Le Lézard
Classified in: Science and technology, Business
Subjects: ERN, ERP, VEN

Creatd Announces Record Gross Revenues of $3.6MM for its Second Quarter 2022, and Nears Break-Even Gross Profit Margins, Raises Full-Year Gross Revenue Guidance to $15MM-$20MM


NEW YORK, Aug. 15, 2022 /PRNewswire/ -- Creatd, Inc. (Nasdaq CM: CRTD) ("Creatd" or the "Company"), a creator-first holding company today reported its financial results for the second quarter ended June 30, 2022. For the second quarter, Creatd grew its gross revenues by 45% to $3.6MM and is currently tracking to achieve between $15MM - $20MM in gross revenues for the year, above its previously stated guidance. During the quarter, net revenues grew to over $1.6MM, reflecting a 67% increase year-over-year. As the Company continues to navigate external headwinds, cost-cutting initiatives have been implemented and designed to streamline workflows and lower overall operating costs.

Savings generated as a result of the Company's second quarter 2022 cost-cutting measures will be reinvested into the Company to promote its growth and expansion and increase shareholder value. These investments will fuel numerous planned initiatives including: expanding Creatd Labs' technology stack; ramping up its marketing and data analysis; and growing Creatd Ventures' CPG brand portfolio. At the same time, the Company expects to further reduce operating expenses as it continues to optimize and reduce its marketing expenditure and scrutinize many of the contributing expenses within general & administrative expenses. Already, the Company has, subsequent to the second quarter, taken steps to reduce headcount materially to gain efficiencies, integrate acquired operations, and manage future expenses.

Additionally, the Company has announced that, effective on or before August 31, 2022, Jeremy Frommer, currently the Company's Executive Chairman, will be appointed as Chief Executive Officer, in addition to maintaining his position as Chairman of the Board. This announcement comes following a notification of intent of resignation received from Laurie Weisberg, Creatd's Chief Executive Officer, who will step down from the CEO position as well as from the Company's Board of Directors. Justin Maury, the Company's co-founder and COO, has been approved to join the board to replace her seat. This is expected to be effectuated shortly. While serving as a director, Mr. Maury will maintain his current role as Creatd's Chief Operating Officer.

Commented Creatd CEO Jeremy Frommer, "As a public company in the microcap space, we are subject to extreme volatility in our stock price, financing, and regulatory processes that can often take our management team's focus off of the broad mission to generate value for Creatd's shareholders, of which I am the largest. We recently withdrew a Rights Offering, due to what I firmly believe is a fast money marketplace that predominantly does not benefit shareholders. Instead, the space is seemingly riddled with obstacles, bureaucracy, and often bad actors. While the Rights Offering expansion plan would have exponentially accelerated Creatd's revenues and leveraged a rapidly approaching break-even cash flow moment, in its absence the Company can nevertheless continue to progress at the current pace of revenue expansion, and take advantage of available funding structures. But that is not my preference. Instead, I want to expand revenues rapidly given the inflection point the company is at, which was the very impetus for the Rights Offering. I am obligated now to work to maximize shareholder value, by exploring all alternatives, resources, and networks to accomplish as much. Part of that process includes spinning out assets from Creatd Studios, in particular the OG Collection, Inc. as well as the potential privatization of other assets."

About Creatd

Creatd, Inc. (Nasdaq CM: CRTD) is a creator-first technology holding company and the parent company of the Vocal platform. Our mission is to empower creators, entrepreneurs, and brands through technology and partnership. We accomplish this through Creatd's four business pillars: Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios.

Creatd: https://creatd.com
Creatd IR: https://investors.creatd.com
Vocal Platform: https://vocal.media
Investor Relations Contact: ir@creatd.com

Forward-Looking Statements

Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings.

Creatd, Inc.
Condensed Consolidated Balance Sheets




June 30,
2022



December 31,
2021




(Unaudited)












Assets














Current Assets







Cash


$

1,556,663



$

3,794,734


Accounts receivable, net



379,312




337,440


Inventory



429,754




106,403


Marketable securities



48,646




-


Prepaid expenses and other current assets



186,883




236,665


Total Current Assets



2,601,258




4,475,242











Property and equipment, net



250,915




102,939


Intangible assets



2,526,763




2,432,841


Goodwill



1,383,785




1,374,835


Deposits and other assets



1,169,329




718,951


Minority investment in businesses



-




50,000


Operating lease right of use asset



2,197,394




18,451











Total Assets


$

10,129,444



$

9,173,259











Liabilities and Stockholders' Deficit


















Current Liabilities









Accounts payable and accrued liabilities


$

4,899,108



$

3,730,540


Share liability



31,080




-


Convertible Notes, net of debt discount and issuance costs



2,291,010




159,193


Current portion of operating lease payable



149,830




18,451


Note payable, net of debt discount and issuance costs



1,863,831




1,278,672


Deferred revenue



262,583




234,159











Total Current Liabilities



9,497,442




5,421,015











Non-current Liabilities:









Note payable



31,417




63,992


Operating lease payable



2,100,818




-











Total Non-current Liabilities



2,132,235




63,992











Total Liabilities



11,629,677




5,485,007











Commitments and contingencies


















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



122,068,892




111,563,618


Less: Treasury stock, 5,657 and 5,657 shares, respectively



(62,406)




(62,406)


Accumulated deficit



(124,314,530)




(109,632,574)


Accumulated other comprehensive income



(107,881)




(78,272)


Total Creatd, Inc. Stockholders' Equity



(2,395,670)




1,807,057


Non-controlling interest in consolidated subsidiaries



895,437




1,881,195





(1,500,233)




3,688,252











Total Liabilities and Stockholders' Equity (Deficit)


$

10,129,444



$

9,173,259


 

 

Creatd, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)




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


 

 

SOURCE Creatd, Inc.


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