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Creatd, Inc. (CRTD) SEC Filing 10-Q Quarterly Report for the period ending Thursday, March 31, 2022

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    10-Q Quarterly Report November 2020

Creatd, Inc.

CIK: 1357671 Ticker: CRTD

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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The following information was filed by Creatd, Inc. (CRTD) on Thursday, April 7, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Creatd, Inc.'s 10-Q Quarterly Report:

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Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parentheticals)
Condensed Consolidated Statement Of Changes In Stockholders??? Equity (Deficit) (Unaudited)
Condensed Consolidated Statement Of Changes In Stockholders??? Equity (Deficit) (Unaudited) (Parentheticals)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Operations And Comprehensive Loss (Unaudited)
Accounting Policies, By Policy (Policies)
Acquisitions
Acquisitions (Details)
Acquisitions (Details) - Schedule Of Components Of The Purchase Price
Acquisitions (Details) - Schedule Of Unaudited Pro-Forma Combined Results Of Operations
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Commitments And Contingencies (Details)
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Convertible Notes Payable (Details)
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Derivative Liabilities (Details)
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Derivative Liabilities (Tables)
Going Concern
Going Concern (Details)
Inventory
Inventory (Details) - Schedule Of Inventory
Inventory (Tables)
Notes Payable
Notes Payable (Details)
Notes Payable (Details) - Schedule Of Notes Payable
Notes Payable (Tables)
Organization And Operations
Organization And Operations (Details)
Property And Equipment
Property And Equipment (Details)
Property And Equipment (Details) - Schedule Of Property And Equipment Stated At Cost, Less Accumulated Depreciation And Amortization
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Related Party
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Segment Information
Segment Information (Details) - Schedule Of Financial Information Related To Our Reportable Segments And Corporate
Segment Information (Details) - Schedule Of Reportable Segments And Corporate
Segment Information (Tables)
Significant Accounting Policies And Practices
Significant Accounting Policies And Practices (Details)
Significant Accounting Policies And Practices (Details) - Schedule Of Amortization Over The Next Five Years
Significant Accounting Policies And Practices (Details) - Schedule Of Changes In Marketable Securities
Significant Accounting Policies And Practices (Details) - Schedule Of Common Stock Equivalents
Significant Accounting Policies And Practices (Details) - Schedule Of Consolidated Subsidiaries And/Or Entities
Significant Accounting Policies And Practices (Details) - Schedule Of Property And Equipment Estimated Useful Lives
Significant Accounting Policies And Practices (Details) - Schedule Of Relevant Assets And Liabilities That Are Measured At Fair Value On Recurring Basis
Significant Accounting Policies And Practices (Details) - Schedule Of Revenue Disaggregated By Revenue
Significant Accounting Policies And Practices (Details) - Schedule Of Revenue Recognition
Significant Accounting Policies And Practices (Tables)
Stockholders??? Equity
Stockholders??? Equity (Details)
Stockholders??? Equity (Details) - Schedule Of Option Outstanding And Option Exercisable
Stockholders??? Equity (Details) - Schedule Of The Stock Option Activity
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Subsequent Events
Subsequent Events (Details)

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Creatd, Inc. provided additional information to their SEC Filing as exhibits

Ticker: CRTD
CIK: 1357671
Form Type: 10-Q Quarterly Report
Accession Number: 0001213900-22-027118
Submitted to the SEC: Mon May 16 2022 4:14:41 PM EST
Accepted by the SEC: Mon May 16 2022
Period: Thursday, March 31, 2022
Industry: Allied To Motion Picture Production

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