UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, ~~2021~~2022

ORor

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. 001-39500

Creatd, Inc.

(Exact name of registrant as specified in its charter)

Nevada		87-0645394
(State or other jurisdiction of incorporation)		(~~IRS~~I.R.S. Employer Identification No.)

~~2050 Center Avenue Suite 640~~

~~Fort Lee,~~ 419 Lafayette Street, 6^th Floor
New ~~Jersey 07024~~York, NY 10003

(Address of principal executive offices)

(201) 258-3770

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001	CRTD	The Nasdaq Stock Market LLC

Common Stock Purchase Warrants	CRTDW	The Nasdaq Stock Market LLC

~~Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $0.001 per share~~

~~Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒~~

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒~~

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~Yes ☒ No ☐~~

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ~~Yes ☒ No ☐~~

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of a “large accelerated filer,” “accelerated ~~filer” and~~filer,” “smaller reporting company,” and ~~emerging~~“emerging growth ~~company~~company” in Rule 12b-2 of the Exchange Act. ~~(Check One)~~

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). ~~Yes ☐ No ☒~~

Yes ☐ No ☒

As of May ~~14, 2021,~~16, 2022, the ~~Company~~registrant had ~~10,989,566~~20,140,413 shares of its common stock, par value $0.001 per share, outstanding.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, ~~2021~~2022

TABLE OF CONTENTS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

AND
OTHER INFORMATION CONTAINED IN THIS REPORT

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this Form 10-Q. In particular, these include statements relating to future actions; prospective products, applications, customers and technologies; future performance or results of anticipated products; anticipated expenses; and projected financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

●

our ability to continue as a going concern;

●

our operating expenses exceed our revenues and will likely continue to do so for the foreseeable future;

●

our ability to obtain additional capital, which may be difficult to raise as a result of our limited operating history or any number of other reasons;

●

our ability to provide digital content that is useful to users;

●

our ability to retain existing users or add new users;

●

competition from traditional media companies;

●

general economic conditions and events and the impact they may have on us and our users; and

●

other factors discussed in this Form 10-Q.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or collaborations or strategic partnerships we may enter into.

You should read this Form 10-Q and the documents that we have filed as exhibits to this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Unless otherwise stated or the context otherwise requires, the terms “Creatd,” “we,” “us,” “our” and the “Company” refer collectively to Creatd, Inc. and its subsidiaries.

PART I –- FINANCIAL INFORMATION

Item 1. ~~Condensed Consolidated~~ Financial ~~Statements~~Statements.

Creatd, Inc.

March 31, ~~2021~~2022

Index to the Condensed Consolidated Financial Statements

Contents		Page(s)
Condensed Consolidated Balance Sheets as of March 31, ~~2021~~2022 (unaudited) and December 31, ~~2020~~2021		2

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021 ~~and 2020~~ (unaudited)		3

Condensed Consolidated Statements of Changes in Stockholders’ Equity ~~(Deficit)~~ for the Three Months Ended March 31, 2022 and 2021 ~~and 2020~~ (unaudited)		4

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 ~~and 2020~~ (unaudited)		6

Notes to the Condensed Consolidated Financial Statements (unaudited)		7

Creatd, Inc.

Condensed Consolidated Balance Sheets

March 31,
2021 December 31,
2020
(Unaudited)
Assets
Current Assets
Cash $ 2,802,772 $ 7,906,782
Accounts receivable, net 151,729 90,355
Prepaid expenses and other current assets
566,727
23,856
Total Current Assets 3,521,228 8,020,993

Property and equipment, net 58,849 56,258

Intangible assets 929,459 960,611

Goodwill 1,035,795 1,035,795

Deposits and other assets 291,836 191,836

Marketable securities 62,733 62,733

Minority investment in businesses 317,096 217,096

Operating lease right of use asset 219,449 239,158

Total Assets $ 6,436,445 $ 10,784,480

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities $ 1,849,136 $ 2,638,688
Derivative liabilities 344,404 42,231
Share liability 187,500 -
Convertible Notes, net of debt discount and issuance costs 239,544 897,516
Current portion of operating lease payable 87,912 79,816
Note payable - related party, net of debt discount 5,397 -
Note payable, net of debt discount and issuance costs 1,423,995 1,221,539
Deferred revenue 148,760 88,637
Total Current Liabilities 4,286,648 4,968,427

Non-current Liabilities:
Note payable 54,298 213,037
Operating lease payable 130,303 157,820
Total Non-current Liabilities 184,601 370,857

Total Liabilities 4,471,249 5,339,284

Commitments and contingencies

Stockholders’ Equity
Series E Preferred stock, $0.001 par value: 20,000,000 shares authorized; 1,088 and 7,738 shares issued and outstanding, respectively 1 8
Common stock par value $0.001: 100,000,000 shares authorized; 10,925,026 issued and 10,915,676 outstanding as of March 31, 2021 and
8,736,378 issued and 8,727,028 outstanding as of December 31, 2020 10,925 8,737
Additional paid in capital 80,633,380 77,505,013
Subscription receivable - (40,000 )
Accumulated deficit (78,572,159 ) (71,928,922 )
Accumulated other comprehensive income (44,545 ) (37,234 )
Less: Treasury stock, 5,657 and 5,657 shares, respectively (62,406 ) (62,406 )
1,965,196 5,445,196

Total Liabilities and Stockholders’ Equity $ 6,436,445 $ 10,784,480

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

~~Creatd, Inc.~~

~~Condensed Consolidated Statements of Comprehensive Loss (Unaudited)~~

For the
three months Ended
For the
three months Ended
March 31,
2021 March 31,
2020
Net revenue $ 743,913 $ 293,142

Gross margin 743,913 293,142

Operating expenses
Research and development 328,852 135,570
General and administrative 6,361,058 1,983,521
Total operating expenses 6,689,910 2,119,091

Loss from operations (5,945,997 ) (1,825,949 )

Other income (expenses)
Other income - 63,556
Interest expense (198,671 ) (375,530 )
Accretion of debt discount and issuance cost (497,165 ) (186,947 )
Derivative expense (100,502 ) -
Change in fair value of derivative liability (197,389 ) -
Settlement of vendor liabilities 92,909 (126,087 )
Gain (loss) on extinguishment of debt 203,578 (535,040 )
Other expenses, net (697,240 ) (1,160,048 )

Loss before income tax provision (6,643,237 ) (2,985,997 )

Income tax provision - -

Net loss $ (6,643,237 ) $ (2,985,997 )

Deemed dividend - -
Inducement expense - -

Net loss attributable to common shareholders (6,643,237 ) (2,985,997 )

Comprehensive loss

Net loss (6,643,237 ) (2,985,997 )

Currency translation gain (loss) (7,311 ) (9,239 )

Comprehensive loss $ (6,650,548 ) $ (2,995,236 )

Per-share data
Basic and diluted loss per share $ (0.68 ) $ (0.96 )

Weighted average number of common shares outstanding 9,836,443 3,101,387

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

	March 31, 2022			December 31, 2021
	(Unaudited)
Assets

Current Assets
Cash	$	3,229,627		$	3,794,734
Accounts receivable, net		390,605			337,440
Inventory		436,981			106,403
Prepaid expenses and other current assets		274,840			236,665
Total Current Assets		4,332,053			4,475,242

Property and equipment, net		139,479			102,939
Intangible assets		2,520,373			2,432,841
Goodwill		1,383,785			1,374,835
Deposits and other assets		914,700			718,951
Minority investment in businesses		50,000			50,000
Operating lease right of use asset		-			18,451

Total Assets	$	9,340,390		$	9,173,259

Liabilities and Stockholders’ Deficit

Current Liabilities
Accounts payable and accrued liabilities	$	4,832,103		$	3,730,540
Convertible Notes, net of debt discount and issuance costs		-			159,193
Current portion of operating lease payable		-			18,451
Note payable, net of debt discount and issuance costs		1,151,087			1,278,672
Deferred revenue		211,676			234,159

Total Current Liabilities		6,194,866			5,421,015

Non-current Liabilities:
Note payable		35,905			63,992

Total Non-current Liabilities		35,905			63,992

Total Liabilities		6,230,771			5,485,007

Commitments and contingencies

Stockholders’ Equity
Common stock par value $0.001: 100,000,000 shares authorized; 19,915,090 issued and 19,909,433 outstanding as of March 31, 2021 and 16,691,170 issued and 16,685,513 outstanding as of December 31, 2021		19,915			16,691
Additional paid in capital		117,949,487			111,563,618
Subscription receivable		-			-
Less: Treasury stock, 5,657 and 5,657 shares, respectively		(62,406	)		(62,406	)
Accumulated deficit		(115,977,464	)		(109,632,574	)
Accumulated other comprehensive income		(83,222	)		(78,272	)
Total Creatd, Inc. Stockholders’ Equity		1,846,310			1,807,057
Non-controlling interest in consolidated subsidiaries		1,263,309			1,881,195
		3,109,619			3,688,252

Total Liabilities and Stockholders’ Equity	$	9,340,390		$	9,173,259

~~Creatd, Inc.~~

~~Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit)~~

~~For the Three Months Ended March 31, 2021 (Unaudited)~~

Series E Additional Other
Preferred Stock Common Stock Treasury stock Paid In Subscription Accumulated Comprehensive Stockholders’
Shares Amount Shares Amount Shares Amount Capital Receivable Deficit Income Equity
Balance, January 1, 2021 7,738 $ 8 8,736,378 $ 8,737 (5,657 ) $ (62,406 ) $ 77,505,013 $ (40,000 ) $ (71,928,922 ) $ (37,234 ) $ 5,445,196

Stock based compensation - - 112,261 112 - - 1,345,803 - - - 1,345,915

Shares issued for prepaid services - - 40,000 40 - - 191,960 - - - 192,000

Shares issued to settle vendor liabilities - - 44,895 45 - - 181,341 - - - 181,386

Common stock issued upon conversion of notes payable - - 65,328 65 - - 142,735 - - - 142,800

Exercise of warrants to stock - - 302,434 302 - - 1,272,370 - - - 1,272,672

Cash received for preferred series E and warrants 40 - - - - - (4,225 ) 40,000 - - 35,775

Conversion of preferred series E to stock (6,690 ) (7 ) 1,623,730 1,624 - - (1,617 ) - - - -

Foreign currency translation adjustments - - - - - - - - - (7,311 ) (7,311 )

Net loss for the three months ended March 31, 2021 - - - - - -- - - (6,643,237 ) - (6,643,237 )

Balance, March 31, 2021 1,088 $ 1 10,925,026 $ 10,925 (5,657 ) $ (62,406 ) $ 80,633,380 $ - $ (78,572,159 ) $ (44,545 ) $ 1,965,196

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~Jerrick Media Holdings,~~Creatd, Inc.

Condensed Consolidated ~~Statement~~Statements of ~~Changes in Stockholders’ Equity (Deficit)~~Operations and Comprehensive Loss

~~For the Three Months Ended March 31, 2020~~ (Unaudited)

Series A Preferred Stock Series B Preferred Stock Series D Preferred Stock Common Stock Treasury stock Additional Paid In Accumulated Other Comprehensive Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Income Equity
Balance, December 31, 2019 - $ - - $ - - $ - 3,059,646 $ 3,060 (159,850 ) $ (367,174 ) $ 36,391,818 $ (44,580,437 ) $ (5,995 ) $ (8,558,728 )

Shares issued with notes payable - - - - - - 2,683 3 - - 31,635 - - 31,638

Shares issued for services - - - - - - 50,000 50 - - 584,950 - - 585,000

Shares issued to settle vendor liabilities - - - - - - 23,565 23 - - 235,612 - - 235,635

Conversion of warrants to stock - - - - - - 5,000 5 - - 5,767 - - 5,772

Stock warrants issued with note payable - - - - - - - - - - 504,856 - - 504,856

Foreign currency translation adjustments - - - - - - - - - - - - (9,239 ) (9,239 )

Net loss for the three months ended March 31, 2020 - - - - - - - - - - - (2,985,997 ) - (2,838,498 )

Balance, March 31, 2020 - $ - - $ - - $ - 3,140,894 $ 3,141 (159,850 ) $ (367,174 ) $ 37,754,638 $ (47,566,434 ) $ (15,234 ) $ (10,191,063 )

	For the Three Months Ended			For the Three Months Ended
	March 31, 2022			March 31, 2021
Net revenue	$	1,348,738		$	743,913

Cost of revenue		1,572,170			867,150

Gross margin (loss)		(223,432	)		(123,237	)

Operating expenses
Research and development		226,654			328,852
Marketing		2,092,021			2,042,655
Stock based compensation		1,080,792			1,570,239
General and administrative		3,386,385			1,881,014

Total operating expenses		6,785,852			5,822,760

Loss from operations		(7,009,284	)		(5,945,997	)

Other income (expenses)
Other income		99			-
Interest expense		(13,896	)		(198,671	)
Accretion of debt discount and issuance cost		(23,477	)		(497,165	)
Derivative expense		-			(100,502	)
Change in derivative liability		3,729			(197,389	)
Settlement of vendor liabilities		14,525			92,909
Gain on extinguishment of debt		147,256			203,578
Other expenses, net		128,236			(697,240	)

Loss before income tax provision		(6,881,048	)		(6,643,237	)

Income tax provision		-			-

Net loss		(6,881,048	)		(6,643,237	)

Non-controlling interest in net loss		617,886			-

Net Loss attributable to Creatd, Inc.		(6,263,162	)		(6,643,237	)

Deemed dividend		(81,728	)		-
Net loss attributable to common shareholders	$	(6,344,890	)	$	(6,643,237	)

Comprehensive loss

Net loss		(6,881,048	)		(6,643,237	)

Currency translation gain (loss)		(4,950	)		(7,311	)

Comprehensive loss	$	(6,885,998	)	$	(6,650,548	)

Per-share data
Basic and diluted loss per share	$	(0.36	)	$	(0.68	)

Weighted average number of common shares outstanding		17,707,951			9,836,443

The accompanying notes are an integral part of these condensed consolidated financial statements.

Creatd, Inc.

Condensed Consolidated ~~Statements~~Statement of ~~Cash Flows~~ Changes in Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2022

(Unaudited)

	Series E Preferred Stock				Common Stock				Treasury stock						Additional Paid In		Accumulated			Non- Controlling			Other Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Interest			Income			Equity

Balance, January 1, 2022		500	$	-		16,691,170	$	16,691		(5,657	)	$	(62,406	)	$	111,563,618	$	(109,632,574	)	$	1,881,195		$	(78,272	)	$	3,688,252

Stock based compensation		-		-		18,171		18		-			-			1,067,591		-			-			-			1,067,609

Shares issued for prepaid services		-		-		50,000		50		-			-			68,950		-			-			-			69,000

Cash received for common stock and warrants, net of $115,000 of issuance costs		-		-		3,046,314		3,046		-			-			4,994,254		-			-			-			4,997,300

Common stock issued upon conversion of notes payable		-		-		109,435		110		-			-			173,346		-			-			-			173,456

Foreign currency translation adjustments		-		-		-		-		-			-			-		-			-			(4,950	)		(4,950	)

Dividends		-		-		-		-		-			-			81,728		(81,728	)		-			-			-

Net loss for the three months ended March 31, 20222		-		-		-		-		-			-			-		(6,263,162	)		(617,886	)		-			(6,881,048	)
Balance, March 31, 2022		500	$	-		19,915,090	$	19,915		(5,657	)	$	(62,406	)	$	117,949,487	$	(115,977,464	)	$	1,263,309		$	(83,222	)	$	3,109,619

For the
three months Ended For the
three months Ended
March 31,
2021 March 31,
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,643,237 ) $ (2,985,997 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 41,199 38,246
Accretion of debt discount and issuance cost 497,165 186,947
Share-based compensation 1,570,239 392,143
Settlement of vendor liabilities (92,908 ) 126,087
Change in fair value of derivative liability 197,389 -
Derivative expense 100,502 -
Loss on extinguishment of debt (203,578 ) 535,040
Non cash lease expense 19,709 17,385
Changes in operating assets and liabilities:
Prepaid expenses (391,918 ) -
Accounts receivable (61,374 ) (20,273 )
Deferred revenue 60,123 (6,681 )
Accounts payable and accrued expenses (370,528 ) 418,340
Operating lease liability (19,421 ) (16,100 )
Net Cash Used In Operating Activities (5,296,638 ) (1,314,863 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment (12,637 ) -
Deposits (100,000 ) -
Cash paid for minority investment in business (100,000 ) -
Net Cash Used In Investing Activities (212,637 ) -

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of warrant 1,312,672 -
Net proceeds from issuance of notes 85,500 303,000
Repayment of notes (43,716 ) (40,000 )
Proceeds from issuance of demand loan - 100,000
Proceeds from issuance of convertible note - 1,172,610
Repayment of convertible notes (941,880 ) (75,000 )
Proceeds from issuance of note payable - related party - 152,989
Repayment of note payable - related party - (180,273 )
Purchase of treasury stock and warrants - (2,500 )
Net Cash Provided By Financing Activities 412,576 1,430,826

Effect of exchange rate changes on cash (7,311 ) (9,239 )

Net Change in Cash (5,104,010 ) 106,724
Cash - Beginning of Year 7,906,782 11,637
Cash - End of period $ 2,802,772 $ 118,361

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Year for:
Income taxes $ - $ -
Interest $ 55,276 $ 38,086

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of vendor liabilities for common stock $ 168,667 $ 37,500
Warrants issued with debt $ - $ 504,295
Shares issued with debt $ - $ 32,200
Issuance of common stock for prepaid services $ 155,178 $ 585,000
Conversion of note payable and interest into convertible notes $ - $ 385,000
Conversion of Demand loan into notes payable $ - $ 150,000
Deferred offering costs $ 4,225 $ -
Common stock issued upon conversion of notes payable $ 142,800 $ -

The accompanying notes are an integral part of these consolidated financial statements.

Creatd, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2021 (Unaudited)

	Series E																Additional									Other
	Preferred Stock						Common Stock				Treasury stock						Paid In			Subscription			Accumulated			Comprehensive			Stockholders’
	Shares			Amount			Shares		Amount		Shares			Amount			Capital			Receivable			Deficit			Income			Equity
Balance, January 1, 2021		7,738		$	8			8,736,378	$	8,737		(5,657	)	$	(62,406	)	$	77,505,013		$	(40,000	)	$	(71,928,922	)	$	(37,234	)	$	5,445,196

Stock based compensation		-			-			112,261		112		-			-			1,345,803			-			-			-			1,345,915

Shares issued for prepaid services		-			-			40,000		40		-			-			191,960			-			-			-			192,000

Shares issued to settle vendor liabilities		-			-			44,895		45		-			-			181,341			-			-			-			181,386

Common stock issued upon conversion of notes payable		-			-			65,328		65		-			-			142,735			-			-			-			142,800

Exercise of warrants to stock		-			-			302,434		302		-			-			1,272,370			-			-			-			1,272,672

Cash received for preferred series E and warrants		40			-			-		-		-			-			(4,225	)		40,000			-			-			35,775

Conversion of preferred series E to stock		(6,690	)		(7	)		1,623,730		1,624		-			-			(1,617	)		-			-			-			-

Foreign currency translation adjustments		-			-			-		-		-			-			-			-			-			(7,311	)		(7,311	)

Net loss for the three months ended March 31, 2021		-			-			-		-		-			--			-			-			(6,643,237	)		-			(6,643,237	)

Balance, March 31, 2021		1,088		$	1			10,925,026	$	10,925		(5,657	)	$	(62,406	)	$	80,633,380		$	-		$	(78,572,159	)	$	(44,545	)	$	1,965,196

The accompanying notes are an integral part of these condensed consolidated financial statements.

Creatd, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

For the
Three Months
Ended For the
Three Months
Ended
March 31,
2022 March 31,
2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,881,048 ) $ (6,643,237 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 141,892 41,199
Accretion of debt discount and issuance cost 23,477 497,165
Share-based compensation 1,080,491 1,570,239
Bad debt expense 92,987 -
Settlement of vendor liabilities (14,525 ) (92,908 )
Change in fair value of derivative liability (3,729 ) 197,389
Derivative expense -
100,502

Gain on extinguishment of debt (147,256 ) (203,578 )
Non cash lease expense 18,451 19,709
Changes in operating assets and liabilities:
Prepaid expenses (6,373 ) (391,918 )
Inventory (136,213 ) -
Accounts receivable (139,388 ) (61,374 )
Deposits and other assets (195,749 ) -
Deferred revenue (22,483 ) 60,123
Accounts payable and accrued expenses 1,170,738 (370,528 )
Operating lease liability (18,451 ) (19,421 )
Net Cash Used In Operating Activities (5,037,179 ) (5,296,638 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment (44,927 ) (12,637 )
Deposits - (100,000 )
Cash paid for minority investment in business - (100,000 )
Cash acquired from acquisition 44,977 -
Purchases of digital assets (51,000 ) -
Net Cash Used In Investing Activities (50,950 ) (212,637 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of warrant - 1,312,672
Net proceeds from issuance of notes 463,559 85,500
Repayment of notes (932,888 ) (43,716 )
Repayment of convertible notes - (941,880 )
Proceeds from issuance of common stock and warrants 4,997,301 -
Net Cash Provided By Financing Activities 4,527,972 412,576

Effect of exchange rate changes on cash (4,950 ) (7,311 )
Net Change in Cash (565,107 ) (5,104,010 )
Cash – Beginning of period 3,794,734 7,906,752
Cash – End of period $ 3,229,627 $ 2,802,742

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Year for:
Income taxes $ - $ -
Interest $ 139,000 $ 55,276

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of vendor liabilities $ 20,297 $ 168,667
Issuance of common stock for prepaid services $ 69,000 $ 155,178
Deferred offering costs $ - $ 4,225
Common stock and warrants issued upon conversion of notes payable $ 173,456 $ 142,800
The accompanying notes are an integral part of these condensed consolidated financial statements.

Creatd, Inc.
March 31, ~~2021~~2022
Notes to the Condensed Consolidated Financial Statements
Note 1 – Organization and Operations

Creatd, Inc., formerly Jerrick Media Holdings, Inc. (“we,” “us,” the “Company,” or “Creatd”), is a technology company focused on ~~the development of digital communities, marketing branded digital content,~~providing economic opportunities for creators, which it accomplishes through its four main business pillars: Creatd Labs, Creatd Partners, Creatd Ventures, and ~~e-commerce opportunities.~~Creatd Studios. Creatd’s ~~content distribution platform,~~flagship product, Vocal, delivers a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting all forms of rich media content. Through Creatd’s proprietary algorithm dynamics, Vocal enhances the visibility of content and maximizes viewership, providing advertisers access to target markets that most closely match their interests.

The Company was originally incorporated under the laws of the State of Nevada on December 30, 1999 under the name LILM, Inc. The Company changed its name on December 3, 2013 to Great Plains Holdings, Inc. as part of its plan to diversify its business.

On February 5, 2016 (the “Closing Date”), GTPH, GPH Merger Sub, Inc., a Nevada corporation and wholly-owned subsidiary of GTPH (“Merger Sub”), and Jerrick Ventures, Inc., a privately-held Nevada corporation headquartered in New Jersey (“Jerrick”), entered into an Agreement and Plan of Merger (the “Merger”) pursuant to which the Merger Sub was merged with and into Jerrick, with Jerrick surviving as a wholly-owned subsidiary of GTPH (the “Merger”). GTPH acquired, pursuant to the Merger, all of the outstanding capital stock of Jerrick in exchange for issuing Jerrick’s shareholders (the “Jerrick Shareholders”), pro-rata, a total of 475,000 shares of GTPH’s common stock. In connection therewith, GTPH acquired 33,415 shares of Jerrick’s Series A Convertible Preferred Stock (the “Jerrick Series A Preferred”) and 8,064 shares of Series B Convertible Preferred Stock (the “Jerrick Series B Preferred”).

In connection with the Merger, on the Closing Date, GTPH and Kent Campbell entered into a Spin-Off Agreement (the “Spin-Off Agreement”), pursuant to which Mr. Campbell purchased from GTPH (i) all of GTPH’s interest in Ashland Holdings, LLC, a Florida limited liability company, and (ii) all of GTPH’s interest in Lil Marc, Inc., a Utah corporation, in exchange for the cancellation of 39,091 shares of GTPH’s Common Stock held by Mr. Campbell. In addition, Mr. Campbell assumed all debts, obligations and liabilities of GTPH, including any existing prior to the Merger, pursuant to the terms and conditions of the Spin-Off Agreement.

Upon closing of the Merger on February 5, 2016, the Company changed its business plan to that of Jerrick.

Effective February 28, 2016, GTPH entered into an Agreement and Plan of Merger (the “Statutory Merger Agreement”) with Jerrick, pursuant to which GTPH became the parent company of Jerrick Ventures, LLC, a wholly-owned operating subsidiary of Jerrick (the “Statutory Merger”) and GTPH changed its name to Jerrick Media Holdings, Inc. to better reflect its new business strategy.

On September 11, 2019, the Company acquired 100% of the membership interests of Seller’s Choice, LLC, a New Jersey limited liability company (“Seller’s Choice”). Seller’s Choice is a digital e-commerce agency based in New ~~Jersey (see Note 4).~~Jersey.

On September 9, 2020, the Company filed a certificate of amendment with the Secretary of State of the State of Nevada to change our name to “Creatd, Inc.”, which became effective on September 10, 2020.
On June 4, 2021, the Company acquired 89% of the membership interests of Plant Camp, LLC, a Delaware limited liability company (“Plant Camp”), which the Company subsequently rebranded as Camp. Plant Camp is a direct-to-consumer (DTC) food brand which creates healthy upgrades to classic comfort food favorites. The results of Plant Camp’s operations have bene included since the date of acquisition in the Statements of Operations.
On July 20, 2021, the Company acquired 44% of the membership interests of WHE Agency, Inc. WHE Agency, Inc, is a talent management and public relations agency based in New York. WHE Agency, Inc, has been consolidated due to the Company’s ownership of 55% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

On August 16, 2021, the Company acquired 16% of the membership interests of Dune, Inc. bring our total membership interests to 21%.
On October 3, 2021, the Company acquired 29% of the membership interests of Dune, Inc. bring our total membership interests to 50%. Dune, Inc. is a direct-to-consumer brand focused on promoting wellness through its range of health-oriented beverages. Dune, Inc, has been consolidated due to the Company’s ownership of 50% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.
On March 7, 2022, the Company acquired 100% of the membership interests of Denver Bodega, LLC, d/b/a Basis, a Colorado limited liability company (“Basis”). Basis is a direct-to-consumer functional beverage brand that makes high-electrolyte mixes meant to aid hydration. Denver Bodega, LLC has been consolidated due to the Company’s ownership of 100% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.
Note 2 – Significant Accounting Policies and Practices

Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by the accounting principles generally accepted in the United States of America.

7
Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, ~~2021~~2022 or any other interim period or for any other future year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, ~~2020,~~2021, included in the Company’s ~~2020~~2021 Annual Report on Form 10-K filed with the SEC. The balance sheet as of December 31, ~~2020~~2021 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements.

Use of Estimates and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of intellectual property.

Actual results could differ from those estimates.

Presentation
During 2021, we adopted a change in presentation on our Condensed Consolidated Statements of Comprehensive Loss in order to present a gross profit line and allocate certain overhead expenses, the presentation of which is consistent with our peers. Under the new presentation, we began allocating overhead expenses related to cost of goods sold. Prior periods have been revised to reflect this change in presentation.
Principles of consolidation

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

As of March 31, ~~2021,~~2022, the Company’s consolidated subsidiaries and/or entities are as follows:

Name of combined affiliate State or other
jurisdiction of
incorporation
or organization Company
Ownership
Interest
Jerrick Ventures LLC Delaware 100 %
Abacus Tech Pty Ltd Australia 100 %
Seller’s Choice, LLC New Jersey 100 %
~~Jerrick Global,~~Creatd Studios, LLC Delaware 100 %
Give, LLC Delaware 100 %
Creatd Partners LLC Delaware 100 %
~~Sci-Fi Shop,~~Denver Bodega, LLC ~~Delaware~~Colorado 100 %
~~OG Collection LLC~~Dune Inc. Delaware ~~100~~50 %
~~VMENA~~Plant Camp LLC Delaware ~~100~~89 %
~~Vocal For Brands,~~Sci-Fi.com, LLC Delaware 100 %
~~Vocal Ventures~~OG Collection LLC Delaware 100 %
~~What to Buy, LLC~~OG Gallery, Inc. Delaware 100 %
VMENA LLC Delaware 100 %
Vocal For Brands, LLC Delaware 100 %
Vocal Ventures LLC Delaware 100 %
What to Buy, LLC Delaware 100 %
WHE Agency, Inc. Delaware 44 %

All inter-company balances and transactions have been eliminated. The condensed consolidated financial statements include Denver Bodega, LLC activity since March 7, 2022.

8
Variable Interest Entities

Management performs an ongoing assessment of its noncontrolling interests from investments in unrelated entities to determine if those entities are variable interest entities (VIEs), and if so, whether the Company is the primary beneficiary. If an entity in such a transaction, by design, meets the definition of a VIE and the Company determines that it, or a condensed consolidated subsidiary is the primary beneficiary, the Company will include the VIE in its condensed consolidated financial statements. If such an entity is deemed to not be condensed consolidated, the Company records only its investment in equity securities as a marketable security or investment under the equity method, as applicable

Fair Value of Financial Instruments

The fair value measurement disclosures are grouped into three levels based on valuation factors:

●

Level 1 – quoted prices in active markets for identical investments

●

Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

●

Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments)

The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at March 31, ~~2021~~2022 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

The Company’s Level 2 assets/liabilities include certain of the Company’s notes ~~payable and capital lease obligations.~~payable. Their carrying value approximates their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace.

The Company’s Level 3 assets/liabilities include goodwill, intangible assets, ~~marketable debt securities,~~ equity investments at cost, and derivative ~~liabilities, when they are recorded at fair value due to an impairment charge.~~liabilities. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities.

The following ~~table provides a summary of the relevant assets and liabilities that are measured at fair value on recurring basis:~~

~~Fair Value Measurements as of~~

~~March 31, 2021~~

Total Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1) Quoted Prices for Similar Assets or Liabilities
in Active Markets
(Level 2) Significant Unobservable
Inputs
(Level 3)
Assets:
Marketable securities - debt securities $ 62,733 $            - $          - $ 62,733
Total assets $ 62,733 $ - $ - $ 62,733

Liabilities:
Derivative liabilities $ 344,404 $ - $ - $ 344,404
Total Liabilities 344,404 $ - $ - $ 344,404
9
~~The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on recurring basis as of March 31, 2021:~~
Fair Value Valuation Methodology Unobservable Inputs
Marketable securities - debt securities $ 62,733 Discounted cash flow analysis Expected cash flows from the investment

Derivative liabilities $ 344,404 Monte Carlo simulations and Binomial model Risk free rate
Expected volatility
Drift rate
~~The following table~~tables provides a summary of the relevant assets that are measured at fair value on non-recurring basis:

Fair Value Measurements as of
March 31, ~~2021~~2022

Total Quoted Prices in Active Markets for Identical Assets or Liabilities
(Level 1) Quoted Prices for Similar Assets or Liabilities
in Active Markets
(Level 2) Significant Unobservable Inputs
(Level 3)
Assets:
Equity investments, at cost $ 317,096 $       - $       - $ 317,096
Total assets $ 317,096 $ - $ - $ 317,096
Total Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1) Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets:
Equity investments, at cost $ 50,000 $          - $        - $ 50,000
Total assets $ 50,000 $ - $ - $ 50,000

~~The following table shows the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on non-recurring basis as of March 31, 2021:~~Cash Equivalents

Fair Value Valuation Methodology Unobservable Inputs
Equity investments, at cost $ 317,096 Qualitative assessment per ASC 321-10-35 Qualitative factors
10
The Company valued the initial value of debt securities, which are investments in convertible notes receivable, by assessing the separate values of the debt and equity components for similar instruments convertible into private company equity (Level 3). The investment was initially measured at cost, which was determined to approximate fair value due to the lack of marketability of the conversion shares underlying these convertible instruments and the expected recoverability of the note principal. The key assumption affecting the level 3 fair values would be collectability of the notes. The Company monitors for impairment indicators at each balance sheet date.
~~Marketable debt securities as of March 31, 2021 are as follows:~~
Fair Value
Hierarchy Cost Unrealized Gains
(Loss) Fair Value
Marketable securities - debt securities 3 $ 62,733 $ - $ 62,733
The change in net unrealized holding gain (loss) on debt securities available for sale that has been included in Accumulated Other Comprehensive Income as a separate component of Stockholder’s Equity for the three months ended March 31, 2021 and 2020 was $0 and $0, respectively.
The Company recognizes impairment on loans or notes receivable (that do not meet the definition of a debt security) when it is probable that it will be unable to collect all amounts due according to the contractual terms, and the amount of loss can be estimated. The loss is estimated based on the present value of expected cash flows. During the three months ended March 31, 2021 the Company recognized a $0 credit loss on debt marketable securities.
~~Cash Equivalents~~
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Financial Claims Scheme (“FCS”) insurable limits. The Company has never experienced any losses related to these balances. As of March 31, ~~2021, and December 31, 2020,~~2022, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of March 31, ~~2021~~2022, was approximately ~~$2.6~~$2.4 million. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

Concentration of Credit Risk and Other Risks and Uncertainties
The Company provides credit in the normal course of business. The Company maintains allowances for credit losses on factors surrounding the credit risk of specific customers, historical trends, and other information.
The Company operates in Australia and holds total assets of $935,285 that are considered to be reasonably possible that operations located outside an entity’s home country will be disrupted in the near term.

Property and Equipment
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:
Estimated
Useful Life
(Years)
Computer equipment and software 3
Furniture and fixtures 5
Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the condensed consolidated statements of operations.
Long-lived Assets Including Goodwill and Other Acquired ~~Intangibles~~Intangible Assets

We evaluate the recoverability of property and equipment and acquired finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. ~~We have not recorded any significant impairment charges during~~During the three months ended March 31, ~~2021.~~2022, the Company recorded an impairment charge of $0 for intangible assets.

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we change the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. The remaining weighted average life of the intangible assets are 6.94 years.

Scheduled amortization over the next five years are as follows:
Twelve months ending March 31,

2023 $ 498,641
2024 429,030
2025 325,307
2026 246,840
2027 228,499
Thereafter 792,056
Total $ 2,520,373
Goodwill is not amortized but is subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles – Goodwill and Other – Testing Indefinite-Lived Intangible Assets for Impairment” (“ASC Topic 350”). The Company tests goodwill for impairment on an annual basis as of the last day of the Company’s fiscal December each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company has four reporting units. The Company uses an income-based approach to determine the fair value of the reporting units. This approach uses a discounted cash flow methodology and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units.

During the year ended December 31, ~~2020~~2021, the Company completed its annual impairment test of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined for three of its reporting units that the fair value of those reporting units was more likely than not greater than their carrying value, including Goodwill. However, based on this qualitative assessment, the Company determined that the carrying value of the Seller’s Choice reporting unit was more likely than not ~~equal or~~ greater than ~~the~~its carrying value, including Goodwill. Based on completion of ~~this~~the annual impairment test, nothe Company recorded an impairment ~~was indicated.~~charge of $1,035,795 for goodwill During the year ended December 31, 2021.

11
~~Investments~~
Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt securities not classified as held-to-maturity or as trading are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity.
The Company accounts for its investments in available-for-sale debt securities, in accordance with sub-topic 320-10 of the FASB ASC (“Sub-Topic 320-10”). Accrued interest on these securities is included in fair value and amortized cost.
Pursuant to Paragraph 320-10-35, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized.
The Company follows FASB ASC 320-10-35 to assess whether an investment in debt securities is impaired in each reporting period. An investment in debt securities is impaired if the fair value of the investment is less than its amortized cost. If the Company intends to sell the debt security (that is, it has decided to sell the security), an other-than-temporary impairment shall be considered to have occurred. If the Company more likely than not will be required to sell the security before recovery of its amortized cost basis or it otherwise does not expect to recover the entire amortized cost basis of the security, an other-than-temporary impairment shall be considered to have occurred. The Company considers the expected cash flows from the investment based on reasonable and supportable forecasts as well as several other factors to estimate whether a credit loss exists. If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date.
The following table sets forth a summary of the changes in ~~marketable securities - available-for-sale debt securities that are measured at fair value on a recurring basis:~~goodwill for the three months ended March 31, 2022.

For the
three months ended
March 31,
2021
Total
Beginning of period $ 62,733
Purchase of marketable securities -
Interest due at maturity -
Other than temporary impairment -
Conversion of marketable securities -
March 31, 2021 $ 62,733
For the
three months ended
March 31,
2022
Total
As of January 1, 2022 $ 1,374,835
Goodwill acquired in a business combination 8,950
Impairment of goodwill -
As of March 31, 2022 1,383,785

We invest in debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As of March 31, 2021, all of our investments had maturities between one and three years. The marketable debt security investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable.
12
~~The following table sets forth a summary of the changes in equity investments, at cost that are measured at fair value on a non-recurring basis:~~
For the
Three Months ended
March 31,
2021
Total
Beginning of period $ 217,096
Purchase of equity investments 100,000
Conversion of marketable securities -
March 31, 2021 $ 317,096
The Company has elected to measure its equity securities without a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. An election to measure an equity security in accordance with this paragraph shall be made for each investment separately.
The Company performed a qualitative assessment considering impairment indicators to evaluate whether these investments were impaired. Impairment indicators that the Company considered included the following: a) a significant deterioration in the earnings performance, credit rating, asset quality or business prospects of the investee; b) a significant adverse change in the regulatory, economic or technology environment of the investee; c) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; d) a bona fide offer to purchase or an offer by the investee to sell the investment; e) factors that raise significant concerns about the investee’s ability to continue as a going concern.
Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Foreign Currency

Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at our Condensed Consolidated Balance Sheet dates. Results of operations and cash flows are translated using the average exchange rates throughout the periods. The effect of exchange rate fluctuations on the translation of assets and liabilities is included as a component of stockholders’ equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in ~~SG&A,~~operating expenses, have not been significant in any period presented.

13
Derivative Liability

The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the condensed consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. ~~The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis.~~

The Company utilizes a ~~Geometric Brownian Motion (“GBM”)~~binomial option model ~~and~~for convertible notes that have an option to convert at a ~~Binomial model~~variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the GBM model included a starting stock price, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

~~Revenue Recognition~~Shipping and Handling Costs

The Company classifies freight billed to customers as sales revenue and the related freight costs as cost or revenue.
Revenue Recognition
Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

● identification of the contract, or contracts, with a customer;

● identification of the performance obligations in the contract;

● determination of the transaction price. The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per ~~mille~~mile basis) and cash prizes offered to Challenge winners;

● allocation of the transaction price to the performance obligations in the contract; and

● recognition of revenue when, or as, we satisfy a performance obligation.
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Revenue disaggregated by revenue source for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 consists of the following:

Three Months Ended
March 31,
2022 2021
Agency (Managed Services, Branded Content, & Talent Management Services) $ 583,141 $ 428,300
Platform (Creator Subscriptions) 508,233 306,902
Ecommerce (Tangible products) 254,724 -
Affiliate Sales 2,640 8,008
Other Revenue - 703
$ 1,348,738 $ 743,913
Three Months Ended
March 31,
2021 2020
Agency (Managed Services + Branded Content) $ 428,300 $ 248,251
Platform (Creator Subscriptions) 306,902 35,962
Affiliate Sales 8,008 8,149
Other Revenue 703 780
$ 743,913 $ 293,142

The Company utilizes the output method to measures the results achieved and value transferred to a customer over time. Timing of revenue recognition for the three months ended March 31, 2022 and 2021 consists of the following:

Three Months Ended
March 31,
2022 2021
Products and services transferred over time $ 1,091,374 $ 735,202
Products and services transferred at a point in time 257,364 8,711
$ 1,348,738 $ 743,913
Agency Revenue

Managed Services

The Company provides Studio/Agency Service offerings to business-to-business (B2B) and business-to-consumer (B2C) product and service brands which encompasses a full range of digital marketing and e-commerce solutions. The Company’s services include the setup and ongoing management of clients’ websites, Amazon and Shopify storefronts and listings, social media pages, search engine marketing, and other various tools and sales channels utilized by e-commerce sellers for sales and growth optimization. Contracts are broken into three ~~categories~~categories: Partners, Monthly Services, and Projects. Contract amounts for Partner and Monthly Services clients range from approximately $500-$7,500 per month while Project amounts vary depending on the scope of work. Partner and Monthly clients are billed monthly for the work completed within that month. Partner Clients may or may not have an additional billing component referred to as Sales Performance Fee, which is a fee based upon a previously agreed upon percentage point of the client’s total sales for the month. Some Partners may also have projects within their contracts that get billed and recognized as agreed upon project milestones are achieved. Revenue is recognized over time as service obligations and milestones in the contract are met.

Branded Content

Branded content represents the revenue recognized from the Company’s obligation to create and publish branded articles and/or branded challenges for clients on the Vocal platform and promote said stories, tracking engagement for the client. ~~The~~In the case of branded articles, the performance obligation is satisfied when the Company successfully publishes the articles on its platform and meets any required promotional milestones as per the contract. In the case of branded challenges, the performance obligation is satisfied when the Company successfully closes the challenge and winners have been announced. The Company utilizes the completed contract method when revenue is recognized over time as the services are performed and any required milestones are met. Certain contracts contain separate milestones whereas the Company separates its performance obligations and utilizes the stand-alone selling price method and residual method to determine the estimate of the allocation of the transaction price.

Below are the significant components of a typical agreement pertaining to branded content revenue:

● The Company collects fixed fees ranging from $10,000 to ~~$110,000.~~$110,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.

● ~~The~~Branded articles are created and published, and challenges are completed, within three months of the signed agreement, or as previously negotiated with the client.

●
● ~~The~~Branded articles and challenges are promoted per the contract and engagement reports are provided to the client.

● ~~Most billing for contracts occurs 50% at signing and 50% upon completion of the services, with net payment terms varying per client.~~
● Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee.

Talent Management Services
Talent Management represents the revenue recognized by WHE Agency, Inc. (“WHE”) from the Company’s obligation to manage and oversee influencer-led campaigns from the contract negotiation stage through content creation and publication. WHE acts in an agent capacity for influencers and collects a management fee of 20% of the value of an influencer’s contract with a brand. Revenue is recognized net of the 80% of the contract that is collected by the influencer and is recognized when performance obligations of the contract are met. Performance obligations are complete when milestones and deliverables of contracts are delivered to the client.
Below are the significant components of a typical agreement pertaining to talent management revenue:
● Total gross contracts range from $500-$50,000.
● The Company collects fixed fees in the amount of 20% of the gross contract amount, ranging from $100 to $20,000 in net revenue per contract.
● The campaign is created and made live by the influencer within one month of the signed agreement, or as previously negotiated with the client.
● Campaigns are promoted per the contract and the customer is provided a link to the live deliverables on the influencer’s social media channels.
● Most billing for contracts occur 100% at execution of the performance obligation. Net payment terms vary by client.
Platform Revenue

Creator Subscriptions

Vocal+ is a premium subscription offering for Vocal creators. In addition to joining for free, Vocal creators now have the option to sign up for a Vocal+ membership for either $9.99 monthly or $99 annually, though these amounts are ~~occasionally~~ subject to promotional ~~discounts.~~discounts and free trials. Vocal+ subscribers receive access to value-added features such as increased rate of cost per mille (thousand) (“CPM”) monetization, a decreased minimum withdrawal threshold, a discount on platform processing fees, member badges for their profiles, access to exclusive Vocal+ Challenges, and early access to new Vocal features. Subscription revenues stem from both monthly and annual subscriptions, the latter of which is amortized over a twelve-month period. Any customer payments received are recognized over the subscription period, with any payments received in advance being deferred until they are earned.

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The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners. Estimates are utilized for payments made for earnings through reads, by establishing the lifetime a subscriber has had a Vocal account, determining the percentage of that lifetime that the subscriber has been a paying customer, and applying that percentage to payments for earnings through reads in the relevant reporting period.

Affiliate Sales Revenue

Affiliate sales represents the commission the Company receives when a purchase is made through affiliate links placed within content hosted on the Vocal platform. Affiliate revenue is earned on a “click through” basis, upon referring visitors, via said links, to an affiliate’s site and having them complete a specific outcome, most commonly a product purchase. The Company uses multiple affiliate platforms, such as Skimlinks, Amazon, and Tune, to form and maintain thousands of vendor relationships. Each vendor establishes their own commission percentage, which typically range from 2-20%. The revenue is recognized upon receipt as reliable estimates could not be made.

~~Deferred~~E-Commerce Revenue

The Company’s e-commerce businesses are housed under Creatd Ventures, and currently consists of three majority-owned e-commerce companies, Camp (previously Plant Camp), Dune Glow Remedy (“Dune”), and Basis. The Company generates revenue through the sale of Camp, Dune, and Basis’ consumer products through its e-commerce distribution channels. The Company satisfies its performance obligation upon shipment of product to its customers and recognizes shipping and handling costs as a fulfillment cost. Customers have 30 days from receipt of an item to return unopened, unused, or damaged items for a full refund. All returns are processed within the relevant recording period and accounted for as a reduction in revenue. The Company runs discounts from time to time to promote sales, improve market penetration, and increase customer retention. Any discounts are run as coupon codes applied at the time of transaction and accounted for as a reduction in gross revenue. The Company assesses variable consideration using the most likely amount method.
Deferred Revenue
Deferred revenue consists of billings and payments from clients in advance of revenue recognition. The Company has two types of deferred revenue, subscription revenue whereas the revenue is recognized over the subscription period and contract liabilities where the performance obligation was not satisfied. The Company will recognize the deferred revenue over the next year. As of March 31, ~~2021 and December 31, 2020,~~2022, the Company had deferred revenue of ~~$148,760 and $88,637, respectively.~~$211,676.

Accounts Receivable and Allowances

Accounts receivable are recorded and carried when the Company has performed the work in accordance with managed services, project, partner, consulting and branded content agreements. For example, we bill a managed service client monthly when we have updated their Amazon store, modified SEO or completed the other services listed in the agreement. For projects and branded content, we will bill the client and record the receivable once milestones are reached that are set in the agreement. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers. During the three months ended March 31, ~~2021~~2022, the Company recorded ~~$997~~$92,987, as a bad debt expense. As of March 31, ~~2021 and December 31, 2020,~~2022, the Company has an allowance for doubtful accounts of ~~$81,506 and $80,509, respectively.~~$279,133.

~~Stock-Based Compensation~~Inventory

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of March 31, 2022, the Company has no valuation allowance.
Stock-Based Compensation
The Company recognizes compensation expense for all equity–based payments granted in accordance with Accounting Standards Codification (“ASC”) 718 ~~“Compensation~~“Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation ~~net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest~~ over the requisite service period of the award. The company has a relatively low forfeiture rate of stock based compensation and forfeitures are recognized as they occur.

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service ~~periods, typically over a five-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date.~~periods.

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is ~~benchmarked against similar companies in a similar industry~~volatility is derived from the Company’s historical data over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. ~~The expected forfeiture rate is estimated based on management’s best estimate.~~ Forfeitures are recognized as they occur.

16
Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. The Company issues awards of equity instruments, such as stock options and restricted stock units, to employees and certain non-employee directors. Compensation expense related to these awards is based on the fair value of the underlying stock on the award date and is amortized over the service period, defined as the vesting ~~period, using the cliff straight-line method.~~period. The vesting period is generally one to three years. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock units. Compensation expense is reduced for actual forfeitures as they occur.

Loss Per Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

The Company had the following common stock equivalents at March 31, ~~2021~~2022 and ~~2020:~~2021:

March 31,
2021 2020
Options 2,350,062 303,833
Warrants 6,273,778 268,660
Convertible notes - related party - 1,855
Convertible notes 49,629 430,084
Totals 8,673,469 1,004,432
March 31,
2022 2021
Options 1,891,348 2,350,062
Warrants 8,591,206 6,273,778
Convertible notes - 49,629
Totals 10,482,554 8,673,469

Reclassifications
Certain prior year amounts in the condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the year ended December 31, 2021, we adopted a change in presentation on our condensed consolidated statements of operations and comprehensive loss in order to present a gross profit line, the presentation of which is consistent with our peers. Under the new presentation, we began allocating payroll and related expenses, professional services and creator payouts. Prior periods have been revised to reflect this change in presentation.

Recently Adopted Accounting Guidance

In ~~December 2019,~~May 2021, the FASB issued authoritative guidance intended to ~~simplify the~~clarify and reduce diversity in an issuer’s accounting for ~~income taxes~~modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU ~~2019-12, “Income Taxes~~2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic ~~740): Simplifying the Accounting for Income Taxes”)~~815). This guidance’s amendments provide measurement, recognition, and disclosure guidance ~~eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in~~for an issuer’s accounting for ~~income taxes. This guidance is effective for annual periods~~modifications or exchanges of freestanding equity-classified written call options that remain equity classified after ~~December 15, 2020, including interim periods within those annual periods.~~modification or exchange. The updated guidance, which became effective for fiscal years beginning after December 15, ~~2020,~~2021, did not have a material impact on the Company’s condensed consolidated financial statements.

Recent Accounting Guidance Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments -– Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. ~~The~~ ASU ~~will be~~2020-6 is effective for ~~annual reporting periods~~the fiscal year beginning after December 15, ~~2021 and~~2022, including interim periods within ~~those annual periods and early adoption is permitted.~~that fiscal year. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.

In ~~May~~July 2021, the FASB issued ~~authoritative guidance intended~~ASU No. 2021-05, Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to ~~clarify and reduce diversity in~~classify a lease with variable lease payments that do not depend on an ~~issuer’s accounting for modifications~~index or ~~exchanges~~rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU 2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic 815). This guidance amendments provide measurement, recognition, and disclosure guidance for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. This guidancethe lease if specified criteria are met. ASU 2021-05 is effective for ~~annual periods~~the fiscal year beginning after December 15, ~~2021,~~2022, including interim periods within ~~those annual periods.~~that fiscal year. The Company ~~is currently evaluating~~expects that there would be no material impact on the ~~impact of the new guidance on its~~Company’s condensed consolidated financial ~~statements.~~statements upon the adoption of this ASU.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805), Which aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in recognition and payment terms that effect subsequent revenue recognition. ASU 2021-08 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.
Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements.
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Note 3 – Going Concern

The Company’s condensed consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the condensed consolidated financial statements, as of March 31, ~~2021,~~2022, the Company had an accumulated deficit of ~~$78.6~~$116 million, a net loss of ~~$6.6~~$6.9 million and net cash used in operating activities of ~~$5.3~~$5.1 million for the reporting period then ended. ~~The Company is in default on debentures as of the date of this filing.~~ These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

On January 30, 2020, the World Health Organization declared the COVID-19 novel coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The COVID-19 coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial impact will be to the Company, capital raising efforts and our operations may be negatively affected.

The Company is attempting to further implement its business plan and generate sufficient revenues; however, its cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds by way of a public or private offering of its debt or equity securities, there can be no assurance that it will be able to do so on reasonable terms, or at all. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and its ability to raise additional funds by way of a public or private offering.

The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 4 ~~- Equity investments, at cost~~– Inventory

The Company has elected to measure its equity securities without a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investmentInventory was comprised of the ~~same issuer. An election to measure an equity security in accordance with this paragraph shall be made for each investment separately.~~following at March 31, 2022 and December 31, 2021:

The Company performed a qualitative assessment considering impairment indicators to evaluate whether these investments were impaired. Impairment indicators that the Company considered included the following: a) a significant deterioration in the earnings performance, credit rating, asset quality or business prospects of the investee; b) a significant adverse change in the regulatory, economic or technology environment of the investee; c) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; d) a bona fide offer to purchase or an offer by the investee to sell the investment; e) factors that raise significant concerns about the investee’s ability to continue as a going concern.
~~On October 2, 2020, the Company converted $102,096 of its marketable debt security into 119,355 shares of preferred stock or a 1.3% equity investment in a private company.~~
On October 23, 2020, the Company entered into an equity interest purchase agreement whereas the Company purchased 3.8% ownership of a private company for $115,000. On February 17, 2021 the Company entered into a membership interest purchase agreement whereas the Company purchased another 3.3% ownership of a private company for $100,000.
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March 31,
2022 December 31,
2021
Raw Materials $ 16,904 $ -
Packaging 20,342 2,907
Finished goods 399,735 103,496
$ 436,981 $ 106,403

Note 5 – ~~Notes Payable~~Property and Equipment

Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following:
March 31,
2022 December 31,
2021
Computer Equipment $ 376,436 $ 353,880
Furniture and Fixtures 124,787 102,416
Leasehold Improvements 11,456 11,457
512,679 467,753
Less: Accumulated Depreciation (373,200 ) (364,814 )
$ 139,479 $ 102,939
Depreciation expense was $8,386 and $10,047 for the three months ended March 31, 2022 and 2021, respectively.

Note 6 – Notes Payable
Notes payable as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 is as follows:

Outstanding Principal as of
March 31,
2021 December 31,
2020 Interest
Rate Maturity
Date
Seller’s Choice Note $ 660,000 $ 660,000 30 % September 2020
The May 2020 PPP Loan Agreement 412,500 412,500 1 % April 2022
The April 2020 PPP Loan Agreement 262,432 282,432 1 % May 2022
The October 2020 Loan Agreement 57,273 55,928 14 % July 21
The November 2020 Loan Agreement - 23,716 14 % May 2021
The February 2021 Loan Agreement 86,089 - 14 % July 21
1,478,293 1,434,576
Less: Debt Discount - -
Less: Debt Issuance Costs - -
1,478,293 1,434,576
Less: Current Debt (1,423,995 ) (1,221,539 )
Total Long-Term Debt $ 54,298 $ 213,037
Outstanding Principal as of
March 31,
2022 December 31,
2021 Interest
Rate Maturity
Date
Seller’s Choice Note $ - $ 660,000 30 % September 2020
The April 2020 PPP Loan Agreement 198,577 198,577 1 % May 2022
The First December 2021 Loan Agreement 140,931 185,655 10 % June 2023
The Second December 2021 Loan Agreement 323,094 313,979 14 % June 2022
The First February 2022 Loan Agreement 337,163 - - % June 2023
The Second February 2022 Loan Agreement 164,123 - 14 % June 2022
First Denver Bodega LLC Loan 50,000 -
Second Denver Bodega LLC Loan 15,724 -
1,229,612 1,358,211
Less: Debt Discount (42,620 ) (15,547 )
Less: Debt Issuance Costs - -
1,186,992 1,342,664
Less: Current Debt (1,151,087 ) (1,278,672 )
Total Long-Term Debt $ 35,905 $ 63,992

~~As of March 31, 2021, if PPP loans payable are not forgiven, remaining scheduled principal payments due on notes payable are as follows:~~
Twelve months ended March 31,
2021 $ 1,423,995
2022 54,298
$ 1,478,293
Seller’s Choice Note

On September 11, 2019, the Company entered into Seller’s Choice Purchase Agreement with Home Revolution ~~LLC (see Note 4).~~LLC. As a part of the consideration provided pursuant to the Seller’s Choice Acquisition, the Company issued the Seller’s Choice Note to the Seller in the principal amount of $660,000. The Seller’s Choice Note bears interest at a rate of 9.5% per annum and is payable on March 11, 2020 (the “Seller’s Choice Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts become due. Upon maturity the Company utilized an automatic extension up to 6 months. This resulted in a 5% increase in the interest rate every month the Seller’s Choice Note is outstanding. As of ~~March~~December 31, 2021, the Company is in default on the Seller’s Choice note.

~~During~~On March 3, 2022, after substantial motion practice, Creatd successfully settled the ~~three months ended March 31, 2021~~dispute with Home Revolution, LLC for a total of $799,000, which includes $660,000 of note principal and $139,000 of accrued interest. The matter has been dismissed. As part of the settlement the Company ~~accrued interest~~recorded a Gain on extinguishment of ~~$48,822.~~debt of $147,256.

The April 2020 PPP Loan Agreement

On April 30, 2020, the Company was granted a loan with a principal amount of $282,432 (the “Loan”), pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020. The Loan, which was in the form of a Note dated April 30, 2020, matures on April 30, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on October 30, 2020. The Note may be prepaid by the Company at any time prior to maturity without payment of any premium. Funds from the Loan may only be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments.

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During the three months ended March 31, ~~2021,~~2022, the Company accrued interest of ~~$696.~~ $490.

~~During the three months ended March 31, 2021, the Company repaid $20,000 in principal.~~
The Company is in the process of returning the funds received from the Loan.

When the applications for PPP first opened up, there was limited available funding and much confusion surrounding the application process. The Company initially submitted its application for the May 2020 PPP Loan in early April but received no response in the aftermath of submitting the application. After consulting multiple advisors, the Company made the decision to apply elsewhere, due to the rampant media coverage of institutions running out of funding and the Company’s need for the capital and belief that if 2 separate loans were approved, the remaining application could simply be withdrawn.

Therefore, in late April, the company proceeded with applying for the April 2020 PPP Loan. After some conflicting communications regarding acceptance, the Company attempted to contact the lender to clarify but got no response. After continued attempts to follow up with both lenders, the Company received approval for the May 2020 PPP
The First December 2021 Loan and funding for the April 2020 PPP Loan on the same day, followed the next day by the funding of the May 2020 PPP Loan. The Company immediately separated the funds for the April 2020 PPP Loan into a separate reserved bank account with the intention of returning the funds. However, after several attempts to contact the lender with no response, the Company was faced with difficulty raising funds in the early-Covid economy and made the decision to utilize the funds for operations and pursue an installment repayment plan when they were able to reach the lender. As of the date of this filing, the Company has begun making repayments on the loan, absent a formal installment agreement due to difficulties reaching the lender. The Company intends to complete repayment before the end of 2021.
~~As each company is only permitted one loan under the CARES Act, there is a possibility the loan may be called by the SBA and the Company would have to repay the loan in full at such time.~~
~~The May 2020 PPP Loan~~ Agreement
On May 4, 2020, Jerrick Ventures, LLC (“Jerrick Ventures”), the Company’s wholly-owned subsidiary, was granted a loan from PNC Bank, N.A. with a principal amount of $412,500, pursuant to the Paycheck Protection Program (the “PPP”). The Loan, which was in the form of a Note dated May 4, 2020 matures on May 4, 2022 and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on November 4, 2020. The Note may be prepaid by Jerrick Ventures at any time prior to maturity without payment of any premium. Funds from the Loan may only be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments. Jerrick Ventures intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.
~~During the three months ended March 31, 2021, the Company accrued interest of $1,017.~~
~~The Company plans to apply for forgiveness of this loan and has begun discussions with the lender regarding that process.~~
~~The October 2020 Loan Agreement~~

On October 6, 2020, the Company entered into a secured loan agreement (the “October 2020 Loan Agreement”) with a lender (the “October 2020 Lender”), whereby the October 2020 Lender issued the Company a secured promissory note of A$74,300 AUD or $53,128 United States Dollars (the “October 2020 Note”). Pursuant to the October 2020 Loan Agreement, the October 2020 Note has an effective interest rate of 14%. The maturity date of the October 2020 Note is September 30,December 3, 2021, (the “October 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the October 2020 Loan Agreement are due. The loan is secured by the Australian research & development credit.
~~During the three months ended March 31, 2021 the Company accrued A$2565 in interest.~~
~~The November 2020 Loan Agreement~~
~~On November 24, 2020,~~ the Company entered into a loan agreement (the ~~“November 2020~~“First December 2021 Loan Agreement”) with a lender (the ~~“November 2020~~“First December 2021 Lender”) whereby the ~~November 2020~~First December 2021 Lender issued the Company a promissory note of ~~$34,000~~$191,975 (the ~~“November 2020~~“First December 2021 Note”). Pursuant to the ~~November 2020~~First December 2021 Loan Agreement, the ~~November 2020~~First December 2021 Note has an effective interest rate of ~~14%~~9%. The maturity date of the ~~November 2020~~First December 2021 Note is ~~May 25,~~June 3, 2023 (the “First December 2021 ~~(the “November 2020~~ Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the ~~November 2020~~First December 2021 Note are due.

During the three months ended March 31, ~~2021,~~2022, the Company repaid ~~$23,716~~$44,725 in ~~principal and $4,736 of accrued interest.~~principal.

20
The ~~February~~Second December 2021 Loan Agreement

On ~~February 24,~~December 14, 2021, the Company entered into a secured loan agreement (the ~~“February~~“Second December 2021 Loan Agreement”) with a lender (the ~~“February~~“Second December 2021 Lender”), whereby the ~~February~~Second December 2021 Lender issued the Company a secured promissory note of ~~A$111,683~~$438,096 AUD or ~~$86,089~~$329,127 United States Dollars (the ~~“February~~“Second December 2021 Note”). Pursuant to the ~~February~~Second December 2021 Loan Agreement, the ~~February~~Second December 2021 Note has an effective interest rate of 14%. The maturity date of the ~~February~~Second December 2021 Note is ~~July 31, 2021~~June 30, 2022 (the ~~“February~~“Second December 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the ~~February~~Second December 2021 Loan Agreement are due. The loan is secured by the Australian research & development credit.

During the three months ended March 31, ~~2021~~2022, the Company accrued ~~A$1,499~~$15,123 AUD in interest.
The First February 2022 Loan Agreement
On February 22, 2022, the Company entered into a secured loan agreement (the “First February 2022 Loan Agreement”) with a lender (the “First February 2022 Lender”), whereby the First February 2022 Lender issued the Company a secured promissory note of $222,540 AUD or $159,223 United States Dollars (the “First February 2022 Note”). Pursuant to the First February 2022 Loan Agreement, the First February 2022 Note has an effective interest rate of 14%. The maturity date of the First February 2022 Note is June 30, 2022 (the “First February 2022 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First February 2022 Loan Agreement are due. The loan is secured by the Australian research & development credit.
During the three months ended March 31, 2022, the Company accrued $3,158 AUD in interest.

The Second February 2022 Loan Agreement
On February 22, 2022, the Company entered into a loan agreement (the “Second February 2022 Loan Agreement”) with a lender (the “Second February 2022 Lender”), whereby the Second February 2022 Lender issued the Company a promissory note of $337,163 (the “Second February 2022 Note”). Pursuant to the Second February 2022 Loan Agreement, the Second February 2022 Note has an effective interest rate of 11%. The maturity date of the Second February 2022 Note is February 22, 2023 (the “Second February 2022 Maturity Date”). The Company is required to make 10 monthly payment of $37,425.
The Company recorded a $37,163 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.
Denver Bodega LLC Notes payable
On March 7, 2022, The Company acquired five note payable agreements from the acquisition of Denver Bodega LLC. See note 12. The total liabilities of these notes amounted to $293,888. During the three months ended March 31, 2022, the Company repaid $228,164. As of March 31, 2022, the Company has two notes outstanding. The First Denver Bodega LLC Loan has a principal balance of $50,000, bears interest at 5%, and requires 36 monthly payments of $1,496. The second Denver Bodega LLC Loan has a principal balance of $15,724 and has a maturity date of April 16, 2022.
Note 67 – Convertible ~~Note~~Notes Payable

~~Convertible notes payable as of March 31, 2021 and December 31, 2020 is as follows:~~
Outstanding Principal as of Warrants granted
March 31,
2021 December 31,
2020 Interest
Rate Conversion
Price Maturity
Date Quantity Exercise
Price
The September 2020 convertible Loan Agreement - 341,880 12 % $             - (*) September 2021 85,555      5
The October 2020 convertible Loan Agreement 169,400 169,400 6 % $ - (*) October 2021 - -
The First December 2020 convertible Loan Agreement - 600,000 12 % $ - (*) December 2021 - -
The Second December 2020 convertible Loan Agreement 169,400 169,400 6 % $ - (*) December 2021 - -
338,800 1,280,680
Less: Debt Discount (94,226 ) (309,637 )
Less: Debt Issuance Costs (5,030 ) (73,527 )
239,544 897,516
Less: Current Debt (239,544 ) (897,516 )
Total Long-Term Debt $ - $ -

~~(*)~~

~~As subject to adjustment as further outlined in the notes~~

The ~~First~~ July ~~2020~~2021 Convertible Loan Agreement

On July ~~01, 2020,~~6, 2021, the Company entered into a loan agreement (the ~~“First July 2020~~“July 2021 Loan Agreement”) with an individual (the ~~“First July 2020~~“July 2021 Lender”), whereby the ~~First~~ July ~~2020~~2021 Lender issued the Company a promissory note of ~~$68,000~~$168,850 (the ~~“First July 2020~~“July 2021 Note”). Pursuant to the ~~First~~ July ~~2020~~2021 Loan Agreement, the ~~First~~ July ~~2020~~2021 Note has interest of ~~twelve~~six percent ~~(10%~~(6%). The ~~First~~ July ~~2020~~2021 Note matures on ~~June 29, 2021.~~the first (12^th) month anniversary of its issuance date.

Upon default or 180 days after issuance the ~~First~~ July ~~2020~~2021 Note is convertible into shares of the Company’s common stock, par value ~~$.001~~$0.001 per share (“Conversion Shares”) equal to ~~61% multiplied by~~75% of average the lowest ~~trade~~three trading prices of the Company’s common stock ~~during~~on the ~~twenty (15) consecutive trading~~fifteen-trading day ~~period~~ immediately preceding the date of the respective ~~conversion.t~~conversion.

The Company recorded a $15,850 debt discount relating to an original issue discount and $3,000 of debt issuance costs related to fees paid to vendors relating to the offering. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

During the three months ended March 31, ~~2021~~2022, the ~~First~~ July ~~2020~~2021 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion ~~date and the period end.~~date. The conversion feature of ~~First~~ July ~~2020~~2021 Note gave rise to a derivative liability of $112,743. The Company recorded $68,000 as a debt discount and $44,743 was recorded to derivative expense. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

~~During the three months ended March 31, 2021 the Company converted $68,000 in principal and $3,400 in interest into 35,469 shares of the Company’s common stock.~~

~~The August 2020 Convertible Loan Agreement~~

On August 17, 2020, the Company entered into a loan agreement (the “August 2020 Loan Agreement”) with an individual (the “August 2020 Lender”), whereby the August 2020 Lender issued the Company a promissory note of $68,000 (the “August 2020 Note”). Pursuant to the August 2020 Loan Agreement, the August 2020 Note has interest of twelve percent (12%). The August 2020 Note matures on August 17, 2021.

Upon default or 180 days after issuance the August 2020 Convertible Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to 61% multiplied by the lowest trade of the common stock during the twenty (15) consecutive trading day period immediately preceding the date of the respective conversion.

The Company recorded a $3,000 debt discount relating to original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.t

During the three months ended March 31, 2021 the August 2020 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of August 2020 Note gave rise to a derivative liability of $120,759. The Company recorded $65,000 was recorded as a debt discount and $55,759 was recorded to derivative expense. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

~~During the three months ended March 31, 2021 the Company converted $68,000 in principal and $3,400 in interest into 29,859 shares of the Company’s common stock.~~

~~The September 2020 Convertible Loan Agreement~~

On September 23, 2020, the Company entered into a loan agreement (the “September 2020 Loan Agreement”) with an individual (the “September 2020 Lender”), whereby the September 2020 Lender issued the Company a promissory note of $385,000 (the “September 2020 Note”). Pursuant to the September 2020 Loan Agreement, the September 2020 Note has interest of twelve percent (12%). The September 2020 Note matures on September 23, 2021.

Upon default or 180 days after issuance the Second July 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.

The Company recorded a $68,255 debt discount relating to original issue discount associated with this note. The Company recorded a $146,393 debt discount relating to 85,555 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the three months ended March 31, 2021 the Company repaid $341,880 in principal and $46,200 in interest.~~

~~The October 2020 Convertible Loan Agreement~~

On October 2, 2020, the Company entered into a loan agreement (the “October 2020 Loan Agreement”) with an individual (the “October 2020 Lender”), whereby the October 2020 Lender issued the Company a promissory note of $169,400 (the “October 2020 Note”). Pursuant to the October 2020 Loan Agreement, the October 2020 Note has interest of twelve percent (6%). The October 2020 Note matures on the first (12^th~~) month anniversary of its issuance date.~~

Upon default or 180 days after issuance the October 2020 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.

The Company recorded a $19,400 debt discount relating to original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

During the three months ended March 31, 2021 the Second July 2020 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of Second July 2020 Note gave rise to a derivative liability of $74,860.$100,532. The Company recorded this as a debt discount. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

~~The First December 2020 convertible Loan Agreement~~

~~On December 9, 2020,~~During the ~~Company entered~~three months ended March 31, 2022, the note holder converted $168,850 of principal and $4,605 of interest into a loan agreement (the “First December 2020 Loan Agreement”) with an individual (the “First December 2020 Lender”), whereby the First December 2020 Lender issued the Company a promissory note of $600,000 (the “First December 2020 Note”). Pursuant to the First December 2020 Loan Agreement, the First December 2020 Note has interest of twelve percent (12%). As additional consideration for entering in the First December 2020 convertible Loan Agreement, the Company issued 45,000109,435 shares of the Company’s common stock. The ~~First December 2020~~ unamortized debt discount of $96,803 was recorded to extinguishment of debt due to conversion.

Note ~~matures on the first (12~~^th~~) month anniversary of its issuance date.~~ 8 – Related Party

Upon default the First December 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.Equity raises

The Company recorded a $110,300 debt discount relating to original issue discount associated with this note. The Company recorded a $113,481 debt discount relating to 45,000 shares issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

During the three months ended March 31, ~~2021~~2022, the ~~Company repaid $600,000~~company conducted two equity raises in ~~principal~~which officers, directors, employees, and ~~$4,340 in interest.~~an affiliate of an officer cumulatively invested $421,001 for 240,571 shares of common stock and 240,571 warrants to purchase common stock.

~~The Second December 2020 Convertible Loan Agreement~~Officer compensation

On December 30, 2020, the Company entered into a loan agreement (the “Second December 2020 Loan Agreement”) with an individual (the “Second December 2020 Lender”), whereby the Second December 2020 Lender issued the Company a promissory note of $169,400 (the “Second December 2020 Note”). Pursuant to the Second December 2020 Loan Agreement, the Second December 2020 Note has interest of twelve percent (6%). The Second December 2020 Note matures on the first (12^th~~) month anniversary of its issuance date.~~

Upon default the Second December 2020 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.

The Company recorded a $18,900 debt discount relating to original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~Note 7 – Related Party~~

~~Notes payable~~

~~Notes payable – related party as of March 31, 2021 and December 31, 2020 is as follows:~~

Outstanding Principal as of Warrants granted
March 31,
2021 December 31,
2020 Interest
Rate Maturity
Date Quantity Exercise
Price
The September 2020 Goldberg Loan Agreement 16,705 16,705 7 % September 2022 - -
The September 2020 Rosen Loan Agreement 3,295 3,295 7 % September 2022 - -
20,000 20,000
Less: Debt Discount (14,603 ) (17,068 )
Less: Debt Issuance Costs - -
5,397 2,932
Less: Current Debt (5,397 ) (2,932 )
$ - $ -
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~~The September 2020 Goldberg Loan Agreement~~
On September 15, 2020, the Company entered into a loan agreement (the “September 2020 Goldberg Loan Agreement”) with Goldberg whereby the Company issued a promissory note of $16,705 (the “September 2020 Goldberg Note”). Pursuant to the September 2020 Goldberg Loan Agreement, the September 2020 Goldberg Note has an interest rate of 7%. The maturity date of the September 2020 Goldberg Note is September 15, 2022 (the “September 2020 Goldberg Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under note are due. The September 2020 Goldberg Loan is secured by the tangible and intangible property of the Company.
Since the September 2020 Goldberg Note has a make-whole provision if the shares of the Company’s common stock issued to the lender in accordance with the Lender’s Exchange Agreement (see note 11) have a value equal to or less than $7,737,594 determined by using the lowest VWAP of the last 30 days prior to September 14, 2021. The principal amount of the September 2020 Goldberg Note shall increase by 200% of the difference between the initial consideration and the September 14, 2021 value. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The make-whole feature gave rise to a derivative liability of $2,557,275, of which $2,540,570 was recorded as a loss on extinguishment of debt and $16,705 as a debt discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost. The derivative liability is marked to market as of March 31, 2021, and the change in derivative liability is recorded on Condensed Consolidated Statements of Comprehensive Loss. See note 8.
During the three months ended March 31, ~~2021 the Company accrued interest of $288.~~
~~The September 2020 Rosen Loan Agreement~~
On September 15, 2020, the Company entered into a loan agreement (the “September 2020 Rosen Loan Agreement”) with Rosen whereby the Company issued a promissory note of $3,295 (the “September 2020 Rosen Note”). Pursuant to the September 2020 Rosen Loan Agreement, the September 2020 Rosen Note has an interest rate of 7%. The maturity date of the September 2020 Rosen Note is September 15, 2022 ~~(the “September 2020 Rosen Maturity Date”), at which time all outstanding principal, accrued~~ and ~~unpaid interest and other amounts due under the note are due. The September 2020 Rosen Loan is secured by the tangible and intangible property of the Company.~~
Since the September 2020 Rosen Note has a make-whole provision if the shares of the Company’s common stock issued to the lender in accordance with the Lender’s Exchange Agreement (see note 11) have a value equal to or less than $554,924 determined by using the lowest VWAP of the last 30 days prior to September 14, 2021. The principal amount of the September 2020 Rosen Note shall increase by 200% of the difference the initial consideration and the September 14, 2021 value. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The make-whole feature of gave rise to a derivative liability of $504,413, of which $501,118 was recorded as a loss on extinguishment of debt and $3,295 as a debt discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost. ~~The derivative liability is marked to market as of March 31, 2021, and the change in derivative liability is recorded on Condensed Consolidated Statements of Comprehensive Loss. See note 8.~~
~~During the three months ended March 31, 2021 the Company accrued interest of $57.~~
~~Officer compensation~~
~~During the three months ended March 31,~~ 2021, the Company paid $35,637 and $20,082, respectively for living expenses for officers of the Company.

Note 89 – Derivative Liabilities

The Company has identified derivative instruments arising from a make-whole feature in the Company’s notes payable at March 31, 2021. For the terms of the make-whole features see the September 2020 Rosen Loan Agreement and the September 2020 Goldberg Loan Agreement in Note 7. The Company has also identified derivative instruments arising from convertible notes that have an option to convert at a variable number of shares in the Company’s convertible notes payable atduring the three months ended March 31, ~~2021.~~2022. For the terms of the conversion features see Note 7. The Company had no derivative assets measured at fair value on a recurring basis as of March 31, ~~2021.~~2022.

24
The Company ~~utilized a Geometric Brownian Motion (“GBM”) model and~~utilizes a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the ~~GBM model and binomial~~Binomial model included a ~~starting~~ stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note adjusted to be on a continuous return basis to align with the ~~GBM~~Monte Carlo simulation model and binomial model.

Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.

Volatility: The Company calculates the expected volatility based on the company’s historical stock prices with a look back period commensurate with the period to maturity.

Expected term: The Company’s remaining term is based on the remaining contractual maturity of the convertible notes.

The following are the changes in the derivative liabilities during the three months ended March 31, ~~2021.~~2022.

Three Months Ended March 31,
2021
Level 1 Level 2 Level 3
Derivative liabilities as January 1, 2021 $ - $   - $ 42,231
Addition - - 308,362
Extinguishment (203,578 )
Changes in fair value - - 197,389
Derivative liabilities as March 31, 2021 $ - $ - $ 344,404
Three Months Ended
March 31, 2022
Level 1 Level 2 Level 3
Derivative liabilities as January 1, 2022 $          - $           - $ -
Addition - - 100,532
Changes in fair value - - (3,729 )
Extinguishment - - (96,803 )
Derivative liabilities as March 31, 2022 $ - $ - $ -
Note 910 – Stockholders’ Equity

Shares Authorized

~~Prior to July 13, 2020, the~~The Company ~~was~~is authorized to issue up to ~~thirty-five~~one hundred and twenty million ~~(35,000,000)~~(120,000,000) shares of capital stock, of which ~~fifteen~~one hundred million ~~(15,000,000)~~(100,000,000) shares are designated as common stock, par value $0.001 per share, and twenty million (20,000,000) are designated as ~~“blank check”~~ preferred stock, par value $0.001 per share. ~~The designations, rights, and preferences of such preferred stock are to be determined by the Company’s board of directors.~~

On July 13, 2020, the Company filed the Second Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada, which authorize the issuance of 100,000,000 shares of common stock, and 20,000,000 shares of preferred stock.
Preferred Stock

~~Preferred Stock~~
Series E Convertible Preferred Stock

~~On December 29, 2020 the~~The Company ~~entered into securities purchase agreements with thirty-three accredited investors whereby the Investors have agreed to purchase from the Company an aggregate of 7,778~~has designated 8,000 shares of ~~the Company’s~~ Series E Convertible Preferred ~~Stock, par value $0.001 per share~~stock and ~~2,831,715 warrants to purchase~~has 500 shares issued and outstanding as of ~~the Company’s common stock, par value $0.001 per share.~~ March 31, 2022.
The shares of Series E Preferred Stock ishave a stated value of $1,000 per share and are convertible into ~~a total~~Common Stock at the election of ~~1,887,810 shares~~the holder of ~~Common Stock. The combined purchase price of one Conversion Share and one and a half warrant was $4.12. The aggregate purchase price for~~ the Series E Preferred Stock, at any time following the Original Issue Date at a price of $4.12 per share, subject to adjustment. Each holder of Series E Preferred Stock shall be entitled to receive, with respect to each share of Series E Preferred Stock then outstanding and ~~warrants was $7,777,777.77. The Company has recorded $817,353 to stock issuance costs, which~~held by such holder, dividends on an as-converted basis in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are ~~part~~paid on shares of ~~Additional Paid-in Capital.~~the Common Stock.

The ~~warrants~~holders of Series E Preferred Stock shall be paid pari passu with the holders of Common Stock with respect to payment of dividends and rights upon liquidation and shall have no voting rights. In addition, as further described in the Series E Designation, as long as any of the shares of Series E Preferred Stock are ~~exercisable for~~outstanding, the Company shall not, without the affirmative vote of the holders of a ~~term~~majority of ~~five-years from~~ the ~~date~~then outstanding shares of ~~issuance, at an exercise price of $4.50 per share. The warrants provide for cashless exercise~~Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the ~~extent~~Series E Preferred Stock or alter or amend this Series E Designation, (b) amend its certificate of incorporation or other charter documents in any manner that ~~there is no registration statement available for~~adversely affects any rights of the ~~underlying~~holders of the Series E Preferred Stock, (c) increase the number of authorized shares of Series E Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.
Each share of Series E Preferred Stock shall be convertible, at any time and from time to time at the option of the holder of such shares, into that number of shares of Common ~~Stock.~~
25
The placement agent for the transaction and received cash compensation equal to 10% of the aggregate purchase price and warrants to purchase 471,953 shares of the Company’s common stock, at an exercise price of $5.15 per share (the “PA Warrants”). The PA Warrants are exercisable for a term of five-years from the date of issuance.
~~During the three months ended March 31, 2021, the Company received the $40,000 of the subscription receivable for~~Stock determined by dividing the Series E ~~Convertible Preferred Stock. The Company has recorded $4,225~~Stated Value by the Conversion Price, subject to ~~stock issuance costs, which are part of Additional Paid-in Capital.~~certain beneficial ownership limitations.

~~During the three months ended March 31, 2021, investors converted 6,690 shares of the Company’s Series E Convertible Preferred~~Common Stock ~~into 1,623,730 shares of the Company’s common stock.~~

~~Common Stock~~
On January ~~14, 2021,~~1, 2022, the Company issued ~~30,000~~8,590 shares of its restricted common stock to settle outstanding vendor liabilities of $20,297. In connection with this transaction the Company also recorded a gain on settlement of vendor liabilities of $369.
On January 6, 2022, the Company issued 8,850 shares of its restricted common stock to consultants in exchange for services at a fair value of ~~$133,200.~~$19,736.

On ~~January 20, 2021,~~February 24, 2022, the Company issued ~~40,000~~50,000 shares of its restricted common stock to consultants in exchange for ~~a year~~four months of services at a fair value of ~~$192,000.~~$69,000. These shares were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the three months ended March 31, ~~2021~~2022 the Company recorded ~~$36,822~~$33,110 to share based payments.

On ~~February~~March 1, ~~2021,~~2022, the Company entered into securities purchase agreements with twenty-eight accredited investors whereby, at the closing, such investors purchased from the Company an aggregate of 1,401,457 shares of the Company’s common stock and (ii) 1,401,457 warrants to purchase shares of common stock, for an aggregate purchase price of $2,452,550. Such warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $1.75 per share. The Company has recorded $40,000 to stock issuance costs, which are part of Additional Paid-in Capital.
On March 7, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with thirteen accredited investors resulting in the raise of $2,659,750 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering an aggregate of 1,519,857 shares of the Company’s common stock together with warrants to purchase an aggregate of 1,519,857 shares of Common Stock at an exercise price of $1.75 per share. The warrants are immediately exercisable and will expire on March 9, 2027. The Company has recorded $75,000 to stock issuance costs, which are part of Additional Paid-in Capital.
On March 30, 2022, the Company issued ~~50,000~~731 shares of its restricted common stock to consultants in exchange for services at a fair value of ~~$196,000.~~$863.

Stock Options

~~On February 3, 2021, the Company issued 1,929 shares of its restricted common stock to consultants in exchange for services at a fair value of $8,198.~~
~~On February 18, 2021, the Company issued 10,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $48,000.~~
~~On February 18, 2021, the Company issued 10,417 shares of its restricted common stock to consultants in exchange for services at a fair value of $50,002.~~
~~On February 26, 2021, the Company issued 291 shares of its restricted common stock to consultants in exchange for services at a fair value of $1,499.~~
~~On March 17, 2021, the Company issued 9,624 shares of its restricted common stock to consultants in exchange for services at a fair value of $49,371.~~
~~On March 28, 2021, the Company issued 31,782 shares of its restricted common stock to settle outstanding vendor liabilities of $125,000.~~
On March 31, 2021, the Company issued 13,113 shares of its restricted common stock to settle outstanding vendor liabilities of $43,667. In connection with this transaction the Company also recorded a loss on settlement of vendor liabilities of $12,719.
~~Stock Options~~
~~The Company applied fair value accounting for all share-based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model.~~
26
~~The assumptions used for options granted during the three months ended March 31, 2021 are as follows:~~
~~March 31,~~
~~2021~~
~~Exercise price~~ $ ~~2.55 – 14.10~~
~~Expected dividends~~ 0 %
~~Expected volatility~~ ~~223.15 – 242.98~~ %
~~Risk free interest rate~~ ~~0.46 – 0.98~~ %
~~Expected life of option~~ ~~5 - 7 years~~
The following is a summary of the Company’s stock option activity:

Options Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Life
(in years)
Balance – December 31, 2020 – outstanding 541,021 12.75 4.29
Granted 1,812,375 6.39 6.22
Exercised - - -
Cancelled/Modified (3,334 ) 15.00 -
Balance – March 31, 2021 – outstanding 2,350,062 7.84 5.37
Balance – March 31, 2021 – exercisable 145,834 $ 23.97 1.55
Options Weighted
Average
Exercise
Price Weighted
Average
Remaining
Contractual
Life (in years)
Balance – January 1, 2022 – outstanding 2,902,619 7.07 4.71
Granted - - -
Exercised - - -
Forfeited/Cancelled (19,093 ) 15.36 -
Balance – March 31, 2022 – outstanding 2,883,526 7.02 4.48
Balance – March 31, 2022 – exercisable 1,891,348 7.60 4.27

Option Outstanding Option Exercisable
Exercise
price Number
Outstanding Weighted
Average
Remaining
Contractual
Life (in years) Weighted
Average
Exercise
Price Number
Exercisable Weighted
Average
Remaining
Contractual
Life (in years)
$ 7.02 2,883,526 4.48 7.60 1,891,348 4.27

Option Outstanding Option Exercisable
Exercise price Number Outstanding Weighted
Average
Remaining
Contractual
Life (in years) Weighted
Average
Exercise
Price Number Exercisable Weighted
Average
Remaining
Contractual
Life (in years)
$ 7.84 2,350,062 5.37 23.97 145,834 1.55
During the year ended December 31, 2018 the Company granted options of 11,667 to consultants that has a fair value of $57,123. As of the date of this filing the company has not issued these options and they are recorded as an accrued liability on the Condensed Consolidated Balance Sheet.

Stock-based compensation for stock options has been recorded in the condensed consolidated statements of operations and totaled ~~$818,612,~~$1,027,083, for the three months ended March 31, ~~2021.~~2022.

As of March 31, ~~2021,~~2022, there was ~~$7,807,672~~$1,649,068 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately ~~1.4~~0.89 year.

Warrants

The Company applied fair value accounting for all share-based payments awards. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model.

Warrant Activities

The following is a summary of the Company’s warrant activity:

Warrant Weighted
Average
Exercise
Price
Balance – December 31, 2020 – outstanding 6,130,948 4.96
Granted 486,516 5.13
Exercised (333,130 ) 4.69
Cancelled/Modified (10,556 ) 24.00
Balance – March 31, 2021 – outstanding 6,273,778 4.96
Balance – March 31, 2021 – exercisable 6,273,778 $ 4.96
Warrant Weighted
Average
Exercise
Price
Balance – January 1, 2022 – outstanding 5,658,830 4.98
Granted 2,988,487 2.12
Exercised - -
Forfeited/Cancelled (13,611 ) 12.00
Balance – December 31, 2021 – outstanding 8,633,706 3.82
Balance – December 31, 2021 – exercisable 8,591,206 $ 3.81

27

Warrants Outstanding Warrants Exercisable
Exercise price Number
Outstanding Weighted
Average
Remaining
Contractual
Life
(in years) Weighted
Average
Exercise Price Number
Exercisable Weighted
Average
Exercise
Price
$ 4.96 6,273,778 4.52 4.96 6,273,778 4.52
Warrants Outstanding Warrants Exercisable
Exercise
price Number
Outstanding Weighted
Average
Remaining
Contractual
Life (in years) Weighted
Average
Exercise
Price Number
Exercisable Weighted
Average
Exercise
Price
$ 3.82 8,633,706 4.01 3.81 8,591,206 4.01

During the three months ended March 31, 2021, the Company issued 302,404 shares of common stock to a certain warrant holder upon the exercise of a warrant to purchase 333,130 shares of common stock. The Company received $1,272,672 in connection with the exercise of a warrant.
~~During the three months ended March 31, 2021 a total of 486,516 warrants were issued in connection with the Series E Convertible Preferred Stock raise.~~
~~Share-based awards, restricted stock award (“RSAs”)~~
~~On February 4, 2021 the Board resolved that, the Company shall pay each member~~2022, some of the ~~Board, for each calendar quarter during which such member continues~~Company’s warrants had a down-round provision triggered that also resulted in an additional 67,173 warrants to ~~serve on~~be issued. A deemed dividend of $81,728 was recorded to the ~~Board, compensation as a group amounts to $62,500 per quarter. The shares vest one year after issuance. The $62,500 worth~~Statements of Common Stock is based on the closing price on the last day of the quarter. Since the shares are based on a variable number of shares in a future period the Company classified this grant as a liability in accordance with ASC 480.Comprehensive Loss.

~~A summary of the activity related to RSUs for the three months ended March 31, 2021is presented below:~~
~~Restricted stock units (RSUs)~~ ~~Total shares~~ ~~Grant date~~
~~fair value~~
~~RSAs non-vested at January 1, 2021~~ - $-
~~RSAs granted~~ ~~55,876~~ ~~$ 4.30 – 4.32~~
~~RSAs vested~~ - $ -
~~RSAs forfeited~~ - $ -
~~RSAs non-vested March 31, 2021~~ ~~55,876~~ ~~$ 4.30 – 4.32~~
~~Stock-based compensation for RSA’s has been recorded in the consolidated statements of operations and totaled $228,535, for the three months ended March 31, 2021.~~
Note 1011 – Commitments and Contingencies

The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carry back net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.Litigation

In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the year ended December 31, 2020.
~~On March 26, 2020 and April 30, 2020, the Company received 2 separate loans pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act.~~
When the applications for PPP first opened up, there was limited available funding and much confusion surrounding the application process. The Company initially submitted its application for the May 2020 PPP Loan in early April but received no response in the aftermath of submitting the application. After consulting multiple advisors, the Company made the decision to apply elsewhere, due to the rampant media coverage of institutions running out of funding and the Company’s need for the capital and belief that if 2 separate loans were approved, the remaining application could simply be withdrawn.
28
Therefore, in late April, the company proceeded with applying for the April 2020 PPP Loan. After some conflicting communications regarding acceptance, the Company attempted to contact the lender to clarify but got no response. After continued attempts to follow up with both lenders, the Company received approval for the May 2020 PPP Loan and funding for the April 2020 PPP Loan on the same day, followed the next day by the funding of the May 2020 PPP Loan. The Company immediately separated the funds for the April 2020 PPP Loan into a separate reserved bank account with the intention of returning the funds. However, after several attempts to contact the lender with no response, the Company was faced with difficulty raising funds in the early-Covid economy and made the decision to utilize the funds for operations and pursue an installment repayment plan when they were able to reach the lender. As of the date of this filing, the Company has begun making repayments on the loan, absent a formal installment agreement due to difficulties reaching the lender. The Company intends to complete repayment before the end of 2021.
~~As each company is only permitted one loan under the CARES Act, there is a possibility the loan may be called by the SBA and the Company would have to repay the loan in full at such time.~~
~~Litigation~~
On or about June 25, 2020, Home Revolution, LLC (“Home Revolution”) filed a lawsuit in the United States District Court for the District of New Jersey, Home Revolution, LLC, et al.al. v. Jerrick Media Holdings, Inc. et al.al., Case No. 2:20-cv-07775-JMV-MF. The Complaint alleges, among other things, that Creatd, Inc. breached the Membership Interest Purchase Agreement, as modified, and ancillary transaction documents in connection with the acquisition of Seller’s Choice, LLC, from Home Revolution in September 2019. The Complaint additionally alleges violation of the New Jersey Uniform Securities Law, violations of the Exchange Act and Rule 10b-5 thereunder, fraud, equitable accounting, breach of fiduciary duty, conversion and unjust enrichment. ~~After filing the Complaint but prior to our Answer date, Home Revolution moved by order to show cause~~Plaintiff also sought to have a receiver appointed by the Court to take over Creatd’s operations. After substantial motion practice, Creatd successfully settled this dispute from June 2020 for a total of $799,000, which includes $660,000 of note principal and $139,000 of accrued interest. The matter has been dismissed as of March 3, 2022.

~~We submitted an opposition,~~On or about August 30, 2021, Robert W. Monster and ~~after oral arguments on August 13, 2020,~~Anonymize, Inc. (“Monster”) filed a lawsuit in the United States District Court for the Western District of Washington at Seattle, Robert W. Monster, et al. v. Creatd, Inc., et al. (Western District of Washington at Seattle 2:21-CV-1177). The Complaint alleges, among other things, that action for Declaratory Judgment under 28 U.S.C. § 2201 that Monster’s registration and use of the internet domain name VOCL.COM (the “Domain Name”) does not violate Creatd’s rights under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d), or otherwise under the Lanham Act, 15 U.S.C. § 1051 et seq. Creatd claims trademark rights and certain other rights with respect to the term and the domain name VOCL.COM. Monster seeks a determination by the Court ~~denied~~that Monster’s registration and/or use of VOCL.COM is not, and has not been in violation of the ~~receiver request in its entirety. We then filed~~ACPA, and that Plaintiffs’ use of VOCL.COM constitutes neither a ~~Motion to Dismiss on August 14, 2020 on a number~~violation of ~~grounds,~~ the ~~most significant of which is that this is a simple (alleged) breach of Promissory Note case. Creatd is current on all payments~~ACPA nor trademark infringement or dilution under the Note, and because both parties are New Jersey entities a mere breach of contract and/or collection-based case is not appropriately venued in federal court. Upon receipt of our Motion to Dismiss, Home Revolution submitted an Amended Complaint, presumably in an effort to cure the problems with the Complaint which we identified in the Motion to Dismiss. Home Revolution has subsequently initiated a series of atypical procedures and, as a result, has (without following the Federal Rules of Civil Procedure) moved for both default and to submit yet another newly Amended Complaint (the one precludes the other and vice versa).
After we submitted a motion to clear up the above, the Court reinstated the matter to the docket and permitted Plaintiff to file the Second Amended Complaint (we had no objection). We have filed a motion to dismiss the Second Amended Complaint. That will take some time to be decided. We expect no major event to occur for the next 12 months. Finally, we believeLanham Act. Creatd believes the lawsuit lacks merit and will vigorously challenge the action. At this time, we are unable to estimate potential damage exposure, if any, related to the litigation.

~~Lease Agreements~~Appointment of New Directors

On ~~May 5, 2018,~~February 17, 2022, the Board of Directors (the “Board”) of the Company ~~signed a 5-year lease for approximately 2,300 square feet of office space at 2050 Center Avenue Suite 640, Fort Lee, New Jersey 07024. Commencement date~~appointed Joanna Bloor, Brad Justus, and Lorraine Hendrickson to serve as members of the ~~lease is June 1, 2018. The total amount due under this lease is $411,150.~~Board. Ms. Bloor has been nominated to, and will serve as, chair of the Compensation Committee, and to be a member of the Audit Committee and Nominating & Corporate Governance Committee. Mr. Justus has been nominated, and will serve as, chair of the Nominating & Corporate Governance Committee, and to be a member of the Compensation Committee and Audit Committee. Ms. Hendrickson has been nominated to, and will serve as, chair of the Audit Committee and to be a member of the Compensation and Nominating & Corporate Governance Committee.

Departure of Directors
On February 17, 2022, the Board received notice that effective immediately, Mark Standish resigned as Chair of the Board, Chair of the Audit Committee and as a member of the Compensation Committee and Nominating & Corporate Governance Committee; Leonard Schiller resigned as member of the Board, Chair of the Compensation Committee and as a member of the Audit Committee and Nominating & Corporate Governance Committee; and LaBrena Martin resigned as a member of the Board, Chair of the Nominating & Corporate Governance Committee and as a member of the Audit Committee and Compensation Committee. Such resignations are not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Management Restructuring
On February 17, 2022, the Board of the Company approved the restructuring of the Company’s senior management team to eliminate the Co-Chief Executive Officer role, appointing Jeremy Frommer as Executive Chairman and Founder, and appointing Laurie Weisberg as Chief Executive Officer (the “Second Restructuring”). Prior to the Second Restructuring, Mr. Frommer and Ms. Weisberg served as the Company’s co-Chief Executive Officers and Ms. Weisberg served as the Company’s Chief Operating Officer. The Second Restructuring does not impact the role or functions of the Company’s Chief Financial Officer, Chelsea Pullano, or the role or functions of the Company’s President and Chief Operating Officer, Justin Maury.
Nasdaq Notice of Delisting
On January 4, 2021, the Company received a letter from the staff of The Nasdaq Capital Market (the “Exchange”) notifying the Company that the Exchange had determined to delist the Company’s common stock and warrants from the Exchange based on the Company’s non-compliance with the Exchange’s (i) $5 million stockholders’ equity requirement for initial listing pursuant to Nasdaq Listing Rule 5505(b), (ii) the $2.5 million stockholders’ equity requirement or any of the alternatives for continued listing pursuant to Nasdaq Listing Rule 5550(b), and (iii) the Company’s failure to provide material information to the Exchange pursuant to Nasdaq Listing Rule 5250(a)(1).
On February 11, 2021, the Company met with the Exchange’s Hearings Panel (the “Panel”) with respect to such determination, in accordance with the Exchange’s rules and, pursuant to such request by the Company to appeal, the delisting of the Company’s securities and the Form 25 Notification of Delisting filing was stayed pending the Panel’s decision.
On March 9, 2021, the Exchange notified the Company that the Panel had determined to continue the listing of the Company on the Exchange. Notwithstanding the Panel’s determination to continue the listing of the Company’s securities on the Exchange, the Panel issued a public reprimand letter to the Company, pursuant to Listing Rule 5815(c)(1)(D), based on its finding “that the Company failed to meet the initial listing criteria with respect to stockholders’ equity and failed to provide Nasdaq with material information with respect to that deficiency.” Specifically, the Panel found that the Company failed to comply with Listing Rule 5250(a)(1), requiring it to notify Nasdaq of certain significant developments that led to the Company’s prior representations about its ability to satisfy the initial listing requirements being inaccurate. In reaching its determination to continue the listing of the Company on Nasdaq, the Panel acknowledged that the Company has since demonstrated compliance with the initial listing requirement for stockholders’ equity and all other applicable initial listing requirements. The Panel also determined that the violations were inadvertent and that the Company had relied on advice of counsel at the time in its interactions with the Nasdaq staff (“Staff”). The Panel also acknowledged the Company’s efforts to implement structural changes within the Company to avoid similar misstatements in the future and that would allow for proper accounting and disclosure on an ongoing basis.
On March 1, 2022, the Company received a letter (the “Letter”) from the staff of The Nasdaq Capital Market (the “Exchange”) notifying the Company that the Exchange has determined to delist the Company’s common stock from the Exchange based on the Company’s Market Value of Listed Securities for the 30-consecutive day period between January 15, 2022 and February 25, 2022 falling short of the requirements under Listing Rule 5550(b)(2) (the “Rule”). Although a 180-day period is typically allowed for an issuer to regain compliance, the Company is not eligible to use such compliance period, as the Exchange had instituted a Panel Monitor through March 9, 2022.
The Company pursued an appeal to the Nasdaq Hearings Panel (the “Panel”) of such determination, in accordance with the Exchange’s rules and, pursuant to such request by the Company to appeal, the delisting of the Company’s securities and the Form 25 Notification of Delisting filing was stayed pending the Panel’s decision.
On April ~~1, 2019,~~22, 2022, the Exchange notified the Company ~~signed a 4-year lease for approximately 796 square feet of office space at 2050 Center Avenue Suite 660, Fort Lee, New Jersey 07024. Commencement date~~that the Panel has determined to continue the listing of the ~~lease is~~Company on the Exchange, subject to the following conditions: (i) on or before May 16, 2022, the Company will file its Quarterly Report on Form 10-Q for the period ended March 31, 2022 demonstrating compliance with Nasdaq Listing Rule 550(b)(1) requiring shareholders’ equity of $2.5 million and (ii) on or before August 29, 2022, the Company will file a Form 8-K documenting the successful completion of any fund-raising activity that has taken place since April ~~1, 2019. The total amount due under this lease is $108,229.~~14, 2022 and the Company’s long-term compliance with the continued listing requirements of the Nasdaq Capital Market.

The Panel has advised that August 29, 2022 represents the full extent of the Panel’s discretion to grant continued listing during the time the Company is non-compliant and should the Company fail to demonstrate compliance by such date, the Panel will issue a final delist determination and the Company will be suspended from trading on the Exchange.

Note 12 – Acquisitions
Denver Bodega, LLC d/b/a Basis
On March 7, 2022, the Company entered into a Membership Interest Purchase (the “Agreement”) with Henry Springer and Kyle Nowak (collectively the “Sellers”), whereby the Company purchased a majority stake in Denver Bodega, LLC, a Colorado limited liability company whose product is Basis, a direct-to-consumer functional beverage brand that makes high-electrolyte mixes meant to aid hydration. Pursuant to the Agreement, Creatd acquired all of the issued and outstanding membership interests of Denver Bodega, LLC for consideration of one dollar ($1.00), as well as the Company’s payoff, assumption, or satisfaction of certain debts and liabilities.
The following sets forth the components of the purchase price:
Purchase price:
Cash paid to seller $ 1
Total purchase price 1

Assets acquired:
Cash 44,977
Accounts Receivable 2,676
Inventory 194,365
Total assets acquired 242,018

Liabilities assumed:
Accounts payable and accrued expenses 127,116
Notes payable 293,888
Total liabilities assumed 421,004

Net liabilities acquired
(178,986 )

Excess purchase price $ 178,987
The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.
Goodwill $ 8,950
Trade Names & Trademarks 8,949
Know-How and Intellectual Property 107,392
Website 8,949
Customer Relationships 44,747

Excess purchase price $ 178,987
The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

The following presents the unaudited pro-forma combined results of operations of the Company with Plant Camp, WHE, Dune, and Denver Bodega as if the entities were combined on January 1, 2021.
Three Months
Ended
March 31,
2022
Revenues $ 1,482,270
Net loss attributable to common shareholders $ (6,352,445 )
Net loss per share $ (0.36 )
Weighted average number of shares outstanding 17,707,951
Three Months
Ended
March 31,
2021
Revenues $ 1,143,732
Net loss attributable to common shareholders $ (6,592,675 )
Net loss per share $ (0.66 )
Weighted average number of shares outstanding 10,060,946
Note 13 – Segment Information
We operate in three reportable segments: Creatd Labs, Creatd Ventures, and Creatd Partners. Our segments were determined based on the economic characteristics of our products and services, our internal organizational structure, the manner in which our operations are managed and the criteria used by our Chief Operating Decision Maker (CODM) to evaluate performance, which is generally the segment’s operating losses.
Operations of: 29Products and services provided:
Creatd Labs
Creatd Labs is the segment focused on development initiatives. Creatd Labs houses the Company’s proprietary technology, including its flagship platform, Vocal, as well as oversees the Company’s content creation framework, and management of its  digital communities. Creatd Labs derives revenues from Vocal creator subscriptions, platform processing fees and technology licensing fees.
Creatd Ventures
Creatd Ventures builds, develops, and scales e-commerce brands. This segment generates revenues through product sales of its two majority-owned direct-to-consumer brands, Camp and Dune Glow Remedy.
Creatd Partners Creatd Partners fosters relationships between brands and creators through its suite of agency services, including content marketing (Vocal for Brands), performance marketing (Seller’s Choice), and influencer marketing (WHE Agency). Creatd Partners derives revenues in the form of brand fees and talent management commissions.

		Page
Special Note Regarding Forward-Looking Statements and Other Information Contained in this Report		ii

PART I –- FINANCIAL INFORMATION

Item 1.	~~Condensed Consolidated~~ Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3132

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3641

Item 4.	Controls and Procedures	3641

PART II –- OTHER INFORMATION

Item 1.	Legal Proceedings	3742

Item 1A.	Risk Factors	3742

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3742

Item 3.	Defaults Upon Senior Securities	3742

Item 4.	Mine Safety Disclosures	3842

Item 5.	Other Information	3842

Item 6.	Exhibits	39

~~Signatures~~		4043

	March 31, 2021			December 31, 2020
	(Unaudited)
Assets
Current Assets
Cash	$	2,802,772		$	7,906,782
Accounts receivable, net		151,729			90,355
Prepaid expenses and other current assets		566,727			23,856
Total Current Assets		3,521,228			8,020,993

Property and equipment, net		58,849			56,258

Intangible assets		929,459			960,611

Goodwill		1,035,795			1,035,795

Deposits and other assets		291,836			191,836

Marketable securities		62,733			62,733

Minority investment in businesses		317,096			217,096

Operating lease right of use asset		219,449			239,158

Total Assets	$	6,436,445		$	10,784,480

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities	$	1,849,136		$	2,638,688
Derivative liabilities		344,404			42,231
Share liability		187,500			-
Convertible Notes, net of debt discount and issuance costs		239,544			897,516
Current portion of operating lease payable		87,912			79,816
Note payable - related party, net of debt discount		5,397			-
Note payable, net of debt discount and issuance costs		1,423,995			1,221,539
Deferred revenue		148,760			88,637
Total Current Liabilities		4,286,648			4,968,427

Non-current Liabilities:
Note payable		54,298			213,037
Operating lease payable		130,303			157,820
Total Non-current Liabilities		184,601			370,857

Total Liabilities		4,471,249			5,339,284

Commitments and contingencies

Stockholders’ Equity
Series E Preferred stock, $0.001 par value: 20,000,000 shares authorized; 1,088 and 7,738 shares issued and outstanding, respectively		1			8
Common stock par value $0.001: 100,000,000 shares authorized; 10,925,026 issued and 10,915,676 outstanding as of March 31, 2021 and
8,736,378 issued and 8,727,028 outstanding as of December 31, 2020		10,925			8,737
Additional paid in capital		80,633,380			77,505,013
Subscription receivable		-			(40,000	)
Accumulated deficit		(78,572,159	)		(71,928,922	)
Accumulated other comprehensive income		(44,545	)		(37,234	)
Less: Treasury stock, 5,657 and 5,657 shares, respectively		(62,406	)		(62,406	)
		1,965,196			5,445,196

Total Liabilities and Stockholders’ Equity	$	6,436,445		$	10,784,480

	For the three months Ended			For the three months Ended
	March 31, 2021			March 31, 2020
Net revenue	$	743,913		$	293,142

Gross margin		743,913			293,142

Operating expenses
Research and development		328,852			135,570
General and administrative		6,361,058			1,983,521
Total operating expenses		6,689,910			2,119,091

Loss from operations		(5,945,997	)		(1,825,949	)

Other income (expenses)
Other income		-			63,556
Interest expense		(198,671	)		(375,530	)
Accretion of debt discount and issuance cost		(497,165	)		(186,947	)
Derivative expense		(100,502	)		-
Change in fair value of derivative liability		(197,389	)		-
Settlement of vendor liabilities		92,909			(126,087	)
Gain (loss) on extinguishment of debt		203,578			(535,040	)
Other expenses, net		(697,240	)		(1,160,048	)

Loss before income tax provision		(6,643,237	)		(2,985,997	)

Income tax provision		-			-

Net loss	$	(6,643,237	)	$	(2,985,997	)

Deemed dividend		-			-
Inducement expense		-			-

Net loss attributable to common shareholders		(6,643,237	)		(2,985,997	)

Comprehensive loss

Net loss		(6,643,237	)		(2,985,997	)

Currency translation gain (loss)		(7,311	)		(9,239	)

Comprehensive loss	$	(6,650,548	)	$	(2,995,236	)

Per-share data
Basic and diluted loss per share	$	(0.68	)	$	(0.96	)

Weighted average number of common shares outstanding		9,836,443			3,101,387

	Series E																Additional									Other
	Preferred Stock						Common Stock				Treasury stock						Paid In			Subscription			Accumulated			Comprehensive			Stockholders’
	Shares			Amount			Shares		Amount		Shares			Amount			Capital			Receivable			Deficit			Income			Equity
Balance, January 1, 2021		7,738		$	8			8,736,378	$	8,737		(5,657	)	$	(62,406	)	$	77,505,013		$	(40,000	)	$	(71,928,922	)	$	(37,234	)	$	5,445,196

Stock based compensation		-			-			112,261		112		-			-			1,345,803			-			-			-			1,345,915

Shares issued for prepaid services		-			-			40,000		40		-			-			191,960			-			-			-			192,000

Shares issued to settle vendor liabilities		-			-			44,895		45		-			-			181,341			-			-			-			181,386

Common stock issued upon conversion of notes payable		-			-			65,328		65		-			-			142,735			-			-			-			142,800

Exercise of warrants to stock		-			-			302,434		302		-			-			1,272,370			-			-			-			1,272,672

Cash received for preferred series E and warrants		40			-			-		-		-			-			(4,225	)		40,000			-			-			35,775

Conversion of preferred series E to stock		(6,690	)		(7	)		1,623,730		1,624		-			-			(1,617	)		-			-			-			-

Foreign currency translation adjustments		-			-			-		-		-			-			-			-			-			(7,311	)		(7,311	)

Net loss for the three months ended March 31, 2021		-			-			-		-		-			--			-			-			(6,643,237	)		-			(6,643,237	)

Balance, March 31, 2021		1,088		$	1			10,925,026	$	10,925		(5,657	)	$	(62,406	)	$	80,633,380		$	-		$	(78,572,159	)	$	(44,545	)	$	1,965,196

	Series A Preferred Stock				Series B Preferred Stock				Series D Preferred Stock				Common Stock				Treasury stock						Additional Paid In		Accumulated			Other Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Income			Equity
Balance, December 31, 2019		-	$	-		-	$	-		-	$	-		3,059,646	$	3,060		(159,850	)	$	(367,174	)	$	36,391,818	$	(44,580,437	)	$	(5,995	)	$	(8,558,728	)

Shares issued with notes payable		-		-		-		-		-		-		2,683		3		-			-			31,635		-			-			31,638

Shares issued for services		-		-		-		-		-		-		50,000		50		-			-			584,950		-			-			585,000

Shares issued to settle vendor liabilities		-		-		-		-		-		-		23,565		23		-			-			235,612		-			-			235,635

Conversion of warrants to stock		-		-		-		-		-		-		5,000		5		-			-			5,767		-			-			5,772

Stock warrants issued with note payable		-		-		-		-		-		-		-		-		-			-			504,856		-			-			504,856

Foreign currency translation adjustments		-		-		-		-		-		-		-		-		-			-			-		-			(9,239	)		(9,239	)

Net loss for the three months ended March 31, 2020		-		-		-		-		-		-		-		-		-			-			-		(2,985,997	)		-			(2,838,498	)

Balance, March 31, 2020		-	$	-		-	$	-		-	$	-		3,140,894	$	3,141		(159,850	)	$	(367,174	)	$	37,754,638	$	(47,566,434	)	$	(15,234	)	$	(10,191,063	)

Name of combined affiliate	State or other jurisdiction of incorporation or organization	Company Ownership Interest
Jerrick Ventures LLC	Delaware		100	%
Abacus Tech Pty Ltd	Australia		100	%
Seller’s Choice, LLC	New Jersey		100	%
~~Jerrick Global,~~Creatd Studios, LLC	Delaware		100	%
Give, LLC	Delaware		100	%
Creatd Partners LLC	Delaware		100	%
~~Sci-Fi Shop,~~Denver Bodega, LLC	~~Delaware~~Colorado		100	%
~~OG Collection LLC~~Dune Inc.	Delaware		~~100~~50	%
~~VMENA~~Plant Camp LLC	Delaware		~~100~~89	%
~~Vocal For Brands,~~Sci-Fi.com, LLC	Delaware		100	%
~~Vocal Ventures~~OG Collection LLC	Delaware		100	%
~~What to Buy, LLC~~OG Gallery, Inc.	Delaware		100	%
VMENA LLC	Delaware		100	%
Vocal For Brands, LLC	Delaware		100	%
Vocal Ventures LLC	Delaware		100	%
What to Buy, LLC	Delaware		100	%
WHE Agency, Inc.	Delaware		44	%

	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities - debt securities	$	62,733	$	-	$	-	$	62,733
Total assets	$	62,733	$	-	$	-	$	62,733

Liabilities:
Derivative liabilities	$	344,404	$	-	$	-	$	344,404
Total Liabilities		344,404	$	-	$	-	$	344,404

	Fair Value		Valuation Methodology	Unobservable Inputs
Marketable securities - debt securities	$	62,733	Discounted cash flow analysis	Expected cash flows from the investment

Derivative liabilities	$	344,404	Monte Carlo simulations and Binomial model	Risk free rate
				Expected volatility
				Drift rate

	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Equity investments, at cost	$	50,000	$	-	$	-	$	50,000
Total assets	$	50,000	$	-	$	-	$	50,000

		Fair Value Hierarchy			Cost				Unrealized Gains (Loss)				Fair Value
Marketable securities - debt securities		3			$	62,733			$	-			$	62,733

		Estimated Useful Life (Years)

Computer equipment and software		3
Furniture and fixtures		5

Twelve months ending March 31,

2023	$	498,641
2024		429,030
2025		325,307
2026		246,840
2027		228,499
Thereafter		792,056
Total	$	2,520,373

	For the three months ended March 31, 2021
	Total
Beginning of period	$	62,733
Purchase of marketable securities		-
Interest due at maturity		-
Other than temporary impairment		-
Conversion of marketable securities		-
March 31, 2021	$	62,733

	For the three months ended March 31, 2022
	Total
As of January 1, 2022	$	1,374,835
Goodwill acquired in a business combination		8,950
Impairment of goodwill		-
As of March 31, 2022		1,383,785

	Three Months Ended
	March 31,
	2022		2021
Agency (Managed Services, Branded Content, & Talent Management Services)	$	583,141	$	428,300
Platform (Creator Subscriptions)		508,233		306,902
Ecommerce (Tangible products)		254,724		-
Affiliate Sales		2,640		8,008
Other Revenue		-		703
	$	1,348,738	$	743,913

	Three Months Ended March 31,
	2021		2020
Agency (Managed Services + Branded Content)	$	428,300	$	248,251
Platform (Creator Subscriptions)		306,902		35,962
Affiliate Sales		8,008		8,149
Other Revenue		703		780
	$	743,913	$	293,142

	●	The Company collects fixed fees ranging from $10,000 to ~~$110,000.~~$110,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.

	●	~~The~~Branded articles are created and published, and challenges are completed, within three months of the signed agreement, or as previously negotiated with the client.

	●
	●	~~The~~Branded articles and challenges are promoted per the contract and engagement reports are provided to the client.

	●	~~Most billing for contracts occurs 50% at signing and 50% upon completion of the services, with net payment terms varying per client.~~

	●	Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee.

	March 31,
	2021		2020
Options		2,350,062		303,833
Warrants		6,273,778		268,660
Convertible notes - related party		-		1,855
Convertible notes		49,629		430,084
Totals		8,673,469		1,004,432

	March 31,
	2022		2021
Options		1,891,348		2,350,062
Warrants		8,591,206		6,273,778
Convertible notes		-		49,629
Totals		10,482,554		8,673,469

	March 31, 2022		December 31, 2021
Raw Materials	$	16,904	$	-
Packaging		20,342		2,907
Finished goods		399,735		103,496
	$	436,981	$	106,403

	March 31, 2022			December 31, 2021
Computer Equipment	$	376,436		$	353,880
Furniture and Fixtures		124,787			102,416
Leasehold Improvements		11,456			11,457
		512,679			467,753
Less: Accumulated Depreciation		(373,200	)		(364,814	)
	$	139,479		$	102,939

	Outstanding Principal as of
	March 31, 2021			December 31, 2020			Interest Rate			Maturity Date
Seller’s Choice Note	$	660,000		$	660,000			30	%	September 2020
The May 2020 PPP Loan Agreement		412,500			412,500			1	%	April 2022
The April 2020 PPP Loan Agreement		262,432			282,432			1	%	May 2022
The October 2020 Loan Agreement		57,273			55,928			14	%	July 21
The November 2020 Loan Agreement		-			23,716			14	%	May 2021
The February 2021 Loan Agreement		86,089			-			14	%	July 21
		1,478,293			1,434,576
Less: Debt Discount		-			-
Less: Debt Issuance Costs		-			-
		1,478,293			1,434,576
Less: Current Debt		(1,423,995	)		(1,221,539	)
Total Long-Term Debt	$	54,298		$	213,037

Twelve months ended March 31,
2021	$	1,423,995
2022		54,298
	$	1,478,293

	Outstanding Principal as of													Warrants granted
	March 31, 2021			December 31, 2020			Interest Rate			Conversion Price			Maturity Date	Quantity		Exercise Price
The September 2020 convertible Loan Agreement		-			341,880			12	%	$	-	(*)	September 2021		85,555		5
The October 2020 convertible Loan Agreement		169,400			169,400			6	%	$	-	(*)	October 2021		-		-
The First December 2020 convertible Loan Agreement		-			600,000			12	%	$	-	(*)	December 2021		-		-
The Second December 2020 convertible Loan Agreement		169,400			169,400			6	%	$	-	(*)	December 2021		-		-
		338,800			1,280,680
Less: Debt Discount		(94,226	)		(309,637	)
Less: Debt Issuance Costs		(5,030	)		(73,527	)
		239,544			897,516
Less: Current Debt		(239,544	)		(897,516	)
Total Long-Term Debt	$	-		$	-

	Three Months Ended March 31, 2021
	Level 1		Level 2		Level 3
Derivative liabilities as January 1, 2021	$	-	$	-	$	42,231
Addition		-		-		308,362
Extinguishment						(203,578	)
Changes in fair value		-		-		197,389
Derivative liabilities as March 31, 2021	$	-	$	-	$	344,404

	Three Months Ended March 31, 2022
	Level 1		Level 2		Level 3
Derivative liabilities as January 1, 2022	$	-	$	-	$	-
Addition		-		-		100,532
Changes in fair value		-		-		(3,729	)
Extinguishment		-		-		(96,803	)
Derivative liabilities as March 31, 2022	$	-	$	-	$	-

	~~March 31,~~ ~~2021~~
~~Exercise price~~	$	~~2.55 – 14.10~~
~~Expected dividends~~		0	%
~~Expected volatility~~		~~223.15 – 242.98~~	%
~~Risk free interest rate~~		~~0.46 – 0.98~~	%
~~Expected life of option~~		~~5 - 7 years~~

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Balance – December 31, 2020 – outstanding		541,021			12.75		4.29
Granted		1,812,375			6.39		6.22
Exercised		-			-		-
Cancelled/Modified		(3,334	)		15.00		-
Balance – March 31, 2021 – outstanding		2,350,062			7.84		5.37
Balance – March 31, 2021 – exercisable		145,834		$	23.97		1.55

Option Outstanding						Option Exercisable
Exercise price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Remaining Contractual Life (in years)
$	7.02		2,883,526		4.48		7.60		1,891,348		4.27

Option Outstanding						Option Exercisable
Exercise price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Remaining Contractual Life (in years)
$	7.84		2,350,062		5.37		23.97		145,834		1.55