UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 6, 2022
Creatd, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 001-39500 | 87-0645394 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (IRS Employer Identification No.) |
2050 Center Avenue, Suite 640
Fort Lee, NJ 07024
(Address of principal executive offices)
(201) 258-3770
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 6, 2022, Creatd, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal year ended December 31, 2021 (the “Press Release”). A copy of the Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information furnished under this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
The Press Release included certain revenue forecast information for the first quarter of 2022. The Press Release is furnished hereto as Exhibit 99.1 and incorporated herein by reference.
The Press Release can also be found on our website at https://creatd.com.
The information in Item 7.01 to this Current Report on Form 8-K, including Exhibits 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit Number |
Description | |
| 99.1 | Press release, dated April 6, 2022, by Creatd, Inc. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CREATD, INC. | ||
| Date: April 7, 2022 | By: | /s/ Jeremy Frommer |
| Name: | Jeremy Frommer | |
| Title: | Co-Chief Executive Officer | |
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Exhibit 99.1
Creatd, Inc. Announces Full Year 2021 Financial Results with Record Revenues
Year-over-year, Creatd’s 2021 GAAP revenue grew 255% to $4.3 million, with $6.9 million in non-GAAP revenue, led by robust growth in all business segments; notable contributions included brand contract renewals, accretive agency acquisitions, e-commerce brand launches, and platform subscriber growth. For FY 2022, Company expects $8-10 million in GAAP revenue and $15-18 million in non-GAAP revenue without a corresponding increase in operational expenses.
New York, N.Y. – April 06, 2022 /PRNewswire/ -- Creatd, Inc. (Nasdaq CM: CRTD) (“Creatd” or the “Company”), a creator-first holding company and the parent company of Vocal, is today announcing financial results for the full year ending December 31, 2021. The Company has delivered sequential quarterly revenue growth in 10 of the last 11 quarters, such that revenues generated during the fourth quarter of 2021, which totaled over $1.5 million, exceeded those generated during the entirety of 2020 by approximately 16%.
Commented Creatd CEO Laurie Weisberg, “We accomplished a great deal during 2021, including establishing a foundation of recurring subscription revenues originating from both Vocal and our direct-to-consumer e-commerce businesses, as well as securing contract renewals with numerous key brand clients. The steady growth of Vocal’s creator base combined with the continued expansion of WHE’s influencer roster has allowed Creatd to extend its global digital reach to over 175 million today. We invested considerable capital and resources to garner this traction and we are determined to continue scaling our efforts while experimenting with new marketing and creator acquisition initiatives. Among these upcoming planned initiatives is the launch of Vocal’s very first mobile application, the expansion of our metaverse pursuits, and the bolstering of our existing brand products and services across the board.”
Continued Weisberg, “Based on preliminary first-quarter results, we expect Q1 2022 revenues to track similarly to those of Q4 2021, due to continued pandemic-related impacts resulting in instances of delayed revenue materialization for Creatd Partners and Creatd Ventures. Nevertheless, based our current full-year outlook, we anticipate that 2022 revenues will increase by 2x year-over-year, without a corresponding increase in operating expenses, as we continue to achieve greater cohesiveness in the business, and improve operating efficiency. In addition to scaling our existing revenue lines, we are currently pursuing a number of accretive acquisitions in the influencer agency and DTC e-commerce spaces, as well as working to execute on our previously announced proposal to spin off our Web 3.0 assets. As the creative community shifts toward the Web 3.0 era, our company has and will continue to enhance our core proprietary platforms in order to accommodate and anticipate creators’ evolving technological needs.”
2021 Full-Year Financial and Operational Highlights
| ● | GAAP Revenue for full-year 2021 increased 255% to $4.3 million, compared with $1.2 million for the year ending December 31, 2020. |
| ● | Revenue for Creatd Partners, primarily resulting from influencer and content marketing deals, grew 105% year-over-year to $2.3 million. |
| ● | Revenue for Creatd Labs, consisting of Vocal creator subscriptions and platform processing fees, increased to $1.9 million year-over-year, as compared to $71,000 in 2021. |
| ● | Revenue for Creatd Ventures, generated from direct-to-consumer e-commerce sales, totaled $90,000 during 2021, marking the first year of significant revenue contribution from this pillar. |
| ● | Operating Expenses in 2021 doubled year-over-year to $32.4 million as compared to $16 million in 2020. The increase in operating expenses is attributable in part to a $2.8 million increase in non-cash charges, relating to the issuance of year-end stock option grants to employees and directors, as well as the vesting of previously issued options, which vest over multiple years. Extraordinary, non-recurring charges for the year totaled approximately $2.5 million related primarily to the audit of acquired companies, legal expenses, consulting, recruiting fees, and one-time marketing expenditures during the second quarter, resulting in the Company successfully reaching a critical mass of over 1 million registered creators on Vocal. Having achieved this milestone, the Company went on to significantly reduce marketing spend in both the third and fourth quarter of 2021. Going forward, the Company expects future quarterly spend to reflect levels consistent with that of the fourth quarter ($1.6 million). Finally, the Company expects to eliminate 2021 extraordinary expenses, remove duplicate outsourced support costs, and does not foresee a material headcount increase. |
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| ● | Comprehensive Loss increased 54% year-over-year to $37.4 million, which included $12.2 million in non-cash and non-recurring operating expenses as well as $2.9 million of other non-recurring, non-cash charges related to the elimination of debt, the majority of which was converted to equity, and a $1.1 million change in derivative liability expenses. |
| ● | Cash at year-end 2021 totaled approximately $3.8 million. In the first quarter of 2022, the Company closed two offerings to raise an additional $5.1 million. Management actively participated in both financings, purchasing a combined total of approximately 280,000 shares. |
| ● | Insider Buying by Creatd’s executive management in the public market occurs regularly when permissible. In 2021, Creatd’s executive management purchased 46,000 open market shares totaling $152,000 at an average purchase price of $3.33 per share. |
| ● | Total Debt decreased year-over-year by approximately $830,000 to $1.5 million. Subsequent to year-end, the Company’s total debt decreased by an additional $678,000, thereby eliminating all long-term debt. Currently, the Company holds only $822,000 of short-term debt, $190,000 of which consists of a government Payroll Protection Program loan that carries 1% annual interest. |
| ● | Shareholders’ Equity totaled $3.7 million at year-end 2021, compared to $2.1 million on September 30, 2021. During the first quarter of 2022, net equity increased as a result of the aforementioned $5.1 million of equity-based financing. |
| ● | Leadership Changes in 2021 and early 2022 were enacted in order to prepare the Company for the next phase of its lifecycle—revenue acceleration and profitability. During 2021, the Company welcomed several new senior management hires and, subsequent to year-end, announced the streamlining of its C-Suite and the addition of high-caliber expertise to its Board of Directors. |
| ● | Total Vocal Creators at year-end totaled over 1.3 million. Having reached a critical milestone of Vocal subscribers during 2021, surpassing 1 million creators–which was correlated with a one-time significant increase in marketing spend–the Company is now well-positioned to build upon its recurring revenue business model. |
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For more information on Creatd’s 2022 business focuses, as well as descriptions of the Company’s four pillars and associated revenue lines, please visit the Q2 2022 Investor Presentation.
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.
For news and updates, subscribe to Creatd’s newsletter: https://creatd.com/newsletter
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.
*** Financial Statements Follow ***
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Creatd, Inc.
Condensed Consolidated Balance Sheet (audited)
| December 31,
2021 | December 31,
2020 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 3,794,734 | $ | 7,906,782 | ||||
| Account receivable, net | 337,440 | 90,355 | ||||||
| Inventory | 106,403 | - | ||||||
| Prepaid expenses and other current assets | 236,665 | 23,856 | ||||||
| Total Current Assets | 4,475,242 | 8,020,993 | ||||||
| Property and equipment, net | 102,939 | 56,258 | ||||||
| Intangible assets | 2,432,842 | 960,611 | ||||||
| Goodwill | 1,374,835 | 1,035,795 | ||||||
| Deposits and other assets | 718,951 | 191,836 | ||||||
| Marketable securities | - | 62,733 | ||||||
| Minority investment in business | 50,000 | 217,096 | ||||||
| Operating lease right of use asset | 18,451 | 239,158 | ||||||
| Total Assets | $ | 9,173,259 | $ | 10,784,480 | ||||
| Liabilities and Stockholders’ Equity (Deficit) | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 3,730,540 | $ | 2,638,688 | ||||
| Derivative liabilities | - | 42,231 | ||||||
| Convertible Notes, net of debt discount and issuance costs | 159,193 | 897,516 | ||||||
| Current portion of operating lease payable | 18,451 | 79,816 | ||||||
| Notes payable, net of debt discount and issuance costs | 1,278,672 | 1,221,539 | ||||||
| Deferred revenue | 234,159 | 88,637 | ||||||
| Total Current Liabilities | 5,421,015 | 4,968,427 | ||||||
| Non-current Liabilities: | ||||||||
| Note payable | 63,922 | 213,037 | ||||||
| Operating lease payable | - | 157,820 | ||||||
| Total Non-current Liabilities | 63,922 | 370,857 | ||||||
| Total Liabilities | 5,485,007 | 5,339,284 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Series E Preferred stock, $0.001 par value, 20,000,000 shares authorized 500 and 7,738 shares issued and outstanding, respectively | - | 8 | ||||||
Common stock, $0.001: 100,000,000 authorized shares 16,691,170 issued and 16,685,513 outstanding as of December 31, 2021, and 8,736,378 issued and 8,727,028 outstanding as of December 31, 2020 | 16,691 | 8,737 | ||||||
| Additional paid-in capital | 111,563,618 | 77,505,013 | ||||||
| Subscription receivable | - | (40,000 | ) | |||||
| Less: Treasury stock, 5,657 and 5,657, respectively | (62,406 | ) | (62,406 | ) | ||||
| Accumulated deficit | (109,632,574 | ) | (71,928,922 | ) | ||||
| Accumulated other comprehensive income | (78,272 | ) | (37,234 | ) | ||||
| Total Creatd, Inc. Stockholders’ Equity | 1,807,057 | 5,445,196 | ||||||
| Non-controlling interest in consolidated subsidiary | 1,881,195 | - | ||||||
| 3,688,252 | 5,445,196 | |||||||
| Total Liabilities and Stockholders’ Equity | $ | 9,173,259 | $ | 10,784,480 | ||||
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Creatd, Inc.
Condensed Consolidated Statements of Operations
(Audited)
| Twelve
Months Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Net revenues | $ | 4,299,717 | $ | 1,212,870 | ||||
| Cost of revenues | 5,300,037 | 1,495,042 | ||||||
| Gross margin | (1,000,320 | ) | (282,172 | ) | ||||
| Operating expenses | ||||||||
| Research and development | 983,528 | 257,431 | ||||||
| Marketing | 9,626,982 | 2,854,904 | ||||||
| Stock based compensation | 9,661,168 | 6,861,163 | ||||||
| Impairment of goodwill | 1,035,795 | - | ||||||
| General and administrative | 11,060,927 | 6,027,665 | ||||||
| Total operating expenses | 32,368,400 | 16,001,163 | ||||||
| Loss from operations | (33,368,720 | ) | (16,283,335 | ) | ||||
| Other income (expenses) | ||||||||
| Other income | 396,223 | 512,071 | ||||||
| Interest expense | (372,106 | ) | (1,376,902 | ) | ||||
| Accretion of debt discount and issuance cost | (3,612,669 | ) | (4,303,072 | ) | ||||
| Derivative expense | (100,502 | ) | - | |||||
| Change in derivative liability | (1,096,287 | ) | 3,019,457 | |||||
| Impairment of Investment | (589,461 | ) | (11,450 | ) | ||||
| Impairment of debt security | - | (50,000 | ) | |||||
| Settlement of vendor liabilities | 59,792 | (126,087 | ) | |||||
| Loss on marketable securities | - | (7,453 | ) | |||||
| Gain (loss) on extinguishment of debt | 1,025,555 | (5,586,482 | ) | |||||
| Gain on forgiveness of debt | 279,022 | 470 | ||||||
| Other income (expenses), net | (4,010,433 | ) | (7,929,448 | ) | ||||
| Loss before income tax provision and equity in net loss from unconsolidated investments | (37,379,153 | ) | (24,212,783 | ) | ||||
| Equity in net loss from equity method investment | - | - | ||||||
| Income tax provision | - | - | ||||||
| Net loss | $ | (37,379,153 | ) | $ | (24,212,783 | ) | ||
| Non-controlling interest in net loss | 86,251 | - | ||||||
| Net Income (loss) attributable to Creatd, Inc. | (37,292,902 | ) | (24,212,783 | ) | ||||
| Deemed dividend | (410,750 | ) | (3,135,702 | ) | ||||
| Inducement expense | - | - | ||||||
| Net loss attributable to common shareholders | (37,703,625 | ) | (27,348,485 | ) | ||||
| Comprehensive income (loss) | ||||||||
| Currency translation gain (loss) | (41,038 | ) | (31,239 | ) | ||||
| Comprehensive loss | (37,420,191 | ) | (24,244,022 | ) | ||||
| Per-share data | ||||||||
| Basic and diluted loss per share | $ | (2.98 | ) | $ | (5.68 | ) | ||
| Weighted average number of common shares outstanding | 12,652,470 | 4,812,153 | ||||||
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