An offeringstatement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Informationcontained in this Preliminary Offering Circular is subject to of completion or amendment. These securities is probably not sold nor mayoffers to buy be accepted before the providing observation filed with the Commission is qualified. This Preliminary Offering Circularshall not constitute an offer to sell or the solicitation of a suggestion to buy nor may there be any sales of these securities inany state during which such offer, solicitation or sale can be unlawful before registration or qualification under the laws of anysuch state. We may elect to satisfy our duty to deliver a Final Offering Circular by sending you a notice within two businessdays after the completion of our sale to you that contains the URL where the Final Offering Circular or the providing statementin which such Final Offering Circular was filed may be obtained.
YouNow is qualifying up to 135,000,000 Props Tokens that may be used to reward users of the Props Live Video App for in app activities, including contributing content and a spotlight to that app; as one time discretionary grants to users of the Props Live Video App; to reward users of an app created by a third party app developer; as one time discretionary grants to users of that app; to reward this third party app developer; and to reward management of the blockchain underlying the rewards, at a deemed providing price of $0. 1369 per Props Token. The sum of the maximum �aggregate providing price� and �mixture product sales�, as those terms are defined in Rule 251a of the Securities Act, pursuant to the YouNow Offering and Props PBC Offering mixed might not exceed $50,000,000 in any twelve month period. Assuming the greatest providing price in the Props PBC Offering is reached as described below, the sum of the maximum �aggregate offering price� and �combination product sales� in the YouNow Offering won’t exceed $35,000,000 in any twelve month period. YouNow developed the Props Live Video App and operated it via February 29, 2020 when, pursuant to an asset sale agreement completed February 26, 2020, the operation of the app passed to 0,33 party acquirer. See �Description of Business � Recent Developments.
� Because the third party acquirer of the Props Live Video App, and the third party app developer, will each be deemed to be a statutory underwriter under Section 2a11 of the Securities Act, the issuance of Props Tokens from YouNow to every of those persons may be characterized as an underwriting commission. The choices willcommence within two calendar days after the providing observation during which this providing round is included has been qualified bythe U. S. Securities and Exchange Commission the �Commission� or the �SEC� and includesan amount of Props Tokens that we quite expect to be provided and sold within two years from the date of initial qualification,unless subsequently amended. The sum of the greatest �combination providing price� and �combination product sales�,as those terms are outlined in Rule 251a of the Securities Act, pursuant to the YouNow Offering and Props PBC Offering combinedmay not exceed $50,000,000 in any twelve month period. The sum of the greatest �aggregate providing price� and �aggregategross sales� pursuant to the Props PBC Offering might not exceed $15,000,000 in any twelve month period.
Props Tokens can be offered to reward users of a digital mediaapp it developed; as one time discretionary grants to users of that app; to reward users of an app created by 1/3 party appdeveloper; as one time discretionary grants to users of that app; to reward this third party app developer; and to reward validatorsof the blockchain underlying the rewards. The Props Tokens to be offered to users of the app developed by YouNow can be offeredthrough that app. YouNow operated that app via February 29, 2020, after which transferred its operation to a third party acquirer. See �Description of Business � Recent Developments. � The third party acquirer of that app may be deemedto be a statutory underwriter under Section 2a11 of the Securities Act as the acquirer might be receiving Props Tokensfrom YouNow with a view to allotting Props Tokens to app users. The Props Tokens to be provided to users of the app created bya third party app developer can be offered through that app.
This developer can be deemed to be a statutory underwriter underSection 2a11 of the Securities Act because the app developer may be receiving Props Tokens from YouNow with a view to distributingProps Tokens to app users. The Props Tokens to be provided through the grant providing can be dispensed at Props PBC�s direction. Props PBC could be deemed to be a statutory underwriter under Section 2a11 of the Securities Act as it will be receivingProps Tokens from YouNow with a view to dispensing Props Tokens to grant recipients. There is no other underwriter or sales agentfor the Props Tokens. Please fastidiously readthe counsel in this offering round and any accompanying offering circular supplements, which we talk over with collectively asthe �providing round�. You should rely only on the information contained during this providing round.
We have not authorizedanyone to come up with distinctive tips. This providing round may only be used where it is legal to sell these securities. You should not assume that the counsel contained in this providing circular is accurate as of any date later than the date hereofor such other dates as are stated herein or as of the respective dates of any documents or other counsel integrated hereinby reference. This offering circularis part of an offering remark that we filed with the SEC, using a continuing providing technique. Periodically, as substantivechanges from or additions to the suggestions set forth herein occur, we can deliver an offering circular complement that could add,update or change guidance contained during this providing round.
Any observation that we make in this offering round will bemodified or superseded by any inconsistent remark made by us in a next offering circular supplement. The offering statementwe filed with the SEC includes exhibits that deliver more detailed descriptions of the matters discussed during this providing circular. You should read this offering circular and the associated exhibits filed with the SEC and any offering round complement, togetherwith further information contained in our annual reports, semi annual reviews and other reviews and data statements thatwe will file periodically with the SEC. See the part entitled �Where You Can Find Additional Information�below for more particulars. Neither we nor PropsPBC has licensed anyone to provide any counsel or to make any representations aside from those contained during this offeringcircular or in any free writing prospectuses we have arranged. Neither we nor Props PBC takes any responsibility for, and can provideno assurance as to the reliability of, every other tips that others may give you.
This offering circular is a proposal of onlythe Props Tokens provided hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The informationcontained in this providing round is existing only as of its date. This offeringsummary highlights fabric suggestions involving our enterprise and this offering. Because it is a summary, it may not containall of the information it is important to you. To realize this providing fully, make sure to read the complete offering circularcarefully, adding the �Risk Factors� and ��Summary of Risk Factors� sections, before making adecision to take part in the Props Network or invest in Props Tokens.
Unless the context calls for otherwise, in this offeringthe terms �we,� �us� and �our� talk to YouNow, Inc. , the issuer of the Props Tokens. Theterm �YouNow and its affiliates� refers to YouNow, Inc. , The Props Foundation Public Benefit Corporation, and YouNow,Inc. �s other affiliates.
There are multiple apps which are designed to provide Props Tokensholders these premium in app reports. The first such app was created by YouNow and is now owned and operated by a third party. See �Description of Business � Recent Developments. � It is a many to many livestreaming application, whichwe talk over with as our �Props Live Video App. � See �Description of the Props Live Video App�for additional advice. In addition, 1/3 party app developer, PeerStream, Inc.
the �Third Party Developer�,has included functionalities for Props Tokens into an app, which we consult with as the �Third Party Developer App. �See �Annex A: PeerStream Plan of Props Token Usage� for further information. We expect these Props Apps,as well as further Props Apps we anticipate may be developed by third parties in the future, will supply the styles of functionalitiesdescribed below, field to each app�s terms and conditions: In part, the Props Network will encourage growth and additionalparticipation by, through the years, rewarding actions regular with the user base and inspiring growth. These rewards may be madethrough a blockchain based �smart contract� the �Protocol Rewards Engine�. An algorithm programmedinto the Protocol Rewards Engine will allocate rewards among the developers operating Props Apps.
The Protocol Rewards Engine�sapp rewards will operate to make Props Tokens available as rewards to users of the Props Live Video App and users of the ThirdParty Developer App and as rewards to the owner and operator of the Props Live Video App and the Third Party Developer. These distributionswill be made pursuant to the offering observation during which this offering circular is included. See �Plan of Distribution�for extra particulars. Additionally, the Props Network will also support increasesin community participation with an infrastructure to help this rewards program. The Protocol Rewards Engine also will reward theadministration of the Props Network�s own blockchain by �Validators.
� Because YouNow could be one of severalValidators, the Protocol Rewards Engine will function to make more Props Tokens available for issuance by YouNow, and YouNow maythen distribute these Props Tokens pursuant to the providing statement through which this providing circular is included. See �Planof Distribution� for extra details. Rewards of Props Tokens issued to 3rd party Validators will also be made pursuantto the providing statement in which this providing circular is included. Further, Props PBC will make secondary distributions ofProps Tokens pursuant to the providing remark wherein this offering circular is included as grants to people who may contributesignificantly to the advancement of the Props Network. See �Plan of Distribution� for additional particulars. PropsPBC anticipates that recipients in the grant program pursuant to the providing commentary wherein this offering round is includedmay be persons coming up key apps or otherwise contributing to Props Network development efforts.
YouNow is qualifying the primary distribution of up to 135,000,000 Props Tokens in reference to the YouNow Offering. These Props Tokens may be issued as rewards to users of the Props Live Video App; as one time discretionary grants to users of the Props Live Video App; to reward users of an app created by the Third Party App Developer; as one time discretionary grants to these users; to reward the Third Party App Developer; and to reward administration of the blockchain underlying the rewards. The number of Props Tokens qualified hereunder represents the maximum amount of Props Tokens that we fairly expect to be provided and sold within two years from the initial qualification date. Regulation A generally calls for that individuals receiving securities either be �accredited buyers� within the meaning of Regulation D under the Securities Act or that every other investor�s investment in the securities does not symbolize greater than 10% of the greater of their annual income or net worth for herbal persons, or 10% of the greater of annual earnings or net assets at fiscal year end for non natural folks. We deem this problem to not apply to non cash consideration, and therefore we deem this obstacle to not limit the variety of Props Tokens which may be got via YouNow�s app rewards program or validator rewards program or through Props PBC�s grant program.
We intend to offer Props Tokens in the YouNow Offering to qualified clients in most states of the United States. In the YouNow Offering, we intend to distribute only up to a greatest of $1 million of Props Tokens in the state of Illinois and $2 million of Props Tokens in the state of Washington. We will not offer Props Tokens during the YouNow Offering within Arizona, Nebraska, or Texas or to any resident of those states. There may be extra states that prohibit or limit us from providing Props Tokens to their citizens. In any state that prevents us from, or considerably limits our potential to, offer Props Tokens in that state, we may seek to work with that state�s regulatory bodies in order that at some time in the future, the state would permit us to offer our Props Tokens to its citizens.
We reserve the right to not offer Props Tokens in additional states. With respect to the Props PBC grant offering, Props PBC only intends to grant tokens in states where the grant is permitted, and we are able to deserve to make such determinations on a grant by grant basis. Should we grant Props Tokens to residents of Texas as part of the Props PBC grant providing, we will only distribute up to a greatest of $1 million of Props Tokens in the state of Texas. YouNow and Props PBC will continue to use this price for theYouNow Offering and Props PBC Offering for at the least 3 months from the first distribution of tokens pursuant to the providing statementin which this offering circular is included. If at any time following that 3 month period the Props Tokens are traded onone or more authorized exchanges or choice buying and selling methods, then beginning in the month following any calendar month wherethere were trades for at the least 1,000,000 Props Tokens done via or on exchanges or alternative trading systems a �calculationmonth�, YouNow and Props PBC will value the Props Tokens in the YouNow Offering and Props PBC Offering at the common closingbid price for the tokens during that calculation month until the tip of a higher calculation month.
We will file supplements tothis offering circular to disclose any changes to the cost of the Props Tokens to be distributed pursuant to the providing statementin which this offering circular is included. We may use distinct prices for Props Tokens in private placements. Users of the Props Live Video App who want to accept Props Tokens in the YouNow providing must, earlier than receipt of Props Tokens, review and accept the terms and prerequisites for use of the app and entire selected other administrative steps. Users of other Props Apps may be required to comply with separate terms in connection with the use of those Props Apps and complete specific other administrative steps. Each participant in this program trying to accept rewards or a one time grant in Props Tokens might be supplied with a copy of the providing round ahead of receipt.
For more particulars, please see the component of this providing circular captioned �Plan of Distribution. � The cloth terms of the Props Tokens are described under �Description of The Props Tokens Being Offered�Terms of the Token Code. � Further, Props Tokens could have selected functionalities within Props Apps, adding application real top rate elements. See �Description of The Props Tokens Being Offered�Functionality for Users� for further detail. The merits Props Tokens afford to users of the Props Live Video App are described under �Description of The Props Live Video App�The Role of Props Tokens in the Props Live Video App.
� The benefits Props Tokens may afford to users of Third Party Developer App are described under �Annex A: PeerStream Plan of Props Token Usage. � Holders of Props Tokens won’t take delivery of an interest in the earnings or losses of YouNow, its associates, the Third Party Developer, the present owner and operator of the Props Live Video App or another third party Props App developer, any rights to distributions from YouNow, its affiliates, the Third Party Developer, the current owner and operator of the Props Live Video App or another third party Props App developer, or any legal or contractual right to exercise control over the operations or continued development of YouNow, its associates, the Third Party Developer, the present owner and operator of the Props Live Video App or some other third party Props App developer. Holders of Props Tokens will not be given a right to any repayment of primary or interest. Holders of Props Tokens won’t have voting rights with respect to YouNow, its affiliates, the Third Party Developer, the current owner and operator of the Props Live Video App or some other third party Props App developer. Also, the outline or statement of the houses of the Props Tokens and the Props Network in this offering circular, or elsewhere, does not create any binding duty on YouNow with respect to the Props Tokens or the holders of the tokens following the tokens� beginning in this providing.
In addition, holders of the Props Tokens won’t have any rights to transform their Props Tokens into another safeguard or, by virtue of their possession of a Props Token, any rights to acquire any further Props Tokens. We are also not conscious about any liabilities that are owed by holders of Props Tokens solely by virtue of owning such tokens. Props Tokens may be issued to users for in app actions inthe Props Live Video App, adding contributing content material and a focus to the Props Live Video App. YouNow is qualifying with theoffering observation wherein this offering round is included the distribution of Props Tokens by YouNow to users of the PropsLive Video App. The strategies for picking the quantity of Props Tokens to be issued to users of the Props Live Video App for in appactivities is described under Description of The Props Live Video App�The Props Live Video App�The Rewards�PropsRewards. � Props Tokens may also be issued as discretionary grants to enormous users of the Props Live Video App inorder to �grandfather� their pre present social statuses in the Props Live Video App into newly founded PropsToken status levels.
Our officers, directors, employees and their associates, and the officials, administrators and personnel of thecurrent owner and operator of the Props Live Video App, and their affiliates, may be eligible to accept rewards of Props Tokensfor their in app activities in the Props Live Video App in the same manner as some other user of the Props Live Video App. Props Tokens may be issued by YouNow to Validators of the sidechainfor the Ethereum blockchain the �Props Blockchain�. YouNow is one such Validator and, apart from YouNow,two other entities currently function Validators. In the longer term, we think to have a few events in total serving as Validatorsof the Props Blockchain. Because YouNow will be one of several Validators, the Protocol Rewards Engine will function to make moreProps Tokens accessible for issuance by YouNow, and YouNow may then distribute these Props Tokens pursuant to the offering statementin which this offering round is included. Rewards of Props Tokens issued to 3rd party Validators will also be made pursuantto the offering commentary in which this providing round is included.
Separate from theuser adventure and functionalities within the Props Apps that the Props Network infrastructure allows, we also intend for thisinfrastructure to play a crucial role in incentivizing key functions and participation in the network. A �smart contract�we have deployed to the Ethereum blockchain, which we talk to as our �Protocol Rewards Engine,� will over time causethe issuance of 400,000,000 Props Tokens as �daily rewards� and �validator rewards�. See �Descriptionof the Props Network�The Protocol Rewards Engine� for extra detail and explanation regarding these allocations. The Props Networkis still being built, and in the beginning, the motivation infrastructure will entail operations undertaken essentially with respectto YouNow and Props PBC: YouNow is presently the sole developer of open source application for the Props Network and YouNow willbe one of the persons that could be guilty for constructing the Props Blockchain and also acting as an oracle to the ProtocolRewards Engine each, a �Validator�. The Props Network�s incentive architecture and substantial token allocationfor contributing builders is, but it surely, designed to allure extra independent builders attracted to building apps incorporatingfunctionality for Props Tokens to join the Props Network.
The Props Network�s infrastructure is also being designed to incorporateadditional developers into a functioning network and token financial system when these additional builders are able to begin operatingProps Apps. Consistent with past disclosure, this post qualification modification addresses the change in ownership of the PropsLive Video App, which is already integrated into the Props Network, and consequently, we do not believe that this amendment reflectsfacts or events which, personally or in the aggregate, represent a primary change in the tips formerly offered. We will address to any extent further additions of apps developed by third events with potential future amendments or dietary supplements to thisoffering circular. See �Description of the Props Network�The Props Apps� for extra detail. We consider thatthe infrastructure we are coming up, along with the community of Props Apps and committed user base that we anticipate willfollow from our distribution of Props Tokens pursuant to this Regulation A offering circular, can assist make the Props Networkthe next generation of digital media platforms.
We consider it’ll empower content creators, builders and users to raised alignincentives across the entire electronic media value chain: app builders may be incentivized to build apps for a group of userswho are, in turn, incentivized to participate by virtue of owning a token that may appreciate in utility and cost with the network�sgrowth. We anticipate that these incentives will simultaneously develop both a big and dependable user base and a large and diverseapplication atmosphere and economic system. The Props LiveVideo App is a video livestreaming application constructed by YouNow. In October 2018, YouNow merged the Props Live Video App withRize, which was a separate live video app initially designed to be YouNow�s live video app for the Props Network. As aresult, the Props Live Video App is the successor to Rize.
This app merger was effected that allows you to, among other things, consolidateuser bases and advancement efforts related to the apps� software and user base�and consolidate YouNow�s effortsentirely for apps designed for the Prop Network. See �Description of the Props Live Video App� for additionaldetails. YouNow operated the Props Live Video App through February 29, 2020, after which transferred its operation to 0,33 partyacquirer named YouNow Media, LLC. See �Description of Business � Recent Developments. � Each Props Appwill should have its own rewards system to reward and incent content material creators, curators and other engaged users.
In the caseof the Props Live Video App, users may earn Props Tokens in trade for his or her distribution of live content via the app. The amountof the Props Tokens that may be got by a Props Live Video App user is decided by a formulation that factors the quantity ofactivity and engagement they generate, as measured by the quantity of �likes� and digital goods they accept from viewers,and the cumulative watch time they generate. See �Description of The Props Live Video App� for further details. In the case of the Third Party Developer App, users may earn Props Tokens in reference to selected in app actions as describedunder �Annex A: PeerStream Plan of Props Token Usage. � The amount of the Props Tokens which may be receivedby a Third Party Developer App user is determined by a formula that factors, among other things, the amount of pastime and engagementthe user generates. See �Annex A: PeerStream Plan of Props Token Usage� for additional details.
The distributionof Props Tokens to users of the Props Live Video App and users of the Third Party Developer App is being qualified under thisoffering round. YouNow, Inc. isa Delaware corporation based in April 2011 under the name Bnow, Inc. On November 19, 2012, the name was changed to YouNow, Inc. Since inception, YouNow has been in the live streaming video market and was the first company to popularize social, live videostreaming on mobile units in the USA. Until the top of February 2020, YouNow constructed and operated consumer facingparticipatory video purposes incorporating uses for digital currencies, when it sold the Props Live Video App to a third partythat continues to function it in the Props Network.
Since 2017, YouNow has leveraged its know-how, experience, user communityand other assets to build the infrastructure for an open, decentralized digital media network called the Props Network. GivenYouNow�s massive past adventure in developing and operating a shopper facing mass market participatory video app usingdigital forex, we imagine we are uniquely located to assist grow this next technology electronic media network. We have sold rights to be given Props Tokens in a whole lot of privateofferings in the past, and in March and April 2019, we allotted Props Tokens to selected accredited buyers who held theserights, as more fully described under �Other Offerings. � In addition, in June 2019, we disbursed Props Tokensto holders of our DPAs, as more fully described under �Other Offerings. � In the long run, we may sell additionalrights to be given Props Tokens or Props Tokens. In addition, YouNow issued 83,500,000 Props Tokens to Props PBC, and Props PBCmay distribute up to 45,000,000 of these Props Tokens pursuant to the offering commentary by which this offering round is included.
See �Plan of Distribution�Props PBC Offering� for extra details. You shouldcarefully think the hazards described below, together with all the other advice contained during this offering circular,before making a choice to accept Props Tokens in your participation in the Props Network. The occurrence of any of the risksdescribed below could have fabric hostile consequences on the value of Props Tokens, the performance of the Props Network, and ourcompany�s company, monetary condition, results of operations and prospects. For these reasons, be sure you fastidiously readthis providing circular and will check with your individual lawyer and fiscal and tax advisors just before making any choice toparticipate in the providing. Additional risks and uncertainties that we don’t shortly know or that we presently deem immaterialmay also have similar fabric opposed outcomes.
The Props Tokenswill have utility in the Props Apps which are operational on the Props Network. There are currently two apps designed to allowfunctionality for Props Tokens: the Props Live Video App and the Third Party Developer App. Props Tokens entitle holders to functionalitiesin these Props Apps. See �Description of the Props Live Video App�The Role of Props Tokens in the Props Live VideoApp� and �Annex A: PeerStream Plan of Props Token Usage� for further assistance. Further, PropsTokens may also be transferable and should be used as a way of sending rewards to other users. The utility of the Props Tokensin each of the Props Apps is area to change as points and functionalities of the Props Apps change.
Additional uses for theProps Tokens may be added in the future in the Props Live Video App and the Props Apps built by any third party developers,adding the Third Party Developer. There is, nonetheless it, no assure that the present functionalities for Props Tokens withinthe Props Live Video App or other Props Apps could be maintained or that these apps will always exist in the future, that additionalfunctionalities for Props Tokens might be added within these Props Apps or that additional apps will join the Props Network withany functionalities for Props Tokens. Even if further apps are added to the Props Network, it is feasible that Props App developerswill allow some further capabilities to be conducted by other cryptocurrency or traditional fiat foreign money, at the discretion ofthese developers. The value of yourProps Tokens may be highly sensitive to the way by which the in app economies for Props Apps are designed and carried out by anythird party app builders, including the Third Party Developer. While we believe we have designed the Props Network to incentivizedevelopers to enroll in apps to the Props Network and come with monstrous utility for Props within their apps, as a result of each app developerhas discretion over how the Props Tokens and their holders are handled within such app developer�s app, we cannot guaranteethat any third party app developer trying to sign up for the Props Network will afford great functionalities for Props Tokens intheir apps. Even in the event that they design their apps to afford Props Tokens substantial utility, this utility may be corresponding to existingutility for Props Tokens in Props Apps, and Props App developers may terminate any use for the Props Tokens that they have got in thepast offered for Props Tokens.
Props App developers will even have discretion over how they reward their users with Props Tokens,other cryptocurrencies or fiat currencies, and the standards for the allocation of such foreign money. The extent to which these usesand advantages of Props Tokens are built into apps may significantly affect the value of Props Tokens. While we think that PropsPBC may have some manage over admitting apps to the community, neither you nor us could be in a position to manage how Props App developersincorporate Props Tokens into their apps, and there can be no guarantee that Props App developers will create any massive utilityfor, or merits to, preserving Props Tokens, if at all. In addition, if builders fail to create in app economies with large userbases and critical demand for electronic assets, this may have a fabric antagonistic impact on the price of Props Tokens. The value of PropsTokens is contingent upon a large number of elements, lots of which adding legal and regulatory situations are beyond our manage. Someof these elements are described in these Risk Factors.
For illustration, as described in these Risk Factors under the caption �RisksRelated to the Development of the Props Network,� the price of the Props Tokens will rely on our skill to successfullydevelop the Props Network, adding creating a community of app developers and users that can help interest in Props Apps anduses for the Props Tokens, as well as navigating technological and market based risks, equivalent to accepted acceptance of distributedledger know-how. The value of the Props Tokens and other styles of cryptoassets will also considerably rely on no matter if blockchainand other new technologies associated with the Props Tokens become useful and economically viable. See the component to theseRisk Factors under the caption �Risks Related to Blockchain Technology� for further detail. In addition, if anincreasing number of Props Tokens are dispensed publicly, the cost people are inclined to pay for Props Tokens may fall considerably,and if or when a secondary market for the Props Tokens develops, the price may fall added. Because we began distributing PropsTokens to holders of our Simple Agreements for Future Tokens �SAFTs� in early March 2019 who proven walletaddresses, and, for this reason, there may already be Props Token holders who wish to sell Props Tokens, the pricetag of Props Tokens issuedto you under this providing round may be subject to especially high risks of price volatility or price drops. See �OtherOfferings� for extra information concerning the SAFTs.
YouNow does not fully control any of those elements, and thereforemay not be capable of control the long run good fortune of the Props Tokens as a feature of the Props Network or the capacity of the PropsTokens to maintain their value. The value of Props Tokens may reduce and may also experience gigantic volatility and unpredictabilityrelative to fiat forex. Moreover, YouNow does not plan to hold any form of bond or trust account designed to give protection to holdersof the Props Tokens, and we don’t intend to secure the Props Tokens with any assets. We expect that approximately50,000,000 tokens can be released by the Protocol Rewards Engine in the first year following its launch, and each year, we expectthat the Protocol Rewards Engine will unlock a decreasing number of Props Tokens 12. 5% of the final rewards pool per yearuntil the complete number of Props Tokens that could be allotted by the Protocol Rewards Engine, 400,000,000, has been released. Weexpect to issue up to 33,000,000 Props Tokens in connection with one time discretionary grants to gigantic users of the PropsLive Video App.
See �Description of the Props Live Video App�One Time Discretionary Grants� for additionalinformation. We expect to also issue up to 2,000,000 Props Tokens in connection with one time discretionary grants to significantusers of the Third Party Developer App. See �Annex A: PeerStream Plan of Props Token Usage� for extra guidance. Additional Props Tokens may be issued in reference to one time grandfathering grants to Props Apps added to the Props Networkin the future. In addition, we havereserved: i roughly 8.
35% of all Props Tokens that we presently anticipate to issue sooner or later, or 83,500,000 PropsTokens, for discretionary distributions by Props PBC in the form of grants to Props App developers, developers constructing Props Networkinfrastructure, or other strategic companions or for cash sales to help Props PBC�s operations, ii roughly 1. 2%of all Props Tokens that we presently assume to issue in the future, or 11,500,000 Props Tokens, for ability issuance pursuantto our contract with PeerStream, Inc. , iii roughly 20% of all Props Tokens that we’ve got issued or assume to be issued,or 200,000,000 Props Tokens, for issuance to people who bought rights to take delivery of Props Tokens in private placements have alreadybeen issued or pursuant to our DPAs, iii approximately 22. 7% of all Props Tokens that we currently anticipate to issue in thefuture, or 227,000,000 Props Tokens, for issuance to YouNow equity traders and latest and future employees, discipline to certainvesting necessities, though we may decide to use these Props Tokens for other functions sooner or later, and iv approximately 4%of all Props Tokens that we have got issued or expect to be issued sooner or later, or 40,000,000 Props Tokens, for issuances toadvisors to YouNow. The total number of Props Tokens published, and the quantity in existence at any time limit, will affect thevalue of your Props Tokens and may dilute that value considerably. If the demand for Props Tokens and uses for Props Tokens onthe Props Network do not similarly boom, the cost of Props Tokens may decline.
In addition, if the initial limit to the totalnumber of Props Tokens is greater in the future, this could also have the effect of diluting the value of your Props Tokens. Initially, becauseYouNow operates the Props Live Video App and acts as one of the Validators, the Protocol Rewards Engine will, partly, be rewardingYouNow by making more Props Tokens available for issuance pursuant to the offering remark during which this offering circular isincluded. This means that YouNow will not only at the start handle a considerable component of all Props Tokens, but will, over the years,have more Props Tokens accessible to it. We expect that a considerable majority of these allotted Props Tokens might be issued byYouNow to the Props Live Video App users, but we may distribute a smaller percentage of these allocated Props Tokens in the timeperiod automatically following qualification of this providing round, as in comparison to later. In addition, becausewe expect that 0.
03475% of the Props Tokens ultimate from the preliminary 400,000,000 to be allotted by the Protocol Rewards Enginewill be allocated day by day to Props Apps as described under �Description of the Props Network�The Protocol RewardsEngine� and 0. 001829% of the final from the preliminary 400,000,000 Props Tokens might be allocated every day to Validators,the dimensions of Props Tokens allocations made pursuant to the Protocol Rewards Engine will necessarily lower over time. As a result,YouNow may originally accumulate giant allocations of Props Tokens and it will then have absolute discretion to distributesuch Props Tokens pursuant to this Regulation A offering round or in other registered or exempt securities offerings. Theseamounts could be moreover the roughly 227,000,000 Props Tokens that YouNow intends to one at a time issue to YouNow equityinvestors and existing and future personnel, area to particular vesting necessities though we may decide to use these Props Tokensfor other functions sooner or later, and the 40,000,000 Props Tokens issued or to be issued by YouNow to advisers in registeredor exempt securities transactions. See �Other Offerings� for further suggestions.
In addition, Props PBCwill have 83,500,000 Props Tokens accessible for distribution. See �Description of the Props Tokens Being Offered�TokenSupply. � We can have significantdiscretion in identifying how these Props Tokens might be issued. For example, the Props Tokens that YouNow may distribute to usersmay be issued slowly over a long period of time or, rather, more simply, to the extent that YouNow determines that it couldhelp its apps or the added advancement of the Props Network. Further, Props PBC may train its discretion to change the totalnumber of Props Tokens that may be issued sooner or later or to change the Protocol Rewards Engine �smart contract,�to the extent that Props PBC determines that such adjustments could help the further development of the Props Network.
As a result,the provision of Props Tokens is considerably within our handle�and should change in ways that can adversely affect the valueof your Props Tokens and should dilute that value significantly. Props Apps may onlyafford selected functionalities and benefits of holding Props Tokens to users preserving a undeniable number of Props Tokens. These thresholdsmay rely on a user�s variety of Props Tokens relative to the holdings of different users of the Props App. For illustration, in theProps Live Video App, the unlocking of digital goods for purchase functionality for Props Tokens is only available once the useris in the twentieth percentile of Props Token holdings for all Props Live Video App users. As a result, you is probably not ableto enjoy this capability unless you’ve got a considerable number of Props Tokens.
In addition, your potential to have this functionalitymay depend, largely, on the actions of alternative people. If these other persons are more active in earning or differently collectingProps Tokens, even if you earn or buy a substantial number of Props Tokens, you could never reach the minimum threshold of PropsToken holdings essential so one can enjoy a distinctive functionality in a Props App. The Props Tokens havelittle efficiency historical past. Moreover, the Props Network and the applications that the Props Network is meant to aid togetherconstitute an unproven and novel model for the operation of cyber web purposes for live video purposes, and the value ofthe Props Tokens is probably going to depend on the good fortune of this model. This luck may, in turn, be dependent both on demand foran alternative to conventional centralized electronic media application infrastructures and the efficiency of the technology usedto create the Props Network and the Props Tokens, that is novel and relatively untested. Further, the price we have set for theProps Tokens of $0.
1369 per token was chosen by us in reference to the undiscounted price paid by buyers of our SAFTs and wasnot set pursuant to any third party valuation. In December 2017, we offered SAFTs to particular traders. See �Other Offerings�for further suggestions concerning the SAFTs; the undiscounted price paid by investors in this offering was $0. 1369. Participationin the offering and your choice to purchase Props Tokens should, hence, be evaluated not just on the idea of the value andprospects of the Props Tokens, taking into account an evaluation of the clients of YouNow and Props PBC in attaining their respectivegoals for the Props Network, but also needs to believe the big uncertainties associated with these assessments given thelack of identical business models and technological systems towards which the Props Tokens, the Props Network and Props Apps maybe usefully compared.
The deemed offeringprice of the Props Token bears no relationship to our book or asset values or to another headquartered standards for valuing securities. The price we’ve set for the Props Tokens of $0. 1369 per token was chosen by us in reference to undiscounted prices paid by investorsof our SAFTs. Because this price is not based upon an autonomous valuation, the pricetag might not be indicative of the proceeds thatyou could be given upon a advertisement sale of the Props Tokens. Further, the deemed providing price may be significantly more thanthe price at which the Props Tokens would trade in the event that they were to be listed on an exchange or actively traded by broker dealers.
While we explored the chance of acquiring an independent valuation of the Props Tokens by an independent third party monthsbefore Props Tokens have been announced, this valuation was never obtained, and anyways, as it would have valued the PropsTokens ahead of their actual introduction on the Props Network, would have had little referring to the cost of Props Tokens youmay be given during this providing. The Props Tokensmay only be traded on a very restricted range of venues, including U. S. registered exchanges or regulated choice buying and selling systemsfor which a Form ATS has been correctly submitted to the SEC. There are presently no national securities exchanges or exchangesthat have been permitted by the Financial Industry Regulatory Authority �FINRA� or registered under Form ATSwith the SEC to support the buying and selling of Props Tokens on the secondary market.
We are aware that several entities are working todevelop and launch such an exchange. See �Description of the Props Tokens Being Offered�Secondary Markets. �There is no assure that any exchanges able and inclined to assist trading in Props Tokens turns into practical. Further, evenif this sort of exchange were to become purposeful, no such trade will be required to list the Props Tokens and that they may decidenot to list the Props Tokens for a number of purposes not under our manage, including, but not restricted to, a perceived lack ofmarket attention in the Props Tokens, and another elements relevant to the individual exchanges for example, if such exchangesare closely invested in another cryptocurrency. If such a exchange did conform to list the Props Tokens, the market may not offerProps Tokens any massive liquidity for a number of purposes adding, for example, a lack of ability buyers. As a result,you should be arranged to hold your Props Tokens indefinitely, as there is no assure that holders can be capable of sell or exchangetheir Props Tokens.
In the event that the Props Tokens remain illiquid for a major amount of time or indefinitely, the valueof the Props Tokens may be materially adversely affected. The Props Tokensdo not have any advice rights attached to them, and holders might not be in a position to obtain all the tips they’d wantregarding YouNow or the tokens. As a Tier 2 issuer under Regulation A, we might be discipline to scaled disclosure and reporting requirements,and we just isn’t required to make an analogous level of public reporting required of issuers in conventional public choices. Inaddition, we are among the first issuers of tokens to have an offering of tokens qualifiedunder Regulation A. Even though the SEC has qualified our Regulation A offering, private buyers, individual States in whichwe may offer the Props Tokens, or potentially other members in the Props Network may disagree with the extent or type of disclosure,reporting or other assistance we are providing, or may in another way object to the means by which we are providing the Props Tokens,or assert that other state laws may apply to this providing.
If any of these people or entities decide to litigate against YouNowregarding these or similar issues, it could have a fabric hostile effect on our operations and on the value of the Props Tokens. Following the conclusionof our providing of Props Tokens under Regulation A, we may be eligible to file an exit report to suspend or terminate our ongoingreporting obligations. If we become eligible, and if we make this election sooner or later, we may choose to not file annual reports,semiannual reports, current reports, financial statements and audited financial statements. As a result, holders of the Props Tokenswould take delivery of less information about the latest status of our company, and the value of our Props Tokens may be adversely affected. We can even cease to file these reports if the Props Tokens are either deemed to not be securities under relevant securitieslaws or if the sidechain that we are building the �Props Blockchain� undergoes such a major hard forkthat we are now not driving the governance of the community.
Holders of PropsTokens will not be given a right to any compensation of predominant or attention, any interest in the earnings or losses of YouNow, itsaffiliates, the Third Party Developer, the latest owner and operator of the Props Live Video App or another third party app developer, any rights to distributions from YouNow, its affiliates,the Third Party Developer, the existing owner and operator of the Props Live Video App, or any other third party app developer, or any legal or contractual right to train handle over theoperations or persevered advancement of YouNow, its affiliates, the Third Party Developer, the latest owner and operator of the Props Live Video App or every other third party app developer. Holders of Props Tokens won’t have any right to vote on any concerns referring to YouNow, its affiliates, the Third Party Developer, the latest owner and operator of the Props Live Video Appor another third party app developer. We assume that Props Token holders will only be capable of vote on in app matters bothwithin the Props Live Video App and, potentially, apps developed by third parties in the future and, sooner or later, we may potentiallyallow Props Token holders to vote on an advisory basis to assist guide Props PBC in making key decisions affecting the Props Networkbased on their stake of Props Tokens. Further, we are not conscious about any binding obligation on YouNow, its associates, the ThirdParty Developer, the current owner and operator of the Props Live Video App or any other third party app developer with respect to the tokens or the holders of the tokens following the tokens�start during this providing. Any profit that you simply may be given on your holdings of Props Tokens may be in keeping with the commercial utilityof the tokens, or on potential capital appreciation associated with the tokens to the extent realizable through trading endeavor. As a result, guidance disclosed in this providing round and in other places related to our agency and its capability to construct thenetwork may be relevant to the value of your investment, however the relevance may be limited and indirect.
As described in�Description of the Props Tokens Being Offered�Functionality for Users� and �Description ofthe Props Live Video App,� Props Tokens have certain functionalities in the Props Live Video App and will have additionalfunctionalities in the future. In addition, as described in �Annex A: PeerStream Plan of Props Token Usage,�Props Tokens have particular functionalities in the Third Party Developer App and will have additional functionalities in thefuture. These functionalities may include, for example, elevated in app social status or access to premium in app digital goods,and the allocation of a bigger daily stipend of in app currency. See �Description of the Props Live Video App�TheRole of Props Tokens in the Props Live Video App� and �Annex A: PeerStream Plan of Props Token Usage�for details involving the functionality of Props Tokens. These functionalitiesmay, nevertheless it, be denied to Props Token holders if a Props Token holder pursuant to the terms and stipulations of use of the applicableProps App.
For illustration, the terms and stipulations of the Props Live Video App supply for the correct to suspend, limit or terminateaccess, at any time with or without warning and without or with cause, including if the user is decided to pose a threat to theapp provider or its users. In addition, the provisional accounting entries Props Apps make when users have accomplished in app activitiesnecessary to earn rewards �Pending Props� may be canceled and never claimed as Props Tokens upon the violationof an app�s terms and prerequisites, as an example. See �Description of the Props Tokens Being Offered�PendingProps. � If you’re unable to use the Props Tokens within accessible Props Apps, you might not be able to derive significantvalue from protecting Props Tokens and you will, as well as, be unable to sell them in secondary markets. See �Descriptionof the Props Tokens Being Offered�Secondary Markets� for extra details. There are presently no national securitiesexchanges or exchanges which have been authorised by FINRA or registered under Form ATS with the SEC to assist the trading ofProps Tokens on a secondary market.
S. tax treatment, as relevant, of the acquisition of Props Tokens. Your receipt of Props Tokens may bring about adversarial taxconsequences to you, adding withholding taxes, income taxes and tax reporting requirements. We intend to treat the issuanceof Props Tokens to a U. S.
holder or non U. S. holder, for U. S. federal income tax functions, as compensation for functions.
Accordingly,a U. S. holder will generally be required to come with in gross income the fair market value of the tokens it receives from us, andProps Tokens we issue to a non U. S. holder may be discipline to a 30% withholding tax if the capabilities such holder performs for usare considered to were carried out in america and certain other situations are met. We cannot and don’t make anyrepresentations or assurances as to personal tax consequences, adding the consequences of using Props Tokens as transactioncurrency.
If the Props Tokensare characterized as a �digital forex� for U. S. federal income tax functions, then, under a notice issued by theU. S. Internal Revenue Service in 2014 the �Notice�, the ordinary rules applicable to property transactionswould apply.
See �Certain United States Federal Income Tax Considerations,� herein. The Notice indicates that,in specific cases, people acquiring Props Tokens may be area to hostile tax consequences upon their receipt of Props Tokens. For example, validators on the Props Blockchain that are not acting in the potential of an employee and that receive Props Tokensshould report the fair market value of such tokens as self employment income and may be subject to self employment tax. In addition,a person that gets Props Tokens as compensation, an incentive, or reward will generally be area to adverse tax consequencesand reporting requirements. Furthermore, Revenue Ruling 2019 24 indicates that the receipt of digital forex by a holder of aProps Token pursuant to an �air drop� following a �hard fork� generally will result in hostile tax consequencesto the holder of a Props Token.
Finally, you could be required to report gain or loss if you use a token including a Props Tokenas a transaction forex. You aren’t guaranteedto accept Props Tokens for acting in app actions, including those described under �Description of the Props LiveVideo App� and �Annex A: PeerStream Plan of Props Token Usage,� or in connection with one time discretionarygrants by YouNow or the Third Party App Developer. Prior to receiving any Props Tokens, it’s a must to entire selected minimal steps�includingcompletion of KYC and AML procedures and finishing touch of all tax forms asked by the Third Party App Developer or the currentowner and operator of the Props Live Video App, as well as �claim� your Pending Props. See �Description ofthe Props Tokens Being Offered�Receiving Props Tokens� for a average description of the required steps in PropsApps and �Description of the Props Live Video App�Terms of Receiving Rewards� for a description of therequired steps in the Props Live Video App. In the Props Live Video App, we expect that the KYC and AML procedures and documentationrequirements required of users earning Props Tokens in amounts below a certain threshold set in our discretion will be more basic,to be able to cut unnecessary administrative burdens on users.
For illustration, the existing owner and operator of the Props LiveVideo App may not require tax forms for users receiving small numbers of Props Tokens. Once a user has reached a greatest thresholdof total Props Tokens earned, but it surely, the present owner and operator of the Props Live Video App may require that the user completeadditional KYC/AML procedures and documentation if you want to receive Props Tokens. Upon completingin app activities or upon offer of a one time discretionary grant, there may be indication, in your Props App account, of receiptof Pending Props, which are accounting mechanisms utilized by the Props Network contributors to signify who is provisionally entitledto accept Props Tokens. Generally, if a user that’s given Pending Props in reference to in app actions or in connectionwith one time discretionary grants offer fails to complete the above described required steps within 120 days of receiving them,the Props App user may never obtain the Props Tokens. The Props App, adding the Props Live Video App, may cancel such a PendingProps.
See �Description of the Props Live Video App�Terms of Receiving Rewards� for further advice. As a result, remember to not view the performance of in app activities or offering of a one time grant as a guarantee that youwill accept Props Tokens. Neither the present owner and operator of the Props Live Video App nor the Third Party Developer anticipatesexercising this discretion to revoke Pending Props linked to activities carried out in Props Apps except in cases of usersapparently abandoning them. If either the latest owner and operator of the Props Live Video App or the Third Party Developerwere to investigate to train its discretion to revoke Pending Props, the current owner and operator of the Props Live Video Appor the Third Party Developer, as applicable, intend to speak with any user with such Pending Props ahead of revoking them,via in app communications and via email. Further,before you receive Props Tokens, Props Apps just like the Props Live Video App can also should whole selected additional steps,adding checking for fraud or violation of the Terms of Service, and administrative procedures related to settlement thatcan delay the issuance or Props Tokens upon getting conducted in app actions. Further, issuance by either the currentowner and operator of the Props Live Video App or the Third Party App Developer of the Props Tokens and final settlement willonly be made once the transfer of Props Tokens from a wallet controlled by either the current owner and operator of the PropsLive Video App or the Third Party App Developer to the user�s wallet is proven by Validators on the Ethereumblockchain.
Prior to payment, Props App users, Props App developers, Validators, and grantees don’t have any right to receiveProps Tokens, and if YouNow or Props PBC, as applicable, were to dissolve or liquidate, or if the operator of the Props LiveVideo App or the Third Party App Developer would cease to reward users of their respective apps, or if YouNow would ceaseto reward Validators, or if Props PBC were to cease making grants with Props Tokens, then users, Validators, and granteeswill have no right to accept Props Tokens, and that they may never take delivery of these Props Tokens. The optimal successof the Props Network may depend upon our capability to attract further application builders to create additional apps to bejoined to the Props Network, that may, in turn, depend in large part on the luck of our efforts to develop an environment ofapplication builders and users. We intend to allure application developers and users by undertaking traditional advertising and marketing effortsand incentivizing participation in the Props Network with Props Tokens. See �Description of the Props Token�s Rolein Helping to Align Incentives of Network Participants� for extra particulars. If any of our present efforts at attractingand preserving application developers aren’t effective or become less beneficial, if we are unable to proceed to use any of thesemethods or advertising channels, or if the cost of using these strategies were to significantly growth, we may not be in a position to attractand retain new application developers and users in a cost advantageous manner or convert application builders into active applicationdevelopers on the Props Network.
Further, arising apps with capability for Ethereum based tokens may not be appealing tosome third party app developers due to costs and regulatory issues. See �Our plans for addressing scalability issuesrelated to the operation of apps based on the Ethereum blockchain subject us to a few technological and regulatory risksthat can cause the Props Network to be ineffective or not sufficiently cost beneficial to proceed operating. � and �Wemay need to handle extra regulatory issues in connection with our plans for the development of the Props Network. �As a result, the expansion of our community could be adversely affected, that might impair the price of the Props Tokens. Props Tokensmay be allotted in ways intended to incentivize movements essential to the Props Network, adding Props App advent,participation in the Props Network online community, the introduction of electronic media content material to be shared on the Props Network,advancement of premium experiences for Props Token holders across the community and for maintenance of the Props Blockchain. Asdiscussed above in �Description of the Props Token�s Role in Helping to Align Incentives of NetworkParticipants,� Props App advent and operation may be incentivized sooner or later by beneficial top quality thirdparty builders of Props Apps with Props Tokens.
App developers such as the current owner and operator of the Props Live VideoApp or the Third Party App Developer may use Props Tokens to incentivize thecreation of digital media content on the Props Network. The luck of theProps Network, therefore, will rely upon users and builders being incentivized to participate in the Props Network in exchangefor Props Tokens. In addition, we incentivize the operation of validators on the Props Blockchain with Props Tokens. Further, werely on validators of the Ethereum blockchain to record ownership and move of Props Tokens to the Ethereum blockchain, whichis where ownership of Props Tokens is recorded. See �Description of the Props Network�The Props Blockchain�TheValidators� for additional particulars.
Incentive structures like these won’t operate as meant, nonetheless it, and we cannotguarantee that these mechanisms, as designed, will effectively incentivize the behaviors that they’re supposed to advertise andwhich are necessary for the operation and added advancement of the Props Network. If these incentive structures fail or are notas beneficial as meant, the Props Network and the cost of the Props Tokens may be adversely affected. Upon qualificationof this post qualification modification, there will be two application developers with apps which are designed to give Props Tokensfunctionality. Further, there can be no assure that further application builders will create Props Apps or join the PropsNetwork. As a results of the restricted number of Props App developers, the Props Network may be adversely impacted by changes inthe company and fiscal condition of, or demand for its services by, these developers. We expect that even to the extent thatdevelopers have contractual obligations to us with respect to their development actions, these developers might be in a position to terminatethese responsibilities at any time, such that any developer may decide at any time to cease development of their application on theProps Network, due to bankruptcy, commercial concerns, or for some other reason.
If a couple of such builders are unableor unwilling to use the network for development of their purposes for any reason, the growth of the community could be impeded,most appropriate to a lack of adoption of the Props Network. This could adversely affect the cost of your Props Tokens. YouNow�spast experience providing consumers with live stream video chat carrier doesn’t guarantee that it or Props PBC will be ableto efficiently develop the Props Network. The historical performance of the YouNow live streaming app and our previousbusiness does not necessarily imply that the Props Network�s future efficiency or further advancement will besuccessful�or the value of Props Tokens with growth or maintain in value. Further we won’t guarantee that Props LiveVideo App users or users of the Third Party App Developer�s app will proceed to use either app, and may adecline may occur may occur in Props Live Video App users or users of the Third Party App Developer�s App in thefuture. It is unattainable topredict no matter if the Props Network can have a substantial user base or grow its current user base in a way that can assist a�two sided financial system� that consists of a inhabitants of Props App builders, and we won’t assure that the Props Networkwill hold its current user base or grow, nor is it feasible to expect even if any major protection incidents will occur on thenetwork.
The growth and stability of the Props Network is littered with a huge variety of complicated and interrelated elements. Pastgrowth and performance of the network are not indicative of the growth and efficiency of the network sooner or later. The Props Network,including gigantic components just like the Protocol Rewards Engine and the Ethereum �smart contract� that creates PropsTokens the �Token Code�, and our internal programs rely on application and laptop programming that is highlycomplex. In addition, the Props Network and internal methods depend on the capacity of this application to store, retrieve, processand manage immense quantities of knowledge and electronic media content. While we will take least expensive steps to prevent such issues, includingundergoing routine audits, some errors or other bugs or defects may only be found after the code has been published for externalor internal use.
For instance, undetected errors in the �smart contracts� we deploy to the Ethereum blockchain may bemanipulated so that you could allow bad actors to issue themselves Props Tokens or otherwise maliciously affect the Props Network. Errorsor other bugs or defects in the application on which we rely may bring about a terrible adventure for application developers andusers, delay introductions of new facets or improvements, bring about errors or compromise our potential to offer protection to user data orour highbrow belongings. Any errors, bugs or defects found out in the software on which we depend could for this reason result in harmto our recognition, loss of builders or users, loss of revenue, or legal responsibility for damages, any of that can adversely affectthe Props Network and the price of your Props Tokens.