Creatd Announces Letter of Intent for 25% Sale of OG Collection, Inc. at $2.5 Million Purchase Price; Transaction Anticipated to Close Ahead of Planned OTC Spin-Off

Rhea-AI Summary

On December 6, 2022, Creatd, Inc. (OTCQB: CRTD) announced a Letter of Intent (LOI) for the sale of 25% equity in its subsidiary OG Collection, Inc. to Dorado Goose LLC for $2.5 million. This transaction values OG Collection at $10 million post-money. Following the sale, ownership stakes for existing shareholders will adjust from 80% to 60%, and management's share will decrease from 20% to 15%. The OG Collection houses a vast media archive, including images, original artworks, and footage. This move aims to enhance monetization efforts and expedite the spin-off process into a publicly listed entity.

Positive

• The sale of 25% equity in OG Collection, Inc. for $2.5 million reflects a robust $10 million valuation.
• The transaction is expected to accelerate the spin-off process, potentially increasing value for existing shareholders.
• Expanding monetization initiatives for the OG Collection's vast media assets and intellectual property.

Negative

• Post-transaction, existing shareholders' ownership will decrease from 80% to 60%, diluting their stake.
• Management's interest will also be diluted from 20% to 15%, possibly affecting alignment of management and shareholder interests.

NEW YORK, Dec. 6, 2022 /PRNewswire/ -- Creatd, Inc. (OTCQB: CRTD) ("Creatd" or the "Company"), a creator-first technology company, today announced that it has entered into a Letter of Intent ("LOI") with an outside party for the sale of 25% of the equity interests of its subsidiary OG Collection, Inc. (the "OG Collection"), its acclaimed media archive capturing some of the most iconic publications and people of the 20th century.

Summary of Proposed Transaction

• Consideration for Purchase of Shares: Under the terms of the LOI, Dorado Goose LLC shall acquire a total of 500,000 shares of OG Collection, Inc. for cash consideration of $2,500,000, implying a pre-money valuation of $7,500,000 and a post-money valuation of $10,000,000.
  
  
• Capitalization: As previously announced, Creatd is pursuing its plan to spin-off the OG Collection, Inc. As part of the transaction, and subject to board approval, the Company will be issuing 80% ownership interests of OG Collection, Inc. to shareholders of record, and 20% to the entity's management. Upon the closing of the proposed transaction outlined in the LOI, this initial capitalization would be adjusted to reflect the new investors' capital investment. With the purchase of the 25% ownership by Dorado Goose LLC, the original 80% ownership to Creatd shareholders would be reduced to 60% and management's original 20% would be reduced to 15% post-transaction.
  
  A record date will be set prior to the distribution of the spin out shares of OG Collection, Inc. Only those shareholders that can demonstrate physical ownership as of such record date will be entitled to the new security.
  
  
• Current Assets: OG Collection, Inc. includes approximately 150,000 published & unpublished images in original format; approximately 25,000 original drawings, sketches, cartoons, and artwork; approximately 3,500 hours of original footage in VS, Super 8 film, and DVD formats; approximately 5,000 mastheads, magazines, stories, unpublished scripts and production materials; and thousands of records from the archives of General Media, Inc. and Bob Guccione's personal estate. In addition, the OG Collection includes the OG Gallery web 3.0 and NFT assets; the intellectual property associated with development of media including the film Filthy Gorgeous and the book series No One's Pet; current projects including podcasts, streaming video and licensing; and all copyright relating to the photography and illustrations of Bob Guccione.

Commented Creatd's Chairman and CEO, Jeremy Frommer, "I am thrilled to have this opportunity to jumpstart the OG Collection, Inc.'s various expansion initiatives including its media development, partnership with the premiere licensing group in the photography space, as well as our Web 3.0 and NFT strategy. Additionally, through the plan contemplated in today's LOI, we will be in an even better position to monetize the hundreds of thousands of original images in our vast media library through both direct sales as well as transactions leveraging the Collection's impressive intellectual property."

Frommer continued, "Equally important to me is the tactical value that the spin-off of the OG Collection, Inc provides to Creatd, Inc's shareholders of record, both in monetary value as well as combating the naked short selling. The transaction announced today not only validates the pre-money value of the spin-off, but will enable us to more swiftly move through the legal and operational milestones required to list a new company. Upon listing on the OTC, the distribution of OG Collection shares to Creatd shareholders will be closely monitored to ensure no shares are distributed to shareholders who cannot prove physical ownership at the time of the transaction."

About Creatd

Creatd, Inc. (OTCQB: CRTD) is a company with a mission to provide economic opportunities to creators and brands by multiplying the impact of platforms, people, and technology. Creatd's pillars work together to create a flywheel effect, supporting our core vision of creating a viable and safe ecosystem for all stakeholders in the creator economy.

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.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/creatd-announces-letter-of-intent-for-25-sale-of-og-collection-inc-at-2-5-million-purchase-price-transaction-anticipated-to-close-ahead-of-planned-otc-spin-off-301695784.html

SOURCE Creatd, Inc.

FAQ

What is the significance of the recent LOI announced by Creatd (CRTD)?

The Letter of Intent represents a significant step for Creatd, as it aims to sell 25% of its subsidiary OG Collection, Inc. for $2.5 million, which will aid in its planned spin-off.

How does the sale affect existing shareholders of Creatd (CRTD)?

Post-transaction, the ownership stake for existing shareholders will reduce from 80% to 60%, which may dilute their investment.

What is the valuation of OG Collection, Inc. following the sale?

The transaction values OG Collection, Inc. at $10 million post-money, based on the $2.5 million sale of 25% equity.

When is the anticipated closing date for the sale of OG Collection, Inc. (CRTD)?

The transaction is expected to close ahead of the planned OTC spin-off, although a specific closing date has not been provided.

What assets does OG Collection, Inc. hold?

OG Collection, Inc. holds a significant media archive with approximately 150,000 images, original artworks, and hours of original footage.