Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
From time to time, we
may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject
to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Except
as set forth below, we are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate,
a material adverse effect on our business, financial condition or operating results.
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 on 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.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
26
PART II