What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-15 compared with 2022-05-16 · 399 added, 270 removed, 155 unchanged (81% of the section changed)

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in the Company’s Annual Report on Form 10-K that was filed with the SEC on April 6, 2022.

“the Company,” or “Creatd”) is a company whose mission is to provide economic opportunities to creators and brands

by multiplying the impact of platforms, people, and technology.

whose mission is to provide economic opportunities to creators and brands by multiplying the impact of platforms, people, and technology.

We operate four main

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Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios.

Together, Creatd’s pillars

work together to create a flywheel effect, supporting our core vision of creating a viable ecosystem for all stakeholders in the creator

Together, Creatd’s

pillars work together to create a flywheel effect, supporting our core vision of creating a viable ecosystem for all stakeholders in the

creator economy.

Creator-Centric Strategy

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approach is the foundation of our culture and mission, and how we choose to allocate our resources.

It governs our business model and

shapes the value we provide for each of our stakeholders across Creatd’s four pillars.

Creatd Labs is dedicated to the development

of technology products that support the creator economy.

This pillar houses Creatd’s proprietary technology platforms, including

Creatd’s flagship product, Vocal.

This pillar is operated through our wholly-owned subsidiary, Abacus Tech Pty Ltd.

Vocal was designed to

serve as a home base for digital creators of all shapes and sizes, from bloggers to podcasters, makers, musicians, photographers, and

Vocal’s robust, proprietary technology platform provides these creators with best-in-class tools, niche (topic-specific) communities,

and monetization opportunities.

Vocal facilitates creators’ monetization in numerous different

ways, including i) by rewarding creators for each ‘read’ their story receives;

ii) via Vocal Challenges, through which creators

can win cash and other rewards;

Creatd Labs is dedicated

to the development of technology products that support the creator economy.

This pillar houses Creatd’s proprietary technology platforms,

including Creatd’s flagship product, Vocal.

Vocal was built to serve

as a home base for digital creators.

This robust, proprietary technology platform provides best-in-class tools, safe and curated communities,

and monetization opportunities that enable creators to find a receptive audience and get rewarded.

Creators of all types call Vocal their

home, from bloggers to social media influencers, to podcasters, founders, musicians, photographers, and more.

Since its initial launch

in 2016, Vocal has grown to be one of the fastest-growing communities for content creators of all shapes and sizes.

Creators can opt to

use Vocal for free, or upgrade to the premium membership tier, Vocal+.

Upon joining Vocal, either as a freemium or premium member, creators

can immediately begin to utilize Vocal’s storytelling tools to create and publish their stories, as well as benefit from Vocal’s

monetization features.

Creatd facilitates creators’ monetization on Vocal in numerous different ways, including i) by rewarding

creators for each ‘read’ their story receives;

ii) via Vocal Challenges, or writing contests through which creators can win

cash and other rewards;

iii) by awarding Bonuses;

iv) by connecting creators with brands for opportunities to collaborate on Vocal

for Brands branded content campaigns;

v) through ‘Subscribe,’ which enables creators to receive payment directly from their

audience via monthly subscriptions and one-off microtransactions;

vi) via Vocal’s Ambassador Program, which enables creators to

receive additional rewards whenever they refer a new Vocal+ member.

iv) by connecting creators with brands for opportunities to collaborate on Vocal for

Brands branded content campaigns;

v) through ‘Subscribe,’ which enables creators to receive payment directly from their audience

via monthly subscriptions and one-off microtransactions;

vi) via Vocal’s Ambassador Program, which enables creators to receive additional

rewards whenever they refer a new Vocal+ member.

July 2022, Creatd released the first iteration of the new Vocal app for iOS, giving its premium Vocal+ members exclusive first access

to the app ahead of its full release, expected in mid-August 2022.

The app, which was designed based on Vocal audience insights, is focused

on optimizing Vocal’s readership;

the app works to increase audience’s ability to easily discover curated stories, thereby

widening creators' distribution of content, and opening up new opportunities for monetization to creators.

Vocal+ is Vocal’s

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Subscribers pay a membership fee to access additional premium features on the platform, including:

rate of earnings per read, Vocal+ Challenge eligibility, use of a ‘Quick Edit’ feature for published stories, ability to

receive monthly pledges from their fans, and more.

The current cost of a Vocal+ membership is either $9.99 per month or $99 annually.

From time to time, the Company offers Vocal+ subscriptions at a discount for a predetermined number of months as a promotion for new

rate of earnings per read, reduced platform processing fees on tips received, eligibility to participate in exclusive Vocal+ Challenges,

access to Vocal’s ‘Quick Edit’ feature for published stories, and more.

The current cost of a Vocal+ membership is either

$9.99 per month or $99 annually.

Moderation and Compliance

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within the content landscape, Vocal’s proprietary moderation system combines the algorithmic detection of copyrighted material,

hate speech, graphic violence, and nudity with human-led curation to ensure the quality and safety of each story published on Vocal, thus

hate speech, graphic violence, and nudity, and human-led curation to ensure the quality and safety of each story published on Vocal, thus

fostering a safe and trustworthy environment for creators, audiences, and brands.

During the second quarter 2022, Creatd announced Vocal’s

new integration partnership with Two Hat, a Microsoft acquiree and a leading provider of AI-assisted content moderation and protection

solutions for digital communities.

Through the partnership, the Company further updated its proprietary moderation technology, with the

aim of ensuring that the Vocal platform remains a safe place for its creators, brand partners, and audiences.

Trust and safety are

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Platform Compliance Policies

Human-led, technology-assisted moderation of every story submitted;

Algorithmic detection of hate speech, nudity, and copyright infringement;

Brand, creator, and audience safety enforced through community watch;

The rejection of what we consider toxic content, with the understanding that diverse opinions are encouraged.

● Human-led, technology-assisted

moderation of every story submitted;

● Algorithmic detection of hate

speech, nudity, and copyright infringement;

● Brand, creator, and audience

safety enforced through community watch;

● The rejection of what we consider

toxic content, with the understanding that diverse opinions are encouraged.

Technology Development

Vocal’s proprietary technology is built

on Keystone, the same underlying open-source framework used by industry leaders such as Atlassian, a $43-billion Australian technology

Vocal’s proprietary

technology is built on Keystone, the same underlying open-source framework used by industry leaders such as Atlassian, a $43-billion Australian

technology company.

Some of the key differentiating elements of Vocal’s technology are speed, sustainability, and scalability.

continues to invest heavily in research and development to continuously improve and innovate its platform, with the goal of optimizing

Company continues to invest heavily in research and development to continuously improve and innovate its platform, with the goal of optimizing

the user experience for creators.

Additionally, the Vocal platform and its underlying

technology allows us to maintain an advantageous capital-light infrastructure.

By using cloud service providers, we are able to focus

on platform and revenue growth rather than building and maintaining the costly internal infrastructures that have materially affected

so many legacy media platforms.

Vocal’s technology has been specifically designed and built to scale without a material corresponding

increase in operational costs.

While our users can embed rich media, such as video, audio, and product links, into their Vocal stories,

the rich media content is hosted elsewhere (such as YouTube, Instagram, Vimeo, Shopify, Spotify, etc.).

Thus, our platform can accommodate

rich media content of all kinds without bearing the financial or operational costs associated with hosting the rich media itself.

to the benefits this framework affords to the Company, it provides the additional benefit to our content creators, in that a creator can

increase their monetization;

for example, a creator can embed their YouTube video into a Vocal story and thus derive earnings from both

platforms when their video is viewed.

Additionally, the Vocal

platform and its underlying technology allow us to maintain an advantageous capital-light infrastructure.

By using cloud service providers,

we are able to focus on platform and revenue growth rather than building and maintaining the costly internal infrastructures that have

materially affected so many legacy media platforms.

Vocal’s technology

has been specifically designed and built to scale without a material corresponding increase in operational costs.

While our users can

embed rich media, such as video, audio, and product links, into their Vocal stories, the rich media content is hosted elsewhere (such

as YouTube, Instagram, Vimeo, Shopify, Spotify, etc.).

Thus, our platform can accommodate rich media content of all kinds without bearing

the financial or operational costs associated with hosting the rich media itself.

In addition to the benefits this framework affords to

the Company, it provides the additional benefit to our content creators, in that a creator can increase their monetization;

a creator can embed their YouTube video into a Vocal story and thus derive earnings from both platforms when their video is viewed.

Creatd Partners

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Vocal for Brands (content marketing), WHE Agency (influencer marketing), and Seller’s Choice (performance marketing).

Partners leverages its network of brands and influencers, along with resources from across Creatd, to help direct-to-consumer brands achieve

conversions and reach their target audiences, while driving success for all of Creatd’s stakeholders.

Vocal for Brands

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Vocal for Brands, Creatd’s content marketing studio,

specializes in pairing leading brands with Vocal creators and influencers to produce marketing campaigns that are non-interruptive, engaging,

and direct-response driven.

Further, Vocal for Brands campaigns leverage Vocal’s first-party data and technology, which enables

specializes in pairing leading brands with Vocal creators as well as WHE influencers to produce marketing campaigns that are non-interruptive,

engaging, and direct-response driven.

Additionally, brands can opt to collaborate with Vocal on a sponsored Challenge, prompting the creation

of high-quality stories that are centered around the brand’s mission and further disseminated through creators’ respective

social channels and promotional outlets.

All Vocal for Brands campaigns leverage Vocal’s first-party audience insights, which enables

the creation of highly targeted and segmented audiences and optimized campaign results.

In addition to branded

story campaigns Additionally, brands can opt to collaborate with Vocal on a sponsored Challenge, prompting the creation of high-quality

stories that are centered around the brand’s mission and further disseminated through creators’ respective social channels

and promotional outlets.

The WHE Agency (“WHE”), acquired by Creatd in 2021, was

founded by Tracy Willis with the goal of supporting top creators and influencers, by connecting them with leading family and lifestyle

brands and global audiences.

Today, WHE represents a roster of over 100 creators across numerous verticals, including family and lifestyle,

music, entertainment, and celebrity categories.

Since acquiring WHE, the Company has facilitated partnerships on influencers’ behalf

with leading brands including CBS, Amazon, Target, Disney, Warby Parker, CVS, Kay Jewelers, Walmart, Gerber, Masterclass, Procter &

Gamble, Nike, and NFL, among others.

The WHE Agency (“WHE”),

acquired by Creatd in 2021, was founded with the goal of supporting top creators and influencers, by connecting them with leading brands

and global audiences.

Today, WHE manages a talent roster comprising over 100 creators across numerous verticals, including family and

lifestyle, music, entertainment, and celebrity categories.

Since acquiring WHE, the Company has helped WHE expand into new verticals,

as well as facilitated partnerships on influencers’ behalf with leading brands including CBS, Amazon, Target, Disney, Warby Parker,

CVS, Kay Jewelers, Walmart, Gerber, Masterclass, Procter & Gamble, Nike, and NFL, among others.

Seller’s Choice

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Creatd Ventures

Creatd Ventures houses Creatd’s portfolio of DTC e-commerce businesses.

Creatd Ventures houses

Creatd’s portfolio of e-commerce businesses, both majority and minority-owned as well as associated e-commerce technology and infrastructure.

The Company supports founders by providing capital, as well as a host of services including design and development, marketing and distribution,

and go-to-market strategy.

Currently, the Creatd Ventures portfolio includes:

Camp , previously Plant Camp, a DTC food brand which creates healthy upgrades to classic comfort food favorites.

Each of Camp’s products are created with hidden servings of vegetables and contain Vitamins A, C, D, E, B1 + B6.

In the fourth quarter of 2021, Camp added two new products to its expanding line of healthy, veggie-based, family-friendly foods.

Currently, Camp has four flavors available for purchase:

Classic Cheddar Mac ‘N’ Cheese, White Cheddar Mac ‘N’ Cheese, Vegan Cheezy Mac, and Twist Veggie Pasta.

Camp, which first launched in 2020, represents the first investment within the Creatd Ventures portfolio.

Dune Glow Remedy (“Dune”), which the Company purchased and brought to market in 2021.

Dune is a beverage brand focused on promoting wellness and beauty from within.

Each beverage in Dune’s product line is meticulously crafted with functional ingredients that nourish skin from the inside out and enhance one’s natural glow.

Basis , which was acquired by the Company in March of 2022.

Basis is a hydrating electrolyte drink mix formulated using rehydration therapies developed by the World Health Organization.

Historically, Basis has shown strong sales volume both on the brand’s website as well as through third-party channels such as Amazon, while continuing to expand distribution to retailers like Urban Outfitters and Erewhon Market.

While working to scale Creatd Ventures’ existing portfolio brands, including through the introduction

of new product offerings, Creatd continues to actively explore new potential additions to the Creatd Ventures portfolio.

Specifically,

the Company expects to broaden Creatd Ventures’ portfolio through the acquisition of brands that are aligned and that can be easily

consolidated into its supply chain and infrastructure.

Currently, the Creatd

Ventures portfolio includes:

● Camp , a direct-to-consumer

(DTC) food brand which creates healthy upgrades to classic comfort food favorites.

Each of Camp’s products are created with hidden

servings of vegetables and contain Vitamins A, C, D, E, B1 + B6.

Since its launch in 2020, Camp continues to add new products to its

line of healthy, veggie-based, family-friendly foods, with flavors including Classic Cheddar Mac ‘N’ Cheese, White Cheddar

Mac ‘N’ Cheese, Vegan Cheezy Mac, and Twist Veggie Pasta.

● Dune Glow Remedy (“Dune”),

which the Company purchased and brought to market in 2021, is a beverage brand focused on promoting wellness and beauty from within.

Each beverage in Dune’s product line is meticulously crafted with functional ingredients that nourish skin from the inside out

and enhance one’s natural glow.

During 2022, Dune has continued to advance its retail and wholesale distribution strategy, securing

numerous partnerships including with lifestyle retailer Urban Outfitters and the Los Angeles-based Erewhon Market.

Further, Creatd Ventures

continues to leverage these and other successful partnerships to create similar opportunities for the other brands in its portfolio.

● Basis , a hydrating electrolyte

drink mix formulated using rehydration therapies developed by the World Health Organization.

Acquired by the Company in first quarter

2022, Basis has a history of strong sales volume both on the brand’s website as well as through third-party distribution channels

such as Amazon.

Creatd’s acquisition of 100% ownership in Basis marks its third majority ownership acquisition for Creatd Ventures.

Creatd Studios

The goal of Creatd Studios

is to elevate creators’ stories to TV, film, books, podcasts, video, and more.

Transmedia Assets :

With millions of compelling stories in its midst, Creatd’s technology surfaces the best candidates for transmedia adaptations, through community and creator data insights.

Then, Creatd Studios helps creators tell their existing stories in new ways, by partnering them with entertainment and publishing studios to create unique content experiences that accelerate earnings, discoverability, and open doors.

In 2022, Creatd Studios announced numerous upcoming production projects, including the upcoming publication of a print book featuring the winning stories from Vocal’s ‘Vocal+ Fiction Awards’ Challenge, and the launch of a new podcast, with two miniseries currently in production.

The OG Collection is an extensive library of original artwork and imagery from the archives of some of the most iconic magazines of the 20th century.

OG Gallery is an exploratory initiative aimed at identifying opportunities to propel the OG Collection into a new technological sphere:

The goal of Creatd Studio s

is to partner with creators to produce stories for TV, film, podcasts, and print.

With millions of compelling stories in its midst, Creatd’s

Vocal technology surfaces the best candidates for transmedia adaptations, through a deep analysis of community, creator, and audience

Then, Creatd Studios helps creators tell their existing stories in new ways, by partnering them with entertainment and publishing

studios to create unique content experiences that accelerate earnings, discoverability, and foster new opportunities.

2022, Creatd Studios announced a series of newly released and upcoming production projects,

Here, Write Now,” the Company’s first-ever podcast showcasing select Vocal creators and stories;

a partnership with UK-based

publisher, Unbound, for the publication of books featuring stories sourced from Vocal;

the formation of a new graphic novel development

arm which in Fall 2022 will release its first title, Steam Wars , created by artist and independent filmmaker Larry Blamire.

The OG Collection is an extensive library of original artwork and imagery from the

archives of some of the most ic onic magazines of the 20th century.

OG Gallery is an

exploratory initiative aimed at identifying opportunities to propel the OG Collection into

a new technological sphere:

the NFT marketplace.

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platforms such as Facebook and Snapchat to provide a more granular profile of our creators, brands, and audiences.

It is through generating this valuable first-party

data that we can continually enrich and refine our targeting capabilities for branded content promotion and creator acquisition, and specifically,

to reduce our creator acquisition costs (CAC) and subscriber acquisition costs (SAC).

It is through generating

this valuable first-party data that we can continually enrich and refine our targeting capabilities for branded content promotion and

creator acquisition, and specifically, to reduce our creator acquisition costs (CAC) and subscriber acquisition costs (SAC).

The idea for Vocal came

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lying dormant.

Vocal is most commonly discussed as a combination

Medium, a platform for writers built by former Twitter founder Ev Williams;

Reddit, a social news aggregation, web content rating, and discussion website;

Patreon, a membership platform that provides business tools for content creators to run a subscription service.

Creatd does not view Vocal as a substitute or

competitor to segment-specific content platforms, such as Vimeo, YouTube, Instagram, or SoundCloud.

Vocal is most commonly

discussed as a combination of:

● Medium, a platform for writers

built by former Twitter founder Ev Williams;

● Reddit, a social news aggregation,

web content rating, and discussion website;

● Patreon, a membership platform

that provides business tools for content creators to run a subscription service.

Creatd does not view

Vocal as a substitute or competitor to segment-specific content platforms, such as Vimeo, YouTube, Instagram, Pinterest, TikTok, Spotify,

or SoundCloud.

We don’t want to replace anyone;

we built Vocal to be accretive to the entire digital ecosystem.

In fact, one of the most powerful components of our technology is the

fact that Vocal makes it easy for creators to embed their existing published content, including videos, songs, podcasts, photographs,

and more, directly into Vocal.

We see this as a growth opportunity by building partnerships with the world’s greatest technology

companies and to further spread our roots deeper into the digital landscape.

In fact, one of

the most powerful components of our technology is the fact that Vocal makes it easy for creators to embed their existing published content,

including videos, songs, podcasts, photographs, and more, directly into Vocal.

We see this as a growth opportunity by building partnerships

with the world’s greatest technology companies and to further spread our roots deeper into the digital landscape

Acquisition Strategy

Creatd’s hybrid finance and design culture

is key to its acquisition strategy.

Acquisition targets are companies that meet a set of opportunistic or financial standards or that

are part of specific digital environments that are accretive and can seamlessly integrate into Creatd’s existing revenue lines.

Creatd will continue to make strategic acquisitions when presented with opportunities that are in the interest of shareholder value.

Creatd’s hybrid

finance and design culture is key to its acquisition strategy.

Acquisition targets are companies that meet a set of opportunistic or financial

standards or that are part of specific digital environments that are accretive and can seamlessly integrate into Creatd’s existing

revenue lines.

Creatd will continue to make strategic acquisitions when presented with opportunities that are in the interest of shareholder

Recent Developments

Nasdaq Notice of Delisting;

Continued Listing

On March 1, 2022, the Company received a letterfrom

the staff of The Nasdaq Capital Market (the “Exchange”) notifying the Company that the Exchange has determined to delist the

Company’s common stock from the Exchange based on the Company’s Market Value of Listed Securities for the 30-consecutive day

period between January 15, 2022 and February 25, 2022 falling short of the requirements under Listing Rule 5550(b)(2) (the “Rule”).

Nasdaq - Continued Listing

On March 1, 2022, the Company received a letter

from the staff of The Nasdaq Capital Market (the “Exchange”) notifying the Company that the Exchange has determined to delist

the Company’s common stock from the Exchange based on the Company’s Market Value of Listed Securities for the 30-consecutive

day period between January 15, 2022 and February 25, 2022 falling short of the requirements under Listing Rule 5550(b)(2) (the “Rule”).

Although a 180-day period is typically allowed for an issuer to regain compliance, the Company was not eligible to use such compliance

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the Panel’s decision.

On April 22, 2022, the

Exchange notified the Company that the Panel has determined to continue the listing of the Company on the Exchange, subject to the following

(i) on or before May 16, 2022, the Company will file its Quarterly Report on Form 10-Q for the period ended March 31, 2022

demonstrating compliance with Nasdaq Listing Rule 550(b)(1) requiring shareholders’ equity of $2.5 million and (ii) on or before

August 29, 2022, the Company will file a Form 8-K documenting the successful completion of any fund-raising activity that has taken place

since April 14, 2022 and the Company’s long-term compliance with the continued listing requirements of the Nasdaq Capital Market.

The Panel has advised

that August 29, 2022 represents the full extent of the Panel’s discretion to grant continued listing during the time the Company

is non-compliant and should the Company fail to demonstrate compliance by such date, the Panel will issue a final delist determination

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

Registered Direct Offering

On March 7, 2022, the Company entered into a securities

purchase agreement (the “Purchase Agreement”) with thirteen accredited investors resulting in the raise of $2,659,750 in gross

proceeds to the Company.

Pursuant to the terms of the Purchase Agreement, the Company agreed to sell in a registered direct offering an

aggregate of 1,519,857 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) together

with warrants to purchase an aggregate of 1,519,857 shares of Common Stock (the “Warrants”) at an exercise price of $1.75

per share (collectively, the “Registered Direct Offering”).

The warrants are immediately exercisable and will expire on March

The Registered Direct Offering closed on March

Gross proceeds to the Company from the Registered Director Offering were $2,659,750, before deducting offering expenses, which

will be used for general corporate purposes, including working capital.

The shares of Common Stock were offered and sold

by the Company pursuant to a prospectus supplement filed with the Securities and Exchange Commission (the “SEC”), in connection

with a takedown from the Company’s effective shelf registration statement on Form S-3, which was filed with the SEC on November

25, 2020 and subsequently declared effective on April 23, 2021 (File No.

Private Placement Financing

On March 1, 2022, the Company entered into securities

purchase agreements with twenty-eight (28) accredited investors whereby, at the closing, such investors purchased from the Company an

aggregate of (i) 1,401,457 shares of the Company’s common stock, par value $0.001 per share and (ii) 1,401,457 warrants to purchase

shares of common stock, for an aggregate purchase price of $2,452,550 (the “Private Placement Financing”).

Such warrants are

exercisable for a term of five-years from the date of issuance, at an exercise price of $1.75 per share, and provide for cashless exercise

On April 22, 2022, the Exchange notified the Company

that the Panel has determined to continue the listing of the Company on the Exchange, subject to the following conditions:

(i) on or before

May 16, 2022, the Company will file its Quarterly Report on Form 10-Q for the period ended March 31, 2022 demonstrating compliance with

Nasdaq Listing Rule 550(b)(1) requiring shareholders’ equity of $2.5 million and (ii) on or before August 29, 2022, the Company

will file a Form 8-K documenting the successful completion of any fund-raising activity that has taken place since April 14, 2022 and

the Company’s long-term compliance with the continued listing requirements of the Nasdaq Capital Market.

The Panel has advised that August 29, 2022 represents

the full extent of the Panel’s discretion to grant continued listing during the time the Company is non-compliant and should the

Company fail to demonstrate compliance by such date, the Panel will issue a final delist determination and the Company will be suspended

from trading on the Exchange.

Securities Purchase

On May 31, 2022, the

Company entered into and closed securities purchase agreements (each, a “Purchase Agreement”) with eight accredited investors

(the “Investors”), whereby the Investors purchased from the Company for an aggregate of $3,600,036 in subscription amount

(i) debentures in the principal amount of $4,000,000 (the “Debentures”);

(ii) 2,000,000 Series C Common Stock Purchase Warrants

to purchase shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (the “Series

C Warrants”);

and (iii) 2,000,000 Series D Common Stock Purchase Warrants to purchase shares of Common Stock (the “Series

D Warrants”, and collectively with the Series C Warrants, the “Warrants”).

The Company and the Investors also entered

into registration rights agreements (each, a “Registration Rights Agreement”) pursuant to the Purchase Agreement.

The Debentures have an

original issue discount of 10%, have a term of six months with 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 $1.00.

The Warrants are exercisable

for a term of five years from the initial exercise date of November 30, 2022, until November 30, 2027.

The Series C 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 than $0.96.

The Series D 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 than $0.96.

The Warrants provide for cashless exercise

to the extent that there is no registration statement available for the underlying shares of Common Stock.

The Benchmark Company, LLC

acted as exclusive financial advisor for the Company in connection with the Private Placement Financing and is entitled to receive 125,000

shares of common stock as compensation for its services.

The closing of the Private Placement Financing occurred on March 1, 2022.

The shares underlying the Debentures,

the Series C Warrants and the Series D Warrants are to be registered within 90 days of the Effective Date.

Additionally, in connection

with the Purchase Agreements, the subsidiaries of the Company delivered a guarantee (the “Guarantee”) in favor of the Investors

whereby each such subsidiary guaranteed the full payment and performance of all obligations of the Company pursuant to the Purchase

The Debentures, Warrants,

Common Stock underlying the Debentures and the Common Stock underlying the Warrants were not registered under the Securities Act, but

qualified for exemption under Section 4(a)(2) and Rule 506 promulgated thereunder.

The Company is relying on this exemption from registration

for private placements based in part on the representations made by Investors, including representations with respect to each Investor’s

status as an accredited investor, as such term is defined in Rule 501(a) of the Securities Act, and each Investor’s investment intent.

Results of Operations

Liquidity and

Capital Resources

The following table summarizes

total current assets, liabilities and working capital at March 31, 2022 compared to December 31, 2021:

March 31, 2022

December 31, 2021

Liquidity and Capital Resources

The following table summarizes total current assets,

liabilities and working capital at June 30, 2022 compared to December 31, 2021:

Increase / (Decrease)

Current Assets

$ (1,873,984 )

Current Liabilities

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$ (6,896,184 )

At March 31, 2022, we had a working capital deficit

$ (5,950,411 )

At June 30, 2022, we had a working capital deficit

of $6,896,184as compared to a working capital deficit of $945,773 at December 31, 2021, an increase in working capital deficit of $5,950,411.

The increase is primarily attributable to a reduction in cash and an increase in accounts payable due in part to marketing-related payables

as well as payables for legal and accounting fees addressing one-time corporate matters.

This was offset by a decrease in notes payable.

Net cash used in operating

activities for the three months ended March 31, 2022, and 2021, was $5,037,179 and $5,296,638, respectively.

The net loss for the three

months ended March 31, 2022, and 2021 was $6,881,048 and $6,643,237, respectively.

The decrease in net cash used in first quarter 2022

reflects a decrease in research and development expenses, offset by an increase in general and administrative costs including consulting,

legal, and accounting fees.

Going forward, as the Company plans to simultaneously grow revenue while improving operational efficiency,

it is anticipated that the Company’s net cash used in operating activities will consistently decrease throughout 2022.

Net cash used in investing

activities for the three months ended March 31, 2022, was $50,950.

This is primarily attributable to the purchase of digital assets within

the Company’s NFT infrastructure, as well as the purchase of property and equipment.

Net cash provided

by financing activities for the three months ended March 31, 2022, and 2021 was $4,527,972 and $412,576, respectively.

During the three

months ended March 31, 2022, the Company’s operations were predominantly financed by net proceeds of $4,997,301 from the sale of

common stock and warrants, which were partially offset by the repayments of notes payable.

Similarly, the Company’s financing activity

for the three months ended March 31, 2021, generated $1,312,672 from the exercises of warrants, the proceeds of which were partially offset

by repayment of notes of $985,596.

Summary of Statements

of Operations for the Three Months Ended March 31, 2022, and 2021:

The increase is primarily attributable to a reduction in cash, prepaid expenses and other current assets, an increase in accounts payable

and notes payable, as well as an increase in deferred revenue resulting primarily from an increase in Vocal+ customers opting for annual

subscriptions, whose revenues are amortized over a 12-month period.

This was offset by an increase in accounts receivable.

On January 30, 2020, the World Health Organization

declared the COVID-19 novel coronavirus outbreak a “Public Health Emergency of International Concern” and on March 10, 2020,

declared it to be a pandemic.

Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel,

and quarantines in certain areas, and forced closures for certain types of public places and businesses.

The COVID-19 coronavirus and

actions taken to mitigate it have had and are expected to continue to have an adverse impact on the economies and financial markets of

many countries, including the geographical area in which the Company operates.

While it is unknown how long these conditions will last

and what the complete financial impact will be to the Company, capital raising efforts and our operations may be negatively affected.

Net cash used in operating activities for the

six months ended June 30, 2022, and 2021, was $(10,620,156) and $(10,996,578), respectively.

The net loss for the six months ended June

30, 2022, and 2021 was $(15,585,986) and $(15,205,713), respectively.

The decrease in net cash used in operating activities reflects a

decrease in cash paid for marketing expenditures, research and development, legal fees, and accounting & audit fees.

Net cash used in investing activities for the

six months ended June 30, 2022, was $367,240.

This is primarily attributable to the purchase of digital assets, including Metaverse plots

in Decentraland, the OG Gallery NFT portfolio and cryptocurrencies Ethereum, Polygon and Mana, as well as physical property and equipment.

Net cash provided by financing activities for

the six months ended June 30, 2022, and 2021 was $8,778,934 and $5,967,733, respectively.

During the six months ended June 30, 2022, the

Company’s operations were predominantly financed by net proceeds of $4,997,301 from the sale of common stock and warrants and $5,152,350

from the proceeds of notes payable, which were partially offset by the repayments of notes payable.

Similarly, the Company’s financing

activity for the six months ended June 30, 2021, generated $1,312,672 from the exercises of warrants, the proceeds of which were partially

offset by repayment of notes of $1,218,718.

Summary of Statements of Operations for the

Three Months Ended June 30, 2022, and 2021:

Three Months Ended

Cost of revenue

$ (1,794,419 )

Operating expenses

8 unchanged sentences

Loss per common share - basic and diluted

totaled $1,348,738 for the three months ended March 31, 2022, as compared to $743,913 for the comparable three months ended March 31,

2021, an increase of $604,825.

The 81% year-over-year increase in quarterly revenue is attributable to the steady

growth of both Creatd Partners (influencer and content marketing) which increased 36% year-over-year, as well as Created Labs (Vocal

and technology development) which experienced a 66% increase in revenue generated as compared to the prior first quarter 2021.

Creatd Ventures (e-Commerce) generated sales totaling $254,724, indicating continued revenue momentum within this segment following its

initial launch with the acquisition of Plant Camp in mid-2021.

Going forward, the Company anticipates continued momentum as Creatd Partners

expands its influencer marketing capabilities and methodically increases its average revenue per brand campaign;

as Creatd Labs increases

conversion from freemium to Vocal+ subscriptions with advancements in its technology development and offerings;

as Creatd Ventures expands

the marketing visibility of its March 2022 acquisition of its latest direct-to-consumer brand acquisition, Basis, and establishes new

and expanded distribution of Dune and Camp.

In addition, during 2022, Creatd anticipates its first material revenue contribution from

its fourth business segment Creatd Studios (Transmedia production).

Revenue totaled $1,625,901 for the three months

ended June 30, 2022, as compared to $970,857 for the comparable three months ended June 30, 2021, an increase of $655,044.

The 67% increase

in revenue is attributable to the steady growth of Creatd Partners (influencer and content marketing) which increased 19% year-over-year,

as well as Creatd Ventures (e-Commerce), which generated sales totaling $634,966 across its portfolio of CPG brands, including Basis,

which the Company acquired in the previous quarter, and continues to demonstrate revenue momentum.

This growth was offset by a decrease

in total revenues generated from Creatd Labs (Vocal and technology development), which comes as a result of the Company’s strategic

shift in Vocal+ marketing toward driving annual versyus monthly subscriptions, with annual subscriptions being amortized over a 12-month

the Company’s efforts continue to result in a steady increase in annual subscriptions.

Going forward, the Company anticipates

continued momentum as Creatd Ventures continues to grow sales and introduce new product SKUs for its portfolio of brands, continues to

expand its retail and wholesale distribution partnerships, and completes additional direct-to-consumer brand acquisitions;

as Creatd Partners

expands its influencer and content marketing offerings and methodically increases its average revenue per brand campaign;

as Creatd Labs

increases conversion from freemium to Vocal+ subscriptions, supported by the recent launch of the new Vocal app as well as the introduction

of new and upcoming Vocal features aimed at increasing creator audience growth, engagement, and monetization.

In addition, during 2022,

Creatd anticipates its first material revenue contribution from its fourth business segment Creatd Studios (Transmedia production).

Cost of Revenue

Cost of revenue for the

three months ended March 31, 2022, were $1,572,170 as compared to $867,150 for the three months ended March 31, 2021.

The increase of

$705,020 in cost of revenue is related to the establishment and operational launch of Creatd Ventures, which recently began contributing

material revenues.

Additionally, the increase is attributable to expansion of the Company’s moderation and content development teams,

a byproduct of increased Vocal+ membership volume combined with the additional sales and talent management personnel associated with Creatd

The Company expects the gross margin to improve over time as it continues to grow and improve upon a self-sustaining, organically

driven revenue model across its business segments.

Cost of revenue for the three months ended June

30, 2022, were $1,794,419 as compared to $731,309 for the three months ended June 30, 2021.

The increase of $1,063,110 in cost of revenue

is related to an increase in payouts to Vocal creators, whose earnings are generated through content reads, winning Challenges, and other

Additionally, the increase in cost of revenue is correlated with continued growth within the Creatd Ventures business segment,

including sales growth for existing brands as well as the acquisition and integration of additional brands, which results in increases

in inventory-related and other costs.

Going forward, the Company expects the gross margin to continue to improve over time as Creatd Ventures

continues to consolidate operations across its portfolio of e-commerce brands and, more broadly, as the Company continues to grow and

scale a self-sustaining, organically driven revenue model across its business segments.

Operating Expenses

Operating expenses for

the three months ended March 31, 2022, were $6,785,852 as compared to $5,822,760 for the three months ended March 31, 2021.

of $963,092 in operating expenses is mainly related to general and administrative (“G&A”) cost increases, predominantly

due to an increase in headcount and related personnel expenses as well as costs related to the Company’s expanded presence in key

markets, which contributed to an increase in office rent and related moving expenses.

G&A was further impacted by a non-recurring

increase in consulting expenses, site development, and recruiting fees.

The year-over-year increase in first quarter G&A was offset

in part by a decrease in research and development expenditure and stock based compensation.

During the first quarter 2022, the company’s non-cash charges

totaled $1,080,792, a $489,447 decrease from first quarter 2021.

This amount represents stock based compensation expenses related to the

vesting of past stock option grants to senior management and board members, which vest over multiple years, and stock-based fees to service

providers that opted for stock in lieu of cash.

The Company expects expenditures to decrease over coming quarters as

the Company normalizes its marketing costs and scrutinizes many of the contributing expenses within G&A.

Operating expenses for the three months ended

June 30, 2022, were $7,824,906 as compared to $8,620,343 for the three months ended June 30, 2021.

The decrease of $795,437 in operating

expenses is primarily attributable to the Company’s decrease in marketing expenses.

This was offset by an increase in research and

development, stock-based compensation, and general and administrative accounts, including office rent, employee compensation and productivity

enhancing software & tools.

During the second quarter of 2022, the company’s

non-cash charges totaled $2,814,980, a $457,798 increase from second quarter 2021.

This increase primarily represents an increase in stock-based

compensation to employees and consultants during the quarter.

The Company expects expenditures to decrease over

coming quarters, as the Company continues to optimize and reduce its marketing expenditure and scrutinize many of the contributing expenses

Already, the Company has, subsequent to the second quarter, taken steps to reduce headcount materially to gain efficiencies,

integrate acquired operations, reduce future expenses and other market factors.

Loss from Operations

Loss from operations for the three months ended

June 30, 2022, was $7,993,424 as compared to $8,380,795 for the three months ended June 30, 2021.

The $387,371 decrease in the loss from

operations this quarter primarily reflects the decrease from total operating expenses.

This was offset by the decrease from gross loss.

Other Income and (Expenses)

Other income (expenses) for the three months ended

June 30, 2022, were $(711,514) as compared to $(181,681) for the three months ended June 30, 2021.

The increase in second quarter 2022

other income was predominantly due to the increase in accretion of debt discount and issuance cost and a decrease from the gain on extinguishment

This was offset by a decrease in interest expense and impairment of investment.

Net loss for the three months ended June 30, 2022,

was $8,704,938, as compared to a net loss of $8,562,476 for the three months ended June 30, 2021.

Net loss attributable to common shareholders for

the three months ended June 30, 2022, was $8,337,066, or loss per share of $0.41, as compared to a net loss attributable to common shareholders

of $8,972,794, or loss per share of $0.81, for the three months ended June 30, 2021.

Summary of Statements of Operations for the

Six Months Ended June 30, 2022, and 2021:

Six Months Ended

Cost of revenue

$ (3,366,589 )

Operating expenses

$ (14,610,758 )

$ (14,100,847 )

Loss from operations

for the three months ended March 31, 2022, was $7,009,284 as compared to $5,945,997 for the three months ended March 31, 2021.

The $1,063,287

increase in the loss from operations this quarter primarily reflects the nearly doubling year over year of Company personnel to 60 professionals.

In addition, short-term consulting and other services that were required during the quarter to address one-time needs heightened expenses.

Going forward, the Company expects the loss from operations to decrease as revenues continue to increase and expenses achieve normalcy

Other Income and

Other income (expenses) for the three months ended March 31, 2022,

were $128,236 as compared to $(697,240) for the three months ended March 31, 2021.

The increase in first quarter 2022 other income was

predominantly due to a decrease in an accretion of debt discount and issuance cost, an elimination of derivative expense, and a decrease

in interest expense.

Net loss for the three months ended March 31, 2022, was $6,881,048,

as compared to a net loss of $6,643,237 for the three months ended March 31, 2021.

Net loss attributable to common shareholders for the three months ended

March 31, 2022, was $6,334,890, or loss per share of $0.36, as compared to a net loss attributable to common shareholders of $6,643,237,

or loss per share of $0.68, for the three months ended March 31, 2021.

Off-Balance Sheet

As of March 31, 2022,

we had no off-balance sheet arrangements.

Significant Accounting

Our significant accounting

policies are described in Note 2 of the Financial Statements.

If we complete an acquisition, we will be required to make estimates and

assumptions typical of other companies.

For example, we will be required to make critical accounting estimates related to valuation and

accounting for business combinations.

The estimates will require us to rely upon assumptions that were highly uncertain at the time the

accounting estimates are made, and changes in them are reasonably likely to occur from period to period.

Changes in estimates used in

these and other items could have a material impact on our financial statements in the future.

Our estimates will be based on our experience

and our interpretation of economic, political, regulatory, and other factors that affect our business prospects.

Actual results may differ

significantly from our estimates.

For detailed information regarding our critical accounting policies and estimates, see our financial

statements and notes thereto included in this Report and in our Annual Report on Form 10-K for the year ended December 31, 2021.

have been no material changes to our critical accounting policies and estimates from those disclosed in our most recent Annual Report

on Form 10-K.

$ (15,002,708 )

$ (14,326,792 )

Other income (expenses)

$ (15,585,986 )

$ (15,205,713 )

Loss per common share - basic and diluted

Revenue totaled $2,974,639 for the six months

ended June 30, 2022, as compared to $1,714,770 for the comparable six months ended June 30, 2021, an increase of $1,259,869.

The 73% year-over-year

increase in revenue is attributable to overall growth across the Company’s business segments, including growth in creator subscriptions,

e-commerce sales, and brand and influencer marketing partnerships.

Cost of Revenue

Cost of revenue for the six months ended June

30, 2022, were $3,366,589 as compared to $1,940,715 for the six months ended June 30, 2021.

The increase of $1,425,874 in cost of revenue

is related to an increase in challenge- and read-related payouts to Vocal creators, as well as Company’s first-quarter 2022 acquisition

of Basis and an increase in inventory related cost of revenues correlating with revenue growth within Ventures.

The Company expects the

gross margin to continue to improve over time as it continues to grow and improve upon a self-sustaining, organically driven revenue model

across its business segments.

Operating Expenses

Operating expenses for the six months ended June

30, 2022, were $14,610,758 as compared to $14,100,847 for the six months ended June 30, 2021.

The increase of $509,911 in operating expenses

is mainly related to an increase in general and administrative expenses, including office rent, travel and entertainment, software and

tools, and compensation.

This increase was partially offset by a decrease in marketing expenses.

The Company expects expenditures to decrease

as the Company normalizes its marketing costs and scrutinizes many of the contributing expenses within G&A.

Loss from Operations

Loss from operations for the six months ended

June 30, 2022, was $15,002,708 as compared to $14,326,792 for the six months ended June 30, 2021.

The $675,916 increase in the loss from

operations primarily reflects an increase in general and administrative expenses, including office rent, travel and entertainment, software

and tools, and compensation, as well as a decrease in gross margin.

Going forward, the Company expects the loss from operations to decrease

as revenues continue to increase and expenses achieve normalcy levels.

Other Income and (Expenses)

Other income (expenses) for the six months ended

June 30, 2022, were $(583,278) as compared to $(878,921) for the six months ended June 30, 2021.

The decrease in other income was predominantly

due to a decrease in interest expense, accretion of debt discount and issuance cost, derivative expense, market to market of derivative

liability, and Impairment of investment.

This was offset by a decrease in gain on forgiveness of debt and gain on settlement of vendor

Net loss for the six months ended June 30, 2022,

was $15,585,986, as compared to a net loss of $15,205,713 for the six months ended June 30, 2021.

Net loss attributable to common shareholders for the six months ended

June 30, 2022, was $14,681,956, or loss per share of $0.77, as compared to a net loss attributable to common shareholders of $15,616,031,

or loss per share of $1.49, for the six months ended June 30, 2021.

Off-Balance Sheet Arrangements

As of June 30, 2022, we had no off-balance sheet

arrangements.

Significant Accounting Policies

Our significant accounting policies are described

in Note 2 of the Financial Statements.

If we complete an acquisition, we will be required to make estimates and assumptions typical of

other companies.

For example, we will be required to make critical accounting estimates related to valuation and accounting for business

combinations.

The estimates will require us to rely upon assumptions that were highly uncertain at the time the accounting estimates are

made, and changes in them are reasonably likely to occur from period to period.

Changes in estimates used in these and other items could

have a material impact on our financial statements in the future.

Our estimates will be based on our experience and our interpretation

of economic, political, regulatory, and other factors that affect our business prospects.

Actual results may differ significantly from

our estimates.

For detailed information regarding our critical accounting policies and estimates, see our financial statements and notes

thereto included in this Report and in our Annual Report on Form 10-K for the year ended December 31, 2021.

There have been no material

changes to our critical accounting policies and estimates from those disclosed in our most recent Annual Report on Form 10-K.

Quantitative and Qualitative Disclosures

About Market Risk.

been no material changes in our exposures to market risk since December 31, 2021.

For details on the Company’s interest rate, foreign

currency exchange, and credit risks, see “Item 7A.

Quantitative and Qualitative Information About Market Risks” in our 2021

Annual Report.

There have been no material changes in our exposures

to market risk since December 31, 2021.

For details on the Company’s interest rate, foreign currency exchange, and credit risks,

see “Item 7A.

Quantitative and Qualitative Information About Market Risks” in our 2021 Annual Report.

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 2. Management’s Discussion and Analysis