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

Rhea-AI Summary

Creatd, Inc. reported strong financial results for Q2 2022, with gross revenues increasing 45% year-over-year to $3.6 million, and net revenues up 67% to over $1.6 million. The company anticipates 2022 gross revenues between $15 million and $20 million, exceeding previous guidance. Operating expenses decreased by 10% due to cost-cutting initiatives, which will be reinvested into growth initiatives, including expanding its technology and brand portfolio. Changes in leadership are also underway, with Jeremy Frommer taking over as CEO.

Positive

• Gross revenues increased 45% YoY to $3.6 million.
• Net revenues rose 67% YoY to over $1.6 million.
• Operating expenses decreased by 10% YoY.
• Projected gross revenues for the year expected between $15 million and $20 million, above prior guidance.

Negative

• Withdrawal of Rights Offering, which aimed to accelerate revenue growth.
• Upcoming leadership change following the resignation of CEO Laurie Weisberg.

• Gross revenues increased 45% YoY
• Net revenues increased 67% YoY
• Operating expenses decreased 10% YoY

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

 

 

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SOURCE Creatd, Inc.

FAQ

What were Creatd's Q2 2022 revenue figures?

Creatd reported gross revenues of $3.6 million and net revenues of over $1.6 million for Q2 2022.

How much did Creatd's operating expenses decrease in Q2 2022?

Operating expenses decreased by 10% year-over-year in Q2 2022.

What is Creatd's revenue projection for 2022?

Creatd anticipates gross revenues between $15 million and $20 million for the year 2022.

Who will be the new CEO of Creatd?

Jeremy Frommer will take over as Chief Executive Officer effective on or before August 31, 2022.