CREATD, INC., 10-Q filed on 11/16/2022
Quarterly Report
v3.22.2.2
Document And Entity Information - shares
 9 Months Ended
Sep. 30, 2022
Nov. 14, 2022
Document Information Line Items    
Entity Registrant Name Creatd, Inc.  
Document Type 10-Q  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   29,072,301
Amendment Flag false  
Entity Central Index Key 0001357671  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Sep. 30, 2022  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q3  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 001-39500  
Entity Incorporation, State or Country Code NV  
Entity Tax Identification Number 87-0645394  
Entity Address, Address Line One 419 Lafayette Street  
Entity Address, Address Line Two 6th Floor  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10003  
City Area Code (201)  
Local Phone Number 258-3770  
Entity Interactive Data Current Yes  
v3.22.2.2
Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Current Assets    
Cash $ 439,539 $ 3,794,734
Accounts receivable, net 222,183 337,440
Inventory 879,050 106,403
Marketable securities 96
Prepaid expenses and other current assets 139,726 236,665
Total Current Assets 1,680,594 4,475,242
Property and equipment, net 248,963 102,939
Intangible assets 2,536,599 2,432,841
Goodwill 1,365,328 1,374,835
Deposits and other assets 769,136 718,951
Minority investment in businesses 50,000
Operating lease right of use asset 2,123,171 18,451
Total Assets 8,723,791 9,173,259
Current Liabilities    
Accounts payable and accrued liabilities 6,714,606 3,730,540
Share liability 52,080
Convertible Notes, net of debt discount and issuance costs 6,062,926 159,193
Current portion of operating lease payable 279,593 18,451
Note payable, net of debt discount and issuance costs 1,758,179 1,278,672
Deferred revenue 305,555 234,159
Total Current Liabilities 15,172,939 5,421,015
Non-current Liabilities:    
Note payable 28,920 63,992
Operating lease payable 2,135,393
Total Non-current Liabilities 2,164,313 63,992
Total Liabilities 17,337,252 5,485,007
Commitments and contingencies
Stockholders’ Equity (Deficit)    
Preferred stock
Common stock par value $0.001: 100,000,000 shares authorized; 24,469,675 issued and 24,380,218 outstanding as of September 30, 2022 and 16,691,170 Outstanding 16,685,513 outstanding as of December 31, 2021 24,470 16,691
Additional paid in capital 124,667,772 111,563,618
Less: Treasury stock at cost, 89,457 and 5,657 shares, respectively (76,106) (62,406)
Accumulated deficit (133,762,800) (109,632,574)
Accumulated other comprehensive income (143,991) (78,272)
Total Creatd, Inc. Stockholders’ Equity (9,290,655) 1,807,057
Non-controlling interest in consolidated subsidiaries 677,194 1,881,195
Total Stockholders' Deficit (8,613,461) 3,688,252
Total Liabilities and Stockholders’ Equity (Deficit) 8,723,791 9,173,259
Series E Preferred Stock    
Stockholders’ Equity (Deficit)    
Preferred stock
v3.22.2.2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Sep. 30, 2022
Dec. 31, 2021
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 20,000,000 20,000,000
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 24,469,675 16,691,170
Common stock, shares outstanding 24,380,218 16,685,513
Treasury stock, shares 89,457 5,657
Series E Preferred Stock    
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 8,000 8,000
Preferred stock, shares issued 500 500
Preferred stock, shares outstanding 500 500
v3.22.2.2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Statement of Comprehensive Income [Abstract]        
Net revenue $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390
Cost of revenue 1,404,562 1,418,213 4,771,151 4,160,743
Gross margin (loss) (381,711) (238,593) (773,661) (1,266,353)
Operating expenses        
Research and development 234,965 322,946 686,131 708,396
Marketing 646,520 1,812,400 4,016,051 8,049,579
Stock based compensation 626,568 2,151,900 3,848,578 5,662,389
Impairment of intangible assets 249,586   257,117 93,791
General and administrative 3,837,469 2,385,135 11,397,989 5,457,258
Total operating expenses 5,595,108 6,672,381 20,205,866 19,971,413
Loss from operations (5,976,819) (6,910,974) (20,979,527) (21,237,766)
Other income (expenses)        
Other income 123,710 99 123,710
Interest expense (673,694) (59,859) (707,950) (319,290)
Accretion of debt discount and issuance cost (1,884,679) (2,176,651) (2,531,687) (3,028,015)
Derivative expense (100,502)
Change in derivative liability (833,456) 3,729 (1,096,287)
Impairment of investment (50,000) (62,733)
Settlement of vendor liabilities (2,867) 92,909
Loss on marketable securities (11,415) (11,646)
Gain (loss) on extinguishment of debt (979,738) 137,109 (832,482) 423,118
Gain on forgiveness of debt 279,022
Other expenses, net (3,549,526) (2,809,147) (4,132,804) (3,688,068)
Loss before income tax provision (9,526,345) (9,720,121) (25,112,331) (24,925,834)
Equity in net loss from equity method investment (16,413) (16,413)
Income tax provision
Net loss (9,526,345) (9,736,534) (25,112,331) (24,942,247)
Non-controlling interest in net loss 299,903 (60,477) 1,285,661 (60,045)
Net Loss attributable to Creatd, Inc. (9,226,442) (9,797,011) (23,826,670) (25,002,292)
Deemed dividend (221,829) (303,557) (410,750)
Net loss attributable to common shareholders (9,448,271) (9,797,011) (24,130,227) (25,413,042)
Comprehensive loss        
Net loss (9,526,345) (9,736,534) (25,112,331) (24,942,247)
Currency translation gain (loss) (36,110) (8,436) (65,719) (16,299)
Comprehensive loss $ (9,562,455) $ (9,744,970) $ (25,178,050) $ (24,958,546)
Per-share data        
Basic and diluted loss per share (in Dollars per share) $ (0.45) $ (0.71) $ (1.23) $ (2.2)
Weighted average number of common shares outstanding (in Shares) 21,030,188 13,710,111 19,669,411 11,563,150
v3.22.2.2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Statement of Comprehensive Income [Abstract]        
Basic and diluted loss per share (in Dollars per share) $ (0.45) $ (0.71) $ (1.23) $ (2.20)
Weighted average number of common shares outstanding (in Shares) 21,030,188 13,710,111 19,669,411 11,563,150
v3.22.2.2
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) (Unaudited) - USD ($)
Series E
Preferred Stock
Common Stock
Treasury stock
Additional Paid In Capital
Accumulated Deficit
Non-Controlling Interest
Other Comprehensive Income
Subscription Receivable
Total
Balance at Dec. 31, 2020 $ 8 $ 8,737 $ (62,406) $ 77,505,013 $ (71,928,922) $ (37,234) $ (40,000) $ 5,445,196
Balance (in Shares) at Dec. 31, 2020 7,738 8,736,378 (5,657)            
Stock based compensation   $ 224   5,505,165 5,505,389
Stock based compensation (in Shares)   224,245              
Shares issued for prepaid services $ 50 226,450 226,500
Shares issued for prepaid services (in Shares)   50,000              
Shares issued to settle vendor liabilities $ 44 181,341 181,385
Shares issued to settle vendor liabilities (in Shares)   44,895              
Shares issued for acquisition   $ 225   893,297         893,522
Shares issued for acquisition (in Shares)   224,503              
Cash received for common stock $ 837 2,461,363 2,462,200
Cash received for common stock (in Shares)   837,500              
Cash received for preferred series E and warrants   (4,225) 40,000 35,775
Cash received for preferred series E and warrants (in Shares) 40                
Common stock issued upon conversion of notes payable $ 901 4,014,424 4,015,325
Common stock issued upon conversion of notes payable (in Shares)   900,665              
Exercise of warrants to stock $ 1,275 5,470,793 5,472,068
Exercise of warrants to stock (in Shares)   1,275,261              
Conversion of preferred series E to stock $ (7) $ 1,739 (1,732)
Conversion of preferred series E to stock (in Shares) (7,168) 1,739,750              
Stock warrants issued with note payable 1,601,452 1,601,452
Foreign currency translation adjustments         (16,299) (16,299)
Non-controlling interest in consolidated subsidiary from acquisition 1,246,865 1,246,865
Dividends 410,750 (410,750)
Net loss (25,002,292) 60,045 (24,942,247)
Balance at Sep. 30, 2021 $ 1 $ 14,032 $ (62,406) 98,264,091 (97,341,964) 1,306,910 (53,533) 2,127,131
Balance (in Shares) at Sep. 30, 2021 610 14,033,197 (5,657)            
Balance at Jun. 30, 2021 $ 1 $ 11,858 $ (62,406) 87,131,333 (87,544,953) 56,433 (45,097)   (452,831)
Balance (in Shares) at Jun. 30, 2021 1,048 11,857,675 (5,657)            
Stock based compensation   $ 23   2,094,787   2,094,810
Stock based compensation (in Shares)   22,934              
Conversion of warrants to stock   $ 955   4,198,442   4,199,397
Conversion of warrants to stock (in Shares)   954,568              
Shares issued for acquisition   $ 224   893,297   893,521
Shares issued for acquisition (in Shares)   224,503              
Cash received for common stock $ 87 248,613   248,700
Cash received for common stock (in Shares)   87,500              
Common stock issued upon conversion of notes payable $ 779 3,697,725   3,698,504
Common stock issued upon conversion of notes payable (in Shares)   779,706              
Conversion of preferred series E to stock $ 106 (106)  
Conversion of preferred series E to stock (in Shares) (438) 106,311              
Foreign currency translation adjustments       (8,436)   (8,436)
Non-controlling interest in consolidated subsidiary from acquisition       1,190,000   1,190,000
Net loss (9,797,011) 60,477   (9,736,534)
Balance at Sep. 30, 2021 $ 1 $ 14,032 $ (62,406) 98,264,091 (97,341,964) 1,306,910 (53,533) 2,127,131
Balance (in Shares) at Sep. 30, 2021 610 14,033,197 (5,657)            
Balance at Dec. 31, 2021 $ 16,691 $ (62,406) 111,563,618 (109,632,574) 1,881,195 (78,272)   3,688,252
Balance (in Shares) at Dec. 31, 2021 500 16,691,170 (5,657)            
Stock based compensation   $ 415   3,822,564   3,822,979
Stock based compensation (in Shares)   415,180              
Shares issued for prepaid services   $ 150   141,000   141,150
Shares issued for prepaid services (in Shares)   150,000              
Shares issued for acquisition   $ 58 40,937 81,660   122,655
Shares issued for acquisition (in Shares)   57,576            
Purchase of treasury stock     $ (13,700)   (13,700)
Purchase of treasury stock (in Shares)     (83,800)            
Cash received for common stock and warrants   $ 7,046   5,715,254   5,722,300
Cash received for common stock and warrants (in Shares)   7,046,314              
Common stock issued upon conversion of notes payable $ 110 173,346   173,456
Common stock issued upon conversion of notes payable (in Shares)   109,435            
Stock warrants issued with note payable       2,907,497   2,907,497
Foreign currency translation adjustments       (65,719)   (65,719)
Dividends       303,556 (303,556)  
Net loss (23,826,670) (1,285,661)   (25,112,331)
Balance at Sep. 30, 2022 $ 24,470 $ (76,106) 124,667,772 (133,762,800) 677,194 (143,991)   (8,613,461)
Balance (in Shares) at Sep. 30, 2022 500 24,469,675 (89,457)            
Balance at Jun. 30, 2022 $ 20,255 $ (62,406) 122,068,892 (124,314,529) 895,437 (107,881)   (1,500,232)
Balance (in Shares) at Jun. 30, 2022 500 20,254,839 (5,657)            
Stock based compensation   $ 107 568,107   568,214
Stock based compensation (in Shares)   107,260            
Shares issued for prepaid services   $ 50 34,900   34,950
Shares issued for prepaid services (in Shares)   50,000            
Shares issued for acquisition   $ 58 40,937 81,660   122,655
Shares issued for acquisition (in Shares)   57,576            
Purchase of treasury stock     $ (13,700)   (13,700)
Purchase of treasury stock (in Shares)     (83,800)            
Cash received for common stock and warrants   $ 4,000   721,000   725,000
Cash received for common stock and warrants (in Shares)   4,000,000              
Stock warrants issued with note payable       1,012,107   1,012,107
Foreign currency translation adjustments       (36,110)   (36,110)
Dividends       221,829 (221,829)  
Net loss (9,226,442) (299,903)   (9,526,345)
Balance at Sep. 30, 2022 $ 24,470 $ (76,106) $ 124,667,772 $ (133,762,800) $ 677,194 $ (143,991)   $ (8,613,461)
Balance (in Shares) at Sep. 30, 2022 500 24,469,675 (89,457)            
v3.22.2.2
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) (Unaudited) (Parentheticals) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]    
Cash received for common stock and warrants, net $ 75,000 $ 190,000
v3.22.2.2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (25,112,331) $ (24,942,247)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 441,943 194,929
Impairment of investment 50,000 62,733
Impairment of intangible assets 257,117 93,791
Accretion of debt discount and issuance cost 2,531,687 3,028,015
Share-based compensation 3,848,578 5,662,389
Bad debt expense 124,186
Loss (Gain) on Forgiveness of debt 832,482 (702,140)
Settlement of vendor liabilities 2,867 (92,909)
Change in fair value of derivative liability (3,729) 1,096,287
Derivative Expense 100,502
Loss on marketable securities 11,646
Non cash lease expense 44,305 60,756
Equity interest granted for other income (123,710)
Equity in net loss from unconsolidated investment 16,413
Changes in operating assets and liabilities:    
Prepaid expenses 114,925 (471,899)
Inventory (492,128) (68,091)
Accounts receivable (481,080) 150,980
Deposits and other assets (50,185) 107,115
Deferred revenue 71,396 111,192
Accounts payable and accrued expenses 3,805,245 160,434
Operating lease liability 145,887 (61,605)
Net Cash Used In Operating Activities (13,857,189) (15,617,065)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Cash paid for property and equipment (213,975) (65,971)
Deposits (325,000)
Cash paid for minority investment in business (510,000)
Cash paid for investments in marketable securities (48,878)
Sale of marketable securities 37,135
Cash consideration for acquisition (75,679) (412,943)
Purchases of digital assets (192,795) (11,241)
Net Cash Used In Investing Activities (494,192) (1,325,155)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from the exercise of warrant 5,472,068
Net proceeds from issuance of notes 2,174,402 321,229
Repayment of notes (2,292,953) (403,843)
Proceeds from issuance of convertible note 5,809,755 3,610,491
Repayment of convertible notes (337,899) (941,880)
Purchase of treasury stock (13,700)  
Proceeds from issuance of common stock and warrants 5,722,300 2,502,200
Net Cash Provided By Financing Activities 11,061,905 10,560,265
Effect of exchange rate changes on cash (65,719) (16,299)
Net Change in Cash (3,355,195) (6,398,254)
Cash - Beginning of period 3,794,734 7,906,782
Cash - End of period 439,539 1,508,528
Cash Paid During the Year for:    
Income taxes
Interest 139,000 58,395
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Settlement of vendor liabilities 147,649 168,667
Warrants issued with debt 2,907,497 1,601,452
Issuance of common stock for prepaid services 141,150 226,500
Operating Lease liability 2,250,648
Deferred offering costs 4,225
Common stock and warrants issued upon conversion of notes payable 173,455 4,015,325
Shares issued for acquisition $ 40,994 $ 893,520
v3.22.2.2
Organization and Operations
 9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
Organization and Operations

Note 1 – Organization and Operations

 

Creatd, Inc., formerly Jerrick Media Holdings, Inc. (“we,” “us,” the “Company,” or “Creatd”), is a technology company focused on providing economic opportunities for creators, which it accomplishes through its four main business pillars: Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios. Creatd’s flagship product, Vocal, delivers a robust long-form, digital publishing platform organized into highly engaged niche-communities capable of hosting all forms of rich media content. Through Creatd’s proprietary algorithm dynamics, Vocal enhances the visibility of content and maximizes viewership, providing advertisers access to target markets that most closely match their interests. 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

On July 20, 2021, the Company acquired 44% of the membership interests of WHE Agency, Inc. WHE Agency, Inc, is a talent management and public relations agency based in New York (“WHE”). WHE has been consolidated due to the Company’s ownership of 55% voting control, and the results of operations have been included since the date of acquisition in the Statements of Operations.

 

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

 

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

 

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

 

On August 1, 2022, the Company acquired 51% of the membership interests of Orbit Media LLC, a New York limited liability company. Orbit is a app-based stock trading platform designed to empower a new generation of investors. Orbit has been consolidated due to the Company’s ownership of 51% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.

 

On September 13, 2022, the Company acquired 100% of the membership interests of Brave Foods, LLC, a Maine limited liability company. Brave is a plant-based food company that provides convenient and healthy breakfast food products. Brave Foods, LLC has been consolidated due to the Company’s ownership of 100% voting control, and the results of operations have been included since the date of acquisition in the Statement of Operations.
v3.22.2.2
Significant Accounting Policies and Practices
 9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
Significant Accounting Policies and Practices

Note 2 – Significant Accounting Policies and Practices

 

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

 

Basis of Presentation

 

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any other interim period or for any other future year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in the Company’s 2021 Annual Report on Form 10-K filed with the SEC. The balance sheet as of December 31, 2021 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements.

 

Use of Estimates and Critical Accounting Estimates and Assumptions

 

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

  

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

 

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

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of intellectual property.

 

Actual results could differ from those estimates.

 

Presentation

 

During 2021, we adopted a change in presentation on our Condensed Consolidated Statements of Comprehensive Loss in order to present a gross profit line and allocate certain overhead expenses, the presentation of which is consistent with our peers. Under the new presentation, we began allocating overhead expenses related to cost of goods sold. Prior periods have been revised to reflect this change in presentation.

 

Principles of consolidation

 

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

 

As of September 30, 2022, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate  State or other
jurisdiction of
incorporation
or organization		  Company
Ownership
Interest		 
Jerrick Ventures LLC  Delaware   100%
Abacus Tech Pty Ltd  Australia   100%
Seller’s Choice, LLC  New Jersey   100%
Brave Foods, LLC  Brave Foods, LLC   100%
Creatd Studios, LLC  Delaware   100%
Give, LLC  Delaware   100%
Creatd Partners LLC  Delaware   100%
Denver Bodega, LLC  Colorado   100%
Dune Inc.  Delaware   50%
Plant Camp LLC  Delaware   89%
Sci-Fi.com, LLC  Delaware   100%
OG Collection, Inc.  Delaware   100%
OG Gallery, LLC  Delaware   100%
Orbit Media LLC  New York   51%
VMENA LLC  Delaware   100%
Vocal For Brands, LLC  Delaware   100%
Vocal Ventures LLC  Delaware   100%
What to Buy, LLC  Delaware   100%
WHE Agency, Inc.  Delaware   44%

 

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

 

Variable Interest Entities

 

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

  

Fair Value of Financial Instruments

 

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

 

  ● Level 1 – quoted prices in active markets for identical investments

 

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

 

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

 

The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, marketable trading securities, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at September 30, 2022 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

 

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

 

The Company’s Level 3 assets/liabilities include goodwill, intangible assets, equity investments at cost, and derivative liabilities. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. 

 

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

 

Fair Value Measurements as of

September 30, 2022

 

   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)		   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		 
Assets:                
Marketable securities - equity securities  $96   $96   $
       -
   $
       -
 
Total assets  $96   $96   $
-
   $
-
 

 

Our marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Marketable equity securities as of September 30, 2022 are $96.

 

The change in net realized depreciation on equity trading securities that has been included in other expenses for the nine months ended September 30, 2022 and 2021 was $11,646 and $0, respectively. 

 

Cash Equivalents

 

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

 

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Financial Claims Scheme (“FCS”) insurable limits. The Company has never experienced any losses related to these balances. The uninsured cash balance as of September 30, 2022, was $0. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

 

Concentration of Credit Risk and Other Risks and Uncertainties

 

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

 

The Company operates in Australia and holds total assets of $622,445. It is reasonably possible that operations located outside an entity’s home country will be disrupted in the near term.

  

Property and Equipment

 

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

 

   Estimated
Useful Life
(Years)		 
     
Computer equipment and software  3 
Furniture and fixtures  5 

 

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

 

Long-lived Assets Including Goodwill and Other Acquired Intangible Assets

 

We evaluate the recoverability of property and equipment, acquired finite-lived intangible assets and, purchased infinite life digital assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. Digital assets accounted for as intangible assets are subject to impairment losses if the fair value of digital assets decreases other than temporary below the carrying value. The fair value is measured using the quoted price of the crypto asset at the time its fair value is being measured. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. During the three months ended September 30, 2022, the Company recorded an impairment charge of $249,586  for intangible assets. During the nine months ended September 30, 2022, the Company recorded an impairment charge of $257,117 for intangible assets.

 

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we change the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. The remaining weighted average life of the intangible assets are 7.1 years.

 

Scheduled amortization over the next five years are as follows:

 

Twelve months ending September 30,
     
2023  $415,215 
2024   443,236 
2025   280,223 
2026   260,935 
2027   239,934 
Thereafter   739,762 
Total   2,379,305 
      
Intangible assets not subject to amortization   157,294 
Total Intangible Assets  $2,536,599 

 

Amortization expense was $94,130 and $75,069 for the three months ended September 30, 2022 and 2021, respectively. Amortization expense was $355,509 and $143,776 for the nine months ended September 30, 2022 and 2021, respectively.

 

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

  

During the year ended December 31, 2021, the Company completed its annual impairment test of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined for three of its reporting units that the fair value of those reporting units was more likely than not greater than their carrying value, including Goodwill. However, based on this qualitative assessment, the Company determined that the carrying value of the Seller’s Choice reporting unit was more likely than not greater than its carrying value, including Goodwill. Based on completion of the annual impairment test, the Company recorded an impairment charge of $1,035,795 for goodwill.

 

During the three months ended September 30, 2022, management observed impairment indicators that led them to believe the carrying amount of goodwill was below its carrying value. The Company determined that the carrying value of the Plant Camp and Dune reporting units were more likely than not greater than their carrying value, including Goodwill. Based on estimated impairment computed, the Company recorded an impairment charge of $25,139 for goodwill.

 

The following table sets forth a summary of the changes in goodwill for the three months ended September 30, 2022.

 

   For the
Three Months ended
September 30,
2022		 
   Total 
As of July 1, 2022    $1,383,785 
Goodwill acquired in a business combination   6,682 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

The following table sets forth a summary of the changes in goodwill for the nine months ended September 30, 2022.

 

   For the
Nine Months ended
September 30,
2022		 
   Total 
As of January 1, 2022    $1,374,835 
Goodwill acquired in a business combination   15,632 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

Commitments and Contingencies

 

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

 

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

 

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

 

Foreign Currency

 

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

 

Derivative Liability

 

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

 

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

 

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

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.

 

The Company utilizes a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

 

Shipping and Handling Costs

 

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

 

Revenue Recognition   

 

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

 

We determine revenue recognition through the following steps:

 

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

 

  ● identification of the performance obligations in the contract;

 

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

 

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

 

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

 

Revenue disaggregated by revenue source for the three and nine months ended September 30, 2022 and 2021 consists of the following:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Agency (Managed Services, Branded Content, & Talent Management Services)  $442,867   $555,766   $1,613,924   $1,472,902 
Platform (Creator Subscriptions)   230,212    611,714    1,138,812    1,370,581 
Ecommerce   347,944    4,153    1,237,634    9,679 
Affiliate Sales   1,828    7,619    7,120    23,425 
Other Revenue   
-
    368    
-
    17,803 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

The Company utilizes the output method to measures the results achieved and value transferred to a customer over time. Timing of revenue recognition for the three and nine months ended September 30, 2022 and 2021 consists of the following:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Products and services transferred over time  $673,079   $1,167,480   $2,752,736   $2,843,483 
Products transferred at a point in time   349,772    12,140    1,244,754    50,907 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

Agency Revenue

 

Managed Services

 

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

 

Branded Content

 

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

 

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

 

  ● The Company collects fixed fees ranging from $10,000 to $110,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.
     
  ● Branded articles are created and published, and challenges are completed, within three months of the signed agreement, or as previously negotiated with the client.

 

  ● Branded articles and challenges are promoted per the contract and engagement reports are provided to the client.
     
  ● Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee. 

 

Talent Management Services

 

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

 

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

 

  ● Total gross contracts range from $500-$50,000.

 

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

 

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

 

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

 

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

  

Platform Revenue

 

Creator Subscriptions

 

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

 

The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners. Potential revenue offset is calculated by reviewing a subscriber’s earnings in conjunction with payments made by the subscriber on a monthly and/or annual basis.

 

Affiliate Sales Revenue

 

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

 

E-Commerce Revenue

 

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

 

Deferred Revenue

 

Deferred revenue consists of billings and payments from clients in advance of revenue recognition. The Company has two types of deferred revenue, subscription revenue whereas the revenue is recognized over the subscription period and contract liabilities where the performance obligation was not satisfied. The Company will recognize the deferred revenue within the next twelve months. As of September 30, 2022, the Company had deferred revenue of $305,555. As of December 31, 2021, the Company had deferred revenue of $234,159, of which $159,727 was recognized as revenue in the nine months ended September 30, 2022, and $13,512 was recognized as revenue in the three months ended September 30, 2022.

 

Accounts Receivable and Allowances

 

Accounts receivable are recorded and carried when the Company has performed the work in accordance with managed services, project, partner, consulting and branded content agreements. For example, we bill a managed service client monthly when we have updated their Amazon store, modified SEO or completed the other services listed in the agreement. For projects and branded content, we will bill the client and record the receivable once milestones are reached that are set in the agreement. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers. During the nine months ended September 30, 2022, the Company recorded $124,186, as a bad debt expense. As of September 30, 2022, the Company has an allowance for doubtful accounts of $311,133. As of December 31, 2021, the Company has an allowance for doubtful accounts of $186,147.

 

Inventory

 

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of September 30, 2022, and December 31, 2021, the Company had no valuation allowance.

 

Stock-Based Compensation

 

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

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods.

 

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

 

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

 

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the three and nine months ended September 30, 2022 and 2021 presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at September 30, 2022 and 2021:

 

   September 30, 
   2022   2021 
Series E preferred   121    148 
Options   4,408,267    2,327,445 
Warrants   20,429,630    6,558,705 
Convertible notes   32,215,486    228,334 
Totals   57,053,504    9,114,632 

 

Reclassifications

 

Certain prior year amounts in the condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the year ended December 31, 2021, we adopted a change in presentation on our condensed consolidated statements of operations and comprehensive loss in order to present a gross profit line, the presentation of which is consistent with our peers. Under the new presentation, we began allocating payroll and related expenses, professional services and creator payouts. Prior periods have been revised to reflect this change in presentation.

   

Recently Adopted Accounting Guidance

 

In May 2021, the FASB issued authoritative guidance intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU 2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic 815). This guidance’s amendments provide measurement, recognition, and disclosure guidance for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The updated guidance, which became effective for fiscal years beginning after December 15, 2021, During the nine months ended September 30, 2022 the Company recognized a deemed dividend of $63,064 from the modification of warrants.

 

Recent Accounting Guidance Not Yet Adopted

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. On October 16, 2019, FASB approved a final ASU delaying the effective date of ASU 2016-13 for small reporting companies to interim and annual periods beginning after December 15, 2022. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The Company does not believe the adoption will have a material impact on the Company’s condensed consolidated financial statements. The adoption of the guidance will affect disclosures and estimates around accounts receivable. 

 

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. ASU 2020-06 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.

 

In July 2021, the FASB issued ASU No. 2021-05, Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. ASU 2021-05 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805), Which aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in recognition and payment terms that effect subsequent revenue recognition. ASU 2021-08 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. 
v3.22.2.2
Going Concern
 9 Months Ended
Sep. 30, 2022
Going Concern [Abstract]  
Going Concern

Note 3 – Going Concern

 

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

 

As reflected in the condensed consolidated financial statements, as of September 30, 2022, the Company had an accumulated deficit of $133.8 million, a net loss of $25.1 million and net cash used in operating activities of $13.9 million for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

  

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

 

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

 

The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
v3.22.2.2
Inventory
 9 Months Ended
Sep. 30, 2022
Inventory Disclosure [Abstract]  
Inventory

Note 4 – Inventory

 

Inventory was comprised of the following at September 30, 2022 and December 31, 2021:

 

    September 30,
2022		     December 31,
2021		  
Raw Materials   $ 82,834     $ -  
Packaging     78,799       2,907  
Finished goods     717,417       103,496  
    $ 879,050     $ 106,403  
v3.22.2.2
Property and Equipment
 9 Months Ended
Sep. 30, 2022
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 5 – Property and Equipment

 

Property and equipment stated at cost, less accumulated depreciation, consisted of the following:

 

   September 30,
2022		   December 31,
2021		 
Computer Equipment  $447,342   $353,880 
Furniture and Fixtures   184,524    102,416 
Leasehold Improvements   47,616    11,457 
    679,482    467,753 
Less: Accumulated Depreciation   (430,519)   (364,814)
   $248,963   $102,939 

 

Depreciation expense was $43,546 and $10,047 for the three months ended September 30, 2022 and 2021, respectively. Depreciation expense was $67,951 and $30,141 for the nine months ended September 30, 2022 and 2021, respectively.
v3.22.2.2
Notes Payable
 9 Months Ended
Sep. 30, 2022
Notes Payable [Abstract]  
Notes Payable

Note 6 – Notes Payable

 

Notes payable as of September 30, 2022 and December 31, 2021 is as follows:

 

   Outstanding
Principal as of		        
   September 30,
2022		   December 31,
2021		   Interest
Rate		   Maturity
Date
Seller’s Choice Note  $-   $660,000    30%  September 2020
The April 2020 PPP Loan Agreement   198,577    198,577    1%  May 2022
The First December 2021 Loan Agreement   47,990    185,655    10%  June 2023
The Second December 2021 Loan Agreement   -    313,979    14%  June 2022
First Denver Bodega LLC Loan   44,008    
-
    5%  March 2025
The Third May 2022 Loan Agreement   16,169    
-
    
-
%  November 2022
The Fourth May 2022 Loan Agreement   30,558    
-
    
-
%  November 2022
The First August 2022 Loan Agreement   129,634    
-
    14%  November 2022
The Second August 2022 Loan Agreement   646,100    
-
    
-
%  January 2023
The First September 2022 Loan Agreement   87,884    
-
    
-
%  September 2023
The Second September 2022 Loan Agreement   848,625    
-
    
-
%  May 2023
The Third September 2022 Loan Agreement   351,964    
-
    
-
%  April 2023
    2,401,509    1,358,211         
Less: Debt Discount   (614,410)   (15,547)        
Less: Debt Issuance Costs   
-
    
-
         
    1,787,099    1,342,664         
Less: Current Debt   (1,758,179)   (1,278,672)        
Total Long-Term Debt  $28,920   $63,992         

 

Seller’s Choice Note

 

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

 

On March 3, 2022, after substantial motion practice, Creatd successfully settled the dispute with Home Revolution, LLC for a total of $799,000, which includes $660,000 of note principal and $139,000 of accrued interest. The matter has been dismissed. As part of the settlement the Company recorded a Gain on extinguishment of debt of $147,256.

  

The April 2020 PPP Loan Agreement

 

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

  

During the nine months ended September 30, 2022, the Company accrued interest of $4,815.

  

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

 

As of September 30, 2022, the Loan is in default, and the lender may require immediate payment of all amounts owed under the Loan or file suit and obtain judgment.

 

The First December 2021 Loan Agreement

 

On December 3, 2021, the Company entered into a loan agreement (the “First December 2021 Loan Agreement”) with a lender (the “First December 2021 Lender”) whereby the First December 2021 Lender issued the Company a promissory note of $191,975 (the “First December 2021 Note”). Pursuant to the First December 2021 Loan Agreement, the First December 2021 Note has an effective interest rate of 9%. The maturity date of the First December 2021 Note is June 3, 2023 (the “First December 2021 Maturity Date”), at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First December 2021 Note are due.

 

During the nine months ended September 30, 2022, the Company repaid $137,665 in principal.

 

The Second December 2021 Loan Agreement

 

On December 14, 2021, the Company entered into a secured loan agreement (the “Second December 2021 Loan Agreement”) with a lender (the “Second December 2021 Lender”), whereby the Second December 2021 Lender issued the Company a secured promissory note of $438,096 AUD or $329,127 United States Dollars (the “Second December 2021 Note”). Pursuant to the Second December 2021 Loan Agreement, the Second December 2021 Note has an effective interest rate of 14%. The maturity date of the Second December 2021 Note is June 30, 2022 (the “Second December 2021 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the Second December 2021 Loan Agreement are due. The Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

 

During the nine months ended September 30, 2022, the Company accrued $22,287  in interest. 

 

As of the date of this filing the Company has exercised its option to extend the maturity date to August 29, 2022.

 

During the nine months ended September 30, 2022, the Company repaid $293,499 of principal and $26,115 of interest.  

 

The First February 2022 Loan Agreement

 

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

 

During the nine months ended September 30, 2022, the Company accrued $8,120 in interest. 

 

As of the date of this filing the Company has exercised its option to extend the maturity date to August 29, 2022.

 

During the nine months ended September 30, 2022, the Company repaid $149,089 of principal and $8,120 of interest.  

 

Denver Bodega LLC Notes payable

 

On March 7, 2022, The Company acquired five note payable agreements from the acquisition of Denver Bodega LLC. See note 12. The total liabilities of these notes amounted to $293,888. During the nine months ended September 30, 2022, the Company repaid $249,880. As of September 30, 2022, the Company has one note outstanding. This note has a principal balance of $44,088, bears interest at 5%, and requires 36 monthly payments of $1,496.

 

The First May 2022 Loan Agreement

 

On May 9, 2022, the Company entered into a loan agreement (the “First May 2022 Loan Agreement”) with a lender (the “First May 2022 Lender”), whereby the First May 2022 Lender issued the Company a promissory note of $693,500 (the “First May 2022 Note”). The Company received cash proceeds of $455,924. Pursuant to the First May 2022 Loan Agreement, the First May 2022 Note has an effective interest rate of 143%. The maturity date of the First May 2022 Note is December 18, 2022 (the “First May 2022 Maturity Date”). The Company is required to make weekly payment of $21,673. The First May 2022 Note is secured by officers of the Company.

 

The Company recorded a $237,576 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $390,114 in principal.

 

On September 22, 2022, the Company and the First May 2022 Lender entered into an exchange agreement whereas both parties agreed to roll the remaining $303,386 in the Second September 2022 Loan Agreement. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $33,115 as loss on extinguishment of debt due to the remaining debt discount on the First May 2022 Loan Agreement.

 

The Second May 2022 Loan Agreement

 

On May 9, 2022, the Company entered into a loan agreement (the “Second May 2022 Loan Agreement”) with a lender (the “Second May 2022 Lender”), whereby the Second May 2022 Lender issued the Company a promissory note of $401,500 (the “Second May 2022 Note”). The Company received cash proceeds of $263,815. Pursuant to the Second May 2022 Loan Agreement, the Second May 2022 Note has an effective interest rate of 162 %. The maturity date of the Second May 2022 Note is November 20, 2022 (the “Second May 2022 Maturity Date”). The Company is required to make weekly payment of $14,339. The Second May 2022 Note is secured by officers of the Company.

 

The Company recorded a $137,685 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $272,447 in principal.

 

On September 23, 2022, the Company and the Second May 2022 Lender entered into an exchange agreement whereas both parties agreed to roll the remaining $129,053 in the Third September 2022 Loan Agreement. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $3,905 as loss on extinguishment of debt due to the remaining debt discount on the Second May 2022 Loan Agreement.

 

The Third May 2022 Loan Agreement

 

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

 

During the nine months ended September 30, 2022, the Company repaid $11,435 in principal.

 

The Fourth May 2022 Loan Agreement

 

On May 26, 2022, the Company entered into a loan agreement (the “Fourth May 2022 Loan Agreement”) with a lender (the “Fourth May 2022 Lender”), whereby the Fourth May 2022 Lender issued the Company a promissory note of $40,000 (the “Fourth May 2022 Note”). Pursuant to the Fourth May 2022 Loan Agreement, the Fourth May 2022 Note has an effective interest rate of 17%. The maturity date of the Fourth May 2022 Note is November 23, 2022 (the “Fourth May 2022 Maturity Date”).

 

During the nine months ended September 30, 2022, the Company repaid $9,442 in principal.

 

The June 2022 Loan Agreement

 

On June 17, 2022, the Company entered into a loan agreement (the “June 2022 Loan Agreement”) with a lender (the “June 2022 Lender”), whereby the June 2022 Lender issued the Company a promissory note of $568,000 (the “June 2022 Note”). The Company received cash proceeds of $378,000. Pursuant to the June 2022 Loan Agreement, the June 2022 Note has an effective interest rate of 217%. The maturity date of the June 2022 Note is November 4, 2022 (the “June 2022 Maturity Date”). The Company is required to make weekly payment of $28,400. The June 2022 Note is secured by officers of the Company.

 

The Company recorded a $190,000 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $255,600 in principal. 

 

On August 19, 2022, the Company and the June 2022 Lender entered into an exchange agreement whereas both parties agreed to roll the remaining $312,400 in the Third September 2022 Loan Agreement. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $66,749 as loss on extinguishment of debt due to the remaining debt discount on the Second May 2022 Loan Agreement.

 

The First August 2022 Loan Agreement

 

On August 18, 2022, the Company entered into a secured loan agreement (the “First August 2022 Loan Agreement”) with a lender (the “First August 2022 Lender”), whereby the First August 2022 Lender issued the Company a secured promissory note of $193,500 AUD or $129,64 United States Dollars (the “First August 2022 Note”). Pursuant to the First August 2022 Loan Agreement, the First August 2022 Note has an effective interest rate of 14%. The maturity date of the First August 2022 Note is June 30, 2023 (the “First August 2022 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First August 2022 Loan Agreement are due. The Company has the option to extend the Maturity date by 60 days. The loan is secured by the Australian research & development credit.

 

During the nine months ended September 30, 2022, the Company accrued $2,037 AUD in interest. 

 

The Second August 2022 Loan Agreement

 

On August 19, 2022, the Company entered into a loan agreement (the “Second August 2022 Loan Agreement”) with a lender (the “Second August 2022 Lender”), whereby the Second August 2022 Lender issued the Company a promissory note of $923,000 (the “Second August 2022 Note”). The Company received cash proceeds of $300,100 and rolled the remaining $312,400 of principal from the June 2022 Loan Agreement. Pursuant to the Second August 2022 Loan Agreement, the Second August 2022 Note has an effective interest rate of 704%. The maturity date of the Second August 2022 Note is January 9, 2022 (the “Second August 2022 Maturity Date”). The Company is required to make weekly payment of $46,150. The Second August 2022 Note is secured by officers of the Company.

 

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

 

During the nine months ended September 30, 2022, the Company repaid $276,900 in principal. 

 

The First September 2022 Loan Agreement

 

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

 

During the nine months ended September 30, 2022, the Company repaid $0 in principal.

 

The Second September 2022 Loan Agreement

 

On September 22, 2022, the Company entered into a loan agreement (the “Second September 2022 Loan Agreement”) with a lender (the “Second September 2022 Lender”), whereby the Second September 2022 Lender issued the Company a promissory note of $876,000 (the “Second September 2022 Note”). The Company received cash proceeds of $272,614 and rolled the remaining $303,386 of principal from the First May 2022 Loan Agreement. Pursuant to the Second September 2022 Loan Agreement, the Second September 2022 Note has an effective interest rate of 475%. The maturity date of the Second September 2022 Note is May 5, 2023 (the “Second September 2022 Maturity Date”). The Company is required to make weekly payment of $27,375. The Second September 2022 Note is secured by officers of the Company.

 

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

 

During the nine months ended September 30, 2022, the Company repaid $27,375 in principal. 

 

The Third September 2022 Loan Agreement

 

On September 22, 2022, the Company entered into a loan agreement (the “Third September 2022 Loan Agreement”) with a lender (the “Third September 2022 Lender”), whereby the Third September 2022 Lender issued the Company a promissory note of $365,000 (the “Third September 2022 Note”). The Company received cash proceeds of $110,762 and rolled the remaining $129,053 of principal from the Second May 2022 Loan Agreement. Pursuant to the Third September 2022 Loan Agreement, the Third September 2022 Note has an effective interest rate of 556%. The maturity date of the Third September 2022 Note is May 5, 2023 (the “Second September 2022 Maturity Date”). The Company is required to make weekly payment of $13,036. The Third September 2022 Note is secured by officers of the Company.

 

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

 

During the nine months ended September 30, 2022, the Company repaid $13,036 in principal. 
v3.22.2.2
Convertible Notes Payable
 9 Months Ended
Sep. 30, 2022
Convertible Note Payable Abstract  
Convertible Notes Payable

Note 7 – Convertible Notes Payable

 

Convertible notes payable as of September 30, 2022, is as follows:

 

   Outstanding 
Principal as of		              Warrants granted 
  

September 30,

2022

  

Interest

Rate

  

Conversion

Price

  

Maturity

Date

  Quantity  

Exercise

Price

 
The Second February 2022 Loan Agreement  $112,613    11%   
-
(*)  February-23   
-
    - 
The May 2022 Convertible Loan Agreement   76,814    11%   
-
(*)  May-23   
-
    - 
The May 2022 Convertible Note Offering   4,090,000    18%   2.00(*)  November-22   4,000,000    $3.00 – $6.00 
The July 2022 Convertible Note Offering   2,150,000    18%   2.00(*)  November-22   2,150,000    $3.00 – $6.00 
    6,429,427                        
Less: Debt Discount   (360,854)                       
Less: Debt Issuance Costs   (5,648)                       
    6,062,926                        

 

(*) As subject to adjustment as further outlined in the notes

 

The July 2021 Convertible Loan Agreement

 

On July 6, 2021, the Company entered into a loan agreement (the “July 2021 Loan Agreement”) with an individual (the “July 2021 Lender”), whereby the July 2021 Lender issued the Company a promissory note of $168,850 (the “July 2021 Note”). Pursuant to the July 2021 Loan Agreement, the July 2021 Note has interest of six percent (6%). The July 2021 Note matures on the first (12th) month anniversary of its issuance date. 

 

Upon default or 180 days after issuance the July 2021 Note is convertible into shares of the Company’s common stock, par value $0.001 per share (“Conversion Shares”) equal to 75% of average the lowest three trading prices of the Company’s common stock on the fifteen-trading day immediately preceding the date of the respective conversion.

 

The Company recorded a $15,850 debt discount relating to an original issue discount and $3,000 of debt issuance costs related to fees paid to vendors relating to the offering. The debt discount and debt issuance costs are being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the July 2021 Note became convertible. Due to the fact that these convertible notes have an option to convert at a variable amount, they are subject to derivative liability treatment. The Company has applied ASC 815, due to the potential for settlement in a variable quantity of shares. The conversion feature has been measured at fair value using a Binomial model at the conversion date. The conversion feature of July 2021 Note gave rise to a derivative liability of $100,532. The Company recorded this as a debt discount. The debt discount is charged to accretion of debt discount over the remaining term of the convertible note.

 

During the nine months ended September 30, 2022, the note holder converted $168,850 of principal and $4,605 of interest into 109,435 shares of the Company’s common stock. The unamortized debt discount of $96,803 was recorded to extinguishment of debt due to conversion.

 

The Second February 2022 Loan Agreement

 

On February 22, 2022, the Company entered into a loan agreement (the “Second February 2022 Loan Agreement”) with a lender (the “Second February 2022 Lender”), whereby the Second February 2022 Lender issued the Company a promissory note of $337,163 (the “Second February 2022 Note”). Pursuant to the Second February 2022 Loan Agreement, the Second February 2022 Note has an interest rate of 11%. The maturity date of the Second February 2022 Note is February 22, 2023 (the “Second February 2022 Maturity Date”). The Company is required to make 10 monthly payments of $37,425. 

 

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

 

The Company recorded a $37,163 debt discount relating to an original issue discount. The debt discount is being accreted over the life of the note to accretion of debt discount and issuance cost.

 

During the nine months ended September 30, 2022, the Company repaid $224,550 in principal.

 

The May 2022 Convertible Loan Agreement

 

On May 20, 2022, the Company entered into a loan agreement (the “May 2022 Loan Agreement”) with an individual (the “May 2022 Lender”), whereby the May 2022 Lender issued the Company a promissory note of $115,163 (the “July 2021 Note”). Pursuant to the Third May 2022 Loan Agreement, the Third May 2022 Note has an interest rate of 11%. The May 2022 Note matures on the first (12th) month anniversary of its issuance date. 

 

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

 

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

 

During the nine months ended September 30, 2022, the Company repaid $38,349 in principal.

 

The May 2022 Convertible Note Offering

 

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

 

The Company recorded a $1,895,391 debt discount relating to 4,000,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

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

 

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

 

On September 15, 2022, the Company and six out of eight lenders May 2022 Investors agreed to forgive default interest and extend the maturity date to March 31, 2023, for a reduced conversion price of $0.20 for the convertible notes and warrants. Since the PV cashflows of the new and old debt were more than 10% differences the company used extinguishment accounting. As part of the agreement the Company recognized $737,756 as loss on extinguishment of debt due to the remaining debt discount and recognized $331,861 as a gain on extinguishment of debt due to the forgiveness of interest. The company also recognized an additional $75,610 of debt discount from the change in relative fair value on the warrants.

 

During the nine months ended September 30, 2022, the Company accrued $103,670 in interest that was not forgiven. As of September 30, 2022, the Company is in default on $900,000 of principal and $103,670 of interest.

 

Subsequent to September 30, 2022, the Company made a repayment of $35,714 towards these notes.

 

The July 2022 Convertible Note Offering

 

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

 

The Company recorded a $863,792 debt discount relating to 2,150,000 warrants issued to investors based on the relative fair value of each equity instrument on the dates of issuance. The debt discount is being accreted over the life of these notes to accretion of debt discount and issuance cost.

 

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

 

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

 

On September 15, 2022, the Company and the July Investors agreed to forgive default interest and extend the maturity date to March 31, 2023 for a reduced conversion price of $0.20 for the convertible notes and warrants. Since the present value of the cash flows of the new and old debt were more than 10% different, the company used extinguishment accounting. As part of the agreement the Company recognized $640,521 as loss on extinguishment related to the change in fair value from the restructuring agreement.

 

Subsequent to September 30, 2022, the Company made a repayment of $714,285 towards these notes.
v3.22.2.2
Related Party
 9 Months Ended
Sep. 30, 2022
Related Party Transactions [Abstract]  
Related Party

Note 8 – Related Party

 

Equity raises

 

During the nine months ended September 30, 2022, the Company conducted two equity raises in which officers, directors, employees, and an affiliate of an officer cumulatively invested $421,001 for 240,571 shares of common stock and 240,571 warrants to purchase common stock.

 

Officer compensation

 

During the nine months ended September 30, 2022 and 2021, the Company paid $87,275 and $72,328, respectively for living expenses for officers of the Company.
v3.22.2.2
Derivative Liabilities
 9 Months Ended
Sep. 30, 2022
Derivative Liability [Abstract]  
Derivative Liabilities

Note 9 – Derivative Liabilities

 

The Company has identified derivative instruments arising from convertible notes that have an option to convert at a variable number of shares in the Company’s convertible notes payable during the nine months ended September 30, 2022. For the terms of the conversion features see Note 7. The Company had no derivative assets measured at fair value on a recurring basis as of September 30, 2022.

 

The Company utilizes a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

 

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

 

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

 

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

 

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

 

The following are the changes in the derivative liabilities during the nine months ended September 30, 2022.

 

   Nine Months Ended
September 30, 2022		 
   Level 1   Level 2   Level 3 
Derivative liabilities as January 1, 2022  $
   -
   $
     -
   $
-
 
Addition   
-
    
-
    100,532 
Changes in fair value   
-
    
-
    (3,729)
Extinguishment   
-
    
-
    (96,803)
Derivative liabilities as September 30, 2022  $
-
   $
-
   $
-
 
v3.22.2.2
Stockholders’ Equity
 9 Months Ended
Sep. 30, 2022
Stockholders' Equity Note [Abstract]  
Stockholders’ Equity

Note 10 – Stockholders’ Equity

 

Shares Authorized

 

The Company is authorized to issue up to one hundred and twenty million (120,000,000) shares of capital stock, of which one hundred million (100,000,000) shares are designated as common stock, par value $0.001 per share, and twenty million (20,000,000) are designated as preferred stock, par value $0.001 per share.

  

Preferred Stock

 

Series E Convertible Preferred Stock

 

The Company has designated 8,000 shares of Series E Convertible Preferred stock and has 500 shares issued and outstanding as of September 30, 2022.

 

The shares of Series E Preferred Stock have a stated value of $1,000 per share and are convertible into Common Stock at the election of the holder of the Series E Preferred Stock, at any time following the Original Issue Date at a price of $4.12 per share, subject to adjustment. Each holder of Series E Preferred Stock shall be entitled to receive, with respect to each share of Series E Preferred Stock then outstanding and held by such holder, dividends on an as-converted basis in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

 

The holders of Series E Preferred Stock shall be paid pari passu with the holders of Common Stock with respect to payment of dividends and rights upon liquidation and shall have no voting rights. In addition, as further described in the Series E Designation, as long as any of the shares of Series E Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock or alter or amend this Series E Designation, (b) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series E Preferred Stock, (c) increase the number of authorized shares of Series E Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

 

Each share of Series E Preferred Stock shall be convertible, at any time and from time to time at the option of the holder of such shares, into that number of shares of Common Stock determined by dividing the Series E Stated Value by the Conversion Price, subject to certain beneficial ownership limitations.

 

Common Stock

 

During the nine months ended September 30, 2022, the Company issued 82,342 shares of its restricted common stock to settle outstanding vendor liabilities of $130,625. In connection with this transaction the Company also recorded a loss on settlement of vendor liabilities of $17,024.

 

On January 6, 2022, the Company issued 8,850 shares of its restricted common stock to consultants in exchange for services at a fair value of $19,736.

 

On February 24, 2022, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for four months of services at a fair value of $69,000. These shares were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the nine months ended September 30, 2022 the Company recorded $69,000 to share based payments.

 

On March 1, 2022, the Company entered into securities purchase agreements with twenty-eight accredited investors whereby, at the closing, such investors purchased from the Company an aggregate of 1,401,457 shares of the Company’s common stock and (ii) 1,401,457 warrants to purchase shares of common stock, for an aggregate purchase price of $2,452,550. Such warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $1.75 per share. The Company has recorded $40,000 to stock issuance costs, which are part of Additional Paid-in Capital.

 

On March 7, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with thirteen accredited investors resulting in the raise of $2,659,750 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering an aggregate of 1,519,857 shares of the Company’s common stock together with warrants to purchase an aggregate of 1,519,857 shares of Common Stock at an exercise price of $1.75 per share. The warrants are immediately exercisable and will expire on March 9, 2027. The Company has recorded $75,000 to stock issuance costs, which are part of Additional Paid-in Capital.

 

During the three months ended March 31, 2022, the Company issued 7,488 shares of its restricted common stock to consultants in exchange for services at a fair value of $8,364.

 

On April 5, 2022 the Company issued 185,000 shares of its restricted common stock to officers of the company in exchange for services at a fair value of $192,400.

 

On June 24, 2022, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for four months of services at a fair value of $37,200. These shares were recorded as common stock issued for prepaid services and will be expensed over the life of the consulting contract to share based payments. During the nine months ended September 30, 2022 the Company recorded $2,405 to share based payments.

 

During the three months ended June 30, 2022, the Company issued 29,387 shares of its restricted common stock to consultants in exchange for services at a fair value of $24,001.

 

On September 15, 2022, the Company entered into a securities purchase agreement with five accredited investors resulting in the raise of $796,000 in gross proceeds to the Company. Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering an aggregate of 4,000,000 shares of the Company’s common stock together with warrants to purchase an aggregate of 4,000,000 shares of Common Stock at an exercise price of $0.20 per share. The warrants are immediately exercisable and will expire on September 15, 2027. The Company has recorded $75,000 to stock issuance costs, which are part of Additional Paid-in Capital.

 

During the three months ended September 30, 2022, the Company issued 50,000 shares of its restricted common stock to consultants in exchange for prepaid services at a fair value of $34,900.

 

During the three months ended September 30, 2022, the Company issued 107,206 shares of its restricted common stock to consultants in exchange for services at a fair value of $22,892.

 

During the three months ended September 30, 2022 the company repurchased 83,800 shares of common stock for $13,700

 

Stock Options

 

The assumptions used for options granted during the nine months ended September 30, 2022 and 2021, are as follows:

 

   September 30,
2022		 
Exercise price  $1.10 – 1.90 
Expected dividends   0%
Expected volatility   165.38% – 166.48%
Risk free interest rate   2.69% – 2.95%
Expected life of option   5 years 

 

   September 30,
2021		 
Exercise price  $2.55 – 14.10 
Expected dividends   0%
Expected volatility   194.39% – 242.98%
Risk free interest rate   0.46% – 0.98%
Expected life of option   5 - 7 years 

 

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


 

   Options   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Life (in years)		 
Balance – December 31, 2020 – outstanding   541,021    12.75    3.27 
Granted   1,850,588    6.32    6.20 
Exercised   
-
    
-
    - 
Forfeited/Cancelled   (64,164)   13.06    - 
Balance – September 30, 2021 – outstanding   2,327,445    7.63    4.29 
Balance – September 30, 2021 – exercisable   608,524    12.75    3.75 

 

   Options   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Life (in years)		 
Balance – January 1, 2022 – outstanding   2,902,619    7.07    4.71 
Granted   1,940,000    1.38    
-
 
Exercised   
-
    
-
    
-
 
Forfeited/Cancelled   (434,352)   13.56    
-
 
Balance – September 30, 2022 – outstanding   4,408,267    3.93    4.43 
Balance – September 30, 2022 – exercisable   3,010,101    4.12    4.32 

 

Option Outstanding   Option Exercisable 
Exercise price   Number
Outstanding		   Weighted
Average
Remaining
Contractual
Life
(in years)		   Weighted
Average
Exercise
Price		   Number
Exercisable		   Weighted
Average
Remaining
Contractual
Life
(in years)		 
$3.93    4,408,267        4.43       4.12    3,010,101    4.32 

  

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

 

Stock-based compensation for stock options has been recorded in the consolidated statements of operations and totaled $4,100,729, for the nine months ended September 30, 2021.

  

Stock-based compensation for stock options has been recorded in the condensed consolidated statements of operations and totaled $523,749, for the three months ended September 30, 2022. Stock-based compensation for stock options has been recorded in the condensed consolidated statements of operations and totaled $3,355,445, for the nine months ended September 30, 2022.

 

As of September 30, 2022, there was $1,283,111 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.21 years.

Warrants

 

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

 

The assumptions used for warrants granted during the nine months ended September 30, 2022  and 2021 are as follows:

 

   September 30,
2021		 
Exercise price    $4.50 – 4.95 
Expected dividends   0%
Expected volatility    237.14% - 237.68 % 
Risk free interest rate    0.82% - 0.86 % 
Expected life of warrant   5 years 
      

 

   September  30,
2022		 
Exercise price   $0.20 – 6.00 
Expected dividends   0%
Expected volatility   164.34% - 169.75% 
Risk free interest rate   2.81% – 4.00% 
Expected life of warrant   5.00 – 5.50 years 

  

Warrant Activities

 

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

 

   Warrant   Weighted
Average
Exercise
Price		 
Balance – December 31, 2020 – outstanding   6,130,948    4.96 
Granted   1,881,267    5.63 
Exercised   (1,438,788)   4.59 
Forfeited/Cancelled   (14,722)   24.00 
Balance – September 30, 2021 – outstanding   6,558,705    4.92 
Balance – September 30, 2021 – exercisable   6,558,705   $4.92 

 

   Warrant   Weighted
Average
Exercise
Price		 
Balance – January 1, 2022 – outstanding   5,658,830    4.98 
Granted   14,812,262    2.29 
Exercised   
-
    
-
 
Forfeited/Cancelled   (41,462)   12.00 
Balance – September 30, 2022 – outstanding   20,429,630    1.88 
Balance – September 30, 2022 – exercisable   16,429,630   $2.62 

 

Warrants Outstanding   Warrants Exercisable 
Exercise price   Number
Outstanding		   Weighted
Average
Remaining
Contractual
Life
(in years)		   Weighted
Average
Exercise
Price		   Number
Exercisable		   Weighted
Average
Exercise
Price		 
$1.88    20,429,630    4.07    2.62    16,429,630    3.81 

   

During the nine months ended September 30, 2021, the Company issued 1,275,261 shares of common stock to a certain warrant holder upon the cashless exercise of a warrant to purchase 1,438,788 shares of common stock. The Company received $5,472,068 in connection with the exercise of the warrant.

 

During the nine months ended September 30, 2021, a total of 486,516 warrants were issued in connection with the Series E Convertible Preferred Stock raise.

 

During the nine months ended September 30, 2021, a total of 1,090,908 warrants were issued with convertible notes. The warrants have a grant date fair value of $3,067,617 using a Black-Scholes option-pricing model and the above assumptions.

 

During the nine months ended September 30, 2021, some of the Company’s warrants had a reset provision triggered that also resulted in an additional 127,801 warrants to be issued. A deemed dividend of $410,750 was recorded to the Statements of Comprehensive Loss.

 

On June 17, 2021, the Company issued 46,667 warrants in connection with the underwriting agreement.

 

Stock-based compensation for stock warrants has been recorded in the consolidated statements of operations and totaled $480,863, for the nine months ended September 30, 2021

 

During the nine months ended September 30, 2022, some of the Company’s warrants had a down-round provision triggered that also resulted in an additional 1,740,948 warrants to be issued. A deemed dividend of $303,557 was recorded to the Statements of Operations and Comprehensive Loss.

 

During the nine months ended September 30, 2022, a total of 6,150,000 warrants were issued with convertible notes (See Note 7 above). The warrants have a grant date fair value of $5,185,826 using a Black-Scholes option-pricing model and the above assumptions and a relative fair value of $2,929,303.
v3.22.2.2
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 11 – Commitments and Contingencies

 

Litigation 

 

On or about June 25, 2020, Home Revolution, LLC (“Home Revolution”) filed a lawsuit in the United States District Court for the District of New Jersey, Home Revolution, LLC, et al. v. Jerrick Media Holdings, Inc. et al., Case No. 2:20-cv-07775-JMV-MF. The Complaint alleges, among other things, that Creatd, Inc. breached the Membership Interest Purchase Agreement, as modified, and ancillary transaction documents in connection with the acquisition of Seller’s Choice, LLC, from Home Revolution in September 2019. The Complaint additionally alleges violation of the New Jersey Uniform Securities Law, violations of the Exchange Act and Rule 10b-5 thereunder, fraud, equitable accounting, breach of fiduciary duty, conversion and unjust enrichment. Plaintiff also sought to have a receiver appointed by the Court to take over Creatd’s operations. After substantial motion practice, Creatd successfully settled this dispute from June 2020 for a total of $799,000, which includes $660,000 of note principal and $139,000 of accrued interest. The matter has been dismissed as of March 3, 2022.

 

On or about August 30, 2021, Robert W. Monster and Anonymize, Inc. (“Monster”) filed a lawsuit in the United States District Court for the Western District of Washington at Seattle, Robert W. Monster, et al. v. Creatd, Inc., et al. (Western District of Washington at Seattle 2:21-CV-1177). The Complaint alleges, among other things, that action for Declaratory Judgment under 28 U.S.C. § 2201 that Monster’s registration and use of the internet domain name VOCL.COM (the “Domain Name”) does not violate Creatd’s rights under the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d), or otherwise under the Lanham Act, 15 U.S.C. § 1051 et seq. Creatd claims trademark rights and certain other rights with respect to the term and the domain name VOCL.COM. Monster seeks a determination by the Court that Monster’s registration and/or use of VOCL.COM is not, and has not been in violation of the ACPA, and that Plaintiffs’ use of VOCL.COM constitutes neither a violation of the ACPA nor trademark infringement or dilution under the Lanham Act. Creatd believes the lawsuit lacks merit and will vigorously challenge the action. At this time, we are unable to estimate potential damage exposure, if any, related to the litigation.

 

A complaint against the Company, dated September 21, 2022, has been filed in the Supreme Court of the State of New York, New York County, by Lind Global Macro Fund LP and Lind Global Fund II LP, making certain claims alleging breach of contract related to two Securities Purchase Agreements executed on May 31, 2022, seeking damages in excess of $920,000. No response to the Complaint has been filed at this time. The Company has not yet submitted a response to the Complaint or had the opportunity to conduct discovery as to the allegations. The Company will file an initial response on or before November 18, 2022. Given the premature nature of this case, it is still too early for the Company to make an assessment as to liability.

 

Inflation Reduction Act of 2022

 

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

 

Lease Agreements

 

On April 26, 2022, the Company signed a 7-year lease for approximately 8,000 square feet of office space at 419 Lafayette Street, 6th Floor, New York, NY, 10003. Commencement date of the lease is May 1, 2022. The total amount due under this lease is $3,502,033.

 

On July 28, 2022, the Company signed a 3-year lease for approximately 1,364 square feet of office space at 1674 Meridian Ave., Miami Beach, FL, 33131. Commencement date of the lease is July 28, 2022. The total amount due under this lease is $181,299. During the three months ended September 30, 2022, it was decided the company would not be using the office space and recorded an impairment of $101,623 on the right-of-use asset.

   

The components of lease expense were as follows:

 

   Three Months
Ended
September 30,
2022		 
Operating lease cost  $148,446 
Short term lease cost   5,568 
Total net lease cost  $154,015 

 

   Nine Months
Ended
September 30,
2022		 
Operating lease cost  $241,601 
Short term lease cost   154,108 
Total net lease cost  $395,709 

 

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

 

   Nine Months
Ended
September 30,
2022		 
Cash paid for amounts included in the measurement of lease liabilities:    
Operating lease payments   54,564 
Weighted average remaining lease term (in years):   3.40 
Weighted average discount rate:   12.50%

  

Total future minimum payments required under the lease as of September 30, are as follows:

 

For the Twelve Months Ended September 30,     Operating
Leases		  
2023     $  534,880  
2024        541,905  
2025        513,507  
2026        528,589  
2027        544,122  
Thereafter        892,399  
Total lease payments        3,555,402  
Less: Amounts representing interest        (1,140,416 )
Total lease obligations       2,414,986  
Less: Current        (279,593 )
      $ 2,135,393  

 

Rent expense for the three months ended September 30, 2022 and 2021 was $154,015 and $67,397, respectively. Rent expense for the nine months ended September 30, 2022 and 2021 was $395,709 and $121,266, respectively. 

 

Market price risk of crypto (“digital”) assets

 

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

 

Appointment of New Directors

 

On February 17, 2022, the Board of Directors (the “Board”) of the Company appointed Joanna Bloor, Brad Justus, and Lorraine Hendrickson to serve as members of the Board. Ms. Bloor has been nominated to, and will serve as, chair of the Compensation Committee, and to be a member of the Audit Committee and Nominating & Corporate Governance Committee. Mr. Justus has been nominated, and will serve as, chair of the Nominating & Corporate Governance Committee, and to be a member of the Compensation Committee and Audit Committee. Ms. Hendrickson has been nominated to, and will serve as, chair of the Audit Committee and to be a member of the Compensation and Nominating & Corporate Governance Committee.

 

Departure of Directors

 

On February 17, 2022, the Board received notice that effective immediately, Mark Standish resigned as Chair of the Board, Chair of the Audit Committee and as a member of the Compensation Committee and Nominating & Corporate Governance Committee; Leonard Schiller resigned as member of the Board, Chair of the Compensation Committee and as a member of the Audit Committee and Nominating & Corporate Governance Committee; and LaBrena Martin resigned as a member of the Board, Chair of the Nominating & Corporate Governance Committee and as a member of the Audit Committee and Compensation Committee. Such resignations are not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

  

Management Restructuring

 

On February 17, 2022, the Board of the Company approved the restructuring of the Company’s senior management team to eliminate the Co-Chief Executive Officer role, appointing Jeremy Frommer as Executive Chairman and Founder, and appointing Laurie Weisberg as Chief Executive Officer (the “Second Restructuring”). Prior to the Second Restructuring, Mr. Frommer and Ms. Weisberg served as the Company’s co-Chief Executive Officers and Ms. Weisberg served as the Company’s Chief Operating Officer. The Second Restructuring does not impact the role or functions of the Company’s Chief Financial Officer, Chelsea Pullano, or the role or functions of the Company’s President and Chief Operating Officer, Justin Maury.

 

Nasdaq Notice of Delisting 

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

 

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

 

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

 

Employment Agreements

 

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

 

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

 

Executive Separation Agreement

 

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

 

The Company will pay severance in the aggregate amount of $475,000, payable as follows: (i) 1/24 will be paid on each of September 15, 2022, October 1, 2022 and November 1, 2022, respectively; (ii) 1/8 will be paid on each of December 1, 2022, January 1, 2023 and February 1, 2023, respectively; (iii) 1/4 will be paid on April 1, 2023; and (iv) the balance will be paid on May 1, 2023. The Company has executed and delivered a Confession of Judgment concerning the severance amount, which is being held in escrow pending satisfaction of payment.

 

Additionally, all unvested and/or outstanding stock options held by Ms. Weisberg as of the date of the separation agreement that are not subject to metric based vesting shall automatically and fully vest. All unvested and/or outstanding stock options held by Ms. Weisberg as of the date of the separation agreement that are subject to metric based vesting shall vest in accordance with their respective original terms.
v3.22.2.2
Acquisitions
 9 Months Ended
Sep. 30, 2022
Asset Acquisition [Abstract]  
Acquisitions

Note 12 – Acquisitions

  

Denver Bodega, LLC d/b/a Basis

 

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

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Cash paid to seller  $1 
Total purchase price   1 
      
Assets acquired:     
Cash   44,977 
Accounts Receivable   2,676 
Inventory   194,365 
Total assets acquired   242,018 
      
Liabilities assumed:     
Accounts payable and accrued expenses   127,116 
Notes payable   293,888 
Total liabilities assumed   421,004 
      
Net liabilities acquired   (178,986)
      
Excess purchase price  $178,987 

  

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Goodwill  $8,950 
Trade Names & Trademarks   8,949 
Know-How and Intellectual Property   107,392 
Website   8,949 
Customer Relationships   44,747 
      
Excess purchase price  $178,987 

 

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

   

Acquisition of Orbit

 

On August 1, 2022 the Company entered into a Membership Interest Purchase (the “Agreement”) with Zachary Shenkman, Wuseok Jung, Wesley Petry, Nicholas Scibilia, Gary Rettig, Brandon Fallin (collectively the “Sellers”), whereby the Company purchased a majority stake in Orbit Media LLC, a New York limited liability company whose product is an app-based stock trading platform designed to empower a new generation of investors, providing users with a like-minded community as well as access to tools, content, and other resources to learn, train, and excel in the financial markets. Pursuant to the Agreement, Creatd acquired fifty one percent (51%) of the issued and outstanding membership interests of Orbit Media LLC for consideration of forty-four thousand dollars ($44,000) in cash and 57,576 shares of the Company’s Common Stock.

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Cash paid to seller  $44,000 
Shares granted to seller   40,994 
Total purchase price   84,994 
      
Net Assets acquired   - 
      
Non-controlling interest in consolidated subsidiary   81,661 
      
Excess purchase price  $166,655 

  

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Know-How and Intellectual Property  $166,655 
      
Excess purchase price  $166,655 

 

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

 

The following sets forth the components of the purchase price:

 

Purchase price:    
Cash paid to seller  $150,000 
Total purchase price   150,000 
      
Assets acquired:     
Cash   73,344 
Inventory   86,154 
Total assets acquired   159,498 
      
Liabilities assumed:     
Accounts payable and accrued expenses   1,316 
Notes payable   75,000 
Total liabilities assumed   76,316 
      
Net assets acquired   83,182 
      
Excess purchase price  $66,818 

  

The excess purchase price amounts are provisional and may be adjusted during the one-year measurement period as required by U.S. GAAP. The following table provides a summary of the preliminary allocation of the excess purchase price.

 

Goodwill  $6,683 
Trade Names & Trademarks   16,704 
Know-How and Intellectual Property   16,704 
Website   16,704 
Customer Relationships   10,023 
      
Excess purchase price  $66,818 

 

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

 

The following presents the unaudited pro-forma combined results of operations of the Company with Plant Camp, WHE, Dune, Denver Bodega, Orbit, and Brave as if the entities were combined on January 1, 2021. 

 

   Three Months
Ended		 
   September 30, 
   2021 
Revenues  $3,429,748 
Net loss attributable to common shareholders  $(25,735,007)
Net loss per share  $(2.17)
Weighted average number of shares outstanding   11,845,229 

 

   Three Months Ended 
   September 30, 
   2022 
Revenues  $4,057,080 
Net loss attributable to common shareholders  $(9,425,313)
Net loss per share  $(0.45)
Weighted average number of shares outstanding   21,087,764 

 

   Nine  Months
Ended		 
   2021 
Revenues  $5,069,181 
Net loss attributable to common shareholders  $(26,428,192)
Net loss per share  $(2.23)
Weighted average number of shares outstanding   11,845,229 

 

  

 

Nine  Months
Ended

 
   2022 
Revenues  $4,683,843 
Net loss attributable to common shareholders  $(24,217,030)
Net loss per share  $(1.23)
Weighted average number of shares outstanding   19,726,987 
v3.22.2.2
Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information

Note 13 – Segment Information 

 

We operate in three reportable segments: Creatd Labs, Creatd Ventures, and Creatd Partners. Our segments were determined based on the economic characteristics of our products and services, our internal organizational structure, the manner in which our operations are managed and the criteria used by our Chief Operating Decision Maker (CODM) to evaluate performance, which is generally the segment’s operating losses.

 

Operations of:   Products and services provided:
Creatd Labs  

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

 

Creatd Ventures  

Creatd Ventures builds, develops, and scales e-commerce brands. This segment generates revenues through product sales of its two majority-owned direct-to-consumer brands, Camp and Dune Glow Remedy.

 

Creatd Partners   Creatd Partners fosters relationships between brands and creators through its suite of agency services, including content marketing (Vocal for Brands), performance marketing (Seller’s Choice), and influencer marketing (WHE Agency). Creatd Partners derives revenues in the form of brand fees and talent management commissions.

 

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

 

   As of September 30, 2022 
   Creatd
Labs		   Creatd
Ventures		   Creatd
Partners		   Corporate   Total 
                     
Accounts receivable, net  $
-
   $4,973   $217,210   $
-
   $222,183 
Prepaid expenses and other current assets   43,336    
-
    
-
    96,390    139,726 
Deposits and other assets   576,551    
-
    
-
    192,585    769,136 
Intangible assets   162,489    1,568,347    648,469    157,294    2,536,599 
Goodwill   
-
    15,632    1,349,696    
-
    1,365,328 
Inventory   
-
    879,050    
-
    
-
    879,050 
All other assets   
-
    
-
    
-
    2,811,769    2,811,769 
Total Assets  $782,376   $2,468,002   $2,215,375   $3,258,038   $8,723,791 
                          
Accounts payable and accrued liabilities  $1,365   $1,518,544   $68,063   $5,126,634   $6,714,606 
Note payable, net of debt discount and issuance costs   129,634    170,365    
-
    1,487,100    1,787,099 
Deferred revenue   161,112    -    144,443    
-
    305,555 
All other Liabilities   
-
    
-
    
-
    8,529,992    8,529,992 
Total Liabilities  $292,111   $1,688,909   $212,506   $15,143,726   $17,337,252 

 

   As of December 31, 2021 
   Creatd
Labs		   Creatd
Ventures		   Creatd
Partners		   Corporate   Total 
                     
Accounts receivable, net  $
-
   $2,884   $334,556   $
-
   $337,440 
Prepaid expenses and other current assets   48,495    
-
    
-
    188,170    236,665 
Deposits and other assets   626,529    
-
    
-
    92,422    718,951 
Intangible assets   
-
    1,637,924    783,676    11,241    2,432,841 
Goodwill   
-
    25,139    1,349,696    
-
    1,374,835 
Inventory   
-
    106,403    
-
    
-
    106,403 
All other assets   
-
    
-
    
-
    3,966,124    3,966,124 
Total Assets  $675,024   $1,772,350   $2,467,928   $4,257,957   $9,173,259 
                          
Accounts payable and accrued liabilities  $9,693   $766,253   $6,232   $2,948,362   $3,730,540 
Note payable, net of debt discount and issuance costs   313,979    
-
    
-
    1,028,685    1,342,664 
Deferred revenue   161,112    13,477    59,570    
-
    234,159 
All other Liabilities   
-
    
-
    
-
    177,644    177,644 
Total Liabilities  $484,784   $779,730   $65,802   $4,154,691   $5,485,007 

 

   For the three months ended September 30, 2022 
   Creatd
Labs		   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $291,414   $316,654   $414,783   $
-
   $1,022,851 
Cost of revenue   564,349    502,396    337,817    
-
    1,404,562 
Gross margin (loss)   (272,935)   (185,742)   76,966    
-
    (381,711)
                          
Research and development   139,997    
-
    94,968    
-
    234,965 
Marketing   370,584    234,760    41,176    
-
    646,520 
Stock based compensation   122,964    111,472    126,654    265,478    626,568 
General and administrative not including depreciation, amortization, or Impairment   90,212    476,386    384,365    3,136,092    4,087,055 
Depreciation and amortization   1,489    43,001    40,917    72,589    157,996 
Impairment of intangibles   
-
    85,406    
-
    164,180    249,586 
                          
Total operating expenses  $723,757   $822,618   $647,163   $3,401,570   $5,595,108 
                          
Interest expense   (17,048)   
-
    
-
    (656,647)   (673,694)
All other expenses   
-
    
-
    
-
    (2,875,832)   (2,875,832)
Other expenses, net   (17,048)   
-
    
-
    (3,532,479)   (3,549,526)
                          
Loss before income tax provision  $(1,001,024)  $(1,008,360)  $(570,197)  $(6,946,764)  $(9,526,345)

 

   For the three months ended September 30, 2021 
   Creatd
Labs		   Creatd
Ventures		   Creatd
Partners		   Corporate   Total 
                     
Net revenue  $565,852   $3,919   $609,849   $-   $1,179,620 
Cost of revenue   849,079    174,438    394,696    -    1,418,213 
                          
Gross margin   (283,227)   (170,519)   215,153    -    (238,593)
                          
Research and development   250,474    60    72,412    -    322,946 
Marketing   1,540,540    -    181,240    90,620    1,812,400 
Stock based compensation   337,026    -    332,531    1,179,579    2,151,900 
General and administrative   386,844    302,764    293,296    1,672,176    2,385,135 
Total operating expenses     2,514,884      32,819      879,479      2,942,375      6,672,381 
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(2,802,443)  $(506,162)  $(664,326)  $(5,747,190)  $(9,720,121)

 

   For the Nine months ended September 30, 2022 
   Creatd
Labs		   Creatd
Ventures		   Creatd
Partners		   Corporate   Total 
                     
Net revenue  $1,138,904   $1,237,542   $1,621,044   $-   $3,997,490 
Cost of revenue   1,917,039    1,706,586    1,147,526    -    4,771,151 
Gross margin (loss)   (778,135)   (469,044)   473,518    -    (773,661)
                          
Research and development   408,810    -    277,321    -    686,131 
Marketing   2,301,994    1,458,280    255,777    -    4,016,051 
Stock based compensation   755,284    684,697    777,948    1,630,649    3,848,578 
General and administrative not including depreciation, amortization, or Impairment   242,330    1,279,676    1,032,487    8,401,553    10,956,046 
Depreciation and amortization   4,166    120,282    114,453    203,042    441,943 
Impairment of intangibles   -    87,983    -    169,134    257,117 
                          
Total operating expenses  $3,712,584   $3,630,918   $2,457,986   $10,404,378   $20,205,866 
                          
Interest expense   (34,095)   
-
    -    (673,855)   (707,950)
All other expenses        -    -    (3,424,854)   (3,424,854)
Other expenses, net   (34,095)   
-
    -    (4,098,709)   (4,132,804)
                          
Loss before income tax provision  $(4,524,814)  $(4,099,962)  $(1,984,468)  $(14,503,087)  $(25,112,331)

 

   For the nine months ended September 30, 2021 
   Creatd
Labs		   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $1,388,411   $9,616   $1,496,363   $-   $2,894,390 
Cost of revenue   2,482,848    497,194    1,180,701    -    4,160,743 
Gross margin   (1,094,437)   (487,578)   315,662    -    (1,266,353)
                          
Research and development   549,426    131    158,839    -    708,396 
Marketing   6,842,142    -    804,958    402,479    8,049,579 
Stock based compensation   886,832    796,676    875,004    3,103,877    5,662,389 
General and administrative   900,323    76,381    682,602    3,891,743    5,551,049 
Total operating expenses  $9,178,723   $873,188   $2,521,403   $7,398,099   $19,971,413 
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(10,286,156)  $(1,360,766)  $(2,205,741)  $(11,073,171)  $(24,925,834)
v3.22.2.2
Subsequent Events
 9 Months Ended
Sep. 30, 2022
Subsequent Events [Abstract]  
Subsequent Events

Note 14 – Subsequent Events 

 

Warrant Exercises

 

Subsequent to September 30, 2022, a total of 4,227,114 warrants were exercised, resulting in the cancellation of 4,227,114 warrants, the issuance of 3,802,626 shares of Common Stock, and gross proceeds of $354,994 to the Company.

 

Promissory Notes

 

Subsequent to September 30, 2022, the Company entered into one promissory note agreement with net proceeds of $100,000.

 

Common Stock Purchase Agreement, Securities Purchase Agreement and Promissory Note

 

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

 

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

 

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

 

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

 

Securities Purchase Agreement

 

On October 24, 2022 (the “Effective Date”), the Company, entered into and closed securities purchase agreement (the “Purchase Agreement”) with one accredited investor (the “Investor”), whereby the Investor purchased from the Company for an aggregate of $1,500,000 in subscription amount, an unsecured debenture in the principal amount of $1,666,650 (the “Debenture”).

 

The Debenture has an original issue discount of 10%, has a term of six months with a maturity date of April 24, 2023, may be extended by six months at the Company’s option subject to certain conditions, and are convertible into shares of Common Stock at a conversion price of $0.20 per share, subject to adjustment upon certain events.

 

In connection with its entry into the Purchase Agreement and issuance of the Debenture, the Company also entered into a side letter agreement (the “Letter Agreement”) with the holders of debentures of the Company, the Series C Warrants and Series D Warrants issued as of May 31, 2022 (the “May Investors”) and the holders of debentures of the Company, the Series E Warrants and Series F Warrants issued as of July 25, 2022 (the “July Investors”). Pursuant to the Letter Agreement each of the May Investors and the July Investors have entered into a lock-up agreement whereby they may not sell any such debentures, warrants, the shares into which such debentures may be converted, or certain shares underlying such warrants until the date that is 30 days after the date on which the registration statement registering for resale the shares of the Company’s common stock underlying the Debenture is declared effective by the Securities and Exchange Commission. Additionally, the Letter Agreement, provides that the May Investors and July Investors have agreed to a further lock up of such shares for a further 30 days upon the receipt of a certain amount of the proceeds from future potential issuances of debentures, common stock or similar securities by the Company. Further additionally, pursuant to the Letter Agreement, the May Investors and the July Investors have agreed to exchange and return for cancellation the Series C Warrants, Series D Warrants, Series E Warrants and Series F Warrants, receiving replacement warrants from the Company (the “Replacement Warrants”), in consideration for (i) the Company’s payment of $750,000 of the proceeds from the sale of the Debenture to the May Investors and July Investors on a pro rata basis and (ii) the Company’s agreement to pay, on a pro rata basis to the May Investors and July Investors, the greater of (x) $750,000 and (y) 50% of the gross proceeds raised in a subsequent financing. The Replacement Warrants reflect a reduction in the number of Series C and Series D Warrants from 1,550,000 in each class to 1,536,607 in each class and a reduction in the number of Series E and Series F Warrants from 1,075,000 in each class to 807,143 in each class, and the initial exercise date for the Replacement Warrants are unchanged from the date as set forth in the respective exchanged Series C, Series D, Series E or Series F Warrant.
v3.22.2.2
Accounting Policies, by Policy (Policies)
 9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any other interim period or for any other future year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in the Company’s 2021 Annual Report on Form 10-K filed with the SEC. The balance sheet as of December 31, 2021 has been derived from audited financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements.

 
Use of Estimates and Critical Accounting Estimates and Assumptions

Use of Estimates and Critical Accounting Estimates and Assumptions

 

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

  

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

 

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

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. The Company uses estimates in accounting for, among other items, revenue recognition, allowance for doubtful accounts, stock-based compensation, income tax provisions, excess and obsolete inventory reserve, and impairment of intellectual property.

 

Actual results could differ from those estimates.

 
Presentation

Presentation

 

During 2021, we adopted a change in presentation on our Condensed Consolidated Statements of Comprehensive Loss in order to present a gross profit line and allocate certain overhead expenses, the presentation of which is consistent with our peers. Under the new presentation, we began allocating overhead expenses related to cost of goods sold. Prior periods have been revised to reflect this change in presentation
Principles of consolidation

Principles of consolidation

 

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

 

As of September 30, 2022, the Company’s consolidated subsidiaries and/or entities are as follows:

 

Name of combined affiliate  State or other
jurisdiction of
incorporation
or organization		  Company
Ownership
Interest		 
Jerrick Ventures LLC  Delaware   100%
Abacus Tech Pty Ltd  Australia   100%
Seller’s Choice, LLC  New Jersey   100%
Brave Foods, LLC  Brave Foods, LLC   100%
Creatd Studios, LLC  Delaware   100%
Give, LLC  Delaware   100%
Creatd Partners LLC  Delaware   100%
Denver Bodega, LLC  Colorado   100%
Dune Inc.  Delaware   50%
Plant Camp LLC  Delaware   89%
Sci-Fi.com, LLC  Delaware   100%
OG Collection, Inc.  Delaware   100%
OG Gallery, LLC  Delaware   100%
Orbit Media LLC  New York   51%
VMENA LLC  Delaware   100%
Vocal For Brands, LLC  Delaware   100%
Vocal Ventures LLC  Delaware   100%
What to Buy, LLC  Delaware   100%
WHE Agency, Inc.  Delaware   44%

 

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

 
Variable Interest Entities

Variable Interest Entities

 

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

  
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

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

 

  ● Level 1 – quoted prices in active markets for identical investments

 

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

 

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

 

The Company’s Level 1 assets/liabilities include cash, accounts receivable, marketable trading securities, accounts payable, marketable trading securities, prepaid and other current assets, line of credit and due to related parties. Management believes the estimated fair value of these accounts at September 30, 2022 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

 

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

 

The Company’s Level 3 assets/liabilities include goodwill, intangible assets, equity investments at cost, and derivative liabilities. Inputs to determine fair value are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. 

 

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

 

Fair Value Measurements as of

September 30, 2022

 

   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)		   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		 
Assets:                
Marketable securities - equity securities  $96   $96   $
       -
   $
       -
 
Total assets  $96   $96   $
-
   $
-
 

 

Our marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Marketable equity securities as of September 30, 2022 are $96.

 

The change in net realized depreciation on equity trading securities that has been included in other expenses for the nine months ended September 30, 2022 and 2021 was $11,646 and $0, respectively. 

 
Cash Equivalents

Cash Equivalents

 

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

 

At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) or Financial Claims Scheme (“FCS”) insurable limits. The Company has never experienced any losses related to these balances. The uninsured cash balance as of September 30, 2022, was $0. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents.

 
Concentration of Credit Risk and Other Risks and Uncertainties

Concentration of Credit Risk and Other Risks and Uncertainties

 

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

 

The Company operates in Australia and holds total assets of $622,445. It is reasonably possible that operations located outside an entity’s home country will be disrupted in the near term.

  
Property and Equipment

Property and Equipment

 

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

 

   Estimated
Useful Life
(Years)		 
     
Computer equipment and software  3 
Furniture and fixtures  5 

 

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

 
Long-lived Assets Including Goodwill and Other Acquired Intangible Assets

Long-lived Assets Including Goodwill and Other Acquired Intangible Assets

 

We evaluate the recoverability of property and equipment, acquired finite-lived intangible assets and, purchased infinite life digital assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. The evaluation is performed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate from the use and eventual disposition. Digital assets accounted for as intangible assets are subject to impairment losses if the fair value of digital assets decreases other than temporary below the carrying value. The fair value is measured using the quoted price of the crypto asset at the time its fair value is being measured. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. During the three months ended September 30, 2022, the Company recorded an impairment charge of $249,586  for intangible assets. During the nine months ended September 30, 2022, the Company recorded an impairment charge of $257,117 for intangible assets.

 

Acquired finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. We routinely review the remaining estimated useful lives of property and equipment and finite-lived intangible assets. If we change the estimated useful life assumption for any asset, the remaining unamortized balance is amortized or depreciated over the revised estimated useful life. The remaining weighted average life of the intangible assets are 7.1 years.

 

Scheduled amortization over the next five years are as follows:

 

Twelve months ending September 30,
     
2023  $415,215 
2024   443,236 
2025   280,223 
2026   260,935 
2027   239,934 
Thereafter   739,762 
Total   2,379,305 
      
Intangible assets not subject to amortization   157,294 
Total Intangible Assets  $2,536,599 

 

Amortization expense was $94,130 and $75,069 for the three months ended September 30, 2022 and 2021, respectively. Amortization expense was $355,509 and $143,776 for the nine months ended September 30, 2022 and 2021, respectively.

 

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

  

During the year ended December 31, 2021, the Company completed its annual impairment test of goodwill. The Company performed the qualitative assessment as permitted by ASC 350-20 and determined for three of its reporting units that the fair value of those reporting units was more likely than not greater than their carrying value, including Goodwill. However, based on this qualitative assessment, the Company determined that the carrying value of the Seller’s Choice reporting unit was more likely than not greater than its carrying value, including Goodwill. Based on completion of the annual impairment test, the Company recorded an impairment charge of $1,035,795 for goodwill.

 

During the three months ended September 30, 2022, management observed impairment indicators that led them to believe the carrying amount of goodwill was below its carrying value. The Company determined that the carrying value of the Plant Camp and Dune reporting units were more likely than not greater than their carrying value, including Goodwill. Based on estimated impairment computed, the Company recorded an impairment charge of $25,139 for goodwill.

 

The following table sets forth a summary of the changes in goodwill for the three months ended September 30, 2022.

 

   For the
Three Months ended
September 30,
2022		 
   Total 
As of July 1, 2022    $1,383,785 
Goodwill acquired in a business combination   6,682 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

The following table sets forth a summary of the changes in goodwill for the nine months ended September 30, 2022.

 

   For the
Nine Months ended
September 30,
2022		 
   Total 
As of January 1, 2022    $1,374,835 
Goodwill acquired in a business combination   15,632 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 
Commitments and Contingencies

Commitments and Contingencies

 

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

 

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

 

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

 
Foreign Currency

Foreign Currency

 

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

 
Derivative Liability

Derivative Liability

 

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

 

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

 

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

 

The Company adopted Section 815-40-15 of the FASB Accounting Standards Codification (“Section 815-40-15”) to determine whether an instrument (or an embedded feature) is indexed to the Company’s own stock. Section 815-40-15 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions.

 

The Company utilizes a binomial option model for convertible notes that have an option to convert at a variable number of shares to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date. The inputs utilized in the application of the Binomial model included a stock price on valuation date, an expected term of each debenture remaining from the valuation date to maturity, an estimated volatility, and a risk-free rate. The Company records the change in the fair value of the derivative as other income or expense in the condensed consolidated statements of operations.

 
Shipping and Handling Costs

Shipping and Handling Costs

 

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

 
Revenue Recognition

Revenue Recognition   

 

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

 

We determine revenue recognition through the following steps:

 

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

 

  ● identification of the performance obligations in the contract;

 

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

 

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

 

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

 

Revenue disaggregated by revenue source for the three and nine months ended September 30, 2022 and 2021 consists of the following:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Agency (Managed Services, Branded Content, & Talent Management Services)  $442,867   $555,766   $1,613,924   $1,472,902 
Platform (Creator Subscriptions)   230,212    611,714    1,138,812    1,370,581 
Ecommerce   347,944    4,153    1,237,634    9,679 
Affiliate Sales   1,828    7,619    7,120    23,425 
Other Revenue   
-
    368    
-
    17,803 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

The Company utilizes the output method to measures the results achieved and value transferred to a customer over time. Timing of revenue recognition for the three and nine months ended September 30, 2022 and 2021 consists of the following:

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Products and services transferred over time  $673,079   $1,167,480   $2,752,736   $2,843,483 
Products transferred at a point in time   349,772    12,140    1,244,754    50,907 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 

Agency Revenue

 

Managed Services

 

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

 

Branded Content

 

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

 

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

 

  ● The Company collects fixed fees ranging from $10,000 to $110,000, with branded challenges ranging from $10,000 to $25,000 and branded articles ranging from $2,500 to $7,500 per article.
     
  ● Branded articles are created and published, and challenges are completed, within three months of the signed agreement, or as previously negotiated with the client.

 

  ● Branded articles and challenges are promoted per the contract and engagement reports are provided to the client.
     
  ● Most contracts include provisions for clients to acquire content rights at the end of the campaign for a flat fee. 

 

Talent Management Services

 

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

 

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

 

  ● Total gross contracts range from $500-$50,000.

 

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

 

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

 

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

 

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

  

Platform Revenue

 

Creator Subscriptions

 

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

 

The transaction price for any given subscriber could decrease based on any payments made to that subscriber. A subscriber may be eligible for payment through one or more of the monetization features offered to Vocal creators, including earnings through reads (on a cost per mille basis) and cash prizes offered to Challenge winners. Potential revenue offset is calculated by reviewing a subscriber’s earnings in conjunction with payments made by the subscriber on a monthly and/or annual basis.

 

Affiliate Sales Revenue

 

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

 

E-Commerce Revenue

 

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

 
Deferred Revenue

Deferred Revenue

 

Deferred revenue consists of billings and payments from clients in advance of revenue recognition. The Company has two types of deferred revenue, subscription revenue whereas the revenue is recognized over the subscription period and contract liabilities where the performance obligation was not satisfied. The Company will recognize the deferred revenue within the next twelve months. As of September 30, 2022, the Company had deferred revenue of $305,555. As of December 31, 2021, the Company had deferred revenue of $234,159, of which $159,727 was recognized as revenue in the nine months ended September 30, 2022, and $13,512 was recognized as revenue in the three months ended September 30, 2022.

 
Accounts Receivable and Allowances

Accounts Receivable and Allowances

 

Accounts receivable are recorded and carried when the Company has performed the work in accordance with managed services, project, partner, consulting and branded content agreements. For example, we bill a managed service client monthly when we have updated their Amazon store, modified SEO or completed the other services listed in the agreement. For projects and branded content, we will bill the client and record the receivable once milestones are reached that are set in the agreement. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers. During the nine months ended September 30, 2022, the Company recorded $124,186, as a bad debt expense. As of September 30, 2022, the Company has an allowance for doubtful accounts of $311,133. As of December 31, 2021, the Company has an allowance for doubtful accounts of $186,147.

 
Inventory

Inventory

 

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Inventories are periodically evaluated to identify obsolete or otherwise impaired products and are written off when management determines usage is not probable. The Company estimates the balance of excess and obsolete inventory by analyzing inventory by age using last used and original purchase date and existing sales pipeline for which the inventory could be used. As of September 30, 2022, and December 31, 2021, the Company had no valuation allowance.

 
Stock-Based Compensation

Stock-Based Compensation

 

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

 

Restricted stock awards are granted at the discretion of the Company. These awards are restricted as to the transfer of ownership and generally vest over the requisite service periods.

 

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

 

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

 
Loss Per Share

Loss Per Share

 

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, which is the case for the three and nine months ended September 30, 2022 and 2021 presented in these condensed consolidated financial statements, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

 

The Company had the following common stock equivalents at September 30, 2022 and 2021:

 

   September 30, 
   2022   2021 
Series E preferred   121    148 
Options   4,408,267    2,327,445 
Warrants   20,429,630    6,558,705 
Convertible notes   32,215,486    228,334 
Totals   57,053,504    9,114,632 

 
Reclassifications

Reclassifications

 

Certain prior year amounts in the condensed consolidated financial statements and the notes thereto have been reclassified where necessary to conform to the current year’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ deficit, net loss or net cash used in operating activities. During the year ended December 31, 2021, we adopted a change in presentation on our condensed consolidated statements of operations and comprehensive loss in order to present a gross profit line, the presentation of which is consistent with our peers. Under the new presentation, we began allocating payroll and related expenses, professional services and creator payouts. Prior periods have been revised to reflect this change in presentation.

   
Recently Adopted Accounting Guidance

Recently Adopted Accounting Guidance

 

In May 2021, the FASB issued authoritative guidance intended to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. (ASU 2021-04), “Derivatives and Hedging Contracts in Entity’s Own Equity (Topic 815). This guidance’s amendments provide measurement, recognition, and disclosure guidance for an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The updated guidance, which became effective for fiscal years beginning after December 15, 2021, During the nine months ended September 30, 2022 the Company recognized a deemed dividend of $63,064 from the modification of warrants.

 
Recent Accounting Guidance Not Yet Adopted

Recent Accounting Guidance Not Yet Adopted

 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU-2016-13”). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. On October 16, 2019, FASB approved a final ASU delaying the effective date of ASU 2016-13 for small reporting companies to interim and annual periods beginning after December 15, 2022. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The Company does not believe the adoption will have a material impact on the Company’s condensed consolidated financial statements. The adoption of the guidance will affect disclosures and estimates around accounts receivable. 

 

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related EPS guidance for both Subtopics. ASU 2020-06 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements.

 

In July 2021, the FASB issued ASU No. 2021-05, Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. ASU 2021-05 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

 

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805), Which aims to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in recognition and payment terms that effect subsequent revenue recognition. ASU 2021-08 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying condensed consolidated financial statements. 
v3.22.2.2
Significant Accounting Policies and Practices (Tables)
 9 Months Ended
Sep. 30, 2022
Accounting Policies [Abstract]  
Schedule of consolidated subsidiaries and/or entities
Name of combined affiliate  State or other
jurisdiction of
incorporation
or organization		  Company
Ownership
Interest		 
Jerrick Ventures LLC  Delaware   100%
Abacus Tech Pty Ltd  Australia   100%
Seller’s Choice, LLC  New Jersey   100%
Brave Foods, LLC  Brave Foods, LLC   100%
Creatd Studios, LLC  Delaware   100%
Give, LLC  Delaware   100%
Creatd Partners LLC  Delaware   100%
Denver Bodega, LLC  Colorado   100%
Dune Inc.  Delaware   50%
Plant Camp LLC  Delaware   89%
Sci-Fi.com, LLC  Delaware   100%
OG Collection, Inc.  Delaware   100%
OG Gallery, LLC  Delaware   100%
Orbit Media LLC  New York   51%
VMENA LLC  Delaware   100%
Vocal For Brands, LLC  Delaware   100%
Vocal Ventures LLC  Delaware   100%
What to Buy, LLC  Delaware   100%
WHE Agency, Inc.  Delaware   44%

 
Schedule of relevant assets and liabilities that are measured at fair value on recurring basis
   Total   Quoted
Prices in
Active
Markets for
Identical
Assets or
Liabilities
(Level 1)		   Quoted
Prices for
Similar
Assets or
Liabilities
in Active Markets
(Level 2)		   Significant
Unobservable
Inputs
(Level 3)		 
Assets:                
Marketable securities - equity securities  $96   $96   $
       -
   $
       -
 
Total assets  $96   $96   $
-
   $
-
 

 
Schedule of property and equipment estimated useful lives
   Estimated
Useful Life
(Years)		 
     
Computer equipment and software  3 
Furniture and fixtures  5 

 
Schedule of amortization over the next five years
Twelve months ending September 30,
     
2023  $415,215 
2024   443,236 
2025   280,223 
2026   260,935 
2027   239,934 
Thereafter   739,762 
Total   2,379,305 
      
Intangible assets not subject to amortization   157,294 
Total Intangible Assets  $2,536,599 

 
Schedule of changes in marketable securities
   For the
Three Months ended
September 30,
2022		 
   Total 
As of July 1, 2022    $1,383,785 
Goodwill acquired in a business combination   6,682 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 

   For the
Nine Months ended
September 30,
2022		 
   Total 
As of January 1, 2022    $1,374,835 
Goodwill acquired in a business combination   15,632 
Impairment of goodwill   (25,139)
As of September 30, 2022  $1,365,328 

 
Schedule of revenue disaggregated by revenue
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Agency (Managed Services, Branded Content, & Talent Management Services)  $442,867   $555,766   $1,613,924   $1,472,902 
Platform (Creator Subscriptions)   230,212    611,714    1,138,812    1,370,581 
Ecommerce   347,944    4,153    1,237,634    9,679 
Affiliate Sales   1,828    7,619    7,120    23,425 
Other Revenue   
-
    368    
-
    17,803 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 
Schedule of revenue recognition
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
Products and services transferred over time  $673,079   $1,167,480   $2,752,736   $2,843,483 
Products transferred at a point in time   349,772    12,140    1,244,754    50,907 
   $1,022,851   $1,179,620   $3,997,490   $2,894,390 

 
Schedule of common stock equivalents
   September 30, 
   2022   2021 
Series E preferred   121    148 
Options   4,408,267    2,327,445 
Warrants   20,429,630    6,558,705 
Convertible notes   32,215,486    228,334 
Totals   57,053,504    9,114,632 

 
v3.22.2.2
Inventory (Tables)
 9 Months Ended
Sep. 30, 2022
Inventory Disclosure [Abstract]  
Schedule of Inventory
    September 30,
2022		     December 31,
2021		  
Raw Materials   $ 82,834     $ -  
Packaging     78,799       2,907  
Finished goods     717,417       103,496  
    $ 879,050     $ 106,403  
v3.22.2.2
Property and Equipment (Tables)
 9 Months Ended
Sep. 30, 2022
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment stated at cost, less accumulated depreciation
   September 30,
2022		   December 31,
2021		 
Computer Equipment  $447,342   $353,880 
Furniture and Fixtures   184,524    102,416 
Leasehold Improvements   47,616    11,457 
    679,482    467,753 
Less: Accumulated Depreciation   (430,519)   (364,814)
   $248,963   $102,939 

 
v3.22.2.2
Notes Payable (Tables)
 9 Months Ended
Sep. 30, 2022
Notes Payable [Abstract]  
Schedule of notes payable
   Outstanding
Principal as of		        
   September 30,
2022		   December 31,
2021		   Interest
Rate		   Maturity
Date
Seller’s Choice Note  $-   $660,000    30%  September 2020
The April 2020 PPP Loan Agreement   198,577    198,577    1%  May 2022
The First December 2021 Loan Agreement   47,990    185,655    10%  June 2023
The Second December 2021 Loan Agreement   -    313,979    14%  June 2022
First Denver Bodega LLC Loan   44,008    
-
    5%  March 2025
The Third May 2022 Loan Agreement   16,169    
-
    
-
%  November 2022
The Fourth May 2022 Loan Agreement   30,558    
-
    
-
%  November 2022
The First August 2022 Loan Agreement   129,634    
-
    14%  November 2022
The Second August 2022 Loan Agreement   646,100    
-
    
-
%  January 2023
The First September 2022 Loan Agreement   87,884    
-
    
-
%  September 2023
The Second September 2022 Loan Agreement   848,625    
-
    
-
%  May 2023
The Third September 2022 Loan Agreement   351,964    
-
    
-
%  April 2023
    2,401,509    1,358,211         
Less: Debt Discount   (614,410)   (15,547)        
Less: Debt Issuance Costs   
-
    
-
         
    1,787,099    1,342,664         
Less: Current Debt   (1,758,179)   (1,278,672)        
Total Long-Term Debt  $28,920   $63,992         

 
v3.22.2.2
Convertible Notes Payable (Tables)
 9 Months Ended
Sep. 30, 2022
Convertible Note Payable Abstract  
Schedule of convertible notes payable
   Outstanding 
Principal as of		              Warrants granted 
  

September 30,

2022

  

Interest

Rate

  

Conversion

Price

  

Maturity

Date

  Quantity  

Exercise

Price

 
The Second February 2022 Loan Agreement  $112,613    11%   
-
(*)  February-23   
-
    - 
The May 2022 Convertible Loan Agreement   76,814    11%   
-
(*)  May-23   
-
    - 
The May 2022 Convertible Note Offering   4,090,000    18%   2.00(*)  November-22   4,000,000    $3.00 – $6.00 
The July 2022 Convertible Note Offering   2,150,000    18%   2.00(*)  November-22   2,150,000    $3.00 – $6.00 
    6,429,427                        
Less: Debt Discount   (360,854)                       
Less: Debt Issuance Costs   (5,648)                       
    6,062,926                        

 
v3.22.2.2
Derivative Liabilities (Tables)
 9 Months Ended
Sep. 30, 2022
Derivative Liability [Abstract]  
Schedule of changes in the derivative liabilities
   Nine Months Ended
September 30, 2022		 
   Level 1   Level 2   Level 3 
Derivative liabilities as January 1, 2022  $
   -
   $
     -
   $
-
 
Addition   
-
    
-
    100,532 
Changes in fair value   
-
    
-
    (3,729)
Extinguishment   
-
    
-
    (96,803)
Derivative liabilities as September 30, 2022  $
-
   $
-
   $
-
 
v3.22.2.2
Stockholders’ Equity (Tables)
 9 Months Ended
Sep. 30, 2022
Stockholders' Equity Note [Abstract]  
Schedule of assumption granted warrants
   September 30,
2022		 
Exercise price  $1.10 – 1.90 
Expected dividends   0%
Expected volatility   165.38% – 166.48%
Risk free interest rate   2.69% – 2.95%
Expected life of option   5 years 

 

   September 30,
2021		 
Exercise price  $2.55 – 14.10 
Expected dividends   0%
Expected volatility   194.39% – 242.98%
Risk free interest rate   0.46% – 0.98%
Expected life of option   5 - 7 years 

 

   September 30,
2021		 
Exercise price    $4.50 – 4.95 
Expected dividends   0%
Expected volatility    237.14% - 237.68 % 
Risk free interest rate    0.82% - 0.86 % 
Expected life of warrant   5 years 
      

 

   September  30,
2022		 
Exercise price   $0.20 – 6.00 
Expected dividends   0%
Expected volatility   164.34% - 169.75% 
Risk free interest rate   2.81% – 4.00% 
Expected life of warrant   5.00 – 5.50 years 

  
Schedule of the stock option activity
   Options   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Life (in years)		 
Balance – December 31, 2020 – outstanding   541,021    12.75    3.27 
Granted   1,850,588    6.32    6.20 
Exercised   
-
    
-
    - 
Forfeited/Cancelled   (64,164)   13.06    - 
Balance – September 30, 2021 – outstanding   2,327,445    7.63    4.29 
Balance – September 30, 2021 – exercisable   608,524    12.75    3.75 

 

   Options   Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Contractual
Life (in years)		 
Balance – January 1, 2022 – outstanding   2,902,619    7.07    4.71 
Granted   1,940,000    1.38    
-
 
Exercised   
-
    
-
    
-
 
Forfeited/Cancelled   (434,352)   13.56    
-
 
Balance – September 30, 2022 – outstanding   4,408,267    3.93    4.43 
Balance – September 30, 2022 – exercisable   3,010,101    4.12    4.32 

 
Schedule of option outstanding and option exercisable
Option Outstanding   Option Exercisable 
Exercise price   Number
Outstanding		   Weighted
Average
Remaining
Contractual
Life
(in years)		   Weighted
Average
Exercise
Price		   Number
Exercisable		   Weighted
Average
Remaining
Contractual
Life
(in years)		 
$3.93    4,408,267        4.43       4.12    3,010,101    4.32 

  
Schedule of warrant activity
   Warrant   Weighted
Average
Exercise
Price		 
Balance – December 31, 2020 – outstanding   6,130,948    4.96 
Granted   1,881,267    5.63 
Exercised   (1,438,788)   4.59 
Forfeited/Cancelled   (14,722)   24.00 
Balance – September 30, 2021 – outstanding   6,558,705    4.92 
Balance – September 30, 2021 – exercisable   6,558,705   $4.92 

 

   Warrant   Weighted
Average
Exercise
Price		 
Balance – January 1, 2022 – outstanding   5,658,830    4.98 
Granted   14,812,262    2.29 
Exercised   
-
    
-
 
Forfeited/Cancelled   (41,462)   12.00 
Balance – September 30, 2022 – outstanding   20,429,630    1.88 
Balance – September 30, 2022 – exercisable   16,429,630   $2.62 

 
Schedule of warrants outstanding and warrants exercisable
Warrants Outstanding   Warrants Exercisable 
Exercise price   Number
Outstanding		   Weighted
Average
Remaining
Contractual
Life
(in years)		   Weighted
Average
Exercise
Price		   Number
Exercisable		   Weighted
Average
Exercise
Price		 
$1.88    20,429,630    4.07    2.62    16,429,630    3.81 

   
v3.22.2.2
Commitments and Contingencies (Tables)
 9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
Schedule of components of lease expense
   Three Months
Ended
September 30,
2022		 
Operating lease cost  $148,446 
Short term lease cost   5,568 
Total net lease cost  $154,015 

 

   Nine Months
Ended
September 30,
2022		 
Operating lease cost  $241,601 
Short term lease cost   154,108 
Total net lease cost  $395,709 

 
Schedule of supplemental cash flow and other information related to leases
   Nine Months
Ended
September 30,
2022		 
Cash paid for amounts included in the measurement of lease liabilities:    
Operating lease payments   54,564 
Weighted average remaining lease term (in years):   3.40 
Weighted average discount rate:   12.50%

  
Schedule of future minimum payments required under the lease
For the Twelve Months Ended September 30,     Operating
Leases		  
2023     $  534,880  
2024        541,905  
2025        513,507  
2026        528,589  
2027        544,122  
Thereafter        892,399  
Total lease payments        3,555,402  
Less: Amounts representing interest        (1,140,416 )
Total lease obligations       2,414,986  
Less: Current        (279,593 )
      $ 2,135,393  

 
v3.22.2.2
Acquisitions (Tables)
 9 Months Ended
Sep. 30, 2022
Asset Acquisition [Abstract]  
Schedule of components of the purchase price
Purchase price:    
Cash paid to seller  $1 
Total purchase price   1 
      
Assets acquired:     
Cash   44,977 
Accounts Receivable   2,676 
Inventory   194,365 
Total assets acquired   242,018 
      
Liabilities assumed:     
Accounts payable and accrued expenses   127,116 
Notes payable   293,888 
Total liabilities assumed   421,004 
      
Net liabilities acquired   (178,986)
      
Excess purchase price  $178,987 

  

Purchase price:    
Cash paid to seller  $44,000 
Shares granted to seller   40,994 
Total purchase price   84,994 
      
Net Assets acquired   - 
      
Non-controlling interest in consolidated subsidiary   81,661 
      
Excess purchase price  $166,655 

  

Purchase price:    
Cash paid to seller  $150,000 
Total purchase price   150,000 
      
Assets acquired:     
Cash   73,344 
Inventory   86,154 
Total assets acquired   159,498 
      
Liabilities assumed:     
Accounts payable and accrued expenses   1,316 
Notes payable   75,000 
Total liabilities assumed   76,316 
      
Net assets acquired   83,182 
      
Excess purchase price  $66,818 

  
Schedule of excess purchase price amounts
Goodwill  $8,950 
Trade Names & Trademarks   8,949 
Know-How and Intellectual Property   107,392 
Website   8,949 
Customer Relationships   44,747 
      
Excess purchase price  $178,987 

 

Know-How and Intellectual Property  $166,655 
      
Excess purchase price  $166,655 

 

Goodwill  $6,683 
Trade Names & Trademarks   16,704 
Know-How and Intellectual Property   16,704 
Website   16,704 
Customer Relationships   10,023 
      
Excess purchase price  $66,818 

 
Schedule of unaudited pro-forma combined results of operations
   Three Months
Ended		 
   September 30, 
   2021 
Revenues  $3,429,748 
Net loss attributable to common shareholders  $(25,735,007)
Net loss per share  $(2.17)
Weighted average number of shares outstanding   11,845,229 

 

   Three Months Ended 
   September 30, 
   2022 
Revenues  $4,057,080 
Net loss attributable to common shareholders  $(9,425,313)
Net loss per share  $(0.45)
Weighted average number of shares outstanding   21,087,764 

 

   Nine  Months
Ended		 
   2021 
Revenues  $5,069,181 
Net loss attributable to common shareholders  $(26,428,192)
Net loss per share  $(2.23)
Weighted average number of shares outstanding   11,845,229 

 

  

 

Nine  Months
Ended

 
   2022 
Revenues  $4,683,843 
Net loss attributable to common shareholders  $(24,217,030)
Net loss per share  $(1.23)
Weighted average number of shares outstanding   19,726,987 
v3.22.2.2
Segment Information (Tables)
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Schedule of reportable segments and corporate
   As of September 30, 2022 
   Creatd
Labs		   Creatd
Ventures		   Creatd
Partners		   Corporate   Total 
                     
Accounts receivable, net  $
-
   $4,973   $217,210   $
-
   $222,183 
Prepaid expenses and other current assets   43,336    
-
    
-
    96,390    139,726 
Deposits and other assets   576,551    
-
    
-
    192,585    769,136 
Intangible assets   162,489    1,568,347    648,469    157,294    2,536,599 
Goodwill   
-
    15,632    1,349,696    
-
    1,365,328 
Inventory   
-
    879,050    
-
    
-
    879,050 
All other assets   
-
    
-
    
-
    2,811,769    2,811,769 
Total Assets  $782,376   $2,468,002   $2,215,375   $3,258,038   $8,723,791 
                          
Accounts payable and accrued liabilities  $1,365   $1,518,544   $68,063   $5,126,634   $6,714,606 
Note payable, net of debt discount and issuance costs   129,634    170,365    
-
    1,487,100    1,787,099 
Deferred revenue   161,112    -    144,443    
-
    305,555 
All other Liabilities   
-
    
-
    
-
    8,529,992    8,529,992 
Total Liabilities  $292,111   $1,688,909   $212,506   $15,143,726   $17,337,252 

 

   As of December 31, 2021 
   Creatd
Labs		   Creatd
Ventures		   Creatd
Partners		   Corporate   Total 
                     
Accounts receivable, net  $
-
   $2,884   $334,556   $
-
   $337,440 
Prepaid expenses and other current assets   48,495    
-
    
-
    188,170    236,665 
Deposits and other assets   626,529    
-
    
-
    92,422    718,951 
Intangible assets   
-
    1,637,924    783,676    11,241    2,432,841 
Goodwill   
-
    25,139    1,349,696    
-
    1,374,835 
Inventory   
-
    106,403    
-
    
-
    106,403 
All other assets   
-
    
-
    
-
    3,966,124    3,966,124 
Total Assets  $675,024   $1,772,350   $2,467,928   $4,257,957   $9,173,259 
                          
Accounts payable and accrued liabilities  $9,693   $766,253   $6,232   $2,948,362   $3,730,540 
Note payable, net of debt discount and issuance costs   313,979    
-
    
-
    1,028,685    1,342,664 
Deferred revenue   161,112    13,477    59,570    
-
    234,159 
All other Liabilities   
-
    
-
    
-
    177,644    177,644 
Total Liabilities  $484,784   $779,730   $65,802   $4,154,691   $5,485,007 

 
Schedule of financial information related to our reportable segments and corporate
   For the three months ended September 30, 2022 
   Creatd
Labs		   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $291,414   $316,654   $414,783   $
-
   $1,022,851 
Cost of revenue   564,349    502,396    337,817    
-
    1,404,562 
Gross margin (loss)   (272,935)   (185,742)   76,966    
-
    (381,711)
                          
Research and development   139,997    
-
    94,968    
-
    234,965 
Marketing   370,584    234,760    41,176    
-
    646,520 
Stock based compensation   122,964    111,472    126,654    265,478    626,568 
General and administrative not including depreciation, amortization, or Impairment   90,212    476,386    384,365    3,136,092    4,087,055 
Depreciation and amortization   1,489    43,001    40,917    72,589    157,996 
Impairment of intangibles   
-
    85,406    
-
    164,180    249,586 
                          
Total operating expenses  $723,757   $822,618   $647,163   $3,401,570   $5,595,108 
                          
Interest expense   (17,048)   
-
    
-
    (656,647)   (673,694)
All other expenses   
-
    
-
    
-
    (2,875,832)   (2,875,832)
Other expenses, net   (17,048)   
-
    
-
    (3,532,479)   (3,549,526)
                          
Loss before income tax provision  $(1,001,024)  $(1,008,360)  $(570,197)  $(6,946,764)  $(9,526,345)

 

   For the three months ended September 30, 2021 
   Creatd
Labs		   Creatd
Ventures		   Creatd
Partners		   Corporate   Total 
                     
Net revenue  $565,852   $3,919   $609,849   $-   $1,179,620 
Cost of revenue   849,079    174,438    394,696    -    1,418,213 
                          
Gross margin   (283,227)   (170,519)   215,153    -    (238,593)
                          
Research and development   250,474    60    72,412    -    322,946 
Marketing   1,540,540    -    181,240    90,620    1,812,400 
Stock based compensation   337,026    -    332,531    1,179,579    2,151,900 
General and administrative   386,844    302,764    293,296    1,672,176    2,385,135 
Total operating expenses     2,514,884      32,819      879,479      2,942,375      6,672,381 
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(2,802,443)  $(506,162)  $(664,326)  $(5,747,190)  $(9,720,121)

 

   For the Nine months ended September 30, 2022 
   Creatd
Labs		   Creatd
Ventures		   Creatd
Partners		   Corporate   Total 
                     
Net revenue  $1,138,904   $1,237,542   $1,621,044   $-   $3,997,490 
Cost of revenue   1,917,039    1,706,586    1,147,526    -    4,771,151 
Gross margin (loss)   (778,135)   (469,044)   473,518    -    (773,661)
                          
Research and development   408,810    -    277,321    -    686,131 
Marketing   2,301,994    1,458,280    255,777    -    4,016,051 
Stock based compensation   755,284    684,697    777,948    1,630,649    3,848,578 
General and administrative not including depreciation, amortization, or Impairment   242,330    1,279,676    1,032,487    8,401,553    10,956,046 
Depreciation and amortization   4,166    120,282    114,453    203,042    441,943 
Impairment of intangibles   -    87,983    -    169,134    257,117 
                          
Total operating expenses  $3,712,584   $3,630,918   $2,457,986   $10,404,378   $20,205,866 
                          
Interest expense   (34,095)   
-
    -    (673,855)   (707,950)
All other expenses        -    -    (3,424,854)   (3,424,854)
Other expenses, net   (34,095)   
-
    -    (4,098,709)   (4,132,804)
                          
Loss before income tax provision  $(4,524,814)  $(4,099,962)  $(1,984,468)  $(14,503,087)  $(25,112,331)

 

   For the nine months ended September 30, 2021 
   Creatd
Labs		   Creatd Ventures   Creatd Partners   Corporate   Total 
                     
Net revenue  $1,388,411   $9,616   $1,496,363   $-   $2,894,390 
Cost of revenue   2,482,848    497,194    1,180,701    -    4,160,743 
Gross margin   (1,094,437)   (487,578)   315,662    -    (1,266,353)
                          
Research and development   549,426    131    158,839    -    708,396 
Marketing   6,842,142    -    804,958    402,479    8,049,579 
Stock based compensation   886,832    796,676    875,004    3,103,877    5,662,389 
General and administrative   900,323    76,381    682,602    3,891,743    5,551,049 
Total operating expenses  $9,178,723   $873,188   $2,521,403   $7,398,099   $19,971,413 
                          
Loss before income tax provision and equity in net loss from unconsolidated investments  $(10,286,156)  $(1,360,766)  $(2,205,741)  $(11,073,171)  $(24,925,834)
v3.22.2.2
Organization and Operations (Details) - shares
 9 Months Ended
Oct. 03, 2021
Aug. 16, 2021
Feb. 05, 2016
Sep. 30, 2022
Sep. 13, 2022
Aug. 01, 2022
Mar. 07, 2022
Jul. 20, 2021
Jun. 04, 2021
Sep. 11, 2019
Great Plains Holdings Inc [Member]                    
Organization and Operations (Details) [Line Items]                    
Issuance of common shares (in Shares)     475,000              
Series A Convertible Preferred Stock [Member]                    
Organization and Operations (Details) [Line Items]                    
Issuance of common shares (in Shares)     33,415              
Series B Convertible Preferred Stock [Member]                    
Organization and Operations (Details) [Line Items]                    
Issuance of common shares (in Shares)     8,064              
Lil Marc, Inc [Member]                    
Organization and Operations (Details) [Line Items]                    
Cancelled of common stock (in Shares)       39,091            
Seller’s Choice [Member]                    
Organization and Operations (Details) [Line Items]                    
Acquired percentage                   100.00%
Plant Camp [Member]                    
Organization and Operations (Details) [Line Items]                    
Acquired percentage                 89.00%  
WHE Agency [Member]                    
Organization and Operations (Details) [Line Items]                    
Acquired percentage               44.00%    
Ownership voting interest               55.00%    
Dune, Inc [Member]                    
Organization and Operations (Details) [Line Items]                    
Acquired percentage 29.00%                  
Ownership voting interest 50.00%                  
Total membership interests percentage 50.00% 21.00%                
Denver Bodega, LLC [Member]                    
Organization and Operations (Details) [Line Items]                    
Acquired percentage             100.00%      
Ownership voting interest             100.00%      
Orbit Media LLC [Member]                    
Organization and Operations (Details) [Line Items]                    
Acquired percentage           51.00%        
Ownership voting interest           51.00%        
Brave Foods, LLC [Member]                    
Organization and Operations (Details) [Line Items]                    
Acquired percentage         100.00%          
Ownership voting interest         100.00%          
v3.22.2.2
Significant Accounting Policies and Practices (Details) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Dec. 31, 2021
Significant Accounting Policies and Practices (Details) [Line Items]          
Marketable equity securities $ 96   $ 96  
Other expenses     11,646 $ 0  
Uninsured cash balance 0   0    
Total assets     622,445    
Impairment charge 249,586   $ 257,117    
Weighted average life of the intangible assets     7 years 1 month 6 days    
Amortization expense 94,130 $ 75,069 $ 355,509 $ 143,776  
Goodwill $ 25,139   $ 25,139   1,035,795
Management fee percentage     20.00%    
Revenue percentage 80.00%   80.00%    
Fixed fees percentage     20.00%    
Contract occur percentage     100.00%    
Promotional discounts amount     $ 9.99    
Free trials amount     99    
Deferred revenue $ 305,555   305,555   234,159
Deferred revenue 13,512   159,727    
Bad debt expense     124,186    
Allowance for doubtful accounts     311,133   $ 186,147
Deemed dividend     63,064    
Minimum [Member]          
Significant Accounting Policies and Practices (Details) [Line Items]          
Contract amounts for partner and monthly services clients     500    
Fixed fees     10,000    
Branded challenges     10,000    
Branded articles     2,500    
Total gross 500   500    
Net revenue     $ 100    
Affiliate sales percentage     2.00%    
Maximum [Member]          
Significant Accounting Policies and Practices (Details) [Line Items]          
Contract amounts for partner and monthly services clients     $ 7,500    
Fixed fees     110,000    
Branded challenges     25,000    
Branded articles     7,500    
Total gross $ 50,000   50,000    
Net revenue     $ 20,000    
Affiliate sales percentage     20.00%    
v3.22.2.2
Significant Accounting Policies and Practices (Details) - Schedule of consolidated subsidiaries and/or entities
 9 Months Ended
Sep. 30, 2022
Jerrick Ventures LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
Abacus Tech Pty Ltd [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Australia
Company Ownership Interest 100.00%
Seller’s Choice, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization New Jersey
Company Ownership Interest 100.00%
Brave Foods, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Brave Foods, LLC
Company Ownership Interest 100.00%
Creatd Studios, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
Give, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
Creatd Partners LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
Denver Bodega, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Colorado
Company Ownership Interest 100.00%
Dune Inc. [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 50.00%
Plant Camp LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 89.00%
Sci-Fi.com, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
OG Collection, Inc. [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
OG Gallery, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
Orbit Media LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization New York
Company Ownership Interest 51.00%
VMENA LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
Vocal For Brands, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
Vocal Ventures LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
What to Buy, LLC [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 100.00%
WHE Agency, Inc. [Member]  
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]  
State or other jurisdiction of incorporation or organization Delaware
Company Ownership Interest 44.00%
v3.22.2.2
Significant Accounting Policies and Practices (Details) - Schedule of relevant assets and liabilities that are measured at fair value on recurring basis
Sep. 30, 2022
USD ($)
Assets:  
Marketable securities - equity securities $ 96
Total assets 96
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]  
Assets:  
Marketable securities - equity securities 96
Total assets 96
Quoted Prices for Similar Assets or Liabilities in Active Markets (Level 2) [Member]  
Assets:  
Marketable securities - equity securities
Total assets
Significant Unobservable Inputs (Level 3) [Member]  
Assets:  
Marketable securities - equity securities
Total assets
v3.22.2.2
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives
 9 Months Ended
Sep. 30, 2022
Computer equipment and software [Member]  
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives [Line Items]  
Property and Equipment, Estimated Useful Life (Years) 3 years
Furniture and fixtures [Member]  
Significant Accounting Policies and Practices (Details) - Schedule of property and equipment estimated useful lives [Line Items]  
Property and Equipment, Estimated Useful Life (Years) 5 years
v3.22.2.2
Significant Accounting Policies and Practices (Details) - Schedule of amortization over the next five years
Sep. 30, 2022
USD ($)
Schedule Of Amortization Over The Next Five Years Abstract  
2023 $ 415,215
2024 443,236
2025 280,223
2026 260,935
2027 239,934
Thereafter 739,762
Total 2,379,305
Intangible assets not subject to amortization 157,294
Total Intangible Assets $ 2,536,599
v3.22.2.2
Significant Accounting Policies and Practices (Details) - Schedule of changes in marketable securities - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Changes In Marketable Securities Abstract      
Balance of beginning $ 1,383,785 $ 1,374,835  
Goodwill acquired in a business combination 6,682 15,632  
Impairment of goodwill (25,139) (25,139) $ (1,035,795)
Balance of ending $ 1,365,328 $ 1,365,328 $ 1,374,835
v3.22.2.2
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]        
Net revenue $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390
Agency (Managed Services, Branded Content, & Talent Management Services) [Member]        
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]        
Net revenue 442,867 555,766 1,613,924 1,472,902
Platform (Creator Subscriptions) [Member]        
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]        
Net revenue 230,212 611,714 1,138,812 1,370,581
Ecommerce (Tangible products) [Member]        
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]        
Net revenue 347,944 4,153 1,237,634 9,679
Affiliate Sales [Member]        
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]        
Net revenue 1,828 7,619 7,120 23,425
Other Revenue [Member]        
Significant Accounting Policies and Practices (Details) - Schedule of revenue disaggregated by revenue [Line Items]        
Net revenue $ 368 $ 17,803
v3.22.2.2
Significant Accounting Policies and Practices (Details) - Schedule of revenue recognition - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Schedule Of Revenue Recognition Abstract        
Products and services transferred over time $ 673,079 $ 1,167,480 $ 2,752,736 $ 2,843,483
Products transferred at a point in time 349,772 12,140 1,244,754 50,907
Revenue recognition $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390
v3.22.2.2
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents - shares
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 57,053,504 9,114,632
Series E Preferred [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 121 148
Warrants [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 20,429,630 6,558,705
Convertible notes [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 32,215,486 228,334
Options [Member]    
Significant Accounting Policies and Practices (Details) - Schedule of common stock equivalents [Line Items]    
Common stock equivalents, total 4,408,267 2,327,445
v3.22.2.2
Going Concern (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2022
USD ($)
Going Concern [Abstract]  
Accumulated deficit $ 133.8
Net cash used in operating activities 13.9
Net loss $ 25.1
v3.22.2.2
Inventory (Details) - Schedule of inventory - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Schedule Of Inventory Abstract    
Raw Materials $ 82,834
Packaging 78,799 2,907
Finished goods 717,417 103,496
Total $ 879,050 $ 106,403
v3.22.2.2
Property and Equipment (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Property, Plant and Equipment [Abstract]        
Depreciation expense $ 43,546 $ 10,047 $ 67,951 $ 30,141
v3.22.2.2
Property and Equipment (Details) - Schedule of property and equipment stated at cost, less accumulated depreciation - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 679,482 $ 467,753
Less: Accumulated Depreciation (430,519) (364,814)
Property and Equipment, Net 248,963 102,939
Computer Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 447,342 353,880
Furniture and Fixtures [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 184,524 102,416
Leasehold Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 47,616 $ 11,457
v3.22.2.2
Notes Payable (Details)
 9 Months Ended
Sep. 23, 2022
USD ($)
Sep. 22, 2022
USD ($)
Aug. 19, 2022
USD ($)
Aug. 18, 2022
USD ($)
Jun. 17, 2022
USD ($)
May 25, 2022
USD ($)
May 09, 2022
USD ($)
Mar. 03, 2022
USD ($)
Feb. 22, 2022
USD ($)
Dec. 14, 2021
USD ($)
Apr. 30, 2020
USD ($)
Sep. 11, 2019
USD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2022
AUD ($)
Sep. 30, 2022
AUD ($)
Sep. 01, 2022
USD ($)
Aug. 18, 2022
AUD ($)
May 26, 2022
USD ($)
Mar. 07, 2022
USD ($)
Feb. 22, 2022
AUD ($)
Dec. 14, 2021
AUD ($)
Dec. 03, 2021
USD ($)
Seller’s Choice Note [Member]                                            
Notes Payable (Details) [Line Items]                                            
Principal amount                       $ 660,000                    
Notes conversion, description                       The Seller’s Choice Note bears interest at a rate of 9.5% per annum and is payable on March 11, 2020 (the “Seller’s Choice Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts become due. Upon maturity the Company utilized an automatic extension up to 6 months. This resulted in a 5% increase in the interest rate every month the Seller’s Choice Note is outstanding. As of December 31, 2021, the Company was in default on the Seller’s Choice note.                    
Promissory note               $ 799,000                            
Principal amount               660,000                            
Accrued interest               139,000                            
Gain on extinguishment of debt               $ 147,256                            
The April 2020 PPP Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Notes conversion, description                     The Loan, which was in the form of a Note dated April 30, 2020, matures on April 30, 2022, and bears interest at a fixed rate of 1.00% per annum, payable monthly commencing on October 30, 2020.                      
Principal amount                     $ 282,432                      
Accrued interest                         $ 4,815                  
The First December 2021 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note                                           $ 191,975
Principal amount                         137,665                  
Effective interest rate                                           9.00%
The Second December 2021 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note                   $ 329,127                     $ 438,096  
Principal amount                             $ 293,499              
Accrued interest                             22,287              
Effective interest rate                   14.00%                     14.00%  
Maturity days                   60 days                        
Interest (in Dollars)                           $ 26,115                
The First February 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Notes conversion, description                 The maturity date of the First February 2022 Note is June 30, 2022 (the “First February 2022 Maturity Date”) at which time all outstanding principal, accrued and unpaid interest and other amounts due under the First February 2022 Loan Agreement are due.                          
Promissory note                 $ 159,223                     $ 222,540    
Principal amount                             149,089              
Accrued interest                             $ 8,120              
Effective interest rate                 14.00%                     14.00%    
Maturity days                 60 days                          
Interest (in Dollars)                           $ 8,120                
Denver Bodega LLC Notes Payable [Member]                                            
Notes Payable (Details) [Line Items]                                            
Total liabilities                                     $ 293,888      
Repaid amount                         249,880                  
Principal balance                         $ 44,088                  
Bears interest                         5.00%   5.00%              
Requires payments                         $ 1,496                  
The First May 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note             $ 693,500                              
Gain on extinguishment of debt   $ 33,115                                        
Effective interest rate             143.00%                              
Cash proceeds             $ 455,924                              
Payments             21,673                              
Debt discount                         237,576                  
Repaid principal amount                         390,114                  
The Second September 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note   876,000                                        
Principal amount   $ 303,386                                        
Effective interest rate   475.00%                                        
Cash proceeds   $ 272,614                                        
Payments   27,375                                        
Debt discount   300,000                                        
Repaid principal amount                         27,375                  
Loan agreement amount   $ 303,386                                        
New and old debt percentage   10.00%                                        
The Second May 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note             $ 401,500                              
Gain on extinguishment of debt $ 3,905   $ 66,749                                      
Effective interest rate             162.00%                              
Cash proceeds             $ 263,815                              
Payments             14,339                              
Debt discount             $ 137,685                              
Repaid principal amount                         272,447                  
The Third September 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note   $ 365,000                                        
Principal amount   $ 129,053                                        
Effective interest rate   556.00%                                        
Cash proceeds   $ 110,762                                        
Payments   13,036                                        
Debt discount   $ 300,000                                        
Repaid principal amount                         13,036                  
Loan agreement amount $ 129,053   $ 312,400                                      
New and old debt percentage 10.00%   10.00%                                      
The Third May 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note           $ 27,604                                
Effective interest rate           20.00%                                
Payments           $ 3,067                                
Repaid principal amount                         11,435                  
The Fourth May 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note                                   $ 40,000        
Effective interest rate                                   17.00%        
Repaid principal amount                         9,442                  
The June 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note         $ 568,000                                  
Principal amount     $ 312,400                                      
Effective interest rate         217.00%                                  
Cash proceeds         $ 378,000                                  
Payments         28,400                                  
Debt discount         $ 190,000                                  
Repaid principal amount                         255,600                  
The First August 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note       $ 12,964                         $ 193,500          
Accrued interest                             $ 2,037              
Effective interest rate       14.00%                         14.00%          
Maturity days       60 days                                    
The Second August 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note     $ 923,000                                      
Effective interest rate     704.00%                                      
Cash proceeds     $ 300,100                                      
Payments     46,150                                      
Debt discount     $ 310,500                                      
Repaid principal amount                         276,900                  
The First September 2022 Loan Agreement [Member]                                            
Notes Payable (Details) [Line Items]                                            
Promissory note                               $ 87,884            
Effective interest rate                               13.00%            
Repaid principal amount                         $ 0                  
v3.22.2.2
Notes Payable (Details) - Schedule of notes payable - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2022
Dec. 31, 2021
Debt Instrument [Line Items]    
Outstanding principal, Total $ 2,401,509 $ 1,358,211
Less: Debt Discount (614,410) (15,547)
Less: Debt Issuance Costs
Outstanding Principal, Total 1,787,099 1,342,664
Less: Current Debt (1,758,179) (1,278,672)
Total Long-Term Debt 28,920 63,992
The April 2020 PPP Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 198,577 198,577
Interest Rate 1.00%  
Maturity Date May 2022  
The First December 2021 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 47,990 185,655
Interest Rate 10.00%  
Maturity Date June 2023  
The Second December 2021 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total   313,979
Interest Rate 14.00%  
Maturity Date June 2022  
First Denver Bodega LLC Loan [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 44,008
Interest Rate 5.00%  
Maturity Date March 2025  
The Third May 2022 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 16,169
Interest Rate  
Maturity Date November 2022  
The Fourth May 2022 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 30,558
Interest Rate  
Maturity Date November 2022  
The First August 2022 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 129,634
Interest Rate 14.00%  
Maturity Date November 2022  
The Second August 2022 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 646,100
Interest Rate  
Maturity Date January 2023  
The First September 2022 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 87,884
Interest Rate  
Maturity Date September 2023  
The Second September 2022 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 848,625
Interest Rate  
Maturity Date May 2023  
The Third September 2022 Loan Agreement [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total $ 351,964
Interest Rate  
Maturity Date April 2023  
Seller’s Choice Note [Member]    
Debt Instrument [Line Items]    
Outstanding principal, Total   $ 660,000
Interest Rate 30.00%  
Maturity Date September 2020  
v3.22.2.2
Convertible Notes Payable (Details) - USD ($)
 1 Months Ended 9 Months Ended
Jul. 06, 2020
Sep. 15, 2022
Jul. 31, 2022
May 31, 2022
May 20, 2022
Feb. 22, 2022
Sep. 30, 2022
Sep. 02, 2022
The July 2021 Convertible Loan Agreement [Member]                
Convertible Notes Payable (Details) [Line Items]                
Promissory notes $ 168,850              
Note accrues interest rate 6.00%              
Common stock, par value (in Dollars per share) $ 0.001              
Conversion shares percentage 75.00%              
Debt discount             $ 15,850  
Debt issuance costs             3,000  
Derivative liability             100,532  
Converted of principal amount             168,850  
Interest amount             $ 4,605  
Shares of common stock (in Shares)             109,435  
Debt discount             $ 96,803  
The Second February 2022 Loan Agreement [Member]                
Convertible Notes Payable (Details) [Line Items]                
Interest amount           $ 37,425    
Debt discount             37,163  
Convertible note           $ 337,163    
Effective interest rate           11.00%    
Common stock, par value (in Dollars per share)       $ 0.001        
Conversion shares percentage       75.00%        
Repaid principal amount             224,550  
The May 2022 Convertible Loan Agreement [Member]                
Convertible Notes Payable (Details) [Line Items]                
Promissory notes         $ 115,163      
Debt discount         $ 15,163      
Effective interest rate         11.00%      
Common stock, par value (in Dollars per share)         $ 0.001      
Conversion shares percentage         75.00%      
Repaid principal amount             38,349  
The May 2022 Convertible Note Offering [Member]                
Convertible Notes Payable (Details) [Line Items]                
Debt issuance costs             125,300  
Converted of principal amount             900,000  
Interest amount             103,670  
Debt discount   $ 75,610   $ 1,895,391     399,964  
Gross proceeds       $ 4,000,000        
Conversion price per share (in Dollars per share)       $ 2        
Warrants issued (in Shares)       4,000,000        
Principal outstanding percentage               110.00%
Accrue interest rate percentage               18.00%
Conversion price (in Dollars per share)   $ 0.2            
Debt percentage   10.00%            
Accrued interest             103,670  
Repayment towards notes             35,714  
The May 2022 Convertible Note Offering [Member] | Common Stock [Member]                
Convertible Notes Payable (Details) [Line Items]                
Common stock, par value (in Dollars per share)       $ 1        
The May 2022 Convertible Note Offering [Member] | Warrant [Member]                
Convertible Notes Payable (Details) [Line Items]                
Warrants issued (in Shares)       4,000,000        
The May 2022 Convertible Note Offering [Member] | Maximum [Member]                
Convertible Notes Payable (Details) [Line Items]                
Gain loss on extinguishment of debt   $ 737,756            
The May 2022 Convertible Note Offering [Member] | Minimum [Member]                
Convertible Notes Payable (Details) [Line Items]                
Gain loss on extinguishment of debt   $ 331,861            
The July 2022 Convertible Note Offering [Member]                
Convertible Notes Payable (Details) [Line Items]                
Debt discount     $ 863,792       214,981  
Gross proceeds     $ 2,150,000          
Conversion price per share (in Dollars per share)     $ 2          
Warrants issued (in Shares)     2,150,000          
Principal outstanding percentage               110.00%
Accrue interest rate percentage               18.00%
Conversion price (in Dollars per share)   $ 0.2            
Debt percentage   10.00%            
Repayment towards notes             $ 714,285  
The July 2022 Convertible Note Offering [Member] | Common Stock [Member]                
Convertible Notes Payable (Details) [Line Items]                
Common stock, par value (in Dollars per share)     $ 1          
The July 2022 Convertible Note Offering [Member] | Warrant [Member]                
Convertible Notes Payable (Details) [Line Items]                
Warrants issued (in Shares)     2,150,000          
The July 2022 Convertible Note Offering [Member] | Maximum [Member]                
Convertible Notes Payable (Details) [Line Items]                
Gain loss on extinguishment of debt   $ 640,521            
v3.22.2.2
Convertible Notes Payable (Details) - Schedule of convertible notes payable
 9 Months Ended
Sep. 30, 2022
USD ($)
$ / shares
shares
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Outstanding Principal (in Dollars) | $ $ 6,429,427
Less: Debt Discount (in Dollars) | $ (360,854)
Less: Debt Issuance Costs (in Dollars) | $ (5,648)
Total (in Dollars) | $ 6,062,926
The Second February 2022 Loan Agreement [Member]  
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Outstanding Principal (in Dollars) | $ $ 112,613
Interest Rate 11.00%
Conversion Price [1]
Maturity Date February-23
Warrants granted, Quantity (in Shares) | shares
Warrants granted, Exercise Price
The May 2022 Convertible Loan Agreement [Member]  
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Outstanding Principal (in Dollars) | $ $ 76,814
Interest Rate 11.00%
Conversion Price [1]
Maturity Date May-23
Warrants granted, Quantity (in Shares) | shares
Warrants granted, Exercise Price
The May 2022 Convertible Note Offering [Member]  
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Outstanding Principal (in Dollars) | $ $ 4,090,000
Interest Rate 18.00%
Conversion Price $ 2 [1]
Maturity Date November-22
Warrants granted, Quantity (in Shares) | shares 4,000,000
The May 2022 Convertible Note Offering [Member] | Minimum [Member]  
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Warrants granted, Exercise Price $ 3
The May 2022 Convertible Note Offering [Member] | Maximum [Member]  
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Warrants granted, Exercise Price $ 6
The July 2022 Convertible Note Offering [Member]  
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Outstanding Principal (in Dollars) | $ $ 2,150,000
Interest Rate 18.00%
Conversion Price $ 2 [1]
Maturity Date November-22
Warrants granted, Quantity (in Shares) | shares 2,150,000
The July 2022 Convertible Note Offering [Member] | Minimum [Member]  
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Warrants granted, Exercise Price $ 3
The July 2022 Convertible Note Offering [Member] | Maximum [Member]  
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items]  
Warrants granted, Exercise Price $ 6
[1] As subject to adjustment as further outlined in the notes
v3.22.2.2
Related Party (Details) - USD ($)
 1 Months Ended 9 Months Ended
Mar. 07, 2022
Sep. 15, 2022
Sep. 30, 2022
Sep. 30, 2021
Related Party Transactions [Abstract]        
Invested amount     $ 421,001  
Shares of common stock (in Shares)     240,571  
Warrants to purchase common stock (in Shares) 1,519,857 4,000,000 240,571  
Expenses     $ 87,275 $ 72,328
v3.22.2.2
Derivative Liabilities (Details)
 9 Months Ended
Sep. 30, 2022
Derivative Liability [Abstract]  
Expected dividend yield, percentage 0.00%
v3.22.2.2
Derivative Liabilities (Details) - Schedule of changes in the derivative liabilities
 9 Months Ended
Sep. 30, 2022
USD ($)
Level 1 [Member]  
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]  
Derivative liabilities as January 1, 2022
Addition
Changes in fair value
Extinguishment
Derivative liabilities as September 30, 2022
Level 2 [Member]  
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]  
Derivative liabilities as January 1, 2022
Addition
Changes in fair value
Extinguishment
Derivative liabilities as September 30, 2022
Level 3 [Member]  
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]  
Derivative liabilities as January 1, 2022
Addition 100,532
Changes in fair value (3,729)
Extinguishment (96,803)
Derivative liabilities as September 30, 2022
v3.22.2.2
Stockholders’ Equity (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended
Apr. 05, 2022
Mar. 07, 2022
Mar. 01, 2022
Jan. 06, 2022
Sep. 15, 2022
Jun. 24, 2022
Feb. 24, 2022
Jun. 17, 2021
Dec. 31, 2018
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Sep. 30, 2021
Stockholders’ Equity (Details) [Line Items]                              
Shares of capital stock (in Shares)                   120,000,000     120,000,000    
Designated of common stock shares (in Shares)                   100,000,000     100,000,000    
Common stock, par value (in Dollars per share)                   $ 0.001     $ 0.001    
Designated of preferred stock (in Shares)                   20,000,000     20,000,000    
Preferred stock, par value (in Dollars per share)                   $ 0.001     $ 0.001    
Preferred stock, share authorized (in Shares)                   20,000,000     20,000,000 20,000,000  
Restricted common stock (in Shares) 185,000         50,000                  
Gain/Loss on settlement of vendor liabilities                   $ 130,625     $ 130,625    
Fair value of services $ 192,400         $ 37,200         $ 29,387 $ 7,488      
Share based payments                         69,000    
Gross proceeds   $ 2,659,750     $ 796,000               $ 354,994    
Aggregate common stock shares (in Shares)   1,519,857     4,000,000                    
warrants to purchase common stock (in Shares)   1,519,857     4,000,000               240,571    
Exercise price (in Dollars per share)   $ 1.75     $ 0.2                    
Restricted common stock issued         $ 75,000               $ 75,000    
Fair value for service exchange                     $ 24,001 $ 8,364      
Share based payments                         2,405    
Repurchased share (in Shares)                   83,800          
Common stock value                   $ 24,470     24,470 $ 16,691  
Grant options (in Shares)                 11,667            
Fair value                 $ 57,123            
Stock-based compensation                   $ 4,100,729     $ 4,100,729   $ 480,863
Unvested employee options, description                         As of September 30, 2022, there was $1,283,111 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.21 years.    
Warrant holder shares (in Shares)                         1,275,261    
Exercise warrant shares (in Shares)                         1,438,788    
Warrant exercises                         $ 5,472,068    
Convertible share (in Shares)                   1,090,908     1,090,908    
Fair value amount                         $ 3,067,617    
Additional warrant (in Shares)                         127,801    
Dividend cash                         $ 410,750    
Underwriting agreement. (in Shares)               46,667              
Additional warrants (in Shares)                         1,740,948    
Deemed dividend                         $ 303,557    
Warrants issued (in Shares)                   6,150,000     6,150,000    
Warrants                   $ 2,929,303     $ 2,929,303    
Common Stock [Member]                              
Stockholders’ Equity (Details) [Line Items]                              
Restricted common stock (in Shares)                   82,342     82,342    
Gain/Loss on settlement of vendor liabilities                   $ 17,024     $ 17,024    
Restricted common stock issued, shares (in Shares)       8,850     50,000                
Fair value of services       $ 19,736                      
Fair value exchange services             $ 69,000                
Common stock value                   13,700     13,700    
Stock Option [Member]                              
Stockholders’ Equity (Details) [Line Items]                              
Stock option                   523,749     $ 3,355,445    
Minimum [Member]                              
Stockholders’ Equity (Details) [Line Items]                              
Fair value of services                   50,000          
Fair value for service exchange                   22,892          
Maximum [Member]                              
Stockholders’ Equity (Details) [Line Items]                              
Fair value of services                   107,206          
Fair value for service exchange                   $ 34,900          
Securities purchase agreements [Member]                              
Stockholders’ Equity (Details) [Line Items]                              
Securities purchase agreement, description     On March 1, 2022, the Company entered into securities purchase agreements with twenty-eight accredited investors whereby, at the closing, such investors purchased from the Company an aggregate of 1,401,457 shares of the Company’s common stock and (ii) 1,401,457 warrants to purchase shares of common stock, for an aggregate purchase price of $2,452,550. Such warrants are exercisable for a term of five-years from the date of issuance, at an exercise price of $1.75 per share. The Company has recorded $40,000 to stock issuance costs, which are part of Additional Paid-in Capital.                         
Series E Convertible Preferred Stock [Member]                              
Stockholders’ Equity (Details) [Line Items]                              
Preferred stock, share authorized (in Shares)                   8,000     8,000    
Preferred stock, share issued (in Shares)                   500     500    
Preferred stock, share outstanding (in Shares)                   500     500    
Series E Preferred Stock [Member]                              
Stockholders’ Equity (Details) [Line Items]                              
Preferred stock, par value (in Dollars per share)                   $ 1,000     $ 1,000    
Preferred stock, share authorized (in Shares)                   8,000     8,000 8,000  
Preferred stock, share issued (in Shares)                   500     500 500  
Preferred stock, share outstanding (in Shares)                   500     500 500  
Price per share (in Dollars per share)                   $ 4.12     $ 4.12    
Convertible share (in Shares)                   486,516     486,516    
Black-Scholes Option-Pricing Model [Member]                              
Stockholders’ Equity (Details) [Line Items]                              
Warrants                   $ 5,185,826     $ 5,185,826    
v3.22.2.2
Stockholders’ Equity (Details) - Schedule of assumption granted warrants - $ / shares
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Stock Options [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Expected dividends 0.00% 0.00%
Expected life of warrant 5 years  
Stock Options [Member] | Minimum [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Exercise price (in Dollars per share) $ 1.1 $ 2.55
Expected volatility 165.38% 194.39%
Risk free interest rate 2.69% 0.46%
Expected life of warrant   5 years
Stock Options [Member] | Maximum [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Exercise price (in Dollars per share) $ 1.9 $ 14.1
Expected volatility 166.48% 242.98%
Risk free interest rate 2.95% 0.98%
Expected life of warrant   7 years
Warrants granted [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Expected dividends 0.00% 0.00%
Expected life of warrant   5 years
Warrants granted [Member] | Minimum [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Exercise price (in Dollars per share) $ 0.2 $ 4.5
Expected volatility 164.34% 237.14%
Risk free interest rate 2.81% 0.82%
Expected life of warrant 5 years  
Warrants granted [Member] | Maximum [Member]    
Stockholders’ Equity (Details) - Schedule of assumption granted warrants [Line Items]    
Exercise price (in Dollars per share) $ 6 $ 4.95
Expected volatility 169.75% 237.68%
Risk free interest rate 4.00% 0.86%
Expected life of warrant 5 years 6 months  
v3.22.2.2
Stockholders’ Equity (Details) - Schedule of the stock option activity - $ / shares
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Schedule Of The Stock Option Activity Abstract    
Options beginning balance 2,902,619 541,021
Weighted Average Exercise Price, beginning balance $ 7.07 $ 12.75
Weighted Average Remaining Contractual Life (in years), beginning balance 4 years 8 months 15 days 3 years 3 months 7 days
Options, Granted 1,940,000 1,850,588
Weighted Average Exercise Price, Granted $ 1.38 $ 6.32
Weighted Average Remaining Contractual Life (in years), Granted 6 years 2 months 12 days
Options, Exercised
Weighted Average Exercise Price, Exercised
Weighted Average Remaining Contractual Life (in years), Exercised  
Options, Forfeited/Cancelled (434,352) (64,164)
Weighted Average Exercise Price, Forfeited/Cancelled $ 13.56 $ 13.06
Weighted Average Remaining Contractual Life (in years), Forfeited/Cancelled  
Options outstanding, ending balance 4,408,267 2,327,445
Weighted Average Exercise Price outstanding, ending balance $ 3.93 $ 7.63
Weighted Average Remaining Contractual Life (in years) outstanding, ending balance 4 years 5 months 4 days 4 years 3 months 14 days
Options, exercisable 3,010,101 608,524
Weighted Average Exercise Price, exercisable $ 4.12 $ 12.75
Weighted Average Remaining Contractual Life (in years), exercisable 4 years 3 months 25 days 3 years 9 months
v3.22.2.2
Stockholders’ Equity (Details) - Schedule of option outstanding and option exercisable
 9 Months Ended
Sep. 30, 2022
$ / shares
shares
Schedule Of Option Outstanding And Option Exercisable Abstract  
Option Outstanding, Exercise price | $ / shares $ 3.93
Option Outstanding, Number Outstanding | shares 4,408,267
Option Outstanding, Weighted Average Remaining Contractual Life (in years) 4 years 5 months 4 days
Option Exercisable, Weighted Average Exercise Price | $ / shares $ 4.12
Option Exercisable, Number Exercisable | shares 3,010,101
Option Exercisable, Weighted Average Remaining Contractual Life (in years) 4 years 3 months 25 days
v3.22.2.2
Stockholders’ Equity (Details) - Schedule of warrant activity - $ / shares
 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Warrant [Member]    
Class of Warrant or Right [Line Items]    
Warrant, outstanding beginning balance 5,658,830 6,130,948
Warrant, Granted 14,812,262 1,881,267
Warrant, Exercised (1,438,788)
Warrant, Forfeited/Cancelled (41,462) (14,722)
Warrant, outstanding ending balance 20,429,630 6,558,705
Warrant, exercisable 16,429,630 6,558,705
Weighted Average Exercise Price [Member]    
Class of Warrant or Right [Line Items]    
Weighted Average Exercise Price, beginning balance $ 4.98 $ 4.96
Weighted Average Exercise Price, Granted 2.29 5.63
Weighted Average Exercise, Exercised 4.59
Weighted Average Exercise Price, Forfeited/Cancelled 12 24
Weighted Average Exercise Price, outstanding ending balance 1.88 4.92
Weighted Average Exercise Price, exercisable $ 2.62 $ 4.92
v3.22.2.2
Stockholders’ Equity (Details) - Schedule of warrants outstanding and warrants exercisable
 9 Months Ended
Sep. 30, 2022
$ / shares
shares
Warrants Outstanding [Member]  
Stockholders’ Equity (Details) - Schedule of warrants outstanding and warrants exercisable [Line Items]  
Warrants Outstanding, Exercise price $ 1.88
Warrants Outstanding, Number Outstanding (in Shares) | shares 20,429,630
Warrants Outstanding, Weighted Average Remaining Contractual Life (in years) 4 years 25 days
Warrants Exercisable [Member]  
Stockholders’ Equity (Details) - Schedule of warrants outstanding and warrants exercisable [Line Items]  
Warrants Outstanding, Weighted Average Exercise Price $ 2.62
Warrants Exercisable, Number Exercisable (in Shares) | shares 16,429,630
Warrants Exercisable, Weighted Average Exercise Price $ 3.81
v3.22.2.2
Commitments and Contingencies (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended
Apr. 05, 2022
Jan. 04, 2021
Dec. 31, 2022
Aug. 16, 2022
Jul. 28, 2022
Apr. 26, 2022
Jun. 30, 2020
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Mar. 31, 2022
Commitments and Contingencies (Details) [Line Items]                        
Settlement amount             $ 799,000          
Principal amount             660,000          
Accrued interest             $ 139,000          
Purchase agreements                       $ 920,000
Excise tax on net repurchases       1.00%                
Lease agreements, description         On July 28, 2022, the Company signed a 3-year lease for approximately 1,364 square feet of office space at 1674 Meridian Ave. On April 26, 2022, the Company signed a 7-year lease for approximately 8,000 square feet of office space at 419 Lafayette Street, 6th Floor, New York, NY, 10003.            
Total lease amount         $ 181,299 $ 3,502,033            
Impaired asset         $ 101,623              
Rent expense               $ 154,015 $ 67,397 $ 395,709 $ 121,266  
Stockholders’ equity requirement, description   On September 2, 2022, the Company received a letter from the staff of The Nasdaq Capital Market notifying the Company that the Nasdaq Hearings Panel has determined to delist the Company’s common stock from the Exchange, based on the Company’s failure to comply with the listing requirements of Nasdaq Rule 5550(b)(1) as a result of the Company’s shareholder equity deficit for the period ended June 30, 2022, as demonstrated in Company’s Quarterly Report on Form 10-Q filed on August 15, 2022, following the Company having not complied with the market value of listed securities requirement in Nasdaq Rule 5550(b)(2) on March 1, 2022, while the Company was under a Panel Monitor, as had been previously disclosed.                    
Employment agreements description On April 5, 2022, upon the recommendation of the Compensation Committee of the Board, the Board approved employment agreements with, and equity issuances for, (i) Jeremy Frommer, Executive Chairman, who will receive (a) an signing award of $80,000, (b) an annual salary of $420,000; (c) 121,000 options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock; (ii) Laurie Weisberg, Chief Executive Officer, who will receive (a) an annual salary of $475,000; (b) 121,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; (iii) Justin Maury, Chief Operating Officer & President, who will receive (a) an annual salary of $475,000 (b) 81,000 options, to vest immediately with a strike price of $1.75, and (c) 50,000 shares of the Company’s restricted common stock; and (iv) Chelsea Pullano, Chief Financial Officer, who will receive (a) an annual salary of $250,000; (b) 37,000 options, to vest immediately with a strike price of $1.75, and (c) 35,000 shares of the Company’s restricted common stock (collectively, the “Executive Employment Arrangements”).                       
Aggregate amount               $ 475,000   $ 475,000    
Forecast [Member]                        
Commitments and Contingencies (Details) [Line Items]                        
Tax percentage     15.00%                  
v3.22.2.2
Commitments and Contingencies (Details) - Schedule of components of lease expense - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2022
Schedule Of Components Of Lease Expense Abstract    
Operating lease cost $ 148,446 $ 241,601
Short term lease cost 5,568 154,108
Total net lease cost $ 154,015 $ 395,709
v3.22.2.2
Commitments and Contingencies (Details) - Schedule of supplemental cash flow and other information related to leases
 9 Months Ended
Sep. 30, 2022
USD ($)
Cash paid for amounts included in the measurement of lease liabilities:  
Operating lease payments $ 54,564
Weighted average remaining lease term (in years): 3 years 4 months 24 days
Weighted average discount rate: 12.50%
v3.22.2.2
Commitments and Contingencies (Details) - Schedule of future minimum payments required under the lease
Sep. 30, 2022
USD ($)
Schedule Of Future Minimum Payments Required Under The Lease Abstract  
2023 $ 534,880
2024 541,905
2025 513,507
2026 528,589
2027 544,122
Thereafter 892,399
Total lease payments 3,555,402
Less: Amounts representing interest (1,140,416)
Total lease obligations 2,414,986
Less: Current (279,593)
Total $ 2,135,393
v3.22.2.2
Acquisitions (Details) - USD ($)
 9 Months Ended
Sep. 13, 2022
Aug. 01, 2022
Mar. 07, 2022
Sep. 30, 2022
Acquisitions (Details) [Line Items]        
Purchase price per share     $ 1  
Cash       $ 410,750
Orbit Media LLC [Member]        
Acquisitions (Details) [Line Items]        
Membership interest percentage   51.00%    
Cash   $ 44,000    
Shares of common stock   57,576    
Brave Foods, LLC [Member]        
Acquisitions (Details) [Line Items]        
Membership interest percentage 100.00%      
Limited liability $ 150,000      
v3.22.2.2
Acquisitions (Details) - Schedule of components of the purchase price
Sep. 30, 2022
USD ($)
Denver Bodega, LLC [Member]  
Asset Acquisition [Line Items]  
Cash paid to seller $ 1
Total purchase price 1
Cash 44,977
Accounts Receivable 2,676
Inventory 194,365
Total assets acquired 242,018
Accounts payable and accrued expenses 127,116
Notes payable 293,888
Total liabilities assumed 421,004
Net liabilities acquired (178,986)
Excess purchase price 178,987
Orbit Media LLC [Member]  
Asset Acquisition [Line Items]  
Cash paid to seller 44,000
Shares granted to seller 40,994
Total purchase price 84,994
Non-controlling interest in consolidated subsidiary 81,661
Excess purchase price 166,655
Brave Foods, LLC [Member]  
Asset Acquisition [Line Items]  
Cash paid to seller 150,000
Total purchase price 150,000
Net Assets acquired 83,182
Cash 73,344
Inventory 86,154
Total assets acquired 159,498
Accounts payable and accrued expenses 1,316
Notes payable 75,000
Total liabilities assumed 76,316
Excess purchase price $ 66,818
v3.22.2.2
Acquisitions (Details) - Schedule of excess purchase price amounts
Sep. 30, 2022
USD ($)
Denver Bodega, LLC [Member]  
Acquisitions (Details) - Schedule of excess purchase price amounts [Line Items]  
Goodwill $ 8,950
Trade Names & Trademarks 8,949
Know-How and Intellectual Property 107,392
Website 8,949
Customer Relationships 44,747
Excess purchase price 178,987
Orbit Media LLC [Member]  
Acquisitions (Details) - Schedule of excess purchase price amounts [Line Items]  
Know-How and Intellectual Property 166,655
Excess purchase price 166,655
Brave Foods, LLC [Member]  
Acquisitions (Details) - Schedule of excess purchase price amounts [Line Items]  
Goodwill 6,683
Trade Names & Trademarks 16,704
Know-How and Intellectual Property 16,704
Website 16,704
Customer Relationships 10,023
Excess purchase price $ 66,818
v3.22.2.2
Acquisitions (Details) - Schedule of unaudited pro-forma combined results of operations - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Acquisitions (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]        
Revenues     $ 4,683,843 $ 5,069,181
Net loss attributable to common shareholders     $ (24,217,030) $ (26,428,192)
Net loss per share (in Dollars per share)     $ (1.23) $ (2.23)
Weighted average number of shares outstanding (in Shares)     19,726,987 11,845,229
Plant Camp LLC [Member]        
Acquisitions (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]        
Revenues   $ 3,429,748    
Net loss attributable to common shareholders   $ (25,735,007)    
Net loss per share (in Dollars per share)   $ (2.17)    
Weighted average number of shares outstanding (in Shares)   11,845,229    
WHE Agency, Inc. [Member]        
Acquisitions (Details) - Schedule of unaudited pro-forma combined results of operations [Line Items]        
Revenues $ 4,057,080      
Net loss attributable to common shareholders $ (9,425,313)      
Net loss per share (in Dollars per share) $ (0.45)      
Weighted average number of shares outstanding (in Shares) 21,087,764      
v3.22.2.2
Segment Information (Details) - Schedule of reportable segments and corporate - USD ($)
Sep. 30, 2022
Dec. 31, 2021
Condensed Balance Sheet Statements, Captions [Line Items]    
Accounts receivable, net $ 222,183 $ 337,440
Prepaid expenses and other current assets 139,726 236,665
Deposits and other assets 769,136 718,951
Intangible assets 2,536,599 2,432,841
Goodwill 1,365,328 1,374,835
Inventory 879,050 106,403
All other assets 2,811,769 3,966,124
Total Assets 8,723,791 9,173,259
Accounts payable and accrued liabilities 6,714,606 3,730,540
Note payable, net of debt discount and issuance costs 1,787,099 1,342,664
Deferred revenue 305,555 234,159
All other Liabilities 8,529,992 177,644
Total Liabilities 17,337,252 5,485,007
Creatd Labs [Member]    
Condensed Balance Sheet Statements, Captions [Line Items]    
Accounts receivable, net
Prepaid expenses and other current assets 43,336 48,495
Deposits and other assets 576,551 626,529
Intangible assets 162,489
Goodwill
Inventory
All other assets
Total Assets 782,376 675,024
Accounts payable and accrued liabilities 1,365 9,693
Note payable, net of debt discount and issuance costs 129,634 313,979
Deferred revenue 161,112 161,112
All other Liabilities
Total Liabilities 292,111 484,784
Creatd Ventures [Member]    
Condensed Balance Sheet Statements, Captions [Line Items]    
Accounts receivable, net 4,973 2,884
Prepaid expenses and other current assets
Deposits and other assets
Intangible assets 1,568,347 1,637,924
Goodwill 15,632 25,139
Inventory 879,050 106,403
All other assets
Total Assets 2,468,002 1,772,350
Accounts payable and accrued liabilities 1,518,544 766,253
Note payable, net of debt discount and issuance costs 170,365
Deferred revenue   13,477
All other Liabilities
Total Liabilities 1,688,909 779,730
Creatd Partners [Member]    
Condensed Balance Sheet Statements, Captions [Line Items]    
Accounts receivable, net 217,210 334,556
Prepaid expenses and other current assets
Deposits and other assets
Intangible assets 648,469 783,676
Goodwill 1,349,696 1,349,696
Inventory
All other assets
Total Assets 2,215,375 2,467,928
Accounts payable and accrued liabilities 68,063 6,232
Note payable, net of debt discount and issuance costs
Deferred revenue 144,443 59,570
All other Liabilities
Total Liabilities 212,506 65,802
Corporate [Member]    
Condensed Balance Sheet Statements, Captions [Line Items]    
Accounts receivable, net
Prepaid expenses and other current assets 96,390 188,170
Deposits and other assets 192,585 92,422
Intangible assets 157,294 11,241
Goodwill
Inventory
All other assets 2,811,769 3,966,124
Total Assets 3,258,038 4,257,957
Accounts payable and accrued liabilities 5,126,634 2,948,362
Note payable, net of debt discount and issuance costs 1,487,100 1,028,685
Deferred revenue
All other Liabilities 8,529,992 177,644
Total Liabilities $ 15,143,726 $ 4,154,691
v3.22.2.2
Segment Information (Details) - Schedule of financial information related to our reportable segments and corporate - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2022
Sep. 30, 2021
Sep. 30, 2022
Sep. 30, 2021
Segment Reporting Information [Line Items]        
Net revenue $ 1,022,851 $ 1,179,620 $ 3,997,490 $ 2,894,390
Cost of revenue 1,404,562 1,418,213 4,771,151 4,160,743
Gross margin (381,711) (238,593) (773,661) (1,266,353)
Research and development 234,965 322,946 686,131 708,396
Marketing 646,520 1,812,400 4,016,051 8,049,579
Stock based compensation 626,568 2,151,900 3,848,578 5,662,389
General and administrative not including depreciation, amortization, or Impairment 4,087,055 2,385,135 10,956,046 5,551,049
Depreciation and amortization 157,996   441,943  
Impairment of intangibles 249,586   257,117 93,791
Total operating expenses 5,595,108 6,672,381 20,205,866 19,971,413
Interest expense (673,694)   (707,950)  
All other expenses (2,875,832)   (3,424,854)  
Other expenses, net (3,549,526)   (4,132,804)  
Loss before income tax provision (9,526,345) (9,720,121) (25,112,331) (24,925,834)
Creatd Labs [Member]        
Segment Reporting Information [Line Items]        
Net revenue 291,414 565,852 1,138,904 1,388,411
Cost of revenue 564,349 849,079 1,917,039 2,482,848
Gross margin (272,935) (283,227) (778,135) (1,094,437)
Research and development 139,997 250,474 408,810 549,426
Marketing 370,584 1,540,540 2,301,994 6,842,142
Stock based compensation 122,964 337,026 755,284 886,832
General and administrative not including depreciation, amortization, or Impairment 90,212 386,844 242,330 900,323
Depreciation and amortization 1,489   4,166  
Impairment of intangibles      
Total operating expenses 723,757 2,514,884 3,712,584 9,178,723
Interest expense (17,048)   (34,095)  
All other expenses      
Other expenses, net (17,048)   (34,095)  
Loss before income tax provision (1,001,024) (2,802,443) (4,524,814) (10,286,156)
Creatd Ventures [Member]        
Segment Reporting Information [Line Items]        
Net revenue 316,654 3,919 1,237,542 9,616
Cost of revenue 502,396 174,438 1,706,586 497,194
Gross margin (185,742) (170,519) (469,044) (487,578)
Research and development 60   131
Marketing 234,760   1,458,280  
Stock based compensation 111,472   684,697 796,676
General and administrative not including depreciation, amortization, or Impairment 476,386 302,764 1,279,676 76,381
Depreciation and amortization 43,001   120,282  
Impairment of intangibles 85,406   87,983  
Total operating expenses 822,618 32,819 3,630,918 873,188
Interest expense    
All other expenses      
Other expenses, net    
Loss before income tax provision (1,008,360) (506,162) (4,099,962) (1,360,766)
Creatd Partners [Member]        
Segment Reporting Information [Line Items]        
Net revenue 414,783 609,849 1,621,044 1,496,363
Cost of revenue 337,817 394,696 1,147,526 1,180,701
Gross margin 76,966 215,153 473,518 315,662
Research and development 94,968 72,412 277,321 158,839
Marketing 41,176 181,240 255,777 804,958
Stock based compensation 126,654 332,531 777,948 875,004
General and administrative not including depreciation, amortization, or Impairment 384,365 293,296 1,032,487 682,602
Depreciation and amortization 40,917   114,453  
Impairment of intangibles      
Total operating expenses 647,163 879,479 2,457,986 2,521,403
Interest expense      
All other expenses      
Other expenses, net      
Loss before income tax provision (570,197) (664,326) (1,984,468) (2,205,741)
Corporate [Member]        
Segment Reporting Information [Line Items]        
Net revenue      
Cost of revenue      
Gross margin      
Research and development      
Marketing 90,620   402,479
Stock based compensation 265,478 1,179,579 1,630,649 3,103,877
General and administrative not including depreciation, amortization, or Impairment 3,136,092 1,672,176 8,401,553 3,891,743
Depreciation and amortization 72,589   203,042  
Impairment of intangibles 164,180   169,134  
Total operating expenses 3,401,570 2,942,375 10,404,378 7,398,099
Interest expense (656,647)   (673,855)  
All other expenses (2,875,832)   (3,424,854)  
Other expenses, net (3,532,479)   (4,098,709)  
Loss before income tax provision $ (6,946,764) $ (5,747,190) $ (14,503,087) $ (11,073,171)
v3.22.2.2
Subsequent Events (Details) - USD ($)
 1 Months Ended 3 Months Ended 9 Months Ended
Mar. 07, 2022
Oct. 24, 2022
Oct. 20, 2022
Sep. 15, 2022
Sep. 30, 2022
Sep. 30, 2022
Dec. 31, 2021
Subsequent Events (Details) [Line Items]              
Warrants exercised (in Shares)         4,227,114 4,227,114  
Cancellation of warrants (in Shares)           4,227,114  
Common stock, share issued (in Shares)         24,469,675 24,469,675 16,691,170
Gross proceeds $ 2,659,750     $ 796,000   $ 354,994  
Net proceeds         $ 75,000 $ 190,000  
Common stock, per share (in Dollars per share)         $ 0.001 $ 0.001 $ 0.001
Proceeds from sale           $ 750,000  
Agreement to pay           $ 750,000  
Gross proceeds percentage           50.00%  
Description of warrants           The Replacement Warrants reflect a reduction in the number of Series C and Series D Warrants from 1,550,000 in each class to 1,536,607 in each class and a reduction in the number of Series E and Series F Warrants from 1,075,000 in each class to 807,143 in each class, and the initial exercise date for the Replacement Warrants are unchanged from the date as set forth in the respective exchanged Series C, Series D, Series E or Series F Warrant.  
Common Stock [Member]              
Subsequent Events (Details) [Line Items]              
Common stock, share issued (in Shares)         3,802,626 3,802,626  
Subsequent Event [Member]              
Subsequent Events (Details) [Line Items]              
Investor purchase   $ 1,500,000 $ 15,000,000        
Common stock, per share (in Dollars per share)     $ 0.001        
Weighted average     82.00%        
Principal amount     $ 300,000        
Purchase price     $ 255,000        
Debt Instrument, Interest Rate, Effective Percentage     10.00%        
Payments to investor     $ 47,142.85        
Unsecured debenture   $ 1,666,650          
Securities purchase agreement description   The Debenture has an original issue discount of 10%, has a term of six months with a maturity date of April 24, 2023, may be extended by six months at the Company’s option subject to certain conditions, and are convertible into shares of Common Stock at a conversion price of $0.20 per share, subject to adjustment upon certain events.           
Promissory Notes [Member]              
Subsequent Events (Details) [Line Items]              
Net proceeds           $ 100,000