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 1345 AVENUE OF THE AMERICAS, 11TH FLOOR

NEW YORK, NEW YORK 10105

TELEPHONE: (212) 370-1300

FACSIMILE: (212) 370-7889

www.egsllp.com

VIA EDGAR

January 29, 2020

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Attn: John Dana Brown, Esq.

RE:

 YouNow, Inc.

Offering Statement on Form 1-A

Qualified, as amended, July 11, 2019

File No. 024-11018

Dear Mr. Brown:

On behalf of YouNow, Inc. (the “Company”) we respectfully submit this correspondence to the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”), to address whether a proposed asset disposition by the Company would represent a “fundamental change” that would require the suspension of qualification of the above-referenced offering statement (the “Offering Statement”) during the Staff’s review of the disclosure that describes the disposition. Based on the analysis contained herein, the Company does not believe that disclosure of the proposed disposition would require such a suspension.

Background

The Company issues cryptographic tokens (“Props Tokens”) on a continuous basis under Regulation A. It has not publicly issued any other securities.

The Company is one of the first two issuers to have a token offering qualified by the Commission. As part of the Company’s business plan, and as described in detail in the Offering Statement, the Company continually issues Props Tokens, to both new and existing Props Token holders, as rewards for engaging in certain specific activities on particular websites and mobile applications (collectively, the “Props Network”, or “Network”, of “Apps”). Once received, Props Tokens can be used by their holders to gain additional App benefits such as premium features. The Company’s business goal is to continue to expand the number of Props Network Apps, the number of Props Token users and the number of Props Tokens in circulation (subject to certain limits), so that Props Tokens become more and more useful, attractive and valuable as a functional crypto asset within a sustainable Props Token economy.

It is the Company’s strongly held belief that any interruption in the continuous issuance of Props Tokens would jeopardize this business goal and harm existing holders of Props Tokens. Continuous Props Token issuance is a principal attraction of the Network to App operators and one of the engines of growth for the Props Token economy, and is particularly important at the moment, when the Props Token economy is still young (just over six months old) and still in its first stages of growth (for data reflecting the growth of App use following the July 2019 introduction of Props Tokens, see Exhibit 15 to the Company’s current report

 U.S. Securities and Exchange Commission

Attn: John Dana Brown, Esq.

RE: YouNow, Inc.

January 29, 2020

Page 2 of 8

on Form 1-U, filed January 24, 2020). Were continuous issuance to be interrupted, the Company believes that Props Token holders would immediately, and reasonably, begin to lose confidence in Props Tokens as a viable crypto asset, and that as a result the growth of the Props Token economy would slow. If the interruption continued, holders would reasonably begin to take their activities elsewhere, app developers would lose trust in the Props Network and the Props Token economy would start to contract. It is not clear to the Company how long it might take for Props Token economic activity to come to a halt. But, given the youth and size of the Props Token economy, the Company believes that this could occur almost immediately. The result for Props Token holders would be a decline in the value of their Props Tokens, possibly to zero, as the Props Token economy collapsed.

The Company’s Immediate Needs

To grow a sustainable Props Token economy, and consequently the value of Props Tokens to their holders, the Company’s immediate needs include expanding the Props Network of Apps and raising working capital to continue the Company’s operations.

The first App in the Props Network was the Company’s own YouNow live video App, which has been rewarding users with Props Tokens issued by the Company since last July. The second App in the Network will be Camfrog, a video chat App operated by PeerStream, Inc., which will go live once the Commission qualifies the post-effective amendment to the Offering Statement currently under review by the Staff, which qualification the Company expects to request for on or about February 11, 2020. (We note that that the continuous offering and issuance of Props Tokens has not been suspended during the Staff’s review to date of this post-effective amendment.) In addition, the Company plans to add its third, fourth and fifth Apps to the Network during H1 2020 (Paltalk, another video chat App operated by PeerStream; Listia, a goods trading marketplace App; and Game Caster, a gameplay streaming App operated by XSplit). Thereafter, the Company intends to continue its efforts to add Apps and expand the Network at what it hopes will be an increasing pace.

At the same time, the Company has been seeking to increase its working capital. The Company has long been projecting to investors that its cash and cash equivalents would not be sufficient to fund its operations through specified approximate dates in 2020. See (i) the Company’s amended offering statement filed July 10, 2019, in the Risk Factors section at page 33 (projecting cash availability for 16 months); (ii) the Company’s amended offering statement filed September 27, 2019, in the Risk Factors section at page 33 (providing a revised projection of cash availability through May 31, 2020); (iii) the Company’s Form 1-SA filed October 9, 2019, at Note 17 to the consolidated financial statements (expressing substantial doubt about the Company’s ability to continue as a going concern for an additional year); and (iv) the Company’s amended offering statement filed December 5, 2019, in the Risk Factors section at page 33 (reaffirming the projection of cash availability through May 31, 2020). To address its working capital needs, the Company has, over time, rationalized its operations and reduced its headcount. More recently, it has sought to focus exclusively on growing the Props Token economy, by pursuing a separation of the Company’s video App operations from its operations as a token propagator and Props Network expander. The two operations share little overlap in terms of business skills and strategies – the Props operations are focused on building out an open-source cryptographic token platform for App businesses, and the video App operations represent a mature web-based consumer product. Moreover, they appeal to different types of investors, focusing on different areas of expertise and possessing different risk appetites and investment expectations. In the Company’s view, unbundling the two operations would free each to find additional

 U.S. Securities and Exchange Commission

Attn: John Dana Brown, Esq.

RE: YouNow, Inc.

January 29, 2020

Page 3 of 8

backing from different investors, with little to no loss of operational efficiencies. Throughout its efforts to address its working capital needs, the Company has sought to achieve an outcome that would preserve the continuous issuance of Props Tokens and the Props Token economy, for the benefit of Props Token holders.

The Company’s Intended Change

On Thursday, January 16, 2020, the Company entered into a term sheet for a contemplated transaction (the “Transaction”) that seeks to address its immediate needs and increases the probability of success of the Props Token economy. A copy of this term sheet is attached hereto as Exhibit A. In consummating the Transaction, the Company would:

•

 sell the assets associated with its live video App to an entity controlled by a current, non-affiliate shareholder of the Company;

•

 keep that App in the Props Network by having the buyer enter into a Props App Services Agreement and a Master Service Agreement (substantially similar to the agreements with which the Camfrog App is being added to the Network by means of the pending post-effective amendment to the Offering Statement);

•

 leave the Company a “pure play” token propagation investment opportunity, which the Company believes is necessary for it to attract new private investment;

•

 allow the Company to reduce its cash burn rate, by retaining its less cash-dependent token propagation operations and disposing of the more cash-dependent App operations, and win more time to seek out additional cash resources;

•

 receive cash that will extend the Company’s operating runway as a token propagator and Network expander;

•

 help grow the Props Network by converting the Company’s own App into a third-party App, which the Company believes will help it attract third-party App operators who might otherwise perceive conflicts of interest between the Company’s role as operator of the Network and its role as operator of one of the Network Apps; and

•

 leave the live video App in a position to prosper on its own.

However, the Company will not be able to effectively meet its needs and benefit the Props Token economy if, as a result of moving from the term sheet described above to a completed asset sale, the Company’s continuous issuance of Props Tokens is interrupted. Such an interruption could occur if the contemplated Transaction were to represent a “fundamental change” as to which the Commission would require a suspension of qualification of the Offering Statement during the Staff’s review of the disclosure that describes the Transaction. For the reasons set forth below, the Company has concluded that the contemplated Transaction does not represent such a change, and can be disclosed to the public without a suspension of qualification, either by means of a supplement to the offering circular contained in the Offering Statement or, if necessary (and as has been employed for the addition of the Camfrog App to the Props Network), by means of a post-effective amendment that is reviewed the Staff but in connection with which no suspension of qualification is required.

 U.S. Securities and Exchange Commission

Attn: John Dana Brown, Esq.

RE: YouNow, Inc.

January 29, 2020

Page 4 of 8

The Elements of a “Fundamental Change”

The term “fundamental change” is not mentioned in Regulation A.1 Nevertheless, the Company recognizes that the Staff has long used the concept of “fundamental change”, as set forth in Item 512(a)(1)(ii) of Regulation S-K, to help determine when, in the course of continuous, registered offerings under Rule 415, post-effective changes in disclosure are substantial enough to require the suspension of such offerings while the Staff reviews the new disclosure. For purposes of this letter, the Company will not question the appropriateness of the Staff employing a similar tool to determine when, in the course of continuous, qualified offerings under Regulation A, changes in disclosure deserve similar treatment.2

The Commission has never offered a general definition of what constitutes a “fundamental change”. Examples in various interpretive materials suggest that a fundamental change may include a major change to an issuer’s operations; a significant acquisition or disposition; or a change in the business or operations of an issuer that would necessitate a restatement of its financial statements. In addition, the fundamental change concept has been described in commentary as “super materiality”, meaning that it would involve a change highly material to investors, and not just material. Finally, although by its own terms it does not control here, Form 1-U would “deem” a fundamental change to include an acquisition for which the purchase price would exceed 50% of the total consolidated assets of the issuer as of the end of the most recently completed fiscal year; or a merger, consolidation, acquisition or similar transaction that would require approval by the issuer’s securityholders; or any contract upon which the issuer’s business is substantially dependent. Form 1-U, Item 1, Instruction 2.3

In all events, the Commission has consistently maintained that it is the responsibility of management to determine what constitutes a fundamental change.4 This is an apt approach, for it recognizes that what may be fundamental for one issuer, and in one circumstance, may not be fundamental for other issuers, or in other circumstances. This is the case here, as the Company addresses below.

Why the Company’s Intended Change is not “Fundamental”

The Company does not believe that the contemplated Transaction represents a fundamental change to the offering because the Company does not believe that a sale of the YouNow App would be material to the holders of Props Tokens. Since the holders of Props Tokens are the only public investors at issue, the

1 It is used in Form 1-U but, as expressly set forth in that form, “solely for the purposes of” reporting developments on that form. See Form 1-U, Item 1, Instruction 2; see also the additional discussion of Form 1-U later in this letter.

2 The Company observes, however, that the 2015 amendments to Regulation A were intended to, among other things, “create additional flexibility for issuers in the offering process”, Commission Release No. 33-9741 (adoption of final rule amendments to Regulation A), at page 7. The Company also believes that it is the view of the investment community generally that Regulation A disclosure rules are intended to be imposed more flexibly than similar rules imposed on Securities Act registrants.

3 See also Division of Corporation Finance Financial Reporting Manual at Section 2045.3 (“offerings pursuant to effective registration statements cannot proceed if the significance of an acquisition exceeds 50% and financial statements have not been filed”).

4 See, e.g., Division of Corporation Finance Financial Reporting Manual at Sections 2045.3 and 13100.2.

 U.S. Securities and Exchange Commission

Attn: John Dana Brown, Esq.

RE: YouNow, Inc.

January 29, 2020

Page 5 of 8

reasonable Props Token holder’s perspective and interests should be the Staff’s predominant concern here. No good, and much harm, could be done by judging whether a fundamental change exists from the perspective of a hypothetical public equity or debt holder that does not exist in this circumstance.

The Company issues Props Tokens under Regulation A and has no other publicly issued securities. The offering circular makes clear that the holders of Props Tokens have no stake in the Company’s equity or earnings, and no right to involvement in the Company’s operations.

As a result, it is the Company’s view that the Transaction would not, if consummated, be material to a reasonable investor in Props Tokens. Changes to the Company that might be material if they were judged from the perspective of a public equity or debt investor may be immaterial to a reasonable holder of the Company’s Props Tokens. Similarly, changes to the Company of the utmost importance to a reasonable holder of Props Tokens might be immaterial if judged from the perspective of a public equity or debt investor. In particular, a reasonable Props Token holder should be greatly concerned about changes that affect the ways in which Props Tokens may be issued, or which slow the growth of, or disrupt, the Props Token economy; should be concerned about any delays in the Company’s acquisition of additional cash resources; and need not be interested one way or another in changes to the ownership of a particular App on the Props Network, or in whether or not the Company itself owns a Network App.

When the reasonable Props Token holder’s perspective is taken into account, it is clear that there is no fundamental change as a result of the contemplated Transaction. This can be seen in a point-by-point review of the typical