Filed
Pursuant to Rule 424(b)(5)
Registration No. 333-250982
PROSPECTUS
SUPPLEMENT
(To
the Prospectus dated April 23, 2021)
750,000 Shares of Common Stock
CREATD,
INC.
We are offering up to 750,000 shares of common stock at a price
per share of $3.40 pursuant to this prospectus supplement and the accompanying prospectus.
Our common stock is listed on The Nasdaq Capital
Market under the symbol “CRTD.” On June 16, 2021, the last reported sale price of our common stock on The Nasdaq Capital Market
was $4.13 per share.
Pursuant to General Instruction I.B.6 of Form
S-3, in no event will we sell securities in a public primary offering with a value of more than one-third of the aggregate market value
of our common stock held by non-affiliates in any twelve-month period, so long as the aggregate market value of our common stock held
by non-affiliates remains below $75,000,000. The aggregate market value of our outstanding common stock held by non-affiliates pursuant
to General Instruction I.B.6 of Form S-3 was approximately $29,414,299, which was calculated based on 11,024,002 shares of common stock
outstanding, as of June 16, 2021, of which 6,970,213 shares were held by non-affiliates, and a price per share of $4.22, which was the
closing sale price of our common stock on The Nasdaq Capital Market on June 9, 2021.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-9 of this prospectus for a discussion
of information that should be considered in connection with an investment in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per Share
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Total
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Public offering price
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$
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3.40
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$
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2,550,000
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Underwriting discounts and commissions(1)
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$
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0.238
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$
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178,500
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Proceeds to Creatd, Inc. before expenses
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$
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3.162
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$
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2,371,500
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(1)
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The Company has also agreed to issue to the representative, or its
designees, warrants to purchase aggregate shares of our common stock in an amount up to 5% of the shares of common stock sold in the this
offering (including the over-allotment option to the extent exercised). See “Underwriting” beginning on page S-13 of this
prospectus for a description of the Company’s arrangements with the underwriters.
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The Company has granted a 30-day option to the
underwriters to purchase up to an additional 112,500 shares of common stock to cover over-allotments, if any. If the underwriters
exercise the option in full, the total underwriting discounts and commissions payable by us will be $205,275, and the total proceeds to
us, before expenses, will be $2,727,225.
The
underwriters expect to deliver the shares to purchasers in the offering on or about June 21, 2021.
Sole
Book Running Manager
THE
BENCHMARK COMPANY
Co-Managers
Aegis Capital Corp. Brookline
Capital Markets
a division of Arcadia Securities, LLC
The date of this prospectus supplement is
June 17, 2021
TABLE
OF CONTENTS
ABOUT THIS
PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the U.S. Securities and
Exchange Commission, or SEC, utilizing a “shelf” registration process. This document is in two parts. The first part is this
prospectus supplement, which describes the specific terms of this offering and also adds to and updates information contained in the
accompanying prospectus and the documents incorporated by reference herein. The second part, the accompanying prospectus, provides more
general information. Generally, when we refer to this prospectus, we are referring to both parts of this document combined. To the extent
there is a conflict between the information contained in this prospectus supplement and the information contained in the accompanying
prospectus or any document incorporated by reference therein filed prior to the date of this prospectus supplement, you should rely on
the information in this prospectus supplement; provided that if any statement in one of these documents is inconsistent with a statement
in another document having a later date-for example, a document incorporated by reference in the accompanying prospectus-the statement
in the document having the later date modifies or supersedes the earlier statement.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference herein were made solely for the benefit of the parties to such agreement, including, in some cases,
for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or
covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such
representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
You
should rely only on the information contained in this prospectus supplement or the accompanying prospectus, or incorporated by reference
herein. We have not authorized, and the underwriter has not authorized, anyone to provide you with information that is different. The
information contained in this prospectus supplement or the accompanying prospectus, or incorporated by reference herein or therein is
accurate only as of the respective dates thereof, regardless of the time of delivery of this prospectus supplement and the accompanying
prospectus or of any sale of our Common Stock. It is important for you to read and consider all information contained in this prospectus
supplement and the accompanying prospectus, including the documents incorporated by reference herein and therein, in making your investment
decision. You should also read and consider the information in the documents to which we have referred you in the sections entitled “Where
You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus supplement
and in the accompanying prospectus, respectively.
We
are offering to sell, and seeking offers to buy, the securities offered by this prospectus supplement only in jurisdictions where offers
and sales are permitted. The distribution of this prospectus supplement and the accompanying prospectus and the offering of the securities
offered by this prospectus supplement in certain jurisdictions may be restricted by law. Persons outside the United States who come into
possession of this prospectus supplement and the accompanying prospectus must inform themselves about, and observe any restrictions relating
to, the offering of the Common Stock and the distribution of this prospectus supplement and the accompanying prospectus outside the United
States. This prospectus supplement and the accompanying prospectus do not constitute, and may not be used in connection with, an offer
to sell, or a solicitation of an offer to buy, any securities offered by this prospectus supplement and the accompanying prospectus by
any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement and any accompanying prospectus, including the documents that we incorporate by reference, contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended, or the Exchange Act. Such forward-looking statements include those that express plans, anticipation,
intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking
statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties
known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements.
In
some cases, you can identify forward-looking statements by terminology, such as “expects,” “anticipates,” “intends,”
“estimates,” “plans,” “believes,” “seeks,” “may,” “should,” “could”
or the negative of such terms or other similar expressions. Accordingly, these statements involve estimates, assumptions and uncertainties
that could cause actual results to differ materially from those expressed in such statements. Any forward-looking statements are only
estimates or predictions of future events based on information currently available to our management and management’s current beliefs
about the potential outcome of future events.
You
should read this prospectus supplement, the accompanying prospectus and the documents that we reference herein and therein and have filed
as exhibits to the registration statement, of which this prospectus supplement forms a part, completely and with the understanding that
our actual future results may be materially different from what we expect. You should assume that the information appearing in this prospectus
supplement and any accompanying prospectus is accurate as of the date on the front cover of this prospectus supplement. Because the risk
factors referred to above, as well as the risk factors referred to on page S-9 of this prospectus supplement and incorporated herein
by reference, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made
by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement
speaks only as of the date on which it is made, and except as may be required under applicable securities laws, we undertake no obligation
to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect
the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors
will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the
information presented in this prospectus supplement and the accompanying prospectus, and particularly our forward-looking statements,
by these cautionary statements.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights selected information contained elsewhere in this prospectus supplement. This summary does not contain all the information
that you should consider before investing in our Company. You should carefully read the entire prospectus, including all documents incorporated
by reference herein. In particular, attention should be directed to our “Risk Factors,” “Information With Respect to
the Company,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the
financial statements and related notes thereto contained herein or otherwise incorporated by reference hereto, before making an investment
decision.
Overview
Creatd,
Inc. (“CRTD,” “the Company,” or “Creatd”) is a creator-first technology company and the parent company
of the Vocal platform. Our mission is to empower creators, entrepreneurs, and brands through technology and partnership. We accomplish
this through Creatd’s three main business pillars: Vocal Ventures, Creatd Partners, and our newest initiative, Recreatd. At its
core, Creatd centers around the philosophy that creators are the driving force that propels success in the digital realm. This philosophy
is represented by a framework we call the Creatd Cycle, which operates on the premise that creators produce content that attracts audiences,
who in turn attract brands who are interested in reaching those audiences and the ability to generate new installations around bespoke
ecosystems such as health and wellness, sports, and education.
Creatd’s
first pillar, Vocal Ventures, houses our proprietary technology platforms, including Creatd’s flagship product, the Vocal platform,
and its 36 wholly owned-and-operated creator communities. Through Vocal, creators can create and share their stories in a way that helps
them get discovered by their ideal audiences and be rewarded for their creativity. Similarly, brands can access their ideal consumers
and drive conversions for their products and services. The Vocal platform’s scalable and unique underlying agile framework lends
itself well to future acquisitions and white-label opportunities for Creatd’s technology because of the ease with which other platforms
can be integrated into our ecosystem.
Creatd Partners, Creatd’s second pillar, houses our brand-oriented initiatives, including our agency businesses, Vocal for Brands
and Seller’s Choice, as well as its corporate ventures and investments. Both of these agencies serve a multitude of clients, while
the venture arm looks to make direct investments in the ones that have significant upside opportunity. Creatd Partners pairs Creatd’s
resources and Vocal’s proprietary technology, which were built to simultaneously amplify creators’ discoverability and potential
reward and help direct-to-consumer brands achieve conversions and reach their target audiences, while generating value for all of Creatd’s
stakeholders.
Recreatd
is the pillar which houses Creatd’s intellectual property and legacy media assets, including acquired artwork, photographs and
media memorabilia. Recreatd represents an initiative by Creatd to revitalize transmedia content, utilizing Vocal Ventures’ technology,
data, and marketing capabilities to reboot archival media assets and e-commerce properties. Creatd has a history of successfully executing
such acquisition and assimilation projects, including its resuscitation of General Media properties such as the iconic women’s
magazine, Viva, into digital communities and absorbing once-defunct content communities like Creators Media (which at one time was valued
at $50MM). Creatd has a vast collection of intellectual property and legacy content, including a documentary about the life of Bob Guccione
directed by Barry Avrich; Till Human Voices Wake Us, a short film starring Lindsay Lohan and directed by famed photographer
Indrani; No One’s Pet, the biography of Penthouse Pet Sheila Kennedy authored by renown film critic Glenn Kenny;
and The Mind’s Eye, The Art of Omni. The Company’s ability to leverage its technology to revitalize this content
represents a significant value proposition for media companies and publishers that are sitting on vast collections of content that are
of supreme quality but are not in a suitable format for today’s consumer.
Vocal
Vocal,
Creatd’s flagship product, is a robust, proprietary technology platform that provides best-in-class tools, safe and curated communities,
and monetization opportunities that enable creators to find a receptive audience and get rewarded. Through Vocal, content creators can
get discovered and monetize their content by connecting to their ideal audiences and partnering with the brands that want to reach those
audiences.
Since
its initial launch in 2016, Vocal has grown to be one of the fastest growing communities for content creators of all kinds, including
writers, musicians, podcasters, photographers, and more; as of March 2021, Vocal has reached over 900,000 freemium creators and over
20,000 Vocal+ paid subscribers across its 36 owned and operated niche communities.
Vocal
provides a large stage for creators to connect with fans and find new audiences. In addition to enabling access to millions of unique
monthly visitors, the platform provides creators with a full suite of tools and services for content creation, discovery, distribution,
and monetization, including:
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Easy-to
use, rich media content editor: Vocal’s storytelling tools enable creators to produce beautiful and engaging stories
in a simple, user-friendly interface, and incorporate rich-media content of all kinds, including streaming content, photos, videos,
podcasts, product links, written text, and more. Vocal’s open canvas content creation editor makes it easy to create high-quality
and engaging stories, and is a cost effective alternative to managing a blog content management system (CMS).
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Numerous
Monetization Features: Both of Vocal’s membership tiers–Vocal freemium and the Vocal+ premium tier – provide
multiple monetization opportunities for creators. Creators can earn money i) every time their story is read, ii) by competing in
Challenges, iii) by receiving ‘tips’ and ‘bonuses’ iv) by collaborating on branded content campaigns through
the company’s in-house agency, Vocal for Brands. For freemium members, content ‘reads’ are monetized at a rate
of $3.80 per 1,000 reads (calculated based on time on page, scrolling behavior, and other internal metrics), whereas Vocal+ members
monetize at $6.00 per 1,000 reads. These rates are subject to change based on market trends or the introduction of additional features
and plan tiers.
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Brand-safe
advertising platform: Vocal was designed to target consumers in an authentic, non-interruptive way. Brand partnerships and
collaborations allow companies tap into the power of Vocal through campaign-optimized stories, authored by real Vocal creators, that
build brand affinity, trust, and drive sales.
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Transparent
Performance Data: Creators can view their “Stats” at any time to view their individual performance data, such
as how many Reads a given story received, how much money they have earned, and how many Tips, Bonuses, or ‘Likes,’ they
received. Additionally, Vocal users have the ability to view key metrics such as community-specific data and Vocal+ membership data.
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Valuable
Audience: The nature of Vocal’s genre-specific (niche) community structure is such that it generates a positively
selected audience, a quality which makes Vocal an attractive prospect for creators and brands alike. In a niche community, audiences
are inherently more likely to be interested in the particular content housed in that community.
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Vocal+
is Creatd’s premium subscription membership program. Vocal+ members pay a membership fee for premium features, including receiving
increased earnings for their content, reduced platform processing fees for Tips received, a Vocal+ badge on their creator page, eligibility
to participate in exclusive Vocal+ Challenges, and more. Vocal+ offers a strong value proposition for new creators, as well as the over
900,000 freemium users registered to Vocal. Creators may sign up for a Vocal+ membership when they create an account, or they can upgrade
an existing Vocal Free account to a Vocal+ account at any time. The current cost of a Vocal+ membership is either $9.99 per month or
$99 annually. From time to time, the Company offers Vocal+ subscriptions at a discount for a predetermined number of months as a promotion
for new subscribers.
Vocal
for Brands
Digital
audiences have become increasingly wary of traditional display and programmatic advertising tactics. Intrusive ads like pop-ups have
proven to disrupt the consumer experience, leading to trends such as the fact that over 25% of internet users have ad blockers installed.
Brands are actively seeking trustworthy and safe platforms like Vocal to drive engagement through non-interruptive brand storytelling
and deliver invaluable performance metrics that help optimize their marketing efforts.
Creatd’s
internal content studio, Vocal for Brands, pairs leading brands with authentic creators to produce marketing campaigns that are non-interruptive,
engaging, and direct-response driven. The key value propositions for brands include:
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Authentic
Storytelling: Our internal data group partners brands with real Vocal creators to tell their brand’s story in a way
that is both engaging and trustworthy. In addition, brands can opt to sponsor a Challenge, which effectively yield a collection of
crowdsourced branded content for brands and help them reach a wider audience.
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Valuable
Audience: Vocal’s first-party data provides an opportunity to create highly targeted and segmented audiences to promote
branded content. Most importantly, Vocal’s technology helps brands target the right audience by utilizing and applying that
first-party data.
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Transparent
Analytics: For every campaign we produce, our brand clients have access to story performance data, engagement data, behavioral
data, and interest data. Brands can apply this data to further increase awareness and optimize audience targeting.
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Vocal’s
first-party data enables our team to create highly targeted and segmented audiences for Vocal for Brands campaigns, and help the brand
reach their ideal audience. Brands can access story performance data, engagement data, behavioral data, and sentiment data, all of which
is used to further optimize the campaign’s success. The combination of Vocal’s hyper-engaged audiences, user-generated communities,
and brand-safe environment help brands achieve maximum ROAS (return on ad spend).
Vocal
for Brands typically collects fixed fees ranging from $10,000 to $110,000, depending on campaign duration and specific client objectives.
To date, Vocal for Brands’ client roster includes up-and-coming direct to consumer (DTC) brands such as IAC’s Vimeo, Moleskine,
New York Post’s Decider, Lull, Daily Harvest, Cleancult, and more.
With
the introduction of Challenges in early first quarter 2020, brands can now tap into Vocal’s network content creators and encourage
them to interact with, learn about and promote their brand while benefiting from Vocal’s brand-safe, moderated, and curated environment.
Vocal Challenges have a unique ability to capture the hearts and minds of the creative community and drive meaningful engagement. Challenges
combine thought-provoking story prompts and sizable reward potential, which work to inspire creators and drive them toward participation.
Brands can similarly capitalize on this combined effect by collaborating with Vocal on a sponsored Challenge, prompting the creation
of high-quality stories that are centered around the brand’s mission and further disseminated through creators’ respective
social channels and promotional outlets.
Seller’s
Choice
In
addition to Vocal for Brands, Creatd supports brands by providing managed and performance marketing services through Seller’s Choice.
an in-house marketing agency for DTC (direct-to-consumer) and e-commerce clients. Acquired by Creatd in September 2019, Seller’s
Choice provides direct-to-consumer brands with design, development, strategy, and sales optimization services. Its status as an Amazon
Solution Provider and its weighty operational structure made it an ideal candidate for acquisition in late 2019. Creatd’s business
model is built to absorb distressed operational infrastructures, integrate the few best components, and shed the non-essential costs.
Creatd
Partners
Creatd
Partners is the Company’s corporate venture arm, as well as the business division that encompasses management of Seller’s
Choice and Vocal for Brands. Creatd Partners invests in qualified brands who are aligned with our corporate mission, such as direct-to-consumer
brands, digital platforms, and technologies that support entrepreneurs and the creator economy. Creatd Partners was established with
the aim of nurturing high-potential, early-stage companies that can meaningfully benefit by leveraging Creatd’s technology, resources
and proven capacity to optimize visibility, reach, and conversions for direct-to-consumer products and services. Creatd Partners investments
are subject to the completion of rigorous due diligence and independent valuation assessment and may encompass a combination of financial
and operational support in exchange for an equity stake in the business.
Creatd
Partners’ first investment is Plant Camp, a direct-to-consumer food company that creates healthy and nutritional upgrades to classic
foods and was launched in December 2020. The Company has made three further investments, the most notable of which is an equity investment
in the health and wellness DTC beverage space. Additionally, Creatd Partners is currently exploring future opportunities that fit its
criteria and risk profile, seeking partner companies that combine a quality product, seasoned founders, and the ability to leverage Creatd’s
platform technology.
Moderation
and Compliance
One
of the key differentiating factors between Vocal and most other user-generated content platforms is the fact that each story submitted
to Vocal is run through the Company’s proprietary moderation process before it goes live on the platform. The decision to implement
moderation into the submission process was in direct response to the rise of misinformation and bad actors on many social platforms.
In response to these inherent pitfalls within the content landscape, Vocal’s proprietary moderation system combines the algorithmic
detection of copyrighted material, hate speech, graphic violence, and nudity, and human-led curation to ensure the quality and safety
of each story published on Vocal, thus fostering a safe and trustworthy environment for creators, audiences, and brands. Moderation and
compliance are more important than ever in a world where ambiguity can systematically damage value. Vocal’s enforcement of community
guidelines and emphasis on content moderation protects the platform, its creators, and Creatd shareholders.
Trust
and safety are paramount to the Vocal ecosystem. We follow best practices when handling personally identifiable information, with guidance
from the European Union’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and the Digital
Millennium Copyright Act (DMCA).
Platform
Compliance Policies include:
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Human-led,
technology assisted moderation of every story submitted;
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Algorithmic
detection of hate speech, nudity, and copyright infringement;
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Brand,
creator, and audience safety enforced through community watch; and
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The
rejection of what we consider toxic content, with the understanding that diverse opinions are encouraged.
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Technology
Development
Vocal’s
proprietary technology is built on Keystone, the same underlying open-source framework used by industry-leaders such as Atlassian, a
$43-billion Australian technology company. Some of the key differentiating elements of Vocal’s technology are speed, sustainability,
and scalability. The Company continues to invest heavily in research and development to continuously improve and innovate its platform,
with the goal of optimizing the user experience for creators. Vocal’s architecture allows it to do more with less cost and provides
a model capable of turning a profit.
Additionally,
the Vocal platform and its underlying technology allows us to maintain an advantageous capital-light infrastructure. By using cloud service
providers, we are able to focus on platform and revenue growth rather than building and maintaining the costly internal infrastructures
that have materially affected so many legacy media platforms. Vocal’s technology has been specifically designed and built to scale
without a material corresponding increase in operational costs. While our users can embed rich media, such as video, audio, and product
links, into their Vocal stories, the rich media content is hosted elsewhere (such as YouTube, Instagram, Vimeo, Shopify, Spotify, etc.).
Thus, our platform can accommodate rich media content of all kinds without bearing the financial or operational costs associated with
hosting the rich media itself. In addition to the benefits this framework affords to the Company, it is the additional benefit to our
content creators, in that a creator can increase their monetization; for example, a creator can embed their YouTube video into a Vocal
story and thus derive earnings from both platforms when their video is viewed.
Application
of First-Party Data
Creatd’s
business intelligence and marketing teams identify and target individual creators, communities, and brands, utilizing empirical data
harnessed from the Vocal platform. The team’s ability to apply its proprietary first-party data works to reduce acquisition costs
for new creators and to help provide brands with conversions and an ideal targeted audience. In this way, our ability to apply first-party
data is one of the value-drivers for the Company and the key advantages of its closed ecosystem strategy, which we refer to as the Creatd
Cycle.
In
its simplest definition, first-party data is data that you collect directly from your customers. Even the most simplistic blog website
is collecting some degree of first-party data; Creatd’s edge is in its application of that data. Our organization is constantly
collecting a tremendous amount of first-party behavioral data extracted from the Vocal platform. To date, we have collected hundreds
of millions of data points around our customers and our audiences.
Importantly,
we do not sell that data, that being a common monetization opportunity for many other businesses. Instead, we use our collected first-party
data for the purposes of bettering the platform. Specifically, our data helps us understand the behaviors and attributes that are common
among the creators, brands, and audiences within our ecosystem. We then pair our first-party Vocal data with third-party data from distribution
platforms such as Facebook and Snapchat to provide a more granular profile of our creators, brands, and audiences.
It
is through generating this valuable first-party data that we can continually enrich and refine our targeting capabilities for branded
content promotion and creator acquisition, and specifically, to reduce our creator acquisition costs (CAC) and subscriber acquisition
costs (SAC). Lower acquisition costs combined with increasing lifetime value (LTV) per subscriber, means that our enterprise value is
accelerating each time we acquire a new user. We anticipate the lifetime value of our subscribers to increase as we introduce more features
that cater to the needs of our creators. It is Vocal’s unique capability to collect and apply first-party behavioral data that
allows us to simultaneously increase the LTV of our subscribers over time, while lowering the cost to acquire them. In fact, the link
between incentivizing creators and lowering creator acquisition costs is a primary focus of the data science team, and an important consideration
for every feature we develop for the Vocal platform.
Competition
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. Depreciating value of digital media business models built on legacy technology platforms created
a unique opportunity for development of a creator-centric platform that could appeal to a global community and, at the same time, be
capable of acquiring undervalued complimentary technology assets.
Creatd’s
founders built the Vocal platform upon the general thesis that a closed and safe ecosystem utilizing first-party data to increase efficiencies
could create a sustainable and defensible business model. Vocal was strategically developed to provide value for content creators, readers,
and brands, and to serve as a home for the ever-increasing amount of digital content being produced and the libraries of digital assets
lying dormant.
Vocal
is most commonly discussed as a combination of:
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Medium,
a platform for writers built by former Twitter founder Ev Williams;
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Reddit,
a social news aggregation, web content rating, and discussion website; and
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Patreon,
a membership platform that provides business tools for content creators to run a subscription service.
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Importantly,
Creatd does not see Vocal as a substitute or competitor to segment-specific content platforms, such as Vimeo, YouTube, Instagram, or
SoundCloud. We don’t want to replace anyone; we built Vocal to be accretive to the entire digital ecosystem. In fact, one of the
most powerful components of our technology is the fact that Vocal makes it easy for creators to embed their existing published content,
including videos, songs, podcasts, photographs, and more, directly into Vocal. We see this as a growth opportunity by building partnerships
with the world’s greatest technology companies and to further spread our roots deeper into the digital landscape.
Revenue
Model
Creatd’s
revenues are primarily generated through:
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Creator
Subscriptions: 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. Management projects 100,000 paid subscribers in 2021.
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Marketing
Partnerships: Vocal partners with leading brands and creators through its internal content studio, Vocal for Brands, to
produce influencer and content marketing campaigns, including sponsored Challenges, that leverage the power of Vocal. Branded stories
and Challenges are optimized for conversions, distributed to a targeted audience based on Vocal’s first-party data, and are
optimized for conversions to maximize revenue growth.
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Managed
Services: Creatd’s in-house marketing agency for e-commerce, Seller’s Choice, provides direct-to-consumer brands
with design, development, strategy, and sales optimization services.
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Platform
Processing Fees and Microtransactions: With Tipping and other types of microtransactions, audiences can engage and support
their favorite Vocal creators by actively investing in their creativity. Vocal takes a platform processing fee on all transactions.
Each Tip sent on Vocal generates revenue for the Company in the form of platform processing fees. For Vocal Free creators, we retain
a 7% platform processing fee for every Tip exchanged. For Vocal+ creators, we retain a 2.9% platform processing fee.
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Affiliate
sales: Vocal generates revenue through affiliate marketing relationships, which pays the Company a percentage of purchases
made on our platform. Affiliate relationships include Amazon, Skimlinks, Tune, and more. This represents a unique opportunity in
the post-pandemic environment where brands need expansive distribution pipelines such as Vocal to reach broader audiences.
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E-commerce: Our
e-commerce strategy involves revitalizing archival imagery and media content in dormant legacy portfolios. Our curation and data
capabilities have helped us create scalable and definable value for our internal collection of media assets through financing, trademarking,
licensing, and production opportunities. Creatd has an exclusive license to leverage the stories housed on Vocal, reimagining them
for films, episodic shows, games, graphic novels, collectibles, books, and more.
|
Growth
Strategy:
Continued
growth is likely to be achieved by focusing on the following key areas:
|
|
●
|
Creator
Growth: Vocal brings new creators, their audience, and brands to its platform through organic growth, performance marketing,
and brand-building campaigns that drive awareness. As the Vocal team continues to collect first-party behavioral data, we are able
to further refine an ideal user profile and hone a specific targeting strategy to effectively scale the platform’s creator
base. Our product roadmap includes new features that will work to incentivize creators to help us expand the Vocal network organically;
upcoming features include creator referrals and gated content, which will enable creators to utilize Vocal’s microtransaction
capabilities to charge recurring fees for exclusive content. With these new features, creators will have further opportunities to
get discovered and earn on Vocal, which works to the benefit of the entire platform.
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|
|
|
|
|
|
●
|
Brand
Partnerships: Continued investment in new product offerings for brand storytelling on Vocal with the goal of increasing
the value to brands in the form of analytics, audience engagement, and conversion data for their products and services. The Vocal
for Brands in-house content studio is constantly evolving in order to elevate brand relationships, both qualitatively and quantitatively.
|
|
|
●
|
Licensing
and Transmedia Opportunities: In collaboration with other production and media companies, as well as with our expanding
user base, we look for content that can be leveraged for adaptation to film, television, digital shorts, books, and comic series.
We believe that Vocal’s ever-expanding community of creators and influencers affords us with the unique opportunity to cultivate
these relationships. This initiative is referred to by the Company as Recreatd.
|
|
|
|
|
|
|
●
|
White
Label Opportunities: White-labeling Vocal’s underlying platform architecture can be utilized for application in a
range of industries, including use by sports franchises, trade companies, education organizations, companies in the financial sector,
and others. An example of a white label installation of Vocal currently on our drawing board is a platform called Give.
The idea behind Give is to borrow Vocal’s topic-specific community structure and adapt it for the non-profit sector. The Give
platform would function as a network of vetted, verified organizations for which creators can raise awareness, funding or discussions
using Vocal’s existing features like storytelling tools, community engagement, and microtransactions. Give will provide charities
with the tools and resources to capture attention and donations in what is a saturated non-profit space.
|
|
|
|
|
|
|
●
|
Vocal
Global: Vocal Global is Creatd’s new market expansion strategy for applying Vocal’s technology to international
platform opportunities. While the U.S., U.K., and Canada represent the vast majority of our audience, we believe there will be significant
demand for our product in overseas markets–including Asia, the Middle East, and South America–particularly for foreign
language installations of the product, an initiative which Creatd refers to as “Content Without Borders.”
|
Acquisition
Strategy
Creatd’s
hybrid finance and design culture is key to its acquisition strategy. Acquisition targets are companies that meet a set of opportunistic
or financial standards or that are part of specific digital environments that are accretive and can seamlessly integrate into Creatd’s
existing revenue lines. Creatd will continue to make strategic acquisitions when presented with opportunities that are in the interest
of shareholder value.
Recent
Developments
On
June 4, 2021, the Company, through its wholly owned subsidiary, Creatd Partners, LLC, a Delaware limited liability company, entered into
a Membership Interest Purchase Agreement with Angela Hein and Heidi Brown, pursuant to which Creatd Partners, LLC acquired 841,005 common
units of Plant Camp LLC, a Delaware limited liability company specializing in the niche of healthy, kid-friendly foods, resulting in
Creatd Partners, LLC owning 89% of the issued and outstanding equity of Plant Camp, for a cash payment to the Sellers of $300,000.
THE
OFFERING
|
Common Stock offered by us in this offering
|
|
750,000
shares
|
|
|
|
|
|
Offering price per share
|
|
$3.40
|
|
|
|
|
|
Common Stock outstanding immediately before this offering
|
|
11,024,022
shares
|
|
|
|
|
|
Common Stock outstanding immediately after this offering
|
|
11,774,022 shares (or 11,886,522 shares if the underwriters exercise
in full their option to purchase additional shares of our common stock).
|
|
|
|
|
|
Over-Allotment Option
|
|
We have granted the underwriters an option to purchase up to an additional shares of common stock at the public offering price, less the underwriting discounts and commissions. This option is exercisable, in whole, or in part, for a period of 30 days from the date of this prospectus supplement.
|
|
|
|
|
|
Use of Proceeds
|
|
We estimate that our net proceeds from this
offering will be approximately $2,213,500 (or $2,569,225, assuming the exercise of the underwriters’ overallotment option in full)
after deducting the underwriting discounts and commissions and other estimated offering expenses payable by us.
We plan to use the net proceeds of this offering
for working capital and general corporate purposes. See “Use of Proceeds.”
|
|
|
|
|
|
Nasdaq Capital Market Symbol
|
|
CRTD
|
The number of shares of our common stock to be
outstanding after this offering is based on 11,024,022 shares of our Common Stock outstanding as of the date hereof, and excludes as of
such date:
|
|
●
|
7,321,602 shares of common
stock that may be issued upon the exercise of outstanding warrants at an exercise price of $4.90 per share;
|
|
|
●
|
2,350,062 shares of common stock that may be issued upon the exercise of outstanding options at an exercise price of $7.84; and
|
|
|
●
|
995,619 shares of common stock underlying convertible notes.
|
Unless
otherwise indicated, all information contained in this prospectus supplement assumes no exercise of outstanding stock options, no settlement
of outstanding restricted stock units and no exercise of outstanding warrants.
RISK
FACTORS
Investment
in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. You should carefully consider
the risk factors incorporated by reference to our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form
10-Q or Current Reports on Form 8-K we file after the date of this prospectus, and all other information contained or incorporated by
reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information
contained in the applicable prospectus supplement before acquiring any of such securities. The occurrence of any of these risks might
cause you to lose all or part of your investment in the offered securities.
Risks
Related to This Offering
MANAGEMENT
WILL HAVE BROAD DISCRETION AS TO THE USE OF THE PROCEEDS FROM THIS OFFERING, AND WE MAY NOT USE THE PROCEEDS EFFECTIVELY.
Our
management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways
that do not improve our results of operations or enhance the value of our Common Stock. Our failure to apply these funds effectively
could have a material adverse effect on our business and cause the price of our Common Stock to decline.
YOU
WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION IN THE NET TANGIBLE BOOK VALUE PER SHARE OF THE COMMON STOCK YOU PURCHASE.
Since the price per share of our Common Stock
being offered is substantially higher than the net tangible book value per share of our Common Stock, you will suffer immediate and substantial
dilution in the net tangible book value of the Common Stock you purchase in this offering. Based on a public offering price of $3.40 per
share, if you purchase shares of Common Stock in this offering, you will suffer immediate and substantial dilution of $0.20 per share
with respect to the net tangible book value of the Common Stock. See the section entitled “Dilution” below for a more detailed
discussion of the dilution you will incur if you purchase Common Stock in this offering.
YOU
MAY EXPERIENCE FUTURE DILUTION AS A RESULT OF FUTURE EQUITY OFFERINGS AND OTHER ISSUANCES OF OUR COMMON STOCK OR OTHER SECURITIES. IN
ADDITION, THIS OFFERING AND FUTURE EQUITY OFFERINGS AND OTHER ISSUANCES OF OUR COMMON STOCK OR OTHER SECURITIES MAY ADVERSELY AFFECT
OUR COMMON STOCK PRICE.
In
order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into
or exchangeable for our Common Stock at prices that may not be the same as the price per share in this offering. We may not be able to
sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid
by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing
stockholders. The price per share at which we sell additional shares of our Common Stock or securities convertible into Common Stock
in future transactions may be higher or lower than the price per share in this offering. In addition, the sale of shares in this offering
and any future sales of a substantial number of shares of our Common Stock in the public market, or the perception that such sales may
occur, could adversely affect the price of our Common Stock. We cannot predict the effect, if any, that market sales of those shares
of Common Stock or the availability of those shares of Common Stock for sale will have on the market price of our Common Stock.
SPECIAL
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements
that involve risks and uncertainties, principally in the sections entitled “Risk Factors.” All statements other than statements
of historical fact contained in this prospectus, including statements regarding future events, our future financial performance, business
strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking
statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,”
“estimates,” “expects,” “intends,” “may,” “plans,” “potential,”
“predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although
we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined
under “Risk Factors” or elsewhere in this prospectus, which may cause our or our industry’s actual results, levels of
activity, performance or achievements expressed or implied by these forward-looking statements.
Forward-looking
statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the
times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available
at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject
to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed in or suggested
by the forward-looking statements.
Forward-looking
statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no
obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting
forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking
statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
USE
OF PROCEEDS
Based upon the offering price of $3.40 per share
of Common Stock, we estimate that the net proceeds from the sale of the shares of Common Stock offered under this prospectus supplement,
after deducting underwriters’ discounts and estimated offering expenses payable by us will be approximately $2,213,500. If the underwriters
exercise the overallotment option in full, we estimate that our net proceeds from this offering will be $2,324,225 after deducting underwriting
discounts and commissions and other estimated offering expenses payable by us.
We
intend to use the net proceeds from this offering for working capital and general corporate purposes. Investors are cautioned that the
proceeds from this offering are expected to be sufficient to enable us to continue operations for only a short period of time. We expect
that we will have to raise such additional funds through the sale of additional equity or equity backed securities. Any future equity
or equity linked financing that we may need may not be able available on terms favorable to us or at all.
Investors
are cautioned, however, that expenditures may vary substantially from these uses. Investors will be relying on the judgment of our management,
who will have broad discretion regarding the application of the proceeds of this offering. The amounts and timing of our actual expenditures
will depend upon numerous factors, including the amount of cash generated by our operations, the amount of competition we face and other
operational factors. We may find it necessary or advisable to use portions of the proceeds from this offering for other purposes.
CAPITALIZATION
The
following table sets forth our consolidated cash and capitalization as of March 31, 2021. Such information is set forth on the following
basis:
|
|
●
|
on a pro forma basis, giving
effect to the sale of 862,500 shares of common stock in this offering (assuming the exercise of the underwriters’ overallotment
option in full) at the public offering price of $3.40 per share after deducting commissions and other estimated offering expenses;
and
|
This
table should be read in conjunction with “Use of Proceeds” and our audited and unaudited financial statements.
|
|
|
As of March 31, 2021
|
|
|
|
|
Actual
|
|
|
Pro Forma
|
|
|
Cash and cash equivalents
|
|
$
|
2,802,772
|
|
|
$
|
5,371,997
|
|
|
Total indebtedness
|
|
$
|
1,723,234
|
|
|
$
|
1,723,234
|
|
|
Stockholders’ equity (deficit):
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
$
|
10,925
|
|
|
$
|
11,788
|
|
|
Additional paid-in capital
|
|
$
|
80,633,380
|
|
|
$
|
83,201,742
|
|
|
Accumulated deficit
|
|
$
|
(78,572,159
|
)
|
|
$
|
(78,572,159
|
)
|
|
Treasury Stock
|
|
$
|
(62, 406
|
)
|
|
$
|
(62,406
|
)
|
|
Total liabilities and stockholders’ equity
|
|
$
|
6,436,445
|
|
|
$
|
9,005,670
|
|
DILUTION
If you invest in our Common Stock, your interest will
be diluted to the extent of the difference between the price per share you pay in this offering and the net tangible book value per share
of our Common Stock immediately after this offering. Our net tangible book value of our Common Stock as of March 31, 2021 was approximately
$(219,507), or approximately $(0.02) per share of Common Stock based on 10,915,676 shares outstanding at that time. “Net tangible
book value” is total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share”
is net tangible book value divided by the total number of shares outstanding.
After giving effect to the sale of 862,500 shares
of Common Stock in this offering (assuming the exercise of the underwriters’ overallotment option in full) at the public offering
price of $3.40 per share of our Common Stock, and after deducting the underwriting commissions and estimated offering expenses payable
by us, our adjusted net tangible book value as of March 31, 2021 would have been approximately $2,439,718, or approximately $0.20 per
share of Common Stock. This represents an immediate increase in net tangible book value of $0.22 per share to our existing stockholders
and an immediate dilution in net tangible book value of approximately $3.20 per share to new investors participating in this offering,
as illustrated by the following table:
|
Public offering price per share
|
|
|
|
|
|
$
|
3.40
|
|
|
Net tangible book value per share as of March 31, 2021
|
|
$
|
(0.02)
|
|
|
|
|
|
|
Increase in net tangible book value per share attributable to this offering
|
|
$
|
0.22
|
|
|
|
|
|
|
Adjusted net tangible book value per share as of March 31, 2021 after this offering
|
|
|
|
|
|
$
|
0.20
|
|
|
Dilution per share to new investors
|
|
|
|
|
|
$
|
3.20
|
|
The
discussion of dilution, and the table quantifying it, assume the sale of all shares covered by this prospectus supplement and no exercise
of any outstanding options or warrants or other potentially dilutive securities. The exercise of potentially dilutive securities having
an exercise price less than the offering price would increase the dilutive effect to new investors.
In
particular, the table above excludes the following securities as of March 31, 2021:
|
|
●
|
6,273,778 shares of common stock that may be issued upon the exercise of outstanding warrants at an exercise price of $4.96.
|
|
|
|
|
|
|
●
|
2,350,062 shares of common stock that may be issued upon the exercise of outstanding options at an exercise price of $7.84; and.
|
|
|
|
|
|
|
●
|
49,629 shares that may be issued upon the conversion of notes.
|
To
the extent that any outstanding stock options, restricted stock units or warrants are converted or exercised, new options are issued
under our equity incentive plans and subsequently exercised or we issue additional shares of Common Stock in the future, there will be
further dilution to new investors participating in this offering.
DESCRIPTION
OF SECURITIES THAT WE ARE OFFERING
Common
Stock
The
holders of the Company’s common stock are entitled to one vote per share. In addition, the holders of the Company’s common
stock will be entitled to receive dividends ratably, if any, declared by the Company’s board of directors out of legally available
funds; however, the current policy of the board of directors is to retain earnings, if any, for operations and growth. Upon liquidation,
dissolution or winding-up, the holders of the Company’s common stock are entitled to share ratably in all assets that are legally
available for distribution. The holders of the Company’s common stock have no preemptive, subscription, redemption or conversion
rights. The rights, preferences and privileges of holders of the Company’s common stock are subject to, and may be adversely affected
by, the rights of the holders of any series of preferred stock, which may be designated solely by action of the board of directors and
issued in the future.
Options
and Warrants
As of March 31, 2021, there were warrants entitling
the holders to purchase up to 6,273,778 shares of Common Stock at a weighted average exercise price of $4.96 per share with a weighted
average remaining contractual life of 4.52 years and options entitling the holders to purchase up to 2,350,062 shares of common stock
at a weighted average price of $7.84 per share with a weighted average remaining contractual life of 5.37 years.
Anti-Takeover
Provisions
Nevada
Anti-Takeover Law and Certain Charter and Bylaw Provisions
We
are a Nevada corporation and the anti-takeover provisions of the Nevada Revised Statutes may discourage, delay or prevent a change in
control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the
person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders. In addition,
our certificate of incorporation and bylaws may discourage, delay or prevent a change in our management or control over us that stockholders
may consider favorable. Our certificate of incorporation and bylaws:
|
|
●
|
authorize
the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;
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|
|
●
|
provide
that vacancies on our board of directors, including newly created directorships, may be filled by a majority vote of directors then
in office;
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|
|
|
|
|
|
●
|
place
restrictive requirements (including advance notification of stockholder nominations and proposals) on how special meetings of stockholders
may be called by our stockholders; do not provide stockholders with the ability to cumulate their votes; and
|
|
|
|
|
|
|
●
|
provide
that our board of directors or a majority of our stockholders may amend our bylaws.
|
Transfer
Agent
The
transfer agent for our Common Stock is Pacific Stock Transfer with an address 6725 Via Austi Parkway, Suite 300 Las Vegas, NV 89119.
UNDERWRITING
The
Benchmark Company, LLC (“Benchmark”) is acting as the representative of the underwriters. We have entered into an underwriting
agreement with Benchmark. Subject to the terms and conditions of the underwriting agreement, we have agreed to offer and sell to the underwriters,
up to shares of common stock at the public offering price shown on the cover page of this prospectus supplement, and the underwriters
have severally agreed to purchase, the number of shares of common stock provided below opposite their respective names.
|
Underwriters
|
|
Number of
Shares
|
|
|
The Benchmark Company, LLC
|
|
|
599,999
|
|
|
Aegis Capital Corp.
|
|
|
150,000
|
|
|
Brookline Capital Markets, a division of Arcadia Securities, LLC
|
|
|
1
|
|
|
Total
|
|
|
750,000
|
|
The underwriters are offering the shares of common
stock subject to their acceptance of the shares of common stock from us and subject to prior sale. The underwriting agreement provides
that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock offered by this prospectus
are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated
to take and pay for all of the shares of common stock if any such shares are taken. However, the underwriters are not required to take
or pay for the shares of common stock covered by the underwriters’ over-allotment option described below.
Over-Allotment Option
We have granted the underwriters an option, exercisable
for 30 days from the date of this prospectus supplement, to purchase up to an aggregate of additional shares of common stock to cover
over-allotments, if any, at the public offering price set forth on the cover page of this prospectus supplement, less the underwriting
discount. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with
the offering of the shares of common stock offered by this prospectus supplement. If the underwriters exercise this option, each underwriter
will be obligated, subject to certain conditions, to purchase a number of additional shares proportionate to that underwriter’s
initial purchase commitment as indicated in the table above.
Underwriting
Commissions and Offering Expenses
The underwriters propose to offer
the common stock to the public at the public offering price shown below. The underwriters may offer the common stock to securities dealers
at the price to the public less a concession not in excess of $0.136. The underwriters have informed us that they do not intend to confirm
sales to any accounts over which they exercise discretionary authority.
The
following table shows the public offering price, underwriting commissions and proceeds, before expenses, to us:
|
|
|
Per Share1
|
|
|
Total
Without
Exercise of
Over-Allotment
Option
|
|
|
Total
With Exercise
of
Over Allotment
Option
|
|
|
Public offering price
|
|
$
|
3.40
|
|
|
$
|
2,550,000
|
|
|
$
|
2,932,500
|
|
|
Underwriting discount
|
|
$
|
0.238
|
|
|
$
|
175,500
|
|
|
$
|
201,825
|
|
|
(1)
|
Does not include the warrants to purchase shares of common stock equal to 5.0% of the number of shares sold in the offering (including shares sold pursuant to the underwriters’ over-allotment option) to be issued to the representative at the closing.
|
The Company has agreed to pay the underwriters’
non-accountable expenses allowance equal to 1% of the aggregate gross proceeds of this offering. The Company has also agreed to pay for
a certain amount of the underwriter’s accountable expenses including actual accountable road show expenses for the offering; prospectus
tracking and compliance software for the offering; the reasonable and documented fees and disbursements of the underwriters’ counsel
up to an amount of $50,000; background checks of the Company’s officers and directors; preparation of bound volumes and cube mementos
in such quantities as the underwriter may reasonably request; provided that these actual accountable expenses of the underwriter shall
not exceed $57,500 in the aggregate, including the fees and disbursements of underwriters’ counsel.
The Company estimates that the total expenses
of the offering payable by us, excluding underwriting discounts and commissions, will be approximately $158,000.
Representative’s Warrants
We have agreed to issue to the representative,
or its designees, warrants to purchase up to 5.0% of the aggregate number of shares of common stock sold in this offering (or up to shares).
The warrants will have a term of five years from the effective date of the offering, will have an exercise price equal to 120% of the
public offering price set forth on the cover page of this prospectus supplement (or $4.08 per share), will provide for a “cashless”
exercise, and will contain certain antidilution adjustments (but excluding any price based anti-dilution). The warrants will contain provisions
for unlimited “piggyback” registration rights, both for a period of no greater than three (3) years from the effective date
of the offering in compliance with FINRA Rule 5110(f)(2)(G)(iv). Pursuant to FINRA Rule 5110(g), the warrants and any shares of common
stock issued upon exercise of the warrants may not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any
hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the securities by
any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of this offering, except
the transfer of any security: (i) by operation of law or by reason of our reorganization; (ii) to any FINRA member firm participating
in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction set forth
above for the remainder of the time period; (iii) if the aggregate amount of our securities held by the underwriters or related persons
do not exceed 1% of the securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of an investment
fund, provided that no participating member manages or otherwise directs investments by the fund and the participating members in the
aggregate do not own more than 10% of the equity in the fund; or (v) the exercise or conversion of any security, if all securities remain
subject to the lock-up restriction set forth above for the remainder of the time period.
Lock-up Agreements
We have agreed, subject to limited exceptions,
for a period of 90 days after the date of the closing of this offering and our officers and directors have agreed, subject to limited
exceptions, for a period of 90 days after the date of underwriting agreement (the “Lock Up Period”), not to offer, sell, contract
to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of, directly or indirectly any shares of common
stock or any securities convertible into or exchangeable for our common stock either owned as of the date of the underwriting agreement
or thereafter acquired without the prior written consent of the representative. The representative may, in its sole discretion and at
any time or from time to time before the termination of the Lock Up Period release all or any portion of the securities subject to lock-up
agreements; provided, however, that, subject to limited exceptions, at least three business days before the release or waiver or any lock-up
agreement, the representative must notify us of the impending release or waiver and we will be required to announce the impending release
or waiver through a major news service at least two business days before the release or waiver.
Indemnification
We have agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act and liabilities arising from breaches of representations and warranties
contained in the underwriting agreement, or to contribute to payments that the underwriters may be required to make in respect of those
liabilities.
Discretionary Accounts
The underwriters do not intend to confirm sales
of the securities offered hereby to any accounts over which they have discretionary authority.
Nasdaq Listing
Our common stock is listed on The Nasdaq Capital Market under the symbol
“CRTD.”
Price Stabilization, Short Positions and Penalty Bids
In connection with this offering, the underwriters
may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with
Regulation M under the Exchange Act:
|
|
●
|
Stabilizing transactions permit bids to purchase
the underlying security so long as the stabilizing bids do not exceed a specified maximum.
|
|
|
|
|
|
|
●
|
Over-allotment involves sales by the underwriters
of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The
short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted
by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position,
the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered
short position by either exercising their over-allotment option and/or purchasing shares in the open market.
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Syndicate covering transactions involve purchases
of shares of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions.
In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of
shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment
option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short position, the position
can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are
concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect
investors who purchase in the offering.
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Penalty bids permit the representative to reclaim
a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing
or syndicate covering transaction to cover syndicate short positions.
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These stabilizing transactions, syndicate covering
transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding
a decline in the market price of the common stock. As a result, the price of our common stock may be higher than the price that might
otherwise exist in the open market. Neither we nor the underwriters makes any representation or prediction as to the direction or magnitude
of any effect that the transactions described above may have on the price of the common stock. In addition, neither we nor the underwriters
make any representations that the underwriters will engage in these stabilizing transactions or that any transaction, once commenced,
will not be discontinued without notice.
Nasdaq Passive Market Making
In connection with this offering, underwriters
and selling group members may engage in passive market making transactions in the common stock on The Nasdaq Capital Market in accordance
with Rule 103 of Regulation M under the Exchange Act during a period before the commencement of offers or sales of common stock and extending
through the completion of distribution. A passive market maker must display its bid at a price not in excess of the highest independent
bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, that bid must then be lowered
when specified purchase limits are exceeded. Passive market making may cause the price of our common stock to be higher than the price
that otherwise would exist in the open market in the absence of those transactions. The underwriters and dealers are not required to engage
in passive market making and may end passive market making activities at any time.
Electronic Distribution
This prospectus supplement, the accompanying prospectus
and the documents incorporated herein and therein by reference may be made available in electronic format on the websites maintained by
one or more of the underwriters. The underwriters may distribute prospectuses electronically. The underwriters may agree to allocate a
number of shares of common stock for sale to their online brokerage account holders. The common stock will be allocated to underwriters
that may make Internet distributions on the same basis as other allocations. In addition, common stock may be sold by the underwriters
to securities dealers who resell the common stock to online brokerage account holders.
Other than this prospectus supplement, the accompanying
prospectus and the documents incorporated herein and therein by reference, information contained in any website maintained by an underwriter
is not part of this prospectus supplement, the accompanying prospectus, the documents incorporated herein and therein by reference or
the registration statement of which this prospectus supplement forms a part, has not been endorsed by us and should not be relied on by
investors in deciding whether to purchase our common stock. The underwriters are not responsible for information contained in websites
that they do not maintain.
Other Relationships
From time to time, certain of the underwriters
and/or their affiliates have provided, and may in the future provide, various investment banking and other financial services for us for
which services they have received and, may in the future receive, customary fees. In the course of their businesses, the underwriters
and their affiliates may actively trade our securities or loans for their own account or for the accounts of customers, and, accordingly,
the underwriters and their affiliates may at any time hold long or short positions in such securities or loans.
In particular, Benchmark acted as an underwriter
and sole-book running manager in connection with the offering of our securities that closed on September 15, 2020, whereby we granted
them a right of first refusal, for a period of twelve (12) months from the closing of such offering, to act as lead managing underwriter
and book runner or minimally as co-lead manager and co-book runner and/or co-lead placement agent at the underwriter’s discretion,
for each and every future public and private equity, equity-linked or debt (excluding commercial bank debt) offering, including all equity
linked financings during such twelve (12) month period, of the Company, or any successor to or subsidiary of the Company. In connection
with this offering, we agreed to pay Benchmark a tail fee during the 6-month period following this offering.
Selling Restrictions
Other
than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered
by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus
may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection
with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will
result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This
prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any
jurisdiction in which such an offer or a solicitation is unlawful.
LEGAL
MATTERS
The validity of the shares of Common Stock offered by this prospectus
supplement has been passed upon for us by Lucosky Brookman LLP. Mitchell Silberberg & Knupp LLP, New York, New York, is acting as
counsel for the underwriter in connection with the shares offered hereby.
EXPERTS
The
financial statements, incorporated in this prospectus supplement by reference from our Annual Report on Form 10-K for the year ended
December 31, 2020, have been audited by Rosenberg Rich Baker Berman, P.A., an independent registered public accounting firm,, as stated
in their reports, which are incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the
reports of such firm given upon their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Available
Information
We
file reports, proxy statements and other information with the SEC. The SEC maintains a web site that contains reports, proxy and information
statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is http://www.sec.gov.
Our
website address is https://www.integratedventuresinc.com. The information on our website, however, is not, and should
not be deemed to be, a part of this prospectus.
This
prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the
information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms
of the documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement. Statements
in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by
reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant
matters. You may view a copy of the registration statement through the SEC’s website, as provided above.
Incorporation
by Reference
The
SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose
important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference
is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede
that information. Any statement contained in a previously filed document incorporated by reference will be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or replaces that statement.
We
incorporate by reference our documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus, between
the date of this prospectus and the termination of the offering of the securities described in this prospectus. We are not, however,
incorporating by reference any documents or portions thereof, whether specifically listed below or filed in the future, that are not
deemed “filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related exhibits
furnished pursuant to Item 9.01 of Form 8-K.
This
prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been
filed with the SEC:
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Our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 31, 2021.
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Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021,
filed with the SEC on May 17, 2021.
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Our
Current Reports on Form 8-K filed with the SEC on January
5, 2021, January 8,
2021, February 2, 2021, February
17, 2021, March 12,
2021, and June 10, 2021.
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All
reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination
of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior
to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will
also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports
and documents.
You
may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they are specifically
incorporated by reference in the documents) by writing or telephoning us at the following address:
Creatd,
Inc.
2050
Center Avenue Suite 640
Fort
Lee, NJ 07024
Telephone:
(201) 258-3770
Exhibits
to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus and
any accompanying prospectus supplement.
The information in
this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy
these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion,
dated April 8, 2021.
PROSPECTUS
CREATD, INC.
$50,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Rights
Units
We may offer and sell up to $50 million in the
aggregate of the securities identified above from time to time in one or more offerings. This prospectus provides you with a general description
of the securities.
Each time we offer and sell securities, we will
provide a supplement to this prospectus that contains specific information about the offering and the amounts, prices and terms of the
securities. The supplement may also add, update or change information contained in this prospectus with respect to that offering. You
should carefully read this prospectus and the applicable prospectus supplement before you invest in any of our securities.
We may offer and sell the securities described
in this prospectus and any prospectus supplement to or through one or more underwriters, dealers and agents, or directly to purchasers,
or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their
names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable
from the information set forth, in the applicable prospectus supplement. See the sections of this prospectus entitled “About this
Prospectus” and “Plan of Distribution” for more information. No securities may be sold without delivery of this prospectus
and the applicable prospectus supplement describing the method and terms of the offering of such securities.
INVESTING IN OUR SECURITIES INVOLVES RISKS.
SEE THE “RISK FACTORS” ON PAGE 11 OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE APPLICABLE PROSPECTUS
SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Our common stock is listed on The NASDAQ Capital
Market under the symbol “CRTD”. On April 1, 2021, the last reported sale price of our common stock on The NASDAQ Capital Market
was $4.57 per share.
The aggregate market value of our outstanding
common stock held by non-affiliates is $43,382,293.52, as of April 8, 2021, based on 10,684,514 shares of outstanding common stock, of
which 4,030,788 are held by affiliates, and a per share price of $6.52, based on the highest closing sale price of our common stock in
the last 60 days. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell our common stock in a public primary offering
with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75,000,000.
We have not offered any securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends
on and includes the date of this prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
The date of this prospectus
is , 2021.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a “shelf” registration process. By using
a shelf registration statement, we may sell securities from time to time and in one or more offerings up to a total dollar amount of $50
million as described in this prospectus. Each time that we offer and sell securities, we will provide a prospectus supplement to this
prospectus that contains specific information about the securities being offered and sold and the specific terms of that offering. The
prospectus supplement may also add, update or change information contained in this prospectus with respect to that offering. If there
is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on the prospectus
supplement. Before purchasing any securities, you should carefully read both this prospectus and the applicable prospectus supplement,
together with the additional information described under the heading “Where You Can Find More Information; Incorporation by Reference.”
We have not authorized any other person to provide
you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We will
not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus and the applicable prospectus supplement to this prospectus is accurate as of the date on its respective
cover, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, unless
we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates.
When we refer to “Creatd,” “we,”
“our,” “us” and the “Company” in this prospectus, we mean Creatd, Inc., unless otherwise specified.
When we refer to “you,” we mean the holders of the applicable series of securities.
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION
BY REFERENCE
Available Information
We file reports, proxy statements and other information
with the SEC. Information filed with the SEC by us can be inspected and copied at the Public Reference Room maintained by the SEC at 100
F Street, N.E., Washington, D.C. 20549. You may also obtain copies of this information by mail from the Public Reference Room of the SEC
at prescribed rates. Further information on the operation of the SEC’s Public Reference Room in Washington, D.C. can be obtained
by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site that contains reports, proxy and information statements and other
information about issuers, such as us, who file electronically with the SEC. The address of that website is http://www.sec.gov.
Our website address is https://creatd.com. The
information on our website, however, is not, and should not be deemed to be, a part of this prospectus.
This prospectus and any prospectus supplement
are part of a registration statement that we filed with the SEC and do not contain all of the information in the registration statement.
The full registration statement may be obtained from the SEC or us, as provided below. Forms of the documents establishing the terms of
the offered securities are or may be filed as exhibits to the registration statement. Statements in this prospectus or any prospectus
supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it
refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the
registration statement at the SEC’s Public Reference Room in Washington, D.C. or through the SEC’s website, as provided above.
Incorporation by Reference
The SEC’s rules allow us to “incorporate
by reference” information into this prospectus, which means that we can disclose important information to you by referring you to
another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and
subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in
a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus modifies or replaces that statement.
We incorporate by reference our documents listed
below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, which we refer to as the “Exchange Act” in this prospectus, between the date of this prospectus and the termination
of the offering of the securities described in this prospectus. We are not, however, incorporating by reference any documents or portions
thereof, whether specifically listed below or filed in the future, that are not deemed “filed” with the SEC, including any
information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Form 8-K.
This prospectus and any accompanying prospectus
supplement incorporate by reference the documents set forth below that have previously been filed with the SEC:
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Our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 31, 2021.
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Our
Current Reports on Form 8-K filed with the SEC on January 5, 2021, January 8, 2021, February 17, 2021, and March 12,
2021.
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All reports and other documents we subsequently
file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, including all such documents
we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement,
but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus
and deemed to be part of this prospectus from the date of the filing of such reports and documents.
You may request a free copy of any of the documents
incorporated by reference in this prospectus (other than exhibits, unless they are specifically incorporated by reference in the documents)
by writing or telephoning us at the following address:
Creatd, Inc.
2050 Center Avenue Suite 640
Fort Lee, NJ 07024
Telephone: (201) 258-3770
Exhibits to the filings will not be sent, however,
unless those exhibits have specifically been incorporated by reference in this prospectus and any accompanying prospectus supplement.
THE COMPANY
Overview
Creatd, Inc. (“CRTD,”
“the Company,” or “Creatd”) is a creator-first technology company and the parent company of the Vocal platform.
Our mission is to empower creators, entrepreneurs, and brands through technology and partnership. We accomplish this through Creatd’s
three main business pillars: Vocal Ventures, Creatd Partners, and our newest initiative, Recreatd. At its core, Creatd centers around
the philosophy that creators are the driving force that propels success in the digital realm. This philosophy is represented by a framework
we call the Creatd Cycle, which operates on the premise that creators produce content that attracts audiences, who in turn attract brands
who are interested in reaching those audiences and the ability to generate new installations around bespoke ecosystems such as health
and wellness, sports, and education.
Creatd’s first
pillar, Vocal Ventures, houses our proprietary technology platforms, including Creatd’s flagship product, the Vocal platform, and
its 36 wholly owned-and-operated creator communities. Through Vocal, creators can create and share their stories in a way that helps them
get discovered by their ideal audiences and be rewarded for their creativity. Similarly, brands can access their ideal consumers and drive
conversions for their products and services. The Vocal platform’s scalable and unique underlying agile framework lends itself well
to future acquisitions and white-label opportunities for Creatd’s technology because of the ease with which other platforms can
be integrated into our ecosystem.
Creatd Partners, Creatd’s second pillar, houses our brand-oriented initiatives, including our agency businesses, Vocal for Brands
and Seller’s Choice, as well as its corporate ventures and investments. Both of these agencies serve a multitude of clients, while
the venture arm looks to make direct investments in the ones that have significant upside opportunity. Creatd Partners pairs Creatd’s
resources and Vocal’s proprietary technology, which were built to simultaneously amplify creators’ discoverability and potential
reward and help direct-to-consumer brands achieve conversions and reach their target audiences, while generating value for all of Creatd’s
stakeholders.
Recreatd is the pillar which houses Creatd’s
intellectual property and legacy media assets, including acquired artwork, photographs and media memorabilia. Recreatd represents an initiative
by Creatd to revitalize transmedia content, utilizing Vocal Ventures’ technology, data, and marketing capabilities to reboot archival
media assets and e-commerce properties. Creatd has a history of successfully executing such acquisition and assimilation projects, including
its resuscitation of General Media properties such as the iconic women’s magazine, Viva, into digital communities and absorbing
once-defunct content communities like Creators Media (which at one time was valued at $50MM). Creatd has a vast collection of intellectual
property and legacy content, including a documentary about the life of Bob Guccione directed by Barry Avrich; Till Human Voices
Wake Us, a short film starring Lindsay Lohan and directed by famed photographer Indrani; No One’s Pet, the
biography of Penthouse Pet Sheila Kennedy authored by renown film critic Glenn Kenny; and The Mind’s Eye, The Art of Omni.
The Company’s ability to leverage its technology to revitalize this content represents a significant value proposition for media
companies and publishers that are sitting on vast collections of content that are of supreme quality but are not in a suitable format
for today’s consumer.
Vocal
Vocal, Creatd’s
flagship product, is a robust, proprietary technology platform that provides best-in-class tools, safe and curated communities, and monetization
opportunities that enable creators to find a receptive audience and get rewarded. Through Vocal, content creators can get discovered and
monetize their content by connecting to their ideal audiences and partnering with the brands that want to reach those audiences.
Since its initial launch
in 2016, Vocal has grown to be one of the fastest growing communities for content creators of all kinds, including writers, musicians,
podcasters, photographers, and more; as of March 2021, Vocal has reached over 900,000 freemium creators and over 20,000 Vocal+ paid subscribers
across its 36 owned and operated niche communities.
Vocal provides a large
stage for creators to connect with fans and find new audiences. In addition to enabling access to millions of unique monthly visitors,
the platform provides creators with a full suite of tools and services for content creation, discovery, distribution, and monetization,
including:
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Easy-to use, rich media content editor: Vocal’s storytelling tools enable creators to produce beautiful and engaging stories in a simple, user-friendly interface, and incorporate rich-media content of all kinds, including streaming content, photos, videos, podcasts, product links, written text, and more. Vocal’s open canvas content creation editor makes it easy to create high-quality and engaging stories, and is a cost effective alternative to managing a blog content management system (CMS).
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Numerous Monetization Features: Both of Vocal’s membership tiers–Vocal freemium and the Vocal+ premium tier – provide multiple monetization opportunities for creators. Creators can earn money i) every time their story is read, ii) by competing in Challenges, iii) by receiving ‘tips’ and ‘bonuses’ iv) by collaborating on branded content campaigns through the company’s in-house agency, Vocal for Brands. For freemium members, content ‘reads’ are monetized at a rate of $3.80 per 1,000 reads (calculated based on time on page, scrolling behavior, and other internal metrics), whereas Vocal+ members monetize at $6.00 per 1,000 reads. These rates are subject to change based on market trends or the introduction of additional features and plan tiers.
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Brand-safe advertising platform: Vocal was designed to target consumers in an authentic, non-interruptive way. Brand partnerships and collaborations allow companies tap into the power of Vocal through campaign-optimized stories, authored by real Vocal creators, that build brand affinity, trust, and drive sales.
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Transparent Performance Data: Creators can view their “Stats” at any time to view their individual performance data, such as how many Reads a given story received, how much money they have earned, and how many Tips, Bonuses, or ‘Likes,’ they received. Additionally, Vocal users have the ability to view key metrics such as community-specific data and Vocal+ membership data.
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Valuable Audience: The nature of Vocal’s genre-specific (niche) community structure is such that it generates a positively selected audience, a quality which makes Vocal an attractive prospect for creators and brands alike. In a niche community, audiences are inherently more likely to be interested in the particular content housed in that community.
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Vocal+ is Creatd’s
premium subscription membership program. Vocal+ members pay a membership fee for premium features, including receiving increased earnings
for their content, reduced platform processing fees for Tips received, a Vocal+ badge on their creator page, eligibility to participate
in exclusive Vocal+ Challenges, and more. Vocal+ offers a strong value proposition for new creators, as well as the over 900,000 freemium
users registered to Vocal. Creators may sign up for a Vocal+ membership when they create an account, or they can upgrade an existing Vocal
Free account to a Vocal+ account at any time. The current cost of a Vocal+ membership is either $9.99 per month or $99 annually. From
time to time, the Company offers Vocal+ subscriptions at a discount for a predetermined number of months as a promotion for new subscribers.
Vocal for Brands
Digital audiences have become increasingly wary
of traditional display and programmatic advertising tactics. Intrusive ads like pop-ups have proven to disrupt the consumer experience,
leading to trends such as the fact that over 25% of internet users have ad blockers installed. Brands are actively seeking trustworthy
and safe platforms like Vocal to drive engagement through non-interruptive brand storytelling and deliver invaluable performance metrics
that help optimize their marketing efforts.
Creatd’s internal content studio, Vocal
for Brands, pairs leading brands with authentic creators to produce marketing campaigns that are non-interruptive, engaging, and direct-response
driven. The key value propositions for brands include:
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Authentic Storytelling: Our internal data group partners brands with real Vocal creators to tell their brand’s story in a way that is both engaging and trustworthy. In addition, brands can opt to sponsor a Challenge, which effectively yield a collection of crowdsourced branded content for brands and help them reach a wider audience.
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Valuable Audience: Vocal’s first-party data provides an opportunity to create highly targeted and segmented audiences to promote branded content. Most importantly, Vocal’s technology helps brands target the right audience by utilizing and applying that first-party data.
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Transparent Analytics: For every campaign we produce, our brand clients have access to story performance data, engagement data, behavioral data, and interest data. Brands can apply this data to further increase awareness and optimize audience targeting.
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Vocal’s first-party data enables our team
to create highly targeted and segmented audiences for Vocal for Brands campaigns, and help the brand reach their ideal audience. Brands
can access story performance data, engagement data, behavioral data, and sentiment data, all of which is used to further optimize the
campaign’s success. The combination of Vocal’s hyper-engaged audiences, user-generated communities, and brand-safe environment
help brands achieve maximum ROAS (return on ad spend).
Vocal for Brands typically
collects fixed fees ranging from $10,000 to $110,000, depending on campaign duration and specific client objectives. To date, Vocal for
Brands’ client roster includes up-and-coming direct to consumer (DTC) brands such as IAC’s Vimeo, Moleskine, New York Post’s
Decider, Lull, Daily Harvest, Cleancult, and more.
With the introduction
of Challenges in early first quarter 2020, brands can now tap into Vocal’s network content creators and encourage them to interact
with, learn about and promote their brand while benefiting from Vocal’s brand-safe, moderated, and curated environment. Vocal Challenges
have a unique ability to capture the hearts and minds of the creative community and drive meaningful engagement. Challenges combine thought-provoking
story prompts and sizable reward potential, which work to inspire creators and drive them toward participation. Brands can similarly capitalize
on this combined effect by collaborating with Vocal on a sponsored Challenge, prompting the creation of high-quality stories that are
centered around the brand’s mission and further disseminated through creators’ respective social channels and promotional
outlets.
Seller’s Choice
In addition to Vocal for Brands, Creatd supports
brands by providing managed and performance marketing services through Seller’s Choice. an in-house marketing agency for DTC (direct-to-consumer)
and e-commerce clients. Acquired by Creatd in September 2019, Seller’s Choice provides direct-to-consumer brands with design, development,
strategy, and sales optimization services. Its status as an Amazon Solution Provider and its weighty operational structure made it an
ideal candidate for acquisition in late 2019. Creatd’s business model is built to absorb distressed operational infrastructures,
integrate the few best components, and shed the non-essential costs.
Creatd Partners
Creatd Partners is the Company’s corporate venture arm, as well as the business division that encompasses management of Seller’s
Choice and Vocal for Brands. Creatd Partners invests in qualified brands who are aligned with our corporate mission, such as direct-to-consumer
brands, digital platforms, and technologies that support entrepreneurs and the creator economy. Creatd Partners was established with the
aim of nurturing high-potential, early-stage companies that can meaningfully benefit by leveraging Creatd’s technology, resources
and proven capacity to optimize visibility, reach, and conversions for direct-to-consumer products and services. Creatd Partners investments
are subject to the completion of rigorous due diligence and independent valuation assessment and may encompass a combination of financial
and operational support in exchange for an equity stake in the business.
Creatd Partners’ first investment is Plant
Camp, a direct-to-consumer food company that creates healthy and nutritional upgrades to classic foods and was launched in December 2020.
The Company has made three further investments, the most notable of which is an equity investment in the health and wellness DTC beverage
space. Additionally, Creatd Partners is currently exploring future opportunities that fit its criteria and risk profile, seeking partner
companies that combine a quality product, seasoned founders, and the ability to leverage Creatd’s platform technology.
Moderation and Compliance
One of the key differentiating
factors between Vocal and most other user-generated content platforms is the fact that each story submitted to Vocal is run through the
Company’s proprietary moderation process before it goes live on the platform. The decision to implement moderation into the submission
process was in direct response to the rise of misinformation and bad actors on many social platforms. In response to these inherent pitfalls
within the content landscape, Vocal’s proprietary moderation system combines the algorithmic detection of copyrighted material,
hate speech, graphic violence, and nudity, and human-led curation to ensure the quality and safety of each story published on Vocal, thus
fostering a safe and trustworthy environment for creators, audiences, and brands. Moderation and compliance are more important than ever
in a world where ambiguity can systematically damage value. Vocal’s enforcement of community guidelines and emphasis on content
moderation protects the platform, its creators, and Creatd shareholders.
Trust and safety are
paramount to the Vocal ecosystem. We follow best practices when handling personally identifiable information, with guidance from the European
Union’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and the Digital Millennium Copyright
Act (DMCA).
Platform Compliance Policies
include:
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Human-led, technology assisted moderation of every story submitted;
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Algorithmic detection of hate speech, nudity, and copyright infringement;
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Brand, creator, and audience safety enforced through community watch; and
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The rejection of what we consider toxic content, with the understanding that diverse opinions are encouraged.
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Technology Development
Vocal’s proprietary technology is built
on Keystone, the same underlying open-source framework used by industry-leaders such as Atlassian, a $43-billion Australian technology
company. Some of the key differentiating elements of Vocal’s technology are speed, sustainability, and scalability. The Company
continues to invest heavily in research and development to continuously improve and innovate its platform, with the goal of optimizing
the user experience for creators. Vocal’s architecture allows it to do more with less cost and provides a model capable of turning
a profit.
Additionally, the Vocal platform and its underlying
technology allows us to maintain an advantageous capital-light infrastructure. By using cloud service providers, we are able to focus
on platform and revenue growth rather than building and maintaining the costly internal infrastructures that have materially affected
so many legacy media platforms. Vocal’s technology has been specifically designed and built to scale without a material corresponding
increase in operational costs. While our users can embed rich media, such as video, audio, and product links, into their Vocal stories,
the rich media content is hosted elsewhere (such as YouTube, Instagram, Vimeo, Shopify, Spotify, etc.). Thus, our platform can accommodate
rich media content of all kinds without bearing the financial or operational costs associated with hosting the rich media itself. In addition
to the benefits this framework affords to the Company, it is the additional benefit to our content creators, in that a creator can increase
their monetization; for example, a creator can embed their YouTube video into a Vocal story and thus derive earnings from both platforms
when their video is viewed.
Application of First-Party
Data
Creatd’s business
intelligence and marketing teams identify and target individual creators, communities, and brands, utilizing empirical data harnessed
from the Vocal platform. The team’s ability to apply its proprietary first-party data works to reduce acquisition costs for new
creators and to help provide brands with conversions and an ideal targeted audience. In this way, our ability to apply first-party data
is one of the value-drivers for the Company and the key advantages of its closed ecosystem strategy, which we refer to as the Creatd Cycle.
In its simplest definition,
first-party data is data that you collect directly from your customers. Even the most simplistic blog website is collecting some degree
of first-party data; Creatd’s edge is in its application of that data. Our organization is constantly collecting a tremendous amount
of first-party behavioral data extracted from the Vocal platform. To date, we have collected hundreds of millions of data points around
our customers and our audiences.
Importantly, we do not
sell that data, that being a common monetization opportunity for many other businesses. Instead, we use our collected first-party data
for the purposes of bettering the platform. Specifically, our data helps us understand the behaviors and attributes that are common among
the creators, brands, and audiences within our ecosystem. We then pair our first-party Vocal data with third-party data from distribution
platforms such as Facebook and Snapchat to provide a more granular profile of our creators, brands, and audiences.
It is through generating this valuable first-party
data that we can continually enrich and refine our targeting capabilities for branded content promotion and creator acquisition, and specifically,
to reduce our creator acquisition costs (CAC) and subscriber acquisition costs (SAC). Lower acquisition costs combined with increasing
lifetime value (LTV) per subscriber, means that our enterprise value is accelerating each time we acquire a new user. We anticipate the
lifetime value of our subscribers to increase as we introduce more features that cater to the needs of our creators. It is Vocal’s
unique capability to collect and apply first-party behavioral data that allows us to simultaneously increase the LTV of our subscribers
over time, while lowering the cost to acquire them. In fact, the link between incentivizing creators and lowering creator acquisition
costs is a primary focus of the data science team, and an important consideration for every feature we develop for the Vocal platform.
Competition
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. Depreciating value of digital media business models built on legacy technology platforms created a unique opportunity
for development of a creator-centric platform that could appeal to a global community and, at the same time, be capable of acquiring undervalued
complimentary technology assets.
Creatd’s founders
built the Vocal platform upon the general thesis that a closed and safe ecosystem utilizing first-party data to increase efficiencies
could create a sustainable and defensible business model. Vocal was strategically developed to provide value for content creators, readers,
and brands, and to serve as a home for the ever-increasing amount of digital content being produced and the libraries of digital assets
lying dormant.
Vocal is most commonly discussed as a combination
of:
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Medium, a platform for writers built by former Twitter founder Ev Williams;
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Reddit, a social news aggregation, web content rating, and discussion website; and
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Patreon, a membership platform that provides business tools for content creators to run a subscription service.
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Importantly, Creatd does not see Vocal as a substitute
or competitor to segment-specific content platforms, such as Vimeo, YouTube, Instagram, or SoundCloud. We don’t want to replace
anyone; we built Vocal to be accretive to the entire digital ecosystem. In fact, one of the most powerful components of our technology
is the fact that Vocal makes it easy for creators to embed their existing published content, including videos, songs, podcasts, photographs,
and more, directly into Vocal. We see this as a growth opportunity by building partnerships with the world’s greatest technology
companies and to further spread our roots deeper into the digital landscape.
Revenue Model
Creatd’s revenues
are primarily generated through:
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Creator Subscriptions: 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. Management projects 100,000 paid subscribers in 2021.
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Marketing Partnerships: Vocal partners with leading brands and creators through its internal content studio, Vocal for Brands, to produce influencer and content marketing campaigns, including sponsored Challenges, that leverage the power of Vocal. Branded stories and Challenges are optimized for conversions, distributed to a targeted audience based on Vocal’s first-party data, and are optimized for conversions to maximize revenue growth.
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Managed Services: Creatd’s in-house marketing agency for e-commerce, Seller’s Choice, provides direct-to-consumer brands with design, development, strategy, and sales optimization services.
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Platform Processing Fees and Microtransactions: With Tipping and other types of microtransactions, audiences can engage and support their favorite Vocal creators by actively investing in their creativity. Vocal takes a platform processing fee on all transactions. Each Tip sent on Vocal generates revenue for the Company in the form of platform processing fees. For Vocal Free creators, we retain a 7% platform processing fee for every Tip exchanged. For Vocal+ creators, we retain a 2.9% platform processing fee.
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Affiliate sales: Vocal generates revenue through affiliate marketing relationships, which pays the Company a percentage of purchases made on our platform. Affiliate relationships include Amazon, Skimlinks, Tune, and more. This represents a unique opportunity in the post-pandemic environment where brands need expansive distribution pipelines such as Vocal to reach broader audiences.
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E-commerce: Our e-commerce strategy involves revitalizing archival imagery and media content in dormant legacy portfolios. Our curation and data capabilities have helped us create scalable and definable value for our internal collection of media assets through financing, trademarking, licensing, and production opportunities. Creatd has an exclusive license to leverage the stories housed on Vocal, reimagining them for films, episodic shows, games, graphic novels, collectibles, books, and more.
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Growth Strategy:
Continued growth is likely
to be achieved by focusing on the following key areas:
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Creator Growth: Vocal brings new creators, their audience, and brands to its platform through organic growth, performance marketing, and brand-building campaigns that drive awareness. As the Vocal team continues to collect first-party behavioral data, we are able to further refine an ideal user profile and hone a specific targeting strategy to effectively scale the platform’s creator base. Our product roadmap includes new features that will work to incentivize creators to help us expand the Vocal network organically; upcoming features include creator referrals and gated content, which will enable creators to utilize Vocal’s microtransaction capabilities to charge recurring fees for exclusive content. With these new features, creators will have further opportunities to get discovered and earn on Vocal, which works to the benefit of the entire platform.
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Brand Partnerships: Continued investment in new product offerings for brand storytelling on Vocal with the goal of increasing the value to brands in the form of analytics, audience engagement, and conversion data for their products and services. The Vocal for Brands in-house content studio is constantly evolving in order to elevate brand relationships, both qualitatively and quantitatively.
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Licensing and Transmedia Opportunities: In collaboration with other production and media companies, as well as with our expanding user base, we look for content that can be leveraged for adaptation to film, television, digital shorts, books, and comic series. We believe that Vocal’s ever-expanding community of creators and influencers affords us with the unique opportunity to cultivate these relationships. This initiative is referred to by the Company as Recreatd.
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White Label Opportunities: White-labeling Vocal’s underlying platform architecture can be utilized for application in a range of industries, including use by sports franchises, trade companies, education organizations, companies in the financial sector, and others. An example of a white label installation of Vocal currently on our drawing board is a platform called Give. The idea behind Give is to borrow Vocal’s topic-specific community structure and adapt it for the non-profit sector. The Give platform would function as a network of vetted, verified organizations for which creators can raise awareness, funding or discussions using Vocal’s existing features like storytelling tools, community engagement, and microtransactions. Give will provide charities with the tools and resources to capture attention and donations in what is a saturated non-profit space.
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Vocal Global: Vocal Global is Creatd’s new market expansion strategy for applying Vocal’s technology to international platform opportunities. While the U.S., U.K., and Canada represent the vast majority of our audience, we believe there will be significant demand for our product in overseas markets–including Asia, the Middle East, and South America–particularly for foreign language installations of the product, an initiative which Creatd refers to as “Content Without Borders.”
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Acquisition Strategy
Creatd’s hybrid finance and design culture
is key to its acquisition strategy. Acquisition targets are companies that meet a set of opportunistic or financial standards or that
are part of specific digital environments that are accretive and can seamlessly integrate into Creatd’s existing revenue lines.
Creatd will continue to make strategic acquisitions when presented with opportunities that are in the interest of shareholder value.
Recent Developments
On September 15, 2020, Company consummated an
underwritten public offering (the “Offering”) of 1,725,000 units of securities (the “Units”), with each Unit consisting
of (i) one share of common stock, par value $0.001 per share (“Common Stock”), and (ii) one warrant to purchase one share
of Common Stock (the “Warrants”). The Offering was conducted pursuant to an Underwriting Agreement, dated September 10, 2020,
by and between the Company and The Benchmark Company, LLC, acting as the representative (the “Representative”) of the several
underwriters named therein (the “Underwriting Agreement”). In connection with the Offering, the Company granted the underwriters
a 45-day option to purchase up to 258,750 shares of Common Stock and/or 258,750 Warrants to purchase Common Stock to cover over-allotments,
if any.
The public offering price per Unit was $4.50.
The shares of Common Stock and Warrants were issued separately and are immediately separable upon issuance. Each Warrant represents the
right to purchase one share of Common Stock at an exercise price of $4.50 per share, expiring 5 years from the date of issuance.
On September 15, 2020, the Company entered into
a Warrant Agreement with Pacific Stock Transfer (“Pacific Stock”), appointing Pacific Stock as Warrant Agent for the Warrants
for purposes of the Offering (the “Warrant Agreement”). A registration statement on Form S-1 (File No. 333-238514) (the “Registration
Statement”) relating to the Offering was initially filed with the U.S. Securities and Exchange Commission (the “SEC”)
on May 20, 2020, and was declared effective on September 10, 2020. Upon the closing of the Offering, Pacific Stock issued the shares
of Common Stock and Warrants comprising the Units, which trade on The Nasdaq Capital Markets under the symbols CRTD and CRTDW, respectively. The
gross proceeds to the Company from the Offering, before deducting underwriting discounts and commissions and other estimated Offering
expenses, and excluding the exercise of any Warrants, was approximately $7.7625 million.
On October 6, 2020, the Underwriters partially
exercised the over-allotment option and on October 8, 2020, purchased an additional 258,750 Warrants, generating gross proceeds, before
deducting underwriting discounts and commissions, of $2,587.50.
The 258,750 Warrants were issued pursuant to the
registration statement on Form S-1 (File No. 333-238514) initially filed with the U.S. Securities and Exchange Commission on May 20, 2020
and declared effective on September 10, 2020.
On December 29, 2020, the Company, entered into
securities purchase agreements (the “Purchase Agreement”) with thirty-three accredited investors (the “Investors”),
whereby, at the closing, the Investors agreed to purchase from the Company an aggregate of (i) 7,778 shares of the Company’s Series
E Convertible Preferred Stock, par value $0.001 per share (the “Series E Preferred Stock”), and (ii) 2,831,721 warrants (the
“Warrants,” and each a “Warrant”), with each Warrant to one purchase one share of Common Stock (the “Warrant
Shares”). The Series E Preferred Stock is convertible into a total of 1,887,810 shares of Common Stock (the “Conversion Shares”,
and together with the “Warrant Shares”, the “Registered Shares”). The combined purchase price of one Conversion
Share and one and a half Warrant was $4.12. The aggregate purchase price for the Series E Preferred Stock and Warrants was $7,777,777.77,
which was delivered at closing on January 4, 2021. The Registered Shares are being registered pursuant to a Registration Statement on
Form S-3 (File No. 333-252018), which was filed on January 11, 2021.
Our Corporate History
Creatd, Inc., formerly Jerrick Media Holdings,
Inc. (“we,” “us,” the “Company,” or “Creatd”), is a technology company focused on the
development of digital communities, marketing branded digital content, and e-commerce opportunities. Creatd’s content distribution
platform, Vocal, delivers a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting
all forms of rich media content. Through 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. (“GTPH”) 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”).
Seller’s Choice is digital e-commerce agency based in New Jersey (see Note 4).
On September 9, 2020, the Company filed a certificate
of amendment with the Secretary of State of the State of Nevada to change our name to “Creatd, Inc.”, which became effective
on September 10, 2020.
RISK FACTORS
Investment in any securities offered pursuant
to this prospectus and the applicable prospectus supplement involves risks. You should carefully consider the risk factors incorporated
by reference to our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form
8-K we file after the date of this prospectus, and all other information contained or incorporated by reference into this prospectus,
as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained in the applicable prospectus
supplement before acquiring any of such securities. The occurrence of any of these risks might cause you to lose all or part of your investment
in the offered securities.
SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements
that involve risks and uncertainties, principally in the sections entitled “Risk Factors.” All statements other than statements
of historical fact contained in this prospectus, including statements regarding future events, our future financial performance, business
strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking
statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,”
“estimates,” “expects,” “intends,” “may,” “plans,” “potential,”
“predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although
we do not make forward looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.
These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined
under “Risk Factors” or elsewhere in this prospectus, which may cause our or our industry’s actual results, levels of
activity, performance or achievements expressed or implied by these forward-looking statements.
Forward-looking statements should not be read
as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance
or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s
good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance
or results to differ materially from what is expressed in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the
date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking
statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except
to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn
that we will make additional updates with respect to those or other forward-looking statements.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities as
set forth in the applicable prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock
is not complete and may not contain all the information you should consider before investing in our capital stock. This description is
summarized from, and qualified in its entirety by reference to, our Second Amended and Restated Articles of Incorporation and Amended
and Restated Bylaws, which have been publicly filed with the SEC. See “Where You Can Find More Information; Incorporation by Reference.”
The Company is authorized to issue 120,000,000
shares of capital stock, par value $0.001 per share, of which 100,000,000 are shares of common stock and 20,000,000 are shares of “blank
check” preferred stock.
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.
Common Stock
The holders of the Company’s common stock
are entitled to one vote per share. In addition, the holders of the Company’s common stock will be entitled to receive dividends
ratably, if any, declared by the Company’s board of directors out of legally available funds; however, the current policy of the
board of directors is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders
of the Company’s common stock are entitled to share ratably in all assets that are legally available for distribution. The holders
of the Company’s common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges
of holders of the Company’s common stock are subject to, and may be adversely affected by, the rights of the holders of any series
of preferred stock, which may be designated solely by action of the board of directors and issued in the future.
Warrants
The holders of the Company’s
Warrants are entitled to purchase one share of our common stock at a price equal to $4.50 per share, subject to adjustment as discussed
below, at any time commencing on date of issuance (the “Issuance Date”) and terminating at 5:00 p.m., New York City time,
on the fifth (5th) anniversary of the Issuance Date.
The warrants will be
issued in registered form under a warrant agent agreement (the “Warrant Agent Agreement”) between us and our warrant agent,
Pacific Stock Transfer (the “Warrant Agent”). The Company and the Warrant Agent may amend or supplement the Warrant Agent
Agreement without the consent of any holder for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective
provision contained therein or adding or changing any other provisions with respect to matters or questions arising under the Warrant
Agent Agreement as the parties thereto may deem necessary or desirable and that the parties determine, in good faith, shall not adversely
affect the interest of the holders. All other amendments and supplements shall require the vote or written consent of holders of at least
50.1%. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances,
including in the event of a stock dividend, extraordinary dividend on or recapitalization, reorganization, merger or consolidation.
The warrants may be exercised
upon surrender of the warrant certificate on or prior to the expiration date at the offices of the Warrant Agent, with the exercise form
attached to the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified
or official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges
of holders of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance
of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all
matters to be voted on by stockholders.
No warrants will be exercisable
unless at the time of the exercise a prospectus or prospectus relating to common stock issuable upon exercise of the warrants is current
and the common stock has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the
holder of the warrants. Under the terms of the Warrant Agent Agreement, we have agreed to use our best efforts to maintain a current prospectus
or prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants. If we are unable to
maintain the qualification or effectiveness of such registration statement until the expiration of the warrants, and therefore are unable
to deliver registered shares of common stock, the warrants may become worthless. Additionally, the market for the warrants may be limited
if the prospectus or prospectus relating to the common stock issuable upon exercise of the warrants is not current or if the common stock
is not qualified or exempt from qualification in the jurisdictions in which the holders of such warrants reside. In no event will the
registered holders of a Warrant be entitled to receive a net-cash settlement, stock or other consideration in lieu of physical settlement
in shares of our common stock.
No fractional shares
of common stock will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive
a fractional interest in a share, we will, upon exercise, round up to the nearest whole number the number of shares of common stock to
be issued to the Warrant holder. If multiple warrants are exercised by the holder at the same time, we will aggregate the number of whole
shares issuable upon exercise of all the warrants.
Preferred Stock
The Company’s board of directors are authorized,
subject to any limitations prescribed by law, without further vote or action by its stockholders, to issue from time to time shares of
preferred stock in one or more series. Each series of preferred stock will have the number of shares, designations, preferences, voting
powers, qualifications and special or relative rights or privileges as shall be determined by the Company’s board of directors,
which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive rights.
It is not possible to state the actual effect
of the issuance of any shares of preferred stock upon the rights of holders of the Company’s common stock until the board of directors
determines the specific rights of the holders of its preferred stock. However, the effects might include, among other things:
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Impairing dividend rights of the Company’s common stock;
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Diluting the voting power of the Company’s common stock;
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Impairing the liquidation rights of the Company’s common stock; and
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Delaying or preventing a change of control without further action by the Company’s stockholders.
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Blank Check Preferred Stock
The ability to authorize “blank check”
preferred stock makes it possible for the Company’s board of directors to issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to acquire the Company. These and other provisions may have the effect of deferring
hostile takeovers or delaying changes in control or management of the Company.
Common Stock Purchase Warrants
As of April 8, 2021, the Company had
outstanding warrants to purchase 3,317,790 shares of its common stock outstanding with various exercise prices and expiration dates,
held by 80 warrant holders.
Common Stock Purchase Options
As of April 8, 2021, the Company had stock
options to purchase 542,687 shares of its common stock outstanding, all of which were exercisable, with various exercise prices
and expiration dates, held by 23 option holders.
Exclusive Forum
Each of
our Second Amended Articles of Incorporation and our Amended and Restated Bylaws provide that unless the Company consents in writing to
the selection of an alternative forum, the Eighth Judicial District Court of Clark County, Nevada shall be the sole and exclusive forum
for state law claims with respect to: (i) any derivative action or proceeding brought in the name or right of the Company or on its behalf,
(ii) any action asserting a claim for breach of any fiduciary duty owed by any director, officer, employee or agent of the Company to
the Company or the Company’s stockholders, (iii) any action arising or asserting a claim arising pursuant to any provision of Nevada
Revised Statutes Chapters 78 or 92A or any provision of the Company’s Second Amended and Restated Articles of Incorporation or Amended
and Restated Bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, including, without limitation, any
action to interpret, apply, enforce or determine the validity of the Company’s Second Amended and Restated Articles of Incorporation
or Amended and Restated Bylaws. This exclusive forum provision would not apply to suits brought to enforce any liability or duty created
by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. To the extent that
any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits
brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Section 22
of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability
created by the Securities Act or the rules and regulations thereunder. The enforceability of similar exclusive forum provisions in other
corporations’ bylaws has been challenged in legal proceedings, and it is possible that a court could rule that this provision in
our Amended and Restated Bylaws is inapplicable or unenforceable.
Additionally,
each of our Second Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws provide that unless the Company
consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the
exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any person or entity
purchasing or otherwise acquiring any interest in shares of capital stock of the Company are deemed to have notice of and consented to
this provision. As this provision applies to Securities Act claims, there may be uncertainty whether a court would enforce
such a provision.
Anti-Takeover Provisions
Nevada Anti-Takeover Law and Certain Charter and Bylaw Provisions
We are a Nevada corporation and the anti-takeover
provisions of the Nevada Revised Statutes may discourage, delay or prevent a change in control by prohibiting us from engaging in a business
combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change
in control would be beneficial to our existing stockholders. In addition, our certificate of incorporation and bylaws may discourage,
delay or prevent a change in our management or control over us that stockholders may consider favorable. Our certificate of incorporation
and bylaws:
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authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;
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provide that vacancies on our board of directors, including newly created directorships, may be filled by a majority vote of directors then in office;
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place restrictive requirements (including advance notification of stockholder nominations and proposals) on how special meetings of stockholders may be called by our stockholders; do not provide stockholders with the ability to cumulate their votes; and
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provide that our board of directors or a majority of our stockholders may amend our bylaws.
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The NASDAQ Capital Market Listing
Our common stock is listed on the NASDAQ Capital
Market under the symbol “CRTD”. Our warrants to purchase shares of our common stock are listed on the NASDAQ Capital Market
under the symbol “CRTDW”.
Transfer Agent and Warrant Agent
The transfer agent and registrar for our common stock and Warrant Agent
is Pacific Stock Transfer with an address 6725 Via Austi Parkway, Suite 300 Las Vegas, NV 89119.
DESCRIPTION OF DEBT
SECURITIES
General
The debt securities that
we may offer by this prospectus consist of notes, debentures, or other evidences of indebtedness. The debt securities may constitute
either senior or subordinated debt securities, and in either case may be either secured or unsecured. Any debt securities that we
offer and sell will be our direct obligations. Debt securities may be issued in one or more series. All debt securities of any one series
need not be issued at the same time, and unless otherwise provided, a series of debt securities may be reopened, with the required consent
of the holders of outstanding debt securities, for issuance of additional debt securities of that series or to establish additional terms
of that series of debt securities (with such additional terms applicable only to unissued or additional debt securities of that series).
The form of indenture has been filed as an exhibit to the registration statement of which this prospectus is a part and is subject to
any amendments or supplements that we may enter into with the trustee(s), however, we may issue debt securities not subject to the indenture
provided such terms of debt securities are not otherwise required to be set forth in the indenture. The material terms of the indenture
are summarized below and we refer you to the indenture for a detailed description of these material terms. Additional or different provisions
that are applicable to a particular series of debt securities will, if material, be described in a prospectus supplement relating to the
offering of debt securities of that series. These provisions may include, among other things and to the extent applicable, the following:
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the title of the debt securities, including, as applicable, whether the debt securities will be issued as senior debt securities, senior subordinated debt securities or subordinated debt securities, any subordination provisions particular to the series of debt securities;
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any limit on the aggregate principal amount of the debt securities;
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whether the debt securities are senior debt securities or subordinated debt securities and applicable subordination provisions, if any;
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whether the debt securities will be secured or unsecured;
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if other than 100% of the aggregate principal amount, the percentage of the aggregate principal amount at which we will sell the debt securities, such as an original issuance discount;
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the date or dates, whether fixed or extendable, on which the principal of the debt securities will be payable;
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the rate or rates, which may be fixed or variable, at which the debt securities will bear interest, if any, the date or dates from which any such interest will accrue, the interest payment dates on which we will pay any such interest, the basis upon which interest will be calculated if other than that of a 360-day year consisting of twelve 30-day months, and, in the case of registered securities, the record dates for the determination of holders to whom interest is payable;
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the place or places where the principal of and any premium or interest on the debt securities will be payable and where the debt securities may be surrendered for conversion or exchange;
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whether we may, at our option, redeem the debt securities, and if so, the price or prices at which, the period or periods within which, and the terms and conditions upon which, we may redeem the debt securities, in whole or in part, pursuant to any sinking fund or otherwise;
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if other than 100% of the aggregate principal amount thereof, the portion of the principal amount of the debt securities which will be payable upon declaration of acceleration of the maturity date thereof or provable in bankruptcy, or, if applicable, which is convertible or exchangeable;
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any obligation we may have to redeem, purchase or repay the debt securities pursuant to any sinking fund or analogous provisions or at the option of a holder of debt securities, and the price or prices at which, the currency in which and the period or periods within which, and the terms and conditions upon which, the debt securities will be redeemed, purchased or repaid, in whole or in part, pursuant to any such obligation, and any provision for the remarketing of the debt securities;
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the issuance of debt securities as registered securities or unregistered securities or both, and the rights of the holders of the debt securities to exchange unregistered securities for registered securities, or vice versa, and the circumstances under which any such exchanges, if permitted, may be made;
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the denominations, which may be in United States Dollars or in any foreign currency, in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple thereof;
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whether the debt securities will be issued in the form of certificated debt securities, and if so, the form of the debt securities (or forms thereof if unregistered and registered securities are issuable in that series), including the legends required by law or as we deem necessary or appropriate, the form of any coupons or temporary global security which may be issued and the forms of any other certificates which may be required under the indenture or which we may require in connection with the offering, sale, delivery or exchange of the debt securities;
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if other than United States Dollars, the currency or currencies in which payments of principal, interest and other amounts payable with respect to the debt securities will be denominated, payable, redeemable or repurchasable, as the case may be;
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whether the debt securities may be issuable in tranches;
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the obligations, if any, we may have to permit the conversion or exchange of the debt securities into common stock, preferred stock or other capital stock or property, or a combination thereof, and the terms and conditions upon which such conversion or exchange will be effected (including conversion price or exchange ratio), and any limitations on the ownership or transferability of the securities or property into which the debt securities may be converted or exchanged;
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if other than the trustee under the indenture, any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the debt securities;
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any deletions from, modifications of or additions to the events of default with respect to the debt securities or the right of the Trustee or the holders of the debt securities in connection with events of default;
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any deletions from, modifications of or additions to the covenants with respect to the debt securities;
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if the amount of payments of principal of, and make-whole amount, if any, and interest on the debt securities may be determined with reference to an index, the manner in which such amount will be determined;
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whether the debt securities will be issued in whole or in part in the global form of one or more debt securities and, if so, the depositary for such debt securities, the circumstances under which any such debt security may be exchanged for debt securities registered in the name of, and under which any transfer of debt securities may be registered in the name of, any person other than such depositary or its nominee, and any other provisions regarding such debt securities;
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whether, under what circumstances and the currency in which, we will pay additional amounts on the debt securities to any holder of the debt securities who is not a United States person in respect of any tax, assessment or governmental charge and, if so, whether we will have the option to redeem such debt securities rather than pay such additional amounts, and the terms of any such option;
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whether the debt securities will be secured by any collateral and, if so, a general description of the collateral and the terms of any related security, pledge or other agreements;
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the persons to whom any interest on the debt securities will be payable, if other than the registered holders thereof on the regular record date therefor; and
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any other material terms or conditions upon which the debt securities will be issued.
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Unless otherwise indicated
in the applicable prospectus supplement, we will issue debt securities in fully registered form without coupons and in denominations of
$1,000 and in integral multiples of $1,000, and interest will be computed on the basis of a 360-day year of twelve 30-day months. If any
interest payment date or the maturity date falls on a day that is not a business day, then the payment will be made on the next business
day without additional interest and with the same effect as if it were made on the originally scheduled date. “Business day”
means any calendar day that is not a Saturday, Sunday or legal holiday in New York, New York, and on which the trustee and commercial
banks are open for business in New York, New York.
Unless we inform you otherwise in a prospectus
supplement, each series of our senior debt securities will rank equally in right of payment with all of our other unsubordinated debt.
The subordinated debt securities will rank junior in right of payment and be subordinate to all of our unsubordinated debt.
Unless otherwise indicated
in the applicable prospectus supplement, the trustee will act as paying agent and registrar for the debt securities under the indenture.
We may act as paying agent under the indenture.
The prospectus supplement
will contain a description of United States federal income tax consequences relating to the debt securities, to the extent applicable.
Covenants
The applicable prospectus
supplement will describe any covenants, such as restrictive covenants restricting us or our subsidiaries, if any, from incurring, issuing,
assuming or guarantying any indebtedness or restricting us or our subsidiaries, if any, from paying dividends or acquiring any of our
or its capital stock.
Consolidation, Merger
and Transfer of Assets
The indenture permits
a consolidation or merger between us and another entity and/or the sale, conveyance or lease by us of all or substantially all of our
property and assets, provided that:
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the resulting or acquiring entity, if other than us, is organized and existing under the laws of a United States jurisdiction and assumes all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the debt securities and performance of the covenants in the indenture;
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immediately after the transaction, and giving effect to the transaction, no event of default under the indenture exists; and
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we have delivered to the trustee an officers’ certificate stating that the transaction and, if a supplemental indenture is required in connection with the transaction, the supplemental indenture comply with the indenture and that all conditions precedent to the transaction contained in the indenture have been satisfied.
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If we consolidate or
merge with or into any other entity, or sell or lease all or substantially all of our assets in compliance with the terms and conditions
of the indenture, the resulting or acquiring entity will be substituted for us in the indenture and the debt securities with the same
effect as if it had been an original party to the indenture and the debt securities. As a result, such successor entity may exercise our
rights and powers under the indenture and the debt securities, in our name and, except in the case of a lease, we will be released from
all our liabilities and obligations under the indenture and under the debt securities.
Notwithstanding the foregoing,
we may transfer all of our property and assets to another entity if, immediately after giving effect to the transfer, such entity is our
wholly owned subsidiary. The term “wholly owned subsidiary” means any subsidiary in which we and/or our other wholly owned
subsidiaries, if any, own all of the outstanding capital stock.
Modification and Waiver
Under the indenture,
some of our rights and obligations and some of the rights of the holders of the debt securities may be modified or amended with the consent
of the holders of not less than a majority in aggregate principal amount of the outstanding debt securities affected by the modification
or amendment. However, the following modifications and amendments will not be effective against any holder without its consent:
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a change in the stated maturity date of any payment of principal or interest;
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a reduction in the principal amount of or interest on any debt securities;
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an alteration or impairment of any right to convert at the rate or upon the terms provided in the indenture;
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a change in the currency in which any payment on the debt securities is payable;
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an impairment of a holder’s right to sue us for the enforcement of payments due on the debt securities; or
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a reduction in the percentage of outstanding debt securities required to consent to a modification or amendment of the indenture or required to consent to a waiver of compliance with certain provisions of the indenture or certain defaults under the indenture.
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Under the indenture,
the holders of not less than a majority in aggregate principal amount of the outstanding debt securities may, on behalf of all holders
of the debt securities:
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waive compliance by us with certain restrictive provisions of the indenture; and
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waive any past default under the indenture in accordance with the applicable provisions of the indenture, except a default in the payment of the principal of or interest on any series of debt securities.
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Events of Default
Unless we indicate otherwise
in the applicable prospectus supplement, “event of default” under the indenture will mean, with respect to any series of debt
securities, any of the following:
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failure to pay interest on any debt security for 30 days after the payment is due;
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failure to pay the principal of any debt security when due, either at maturity, upon redemption, by declaration or otherwise;
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failure on our part to observe or perform any other covenant or agreement in the indenture that applies to the debt securities for 90 days after we have received written notice of the failure to perform in the manner specified in the indenture; and
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certain events of bankruptcy, insolvency or reorganization.
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Remedies Upon an Event
of Default
If an event of default
occurs and continues, the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding debt securities
of such series may declare the entire principal of all the debt securities to be due and payable immediately, except that, if the event
of default is caused by certain events in bankruptcy, insolvency or reorganization, the entire principal of all of the debt securities
of such series will become due and payable immediately without any act on the part of the trustee or holders of the debt securities. If
such a declaration occurs, the holders of a majority of the aggregate principal amount of the outstanding debt securities of such series
can, subject to conditions, rescind the declaration.
The indenture requires
us to furnish to the trustee not less often than annually, a certificate from our principal executive officer, principal financial officer
or principal accounting officer, as the case may be, as to such officer’s knowledge of our compliance with all conditions and covenants
under the indenture. The trustee may withhold notice to the holders of debt securities of any default, except defaults in the payment
of principal of or interest on any debt securities if the trustee in good faith determines that the withholding of notice is in the best
interests of the holders. For purposes of this paragraph, “default” means any event which is, or after notice or lapse of
time or both would become, an event of default under the indenture.
The trustee is not obligated
to exercise any of its rights or powers under the indenture at the request, order or direction of any holders of debt securities, unless
the holders offer the trustee satisfactory security or indemnity. If satisfactory security or indemnity is provided, then, subject to
other rights of the trustee, the holders of a majority in aggregate principal amount of the outstanding debt securities may direct the
time, method and place of:
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conducting any proceeding for any remedy available to the trustee; or
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exercising any trust or power conferred upon the trustee.
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The holder of a debt
security will have the right to begin any proceeding with respect to the indenture or for any remedy only if:
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the holder has previously given the trustee written notice of a continuing event of default;
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the holders of not less than a majority in aggregate principal amount of the outstanding debt securities have made a written request of, and offered reasonable indemnity to, the trustee to begin such proceeding;
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the trustee has not started such proceeding within 60 days after receiving the request; and
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no direction inconsistent with such written request has been given to the trustee under the indenture.
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However, the holder of
any debt security will have an absolute right to receive payment of principal of and interest on the debt security when due and to institute
suit to enforce this payment.
Satisfaction and Discharge; Defeasance
Satisfaction and Discharge
of Indenture. Unless otherwise indicated in the applicable prospectus supplement, if at any time,
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we have paid the principal of and interest on all the debt securities of any series, except for debt securities which have been destroyed, lost or stolen and which have been replaced or paid in accordance with the indenture, as and when the same shall have become due and payable, or
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we have delivered to the trustee for cancellation all debt securities of any series theretofore authenticated, except for debt securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in the indenture, or
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all the debt securities of such series not theretofore delivered to the trustee for cancellation have become due and payable, or are by their terms are to become due and payable within one year or are to be called for redemption within one year, and we have deposited with the trustee, in trust, sufficient money or government obligations, or a combination thereof, to pay the principal, any interest and any other sums due on the debt securities, on the dates the payments are due or become due under the indenture and the terms of the debt securities,
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then the indenture shall
cease to be of further effect with respect to the debt securities of such series, except for:
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rights of registration of transfer and exchange, and our right of optional redemption;
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substitution of mutilated, defaced, destroyed, lost or stolen debt securities;
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rights of holders to receive payments of principal thereof and interest thereon upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the holders to receive mandatory sinking fund payments, if any;
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the rights, obligations and immunities of the trustee under the indenture; and
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the rights of the holders of such series of debt securities as beneficiaries thereof with respect to the property so deposited with the trustee payable to all or any of them.
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Defeasance and Covenant
Defeasance. Unless otherwise indicated in the applicable prospectus supplement, we may elect with respect to any debt securities
of any series either:
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to defease and be discharged from all of our obligations with respect to such debt securities (“defeasance”), with certain exceptions described below; or
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to be released from our obligations with respect to such debt securities under such covenants as may be specified in the applicable prospectus supplement, and any omission to comply with those obligations will not constitute a default or an event of default with respect to such debt securities (“covenant defeasance”).
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We must comply with the
following conditions before the defeasance or covenant defeasance can be effected:
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we must irrevocably deposit with the indenture trustee or other qualifying trustee, under the terms of an irrevocable trust agreement in form and substance satisfactory to the trustee, trust funds in trust solely for the benefit of the holders of such debt securities, sufficient money or government obligations, or a combination thereof, to pay the principal, any interest and any other sums on the due dates for those payments; and
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we must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income, gain or loss for federal income tax purposes as a result of defeasance or covenant defeasance, as the case may be, to be effected with respect to such debt securities and will be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such defeasance or covenant defeasance, as the case may be, had not occurred.
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In connection with defeasance,
any irrevocable trust agreement contemplated by the indenture must include, among other things, provision for:
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payment of the principal of and interest on such debt securities, if any, appertaining thereto when due (by redemption, sinking fund payments or otherwise),
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the payment of the expenses of the trustee incurred or to be incurred in connection with carrying out such trust provisions,
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rights of registration, transfer, substitution and exchange of such debt securities in accordance with the terms stated in the indenture, and
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continuation of the rights, obligations and immunities of the trustee as against the holders of such debt securities as stated in the indenture.
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The accompanying prospectus
supplement may further describe any provisions permitting or restricting defeasance or covenant defeasance with respect to the debt securities
of a particular series.
Global Securities
Unless otherwise indicated
in the applicable prospectus supplement, each debt security offered by this prospectus will be issued in the form of one or more global
debt securities representing all or part of that series of debt securities. This means that we will not issue certificates for that series
of debt securities to the holders. Instead, a global debt security representing that series will be deposited with, or on behalf of, a
securities depositary and registered in the name of the depositary or a nominee of the depositary. Any such depositary must be a clearing
agency registered under the Exchange Act. We will describe the specific terms of the depositary arrangement with respect to a series of
debt securities to be represented by a global security in the applicable prospectus supplement.
Notices
We will give notices
to holders of the debt securities by mail at the addresses listed in the security register. In the case of notice in respect of unregistered
securities or coupon securities, we may give notice by publication in a newspaper of general circulation in New York, New York.
Governing Law
The particular terms
of a series of debt securities will be described in a prospectus supplement relating to such series of debt securities. Any indentures
will be subject to and governed by the Trust Indenture Act of 1939, as amended, and may be supplemented or amended from time to time following
their execution. Unless otherwise stated in the applicable prospectus supplement, we will not be limited in the amount of debt securities
that we may issue, and neither the senior debt securities nor the subordinated debt securities will be secured by any of our property
or assets. Thus, by owning debt securities, you are one of our unsecured creditors.
Regarding the Trustee
From time to time, we
may maintain deposit accounts and conduct other banking transactions with the trustee to be appointed under the indenture or its affiliates
in the ordinary course of business.
DESCRIPTION OF WARRANTS
We may offer to sell
warrants from time to time. If we do so, we will describe the specific terms of the warrants in a prospectus supplement. In particular,
we may issue warrants for the purchase of common stock, preferred stock and/or debt securities in one or more series. We may also issue
warrants independently or together with other securities and the warrants may be attached to or separate from those securities.
We will evidence each
series of warrants by warrant certificates that we will issue under a separate agreement. We will enter into the warrant agreement with
a warrant agent. We will indicate the name and address of the warrant agent in the applicable prospectus supplement relating to a particular
series of warrants.
We will describe in the
applicable prospectus supplement the terms of the series of warrants, including:
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the offering price and aggregate number of warrants offered;
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the currency for which the warrants may be purchased;
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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;
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if applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise;
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in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise;
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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
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the terms of any rights to redeem or call the warrants;
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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the dates on which the right to exercise the warrants will commence and expire;
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the manner in which the warrant agreement and warrants may be modified;
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certain United States federal income tax consequences of holding or exercising the warrants;
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the terms of the securities issuable upon exercise of the warrants; and
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any other specific material terms, preferences, rights or limitations of or restrictions on the warrants.
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Holders may exercise
the warrants by delivering the warrant certificate representing the warrants to be exercised together with other requested information,
and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement.
We will set forth in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to
the warrant agent.
Upon receipt of the required
payment and the warrant certificate properly completed and duly executed at the office of the warrant agent or any other office indicated
in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If a holder exercises
fewer than all of the warrants represented by the warrant certificate, then we will issue a new warrant certificate for the remaining
amount of warrants.
Holder will not have
any of the rights of the holders of the securities purchasable upon the exercise of warrants until you exercise them. Accordingly, holder
will not be entitled to, among other things, vote or receive dividend payments or similar distributions on the securities you can purchase
upon exercise of the warrants.
The information provided
above is only a summary of the terms under which we may offer warrants for sale. Accordingly, investors must carefully review the applicable
warrant agreement for more information about the specific terms and conditions of these warrants before investing in us. In addition,
please carefully review the information provided in the applicable prospectus supplement, which contains additional information that is
important for you to consider in evaluating an investment in our securities.
DESCRIPTION OF RIGHTS
We may issue rights to our stockholders to purchase
shares of our common stock or preferred stock described in this prospectus. We may offer rights separately or together with one or more
additional rights, preferred stock, common stock, warrants or any combination of those securities in the form of units, as described in
the applicable prospectus supplement. Each series of rights will be issued under a separate rights agreement to be entered into between
us and a bank or trust company, as rights agent. The rights agent for any rights we offer will be set forth in the applicable prospectus
supplement. The rights agent will act solely as our agent in connection with the certificates relating to the rights of the series of
certificates and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial
owners of rights. The following description sets forth certain general terms and provisions of the rights to which any prospectus supplement
may relate. The particular terms of the rights to which any prospectus supplement may relate and the extent, if any, to which the general
provisions may apply to the rights so offered will be described in the applicable prospectus supplement. To the extent that any particular
terms of the rights, rights agreement or rights certificates described in a prospectus supplement differ from any of the terms described
below, then the terms described below will be deemed to have been superseded by that prospectus supplement. We encourage you to read the
applicable rights agreement and rights certificate for additional information before you decide whether to purchase any of our rights.
The prospectus supplement relating to any rights
that we offer will include specific terms relating to the offering, including, among other matters:
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the date of determining the stockholders entitled to the rights distribution;
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the aggregate number of shares of common stock, preferred stock or other securities purchasable upon exercise of the rights;
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the exercise price;
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the aggregate number of rights issued;
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whether the rights are transferrable and the date, if any, on and after which the rights may be separately transferred;
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the date on which the right to exercise the rights will commence, and the date on which the right to exercise the rights will expire;
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the method by which holders of rights will be entitled to exercise;
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the conditions to the completion of the offering;
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the withdrawal, termination and cancellation rights;
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whether there are any backstop or standby purchaser or purchasers and the terms of their commitment;
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whether stockholders are entitled to oversubscription right;
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any U.S. federal income tax considerations; and
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any other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise of the rights.
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If less than all of the rights issued in any rights
offering are exercised, we may offer any unsubscribed securities directly to persons other than stockholders, to or through agents, underwriters
or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus
supplement. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters
or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for
after such rights offering.
DESCRIPTION OF UNITS
We may issue units consisting of any combination
of the other types of securities offered under this prospectus in one or more series. We may evidence each series of units by unit certificates
that we will issue under a separate agreement. We may enter into unit agreements with a unit agent. We will indicate the name and address
of the unit agent in the applicable prospectus supplement relating to a particular series of units.
The following description, together with the additional
information included in any applicable prospectus supplement, summarizes the general features of the units that we may offer under this
prospectus. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related
to the series of units being offered, as well as the complete unit agreements that contain the terms of the units. Specific unit agreements
will contain additional important terms and provisions and we will file as an exhibit to the registration statement of which this prospectus
is a part, or will incorporate by reference from another report that we file with the SEC, the form of each unit agreement relating to
units offered under this prospectus.
If we offer any units, certain terms of that series
of units will be described in the applicable prospectus supplement, including, without limitation, the following, as applicable:
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the title of the series of units;
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identification and description of the separate constituent securities comprising the units;
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the price or prices at which the units will be issued;
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the date, if any, on and after which the constituent securities comprising the units will be separately transferable;
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a discussion of certain United States federal income tax considerations applicable to the units; and
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any other terms of the units and their constituent securities.
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PLAN OF DISTRIBUTION
We may sell the securities from time to time pursuant
to underwritten public offerings, negotiated transactions, block trades or a combination of these methods or through underwriters or dealers,
through agents and/or directly to one or more purchasers. The securities may be distributed from time to time in one or more transactions:
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at a fixed price or prices, which may be changed;
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at market prices prevailing at the time of sale;
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at prices related to such prevailing market prices; or
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at negotiated prices.
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Each time that we sell securities covered by this
prospectus, we will provide a prospectus supplement or supplements that will describe the method of distribution and set forth the terms
and conditions of the offering of such securities, including the offering price of the securities and the proceeds to us, if applicable.
Offers to purchase the securities being offered
by this prospectus may be solicited directly. Agents may also be designated to solicit offers to purchase the securities from time to
time. Any agent involved in the offer or sale of our securities will be identified in a prospectus supplement.
If a dealer is utilized in the sale of the securities
being offered by this prospectus, the securities will be sold to the dealer, as principal. The dealer may then resell the securities to
the public at varying prices to be determined by the dealer at the time of resale.
If an underwriter is utilized in the sale of the
securities being offered by this prospectus, an underwriting agreement will be executed with the underwriter at the time of sale and the
name of any underwriter will be provided in the prospectus supplement that the underwriter will use to make resales of the securities
to the public. In connection with the sale of the securities, we or the purchasers of securities for whom the underwriter may act as agent,
may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell the securities to or through
dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for which they may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will
be acting on a best efforts basis and a dealer will purchase securities as a principal, and may then resell the securities at varying
prices to be determined by the dealer.
Any compensation paid to underwriters, dealers
or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to
participating dealers will be provided in the applicable prospectus supplement. Underwriters, dealers and agents participating in the
distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act of 1933, as amended, and any
discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting
discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities, including
liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof and to reimburse those
persons for certain expenses.
Any common stock will be listed on the Nasdaq
Capital Market, but any other securities may or may not be listed on a national securities exchange. To facilitate the offering of securities,
certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of the
securities. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the
offering of more securities than were sold to them. In these circumstances, these persons would cover such over-allotments or short positions
by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize
or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby
selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection
with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at
a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
We may engage in at the market offerings into
an existing trading market in accordance with Rule 415(a)(4) under the Securities Act.
In addition, we may enter into derivative transactions
with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable
prospectus supplement so indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus
and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us
or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received
from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions
will be an underwriter and, if not identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective
amendment). In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell
the securities short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party may
transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
We do not make any representation or prediction
as to the direction or magnitude of any effect that the transactions described above might have on the price of the securities. In addition,
we do not make any representation that underwriters will engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.
The specific terms of any lock-up provisions in
respect of any given offering will be described in the applicable prospectus supplement.
To comply with applicable state securities laws,
the securities offered by this prospectus will be sold, if necessary, in such jurisdictions only through registered or licensed brokers
or dealers. In addition, securities may not be sold in some states unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
The underwriters, dealers and agents may engage
in transactions with us, or perform services for us, in the ordinary course of business for which they receive compensation.
LEGAL MATTERS
Lucosky Brookman LLP will pass upon certain legal
matters relating to the issuance and sale of the securities offered hereby on behalf of Creatd, Inc. Additional legal matters may be passed
upon for us or any underwriters, dealers or agents, by counsel that we will name in the applicable prospectus supplement.
EXPERTS
Our consolidated balance sheets as of December
31, 2020 and 2019, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each
of those two years have been audited by Rosenberg Rich Baker Berman, P.A., an independent registered public accounting firm, as set forth
in its report incorporated by reference and are included in reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
750,000 Shares of Common Stock
CREATD, INC.
PROSPECTUS
Sole Book Running Manager
THE BENCHMARK COMPANY
June 17, 2021
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