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, 2023

☐ 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
N/A		N/A		N/A

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 18, 2023, the registrant had 91,245,572 shares of its common stock, par value $0.001 per share, outstanding.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS

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

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4.	Controls and Procedures	14

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	15

Item 1A.	Risk Factors	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3.	Defaults Upon Senior Securities	16

Item 4.	Mine Safety Disclosures	16

Item 5.	Other Information	16

Item 6.	Exhibits	17

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, 2023

Index to the Condensed Consolidated Financial Statements

Contents		Page(s)
Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (unaudited)		F-1

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022 (unaudited)		F-2

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2023 and 2022 (unaudited)		F-3

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (unaudited)		F-5

Notes to the Condensed Consolidated Financial Statements (unaudited)		F-6

Creatd, Inc.

Condensed Consolidated Balance Sheets

	March 31, 2023			December 31, 2022
	(Unaudited)

Assets
Current Assets
Cash	$	172,052		$	706,224
Accounts receivable, Net		244,353			239,423
Inventory		256,257			404,970
Prepaid expenses and other current assets		274,081			128,547
Total Current Assets		946,743			1,479,164

Property and equipment, net		201,939			212,545
Intangible assets		231,284			230,084
Goodwill		46,460			46,460
Deposits and other assets		1,052,954			797,231
Operating lease right of use asset		1,995,956			2,054,265

Total Assets	$	4,475,336		$	4,819,749

Liabilities and Stockholders’ Deficit

Current Liabilities
Accounts payable and accrued liabilities	$	11,109,340		$	7,565,720
Convertible Notes, net of debt discount and issuance costs		4,497,023			5,369,599
Current portion of operating lease payable		287,542			326,908
Note payable, net of debt discount and issuance costs		1,570,601			1,645,680
Derivative Liability		58,970			-
Deferred revenue		253,348			299,409

Total Current Liabilities		17,776,824			15,207,316

Non-current Liabilities:
Note payable		32,020			38,014
Operating lease payable		2,018,789			2,077,618

Total Non-current Liabilities		2,050,809			2,115,632

Total Liabilities		19,827,633			17,322,948

Commitments and contingencies (Note 10)

Stockholders’ Deficit
Preferred stock, $0.001 par value, 20,000,000 shares authorized
Series E Preferred stock, $0.001 par value, 8,000 shares authorized, 450 and 450 shares outstanding as of March 31, 2023 and December 31, 2022, respectively
Common stock par value $0.001: 1,500,000,000 shares authorized; 86,533,654 issued and 86,440,281 outstanding as of March 31, 2023, and 39,062,386 issued and 38,969,013 outstanding as of December 31, 2022		86,534			39,062
Additional paid in capital		152,688,839			134,570,600
Less: Treasury stock, 93,373 and 93,373 shares, as of March 31, 2023 and December 31, 2022, respectively		(78,456	)		(78,456	)
Accumulated deficit		(168,385,954	)		(146,142,373	)
Accumulated other comprehensive loss		(10,212	)		(140,183	)
Total Creatd, Inc. Stockholders’ Deficit		(15,699,249	)		(11,751,350	)
Non-controlling interest in consolidated subsidiaries		346,952			(751,849	)
		(15,352,297	)		(12,503,199	)

Total Liabilities and Stockholders’ Deficit	$	4,475,336		$	4,819,749

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

F-1

Creatd, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

	For the Three Months Ended			For the Three Months Ended
	March 31, 2023			March 31, 2022

Net revenue	$	986,145		$	1,348,738

Cost of revenue		1,012,687			1,572,170

Gross margin (loss)		(26,542	)		(223,432	)

Operating expenses
Compensation		4,114,523			1,662,830
Research and development		131,626			226,654
Marketing		535,521			2,092,021
Stock based compensation		7,328,044			1,080,792
General and administrative		1,575,359			1,723,555

Total operating expenses		13,685,073			6,785,852

Loss from operations		(13,711,615	)		(7,009,284	)

Other income (expenses)
Other income		12,000			99
Interest expense		(65,370	)		(13,896	)
Accretion of debt discount and issuance cost		(2,155,159	)		(23,477	)
Derivative liability		(58,970)			3,729
Settlement of vendor liabilities		23,589			14,525
Gain on extinguishment of debt		-			147,256

Other income (expenses), net		(2,243,910	)		128,236

Loss before income tax provision		(15,955,525	)		(6,881,048	)

Income tax provision		-			-

Net loss		(15,955,525	)		(6,881,048	)

Non-controlling interest in net loss		49,190			617,886

Net Loss attributable to Creatd, Inc.		(15,906,335	)		(6,263,162	)

Deemed dividend		(6,337,246	)		(81,728	)

Net loss attributable to common shareholders	$	(22,243,581	)	$	(6,344,890	)

Comprehensive loss

Net loss		(15,955,525	)		(6,881,048	)

Currency translation gain (loss)		129,971			(4,950	)

Comprehensive loss	$	(15,825,554	)	$	(6,885,998	)

Per-share data
Basic and diluted loss per share	$	(0.35	)	$	(0.36	)

Weighted average number of common shares outstanding		63,491,732			17,707,951

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

F-2

Creatd, Inc.

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

	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, 2023		450	$	-		39,062,386	$	39,062		(93,373	)	$	(78,456	)	$	134,570,600		$	(146,142,373	)	$	(751,849	)	$	(140,183	)	$	(12,503,199	)
Stock based compensation		-		-		31,118,098		31,118		-			-			7,260,113			-			-			-			7,291,231
Shares issued for prepaid services		-		-		1,250,000		1,250		-			-			212,500			-			-			-			213,750
Shares issued for acquisition of Non-controlling interest in consolidated subsidiaries		-		-		1,325,794		1,326		-			-			(899,317	)		-			897,991			-			-
BCF issued with convertible note		-		-		-		-		-			-			2,000,000			-			-			-			2,000,000
Exercise of warrants to stock						3,767,925		3,768		-			-			749,925			-			-			-			753,693
Stock warrants issued with note payable		-		-		-		-		-			-			-			-			-			-			-
Cash received for common stock		-		-		3,062,600		3,063		-			-			1,046,937			-			-			-			1,050,000
Common stock issued upon conversion of convertible notes		-		-		6,946,851		6,947		-			-			1,410,835			-			-			-			1,417,782
Foreign currency translation adjustments		-		-		-		-		-			-			-			-			-			129,971			129,971
Sale of minority interest in OG Collection INC						-		-		-			-			-			-			250,000			-			250,000
Dividends		-		-		-		-		-			-			6,337,246			(6,337,246	)		-			-			-
Net loss for the three months ended March 31, 2023		-		-		-		-		-			-			-			(15,906,335	)		(49,190	)		-			(15,955,525	)
Balance, March 31, 2023		450	$	-		86,533,654	$	86,534		(93,373	)	$	(78,456	)	$	152,688,839		$	(168,385,954	)	$	346,952		$	(10,212	)	$	(15,352,297	)

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

F-3

Creatd, Inc.

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

For the Three Months Ended March 31, 2022

(Unaudited)

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

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

SEC Form 10-Q filed by Creatd Inc.