Overview

Offering Summary: Proof Ethereum LLC (the “Company”) is offering membership interests (the “Membership Interests”) under Regulation D / 506(c). In the future, the Company also may conduct additional offerings under other exemptions from registration. This summary has been prepared by the Manager and should be read together with the other offering documents by all prospective investors in the Reg D / 506(c) offering before investing.
Amount: Up to $250 million in total.
Manager: Proof Ethereum Management Inc., a Nevada Corporation (the “Manager”). Proof Ethereum Management is a wholly-owned subsidiary of North Capital Investment Technology, Inc.
Use of Proceeds: The Company intends to invest most of its assets in Ether, the cryptocurrency which powers the Ethereum block chain. In addition, the Company will mine for Ether, will enter into mining contracts related to Ethereum, and will provide “proof of stake” and other technology services related to Ethereum.
Management Fee and Expenses: The Company will have no employees or overhead, but will pay a management fee to the Manager equal to 2% of net assets. In addition, the Company will reimburse the Manager up to 25 basis points per quarter (1% per annum) for expenses incurred in connection with the formation of the company and the marketing of the Offering.
Withdrawal: The Membership Interests are restricted securities and no market for them is expected to develop for the foreseeable future. The Manager will make commercially reasonable efforts to provide quarterly liquidity to holders who wish to withdraw from the Company. There is no assurance that holders will be able to withdraw in whole or in part, if such redemption would (in the sole discretion of the Manager) be adverse to the interests of the remaining holders. The Manager may impose a withdrawal liquidity charge of up to 3%, to be retained by the Company, in connection with any such withdrawal.
Managing Dealer: The Managing Dealer for the Offering is North Capital Private Securities Corporation, a registered broker-dealer and member FINRA and SIPC. North Capital is an affiliate of the Company and is under common control with the Manager. As such, no independent review of the Offering of these Membership Interests has been conducted, because the Managing Dealer and the Manager share employees and management such that independence is not possible.
Managing Dealer: Proof Ethereum LLC (the “Company”) is offering membership interests (the “Membership Interests”) under Regulation D / 506(c). In the future, the Company may conduct additional offerings under other exemptions from registration. This summary has been prepared by the Manager and should be read together with the other offering documents by all prospective investors in the Reg D / 506(c) offering before investing.
Taxation: The Company intends to seek treatment as a partnership for Federal tax purposes. Accordingly, the Company generally does not expect to be subject to Federal income tax, and each holder of Membership Interests will be required to report on its own annual tax return its allocable share of the Company’s taxable income or loss.
Auditor: The Company intends to produce audited financial statements. Jason M Tyra CPA PLLC will be engaged to provide the annual audit. As the Company is a de novo firm, incorporated in June 2017, there are no current audited financial statements. Tyra CPA has conducted a review of the initial financial statements of the Company in preparation for this Offering.
Attorney: Carman Lehnhof Israelsen LLP
Custodian: Kingdom Trust Company

Proof Ethereum Management is the Manager of the Company. The Manager is a wholly-owned subsidiary of North Capital Investment Technology Inc., a financial technology firm that provides trading technology for private securities transactions and is the parent of a registered broker-dealer, North Capital Private Securities Corp. North Capital has over 20 professionals engaged in its financial technology and services business. The Manager will take advantage of the personnel and resources of North Capital in pursuing its business plan.

On behalf of the Manager, Messrs. Dowd and Weaver will have day-to-day responsibility for the operations of the Company. Ms. Holt will supervise the preparation of financial statements and calculation of the Company’s net asset value. The Manager plans to appoint an independent third party for accounting and NAV calculation services.

James P. Dowd is the founder and CEO of the North Capital companies. He has 32 years of experience in global financial markets, including twenty one years as a portfolio manager. Mr. Dowd is a CFA charter holder and is a Certified Public Accountant registered with the State of Illinois, license# 065040261. He is a registered principal with North Capital Private Securities Corp and has passed the FINRA Series 3, 7, 24, 63, 65 and 78 exams. He is registered with the NFA under ID# 0295155 and with FINRA under CRD# 2109413. Prior to forming North Capital, Inc. in October 2008, Mr. Dowd was a Senior Managing Director at Bear Stearns & Company, from September 2003 to September 2008. At Bear he led the portfolio management team allocating firm and customer capital to non-affiliate hedge funds. Before Bear, Mr. Dowd held senior positions with Tokai Asia Ltd. and Bankers Trust Company, where he was Managing Director and Head of Derivatives Trading for Asia. Dowd is a magna cum laude graduate of Georgetown University School of Foreign Service.

Michael T Weaver Jr., Director-Principal at North Capital, has over 10 years of experience in financial markets. Mr. Weaver has passed the FINRA Series 7, 24, 63 and 65 exams. He is registered with FINRA under CRD# 4839552. Mr. Weaver started his career as an Analyst in the Fixed-Income Sales & Trading (S&T) Program at Banc of America Securities, working in the Structured Securities Group and the Central Funding Group, where he was an interest rate trader of Agency Specials, Strips, TIPS, Off-the-run Treasuries and the on the run 30 year UST bond in repo. Mr. Weaver also has experience as a Summer Analyst in Investment Banking at Goldman Sachs, a Summer Associate in S&T at Deutsche Bank and an Intern at MKP Capital Management. Mr. Weaver graduated Magna Cum Laude from Morehouse College, where he earned a Bachelor of Arts in Business Administration with a concentration in Finance. While at Morehouse, he was inducted into Phi Beta Kappa and Beta Gamma Sigma. Mr. Weaver also holds an MBA from Cornell University where he was a Roy H. Park Leadership Fellow. He is currently a Level III Candidate in the CFA program.

Stephanie Holt, CFO and Managing Director at North Capital, has over 25 years of experience in finance. Ms. Holt holds the FINRA Series 99 license and is registered with FINRA under CRD#1805253. Ms. Holt has held management and executive positions in the finance, high tech, medical, and manufacturing industries. Ms. Holt graduated from University of California, Riverside, where she earned a Bachelor of Science in Business Economics with a concentration in Accounting She also holds an MBA from University of Redlands.

Anton Prakash, CTO at North Capital, has nearly 25 years of experience in the Information Technology field, including 15 years in FinTech. Mr.Prakash started his career in the Persian Gulf with Gulf Air, where he helped migrate the company’s technology platform from mainframe to UNIX servers. He relocated to the U.S. and worked for General Electric as a specialist in databases and data center management. His experience in FinTech began with the role of head of product development for a startup in the commercial real estate arena, where he developed systems for loan application processing and loan trading. Mr. Prakash was the program manager who designed and delivered the online billing and payment system for PG&E, one of the largest utilities in the U.S. He is the founder of EphronTech, a software development and services company based in the San Francisco Bay Area, with operations in southern India. Under his leadership, EphronTech has delivered numerous cloud-based and mobile products and services in the FinTech space, including consumer credit, industrial insurance, asset management, marketplace lending and private securities. Mr. Prakash has a Bachelor of Engineering in computer science and a Masters in Business Technology Administration. He is a regular columnist covering technology trends for a vernacular magazine enjoying the second largest circulation in Asia.

Network

The Company will invest most of its assets in Ether, the cryptocurrency underpinning the Ethereum block chain.

The Company will also mine for Ether and enter into mining contracts.

The Company will provide “proof of stake” and related technology services related to the Ethereum block chain.

The Company plans to purchase and hold Ether, which will offer investors the ability to participate in the appreciation of the Ether cryptocoin, through ownership of Membership Interests of the Company. The Company’s commitment to hold its assets in Ether (including the Offering proceeds and the proceeds of other offerings the Company may make in the future) is predicated on the opinion that Ether will appreciate over time, and that investors in the Company wish to speculate on this potential appreciation.

The Company plans to engage in Ether mining and enter into Ether mining contracts and royalty agreements. Ether mining is done through specialized computers designed for the purpose of mining of Ether or other cryptocoins, such as Bitcoin. Mining is the process by which transactions are added to the block chain. Mining involves solving a computationally difficult puzzle, which serves to verify and secure the block chain.

The Ethereum block chain currently relies upon a "proof of work" algorithm but, according to the Ethereum Foundation will be switching to a "proof of stake" algorithm. Proof of Stake occurs through a miner posting a stake (effectively securing an amount of their cryptocoins), to verify a block of transactions. The cryptographic calculations in the proof of stake algorithms are simpler for computers to solve than proof of work calculations. The Company expects to be able to offer proof of stake services due to its ownership of Ether.

The Securities offered involve a high degree of risk including the risk of loss of principal. Before investing in the Interests, prospective investors should carefully consider the Risks of the investment. Some of the risk factors include:

• The Company depends on the growth and adoption of block chain technology and Ethereum.
• The Company has a limited operating history and has only been in existence since June 2017
• The Company relies on third-party suppliers for the materials used in mining for Ether
• The services the Company provides are based on advanced technology, and the company needs to rapidly and successfully develop and introduce new products and services in a competitive, demanding and rapidly changing environment.
• The Company’s business could be negatively impacted by cyber security threats, attacks and other disruptions
• Wallet security is a unique and significant risk for the Company.

This is not a full list of the risk factors. Please refer to the Private Placement Memorandum for a more complete set of risk factors.