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,~~June 30, 2022

☐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)		(I.R.S. Employer Identification No.)

419 Lafayette Street, 6^th Floor
New 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

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 ☐

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 ☐

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,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 ☒

As of ~~May 16,~~August 15, 2022, the registrant had ~~20,140,413~~20,361,758 shares of its common stock, par value $0.001 per share, outstanding.

FORM 10-Q FOR THE QUARTER ENDED ~~MARCH 31,~~JUNE 30, 2022

TABLE OF CONTENTS

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

PART I - FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3240

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4149

Item 4.	Controls and Procedures	4149

PART II - OTHER INFORMATION		50

Item 1.	Legal Proceedings	4250

Item 1A.	Risk Factors	4250

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4250

Item 3.	Defaults Upon Senior Securities	4250

Item 4.	Mine Safety Disclosures	4250

Item 5.	Other Information	4250

Item 6.	Exhibits	4352

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. Financial Statements.

Creatd, Inc.

~~March 31,~~June 30, 2022

Index to the Condensed Consolidated Financial Statements

Contents		Page(s)
Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2022 (unaudited) and December 31, 2021		2

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended ~~March 31,~~June 30, 2022 and 2021 (unaudited)		3

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Six Months Ended ~~March 31,~~June 30, 2022 and 2021 (unaudited)		4

Condensed Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2022 and 2021 (unaudited)		68

Notes to the Condensed Consolidated Financial Statements (unaudited)		79

Creatd, Inc.

Condensed Consolidated Balance Sheets

							June 30, 2022			December 31, 2021
	March 31, 2022			December 31, 2021			(Unaudited)
	(Unaudited)
Assets

Current Assets
Cash	$	3,229,627		$	3,794,734		$	1,556,663		$	3,794,734
Accounts receivable, net		390,605			337,440			379,312			337,440
Inventory		436,981			106,403			429,754			106,403
Marketable securities								48,646			-
Prepaid expenses and other current assets		274,840			236,665			186,883			236,665
Total Current Assets		4,332,053			4,475,242			2,601,258			4,475,242

Property and equipment, net		139,479			102,939			250,915			102,939
Intangible assets		2,520,373			2,432,841			2,526,763			2,432,841
Goodwill		1,383,785			1,374,835			1,383,785			1,374,835
Deposits and other assets		914,700			718,951			1,169,329			718,951
Minority investment in businesses		50,000			50,000			-			50,000
Operating lease right of use asset		-			18,451			2,197,394			18,451

Total Assets	$	9,340,390		$	9,173,259		$	10,129,444		$	9,173,259

Liabilities and Stockholders’ Deficit

Current Liabilities
Accounts payable and accrued liabilities	$	4,832,103		$	3,730,540		$	4,899,108		$	3,730,540
Share liability								31,080			-
Convertible Notes, net of debt discount and issuance costs		-			159,193			2,291,010			159,193
Current portion of operating lease payable		-			18,451			149,830			18,451
Note payable, net of debt discount and issuance costs		1,151,087			1,278,672			1,863,831			1,278,672
Deferred revenue		211,676			234,159			262,583			234,159

Total Current Liabilities		6,194,866			5,421,015			9,497,442			5,421,015

Non-current Liabilities:
Note payable		35,905			63,992			31,417			63,992
Operating lease payable								2,100,818			-

Total Non-current Liabilities		35,905			63,992			2,132,235			63,992

Total Liabilities		6,230,771			5,485,007			11,629,677			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
Stockholders’ Equity (Deficit)
Preferred stock, $0.001 par value: 20,000,000 shares authorized
Series E Preferred stock, $0.001 par value: 8,000 shares authorized; 500 and 500 shares issued and outstanding, respectively								-			-
Common stock par value $0.001: 100,000,000 shares authorized; 20,254,839 issued and 20,249,182 outstanding as of June 30, 2022 and 16,691,170 Outstanding 16,685,513 outstanding as of December 31, 2021								20,255			16,691
Additional paid in capital		117,949,487			111,563,618			122,068,892			111,563,618
Subscription receivable		-			-
Less: Treasury stock, 5,657 and 5,657 shares, respectively		(62,406	)		(62,406	)		(62,406	)		(62,406	)
Accumulated deficit		(115,977,464	)		(109,632,574	)		(124,314,530	)		(109,632,574	)
Accumulated other comprehensive income		(83,222	)		(78,272	)		(107,881	)		(78,272	)
Total Creatd, Inc. Stockholders’ Equity		1,846,310			1,807,057			(2,395,670	)		1,807,057
Non-controlling interest in consolidated subsidiaries		1,263,309			1,881,195			895,437			1,881,195
		3,109,619			3,688,252			(1,500,233	)		3,688,252

Total Liabilities and Stockholders’ Equity	$	9,340,390		$	9,173,259
Total Liabilities and Stockholders’ Equity (Deficit)							$	10,129,444		$	9,173,259

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

Creatd, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

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

	For the Three Months Ended			For the Three Months Ended			For the Six Months Ended			For the Six Months Ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021

Net revenue	$	1,625,901		$	970,857		$	2,974,639		$	1,714,770

Cost of revenue		1,794,419			731,309			3,366,589			1,940,715

Gross margin (loss)		(168,518	)		239,548			(391,950	)		(225,945	)

Operating expenses
Research and development		224,512			56,598			451,166			385,450
Marketing		1,277,510			4,194,524			3,369,531			6,237,179
Stock based compensation		2,141,218			1,940,250			3,222,010			3,510,489
General and administrative		4,181,666			2,428,971			7,568,051			3,967,729

Total operating expenses		7,824,906			8,620,343			14,610,758			14,100,847

Loss from operations		(7,993,424	)		(8,380,795	)		(15,002,708	)		(14,326,792	)

Other income (expenses)
Other income		-			-			99			-
Interest expense		(20,360	)		(60,760	)		(34,256	)		(259,431	)
Accretion of debt discount and issuance cost		(623,531	)		(354,199	)		(647,008	)		(851,364	)
Derivative expense		-			-			-			(100,502	)
Change in derivative liability		-			(65,442	)		3,729			(262,831	)
Impairment of investment		(50,000	)		(62,733	)		(50,000	)		(62,733	)
Settlement of vendor liabilities		(17,392	)		-			(2,867	)		92,909
Gain on extinguishment of debt		-			82,431			-			286,009
Loss on marketable securities		(231	)		-			(231	)		-
Gain on extinguishment of debt		-			-			147,256			-
Gain on forgiveness of debt		-			279,022			-			279,022

Other income (expenses), net		(711,514	)		(181,681	)		(583,278	)		(878,921	)

Loss before income tax provision		(8,704,938	)		(8,562,476	)		(15,585,986	)		(15,205,713	)

Income tax provision		-			-			-			-

Net loss		(8,704,938	)		(8,562,476	)		(15,585,986	)		(15,205,713	)

Non-controlling interest in net loss		367,872			432			985,758			432

Net Loss attributable to Creatd, Inc.		(8,337,066	)		(8,562,044	)		(14,600,228	)		(15,205,281	)

Deemed dividend		-			(410,750	)		(81,728	)		(410,750	)

Net loss attributable to common shareholders	$	(8,337,066	)	$	(8,972,794	)	$	(14,681,956	)	$	(15,616,031	)

Comprehensive loss

Net loss		(8,704,938	)		(8,562,476	)		(15,585,986	)		(15,205,713	)

Currency translation gain (loss)		(24,659	)		(552	)		(29,609	)		(7,863	)

Comprehensive loss	$	(8,729,597	)	$	(8,563,028	)	$	(15,615,595	)	$	(15,213,576	)

Per-share data
Basic and diluted loss per share	$	(0.41	)	$	(0.81	)	$	(0.77	)	$	(1.49	)

Weighted average number of common shares outstanding		20,233,585			11,081,354			18,977,745			10,465,815

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

Creatd, Inc.

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

For the Three Months Ended ~~March 31,~~June 30, 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

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

Balance, April 1, 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

Stock based compensation		-		-		289,749		290		-			-			2,186,865		-			-			-			2,187,155

Shares issued for prepaid services		-		-		50,000		50		-			-			37,150		-			-			-			37,200

Stock warrants issued with note payable		-		-		-		-		-			-			1,895,390		-			-			-			1,895,390

Foreign currency translation adjustments		-		-		-		-		-			-			-		-			-			(24,659	)		(24,659	)

Net loss for the three months ended June 30, 2022		-		-		-		-		-			-			-		(8,337,066	)		(367,872	)		-			(8,704,938	)

Balance, June 30, 2022		500	$	-		20,254,839	$	20,255		(5,657	)	$	(62,406	)	$	122,068,892	$	(124,314,530	)	$	895,437		$	(107,881	)	$	(1,500,233	)

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 Six Months Ended June 30, 2022

(Unaudited)

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

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		-		-		307,920		308		-			-			3,254,456		-			-			-			3,254,764

Shares issued for prepaid services		-		-		100,000		100		-			-			106,100		-			-			-			106,200

Stock warrants issued with note payable		-		-		-		-		-			-			1,895,390		-			-			-			1,895,390

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		-		-		-		-		-			-			-		-			-			(29,609	)		(29,609	)

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

Net loss for the six months ended June 30, 2022		-		-		-		-		-			-			-		(14,600,228	)		(985,758	)		-			(15,585,986	)

Balance, June 30, 2022		500	$	-		20,254,839	$	20,255		(5,657	)	$	(62,406	)	$	122,068,892	$	(124,314,530	)	$	895,437		$	(107,881	)	$	(1,500,233	)

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,~~June 30, 2021

(Unaudited)

	Series E Preferred Stock					Common Stock				Treasury stock					Additional Paid In			Accumulated			Non-Controlling			Other Comprehensive			Stockholders’ Equity
	Shares			Amount		Shares		Amount		Shares		Amount			Capital			Deficit			Interest			Income			(Deficit)
Balance, April 1, 2021		1,088		$	1		10,925,026	$	10,925		5,657	$	(62,406	)	$	80,633,380		$	(78,572,159	)	$	-		$	(44,545	)	$	1,965,196

Stock based compensation		-			-		89,050		89		-		-			2,064,575			-			-			-			2,064,664

Conversion of warrants to stock		-			-		18,259		18		-		-			(18	)		-			-			-			-

Stock warrants issued with note payable		-			-		-		-		-		-			1,601,452			-			-			-			1,601,452

Cash received for common stock		-			-		750,000		750		-		-			2,212,750			-			-			-			2,213,500

Shares issued for prepaid services		-			-		10,000		10		-		-			34,490			-			-			-			34,500

Common stock issued upon conversion of notes payable		-			-		55,631		56		-		-			173,964			-			-			-			174,020

Conversion of preferred series E to stock		(40	)		-		9,709		10		-		-			(10	)		-			-			-			-

Foreign currency translation adjustments		-			-		-		-		-		-			-			-			-			(552	)		(552	)

Non-controlling interest in consolidated subsidiary from acquisition		-			-		-		-		-		-			-			-			56,865			-			56,865

Dividends		-			-		-		-		-		-			410,750			(410,750	)		-			-			-

Net loss for the three months ended June 30, 2021		-			-		-		-		-		-			-			(8,562,044	)		(432	)		-			(8,562,476	)

Balance, June 30, 2021		1,048		$	1		11,857,675	$	11,858		5,657	$	(62,406	)	$	87,131,333		$	(87,544,953	)	$	56,433		$	(45,097	)	$	(452,831	)

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

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

Creatd, Inc.

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

For the Six Months Ended June 30, 2021

(Unaudited)

	Series E Preferred Stock						Common Stock				Treasury stock					Additional Paid In			Subscription			Accumulated			Non-Controlling			Other Comprehensive			Stockholders’ Equity
	Shares			Amount			Shares		Amount		Shares		Amount			Capital			Receivable			Deficit			Interest			Income			(Deficit)
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		-			-			201,311		201		-		-			3,410,380			-			-			-			-			3,410,581

Shares issued for prepaid services		-			-			50,000		50		-		-			226,450			-			-			-			-			226,500

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

Common stock issued upon conversion of notes payable		-			-			120,959		121		-		-			316,699			-			-			-			-			316,820

Exercise of warrants to stock		-			-			320,693		321		-		-			1,272,350			-			-			-			-			1,272,671

Cash received for common		-			-			750,000		750		-		-			2,212,750			-			-			-			-			2,213,500

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

Conversion of preferred series E to stock		(6,730	)		(7	)		1,633,439		1,633		-		-			(1,626	)		-			-			-			-			-

Stock warrants issued with note payable		-			-			-		-		-		-			1,601,451			-			-			-			-			1,601,451

Foreign currency translation adjustments		-			-			-		-		-		-			-			-			-			-			(7,863	)		(7,863	)

Non-controlling interest in consolidated subsidiary from acquisition		-			-			-		-		-		-			-			-			-			56,865			-			56,865

Dividends		-			-			-		-		-		-			410,750			-			(410,750	)		-			-			-

Net loss for the six months ended June 30, 2021		-			-			-		-		-		-			-			-			(15,205,281	)		(432	)		-			(15,205,713	)

Balance, June 30, 2021		1,048		$	1			11,857,675	$	11,858		5,657	$	(62,406	)	$	87,131,333		$	-		$	(87,544,953	)	$	56,433		$	(45,097	)	$	(452,831	)

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			For the Six Months Ended			For the Six Months Ended
							June 30, 2022			June 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,881,048	)	$	(6,643,237	)	$	(15,585,986	)	$	(15,205,713	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		141,892			41,199			283,947			91,042
Impairment of investment								50,000			62,733
Impairment of intangible assets								7,531
Accretion of debt discount and issuance cost		23,477			497,165			647,008			851,364
Share-based compensation		1,080,491			1,570,239			3,349,362			3,510,489
Bad debt expense		92,987			-			53,166			-
Gain on Forgiveness of debt								(147,256	)		(279,022	)
Settlement of vendor liabilities		(14,525	)		(92,908	)		2,867			(92,909	)
Change in fair value of derivative liability		(3,729	)		197,389			(3,729	)		262,831
Derivative expense		-			100,502
Derivative Expense								-			100,502
Loss on marketable securities								231			-
Gain on extinguishment of debt		(147,256	)		(203,578	)		-			(286,009	)
Non cash lease expense		18,451			19,709			71,705			39,717
Changes in operating assets and liabilities:
Prepaid expenses		(6,373	)		(391,918	)		66,090			(742,565	)
Inventory		(136,213	)		-			(128,986	)		-
Accounts receivable		(139,388	)		(61,374	)		(86,286	)		(186,420	)
Deposits and other assets		(195,749	)		-			(450,378	)		63,356
Deferred revenue		(22,483	)		60,123			28,424			119,209
Accounts payable and accrued expenses		1,170,738			(370,528	)		1,240,585			734,643
Operating lease liability		(18,451	)		(19,421	)		(18,451	)		(39,826	)
Net Cash Used In Operating Activities		(5,037,179	)		(5,296,638	)		(10,620,156	)		(10,996,578	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment		(44,927	)		(12,637	)		(170,544	)		(25,650	)
Deposits		-			(100,000	)		-			(100,000	)
Cash paid for minority investment in business		-			(100,000	)		-			(150,000	)
Cash acquired from acquisition		44,977			-
Cash paid for investments in marketable securities								(48,878	)
Cash consideration for acquisition								44,977			(469,768	)
Purchases of digital assets		(51,000	)		-			(192,795	)		-
Net Cash Used In Investing Activities		(50,950	)		(212,637	)		(367,240	)		(745,418	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of warrant		-			1,312,672			-			1,312,672
Net proceeds from issuance of notes		463,559			85,500			1,277,614			199,788
Repayment of notes		(932,888	)		(43,716	)		(1,258,442	)		(276,838	)
Proceeds from issuance of convertible note								3,874,736			3,460,491
Repayment of convertible notes		-			(941,880	)		(112,275	)		(941,880	)
Proceeds from issuance of common stock and warrants		4,997,301			-			4,997,301			2,213,500
Net Cash Provided By Financing Activities		4,527,972			412,576			8,778,934			5,967,733

Effect of exchange rate changes on cash		(4,950	)		(7,311	)		(29,609	)		(7,863	)

Net Change in Cash		(565,107	)		(5,104,010	)		(2,238,071	)		(5,782,126	)
Cash – Beginning of period		3,794,734			7,906,752
Cash – End of period	$	3,229,627		$	2,802,742

Cash - Beginning of period								3,794,734			7,906,782

Cash - End of period							$	1,556,663		$	2,124,656

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

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of vendor liabilities	$	20,297		$	168,667		$	20,297		$	168,667
Warrants issued with debt							$	1,895,390		$	1,601,452
Issuance of common stock for prepaid services	$	69,000		$	155,178		$	106,200		$	226,500
Operating Lease liability incurred for right-of-use asset							$	2,250,648		$	-
Deferred offering costs	$	-		$	4,225		$	-		$	4,225
Common stock and warrants issued upon conversion of notes payable	$	173,456		$	142,800		$	173,456		$	316,820

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

Creatd, Inc.

~~March 31,~~June 30, 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 providing economic opportunities for creators, which it accomplishes through its four main business pillars: Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios. Creatd’s 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.

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.

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, 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, 2021, included in the Company’s 2021 Annual Report on Form 10-K filed with the SEC. The balance sheet as of December 31, 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,~~June 30, 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	%
Creatd Studios, LLC	Delaware		100	%
Give, LLC	Delaware		100	%
Creatd Partners LLC	Delaware		100	%
Denver Bodega, LLC	Colorado		100	%
Dune Inc.	Delaware		50	%
Plant Camp LLC	Delaware		89	%
Sci-Fi.com, LLC	Delaware		100	%
OG Collection LLC	Delaware		100	%
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.

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, marketable trading securities, 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,~~June 30, 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. 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, equity investments at cost, and derivative 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 tables provides a summary of the relevant assets that are measured at fair value on ~~non-recurring~~a recurring basis:

Fair Value Measurements as of

~~March 31,~~June 30, 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)		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
Marketable securities - equity securities									$	48,646	$	48,646	$	-	$	-
Total assets	$	50,000	$	-	$	-	$	50,000	$	48,646	$	48,646	$	-	$	-

Our marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Marketable equity securities as of June 30, 2022 are $48,646.

The change in net realized depreciation on equity trading securities that has been included in other expenses for the six months ended June 30, 2022 and 2021 was $(231) and $0, respectively.

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,~~June 30, 2022, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of ~~March 31,~~June 30, 2022, was ~~approximately $2.4 million.~~$414,055. 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~~$1,029,137. It is 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 Intangible Assets

We evaluate the recoverability of property and equipment, ~~and~~ acquired finite-lived intangible assets and, purchased infinite life digital 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. Digital assets accounted for as intangible assets are subject to impairment losses if the fair value of digital assets decreases other than temporary below the carrying value. The fair value is measured using the quoted price of the crypto asset at the time its fair value is being measured. 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. During the three and six months ended ~~March 31,~~June 30, 2022, the Company recorded an impairment charge of $0$7,531 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~~6.32 years.

Scheduled amortization over the next five years are as follows:

Twelve months ending June 30,

2023	$	489,968
2024		418,007
2025		276,960
2026		249,079
2027		206,743
Thereafter		691,296
Total		2,332,053

Intangible assets not subject to amortization		194,710
Total Intangible Assets	$	2,526,763

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, 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 greater than its carrying value, including Goodwill. Based on completion of the annual impairment test, the Company recorded an impairment charge of $1,035,795 for ~~goodwill During the year ended December 31, 2021.~~goodwill.

The following table sets forth a summary of the changes in goodwill for the ~~three~~six months ended ~~March 31,~~June 30, 2022.

	For the three months ended March 31, 2022		For the six months ended June 30, 2022
	Total		Total
As of January 1, 2022	$	1,374,835	$	1,374,835
Goodwill acquired in a business combination		8,950		8,950
Impairment of goodwill		-		-
As of March 31, 2022		1,383,785
As of June 30, 2022			$	1,383,785

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 operating expenses, have not been significant in any period presented.

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 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 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.

Shipping and Handling Costs

The Company classifies freight billed to customers as sales revenue and the related freight costs as cost orof 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 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.

Revenue disaggregated by revenue source for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 consists of the following:

	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2022		2021		2022		2021
Agency (Managed Services, Branded Content, & Talent Management Services)	$	583,141	$	428,300	$	587,916	$	488,836	$	1,171,057	$	917,136
Platform (Creator Subscriptions)		508,233		306,902		400,367		451,965		908,600		758,867
Ecommerce (Tangible products)		254,724		-
Ecommerce						634,966		5,526		889,690		5,526
Affiliate Sales		2,640		8,008		2,652		7,798		5,292		15,806
Other Revenue		-		703		-		16,732		-		17,435
	$	1,348,738	$	743,913	$	1,625,901	$	970,857	$	2,974,639	$	1,714,770

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 and six months ended ~~March 31,~~June 30, 2022 and 2021 consists of the following:

	Three Months Ended				Three Months Ended				Six Months Ended
	March 31,				June 30,				June 30,
	2022		2021		2022		2021		2022		2021
Products and services transferred over time	$	1,091,374	$	735,202	$	988,283	$	940,801	$	2,079,657	$	1,676,003
Products and services transferred at a point in time		257,364		8,711
Products transferred at a point in time						637,618		30,056		894,982		38,767
	$	1,348,738	$	743,913	$	1,625,901	$	970,857	$	2,974,639	$	1,714,770

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: 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. 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, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.

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

	●	Branded articles and challenges are promoted per the contract and engagement reports are provided to the 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 subject to promotional 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.

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.

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~~within the next ~~year.~~twelve months. As of ~~March 31,~~June 30, 2022, the Company had deferred revenue of ~~$211,676.~~$262,583.

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~~six months ended ~~March 31,~~June 30, 2022, the Company recorded ~~$92,987,~~$53,166, as a bad debt expense. During six months ended June 30, 2022, the Company wrote off $81,925 of allowance for doubtful accounts. As of ~~March 31,~~June 30, 2022, the Company has an allowance for doubtful accounts of ~~$279,133.~~$239,313

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,~~June 30, 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 – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation 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.

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 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. Forfeitures are recognized as they occur.

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. 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 and six months ended ~~March 31,~~June 30, 2022 and 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,~~June 30, 2022 and 2021:

	March 31,				June 30,
	2022		2021		2022		2021
Series E preferred						121		254
Options		1,891,348		2,350,062		2,994,267		2,363,187
Warrants		8,591,206		6,273,778		8,607,661		7,496,070
Convertible notes		-		49,629		2,000,000		1,008,798
Totals		10,482,554		8,673,469		11,602,049		10,868,309

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 May 2021, the FASB issued authoritative guidance intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges 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’s 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. The updated guidance, which became effective for fiscal years beginning after December 15, 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. On October 16, 2019, FASB approved a final ASU delaying the effective date of ASU 2016-13 ~~is effective~~ for ~~the fiscal year~~small reporting companies to interim and annual periods beginning after December 15, ~~2022, including interim periods within that fiscal year.~~2022. The Company is currently evaluating the impact of these amendments to the ~~new guidance~~Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The Company does not believe the adoption will have a material impact on ~~its~~the Company’s condensed consolidated financial statements. The adoption of the guidance will affect disclosers and estimates around accounts receivable.

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. ASU ~~2020-6~~2020-06 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 July 2021, the FASB issued ASU No. 2021-05, Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. ASU 2021-05 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.

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.

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,~~June 30, 2022, the Company had an accumulated deficit of ~~$116~~$124 million, a net loss of ~~$6.9~~$15.6 million and net cash used in operating activities of ~~$5.1~~$10.6 million for the reporting period then ended. 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 – Inventory

Inventory was comprised of the following at ~~March 31,~~June 30, 2022 and December 31, 2021:

	March 31, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Raw Materials	$	16,904	$	-	$	206,510	$	-
Packaging		20,342		2,907		16,504		2,907
Finished goods		399,735		103,496		206,740		103,496
	$	436,981	$	106,403	$	429,754	$	106,403

Note 5 – Property and Equipment

Property and equipment stated at cost, less accumulated depreciation and amortization, consisted of the following:

	March 31, 2022			December 31, 2021			June 30, 2022			December 31, 2021
Computer Equipment	$	376,436		$	353,880		$	383,665		$	353,880
Furniture and Fixtures		124,787			102,416			195,289			102,416
Leasehold Improvements		11,456			11,457			47,616			11,457
		512,679			467,753			640,134			467,753
Less: Accumulated Depreciation		(373,200	)		(364,814	)		(389,219	)		(364,814	)
	$	139,479		$	102,939		$	250,915		$	102,939

Depreciation expense was ~~$8,386~~$24,405 and ~~$10,047~~$20,094 for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021, respectively.

Note 6 – Notes Payable

Notes payable as of ~~March 31,~~June 30, 2022 and December 31, 2021 is as follows:

	Outstanding Principal as of										Outstanding Principal as of
	March 31, 2022			December 31, 2021			Interest Rate			Maturity Date	June 30, 2022			December 31, 2021			Interest Rate			Maturity Date
Seller’s Choice Note	$	-		$	660,000			30	%	September 2020	$	-		$	660,000			30	%	September 2020
The April 2020 PPP Loan Agreement		198,577			198,577			1	%	May 2022		198,577			198,577			1	%	May 2022
The First December 2021 Loan Agreement		140,931			185,655			10	%	June 2023		98,025			185,655			10	%	June 2023
The Second December 2021 Loan Agreement		323,094			313,979			14	%	June 2022		308,113			313,979			14	%	June 2022
The First February 2022 Loan Agreement		337,163			-			-	%	June 2023		156,513			-			14	%	June 2022
The Second February 2022 Loan Agreement		164,123			-			14	%	June 2022
First Denver Bodega LLC Loan		50,000			-							45,507			-			-%		March 2025
Second Denver Bodega LLC Loan		15,724			-
The First May 2022 Loan Agreement												563,462			-			-%		December 2022
The Second May 2022 Loan Agreement												301,125			-			-%		November 2022
The Third May 2022 Loan Agreement												20,282			-			-%		November 2022
The Fourth May 2022 Loan Agreement												35,170			-			-%		November 2022
The June 2022 Loan Agreement												539,600			-			-%		November 2022
		1,229,612			1,358,211							(2,266,374	)		1,358,211
Less: Debt Discount		(42,620	)		(15,547	)						(371,126	)		(15,547	)
Less: Debt Issuance Costs		-			-							-			-
		1,186,992			1,342,664							1,895,248			1,342,664
Less: Current Debt		(1,151,087	)		(1,278,672	)						(1,863,831	)		(1,278,672	)
Total Long-Term Debt	$	35,905		$	63,992						$	31,417		$	63,992

Seller’s Choice Note

On September 11, 2019, the Company entered into Seller’s Choice Purchase Agreement with Home Revolution 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 December 31, 2021, the Company iswas in default on the Seller’s Choice note.

On March 3, 2022, after substantial motion practice, Creatd successfully settled the 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 recorded a Gain on extinguishment of 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.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company accrued interest of ~~$490.~~$2,312.

The Company is in the process of returning the funds received from the Loan.

As of June 30, 2022, the Loan is in default, and the lender may require immediate payment of all amounts owed under the Loan or file suit and obtain judgment.

The First December 2021 Loan Agreement

On December 3, 2021, the Company entered into a loan agreement (the “First December 2021 Loan Agreement”) with a lender (the “First December 2021 Lender”) whereby the First December 2021 Lender issued the Company a promissory note of $191,975 (the “First December 2021 Note”). Pursuant to the First December 2021 Loan Agreement, the First December 2021 Note has an effective interest rate of 9%. The maturity date of the First December 2021 Note is June 3, 2023 (the “First December 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First December 2021 Note are due.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company repaid ~~$44,725~~$87,630 in principal.

The Second December 2021 Loan Agreement

On December 14, 2021, the Company entered into a secured loan agreement (the “Second December 2021 Loan Agreement”) with a lender (the “Second December 2021 Lender”), whereby the Second December 2021 Lender issued the Company a secured promissory note of $438,096 AUD or $329,127 United States Dollars (the “Second December 2021 Note”). Pursuant to the Second December 2021 Loan Agreement, the Second December 2021 Note has an effective interest rate of 14%. The maturity date of the Second December 2021 Note is June 30, 2022 (the “Second December 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second December 2021 Loan Agreement are due. The Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company accrued ~~$15,123~~$31,052 AUD in interest.

As of the date of this filing the Company has exercised its option to extend the maturity date to August 29, 2022.

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 Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company accrued ~~$3,158~~$10,926 AUD in interest.

~~The Second February 2022 Loan Agreement~~

~~On February 22, 2022,~~As of the date of this filing the Company ~~entered into a loan agreement (the “Second February 2022 Loan Agreement”) with a lender (the “Second February 2022 Lender”), whereby~~has exercised its option to extend 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.~~August 29, 2022.

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~~six months ended ~~March 31,~~June 30, 2022, the Company repaid ~~$228,164.~~$248,381. As of ~~March 31,~~June 30, 2022, the Company has ~~two notes~~one note outstanding. ~~The First Denver Bodega LLC Loan~~This note has a principal balance of ~~$50,000,~~$45,507, bears interest at 5%, and requires 36 monthly payments of $1,496.

The ~~second Denver Bodega LLC~~First May 2022 Loan Agreement

On May 9, 2022, the Company entered into a loan agreement (the “First May 2022 Loan Agreement”) with a lender (the “First May 2022 Lender”), whereby the First May 2022 Lender issued the Company a promissory note of $693,500 (the “First May 2022 Note”). The Company received cash proceeds of $455,924. Pursuant to the First May 2022 Loan Agreement, the First May 2022 Note has ~~a principal balance~~an effective interest rate of ~~$15,724 and has a~~34%. The maturity date of ~~April 16, 2022.~~the First May 2022 Note is December 18, 2022 (the “First May 2022 Maturity Date”). The Company is required to make weekly payment of $21,673. The First May 2022 Note is secured by officers of the Company.

The Company recorded a $237,576 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.

During the six months ended June 30, 2022, the Company repaid $130,038 in principal.

The Second May 2022 Loan Agreement

On May 9, 2022, the Company entered into a loan agreement (the “Second May 2022 Loan Agreement”) with a lender (the “Second May 2022 Lender”), whereby the Second May 2022 Lender issued the Company a promissory note of $401,500 (the “Second May 2022 Note”). The Company received cash proceeds of $263,815. Pursuant to the Second May 2022 Loan Agreement, the Second May 2022 Note has an effective interest rate of 34%. The maturity date of the Second May 2022 Note is November 20, 2022 (the “Second May 2022 Maturity Date”). The Company is required to make weekly payment of $14,339. The Second May 2022 Note is secured by officers of the Company.

The Company recorded a $137,685 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.

During the six months ended June 30, 2022, the Company repaid $100,375 in principal.

The Third May 2022 Loan Agreement

On May 25, 2022, the Company entered into a loan agreement (the “Third May 2022 Loan Agreement”) with a lender (the “Third May 2022 Lender”), whereby the Third May 2022 Lender issued the Company a promissory note of $23,900 (the “Third May 2022 Note”). Pursuant to the Third May 2022 Loan Agreement, the Third May 2022 Note has an effective interest rate of 20%. The maturity date of the Third May 2022 Note is November 23, 2022 (the “Third May 2022 Maturity Date”). The Company is required to make monthly payments of $3,067.

During the six months ended June 30, 2022, the Company repaid $3,618 in principal.

The Fourth May 2022 Loan Agreement

On May 26, 2022, the Company entered into a loan agreement (the “Fourth May 2022 Loan Agreement”) with a lender (the “Fourth May 2022 Lender”), whereby the Fourth May 2022 Lender issued the Company a promissory note of $40,000 (the “Fourth May 2022 Note”). Pursuant to the Fourth May 2022 Loan Agreement, the Fourth May 2022 Note has an effective interest rate of 20%. The maturity date of the Fourth May 2022 Note is November 23, 2022 (the “Fourth May 2022 Maturity Date”).

During the six months ended June 30, 2022, the Company repaid $4,829 in principal.

The June 2022 Loan Agreement

On June 17, 2022, the Company entered into a loan agreement (the “June 2022 Loan Agreement”) with a lender (the “June 2022 Lender”), whereby the June 2022 Lender issued the Company a promissory note of $568,000 (the “June 2022 Note”). The Company received cash proceeds of $378,000. Pursuant to the June 2022 Loan Agreement, the June 2022 Note has an effective interest rate of 33%. The maturity date of the June 2022 Note is November 4, 2022 (the “June 2022 Maturity Date”). The Company is required to make weekly payment of $28,400. The June 2022 Note is secured by officers of the Company.

The Company recorded a $190,000 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.

During the six months ended June 30, 2022, the Company repaid $28,400 in principal.

Note 7 – Convertible Notes Payable

Convertible notes payable as of June 30, 2022, is as follows:

	Outstanding Principal as of											Warrants granted
	June 30, 2022			Interest Rate			Conversion Price			Maturity Date		Quantity	Exercise Price
The Second February 2022 Loan Agreement	$	224,888			11	%		-	(*)		February-23	-		-
The May 2022 Convertible Loan Agreement		115,163			11	%		-	(*)		May-23	-		-
The May 2022 Convertible Note Offering		4,000,000			18	%		2.00	(*)		November-22	4,000,000		$3.00 – $6.00
		4,340,051
Less: Debt Discount		(1,944,282	)
Less: Debt Issuance Costs		(104,759	)
		2,291,010

(*)	As subject to adjustment as further outlined in the notes

The July 2021 Convertible Loan Agreement

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

Upon default or 180 days after issuance the July 2021 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 $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~~six months ended ~~March 31,~~June 30, 2022, the July 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. The conversion feature of July 2021 Note gave rise to a derivative liability of $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.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the note holder converted $168,850 of principal and $4,605 of interest into 109,435 shares of the Company’s common stock. The unamortized debt discount of $96,803 was recorded to extinguishment of debt due to conversion.

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 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 payments of $37,425.

Upon default the May 2022 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 ten-trading day immediately preceding the date of the respective conversion.

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.

During the six months ended June 30, 2022, the Company repaid $112,275 in principal.

The May 2022 Convertible Loan Agreement

On May 20, 2022, the Company entered into a loan agreement (the “May 2022 Loan Agreement”) with an individual (the “May 2022 Lender”), whereby the May 2022 Lender issued the Company a promissory note of $115,163 (the “July 2021 Note”). Pursuant to the Third May 2022 Loan Agreement, the Third May 2022 Note has an interest rate of 11%. The May 2022 Note matures on the first (12^th) month anniversary of its issuance date.

The Company recorded a $15,163 debt discount relating to an original issue discount The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

The May 2022 Convertible Note Offering

During May of 2022, the Company conducted multiple closings of a private placement offering to accredited investors (the “May 2022 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “May 2022 Investors”) for aggregate gross proceeds of $4,000,000. The May 2022 convertible notes are convertible into shares of the Company’s common stock, par value $.001 per share at a conversion price of $2.00 per share. As additional consideration for entering in the May 2022 Convertible Note Offering, the Company issued 4,000,000 warrants of the Company’s common stock. The May 2022 Convertible Note matures on November 30, 2022.

The Company recorded a $1,895,391 debt discount relating to 4,000,000 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 these notes to accretion of debt discount and issuance cost.

The Company recorded a $399,964 debt discount relating to an original issue discount and $125,300 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.

Note 8 – Related Party

Equity raises

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the company conducted two equity raises in which officers, directors, employees, and an affiliate of an officer cumulatively invested $421,001 for 240,571 shares of common stock and 240,571 warrants to purchase common stock.

Officer compensation

During the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021, the Company paid ~~$35,637~~$48,655 and ~~$20,082,~~$72,328, respectively for living expenses for officers of the Company.

Note 9 – Derivative Liabilities

The Company has 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 during the ~~three~~six months ended ~~March 31,~~June 30, 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,~~June 30, 2022.

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 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~~six months ended ~~March 31,~~June 30, 2022.

	~~Three~~Six Months Ended ~~March 31,~~June 30, 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,~~June 30, 2022	$	-	$	-	$	-

Note 10 – Stockholders’ Equity

Shares Authorized

The Company is authorized to issue up to one hundred and twenty million (120,000,000) shares of capital stock, of which one hundred million (100,000,000) shares are designated as common stock, par value $0.001 per share, and twenty million (20,000,000) are designated as preferred stock, par value $0.001 per share.

Preferred Stock

Series E Convertible Preferred Stock

The Company has designated 8,000 shares of Series E Convertible Preferred stock and has 500 shares issued and outstanding as of ~~March 31,~~June 30, 2022.

The shares of Series E Preferred Stock have a stated value of $1,000 per share and are convertible into Common Stock at the election of the holder of 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 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 paid on shares of the Common Stock.

The 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 outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the 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 adversely affects any rights of the 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 determined by dividing the Series E Stated Value by the Conversion Price, subject to certain beneficial ownership limitations.

Common Stock

~~On January 1,~~During the six months ended June 30, 2022, the Company issued ~~8,590~~82,342 shares of its restricted common stock to settle outstanding vendor liabilities of ~~$20,297.~~$130,625. In connection with this transaction the Company also recorded a ~~gain~~loss on settlement of vendor liabilities of ~~$369.~~$17,024.

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 $19,736.

On February 24, 2022, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for four months of services at a fair value of $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~~six months ended ~~March 31,~~June 30, 2022 the Company recorded ~~$33,110~~$69,000 to share based payments.

On March 1, 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.

OnDuring the 3 months ended March ~~30,~~31, 2022, the Company issued ~~731~~7,488 shares of its restricted common stock to consultants in exchange for services at a fair value of ~~$863.~~$8,364.

On April 5, 2022 the Company issued 185,000 shares of its restricted common stock to officers of the company in exchange for services at a fair value of $192,400.

On June 24, 2022, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for four months of services at a fair value of $37,200. 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 six months ended June 30, 2022 the Company recorded $2,405 to share based payments.

During the three months ended June 30, 2022, the Company issued 29,387 shares of its restricted common stock to consultants in exchange for services at a fair value of $24,001.

Stock Options

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

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Balance – January 1, 2022 – outstanding		2,902,619			7.07		4.71		2,902,619			7.07		4.71
Granted		-			-		-		1,940,000			1.38		-
Exercised		-			-		-		-			-		-
Forfeited/Cancelled		(19,093	)		15.36		-		(433,519	)		13.56		-
Balance – March 31, 2022 – outstanding		2,883,526			7.02		4.48
Balance – March 31, 2022 – exercisable		1,891,348			7.60		4.27
Balance – June 30, 2022 – outstanding									4,409,100			3.93		4.68
Balance – June 30, 2022 – exercisable									2,994,267			4.06		4.57

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)
$	3.93		4,409,100		4.68		4.06		2,994,267		4.57

During the year ended December 31, 2018 the Company granted options of 11,667 to consultants that ~~has~~have 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 ~~$1,027,083,~~$2,831,696, for the ~~three~~six months ended ~~March 31,~~June 30, 2022.

As of ~~March 31,~~June 30, 2022, there was ~~$1,649,068~~$1,806,860 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 ~~0.89 year.~~1.37 years.

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.

The assumptions used for warrants granted during the six months ended June 30, 2022 are as follows:

	June 30, 2022
Exercise price	$	3.00 – 6.00
Expected dividends		0	%
Expected volatility		169,75	%
Risk free interest rate		2.81	%
Expected life of warrant		5.50 years

Warrant Activities

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

	Warrant			Weighted Average Exercise Price		Warrant			Weighted Average Exercise Price
Balance – January 1, 2022 – outstanding		5,658,830			4.98		5,658,830			4.98
Granted		2,988,487			2.12		6,988,487			3.48
Exercised		-			-		-			-
Forfeited/Cancelled		(13,611	)		12.00		(39,656	)		12.00
Balance – December 31, 2021 – outstanding		8,633,706			3.82
Balance – December 31, 2021 – exercisable		8,591,206		$	3.81
Balance – June 30, 2021 – outstanding							12,607,661			4.02
Balance – June 30, 2021 – exercisable							8,607,661		$	3.79

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
$	4.02		12,607,661		4.30		3.79		8,607,661		3.78

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~~six months ended ~~March 31,~~June 30, 2022, some of the Company’s warrants had a down-round provision triggered that also resulted in an additional 67,173 warrants to be issued. A deemed dividend of $81,728 was recorded to the Statements of Operations and Comprehensive Loss.

During the six months ended June 30, 2022, a total of 4,000,000 warrants were issued with convertible notes (See Note 7 above). The warrants have a grant date fair value of $4,074,803 using a Black-Scholes option-pricing model and the above assumptions.

Note 11 – Commitments and Contingencies

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. v. Jerrick Media Holdings, Inc. et 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. 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.

On or about August 30, 2021, Robert W. Monster and 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 that Monster’s registration and/or use of VOCL.COM is not, and has not been in violation of the ACPA, and that Plaintiffs’ use of VOCL.COM constitutes neither a violation of the ACPA nor trademark infringement or dilution under the Lanham 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

On April 26, 2022, the Company signed a 7-year lease for approximately 8,000 square feet of office space at 419 Lafayette Street, 6th Floor, New York, NY, 10003. Commencement date of the lease is May 1, 2022. The total amount due under this lease is $3,502,033.

The components of lease expense were as follows:

	Three Months Ended June 30, 2022
Operating lease cost	$	93,155
Short term lease cost		72,826
Total net lease cost	$	165,980

	Six Months Ended June 30, 2022
Operating lease cost	$	93,155
Short term lease cost		148,540
Total net lease cost	$	241,694

Supplemental cash flow and other information related to leases was as follows:

	Six Months Ended June 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease payments		39,900
Weighted average remaining lease term (in years):		6.83
Weighted average discount rate:		12.50	%

Total future minimum payments required under the lease as of June 30, are as follows:

For the Twelve Months Ended June 30,	Operating Leases
2023	$	361,440
2024		495,250
2025		509,784
2026		524,753
2027		540,172
Thereafter		951,971
Total lease payments		3,383,370
Less: Amounts representing interest		(1,132,722	)
Total lease obligations		2,250,648
Less: Current		(149,830	)
	$	2,100,818

Rent expense for the six months ended June 30, 2022 and 2021 was $241,694 and $53,869, respectively.

Market price risk of crypto (“digital”) assets

The Company holds crypto and digital assets in third-party wallets. Crypto asset price risk could adversely affect its operating results and will depend upon the market price of Bitcoin, ETH, as well as other crypto assets. Crypto asset prices have fluctuated significantly from quarter to quarter. There is no assurance that crypto asset prices will reflect historical trends. A decline in the market price of Bitcoin, ETH, and Other crypto assets could have an adverse effect on our earnings, the carrying value of the crypto assets, and future cash flows. This may also affect the liquidity and the ability to meet our ongoing obligations.

Appointment of New Directors

On February 17, 2022, the Board of Directors (the “Board”) of the Company appointed Joanna Bloor, Brad Justus, and Lorraine Hendrickson to serve as members of the 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 22, 2022, the Exchange notified the Company that the Panel has determined to continue the listing of the 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 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.

Employment Agreements

On April 5, 2022, upon the recommendation of the Compensation Committee of the Board, the Board approved employment agreements with, and equity issuances for, (i) Jeremy Frommer, Executive Chairman, who will receive (a) an signing award of $80,000, (b) an annual salary of $420,000; (c) 121,000 options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock; (ii) Laurie Weisberg, Chief Executive Officer, who will receive (a) an annual salary of $475,000; (b) 121,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; (iii) Justin Maury, Chief Operating Officer & President, who will receive (a) an annual salary of $475,000 (b) 81,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; and (iv) Chelsea Pullano, Chief Financial Officer, who will receive (a) an annual salary of $250,000; (b) 37,000 options, to vest immediately with a strike price of $1.75, and (c) 35,000 shares of the Company’s restricted common stock (collectively, the “Executive Employment Arrangements”).

Pursuant to the Executive Employment Arrangements, the Company entered into executive employment agreements with each of the respective executives as of April 5, 2022 (the “Executive Employment Agreements”). The Executive Employment Agreements contain customary terms, conditions and rights.

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
	June 30,
	2021
Revenues	$	2,262,295
Net loss attributable to common shareholders	$	(15,781,931	)
Net loss per share	$	(1.48	)
Weighted average number of shares outstanding		10,690,318

	Three Months Ended			Six Months Ended
	March 31,			June 30,
	2021			2022
Revenues	$	1,143,732		$	3,108,171
Net loss attributable to common shareholders	$	(6,592,675	)	$	(14,689,511	)
Net loss per share	$	(0.66	)	$	(0.77	)
Weighted average number of shares outstanding		10,060,946			18,977,745

	Six Months
	Ended
	2021
Revenues	$	2,662,114
Net loss attributable to common shareholders	$	(16,111,758	)
Net loss per share	$	(1.54	)
Weighted average number of shares outstanding		10,465,815

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:		Products 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.

The following tables present certain financial information related to our reportable segments and Corporate:

	As of March 31, 2022										As of June 30, 2022
	Creatd Labs		Creatd Ventures		Creatd Partners		Corporate		Total		Creatd Labs		Creatd Ventures		Creatd Partners		Corporate		Total

Accounts receivable, net	$	-	$	7,649	$	382,956	$	-	$	390,605	$	-	$	9,433	$	369,879	$	-	$	379,312
Prepaid expenses and other current assets		45,815		-		-		229,025		274,840		41,512		-		-		145,371		186,883
Deposits and other assets		839,114		-		-		75,586		914,700		976,744		-		-		192,585		1,169,329
Intangible assets		-		1,733,673		724,459		62,241		2,520,373		-		1,652,151		679,902		194,710		2,526,763
Goodwill		-		34,089		1,349,696		-		1,383,785		-		34,089		1,349,696		-		1,383,785
Inventory		-		436,981		-		-		436,981		-		429,754		-		-		429,754
All other assets		-		-		-		3,419,106		3,419,106		-		-		-		4,053,618		4,053,618
Total Assets	$	884,929	$	2,212,392	$	2,457,111	$	3,785,958	$	9,340,390	$	1,018,256	$	2,125,427	$	2,399,477	$	4,586,284	$	10,129,444

Accounts payable and accrued liabilities	$	22,784	$	1,129,605	$	19,985	$	3,659,729	$	4,832,103	$	36,730	$	1,165,016	$	78,333	$	3,619,029	$	4,899,108
Note payable, net of debt discount and issuance costs		487,217		65,724		-		634,051		1,186,992		464,626		100,959		-		1,329,663		1,895,248
Deferred revenue		161,112		43,545		7,019		-		211,676		161,112		-		101,471		-		262,583
All other Liabilities		-		-		-				-		-		-		-		4,572,738		4,572,738
Total Liabilities	$	671,113	$	1,238,874	$	27,004	$	4,293,780	$	6,230,771	$	662,468	$	1,265,975	$	179,804	$	9,521,430	$	11,629,677

	As of December 31, 2021										As of December 31, 2021
	Creatd Labs		Creatd Ventures		Creatd Partners		Corporate		Total		Creatd Labs		Creatd Ventures		Creatd Partners		Corporate		Total

Accounts receivable, net	$	-	$	2,884	$	334,556	$	-	$	337,440	$	-	$	2,884	$	334,556	$	-	$	337,440
Prepaid expenses and other current assets		48,495		-		-		188,170		236,665		48,495		-		-		188,170		236,665
Deposits and other assets		626,529		-		-		92,422		718,951		626,529		-		-		92,422		718,951
Intangible assets		-		1,637,924		783,676		11,241		2,432,841		-		1,637,924		783,676		11,241		2,432,841
Goodwill		-		25,139		1,349,696		-		1,374,835		-		25,139		1,349,696		-		1,374,835
Inventory		-		106,403		-		-		106,403		-		106,403		-		-		106,403
All other assets		-		-		-		3,966,124		3,966,124		-		-		-		3,966,124		3,966,124
Total Assets	$	675,024	$	1,772,350	$	2,467,928	$	4,257,957	$	9,173,259	$	675,024	$	1,772,350	$	2,467,928	$	4,257,957	$	9,173,259

Accounts payable and accrued liabilities	$	9,693	$	766,253	$	6,232	$	2,948,362	$	3,730,540	$	9,693	$	766,253	$	6,232	$	2,948,362	$	3,730,540
Note payable, net of debt discount and issuance costs		313,979		-		-		1,028,685		1,342,664		313,979		-		-		1,028,685		1,342,664
Deferred revenue		161,112		13,477		59,570		-		234,159		161,112		13,477		59,570		-		234,159
All other Liabilities		-		-		-		177,644		177,644		-		-		-		177,644		177,644
Total Liabilities	$	484,784	$	779,730	$	65,802	$	4,154,691	$	5,485,007	$	484,784	$	779,730	$	65,802	$	4,154,691	$	5,485,007

	For the three months ended March 31, 2022															For the three months ended June 30, 2022
	Creatd Labs			Creatd Ventures			Creatd Partners			Corporate			Total			Creatd Labs			Creatd Ventures			Creatd Partners			Corporate			Total

Net revenue	$	508,268		$	254,690		$	585,780		$	-		$	1,348,738		$	496,673		$	486,250		$	642,978		$	-		$	1,625,901
Cost of revenue		706,196			409,969			456,005			-			1,572,170			718,636			649,433			426,350			-			1,794,419
Gross margin (loss)		(197,928	)		(155,279	)		129,775			-			(223,432	)		(221,963	)		(163,183	)		216,628			-			(168,518	)

Research and development		134,876			-			91,778			-			226,654			134,724			-			89,788			-			224,512
Marketing		970,484			1,013,706			-			107,831			2,092,021			665,293			538,296			73,921			-			1,277,510
Stock based compensation		251,907			226,298			248,548			354,039			1,080,792			413,585			374,922			429,729			922,982			2,141,218
General and administrative not including depreciation, amortization, or Impairment		218,766			288,272			378,492			2,358,963			3,244,493			130,342			367,222			381,432			3,302,670			4,181,666
Depreciation and amortization		-			71,271			31,599			39,022			141,892			-			76,440			38,100			27,515			142,055

Total operating expenses	$	1,576,033		$	1,599,547		$	750,417		$	2,859,855		$	6,785,852		$	1,343,944		$	1,280,440		$	974,870		$	4,225,652		$	7,824,906

Interest expense		(13,229	)		-			-			(667	)		(13,896	)		(15,099	)		-			-			(5,261	)		(20,360	)
All other expenses		-			-			-			142,132			142,132			-			-			-			(691,154	)		(691,154	)
Other expenses, net		(13,229	)								141,465			128,236			(15,099	)		-			-			(696,415	)		(711,514	)

Loss before income tax provision	$	(1,787,190	)	$	(1,754,826	)	$	(728,474	)	$	(2,610,558	)	$	(6,881,048	)	$	(1,570,239	)	$	(1,443,623	)	$	(758,242	)	$	(4,932,834	)	$	(8,704,938	)

	For the three months ended March 31, 2021												For the three months ended June 30, 2021
	Creatd Labs			Creatd Partners			Corporate			Total			Creatd Labs			Creatd Partners			Corporate			Total

Net revenue	$	167,983		$	575,930		$	-		$	743,913		$	295,805		$	675,052		$	-		$	970,857
Cost of revenue		242,134			625,016			-			867,150			336,339			394,970			-			731,309
Gross margin		(74,151	)		(49,086	)		-			(123,237	)		(40,534	)		280,082			-			239,548

Research and development		195,691			133,161			-			328,852			33,963			22,635			-			56,598
Marketing		1,736,257			204,266			102,132			2,042,655			3,565,345			419,452			-			4,194,524
Stock based compensation		365,985			361,105			843,149			1,570,239			374,768			389,396			209,727			1,940,250
General and administrative not including depreciation, amortization, or Impairment		124,053			214,627			1,501,135			1,932,552			75,711			221,560			1,176,086			2,428,971
Depreciation and amortization		2,753			9,175			29,271			41,199			1,507			13,368			2,131,700			49,843
Total operating expenses	$	2,424,740		$	922,333		$	2,475,687		$	5,822,760		$	4,049,787		$	1,053,043		$	34,968		$	8,620,343

Interest expense		(24,596	)		-			(174,075	)		(198,671	)		(11,521	)		-			(49,239	)		(60,760	)
All other expenses		-			-			(498,569	)		(498,569	)		-			-			(170,160	)		(181,681	)
Other expenses, net		(24,596	)		-			(672,644	)		(697,240	)		(11,521	)		-			(672,644	)		(697,240	)

Loss before income tax provision	$	(2,523,487	)	$	(971,419	)	$	(3,148,331	)	$	(6,643,237	)	$	(4,094,653	)	$	(772,961	)	$	(3,694,862	)	$	(8,562,476	)

	For the six months ended June 30, 2022
	Creatd Labs			Creatd Ventures			Creatd Partners			Corporate			Total

Net revenue	$	908,680		$	889,610		$	1,176,349		$	-		$	2,974,639
Cost of revenue		1,348,265			1,218,430			799,894			-			3,366,589
Gross margin (loss)		(439,585	)		(328,820)			376,455			-			(391,950	)

Research and development		270,733			-			180,433			-			451,166
Marketing		1,754,761			1,419,797			194,973			-			3,369,531
Stock based compensation		622,345			564,166			646,637			1,388,862			3,222,010
General and administrative not including depreciation, amortization, or Impairment		227,045			639,669			664,423			5,752,967			7,284,104
Depreciation and amortization		-			152,793			76,156			54,998			283,947

Total operating expenses	$	2,874,884		$	2,776,425		$	1,762,622		$	7,196,827		$	14,610,758

Interest expense		(30,198	)		-			-			(4,058	)		(34,256	)
All other expenses		-			-			-			(549,022)			(549,022)
Other expenses, net		(30,198	)		-			-			(553,080)			(583,278)

Loss before income tax provision	$	(3,344,667	)	$	(3,105,245	)	$	(1,386,167	)	$	(7,749,907	)	$	(15,585,986	)

	For the six months ended June 30, 2021
	Creatd Labs			Creatd Partners			Corporate			Total

Net revenue	$	522,463		$	1,192,307		$	-		$	1,714,770
Cost of revenue		892,562			1,048,153			-			1,940,715
Gross margin		(370,099	)		144,154			-			(225,945)

Research and development		231,299			154,151			-			385,450
Marketing		5,301,602			623,718			311,859			6,237,179
Stock based compensation		678,066			704,533			2,127,890			3,510,489
General and administrative not including depreciation, amortization, or Impairment		120,836			353,614			3,402,237			3,876,687
Depreciation and amortization		2,753			24,418			63,871			91,042
Total operating expenses	$	6,334,556		$	1,860,434		$	5,905,857		$	14,100,847

Interest expense		(49,192	)		-			(210,239	)		(259,431	)
All other expenses		-			-			(619,490	)		(619,490	)
Other expenses, net		(49,192	)		-			(829,729	)		(878,921	)

Loss before income tax provision	$	(6,753,847	)	$	(1,716,280	)	$	(6,735,586	)	$	(15,205,713	)

Note 14 – Subsequent Events

~~Employment Agreements~~Securities Purchase Agreement

On ~~April 5,~~July 25, 2022, ~~upon~~ the ~~recommendation of the Compensation Committee of the Board, the Board approved employment~~Company entered into and closed securities purchase agreements with ~~and equity issuances~~five accredited investors for ~~(i) Jeremy Frommer, Executive Chairman, who will receive (a) an signing award~~debentures in the principal amount of ~~$80,000, (b) an annual salary of $420,000; (c) 121,000 options,~~$2,150,000, 1,075,000 Series E Common Stock Purchase Warrants to ~~vest immediately with a strike price of $1.75, and (d) 50,000~~purchase shares of the Company’s ~~restricted common stock; (ii) Laurie Weisberg, Chief Executive Officer, who will receive (a)~~Common Stock, and 2,000,000 Series F Common Stock Purchase Warrants to purchase shares of Common Stock.

The debentures have an ~~annual salary~~original issue discount of ~~$475,000; (b) 121,000 options,~~10%, have a maturity date of November 30, 2022, may be extended by six months at the Company’s option subject to ~~vest~~certain conditions, and are convertible into shares of Common Stock at a conversion price of $2.00 per share, subject to adjustment upon certain events including a one-time adjustment to the price of the Common Stock offered in the Rights Offering (as defined therein), with such adjusted conversion price not to be lower than $1.25.

The Warrants are immediately exercisable for a term of five years until July 25, 2027. The Series E Warrants are exercisable at an exercise price of $3.00, subject to adjustment upon certain events including a one-time adjustment to the price of the Common Stock offered in the Rights Offering, with such adjusted exercise price not to be lower than $1.01. The Series F Warrants are exercisable at an exercise price of $6.00 subject to adjustment upon certain events including a one-time adjustment to the price of the Common Stock offered in the Rights Offering, with such adjusted exercise price not to be lower than $1.01. The Warrants provide for cashless exercise to the extent that there is no registration statement available for the underlying shares of Common Stock. The shares underlying the Debentures, the Series E Warrants and the Series F Warrants are to be registered within 90 days of the Effective Date.

Trigger of Price Reset

On July 29, 2022, the Company announced that it was not moving forward with its previously announced Rights Offering. In doing so, it triggered a price reset in the Securities Purchase Agreements entered into on May 31, 2022 and the Securities Purchase Agreements entered into on July 25, 2022. As a result of this price reset, the May 31, 2022 debentures now have a conversion price of $1.00, and both the Series C and Series D warrants have exercise prices of $0.96. As a result of the price reset, the July 25, 2022 debentures now have a conversion price of $1.25, and both the Series E and Series F warrants have exercise prices of $1.01.

Acquisition of Orbit

On August 1, 2022 the Company entered into a Membership Interest Purchase (the “Agreement”) with Zachary Shenkman, Wuseok Jung, Wesley Petry, Nicholas Scibilia, Gary Rettig, Brandon Fallin (collectively the “Sellers”), whereby the Company purchased a majority stake in Orbit Media LLC, a New York limited liability company whose product is an app-based stock trading platform designed to empower a new generation of investors, providing users with a ~~strike price~~like-minded community as well as access to tools, content, and other resources to learn, train, and excel in the financial markets. Pursuant to the Agreement, Creatd acquired fifty one percent (51%) of ~~$1.75,~~the issued and ~~(c) 50,000~~outstanding membership interests of Orbit Media LLC for consideration of forty-four thousand dollars ($44,000) in cash and 57,576 shares of the Company’s restricted common stock; (iii) Justin Maury, Chief Operating Officer & President, who will receive (a) an annual salary of $475,000 (b) 81,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; and (iv) Chelsea Pullano, Chief Financial Officer, who will receive (a) an annual salary of $250,000; (b) 37,000 options, to vest immediately with a strike price of $1.75, and (c) 35,000 shares of the Company’s restricted common stock (collectively, the “Executive Employment Arrangements”).Common Stock.

~~Pursuant~~Consultant Shares

Subsequent to ~~the Executive Employment Arrangements,~~June 30, 2022, the Company ~~entered into executive employment agreements with each~~issued 55,000 shares of ~~the respective executives as of April 5, 2022 (the “Executive Employment Agreements”). The Executive Employment Agreements contain customary terms, conditions and rights.~~Common Stock to consultants.

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

This Form 10-Q and other reports filed by Creatd, Inc. (the “Company”), from time to time with the SEC (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this Form 10-Q.

We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. This discussion should be read in conjunction with our financial statements and accompanying notes for the year ended December 31, 2021, which are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on April 6, 2022.

Overview

Creatd, Inc. ~~(“CRTD,” “the Company,” or “Creatd”)~~ is a company whose mission is to provide economic opportunities to creators and brands by multiplying the impact of platforms, people, and technology.

We operate four main business segments, or ‘pillars’: Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios. Together, Creatd’s pillars work together to create a flywheel effect, supporting our core vision of creating a viable ecosystem for all stakeholders in the creator economy.

Creator-Centric Strategy

Our purpose is to empower creators to prosper through exceptional tools, built-in communities, and opportunities for monetization and audience expansion. This creator-first approach is the foundation of our culture and mission, and how we choose to allocate our resources. ~~It governs our business model and shapes the value we provide for each of our stakeholders across Creatd’s four pillars.~~

Creatd Labs

Creatd Labs is dedicated to the development of technology products that support the creator economy. This pillar houses Creatd’s proprietary technology platforms, including Creatd’s flagship product, Vocal. ~~This pillar is operated through our wholly-owned subsidiary, Abacus Tech Pty Ltd.~~

Vocal

Vocal was ~~designed~~built to serve as a home base for digital creators. This robust, proprietary technology platform provides best-in-class tools, safe and curated communities, and monetization opportunities that enable creators to find a receptive audience and get rewarded. Creators of all types call Vocal their home, from bloggers to social media influencers, to podcasters, founders, musicians, photographers, and more.

Since its initial launch in 2016, Vocal has grown to be one of the fastest-growing communities for content creators of all shapes and ~~sizes,~~sizes. Creators can opt to use Vocal for free, or upgrade to the premium membership tier, Vocal+. Upon joining Vocal, either as a freemium or premium member, creators can immediately begin to utilize Vocal’s storytelling tools to create and publish their stories, as well as benefit from ~~bloggers to podcasters, makers, musicians, photographers, and more.~~ Vocal’s ~~robust, proprietary technology platform provides these creators with best-in-class tools, niche (topic-specific) communities, and~~ monetization ~~opportunities.~~

~~Vocal~~features. Creatd facilitates creators’ monetization on Vocal in numerous different ways, including i) by rewarding creators for each ‘read’ their story receives; ii) via Vocal Challenges, or writing contests through which creators can win cash and other rewards; iii) by awarding Bonuses; iv) by connecting creators with brands for opportunities to collaborate on Vocal for Brands branded content campaigns; v) through ‘Subscribe,’ which enables creators to receive payment directly from their audience via monthly subscriptions and one-off microtransactions; vi) via Vocal’s Ambassador Program, which enables creators to receive additional rewards whenever they refer a new Vocal+ member.

In July 2022, Creatd released the first iteration of the new Vocal app for iOS, giving its premium Vocal+ members exclusive first access to the app ahead of its full release, expected in mid-August 2022. The app, which was designed based on Vocal audience insights, is focused on optimizing Vocal’s readership; the app works to increase audience’s ability to easily discover curated stories, thereby widening creators' distribution of content, and opening up new opportunities for monetization to creators.

Vocal+

Vocal+ is Vocal’s premium membership program. Subscribers pay a membership fee to access additional premium features on the platform, including: a higher rate of earnings per read, reduced platform processing fees on tips received, eligibility to participate in exclusive Vocal+ ~~Challenge eligibility, use of a~~Challenges, access to Vocal’s ‘Quick Edit’ feature for published stories, ~~ability to receive monthly pledges from their fans,~~ and more. The current cost of a Vocal+ membership is either $9.99 per month or $99 annually. ~~From time to time, the Company offers Vocal+ subscriptions at a discount for a predetermined number of months as a promotion for new subscribers.~~

Moderation and Compliance

One of the key differentiating factors between Vocal and most other user-generated content platforms is the fact that each story submitted to Vocal is run through the Company’s proprietary moderation process before it goes live on the platform. The decision to implement moderation into the submission process was in direct response to the rise of misinformation and bad actors on many social platforms. In response to these inherent pitfalls within the content landscape, Vocal’s proprietary moderation system combines the algorithmic detection of copyrighted material, hate speech, graphic violence, and nudity, ~~with~~and human-led curation to ensure the quality and safety of each story published on Vocal, thus fostering a safe and trustworthy environment for creators, audiences, and brands. During the second quarter 2022, Creatd announced Vocal’s new integration partnership with Two Hat, a Microsoft acquiree and a leading provider of AI-assisted content moderation and protection solutions for digital communities. Through the partnership, the Company further updated its proprietary moderation technology, with the aim of ensuring that the Vocal platform remains a safe place for its creators, brand partners, and audiences.

Trust and safety are paramount to the Vocal ecosystem. We follow best practices when handling personally identifiable information, with guidance from the European Union’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and the Digital Millennium Copyright Act (DMCA).

Platform Compliance Policies include:

●

Human-led, technology-assisted moderation of every story submitted;

●

Algorithmic detection of hate speech, nudity, and copyright infringement;

●

Brand, creator, and audience safety enforced through community watch; and

●

The rejection of what we consider toxic content, with the understanding that diverse opinions are encouraged.

Technology Development

Vocal’s proprietary technology is built on Keystone, the same underlying open-source framework used by industry leaders such as Atlassian, a $43-billion Australian technology company. Some of the key differentiating elements of Vocal’s technology are speed, sustainability, and scalability. The Company continues to invest heavily in research and development to continuously improve and innovate its platform, with the goal of optimizing the user experience for creators.

Additionally, the Vocal platform and its underlying technology ~~allows~~allow us to maintain an advantageous capital-light infrastructure. By using cloud service providers, we are able to focus on platform and revenue growth rather than building and maintaining the costly internal infrastructures that have materially affected so many legacy media platforms.

Vocal’s technology has been specifically designed and built to scale without a material corresponding increase in operational costs. While our users can embed rich media, such as video, audio, and product links, into their Vocal stories, the rich media content is hosted elsewhere (such as YouTube, Instagram, Vimeo, Shopify, Spotify, etc.). Thus, our platform can accommodate rich media content of all kinds without bearing the financial or operational costs associated with hosting the rich media itself. In addition to the benefits this framework affords to the Company, it provides the additional benefit to our content creators, in that a creator can increase their monetization; for example, a creator can embed their YouTube video into a Vocal story and thus derive earnings from both platforms when their video is viewed.

Creatd Partners

Creatd Partners houses the Company’s agency businesses, with the goal of fostering partnerships between creators and brands. Creatd Partners’ offerings include: Vocal for Brands (content marketing), WHE Agency (influencer marketing), and Seller’s Choice (performance marketing). Creatd Partners leverages its network of brands and influencers, along with resources from across Creatd, to help direct-to-consumer brands achieve conversions and reach their target audiences, while driving success for all of Creatd’s stakeholders.

Vocal for Brands

All brands have a story to tell, and we leverage Vocal’s creator community to help them tell it. Vocal for Brands, Creatd’s content marketing studio, specializes in pairing leading brands with Vocal creators ~~and~~as well as WHE influencers to produce marketing campaigns that are non-interruptive, engaging, and direct-response driven. ~~Further, Vocal for Brands campaigns leverage Vocal’s first-party data and technology, which enables the creation of highly targeted and segmented audiences and optimized campaign results.~~

~~In addition to branded story campaigns~~ Additionally, brands can opt to collaborate with Vocal on a sponsored Challenge, prompting the creation of high-quality stories that are centered around the brand’s mission and further disseminated through creators’ respective social channels and promotional outlets. All Vocal for Brands campaigns leverage Vocal’s first-party audience insights, which enables the creation of highly targeted and segmented audiences and optimized campaign results.

WHE Agency

The WHE Agency (“WHE”), acquired by Creatd in 2021, was founded ~~by Tracy Willis~~ with the goal of supporting top creators and influencers, by connecting them with leading ~~family and lifestyle~~ brands and global audiences. Today, WHE ~~represents~~manages a talent roster ofcomprising over 100 creators across numerous verticals, including family and lifestyle, music, entertainment, and celebrity categories. Since acquiring WHE, the Company has helped WHE expand into new verticals, as well as facilitated partnerships on influencers’ behalf with leading brands including CBS, Amazon, Target, Disney, Warby Parker, CVS, Kay Jewelers, Walmart, Gerber, Masterclass, Procter & Gamble, Nike, and NFL, among others.

Seller’s Choice

Seller’s Choice is Creatd Partners’ performance marketing agency specializing in DTC (direct-to-consumer) and e-commerce clientele. Seller’s Choice provides direct-to-consumer brands with design, development, strategy, and sales optimization services.

Creatd Ventures

Creatd Ventures houses Creatd’s portfolio of ~~DTC~~ e-commerce ~~businesses.~~businesses, both majority and minority-owned as well as associated e-commerce technology and infrastructure. The Company supports founders by providing capital, as well as a host of services including design and development, marketing and distribution, and go-to-market strategy. While working to scale Creatd Ventures’ existing portfolio brands, including through the introduction of new product offerings, Creatd continues to actively explore new potential additions to the Creatd Ventures portfolio. Specifically, the Company expects to broaden Creatd Ventures’ portfolio through the acquisition of brands that are aligned and that can be easily consolidated into its supply chain and infrastructure.

Currently, the Creatd Ventures portfolio includes:

●

Camp, ~~previously Plant Camp,~~ a ~~DTC~~direct-to-consumer (DTC) food brand which creates healthy upgrades to classic comfort food favorites. Each of Camp’s products are created with hidden servings of vegetables and contain Vitamins A, C, D, E, B1 + B6. ~~In the fourth quarter of 2021,~~Since its launch in 2020, Camp ~~added two~~continues to add new products to its ~~expanding~~ line of healthy, veggie-based, family-friendly ~~foods. Currently, Camp has four~~foods, with flavors ~~available for purchase:~~including Classic Cheddar Mac ‘N’ Cheese, White Cheddar Mac ‘N’ Cheese, Vegan Cheezy Mac, and Twist Veggie Pasta. ~~Camp, which first launched in 2020, represents the first investment within the Creatd Ventures portfolio.~~

●

Dune Glow Remedy(“Dune”), which the Company purchased and brought to market in ~~2021. Dune~~2021, is a beverage brand focused on promoting wellness and beauty from within. Each beverage in Dune’s product line is meticulously crafted with functional ingredients that nourish skin from the inside out and enhance one’s natural glow. During 2022, Dune has continued to advance its retail and wholesale distribution strategy, securing numerous partnerships including with lifestyle retailer Urban Outfitters and the Los Angeles-based Erewhon Market. Further, Creatd Ventures continues to leverage these and other successful partnerships to create similar opportunities for the other brands in its portfolio.

●

Basis, ~~which was acquired by the Company in March of 2022. Basis is~~ a hydrating electrolyte drink mix formulated using rehydration therapies developed by the World Health Organization. ~~Historically,~~Acquired by the Company in first quarter 2022, Basis has ~~shown~~a history of strong sales volume both on the brand’s website as well as through third-party distribution channels such as ~~Amazon, while continuing to expand distribution to retailers like Urban Outfitters and Erewhon Market.~~ Amazon. Creatd’s acquisition of 100% ownership in Basis marks its third majority ownership acquisition for Creatd Ventures.

Creatd Studios

The goal of Creatd ~~Studios~~Studios is to ~~elevate creators’~~partner with creators to produce stories tofor TV, film, ~~books,~~ podcasts, ~~video,~~ and ~~more.~~print. With millions of compelling stories in its midst, Creatd’s Vocal technology surfaces the best candidates for transmedia adaptations, through a deep analysis of community, creator, and audience insights. Then, Creatd Studios helps creators tell their existing stories in new ways, by partnering them with entertainment and publishing studios to create unique content experiences that accelerate earnings, discoverability, and foster new opportunities.

●

~~Transmedia Assets~~: With millions of compelling stories in its midst, Creatd’s technology surfaces the best candidates for transmedia adaptations, through community and creator data insights. Then, Creatd Studios helps creators tell their existing stories in new ways, by partnering them with entertainment and publishing studios to create unique content experiences that accelerate earnings, discoverability, and open doors. In 2022, Creatd Studios announced ~~numerous~~a series of newly released and upcoming production projects, including the upcoming publication of a print book featuring the winning stories from Vocal’s ‘Vocal+ Fiction Awards’ Challenge, and the launch of a new podcast, with two miniseries currently in production.including:

“Write Here, Write Now,” the Company’s first-ever podcast showcasing select Vocal creators and stories; a partnership with UK-based publisher, Unbound, for the publication of books featuring stories sourced from Vocal; the formation of a new graphic novel development arm which in Fall 2022 will release its first title, Steam Wars, created by artist and independent filmmaker Larry Blamire.

●

OG ~~Gallery~~: Gallery: The OG Collection is an extensive library of original artwork and imagery from the archives of some of the most ~~iconic~~iconic magazines of the 20th century. OG Gallery is an exploratory initiative aimed at identifying opportunities to propel the OG Collection into a new technological sphere: the NFT marketplace.

Application of First-Party Data

Creatd’s business intelligence and marketing teams identify and target individual creators, communities, and brands, utilizing empirical data harnessed from the Vocal platform. The team’s ability to apply its proprietary first-party data works to reduce acquisition costs for new creators and to help provide brands with conversions and an ideal targeted audience. In this way, our ability to apply first-party data is one of the value-drivers for the Company across its four business pillars.

Importantly, we do not sell the collected data, that being a common monetization opportunity for many other businesses. Instead, we use our collected ~~first-party~~first party data for the purposes of bettering the platform. Specifically, our data helps us understand the behaviors and attributes that are common among the creators, brands, and audiences within our ecosystem. We then pair our first-party Vocal data with third-party data from distribution platforms such as Facebook and Snapchat to provide a more granular profile of our creators, brands, and audiences.

It is through generating this valuable first-party data that we can continually enrich and refine our targeting capabilities for branded content promotion and creator acquisition, and specifically, to reduce our creator acquisition costs (CAC) and subscriber acquisition costs (SAC).

Competition

The idea for Vocal came as a response to what Creatd’s founders recognized as systemic flaws inherent to the digital media industry and its operational infrastructures. The depreciating value of digital media business models built on legacy technology platforms created a unique opportunity for the development of a creator-centric platform that could appeal to a global community and, at the same time, be capable of acquiring undervalued complimentary technology assets.

Creatd’s founders built the Vocal platform upon the general thesis that a closed and safe ecosystem utilizing first-party data to increase efficiencies could create a sustainable and defensible business model. Vocal was strategically developed to provide value for content creators, readers, and brands, and to serve as a home for the ever-increasing amount of digital content being produced and the libraries of digital assets lying dormant.

Vocal is most commonly discussed as a combination of:

●

Medium, a platform for writers built by former Twitter founder Ev Williams;

●

Reddit, a social news aggregation, web content rating, and discussion website; and

●

Patreon, a membership platform that provides business tools for content creators to run a subscription service.

Creatd does not view Vocal as a substitute or competitor to segment-specific content platforms, such as Vimeo, YouTube, Instagram, Pinterest, TikTok, Spotify, or SoundCloud. We don’t want to replace anyone; we built Vocal to be accretive to the entire digital ecosystem. In fact, one of the most powerful components of our technology is the fact that Vocal makes it easy for creators to embed their existing published content, including videos, songs, podcasts, photographs, and more, directly into Vocal. We see this as a growth opportunity by building partnerships with the world’s greatest technology companies and to further spread our roots deeper into the digital ~~landscape.~~landscape

Acquisition Strategy

Creatd’s hybrid finance and design culture is key to its acquisition strategy. Acquisition targets are companies that meet a set of opportunistic or financial standards or that are part of specific digital environments that are accretive and can seamlessly integrate into Creatd’s existing revenue lines. Creatd will continue to make strategic acquisitions when presented with opportunities that are in the interest of shareholder value.

Recent Developments

Nasdaq ~~Notice of Delisting;~~- Continued Listing

On March 1, 2022, the Company received a ~~letterfrom~~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 was not eligible to use such compliance period, as the Exchange had instituted a Panel Monitor through March 9, 2022.

~~Registered Direct Offering~~Securities Purchase Agreement

On ~~March 7,~~May 31, 2022, the Company entered into aand closed securities purchase ~~agreement (the~~agreements (each, a “Purchase Agreement”) with ~~thirteen~~eight accredited investors ~~resulting in~~(the “Investors”), whereby the ~~raise of $2,659,750 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreement,~~Investors purchased from the Company ~~agreed to sell in a registered direct offering~~for an aggregate of ~~1,519,857~~$3,600,036 in subscription amount (i) debentures in the principal amount of $4,000,000 (the “Debentures”); (ii) 2,000,000 Series C Common Stock Purchase Warrants to purchase shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) ~~together with warrants~~(the “Series C Warrants”); and (iii) 2,000,000 Series D Common Stock Purchase Warrants to purchase ~~an aggregate of 1,519,857~~ shares of Common Stock (the ~~“Warrants”) at an exercise price of $1.75 per share (collectively,~~“Series D Warrants”, and collectively with the ~~“Registered Direct Offering”~~Series C Warrants, the “Warrants”). The ~~warrants are immediately exercisable~~Company and ~~will expire on March 9, 2027.~~the Investors also entered into registration rights agreements (each, a “Registration Rights Agreement”) pursuant to the Purchase Agreement.

The ~~Registered Direct Offering closed on March 9, 2022. Gross proceeds~~Debentures have an original issue discount of 10%, have a term of six months with a maturity date of November 30, 2022, may be extended by six months at the Company’s option subject to certain conditions, and are convertible into shares of Common Stock at a conversion price of $2.00 per share, subject to adjustment upon certain events including a one-time adjustment to the ~~Company from~~price of the ~~Registered Director~~Common Stock offered in the Rights Offering ~~were $2,659,750, before deducting offering expenses, which will~~(as defined therein), with such adjusted conversion price not to be ~~used for general corporate purposes, including working capital.~~lower than $1.00.

The shares of Common Stock were offered and sold by the Company pursuant to a prospectus supplement filed with the Securities and Exchange Commission (the “SEC”), in connection with a takedown from the Company’s effective shelf registration statement on Form S-3, which was filed with the SEC on November 25, 2020 and subsequently declared effective on April 23, 2021 (File No. 333-250982).

~~Private Placement Financing~~

On March 1, 2022, the Company entered into securities purchase agreements with twenty-eight (28) accredited investors whereby, at the closing, such investors purchased from the Company an aggregate of (i) 1,401,457 shares of the Company’s common stock, par value $0.001 per share and (ii) 1,401,457 warrants to purchase shares of common stock, for an aggregate purchase price of $2,452,550 (the “Private Placement Financing”). Such warrantsWarrants are exercisable for a term of ~~five-years~~five years from the initial exercise date of ~~issuance,~~November 30, 2022, until November 30, 2027. The Series C Warrants are exercisable at an exercise price of ~~$1.75 per share, and~~$3.00, subject to adjustment upon certain events including a one-time adjustment to the price of the Common Stock offered in the Rights Offering, with such adjusted exercise price not to be lower than $0.96. The Series D Warrants are exercisable at an exercise price of $6.00 subject to adjustment upon certain events including a one-time adjustment to the price of the Common Stock offered in the Rights Offering, with such adjusted exercise price not to be lower than $0.96. The Warrants provide for cashless exercise to the extent that there is no registration statement available for the underlying shares of ~~common stock.~~Common Stock. The ~~Benchmark Company, LLC acted as exclusive financial advisor for~~shares underlying the ~~Company~~Debentures, the Series C Warrants and the Series D Warrants are to be registered within 90 days of the Effective Date.

Additionally, in connection with the ~~Private Placement Financing and is entitled to receive 125,000 shares of common stock as compensation for its services. The closing~~Purchase Agreements, the subsidiaries of the ~~Private Placement Financing occurred~~Company delivered a guarantee (the “Guarantee”) in favor of the Investors whereby each such subsidiary guaranteed the full payment and performance of all obligations of the Company pursuant to the Purchase Agreement.

The Debentures, Warrants, Common Stock underlying the Debentures and the Common Stock underlying the Warrants were not registered under the Securities Act, but qualified for exemption under Section 4(a)(2) and Rule 506 promulgated thereunder. The Company is relying on ~~March 1, 2022.~~this exemption from registration for private placements based in part on the representations made by Investors, including representations with respect to each Investor’s status as an accredited investor, as such term is defined in Rule 501(a) of the Securities Act, and each Investor’s investment intent.

Results of Operations

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at ~~March 31,~~June 30, 2022 compared to December 31, 2021:

	March 31, 2022			December 31, 2021			Increase / (Decrease)			June 30, 2022			December 31, 2021			Increase / (Decrease)
Current Assets	$	4,332,053		$	4,475,242		$	(143,189	)	$	2,601,258		$	4,475,242		$	(1,873,984	)
Current Liabilities	$	6,194,866		$	5,421,015		$	773,851		$	9,497,442		$	5,421,015		$	4,076,427
Working Capital (Deficit)	$	(1,862,813	)	$	(945,773	)	$	(917,040	)	$	(6,896,184	)	$	(945,773	)	$	(5,950,411	)

At ~~March 31,~~June 30, 2022, we had a working capital deficit of ~~$1,862,813 as~~$6,896,184as compared to a working capital deficit of $945,773 at December 31, 2021, an increase in working capital deficit of ~~$917,040.~~$5,950,411. The increase is primarily attributable to a reduction in cash, prepaid expenses and other current assets, an increase in accounts payable ~~due in part to marketing-related payables~~and notes payable, as well as ~~payables~~an increase in deferred revenue resulting primarily from an increase in Vocal+ customers opting for ~~legal and accounting fees addressing one-time corporate matters.~~annual subscriptions, whose revenues are amortized over a 12-month period. This was offset by ~~a decrease~~an increase in ~~notes payable.~~accounts receivable.

Net Cash

Net cash used in operating activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022, and 2021, was ~~$5,037,179~~$(10,620,156) and ~~$5,296,638,~~$(10,996,578), respectively. The net loss for the ~~three~~six months ended ~~March 31,~~June 30, 2022, and 2021 was ~~$6,881,048~~$(15,585,986) and ~~$6,643,237,~~$(15,205,713), respectively. The decrease in net cash used in ~~first quarter 2022~~operating activities reflects a decrease in cash paid for marketing expenditures, research and development, ~~expenses, offset by an increase in general and administrative costs including consulting,~~ legal fees, and accounting & audit fees. Going forward, as the Company plans to simultaneously grow revenue while improving operational efficiency, it is anticipated that the Company’s net cash used in operating activities will consistently decrease throughout 2022.

Net cash used in investing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022, was ~~$50,950.~~$367,240. This is primarily attributable to the purchase of digital assets, ~~within~~including Metaverse plots in Decentraland, the ~~Company’s~~OG Gallery NFT ~~infrastructure,~~portfolio and cryptocurrencies Ethereum, Polygon and Mana, as well as ~~the purchase of~~physical property and equipment.

Net cash provided by financing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022, and 2021 was ~~$4,527,972~~$8,778,934 and ~~$412,576,~~$5,967,733, respectively. During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company’s operations were predominantly financed by net proceeds of $4,997,301 from the sale of common stock and warrants and $5,152,350 from the proceeds of notes payable, which were partially offset by the repayments of notes payable. Similarly, the Company’s financing activity for the ~~three~~six months ended ~~March 31,~~June 30, 2021, generated $1,312,672 from the exercises of warrants, the proceeds of which were partially offset by repayment of notes of ~~$985,596.~~$1,218,718.

Summary of Statements of Operations for the Three Months Ended ~~March 31,~~June 30, 2022, and 2021:

	Three Months Ended March 31,						Three Months Ended June 30,
	2022			2021			2022			2021
Revenue	$	1,348,738		$	743,913		$	1,625,901		$	970,857
Cost of revenue	$	1,572,170		$	867,150		$	(1,794,419	)	$	(731,309	)
Operating expenses	$	(6,785,852	)	$	(5,822,760	)	$	(7,824,906	)	$	(8,620,343	)
Loss from operations	$	(7,009,284	)	$	(5,945,997	)	$	(7,993,424	)	$	(8,380,795	)
Other income (expenses)	$	128,236		$	(697,240	)	$	(711,514	)	$	(181,681	)
Net loss	$	(6,881,048	)	$	(6,643,237	)	$	(8,704,938	)	$	(8,562,476	)
Loss per common share – basic and diluted	$	(0.36	)	$	(0.68	)
Loss per common share - basic and diluted							$	(0.41	)	$	(0.81	)

Revenue

Revenue totaled ~~$1,348,738~~$1,625,901 for the three months ended ~~March 31,~~June 30, 2022, as compared to ~~$743,913~~$970,857 for the comparable three months ended ~~March 31,~~June 30, 2021, an increase of ~~$604,825.~~$655,044. The ~~81% year-over-year~~67% increase in ~~quarterly~~ revenue is attributable to the steady growth of ~~both~~ Creatd Partners (influencer and content marketing) which increased ~~36%~~19% year-over-year, as well as ~~Created~~Creatd Ventures (e-Commerce), which generated sales totaling $634,966 across its portfolio of CPG brands, including Basis, which the Company acquired in the previous quarter, and continues to demonstrate revenue momentum. This growth was offset by a decrease in total revenues generated from Creatd Labs (Vocal and technology development), which ~~experienced~~comes as a ~~66%~~result of the Company’s strategic shift in Vocal+ marketing toward driving annual versyus monthly subscriptions, with annual subscriptions being amortized over a 12-month period; the Company’s efforts continue to result in a steady increase in revenue generated as compared to the prior first quarter 2021. In addition, Creatd Ventures (e-Commerce) generated sales totaling $254,724, indicating continued revenue momentum within this segment following its initial launch with the acquisition of Plant Camp in mid-2021.annual subscriptions. Going forward, the Company anticipates continued momentum as Creatd Ventures continues to grow sales and introduce new product SKUs for its portfolio of brands, continues to expand its retail and wholesale distribution partnerships, and completes additional direct-to-consumer brand acquisitions; as Creatd Partners expands its influencer and content marketing ~~capabilities~~offerings and methodically increases its average revenue per brand campaign; as Creatd Labs increases conversion from freemium to Vocal+ subscriptions, ~~with advancements in its technology development and offerings;~~supported by the recent launch of the new Vocal app as ~~Creatd Ventures expands~~well as the ~~marketing visibility~~introduction of ~~its March 2022 acquisition of its latest direct-to-consumer brand acquisition, Basis, and establishes~~ new and ~~expanded distribution of Dune~~upcoming Vocal features aimed at increasing creator audience growth, engagement, and ~~Camp.~~monetization. In addition, during 2022, Creatd anticipates its first material revenue contribution from its fourth business segment Creatd Studios (Transmedia production).

Cost of Revenue

Cost of revenue for the three months ended ~~March 31,~~June 30, 2022, were ~~$1,572,170~~$1,794,419 as compared to ~~$867,150~~$731,309 for the three months ended ~~March 31,~~June 30, 2021. The increase of ~~$705,020~~$1,063,110 in cost of revenue is related to ~~the establishment~~an increase in payouts to Vocal creators, whose earnings are generated through content reads, winning Challenges, and ~~operational launch of Creatd Ventures, which recently began contributing material revenues.~~other means. Additionally, the increase in cost of revenue is correlated with continued growth within the Creatd Ventures business segment, including sales growth for existing brands as well as the acquisition and integration of additional brands, which results in increases in inventory-related and other costs. Going forward, the Company expects the gross margin to continue to improve over time as Creatd Ventures continues to consolidate operations across its portfolio of e-commerce brands and, more broadly, as the Company continues to grow and scale a self-sustaining, organically driven revenue model across its business segments.

Operating Expenses

Operating expenses for the three months ended June 30, 2022, were $7,824,906 as compared to $8,620,343 for the three months ended June 30, 2021. The decrease of $795,437 in operating expenses is primarily attributable to the Company’s decrease in marketing expenses. This was offset by an increase in research and development, stock-based compensation, and general and administrative accounts, including office rent, employee compensation and productivity enhancing software & tools.

During the second quarter of 2022, the company’s non-cash charges totaled $2,814,980, a $457,798 increase from second quarter 2021. This increase primarily represents an increase in stock-based compensation to employees and consultants during the quarter.

The Company expects expenditures to decrease over coming quarters, as the Company continues to optimize and reduce its marketing expenditure and scrutinize many of the contributing expenses within G&A. Already, the Company has, subsequent to the second quarter, taken steps to reduce headcount materially to gain efficiencies, integrate acquired operations, reduce future expenses and other market factors.

Loss from Operations

Loss from operations for the three months ended June 30, 2022, was $7,993,424 as compared to $8,380,795 for the three months ended June 30, 2021. The $387,371 decrease in the loss from operations this quarter primarily reflects the decrease from total operating expenses. This was offset by the decrease from gross loss.

Other Income and (Expenses)

Other income (expenses) for the three months ended June 30, 2022, were $(711,514) as compared to $(181,681) for the three months ended June 30, 2021. The increase in second quarter 2022 other income was predominantly due to the increase in accretion of debt discount and issuance cost and a decrease from the gain on extinguishment of debt. This was offset by a decrease in interest expense and impairment of investment.

Net Loss

Net loss for the three months ended June 30, 2022, was $8,704,938, as compared to a net loss of $8,562,476 for the three months ended June 30, 2021.

Net loss attributable to common shareholders for the three months ended June 30, 2022, was $8,337,066, or loss per share of $0.41, as compared to a net loss attributable to common shareholders of $8,972,794, or loss per share of $0.81, for the three months ended June 30, 2021.

Summary of Statements of Operations for the Six Months Ended June 30, 2022, and 2021:

	Six Months Ended June 30,
	2022			2021
Revenue	$	2,974,639		$	1,714,770
Cost of revenue	$	(3,366,589	)	$	(1,940,715
Operating expenses	$	(14,610,758	)	$	(14,100,847	)
Loss from operations	$	(15,002,708	)	$	(14,326,792	)
Other income (expenses)	$	(583,278	)	$	(878,921	)
Net loss	$	(15,585,986	)	$	(15,205,713	)
Loss per common share - basic and diluted	$	(0.77	)	$	(1.49	)

Revenue

Revenue totaled $2,974,639 for the six months ended June 30, 2022, as compared to $1,714,770 for the comparable six months ended June 30, 2021, an increase of $1,259,869. The 73% year-over-year increase in revenue is attributable to ~~expansion of~~overall growth across the Company’s ~~moderation and content development teams, a byproduct of increased Vocal+ membership volume combined with the additional~~business segments, including growth in creator subscriptions, e-commerce sales, and ~~talent management personnel associated~~brand and influencer marketing partnerships.

Cost of Revenue

Cost of revenue for the six months ended June 30, 2022, were $3,366,589 as compared to $1,940,715 for the six months ended June 30, 2021. The increase of $1,425,874 in cost of revenue is related to an increase in challenge- and read-related payouts to Vocal creators, as well as Company’s first-quarter 2022 acquisition of Basis and an increase in inventory related cost of revenues correlating with ~~Creatd Partners.~~revenue growth within Ventures. The Company expects the gross margin to continue to improve over time as it continues to grow and improve upon a self-sustaining, organically driven revenue model across its business segments.

Operating Expenses

Operating expenses for the ~~three~~six months ended ~~March 31,~~June 30, 2022, were ~~$6,785,852~~$14,610,758 as compared to ~~$5,822,760~~$14,100,847 for the ~~three~~six months ended ~~March 31,~~June 30, 2021. The increase of ~~$963,092~~$509,911 in operating expenses is mainly related to an increase in general and administrative ~~(“G&A”) cost increases, predominantly due to an increase in headcount and related personnel~~ expenses, ~~as well as costs related to the Company’s expanded presence in key markets, which contributed to an increase in~~including office rent, travel and ~~related moving expenses. G&A~~entertainment, software and tools, and compensation. This increase was ~~further impacted by a non-recurring increase in consulting expenses, site development, and recruiting fees. The year-over-year increase in first quarter G&A was~~partially offset ~~in part~~ by a decrease in ~~research and development expenditure and stock based compensation.~~

During the first quarter 2022, the company’s non-cash charges totaled $1,080,792, a $489,447 decrease from first quarter 2021. This amount represents stock based compensation expenses related to the vesting of past stock option grants to senior management and board members, which vest over multiple years, and stock-based fees to service providers that opted for stock in lieu of cash.

marketing expenses. The Company expects expenditures to decrease ~~over coming quarters~~ as the Company normalizes its marketing costs and scrutinizes many of the contributing expenses within G&A.

Loss from Operations

Loss from operations for the ~~three~~six months ended ~~March 31,~~June 30, 2022, was ~~$7,009,284~~$15,002,708 as compared to ~~$5,945,997~~$14,326,792 for the ~~three~~six months ended ~~March 31,~~June 30, 2021. The ~~$1,063,287~~$675,916 increase in the loss from operations ~~this quarter~~ primarily reflects ~~the nearly doubling year over year of Company personnel to 60 professionals. In addition, short-term consulting~~an increase in general and ~~other services that were required during the quarter to address one-time needs heightened expenses.~~administrative expenses, including office rent, travel and entertainment, software and tools, and compensation, as well as a decrease in gross margin. Going forward, the Company expects the loss from operations to decrease as revenues continue to increase and expenses achieve normalcy levels.

Other Income and (Expenses)

Other income (expenses) for the ~~three~~six months ended ~~March 31,~~June 30, 2022, were ~~$128,236~~$(583,278) as compared to ~~$(697,240)~~$(878,921) for the ~~three~~six months ended ~~March 31,~~June 30, 2021. The ~~increase~~decrease in ~~first quarter 2022~~ other income was predominantly due to a decrease in aninterest expense, accretion of debt discount and issuance cost, ~~an elimination~~derivative expense, market to market of derivative ~~expense,~~liability, and Impairment of investment. This was offset by a decrease in ~~interest expense.~~gain on forgiveness of debt and gain on settlement of vendor liabilities.

Net Loss

Net loss for the ~~three~~six months ended ~~March 31,~~June 30, 2022, was ~~$6,881,048,~~$15,585,986, as compared to a net loss of ~~$6,643,237~~$15,205,713 for the ~~three~~six months ended ~~March 31,~~June 30, 2021.

Net loss attributable to common shareholders for the ~~three~~six months ended ~~March 31,~~June 30, 2022, was ~~$6,334,890,~~$14,681,956, or loss per share of ~~$0.36,~~$0.77, as compared to a net loss attributable to common shareholders of ~~$6,643,237,~~$15,616,031, or loss per share of ~~$0.68,~~$1.49, for the ~~three~~six months ended ~~March 31,~~June 30, 2021.

Off-Balance Sheet Arrangements

As of ~~March 31,~~June 30, 2022, we had no off-balance sheet arrangements.

Significant Accounting Policies

Our significant accounting policies are described in Note 2 of the Financial Statements. If we complete an acquisition, we will be required to make estimates and assumptions typical of other companies. For example, we will be required to make critical accounting estimates related to valuation and accounting for business combinations. The estimates will require us to rely upon assumptions that were highly uncertain at the time the accounting estimates are made, and changes in them are reasonably likely to occur from period to period. Changes in estimates used in these and other items could have a material impact on our financial statements in the future. Our estimates will be based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates. For detailed information regarding our critical accounting policies and estimates, see our financial statements and notes thereto included in this Report and in our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to our critical accounting policies and estimates from those disclosed in our most recent Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our exposures to market risk since December 31, 2021. For details on the Company’s interest rate, foreign currency exchange, and credit risks, see “Item 7A. Quantitative and Qualitative Information About Market Risks” in our 2021 Annual Report.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are not effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~March 31,~~June 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. However, throughout 2021 and into 2022, the Company continues the complete review of all of its financial procedures and controls and is continuing the process of updating and optimizing its infrastructure around these controls. Over the past year, the Company has hired additional finance and accounting personnel, significantly improving the segregation of duties within that department and providing additional bandwidth for management to focus on improving controls and procedures. This review is ongoing, and the Company believes that this process will continue to positively affect our internal control over financial reporting in the future.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

Item 1A. Risk Factors.

Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our most recent Annual Report on Form 10-K for the year ended December 31, 2021, the occurrence of any one of which could have a material adverse effect on our actual results.

There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

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

During the three months ended ~~March 31,~~June 30, 2022, we issued securities that were not registered under the Securities Act and were not previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q as listed below. All of the securities discussed in this Item 2 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

Consultant Shares

During the three months ended ~~March 31,~~June 30, 2022, the Company issued ~~113,420~~157,094 shares of Common Stock to consultants and employees.

~~Debt Conversion~~

~~During the three months ended March 31, 2022, a lender converted $168,850 in promissory notes into 109,435 shares of Common Stock.~~

Item 3. Defaults Upon Senior Securities.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~There is no~~Resignation of Chief Executive Officer and Director

On August 9, 2022, Laurie Weisberg, the Company’s Chief Executive Officer and a member of the Board, notified the Company of her intention to resign from the positions of Chief Executive Officer, director, and any other ~~information required~~positions held with the Company or any of its subsidiaries, regardless of whether Ms. Weisberg had been appointed. Such resignations are to become effective on a date to be ~~disclosed~~determined following further discussion with the Board, but in no event later than August 31, 2022.

Appointment of Chief Executive Officer

Effective upon Ms. Weisberg’s resignation as Chief Executive Officer, Jeremy Frommer, currently the Company’s Executive Chairman, will be appointed as Chief Executive Officer, pursuant to the Board’s approval.

Jeremy Frommer

Mr. Frommer was appointed Executive Chairman in February 2022 and has been a member of our board of directors since February 2016. Previously, he served as our Chief Executive Officer from February 2016 to August 2021, and Co-Chief Executive Officer from August 2021 to February 2022. Mr. Frommer has over 20 years of experience in the financial technology industry. Previously, Mr. Frommer held key leadership roles in the investment banking and trading divisions of large financial institutions. From 2009 to 2012, Mr. Frommer was briefly retired until beginning concept formation for Jerrick Ventures which he officially founded in 2013. From 2007 to 2009, Mr. Frommer was Managing Director of Global Prime Services at RBC Capital Markets, the investment banking arm of the Royal Bank of Canada, the largest financial institution in Canada, after the sale of Carlin Financial Group, a professional trading firm. From 2004 to 2007, Mr. Frommer was the Chief Executive Officer of Carlin Financial Group after the sale of NextGen Trading, a software development company focused on building equity trading platforms. From 2002 to 2004, Mr. Frommer was Founder and Chief Executive Officer of NextGen Trading. From 2000 to 2002, he was Managing Director of Merger Arbitrage Trading at Bank of America, a financial services firm. Mr. Frommer was also a director of LionEye Capital, a hedge fund from June 2012 to June 2014. He holds a B.A. from the University of Albany. We believe Mr. Frommer is qualified to serve on our board of directors due to his financial and leadership experience.

Appointment of Director

Effective upon Ms. Weisberg’s resignation as a director, Justin Maury, currently the Company’s President and Chief Operating Officer, will be appointed to the Board, pursuant to the Board’s approval.

Justin Maury

Mr. Maury has served as our President since January 2019 and was appointed Chief Operating Officer in August 2021. A full-stack designer and product developer by training, Mr. Maury partnered with Jeremy Frommer and founded the Company in 2013, having brought with him 10 years of experience in the creative industry. Since joining Creatd in 2013, Mr. Maury has been an instrumental force in the Company’s business and revenue expansion, and has overseen the Company’s product development since inception, including overseeing the design, development, launch, and ongoing growth of the Company’sflagship product, Vocal, the innovative creator that, under ~~this item which was not previously disclosed.~~Mr. Maury’s leadership, has grown to a community of over 1.5 million users with a total audience reach of over 175 million.h of over 175 million.

As a director, we believe Mr. Maury will add considerable value, including through by providing a unique perspective into Creatd’s product performance and evolution and by providing invaluable direct input to help guide the Company’s ongoing refinement of its technology roadmap and maturation of its business model.

Item 6. Exhibits.

Exhibit No.		Description

4.1		Form of ~~Common Stock Purchase Warrant (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed with the Commission on March 3, 2022).~~

~~4.2~~		~~Form of Common Stock Purchase Warrant~~Original Issue Discount Senior Convertible Debenture (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the Commission on ~~March 9,~~June 3, 2022).

4.2		Form of Series C Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 to the Company’s current report on Form 8-K filed with the Commission on June 3, 2022)

4.3		Form of Series D Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.3 to the Company’s current report on Form 8-K filed with the Commission on June 3, 2022)

10.1		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the Commission on ~~March~~June 3, 2022).

10.2		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed with the Commission on June 3, 2022)

10.3		Form of Guaranty (incorporated by reference to Exhibit 10.3 to the Company’s current report on Form 8-K filed with the Commission on June 3, 2022)

10.4		Creatd, Inc. 2022 Omnibus Securities ~~Purchase Agreement~~and Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the Commission on ~~March 9,~~June 7, 2022).

~~17.1~~		~~Letter of resignation of Mark Standish (incorporated by reference to Exhibit 17.1 to the Company’s current report on Form 8-K filed with the Commission on February 18, 2022).~~

~~17.2~~		~~Letter of resignation of Leonard Schiller (incorporated by reference to Exhibit 17.2 to the Company’s current report on Form 8-K filed with the Commission on February 18, 2022).~~

~~17.3~~		~~Letter of resignation of LaBrena Martin (incorporated by reference to Exhibit 17.3 to the Company’s current report on Form 8-K filed with the Commission on February 18, 2022).~~

31.1*		Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a), As adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a), As adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, As adopted Pursuant to Section 906 of the Sarbanes-Oxley Act 2002

32.2*		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, As adopted Pursuant to Section 906 of the Sarbanes-Oxley Act 2002

101.INS*		Inline XBRL Instance Document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Filed herewith

This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CREATD, INC.

Date: ~~May 16,~~August 15, 2022	By:	/s/ Laurie Weisberg
	Name:	Laurie Weisberg
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: ~~May 16,~~August 15, 2022	By:	/s/ Chelsea Pullano
	Name:	Chelsea Pullano
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

0001357671 crtd:TheDecember2021LoanAgreementTwoMember 2022-01-01 2022-06-30 iso4217:USD xbrli:shares

	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

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