UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: ~~March 31~~,September 30, 2023

☐ 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. 001-39500

Creatd, Inc.

(Exact name of registrant as specified in its charter)

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

419 Lafayette Street, 6^th Floor
New York, NY 10003

(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:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of a “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

As of ~~May 18,~~November 14, 2023, the registrant had ~~91,245,572~~183,677,272 shares of its common stock, par value $0.001 per share, outstanding.

FORM 10-Q FOR THE QUARTER ENDED ~~MARCH 31,~~SEPTEMBER 30, 2023

TABLE OF CONTENTS

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

PART I - FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4.	Controls and Procedures	14

PART II - OTHER INFORMATION		15

Item 1.	Legal Proceedings	15

Item 1A.	Risk Factors	15

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3.	Defaults Upon Senior Securities	16

Item 4.	Mine Safety Disclosures	16

Item 5.	Other Information	16

Item 6.	Exhibits	17

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 to 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. Financial Statements.

Creatd, Inc.

~~March 31,~~September 30, 2023

Index to the Condensed Consolidated Financial Statements

Contents		Page(s)
Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2023 and December 31, 2022 (unaudited)		F-1

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended ~~March 31,~~September 30, 2023 and 2022 (unaudited)		F-2

Condensed Consolidated Statements of Changes in Stockholders’ ~~Equity (Deficit)~~Deficit for the Three and Nine Months Ended ~~March 31,~~September 30, 2023 and 2022 (unaudited)		F-3

Condensed Consolidated Statements of Cash Flows for the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2023 and 2022 (unaudited)		F-5

Notes to the Condensed Consolidated Financial Statements (unaudited)		F-6

Creatd, Inc.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2023			2022
	(Unaudited)
Assets

Current Assets
Cash	$	6,759		$	706,224
Accounts receivable, net		35,104			239,423
Inventory, net		112,398			404,970
Prepaid expenses and other current assets		209,408			128,547
Total Current Assets		363,669			1,479,164

Property and equipment, net		140,819			212,545
Intangible assets, net		183,229			230,084
Goodwill		46,460			46,460
Deposits and other assets		298,503			797,231
Operating lease right of use asset		1,859,320			2,054,265

Total Assets	$	2,892,000		$	4,819,749

Liabilities and Stockholders’ Deficit

Current Liabilities
Accounts payable and accrued liabilities	$	13,440,962		$	7,565,720
Convertible Notes, net of debt discount and issuance costs		6,019,635			5,369,599
Current portion of operating lease payable		250,822			326,908
Note payable, net of debt discount and issuance costs		1,587,952			1,645,680
Deferred revenue		342,609			299,409
Derivative liability		51,535			-

Total Current Liabilities		21,693,515			15,207,316

Non-current Liabilities:
Note payable		-			38,014
Operating lease payable		1,908,186			2,077,618
Preferred stock liability		11,000			-

Total Non-current Liabilities		1,919,186			2,115,632

Total Liabilities		23,612,701			17,322,948

Commitments and contingencies (Note 10)

Stockholders’ Deficit

Preferred stock, $0.001 par value, 20,000,000 shares authorized
Series E Preferred stock, $0.001 par value, 8,000 shares authorized 450 and 450 shares issued and outstanding, respectively		-			-
Common stock par value $0.001: 1,500,000,000 shares authorized; 137,599,892 issued and 137,506,519 outstanding as of September 30, 2023 and 39,062,386 issued and 38,969,013 outstanding as of December 31, 2022		137,600			39,062
Additional paid in capital		168,650,907			134,570,600
Less: Treasury stock, 93,373 and 93,373 shares, respectively		(78,456	)		(78,456	)
Accumulated other comprehensive income		161,822			(140,183	)
Accumulated deficit		(190,480,469	)		(146,142,373	)
Total Creatd, Inc. Stockholders’ Deficit		(21,608,596	)		(11,751,350	)

Non-controlling interest in consolidated subsidiaries		887,895			(751,849	)

Total Creatd, Inc. Stockholders’ Deficit		(20,720,701	)		(12,503,199	)

Total Liabilities and Stockholders’ Deficit	$	2,892,000		$	4,819,749

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

1F-1

Creatd, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	For the Three Months Ended September 30, 2023			For the Three Months Ended September 30, 2022			For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022

Net revenue	$	437,855		$	1,022,851		$	2,123,364		$	3,997,490

Cost of revenue		359,700			1,404,562			1,809,974			4,771,151

Gross margin (loss)		78,155			(381,711	)		313,390			(773,661	)

Operating expenses
Compensation		341,338			1,736,035			5,176,920			3,510,727
Research and development		543,161			234,965			721,088			686,131
Marketing		61,898			646,520			969,228			4,016,051
Stock based compensation		397,516			626,568			8,283,267			3,848,578
Impairment of intangible assets		-			249,586			-			257,117
General and administrative		657,055			2,101,434			3,509,952			7,887,262

Total operating expenses		2,000,968			5,595,108			18,660,445			20,205,866

Loss from operations		(1,922,813	)		(5,976,819	)		(18,347,065	)		(20,979,527	)

Other income (expenses)
Other income		-			-			12,000			99
Settlement of vendor liabilities		2,266			-			25,855			(2,867	)
Interest expense		(473,457	)		(673,694	)		(632,808	)		(707,950	)
Accretion of debt discount and issuance cost		(486,359	)		(1,884,679	)		(4,346,584	)		(2,531,687	)
Change in derivative liability		(38,391	)		-			(51,535	)		3,729
Impairment of investment		-			-			-			(50,000	)
Loss on marketable securities		-			(11,415	)		-			(11,646	)
Loss on extinguishment of debt		-			(979,738	)		-			(832,482	)

Total other expenses		(995,941	)		(3,549,526	)		(4,993,072	)		(4,132,804	)

Loss before income tax provision		(2,918,754	)		(9,526,345	)		(23,340,137	)		(25,112,331	)

Income tax provision		-			-			-			-

Net loss	$	(2,918,754	)	$	(9,526,345	)	$	(23,340,137	)	$	(25,112,331	)

Non-controlling interest in net loss		-			299,903			64,640			1,285,661

Net Loss attributable to Creatd, Inc.	$	(2,918,754	)	$	(9,226,442	)	$	(23,275,497	)	$	(23,826,670	)

Deemed dividend		(8,497,035	)		(221,829	)		(21,062,599	)		(303,557	)

Net loss attributable to common shareholders	$	(11,415,789	)	$	(9,448,271	)	$	(44,338,096	)	$	(24,130,227	)

Comprehensive loss
Net loss		(2,918,754	)		(9,526,345	)		(23,340,137	)		(25,112,331	)

Currency translation gain (loss)		81,487			(36,110	)		302,005			(65,719	)

Comprehensive loss	$	(2,837,267	)	$	(9,562,455	)	$	(23,038,132	)	$	(25,178,050	)

Per-share data
Basic and diluted loss per share	$	(0.09	)	$	(0.45	)	$	(0.48	)	$	(1.23	)

Weighted average number of common shares outstanding		120,254,881			21,030,188			91,861,080			19,669,411

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

F-2

Creatd, Inc.

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

(Unaudited)

March 31,
2023 December 31,
2022
(Unaudited)

Assets
Current Assets
Cash $ 172,052 $ 706,224
Accounts receivable, Net 244,353 239,423
Inventory 256,257 404,970
Prepaid expenses and other current assets 274,081 128,547
Total Current Assets 946,743 1,479,164

Property and equipment, net 201,939 212,545
Intangible assets 231,284 230,084
Goodwill 46,460 46,460
Deposits and other assets 1,052,954 797,231
Operating lease right of use asset 1,995,956 2,054,265

Total Assets $ 4,475,336 $ 4,819,749

Liabilities and Stockholders’ Deficit

Current Liabilities
Accounts payable and accrued liabilities $ 11,109,340 $ 7,565,720
Convertible Notes, net of debt discount and issuance costs 4,497,023 5,369,599
Current portion of operating lease payable 287,542 326,908
Note payable, net of debt discount and issuance costs 1,570,601 1,645,680
Derivative Liability 58,970 -
Deferred revenue 253,348 299,409

Total Current Liabilities 17,776,824 15,207,316

Non-current Liabilities:
Note payable 32,020 38,014
Operating lease payable 2,018,789 2,077,618

Total Non-current Liabilities 2,050,809 2,115,632

Total Liabilities 19,827,633 17,322,948

Commitments and contingencies (Note 10)

Stockholders’ Deficit
Preferred stock, $0.001 par value, 20,000,000 shares authorized
Series E Preferred stock, $0.001 par value, 8,000 shares authorized, 450 and 450 shares outstanding as of March 31, 2023 and December 31, 2022, respectively
Common stock par value $0.001: 1,500,000,000 shares authorized; 86,533,654 issued and 86,440,281 outstanding as of March 31, 2023, and 39,062,386 issued and 38,969,013 outstanding as of December 31, 2022 86,534 39,062
Additional paid in capital 152,688,839 134,570,600
Less: Treasury stock, 93,373 and 93,373 shares, as of March 31, 2023 and December 31, 2022, respectively (78,456 ) (78,456 )
Accumulated deficit (168,385,954 ) (146,142,373 )
Accumulated other comprehensive loss (10,212 ) (140,183 )
Total Creatd, Inc. Stockholders’ Deficit (15,699,249 ) (11,751,350 )
Non-controlling interest in consolidated subsidiaries 346,952 (751,849 )
(15,352,297 ) (12,503,199 )

Total Liabilities and Stockholders’ Deficit $ 4,475,336 $ 4,819,749

	Series E Preferred Stock				Common Stock				Treasury stock						Additional Paid In			Accumulated			Non- Controlling			Other Comprehensive			Stockholders’ Equity
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Interest			Income			(Deficit)

Balance December 31, 2022		450	$	-		39,062,386	$	39,062		(93,373	)	$	(78,456	)	$	134,570,600		$	(146,142,373	)	$	(751,849	)	$	(140,183	)	$	(12,503,199	)

Stock based compensation		-		-		31,118,098		31,118		-			-			7,260,113			-			-			-			7,291,231

Shares issued for prepaid services		-		-		1,250,000		1,250		-			-			212,500			-			-			-			213,750

Shares issued for acquisition of non-controlling interest in consolidated subsidiaries		-		-		1,325,794		1,326		-			-			(899,317	)		-			897,991			-			-

BCF issued with note payable		-		-		-		-		-			-			2,000,000			-			-			-			2,000,000

Exercise of warrants to stock		-		-		3,767,925		3,768		-			-			749,925			-			-			-			753,693

Cash received for common stock		-		-		3,062,600		3,063		-			-			1,046,937			-			-			-			1,050,000

Common stock issued upon conversion of notes payable		-		-		6,946,851		6,947		-			-			1,410,835			-			-			-			1,417,782

Foreign currency translation adjustments		-		-		-		-		-			-			-			-			-			129,971			129,971

Sale of minority interest in OG Collection INC		-		-		-		-		-			-			-			-			250,000			-			250,000

Deemed dividend		-		-		-		-		-			-			6,337,246			(6,337,246	)		-			-			-

Net loss for the three months ended March 31, 2023		-		-		-		-		-			-			-			(15,906,335	)		(49,190	)		-			(15,955,525	)

Balance March 31, 2023		450			$	86,533,654	$	86,534		(93,373	)	$	(78,456	)	$	152,688,839		$	(168,385,954	)	$	346,952		$	(10,212	)	$	(15,352,297	)

Stock based compensation		-		-		9,338,253		9,338		-						442,682			-			-			-			452,020

Shares issued for acquisition of non-controlling interest in consolidated subsidiaries		-		-		691,133		691		-						(540,520	)		-			539,829			-			-

Cash received for common stock		-		-		2,792,585		2,792		-						166,346			-			-			-			169,138

Shares issued with notes payable		-		-		375,000		375		-						25,875			-			-			-			26,250

Common stock issued upon conversion of notes payable		-		-		569,300		569		-						33,589			-			-			-			34,158

Foreign currency translation adjustments		-		-		-		-		-						-			-			-			90,547			90,547

Deemed dividend		-		-		2,729,522		2,730		-						6,225,588			(6,228,318	)		-			-			-

Net loss for the three months ended June 30, 2023		-		-		-		-		-						-			(4,450,408	)		(15,450	)		-			(4,465,858	)

Balance June 30, 2023		450.00	$	-		103,029,447	$	103,029		(93,373	)	$	(78,456	)	$	159,042,399		$	(179,064,680	)	$	871,331		$	80,335		$	(19,046,042	)

Stock based compensation		-		-		5,851,870		5,852		-						391,664			-			-			-			397,516

Shares issued for acquisition of non-controlling interest in consolidated subsidiaries		-		-		1,093,750		1,094		-						(17,658	)		-			16,564			-			-

Shares issued for exercise of warrants		-		-		9,240,000		9,240		-						227,991			-			-			-			237,231

Cash received for common stock		-		-		4,127,742		4,128		-						76,132			-			-			-			80,260

Shares issued with notes payable		-		-		4,875,000		4,875		-						208,172			-			-			-			213,047

Common stock issued upon conversion of notes payable		-		-		9,382,183		9,382		-						225,172			-			-			-			234,554

Foreign currency translation adjustments		-		-		-		-		-						-			-			-			81,487			81,487

Deemed dividend		-		-		-		-		-						8,497,035			(8,497,035	)		-			-			-

Net loss for the three months ended September 30, 2023		-		-		-		-		-						-			(2,918,754	)		-			-			(2,918,754	)

Balance September 30, 2023		450	$	-		137,599,992	$	137,600		(93,373	)	$	(78,456	)	$	168,650,907		$	(190,480,469	)	$	887,895		$	161,822		$	(20,720,701	)

F-3

Creatd, Inc.
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

	Series E														Additional					Non-			Other
	Preferred Stock				Common Stock				Treasury stock						Paid In		Accumulated			Controlling			Comprehensive			Stockholders'
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Interest			Income			Equity

Balance, January 1, 2022		500	$	-		16,691,170	$	16,691		(5,657	)	$	(62,406	)	$	111,563,618	$	(109,632,574	)	$	1,881,195		$	(78,272	)	$	3,688,252

Stock based compensation		-		-		18,171		18		-			-			1,067,591		-			-			-			1,067,609

Shares issued for prepaid services		-		-		50,000		50		-			-			68,950		-			-			-			69,000

Cash received for common stock and warrants, net of $115,000 of issuance costs		-		-		3,046,314		3,046		-			-			4,994,254		-			-			-			4,997,300

Common stock issued upon conversion of notes payable		-		-		109,435		110		-			-			173,346		-			-			-			173,456

Foreign currency translation adjustments		-		-		-		-		-			-			-		-			-			(4,950	)		(4,950	)

Dividends		-		-		-		-		-			-			81,728		(81,728	)		-			-			-

Net loss for the three months ended March 31, 20222		-		-		-		-		-			-			-		(6,263,162	)		(617,886	)		-			(6,881,048	)

Balance, March 31, 2022		500	$	-		19,915,090	$	19,915		(5,657	)	$	(62,406	)	$	117,949,487	$	(115,977,464	)	$	1,263,309		$	(83,222	)	$	3,109,619

Stock based compensation		-		-		289,749		290		-			-			2,186,865		-			-			-			2,187,155

Shares issued for prepaid services		-		-		50,000		50		-			-			37,150		-			-			-			37,200

Stock warrants issued with note payable		-		-		-		-		-			-			1,895,390		-			-			-			1,895,390

Foreign currency translation adjustments		-		-		-		-		-			-			-		-			-			(24,659	)		(24,659	)

Net loss for the three months ended June 30, 2022		-		-		-		-		-			-			-		(8,337,066	)		(367,872	)		-			(8,704,938	)

Balance, June 30, 2022		500	$	-		20,254,839	$	20,255		(5,657	)	$	(62,406	)	$	122,068,892	$	(124,314,530	)	$	895,437		$	(107,881	)	$	(1,500,233	)

Stock based compensation		-		-		107,260		107		-			-			568,107		-			-			-			568,214

Shares issued for prepaid services		-		-		50,000		50		-			-			34,900		-			-			-			34,950

Shares issued for acquisition		-		-		57,576		58		-			-			40,937		-			81,660			-			122,655

Purchase of treasury stock		-		-		-		-		(83,800	)		(13,700	)		-		-			-			-			(13,700	)

Cash received for common stock and warrants, net of $75,000 of issuance costs		-		-		4,000,000		4,000		-			-			721,000		-			-			-			725,000

Stock warrants issued with note payable		-		-		-		-		-			-			1,012,107		-			-			-			1,012,107

Foreign currency translation adjustments		-		-		-		-		-			-			-		-			-			(36,110	)		(36,110	)

Dividends		-		-		-		-		-			-			221,829		(221,829	)		-			-			-

Net loss for the three months ended September 30, 2022		-		-		-		-		-			-			-		(9,226,442	)		(299,903	)		-			(9,526,345	)

Balance, September 30, 2022		500	$	-		24,469,675	$	24,470		(89,457	)	$	(76,106	)	$	124,667,772	$	(133,762,800	)	$	677,194		$	(143,991	)	$	(8,613,461	)

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

~~F-1~~F-4

Creatd, Inc.

Condensed Consolidated Statements of ~~Operations and Comprehensive Loss~~Cash Flows

(Unaudited)

For the
Three
Months
Ended For the
Three
Months
Ended
March 31,
2023 March 31,
2022

Net revenue $ 986,145 $ 1,348,738

Cost of revenue 1,012,687 1,572,170

Gross margin (loss) (26,542 ) (223,432 )

Operating expenses
Compensation 4,114,523 1,662,830
Research and development 131,626 226,654
Marketing 535,521 2,092,021
Stock based compensation 7,328,044 1,080,792
General and administrative 1,575,359 1,723,555

Total operating expenses 13,685,073 6,785,852

Loss from operations (13,711,615 ) (7,009,284 )

Other income (expenses)
Other income 12,000 99
Interest expense (65,370 ) (13,896 )
Accretion of debt discount and issuance cost (2,155,159 ) (23,477 )
Derivative liability (58,970) 3,729
Settlement of vendor liabilities 23,589 14,525
Gain on extinguishment of debt - 147,256

Other income (expenses), net (2,243,910 ) 128,236

Loss before income tax provision (15,955,525 ) (6,881,048 )

Income tax provision - -

Net loss (15,955,525 ) (6,881,048 )

Non-controlling interest in net loss 49,190 617,886

Net Loss attributable to Creatd, Inc. (15,906,335 ) (6,263,162 )

Deemed dividend (6,337,246 ) (81,728 )

Net loss attributable to common shareholders $ (22,243,581 ) $ (6,344,890 )

Comprehensive loss

Net loss (15,955,525 ) (6,881,048 )

Currency translation gain (loss) 129,971 (4,950 )

Comprehensive loss $ (15,825,554 ) $ (6,885,998 )

Per-share data
Basic and diluted loss per share $ (0.35 ) $ (0.36 )

Weighted average number of common shares outstanding 63,491,732 17,707,951

	For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(23,340,137	)	$	(25,112,331	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		118,581			441,943
Impairment of investment		-			50,000
Impairment of intangible assets		-			257,117
Accretion of debt discount and issuance cost		4,346,584			2,531,687
Stock based compensation		8,283,267			3,848,578

Currency translation		302,005			-
Bad debt expense		25,198			124,186
Loss on forgiveness of debt		-			832,482
Settlement of vendor liabilities		(25,855	)		2,867
Change in fair value of derivative liability		51,535			(3,729	)

Loss on marketable securities		-			11,646
Non cash lease expense		-			44,305

Changes in operating assets and liabilities:
Accounts receivable		179,121			(481,080	)
Inventory		292,572			(492,128	)
Prepaid expenses		(9,611	)		114,925
Operating lease right of use asset		194,945
Deposits and other assets		498,728			(50,185	)
Accounts payable and accrued expenses		5,901,097			3,805,245
Deferred revenue		43,200			71,396
Operating lease liability		(245,518	)		145,887
Net Cash Used In Operating Activities		(3,384,288	)		(13,857,189	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment		-			(213,975	)
Cash received from sale of interest in OGC		250,000			-
Cash paid for investments in marketable securities		-			(48,878	)
Sale of marketable securities		-			37,135
Cash consideration for acquisition		-			(75,679	)
Purchases of digital assets		-			(192,795	)
Net Cash Provided by (Used In) Investing Activities		250,000			(494,192	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of warrant		990,924			-
Proceeds from issuance of preferred stock (Vocal)		11,000			-
Net proceeds from issuance of notes		1,398,022			2,174,402
Repayment of notes		(1,868,112	)		(2,292,953	)
Proceeds from issuance of convertible note		2,775,640			5,809,755
Repayment of convertible notes		(2,172,049	)		(337,899	)
Purchase of treasury stock		-			(13,700	)
Proceeds from issuance of common stock and warrants		1,299,398			5,722,300
Net Cash Provided By Financing Activities	$	2,434,823		$	11,061,905

Effect of exchange rate changes on cash		-			(65,719	)

Net Change in Cash		(699,465	)		(3,355,195	)

Cash - Beginning of period		706,224			3,794,734

Cash - End of period	$	6,759		$	439,539

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Year for:
Income taxes	$	-		$	-
Interest	$	632,808		$	139,000

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of vendor liabilities	$	-		$	147,649
Warrants issued with debt	$	-		$	2,907,497
Shares issued for the conversion of convertible notes payable	$	1,686,494		$	173,455
Beneficial conversion feature issued with convertible note	$	2,000,000		$	-
Shares issued with notes payable	$	239,297		$	-
Shares issued for prepaid services	$	213,750		$	141,150
Operating lease liability	$	2,159,008		$	2,250,648
Shares issued for acquisition of non-controlling interest in consolidated subsidiaries	$	1,457,495		$	40,994
Deemed dividend	$	21,062,599		$	221,829

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

~~F-2~~

~~Creatd, Inc.~~

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

Series E
Preferred Stock Common Stock Treasury stock Additional
Paid In Accumulated Non-Controlling Other
Comprehensive Stockholders’
Equity
Shares Amount Shares Amount Shares Amount Capital Deficit Interest Income (Deficit)
Balance, January 1, 2023 450 $ - 39,062,386 $ 39,062 (93,373 ) $ (78,456 ) $ 134,570,600 $ (146,142,373 ) $ (751,849 ) $ (140,183 ) $ (12,503,199 )
Stock based compensation - - 31,118,098 31,118 - - 7,260,113 - - - 7,291,231
Shares issued for prepaid services - - 1,250,000 1,250 - - 212,500 - - - 213,750
Shares issued for acquisition of Non-controlling interest in consolidated subsidiaries - - 1,325,794 1,326 - - (899,317 ) - 897,991 - -
BCF issued with convertible note - - - - - - 2,000,000 - - - 2,000,000
Exercise of warrants to stock 3,767,925 3,768 - - 749,925 - - - 753,693
Stock warrants issued with note payable - - - - - - - - - - -
Cash received for common stock - - 3,062,600 3,063 - - 1,046,937 - - - 1,050,000
Common stock issued upon conversion of convertible notes - - 6,946,851 6,947 - - 1,410,835 - - - 1,417,782
Foreign currency translation adjustments - - - - - - - - - 129,971 129,971
Sale of minority interest in OG Collection INC - - - - - - 250,000 - 250,000
Dividends - - - - - - 6,337,246 (6,337,246 ) - - -
Net loss for the three months ended March 31, 2023 - - - - - - - (15,906,335 ) (49,190 ) - (15,955,525 )
Balance, March 31, 2023 450 $ - 86,533,654 $ 86,534 (93,373 ) $ (78,456 ) $ 152,688,839 $ (168,385,954 ) $ 346,952 $ (10,212 ) $ (15,352,297 )

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

~~F-3~~

~~Creatd, Inc.~~

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

~~For the Three Months Ended March 31, 2022~~F-5

~~(Unaudited)~~

Series E
Preferred Stock Common Stock Treasury stock Additional
Paid In Accumulated Non-
Controlling Other
Comprehensive Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Interest Income Equity

Balance, January 1, 2022 500 $ - 16,691,170 $ 16,691 (5,657 ) $ (62,406 ) $ 111,563,618 $ (109,632,574 ) $ 1,881,195 $ (78,272 ) $ 3,688,252

Stock based compensation - - 18,171 18 - - 1,067,591 - - - 1,067,609

Shares issued for prepaid services - - 50,000 50 - - 68,950 - - - 69,000

Cash received for common stock and warrants, net of $115,000 of issuance costs - - 3,046,314 3,046 - - 4,994,254 - - - 4,997,300

Common stock issued upon conversion of notes payable - - 109,435 110 - - 173,346 - - - 173,456

Foreign currency translation adjustments - - - - - - - - - (4,950 ) (4,950 )

Dividends - - - - - - 81,728 (81,728 ) - - -

Net loss for the three months ended March 31, 20222 - - - - - - - (6,263,162 ) (617,886 ) - (6,881,048 )
Balance, March 31, 2022 500 $ - 19,915,090 $ 19,915 (5,657 ) $ (62,406 ) $ 117,949,487 $ (115,977,464 ) $ 1,263,309 $ (83,222 ) $ 3,109,619

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

~~F-4~~

~~Creatd, Inc.~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(Unaudited)~~

For the
Three
Months
Ended For the
Three
Months
Ended
March 31,
2023 March 31,
2022

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (15,955,525 ) $ (6,881,048 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 9,406 141,892
Accretion of debt discount and issuance cost 2,155,159 23,477
Share-based compensation 7,291,231 1,080,491
Derivative Expense 58,970 -
Currency Translation 129,971 (4,950 )
Bad debt expense 75,874 92,987
Settlement of vendor liabilities (23,589 ) (14,525 )
Change in fair value of derivative liability - (3,729 )
Gain on extinguishment of debt - (147,256 )
Non-cash lease expense - 18,451
Accounts receivable (80,804 ) (139,388 )
Inventory 148,713 (136,213 )
Prepaid expenses 68,216 (6,373 )
Deposits and other assets (255,723 ) (195,749 )
Operating lease right of use asset (39,886 )
Accounts payable and accrued liabilities 3,605,990 1,170,738
Deferred revenue (46,061 ) (22,483 )
Operating lease liability - (18,451 )
Net Cash Used In Operating Activities (2,858,058 ) (5,042,129 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property and equipment - (44,927 )
Cash received from the sale of minority interest in OG Collection Inc 250,000 -
Cash consideration for acquisition - 44,977
Purchases of digital assets - (51,000 )
Net Cash Provided By (Used In) Investing Activities 250,000 (50,950 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of warrant 753,693 -
Net proceeds from issuance of notes 312,688 463,559
Repayment of notes (620,353 ) (932,888 )
Proceeds from issuance of convertible note 2,125,000 -
Repayment of convertible notes (1,547,142 ) -
Proceeds from issuance of common stock and warrants 1,050,000 4,997,301
Net Cash Provided By Financing Activities 2,073,886 4,527,972

Net Change in Cash (534,172 ) (570,057 )

Cash - Beginning of period 706,224 3,794,734

Cash - End of period $ 172,052 $ 3,224,677

SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the Year for:
Interest $ 65,370 $ 139,000

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of marketable debt securities into equity securities $ - $ 20,297
Deemed dividend $ 6,337,246 $ -
Shares issued for acquisition of NCI in consolidated subsidiaries $ 899,317 $ -
Beneficial conversion feature on convertible notes $ 2,000,000 $ -
Issuance of common stock for prepaid services $ 213,750 $ 69,000
Common stock and warrants issued upon conversion of notes payable $ 1,417,782 $ 142,800

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

~~F-5~~

Creatd, Inc.

~~March 31,~~September 30, 2023

Notes to the Condensed Consolidated Financial Statements

Note 1 – Organization and Operations

Creatd, Inc., formerly Jerrick Media Holdings, Inc. (“we,” “us,” the “Company,” or “Creatd”), is a technology company focused on providing economic opportunities for creators, which it accomplishes through its four main business pillars: Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios. Creatd’s flagship product, 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 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 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.

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”), a digital e-commerce agency.

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.

On June 4, 2021, the Company acquired 89% of the membership interests of Plant Camp, LLC, a Delaware limited liability company (“Plant Camp”), which the Company subsequently rebranded as Camp. Camp is a direct-to-consumer (DTC) food brand which creates healthy upgrades to classic comfort food favorites. The results of Plant Camp’s operations have been included since the date of acquisition in the Statements of Operations.

On July 20, 2021, the Company acquired 44% of the membership interests of WHE Agency, Inc. WHE Agency, Inc, is a talent management and public relations agency based in New York (“WHE”).

On January 9, 2023, the Company acquired an additional 51% of the equity interest in WHE Agency, Inc. bringing our total ownership to 95%. WHE has been consolidated due to the Company’s ownership of 55% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

Between October 21, 2020, and August 16, 2021, the Company acquired 21% of the membership interests of Dune, Inc. Dune, Inc. is a direct-to-consumer brand focused on promoting wellness through its range of health-oriented beverages.

On October 3, 2021, the Company acquired an additional 29% of the membership interests of Dune, Inc., bringing our total membership interests to 50%. Dune, Inc., has been consolidated due to the Company’s ownership of 50% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

On January 25, 2023, the Company acquired an additional 23% equity interest in Dune, Inc. bringing our total ownership to 85%. Dune, Inc., has been consolidated due to the Company’s ownership of 50% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

F-6

On March 7, 2022, the Company acquired 100% of the membership interests of Denver Bodega, LLC, d/b/a Basis, a Colorado limited liability company (“Basis”). Basis is a direct-to-consumer functional beverage brand that makes high-electrolyte mixes meant to aid hydration. Denver Bodega, LLC has been consolidated due to the Company’s ownership of 100% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.

On August 1, 2022, the Company acquired 51% of the membership interests of Orbit Media LLC, a New York limited liability company. Orbit is an app-based stock trading platform designed to empower a new generation of investors.

~~F-6~~

On February 3, 2023, the Company acquired an additional 5% of the membership interests of Orbit Media, LLC., bringing our total membership interests to 56%. Orbit has been consolidated due to the Company’s ownership of 51% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.

On September 13, 2022, the Company acquired 100% of the membership interests of Brave Foods, LLC, a Maine limited liability company. Brave is a plant-based food company that provides convenient and healthy breakfast food products. Brave Foods, LLC has been consolidated due to the Company’s ownership of 100% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.

On December 13, 2022, an investor entered into a Subscription Agreement whereby it purchased from OG Collection, Inc., a subsidiary of the Company (“OG”), 150,000 shares of common stock of OG for a purchase price of $750,000, and, in connection therewith OG, the Company, and the Investor entered into a Shareholder Agreement.

February 1, 2023, an investor entered into a Subscription Agreement whereby it purchased from OG Collection, Inc., a subsidiary of the Company (“OG”), 50,000 shares of common stock of OG for a purchase price of $250,000, and, in connection therewith OG, the Company, and the Investor entered into a Shareholder Agreement.

On May 30, 2023, the Company acquired an additional 15% equity interest in Dune, Inc. bringing our total ownership to 100%. Dune, Inc., has been consolidated due to the Company’s ownership of 50% voting control, and the results of operations have been included since the date of acquisition on October 3, 2021, in the Statements of Operations.

On June 30, 2023, the Company acquired an additional 10% of the membership interests of Plant Camp, LLC, bringing our total ownership to 100%. Plant Camp, LLC has been consolidated due to the Company’s ownership of 50% voting control, and the results of operations have been included since the date of acquisition on June 4, 2021, in the Statements of Operations.

On July 28, 2023, the Company acquired an additional 17.5% of the membership interests of Orbit Media, LLC., bringing our total membership interests to 74%. Orbit has been consolidated due to the Company’s ownership of 51% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.

Note 2 – Significant 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.

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, 2023, or any other interim period or for any other future year. These unaudited condensed consolidated 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, 2022, included in the Company’s 2022 Annual Report on Form 10-K filed with the SEC. The balance sheet as of December 31, 2022, 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.

F-7

Use of Estimates and Critical Accounting Estimates and Assumptions

The preparation of Consolidated 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.

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. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of intellectual property.

Actual results could differ from those estimates.

~~F-7~~

Principles of consolidation

The Company consolidates all majority-owned subsidiaries, if any, in which the parent’s power to control exists. All consolidated subsidiaries report based on a year ending of December 31.

As of ~~March 31,~~September 30, 2023, 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	%
Creatd Ventures LLC	Delaware		100	%
CEOBloc LLC	Delaware		100	%
Dune Inc.	Delaware		85100	%
Vocal, Inc.	Nevada		100	%
WHE Agency, Inc.	Delaware		95	%
OG Collection, Inc.	Delaware		86	%
Orbit Media LLC	New York		56	%
~~WHE Agency, Inc.~~	~~Delaware~~		9574	%

As of ~~March 31,~~September 30, 2023, Creatd Ventures, LLC (formerly Creatd Partners, LLC) is operating three DBAs for Brave Foods, Plant Camp, and Basis (formerly Denver Bodega, LLC).

All other previously consolidated subsidiaries have been dissolved.

All inter-company balances and transactions have been eliminated. The condensed consolidated financial statements include Denver Bodega, LLC activity since March 7, 2022, Orbit Media LLC activity since August 1, 2022, and Brave Foods, LLC activity since September 13, 2022.

~~Variable Interest Entities~~

Management performs an ongoing assessment of its noncontrolling interests from investments in unrelated entities to determine if those entities are variable interest entities (VIEs), and if so, whether the Company is the primary beneficiary. If an entity in such a transaction, by design, meets the definition of a VIE and the Company determines that it, or a consolidated subsidiary is the primary beneficiary, the Company will include the VIE in its consolidated financial statements. If such an entity is deemed to not be consolidated, the Company records only its investment in equity securities as a marketable security or investment under the equity method, as applicable.

Fair Value of Financial Instruments

The fair value measurement disclosures are grouped into three levels based on valuation factors:

●

Level 1 – quoted prices in active markets for identical investments

●

Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

●

Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments)

F-8

The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, marketable trading securities, 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,~~September 30, 2023 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 include certain of the Company’s notes payable. 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 derivative liabilities. 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 models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities.

The following tables provide a summary of the relevant liabilities that are measured at fair value on a recurring basis:

Fair Value Measurements as of

~~March 31,~~September 30, 2023

	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)		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)
Liabilities:
Derivative liabilities	$	58,970	$	-	$	-	$	58,970	$	51,535	$	-	$	-	$	51,535
Total Liabilities	$	58,970	$	-	$	-	$	58,970	$	51,535	$	-	$	-	$	51,535

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”) or Financial Claims Scheme (“FCS”) insurable limits. The Company has never experienced any losses related to these balances. The uninsured cash balance as of ~~March 31,~~September 30, 2023, was $0. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

Concentration of Credit Risk and Other Risks and Uncertainties

The Company provides credit in the normal course of business. The Company maintains allowances for credit losses on factors surrounding the credit risk of specific customers, historical trends, and other information.

The Company operates in Australia and holds total assets of ~~$968,331.~~$138,484. It is reasonably possible that operations located outside an entity’s home country will be disrupted in the near term.

F-9

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
Leasehold Improvements		3

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.

Long-lived Assets Including Acquired Intangible Assets

We evaluate the recoverability of property and equipment, acquired finite-lived intangible assets and, purchased infinite life digital 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. Digital assets accounted for as intangible assets are subject to impairment losses if the fair value of digital assets decreases other than temporarily below the carrying value. The fair value is measured using the quoted price of the crypto asset at the time its fair value is being measured. 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. During the three and nine months ended ~~March 31,~~September 30, 2023, the Company recorded an impairment charge of $0 for intangible assets.

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. The remaining weighted average life of the intangible assets is ~~9.81~~8.51 years.

Scheduled amortization over the next five years are as follows:

Twelve months ending ~~March 31,~~September 30,

2024	$	32,097	$	32,097
2025		28,743		31,528
2026		20,961		20,961
2027		20,961		20,961
2028		20,961		20,961
Thereafter		51,482		56,721
Total		175,205

Intangible assets not subject to amortization		22,783
Total Intangible Assets	$	197,988	$	183,229

Amortization expense was ~~$8,024~~$46,855 and ~~$133,504~~$94,130 for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively.

Goodwill

Goodwill is not amortized but is subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles – Goodwill and Other – Testing Indefinite-Lived Intangible Assets for Impairment” (“ASC Topic 350”). The Company tests goodwill for impairment on an annual basis as of the last day of the Company’s fiscal December each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company uses an income-based approach to determine the fair value of the reporting units. This approach uses a discounted cash flow methodology and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units.

F-10

During the year ended December 31, 2022, the Company completed its annual impairment tests of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined for one of its reporting units that the fair value of that reporting unit was more likely than not greater than its carrying value, including Goodwill. However, based on this qualitative assessment, the Company determined that the carrying value of the Denver Bodega, Dune, Plant Camp, and WHE Agency reporting units was more likely than not greater than their carrying value, including Goodwill. Based on the completion of the annual impairment tests, the Company recorded an impairment charge of $1,433,815 for goodwill for the ~~years~~year ended December 31, 2022.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company did not acquire any additional goodwill or recognize any additional impairment of goodwill.

The following table sets forth a summary of the changes in goodwill for the ~~three~~nine months ended ~~March 31,~~September 30, 2023

For the
Three Months
Ended
March 31,
2023

Total
As of January 1, 2023 $ 46,460
Goodwill acquired in a business combination -
Impairment of goodwill -
As of March 31, 2023 46,460

	For the Nine Months Ended September 30, 2023
	Total
As of January 1, 2023	$	46,460
Goodwill acquired in a business combination		-
Impairment of goodwill		-
As of September 30, 2023		46,460

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the 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.

F-11

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 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 stockholders’ equity in accumulated other comprehensive income. Gains and losses from foreign currency transactions, which are included in operating expenses, 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 utilizes a binomial option model for convertible notes that have an option to convert at a variable number of shares 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 ~~Binomial~~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.

Shipping and Handling Costs

The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of revenue.

F-12

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. 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 mile basis) and cash prizes offered to Challenge winners;

●

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 three and nine months ended ~~March 31,~~September 30, 2023 and 2022 consists of the following:

	Three Months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
	2023		2022		2023		2022		2023		2022
Agency (Managed Services, Branded Content, & Talent Management Services)	$	246,201	$	583,141	$	155,329	$	442,867	$	594,667	$	1,613,924
Platform (Creator Subscriptions)		299,194		508,233		243,397		230,212		852,969		1,138,812
Ecommerce (Tangible Products)		410,894		254,724
Ecommerce						39,014		347,944		646,745		1,237,634
Affiliate Sales		986		2,640		115		1,828		28,983		7,120
Other Revenue		28,870		-
	$	986,145	$	1,348,738
					$	437,855	$	1,022,851	$	2,123,364	$	3,997,490

The Company utilizes the output method to ~~measure~~measures the results achieved and value transferred to a customer over time. Timing of revenue recognition for the three ~~months~~and Nine Months ended ~~March 31,~~September 30, 2023 and 2022 consists of the following:

	Three Months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
	2023		2022		2023		2022		2023		2022
Products and services transferred over time	$	575,251	$	1,091,374	$	398,726	$	673,079	$	1,447,636	$	2,752,736
Products transferred at a point in time		410,894		257,364		39,129		349,772		675,728		1,244,754
	$	986,145	$	1,348,738	$	437,855	$	1,022,851	$	2,123,364	$	3,997,490

Agency Revenue

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.

F-13

Branded Content

Branded content represents the revenue recognized from the Company’s obligation to create and publish branded articles and/or branded challenges for clients on the Vocal platform and promote said stories, tracking engagement for the client. In the case of branded articles, 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. In the case of branded challenges, the performance obligation is satisfied when the Company successfully closes the challenge and winners have been announced. The Company utilizes the completed contract method when revenue is recognized over time as the services are performed and any required milestones are met. Certain contracts contain separate milestones whereas the Company separates its performance obligations and utilizes the stand-alone selling price method and residual method to determine the estimate of the allocation of the transaction price.

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

	●	The Company collects fixed fees ranging from ~~$10,000~~$5,000 to ~~$110,000,~~$60,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $10,000 per article.

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

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

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

Talent Management Services

Talent Management represents the revenue recognized by WHE Agency, Inc. (“WHE”) from the Company’s obligation to manage and oversee influencer-led campaigns from the contract negotiation stage through content creation and publication. WHE acts in an agent capacity for influencers and collects a management fee of approximately 20% of the value of an influencer’s contract with a brand. Revenue is recognized net of the 80% of the contract that is collected by the influencer and is recognized when performance obligations of the contract are met. Performance obligations are complete when milestones and deliverables of contracts are delivered to the client.

Below are the significant components of a typical agreement pertaining to talent management revenue:

●

Total gross contracts range from $500-$100,000.

●

The Company collects fixed fees in the amount of 20 to 25% of the gross contract amount, ranging from $100 to $25,000 in net revenue per contract.

●

The campaign is created and made live by the influencer within the timeframe specified in the contract.

●

Campaigns are promoted per the contract and the customer is provided a link to the live deliverables on the influencer’s social media channels.

●

Most billing for contracts occur 100% at execution of the performance obligation. Net payment terms vary by client.

F-14

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 subject to promotional discounts and free trials. 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. Potential revenue offset is calculated by reviewing a subscriber’s earnings in conjunction with payments made by the subscriber on a monthly and/or annual basis.

Affiliate Sales Revenue

Affiliate sales represents the commission the Company receives from views or sales of its multimedia assets. Affiliate revenue is earned on a “click through” basis, upon visitors viewing or purchasing the relevant video, book, or other media asset and completing a specific conversion. The revenue is recognized upon receipt as reliable estimates could not be made.

E-Commerce Revenue

The Company’s e-commerce businesses are housed under Creatd Ventures, and currently consists of four majority-owned e-commerce companies, Camp (previously Plant Camp), Dune Glow Remedy (“Dune”), Basis, and Brave. The Company generates revenue through the sale of Camp, Dune, Basis, and Brave’s consumer products through its e-commerce distribution channels. The Company satisfies its performance obligation upon shipment of product to its customers and recognizes shipping and handling costs as a fulfillment cost. Customers have 30 days from receipt of an item to return unopened, unused, or damaged items for a full refund for Camp, Dune, and Basis, and 7 days from receipt of purchase for Brave. All returns are processed within the relevant recording period and accounted for as a reduction in revenue. The Company runs discounts from time to time to promote sales, improve market penetration, and increase customer retention. Any discounts are run as coupon codes applied at the time of transaction and accounted for as a reduction in gross revenue. The Company assesses variable consideration using the most likely amount method.

Deferred Revenue

Deferred revenue consists of billings and payments from clients in advance of revenue recognition. The Company has two types of deferred revenue, subscription revenue whereas the revenue is recognized over the subscription period and contract liabilities where the performance obligation was not satisfied. The Company will recognize the deferred revenue within the next twelve months. As of ~~March 31,~~September 30, 2023, the Company had deferred revenue of ~~$253,348.~~$342,609.

F-15

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 ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company recorded ~~$75,874 as a~~$25,198 for bad debt expense. As of ~~March 31,~~September 30, 2023, the Company has an allowance for doubtful accounts of ~~$600,951.~~$0.

Inventory

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of ~~March 31,~~September 30, 2023, the Company had inventory on hand valued at $112,398 after a reserve for obsolescence of ~~$320,282.~~$275,596.

Stock-Based Compensation

The Company recognizes compensation expense for all equity–based payments granted in accordance with Accounting Standards Codification (“ASC”) 718 “Compensation – Stock Compensation”. Under fair value recognition provisions, the Company recognizes equity–based compensation over the requisite service period of the award. The company has a relatively low forfeiture rate of stock-based compensation and forfeitures are recognized as they occur.

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.

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 forfeitures are recognized as they occur. Expected volatility is derived from the Company’s historical data 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. Forfeitures are recognized as they occur.

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. 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 fair value of the underlying stock on the award date and is amortized over the service period, defined as the vesting period. The vesting period is generally one to three years. A Black-Scholes model is utilized to estimate the 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 forfeitures as they occur.

F-16

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. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023, 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 ~~March 31,~~September 30, 2023 and 2022:

	March 31,				September 30,
	2023		2022		2023		2022
Series E preferred		109,223		-		109,223		121,359
Options		4,391,600		1,891,348		72,408,267		2,994,267
Warrants		40,574,614		8,591,206		296,122,794		8,607,661
Convertible notes		24,169,999		-		103,727,930		2,000,000
Totals		69,245,436		10,482,554		472,368,214		13,723,287

Recently Adopted Accounting Guidance

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. On October 16, 2019, FASB approved a final ASU delaying the effective date of ASU 2016-13 for small reporting companies to interim and annual periods beginning after December 15, 2022. The adoption did not ~~material~~materially impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805), ~~Which~~which aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in recognition and payment terms that effect subsequent revenue recognition. ASU 2021-08 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The adoption did not have a material impact on the Company’s consolidated financial statements.

F-17

Note 3 – Going Concern

The Company’s 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 consolidated financial statements, as of ~~March 31,~~September 30, 2023, the Company had an accumulated deficit of ~~$168.3~~$190.5 million, a net loss of ~~$16.0~~$23.3 million and net cash used in operating activities of ~~$2.9~~$3.4 million for the ~~reporting~~9 months in the period then ended. 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.

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.

The 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 – Inventory

Inventory net of reserves was comprised of the following at ~~March 31,~~September 30, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Raw Materials	$	76,322	$	-
Packaging		22,787		34,632		-		34,635
Finished goods		157,148		370,335		112,398		370,335
	$	256,257	$	404,970	$	112,398	$	404,970

F-18

Note 5 – Notes Payable

Notes payable as of ~~March 31,~~September 30, 2023 and December 31, 2022 is as follows:

Outstanding
Principal as of

March 31,
2023

December 31,
2022

Interest
Rate

Maturity
Date
The April 2020 PPP Loan Agreement 198,577 198,577 5 % April 2022
First Denver Bodega LLC Loan 32,645 38,014 5 % March 2025
The Third May 2022 Loan Agreement 6,554 9,409 - % November 2022
The Fourth May 2022 Loan Agreement 30,697 31,701 - % November 2022
The Second June 2022 Loan agreement 39,500 39,500 - % October 2022
The First August 2022 Loan Agreement 130,615 130,615 14 % June 2023
The Second August 2022 Loan Agreement 92,950 387,950 - % January 2023
The First September 2022 Loan Agreement 47,439 73,236 - % September 2023
The Second September 2022 Loan Agreement 658,625 763,625 - % May 2023
The Third September 2022 Loan Agreement 121,964 256,964 - % April 2023
The November 2022 Loan 34,837 68,211 - % June 2023
The First February 2023 Loan Agreement 325,346 - 14 % June 2023
1,719,749 1,683,694
Less: Debt Discount (117,128 ) (314,108 )
Less: Debt Issuance Costs - -
1,602,621 1,683,694
Less: Current Debt (1,570,601 ) (1,645,680 )
Total Long-Term Debt $ 32,020 $ 38,014

	Outstanding Principal as of
	September 30, 2023			December 31, 2022			Interest Rate			Maturity Date
The April 2020 PPP Loan Agreement*		198,577			198,577			5	%	April 2022
First Denver Bodega LLC Loan		-			38,014			5	%	March 2025
The Third May 2022 Loan Agreement		-			9,409			-	%	November 2022
The Fourth May 2022 Loan Agreement*		24,124			31,701			-	%	November 2022
The Second June 2022 Loan agreement*		34,500			39,500			-	%	October 2022
The First August 2022 Loan Agreement*		-			130,615			14	%	July 2023
The Second August 2022 Loan Agreement*		14,450			387,950			-	%	January 2023
The First September 2022 Loan Agreement		13,883			73,236			-	%	December 2023
The Second September 2022 Loan Agreement*		498,625			763,625			-	%	May 2023
The Third September 2022 Loan Agreement**		22,964			256,964			-	%	October 2023
The November 2022 Loan		-			68,211			-	%	June 2023
The April 2023 Loan Agreement*		45,055			-			18	%	April 2023
The June 2023 Loan Agreement*		13,000			-			-	%	September 2023
The First July 2023 Loan Agreement		300,000			-			10	%	July 2024
The Third July 2023 Loan Agreement		261,250			-			12	%	April 2024
The August 2023 Loan Agreement		123,463			-			-	%	February 2025
The First September 2023 Loan Agreement		51,750			-			15	%	June 2024
The Second September 2023 Loan Agreement		107,222			-			15	%	June 2024
		1,708,863			1,997,803
Less: Debt Discount		(120,911	)		(314,108	)
		1,587,952			1,683,694
Less: Current Debt		(1,587,952	)		(1,645,680	)
Total Long-Term Debt	$	-		$	38,014

*	Note: was in default as of September 30, 2023
**	Note: went into default between the balance sheet date and the date of this filing

The April 2020 PPP Loan Agreement

On April 30, 2020, the Company was granted a loan 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 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 ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company accrued interest of ~~$2,387.~~$7,426.

As of ~~March 31,~~September 30, 2023, the Loan is in default, and the lender may require immediate payment of all amounts owed under the Loan or file suit and obtain judgment.

F-19

The First February 2022 Loan Agreement

On February 22, 2022, the Company entered into a secured loan agreement (the “First February 2022 Loan Agreement”) with a lender (the “First February 2022 Lender”), whereby the First February 2022 Lender issued the Company a secured promissory note of $222,540 AUD or $159,223 United States Dollars (the “First February 2022 Note”). Pursuant to the First February 2022 Loan Agreement, the First February 2022 Note has an effective interest rate of 14%. The maturity date of the First February 2022 Note is June 30, 2022 (the “First February 2022 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First February 2022 Loan Agreement are due. The Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

During the year ended December 31, 2022, the Company repaid $159,223 of principal and $8,120 of interest.

Denver Bodega LLC Notes Payable

On March 7, 2022, The Company acquired five note payable agreements from the acquisition of Denver Bodega LLC. See Note 11. The total liabilities of these notes amounted to $293,888. During the year ended December 31, 2022, the Company repaid $255,874. ~~As of March 31,~~

On May 30, 2023, the ~~Company has one~~holder of the remaining note ~~outstanding. This~~agreed to convert the note ~~has~~into Common Stock at a ~~principal balance~~price of ~~$32,645, bears interest at 5%, and requires 36 monthly payments of $1,496.~~$0.06 per share.

~~During the three months ended March 31, 2023, the Company accrued interest of $205 and made repayments of $5,367.~~

~~F-20~~

The Third May 2022 Loan Agreement

On May 25, 2022, the Company entered into a loan agreement (the “Third May 2022 Loan Agreement”) with a lender (the “Third May 2022 Lender”), whereby the Third May 2022 Lender issued the Company a promissory note of $27,604 (the “Third May 2022 Note”). Pursuant to the Third May 2022 Loan Agreement, the Third May 2022 Note has a flat interest fee of $3,704, for an effective interest rate of 20%. The maturity date of the Third May 2022 Note is November 23, 2022 (the “Third May 2022 Maturity Date”). The Company is required to make monthly payments of $3,067.

As of ~~March 31,~~September 30, 2023, the Loan is in default. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$2,855~~$9,409 in principal.

The Fourth May 2022 Loan Agreement

On May 26, 2022, the Company entered into a loan agreement (the “Fourth May 2022 Loan Agreement”) with a lender (the “Fourth May 2022 Lender”), whereby the Fourth May 2022 Lender issued the Company a promissory note of $45,200 (the “Fourth May 2022 Note”). Pursuant to the Fourth May 2022 Loan Agreement, the Fourth May 2022 Note has a flat interest fee of $5,200, for an effective interest rate of 17%. The maturity date of the Fourth May 2022 Note is November 23, 2022 (the “Fourth May 2022 Maturity Date”).

As of ~~March 31,~~September 30, 2023, the Loan is in default. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$1,004~~$7,577 in ~~principal.~~principal and $2,963 of interest.

~~F-21~~F-20

The Second June 2022 Loan Agreement

On June 17, 2022, the Company entered into a loan agreement (the “Second June 2022 Loan Agreement”) with a lender (the “Second June 2022 Lender”), whereby the Second June 2022 Lender issued the Company a promissory note of $104,500 (the “Second June 2022 Note”). The Note holder repaid a vendor liability of $104,500. The maturity date of the Second June 2022 Note is October 15, 2022 (the “Second June 2022 Maturity Date”).

As of ~~March 31,~~September 30, 2023, ~~this note~~the Loan is in default. During the nine months ended September 30, 2023, the Company repaid $5,000 in principal.

The First August 2022 Loan Agreement

On August 18, 2022, the Company entered into a secured loan agreement (the “First August 2022 Loan Agreement”) with a lender (the “First August 2022 Lender”), whereby the First August 2022 Lender issued the Company a secured promissory note of $193,500 AUD or $134,070 United States Dollars (the “First August 2022 Note”). Pursuant to the First August 2022 Loan Agreement, the First August 2022 Note has an effective interest rate of 14%. The maturity date of the First August 2022 Note is June 30, 2023 (the “First August 2022 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First August 2022 Loan Agreement are due. The ~~Company~~company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

As of September 30, 2023, the Loan is in default. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company accrued ~~$7,224 AUD~~$9,068 in interest.

The Second August 2022 Loan Agreement

On August 19, 2022, the Company entered into a loan agreement (the “Second August 2022 Loan Agreement”) with a lender (the “Second August 2022 Lender”), whereby the Second August 2022 Lender issued the Company a promissory note of $923,000 (the “Second August 2022 Note”). The Company received cash proceeds of $300,100 and rolled the remaining $312,400 of principal from the June 2022 Loan Agreement. Pursuant to the Second August 2022 Loan Agreement, the Second August 2022 Note has a flat interest fee of $310,500, for an effective interest rate of 167%. The maturity date of the Second August 2022 Note is January 9, 2022 (the “Second August 2022 Maturity Date”). The Company is required to make weekly payment of $46,150. The Second August 2022 Note is secured by officers of the Company.

The Company recorded a $310,500 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

As of September 30, 2023, the Loan is in default. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$295,000~~$373,500 in principal.

~~Subsequent to March 31, 2023, the Company repaid $34,500 in principal.~~

~~F-22~~

The First September 2022 Loan Agreement

On September 1, 2022, the Company entered into a loan agreement (the “First September 2022 Loan Agreement”) with a lender (the “First September 2022 Lender”), whereby the First September 2022 Lender issued the Company a promissory note of $87,884 (the “First September 2022 Note”). Pursuant to the First September 2022 Loan Agreement, the First September 2022 Note has an effective interest rate of 13%. The maturity date of the First September 2022 Note is September 1, 2023 (the “First September 2022 Maturity Date”).

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$25,798~~$59,354 in principal.

F-21

The Second September 2022 Loan Agreement

On September 22, 2022, the Company entered into a loan agreement (the “Second September 2022 Loan Agreement”) with a lender (the “Second September 2022 Lender”), whereby the Second September 2022 Lender issued the Company a promissory note of $876,000 (the “Second September 2022 Note”). The Company received cash proceeds of $272,614 and rolled the remaining $303,386 of principal from the First May 2022 Loan Agreement. Pursuant to the Second September 2022 Loan Agreement, the Second September 2022 Note has a flat interest fee of $321,637, for an effective interest rate of 100%. The maturity date of the Second September 2022 Note is May 5, 2023 (the “Second September 2022 Maturity Date”). The Company is required to make weekly payment of $27,375. The Second September 2022 Note is secured by officers of the Company. On June 23, 2023, the Company and the Second September 2022 Lender executed an agreement amending the payment terms and extending the Second September 2022 Maturity Date to December 31, 2023.

The Company recorded a $300,000 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

As of ~~March 31,~~September 30, 2023, the Loan is in default. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$105,000~~$265,000 in principal.

~~Subsequent to March 31, 2023, the Company made repayments of $42,000 towards this note.~~

The Third September 2022 Loan Agreement

On September 22, 2022, the Company entered into a loan agreement (the “Third September 2022 Loan Agreement”) with a lender (the “Third September 2022 Lender”), whereby the Third September 2022 Lender issued the Company a promissory note of $365,000 (the “Third September 2022 Note”). The Company received cash proceeds of $110,762 and rolled the remaining $129,053 of principal from the Second May 2022 Loan Agreement. Pursuant to the Third September 2022 Loan Agreement, the Third September 2022 Note has a flat interest fee of $139,524, for an effective interest rate of 143%. The maturity date of the Third September 2022 Note is May 5, 2023 (the “Second September 2022 Maturity Date”). The Company is required to make weekly payment of $13,036. The Third September 2022 Note is secured by officers of the Company. On June 9, 2023, the Company and the Third September 2022 Lender executed an agreement amending the payment terms and extending the Third September 2022 Maturity Date to October 12, 2023.

The Company recorded a $300,000 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

As of ~~March 31, 2023,~~the date of this filing, the Loan is in default. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$135,000~~$234,000 in principal.

~~Subsequent to March 31, 2023, the Company made repayments of $30,000 towards this note.~~

The November 2022 Loan Agreement

On November 15, 2022, the Company entered into a loan agreement (the “November 2022 Loan Agreement”) with a lender (the “November 2022 Lender”) whereby the November 2022 Lender issued the Company a promissory note of $80,325 (the “November 2022 Note”). Pursuant to the November 2022 Loan Agreement, the November 2022 Note has a flat interest fee of $16,975, for an effective interest rate of 21%. The maturity date of the November 2022 Note is June 3, 2023 (the “November 2022 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the November 2022 Note are due.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$33,374~~this note in ~~principal.~~full.

~~F-23~~F-22

The First February 2023 Loan Agreement

On February 13, 2023, the Company entered into a secured loan agreement (the “First February 2023 Loan Agreement”) with a lender (the “First February 2023 Lender”), whereby the First February 2023 Lender issued the Company a secured promissory note of $424,755 AUD or $321,891 United States Dollars (the “First February 2023 Note”). Pursuant to the First February 2023 Loan Agreement, the First February 2023 Note has an effective interest rate of 14%. The maturity date of the First February 2023 Note is June 30, 2023 (the “First February 2023 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First February 2023 Loan Agreement are due. The Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit. As of September 30, 2023, this note was in default.

During the nine months ended September 30, 2023, the Company accrued $15,063 in interest.

The April 2023 Loan Agreement

On April 20, 2023, the Company entered into a loan agreement (the “April 2023 Loan Agreement”) with a lender (the “April 2023 Lender”), whereby the April 2023 Lender issued the Company a promissory note of $130,000 (the “April 2023 Note”). Pursuant to the April 2023 Loan Agreement, the April 2023 Note has an effective interest rate of 18%. The maturity date of the April 2023 Note is April 26, 2023 (the “April 2023 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the April 2023 Loan Agreement are due. As of September 30, 2023, this note was in default.

As of September 30, 2023, the Loan is in default. During the nine months ended September 30, 2023, the Company accrued $2,133 in interest and repaid $84,945 in principal.

The May 2023 Loan Agreement

On May 15, 2023, the Company entered into a loan agreement (the “May 2023 Loan Agreement”) with a lender (the “May 2023 Lender”), whereby the May 2023 Lender issued the Company a promissory note of $114,872 (the “May 2023 Note”). Pursuant to the May 2023 Loan Agreement, the May 2023 Note has a flat interest fee of $12,672, for an effective interest rate of 20%. The maturity date of the May 2023 Note is November 12, 2024 (the “May 2023 Maturity Date”). The Company is required to make monthly payments of $12,764.

During the nine months ended September 30, 2023, the Company repaid $114,872 in principal.

The June 2023 Loan Agreement

On June 29, 2023, the Company entered into a loan agreement (the “June 2023 Loan Agreement”) with a lender (the “June 2023 Lender”), whereby the June 2023 Lender issued the Company a promissory note of $13,000 (the “June 2023 Note”). The maturity date of the May 2023 Note is September 30, 2023 (the “June 2023 Maturity Date”).

As of September 30, 2023, the Loan is in default. The Company recorded a $500 debt discount relating to an original issue discount. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

The First July 2023 Loan Agreement

On July 11, 2023, the Company entered into a loan agreement (the “First July 2023 Loan Agreement”) with a lender (the “First July 2023 Lender”), whereby the July 2023 Lender issued the Company a promissory note of $300,000 (the “First July 2023 Note”). The maturity date of the First July 2023 Note is July 10, 2024 (the “First July 2023 Maturity Date”).

The Company recorded a $30,000 debt discount relating to an original issue discount. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost. The Company also recorded a 10% Guaranteed Interest (equal to $30,000) deemed earned as of the issuance date. The Principal Amount and the Guaranteed Interest shall be due and payable in seven equal monthly payments (each, a “Monthly Payment”) of $47,142.85, commencing on December 11, 2023 and continuing on the 11^th day of each month thereafter (each, a “Monthly Payment Date”) until paid in full not later than July 11, 2024(the “Maturity Date”).

~~During~~

F-23

The Second July 2023 Loan Agreement

On July 24, 2023, the ~~three months ended March~~Company entered into a secured loan agreement (the “Second July 2023 Loan Agreement”) with a lender (the “Second July 2023 Lender”), whereby the Second July 2023 Lender issued the Company a secured promissory note of $175,000 AUD or $118,116 United States Dollars (the “Second July 2023 Note”). Pursuant to the Second July 2023 Loan Agreement, the Second July 2023 Note has an additional balance due in the form of an original issue discount based on the period of time the loan remained outstanding. The repayment of the Second July 2023 Note occurred on August 8, 2023 (the “Second July 2023 Repayment Date”) at which time the original principal plus 35,000 AUD or $24,440 United States Dollar was repaid.

The Third July 2023 Loan Agreement

On July 31, 2023, the Company entered into a loan agreement (the “Third July 2023 Loan Agreement”) with a lender (the “Third July 2023 Lender”), whereby the Third July 2023 Lender issued the Company a promissory note of $261,250 (the “Third July 2023 Note”). The maturity date of the Third July 2023 Note is July 10, 2024 (the “Third July 2023 Maturity Date”).

The Company recorded a $52,250 debt discount relating to an original issue discount and debt issuance costs of $9,000. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost. The Company will also accrue interest at the rate of 10% per annum on the outstanding balance of the note. The Principal Amount and the Guaranteed Interest shall be due and payable in six equal monthly payments (each, a “Monthly Payment”) of $45,416.67, commencing on November 30, 2023 and continuing on the last day of each month thereafter (each, a “Monthly Payment Date”) until paid in full not later than April 30, 2024 (the “Maturity Date”).

During the nine months ended September 30, 2023, the Company accrued ~~$7,461 AUD~~$4,295 in interest.

The August 2023 Loan Agreement

On August 23, 2023, the Company entered into a loan agreement (the “August 2023 Loan Agreement”) with a lender (the “August 2023 Lender”), whereby the August 2023 Lender issued the Company a promissory note of $137,448 (the “May 2023 Note”). Pursuant to the August 2023 Loan Agreement, the August 2023 Note has a flat interest fee of $12,948. The maturity date of the August 2023 Note is February 20, 2025 (the “August 2023 Maturity Date”). The Company is required to make a minimum payment every 60 days of $15,272.

During the nine months ended September 30, 2023, the Company repaid $13,985 in principal.

The First September 2023 Loan Agreement

On September 27, 2023, the Company entered into a loan agreement (the “First September 2023 Loan Agreement”) with a lender (the “First September 2023 Lender”), whereby the First September 2023 Lender issued the Company a promissory note of $51,750 (the “First September 2023 Note”). The maturity date of the First September 2023 Note is June 30, 2024 (the “First September 2023 Maturity Date”).

The Company recorded a $6,750 debt discount relating to an original issue discount and debt issuance costs of $5,000. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost. The Principal Amount shall be due and payable in full on the Maturity Date.

The Second September 2023 Loan Agreement

On September 28, 2023, the Company entered into a secured loan agreement (the “First September 2023 Loan Agreement”) with a lender (the “First September 2023 Lender”), whereby the First September 2023Lender issued the Company a secured promissory note of $166,905 AUD or $107,221 United States Dollars (the “First August 2022 Note”). Pursuant to the First September 2023 Loan Agreement, the First August 2022 Note has an effective interest rate of 15%. The maturity date of the First September 2023 Note is June 30, 2024 (the “First September 2023 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First September 2023 Loan Agreement will be due. The company has the option to extend the Maturity date by 60 days at an interest rate of 19%. The loan is secured by the Australian research & development credit.

During the nine months ended September 30, 2023, the Company accrued $88 in interest.

F-24

Note 6 – Convertible Notes Payable

Convertible notes payable as of ~~March 31,~~September 30, 2023 and December 31, 2022 is as follows:

Outstanding
Principal
as of Outstanding
Principal
as of Warrants granted
March 31, December 31, Interest Conversion
Maturity
Exercise
2023 2022 Rate Price Date Quantity Price
The May 2022 Convertible Loan Agreement - 50,092 11 % - (*) May-23 - -
The May 2022 Convertible Note Offering 990,000 990,000 18 % 2.00 (*) November-22 4,000,000 $ 3.00 – $6.00
The July 2022 Convertible Note Offering 2,250,000 3,750,000 18 % 0.20 (*) March-23 2,150,000 $ 3.00 – $6.00
The First October 2022 Convertible Loan Agreement 104,250 104,250 10 % - (*) September-23
The Second October 2022 Convertible Loan Agreement 252,857 300,000 10 % - (*) October-23

The Third October 2022 Convertible Loan Agreement - 866,650 10 % 0.20 (*) April-23
The December 2022 Convertible Loan Agreement 250,000 750,000 - % 0.20 (*) April-23 562,500.00 $ 0.20
The January 2023 Loan Agreement 847,500 - -% (*) June-23 - $ -
The February 2023 Loan Agreement 1,387,500 - -% (*) June-23 - $ -
The March 2023 Loan Agreement 129,250 - 10 % (*) March-24 - $ -
6,211,357 6,810,992
Less: Debt Discount (1,704,406 ) (1,426,728 )
Less: Debt Issuance Costs (9,928 ) (14,665 )
4,497,023 5,369,599

	Outstanding Principal as of			Outstanding Principal as of											Warrants granted
	September 30,			December 31,			Interest			Conversion			Maturity				Exercise
	2023			2022			Rate			Price			Date		Quantity		Price
The May 2022 Convertible Loan Agreement		-			50,092			11	%		-	(*)		May-23		-			-
The May 2022 Convertible Note Offering*		990,000			990,000			18	%		2.00	(*)		November-22		4,000,000		$	3.00 – $6.00
The July 2022 Convertible Note Offering*		2,015,447			3,750,000			18	%		0.20	(*)		March-23		2,150,000		$	3.00 – $6.00
The First October 2022 Convertible Loan Agreement		-			104,250			10	%		-	(*)		September-23
The Second October 2022 Convertible Loan Agreement		-			300,000			10	%		-	(*)		October-23
The Third October 2022 Convertible Loan Agreement		-			866,650			10	%		0.20	(*)		April-23
The December 2022 Convertible Loan Agreement**		250,000			750,000			-	%		0.20	(*)		April-23		562,500.00		$	0.20
The April 2023 Loan Agreement		109,500			-			10	%			(*)		May-24		-		$	-
The First May 2023 Loan Agreement		242,378			-			10	%	$	0.08			May-24		2,200,000		$	0.125
The Second May 2023 Loan Agreement		42,167			-			10	%			(*)		February-24		-		$	-
The June 2023 Loan Agreement		68,702			-			-	%		0.20	(*)		December-23		86,100		$	0.20
The July 2023 Loan Agreement		143,000			-			-	%		0.20	(*)		December-23		-		$	-
		6,096,192			6,810,992
Less: Debt Discount		(75,578	)		(1,426,728	)
Less: Debt Issuance Costs		(978	)		(14,665	)
		6,019,636			5,369,599

	(*)	As subject to adjustment as further outlined in the notes
*	Note: was in default as of September 30, 2023
**	Note: went into default between the balance sheet date and the date of this filing

~~F-24~~F-25

The May 2022 Convertible Loan Agreement

On May 20, 2022, the Company entered into a loan agreement (the “May 2022 Loan Agreement”) with ~~an individual~~a lender (the “May 2022 Lender”), whereby the May 2022 Lender issued the Company a promissory note of $115,163 (the “May 2022 Note”). Pursuant to the May 2022 Loan Agreement, the May 2022 Note has an interest rate of 11%. The May 2022 Note matures on the first (12^th) month anniversary of its issuance date.

~~F-25~~

Upon default the May 2022 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the ten-trading day immediately preceding the date of the respective conversion.

The Company recorded a $15,163 debt discount relating to an original issue discount The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

During the year ended December 31, 2022, the Company repaid $63,915 in principal and converted $12,783 in principal into 39,637 shares of the Company’s common stock.

On January 17, 2023, the May 2022 Lender converted $51,132 in principal into 113,601 shares of the Company’s common stock and repaid the remaining note balance.

The May 2022 Convertible Note Offering

During May of 2022, the Company conducted multiple closings of a private placement offering to accredited investors (the “May 2022 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “May 2022 Investors”) for aggregate gross proceeds of $4,000,000. The May 2022 convertible notes are convertible into shares of the Company’s common stock, par value $.001 per share at a conversion price of $2.00 per share. As additional consideration for entering in the May 2022 Convertible Note Offering, the Company issued 4,000,000 warrants of the Company’s common stock. The May 2022 Convertible Note matured on November 30, 2022.

The Company recorded a $1,895,391 debt discount relating to 4,000,000 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.

The Company recorded a $399,964 debt discount relating to an original issue discount and $125,300 of debt issuance costs related to fees paid to vendors relating to the offering. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

On September 2, 2022, the Company went into default on these notes. As part of the default terms the Company owes 110% of the principal outstanding and the notes accrue interest at a rate of 18%.

On September 15, 2022, the Company and six out of eight lenders May 2022 Investors agreed to forgive default interest and extend the maturity date to March 31, 2023, for a reduced conversion price of $0.20 for the convertible notes and warrants. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $1,083,684 as loss on extinguishment of debt due to the remaining debt discount and recognized $331,861 as a gain on extinguishment of debt due to the forgiveness of interest. The company also recognized an additional $75,610 of debt discount from the change in relative fair value on the warrants. The remaining notes are in default as of ~~March 31,~~September 30, 2023.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company accrued ~~$43,940~~$133,284 in interest.

The July 2022 Convertible Note Offering

During July of 2022, the Company conducted multiple closings of a private placement offering to accredited investors (the “July 2022 Convertible Note Offering”) of units of the Company’s securities by entering into subscription agreements with “accredited investors” (the “July 2022 Investors”) for aggregate gross proceeds of $2,150,000. The July 2022 convertible notes are convertible into shares of the Company’s common stock, par value $.001 per share at a conversion price of $2.00 per share. As additional consideration for entering in the July 2022 Convertible Note Offering, the Company issued 2,150,000 warrants of the Company’s common stock. The July 2022 Convertible Note matures on November 30, 2022.

The Company recorded a $863,792 debt discount relating to 2,150,000 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.

The Company recorded a $214,981 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

F-26

On September 2, 2022, the Company went into default on these notes. As part of the default terms the Company owes 110% of the principal outstanding and the notes accrue interest at a rate of 18%.

On September 15, 2022, the Company and the July Investors agreed to forgive default interest and extend the maturity date to March 31, 2023, for a reduced conversion price of $0.20 for the convertible notes and warrants. Since the present value of the cash flows of the new and old debt were more than 10% different, the company used extinguishment accounting. As part of the agreement the Company recognized $339,594 as loss on extinguishment of debt due to the remaining debt discount and recognized $230,162 as a gain on extinguishment of debt due to the forgiveness of interest.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$1,500,000~~$1,785,686 in principal.

As of September 30, 2023, the ~~date~~notes included in the July 2022 Convertible Note Offering are in default and Default Interest has been accrued at 18% in the amount of ~~this filing, this loan is in default.~~$334,296.

The First October 2022 Loan Agreement

On October 3, 2022, the Company entered into a loan agreement (the “First October 2022 Loan Agreement”) with a lender (the “First October 2022 Lender”), whereby the First October 2022 Lender issued the Company a promissory note of $104,250 (the “First October 2022 Note”). Pursuant to the First October 2022 Loan Agreement, the First October 2022 Note has an interest rate of 10%. The maturity date of the First October 2022 Note is September 29, 2023 (the “First October 2022 Maturity Date”).

On April 1, 2023, the First October 2022 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the ten-trading day immediately preceding the date of the respective conversion.

The Company recorded a $4,250 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

During the nine months ended September 30, 2023, the Company repaid the First October 2022 Note in full along with $36,274 of accrued interest.

The Second October 2022 Loan Agreement

On October 20, 2022, the Company entered into a loan agreement (the “Second October 2022 Loan Agreement”) with a lender (the “Second October 2022 Lender”), whereby the Second October 2022 Lender issued the Company a promissory note of $300,000 (the “Second October 2022 Note”). Pursuant to the Second October 2022 Loan Agreement, the Second October 2022 Note has an interest rate of 10%. The maturity date of the Second October 2022 Note is October 20, 2023 (the “Second October 2022 Maturity Date”).

Upon default, the Second October 2022 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to the lowest VWAP of the Company’s common stock on the twenty-trading day immediately preceding the date of the respective conversion.

The Company recorded a $45,000 debt discount relating to an original issue discount, $409,945 relating to the fair value of 815,000 shares of common stock issue to the lender, and $17,850 of debt issuance costs related to fees paid to vendors relating to the debt agreement. The debt discount and debt issuance cost are being accreted over the life of the note to accretion of debt discount and issuance cost.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company ~~made a repayment of $47,143 towards~~repaid $300,000 in principal.

Subsequent to September 30, 2023, the ~~balance of~~Company repaid the Second October 2022 ~~Note.~~Note in full along with $30,000 of accrued interest.

The Third October 2022 Loan Agreement

On October 24, 2022, the Company entered into a loan agreement (the “Third October 2022 Loan Agreement”) with a lender (the “Third October 2022 Lender”), whereby the Third October 2022 Lender issued the Company a promissory note of $1,666,650 (the “Third October 2022 Note”). Pursuant to the Third October 2022 Loan Agreement. The maturity date of the Third October 2022 Note is April 24, 2023 (the “Third October 2022 Maturity Date”).

The Third October 2022 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to $0.20.

The Company recorded a $1,833,300 debt discount relating to a $166,650 original issue discount and $1,666,650 from a beneficial conversion feature. The debt discount and debt issuance cost are being accreted over the life of the note to accretion of debt discount and issuance cost.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Third October 2022 Lender converted the remaining balance of $866,650 into 4,333,250 shares of the Company’s common stock.

F-27

The December 2022 Convertible Loan Agreement

On December 12, 2022, the Company entered into a loan agreement (the “December 2022 Loan Agreement”) with a lender (the “December 2022 Lender”), whereby the December 2022 Lender issued the Company a promissory note of $750,000 (the “December 2022 Note”). Pursuant to the December 2022 Loan Agreement. The maturity date of the Third October 2022 Note is April 24, 2023 (the “Third October 2022 Maturity Date”).

The Second October 2022 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to $0.20.

The Company recorded a $241,773 debt discount relating to 562,500 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance and $508,227 relating to the beneficial conversion feature. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

During the ~~three~~nine months ended ~~in March 31,~~September 30, 2023, the December 2022 Lender converted $500,000 into 2,500,000 shares of the Company’s common ~~stock.~~stock and accrued $7,397 of interest.

As of the date of this filing, this note is in default.

The January 2023 Loan Agreement

On January 13, 2023, the Company entered into a loan agreement (the “January 2023 Loan Agreement”) with a lender (the ~~“TJanuary~~“January 2023 Lender”), whereby the January 2023 Lender issued the Company a promissory note of $847,500 (the “January 2023 Note”)~~.The~~. The maturity date of the January 2023 Note is June 13, 2023 (the “January 2023 Maturity Date”).

The January 2023 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to $0.20.

The Company recorded a $847,500 debt discount relating to a $97,500 original issue discount and $750,000 from a beneficial conversion feature. The debt discount and debt issuance cost are being accreted over the life of the note to accretion of debt discount and issuance cost. As of September 30, 2023, the Company has accrued $25,077 of interest.

As of the date of this filing, this note is in default.

The February 2023 Loan Agreement

On February 1, 2023, the Company entered into a loan agreement (the “February 2023 Loan Agreement”) with a lender (the “February 2023 Lender”), whereby the February 2023 Lender issued the Company a promissory note of $1,387,500 (the “February 2023 Note”). The maturity date of the February 2023 Note is June 13, 2023 (the “February 2023 Maturity Date”).

The Third October 2022 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to $0.20.

The Company recorded a $1,387,500 debt discount relating to a $137,500 original issue discount and $1,250,000 from a beneficial conversion feature. The debt discount and debt issuance cost are being accreted over the life of the note to accretion of debt discount and issuance cost. As of September 30, 2023, the Company has accrued $41,055 of interest.

As of the date of this filing, this note is in default.

The March 2023 Loan Agreement

On March 31, 2023, the Company entered into a loan agreement (the “March 2023 Loan Agreement”) with a lender (the “March 2023 Lender”), whereby the March 2023 Lender issued the Company a promissory note of $129,250 (the “March 2023 Note”). Pursuant to the March 2023 Loan Agreement, the March 2023 Note has an interest rate of 10%. The maturity date of the March 2023 Note is March 31, 2024 (the “March 2023 Maturity Date”).

F-28

On October 1, 2023, the March 2023 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to ~~75%~~65% of the average of the lowest three trading prices of the Company’s common stock on the ten-trading day immediately preceding the date of the respective conversion.

The Company recorded a $4,250 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

Subsequent to September 30, 2023, the Company repaid the March 2023 Note in full along with $38,302 of accrued interest.

The April 2023 Loan Agreement

On April 24, 2023, the Company entered into a loan agreement (the “April 2023 Loan Agreement”) with a lender (the “April 2023 Lender”), whereby the April 2023 Lender issued the Company a promissory note of $109,250 (the “April 2023 Note”). Pursuant to the April 2023 Loan Agreement, the April 2023 Note has an interest rate of 10%. The maturity date of the April 2023 Note is April 24, 2024 (the “April 2023 Maturity Date”).

On October 21, 2023, the April 2023 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 65% of the lowest trading price of the Company’s common stock on the ten-trading day immediately preceding the date of the respective conversion.

The Company recorded a $9,500 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost. During the nine months ended September 30, 2023, the Company accreted $2,388 of debt discount expense and accrued $8,052 in interest.

The First May 2023 Loan Agreement

On May 16, 2023, the Company entered into a loan agreement (the “First May 2023 Loan Agreement”) with a lender (the “First May 2023 Lender”), whereby the First May 2023 Lender issued the Company a promissory note of $275,000 (the “First May 2023 Note”). Pursuant to the First May 2023 Loan Agreement, the First May 2023 Note has an interest rate of 10%. The maturity date of the First May 2023 Note is May 16, 2024 (the “First May 2023 Maturity Date”). As additional consideration for entering in the First May 2022 Loan Agreement, the Company issued 2,200,000 warrants of the Company’s common stock and 375,000 restricted shares of the Company’s common stock.

The First May 2023 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) at a price of $0.075 per share.

The Company recorded a $60,000 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

~~F-28~~F-29

The Second May 2023 Loan Agreement

On May 24, 2023, the Company entered into a loan agreement (the “Second May 2023 Loan Agreement”) with a lender (the “Second May 2023 Lender”), whereby the Second May 2023 Lender issued the Company a promissory note of $86,250 (the “Second May 2023 Note”). Pursuant to the Second May 2023 Loan Agreement, the Second May 2023 Note has an interest rate of 10%. The maturity date of the Second May 2023 Note is February 28, 2024 (the “Second May 2023 Maturity Date”). Beginning June 30, 2023, the Company is required to make 9 monthly payments of $11,021.

At any time following an event of default, the Second May 2023 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 61% of the lowest trading price of the Company’s common stock in the twenty-trading day immediately preceding the date of the respective conversion.

The Company recorded a $16,250 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

The June 2023 Loan Agreement

On June 23, 2023, the Company entered into a loan agreement (the “June 2023 Loan Agreement”) with Jeremy Frommer, the Company’s CEO, whereby the Mr. Frommer issued the Company a promissory note of $86,100 (the “June 2023 Note”). Pursuant to the June 2023 Loan Agreement, the June 2023 Note has an effective interest rate of 18%. The maturity date of the June 2023 Note is December 23, 2023 (the “June 2023 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the June 2023 Loan Agreement are due. The June 2023 Note is convertible into the Company’s common stock at a price of $0.20 per share.

During the nine months ended September 30, 2023, the Company accrued and paid $6,283 of interest.

The July 2023 Loan Agreement

On July 27, 2023, the Company entered into a loan agreement (the “July 2023 Loan Agreement”) with a lender (the “July 2023 Lender”), whereby the July 2023 Lender issued the Company a promissory note of $143,000 (the “July 2023 Note”). Pursuant to the July 2023 Loan Agreement, the July 2023 Note has an interest rate of 10%. The maturity date of the July 2023 Note is July 27, 2024 (the “July 2023 Maturity Date”).

On October 21, 2023, the July 2023 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 65% of the lowest trading price of the Company’s common stock on the ten-trading day immediately preceding the date of the respective conversion.

The Company recorded a $3,000 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost. During the nine months ended September 30, 2023, the Company accreted $537 of debt discount expense and accrued $2,547 in interest.

F-30

Note 7 – Related Party

Officer compensation

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, the Company paid ~~$47,701~~$88,973 and ~~$20,082,~~$87,275, respectively for living expenses for officers of the Company.

Related Party Notes Payable

On June 23, 2023, the Company entered into a loan agreement (the “June 2023 Loan Agreement”) with Jeremy Frommer, the Company’s CEO, whereby Mr. Frommer issued the Company a promissory note of $88,100 (the “June 2023 Note”). Pursuant to the June 2023 Loan Agreement, the June 2023 Note has an effective interest rate of 18%. The maturity date of the June 2023 Note is December 23, 2023 (the “June 2023 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the June 2023 Loan Agreement are due. The June 2023 Note is convertible into the Company’s common stock at a price of $0.20 per share.

Note 8 – Derivative Liabilities

The Company has identified derivative instruments arising from a make-whole feature in the Company’s outstanding Equity Line of Credit at ~~March 31,~~September 30, 2023.

The Company utilized a Monte Carlo simulation 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 simulation included a stock price on valuation date, the term of the make-whole feature, 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.

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 Monte Carlo simulation 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 life of the make-whole feature.

The following are the changes in the derivative liabilities during the ~~three~~nine months ended ~~March 31,~~September 30, 2023:

	~~Three~~	Nine Months Ended ~~March 31,~~ September 30, 2023
		Level 1		Level 2		Level 3
Derivative liabilities as January 1, 2023	$	-	$	-	$	-
Addition		-		-		~~58,970~~123,649
Changes in fair value		-		-		-
Extinguishment		-		-		-(72,114	)
Derivative liabilities as ~~March 31,~~September 30, 2023		-		-		~~58,970~~51,535

~~F-29~~F-31

Note 9 – Stockholders’ Equity

Shares Authorized

The Company is authorized to issue up to one billion, five hundred and twenty million (1,520,000,000) shares of capital stock, of which one billion five hundred million (1,500,000,000) shares are designated as common stock, par value $0.001 per share, and twenty million (20,000,000) are designated as preferred stock, par value $0.001 per share.

Common Stock

On January 25, 2023, the Company entered into a securities purchase agreement with an investor resulting in gross proceeds of $750,000 to the Company. Pursuant to the terms of the purchase agreement, the Company agreed to sell an aggregate of 1,562,500 shares of the Company’s common stock, par value $0.001 per share, at a purchase price of $0.48 per Share.

On February 8, 2023, in recognition of certain employees having accepted reduced salaries beginning August 22, 2023, the Company issued equity awards totaling 29,170,653 shares to officers and the employees of the Company. The fair value of these issuances is $6,797,648.

On February 14, 2023, the Company issued 10,417 shares of its restricted common stock to consultants in exchange for services at a fair value of $5,000.

~~F-30~~

On February 28, 2023, the Company issued 1,250,000 shares of its restricted common stock to consultants in exchange for ~~six~~nine months of services at a fair value of $213,750. The shares issued to the consultant were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments.

On March 13, 2023, the Company sold 1,500,000 shares of its common stock pursuant to the Investment Agreement entered into on the October 20, 2022, between the Company and Coventry for gross proceeds of $300,000 to the Company.

On March 14, 2023, the Company issued 44,248 shares of its restricted common stock to consultants in exchange for services at a fair value of $5,000.

On March 27, 2023, the Company issued 1,892,780 shares of its restricted common stock to consultants in exchange for services at a fair value of $246,061.

On April 26, 2023, the Company issued 100,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $11,400.

On May 3, 2023, the Company sold 1,409,841 shares of its common stock pursuant to the Investment Agreement entered into on the October 20, 2022, between the Company and Coventry Enterprises for gross proceeds of $100,000 to the Company. Additionally, the Company issued 2,729,522 shares of its common stock to Coventry Enterprises at a fair value of $240,198 as a result of triggering the make-whole feature in the Company’s outstanding Equity Line of Credit.

On May 16, 2023, the Company issued 375,000 shares of its restricted common stock at a fair value of $26,250 to the First May 2023 Lender as additional consideration for entering into the First May 2023 Loan Agreement.

On May 30, 2023, the Company issued 569,300 shares of its restricted common stock at a fair value of $34,158 in exchange for the conversion of the remaining Denver Bodega LLC Note Payable.

On May 30, 2023, the Company issued 491,133 shares of its restricted common stock at a fair value of $297,401 in exchange for the remaining equity interest in Dune Inc.

On May 31, 2023, the Company issued 100,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $5,700.

On June 20, 2023, the Company sold 1,382,744 shares of its common stock pursuant to the Investment Agreement entered into on the October 20, 2022, between the Company and Coventry Enterprises for gross proceeds of $69,137 to the Company. Additionally, the Company issued 1,177,839 shares of its common stock to Coventry Enterprises at a fair value of $50,649 in consideration for an extension on mandatory monthly payments due under the Second October 2022 Loan Agreement.

On June 20, 2023, the Company issued equity awards totaling 6,235,360 shares to officers and the employees of the Company at a fair value of $268,120.

On June 29, 2023, the Company issued 1,150,000 shares of its common stock to consultants in exchange for services at a fair value of $296,720.

On June 30, 2023, the Company issued 200,000 shares of its restricted common stock at a fair value of $244,428 in exchange for the remaining equity interest in Plant Camp LLC.

On July 10, 2023, the Company issued 9,240,010 shares of common stock pursuant to the exercise of warrants for gross proceeds of $231,000.

On July 11, 2023, the Company issued 2,250,000 shares of its restricted common stock at a fair value of $164,250 as commitment shares pursuant to a promissory note.

F-32

On July 28, 2023, the Company issued 1,093,750 shares of its restricted common stock at a fair value of $44,844 in exchange for 18% membership interest in Orbit Media LLC.

On July 31, 2023, the Company issued 2,000,000 shares of its restricted common stock at a fair value of $84,000 as commitment shares pursuant to a promissory note.

On August 28, 2023, the Company issued 5,523,459 shares of its common stock pursuant to a conversion of $138,086 in convertible promissory notes at a price of $0.025 per share.

On September 5, 2023, the Company issued 2,101,870 shares of its restricted common stock to consultants in exchange for services at a fair value of $71,464.

On September 8, 2023, the Company issued 1,000,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $30,000.

On September 14, 2023, the Company issued 2,750,000 shares of its restricted common stock to consultants in exchange for services at a fair value of $52,250.

On September 5, 2023, the Company sold 4,127,742 shares of its common stock pursuant to the Investment Agreement entered into on the October 20, 2022, between the Company and Coventry Enterprises for gross proceeds of $97,142 to the Company.

On September 18, 2023, the Company issued 3,858,724 shares of its common stock pursuant to a conversion of $96,468 in convertible promissory notes at a price of $0.025 per share.

On September 26, 2023, the Company issued 625,000 shares of its restricted common stock at a fair value of $13,125 pursuant to an extension for a monthly payment on a promissory note.

Stock Options

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

Options
Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Life
(in years)

Balance – January 1, 2023 – outstanding 4,408,267 4.05 4.29
Granted - - -
Exercised - - -
Forfeited/Cancelled (16,667 ) 14.10 -
Balance – March 31, 2023 – outstanding 4,391,600 4.01 4.05
Balance – March 31, 2023 – exercisable 3,756,600 4.42 4.03

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Balance – January 1, 2023 – outstanding		4,398,603		4.01		3.80
Granted		68,000,000		1.44		-
Exercised		-		-		-
Forfeited/Cancelled		-		-		-
Balance – September 30, 2023 – outstanding		72,398,603		1.30		3.83
Balance – September 30, 2023 – exercisable		63,279,603		4.99		3.67

Option Outstanding

Option Exercisable

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)

Exercise price

Number

Outstanding

Weighted

Average

Remaining

Contractual

Life (in years)

Weighted
Average

Exercise Price

Number

Exercisable

Weighted

Average

Remaining

Contractual

Life (in years)

4.01

4,391,600

4.05

4.42

3,756,600

4.03

1.30

72,398,603

3.83

4.99

63,279,603

3.67

Stock-based compensation for stock options has been recorded in the consolidated statements of operations and totaled ~~$237,522~~$8,283,267 for the ~~three~~nine months ended ~~March 31,~~September 30, 2023.

As of ~~March 31,~~September 30, 2023, there was $0 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans.

~~F-31~~F-33

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

	Warrant			Weighted Average Exercise Price			Warrant			Weighted Average Exercise Price
Balance – January 1, 2023 – outstanding		16,261,770			2.79			16,261,701			2.94
Granted		28,119,616			0.77			293,194,132			0.72
Exercised		(3,769,059	)		(0.20	)		(13,009,059	)		(0.03	)
Forfeited/Cancelled		(37,643	)		16.00			(323,980	)		(4.31	)
Balance – March 31, 2023 – outstanding		40,574,614			0.80
Balance – March 31, 2023 – exercisable		40,574,614		$	0.80
Balance – September 30, 2023 – outstanding								296,122,794			0.11
Balance – September 30, 2023 – exercisable								296,122,794		$	0.11

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

$ 1.27 40,574,614 4.51 1.27 40,574,614 4.51

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

0.11

296,122,794

4.32

0.11

296,122,794

0.11

During the three months ended March 31, 2023, the Company issued 3,767,925 shares of common stock to warrant holders upon the exercise of 3,767,925 warrants. The Company received $753,693 in connection with the exercise of the warrants.

During the three months ended March 31, 2023, the company granted warrant holders 3,767,925 warrants to exercise existing warrants. A deemed dividend of $1,625,044 was recorded to the Statements of Operations and Comprehensive Loss.

During the three months ended March 31, 2023, some of the Company’s warrants had a down-round provision triggered that also resulted in an additional 18,837,979 warrants to be issued. A deemed dividend of $3,661,981 was recorded to the Statements of Comprehensive Loss.

During the three months ended June 30, 2023, a total of 2,936,100 warrants were issued with convertible notes and notes payable. The warrants have a grant date fair value of $190,935 using a Black-Scholes option-pricing model and the above assumptions.

During the three months ended June 30, 2023, some of the Company’s warrants had a down-round provision triggered that also resulted in an additional 88,318,466 warrants to be issued. A deemed dividend of $5,745,484 was recorded to the Statements of Comprehensive Loss.

During the three months ended September 30, 2023, a total of 25,011,250 warrants were issued with convertible notes and notes payable. The warrants have a grant date fair value of $723,250 using a Black-Scholes option-pricing model and the above assumptions.

During the three months ended September 30, 2023, some of the Company’s warrants had a down-round provision triggered that also resulted in an additional 109,617,955 warrants to be issued. A deemed dividend of $8,497,035 was recorded to the Statements of Comprehensive Loss.

Note 10 – Commitments and Contingencies

Litigation

Skube v. WHE Agency Inc., et al

A complaint against WHE, Creatd and Jeremy Frommer filed December 22, 2022, was filed in the Supreme Court of the State of New York, New York County, by Jessica Skube, making certain claims alleging conversion, trespass to chattel, unjust enrichment, breach of contract, fraud in the inducement, seeking damages of $161,000 and punitive damages of $500,000. Skube filed an Order to Show Cause, which the Company opposed, which ~~is currently pending.~~was denied. Given the premature nature of this case, it is still too early for the Company to make an assessment as to liability.

Lind Global v. Creatd, Inc.

A complaint against Creatd dated September 21, 2022, has been filed in the Supreme Court of the State of New York, New York County, by Lind Global Macro Fund LP and Lind Global Fund II LP, making certain claims alleging breach of contract related to two Securities Purchase Agreements executed on May 31, 2022, seeking damages in excess of $920,000. The Company filed a Motion to Dismiss, which ~~is currently pending.~~was denied. The Company then submitted an Answer. Given the premature nature of this case, it is still too early for the Company to make an assessment as to liability.

~~F-32~~F-34

Laurie Weisberg v. Creatd, Inc.

A confession of judgment against Creatd dated September 2, 2022, has been filed in the Supreme Court of the State of New York, New York County, by Laurie Weisberg, seeking to enforce payment of approximately $415,000 under an executive separation agreement also dated September 2, 2022. Ms. Weisberg also seeks payment of legal fees amounting to approximately $5,000. The Company and Ms. Weisberg are actively negotiating in an attempt to resolve the dispute. The Company does not expect the liability to exceed $420,000.

The Company has recorded approximately $415,000 in accrued expenses related to this dispute.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA includes a 15% Corporate Alternative Minimum Tax (“Corporate AMT”) for tax years beginning after December 31, 2022. We do not expect the Corporate AMT to have a material impact on our consolidated financial statements. Additionally, the IRA imposes a 1% excise tax on net repurchases of stock by certain publicly traded corporations. The excise tax is imposed on the value of the net stock repurchased or treated as repurchased. The new law will apply to stock repurchases occurring after December 31, 2022.

Lease Agreements

The Company currently does not own any properties. Our corporate headquarters consists of a total of 8,000 square feet and is located at 419 Lafayette Street, ^6th Floor, New York, NY, 10003. The current lease term is 7 years commencing May 1, 2022. The total amount ~~due~~remaining under this lease is ~~$3,502,033.~~$2,977,483.

On April 19, 2022, the Company signed a 2-year lease for approximately 2,252 square feet of office space at 1 Westmount Square, Westmount, Qc H3Z2P9. Commencement date of the lease is July 1, 2022. The total amount due under this lease is $72,064. During the year ended December 31, 2022, it was decided the company would not be using the office space and recorded an impairment of $63,472 on the right-of-use asset. As of March 31, 2023, the company was in breach of this lease agreement and subsequently reached a settlement agreement to terminate the lease.

On July 28, 2022, the Company signed a 3-year lease for approximately 1,364 square feet of office space at 1674 Meridian Ave., Miami Beach, FL, 33131. Commencement date of the lease is July 28, 2022. The total amount due under this lease is $181,299. During the year ended December 31, 2022, it was decided the company would not be using the office space and recorded an impairment of $101,623 on the right-of-use asset. As of March 31, 2023, the company is in breach of this lease agreement.

On September 9, 2021, the Company signed a 1-year lease for approximately 3,200 square feet at 648 Broadway, Suite 200, New York, NY 10012. Monthly rent under the lease was $12,955 for the leasing period. As of March 31, 2023, the company is in breach of this lease agreement.

~~The components of lease expense were as follows:~~

Three Months
Ended
March 31,
2023

Operating lease cost $ 537,253
Short term lease cost 536
Total net lease cost $ 537,632

~~F-33~~

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

	Three Months Ended March 31, 2023
~~Cash paid for amounts included in the measurement of lease liabilities:~~
~~Operating lease payments~~		~~323,292~~
~~Weighted average remaining lease term (in years):~~		~~5.99~~
~~Weighted average discount rate:~~		~~12.5~~	%

~~Total future minimum payments required under the lease as of March 31 are as follows:~~

For the Twelve Months Ended March 31, Operating
Leases
2023 $ 498,552
2024 532,689
2025 517,231
2026 532,424
2027 548,073
Thereafter 754,064
Total lease payments 3,383,033
Less: Amounts representing interest (1,076,702 )
Total lease obligations 2,306,331
Less: Current (287,542 )
$ 2,018,789

~~Rent expense for the three months ended March 31, 2023, was $70,557.~~

Market price risk of crypto (“digital”) assets

The Company holds crypto and digital assets in third-party wallets. Crypto asset price risk could adversely affect its operating results and will depend upon the market price of Bitcoin, ETH, as well as other crypto assets. Crypto asset prices have fluctuated significantly from quarter to quarter. There is no assurance that crypto asset prices will reflect historical trends. A decline in the market price of Bitcoin, ETH, and Other crypto assets could have an adverse effect on our earnings, the carrying value of the crypto assets, and future cash flows. This may also affect the liquidity and the ability to meet our ongoing obligations.

Nasdaq Notice of Delisting

On September 2, 2022, the Company received a letter from the staff of The Nasdaq Capital Market notifying the Company that the Nasdaq Hearings Panel has determined to delist the Company’s common stock from the Exchange, based on the Company’s failure to comply with the listing requirements of Nasdaq Rule 5550(b)(1) as a result of the Company’s shareholder equity deficit for the period ended June 30, 2022, as demonstrated in Company’s Quarterly Report on Form 10-Q filed on August 15, 2022, following the Company having not complied with the market value of listed securities requirement in Nasdaq Rule 5550(b)(2) on March 1, 2022, while the Company was under a Panel Monitor, as had been previously disclosed. Suspension of trading in the Company’s shares on the Exchange became effective at the opening of business on September 7, 2022, at which time the Company’s common stock, under the symbol “CRTD,” and publicly-traded warrants, under the symbol “CRTDW,” was quoted on the OTCPink marketplace operated by OTC Markets Group Inc.

F-35

Following passage of the proscribed 15-day time period for appeal as stated in the Letter, on October 26, 2022, Nasdaq completed the delisting by filing a Form 25 Notification of Delisting with the Securities and Exchange Commission.

The Company’s common stock, under the symbol “CRTD,” is quoted on the OTCQB marketplace operated by OTC Markets Group Inc. effective as of September 26, 2022. Effective April 4, 2023, our symbol changed to “VOCL.” The Company’s publicly-traded warrants, under the symbol “CRTDW,” are quoted on the OTCPink marketplace operated by OTC Markets Group Inc.

~~F-34~~

Employment Agreements

On April 5, 2022, upon the recommendation of the Compensation Committee of the Board, the Board approved employment agreements with, and equity issuances for, (i) Jeremy Frommer, Executive Chairman, who will receive (a) an signing award of $80,000, (b) an annual salary of $420,000; (c) 121,000 options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock; (ii) Laurie Weisberg, Chief Executive Officer, who will receive (a) an annual salary of $475,000; (b) 121,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; (iii) Justin Maury, Chief Operating Officer & President, who will receive (a) an annual salary of $475,000 (b) 81,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; and (iv) Chelsea Pullano, Chief Financial Officer, who will receive (a) an annual salary of $250,000; (b) 37,000 options, to vest immediately with a strike price of $1.75, and (c) 35,000 shares of the Company’s restricted common stock (collectively, the “Executive Employment Arrangements”).

Pursuant to the Executive Employment Arrangements, the Company entered into executive employment agreements with each of the respective executives as of April 5, 2022 (the “Executive Employment Agreements”). The Executive Employment Agreements contain customary terms, conditions and rights.

Executive Separation Agreement

On September 2, 2022, the Company entered into an Executive Separation Agreement with Laurie Weisberg the Company’s Chief Executive Officer and member of the Board of Directors setting forth the terms and conditions related to the Executive’s resignation for good reason as Chief Executive Officer, Director and any other positions held with the Company or any subsidiary.

The Company will pay severance in the aggregate amount of $475,000, payable as follows: (i) 1/24 will be paid on each of September 15, 2022, October 1, 2022 and November 1, 2022, respectively; (ii) 1/8 will be paid on each of December 1, 2022, January 1, 2023 and February 1, 2023, respectively; (iii) 1/¼4 will be paid on April 1, 2023; and (iv) the balance will be paid on May 1, 2023. The Company has executed and delivered a Confession of Judgment concerning the severance amount, which is being held in escrow pending satisfaction of payment.

Additionally, all unvested and/or outstanding stock options held by Ms. Weisberg as of the date of the separation agreement that are not subject to metric based vesting shall automatically and fully vest. All unvested and/or outstanding stock options held by Ms. Weisberg as of the date of the separation agreement that are subject to metric based vesting shall vest in accordance with their respective original terms.

~~F-35~~F-36

Note 11 – Acquisitions

~~Denver Bodega, LLC d/b/a Basis~~

On March 7, 2022, the Company entered into a Membership Interest Purchase (the “Agreement”) with Henry Springer and Kyle Nowak (collectively the “Sellers”), whereby the Company purchased a majority stake in Denver Bodega, LLC, a Colorado limited liability company whose product is Basis, a direct-to-consumer functional beverage brand that makes high-electrolyte mixes meant to aid hydration. Pursuant to the Agreement, Creatd acquired all of the issued and outstanding membership interests of Denver Bodega, LLC for consideration of one dollar ($1.00), as well as the Company’s payoff, assumption, or satisfaction of certain debts and liabilities.

The following sets forth the components of the purchase price:

Purchase price:
Cash paid to seller	$	1
Total purchase price		1

Assets acquired:
Cash		44,977
Accounts Receivable		2,676
Inventory		194,365
Total assets acquired		242,018

Liabilities assumed:
Accounts payable and accrued expenses		127,116
Notes payable		293,888
Total liabilities assumed		421,004

Net liabilities acquired		(178,986	)

Excess purchase price	$	178,987

The following table provides a summary of the preliminary allocation of the excess purchase price.

Goodwill	$	12,691
Trade Names & Trademarks		19,970
Know-How and Intellectual Property		107,633
Customer Relationships		38,693
Excess purchase price	$	178,987

The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

~~Orbit Media, LLC~~

On August 1, 2022 the Company entered into a Membership Interest Purchase (the “Agreement”) with Zachary Shenkman, Wuseok Jung, Wesley Petry, Nicholas Scibilia, Gary Rettig, Brandon Fallin (collectively the “Sellers”), whereby the Company purchased a majority stake in Orbit Media LLC, a New York limited liability company whose product is an app-based stock trading platform designed to empower a new generation of investors, providing users with a like-minded community as well as access to tools, content, and other resources to learn, train, and excel in the financial markets. Pursuant to the Agreement, Creatd acquired fifty one percent (51%) of the issued and outstanding membership interests of Orbit Media LLC for consideration of forty-four thousand dollars ($44,000) in cash and 57,576 shares of the Company’s Common Stock. This transaction was considered to be an acquisition of in-process research and development with no alternative future use. Orbit Media, LLC is part of the Company’s consolidated subsidiaries as of December 31, 2022.

~~F-36~~F-37

~~Brave Foods, LLC~~

On September 13, 2022, the Company acquired 100% of the membership interests of Brave Foods, LLC, a Maine limited liability company for $150,000. Brave is a plant-based food company that provides convenient and healthy breakfast food products.

The following sets forth the components of the purchase price:

Purchase price:
Cash paid to seller	$	150,000
Total purchase price		150,000

Assets acquired:
Cash		73,344
Inventory		46,375
Total assets acquired		119,719

Liabilities assumed:
Accounts payable and accrued expenses		1,316
Notes payable		75,000
Total liabilities assumed		76,316

Net assets acquired		43,403
Excess purchase price	$	106,596

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. It is likely that all intangible assets will be reallocated during the measurement period. The following table provides a summary of the allocation of the excess purchase price.

Goodwill	$	46,460
Trade Names & Trademarks		16,705
Know-How and Intellectual Property		16,704
Website		16,704
Customer Relationships		10,023
Excess purchase price	$	106,596

The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition.

~~F-37~~F-38

Note 12 – Segment Information

We operate in ~~three~~four reportable segments: Creatd Labs, Creatd Ventures, and Creatd ~~Partners.~~Partners are our three main operating segments. Our fourth segment, Creatd Studios, has high quality capabilities in place for future growth but is not current an operating segment of focus. Our segments were determined based on the economic characteristics of our products and services, our internal organizational structure, the manner in which our operations are managed and the criteria used by our Chief Operating Decision Maker (CODM) to evaluate performance, which is generally the segment’s operating losses.

Operations of:		Products and services provided:
Creatd Labs		Creatd Labs is the segment focused on development initiatives. Creatd Labs houses the Company’s proprietary technology, including its flagship platform, Vocal, as well as oversees the Company’s content creation framework, and management of its digital communities. Creatd Labs derives revenues from Vocal creator subscriptions, platform processing fees and technology licensing fees.

Creatd Ventures		Creatd Ventures builds, develops, and scales e-commerce brands. This segment generates revenues through product sales of its two majority-owned direct-to-consumer brands, Camp and Dune Glow Remedy.
Creatd Partners		Creatd Partners fosters relationships between brands and creators through its suite of agency services, including content marketing (Vocal for Brands), performance marketing (Seller’s Choice), and influencer marketing (WHE Agency). Creatd Partners derives revenues in the form of brand fees and talent management commissions.

The following tables present certain financial information related to our reportable segments and Corporate:

As of March 31, 2023
Creatd Labs Creatd Ventures Creatd Studios Creatd Partners Corporate Total

Accounts receivable, net $ - $ 4,972 $ - $ 239,381 $ - $ 244,353
Prepaid expenses and other current assets 25,575 - - - 248,506 274,080
Deposits and other assets 915,279 - - - 137,675 1,052,954
Intangible assets - 217,176 14,108 - - 231,283
Goodwill - 46,460 - - - 46,460
Inventory 16,374 198,633 41,250 - - 256,257
All other assets - - - - 2,369,947 2,369,948
Total Assets $ 957,228 $ 467,241 $ 55,358 $ 239,381 $ 2,756,128 $ 4,475,336

Accounts payable and accrued liabilities $ 2,019 $ 1,514,866 $ 22,750 $ 433,409 $ 9,136,296 $ 11,109,340
Note payable, net of debt discount and issuance costs 474,496 139,770 - - 988,355 1,602,621
Deferred revenue 253,348 - - - - 253,348
All other Liabilities - - - - 6,862,324 6,862,324
Total Liabilities $ 729,863 $ 1,654,636 $ 22,750 $ 433,409 $ 16,986,975 $ 19,827,633

Balance Sheet

As of September 30, 2023

	Creatd Labs		Creatd Ventures		Creatd Studios		Creatd Partners		Corporate		Total

Accounts receivable, net		35,104		-		-		-		-		35,104
Prepaid expenses and other current assets		115,164		-		-		-		94,244		209,408
Deposits and other assets		138,344		-		-		-		160,159		298,503
Intangible assets		-		183,229		-		-		-		183,229
Goodwill		-		46,460		-		-		-		46,460
Inventory		16,374		96,024		-		-		-		112,398
All other assets		-		772		269		-		2,005,857		2,006,898
Total Assets		304,986		326,485		269		-		2,260,260		2,892,000

Accounts payable and accrued liabilities		1,490,249		1,774,135		10,929		394,619		9,771,030		13,440,962
Note payable, net of debt discount and issuance costs		218,747		72,507		-		-		7,316,333		7,607,587
Deferred revenue		342,609		-		-		-		-		342,609
All other Liabilities		11,000		-		-		-		2,210,543		2,221,543
Total Liabilities		2,062,605		1,846,642		10,929		394,619		19,297,906		23,612,701

Balance Sheet

As of December 31, 2022

	Creatd		Creatd		Creatd		Creatd
	Labs		Ventures		Studios		Partners		Corporate		Total

Accounts receivable, net		-		11,217		-		228,206		-		239,423
Prepaid expenses and other current assets		23,712		40,681		-		-		64,154		128,547
Deposits and other assets		629,955		2,600		-		-		164,676		797,231
Intangible assets		-		207,301		-		-		22,783		230,084
Goodwill				46,460		-		-		-		46,460
Inventory		30,125		374,845		-		-		-		404,970
All other assets		-		-		-		-		2,973,034		2,973,034
Total Assets		683,792		683,104		-		228,206		3,224,647		4,819,749

Accounts payable and accrued liabilities		8,495		1,635,298		-		509,931		5,411,996		7,565,720
Note payable, net of debt discount and issuance costs		130,615		184,160		-		-		6,700,504		7,015,279
Deferred revenue		275,017		-		-		24,392		-		299,409
All other Liabilities		-		-		-		-		2,442,540		2,442,540
Total Liabilities		414,127		1,819,458		-		534,323		14,555,040		17,322,948

~~F-38~~F-39

As of December 31, 2022
Creatd
Labs Creatd
Ventures Creatd
Studios Creatd
Partners Corporate Total

Accounts receivable, net $ - $ 11,217 $ - $ 228,206 $ - $ 239,423
Prepaid expenses and other current assets 23,712 40,681 - - 64,154 128,547
Deposits and other assets 629,955 2,600 - - 164,676 797,231
Intangible assets - 207,301 - - 22,783 230,084
Goodwill 30,125 46,460 - - - 76,585
Inventory - 374,845 - - - 374,845
All other assets - - - - 2,973,034 2,973,034
Total Assets $ 683,792 $ 683,104 $ - $ 228,206 $ 3,224,647 $ 4,819,749

Accounts payable and accrued liabilities $ 8,495 $ 1,635,298 $ - $ 509,931 $ 5,411,996 $ 7,565,720
Note payable, net of debt discount and issuance costs 130,615 184,160 - - 1,368,919 1,683,694
Deferred revenue 275,017 - - 24,392 - 299,409
All other Liabilities - - - - 7,774,125 7,774,125
Total Liabilities $ 414,127 $ 1,819,458 $ - $ 534,323 $ 14,555,040 $ 17,322,948

Income Statement

For the three months ended September 30, 2023

	For the three months ended March 31, 2023																		Creatd			Creatd			Creatd			Creatd
	Creatd Labs			Creatd Ventures			Creatd Studios			Creatd Partners			Corporate			Total			Labs			Ventures			Studios			Partners			Corporate			Total

Net revenue	$	299,195		$	410,894		$	28,869		$	247,187		$	-		$	986,145		$	243,397		$	39,014		$	115		$	155,329		$	-		$	437,855
Cost of revenue		232,098			703,253			2,500			74,836			-			1,012,687		$	230,247		$	97,167		$	-		$	32,286		$	-		$	359,700
Gross margin		67,097			(292,359	)		26,369			172,351			-			(26,542	)	$	13,150		$	(58,153	)	$	115		$	123,043		$	-		$	78,155

Compensation		787,259			134,050			41,538			2,638			3,149,038			4,114,523		$	209,911		$	58,764		$	24,080		$	15,102		$	33,482		$	341,338
Research and development		131,626			-			-			-			-			131,626		$	543,161		$	-		$	-		$	-		$	-		$	543,161
Marketing		532,065			3,456			-			-			-			535,521		$	61,898		$	-		$	-		$	-		$	-		$	61,898
Stock based compensation		1,685,450			1,538,889			-			1,685,450			2,418,255			7,328,044		$	244,458		$	68,435		$	28,043		$	17,587		$	38,993		$	397,516
General and administrative		173,831			77,133			41,223			78,761			1,165,610			1,536,558		$	83,960		$	50,029		$	29,236		$	40,036		$	382,709		$	585,970
Depreciation and amortization		-			8,025			-			-			30,776			38,801		$	-		$	8,681		$	-		$	-		$	62,404		$	71,085
Total operating expenses	$	3,310,231		$	1,761,553		$	82,761		$	1,766,849		$	6,763,679		$	13,685,073		$	1,143,388		$	185,909		$	81,359		$	72,725		$	517,588		$	2,000,968

Interest expense	$	16,778		$	-		$	-		$	2,266		$	46,326		$	65,370		$	(38,982	)	$	(2,498	)	$	-		$	(2,266	)	$	(429,710	)	$	(473,457	)
All other expenses		-			-			-			-			(2,309,280	)		(2,309,280	)	$	(31,182	)	$	-		$	-		$	-		$	(491,302	)	$	(522,484	)

Other expenses, net	$	16,778		$	-		$	-		$	2,266		$	(2,262,954	)	$	(2,243,910	)	$	(70,164	)	$	(2,498	)	$	-		$	(2,266	)	$	(921,012	)	$	(995,941	)

Loss before income tax provision and equity in net loss from unconsolidated investments	$	(3,226,356	)	$	(2,053,912	)	$	(56,392	)	$	(1,592,232	)	$	(9,026,633	)	$	(15,955,525	)	$	(1,200,402	)	$	(246,560	)	$	(81,244	)	$	48,052		$	(1,438,600	)	$	(2,918,754	)

Income Statement

For the three months ended September 30, 2022

	Creatd			Creatd			Creatd		Creatd
	Labs			Ventures			Studios		Partners			Corporate			Total

Net revenue	$	291,414		$	316,654		$	-	$	414,783		$	-		$	1,022,851
Cost of revenue	$	564,349		$	502,396		$	-	$	337,817		$	-		$	1,404,562
Gross margin	$	(272,935	)	$	(185,742	)	$	-	$	76,966		$	-		$	(381,711	)

Compensation	$	59,603		$	353,008		$	-	$	289,107		$	1,034,317		$	1,736,035
Research and development	$	139,997		$	-		$	-	$	94,968		$	-		$	234,965
Marketing	$	370,584		$	234,760		$	-	$	41,176		$	-		$	646,520
Stock based compensation	$	122,964		$	111,472		$	-	$	126,654		$	265,478		$	626,568
General and administrative	$	29,120		$	80,377		$	-	$	54,341		$	2,029,186		$	2,193,024
Depreciation and amortization	$	1,489		$	43,001		$	-	$	40,917		$	72,589		$	157,996
Total operating expenses	$	723,757		$	822,618		$	-	$	647,163		$	3,401,570		$	5,595,108

Interest expense	$	(17,048	)	$	-		$	-	$	-		$	(656,646	)	$	(673,694	)
All other expenses	$	-		$	-		$	-	$	-		$	(2,875,832	)	$	(2,875,832	)

Other expenses, net	$	(17,048	)	$	-		$	-	$	-		$	(3,532,478	)	$	(3,549,527	)

Loss before income tax provision and equity in net loss from unconsolidated investments	$	(1,013,740	)	$	(1,008,360	)	$	-	$	(570,197	)	$	(6,934,048	)	$	(9,526,346	)

~~F-39~~F-40

Income Statement

For the nine months ended September 30, 2023

	Creatd			Creatd			Creatd			Creatd
	Labs			Ventures			Studios			Partners			Corporate			Total

Net revenue	$	852,969		$	646,745		$	28,983		$	594,667		$	-		$	2,123,364
Cost of revenue	$	728,357		$	895,386		$	2,500		$	183,731		$	-		$	1,809,974
Gross margin	$	124,612		$	(248,641	)	$	26,483		$	410,936		$	-		$	313,390

Compensation	$	1,123,325		$	314,471		$	128,862		$	80,817		$	3,529,445		$	5,176,920
Research and development	$	721,088		$	-		$	-		$	-		$	-		$	721,088
Marketing	$	-		$	276,189		$	-		$	693,039		$	-		$	969,228
Stock based compensation	$	-		$	-		$	-		$	-		$	8,283,267		$	8,283,267
General and administrative	$	114,169		$	142,373		$	95,373		$	26,100		$	2,988,730		$	3,366,745
Depreciation and amortization	$	-		$	41,972		$	-		$	-		$	101,235		$	143,207
Total operating expenses	$	1,958,582		$	775,005		$	224,235		$	799,956		$	14,902,677		$	18,660,455

Interest expense	$	(37,881	)	$	(7,830	)	$	-		$	-		$	(587,097	)	$	(632,808	)
All other expenses	$	(31,182	)	$	-		$	-		$	-		$	(4,329,082	)	$	(4,360,264	)

Other expenses, net	$	(69,063	)	$	(7,830	)	$	-		$	-		$	(4,916,179	)	$	(4,993,072	)

Loss before income tax provision and equity in net loss from unconsolidated investments	$	(1,903,033	)	$	(1,031,476	)	$	(197,752	)	$	(389,020	)	$	(19,818,856	)	$	(23,340,137	)

Income Statement

For the nine months ended September 30, 2022

	Creatd			Creatd			Creatd		Creatd
	Labs			Ventures			Studios		Partners			Corporate			Total

Net revenue	$	1,138,904		$	1,237,542		$	-	$	1,621,044		$	-		$	3,997,490
Cost of revenue	$	1,917,039		$	1,706,586		$	-	$	1,147,526		$	-		$	4,771,151
Gross margin	$	(778,135	)	$	(469,044	)	$	-	$	473,518		$	-		$	(773,661	)

Compensation	$	724,423		$	49,735		$	-	$	198,074		$	2,538,495		$	3,510,727
Research and development	$	408,810		$	-		$	-	$	277,321		$	-		$	686,131
Marketing	$	2,301,994		$	1,458,280		$	-	$	255,777		$	-		$	4,016,051
Stock based compensation	$	755,284		$	684,697		$	-	$	777,948		$	1,630,649		$	3,848,578
General and administrative	$	(482,093	)	$	1,317,924		$	-	$	834,413		$	6,032,192		$	7,702,436
Depreciation and amortization	$	4,166		$	120,282		$	-	$	114,453		$	203,042		$	441,943
Total operating expenses	$	3,712,584		$	3,630,918		$	-	$	2,457,986		$	10,404,378		$	20,205,866

Interest expense	$	(34,095	)	$	-		$	-	$	-		$	(673,855	)	$	(707,950	)
All other expenses	$	-		$	-		$	-	$	-		$	(3,424,854	)	$	(3,424,854	)

Other expenses, net	$	(34,095	)	$	-		$	-	$	-		$	(4,098,709	)	$	(4,132,804	)

Loss before income tax provision and equity in net loss from unconsolidated investments	$	(4,524,814	)	$	(4,099,962	)	$	-	$	(1,984,468	)	$	(14,503,087	)	$	(25,112,331	)

For the three months ended March 31, 2022
Creatd
Labs Creatd
Ventures Creatd
Studios Creatd
Partners Corporate Total

Net revenue $ 508,268 $ 254,690 - $ 585,780 $ - $ 1,348,738
Cost of revenue 706,196 409,969 - 456,005 - 1,572,170
Gross margin (197,928 ) (155,279 ) - 129,775 - (223,432 )

Compensation 129,009 195,442 - 249,608 299,151 873,210
Research and development 134,876 - - 91,778 - 226,654
Marketing 970,484 1,013,706 - - 107,831 2,092,021
Stock based compensation 251,907 226,298 - 248,548 354,039 1,080,792
General and administrative 89,757 92,830 - 128,884 2,059,812 2,371,283
Depreciation and amortization - 71,271 - 31,599 39,022 141,892
Impairment of goodwill - - - - - -
Impairment of intangibles - - - - - -
Total operating expenses $ 1,576,033 $ 1,599,547 - $ 750,417 $ 2,859,855 $ 6,785,852

Interest expense (13,229 ) - - - (667 ) (13,896 )
All other expenses - - - - 142,132 142,132

Other expenses, net (13,229 ) - - - 141,465 128,236
Loss before income tax provision and equity in net loss from unconsolidated investments $ (1,787,190 ) $ (1,754,826 ) $ - $ (620,642 ) $ (2,718,390 ) $ (6,881,048 )

~~Note 14 – Subsequent Events~~

~~Convertible Notes~~

F-41

Note 14 – Subsequent ~~to March 31,~~Events

Note Conversions

On October 3, 2023, an investor converted $150,000 in principal of a convertible promissory note into 6,000,000 shares of the Company’s common stock.

On October 11, 2023, an investor converted $30,000 in principal and $8,197.50 in interest and fees of a convertible promissory note into 1,527,900 shares of the Company’s common stock.

Debenture and Warrant Restructuring

On October 6, 2023, the Company entered into ~~a loan~~an agreement with ~~a lender whereby~~ the ~~lender~~holder (the “Holder”) of certain of the Company’s previously issued securities (the “Restructuring Agreement”).

The Restructuring Agreement, among other things, modified certain provisions of the following securities of the Company:

(i) Original Issue Discount Convertible Debenture issued on December 12, 2022 (the “December 2022 Debenture”)

(ii) Original Issue Discount Convertible Debenture issued on January 13, 2023 (the “January 2023 Debenture”)

(iii) Original Issue Discount Convertible Debenture issued on February 1, 2023 (the “February 2023 Debenture” and, together with the December 2022 Debenture and January 2023 Debenture, the “Debentures”)

(iv) Common Stock Purchase Warrant issued on December 12, 2022 (the “Restructured Warrants”)

Pursuant to the Restructuring Agreement, the Company and the Holder agreed to, among other things, to (i) extend the maturity dates for the Debentures, which have a ~~promissory note~~cumulative remaining balance of ~~$109,250.~~ $2,485,000, to February 28, 2024; (ii) reduce the conversion price of the Debentures down to $0.025, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock; (iii) reduce the exercise price of the Restructured Warrants down to $0.025, subject to adjustment for subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock; (iv) allow the Company to prepay the Debentures at any time with no prepayment penalty or fees; and (v) issue the Holder 5,000,000 shares as consideration.

Assignment and Assumption Agreement

On October 6, 2023, the Company entered into an agreement (the “Assignment and Assumption Agreement”) with an entity (the “Buyer”) to acquire the assets and assume the liabilities of the brands known as Brave and Basis, DBAs of the Company’s wholly owned subsidiary Creatd Ventures LLC.

In addition to the assumption of approximately $215,000 in liabilities and the cancellation of an additional $38,750, the Company received a 7.5% membership interest in the acquiring entity and will receive 7.5% of all cash receipts generated from the acquired inventory.

Dispute Settlement

On October 11, 2023, the Company entered into an agreement (the “Settlement Agreement”) with a former executive (the “Executive”) regarding a previously executed Executive Separation Agreement.

The ~~note~~Company and Executive agreed to settle the outstanding liability of $405,208 in exchange for $75,000 in cash payment and 5,753,472 shares of the Company’s common stock. In exchange, the Executive has ~~an interest rate~~agreed to rescind the Confession of ~~10% and a maturity date of April 24, 2024.~~Judgement as granted in the original Executive Separation Agreement.

F-42

~~Beginning on~~Chief Financial Officer Resignation

On October ~~24,~~12, 2023, the ~~note is convertible into~~Board of Directors (the “Board”) of Creatd, Inc. (the “Company”) was notified by Eric Pickens, CFO, of his intention to transition to a consultant for the Company supporting its finance and accounting functions and to resign from the position of CFO. On October 16, 2023, the Board determined it was in the best interest of the Company to accept Mr. Pickens’ resignation and to continue his engagement with the Company as a finance and accounting consultant.

Chief Financial Officer Appointment

On October 16, 2023, the Board appointed Mr. Jeremy Frommer as the Chief Financial Officer of the Company, effective October 16, 2023.

Share Award Recession

On October 16, 2023, the Company’s board of directors (the “Board”) determined to rescind a previously approved allocation of a class of restricted shares to the then executive officers and board of directors. This class consisted of 21,398,080 shares and was previously approved by the Board on February 8, 2023, eliminating the corresponding liability of $2,071,245 for the payroll taxes on this issuance.

Executive and Director Share Awards

On October 17, 2023, the Board approved the issuance of 21,398,080 shares of ~~the Company’s~~ common stock ~~par~~to certain officers, directors, and employees at a fair market value ~~$0.001 per share, equal to 65%~~ of ~~the lowest trading price of the Company’s common stock on the ten-trading day immediately preceding the date of the respective conversion.~~$620,544.

~~Consultant Shares~~

~~Subsequent to March 31, 2023, the Company issued 675,000 shares of Common Stock to consultants with a fair value of $76,950.~~

Equity Line of Credit

~~Subsequent to March 31,~~On October 20, 2023, 2023, the Company drew down from its outstanding Equity Line of Credit and issued ~~1,409,841~~4,242,322 shares for total proceeds of ~~$91,016.~~$75,000.

Note Amendment Agreement

On October 23, 2023, the Company entered into a note amendment agreement with a note holder whereby two note payments, due on October 16, 2023 and November 16, 2023, were extended to December 15, 2023. In exchange for this extension, the Company paid the note holder $10,000 and issued 1,500,000 shares of the Company’s common stock.

PIPE

On October 23, 2923, the Company entered into securities purchase agreements with 7 investors whereby the investors purchased 7,735,294 shares of the Company’s common stock at a price of $0.017 per share and were issued 15,407,588 warrants to purchase the Company’s common stock at a price of $0.02 per share for gross proceeds of $20,500.

Vocal, Inc. RegCF Closings

Subsequent to September 30, 2023, the Company conducted 2 closings of the RegCF for its subsidiary, Vocal, Inc., for gross proceeds of $67,982.

Promissory Note

On November 1, 2023, Creatd, Inc. (the “Company”) entered into a share purchase agreement (the “Agreement”) with Auctus Fund, LLC (the “Buyer”), pursuant to which (i) the Buyer purchased a promissory note (the “Promissory Note”) made by the Company, in the aggregate principal amount of $111,111, convertible into shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), upon the terms set forth in the Promissory Note, and (ii) the Company issued 5,000,000 restricted shares of Common Stock to the Buyer as additional consideration for the purchase of the Promissory Note, for a purchase price of $100,000. The Company ~~also issued an additional 2,729,522~~will pay guaranteed interest on the unpaid Principal Amount at the rate of 10% (the “Interest Rate”) per annum from October 31, 2023 (the “Issue Date”) until the same becomes due and payable. The maturity date shall be twelve months from the Issue Date.

The per share conversion price into which Principal Amount and interest (including any Default Interest) under the Promissory Note shall be convertible into shares ~~pursuant~~of Common Stock (the “Conversion Price”) shall be $0.016, subject to adjustments for any stock dividend, stock split, stock combination, rights offerings, reclassification or similar transaction that proportionately decreases or increases the ~~trigger of the make-whole provision contained~~Common Stock as set forth in the ~~first amendment to the common stock purchase agreement for the Equity Line of Credit.~~

Promissory Note.

~~F-40~~F-43

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

This Form 10-Q and other reports filed by 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 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, 2022, which are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on April 19, 2023.

Overview

Creatd, Inc. provides economic opportunities for creators through access to its curated social platform called Vocal, enabling creators to share their stories, build an audience, and be rewarded. In addition to revenues generated directly from the platform from subscribers and microtransactions, the existence of Vocal, and the first-party data it produces, has resulted in the creation of numerous derivative business opportunities for the Company. Secondary opportunities with the potential to eventually exceed the core Vocal revenues include well-known brands activating through the Vocal platform under Creatd’s “Vocal for Brands” business unit. In addition to this branded content production, the establishment of a portfolio of consumer brands owned and operated in-house, will similarly leverage the core data and intelligence derived from the Company’s core Vocal platform.

Creator-Centric Strategy

Creatd exists to support the boundless capacity of creators. Our mission is to empower creators by providing best-in-class tools, supportive audience communities, and avenues for monetization. Our creator-first approach is the cornerstone of our culture and purpose and is what drives every decision we make. We are committed to channeling our resources toward fueling the dreams and ambitions of creators and helping them to unleash their full potential.

That’s why we built our flagship proprietary technology platform, Vocal-a home base for creators offering an unparalleled suite of digital tools and resources, curated communities, and monetization opportunities.

Vocal

Our flagship technology, Vocal, provides the Company with a core platform that is highly scalable on its own but also provides the foundation upon which other revenue sources rely. The first direct core business of Vocal has proven to be a scalable revenue source-Creator Subscriptions. The core will be augmented in the near term with the introduction of the ability for writers and creators to monetize their followings further by directly charging for premium content such as newsletters. Vocal will charge a recurring commission on these new premium content subscriptions. As discussed above, the core Vocal platform underlies numerous derivative revenue sources for the Company.

Since its launch in 2016, Vocal has quickly become the go-to platform for content creators of all kinds, with over 1.5 million registered creators and counting. Whether you’re a blogger, social media influencer, podcaster, founder, musician, photographer, or anything in between, Vocal has everything you need to unleash your creativity and monetize your content.

Creators can opt to use Vocal for free, or upgrade to the premium membership tier, Vocal+. Upon joining Vocal, either as a freemium or premium member, creators can immediately begin to utilize Vocal’s storytelling tools to create and publish their stories, as well as benefit from Vocal’s monetization features.

At Creatd, we believe in rewarding creators for their hard work and dedication. That’s why we offer a range of monetization features on Vocal, whereby creators earn in numerous ways including i) the number of ‘reads’ their story receives; ii) via Vocal Challenges, or writing contests with cash prizes; iii) receiving Bonuses; iv) by participating in Vocal for Brands marketing campaigns; v) through ~~‘ Subscribe,~~’Subscribe,’ which enables creators to receive payment directly from their audience via monthly subscriptions and one-off microtransactions; vi) via Vocal’s Ambassador Program, which enables creators to be compensated for referring new premium members. But what sets Vocal apart from other platforms is our commitment to innovation and scalability. Built on Keystone, the same open-source framework used by industry leaders in the SaaS space, Vocal’s technology is designed for speed, sustainability, and scalability. And with our capital-light infrastructure and focus on research and development, we are able to continuously improve and enhance the platform, without incurring the operational costs that have weighed down legacy media platforms.

Creatd firmly believes that the future belongs to creators. And with Vocal, we’re proud to be leading the charge in providing them with the tools, resources, and opportunities they need to succeed.

Branded Content

In developing our creator ecosystem, we came to understand that like individual creators, all brands have a unique story to tell. That’s why we’ve developed Vocal for Brands, our in-house content studio that specializes in creating best-in-class organic marketing campaigns. Our approach combines the production of branded content influencer and performance marketing initiatives that work together to increase sales, revenue, visibility, and brand affinity for our clients.

We work with leading brands to pair them with our network of creators, tapping into their communities to help share their stories in a way that is engaging, direct-response driven, and non-interruptive. Similarly, through Sponsored Challenges, we prompt the creation of thousands of high-quality stories that are centered around the brand’s mission, further disseminated through creators’ respective social channels and promotional outlets.

Our campaigns are amplified with the help of Vocal’s first-party data insights, allowing us to create highly targeted, segmented audiences for brands with optimal results.

Consumer Products Group

At Creatd, we are proud of our internally owned and operated e-commerce businesses and associated technology and infrastructure. Our Consumer Products Group has grown to become a significant revenue contributor and we continue to invest in our portfolio to support direct-to-consumer brands with a wide range of services including design and development, marketing and distribution, and go-to-market strategies. We additionally remain on the lookout for up-and-coming brands that can potentially be acquired and easily consolidated into our shared supply chain, resources, and infrastructure to further broaden our portfolio.

The Company’s Consumer Products portfolio currently includes:

Camp, a direct-to-consumer (DTC) food brand which creates healthy upgrades to classic comfort food favorites. Each of Camp’s products is created with servings of vegetables and contains Vitamins A, C, D, E, B1, and B6. Since its launch in 2020, Camp continues to add new products to its line of healthy, veggie-based, family-friendly foods, with flavors including Classic Cheddar Mac ‘N’ Cheese, White Cheddar Mac ‘N’ Cheese, Vegan Cheezy Mac, and Twist Veggie Pasta.

Dune Glow Remedy (“Dune”), which the Company purchased and brought to market in 2021, is a beverage brand focused on promoting wellness and beauty from within. Each beverage in Dune’s product line is meticulously crafted with functional ingredients that nourish skin from the inside out and enhance one’s natural glow. During 2022, Dune has continued to advance its retail and wholesale distribution strategy, securing numerous partnerships including with lifestyle retailer Urban Outfitters, Equinox, and the Los Angeles-based Erewhon Market.

Basis is a hydrating electrolyte drink mix that was acquired in the first quarter of 2022. This brand has a history of strong sales volume both on the brand’s website as well as through third-party distribution channels such as Amazon.

Brave is a plant-based food company that provides convenient and healthy breakfast food products. Our Company acquired 100% of the membership interests of Brave Foods, LLC in September 2022. What started as a search for a better morning routine evolved into a business serving thousands of go-getters of every type. We are thrilled to have these amazing brands as part of our portfolio and we are excited to continue expanding our Consumer Products portfolio.

IP Development and Production

At Creatd, we’re always looking for ways to bring our creators’ stories to new audiences across different media. Our IP Development and Production efforts involve partnering with our top creators to develop their content for television, film, podcasts, and print. With our cutting-edge Vocal platform, we have access to a wealth of intellectual property that’s constantly being curated by a blend of human moderation and advanced machine learning models. Our Vocal technology allows us to analyze community, creator, and audience insights to surface the best candidates for transmedia adaptations. We’re committed to leveraging our vast library of compelling stories to create engaging and impactful content across multiple platforms. As of early 2023, Creatd announced a series of newly released and production projects. They include podcasts, books, and Web 3.0 opportunities.

Application of First-Party Data

First-party data is information that a creator platform collects directly from its users, such as their demographics, interests, and behaviors. By utilizing this data, Vocal’s creator platform can gain insights into its users’ preferences and tailor marketing campaigns accordingly.

For example, a large segment of Vocal users is interested in health and fitness, as evidenced through the Longevity community. This information can additionally be used not only to create more personalized experiences for Vocal audiences, but additionally to help fitness-oriented brands create targeted campaigns for workout equipment, supplements, or fitness apparel. With our ability to understand users’ niche interests and behaviors, the platform can create campaigns that resonate with its audience and drive better engagement and conversions.

The use of first-party data also helps the creator platform maintain a closer relationship with its users, as it enables a more personalized experience of content consumption and engagement for Vocal users. This can lead to higher retention rates, increased user loyalty, and improved user satisfaction. Finally, our business intelligence team pairs first-party Vocal data with third-party data from distribution platforms such as Instagram, TikTok, Twitter, and Snapchat providing a more granular profile of creators, brands, and audiences. By generating this valuable first-party data, the Company can continually enrich and refine its targeting capabilities for branded content marketing and creator acquisition, specifically, to reduce creator acquisition costs (CAC) and subscriber acquisition costs (SAC).

Competitive Advantage

The idea for Vocal came as a response to what Creatd’s founders recognized as systemic flaws inherent to the digital media industry and its operational infrastructures, and the competitive advantage that a closed and safe platform ecosystem would provide. First-party data is widely understood as a tool for companies to collect and analyze data about their users directly from the source, providing valuable insights into their behaviors, preferences, and interests. Importantly, by leveraging this data within a closed and safe platform ecosystem, companies can create more personalized experiences for their users, deliver more relevant content and advertising, and increase user engagement and retention.

A secondary, and crucial, advantage of a closed ecosystem is that it allows companies to control the user experience and ensure a high level of safety and security. By controlling the data that is shared and the interactions that take place within the ecosystem, companies can minimize the risk of fraud, abuse, and other harmful behaviors that can undermine user trust and loyalty. This can be particularly important in industries where user safety and privacy are paramount, such as social networking, e-commerce, and financial services.

Finally, the existence of Vocal and its ecosystem enables the Company to optimize our operations and increase efficiencies, effectively creating a more defensible business model by reducing the risk of competition and disintermediation. By controlling the data and interactions within the ecosystem, we create barriers to entry for competitors and reduce the risk of users migrating to other platforms. This can be particularly important in an industry such as Creatd’s, in which network effects and economies of scale are critical to success, such as social networking, e-commerce, and digital advertising.

Leveraging these advantages has enabled the Company to differentiate itself in the market, attract and retain users, and drive sustainable growth and profitability.

Acquisition Strategy

Creatd’s strategic business line expansion has led to the acquisition of several complementary businesses. These acquisitions have allowed Creatd to expand its reach and diversify its revenue streams, enabling the company to leverage its internal resources and expertise to drive continued growth. In addition, the acquisitions have provided opportunities for cost synergies and operational efficiencies, further enhancing the company’s profitability and positioning it for long-term success.

Revenue Model

Creatd’s revenues are primarily generated through:

Platform: Creatd’s flagship technology product, Vocal, generates revenues through subscription fees from premium Vocal creators, a membership program known as Vocal+. The Vocal+ subscription offering provides creators with increased monetization and access to premium tools and features. At approximately $10 per month, Vocal+ offers creators a strong value proposition for freemium users to upgrade, while providing a scalable source of monthly recurring gross revenue for Creatd. Additional platform-based revenues are generated from Tipping and other transactions that occur on the platform. For each such transaction, which are designed to enable Vocal audiences to engage and support their favorite creators, Vocal takes platform processing fees ranging from approximately 3% to 7%.

E-commerce: The majority of the Company’s e-commerce revenues comes from sales associated with Creatd’s portfolio of internally owned and operated e-commerce businesses, Camp, Dune, Basis, and Brave. Additionally, the Company’s e-commerce strategy involves revitalizing archival imagery and media content in dormant legacy portfolios. Creatd maintains an exclusive license to leverage the stories housed on Vocal, reimagining them for films, episodic shows, games, graphic novels, collectibles, books, and more.

Agency: The Company derives revenues from marketing partnerships through its internal branded content studio, Vocal for Brands, which specializes in pairing leading brands with select Vocal creators to produce content marketing campaigns, including sponsored Challenges, that leverage the power of Vocal. Branded stories and Challenges are distributed to a targeted audience based on Vocal’s first-party data, and are optimized for conversions to maximize revenue growth.

Corporate History and Information

We were 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.

On February 5, 2016 (the “Merger Closing Date”), we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with GPH Merger Sub, Inc., a Nevada corporation and our wholly-owned subsidiary (“Merger Sub”), and Jerrick Ventures, Inc., a privately-held Nevada corporation headquartered in New Jersey (“Jerrick”), pursuant to which the Merger Sub was merged with and into Jerrick, with Jerrick surviving as our wholly-owned subsidiary (the “Merger”). Pursuant to the terms of the Merger Agreement, we acquired, through a reverse triangular merger, all of the outstanding capital stock of Jerrick in exchange for issuing Jerrick’s shareholders (the “Jerrick Shareholders”), pro-rata, a total of 475,000 shares of our common stock, par value $0.001 per share (“Common Stock”). Additionally, we assumed 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”).

Upon closing of the Merger on February 5, 2016, the Company changed its business plan to our current plan.

In connection with the Merger, on the Merger Closing Date, we entered into a Spin-Off Agreement with Kent Campbell (the “Spin-Off Agreement”), pursuant to which Mr. Campbell purchased (i) all of our interest in Ashland Holdings, LLC, a Florida limited liability company, and (ii) all of our interest in Lil Marc, Inc., a Utah corporation, in exchange for the cancellation of 13,030 shares of our common stock held by Mr. Campbell. In addition, Mr. Campbell assumed all of our debts, obligations and liabilities, including any existing prior to the Merger, pursuant to the terms and conditions of the Spin-Off Agreement.

Effective February 28, 2016, we entered into an Agreement and Plan of Merger (the “Statutory Merger Agreement”), pursuant to which we became the parent company of Jerrick Ventures, LLC, our wholly-owned operating subsidiary (the “Statutory Merger”).

On February 28, 2016, we changed our name to Jerrick Media Holdings, Inc. to better reflect our new business strategy.

On July 25, 2019, we filed a certificate of amendment to our articles of incorporation, as amended (the “Amendment”), with the Secretary of State of the State of Nevada to effectuate a one-for-twenty (1:20) reverse stock split (the “Reverse Stock Split”) of our common stock without any change to its par value. The Amendment became effective on July 30, 2019. The number of shares of authorized common stock was proportionately reduced as a result of the Reverse Stock Split. The number of shares of authorized preferred stock was not affected by the Reverse Stock Split. No fractional shares were issued in connection with the Reverse Stock Split as all fractional shares were “rounded up” to the next whole share.

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. On March 3, 2022, the Company settled the Seller’s Choice Note for a cash payment of $799,000.

On July 13, 2020, upon approval from our board of directors and stockholders, we filed Second Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada for the purpose of increasing our authorized shares of Common Stock to 100,000,000.

On August 13, 2020, we filed a certificate of amendment to our second amended and restated articles of incorporation (the “Amendment”), with the Secretary of State of the State of Nevada to effectuate a one-for-three (1:3) reverse stock split (the “August 2020 Reverse Stock Split”) of our common stock without any change to its par value. The Amendment became effective on August 17, 2020. No fractional shares were issued in connection with the August 2020 Reverse Stock Split as all fractional shares were rounded down to the next whole share. All share and per share amounts of our common stock listed in this Form 10-K have been adjusted to give effect to the August 2020 Reverse Stock Split.

On July 20, 2021, the Company acquired 44% of the membership interests of WHE Agency, Inc. WHE Agency, Inc, is a talent management and public relations agency based in New York (“WHE”).

On October 3, 2021, the Company acquired an additional 29% of the membership interests of Dune, Inc., bringing our total membership interests to 50%.

On August 1, 2022, the Company acquired 51% of the membership interests of Orbit Media LLC, a New York limited liability company. Orbit is aan app-based stock trading platform designed to empower a new generation of investors.

On February 1, 2023, an investor entered into a Subscription Agreement whereby it purchased from OG Collection, Inc., a subsidiary of the Company (“OG”), 50,000 shares of common stock of OG for a purchase price of $250,000, and, in connection therewith OG, the Company, and the Investor entered into a Shareholder Agreement.

On ~~September 13, 2022,~~May 30, 2023, the Company acquired an additional 15% equity interest in Dune, Inc. bringing our total ownership to 100%. Dune, Inc., has been consolidated due to the Company’s ownership of 50% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

On June 30, 2023, the Company acquired an additional 10% of the membership interests of ~~Brave Foods,~~Plant Camp, LLC, ~~a Maine limited liability company. Brave is a plant-based food company that provides convenient and healthy breakfast food products. Brave Foods,~~bringing our total ownership to 100%. Plant Camp, LLC has been consolidated due to the Company’s ownership of ~~100%~~50% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

Recent Developments

Dorado Goose Transaction

On January 18, 2023, the Company, entered into and closed two securities purchase agreements with Dorado Goose LLC or the investor, whereby the investor purchased from the Company for an aggregate of $1,500,000 in subscription amount, (i) an unsecured debenture in the principal amount of $847,500 and (ii) 1,562,500 shares of common stock. The Company and the investor also entered into a registration rights agreement pursuant to the securities purchase agreements. The subsidiaries of the Company delivered a guarantee in favor of the investor whereby each such subsidiary guaranteed the full payment and performance of all obligations of the Company pursuant to the debenture. The debenture has an original issue discount of 13%, has a maturity date of June 13, 2023, may be extended by six months at the Company’s option subject to certain conditions, and are convertible into shares of common stock at a conversion price of $0.20 per share, subject to adjustment upon certain events. The debenture and the common stock were not registered under the Securities Act but qualified for exemption under Section 4(a)(2) and Rule 506 promulgated thereunder.

Quotation on OTCQB

Effective on September 7, 2022, our common stock is quoted on the OTCQB Marketplace operated by OTC Markets Group Inc. (“OTCQB”) under the symbol “CRTD.” Effective April 4, 2023, our symbol changed to “VOCL.”

Board of Directors and Management

On June 1, 2022, the Board of Directors approved the Creatd, Inc. 2022 Omnibus Securities and Incentive Plan. On November 10, 2022, the Board of Directors approved an amendment to the Creatd, Inc. 2022 Omnibus Securities and Incentive Plan. The plan provides for the granting of distribution equivalent rights, incentive share options, non-qualified share options, performance unit awards, restricted share awards, restricted share unit awards, share appreciation rights, tandem share appreciation rights, unrestricted share awards or any combination of the foregoing, as may be best suited to the circumstances of the particular employee, director or consultant as provided in the plan. the aggregate number of common shares (including common shares underlying options designated as incentive share options or non-qualified share options) that may be issued under the plan shall not exceed the sum of (i) 30,000,000 common shares plus (ii) an annual increase on the first day of each calendar year beginning January 1, 2023 and ending on and including January 1, 2031 equal to the lesser of (a) five percent (5%) of the common shares outstanding on the final day of the immediately preceding calendar year, and (b) such smaller number of common shares as determined by the Board.

On January 18, 2023, the Company held its Annual Meeting of Stockholders. The results of the matters voted on by the Company’s stockholders included the election of Directors to serve on the Company’s board; Amendment to our Articles of Incorporation to Increase Authorized Stock; and the approval of Creatd 2022 Omnibus Securities and Incentive Plan.

On February 8, 2023 (the “Effective Date”), the Board of Directors (the “Board”) of Creatd, Inc., a Nevada corporation (the “Company”) approved, based on the recommendation of the Compensation Committee (the “Committee”) of the Board, certain equity and cash compensation for certain key members of the Company’s management team and non-employee directors as discussed below.

The Company has made certain equity awards to the key members of the Company’s management team (the “Equity Awards”), comprised of 10,692,308 shares of the Company’s common stock (“Common Stock”) to Jeremy Frommer, Chief Executive Officer of the Company, 5,894,788 shares of Common Stock to Justin Maury, Chief Operating Officer of the Company, and 1,663,223 shares of Common Stock to Chelsea Pullano, Chief Financial Officer of the Company. As a condition to receiving the Equity Awards, each such officer agreed to lock-up terms such that only 10% of the shares comprising such individual’s Equity Award can be sold until 90 days after the date of the issuance of the Equity Awards (the “Lock Up Period”) and that during the Lock Up Period, and for nine months thereafter, each such individual can only sell the number of shares equal to the lesser of 5% of the trailing 30 day average volume or 25,000 shares in any single trading day. Additionally, beginning one year after the issuance of the Equity Awards, each individual receiving Equity Awards can only sell the number of shares equal to the lesser of 5% of the trailing 30-day average volume or 40,000 shares in any single trading day (the “Volume Restrictions”).

The Company will also pay cash bonuses to the key members of the Company’s management team (the “Executive Bonuses”) in the amounts of $125,000 to Jeremy Frommer, $62,500 to Justin Maury and $31,250 to Chelsea Pullano, to be paid out on a discretionary basis as determined by the Committee. In addition, each of Jeremy Frommer and Justin Maury will receive monthly housing stipends in the amount of $6,300 (the “Housing Stipends”).

Additionally, the Company will make certain cash payments and equity awards to the non-employee members of the Board (the “Director Compensation”), comprised of annual cash compensation of $140,000, payable in monthly installments, an annual grant of $140,000 in Common Stock, issued quarterly and priced at the average of the last five trading days of the previous quarter. In the fiscal year 2023, each independent director shall be eligible for a cash bonus of $20,000, which shall be paid on a discretionary basis. As a share bonus, 1,700,000 shares of Common Stock shall be issuable to Peter Majar and 1,000,000 shares of Common Stock shall be issuable to Erica Wagner, with such shares subject to the same lock-up and volume restrictions as the Equity Awards.

The Company will offer the chair of the audit committee of the Board (the “Audit Committee Chair”) an additional annual cash compensation of $20,000, payable in monthly installments, and an annual grant of $20,000 in Common Stock, issued quarterly and priced at the average of the last five trading days of the previous quarter.

All equity awards made to the independent directors of the Company are made pursuant to the Creatd, Inc. 2022 Omnibus Securities and Incentive Plan (the “Plan”).

Common Stock Purchase Agreement, Securities Purchase Agreement and Promissory Note

On October 20, 2022, the Company entered into the Investment Agreement with Coventry (the “Investor”). Pursuant to the terms of the Investment Agreement, for a period of thirty-six (36) months commencing on the trading day immediately following date of effectiveness of the Registration Statement (as defined below), the Investor shall purchase up to $15,000,000 of the Company’s common stock, par value $0.001 per share (the “Shares”), pursuant to Drawdown Notices (as defined below), covering the Registrable Securities (as defined below). The purchase price of the Shares under the Investment Agreement is equal to 82% of the lowest volume weighted average price (VWAP) during the last ten trading days prior to the date the Company delivers to the Investor a Put notice (a “Drawdown Notice”) in writing requiring Investor to purchase shares of the Company, subject to the terms of the Investment Agreement.

On October 20, 2022, the Company also entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the Investor, pursuant to which the Company issued to the Investor on that date a Promissory Note (the “Note”) in the principal amount of $300,000 in exchange for a purchase price of $255,000, which the Investor funded on October 20,2022. The proceeds of the Note will be used by the Company for general working capital purposes.

The Note bears interest at the rate of 10% per annum. Starting on the fifth month anniversary of the funding of the Note, and for the next six months thereafter, the Company will make seven equal monthly payments of $47,142.85 to the Investor.

On October 20, 2022, in connection with the entry by the Company and the Investor into the economic agreements, (i.e., the Investment Agreement, the Purchase Agreement, and the Note and the funding thereof), the Company issued 800,000 shares of its common stock to the Investor.

The February 2023 Securities Purchase Agreement

On February 1, 2023, the Company entered into and closed a securities purchase agreement with one accredited investor, whereby the Investor purchased from the Company for an aggregate of $1,250,000 in subscription amount, an unsecured debenture in the principal amount of $1,250,000. The Company and the investor also entered into a registration rights agreement pursuant to the securities purchase agreement. The debenture has a term of six months with a maturity date of August 1, 2023, which may be extended by six months at the Company’s option subject to certain conditions and monthly redemption options at the election of the holder and are convertible into shares of Common Stock at a conversion price of $0.20 per share, subject to adjustment upon certain events.

~~Listing~~Appointment of new Chief Financial Officer

On May 18, 2023, the Board appointed Mr. Eric Pickens as the Chief Financial Officer of the Company, effective May 22, 2023. In connection with such appointment, Chelsea Pullano, the Company’s previous Chief Financial Officer, assumed a new position within the Company focused on ~~Upstream~~filing, regulation, and strategy.

On February 14, 2023, the Company completed the listing on Upstream of the Company’s shares of common stock, comprising the same class of common shares currently registered with the Commission that are currently issued and outstanding. Upstream is the trading app for digital securities and NFTs powered by Horizon Fintex and MERJ Exchange Limited (“MERJ”). The shares listed on Upstream are represented on MERJ Exchange as a “digital security” in the form of uncertificated securities that have the same shareholder rights as all other shares of such issuer. It is a representation of common stock in an uncertificated form. The Company has not issued any new securities pursuant to the listing on Upstream. All common shares have been registered with the Commission and comprise the entire number of shares of the Company issued and outstanding and all of the Company’s shares of common stock have the same CUSIP/ISIN number.

MERJ operates Upstream as a fully regulated and licensed integrated securities exchange, clearing system and depository for digital and non-digital securities. MERJ is an affiliate of the World Federation of Exchanges (WFE), recognized by HM Revenue and Customs UK, a full member of the Association of National Numbering Agencies (ANNA) and a Qualifying Foreign Exchange for OTC Markets in the US. MERJ is also a member of the Sustainable Stock Exchanges Initiative. MERJ is regulated in the Seychelles by the Financial Services Authority Seychelles, https://fsaseychelles.sc/. MERJ is not registered or regulated in any manner in the United States.

Upstream is accessible via the major app stores. After downloading the application, users will have access to review all the securities that trade on Upstream including trading activity, regulatory disclosures and other corporate information. Further there is a direct link of information on our Company at https://investors.creatd.com/resources/faqs/default.aspx. This includes a listing particulars document, which is a required disclosure as part of the requirements of MERJ Exchange Limited as defined by Securities Act 2007 of the Seychelles (as amended) and any other measure prescribed thereunder by the Minister or the Securities Authority. Investors are encouraged to review the listing particulars that may be found at the following link: https://upstream.exchange/creatd.

Pursuant to Upstream’s policy, terms and conditions, investors based in the United States or Canada are prohibited from buying shares on the Upstream secondary market. However, U.S.- and Canada-based investors may sell securities they previously purchased or acquired from an issuer, stockbroker or stock exchange that has dual-listed on Upstream. U.S.- or Canada-based investors are those investors who citizens of the United States or Canada, including those living abroad, or permanent residents of the United States or Canada. To the extent shares had been deposited at a time prior to Upstream’s policy prohibiting such deposits, such shares cannot be sold at this time, and such shareholder would need to have such shares returned to the Company’s transfer agent to complete a sale.

The Press Release stated, “Global investors can now trade by downloading Upstream from their preferred app store at https://upstream.exchange/, creating an account by tapping sign up...”. This was not to suggest that investors based in the United States or Canada can buy shares on the Upstream secondary market, but to suggest that investors who are not U.S.- and Canada-based can trade on Upstream.

~~Investors who have deposited shares with Upstream may subsequently elect, at any time, to transfer such shares to from Upstream to the Company’s transfer agent for trade via their U.S. broker.~~

The Company is providing our investors with detailed information on the process on how to deposit and trade shares on Upstream directly on our website at the following link: https://investors.creatd.com/resources/faqs/default.aspx.

Shares transferred into Upstream will be effected via the Company’s Transfer Agent, Pacific Stock Transfer Company (“Pacific”). For shares already recorded with Pacific, investors can transfer such shares to Upstream by taking the following steps: Open Upstream, then choose Investor: Manage Securities, Deposit Securities and, next, Enter the Company’s Ticker Symbol and Number of Shares their requesting to deposit. Investors would then confirm the shares are unrestricted or “free trading” and tap Submit. The value of each share deposit request on the Upstream app may not exceed $100,000, with such value determined by the closing price of the security on the previous trading day multiplied by the number of shares being deposited. Once the investor makes the share deposit request using the Upstream app, and the transfer agent has the investor’s shares in ‘book entry’, the deposit is typically processed within 48 hours during business days. Once the transfer has been completed investors will receive a push notification in the Upstream app and see the share deposit in their Upstream Portfolio.

If the investor’s shares are currently in the investor’s brokerage account, then the investor will be required to transfer its shares to Pacific to have shares recorded as “direct registration” in “book entry” with Pacific. To make such transfer request, an investor would need to contact their brokerage firm and request to transfer their shares back to “book entry” with the transfer agent.

All shares transferred to Upstream shall be held in MERJ Dep., which is a company licensed as a Securities Facility pursuant to the Seychelles Securities Act, 2007. The Company has appointed MERJ Dep. to act as the Depository Nominee in respect of any securities traded which are quoted on Upstream and granted MERJ Dep. as the Depository Nominee, pursuant to the Securities Facility Rules Directive on Depository Interests.

Shares may be withdrawn from Upstream back to the transfer agent. The Upstream app has a function under Investor Services, Manage Securities, Withdraw Securities. The shareholder then enters the ticker symbol and the number of shares to being withdrawn and taps ‘Notarize’ to cryptographically sign this transaction. The shares are removed from the user’s Upstream portfolio and an email is sent to the transfer agent with a share withdrawal request whereafter the transfer agent will liaise directly with the shareholder to ensure the share balance is entered in ‘book entry’ into the user’s name & address. Third party share withdrawals from Upstream are not permitted, the share withdrawal request name and address (as retrieved from the Upstream know your customer (KYC) information by Upstream compliance) is required to be the same name and address that will be entered in the transfer agents ‘book entry’ for such shareholder.

The NFTs traded on Upstream are issued by the Company and convey no ownership interest in the Company, nor do they provide any dividends, royalties, or other equity interests or rights that would indicate an expectation of profit. The NFTs are issued only on Upstream and can only be traded on Upstream.

The Commission evaluates whether a particular digital asset, including an NFT, is a security based on what is commonly referred to as the Howey Test. The Howey Test looks at four factors: (i) an investment of money (ii) in a common enterprise (iii) with the expectation of profit (iv) to be derived from the efforts of others. We believe the commemorative NFTs issued by Creatd do not meet the definition for securities under the Howey Test. Such NFTs, issued to investors who deposited shares of Creatd with Upstream, are commemorative in nature, memorializing the listing on Upstream, as a novelty item, being akin to a tombstone, plaque, sticker, poster or t-shirt commemorating the listing, similar to what NASDAQ and the NYSE may provide to its issuers. The NFT issued by Creatd conveys no ownership interest in Creatd, nor does it provide any dividends, royalties, or other equity interests or rights that would indicate an expectation of profit. The NFTs are issued only on Upstream and can only be traded on Upstream. No consideration was paid for the NFTs, and such investors are still able to transfer such shares back to Pacific Stock Transfer following receipt of the NFTs.

To trade on Upstream, users create a trading account using the Upstream smartphone app, with a random-generated username (in the form of an address that’s a 42-character hexadecimal address derived from the last 20 bytes of a random public key) and a password (in the form of a random cryptographic private key).The public and private key (the cryptographic ~~keypair~~) is generated locally on the smartphone and only the public key is ever known to Upstream, MERJ Dep., or peer to peer trading counterparties on Upstream. Only the individual users hold their private keys. This privacy ensures that only the Upstream user can cryptographically sign a securities transaction (bid/offer/buy/sell/cancel) for it to be executed on Upstream, that is, all transactions such as share sales are self-directed, peer to peer, and instantly settled using the Upstream distributed ledger platform.

In order to buy, sell, deposit or withdraw shares on Upstream, an Upstream user that has created their account as outlined in the previous paragraph, is required to submit KYC information for the Upstream compliance team to review. KYC information is then linked to the user’s public key, and if the user passes KYC review, then this user’s cryptographic keypair’s transactions will be accepted as legitimate self-directed securities transaction requests to Upstream for execution on the platform.

Shareholders should be aware that there are risks and uncertainties with the Company’s dual listing on Upstream. In particular, the restriction on trading for US- and Canada-based investors may affect the liquidity of our common stock and lead to volatility in the price and trading volume of our common stock.

In addition, though the NFTs traded on Upstream are commemorative in nature, the regulatory regime governing blockchain technologies, cryptocurrencies and tokens is uncertain, and new regulations or policies may materially affect our NFT marketplace and our business generally.

Although we believe that these NFTs are not securities, there is risk that the issuance of NFTs may be considered a public offering in violation of the federal securities laws, and perhaps certain state securities laws. For issuances that are deemed to be public offerings under federal securities laws or in violation of certain state securities laws, purchasers of such products might be granted the right to rescind the sale of these products and demand that we return the purchase price of these products. We did not receive a purchase price for these NFTs; however, there is risk that the Company may be subject to other penalties or that other remedies may apply.

~~Additional information regarding Upstream can be found at Revolutionary exchange & trading app for digital securities (upstream.exchange).~~

Results of Operations

Overview

Operating results for the ~~three~~nine months ending ~~March 31,~~September 30, 2023, continue to reflect the Company’s efforts to right-size operations in preparation for both near and long-term growth. Overall revenues decreased by ~~27%~~47% vs the same period in the prior year as a result of specific strategic decisions management deemed in the Company’s best ~~long term~~long-term interest. The direct cost of sales was reduced by an even greater percentage (-62%), enabling the Company to achieve an overall positive gross margin during the period. Aggressive pricing to promote Vocal+ annual memberships ~~reduced~~did reduce digital subscription revenue ~~by 41%~~ but increased retention rates and the average customer lifetime ~~value while a~~value. A managed pause in the influencer marketing activity at WHE ~~resulted in a 57% decrease in~~did substantially decreased revenues from this segment. ~~A 61% increase in overall direct to consumer brand revenue helped to offset the revenue decrease, holding it at 27%. These~~The above results were achieved while reducing the marketing spend by almost ~~75%~~76%. Furthermore, while overall expenses ~~doubled~~decreased by 7% period over period, backing out non-cash and non-recurring expenses ~~actually~~ resulted in a ~~(28%)~~-36% decrease in compensation, R&D, marketing, general & administrative expenses. ~~Overall,~~Despite the ~~loss of revenues in non-core business divisions of over $300,000 and the lesser loss of $200,000 in Vocal subscriptions are due to one-time transitional events. Compared to the exponential~~significant reductions in marketing and general operating expenses, the ~~company~~Company believes that revenues will reverse and grow significantly upon realization of ~~our Q2~~its recapitalization ~~plan.~~plan, projected to be fully implemented by the end of Q4. With this new forward growth ~~built within our~~layered upon a reduced operating expense budget and slimmed down headcount, the ~~company expects~~Company continues to expect to reach ~~it’s long stated~~its long-stated goal of cash flow ~~break even~~breakeven within a year.

Summary of Statements of Operations for the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2023, and 2022:

	Three Months Ended March 31,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue	$	986,145		$	1,348,738		$	2,123,364		$	3,997,490
Cost of revenue	$	1,012,687		$	1,572,170		$	1,809,974		$	4,771,151
*Operating expenses	$	13,685,073		$	6,785,852		$	18,660,455		$	20,205,866
Loss from operations	$	(13,711,615	)	$	(7,009,284	)	$	(18,347,065	)	$	(20,979,527	)
Other income (expenses)	$	(2,243,910	)	$	128,236		$	(4,993,072	)	$	(4,132,804	)
Net loss	$	(15,955,525	)	$	(6,881,048	)	$	(23,304,137	)	$	(25,112,331	)
Loss per common share - basic and diluted	$	(0.35	)	$	(0.36	)	$	(0.48	)	$	(1.23	)

*Q1 2023 results include non-cash items totaling $9,542,173

The nine-month results ending September 30, 2023, include non-cash items totaling $12,603,996

Revenue

Revenue totaled ~~$986,145~~$2,123,364 for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, as compared to ~~$1,348,738~~$3,997,490 for the comparable ~~three~~nine months ended ~~March 31,~~September 30, 2022, a decrease of ~~$362,593 (27%~~$1,874,126 (47%). The decrease in ~~quarterly~~ revenue is attributable to a decrease in agency revenues in non-core business divisions and a relatively small loss in subscription revenue, partially offset by an increase in revenue from the Company’s direct to consumer brands.

Cost of Revenue

Cost of revenue for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, was ~~$1,012,687~~$1,809,974 as compared to ~~$1,572,170~~$4,771,151 for the ~~three~~nine months ended ~~March 31,~~September 30, 2022. The decrease of ~~$559,483 (35%~~$2,961,177 (62%) in cost of revenue is primarily related to a decrease in ~~payroll-related~~revenue augmented by a reduction in direct labor related costs. The Company expects the gross margin to improve over time as it continues to grow and improve upon a self-sustaining, organically driven revenue model across its business segments.

Operating Expenses

Backing out non-cash and non-recurring operating expenses results in a net ~~(28%~~(37%) decrease in compensation and general & administrative expenses. On a GAAP adjusted basis (which includes non-cash and non-recurring operating expenses) operating expenses for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, were ~~$13,685,073~~$18,660,455 as compared to ~~$6,785,852~~$20,205,866 for the ~~three~~nine months ended ~~March 31,~~September 30, 2022. The ~~increase~~decrease of ~~$6,899,221~~$1,545,411 in operating expenses is ~~mainly~~ related to an increase in stock-based compensation for the award of shares to employees and officers of the Company in recognition of having accepted reduced salaries beginning August 22, 2022, and associated taxes. This was offset by a decrease in marketing and ~~general~~research and ~~administrative expenses.~~development expenses of $3,011,866 (-64%).

Loss from Operations

Loss from operations for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, was ~~$13,711,615~~$18,347,065 as compared to ~~$7,009,284~~$20,979,527 for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily due to stock-based compensation and other one-time expenses. Going forward, the Company expects the loss from operations to decrease significantly as it focuses on organic revenue growth and continues to find efficiencies to reduce operating expenses.

Other Income and (Expenses)

Other income (expenses) for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, were ~~$(2,243,910)~~$(4,993,072) as compared to ~~$128,236~~$(4,132,804) for the ~~three~~nine months ended ~~March 31,~~September 30, 2022. These expenses were predominantly due to accretion of debt discount and issuance costs related to the issuance of additional promissory and convertible notes.

Net Loss

Net loss for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, was ~~$15,955,525,~~$(23,340,137), as compared to a net loss of ~~$6,881,048~~$(25,112,331) for the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

Net loss attributable to common shareholders for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, was ~~$22,243,581,~~$44,338,096, or a loss per share of ~~$0.35,~~$0.48, as compared to a net loss attributable to common shareholders of ~~$6,334,890,~~$24,130,227, or a loss per share of ~~$0.36,~~$1.23, for the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital ~~at March 31,~~as of September 30, 2023, compared to December 31, 2022:

	March 31, 2023			December 31, 2022			Increase / (Decrease)			September 30, 2023			December 31, 2022			Increase / (Decrease)
Current Assets	$	946,743		$	1,479,164		$	(532,421	)	$	363,669		$	1,479,164		$	(1,115,495	)
Current Liabilities	$	17,776,824		$	15,207,316		$	2,569,508		$	21,693,515		$	15,207,316		$	6,486,199
Working Capital (Deficit)	$	(16,830,081	)	$	(13,728,152	)	$	(3,101,929	)	$	(21,329,846	)	$	(13,728,152	)	$	(7,601,694	)

~~At March 31,~~As of September 30, 2023, wethe Company had a working capital deficit of ~~$16,830,081~~$21,329,846 as compared to a working capital deficit of $13,728,152 at December 31, 2022, an increase in working capital deficit of ~~$3,101,929.~~$7,601,694. This increase is primarily attributable to a reduction in cash and an increase in accounts payable and accrued liabilities. This was partially offset by a decrease in convertible notes payable and notes payable.

Net Cash

Net cash used in operating activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, was ~~$2,858,058, a decrease~~$3,384,288, an improvement of ~~$2,184,071~~$10,335,705 from the same period in 2022. ~~The net loss for the three months ended March 31, 2023, and 2022 was $15,955,525 and $6,881,048, respectively.~~ Going forward, the Company plans to continue to reduce expenses by improving ~~operational~~operating efficiency while focusing on organic revenue growth, and it is anticipated that the Company’s net cash used in operating activities will consistently decrease throughout 2023.

Net cash provided by investing activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, was $250,000. This is attributable to the sale of a non-controlling interest in the Company’s subsidiary OG Collection, Inc.

Net cash provided by financing activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, and 2022 was ~~$2,073,886~~$2,434,823 and ~~$4,527,972,~~$11,061,905, respectively. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company’s operations were predominantly financed by proceeds from the continued exercise of warrants, the issuance of both convertible notes and promissory notes, and the sale of common stock. This was partially offset by repayments of both convertible ~~notes~~ and ~~repayments of~~ promissory notes. Similarly, the Company’s financing activity for the three months ended March 31, 2022, generated net proceeds of $4,997,301 from the sale of common stock and warrants, which were partially offset by the repayments of notes payable.

Off-Balance Sheet Arrangements

As of ~~March 31,~~September 30, 2023, wethe Company had no off-balance sheet arrangements.

Significant Accounting Policies

Our significant accounting policies are described in Note 2 of the Financial Statements. 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. For detailed information regarding our critical accounting policies and estimates, see our financial statements and notes thereto included in this Report and in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to our critical accounting policies and estimates from those disclosed in our most recent Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our exposures to market risk since December 31, 2022. For details on the Company’s interest rate, foreign currency exchange, and credit risks, see “Item 7A. Quantitative and Qualitative Information About Market Risks” in our 2022 Annual Report.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The 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 such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are not effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in 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) during the quarter ended ~~March 31,~~September 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. However, throughout 2022 and into 2023, the Company continues the complete review of all of its financial procedures and controls and is continuing the process of updating and optimizing its infrastructure around these controls. Over the past year, the Company has hired additional finance and accounting personnel, significantly improving the segregation of duties within that department and providing additional bandwidth for management to focus on improving controls and procedures. This review is ongoing, and the Company believes that this process will continue to positively affect our internal control over financial reporting in the future.

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. 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. Except as set forth below, we are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

Skube v. WHE Agency Inc., et al

A complaint against WHE, Creatd and Jeremy Frommer ~~filed December 22, 2022,~~ was filed in the Supreme Court of the State of New York, New York County, on December 22, 2022, by Jessica Skube, making certain claims alleging conversion, trespass to chattel, unjust enrichment, breach of contract, fraud in the inducement, seeking damages of $161,000 and punitive damages of $500,000. Skube filed an Order to Show Cause, which the Company opposed, which is currently pending. ~~Given the premature nature of~~At this ~~case,~~time, it is ~~still~~ too early for the Company to make an assessment as to liability.

Lind Global v. Creatd, Inc.

A complaint against Creatd dated September 21, 2022, has been filed in the Supreme Court of the State of New York, New York County, by Lind Global Macro Fund LP and Lind Global Fund II LP, making certain claims alleging breach of contract related to two Securities Purchase Agreements executed on May 31, 2022, seeking damages in excess of $920,000. The Company filed a Motion to Dismiss, which is currently pending. ~~Given the premature nature of~~At this ~~case,~~time, it is ~~still~~ too early for the Company to make an assessment as to liability.

Laurie Weisberg v. Creatd, Inc.

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, 2022, the occurrence of any one of which could have a material adverse effect on our actual results.

~~Except as set forth below, there~~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, 2022.

Shareholders may be adversely impacted by any differences between the regulations of MERJ Depository and Registry Limited (MERJ) and rights afforded to shareholders and those applicable to securities traded in the United States.

Shareholders should be aware that there are risks and uncertainties with the Company’s dual listing on Upstream. In particular, any differences between the regulations of MERJ Depository and Registry Limited (MERJ) and rights afforded to shareholders and those applicable to securities traded in the United States may adversely impact shareholders.

~~Shareholders face risks related to potential discrepancies that could occur between the trading prices of our common stock on OTCQB and the tokenized shares on Upstream.~~

Dual listing on two stock exchanges has the risk of the potential discrepancies that could occur between the trading prices of our common stock on OTCQB and the tokenized shares on Upstream. Dual listing may increase the exposure of the Company to market risks, including currency fluctuations and geopolitical events, as it may be subject to different economic conditions and political environments in each exchange, which could potentially lead to greater volatility in the Company’s stock price.

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

During the three months ended ~~March 31,~~September 30, 2023, 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.

Consultant Shares

During the three months ended ~~March 31,~~September 30, 2023, the Company issued ~~347,435~~5,851,870 shares of Common Stock to ~~consultants and employees.~~consultants.

~~Debt Conversion~~Additional Purchase of Orbit Media, LLC

During the three months ended ~~March 31,~~September 30, 2023, ~~a lender converted $51,132~~the Company issued 1,093,750 shares to purchase an additional 18% equity interest in ~~convertible notes into 113,601 shares of Common Stock.~~Orbit Media, LLC bringing our total ownership to 74%.

~~Securities Purchase Agreement~~Shares Issued with Convertible Notes

During the three months ended ~~March 31, 2023, the Company entered into a Securities Purchase Agreement with an investor to purchase 1,562,500 shares of common stock for gross proceeds of $750,000.~~

~~Additional Purchase of Orbit Media, LLC~~

~~During the three months ended March 31,~~September 30, 2023, the Company issued ~~125,000~~2,625,000 unregistered shares as commitment shares as additional consideration to ~~purchase an additional 5% of the membership interests of Orbit Media, LLC., bringing our total membership interests to 56%.~~

~~Additional Purchase of Dune, Inc.~~

~~During the three months ended March 31, 2023, the Company issued 100,000 shares to purchase an additional 23% equity interest in Dune, Inc. bringing our total ownership to 85%.~~

~~Additional Purchase of WHE Agency, Inc.~~

~~During the three months ended March 31, 2023, the Company issued 100,000 shares to purchase an additional 51% of the equity interest in WHE Agency, Inc. bringing our total ownership to 95%.~~a lender for entering into or extending convertible notes.

Item 3. Defaults Upon Senior Securities.

~~There has been no~~As of September 30, 2023, the Company is in default on $2,265,447 in ~~the payment of~~ principal ~~interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.~~on senior secured notes from The July 2022 Convertible Note Offering.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

There is no other information required to be disclosed under this item which was not previously disclosed.

Item 6. Exhibits.

Exhibit No.		Description

~~4.1~~		~~Form of Debenture (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the Commission on January 20, 2023)~~

~~4.2~~		~~Form of Debenture (incorporated by reference to Exhibit 4.1 to the Company’s current report on Form 8-K filed with the Commission on February 10, 2023)~~

~~10.1~~		~~Form of Securities Purchase Agreement for Debentures (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the Commission on January 20, 2023)~~

~~10.2~~		~~Form of Securities Purchase Agreement for Common Stock (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed with the Commission on January 20, 2023)~~

~~10.3~~		~~Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.3 to the Company’s current report on Form 8-K filed with the Commission on January 20, 2023)~~

~~10.4~~		~~Form of Subsidiary Guarantee (incorporated by reference to Exhibit 10.4 to the Company’s current report on Form 8-K filed with the Commission on January 20, 2023)~~

~~10.5~~		~~Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the Commission on February 10, 2023)~~

~~10.6~~		~~Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed with the Commission on February 10, 2023)~~

~~10.7~~		~~Creatd, Inc. 2022 Omnibus Securities and Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the Commission on February 10, 2023)~~

~~10.8~~		~~Form of Equity Award Letter (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed with the Commission on February 10, 2023)~~

31.1*		Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a), As adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a), As adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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

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

101.INS*		Inline XBRL Instance Document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Filed 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.

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.

Date: ~~May 18,~~November 14, 2023	By:	/s/ Jeremy Frommer
	Name:	Jeremy Frommer
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: ~~May 18,~~November 14, 2023	By:	/s/ ~~Chelsea Pullano~~Jeremy Frommer
	Name:	~~Chelsea Pullano~~Jeremy Frommer
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

	For the Three Months Ended			For the Three Months Ended
	March 31, 2023			March 31, 2022

Net revenue	$	986,145		$	1,348,738

Cost of revenue		1,012,687			1,572,170

Gross margin (loss)		(26,542	)		(223,432	)

Operating expenses
Compensation		4,114,523			1,662,830
Research and development		131,626			226,654
Marketing		535,521			2,092,021
Stock based compensation		7,328,044			1,080,792
General and administrative		1,575,359			1,723,555

Total operating expenses		13,685,073			6,785,852

Loss from operations		(13,711,615	)		(7,009,284	)

Other income (expenses)
Other income		12,000			99
Interest expense		(65,370	)		(13,896	)
Accretion of debt discount and issuance cost		(2,155,159	)		(23,477	)
Derivative liability		(58,970)			3,729
Settlement of vendor liabilities		23,589			14,525
Gain on extinguishment of debt		-			147,256

Other income (expenses), net		(2,243,910	)		128,236

Loss before income tax provision		(15,955,525	)		(6,881,048	)

Income tax provision		-			-

Net loss		(15,955,525	)		(6,881,048	)

Non-controlling interest in net loss		49,190			617,886

Net Loss attributable to Creatd, Inc.		(15,906,335	)		(6,263,162	)

Deemed dividend		(6,337,246	)		(81,728	)

Net loss attributable to common shareholders	$	(22,243,581	)	$	(6,344,890	)

Comprehensive loss

Net loss		(15,955,525	)		(6,881,048	)

Currency translation gain (loss)		129,971			(4,950	)

Comprehensive loss	$	(15,825,554	)	$	(6,885,998	)

Per-share data
Basic and diluted loss per share	$	(0.35	)	$	(0.36	)

Weighted average number of common shares outstanding		63,491,732			17,707,951

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Balance – January 1, 2023 – outstanding		4,408,267			4.05		4.29
Granted		-			-		-
Exercised		-			-		-
Forfeited/Cancelled		(16,667	)		14.10		-
Balance – March 31, 2023 – outstanding		4,391,600			4.01		4.05
Balance – March 31, 2023 – exercisable		3,756,600			4.42		4.03

	Three Months Ended March 31, 2023
Operating lease cost	$	537,253
Short term lease cost		536
Total net lease cost	$	537,632

For the Twelve Months Ended March 31,	Operating Leases
2023	$	498,552
2024		532,689
2025		517,231
2026		532,424
2027		548,073
Thereafter		754,064
Total lease payments		3,383,033
Less: Amounts representing interest		(1,076,702	)
Total lease obligations		2,306,331
Less: Current		(287,542	)
	$	2,018,789

	As of March 31, 2023
	Creatd Labs		Creatd Ventures		Creatd Studios		Creatd Partners		Corporate		Total

Accounts receivable, net	$	-	$	4,972	$	-	$	239,381	$	-	$	244,353
Prepaid expenses and other current assets		25,575		-		-		-		248,506		274,080
Deposits and other assets		915,279		-		-		-		137,675		1,052,954
Intangible assets		-		217,176		14,108		-		-		231,283
Goodwill		-		46,460		-		-		-		46,460
Inventory		16,374		198,633		41,250		-		-		256,257
All other assets		-		-		-		-		2,369,947		2,369,948
Total Assets	$	957,228	$	467,241	$	55,358	$	239,381	$	2,756,128	$	4,475,336

Accounts payable and accrued liabilities	$	2,019	$	1,514,866	$	22,750	$	433,409	$	9,136,296	$	11,109,340
Note payable, net of debt discount and issuance costs		474,496		139,770		-		-		988,355		1,602,621
Deferred revenue		253,348		-		-		-		-		253,348
All other Liabilities		-		-		-		-		6,862,324		6,862,324
Total Liabilities	$	729,863	$	1,654,636	$	22,750	$	433,409	$	16,986,975	$	19,827,633