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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 31, 2023
Creatd, Inc.
(Exact name of registrant as specified in its charter)
Nevada |
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001-39500 |
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87-0645394 |
(State or other jurisdiction of
incorporation or organization) |
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(Commission File Number) |
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(IRS Employer
Identification No.) |
419 Lafayette Street, 6th Floor
New York, NY 10003
(Address of principal executive offices)
(201) 258-3770
(Registrant’s telephone number, including
area code)
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class |
|
Trading Symbol(s) |
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Name of each exchange on which registered |
N/A |
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N/A |
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N/A |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure.
On August 31, 2023, Creatd,
Inc., a Nevada corporation (the “Company”), hosted a X (formerly Twitter) Space where CEO Jeremy Frommer discussed alternative
financing opportunities for subsidiaries (the “Space”). A transcript of the Space is furnished hereto as Exhibit 99.1, incorporated
herein by reference.
The audio of the Space
can also be found on X at https://twitter.com/i/spaces/1eaKbrWpwZkKX.
The information in Item
7.01 and Item 8.01 to this Current Report on Form 8-K, including Exhibit 99.1 is being furnished and shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section,
nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth
by specific reference in such filing.
Item 8.01 Other Events
The information set forth in Item 7.01 of this Current Report on Form
8-K is incorporated by reference into this Item 8.01.
Forward-Looking Statements
This Current Report on
Form 8-K includes information that may constitute forward-looking statements. These forward-looking statements are based on the Company’s
current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to the
Company. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. Forward looking statements
include, without limitation, statements relating to projected industry growth rates, the Company’s current growth rates and the
Company’s present and future cash flow position. A variety of factors could cause actual events and results, as well as the Company’s
expectations, to differ materially from those expressed in or contemplated by the forward-looking statements. Risk factors affecting the
Company are discussed in detail in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise,
except to the extent required by applicable securities laws.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
CREATD, INC. |
|
|
Date: August 31, 2023 |
By: |
/s/ Jeremy Frommer |
|
Name: |
Jeremy Frommer |
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Title: |
Chief Executive Officer |
2
Exhibit 99.1
Today’s discussion is about how CEOs are capable of weathering
the storm we’re seeing in the small cap and micro cap space. I’ve never seen anything quite like it.
If you look at the numbers, the S&P has managed to grow by about
9% year to date when you factor in dividends. But that’s not the whole picture, right? Out of 30,000 stocks on U.S. exchanges, including
the NASDAQ, New York, OTC, etc., it’s just a handful: Apple, Microsoft, Google Alphabet, Amazon, and recently NVIDIA.
Together, this group accounts for a significant portion of the market’s
2023 gains. I believe the math suggests that if you removed them, the market would only be up about 1% on an index basis. And if you consider
Facebook and Tesla, the two other tech giants, without their contributions, we’d be negative for the year.
You get the picture, right? It’s a small group of stocks that
are truly performing well. This small group dictates the pace, and the media often focuses on them because that’s the narrative
they want to convey. This leaves the rest of us, like the retail market, navigating in its own realm.
It’s challenging to ignore the stories of companies that once
stood strong and are now crumbling. It’s not just the micro cap stocks; iconic brands are beginning to vanish. Moreover, contrary
to popular belief, the job market isn’t that strong. It won’t get stronger because work is becoming more efficient. The turbulence
we’re experiencing now is just the tip of the iceberg. These shifting tides are also impacting the real estate market, especially
as interest rates seem to be rising.
However, there’s a silver lining. Sometimes, such pressure needs
to build. I’ve observed this pressure for 10 years as CEO of a publicly traded company, and for 10 years since the company’s
inception I’ve witnessed the changes we’re discussing.
The shift is so dramatic that it prompted me to travel to Washington
for a protest last winter. I wanted to understand the mindset of the retail investor I saw discussing stocks on various social platforms.
I recognized that these individuals are my real shareholders. Big institutions aren’t investing in microcap companies as part of
their broad strategy. They barely have enough experts in their funds to focus on the major stocks they’re investing in. But when
the pressure mounts, there’s hope for smaller businesses and those in the microcap space. We can now connect directly with investors,
bypassing middlemen who often introduce toxic financing. We can begin to counteract those algorithms that seem to operate without consequences.
Yes, we can also challenge the rigged game that a certain elite in
the financial sector appears to be playing. I’ve already begun this mental shift.
We’re entering a new era. Taking calculated risks is now a requirement.
It’s time to move away from what I often refer to in these calls as “fast money” investors. If you’re here just
to make a quick profit, it’s akin to having the OTB crowd as my investors. I want a group that’s committed to seeing us build
a genuine company and succeed. Many past investments were rigged against this because they offered convertible notes that allowed the
original investor to sell that stock at a discount, then retain the warrants for upside. When demand didn’t exceed supply, as was
the case post-pandemic, the strength to combat those algorithms and that elite class diminished.
Now, we’re looking to innovation and resilience as our allies.
We’re not passive observers; we’re actively shaping our narrative. CEOs who don’t address these issues with their shareholders
aren’t worth investing in. Companies need to have candid conversations with their small retail investor bases. They must acknowledge
that old methods are becoming obsolete, but there’s potential for growth and collaboration.
We’re not seeking short-term investors. We’re not interested
in the era of pump and dumps. The issue is that there are more manipulated stocks with no real businesses than genuine companies in this
space.
Misinformation about our company circulates on social media. I wish
we had the resources to correct it all. However, amidst these challenges, there’s a lifeline: Regulation CF, or crowdfunding. This
tool can change the game.
It’s not the only solution. As I’ve mentioned before, blockchain
is also part of this evolution. Tools that democratize the environment and eliminate middlemen, which always create opportunities for
unscrupulous individuals to exploit their knowledge against yours, are essential. Regulation CF crowdfunding connects us directly with
investors.
This regulation allows companies to raise capital directly from investors,
bypassing traditional middlemen, toxic financing, and institutional manipulation. Regulation CF offers opportunities for both companies
and investors, both legacy and new. A Regulation CF can raise up to $5 million. This is a more recent development than the initial introduction
of Regulation CF. The institutional adaptation it’s currently experiencing, I believe, took about three years of tech development
to reach its current level.
The growth in the Regulation CF and Regulation A spaces is impressive.
Vocal Inc. has created a subsidiary, a social publishing platform. It’s powerful, with over two million creators. I believe it reaches
an audience of around 200 million people.
We have a strong group of creators within that two million. Before
introducing the Regulation CF to this community, we launched a basic version of the Regulation CF website landing page for friends, family,
and a Twitter group. It’s been an enlightening process, and I’ve guided over 20 people through it. Everyone in the investment
community should experience it.
It reminds me of how commissions in the financial sector were replaced
by free trading for a monthly subscription. This change eliminated brokers who charged commissions. Platforms like Wefunder and DealMaker
represent the end of the investment banking field. There will be no more bankers. Companies should have always been able to approach the
public directly to raise funds. This friends and family round will continue until about September 13th. After that, we plan to expand
beyond these small groups.
I believe the intrinsic value of the Vocal subsidiary is between $60
million and $100 million. If you compare it to competitors like Medium and Substack, which have similar revenues and are valued at half
a billion or more in the private market, Creatd Inc. and its subsidiary, Vocal, present a compelling case study. Regulation CF will redefine
the entire space’s trajectory. Companies often have more complex assets and organizational structures than retail understands. Vocal’s
mission aligns with other platforms valued at half a billion dollars or more, like Medium, Wattpad, and Substack. Each provides unique
offerings, but ultimately, they aim to serve storytellers, artists, podcasters, and creative minds. This aligns perfectly with the principles
of Regulation CF crowdfunding.
Regulation CF aims to eliminate the same middlemen in finance that
we’ve encountered in the public market. Many people profited from commissions for a long time, but that era ended. Vocal’s
role in the creator economy, valued at over 280 billion, is significant. Trust and authenticity have shifted from the institutional to
the individual level, evident in personal relationships, business, and politics. As the creator economy expands, Vocal offers a platform
where millions of creators can connect with a global audience. This growth hasn’t been without challenges. However, our decision
to privatize a significant portion of Vocal through Regulation CF marks a turning point.
I’ve often discussed how economies undergo cycles. I believe
in various theories, including seven-year cycles. We’re currently in a cycle where it’s more beneficial to break up components.
This is where Creatd began. Initially, the company aimed to own and spin out tech ventures, leveraging the liquidity of the public stock
market. However, as with the savings and loan crisis, there comes a time when selling off assets and creating entities around them leads
to significant market growth. Every time I’ve witnessed such a cycle, value becomes privatized. Companies maintain a significant
portion and then re-IPO when interest rates decrease and growth is sought. This is our plan.
By allowing creators to invest directly in the company, our value proposition
is enhanced. We’re moving away from dependence on fast money, ensuring long-term value creation and strengthening our bond with
stakeholders. Regulation CF introduces a mechanism that’s inclusive and empowering. With the potential to raise capital from investors
aligned with the company’s mission, businesses can pivot away from volatility. The Vocal Inc structure in which participating preferred
stock is offered in our Regulation CF promises strong returns for investors while ensuring the company’s growth remains free from
short-term pressures.
The challenges companies face are still significant. However, our approach
involves consolidating a significant portion of our portfolio into private entities capable of raising separate capital. This is a roadmap
for all three of our subsidiaries. Our end goal is to eventually spin them all off while maintaining less than 50% ownership, allowing
these entities to operate independently. By relieving itself of operational burdens and clearing $5 million in debt from its balance sheet,
Creatd Inc. could possess a portfolio with an implied value of $60 million, not including the cash from the sale of its current entities.
The implied value of our company right now is about $4 million.
I recommend checking out the website where you can invest. Even if
you’re not there to invest or believe in the company, visiting the site will give you an idea of whether Regulation CFs are right
for you. I believe they represent the future of financing for subsidiaries spun out of public companies. I highly recommend visiting invest.vocal.media.
Even if you don’t invest, exploring the site will give you insight into the process.
With that, I’ve tried to cover a lot of ground. If there are
any questions regarding Regulation CFs, I’m happy to answer them. Otherwise, I appreciate the time we’ve spent today discussing
the Regulation CF.
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