely misplaced a ton of cash this yr and… $1 million $220,000 in advertising goes to alter that?
Toss in potential securities fraud and… how is that this remotely a gorgeous funding alternative?
At time of publication YEP have to this point solicited $116,908 from most of the people. The providing closes on November twenty first.
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