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Creatd’s Expansion Plan is Ready for Action

by Jeremy Frommer 6 months ago in business · updated 6 months ago
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For the first time ever, we are directly offering every single CRTD shareholder the opportunity to invest side-by-side with us through a Rights Offering.

Today marks our most important financial offering as a company since our Uplisting to the Nasdaq in September of 2020. With no long-term debt on our balance sheet and a closing gap between revenue and operational expenses, Creatd’s expansion has reached its moment of inflection.

We have just announced a $40 million Rights Offering, available to all Creatd shareholders for participation. The Rights Offering will allow Creatd’s current and future shareholders to purchase units consisting of common stock and warrants. If all shareholders participate, and $40MM is raised, the expansion plan funded by the offering could drive between a 10x – 20x increase in revenues over the next 12 to 18 months. Then, if all warrants underlying the units are exercised, the Company would receive an additional $180MM.

Over the last few years, I have observed our stock oscillate from as low as $0.62 a share to as high as $9.80, which effectively translates into a Company valuation of between $15MM - $100MM. Today we stand at 20.1MM shares outstanding at a price of $0.81 for a market value of $16.9MM, as well as the ability to access authorized shares of up to $100MM in the future. We have kept a tight float in comparison to microcap stocks such as Remark Holdings (MARK) and Genius (GNUS), which trade at sub $1.00 with over $100MM and $250MM in outstanding shares, respectively.

During this few-year period, we grew revenues from nothing to $4.3MM for Fiscal Year 2021, and believe we are on our way to reaching between $7MM - $10MM for Fiscal Year 2022, and that’s before adjustments from the initiation of our expansion plan. All the while, we maintained flat operating expenses, with the exception of one-time charges, as well as a decrease in our core platform, Vocal’s, marketing expenditures over the past three quarters. Additionally, during this same period, we grew Vocal’s network to more than 1.5MM creators and an audience reach that exceeds 200MM globally. And finally, during this same period, we implemented continuous product updates to Vocal—truly making it a best-in-class platform that today serves as a homebase and safe environment for diverse creators of all shapes, sizes, and mediums.

With private funding from friends and family, as well as institutional shareholders, we never tapped into the venture capital space. Instead, we embarked in 2016 on a years-long journey to the Nasdaq—an audacious choice and a highly complex undertaking—and ultimately achieved that in September 2020 in the midst of the pandemic crisis. Most importantly, we have since eliminated all long-term debt from our balance sheet, unlike small-cap companies such as Buzzfeed, E-Sports Entertainment, and Ipsidy, among the many other Nasdaq companies with material debt. As things stand today, we believe we are finally in a position to compete head-to-head with the multi-billion-dollar-valued platforms in our space, at a fraction of their internal headcount, and with far lower development costs.

As we speak, we are witnessing the transfer of value away from legacy social media companies like Snap, Facebook, and Twitter, toward subscription-based business models. We have also designed Vocal to withstand the current perceptions of these platforms by employing an AI-assisted and human-led moderation system to cultivate a safe and secure platform for our creators and brands. Creatd’s founders built the non-ad-dependent Vocal platform upon the general thesis that a closed and safe ecosystem utilizing first-party data to increase efficiencies creates a sustainable and defensible business model. With this, Vocal is now set to seize the mantle from these companies.

I encourage you all to read Creatd’s 2022 Investor Presentation and look forward to communicating further in the future as well as hosting an investor day presentation in the middle of June. In particular, I appreciate responding to messages at the bottom of this story. This is our newest value-added feature on Vocal.

The presentation describes an expansion plan across our four pillars. Important to note is the highly scalable nature of our technology (Creatd Labs) and e-commerce (Creatd Ventures) pillars, thus warranting higher levels of capital infusion as compared to the agency (Creatd Partners) and media production (Creatd Studios) pillars. As it happens, the latter two businesses, while less scalable in nature, drive significant value for their more scalable sister counterparts. The projects and brand partners in those pillars help us penetrate new markets and untapped audiences for Vocal and our DTC subscriber businesses.

View Creatd’s 2022 Investor Presentation

View Creatd's $40MM Rights Offering press release announcement

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About the author

Jeremy Frommer

Executive Chairman & Founder of Creatd (NASDAQ: CRTD) and Vocal. I abhor hypocrisy, admire hard work, and aspire to think abstractly.

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Comments (8)

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  • Georgenes Medeiros6 months ago

    Excellent, I loved the subject. I identified a lot. Keep writing....

  • jimmy cox6 months ago

    What's the difference between this $2/share offering and last year's $4.5/share directing offering? A lot of investors bought CRTD at $5+/share last year and the price went all the way down to $0.62. Is this gonna happen again closed at $1.1 on 5/27/2022?

  • Navin Kumar das6 months ago

    good job

  • Judey Kalchik6 months ago

    I appreciate the sharing of this information. It’s a great stride in communicating with the readers and creators. Are there plans to increase communication to creators, so that information reaches them slightly before the public receives it? Many creators, rightly or not, feel a sense of partnership with Vocal, especially those who are Vocal+ members. Such communication would go a long way to fostering loyalty and retain that sense of ownership and belonging.

  • Natalie Wilkinson6 months ago

    If I understand this correctly, writers will be given a chance to invest in shares in the company when the public offering goes out? Prior to the public offering?

  • Gerald Holmes6 months ago

    Will this result in Creators being paid more for read?

  • Trevor Wells6 months ago

    Will this transition result in Vocal+ costing more money or interfere with creators' ability to share their content on social media?

  • Call Me Les6 months ago

    "we are witnessing the transfer of value away from legacy social media companies like Snap, Facebook, and Twitter, toward subscription-based business models." Currently, our only easily accessible method to circulate our stories is through social media. Does this statement reflect a change to Vocal's advice on how to gain readers? Is an in-house audience coming our way, like on Medium? What can we expect from Vocal in way of support for this 'transition' and how can we best prepare our current readers for the coming migration? Best, Les

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