UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~June 30, 2020~~March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. ~~000-51872~~001-39500

~~JERRICK MEDIA HOLDINGS, INC.~~Creatd, Inc.

(Exact name of registrant as specified in its charter)

Nevada		87-0645394
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

2050 Center Avenue Suite 640

Fort Lee, New Jersey 07024

(Address of principal executive offices)

(201) 258-3770

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:~~None.~~

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

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the ~~registrant~~registrant: (1) has filed all reports required to be filed by ~~section~~Section 13 or 15(d) of the Securities Exchange Act of 1934 during the ~~past~~preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, ~~or a~~ smaller reporting company, or an emerging growth company. See the definitions of a “large accelerated filer,” “accelerated filer” and “smaller reporting ~~company”~~company,” and emerging growth company in Rule 12b-2 of the Exchange ~~Act:~~Act. (Check One)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the ~~registrant~~Registrant is a shell company (as defined in Rule 12b-2 of the ~~Exchange~~ Act). Yes ☐ No ☒

As of ~~August 13, 2020, there were 9,959,812~~May 14, 2021, the Company had 10,989,566 shares ~~outstanding~~ of ~~the registrant’s~~its common ~~stock.~~stock, par value $0.001 per share, outstanding.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2021

TABLE OF CONTENTS

- i -

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

AND OTHER INFORMATION CONTAINED IN THIS REPORT

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this Form 10-Q. In particular, these include statements relating to future actions; prospective products, applications, customers and technologies; future performance or results of anticipated products; anticipated expenses; and projected financial results. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

●

our ability to continue as a going concern;

●

our operating expenses exceed our revenues and will likely continue to do so for the foreseeable future;

●

our ability to obtain additional capital, which may be difficult to raise as a result of our limited operating history or any number of other reasons;

●

our ability provide digital content that is useful to users;

●

our ability to retain existing users or add new users;

●

competition from traditional media companies;

●

general economic conditions and events and the impact they may have on us and our users; and

●

other factors discussed in this Form 10-Q.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or collaborations or strategic partnerships we may enter into.

You should read this Form 10-Q and the documents that we have filed as exhibits to this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Unless otherwise stated or the context otherwise requires, the terms “Creatd,” “we,” “us,” “our” and the “Company” refer collectively to Creatd, Inc. and its subsidiaries.

PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

~~Jerrick Media Holdings,~~Creatd, Inc.
March 31, 2021

~~June 30, 2020~~

Index to the Condensed Consolidated Financial Statements

Contents		Page(s)

Condensed Consolidated Balance Sheets as of ~~June 30, 2020~~March 31, 2021 (unaudited) and December 31, ~~2019~~2020		2

Condensed Consolidated Statements of Comprehensive Loss for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)		3

Condensed Consolidated ~~Statement~~Statements of Changes in Stockholders’ Equity (Deficit) for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)		4

Condensed Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)		86

Notes to the Condensed Consolidated Financial Statements (unaudited)		97

~~- 1 -~~

~~Jerrick Media Holdings,~~

Creatd, Inc.

Condensed Consolidated Balance Sheets

	June 30, 2020				December 31, 2019
	(Unaudited)							March 31, 2021			December 31, 2020
								(Unaudited)
Assets

Current Assets
Cash	$	44,628			$	11,637		$	2,802,772		$	7,906,782
Prepaid expenses		-				4,127
Accounts receivable, net		76,462				50,849			151,729			90,355
Note receivable – related party		11,450				11,450
Marketable securities		176,325				-
Prepaid expenses and other current assets									566,727			23,856
Total Current Assets		308,865				78,063			3,521,228			8,020,993

Property and equipment, net		34,741				42,363			58,849			56,258

Intangible assets		1,024,299				1,087,278			929,459			960,611

Goodwill		1,035,795				1,035,795			1,035,795			1,035,795

Deposits and other assets		48,973				16,836			291,836			191,836

Marketable securities									62,733			62,733

Minority investment in businesses									317,096			217,096

Operating lease right of use asset		276,742				311,711			219,449			239,158

Total Assets	$	2,729,415			$	2,572,046		$	6,436,445		$	10,784,480

Liabilities and Stockholders’ Deficit

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities	$	2,851,017			$	1,763,222		$	1,849,136		$	2,638,688
Demand loan		325,000				225,000
Convertible Notes - related party, net of debt discount		20,000				20,387
Derivative liabilities									344,404			42,231
Share liability									187,500			-
Convertible Notes, net of debt discount and issuance costs		5,151,540				2,896,425			239,544			897,516
Current portion of operating lease payable		76,833				105,763			87,912			79,816
Note payable - related party, net of debt discount		4,990,979				5,129,342			5,397			-
Note payable, net of debt discount and issuance costs		1,314,634				660,000			1,423,995			1,221,539
Unrecognized tax benefit		68,000				68,000
Deferred revenue		55,959				50,691			148,760			88,637
Warrant liability		-				10,000

Total Current Liabilities		14,853,962				10,928,830			4,286,648			4,968,427

Non-current Liabilities:				��
Note payable		401,764				-			54,298			213,037
Operating lease payable		197,810				201,944			130,303			157,820

Total Non-current Liabilities		599,574				201,944			184,601			370,857

Total Liabilities		15,453,536				11,130,774			4,471,249			5,339,284

Commitments and contingencies

Stockholders’ Deficit
Series A Preferred stock, $0.001 par value, 0 and 31,581 shares issued and outstanding, respectively		-				-
Series B Preferred stock, $0.001 par value, 0 and 8,063 shares issued and outstanding, respectively		-				-
Series D Preferred stock, $0.001 par value, 0 and 914 shares issued and outstanding, respectively		-				-
Common stock par value $0.001: 100,000,000 shares authorized; 9,982,195 issued and 9,959,812 outstanding as of June 30, 2020 and 9,178,937 issued and 9,019,087 outstanding as of December 31, 2019		9,982				9,179
Stockholders’ Equity
Series E Preferred stock, $0.001 par value: 20,000,000 shares authorized; 1,088 and 7,738 shares issued and outstanding, respectively									1			8
Common stock par value $0.001: 100,000,000 shares authorized; 10,925,026 issued and 10,915,676 outstanding as of March 31, 2021 and
8,736,378 issued and 8,727,028 outstanding as of December 31, 2020									10,925			8,737
Additional paid in capital		39,069,009				36,385,699			80,633,380			77,505,013
Subscription receivable									-			(40,000	)
Accumulated deficit		(51,708,425	)			(44,580,437	)		(78,572,159	)		(71,928,922	)
Accumulated other comprehensive income (loss)		(34,525	)			(5,995	)
Less: Treasury stock, 22,383 and 159,850 shares, respectively		(60,162	)			(367,174	)
Accumulated other comprehensive income									(44,545	)		(37,234	)
Less: Treasury stock, 5,657 and 5,657 shares, respectively									(62,406	)		(62,406	)
		(12,724,121	)			(8,558,728	)		1,965,196			5,445,196

Total Liabilities and Stockholders’ Deficit	$	2,729,415			$	2,572,046
Total Liabilities and Stockholders’ Equity								$	6,436,445		$	10,784,480

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~- 2 -~~

~~Jerrick Media Holdings,~~Creatd, Inc.

Condensed Consolidated Statements of 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, 2020			June 30, 2019			June 30, 2020			June 30, 2019			For the three months Ended			For the three months Ended
													March 31, 2021			March 31, 2020
Net revenue	$	322,540		$	7,181		$	615,682		$	41,515		$	743,913		$	293,142

Gross margin		322,540			7,181			615,682			41,515			743,913			293,142

Operating expenses
Compensation		1,893,178			545,037			2,266,698			1,271,611
Consulting fees		902,099			191,254			1,552,106			397,631
Research and development		35,705			13,559			171,275			354,898			328,852			135,570
General and administrative		1,026,810			659,452			1,986,804			1,124,490			6,361,058			1,983,521

Total operating expenses		3,857,792			1,409,302			5,976,883			3,148,630			6,689,910			2,119,091

Loss from operations		(3,535,252	)		(1,402,121	)		(5,361,201	)		(3,107,115	)		(5,945,997	)		(1,825,949	)

Other income (expenses)
Other income		14,229			-			77,785			-			-			63,556
Interest expense		(491,206	)		(110,032	)		(866,736	)		(164,601	)		(198,671	)		(375,530	)
Accretion of debt discount and issuance cost		(140,274	)		(69,626	)		(327,221	)		(116,990	)		(497,165	)		(186,947	)
Derivative expense														(100,502	)		-
Change in fair value of derivative liability														(197,389	)		-
Settlement of vendor liabilities		-			-			(126,087	)		-			92,909			(126,087	)
Gain on marketable securities		10,042			-			10,042			-
Loss on extinguishment of debt		-			(3,635	)		(535,040	)		(81,149	)
Gain on settlement of debt		470			-			470			-

Gain (loss) on extinguishment of debt														203,578			(535,040	)
Other expenses, net		(606,739	)		(183,293	)		(1,766,787	)		(362,740	)		(697,240	)		(1,160,048	)

Loss before income tax provision		(4,141,991	)		(1,585,414	)		(7,127,988	)		(3,469,855	)		(6,643,237	)		(2,985,997	)

Income tax provision		-			-			-			-			-			-

Net loss	$	(4,141,991	)	$	(1,585,414	)	$	(7,127,988	)	$	(3,469,855	)	$	(6,643,237	)	$	(2,985,997	)

Deemed dividend		-			-			-			-			-			-
Inducement expense		-			(7,628	)		-			(7,628	)		-			-

Net loss attributable to common shareholders		(4,141,991	)		(1,577,786	)		(7,127,988	)		(3,462,227	)		(6,643,237	)		(2,985,997	)

Other comprehensive income (loss)
Comprehensive loss

Currency translation (loss)		(19,291	)		-			(28,530	)		-
Net loss														(6,643,237	)		(2,985,997	)

Currency translation gain (loss)														(7,311	)		(9,239	)

Comprehensive loss	$	(4,161,282	)	$	(1,577,786	)	$	(7,156,518	)	$	(3,462,227	)	$	(6,650,548	)	$	(2,995,236	)

Per-share data
Basic and diluted loss per share	$	(0.43	)	$	(0.20	)	$	(0.76	)	$	(0.47	)	$	(0.68	)	$	(0.96	)

Weighted average number of common shares outstanding		9,582,964			8,072,257			9,368,777			7,389,564			9,836,443			3,101,387

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~- 3 -~~

~~Jerrick Media Holdings,~~Creatd, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

For the Three Months Ended ~~June 30, 2020~~March 31, 2021 (Unaudited)

Series A Preferred Stock Series B Preferred Stock Series D Preferred Stock Common Stock Treasury stock Additional
Paid In Accumulated Other
Comprehensive
Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Income Equity

Balance, March 31, 2020 - $ - - $ - - $ - 9,422,683 $ 9,423 (159,850 ) $ (367,174 ) $ 37,748,356 $ (47,566,434 ) $ (15,234 ) $ (10,191,063 )

Shares issued with note payable - - - - - - 16,272 16 - - 27,281 - - 27,297

Conversion of warrants to stock - - - - - - 6,718 7 - - (10,007 ) - - (10,000 )

Conversion of options to stock - - - - - - 688,473 688 - - 1,404,976 - - 1,405,664

Stock warrants issued with note payable - - - - - - - - - - 247,281 - - 247,281

Cancellation of Treasury stock - - - - - - (151,951 ) (152 ) 151,951 349,030 (348,878 ) - - -

Purchase of treasury stock - - - - - - - - (14,484 ) (42,018 ) - - - (42,018 )

Foreign currency translation adjustments - - - - - - - - - - - - (19,291 ) (19,291 )

Net loss for the three months ended June 30, 2020 - - - - - - - - - - - (4,141,991 ) - (4,141,991 )

Balance, June  30, 2020 - $ - - $ - - $ - 9,982,195 $ 9,982 (22,383 ) $ (60,162 ) $ 39,069,009 $ (51,708,425 ) $ (34,525 ) $ (12,724,121 )
~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~
~~- 4 -~~
~~Jerrick Media Holdings, Inc.~~
~~Consolidated Statement of Changes in Stockholders’ Equity (Deficit)~~
~~For the Six Months Ended June 30, 2020 (Unaudited)~~
Series A Preferred Stock Series B Preferred Stock Series D Preferred Stock Common Stock Treasury stock Additional
Paid In Accumulated Other
Comprehensive Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Income Equity

Balance, December 31, 2019 - $ - - $ - - $ - 9,178,937 $ 9,179 (159,850 ) $ (367,174 ) $ 36,385,699 $ (44,580,437 ) $ (5,995 ) $ (8,558,728 )

Shares issued with notes payable - - - - - - 24,322 24 - - 58,912 - - 58,936

Shares issued for services - - - - - - 150,000 150 - - 584,848 - - 584,998

Shares issued to settle vendor liabilities - - - - - - 70,696 71 - - 235,564 - - 235,635

Conversion of warrants to stock - - - - - - 21,718 22 - - (4,250 ) - - (4,228 )

Conversion of options to stock - - - - - - 688,473 688 - - 1,404,976 - - 1,405,664

Stock warrants issued with note payable - - - - - - - - - - 752,138 - - 752,138

Cancellation of Treasury stock - - - - - - (151,951 ) (152 ) 151,951 349,030 (348,878 ) - - -

Purchase of treasury stock - - - - - - - - (14,484 ) (42,018 ) - - - (42,018 )

Foreign currency translation adjustments - - - - - - - - - - - - (28,530 ) (28,530 )

Net loss for the six months ended June 30, 2020 - - - - - - - - - - - (7,127,988 ) - (7,127,988 )

Balance, June  30, 2020 - $ - - $ - - $ - 9,982,195 $ 9,982 (22,383 ) $ (60,162 ) $ 39,069,009 $ (51,708,425 ) $ (34,525 ) $ (12,724,121 )
Series E Additional Other
Preferred Stock Common Stock Treasury stock Paid In Subscription Accumulated Comprehensive Stockholders’
Shares Amount Shares Amount Shares Amount Capital Receivable Deficit Income Equity
Balance, January 1, 2021 7,738 $ 8 8,736,378 $ 8,737 (5,657 ) $ (62,406 ) $ 77,505,013 $ (40,000 ) $ (71,928,922 ) $ (37,234 ) $ 5,445,196

Stock based compensation - - 112,261 112 - - 1,345,803 - - - 1,345,915

Shares issued for prepaid services - - 40,000 40 - - 191,960 - - - 192,000

Shares issued to settle vendor liabilities - - 44,895 45 - - 181,341 - - - 181,386

Common stock issued upon conversion of notes payable - - 65,328 65 - - 142,735 - - - 142,800

Exercise of warrants to stock - - 302,434 302 - - 1,272,370 - - - 1,272,672

Cash received for preferred series E and warrants 40 - - - - - (4,225 ) 40,000 - - 35,775

Conversion of preferred series E to stock (6,690 ) (7 ) 1,623,730 1,624 - - (1,617 ) - - - -

Foreign currency translation adjustments - - - - - - - - - (7,311 ) (7,311 )

Net loss for the three months ended March 31, 2021 - - - - - -- - - (6,643,237 ) - (6,643,237 )

Balance, March 31, 2021 1,088 $ 1 10,925,026 $ 10,925 (5,657 ) $ (62,406 ) $ 80,633,380 $ - $ (78,572,159 ) $ (44,545 ) $ 1,965,196

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~- 5 -~~
4

Jerrick Media Holdings, Inc.
~~Consolidated Statement of Changes in Stockholders’ Equity~~ ~~(Deficit)~~
~~For the Three Months Ended June 30, 2019 (Unaudited)~~
Series A
Preferred Stock Series B
Preferred Stock Series D
Preferred Stock Common Stock Treasury stock Additional
Paid In Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Balance, March 31, 2019 - $ - - $ - - $ - 6,730,306 $ 6,730 (111,667 ) $ (220,781 ) $ 35,091,928 $ (38,429,506 ) $ (3,551,629 )

Stock based compensation - - - - - - - - - - 122,776 - 122,776

Cash received for common stock and warrants - - - - - - - - - - - - -

Tender offering - - - - - - 2,100,173 2,101 - - (2,101 ) - -

Stock issuance cost - - - - - - - - - - (35,000 ) - (35,000 )

Stock warrants issued with note payable - - - - - - - - 1,153,353 - 1,153,353

Purchase of treasury stock and warrants - - - - - - - - (38,183 ) (141,393 ) (89,034 ) - (230,427 )

Inducement expense - - - - - - - - - - - 7,626 7,626

Net loss for the three months ended June 30, 2019 - - - - - - - - - - - (1,585,414 ) (1,585,414 )

Balance, June 30, 2019 - $ - - $ - - $ - 8,830,479 $ 8,831 (149,850 ) $ (362,174 ) $ 35,241,922 $ (40,007,294 ) $ (5,118,715 )
~~See accompanying notes to the consolidated financial statements~~
~~- 6 -~~
~~Jerrick Media Holdings, Inc.~~
Consolidated Statement of Changes in Stockholders’ Equity (Deficit)
For the ~~Six~~Three Months Ended ~~June 30, 2019~~March 31, 2020 (Unaudited)

Series A Series B Series D Additional
Preferred Stock Preferred Stock Preferred Stock Common Stock Treasury stock Paid In Accumulated Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity

Balance, December 31, 2018 - $ - - $ - - $ - 6,475,340 $ 6,475 (27,667 ) $ (52,341 ) $ 34,100,327 $ (36,545,065 ) $ (2,490,604 )

Stock based compensation - - - - - - 125,000 126 - - 433,959 - 434,085

Cash received for common stock and warrants - - - - - - 129,966 130 - - 649,699 - 649,829

Tender offering - - - - - - 2,100,173 2,100 (2,100 ) - -

Stock issuance cost - - - - - - - - - - (178,146 ) - (178,146 )

Stock warrants issued with note payable - - - - - - - - - - 328,777 - 328,777

Purchase of treasury stock and warrants - - - - - - - - (122,183 ) (309,833 ) (90,594 ) - (400,427 )

Inducement expense - - - - - - - - - - - 7,626 7,626

Net loss for the six months ended June 30, 2019 - - - - - - - - - - - (3,469,855 ) (3,469,855 )

Balance, June 30, 2019 - $ - - $ - - $ - 8,830,479 $ 8,831 (149,850 ) $ (362,174 ) $ 35,241,922 $ (40,007,294 ) $ (5,118,715 )
Series A Preferred Stock Series B Preferred Stock Series D Preferred Stock Common Stock Treasury stock Additional Paid In Accumulated Other Comprehensive Stockholders’
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Income Equity
Balance, December 31, 2019 - $ - - $ - - $ - 3,059,646 $ 3,060 (159,850 ) $ (367,174 ) $ 36,391,818 $ (44,580,437 ) $ (5,995 ) $ (8,558,728 )

Shares issued with notes payable - - - - - - 2,683 3 - - 31,635 - - 31,638

Shares issued for services - - - - - - 50,000 50 - - 584,950 - - 585,000

Shares issued to settle vendor liabilities - - - - - - 23,565 23 - - 235,612 - - 235,635

Conversion of warrants to stock - - - - - - 5,000 5 - - 5,767 - - 5,772

Stock warrants issued with note payable - - - - - - - - - - 504,856 - - 504,856

Foreign currency translation adjustments - - - - - - - - - - - - (9,239 ) (9,239 )

Net loss for the three months ended March 31, 2020 - - - - - - - - - - - (2,985,997 ) - (2,838,498 )

Balance, March 31, 2020 - $ - - $ - - $ - 3,140,894 $ 3,141 (159,850 ) $ (367,174 ) $ 37,754,638 $ (47,566,434 ) $ (15,234 ) $ (10,191,063 )

~~See accompanying notes to the consolidated financial statements~~
~~- 7 -~~
~~Jerrick Media Holdings, Inc.~~
~~Condensed Consolidated Statements of Cash Flows (Unaudited)~~
For the Six Months Ended For the Six Months Ended
June 30,
2020 June 30,
2019

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,127,988 ) $ (3,469,855 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 76,939 5,660
Accretion of debt discount and issuance cost 327,221 116,991
Inducement expense - 7,626
Share-based compensation 1,994,792 448,291
Bad debt expense 34,737 -
Gain on settlement of debt (470 ) -
Loss on settlement of vendor liabilities 126,087 -
Gain on marketable securities (10,042 ) -
Loss on extinguishment of debt 535,040 81,149
Non-cash lease expense 34,969 (47,643 )
Changes in operating assets and liabilities:
Accounts receivable (60,350 ) 4,000
Deposits and other assets (2,137 ) -
Deferred revenue 5,268 8,828
Accounts payable and accrued expenses 1,213,615 (251,299 )
Operating lease liability (33,064 ) -
Net Cash Used In Operating Activities (2,885,383 ) (3,096,252 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment (6,339 ) (26,851 )
Purchase of marketable securities (166,283 ) -
Deposits (30,000 ) -
Net Cash Used In Investing Activities (202,622 ) (26,851 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft - (33,573 )
Net proceeds from issuance of notes 1,349,094 -
Repayment of notes (58,226 ) (50,000 )
Proceeds from issuance of demand loan 250,000 100,000
Proceeds from issuance of convertible note 1,920,460 1,993,025
Repayment of convertible notes (75,000 ) (12,508 )
Proceeds from issuance of note payable - related party 152,989 1,590,000
Repayment of note payable - related party (327,773 ) (275,000 )
Proceeds from issuance of common stock and warrants - 649,829
Cash paid for stock issuance costs - (35,000 )
Purchase of treasury stock and warrants (62,018 ) (407,307 )
Net Cash Provided By Financing Activities 3,149,526 3,519,466

Effect of exchange rate changes on cash (28,530 ) -

Net Change in Cash 32,991 396,363

Cash - Beginning of Year 11,637 -

Cash - End of period $ 44,628 $ 396,363

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Year for:
Income taxes $ - $ -
Interest $ 55,859 $ 18,273

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of vendor liabilities $ 109,548 $ -
Deferred offering costs $ - $ 143,146
Warrants issued with debt $ 752,136 $ 247,628
Shares issued with debt $ 58,935 $ -
Issuance of common stock for prepaid services $ 585,000 $ -
Cancellation of Treasury stock $ 349,030 $ -
Operating Lease liability $ - $ 288,790
Option liability $ - $ 7,328
Conversion of note payable and interest into convertible notes $ 385,000 $ -
Conversion of Demand loan into notes payable $ 150,000 $ -
Conversion of note payable and interest into convertible notes $ 385,000 $ -
Conversion of note payable- related party and interest into convertible notes- related party $ - $ 20,000
The accompanying notes are an integral part of these condensed consolidated financial statements.

~~- 8 -~~
5

~~Jerrick Media Holdings,~~Creatd, Inc.
~~June 30, 2020~~Condensed Consolidated Statements of Cash Flows (Unaudited)
For the
three months Ended For the
three months Ended
March 31,
2021 March 31,
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,643,237 ) $ (2,985,997 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 41,199 38,246
Accretion of debt discount and issuance cost 497,165 186,947
Share-based compensation 1,570,239 392,143
Settlement of vendor liabilities (92,908 ) 126,087
Change in fair value of derivative liability 197,389 -
Derivative expense 100,502 -
Loss on extinguishment of debt (203,578 ) 535,040
Non cash lease expense 19,709 17,385
Changes in operating assets and liabilities:
Prepaid expenses (391,918 ) -
Accounts receivable (61,374 ) (20,273 )
Deferred revenue 60,123 (6,681 )
Accounts payable and accrued expenses (370,528 ) 418,340
Operating lease liability (19,421 ) (16,100 )
Net Cash Used In Operating Activities (5,296,638 ) (1,314,863 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment (12,637 ) -
Deposits (100,000 ) -
Cash paid for minority investment in business (100,000 ) -
Net Cash Used In Investing Activities (212,637 ) -

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of warrant 1,312,672 -
Net proceeds from issuance of notes 85,500 303,000
Repayment of notes (43,716 ) (40,000 )
Proceeds from issuance of demand loan - 100,000
Proceeds from issuance of convertible note - 1,172,610
Repayment of convertible notes (941,880 ) (75,000 )
Proceeds from issuance of note payable - related party - 152,989
Repayment of note payable - related party - (180,273 )
Purchase of treasury stock and warrants - (2,500 )
Net Cash Provided By Financing Activities 412,576 1,430,826

Effect of exchange rate changes on cash (7,311 ) (9,239 )

Net Change in Cash (5,104,010 ) 106,724
Cash - Beginning of Year 7,906,782 11,637
Cash - End of period $ 2,802,772 $ 118,361

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Year for:
Income taxes $ - $ -
Interest $ 55,276 $ 38,086

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of vendor liabilities for common stock $ 168,667 $ 37,500
Warrants issued with debt $ - $ 504,295
Shares issued with debt $ - $ 32,200
Issuance of common stock for prepaid services $ 155,178 $ 585,000
Conversion of note payable and interest into convertible notes $ - $ 385,000
Conversion of Demand loan into notes payable $ - $ 150,000
Deferred offering costs $ 4,225 $ -
Common stock issued upon conversion of notes payable $ 142,800 $ -
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Creatd, Inc.
March 31, 2021

Notes to the Condensed Consolidated Financial Statements

Note 1 – Organization and Operations

Creatd, Inc., formerly Jerrick Media Holdings, Inc. (“we,” “us,” the “Company,” or ~~“Jerrick Media” or “Jerrick”~~“Creatd”), is a technology company focused on the development of digital communities, marketing branded digital content, and e-commerce opportunities. ~~Jerrick’s~~Creatd’s content distribution platform, Vocal, delivers a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting all forms of rich media content. Through ~~Jerrick’s~~Creatd’s proprietary algorithm dynamics, Vocal enhances the visibility of content and maximizes viewership, providing advertisers access to target markets that most closely match their interests.

The Company was originally incorporated under the laws of the State of Nevada on December 30, 1999 under the name LILM, Inc. The Company changed its name on December 3, 2013 to Great Plains Holdings, Inc. as part of its plan to diversify its business.

On February 5, 2016 (the “Closing Date”), GTPH, GPH Merger Sub, Inc., a Nevada corporation and wholly-owned subsidiary of GTPH (“Merger Sub”), and Jerrick Ventures, Inc., a privately-held Nevada corporation headquartered in New Jersey (“Jerrick”), entered into an Agreement and Plan of Merger (the “Merger”) pursuant to which the Merger Sub was merged with and into Jerrick, with Jerrick surviving as a wholly-owned subsidiary of GTPH (the “Merger”). GTPH acquired, pursuant to the Merger, all of the outstanding capital stock of Jerrick in exchange for issuing Jerrick’s shareholders (the “Jerrick Shareholders”), pro-rata, a total of ~~1,425,000~~475,000 shares of GTPH’s common stock. In connection therewith, GTPH acquired 33,415 shares of Jerrick’s Series A Convertible Preferred Stock (the “Jerrick Series A Preferred”) and 8,064 shares of Series B Convertible Preferred Stock (the “Jerrick Series B Preferred”).

In connection with the Merger, on the Closing Date, GTPH and Kent Campbell entered into a Spin-Off Agreement (the “Spin-Off Agreement”), pursuant to which Mr. Campbell purchased from GTPH (i) all of GTPH’s interest in Ashland Holdings, LLC, a Florida limited liability company, and (ii) all of GTPH’s interest in Lil Marc, Inc., a Utah corporation, in exchange for the cancellation of 39,091 shares of GTPH’s Common Stock held by Mr. Campbell. In addition, Mr. Campbell assumed all debts, obligations and liabilities of GTPH, including any existing prior to the Merger, pursuant to the terms and conditions of the Spin-Off Agreement.

Upon closing of the Merger on February 5, 2016, the Company changed its business plan to that of ~~Jerrick Media.~~Jerrick.

Effective February 28, 2016, GTPH entered into an Agreement and Plan of Merger (the “Statutory Merger Agreement”) with Jerrick, pursuant to which GTPH became the parent company of Jerrick Ventures, LLC, a wholly-owned operating subsidiary of Jerrick (the “Statutory Merger”) and GTPH changed its name to Jerrick Media Holdings, Inc. to better reflect its new business strategy.

On September 11, 2019, the Company acquired 100% of the membership interests of Seller’s Choice, LLC, a New Jersey limited liability company (“Seller’s Choice”). Seller’s Choice is digital e-commerce agency based in New Jersey (see Note 4).

On September 9, 2020, the Company filed a certificate of amendment with the Secretary of State of the State of Nevada to change our name to “Creatd, Inc.”, which became effective on September 10, 2020.

Note 2 – Significant ~~and Critical~~ Accounting Policies and Practices

Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by the accounting principles generally accepted in the United States of America.

~~- 9 -~~

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, ~~2020~~2021 or any other interim period or for any other future year. These unaudited condensed financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, ~~2019,~~2020, included in the Company’s ~~2019~~2020 Annual Report on Form 10-K filed with the SEC. The balance sheet as of December 31, ~~2019~~2020 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements.

Use of Estimates ~~and Assumptions~~ and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements were:

~~(i)~~	~~Assumption as a going concern~~: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

~~(ii)~~	~~Fair value of long-lived assets:~~ Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

~~(iii)~~	~~Valuation allowance for deferred tax assets~~: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses and (b) general economic conditions.

~~(iv)~~	~~Estimates and assumptions used in valuation of equity instruments~~: Management estimates expected term of share options and similar instruments, expected volatility of the Company’s common shares and the method used to estimate it, expected annual rate of quarterly dividends, and risk-free rate(s) to value share options and similar instruments.

~~(v)~~	~~Operating lease estimates and assumptions:~~ These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We estimate the incremental borrowing rate for each lease based on an evaluation of our credit ratings and the prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the terms of the lease.

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

~~- 10 -~~

Actual results could differ from those estimates.

Principles of consolidation

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists.

As of ~~June 30, 2020,~~March 31, 2021, the Company’s consolidated subsidiaries and/or entities are as follows:

Name of combined affiliate	State or other jurisdiction of incorporation or organization	Company Ownership Interest

Jerrick Ventures LLC	Delaware		100	%
Abacus Tech Pty Ltd	Australia		100	%
Seller’s Choice, LLC	New Jersey		100	%
Jerrick Global, LLC	Delaware		100	%
~~Jerrick Investment Advisors~~Give, LLC	Delaware		100	%
~~Jerrick~~Creatd Partners LLC	Delaware		100	%
~~Maven Tech~~Sci-Fi Shop, LLC	Delaware		100	%
OG Collection LLC	Delaware		100	%
VMENA LLC	Delaware		100	%
Vocal For Brands, LLC	Delaware		100	%
Vocal Ventures LLC	Delaware		100	%
What to Buy, LLC	Delaware		100	%

All inter-company balances and transactions have been eliminated.

Fair Value of Financial Instruments

The ~~Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about~~ fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in U.S. GAAP and expandsmeasurement disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair valueare grouped into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels ~~of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:~~based on valuation factors:

●

Level 1

~~Quoted market~~ – quoted prices ~~available~~ in active markets for identical ~~assets or liabilities as of the reporting date.~~investments

	●
Level 2	~~Pricing~~ – other significant observable inputs ~~other than~~(including quoted prices ~~in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.~~for similar investments and market corroborated inputs)

	●
Level 3	~~Pricing~~ – significant unobservable inputs ~~that are generally observable inputs and not corroborated by market data.~~(including our own assumptions in determining the fair value of investments)

~~Financial~~The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at March 31, 2021 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

The Company’s Level 2 assets/liabilities ~~are considered Level 3 when~~include certain of the Company’s notes payable and capital lease obligations. Their carrying value approximates their fair values based upon a comparison of the interest rate and terms of such debt given the level of risk to the rates and terms of similar debt currently available to the Company in the marketplace.

The Company’s Level 3 assets/liabilities include goodwill, intangible assets, marketable debt securities, equity investments at cost, and derivative liabilities, when they are recorded at fair value due to an impairment charge. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow ~~methodologies or similar techniques and at least one significant model assumption or input is unobservable.~~

~~The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the~~models. Unobservable inputs used ~~to measure~~in the ~~financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is~~models are significant to the fair ~~value measurement~~values of the ~~instrument.~~assets and liabilities.

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, notes payable, convertible debt, accounts payable and accrued liabilities approximate their fair value because of the short maturity of those instruments. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

~~- 11 -~~

~~The assets or liabilities’ fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.~~ The following table provides a summary of the relevant assets and liabilities that are measured at fair value on a recurring basis:

Fair Value Measurements as of

~~June 30, 2020~~March 31, 2021

	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities - debt securities	$	62,733	$	-	$	-	$	62,733
Total assets	$	62,733	$	-	$	-	$	62,733

Liabilities:
Derivative liabilities	$	344,404	$	-	$	-	$	344,404
Total Liabilities		344,404	$	-	$	-	$	344,404

The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on recurring basis as of March 31, 2021:

	Fair Value		Valuation Methodology	Unobservable Inputs
Marketable securities - debt securities	$	62,733	Discounted cash flow analysis	Expected cash flows from the investment

Derivative liabilities	$	344,404	Monte Carlo simulations and Binomial model	Risk free rate
				Expected volatility
				Drift rate

The following table provides a summary of the relevant assets that are measured at fair value on non-recurring basis:

Fair Value Measurements as of

Quoted Prices Quoted Prices
in Active for Similar
Markets for Assets or
Identical Liabilities in Significant
Assets or Active Unobservable
Liabilities Markets Inputs
Total (Level 1) (Level 2) (Level 3)
Assets:
Marketable securities - debt securities $ 150,000 $ - $ - $ 150,000
Marketable securities - equity securities 26,325 26,325 - -
Total assets $ 176,325 $ 26,325 $ - $ 150,000

March 31, 2021

	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Equity investments, at cost	$	317,096	$	-	$	-	$	317,096
Total assets	$	317,096	$	-	$	-	$	317,096

The following table shows the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on non-recurring basis as of March 31, 2021:

		Fair Value				Valuation Methodology			Unobservable Inputs
Equity investments, at cost		$	317,096			Qualitative assessment per ASC 321-10-35			Qualitative factors

The Company valued the initial value of debt securities, which are investments in convertible notes receivable, by assessing the separate values of the debt and equity components for similar instruments convertible into private company equity (Level 3). The investment was initially measured at cost, which was determined to approximate fair value due to the lack of marketability of the conversion shares underlying these convertible instruments and the expected recoverability of the note principal. The key assumption affecting the level 3 fair values would be collectability of the notes. The Company monitors for impairment indicators at each balance sheet date.

Marketable debt securities as of ~~June 30, 2020~~March 31, 2021 are as follows:

Fair Value Hierarchy Cost
Unrealized
Gains (Loss)
Fair Value
Marketable securities - debt securities 3 $ 150,000 $ - $ 150,000

		Fair Value Hierarchy			Cost				Unrealized Gains (Loss)				Fair Value
Marketable securities - debt securities		3			$	62,733			$	-			$	62,733

The change in net unrealized holding gain (loss) on debt securities available for sale that has been included in Accumulated Other Comprehensive Income as a separate component of Stockholder’s Equity for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ was $0 and $0, respectively.

~~Our marketable equity securities are publicly traded stocks measured at fair~~The Company recognizes impairment on loans or notes receivable (that do not meet the definition of a debt security) when it is probable that it will be unable to collect all amounts due according to the contractual terms, and the amount of loss can be estimated. The loss is estimated based on the present value ~~using quoted prices for identical assets in active markets and classified as Level 1 within~~of expected cash flows. During the ~~fair value hierarchy. Marketable equity securities as of June 30, 2020 are as follows:~~

Fair Value Hierarchy

Cost

Realized
Gains (Loss)
Fair Value
Marketable securities - equity securities 1 $ 16,283 $ 10,042 $ 26,325

~~The change in net realized and unrealized appreciation on equity trading securities that has been included in other expenses for the six~~three months ended ~~June 30, 2020 and 2019 was $10,042 and~~March 31, 2021 the Company recognized a $0 ~~respectively.~~credit loss on debt marketable securities.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company ~~minimizes its~~has never experienced any losses related to these balances. As of March 31, 2021, and December 31, 2020, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of March 31, 2021 was approximately $2.6 million. The Company does not believe it is exposed to significant credit risk ~~associated with~~on cash ~~by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally insured limits.~~and cash equivalents.

~~Property and Equipment~~

Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method (after taking into account their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

		~~Estimated Useful Life~~ ~~(Years)~~

~~Computer equipment and software~~		3
~~Furniture and fixtures~~		5

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.

~~- 12 -~~

Long-lived Assets Including Goodwill and Other Acquired Intangibles Assets

We evaluate the recoverability of property and equipment and acquired finite-lived intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. We have not recorded any significant impairment charges during the ~~six~~three months ended ~~June 30, 2020.~~

We review goodwill for impairment at least annually or more frequently if events or changes in circumstances would more likely than not reduce the fair value of our single reporting unit below its carrying value. As of June 30, 2020, no impairment of goodwill has been identified.March 31, 2021.

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we change the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life.

During the year ended December 31, 2020 the Company completed its annual impairment test of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined that the fair value of the reporting unit was more likely than not equal or greater than the carrying value, including Goodwill. Based on completion of this annual impairment test, no impairment was indicated.

Investments

Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt securities not classified as held-to-maturity or as trading are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity.

The Company accounts for its investments in available-for-sale debt securities, in accordance with sub-topic 320-10 of the FASB ~~Accounting Standards Codification~~ASC (“~~Sub-topic~~Sub-Topic 320-10”). Accrued interest on these securities is included in fair value and amortized cost.

Pursuant to Paragraph ~~320-10-35-1,~~320-10-35, investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the ~~consolidated balance sheets at each balance sheet date.~~statement of financial position. Unrealized holding gains and losses for available-for-sale securities (including those classified as current assets) shall be excluded from earnings and reported in other comprehensive income until realized except an available-for-sale security that is designated as being hedged in a fair value hedge, from which all or a portion of the unrealized holding gain and loss of shall be recognized in earnings during the period of the hedge, pursuant to paragraphs 815-25-35-1 through 815-25-35-4.realized.

The Company follows ~~Paragraphs 326-30-35-1 through 326-30-35-4~~FASB ASC 320-10-35 to assess whether an investment in debt securities is impaired in each reporting period. An investment in debt ~~security~~securities is impaired if the fair value of the investment is less than its amortized cost. ~~Impairment indicators include, but are~~If the Company intends to sell the debt security (that is, it has decided to sell the security), an other-than-temporary impairment shall be considered to have occurred. If the Company more likely than not ~~limited~~will be required to sell the security before recovery of its amortized cost basis or it otherwise does not expect to recover the entire amortized cost basis of the security, an other-than-temporary impairment shall be considered to have occurred. The Company considers the expected cash flows from the investment based on reasonable and supportable forecasts as well as several other factors to estimate whether a credit loss exists. If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment shall be recognized in earnings equal to the ~~following: a. asset quality, or business prospects of~~entire difference between the investee; b. a significant adverse change in the regulatory, economic, or technological environment of the investee; c. a significant adverse change in the general market condition of either the geographic area or the industry in which the investee operates. If theinvestment’s amortized cost basis and its fair value ~~of an investment is less than its amortized cost~~ at the balance sheet ~~date of the reporting period for which impairment is assessed, the impairment is either temporary or other than temporary.~~date.

~~- 13 -~~

The following table sets forth a summary of the changes in marketable securities - available-for-sale debt securities that are measured at fair value on a recurring basis:

For the three months ended
June 30,
2020 For the six months ended
June 30,
2020
Total Total
January 1, 2020 $ - $ -
Purchase of marketable securities 166,283 166,283
Gain on trading securities 10,042 10,042
June 30, 2020 $ 176,325 $ 176,325

	For the three months ended March 31, 2021
	Total
Beginning of period	$	62,733
Purchase of marketable securities		-
Interest due at maturity		-
Other than temporary impairment		-
Conversion of marketable securities		-
March 31, 2021	$	62,733

We invest in debt ~~and equity~~ securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As of ~~June 30, 2020,~~March 31, 2021, all of our investments had maturities between one and ~~two~~three years. The marketable debt security investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable.

The following table sets forth a summary of the changes in equity investments, at cost that are measured at fair value on a non-recurring basis:

	For the Three Months ended March 31, 2021
	Total
Beginning of period	$	217,096
Purchase of equity investments		100,000
Conversion of marketable securities		-
March 31, 2021	$	317,096

The Company has elected to measure its equity securities without a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. An election to measure an equity security in accordance with this paragraph shall be made for each investment separately.

The Company performed a qualitative assessment considering impairment indicators to evaluate whether these investments were impaired. Impairment indicators that the Company considered included the following: a) a significant deterioration in the earnings performance, credit rating, asset quality or business prospects of the investee; b) a significant adverse change in the regulatory, economic or technology environment of the investee; c) a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates; d) a bona fide offer to purchase or an offer by the investee to sell the investment; e) factors that raise significant concerns about the investee’s ability to continue as a going concern.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB ~~Accounting Standards Codification~~ASC to report accounting for contingencies. Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Foreign Currency

Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at our Consolidated Balance Sheet dates. Results of operations and cash flows are translated using the average exchange rates throughout the periods. The effect of exchange rate fluctuations on the translation of assets and liabilities is included as a component of ~~shareholders’~~stockholders’ equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in SG&A, have not been significant in any period presented.

Derivative Liability

The Company evaluates its debt and equity issuances to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 815-10-05-4 and Section 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as either an asset or a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon conversion, exercise or cancellation of a derivative instrument, the instrument is marked to fair value at the date of conversion, exercise or cancellation and then the related fair value is reclassified to equity.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended December 31, 2017 on a retrospective basis.

The Company utilizes a Geometric Brownian Motion (“GBM”) model and a Binomial model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the GBM model included a starting stock price, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the consolidated statements of operations.

Revenue Recognition

Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We determine revenue recognition through the following steps:

●

identification of the contract, or contracts, with a customer;

●

identification of the performance obligations in the contract;

●

determination of the transaction ~~price;~~price. The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners;

~~- 14 -~~

●

allocation of the transaction price to the performance obligations in the contract; and

●

recognition of revenue when, or as, we satisfy a performance obligation.

Revenue disaggregated by revenue source for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ consists of the following:

Three Months Ended Six Months Ended
June 30, June 30,
2020 2019 2020 2019
Branded content $ 68,728 $ 2,350 $ 124,728 $ 22,421
Managed Services 190,106 - 382,357 -
Creator Subscriptions 54,972 - 90,934 -
Affiliate sales 8,195 2,539 16,344 5,661
Other revenue 539 2,292 1,319 13,433
$ 322,540 $ 7,181 $ 615,682 $ 41,515

	Three Months Ended March 31,
	2021		2020
Agency (Managed Services + Branded Content)	$	428,300	$	248,251
Platform (Creator Subscriptions)		306,902		35,962
Affiliate Sales		8,008		8,149
Other Revenue		703		780
	$	743,913	$	293,142

~~Branded Content~~

Branded content represents the revenue recognized from the Company’s obligation to create and publish branded articles for clients on the Vocal platform and promote said stories, tracking engagement for the client. The performance obligation is satisfied when the Company successfully publishes the articles on its platform and meets any required promotional milestones as per the contract. The revenue is recognized over time as the services are performed.

~~Below are the significant components of a typical agreement pertaining to branded content revenue:~~

●

~~The Company collects fixed fees ranging from $5,000 to $45,000~~

●

~~The articles are created and published within three months of the signed agreement, or as previously negotiated with the client~~

●

~~The articles are promoted per the contract and engagement reports are provided to the client~~

●

~~The client pays 50% at signing and 50% upon completion~~

●

~~Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee~~

~~Affiliate Sales~~Agency Revenue

Affiliate sales represents the commission the Company receives when a purchase is made through affiliate links placed within content hosted on the Vocal platform. Affiliate revenue is earned on a “click through” basis, upon referring visitors, via said links, to an affiliate’s site and having them complete a specific outcome, most commonly a product purchase. The Company uses multiple affiliate platforms, such as Skimlinks, Amazon, and Tune, to form and maintain thousands of vendor relationships. Each vendor establishes their own commission percentage, which typically range from 2-20%. The revenue is recognized upon receipt as reliable estimates could not be made.

~~Subscription~~

Vocal+ is a premium subscription offering for Vocal creators. In addition to joining for free, Vocal creators now have the option to sign up for a Vocal+ membership for either $9.99 monthly or $99 annually. Vocal+ subscribers receive access to value-added features such as increased rate of CPM cost per mille (thousand) (“CPM”) monetization, a decreased minimum withdrawal threshold, a discount on platform processing fees, member badges for their profiles, access to exclusive Vocal+ Challenges, and early access to new Vocal features. Subscription revenues stem from both monthly and annual subscriptions, the latter of which is amortized over a twelve-month period. Any customer payments received are recognized over the subscription period, with any payments received in advance being deferred until they are earned.

~~- 15 -~~

Managed Services

The Company provides Studio/Agency Service offerings to business-to-business (B2B) and business-to-consumer (B2C) product and service brands which encompasses a full range of digital marketing and e-commerce solutions. The Company’s services include the setup and ongoing management of clients’ websites, Amazon and Shopify storefronts and listings, social media pages, search engine marketing, and other various tools and sales channels utilized by e-commerce sellers for sales and growth optimization. Contracts are broken into three categories Partners, Monthly Services, and Projects. Contract amounts for Partner and Monthly Services clients range from approximately $500-$7,500 per month while Project amounts vary depending on the scope of work. Partner and Monthly clients are billed monthly for the work completed within that month. Partner Clients may or may not have an additional billing component referred to as Sales Performance Fee, which is a fee based upon a previously agreed upon percentage point of the client’s total sales for the month. Some Partners may also have projects within their contracts that get billed and recognized as agreed upon project milestones are achieved.

Revenue is recognized over time as service obligations and milestones in the contract are met.

Branded Content

Below are the significant components of a typical agreement pertaining to branded content revenue:

	●	The Company collects fixed fees ranging from $10,000 to $110,000.

	●	The articles are created and published within three months of the signed agreement, or as previously negotiated with the client.

	●	The articles are promoted per the contract and engagement reports are provided to the client.

	●	Most billing for contracts occurs 50% at signing and 50% upon completion of the services, with net payment terms varying per client.

	●	Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee.

Platform Revenue

Creator Subscriptions

Vocal+ is a premium subscription offering for Vocal creators. In addition to joining for free, Vocal creators now have the option to sign up for a Vocal+ membership for either $9.99 monthly or $99 annually, though these amounts are occasionally subject to promotional discounts. Vocal+ subscribers receive access to value-added features such as increased rate of cost per mille (thousand) (“CPM”) monetization, a decreased minimum withdrawal threshold, a discount on platform processing fees, member badges for their profiles, access to exclusive Vocal+ Challenges, and early access to new Vocal features. Subscription revenues stem from both monthly and annual subscriptions, the latter of which is amortized over a twelve-month period. Any customer payments received are recognized over the subscription period, with any payments received in advance being deferred until they are earned.

The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners. Estimates are utilized for payments made for earnings through reads, by establishing the lifetime a subscriber has had a Vocal account, determining the percentage of that lifetime that the subscriber has been a paying customer, and applying that percentage to payments for earnings through reads in the relevant reporting period.

Affiliate Sales Revenue

Deferred Revenue

Deferred revenue consists of billings and payments from clients in advance of revenue recognition. As of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company had deferred revenue of ~~$55,959~~$148,760 and ~~$50,691,~~$88,637, respectively.

Accounts Receivable and Allowances

Accounts receivable are recorded and carried when the Company has performed the work in accordance with managed services, project, partner, consulting and branded content agreements. For example, we bill a managed service client monthly when we have updated their Amazon store, modified SEO or completed the other services listed in the agreement. For projects and branded content, we will bill the client and record the receivable once milestones are reached that are set in the agreement. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers. During the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 the Company recorded ~~$34,737~~$997 as a ~~reserve for doubtful accounts.~~bad debt expense. As of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020, the Company has an allowance for doubtful accounts of ~~$68,240~~$81,506 and ~~$33,503~~$80,509, respectively.

Stock-Based Compensation

The Company recognizes compensation expense for all equity–based payments granted in accordance with ~~ASC~~Accounting Standards Codification (“ASC”) 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods, typically over a five-year period (vesting on a straight–line basis). The fair value of a stock award is equal to the fair market value of a share of Company stock on the grant date.

The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the value of the underlying share, the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is benchmarked against similar companies in a similar industry over the expected option life and other appropriate factors. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. The dividend yield is assumed to be zero as the Company has never paid or declared any cash dividends on its Common stock and does not intend to pay dividends on its Common stock in the foreseeable future. The expected forfeiture rate is estimated based on management’s best estimate.

~~- 16 -~~

Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, our equity–based compensation could be materially different in the future. ~~In addition,~~The Company issues awards of equity instruments, such as stock options and restricted stock units, to employees and certain non-employee directors. Compensation expense related to these awards is based on the ~~Company~~fair value of the underlying stock on the award date and is ~~required~~amortized over the service period, defined as the vesting period, using the cliff straight-line method. The vesting period is generally one to three years. A Black-Scholes model is utilized to estimate the ~~expected forfeiture rate and recognize expense only for those shares expected to vest. If~~fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock units. Compensation expense is reduced for actual ~~forfeiture rate is materially different from its estimate, the equity–based compensation could be significantly different from what the Company has recorded in the current period.~~forfeitures as they occur.

Loss Per Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

The Company had the following common stock equivalents at ~~June 30, 2020~~March 31, 2021 and ~~2019:~~2020:

	June 30,				March 31,
	2020		2019		2021		2020
Options		452,523		882,500		2,350,062		303,833
Warrants		936,240		713,138		6,273,778		268,660
Convertible notes - related party		5,574		5,180		-		1,855
Convertible notes		1,562,138		551,923		49,629		430,084
Totals		2,956,475		2,152,741		8,673,469		1,004,432

~~Reclassifications~~

Certain prior year amounts in the condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year presentation. The company reclassified $105,763 from current portion of operating lease right of use asset to operating lease right of use asset within the December 31, 2019 Balance Sheet. These reclassifications did not affect the prior period total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities.

Recently Adopted Accounting Guidance

The Company invests in equity and debt securities. The Company’s investments in debt securities are classified at the date of purchase as available-for-sale securities. Debt securities are reported at fair value with unrealized gains and losses, net of the related tax effect, reflected as an accumulated other comprehensive income component of stockholder’s equity until such gains or losses are realized. In accordance with ASU 2016-01, Equity securities are now reported at fair value with unrealized gains and losses, net of the related tax effect, reflected as a gain or loss on the statement of operations.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”, which eliminates the exception that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted. The adoption of ASU 2016-16 did not have a material impact on its condensed consolidated financial statements.

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on the current Step 1). The updated guidance, which became effective for fiscal years beginning after December 15, 2019, did not have a material impact on its condensed consolidated financial statements.

~~- 17 -~~

~~In August 2018, the FASB issued ASU 2018-13,~~ ~~Fair Value Measurement - Disclosure Framework (Topic 820)~~. The updated guidance improves the disclosure requirements for fair value measurements. The adoption of ASU 2018-13 did not have a material impact on its condensed consolidated financial statements.

~~In August 2018, the FASB issued ASU 2018-15,~~ ~~Intangibles-Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contrac~~t. This guidance requires companies to apply the internal-use software guidance in Accounting Standards Codification (“ASC”) 350-40 to implementation costs incurred in a hosting arrangement that is a service contract to determine whether to capitalize certain implementation costs or expense them as incurred. The adoption of ASU 2018-15 did not have a material impact on its condensed consolidated financial statements.

~~Recent Accounting Guidance Not Yet Adopted~~

In December 2019, the FASB issued authoritative guidance intended to simplify the accounting for income taxes (ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”). This guidance eliminates certain exceptions to the general approach to the income tax accounting model and adds new guidance to reduce the complexity in accounting for income taxes. This guidance is effective for annual periods after December 15, 2020, including interim periods within those annual periods. The updated guidance, which became effective for fiscal years beginning after December 15, 2020, did not have a material impact on the Company’s condensed consolidated financial statements.

Recent Accounting Guidance Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company is currently evaluating the ~~potential~~ impact of ~~this~~the new guidance on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2021 and interim periods within those annual periods and early adoption is permitted. ~~We are~~The Company is currently evaluating the impact of the new guidance on ~~our~~its condensed consolidated financial statements.

In May 2021, the FASB issued authoritative guidance intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU 2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic 815). This guidance amendments provide measurement, recognition, and disclosure guidance for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. This guidance is effective for annual periods after December 15, 2021, including interim periods within those annual periods. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements.

Note 3 – Going Concern

The Company’s condensed consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the condensed consolidated financial statements, as of March 31, 2021, the Company had an accumulated deficit ~~at June 30, 2020,~~of $78.6 million, a net loss of ~~$7.1~~$6.6 million and net cash used in operating activities of ~~$2.9~~$5.3 million for the reporting period then ended. The Company is in default on debentures as of the date of this filing. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

On January 30, 2020, the World Health Organization declared the COVID-19 novel coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020, declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The COVID-19 coronavirus and actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. While it is unknown how long these conditions will last and what the complete financial impact will be to the Company, capital raising efforts and our operations may be negatively affected.

The Company is attempting to further implement its business plan and generate sufficient revenues; however, its cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds by way of a public or private offering of its debt or equity securities, there can be no assurance that it will be able to do so on reasonable terms, or at all. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and its ability to raise additional funds by way of a public or private offering.

~~- 18 -~~

The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 4 ~~– Acquisition~~- Equity investments, at cost

The Company has elected to measure its equity securities without a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of ~~Seller’s Choice~~the same issuer. An election to measure an equity security in accordance with this paragraph shall be made for each investment separately.

On ~~September 11, 2019,~~October 2, 2020, the Company converted $102,096 of its marketable debt security into 119,355 shares of preferred stock or a 1.3% equity investment in a private company.

On October 23, 2020, the Company entered into an equity interest purchase agreement whereas the Company purchased 3.8% ownership of a private company for $115,000. On February 17, 2021 the Company entered into a ~~Membership Interest Purchase Agreement (the “Seller’s Choice Purchase Agreement”) by and between~~membership interest purchase agreement whereas the Company ~~and Home Revolution, LLC,~~purchased another 3.3% ownership of a ~~Delaware limited liability~~private company (the “Seller”). Pursuant to the Seller’s Choice Purchase Agreement, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the Seller’s Choice Purchase Agreement (the “Seller’s Choice Closing”), the Company acquired 100% of the membership interests of Seller’s Choice. As a result of the transactions contemplated by the Seller’s Choice Purchase Agreement, Seller’s Choice became a wholly owned subsidiary of the Company (collectively, the “Seller’s Choice Acquisition”).

At the Seller’s Choice Closing, the aggregate consideration (the “Consideration”) paid to the Seller was as follows: (i) $340,000, in cash; (ii) 333,334 shares of the Company’s common stock; and (iii) a secured promissory note in the principal amount of $660,000 (the “Seller’s Choice Note”). In connection with the Seller’s Choice Note, the Company, Seller, and Seller’s Choice entered into a Security Agreement whereby the Seller’s Choice Note is secured by the assets of Seller’s Choice.

Following the closing of the transaction, Seller’s Choice’s financial statements as of the Closing were consolidated with the Condensed consolidated financial statements of the Company. These amounts are provisional and may be adjusted during the measurement period.

~~Following the closing of the merger transaction the Company’s investment in Seller’s Choice consisted of the following:~~

Shares Amount
Consideration paid:
Cash paid $ 340,000
Common stock issued at closing (1) 333,334 $ 1,166,669
Note payable 660,000
Total consideration paid $ 2,166,669

Total consideration $ 2,166,669

~~(1)~~

~~The common stock issued at the closing of the Seller’s Choice Acquisition had a closing price of $3.50 per share on the date of the transaction.~~

~~The following presents the unaudited pro-forma combined results of operations of the Company with Seller’s Choice as if the entities were combined on January 1, 2019.~~

Six Months Ended
June 30,
2019
Revenues, net $ 708,205
Net loss attributable to common shareholders $ (3,619,885 )
Net loss per share $ (0.47 )
Weighted average number of shares outstanding 7,722,898

~~The unaudited pro-forma results of operations are presented~~ for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2019 or to project potential operating results as of any future date or for any future periods.$100,000.

~~- 19 -~~

~~The Company consolidated Seller’s Choice as of the closing date of the Seller’s Choice Acquisition, and the results of operations of the Company since that date include that of Seller’s Choice.~~

Note 5 – Notes Payable

Notes payable as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 is as follows:

Outstanding Principal as of
June 30,
2020 December 31,
2019 Interest Rate Maturity Date
Seller’s Choice Note 660,000 660,000 9.5 % September 2020
The First January 2020 Loan Agreement - - 6 % January 2020
The Second January 2020 Loan Agreement - - 5 % January 2020
The Third January 2020 Loan Agreement - - 10 % January 2020
The Fourth January 2020 Loan Agreement - - 7 % February 2020
The February 2020 Loan agreement - - 5 % March 2020
The First March 2020 Loan Agreement 3,300 - 25 % September 2020
The Second March 2020 Loan Agreement 6,474 - 19 % September 2021
The April 2020 PPP Loan Agreement 412,500 - 1 % April 2022
The May 2020 PPP Loan Agreement 282,432 - 1 % May 2022
The June 2020 Loan Agreement 351,692 - 15 % July 2020
1,716,398 660,000
Less: Debt Discount - -
Less: Debt Issuance Costs - -
1,716,398 660,000
Less: Current Debt (1,314,634 )
Total Long-Term Debt $ 401,764 $

	Outstanding Principal as of
	March 31, 2021			December 31, 2020			Interest Rate			Maturity Date
Seller’s Choice Note	$	660,000		$	660,000			30	%	September 2020
The May 2020 PPP Loan Agreement		412,500			412,500			1	%	April 2022
The April 2020 PPP Loan Agreement		262,432			282,432			1	%	May 2022
The October 2020 Loan Agreement		57,273			55,928			14	%	July 21
The November 2020 Loan Agreement		-			23,716			14	%	May 2021
The February 2021 Loan Agreement		86,089			-			14	%	July 21
		1,478,293			1,434,576
Less: Debt Discount		-			-
Less: Debt Issuance Costs		-			-
		1,478,293			1,434,576
Less: Current Debt		(1,423,995	)		(1,221,539	)
Total Long-Term Debt	$	54,298		$	213,037

As of March 31, 2021, if PPP loans payable are not forgiven, remaining scheduled principal payments due on notes payable are as follows:

Twelve months ended March 31,
2021	$	1,423,995
2022		54,298
	$	1,478,293

Seller’s Choice Note

On September 11, 2019, the Company entered into Seller’s Choice Purchase Agreement with Home Revolution LLC (see Note 4). As a part of the consideration provided pursuant to the Seller’s Choice Acquisition, the Company issued the Seller’s Choice Note to the Seller in the principal amount of $660,000. The Seller’s Choice Note bears interest at a rate of 9.5% per annum and is payable on March 11, 2020 (the “Seller’s Choice Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts become due. Upon maturity the Company utilized an automatic extension up to 6 months. This resulted in a 5% increase in the interest rate every month the Seller’s Choice Note is outstanding. As of March 31, 2021 the Company is in default on the Seller’s Choice note.

During the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 the Company accrued interest of ~~$41,300, and paid $21,400 of interest.~~$48,822.

~~The First January 2020 Loan Agreement~~

On January 3, 2020, the Company entered into a loan agreement (the “First January 2020 Loan Agreement”) with an individual (the “First January 2020 Lender”) whereby the First January 2020 Lender issued the Company a promissory note of $250,000 (the “First January 2020 Note”). Pursuant to the First January 2020 Loan Agreement, the First January 2020 Note has an effective interest rate of 6%. As additional consideration for entering in the First January 2020 Loan Agreement, the Company issued the First January 2020 Lender was issued 4,000 shares of the Company’s common stock. The maturity date of the First January 2020 Note was January 15, 2020 (the “First January 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First January 2020 Note were due.

~~During the six months ended June 30, 2020 the Company converted $250,000 in principal to the Third February 2020 convertible Note.~~

~~- 20 -~~

~~The Second January 2020 Loan Agreement~~

On January 14, 2020, the Company entered into a loan agreement (the “Second January 2020 Loan Agreement”) with an individual (the “Second January 2020 Lender”) whereby the Second January 2020 Lender issued the Company a promissory note of $10,000 (the “Second January 2020 Note”). Pursuant to the Second January 2020 Loan Agreement, the Second January 2020 Note has an effective interest rate of 5%. The maturity date of the Second January 2020 Note was January 24, 2020 (the “Second January 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second January 2020 Note were due. As additional consideration for entering in the Second January Loan Agreement, the Company issued a five-year warrant to purchase 150 shares of the Company’s common stock at a purchase price of $6.00 per share. The Company recorded a $580 debt discount relating to 150 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the six months ended June 30, 2020 the Company repaid $10,000 in principal and $500 in interest.~~

~~The Third January 2020 Loan Agreement~~

On January 22, 2020, the Company entered into a loan agreement (the “Third January 2020 Loan Agreement”) with an individual (the “Third January 2020 Lender”) whereby the Third January 2020 Lender issued the Company a promissory note of $15,000 (the “Third January 2020 Note”). Pursuant to the Third January 2020 Loan Agreement, the Third January 2020 Note has an effective interest rate of 10%. The maturity date of the Third January 2020 Note was January 29, 2020 (the “Third January 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Third January 2020 Note were due. As additional consideration for entering in the Third January Loan Agreement, the Company issued a five-year warrant to purchase 225 shares of the Company’s common stock at a purchase price of $6.00 per share. The Company recorded a $892 debt discount relating to 225 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the six months ended June 30, 2020 the Company repaid $15,000 in principal and $1,500 in interest.~~

~~The Fourth January 2020 Loan Agreement~~

On January 23, 2020, the Company entered into a loan agreement (the “Fourth January 2020 Loan Agreement”) with an individual (the “Fourth January 2020 Lender”) whereby the Fourth January 2020 Lender issued the Company a promissory note of $135,000 (the “Fourth January 2020 Note”). Pursuant to the Fourth January 2020 Loan Agreement, the Fourth January 2020 Note has an effective interest rate of 7%. As additional consideration for entering in the First January 2020 Loan Agreement, the Company issued the First January 2020 Lender was issued 2,250 shares of the Company’s common stock. The maturity date of the Fourth January 2020 Note was February 23, 2020 (the “Fourth January 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Fourth January 2020 Note were due.

~~During the six months ended June 30, 2020 the Company converted $135,000 in principal to the Second February 2020 convertible Note.~~

~~The February 2020 Loan Agreement~~

On February 25, 2020, the Company entered into a loan agreement (the “February 2020 Loan Agreement”) with an individual (the “February 2020 Lender”) whereby the February 2020 Lender issued the Company a promissory note of $15,000 (the “February 2020 Note”). Pursuant to the February 2020 Loan Agreement, the February 2020 Note has an effective interest rate of 5%. The maturity date of the February 2020 Note was March 3, 2020 (the “February 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the February 2020 Note were due. As additional consideration for entering in the February 2020 Loan Agreement, the Company issued a five-year warrant to purchase 225 shares of the Company’s common stock at a purchase price of $6.00 per share. The Company recorded a $801 debt discount relating to 225 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~- 21 -~~

~~During the six months ended June 30, 2020 the Company repaid $15,000 in principal and $750 in interest.~~

~~The First March 2020 Loan Agreement~~

On March 23, 2020, the Company entered into a loan agreement (the “First March 2020 Loan Agreement”) with an individual (the “First March 2020 Lender”) whereby the First March 2020 Lender issued the Company a promissory note of $11,000 (the “First March 2020 Note”). Pursuant to the First March 2020 Loan Agreement, the First March 2020 Note has an effective interest rate of 25%. The maturity date of the First March 2020 Note is September 23, 2020 (the “First March 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First March 2020 Note are due.

~~During the six months ended June 30, 2020 the Company accrued interest of $2,695.~~

~~During the six months ended June 30, 2020 the Company repaid $7,700 in principal.~~

~~The Second March 2020 Loan Agreement~~

On March 26, 2020, the Company entered into a loan agreement (the “Second March 2020 Loan Agreement”) with an individual (the “Second March 2020 Lender”) whereby the Second March 2020 Lender issued the Company a promissory note of $17,000 (the “Second March 2020 Note”). Pursuant to the Second March 2020 Loan Agreement, the Second March 2020 Note has an effective interest rate of 19%. The maturity date of the Second March 2020 Note is September 17, 2020 (the “Second March 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second March 2020 Note are due.

~~During the six months ended June 30, 2020 the Company accrued interest of $1,734.~~

~~During the six months ended June 30, 2020 the Company repaid $10,526 in principal.~~

The April 2020 PPP Loan Agreement

On April 30, 2020, ~~Jerrick Ventures, LLC (“Jerrick Ventures”),~~ the ~~Company’s wholly-owned subsidiary,~~Company was granted a loan ~~from PNC Bank, N.A.~~ with a principal amount of $282,432 (the “Loan”), pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020. The Loan, which was in the form of a Note dated April 30, 2020 matures on April 30, 2022 and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on October 30, 2020. The Note may be prepaid by ~~Jerrick Ventures~~the Company at any time prior to maturity without payment of any premium. Funds from the Loan may only be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments.

During the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021, the Company accrued interest of ~~$644.~~ $696.

During the three months ended March 31, 2021, the Company repaid $20,000 in principal.

The Company is in the process of returning the funds received from ~~this loan.~~the Loan.

When the applications for PPP first opened up, there was limited available funding and much confusion surrounding the application process. The Company initially submitted its application for the May 2020 PPP Loan in early April but received no response in the aftermath of submitting the application. After consulting multiple advisors, the Company made the decision to apply elsewhere, due to the rampant media coverage of institutions running out of funding and the Company’s need for the capital and belief that if 2 separate loans were approved, the remaining application could simply be withdrawn.

Therefore, in late April, the company proceeded with applying for the April 2020 PPP Loan. After some conflicting communications regarding acceptance, the Company attempted to contact the lender to clarify but got no response. After continued attempts to follow up with both lenders, the Company received approval for the May 2020 PPP Loan and funding for the April 2020 PPP Loan on the same day, followed the next day by the funding of the May 2020 PPP Loan. The Company immediately separated the funds for the April 2020 PPP Loan into a separate reserved bank account with the intention of returning the funds. However, after several attempts to contact the lender with no response, the Company was faced with difficulty raising funds in the early-Covid economy and made the decision to utilize the funds for operations and pursue an installment repayment plan when they were able to reach the lender. As of the date of this filing, the Company has begun making repayments on the loan, absent a formal installment agreement due to difficulties reaching the lender. The Company intends to complete repayment before the end of 2021.

As each company is only permitted one loan under the CARES Act, there is a possibility the loan may be called by the SBA and the Company would have to repay the loan in full at such time.

The May 2020 PPP Loan Agreement

On May 4, 2020, Jerrick Ventures, LLC (“Jerrick Ventures”), the ~~Company~~Company’s wholly-owned subsidiary, was granted a loan from ~~a banking institution~~PNC Bank, N.A. with a principal amount of $412,500, pursuant to the Paycheck Protection Program (the “PPP”). The Loan, which was in the form of a Note dated May 4, 2020 matures on May 4, 2022 and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on November 4, 2020. The Note may be prepaid by Jerrick Ventures at any time prior to maturity without payment of any premium. Funds from the Loan may only be used to retain workers and maintain payroll or make mortgage payments, lease payments and utility payments. Jerrick Ventures intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

~~- 22 -~~

During the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021, the Company accrued interest of ~~$472.~~ $1,017.

The Company plans to apply for forgiveness of this loan and has begun discussions with the lender regarding that process.

The ~~June~~October 2020 Loan Agreement

On ~~June 30,~~October 6, 2020, the Company entered into a secured loan agreement (the ~~“June~~“October 2020 Loan Agreement”) with ~~banking institution~~a lender (the ~~“June~~“October 2020 Lender”), whereby the ~~June~~October 2020 Lender issued the Company a secured promissory note of A$~~510,649 Australian dollar (“AUD”)~~74,300 AUD or ~~$351,692~~$53,128 United States ~~Dollar~~Dollars (the ~~“June~~“October 2020 Note”). Pursuant to the ~~June~~October 2020 Loan Agreement, the ~~June~~October 2020 Note has an effective interest rate of ~~15%~~14%. The maturity date of the ~~June~~October 2020 Note is ~~July 31, 2020~~September 30, 2021 (the ~~“June~~“October 2020 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the ~~June~~October 2020 ~~Note~~Loan Agreement are ~~due in AUD currency. This~~due. The loan is secured by the Australian research & development credit.

During the ~~six~~three months ended ~~June 30,~~March 31, 2021 the Company accrued A$2565 in interest.

The November 2020 Loan Agreement

On November 24, 2020, the Company entered into a loan agreement (the “November 2020 Loan Agreement”) with a lender (the “November 2020 Lender”) whereby the November 2020 Lender issued the Company a promissory note of $34,000 (the “November 2020 Note”). Pursuant to the November 2020 Loan Agreement, the November 2020 Note has an effective interest rate of 14%. The maturity date of the November 2020 Note is May 25, 2021 (the “November 2020 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the November 2020 Note are due.

During the three months ended March 31, 2021, the Company repaid $23,716 in principal and $4,736 of ~~$3,902.~~ accrued interest.

The February 2021 Loan Agreement

On February 24, 2021, the Company entered into a secured loan agreement (the “February 2021 Loan Agreement”) with a lender (the “February 2021 Lender”), whereby the February 2021 Lender issued the Company a secured promissory note of A$111,683 AUD or $86,089 United States Dollars (the “February 2021 Note”). Pursuant to the February 2021 Loan Agreement, the February 2021 Note has an effective interest rate of 14%. The maturity date of the February 2021 Note is July 31, 2021 (the “February 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the February 2021 Loan Agreement are due. The loan is secured by the Australian research & development credit.

During the three months ended March 31, 2021 the Company accrued A$1,499 in interest.

Note 6 – Convertible Note Payable

Convertible notes payable as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 is as follows:

Outstanding Principal
as of Warrants granted
June 30,
2020 December 31,
2019 Interest
Rate Conversion
Price Maturity
Date Quantity Exercise
Price
The February 2018 Convertible Note Offering - 75,000 15 % 4.00 (*) January – February 2020 253,919 4.00
The March 2018 Convertible Note Offering 75,000 75,000 14 % 4.00 (*) March – April 2020 240,342 4.00
The February 2019 Convertible Note Offering 2,311,703 2,311,703 10 % 5.00 (*) February – March 2020 133,190 6.00
The November 2019 Convertible Note Offering 559,433 559,433 12 % 4.50 (*) May – June 2020 - -
The First January 2020 convertible Loan Agreement 87,473 - 12 % $ 4.50 (*) July – August 2020 - -
The First February 2020 convertible Loan Agreement 85,000 - 10 % $ 4.00 (*) August 2020 - -
The Second February 2020 convertible Loan Agreement 200,000 - 12 % $ 4.50 (*) February 2021 20,000 5.00
The Third February 2020 convertible Loan Agreement 1,500,000 - 12 % $ 4.50 (*) February 2021 124,995 5.00
The April 2020 Convertible Note Offering 350,010 - 12 % $ 4.50 (*) October 2020 - -
The June 2020 Convertible Loan Agreement 550,000 - 12 % $ - (*) June 2021 148,809 3.85
5,718,619 3,021,136
Less: Debt Discount (528,130 ) (124,096 )
Less: Debt Issuance Costs (38,949 ) (614 )
5,151,540 2,896,425
Less: Current Debt (5,151,540 ) (2,896,425 )
Total Long-Term Debt $ - $ -

	Outstanding Principal as of													Warrants granted
	March 31, 2021			December 31, 2020			Interest Rate			Conversion Price			Maturity Date	Quantity		Exercise Price
The September 2020 convertible Loan Agreement		-			341,880			12	%	$	-	(*)	September 2021		85,555		5
The October 2020 convertible Loan Agreement		169,400			169,400			6	%	$	-	(*)	October 2021		-		-
The First December 2020 convertible Loan Agreement		-			600,000			12	%	$	-	(*)	December 2021		-		-
The Second December 2020 convertible Loan Agreement		169,400			169,400			6	%	$	-	(*)	December 2021		-		-
		338,800			1,280,680
Less: Debt Discount		(94,226	)		(309,637	)
Less: Debt Issuance Costs		(5,030	)		(73,527	)
		239,544			897,516
Less: Current Debt		(239,544	)		(897,516	)
Total Long-Term Debt	$	-		$	-

(*)

As subject to adjustment as further outlined in the notes

~~- 23 -~~

The ~~February 2018~~First July 2020 Convertible ~~Note Offering~~Loan Agreement

During the three months ended March 31, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “February 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “February 2018 Investors”) for aggregate gross proceeds of $725,000. In addition, $250,000 of the Company’s short-term debt along with accrued but unpaid interest of $40,675 was exchanged for convertible debt in the February 2018 Offering. These conversions resulted in the issuance of 72,669 warrants with a fair value of $181,139. These were recorded as a loss on extinguishment of debt.

The February 2018 Convertible Note Offering consisted of a maximum of $750,000 of units of the Company’s securities (each, a “February 2018 Unit” and collectively, the “February 2018 Units”), with each February 2018 Unit consisting of (a) a 15% Convertible Secured Promissory Note (each a “February 2018 Convertible Note” and together the “February 2018 Convertible Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“February 2018 Conversion Shares”) at a conversion price of $4.00 per share (the “February 2018 Note Conversion Price”), and (b) a five-year warrant (each a “February 2018 Offering Warrant and together the “February 2018 Offering Warrants”) to purchase common stock equal to one hundred percent (100%) of the shares into which the February 2018 Convertible Notes can be converted into (“February 2018 Warrant Shares”) at an exercise price of $4.00 per share (“February 2018 Warrant Exercise Price”). The February 2018 Offering Notes mature on the second (2nd) anniversary of their issuance dates. The February 2018 Offering Notes are secured by a second priority security interest in the Company’s assets up to $1,000,000.

The February 2018 Note Conversion Price and the February 2018 Offering Warrant Exercise Price are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

The conversion feature of the February 2018 Convertible Note Offering provides for an effective conversion price that is below market value on the date of issuance. Such feature is normally characterized as a beneficial conversion feature (“BCF”). When the Company records a BCF the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The Company recorded a BCF and related debt discount of $37,350, the discount is being accreted over the life of the first Debenture to accretion of debt discount and issuance cost.

The Company recorded a $316,875 debt discount relating to 3,625,000 February 2018 Offering Warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

In connection with the February 2018 Convertible Note Offering, the Company retained a placement agent (the “Placement Agent”), to carry out the Offering on a “best-efforts” basis. For services in its capacity as Placement Agent, the Company has paid the Placement Agent a cash fee of $94,250 and issued to the Placement Agent shares of the Company’s common stock equal to ten percent (10%) of the Conversion Shares underlying the February 2018 Convertible Notes or 362,500 shares that had a fair value of $74,881, which was recorded as issuance cost and is being accreted over the life of these notes to accretion of debt discount and issuance cost.

~~- 24 -~~

~~During the year ended December 31, 2018, the Company converted $940,675 of principal and $86,544 of unpaid interest into the August 2018 Equity Raise.~~

~~During the year ended December 31, 2019 the Company repaid $19,758 in interest.~~

~~During the six months ended June 30,~~On July 01, 2020, the Company ~~repaid $75,000 in principal and $781.25 in~~entered into a loan agreement (the “First July 2020 Loan Agreement”) with an individual (the “First July 2020 Lender”), whereby the First July 2020 Lender issued the Company a promissory note of $68,000 (the “First July 2020 Note”). Pursuant to the First July 2020 Loan Agreement, the First July 2020 Note has interest ~~and the Notes are no longer outstanding.~~of twelve percent (10%). The First July 2020 Note matures on June 29, 2021.

~~The March 2018 Convertible~~Upon default or 180 days after issuance the First July 2020 Note ~~Offering~~

During the three months ended March 31, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “March 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “March 2018 Investors”) for aggregate gross proceeds of $770,000. In addition, $50,000 of the Company’s short-term debt, $767 accrued but unpaid interest and $140,600 of the Company’s vendor liabilities was exchanged for convertible debt within the March 2018 Convertible Note Offering. These conversions resulted in the issuance of 47,842 warrants with a fair value of $84,087. These were recorded as a loss on extinguishment of debt.

The March 2018 Convertible Note Offering consisted of a maximum of $900,000, with an over-allotment option of an additional $300,000 of units of the Company’s securities (each, a “March 2018 Unit” and collectively, the “March 2018 Units”), with each March 2018 Unit consisting of (a) a 14% Convertible Secured Promissory Note (each a “March 2018 Note” and together the “March 2018 Notes”),is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) ~~at a conversion price~~equal to 61% multiplied by the lowest trade of ~~$4.00 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together~~ the ~~“Warrants”) to purchase~~ common stock ~~equal to one hundred percent (100%)~~during the twenty (15) consecutive trading day period immediately preceding the date of the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $4.00 per share (“Exercise Price”). The March 2018 Notes mature on the second (2nd) anniversary of their issuance dates.respective conversion.t

~~The Conversion Price of~~During the three months ended March ~~2018~~31, 2021 the First July 2020 Note ~~and~~became convertible. Due to the ~~Exercise Price of the Warrants~~fact that these convertible notes have an option to convert at a variable amount, they are subject to ~~adjustment~~derivative liability treatment. The Company has applied ASC 815, due to the potential for ~~issuances~~settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of First July 2020 Note gave rise to a derivative liability of $112,743. The Company recorded $68,000 as a debt discount and $44,743 was recorded to derivative expense. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

During the three months ended March 31, 2021 the Company converted $68,000 in principal and $3,400 in interest into 35,469 shares of the Company’s common stock.

The August 2020 Convertible Loan Agreement

On August 17, 2020, the Company entered into a loan agreement (the “August 2020 Loan Agreement”) with an individual (the “August 2020 Lender”), whereby the August 2020 Lender issued the Company a promissory note of $68,000 (the “August 2020 Note”). Pursuant to the August 2020 Loan Agreement, the August 2020 Note has interest of twelve percent (12%). The August 2020 Note matures on August 17, 2021.

Upon default or 180 days after issuance the August 2020 Convertible Note is convertible into shares of the Company’s common stock, ~~or any equity linked instruments or securities convertible into~~par value $.001 per share (“Conversion Shares”) equal to 61% multiplied by the ~~Company’s~~lowest trade of the common stock ~~at a purchase price~~during the twenty (15) consecutive trading day period immediately preceding the date of ~~less than~~ the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.respective conversion.

The Company recorded a ~~$254,788~~$3,000 debt discount relating to ~~240,342~~original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.t

During the three months ended March 31, 2021 the August 2020 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of August 2020 Note gave rise to a derivative liability of $120,759. The Company recorded $65,000 was recorded as a debt discount and $55,759 was recorded to derivative expense. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

During the three months ended March 31, 2021 the Company converted $68,000 in principal and $3,400 in interest into 29,859 shares of the Company’s common stock.

The September 2020 Convertible Loan Agreement

On September 23, 2020, the Company entered into a loan agreement (the “September 2020 Loan Agreement”) with an individual (the “September 2020 Lender”), whereby the September 2020 Lender issued the Company a promissory note of $385,000 (the “September 2020 Note”). Pursuant to the September 2020 Loan Agreement, the September 2020 Note has interest of twelve percent (12%). The September 2020 Note matures on September 23, 2021.

Upon default or 180 days after issuance the Second July 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.

The Company recorded a $68,255 debt discount relating to original issue discount associated with this note. The Company recorded a $146,393 debt discount relating to 85,555 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the year ended December 31, 2018, the Company converted $886,367 of principal and $51,293 of unpaid interest pursuant to the August 2018 Equity Raise.~~

~~During the six months ended June 30, 2020 the Company accrued interest of $5,625.~~

~~- 25 -~~

~~The February 2019 Convertible Note Offering~~

During the nine months ended September 30, 2019, the Company conducted an offering to accredited investors (the “February 2019 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “February 2019 Investors”) for aggregate gross proceeds of $1,993,025.

The February 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “February 2019 Note” and together, the “February 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $5.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company between February 21, 2019 and the date on which the Company’s consummates a listing onto a national securities exchange, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”), and (b) a four-year stock purchase warrant (each a “Warrant and together the “Warrants”) to purchase a quantity of shares of the Company’s common stock up to thirty-three percent (33%) of the number of shares of common stock into which the underlying Notes may be converted, at an exercise price of $6.00 per share (“Exercise Price”). During the nine months ended September 30, 2019 a total of 133,190 Warrants were issued in conjunction with The February 2019 Convertible Note Offering.

~~The February 2019 Notes mature on the first (1~~^st) anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates, the principal and interest evidenced by the Note shall be mandatorily converted upon the earlier of (i) the listing of the Common Stock onto a national securities exchange, or (ii) upon a Qualified Offering.

The Conversion Price of the February 2019 Note and the Exercise Price of the Warrants are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

The Company recorded a $222,632 debt discount relating to 133,190 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the six months ended June 30, 2020 the Company accrued interest of $140,662.~~

~~The November 2019 Convertible Note Offering~~

During the year ended December 31, 2019, the Company conducted an offering to accredited investors (the “November 2019 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “November 2019 Investors”) for aggregate gross proceeds of $479,500. In addition, the Company converted $318,678 in Accounts Payable into this offering.

The November 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “November 2019 Note” and together, the “November 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at a fixed conversion price equal to $4.50 per share.

The November 2019 Notes mature six months after the anniversary of their issuance dates. At any time on or after the Maturity Date, at the election of the Offering’s Purchaser, this Note may convert into Common Stock equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest of this Note on the date of such conversion by $4.50.

~~- 26 -~~

The Company recorded a $84,377 debt discount relating to an original issue discount equal to $79,933 and a beneficial conversion feature of $4,444. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the six months ended June 30, 2020 the company accrued interest of $41,625.~~

~~The January 2020 Convertible Note Offering~~

During the three months ended March 31, ~~2020,~~2021 the Company conducted an offering to accredited investors (the “January 2020 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “January 2020 Investors”) for aggregate gross proceeds of $87,473.repaid $341,880 in principal and $46,200 in interest.

The January 2020 Convertible Note Offering consisted of (a) a 12% Convertible Promissory Note (each a “January 2020 Note” and together, the “January 2020 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $4.50 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

~~The January 2020 Notes mature on the first (6~~^th) month anniversary of their issuance dates. If an event of default occurs and is not cured within 30 days of the Company receiving notice, the notes will be convertible at 80% multiplied by the lowest VWAP of the common stock during the five (5) consecutive trading day period immediately preceding the date of the respective conversion, and a default interest rate of 24% will become effective.

The Conversion Price of the January 2020 Note are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.

The Company recorded a $12,473 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the six months ended June 30, 2020 the Company accrued interest of $4,762.~~

The ~~First February~~October 2020 Convertible Loan Agreement

On ~~February 4,~~October 2, 2020, the Company entered into a loan agreement (the ~~“First February~~“October 2020 Loan Agreement”) with an individual (the ~~“First February~~“October 2020 Lender”), whereby the ~~First February~~October 2020 Lender issued the Company a promissory note of ~~$85,000~~$169,400 (the ~~“First February~~“October 2020 Note”). Pursuant to the ~~First February~~October 2020 Loan Agreement, the ~~First February 2020 Note has interest of ten percent (10%).~~

The First February 2020 Note are convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $4.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

~~The First February 2020 Notes mature on the first (6~~^th) month anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates and the Notes have not been repaid or an event of default occurs as defined in the Notes, the notes will be convertible at the lesser of the fixed conversion price or 65% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion and a default interest rate of 15% will be applied.

~~- 27 -~~

The Conversion Price of the First February 2020 Note are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.

The Company recorded a $8,000 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the six months ended June 30, 2020 the Company accrued interest of $4,108.~~

~~The Second February 2020 Convertible Loan Agreement~~

On February 11, 2020, the Company entered into a loan agreement (the “Second February 2020 Loan Agreement”) with an individual (the “Second February 2020 Lender”), the Second February 2020 Lender issued the Company a promissory note of $200,000 (the “Second February 2020 Note”). Pursuant to the Second February 2020 Loan Agreement, the Second FebruaryOctober 2020 Note has interest of twelve percent ~~(12%~~(6%). As additional consideration for entering in the Second February 2020 convertible Loan Agreement, the Company issued a five-year warrant to purchase 20,000 shares of the Company’s common stock at a purchase price of $5.00 per share.

The Second February 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $4.50 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

~~The Second February~~October 2020 Note matures on the first (12^th) month anniversary of its issuance date. In

Upon default or 180 days after issuance the ~~event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Date and the~~October 2020 Note is ~~unpaid, the note will be~~ convertible ~~at the lesser~~into shares of the ~~fixed conversion price or~~Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% ~~multiplied by~~of average the lowest ~~trade~~three trading prices of the Company’s common stock ~~during~~on the ~~twenty (20) consecutive trading~~fifteen-trading day ~~period~~ immediately preceding the date of the respective conversion.

The Conversion Price of the First February 2020 Note is subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.

~~The~~ Company recorded a ~~$33,340~~$19,400 debt discount relating to original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

During the ~~six~~three months ended ~~June 30,~~March 31, 2021 the Second July 2020 Note became convertible. Due to the ~~company accrued interest~~fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of ~~$11,267.~~shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date and the period end. The conversion feature of Second July 2020 Note gave rise to a derivative liability of $74,860. The Company recorded this as a debt discount. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

The ~~Third February~~First December 2020 convertible Loan Agreement

On ~~February 25,~~December 9, 2020, the Company entered into a loan agreement (the ~~“Third February~~“First December 2020 Loan Agreement”) with an individual (the ~~“Third February~~“First December 2020 Lender”), whereby the ~~Third February~~First December 2020 Lender issued the Company a promissory note of ~~$1,500,000~~$600,000 (the “Third February 2020 Note”). The Company received proceeds of $864,950 and converted notes payable of $385,000 in exchange for the note (see Note 5). Pursuant to the Third February 2020 Loan Agreement, the Second February 2020 Note has interest of twelve percent (12% ).

~~- 28 -~~

The Third February 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $4.50 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

~~The Third February 2020 mature on the first (12~~^th) month anniversary of their issuance dates. In the event that the Offering’s Purchasers do not choose to convert the Notes into the Common Stock on or prior to the Maturity Dates and the note is unpaid, the notes will be convertible at the lower of the fixed conversion price or 75% multiplied by the lowest trade of the common stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.

The Conversion Price of the Third February 2020 Note are subject to adjustment for issuances of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price being reduced to such lower purchase price, subject to carve-outs as described therein.

In accordance with ASC 470-50, since the present value of the cash flows under the new debt instrument was at least ten percent different from the present value of the remaining cash flows under the terms of the original debt instrument, the Company accounted for the note exchange as described above as a debt extinguishment. The Company recorded a loss on debt extinguishment of $535,041. This represents the fair value of the warrants issued $445,705 and a debt premium of $89,336. The note has an effective interest rate of 24%. The Company recorded a debt discount of $160,714. This is made up of an original issue discount of $250,050 less a debt premium of $89,336.

~~During the six months ended June 30, 2020 the Company accrued interest of $62,500.~~

~~The April 2020 Convertible Note Offering~~

During April of 2020, the Company conducted multiple closings of a private placement offering to accredited investors (the “April 2020 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “April 2020 Investors”) for aggregate gross proceeds of $350,010. The April 2020 Convertible Note Offering accrues interest at a rate of twelve percent per annum (12%). The April 2020 Convertible Note Offering mature on the six (6^th~~) month anniversary of their issuance dates.~~

The April 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $4.50 per share after the maturity date or (ii) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).

The Company recorded a $50,010 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the six months ended June 30, 2020 the Company accrued interest of $8,050.~~

~~The June 2020 Convertible Loan Agreement~~

On June 19, 2020, the Company entered into a loan agreement (the “June 2020Loan Agreement”) with an individual (the “June 2020 Lender”), the June 2020 Lender issued the Company a promissory note of $550,000 (the “June“First December 2020 Note”). Pursuant to the ~~June~~First December 2020 Loan Agreement, the ~~June~~First December 2020 Note has interest of twelve percent (12%). As additional consideration for entering in the ~~June~~First December 2020 convertible Loan Agreement, the Company issued ~~a five-year warrant to purchase 148,809~~45,000 shares of the Company’s common ~~stock at a purchase price of $3.85 per share.~~stock. The ~~June~~First December 2020 Note matures on the first (12^th) month anniversary of its issuance date.

~~- 29 -~~

Upon default the ~~June~~First December 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to the closing bid price of the Company’s common stock on the trading day immediately preceding the date of the respective conversion.

The Company recorded a ~~$67,500~~$110,300 debt discount relating to original issue discount associated with this note. The Company recorded a ~~$274,578~~$113,481 debt discount relating to ~~148,809 warrants and 16,272~~45,000 shares issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

During the ~~six~~three months ended ~~June~~March 31, 2021 the Company repaid $600,000 in principal and $4,340 in interest.

The Second December 2020 Convertible Loan Agreement

On December 30, 2020, the Company ~~accrued~~entered into a loan agreement (the “Second December 2020 Loan Agreement”) with an individual (the “Second December 2020 Lender”), whereby the Second December 2020 Lender issued the Company a promissory note of $169,400 (the “Second December 2020 Note”). Pursuant to the Second December 2020 Loan Agreement, the Second December 2020 Note has interest of ~~$13,317.~~ twelve percent (6%). The Second December 2020 Note matures on the first (12^th) month anniversary of its issuance date.

Upon default the Second December 2020 Note ~~7 – Related Party~~

~~Convertible notes~~

~~Convertible notes payable – related party as of June 30, 2020 and 2019~~ is ~~as follows:~~

Outstanding Principal as of Warrants granted
June 30,
2019 December 31,
2019 Interest
Rate Maturity
Date Quantity Exercise
Price
The March 2018 Convertible Note Offering - 400 14 % April 2020 59,850 4.00
The February 2019 Convertible Note Offering 20,000 20,000 10 % May 2020 1,320 6.00
20,000 20,400
Less: Debt Discount - (13 )
Less: Debt Issuance Costs - -
20,000 20,387
Less: Current Debt (20,000 ) (20,387 )
Total Long-Term Debt $ - $ -

~~The March 2018 Convertible Note Offering~~

During the year ended December 31, 2018, the Company conducted multiple closings of a private placement offering to accredited investors (the “March 2018 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “Investors”) for aggregate gross proceeds of $239,400.

The March 2018 Convertible Note Offering consisted of a maximum of $900,000, with an over-allotment option of an additional $300,000, of units of the Company’s securities (each, a “March 2018 Unit” and collectively, the “March 2018 Units”), with each March 2018 Unit consisting of (a) a 14% Convertible Secured Promissory Note (each a “March 2018 Note” and together the “March 2018 Notes”), convertible into shares of the Company’s common stock, par value ~~$.001~~$0.001 per share (“Conversion Shares”) ~~at a conversion price of $4.00 per share (the “Conversion Price”), and (b) a four-year warrant (each a “Warrant and together the “Warrants”) to purchase common stock~~ equal to ~~one hundred percent (100%)~~75% of average the shares into which the Notes can be converted into (“Warrant Shares”) at an exercise price of $4.00 per share (“Exercise Price”). The Notes mature on the second (2nd) anniversary of their issuance dates.

~~The Conversion Price of the Note and the Exercise Price of the Warrants are subject to adjustment for issuances~~lowest three trading prices of the Company’s common stock or any equity linked instruments or securities convertible into the Company’s common stock at a purchase price of less than the prevailing Conversion Price or Exercise Price. Such adjustment shall result in the Conversion Price and Exercise Price being reduced to such lower purchase price, subject to carve-outs as described therein.

~~- 30 -~~

~~The Company recorded a $84,854 debt discount relating to 59,850 warrants issued to investors based~~ on the ~~relative fair value of each equity instrument on~~fifteen-trading day immediately preceding the ~~dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.~~

~~During the year ended December 31, 2018, the Company converted $239,000 of principal and $15,401 of unpaid interest into the August 2018 Equity Raise.~~

During the six months ended June 30, 2020 the lender forgave $400 of principal and $70 of unpaid interest. This was recorded as a gain on settlement of debt on the Condensed Consolidated Statements of Comprehensive Income (Loss).

~~The February 2019 Convertible Note Offering~~

~~During the Nine months ended September 30, 2019, the Company conducted an offering to accredited investors (the “February 2019 Convertible Note Offering”) of units~~date of the ~~Company’s securities by entering into subscription agreements with “accredited investors” (the “February 2019 Investors”) for aggregate gross proceeds of $20,000.~~

The February 2019 Convertible Note Offering consisted of (a) a 10% Convertible Promissory Note (each a “February 2019 Note” and together, the “February 2019 Notes”), convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $5.00 per share or (ii) the price provided to investors in connection with (a) any private placement offerings or one or more registered public offerings by the Company under the Securities Act, pursuant to which the Company receives monies in the amount greater than $1,500,000 in exchange for securities of the Company between February 21, 2019 and the date on which the Company’s consummates a listing onto a national securities exchange, or (b) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”), and (b) a four-year stock purchase warrant (each a “Warrant and together the “Warrants”) to purchase a quantity of shares of the Company’s common stock up to thirty-three percent (33%) of the number of shares of common stock into which the underlying Notes may be converted, at an exercise price of $6.00 per share (“Exercise Price”). During the nine months ended September 30, 2019 a total of 1,320 Warrants were issued in conjunction with The February 2019 Convertible Note Offering.

The Company recorded a ~~$2,465~~$18,900 debt discount relating to ~~1,320 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance.~~original issue discount associated with this note. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~During the year ended December 31, 2019, $20,000 in principal was converted from a promissory note into this Offering.~~Note 7 – Related Party

~~During the six months ended June 30, 2020 the company accrued interest of $1,000.~~

~~- 31 -~~

Notes payable

Notes payable – related party as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 is as follows:

Outstanding Principal as of Warrants granted
June 30,
2020 December 31,
2019 Interest
Rate Maturity
Date Quantity Exercise
Price
The June 2018 Frommer Loan Agreement 10,000 10,000 6 % August 17, 2018 1,500 4.00
The July 2018 Schiller Loan Agreements 20,863 20,863 6 % August 17, 2018 7,500 4.00
The June 2019 Loan Agreement 4,825,000 4,825,000 12.5 % December 3, 2019 - -
The December 2019 Gravitas Loan Agreement 135,116 300,000 6.7 % March 1, 2020 - -
The January 2020 Rosen Loan Agreement - - - February 2020 - -
The February 2020 Banner Loan Agreement - - - February 2020 148 6.00
The February 2020 Frommer Loan Agreement - - - February 2020 45 6.00
4,990,979 5,155,863
Less: Debt Discount - -
Less: Debt Issuance Costs - (26,521 )
4,990,979 5,129,342
Less: Current Debt (4,990,979 ) (5,129,342 )
$ - $ -

	Outstanding Principal as of										Warrants granted
	March 31, 2021			December 31, 2020			Interest Rate			Maturity Date	Quantity		Exercise Price
The September 2020 Goldberg Loan Agreement		16,705			16,705			7	%	September 2022		-		-
The September 2020 Rosen Loan Agreement		3,295			3,295			7	%	September 2022		-		-
		20,000			20,000
Less: Debt Discount		(14,603	)		(17,068	)
Less: Debt Issuance Costs		-			-
		5,397			2,932
Less: Current Debt		(5,397	)		(2,932	)
	$	-		$	-

The ~~June 2018 Frommer~~September 2020 Goldberg Loan Agreement

On ~~June 29, 2018,~~September 15, 2020, the Company entered into a loan agreement (the ~~“June 2018 Frommer~~“September 2020 Goldberg Loan Agreement”) with ~~Jeremy Frommer, an officer of the Company,~~Goldberg whereby the Company issued ~~Frommer~~ a promissory note ~~in the principal amount~~ of ~~$10,000~~$16,705 (the ~~“June 2018 Frommer~~“September 2020 Goldberg Note”). ~~As additional consideration for entering in~~Pursuant to the ~~June 2018 Frommer Note~~September 2020 Goldberg Loan Agreement, the Company issued Frommer a four-year warrant to purchase 1,500 shares of the Company’s common stock at a purchase price of $4.00 per share. Pursuant to the June 2018 Frommer Loan Agreement, the June 2018 FrommerSeptember 2020 Goldberg Note ~~bears~~has an interest ~~at a~~ rate of ~~6% per annum and payable on the maturity date of August 17, 2018 (the “June 2018 Frommer Maturity Date”)~~7%. ~~On November 8, 2018 the Company executed upon an agreement that extended the~~The maturity date of the June 2018 Frommer Agreement to March 7, 2019. As part of the extension agreement, the Company issued Frommer an additional 2,043 warrants to purchase common stock of the Company at an exercise price of $6.00. These warrants had a fair value of $4,645 which was recorded to loss on extinguishment of debt. On February 18, 2019 the Company executed upon an agreement that further extended the maturity date of the June 2018 Frommer Agreement to March 7, 2019. As part of the extension agreement, the Company issued Frommer an additional 2,077 warrants to purchase common stock of the Company at an exercise price of $6.00. On March 29, 2019 the Company entered into an agreement with Mr. Frommer that further extended the maturity date of this loan to MaySeptember 2020 Goldberg Note is September 15, 2019. On June 29, 2019 the Company entered into an agreement with Mr. Frommer that further extended the maturity date of this loan to December 15, 2019. On December 15, 2019 the Company entered into an agreement with Mr. Frommer that further extended the maturity date to May 15, 2020.

~~During the six months ended June 30,~~2022 (the “September 2020 ~~the Company accrued interest of $399.~~

~~The July 2018 Schiller Loan Agreement~~

On July 17, 2018, the Company entered into a loan agreement (the “Second July 2018 Schiller Loan Agreement”) with Schiller, a member of the Board, whereby the Company issued Schiller a promissory note in the principal aggregate amount of $25,000 (the “Second July 2018 Schiller Note”). As additional consideration for entering in the Second July 2018 Schiller Loan Agreement, the Company issued Schiller a four-year warrant to purchase 3,750 shares of the Company’s common stock at a purchase price of $4.00 per share. Pursuant to the Second July 2018 Schiller Loan Agreement, the Second July 2018 Schiller Note bears interest at a rate of 6% per annum and payable on the maturity date of August 17, 2018. Subsequent to the balance sheet date, on November 8, 2018 the Company executed upon an agreement that extended the maturity date of this loan to March 7, 2019. As part of the extension agreement, the Company issued Schiller warrants to purchase 5,095 shares of common stock of the Company at an exercise price of $6.00. On February 18, 2019 the Company executed upon an agreement that further extended the maturity date of the Second July 2018 Schiller Loan Agreement to March 7, 2019. As part of the extension agreement, the Company issued Schiller an additional 5,180 warrants to purchase common stock of the Company at an exercise price of $6.00. On March 29, 2019 the Company entered into an agreement with Mr. Schiller that further extended the maturity date of this loan to May 15, 2019. On December 15, 2019 the Company entered into an agreement that further extended the maturity date of this loan to May 15, 2020.

~~- 32 -~~

~~During the six months ended June 30, 2020 the Company accrued interest of $832.~~

~~During the year ended December 31, 2019 $4,137 in principal was converted into the February 2019 Convertible Note Offering.~~

~~The June 2019 Loan Agreement~~

On June 3, 2019, the Company entered into a loan agreement (the “June 2019 Loan Agreement”), pursuant to which the Company was to be indebted in the amount of $2,400,000, of which $1,200,000 was funded by September 30, 2019 and $1,200,000 was exchanged from the May 2016 Rosen Loan Agreement dated May 26, 2016 in favor of Rosen for a joint and several interest in the Term Loan pursuant to the Debt Exchange Agreement. The June 2019 Loan Agreement, the June 2019 Loan bears interest at a rate of 12.5% per annum, compounded annually and payable on the maturity date of December 3, 2019 (the “June 2019Goldberg Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under note are due. The September 2020 Goldberg Loan is secured by the ~~June 2019. In connection~~tangible and intangible property of the Company.

Since the September 2020 Goldberg Note has a make-whole provision if the shares of the Company’s common stock issued to the lender in accordance with the ~~conversion~~Lender’s Exchange Agreement (see note 11) have a value equal to or less than $7,737,594 determined by using the lowest VWAP of the ~~May 2016 Rosen Loan Agreement~~last 30 days prior to September 14, 2021. The principal amount of the September 2020 Goldberg Note shall increase by 200% of the difference between the initial consideration and the September 14, 2021 value. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The make-whole feature gave rise to a derivative liability of $2,557,275, of which $2,540,570 was recorded as a loss on extinguishment of debt and $16,705 as a debt ~~discount of $92,752.~~discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~On July 29, 2019, the Company entered into the First Amendment Agreement~~ The derivative liability is marked to ~~the June 2019 Loan Agreement pursuant to which the parties agreed to amend the June 2019 Loan Agreement~~market as of March 31, 2021, and the ~~June 2019 Security Agreement so as to (i) increase the principal aggregate amount~~change in derivative liability is recorded on Condensed Consolidated Statements of ~~the June 2019 Loan to $2,500,000, and (ii) amend the provisions regarding the ranking of interest of such loan.~~

On August 12, 2019, the Company entered into the Second Amendment Agreement to the June 2019 Loan Agreement pursuant to which the parties agreed to further amend the June 2019 Loan Agreement and the June 2019 Security Agreement so as to (i) increase the principal aggregate amount of the June 2019 Loan to $3,000,000, and (ii) amend the provisions regarding the ranking of interest of such loan.

On September 16, 2019, the Company entered into the Third Amendment Agreement to the June 2019 Loan Agreement pursuant to which the parties agreed to further amend the June 2019 Loan Agreement and the June 2019 Security Agreement so as to (i) increase the principal amount of the June 2019 Loan to $4,000,000; and (ii) amend the provisions therein with regard to the ranking of security interests.

On October 10, 2019 the Company and investors entered into the Fourth Amendment Agreement to the June 2019 Loan Agreement, whereby the parties thereto agreed to (i) increase the principal amount of the June 2019 Loan to $4,825,000; and (ii) amend the interest, conversion terms, and other covenants of the note.

On February 27, 2020, the Company entered into a fifth amendment agreement to the June 2019 Loan Agreement, whereby the parties agreed to amend Section 2.6 of the June 2019 Loan Agreement and provide for: (i) an additional 10% of shares to be issued at the time of conversion in the event that the price per share (or unit, as applicable) of securities issued in a Qualified Public Offering (as such term is defined in the Fifth Amendment) is below $5.00; and (ii) provide for the acceleration of all outstanding interest due on the Loan upon the consummation of a Qualified Public Offering.

~~The December 2019 Gravitas Loan Agreement~~

~~On December 23, 2019, the Company entered into a loan agreement (the “December 2019 Gravitas Loan Agreement”), whereby the Company issued Gravitas a promissory~~Comprehensive Loss. See note in the principal amount of $300,000 (the “December 2019 Gravitas Note”). Pursuant to the December 2019 Gravitas Loan Agreement, the December 2019 Gravitas Note has a flat interest payment of $20,000.8.

~~- 33 -~~

During the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 the Company accrued interest of ~~$26,966.~~$288.

~~During the six months ended June 30, 2020 the Company repaid $164,884 in principal.~~

The ~~January~~September 2020 Rosen Loan Agreement

On January 14, 2020, the Company entered into a loan agreement (the “January 2020 Rosen Loan Agreement”), whereby the Company issued a promissory note in the principal amount of $150,000 (the “January 2020 Rosen Note”). Pursuant to the January 2020 Rosen Loan Agreement, the January 2020 Rosen Note accrues interest at a fixed amount of $2,500 for the duration of the note.

~~During the six months ended June 30, 2020 the Company accrued interest of $15,273.~~

~~During the six months ended June 30, 2020 the Company repaid $150,000 in principal and $15,273 in interest.~~

~~The February Banner 2020 Loan Agreement~~

~~On February~~September 15, 2020, the Company entered into a loan agreement (the ~~“February~~“September 2020 ~~Banner~~Rosen Loan Agreement”), with Rosen whereby the Company issued a promissory note ~~in the principal amount~~ of ~~$9,900~~$3,295 (the ~~“February~~“September 2020 Rosen Note”) ~~for expenses paid on behalf of the Company by an employee.~~. Pursuant to the ~~February~~September 2020 Rosen Loan Agreement, the ~~February~~September 2020 Rosen Note ~~bears~~has an interest ~~at a~~ rate of ~~$495. As additional consideration for entering in~~7%. The maturity date of the ~~February~~September 2020 Rosen Note is September 15, 2022 (the “September 2020 Rosen Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the note are due. The September 2020 Rosen Loan ~~Agreement,~~is secured by the ~~Company issued~~tangible and intangible property of the Company.

Since the September 2020 Rosen Note has a ~~five-year warrant to purchase 148~~make-whole provision if the shares of the Company’s common stock atissued to the lender in accordance with the Lender’s Exchange Agreement (see note 11) have a ~~purchase price~~value equal to or less than $554,924 determined by using the lowest VWAP of ~~$6.00 per share.~~the last 30 days prior to September 14, 2021. The principal amount of the September 2020 Rosen Note shall increase by 200% of the difference the initial consideration and the September 14, 2021 value. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The make-whole feature of gave rise to a derivative liability of $504,413, of which $501,118 was recorded as a loss on extinguishment of debt and $3,295 as a debt discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost. The derivative liability is marked to market as of March 31, 2021, and the change in derivative liability is recorded on Condensed Consolidated Statements of Comprehensive Loss. See note 8.

During the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 the Company ~~repaid $9,900 in principal and $495 in interest.~~accrued interest of $57.

~~The February 2020 Frommer Loan Agreement~~Officer compensation

On February 18, 2020, the Company entered into a loan agreement (the “February 2020 Frommer Loan Agreement”) with Jeremy Frommer, an officer of the Company, whereby the Company issued Frommer a promissory note in the principal amount of $2,989 (the “February 2020 Frommer Note”). As additional consideration for entering in the June 2018 Frommer Note Loan Agreement, the Company issued Frommer a five-year warrant to purchase 45 shares of the Company’s common stock at a purchase price of $6.00 per share. Pursuant to the February 2020 Frommer Loan Agreement, the note is payable on the maturity date of February 28, 2020 (the “February 2020 Frommer Maturity Date”).

During the ~~six~~three months ended ~~June 30, 2020 the Company repaid $2,989 in principal and $160 in interest.~~

~~Demand loan~~

On June 13, 2019, Mark Standish, who was subsequently named Chairman of the Board, made non-interest bearing loans of $100,000 to the Company in the form of cash. The loan is due on demand and unsecured. During the year ended DecemberMarch 31, ~~2019 the company repaid $25,000 of principal.~~

~~On December 17, 2019, Standish made non-interest bearing loans of $150,000 to the Company in the form of cash. The loan is due on demand and unsecured.~~

~~During the six months ended June 30, 2020, the Company repaid $150,000 in principal.~~

~~On March 27, 2020, a lender made non-interest bearing loans of $100,000 to the Company in the form of cash. The loan is due on demand and unsecured.~~

~~On April 9, 2020, a lender made non-interest bearing loans of $50,000 to the Company in the form of cash. The loan is due on demand and unsecured.~~

~~- 34 -~~

~~On April 21, 2020, a lender made non-interest bearing loans of $100,000 to the Company in the form of cash. The loan is due on demand and unsecured.~~

~~Officer compensation~~

~~During the six months ended June 30, 2020~~2021 the Company paid ~~$56,479~~$20,082 for living expenses for officers of the Company.

Note 8 – ~~Stockholders’ Deficit~~Derivative Liabilities

The Company has identified derivative instruments arising from a make-whole feature in the Company’s notes payable at March 31, 2021. For the terms of the make-whole features see the September 2020 Rosen Loan Agreement and the September 2020 Goldberg Loan Agreement in Note 7. The Company has also identified derivative instruments arising from convertible notes that have an option to convert at a variable number of shares in the Company’s convertible notes payable at March 31, 2021. For the terms of the conversion features see Note 7. The Company had no derivative assets measured at fair value on a recurring basis as of March 31, 2021.

The Company utilized a Geometric Brownian Motion (“GBM”) model and a binomial model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the GBM model and binomial model included a starting stock price, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate.

Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note adjusted to be on a continuous return basis to align with the GBM model and binomial model.

Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.

Volatility: The Company calculates the expected volatility based on the company’s historical stock prices with a look back period commensurate with the period to maturity.

Expected term: The Company’s remaining term is based on the remaining contractual maturity of the convertible notes.

The following are the changes in the derivative liabilities during the three months ended March 31, 2021.

	Three Months Ended March 31, 2021
	Level 1		Level 2		Level 3
Derivative liabilities as January 1, 2021	$	-	$	-	$	42,231
Addition		-		-		308,362
Extinguishment						(203,578	)
Changes in fair value		-		-		197,389
Derivative liabilities as March 31, 2021	$	-	$	-	$	344,404

Note 9 – Stockholders’ Equity

Shares Authorized

~~During the period presented,~~Prior to July 13, 2020, the Company was authorized to issue up to thirty-five million (35,000,000) shares of capital stock, of which fifteen million (15,000,000) shares are designated as common stock, par value $0.001 per share, and twenty million (20,000,000) are designated as “blank check” preferred stock, par value $0.001 per share. The designations, rights, and preferences of such preferred stock are to be determined by the Company’s board of directors.

On July 13, 2020, the Company filed the Second Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada, which authorize the issuance of 100,000,000 shares of common stock, and 20,000,000 shares of preferred stock.

Preferred Stock

Series E Convertible Preferred Stock

On December 29, 2020 the Company entered into securities purchase agreements with thirty-three accredited investors whereby the Investors have agreed to purchase from the Company an aggregate of 7,778 shares of the Company’s Series E Convertible Preferred Stock, par value $0.001 per share and 2,831,715 warrants to purchase shares of the Company’s common stock, par value $0.001 per share. The Series E Preferred Stock is convertible into a total of 1,887,810 shares of Common Stock. The combined purchase price of one Conversion Share and one and a half warrant was $4.12. The aggregate purchase price for the Series E Preferred Stock and warrants was $7,777,777.77. The Company has recorded $817,353 to stock issuance costs, which are part of Additional Paid-in Capital.

The warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $4.50 per share. The warrants provide for cashless exercise to the extent that there is no registration statement available for the underlying shares of Common Stock.

The placement agent for the transaction and received cash compensation equal to 10% of the aggregate purchase price and warrants to purchase 471,953 shares of the Company’s common stock, at an exercise price of $5.15 per share (the “PA Warrants”). The PA Warrants are exercisable for a term of five-years from the date of issuance.

During the three months ended March 31, 2021, the Company received the $40,000 of the subscription receivable for the Series E Convertible Preferred Stock. The Company has recorded $4,225 to stock issuance costs, which are part of Additional Paid-in Capital.

During the three months ended March 31, 2021, investors converted 6,690 shares of the Company’s Series E Convertible Preferred Stock into 1,623,730 shares of the Company’s common stock.

Common Stock

On January ~~30, 2020,~~14, 2021, the Company issued ~~150,000~~30,000 shares of its restricted common stock to consultants in exchange for ~~three months~~services at a fair value of $133,200.

On January 20, 2021, the Company issued 40,000 shares of its restricted common stock to consultants in exchange for a year of services at a fair value of ~~$585,000.~~$192,000. These shares were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 the Company recorded ~~$585,000~~$36,822 to share based payments.

On ~~January 6, 2020,~~February 1, 2021, the Company issued ~~4,236~~50,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $196,000.

On February 3, 2021, the Company issued 1,929 shares of its restricted common stock to consultants in exchange for services at a fair value of $8,198.

On February 18, 2021, the Company issued 10,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $48,000.

On February 18, 2021, the Company issued 10,417 shares of its restricted common stock to consultants in exchange for services at a fair value of $50,002.

On February 26, 2021, the Company issued 291 shares of its restricted common stock to consultants in exchange for services at a fair value of $1,499.

On March 17, 2021, the Company issued 9,624 shares of its restricted common stock to consultants in exchange for services at a fair value of $49,371.

On March 28, 2021, the Company issued 31,782 shares of its restricted common stock to settle outstanding vendor liabilities of ~~$12,500.~~$125,000.

On March 31, 2021, the Company issued 13,113 shares of its restricted common stock to settle outstanding vendor liabilities of $43,667. In connection with this transaction the Company also recorded a loss on settlement of vendor liabilities of ~~$4,233.~~$12,719.

On March 5, 2020, the Company issued 6,459 shares of its restricted common stock to settle outstanding vendor liabilities of $25,000. In connection with this transaction the Company also recorded a gain on settlement of vendor liabilities of $1,098.

On March 13, 2020 the Company entered into an exchange agreement with a warrant holder. The company agreed to exchange 17,500 warrants for 15,000 shares of the company common stock. In connection with this agreement the company recorded a loss on conversion of warrants to stock of $5,772

On March 19, 2020, the Company issued 60,000 shares of its restricted common stock to settle outstanding vendor liabilities of $72,048. In connection with this transaction the Company also recorded a gain on settlement of vendor liabilities of $122,953.

~~On June 29, 2020 the Company entered into an exchange agreement with a warrant holder. The company agreed to exchange 17,500 warrants for 6,718 shares of the company common stock and $10,000.~~

~~During the six months ended June 30, 2020 the Company cancelled 151,951 shares of treasury stock.~~

Stock Options

The Company applied fair value accounting for all share-based payments awards. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model.

~~- 35 -~~

The assumptions used for options granted during the three months ended March 31, 2021 are as follows:

	March 31, 2021
Exercise price	$	2.55 – 14.10
Expected dividends		0	%
Expected volatility		223.15 – 242.98	%
Risk free interest rate		0.46 – 0.98	%
Expected life of option		5 - 7 years

The following is a summary of the Company’s stock option activity:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Balance – December 31, 2019 – outstanding		911,500			8.16		2.51
Balance – December 31, 2020 – outstanding									541,021			12.75		4.29
Granted		-			-		-		1,812,375			6.39		6.22
Exercised		-			-		-		-			-		-
Cancelled/Modified		(458,977	)		8.43		-		(3,334	)		15.00		-
Balance – June 30, 2020 – outstanding and exercisable		452,523			7.89		2.24
Balance – March 31, 2021 – outstanding									2,350,062			7.84		5.37
Balance – March 31, 2021 – exercisable									145,834		$	23.97		1.55

Option Outstanding						Option Exercisable
Exercise price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Remaining Contractual Life (in years)
$	7.84		2,350,062		5.37		23.97		145,834		1.55

During the ~~year~~ ended December 31, 2018 the Company granted options of ~~500,000~~11,667 to ~~consultants.~~consultants that has a fair value of $57,123. As of the date of this filing the company has not issued these ~~options.~~options and they are recorded as an accrued liability on the Consolidated Balance Sheet.

On May 7, 2020, the board of directors approved the Jerrick Media Holdings, Inc. 2020 Omnibus Equity Incentive Plan (the “Plan”). Only employees, non-employee directors and consultants are eligibleStock-based compensation for ~~awards under the Plan. The Plan provides for awards~~stock options has been recorded in the ~~form~~consolidated statements of ~~options (incentive stock options or nonstatutory stock options) restricted stock grants,~~operations and ~~restricted stock unit grants. Up~~totaled $818,612, for the three months ended March 31, 2021.

As of March 31, 2021, there was $7,807,672 of total unrecognized compensation expense related to ~~7,500,000 shares of common stock may be issued under the Plan and the option exercise price of stock~~unvested employee options granted under the ~~Plan shall not~~Company’s share-based compensation plans that is expected to be ~~less than 100%~~recognized over a weighted average period of the Fair Market Value (as defined in the Plan) (110% for 10% shareholders in the case of ISOs) of a share of common stock on the date of the grant. The option exercise price may be payable in cash, surrender of stock, cashless exercise or net exercise. Each grant awarded under the Plan shall be evidenced by a grant agreement and may or may not be subject to vesting. The Plan is subject to the approval of the Company’s stockholders within one year of the date of adoption by the Board of Directors. On July 8, 2020, the Company’s stockholders approved the Plan, which terminates on May 7, 2030. The Board of Directors may amend or terminate the Plan at any time and for any reason. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules.approximately 1.4 year.

On May 20, 2020 the Company entered into an exchange agreements with eight option holders. The company agreed to exchange 458,977 options previously issued under the 2015 Incentive Stock and Award Plan for 688,473 shares of the Company common stock. In connection with this agreement the Company recorded stock based compensation on conversion of options to stock of $1,405,664.

Warrants

The Company applied fair value accounting for all share-based payments awards. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model.

~~The assumptions used for warrants granted during the six months ended June 30, 2020 are as follows:~~

June 30,
2020 June 30,
2019
Exercise price $ 3.85 - 6.00 $ 4.00 - 6.00
Expected dividends 0% 0%
Expected volatility 234.03% - 237.39 % 107.59%-114.13 %
Risk free interest rate 0.33% - 1.63 % 1.93-2.41 %
Expected life of warrant 5 years 4 – 5 years

~~- 36 -~~

Warrant Activities

The following is a summary of the Company’s warrant activity:

Warrants Weighted
Average
Exercise
Price Aggregate Intrinsic Value

Outstanding and Exercisable – December 31, 2019 742,221 $ 5.25 -
Granted 294,597 4.42
Exercised - -
Forfeited/Cancelled (100,578 ) 4.13
Outstanding – June 30, 2020 936,240 5.11 7,440
Exercisable – June 30, 2020 787,431 5.35 -

	Warrant			Weighted Average Exercise Price
Balance – December 31, 2020 – outstanding		6,130,948			4.96
Granted		486,516			5.13
Exercised		(333,130	)		4.69
Cancelled/Modified		(10,556	)		24.00
Balance – March 31, 2021 – outstanding		6,273,778			4.96
Balance – March 31, 2021 – exercisable		6,273,778		$	4.96

Warrants Outstanding Warrants Exercisable
Exercise price Number
Outstanding Weighted
Average
Remaining
Contractual
Life
(in years) Weighted
Average
Exercise Price Number
Exercisable Weighted
Average
Exercise Price
$ 5.11 936,240 3.24 5.35 787,431 2.92

Warrants Outstanding								Warrants Exercisable
Exercise price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	4.96		6,273,778		4.52		4.96		6,273,778		4.52

During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Company issued 302,404 shares of common stock to a ~~total~~certain warrant holder upon the exercise of ~~600 warrants were issued~~a warrant to purchase 333,130 shares of common stock. The Company received $1,272,672 in connection with ~~notes payable (See Note 5 above). The warrants have~~the exercise of a ~~grant date fair value of $523,802 using a Black-Scholes option-pricing model and the above assumptions.~~warrant.

During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021 a total of ~~293,804~~486,516 warrants were issued in connection with ~~convertible notes (See Note 6 above). The warrants have a grant date fair value of $1,017,605 using a Black-Scholes option-pricing model and~~ the ~~above assumptions.~~Series E Convertible Preferred Stock raise.

~~During~~Share-based awards, restricted stock award (“RSAs”)

On February 4, 2021 the ~~six~~Board resolved that, the Company shall pay each member of the Board, for each calendar quarter during which such member continues to serve on the Board, compensation as a group amounts to $62,500 per quarter. The shares vest one year after issuance. The $62,500 worth of Common Stock is based on the closing price on the last day of the quarter. Since the shares are based on a variable number of shares in a future period the Company classified this grant as a liability in accordance with ASC 480.

A summary of the activity related to RSUs for the three months ended ~~June 30, 2020, a total~~March 31, 2021is presented below:

Restricted stock units (RSUs)	Total shares		Grant date fair value
RSAs non-vested at January 1, 2021	-		$-
RSAs granted		55,876		$ 4.30 – 4.32
RSAs vested		-	$	-
RSAs forfeited		-	$	-

RSAs non-vested March 31, 2021		55,876		$ 4.30 – 4.32

Stock-based compensation for RSA’s has been recorded in the consolidated statements of ~~193 warrants were issued with notes payable – related party (See Note 7 above). The warrants have a grant date fair value of $753 using a Black-Scholes option-pricing model~~operations and totaled $228,535, for the ~~above assumptions.~~three months ended March 31, 2021.

Note 910 – Commitments and Contingencies

The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carry back net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.

In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the ~~six months~~year ended ~~June 30,~~December 31, 2020.

On March 26, 2020 and April 30, 2020, the Company received 2 separate loans pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act.

When the applications for PPP first opened up, there was limited available funding and much confusion surrounding the application process. The ~~company is~~Company initially submitted its application for the May 2020 PPP Loan in early April but received no response in the ~~process~~aftermath of submitting the application. After consulting multiple advisors, the Company made the decision to apply elsewhere, due to the rampant media coverage of institutions running out of funding and the Company’s need for the capital and belief that if 2 separate loans were approved, the remaining application could simply be withdrawn.

Therefore, in late April, the company proceeded with applying for the April 2020 PPP Loan. After some conflicting communications regarding acceptance, the Company attempted to contact the lender to clarify but got no response. After continued attempts to follow up with both lenders, the Company received approval for the May 2020 PPP Loan and funding for the April 2020 PPP Loan on the same day, followed the next day by the funding of the May 2020 PPP Loan. The Company immediately separated the funds for the April 2020 PPP Loan into a separate reserved bank account with the intention of returning the funds. However, after several attempts to contact the lender with no response, the Company was faced with difficulty raising funds ~~received~~in the early-Covid economy and made the decision to utilize the funds for operations and pursue an installment repayment plan when they were able to reach the lender. As of the date of this filing, the Company has begun making repayments on ~~April 30, 2020.~~

~~Litigation~~the loan, absent a formal installment agreement due to difficulties reaching the lender. The Company intends to complete repayment before the end of 2021.

As each company is only permitted one loan under the CARES Act, there is a possibility the loan may be called by the SBA and the Company would have to repay the loan in full at such time.

Litigation

On or about June 25, 2020, Home Revolution, LLC (“Home Revolution”) filed a lawsuit in the United States District Court for the District of New Jersey, ~~(the “Court”), entitled~~ Home Revolution, LLC, et al. v. Jerrick Media Holdings, Inc. et al., Case No. 2:~~20-cv-07775-JMV-MF (the “Action”).~~20-cv-07775-JMV-MF. The ~~complaint for the lawsuit~~Complaint alleges, among other things, that ~~the Company~~Creatd, Inc. breached the Membership Interest Purchase Agreement, as modified, and ancillary transaction documents in connection with the acquisition of Seller’s Choice, LLC, from Home Revolution in September 2019. The ~~complaint~~Complaint additionally alleges violation of the New Jersey Uniform Securities Law, violations of the Exchange Act and Rule 10b-5 thereunder, fraud, equitable accounting, breach of fiduciary duty, conversion and unjust enrichment.

The Company continues to believe that the Action lacks merit. In the event this Action is not summarily dismissed, Jerrick intends to vigorously challenge it. At this time, the Company is unable to estimate potential damage exposure, if any, related to the litigation.

~~- 37 -~~

~~In addition to the existing claim for damages contained in~~ After filing the Complaint ~~on July 29, 2020,~~but prior to our Answer date, Home Revolution moved by order to show cause ~~for preliminary injunctive relief. On~~to have a receiver appointed by the Court to take over Creatd’s operations.

We submitted an opposition, and after oral arguments on August 13, 2020, the Court denied the receiver request in its entirety. We then filed a Motion to Dismiss on August 14, 2020 on a number of grounds, the most significant of which is that this is a simple (alleged) breach of Promissory Note case. Creatd is current on all payments under the Note, and because both parties are New Jersey entities a mere breach of contract and/or collection-based case is not appropriately venued in federal court. Upon receipt of our Motion to Dismiss, Home ~~Revolution’s request~~Revolution submitted an Amended Complaint, presumably in an effort to cure the problems with the Complaint which we identified in the Motion to Dismiss. Home Revolution has subsequently initiated a series of atypical procedures and, as a result, has (without following the Federal Rules of Civil Procedure) moved for ~~a preliminary injunction.~~both default and to submit yet another newly Amended Complaint (the one precludes the other and vice versa).

After we submitted a motion to clear up the above, the Court reinstated the matter to the docket and permitted Plaintiff to file the Second Amended Complaint (we had no objection). We have filed a motion to dismiss the Second Amended Complaint. That will take some time to be decided. We expect no major event to occur for the next 12 months. Finally, we believe the lawsuit lacks merit and will vigorously challenge the action.

Lease Agreements

On May 5, 2018, the Company signed a 5-year lease for approximately 2,300 square feet of office space at 2050 Center Avenue Suite 640, Fort Lee, New Jersey 07024. Commencement date of the lease is June 1, 2018. The total amount due under this lease is $411,150.

On April 1, 2019, the Company signed a 4-year lease for approximately 796 square feet of office space at 2050 Center Avenue Suite 660, Fort Lee, New Jersey 07024. Commencement date of the lease is April 1, 2019. The total amount due under this lease is ~~$108,229~~$108,229.

The components of lease expense were as follows:

	Six Months Ended June 30, 2020		Three Months Ended March 31, 2021
Operating lease cost	$	34,970	$	19,709
Short term lease cost		7,950		3,714
Total net lease cost	$	42,920	$	23,423

Supplemental cash flow and other information related to leases was as follows:

	~~Six~~ Three Months Ended ~~June 30,~~March 31, ~~2020~~2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease payments		~~33,064~~26,646

Weighted average remaining lease term (in years):		~~3.05~~2.2

Weighted average discount rate:		13	%

Total future minimum payments required under the lease as of ~~June 30,~~December 31, 2020 are as follows:

Twelve Months Ending December 31,
2020 $ 106,927
2021 111,257
2022 109,730
2023 2,081
Total $ 329,995

Twelve Months Ending December 31,
2021	$	82,336
2022		114,627
2023		53,094
Total	$	250,058

Rent expense for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020 was $26,934.30 and ~~2019 was $59,168 and $36,671~~$21,358, respectively.

Note 1011 – Subsequent Events

On May 13, 2021, one of the Company’s vendors issued a credit memo crediting $399,050 for Q1 2021 services.

Subsequent to ~~June 30, 2020~~March 31, 2021, the Company entered into ~~five convertible promissory note agreements with proceeds of $318,000 and~~ one promissory note agreement with net proceeds of ~~$230,000. The Company also~~$115,000, and subsequently repaid ~~$5,000 in principal from two of~~$28,403 towards the ~~promissory note agreements.~~note.

Subsequent to ~~June 30, 2020~~March 31, 2021, the Company ~~also~~entered into convertible promissory notes with three investors for aggregate net proceeds of $3,860,000. The Company issued ~~1,175,563 five-year stock options to its employees. These options all have a vesting date~~an aggregate of ~~4/1/2021,~~1,090,908 warrants with an exercise price of ~~$2.85.~~$4.50.

~~On July 13, 2020,~~Subsequent to March 31, 2021, a lender converted $169,400 in outstanding debt into 55,631 shares of Common Stock.

Subsequent to March 31, 2021, a total of 43,084 warrants were exercised via cashless exercise, resulting in the ~~Company filed Second Amended~~cancellation of 43,084 warrants, and ~~Restated Articles of Incorporation with the Secretary of State of the State of Nevada. The Second Amended and Restated Articles of Incorporation authorize~~ the issuance of ~~100,000,000~~18,259 shares of ~~common stock, and 20,000,000 shares of preferred stock.~~Common Stock.

~~- 38 -~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This ~~quarterly report on~~ Form 10-Q and other reports filed by ~~Jerrick Media Holdings,~~Creatd, Inc. (the “Company”), from time to time with the SEC (collectively, the “Filings”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this ~~report.~~Form 10-Q.

We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. This discussion should be read in conjunction with our financial statements and accompanying notes for the year ended December 31, ~~2019,~~2020, which are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March ~~30, 2020.~~31, 2021.

Overview

~~Jerrick Media Holdings, Inc. (OTCQB: JMDA). provides~~Our mission is to empower creators, entrepreneurs, and brands through technology ~~solutions~~and partnership. We accomplish this through Creatd’s three main business pillars: Vocal Ventures, Creatd Partners, and Recreatd. At its core, Creatd centers around the philosophy that creators are the driving force that propels success in the digital realm. This philosophy is represented by a framework we call the Creatd Cycle, which operates on the premise that creators produce content that attracts audiences, who in turn attract brands who are interested in reaching those audiences.

Creatd’s first pillar, Vocal Ventures, houses our proprietary technology platforms, including Creatd’s flagship product, the Vocal platform, and its network of 37 wholly owned-and-operated creator communities. Through Vocal, creators can create and share their stories in a way that helps them get discovered by their ideal audiences and be rewarded for their creativity. Similarly, brands can access their ideal consumers and drive conversions for their products and services. The Vocal platform’s scalable and unique underlying agile framework lends itself well to future acquisitions and white-label opportunities for Creatd’s technology because of the ease with which other platforms can be integrated into our ecosystem.

Creatd Partners, Creatd’s second pillar, houses our brand-oriented initiatives, including our agency businesses, Vocal for Brands and Seller’s Choice, as well as its corporate ventures and investments. Both of these agencies serve a multitude of clients, while the venture arm looks to make direct investments in the ones that have significant upside opportunity. Creatd Partners pairs Creatd’s resources and Vocal’s proprietary technology, which were built to simultaneously amplify creators’ discoverability and potential reward and help direct-to-consumer brands achieve conversions and reach their target audiences, while generating value for all of Creatd’s stakeholders.

Recreatd is the pillar which houses Creatd’s intellectual property and legacy media assets, including acquired artwork, photographs and media memorabilia. Recreatd represents an initiative by Creatd to revitalize transmedia content, ~~creators, brands~~utilizing Vocal Ventures’ technology, data, and ~~their respective audiences through~~marketing capabilities to reboot archival media assets and e-commerce properties. The Company’s ability to leverage its ~~flagship~~ technology ~~platform Vocal.~~to revitalize this content represents a significant value proposition for media companies and publishers that are sitting on vast collections of content that are of supreme quality but are not in a suitable format for today’s consumer.

Vocal

Vocal, Creatd’s flagship product, is a ~~user-generated long-form digital publishing~~robust, proprietary technology platform ~~primarily focused~~that provides best-in-class tools, safe and curated communities, and monetization opportunities that enable creators to find a receptive audience and get rewarded. Through Vocal, content creators can get discovered and monetize their content by connecting to their ideal audiences and partnering with the brands that want to reach those audiences.

Vocal+ is Creatd’s premium subscription membership program. Vocal+ members pay a membership fee for premium features, including receiving increased earnings for their content, reduced platform processing fees for Tips received, a Vocal+ badge on ~~providing needed resources~~their creator page, eligibility to participate in exclusive Vocal+ Challenges, and ~~opportunities~~more. Creators may sign up for ~~the virtually infinite number of creators, brands, and audiences that occupy the digital sphere.~~ a Vocal+ membership when they create an account, or they can upgrade an existing Vocal Free account to a Vocal+ account at any time.

Since its initial launch in ~~December of~~ 2016, Vocal has grown to ~~become~~be one of the fastest growing ~~digital~~ communities for content creators of all ~~kinds–from bloggers, to filmmakers, to~~kinds, including writers, musicians, ~~artists,~~ podcasters, ~~entrepreneurs,~~photographers, and ~~more–all~~more; as of ~~whom rely on~~March 2021, Vocal ~~for its storytelling tools, engaged communities, and monetization opportunities that help them get discovered and fund their creativity. Currently, Vocal is home to~~has reached over ~~650,000 content~~900,000 freemium creators and ~~brands,~~over 20,000 Vocal+ paid subscribers across its 38 owned and ~~attracts millions of audience members each month across~~operated niche communities. Subsequent to the ~~Company’s network of 100% owned-and-operated communities.~~

~~- 39 -~~

~~There are over 4.5 billion internet users; of~~first quarter 2021, the Company announced that ~~83% publish some form of content on~~Vocal+ reached a monthly basis (photos, writing, reviews), and 3.8 billion of them are active on social media (according to data by GlobalWebIndex and Reddit). In 2020, the internet has become the linchpin of the modern information society, as well as the modern social society. Technology platforms such as Vocal exist to help creators capture opportunities within the vast and competitive digital landscape. Given Vocal’s inherent monetization capabilities, topic-specific structure, and adaptability to a wide range of uses and industries, we believe that it is the ideal platform to help users adjust to a world increasingly reliant on digital connectivity. The impact of a global crisis like the 2020 COVID-19 pandemic only further emphasizes how critical a role digital platforms play in society, with the continuation of social distancing measures, businesses undergoing massive digital transformations, increased virtual socialization, and remote workplaces. These factors aside, Vocal exists in an environment where the total addressable market (TAM) of the platform is growing exponentially; given the current conditions, it may see growth even more rapidly.new record high, surpassing 25,000 subscribers.

Vocal ~~makes it easy~~provides a broad stage for creators to ~~produce well-constructed, search engine optimized,~~connect with fans and ~~engaging content. The platform’s~~find new audiences. In addition to enabling access to millions of unique ~~canvas-style editor supports~~monthly visitors, the platform provides creators with a full suite of tools and services for content creation, ~~utilizing a wide range of rich-media assets including streaming content, photos, videos, podcasts, product links, written text,~~discovery, distribution, and more. Further, Vocal’s proprietary moderation system is vital in a digital environment increasingly characterized by misinformation, toxicity, and hate speech. Vocal’s enforcement of community guidelines and content moderation creates a secure environmentmonetization, including:

●

Easy-to use, rich media content editor: Vocal’s storytelling tools enable creators to produce beautiful and engaging stories in a simple, user-friendly interface, and incorporate rich-media content of all kinds, including streaming content, photos, videos, podcasts, product links, written text, and more. Vocal’s open canvas content creation editor makes it easy to create high-quality and engaging stories, and is a cost effective alternative to managing a blog content management system (CMS).

●

Numerous Monetization Features: Both of Vocal’s membership tiers–Vocal freemium and the Vocal+ premium tier – provide multiple monetization opportunities for creators. Creators can earn money i) every time their story is read, ii) by competing in Challenges, iii) by receiving ‘tips’ and ‘bonuses’ iv) by collaborating on branded content campaigns through the company’s in-house agency, Vocal for Brands. For freemium members, content ‘reads’ are monetized at a rate of $3.80 per 1,000 reads (calculated based on time on page, scrolling behavior, and other internal metrics), whereas Vocal+ members monetize at $6.00 per 1,000 reads. These rates are subject to change based on market trends or the introduction of additional features and plan tiers.

●

Brand-safe advertising platform: Vocal was designed to target consumers in an authentic, non-interruptive way. Brand partnerships and collaborations allow companies tap into the power of Vocal through campaign-optimized stories, authored by real Vocal creators, that build brand affinity, trust, and drive sales.

●

Transparent Performance Data: Creators can view their “Stats” at any time to view their individual performance data, such as how many Reads a given story received, how much money they have earned, and how many Tips, Bonuses, or ‘Likes,’ they received. Additionally, Vocal users have the ability to view key metrics such as community-specific data and Vocal+ membership data.

●

Valuable Audience: The nature of Vocal’s genre-specific (niche) community structure is such that it generates a positively selected audience, a quality which makes Vocal an attractive prospect for creators and brands alike. In a niche community, audiences are inherently more likely to be interested in the particular content housed in that community.

Vocal for ~~all platform stakeholders, including Vocal creators, brands, and audiences.~~Brands

Additionally, Freemium (Vocal Free) creators can opt to upgrade to a premium tier, Vocal+, and pay a subscription fee to access a suite of additional features such as an increased rate of cost per mille (CPM) monetization, brand collaborations, the ability to enter exclusive members-only Challenges, early access to new features, and other rewards. In less than one year since first introducing the Vocal+ premium subscription offering, we have successfully onboarded nearly 4,000 paid subscribers. The Vocal+ premium subscription tier is accretive to Jerrick’s overall business model not only in the fact that it represents a highly scalable revenue stream, but in the fact that there is a direct correlation between the number of Vocal+ members and the costs to acquire and retain creators on Vocal. Specifically, historical data shows that as the number of paid Vocal+ subscribers grows, creator acquisition costs decline for both the Freemium and Vocal+ paid tier.

~~In conjunction with its creator services, the Company’s in-house~~Creatd’s internal content studio, Vocal for Brands, leverages the Company’s technology and Vocal creator platform to help DTC (direct-to-consumer) brands reach their ideal audience in an educational, trustworthy and direct-results focused way, rather than through traditional programmatic advertising methods like display ads and pop ups, that are inherently interruptive.

~~Vocal for Brands partners~~pairs leading brands with authentic ~~Vocal~~ creators to produce ~~beautiful, campaign-optimized stories on Vocal~~marketing campaigns that ~~build brand affinity~~are non-interruptive, engaging, and trust, and drive results. Additionally, with the introduction of Challenges in early first quarter 2020, brands can now tap into Vocal’s network of approximately 650,000 content creators and encourage them to interact with, learn about and promote their brand while benefiting from Vocal’s brand-safe, moderated, and curated environment. Brand-sponsored Challenges effectively yield a collection of crowdsourced branded contentdirect-response driven. The key value propositions for brands ~~and help them reach a wider audience. In both cases, Vocal for Brands clients uniquely benefit from~~ include:

●

Authentic Storytelling: Our internal data group partners brands with real Vocal creators to tell their brand’s story in a way that is both engaging and trustworthy. In addition, brands can opt to sponsor a Challenge, which effectively yield a collection of crowdsourced branded content for brands and help them reach a wider audience.

●

Valuable Audience: Vocal’s first-party data provides an opportunity to create highly targeted and segmented audiences to promote branded content. Most importantly, Vocal’s technology helps brands target the right audience by utilizing and applying that first-party data.

●

Transparent Analytics: For every campaign we produce, our brand clients have access to story performance data, engagement data, behavioral data, and interest data. Brands can apply this data to further increase awareness and optimize audience targeting.

Vocal’s first-party data ~~which is what~~ enables our team to create highly targeted and segmented audiences for Vocal for Brands campaigns, and help ~~brands~~the brand reach their ideal audience. Brands can access story performance data, engagement data, behavioral data, and sentiment data, all of which is used to further optimize the campaign’s success. The combination of Vocal’s hyper-engaged audiences, user-generated communities, and brand-safe environment help brands achieve maximum ROAS (return on ad spend).

~~Jerrick’s resources~~Vocal for Brands typically collects fixed fees ranging from $10,000 to $110,000, depending on campaign duration and ~~Vocal’s proprietary technology were~~specific client objectives.

Additionally, with the introduction of Challenges in early first quarter 2020, brands can now collaborate with Vocal on a sponsored Challenge, prompting the creation of high-quality stories that are centered around the brand’s mission and further disseminated through creators’ respective social channels and promotional outlets.

Seller’s Choice

In addition to Vocal for Brands, Creatd supports brands by providing managed and performance marketing services through Seller’s Choice. an in-house marketing agency for DTC (direct-to-consumer) and e-commerce clients. Acquired by Creatd in September 2019, Seller’s Choice provides direct-to-consumer brands with design, development, strategy, and sales optimization services. Its status as an Amazon Solution Provider and its weighty operational structure made it an ideal candidate for acquisition in late 2019. Creatd’s business model is built to ~~simultaneously amplify creators’ discoverability~~absorb distressed operational infrastructures, integrate the few best components, and ~~earnings, help direct-to-consumer brands achieve conversions and reach their target audiences, and yield value for all of Jerrick’s stakeholders. Further,~~shed the ~~Vocal platform’s unique underlying architecture generates scalable and sustainable revenues, and lends itself well to future acquisitions and white-label opportunities for Jerrick.~~

At the Company's 2020 Annual Meeting of Shareholders on July 8th, 2020, Jerrick Media Holdings, Inc. received approval to change its name to Creatd, Inc., expected to take effect upon its planned uplisting in mid-third quarter. Once Creatd, Inc. begins trading on the Nasdaq Capital Markets, the Company plans to trade under the ticker symbol ‘CRTD.’non-essential costs.

~~- 40 -~~

Creatd Partners

Creatd Partners is the Company’s corporate venture arm, as well as the business division that encompasses management of Seller’s Choice and Vocal for Brands. Creatd Partners invests in qualified brands who are aligned with our corporate mission, such as direct-to-consumer brands, digital platforms, and technologies that support entrepreneurs and the creator economy. Creatd Partners was established with the aim of nurturing high-potential, early-stage companies that can meaningfully benefit by leveraging Creatd’s technology, resources and proven capacity to optimize visibility, reach, and conversions for direct-to-consumer products and services. Creatd Partners investments are subject to the completion of rigorous due diligence and independent valuation assessment and may encompass a combination of financial and operational support in exchange for an equity stake in the business.

Creatd Partners’ first investment is Plant Camp, a direct-to-consumer food company that creates healthy and nutritional upgrades to classic foods and was launched in December 2020. In first quarter 2021, the Company announced its second Creatd Partner investment, Untamed Photographer, an environmental art platform for wildlife photographers.

Creatd Partners is currently exploring future opportunities that fit its criteria and risk profile, seeking partner companies that combine a quality product, seasoned founders, and the ability to leverage Creatd’s platform technology.

Acquisition Strategy

Creatd’s hybrid finance and design culture is key to its acquisition strategy. Acquisition targets are companies that meet a set of opportunistic or financial standards or that are part of specific digital environments that are accretive and can seamlessly integrate into Creatd’s existing revenue lines. Creatd will continue to make strategic acquisitions when presented with opportunities that are in the interest of shareholder value.

Results of Operations

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at ~~June 30, 2020~~March 31, 2021 compared to December 31, ~~2019:~~2020:

	June 30, 2020			December 31, 2019 (Revised)			Increase / (Decrease)			March 31, 2021			December 31, 2020		Increase / (Decrease)
Current Assets	$	308,865		$	78,063		$	230,802		$	3,521,228		$	8,020,993	$	(4,499,765	)
Current Liabilities	$	14,853,962		$	10,928,830		$	3,925,132		$	4,286,648		$	4,968,427	$	(681,779	)
Working Capital Deficit	$	(14,545,097	)	$	(10,850,767	)	$	(3,694,330	)
Working Capital (Deficit)										$	(765,420	)	$	3,052,566	$	(3,817,986	)

At ~~June 30, 2020,~~March 31, 2021, we had a working capital ~~deficit~~(deficit) of ~~$14,545,097~~$765,420 as compared to a working capital ~~deficit~~ of ~~$10,850,767~~$3,052,566 at December 31, ~~2019, an increase~~2020, a decrease in working capital of ~~$3,694,330.~~$3,817,986. The ~~increase~~decrease is primarily attributable to a reduction in cash and an increase in ~~accounts payable~~derivative liability, share liability, deferred revenue and ~~accrued expenses,~~ notes ~~payable, convertible notes payable, and accounts~~ payable. This was offset by an increase ~~of account receivable~~in prepaid expense, and ~~marketable securities.~~

a decrease in accounts payable and convertible notes payable.

Net Cash

Net cash used in operating activities for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, was $5,296,638 and ~~2019, was $2,885,383 and $3,096,252,~~$1,314,863, respectively. The net loss for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020 was $6,643,237 and ~~2019 was $7,127,988 and $3,469,855,~~$2,985,997, respectively. This change is primarily attributable to the net loss for the current period offset by share-based payments in the amount of ~~$1,994,792~~$1,570,239 to employees and consultants for services rendered, the accretion of debt discount and debt issuance costs of ~~$326,506~~$497,165 due to the incentives given with debentures, and a ~~loss~~gain on extinguishment of debt of ~~$535,041~~$100,502 in addition to a change in accounts payable and accrued expenses of ~~$1,208,557. These increases were offset by a change in accounts receivable during the six months ended June 30, 2020.~~$370,528.

Net cash used in investing activities for the ~~six~~three months ended ~~June 30, 2020 and 2019~~March 31, 2021 was ~~$202,622 and $26,851, respectively.~~$212,637. This ~~change~~ is attributable to the purchase of property and equipment, deposits on investments, and cash ~~used to~~paid for the purchase ~~marketable securities.~~

of investments.

Net cash provided by financing activities for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020 was $412,576 and ~~2019 was $3,149,526 and $3,519,466.~~$1,430,826. During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Company was predominantly financed by ~~issuance~~net proceeds from the exercise of ~~debt~~warrant of $1,312,672 and ~~related party~~the proceeds from loans and notes of ~~$3,269,554 and $402,989, respectively~~$85,500 to fund ~~operations. These increases~~operations, the proceeds of which were partially offset by the repayment of notes and ~~related party~~loans a of $985,596. Similarly, the Company’s financing activity for the three-month period ended March 31, 2020 generated $1,475,610 from loans and notes, the proceeds of which were partially offset from repayment of notes of ~~$133,226 and $327,773, respectively.~~$115,000.

Summary of Statements of Operations for the Three Months Ended ~~June 30, 2020~~March 31, 2021 and ~~2019:~~2020:

Three Months Ended
June 30,
2020 2019
Revenue $ 322,540 $ 7,181
Operating Expenses $ (3,857,792 ) $ (1,409,302 )
Loss from operations $ (3,535,252 ) $ (1,402,121 )
Other Expenses $ (606,739 ) $ (183,293 )
Net loss $ (4,141,991 ) $ (1,585,414 )
Loss per common share – basic and diluted $ (0.43 ) $ (0.20 )
Three Months Ended
March 31,
2021 2020
Revenue $ 743,913 $ 293,142
Operating Expenses $ 6,689,910 $ 2,119,091
Loss from operations $ (5,945,997 ) $ (1,825,949 )
Other Expenses $ (697,240 ) $ (1,160,048 )
Net loss $ (6,643,237 ) $ (2,985,997 )
Loss per common share – basic and diluted $ (0.68 ) $ (0.96 )

Revenue
Revenue was ~~$322,540~~$743,913 for the three months ended ~~June 30, 2020,~~March 31, 2021, as compared to ~~$7,181~~$293,142 for the comparable three months ended ~~June 30, 2019,~~March 31, 2020, an increase of ~~$315,359.~~$450,771. The year-over-year increase in quarterly revenue is ~~primarily~~ attributable to the ~~launch and~~ steady growth of Vocal+ ~~paid subscribers,~~Creator Subscriptions as well as growth in the ~~rising price points for~~Company’s agency businesses, Vocal for Brands ~~campaigns,~~ and ~~the integration of~~ Seller’s Choice, ~~into Jerrick following the Company’s successful acquisition~~which have experienced an acceleration in ~~late third quarter 2019.~~revenues.

Operating Expenses

Operating expenses for the three months ended ~~June 30, 2020~~March 31, 2021, were ~~$3,857,792~~$6,689,910 as compared to ~~$1,409,302~~$2,119,091 for the three months ended ~~June 30, 2019.~~March 31, 2020. The increase of ~~$2,448,490~~$4,570,819 in operating ~~expenses is the result of an increase in general and administrative expenses and consulting fees. The increase to these~~ expenses is mainly related to ~~one-time~~a $993,000 increase in personnel compensation, as a result of the Company’s significantly increasing employee headcount; a $1.6 million increase in marketing expenditure, which will be actively managed to achieve optimum return on investment; $1.5 million in stock-based ~~payments~~compensation to ~~consultants~~employees and ~~employees. In addition, the acquisition of Seller’s Choice and subsequent integration into Jerrick’s infrastructure,~~consultants, as well as ~~the implementation of the Company’s future business plans contributed~~incentive-based options issued to ~~this increase.~~employees.
~~- 41 -~~

Loss from Operations

Loss from operations for the three months ended ~~June 30, 2020~~March 31, 2021, was ~~$3,535,252~~$(5,945,997) as compared to ~~$1,402,121~~$(1,825,949) for the three months ended ~~June 30, 2019.~~March 31, 2020. The increase in the loss from operations isthis quarter primarily ~~due to one-time stock-based payments to consultants and employees, as well as increased expenses~~reflects an increase in marketing due to the ~~continued development~~launch of a significant marketing campaign, and redundancies in new staff members and outsourced costs that will be eliminated over time. Going forward, the ~~Vocal platform,~~Company expects the ~~acquisition of Seller’s Choice and the implementation of the Company’s future business plans.~~loss from operations to return to base levels

35
Other Income and Expenses

Other income and expenses for the three months ended ~~June 30, 2020~~March 31, 2021 was ~~$606,739~~$697,240 as compared to ~~$183,293~~$1,160,048 for the three months ended ~~June 30, 2019. Other~~March 31, 2020. The decrease in first quarter 2021 other expenses ~~during the three months ended June 30, 2020~~ was ~~comprised~~predominantly due to a gain on extinguishment of debt of $738,618 and a reduction in interest expense. This was offset by an increase in derivative expense, change in fair value of ~~$491,206 on notes and related party notes~~derivative liability, and accretion of debt discount and issuance cost of $140,274 due to the incentives given with debentures. During the three months ended June 30, 2019, other expenses were comprised of interest expense of $110,032 on notes and related party notes and accretion of debt discount and issuance cost of $69,626 due to the incentives given with debentures, loss on extinguishment of liabilities of $3,635 for the incentives given to amend or convert debt.cost.

Net Loss

Net loss attributable to common shareholders for the three months ended ~~June 30, 2020,~~March 31, 2021, was ~~$4,141,991,~~$6,643,237, or loss per share of ~~$0.43,~~$0.68, as compared to a net loss attributable to common shareholders of ~~$1,593,042,~~$2,985,997, or loss per share of ~~$0.20,~~$0.96, for the three months ended ~~June 30, 2019.~~March 31, 2020.

~~Summary of Statements of Operations for the Six Months Ended June 30, 2020 and 2019:~~
Six Months Ended
June 30,
2020 2019
Revenue $ 615,682 $ 41,515
Operating Expenses $ (5,976,883 ) $ (3,148,630 )
Loss from operations $ (5,361,201 ) $ (3,107,115 )
Other Expenses $ (1,766,787 ) $ (362,740 )
Net loss $ (7,127,988 ) $ (3,469,855 )
Loss per common share – basic and diluted $ (0.76 ) $ (0.47 )
~~Revenue~~
Revenue was $615,682 for the six months ended June 30, 2020, as compared to $41,515 for the comparable six months ended June 30, 2019, an increase of $574,167. The increase in revenue is primarily attributable to the launch and steady growth of Vocal+ paid subscribers, the rising price points for Vocal for Brands campaigns, and the integration of Seller’s Choice into Jerrick following the Company’s successful acquisition in late third quarter 2019.
~~Operating Expenses~~
Operating expenses for the six months ended June 30, 2020 were $5,976,883 as compared to $3,148,630 for the six months ended June 30, 2019. The increase of $2,828,253 in operating expenses is mainly related to one-time stock-based payments to consultants and employees. In addition, the acquisition of Seller’s Choice and subsequent integration into Jerrick’s infrastructure, as well as the implementation of the Company’s future business plans contributed to this increase.
~~- 42 -~~
~~Loss from Operations~~
Loss from operations for the six months ended June 30, 2020 was $5,361,201 as compared to $3,107,115 for the six months ended June 30, 2019. The increase in the loss from operations is primarily due to one-time stock-based payments to consultants and employees, as well as increased expenses due to the continued development of the Vocal platform, the acquisition of Seller’s Choice and the implementation of the Company’s future business plans.
~~Other Expenses~~
Other expenses for the six months ended June 30, 2020 was $1,766,787 as compared to $362,740 for the six months ended June 30, 2019. Other expenses during the six months ended June 30, 2020 was comprised of interest expense of $866,736 on notes and related party notes, accretion of debt discount and issuance cost of $327,221 due to the incentives given with debentures, and loss on extinguishment of liabilities of $535,040 for the incentives given to amend or convert debt. During the six months ended June 30, 2019, other expenses were comprised of interest expense of $164,601 on notes and related party notes and accretion of debt discount and issuance cost of $116,990 due to the incentives given with debentures, loss on extinguishment of liabilities of $81,149 for the incentives given to amend or convert debt.
~~Net Loss~~
Net loss attributable to common shareholder for the six months ended June 30, 2020, was $7,127,988, or loss per share of $0.76, as compared to a net loss of $3,477,483, or loss per share of $0.47, for the six months ended June 30, 2019.
Inflation did not have a material impact on the Company’s operations for the applicable period. Other than the foregoing, management knows of no trends, demands, or uncertainties that are reasonably likely to have a material impact on the Company’s results of operations.
Off-Balance Sheet Arrangements

As of ~~June 30, 2020,~~March 31, 2021, we had no off-balance sheet arrangements.

~~Critical~~Significant Accounting Policies

Our significant accounting policies are described in Note 2 of the Condensed Consolidated Financial Statements. During the ~~six~~three months ending ~~June 30, 2020,~~March 31, 2021, we were not required to make any material estimates and assumptions that affect the reported amounts and related disclosures of assets, liabilities, revenue and expenses. However, if we complete an acquisition, we will be required to make estimates and assumptions typical of other companies. For example, we will be required to make critical accounting estimates related to valuation and accounting for business combinations. The estimates will require us to rely upon assumptions that were highly uncertain at the time the accounting estimates are made, and changes in them are reasonably likely to occur from period to period. Changes in estimates used in these and other items could have a material impact on our financial statements in the future. Our estimates will be based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business prospects. Actual results may differ significantly from our estimates.

Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market ~~Risk~~Risk.

~~The Company is not required~~There have been no material changes in our exposures to ~~provide~~market risk since December 31, 2020. For details on the ~~information required by this Item as it is a “smaller reporting company,” as defined~~Company’s interest rate, foreign currency exchange, and credit risks, see “Item 7A. Quantitative and Qualitative Information About Market Risks” in ~~Rule 229.10(f)(1).~~our 2020 Annual Report.
~~- 43 -~~

Item 4. Controls and ~~Procedures~~Procedures.

~~Limitations on Effectiveness of~~Disclosure Controls and Procedures

The ~~term “disclosure~~Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures~~” as~~ (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions,of 1934, as ~~appropriate to allow timely decisions regarding required disclosure.~~
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact there are resource constraints and management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
~~Evaluation of Disclosure Controls and Procedures~~
~~Our management, with the participation of our Principal Executive and Financial Officer, evaluated,~~amended (the “Exchange Act”)) as of the end of the period covered by this ~~Quarterly Report~~report (the “Evaluation Date”). Based on ~~Form 10-Q,~~such evaluation, the ~~effectiveness~~Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~our~~the Evaluation Date, the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934). Based on that evaluation, our Principal Executive and Financial Officer concluded our disclosure controls and procedures wereare not ~~effective at the reasonable assurance level as of June 30, 2020.~~effective.

Changes in Internal Control Over Financial Reporting

~~No change~~There have not been any changes in ~~our~~the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) ~~has occurred~~ during the ~~three and six months~~quarter ended ~~June 30, 2020~~March 31, 2021 that ~~has~~have materially affected, or isare reasonably likely to materially affect, the Company’s internal control over financial reporting. However, during first quarter 2021, the Company continued the complete review of all of its financial procedures and controls that was requisitioned and begun during 2020 and is continuing the process of updating and optimizing its infrastructure around these controls. The Company believes that this process will positively affect our internal control over financial ~~reporting.~~reporting in the future.

~~- 44 -~~
36

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

On June 25, 2020, Home Revolution, LLC (“Home Revolution”) filed a lawsuit in the United States District Court for the District of New Jersey (the “Court”), entitled Home Revolution, LLC, et al v. Jerrick Media Holdings, Inc. et al, Case No. 2:20-cv-07775-JMV-MF (the “Action”). The complaint for the lawsuit alleges, among other things, that the Company breached the Membership Interest Purchase Agreement, as modified, and ancillary transaction documents in connection with the acquisition of Seller’s Choice, LLC, from Home Revolution in September 2019. The complaint additionally alleges violation of the New Jersey Uniform Securities Law, violations of the Exchange Act and Rule 10b-5 thereunder, fraud, equitable accounting, breach of fiduciary duty, conversion and unjust enrichment.

The Company continues to believe that the Action lacks merit. In the event this Action is not summarily dismissed, ~~Jerrick~~the Company intends to vigorously challenge it. At this time, the Company is unable to estimate potential damage exposure, if any, related to the litigation.

In addition to the existing claim for damages contained in the Complaint, on July 29, 2020, Home Revolution moved, by order to show cause, for preliminary injunctive relief. On August 13, 2020, the Court denied Home Revolution’s request for a preliminary injunction.

Item 1A. Risk Factors.

Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our most recent Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, the occurrence of any one of which could have a material adverse effect on our actual results.

There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019 or our Quarterly Report on Form 10-Q for the six months ended June 30, 2020, except as noted below.~~2020.
~~Unfavorable global economic, business, or political conditions could adversely affect our business, financial condition or results of operations.~~
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control, including the impact of health and safety concerns, such as those relating to the current COVID-19 coronavirus (“COVID-19”) pandemic. The global financial crisis in connection with the COVID-19 pandemic has caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our Vocal platform and our ability to raise additional capital when needed on acceptable terms, if at all. Any of the foregoing could harm our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business.
~~- 45 -~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended ~~June 30, 2020,~~March 31, 2021, we issued securities that were not registered under the Securities Act and were not previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q as listed below. All of the securities discussed in this Item 2 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

~~The April 2020 Convertible Note Offering~~
During April of 2020, the Company conducted multiple closings of a private placement offering to accredited investors (the “April 2020 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “April 2020 Investors”) for aggregate gross proceeds of $350,010. The April 2020 Convertible Note Offering accrues interest at a rate of twelve percent per annum (12%). The April 2020 Convertible Note Offering mature on the six (6^th~~) month anniversary of their issuance dates.~~
The April 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) at the lesser of (i) a fixed conversion price equal to $4.50 per share after the maturity date or (ii) any private placement offerings or one or more registered public offerings by the Company under the Securities Act in connection with its listing onto a national securities exchange (a “Qualified Offering”).
The Company recorded a $50,010 debt discount relating to original issue discount associated with these notes. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.
~~During the six months ended June 30, 2020 the Company accrued interest of $8,050.~~
~~The June 2020 Convertible Loan Agreement~~Employee Options Issuances

On ~~June~~February 19, 2020, the Company entered into a loan agreement (the “June 2020Loan Agreement”) with an individual (the “June 2020 Lender”), the June 2020 Lender issued the Company a promissory note of $550,000 (the “June 2020 Note”). Pursuant to the June 2020 Loan Agreement, the June 2020 Note has interest of twelve percent (12%). As additional consideration for entering in the June 2020 convertible Loan Agreement,2021, the Company issued ~~a five-year warrant~~options to purchase ~~148,809~~1,473,000 shares of Common Stock granted to management and employees under the ~~Company’s common stock at a purchase~~Jerrick Media Holdings, Inc. 2020 Omnibus Equity Incentive Plan. These options have an exercise price of ~~$3.85 per share. The June 2020 Note matures~~$5.65, vest 50% on ~~the first (12~~^th~~) month anniversary of its issuance date.~~
Upon default the June 2020 Note is convertible into shares of the Company’s common stock, par value $.001 per share (“Conversion Shares”) equal to the closing bid price of the Company’s common stockFebruary 19, 2022 and 50% on ~~the trading day immediately preceding~~February 19, 2023 and expire 5 years from the date of ~~the respective conversion.~~vesting.

~~The Company recorded~~Conversion of Outstanding Promissory Notes
On January 4, 2021, a ~~$67,500 debt discount relating to original issue discount associated with this note. The Company recorded~~lender converted $68,000 in promissory notes into 35,469 shares of Common Stock.
On February 22, 2021, a ~~$274,578 debt discount relating to 148,809 warrants and 16,272~~lender converted $68,000 in promissory notes into 29,859 shares ~~issued to investors based on the relative fair value~~ of ~~each equity instrument on the dates of issuance. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.~~Common Stock.

Consultant Shares
During the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021, the Company ~~accrued interest~~issued 152,261 shares of ~~$13,317.~~ Common Stock to consultants and employees.

Item 3. Defaults Upon Senior Securities.

None.
37

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~There~~On May 14, 2021 (the “Effective Date”), the Company entered into a securities purchase agreement (the “Purchase Agreement”) with three accredited investors (the “Investors”), whereby, at the closing, the Investors have agreed to purchase from the Company (i) convertible notes in the aggregate principal amount of $4,666,668 (the “Notes”), inclusive of original issuance discount, and (ii) 1,090,908 warrants (the “Warrants”) to purchase shares of the Company’s common stock. The Notes have a maturity date of November 22, 2022, with monthly installment payments due beginning six months from the date of issuance of the Notes. The Notes do not bear interest except in connection with a default, as described in the Notes. The Notes are convertible into shares of Common Stock at a fixed price of $5.00 per share, subject to adjustment as set forth in the Notes. The Company received $4.0 million of gross proceeds, reflecting an original issuance discount of $666,668.
The Warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $4.50 per share. The Warrants provide for cashless exercise to the extent that there is no registration statement available for the underlying shares of Common Stock.
The representations and warranties contained in the Purchase Agreement were made by the parties to, and solely for the benefit of, the other in the context of all of the terms and conditions of the Purchase Agreement and in the context of the specific relationship between the parties. The provisions of the Purchase Agreement, including the representations and warranties contained therein, are not for the benefit of any party other than the parties to the Purchase Agreement. The Purchase Agreement is not intended for investors and the public to obtain factual information ~~required~~about the current state of affairs of the parties.
Pursuant to the Purchase Agreement, the Company agreed to file with the Securities and Exchange Commission by not later than 15 business days from the date of the registration statement to register for resale the shares of Common Stock underlying the Notes and Warrants.
In connection with the Purchase Agreement, the Company entered into (a) that certain Security Agreement, granting a security interest in favor of Lind Global Macro Fund, LP as agent for the Investors (“Security Agreement”); and (b) that certain Trademark Security Agreement, granting a security interest in certain trademark collateral in favor of Lind Global Macro Fund, LP as agent for the Investors (the “Trademark Security Agreement”).
The closing of the Purchase Agreement occurred on May 17, 2021.
The above disclosure contains only a brief description of the material terms of the Purchase Agreement, the Notes, the Warrants, the Security Agreement, and the Trademark Security Agreement, and does not purport to be ~~disclosed under~~a complete description of the rights and obligations of the parties thereunder, and such description is qualified in its entirety by reference to the full text of the Purchase Agreement, the Notes, the Warrants, the Security Agreement, and the Trademark Security Agreement, the forms of which are attached as Exhibits 10.1, 4.1, 4.2, 10.2, and 10.3, respectively, to this ~~item which was not previously disclosed.~~Quarterly Report on Form 10-Q, and are incorporated herein by reference.

~~- 46 -~~
38

Item 6. Exhibits.

Exhibit No. Description
4.1*
Form of Convertible Note

4.2*
Form of Warrant
10.1*
Form of Securities Purchase Agreement
10.2*
Security Agreement
10.3* Trademark Security Agreement
31.1** Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

31.2** Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

32.1**32.1# Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**32.2# Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS XBRL Instant Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* XBRL Taxonomy Extension Label Linkbase Document
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith
# ** ~~Furnished herewith~~
This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

~~- 47 -~~
39

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CREATD, INC. ~~JERRICK MEDIA HOLDINGS, INC.~~

~~Date: August 14, 2020~~ By: /s/ Jeremy Frommer
Name: Jeremy Frommer

Title: Chief Executive Officer

(Principal Executive Officer)

~~Date: August 14, 2020~~ By: /s/ Chelsea Pullano
Name: Chelsea Pullano

Title: Chief Financial Officer

(Principal Financial and
Accounting Officer)

~~- 48 -~~40

			Page
Special Note Regarding Forward-Looking Statements and Other Information Contained in this Report			ii

PART I – FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements		1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43	36

Item 4.	Controls and Procedures	44	36

		PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	45	37

Item 1A.	Risk Factors	45	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46	37

Item 3.	Defaults Upon Senior Securities	46	37

Item 4.	Mine Safety Disclosures	46	38

Item 5.	Other Information	46	38

Item 6.	Exhibits	47	39

Signatures		48	40

	Series A Preferred Stock				Series B Preferred Stock				Series D Preferred Stock				Common Stock						Treasury stock						Additional Paid In			Accumulated			Other Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Shares			Amount			Capital			Deficit			Income			Equity

Balance, March 31, 2020		-	$	-		-	$	-		-	$	-		9,422,683		$	9,423			(159,850	)	$	(367,174	)	$	37,748,356		$	(47,566,434	)	$	(15,234	)	$	(10,191,063	)

Shares issued with note payable		-		-		-		-		-		-		16,272			16			-			-			27,281			-			-			27,297

Conversion of warrants to stock		-		-		-		-		-		-		6,718			7			-			-			(10,007	)		-			-			(10,000	)

Conversion of options to stock		-		-		-		-		-		-		688,473			688			-			-			1,404,976			-			-			1,405,664

Stock warrants issued with note payable		-		-		-		-		-		-		-			-			-			-			247,281			-			-			247,281

Cancellation of Treasury stock		-		-		-		-		-		-		(151,951	)		(152	)		151,951			349,030			(348,878	)		-			-			-

Purchase of treasury stock		-		-		-		-		-		-		-			-			(14,484	)		(42,018	)		-			-			-			(42,018	)

Foreign currency translation adjustments		-		-		-		-		-		-		-			-			-			-			-			-			(19,291	)		(19,291	)

Net loss for the three months ended June 30, 2020		-		-		-		-		-		-		-			-			-			-			-			(4,141,991	)		-			(4,141,991	)

Balance, June 30, 2020		-	$	-		-	$	-		-	$	-		9,982,195		$	9,982			(22,383	)	$	(60,162	)	$	39,069,009		$	(51,708,425	)	$	(34,525	)	$	(12,724,121	)

	Series E																Additional									Other
	Preferred Stock						Common Stock				Treasury stock						Paid In			Subscription			Accumulated			Comprehensive			Stockholders’
	Shares			Amount			Shares		Amount		Shares			Amount			Capital			Receivable			Deficit			Income			Equity
Balance, January 1, 2021		7,738		$	8			8,736,378	$	8,737		(5,657	)	$	(62,406	)	$	77,505,013		$	(40,000	)	$	(71,928,922	)	$	(37,234	)	$	5,445,196

Stock based compensation		-			-			112,261		112		-			-			1,345,803			-			-			-			1,345,915

Shares issued for prepaid services		-			-			40,000		40		-			-			191,960			-			-			-			192,000

Shares issued to settle vendor liabilities		-			-			44,895		45		-			-			181,341			-			-			-			181,386

Common stock issued upon conversion of notes payable		-			-			65,328		65		-			-			142,735			-			-			-			142,800

Exercise of warrants to stock		-			-			302,434		302		-			-			1,272,370			-			-			-			1,272,672

Cash received for preferred series E and warrants		40			-			-		-		-			-			(4,225	)		40,000			-			-			35,775

Conversion of preferred series E to stock		(6,690	)		(7	)		1,623,730		1,624		-			-			(1,617	)		-			-			-			-

Foreign currency translation adjustments		-			-			-		-		-			-			-			-			-			(7,311	)		(7,311	)

Net loss for the three months ended March 31, 2021		-			-			-		-		-			--			-			-			(6,643,237	)		-			(6,643,237	)

Balance, March 31, 2021		1,088		$	1			10,925,026	$	10,925		(5,657	)	$	(62,406	)	$	80,633,380		$	-		$	(78,572,159	)	$	(44,545	)	$	1,965,196

	Series A Preferred Stock				Series B Preferred Stock				Series D Preferred Stock				Common Stock				Treasury stock						Additional Paid In			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity

Balance, March 31, 2019		-	$	-		-	$	-		-	$	-		6,730,306	$	6,730		(111,667	)	$	(220,781	)	$	35,091,928		$	(38,429,506	)	$	(3,551,629	)

Stock based compensation		-		-		-		-		-		-		-		-		-			-			122,776			-			122,776

Cash received for common stock and warrants		-		-		-		-		-		-		-		-		-			-			-			-			-

Tender offering		-		-		-		-		-		-		2,100,173		2,101		-			-			(2,101	)		-			-

Stock issuance cost		-		-		-		-		-		-		-		-		-			-			(35,000	)		-			(35,000	)

Stock warrants issued with note payable						-		-		-		-		-		-		-			-			1,153,353			-			1,153,353

Purchase of treasury stock and warrants		-		-		-		-		-		-		-		-		(38,183	)		(141,393	)		(89,034	)		-			(230,427	)

Inducement expense		-		-		-		-		-		-		-		-		-			-			-			7,626			7,626

Net loss for the three months ended June 30, 2019		-		-		-		-		-		-		-		-		-			-			-			(1,585,414	)		(1,585,414	)

Balance, June 30, 2019		-	$	-		-	$	-		-	$	-		8,830,479	$	8,831		(149,850	)	$	(362,174	)	$	35,241,922		$	(40,007,294	)	$	(5,118,715	)

	Series A				Series B				Series D														Additional
	Preferred Stock				Preferred Stock				Preferred Stock				Common Stock				Treasury stock						Paid In			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity

Balance, December 31, 2018		-	$	-		-	$	-		-	$	-		6,475,340	$	6,475		(27,667	)	$	(52,341	)	$	34,100,327		$	(36,545,065	)	$	(2,490,604	)

Stock based compensation		-		-		-		-		-		-		125,000		126		-			-			433,959			-			434,085

Cash received for common stock and warrants		-		-		-		-		-		-		129,966		130		-			-			649,699			-			649,829

Tender offering		-		-		-		-		-		-		2,100,173		2,100								(2,100	)		-			-

Stock issuance cost		-		-		-		-		-		-		-		-		-			-			(178,146	)		-			(178,146	)

Stock warrants issued with note payable		-		-		-		-		-		-		-		-		-			-			328,777			-			328,777

Purchase of treasury stock and warrants		-		-		-		-		-		-		-		-		(122,183	)		(309,833	)		(90,594	)		-			(400,427	)

Inducement expense		-		-		-		-		-		-		-		-		-			-			-			7,626			7,626

Net loss for the six months ended June 30, 2019		-		-		-		-		-		-		-		-		-			-			-			(3,469,855	)		(3,469,855	)

Balance, June 30, 2019		-	$	-		-	$	-		-	$	-		8,830,479	$	8,831		(149,850	)	$	(362,174	)	$	35,241,922		$	(40,007,294	)	$	(5,118,715	)

	For the Six Months Ended			For the Six Months Ended
	June 30, 2020			June 30, 2019

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(7,127,988	)	$	(3,469,855	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		76,939			5,660
Accretion of debt discount and issuance cost		327,221			116,991
Inducement expense		-			7,626
Share-based compensation		1,994,792			448,291
Bad debt expense		34,737			-
Gain on settlement of debt		(470	)		-
Loss on settlement of vendor liabilities		126,087			-
Gain on marketable securities		(10,042	)		-
Loss on extinguishment of debt		535,040			81,149
Non-cash lease expense		34,969			(47,643	)
Changes in operating assets and liabilities:
Accounts receivable		(60,350	)		4,000
Deposits and other assets		(2,137	)		-
Deferred revenue		5,268			8,828
Accounts payable and accrued expenses		1,213,615			(251,299	)
Operating lease liability		(33,064	)		-
Net Cash Used In Operating Activities		(2,885,383	)		(3,096,252	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment		(6,339	)		(26,851	)
Purchase of marketable securities		(166,283	)		-
Deposits		(30,000	)		-
Net Cash Used In Investing Activities		(202,622	)		(26,851	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft		-			(33,573	)
Net proceeds from issuance of notes		1,349,094			-
Repayment of notes		(58,226	)		(50,000	)
Proceeds from issuance of demand loan		250,000			100,000
Proceeds from issuance of convertible note		1,920,460			1,993,025
Repayment of convertible notes		(75,000	)		(12,508	)
Proceeds from issuance of note payable - related party		152,989			1,590,000
Repayment of note payable - related party		(327,773	)		(275,000	)
Proceeds from issuance of common stock and warrants		-			649,829
Cash paid for stock issuance costs		-			(35,000	)
Purchase of treasury stock and warrants		(62,018	)		(407,307	)
Net Cash Provided By Financing Activities		3,149,526			3,519,466

Effect of exchange rate changes on cash		(28,530	)		-

Net Change in Cash		32,991			396,363

Cash - Beginning of Year		11,637			-

Cash - End of period	$	44,628		$	396,363

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Year for:
Income taxes	$	-		$	-
Interest	$	55,859		$	18,273

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of vendor liabilities	$	109,548		$	-
Deferred offering costs	$	-		$	143,146
Warrants issued with debt	$	752,136		$	247,628
Shares issued with debt	$	58,935		$	-
Issuance of common stock for prepaid services	$	585,000		$	-
Cancellation of Treasury stock	$	349,030		$	-
Operating Lease liability	$	-		$	288,790
Option liability	$	-		$	7,328
Conversion of note payable and interest into convertible notes	$	385,000		$	-
Conversion of Demand loan into notes payable	$	150,000		$	-
Conversion of note payable and interest into convertible notes	$	385,000		$	-
Conversion of note payable- related party and interest into convertible notes- related party	$	-		$	20,000

			Quoted Prices		Quoted Prices
			in Active		for Similar
			Markets for		Assets or
			Identical		Liabilities in		Significant
			Assets or		Active		Unobservable
			Liabilities		Markets		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Marketable securities - debt securities	$	150,000	$	-	$	-	$	150,000
Marketable securities - equity securities		26,325		26,325		-		-
Total assets	$	176,325	$	26,325	$	-	$	150,000

	For the three months ended June 30, 2020		For the six months ended June 30, 2020
	Total		Total
January 1, 2020	$	-	$	-
Purchase of marketable securities		166,283		166,283
Gain on trading securities		10,042		10,042
June 30, 2020	$	176,325	$	176,325

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Branded content	$	68,728	$	2,350	$	124,728	$	22,421
Managed Services		190,106		-		382,357		-
Creator Subscriptions		54,972		-		90,934		-
Affiliate sales		8,195		2,539		16,344		5,661
Other revenue		539		2,292		1,319		13,433
	$	322,540	$	7,181	$	615,682	$	41,515

	Shares		Amount
Consideration paid:
Cash paid			$	340,000
Common stock issued at closing (1)		333,334	$	1,166,669
Note payable				660,000
Total consideration paid			$	2,166,669

Total consideration			$	2,166,669

	Six Months Ended
	June 30, 2019
Revenues, net	$	708,205
Net loss attributable to common shareholders	$	(3,619,885	)
Net loss per share	$	(0.47	)
Weighted average number of shares outstanding		7,722,898

	Outstanding Principal as of													Warrants granted
	June 30, 2020			December 31, 2019			Interest Rate			Conversion Price			Maturity Date	Quantity		Exercise Price
The February 2018 Convertible Note Offering		-			75,000			15	%		4.00	(*)	January – February 2020		253,919		4.00
The March 2018 Convertible Note Offering		75,000			75,000			14	%		4.00	(*)	March – April 2020		240,342		4.00
The February 2019 Convertible Note Offering		2,311,703			2,311,703			10	%		5.00	(*)	February – March 2020		133,190		6.00
The November 2019 Convertible Note Offering		559,433			559,433			12	%		4.50	(*)	May – June 2020		-		-
The First January 2020 convertible Loan Agreement		87,473			-			12	%	$	4.50	(*)	July – August 2020		-		-
The First February 2020 convertible Loan Agreement		85,000			-			10	%	$	4.00	(*)	August 2020		-		-
The Second February 2020 convertible Loan Agreement		200,000			-			12	%	$	4.50	(*)	February 2021		20,000		5.00
The Third February 2020 convertible Loan Agreement		1,500,000			-			12	%	$	4.50	(*)	February 2021		124,995		5.00
The April 2020 Convertible Note Offering		350,010			-			12	%	$	4.50	(*)	October 2020		-		-
The June 2020 Convertible Loan Agreement		550,000			-			12	%		$ - (*)		June 2021		148,809		3.85
		5,718,619			3,021,136
Less: Debt Discount		(528,130	)		(124,096	)
Less: Debt Issuance Costs		(38,949	)		(614	)
		5,151,540			2,896,425
Less: Current Debt		(5,151,540	)		(2,896,425	)
Total Long-Term Debt	$	-		$	-

	Warrants			Weighted Average Exercise Price		Aggregate Intrinsic Value

Outstanding and Exercisable – December 31, 2019		742,221		$	5.25		-
Granted		294,597			4.42
Exercised		-			-
Forfeited/Cancelled		(100,578	)		4.13
Outstanding – June 30, 2020		936,240			5.11		7,440
Exercisable – June 30, 2020		787,431			5.35		-

Twelve Months Ending December 31,
2020	$	106,927
2021		111,257
2022		109,730
2023		2,081
Total	$	329,995

	Three Months Ended June 30,
	2020			2019
Revenue	$	322,540		$	7,181
Operating Expenses	$	(3,857,792	)	$	(1,409,302	)
Loss from operations	$	(3,535,252	)	$	(1,402,121	)
Other Expenses	$	(606,739	)	$	(183,293	)
Net loss	$	(4,141,991	)	$	(1,585,414	)
Loss per common share – basic and diluted	$	(0.43	)	$	(0.20	)

	Six Months Ended June 30,
	2020			2019
Revenue	$	615,682		$	41,515
Operating Expenses	$	(5,976,883	)	$	(3,148,630	)
Loss from operations	$	(5,361,201	)	$	(3,107,115	)
Other Expenses	$	(1,766,787	)	$	(362,740	)
Net loss	$	(7,127,988	)	$	(3,469,855	)
Loss per common share – basic and diluted	$	(0.76	)	$	(0.47	)

Exhibit No.		Description
4.1*		Form of Convertible Note

4.2*		Form of Warrant

10.1*		Form of Securities Purchase Agreement

10.2*		Security Agreement

10.3*		Trademark Security Agreement

31.1**		Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

31.2**		Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).

32.1**32.1#		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**32.2#		Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instant Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

CREATD, INC.		~~JERRICK MEDIA HOLDINGS, INC.~~

~~Date: August 14, 2020~~	By:	/s/ Jeremy Frommer
	Name:	Jeremy Frommer

Title:	Chief Executive Officer

	(Principal Executive Officer)

~~Date: August 14, 2020~~	By:	/s/ Chelsea Pullano
	Name:	Chelsea Pullano

Title:	Chief Financial Officer

	(Principal Financial and Accounting Officer)