What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 757 added, 369 removed, 1008 unchanged (53% of the section changed)

Financial Statements.

March 31, 2022

June 30, 2022

Index to the Condensed Consolidated Financial

Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)

Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2022 and 2021

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (unaudited)

Notes to the Condensed Consolidated Financial Statements (unaudited)

2 unchanged sentences

Accounts receivable, net

Marketable securities

Prepaid expenses and other current assets

8 unchanged sentences

Accounts payable and accrued liabilities

Share liability

Convertible Notes, net of debt discount and issuance costs

4 unchanged sentences

Non-current Liabilities:

Operating lease payable

Total Non-current Liabilities

1 unchanged sentence

Commitments and contingencies

Stockholders’ Equity

Stockholders’ Equity (Deficit)

Preferred stock, $ 0.001 par value:

20,000,000 shares authorized

Series E Preferred stock, $ 0.001 par value:

8,000 shares authorized;

shares issued and outstanding, respectively

Common stock par value $ 0.001 :

100,000,000 shares authorized;

19,915,090 issued and 19,909,433 outstanding as of March 31, 2021 and 16,691,170 issued and 16,685,513 outstanding as of December 31, 2021

20,254,839 issued and 20,249,182 outstanding as of June 30, 2022 and 16,691,170 Outstanding 16,685,513 outstanding as of December 31, 2021

Additional paid in capital

Subscription receivable

Treasury stock, 5,657 and 5,657 shares, respectively

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Stockholders’ Equity

( 2,395,670 )

Non-controlling interest in consolidated subsidiaries

Total Liabilities and Stockholders’ Equity

The accompanying notes are an integral part

of these condensed consolidated financial statements.

Consolidated Statements of Operations and Comprehensive Loss

( 1,500,233 )

Total Liabilities and

Stockholders’ Equity (Deficit)

The accompanying notes are an integral part of these condensed consolidated

financial statements.

Condensed Consolidated Statements of

Operations and Comprehensive Loss

Cost of revenue

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( 8,380,795 )

( 15,002,708 )

( 14,326,792 )

Other income (expenses)

3 unchanged sentences

Change in derivative liability

Impairment of investment

Settlement of vendor liabilities

Gain on extinguishment of debt

Other expenses, net

Loss on marketable securities

Gain on extinguishment of debt

Gain on forgiveness of debt

Other income (expenses), net

Loss before income tax provision

1 unchanged sentence

( 8,562,476 )

( 15,585,986 )

( 15,205,713 )

Income tax provision

1 unchanged sentence

( 8,562,476 )

( 15,585,986 )

( 15,205,713 )

Non-controlling interest in net loss

2 unchanged sentences

( 8,562,044 )

( 14,600,228 )

( 15,205,281 )

Deemed dividend

2 unchanged sentences

$ ( 8,972,794 )

$ ( 14,681,956 )

$ ( 15,616,031 )

Comprehensive loss

1 unchanged sentence

( 8,562,476 )

( 15,585,986 )

( 15,205,713 )

Currency translation gain (loss)

2 unchanged sentences

$ ( 8,563,028 )

$ ( 15,615,595 )

$ ( 15,213,576 )

Per-share data

1 unchanged sentence

Weighted average number of common shares outstanding

The accompanying notes

are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated

financial statements.

Condensed Consolidated Statement of Changes

in Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Preferred Stock

Treasury stock

Non-Controlling

Comprehensive

Stockholders’

Balance, January 1, 2022

Balance, April

$ 117,949,487

1 unchanged sentence

Stock based compensation

Shares issued for prepaid services

Cash received for common stock and warrants, net of $ 115,000 of issuance costs

Common stock issued upon conversion of notes payable

Foreign currency translation adjustments

Net loss for the three months ended March 31, 20222

Balance, March 31, 2022

Shares issued for prepaid

Stock warrants issued with

Foreign currency translation

Net loss for the three

months ended June 30, 2022

( 8,337,066 )

( 8,704,938 )

The accompanying notes

are an integral part of these consolidated financial statements.

Balance, June 30, 2022

$ 122,068,892

$ ( 124,314,530 )

$ ( 107,881 )

$ ( 1,500,233 )

The accompanying notes are an integral part

of these consolidated financial statements.

Condensed Consolidated Statement of Changes

in Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2021

For the Six Months Ended June 30, 2022

Preferred Stock

Non-Controlling

Comprehensive

Stockholders’

January 1, 2021

Balance, January

$ 111,563,618

$ ( 109,632,574 )

Stock based compensation

Shares issued for prepaid

Stock warrants issued with

Cash received for common

stock and warrants, net of $115,000 of issuance costs

Common stock issued upon

conversion of notes payable

Foreign currency translation

Net loss for the six

months ended June 30, 2022

( 14,600,228 )

( 15,585,986 )

Balance, June 30, 2022

$ 122,068,892

$ ( 124,314,530 )

$ ( 107,881 )

$ ( 1,500,233 )

The accompanying notes are an integral part

of these consolidated financial statements.

Condensed Consolidated

Statement of Changes in Stockholders’ Equity (Deficit)

For the Three Months

Ended June 30, 2021

Preferred Stock

Non-Controlling

Comprehensive

Stockholders’

April 1, 2021

$ ( 78,572,159 )

based compensation

of warrants to stock

warrants issued with note payable

received for common stock

issued for prepaid services

issued to settle vendor liabilities

stock issued upon conversion of notes payable

of warrants to stock

Cash received

for preferred series E and warrants

of preferred series E to stock

currency translation adjustments

loss for the three months ended March 31, 2021

March 31, 2021

The accompanying notes are an integral part

of these condensed consolidated financial statements.

Condensed Consolidated Statements of Cash

Non-controlling

interest in consolidated subsidiary from acquisition

loss for the three months ended June 30, 2021

( 8,562,044 )

( 8,562,476 )

June 30, 2021

$ ( 87,544,953 )

$ ( 452,831 )

The accompanying notes

are an integral part of these condensed consolidated financial statements.

Condensed Consolidated

Statement of Changes in Stockholders’ Equity (Deficit)

For the Six Months

Ended June 30, 2021

Non-Controlling

Comprehensive

Stockholders’

Balance, January 1, 2021

$ ( 71,928,922 )

Stock based compensation

Shares issued for prepaid

Shares issued to settle vendor

Common stock issued upon

conversion of notes payable

Exercise of warrants to stock

Cash received for common

Cash received for preferred

series E and warrants

Conversion of preferred series

Stock warrants issued with

Foreign currency translation

Non-controlling interest

in consolidated subsidiary from acquisition

Net loss for the six

months ended June 30, 2021

( 15,205,281 )

( 15,205,713 )

Balance, June 30,

$ ( 87,544,953 )

$ ( 452,831 )

The accompanying notes

are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows

CASH FLOWS FROM OPERATING ACTIVITIES:

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Depreciation and amortization

Impairment of investment

Impairment of intangible assets

Accretion of debt discount and issuance cost

1 unchanged sentence

Bad debt expense

Gain on Forgiveness of debt

Settlement of vendor liabilities

1 unchanged sentence

Derivative Expense

Loss on marketable securities

Gain on extinguishment of debt

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Cash paid for minority investment in business

Cash acquired from acquisition

Cash paid for investments in marketable securities

Cash consideration for acquisition

Purchases of digital assets

4 unchanged sentences

Repayment of notes

( 1,258,442 )

Proceeds from issuance of convertible note

Repayment of convertible notes

4 unchanged sentences

( 2,238,071 )

( 5,782,126 )

Cash - Beginning of period

4 unchanged sentences

Settlement of vendor liabilities

Warrants issued with debt

Issuance of common stock for prepaid services

Operating Lease liability incurred for right-of-use asset

Deferred offering costs

Common stock and warrants issued upon conversion of notes payable

The accompanying notes

are an integral part of these condensed consolidated financial statements.

March 31, 2022

The accompanying notes are an integral part of these condensed consolidated financial statements.

June 30, 2022

Notes to the Condensed

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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

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”).

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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 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

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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.

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,

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The results of Plant Camp’s operations have bene 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 Agency, Inc, 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.

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 Agency, Inc, 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.

On August 16, 2021, the Company acquired 16 %

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bring our total membership interests to 50 %.

is a direct-to-consumer brand

focused on promoting wellness through its range of health-oriented beverages.

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.

is a direct-to-consumer brand focused

on promoting wellness through its range of health-oriented beverages.

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

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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.

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.

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

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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

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.

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.

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.

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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 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

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After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

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.

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.

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.

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.

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if any, in which the parent’s power to control exists.

As of March 31, 2022, the Company’s consolidated

As of June 30, 2022, the Company’s consolidated

subsidiaries and/or entities are as follows:

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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),

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.

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into three levels based on valuation factors:

Level 1 – quoted prices in active markets for identical

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)

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, prepaid and other current assets, line of credit

and due to related parties.

Management believes the estimated fair value of these accounts at March 31, 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

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 June 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

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.

1 unchanged sentence

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.

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

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 non-recurring basis:

relevant assets that are measured at fair value on a recurring basis:

Fair Value Measurements as of

March 31, 2022

June 30, 2022

in Active Markets

Equity investments, at cost

Marketable securities - equity securities

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 June 30, 2022 are $ 48,646 .

The change in net realized depreciation on equity

trading securities that has been included in other expenses for the six months ended June 30, 2022 and 2021 was $( 231 ) and $ 0 , respectively.

Cash Equivalents

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experienced any losses related to these balances.

As of March 31, 2022, cash amounts in excess of $ 250,000 were not fully insured.

The uninsured cash balance as of March 31, 2022, was approximately $ 2.4 million.

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

As of June 30, 2022, cash amounts in excess of $ 250,000 were not fully insured.

The uninsured cash balance as of June 30, 2022, was $ 414,055 .

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

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The Company operates in Australia and holds total

assets of $ 935,285 that are considered to be reasonably possible that operations located outside an entity’s home country will

be disrupted in the near term.

assets of $ 1,029,137 .

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.

for major additions and betterments are capitalized.

Maintenance and repairs are charged to operations as incurred.

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:

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:

Computer equipment and software

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We evaluate the recoverability of property and

equipment and acquired finite-lived intangible 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.

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 March 31, 2022, the Company recorded an impairment charge of $ 0 for intangible

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 and six months ended June 30,

2022, the Company recorded an impairment charge of $ 7,531 for intangible assets.

Acquired finite-lived intangible assets are amortized

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are 6.32 years.

Scheduled amortization over the next five years are as

Twelve months ending March 31,

Scheduled amortization over the next five years are as follows:

Twelve months ending June 30,

Intangible assets not subject to amortization

Total Intangible Assets

Goodwill is not amortized but is subject to periodic

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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 year ended December

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.

The following table sets forth a summary of the

changes in goodwill for the three months ended March 31, 2022.

three months ended

changes in goodwill for the six months ended June 30, 2022.

six months ended

As of January 1, 2022

1 unchanged sentence

Impairment of goodwill

As of March 31, 2022

As of June 30, 2022

Commitments and Contingencies

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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.

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

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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.

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

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 or revenue.

as sales revenue and the related freight costs as cost of revenue.

Revenue Recognition

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to in exchange for those goods or services.

We determine revenue recognition through the

following steps:

We determine revenue recognition through the following

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

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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;

recognition of revenue when, or as, we satisfy a performance

Revenue disaggregated by revenue source for the

three months ended March 31, 2022 and 2021 consists of the following:

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;

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

disaggregated by revenue source for the three and six months ended June 30, 2022 and 2021 consists of the following:

Three Months Ended

Six Months Ended

Agency (Managed Services, Branded Content, & Talent Management Services)

Platform (Creator Subscriptions)

Ecommerce (Tangible products)

Affiliate Sales

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the results achieved and value transferred to a customer over time.

Timing of revenue recognition for the three months ended March 31,

2022 and 2021 consists of the following:

Timing of revenue recognition

for the three and six months ended June 30, 2022 and 2021 consists of the following:

Three Months Ended

Six Months Ended

Products and services transferred over time

Products and services transferred at a point in time

Products transferred at a point in time

Agency Revenue

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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.

Revenue is recognized over time as service obligations and milestones

in the contract are met.

Branded Content

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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

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

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● 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.

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

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● 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 one month of the signed agreement, or as previously negotiated with the client.

Campaigns are promoted per the contract and the customer

is provided a link to the live deliverables on the influencer’s social media channels.

The campaign is created and made live by the influencer within one month of the signed agreement, or as previously negotiated with the client.

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.

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Estimates are utilized for payments made for earnings through reads, by establishing the lifetime a subscriber has had a Vocal

account, determining the percentage of that lifetime that the subscriber has been a paying customer, and applying that percentage to

payments for earnings through reads in the relevant reporting period.

account, determining the percentage of that lifetime that the subscriber has been a paying customer, and applying that percentage to payments

for earnings through reads in the relevant reporting period.

Affiliate Sales Revenue

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The Company will

recognize the deferred revenue over the next year.

As of March 31, 2022, the Company had deferred revenue of $211,676.

recognize the deferred revenue within the next twelve months.

As of June 30, 2022, the Company had deferred revenue of $ 262,583 .

Accounts Receivable and Allowances

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our customers, current economic conditions, and other factors that may affect our ability to collect from customers.

During the three

months ended March 31, 2022, the Company recorded $ 92,987 , as a bad debt expense.

As of March 31, 2022, the Company has an allowance for

doubtful accounts of $ 279,133 .

During the six months

ended June 30, 2022, the Company recorded $ 53,166 , as a bad debt expense.

During six months ended June 30, 2022, the Company wrote off

$ 81,925 of allowance for doubtful accounts.

As of June 30, 2022, the Company has an allowance for doubtful accounts of $ 239,313

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

As of March 31, 2022, the Company has no valuation allowance.

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 June 30, 2022, the Company has no valuation allowance.

Stock-Based Compensation

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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.

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

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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.

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.

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.

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

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.

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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 months ended

March 31, 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.

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 six months ended

June 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 March 31, 2022 and 2021:

at June 30, 2022 and 2021:

Series E preferred

Convertible notes

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The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets.

ASU 2016-13 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.

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 disclosers and estimates

around accounts receivable.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt

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As reflected in the condensed consolidated financial

statements, as of March 31, 2022, the Company had an accumulated deficit of $ 116 million, a net loss of $ 6.9 million and net

statements, as of June 30, 2022, the Company had an accumulated deficit of $ 124 million, a net loss of $ 15.6 million and net

cash used in operating activities of $ 10.6 million for the reporting period then ended.

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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 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

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Note 4 – Inventory

Inventory was comprised of the following at March

Inventory was comprised of the following at June

30, 2022 and December 31, 2021:

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Accumulated Depreciation

Depreciation expense was $ 8,386 and $ 10,047 for the three months ended

March 31, 2022 and 2021, respectively.

Depreciation expense was $ 24,405 and $ 20,094 for the six months ended

June 30, 2022 and 2021, respectively.

Note 6 – Notes Payable

Notes payable as of March 31, 2022 and December

Notes payable as of June 30, 2022 and December

31, 2021 is as follows:

Outstanding Principal as of

Principal as of

Seller’s Choice Note

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The First February 2022 Loan Agreement

The Second February 2022 Loan Agreement

First Denver Bodega LLC Loan

Second Denver Bodega LLC Loan

The First May 2022 Loan Agreement

December 2022

The Second May 2022 Loan Agreement

November 2022

The Third May 2022 Loan Agreement

November 2022

The Fourth May 2022 Loan Agreement

November 2022

The June 2022 Loan Agreement

November 2022

( 2,266,374 )

Debt Discount

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Choice Note is outstanding.

As of December 31, 2021, the Company is in default on the Seller’s Choice note.

As of December 31, 2021, the Company was in default on the Seller’s Choice note.

On March 3, 2022, after substantial motion practice,

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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 three months ended March 31, 2022,

the Company accrued interest of $ 490 .

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 six months ended June 30, 2022, the

Company accrued interest of $ 2,312 .

The Company is in the process of returning the

funds received from the Loan.

As of June 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

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Pursuant to the First December 2021 Loan Agreement, the First December 2021 Note has an effective interest rate of 9 %.

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 three months ended March 31, 2022,

the Company repaid $ 44,725 in principal.

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 six months ended June 30, 2022, the

Company repaid $ 87,630 in principal.

The Second December 2021 Loan Agreement

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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 %.

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 loan is secured by the Australian research & development credit.

During the three months ended March 31, 2022,

the Company accrued $ 15,123 AUD in interest.

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 six months ended June 30, 2022, the

Company accrued $ 31,052 AUD in interest.

As of the date of this filing the Company has

exercised its option to extend the maturity date to August 29, 2022.

The First February 2022 Loan Agreement

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February 2022 Loan Agreement are due.

The loan is secured by the Australian research & development credit.

During the three months ended March 31, 2022,

the Company accrued $ 3,158 AUD in interest.

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 effective interest rate of 11 %.

maturity date of the Second February 2022 Note is February 22, 2023 (the “Second February 2022 Maturity Date”).

is required to make 10 monthly payment of $ 37,425 .

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.

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 six months ended June 30, 2022, the

Company accrued $ 10,926 AUD in interest.

As of the date of this filing the Company has

exercised its option to extend the maturity date to August 29, 2022.

Denver Bodega LLC Notes payable

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The total liabilities of these notes amounted to $ 293,888 .

During the three months ended March 31, 2022, the Company repaid $ 228,164 .

As of March 31, 2022, the Company has two notes outstanding.

The First Denver Bodega LLC Loan has a principal balance of $ 50,000 , bears interest at 5 %, and requires 36 monthly payments of $ 1,496 .

The second Denver Bodega LLC Loan has a principal balance of $ 15,724 and has a maturity date of April 16, 2022 .

During the six months ended June 30, 2022, the Company repaid $ 248,381 .

As of June 30, 2022, the Company has one note outstanding.

note has a principal balance of $ 45,507 , 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 34 %.

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 six months ended June 30, 2022, the

Company repaid $ 130,038 in principal.

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 34 %.

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 six months ended June 30, 2022, the

Company repaid $ 100,375 in principal.

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 $ 23,900 (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 six months ended June 30, 2022, the

Company repaid $ 3,618 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 20% .

The maturity date of the Fourth May 2022 Note

is November 23, 2022 (the “ Fourth May 2022 Maturity Date”).

During the six months ended June 30, 2022, the

Company repaid $ 4,829 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 .

to the June 2022 Loan Agreement, the June 2022 Note has an effective interest rate of 33 %.

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 .

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 six months ended June 30, 2022, the

Company repaid $ 28,400 in principal.

Note 7 – Convertible Notes Payable

notes payable as of June 30, 2022, is as follows:

Principal as of

Warrants granted

The Second February 2022 Loan Agreement

The May 2022 Convertible Loan Agreement

The May 2022 Convertible Note Offering

$ 3.00 – $ 6.00

Debt Discount

( 1,944,282 )

Debt Issuance Costs

As subject to adjustment as further outlined in the notes

The July 2021 Convertible Loan Agreement

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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 three months ended March 31, 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.

During the six months ended June 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

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charged to accretion of debt discount over the remaining term of the convertible note.

During the three months ended March 31, 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.

During the six months ended June 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 %.

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

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 six months ended June 30, 2022, the

Company repaid $ 112,275 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 (12 th ) month anniversary of its issuance

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

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.

May 2022 Convertible Note Offering

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.

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.

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.

Note 8 – Related Party

Equity raises

During the three months ended March 31, 2022,

the company conducted two equity raises in which officers, directors, employees, and an affiliate of an officer cumulatively invested

During the six months ended June 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 three months ended March 31, 2022 and

During the six months ended June 30, 2022 and

2021, the Company paid $ 48,655 and $ 72,328 , respectively for living expenses for officers of the Company.

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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 three months ended March 31, 2022.

payable during the six months ended June 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 March 31, 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.

assets measured at fair value on a recurring basis as of June 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:

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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.

Treasury Note adjusted to be on a continuous return basis to align with the Monte Carlo simulation model

and binomial model.

Dividend yield:

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Expected term:

The Company’s remaining

term is based on the remaining contractual maturity of the convertible notes.

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 three months ended March 31, 2022.

Three Months Ended

March 31, 2022

liabilities during the six months ended June 30, 2022.

Six Months Ended

June 30, 2022

Derivative liabilities as January 1, 2022

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Extinguishment

Derivative liabilities as March 31, 2022

Derivative liabilities as June 30, 2022

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.

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

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The Company has designated 8,000 shares of Series

E Convertible Preferred stock and has 500 shares issued and outstanding as of March 31, 2022.

E Convertible Preferred stock and has 500 shares issued and outstanding as of June 30, 2022.

The shares of Series E Preferred Stock have a

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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.

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

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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

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.

On January 1, 2022, the Company issued 8,590 shares

of its restricted common stock to settle outstanding vendor liabilities of $ 20,297 .

In connection with this transaction the Company also

recorded a gain on settlement of vendor liabilities of $ 369 .

During the six months ended June 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

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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 three months ended March 31, 2022 the Company recorded $ 33,110 to share based payments.

During the six months ended June 30, 2022 the Company recorded $ 69,000 to share based payments.

On March 1, 2022, the Company entered into

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Company has recorded $ 75,000 to stock issuance costs, which are part of Additional Paid-in Capital.

On March 30, 2022, the Company issued 731

shares of its restricted common stock to consultants in exchange for services at a fair value of $ 863 .

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 six months ended June 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 .

Stock Options

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Forfeited/Cancelled

Balance – March 31, 2022 – outstanding

Balance – March 31, 2022 – exercisable

Balance – June 30, 2022 – outstanding

Balance – June 30, 2022 – exercisable

Option Outstanding

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During the year ended December 31, 2018 the Company

granted options of 11,667 to consultants that has a fair value of $ 57,123 .

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

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Stock-based compensation for stock options has

been recorded in the condensed consolidated statements of operations and totaled $ 1,027,083 , for the three months ended March 31, 2022.

As of March 31, 2022, there was $1,649,068 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 0.89 year.

been recorded in the condensed consolidated statements of operations and totaled $ 2,831,696 , for the six months ended June 30, 2022.

As of June 30, 2022, there was $1,806,860 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 1.37 years.

The Company applied fair value accounting for

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The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing

The assumptions

used for warrants granted during the six months ended June 30, 2022 are as follows:

Exercise price

$ 3.00 – 6.00

Expected dividends

Expected volatility

Risk free interest rate

Expected life of warrant

Warrant Activities

3 unchanged sentences

Forfeited/Cancelled

Balance – December 31, 2021 – outstanding

Balance – December 31, 2021 – exercisable

Balance – June 30, 2021 – outstanding

Balance – June 30, 2021 – exercisable

Warrants Outstanding

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Life (in years)

During the three months ended March 31,

2022, some of the Company’s warrants had a down-round provision triggered that also resulted in an additional 67,173 warrants

to be issued.

A deemed dividend of $ 81,728 was recorded to the Statements of Comprehensive Loss.

During the six months ended June 30, 2022, some

of the Company’s warrants had a down-round provision triggered that also resulted in an additional 67,173 warrants to be issued.

A deemed dividend of $ 81,728 was recorded to the Statements of Operations and Comprehensive Loss.

six months ended June 30, 2022, a total of 4,000,000 warrants were issued with convertible notes (See Note 7 above).

have a grant date fair value of $ 4,074,803 using a Black-Scholes option-pricing model and the above assumptions.

11 – Commitments and Contingencies

37 unchanged sentences

time, we are unable to estimate potential damage exposure, if any, related to the litigation.

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 .

The components

of lease expense were as follows:

Operating lease cost

Short term lease cost

Total net lease cost

Operating lease cost

Short term lease cost

Total net lease cost

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

Cash paid for amounts included in the measurement of lease liabilities:

Operating lease payments

Weighted average remaining lease term (in years):

Weighted average discount rate:

minimum payments required under the lease as of June 30, are as follows:

For the Twelve Months Ended June 30,

Total lease payments

Amounts representing interest

( 1,132,722 )

Total lease obligations

for the six months ended June 30, 2022 and 2021 was $ 241,694 and $ 53,869 , respectively.

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.

of New Directors

74 unchanged sentences

and the Company will be suspended from trading on the Exchange.

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;

options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock;

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

12 – Acquisitions

37 unchanged sentences

Weighted average number of shares outstanding

Net loss attributable to common shareholders

$ ( 16,111,758 )

Net loss per share

Weighted average number of shares outstanding

Note 13 – Segment Information

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

As of March 31, 2022

As of June 30, 2022

Creatd Ventures

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Total Liabilities

For the three months ended March 31, 2022

For the three months ended June 30, 2022

Creatd Ventures

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$ ( 8,704,938 )

For the three months ended March 31, 2021

For the three months ended June 30, 2021

Creatd Partners

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$ ( 8,562,476 )

For the six months ended June 30, 2022

Creatd Ventures

Creatd Partners

Cost of revenue

Gross margin (loss)

Research and development

Stock based compensation

General and administrative not including depreciation, amortization, or Impairment

Depreciation and amortization

Total operating expenses

Interest expense

All other expenses

Other expenses, net

Loss before income tax provision

For the six months ended June 30, 2021

Creatd Partners

Cost of revenue

Research and development

Stock based compensation

General and administrative not including depreciation, amortization, or Impairment

Depreciation and amortization

Total operating expenses

Interest expense

All other expenses

Other expenses, net

Loss before income tax provision

14 – Subsequent Events

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;

options, to vest immediately with a strike price of $1.75, and (d) 50,000 shares of the Company’s restricted common stock;

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

Securities Purchase Agreement

On July 25, 2022, the Company entered into and closed

securities purchase agreements with five accredited investors for debentures in the principal amount of $ 2,150,000 , 1,075,000 Series E

Common Stock Purchase Warrants to purchase shares of the Company’s Common Stock, and 2,000,000 Series F Common Stock Purchase Warrants

to purchase shares of Common Stock.

The debentures have an original issue discount of

10%, have a maturity date of November 30, 2022, 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 $2.00 per share, subject to adjustment upon certain events including

a one-time adjustment to the price of the Common Stock offered in the Rights Offering (as defined therein), with such adjusted conversion

price not to be lower than $1.25.

The Warrants are immediately exercisable for a term of five years until

July 25, 2027.

The Series E Warrants are exercisable at an exercise price of $3.00, subject to adjustment upon certain events including

a one-time adjustment to the price of the Common Stock offered in the Rights Offering, with such adjusted exercise price not to be lower

The Series F Warrants are exercisable at an exercise price of $6.00 subject to adjustment upon certain events including a

one-time adjustment to the price of the Common Stock offered in the Rights Offering, with such adjusted exercise price not to be lower

The Warrants provide for cashless exercise to the extent that there is no registration statement available for the underlying

shares of Common Stock.

The shares underlying the Debentures, the Series E Warrants and the Series F Warrants are to be registered within

90 days of the Effective Date.

Trigger of Price Reset

On July 29, 2022, the

Company announced that it was not moving forward with its previously announced Rights Offering.

In doing so, it triggered a price reset

in the Securities Purchase Agreements entered into on May 31, 2022 and the Securities Purchase Agreements entered into on July 25, 2022.

As a result of this price reset, the May 31, 2022 debentures now have a conversion price of $ 1.00 , and both the Series C and Series D

warrants have exercise prices of $ 0.96 .

As a result of the price reset, the July 25, 2022 debentures now have a conversion price of $ 1.25 ,

and both the Series E and Series F warrants have exercise prices of $ 1.01 .

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.

Consultant Shares

Subsequent to June 30, 2022,

the Company issued 55,000 shares of Common Stock to consultants.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements