Form S-1/A Creatd, Inc.

Exhibit 1.1

 

DEALER-MANAGER AGREEMENT

 

July __, 2022

 

RHK Capital, LLC

doing business as RHK Noble

As Dealer-Manager

88 Post Road West

Westport, CT 06880

 

Ladies and Gentlemen:

 

The following will confirm our agreement relating to the proposed subscription rights offering (the “Rights Offering”) to be undertaken by Creatd, Inc., a Nevada corporation (the “Company”), pursuant to which the Company will distribute to holders of record of its common stock, par value $0.001 per share (the “Common Stock”), and holders of certain shares of series E preferred stock, par value $0.001 per share (the “Preferred Shares”), common stock warrants (the “Eligible Warrants”), and stock options (the “Eligible Options”), subscription rights (the “Rights”) as set forth in the Company’s registration statement on Form S-1, as amended (File No. 333-264908), initially filed with the U.S. Securities and Exchange Commission (the “Commission”) on May 27, 2022, to subscribe for and purchase up to an aggregate of 20,000,000 units (the “Units”), each consisting of one share of Common Stock (the “Rights Shares”), one series A warrant exercisable to acquire one share of Common Stock at an exercise price of $3.00 per share (the “Series A Warrants”), and one series B warrant exercisable to acquire one share of Common Stock at an exercise price of $6.00 per share (the “Series B Warrants” and, together with the Series A Warrants, the “Warrants”), at a subscription price of $2.00 per Unit (the “Subscription Price”).

 

1. The Rights Offering.

 

(a) The Company proposes to undertake the Rights Offering pursuant to which each holder of Common Stock and/or Preferred Shares, Eligible Warrants and Eligible Options held of record by such holder at the close of business on July 29, 2022 (the “Record Date”) shall receive two Rights for every share of Common Stock and/or every share of Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options. Holders of Rights (each a “Holder”) will be entitled to subscribe for and purchase, at the Subscription Price, one Unit for every Right granted to Holders on the Record Date (the “Basic Subscription Right”).

 

(b) The Rights and the Units shall be non-transferable and will not be listed for trading on any stock exchange or market. The Rights Shares will be listed for trading on The Nasdaq Capital Market (“Nasdaq”). The Company will apply for the Warrants to be traded or quoted on Nasdaq or BOX Exchange, LLC or, if the Company does not meet their required listing standards, the Company will use its commercially reasonable efforts to list the Warrants on tZERO or another suitable securities exchange or recognized trading system.

 

(c) Any holder of Rights who fully exercises all Basic Subscription Rights issued to such holder is entitled to subscribe for Units which were not otherwise subscribed for by others pursuant to their Basic Subscription Rights (the “Over-Subscription Right”). The Over-Subscription Right shall allow a holder of a Right to subscribe for an additional amount equal to any and all of the Units which were not otherwise subscribed for as of the Expiration Date (as defined below). Units acquired pursuant to the Over-Subscription Rights are subject to allotment and pro rata allocation, as more fully discussed in the Prospectus (as defined herein).

 

 

(d) The Rights will expire at 5:00 p.m., Eastern time, on August 22, 2022 (the “Expiration Date”). The Company shall have the right to extend the Expiration Date for up to an additional 45 days in its sole discretion.

 

(e) All funds from the exercise of Basic Subscription Rights and Over-Subscription Rights will be submitted to Continental Stock Transfer & Trust Co., as the subscription agent (the “Subscription Agent”), and held in an escrow account with an escrow agent retained by the Subscription Agent pending a final determination of the number of Units to be issued pursuant to the exercise of Basic Subscription Rights and Over-Subscription Rights. As soon as is practicable after the Expiration Date, the Company shall conduct a closing of the Rights Offering (a “Closing”).

 

2. Appointment as Dealer-Manager; Role of Dealer-Manager. The Company hereby engages RHK Capital, LLC doing business as RHK Noble (“RHK”), as the exclusive dealer-manager (the “Dealer-Manager”) in connection with the Rights Offering, and authorizes the Dealer-Manager to act as such on its behalf in connection with the Rights Offering, in accordance with this Dealer-Manager Agreement (this “Agreement”). Until the Expiration Date, the Company will not solicit, negotiate with or enter into any agreement with any placement agent, financial advisor, dealer-manager, brokers, dealers or underwriters or any other person or entity in connection with the Rights Offering. On the basis of the representations and warranties and agreements of the Company contained in this Agreement and subject to and in accordance with the terms and conditions hereof, the Dealer-Manager agrees that as Dealer-Manager it will, in accordance with its customary practice and to the extent requested by the Company, use its commercially reasonable efforts to (i) advise on pricing, structuring and other terms and conditions of the Rights Offering, including whether to provide for transferability, tradability and oversubscription rights and limits (it being acknowledged that such services have been previously provided pursuant to the Engagement Letter (as defined herein) without compensation therefor), (ii) provide guidance on general market conditions and their impact on the Rights Offering, (iii) assist the Company in drafting a presentation that may be used to market the Rights Offering to existing and potential investors, describing the proposed capital raising, the Company’s history and performance to date, track records of key executives, highlights of the Company’s business plan and the intended use of proceeds from the Rights Offering, (iv) advise on the selection of the Information Agent and Subscription Agent (it being acknowledged that such advice has been previously rendered pursuant to the Engagement Letter), (v) assist the Company with its understanding of state blue sky laws, (vi) solicit the holders of the Rights to encourage them to exercise such Rights, and (vii) use its best efforts to place any unsubscribed Units at the Subscription Price for an additional period of up to 45 days. For the avoidance of doubt and notwithstanding anything that may be to the contrary in this Agreement, the Company and the Dealer-Manager hereby agree that the Dealer-Manager will not underwrite the Rights Offering, the Dealer-Manager has no obligation to act, and will not act, in any capacity as an underwriter in connection with the Rights Offering and the Dealer-Manager has no obligation to purchase or procure purchases of the Units offered in connection with the Rights Offering and Dealer-Manager shall not accept any part of the sale price of any Units offered in connection with the Rights Offering. Except as set forth herein, the Company agrees that it will not hold the Dealer-Manager liable or responsible for the failure of the Rights Offering in the event that the Rights Offering is not successfully consummated for any reason.

 

 

3. No Liability for Acts of Brokers, Dealers, Banks and Trust Companies. The Dealer-Manager shall not be subject to any liability to the Company or any of the Company’s Subsidiaries (as defined below) or “affiliates” (“Affiliates,” as such term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)), for any act or omission on the part of any broker or dealer in securities (other than the Dealer-Manager) or any natural person, partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, or other entity or organization (each, a “Person”), and the Dealer-Manager shall not be liable for its own acts or omissions in performing its obligations as advisor or Dealer-Manager hereunder or otherwise in connection with the Rights Offering or the related transactions, except for any losses, claims, damages, liabilities and expenses resulting directly from any such acts or omissions undertaken or omitted to be taken by the Dealer-Manager through its bad faith, gross negligence or willful misconduct. The Dealer-Manager may appoint sub-placement agents and/or dealers in connection with the Rights Offering. In soliciting or obtaining exercises of Rights, the Dealer-Manager shall not be deemed to be acting as the agent of the Company or as the agent of any broker, dealer, bank or trust company, and no broker, dealer, bank or trust company shall be deemed to be acting as the Dealer-Manager’s agent or as the agent of the Company. As used herein, the term “Subsidiary” means a Subsidiary of the Company as defined in Rule 405 of the Securities Act. Unless the context specifically requires otherwise, the term “Company” as used in this Agreement means the Company and its Subsidiaries collectively on a consolidated basis.

 

4. The Offer Documents.

 

(a) There will be used in connection with the Rights Offering certain materials in addition to the Registration Statement, Preliminary Prospectus and any Prospectus Supplement as filed (each as defined herein), including: (i) all exhibits to the Registration Statement which pertain to the conduct of the Rights Offering, (ii) any soliciting materials relating to the Rights Offering approved by the Company and (iii) any free writing prospectus with respect to the Rights Offering filed by the Company (collectively with the Registration Statement and the Prospectus, the “Offer Documents”). The Dealer-Manager shall be given an opportunity to review and comment upon the Offer Documents.

 

(b) The Company agrees to furnish the Dealer-Manager with as many copies as it may reasonably request of the final forms of the Offer Documents and the Dealer-Manager is authorized to use copies of the Offer Documents in connection with its acting as Dealer-Manager. The Dealer-Manager hereby agrees that it will not disseminate any written material for or in connection with the solicitation of exercises of Rights pursuant to the Rights Offering other than the Offer Documents.

 

(c) The Company represents and agrees that no solicitation material, other than the Offer Documents and the documents to be filed therewith as exhibits thereto (each in the form of which has been approved by the Dealer-Manager), will be used in connection with the Rights Offering by or on behalf of the Company without the prior approval of the Dealer-Manager, which approval will not be unreasonably withheld. In the event that the Company uses or permits the use of any such solicitation material in connection with the Rights Offering, then the Dealer-Manager shall be entitled to withdraw as Dealer-Manager in connection with the Rights Offering and the related transactions without any liability or penalty to the Dealer-Manager or any other Person identified in Section 11 hereof as an “indemnified party,” and the Dealer-Manager shall be entitled to receive the payment of all fees and expenses payable under this Agreement or the Engagement Letter which have accrued to the date of such withdrawal or which otherwise thereafter become payable.

 

 

(d) As of the date hereof and at all times prior to and following the effectiveness of the Registration Statement, the Company and its officers, directors and Affiliates shall abide by all rules and regulations of the Commission relating to public offerings, including, without limitation, those relating to public statements and disclosures of material non-public information.

 

5. Representations and Warranties. The Company represents and warrants to the Dealer-Manager that:

 

(a) The Company has prepared and filed with the Commission a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-264908) including a Preliminary Prospectus (as defined below) for the registration of the Rights, Units, Rights Shares, Warrants and Common Stock underlying the Warrants under the Securities Act, which Registration Statement, as so amended prior to the Effective Time (including post-effective amendments, if any), has been declared effective by the Commission and copies of which have heretofore been delivered to the Dealer-Manager. At the time of such filing, the Company met the requirements of Form S-1 under the Securities Act. Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule 430A (“Rule 430A”) of the rules and regulations of the Commission under the Securities Act (the “Securities Act Regulations”) and paragraph (b) of Rule 424 (“Rule 424(b)”) of the Securities Act Regulations. The information included in such prospectus that was omitted from such Registration Statement at the time it became effective but that is deemed to be part of such Registration Statement at the time it became effective pursuant to paragraph (b) of Rule 430A is referred to as “Rule 430A Information.” The Preliminary Prospectus and each prospectus used before such Registration Statement became effective, and any prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is referred to herein as a “Preliminary Prospectus.” For purposes of this Agreement, “Effective Time” means the date and the time as of which such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; “Effective Date” means the date of the Effective Time; “Registration Statement” means such Registration Statement, as amended at the Effective Time, including any documents which are exhibits thereto; and “Prospectus” means such final prospectus, as first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Securities Act, including the Preliminary Prospectus and all information or reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), incorporated in the Prospectus by reference. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus. All references in this Agreement to the Registration Statement, a Preliminary Prospectus, and the Prospectus, or any amendments or supplements to any of the foregoing shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). The Prospectus delivered to the Dealer-Manager for use in connection with the Rights Offering will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T promulgated by the Commission.

 

 

(b) The Registration Statement (together with all exhibits filed as part of the Registration Statement) conforms, and any Preliminary Prospectus and the Prospectus and any further amendments or supplements to the Registration Statement conforms or will conform, when they are filed with or become effective by the Commission, as the case may be, in each case, in all material respects to the requirements of the Securities Act and collectively do not and will not, as of the applicable Effective Date (as to the Registration Statement and any amendment thereto) and as of the applicable filing date (as to the Prospectus and any amendment or supplement thereto) contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (with respect to the Prospectus, in the light of the circumstances under which they were made) not misleading; provided that no representation or warranty is made by the Company as to information contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Dealer-Manager specifically for inclusion therein, it being acknowledged and agreed that such information provided by or on behalf of the Dealer-Manager consists solely and exclusively of disclosure of the name of the Dealer-Manager acting in its capacity as dealer-manager for the Rights Offering contained in the Prospectus (collectively, the “Dealer-Manager Information”) under appropriate headings and in its final form as approved by the Dealer-Manager and its counsel.

 

(c) There are no contracts, agreements, plans or other documents which are required to be described in the Prospectus or filed as exhibits to the Registration Statement by the Securities Act which have not been described in the Prospectus or filed as exhibits to the Registration Statement or referred to in, or incorporated by reference into, the exhibit table of the Registration Statement as permitted by the Securities Act.

 

(d) The Company and each of its Subsidiaries have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the absence of such power or authority (either individually and in the aggregate) could not reasonably be expected to have a material adverse effect on: (i) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects (as such prospects are disclosed or described in the Prospectus) of the Company or its Subsidiaries; (ii) the long-term debt or capital stock of the Company or its Subsidiaries; or (iii) the Rights Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the Prospectus (any such effect being a “Material Adverse Effect”).

 

 

(e) This Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery by the Dealer-Manager, constitutes the valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally and by general principles of equity.

 

(f) Neither the Company nor any of its Subsidiaries: (i) is in violation of its charter or by-laws, (ii) in default under or in breach of, and no event has occurred which, with notice or lapse of time or both, would constitute a default or breach under or result in the creation or imposition of any lien, charge, mortgage, pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever (each, a “Lien”) upon any of their property or assets pursuant to, any material contract, agreement, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, or (iii) is in violation in any respect of any law, rule, regulation, ordinance, directive, judgment, decree or order, foreign and domestic, to which it or its properties or assets may be subject or has failed to obtain any material license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its properties or assets or to the conduct of its business, except, in the case of clauses (ii) and (iii) above, any violation, default or failure to possess the same that would not have a Material Adverse Effect.

 

(g) Prior to or on the date hereof: (i) the Company and the Subscription Agent have or will have entered into a subscription agency agreement (the “Subscription Agency Agreement”) if required by the Subscription Agent and (ii) the Company and D.F. King & Co. (the “Information Agent”) have or will have entered into an information agency agreement (the “Information Agency Agreement”) if required by the Information Agent. When executed by the Company, if applicable, each of the Subscription Agency Agreement and the Information Agency Agreement will have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by Subscription Agent or the Information Agent, as the case may be, will constitute a valid and legally binding agreement of the Company enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally and by general principles of equity.

 

(h) The Rights, Units, Rights Shares and Warrants to be issued and distributed by the Company have been duly and validly authorized and, when issued and delivered in accordance with the terms of the Offer Documents, will be duly and validly issued, and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, no holder of the Rights, Units, Rights Shares or Warrants is or will be subject to personal liability by reason of being such a holder, and the Rights, Units, Rights Shares and Warrants conform to the description thereof contained in the Prospectus. The shares of Common Stock issuable upon conversion or exercise (as applicable) of any Warrants have been duly and validly authorized and, when issued and delivered in accordance with the terms of the Warrants, will be duly and validly issued, fully paid and non-assessable and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, no holder of the Common Stock is or will be subject to personal liability by reason of being such a holder, and the Common Stock conforms to the description thereof contained in the Prospectus.

 

 

(i) Except as disclosed in the Prospectus with respect to the Company’s authorized capitalization, the Common Stock underlying the Warrants has been duly and validly authorized and reserved for issuance upon conversion or exercise (as applicable) of the Warrants and are free of statutory and contractual preemptive rights and are sufficient in number to meet the exercise requirements of the Rights Offering; and the Units, when so issued and delivered against payment therefore in accordance with the terms of the Rights Offering, will be duly and validly issued, fully paid and non-assessable, with no personal liability attaching to the ownership thereof, and will conform to the description thereof contained in the Prospectus.

 

(j) The Common Stock is listed for trading on Nasdaq. The Company has not received an oral or written notification from Nasdaq or any court or any other federal, state, local or foreign governmental or regulatory authority having jurisdiction over the Company or any of its Subsidiaries or any of their properties or assets (“Governmental Authority”) of any investigation or other action that would cause the Common Stock to not be listed on Nasdaq.

 

(k) The Company has an authorized capitalization as set forth under the caption “Capitalization” in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and have been issued in compliance with federal and state securities laws. None of the outstanding shares of Company capital stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those accurately described in the Registration Statement. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Registration Statement accurately and fairly presents in all material respects the information required to be shown with respect to such plans, arrangements, options and rights.

 

(l) The Company and its Subsidiaries own or lease all such assets or properties as are necessary to the conduct of its business as presently operated and as proposed to be operated as described in the Registration Statement and the Prospectus. Except to the extent leased by the Company or its Subsidiaries, the Company and its Subsidiaries have good and marketable title in fee simple to all assets or real property and good and marketable title to all personal property owned by them, in each case free and clear of any Lien, except for such Liens as are described in the Registration Statement and the Prospectus. Any assets or real property and buildings held under lease or sublease by the Company or any Subsidiary is held under valid, subsisting and enforceable leases with such exceptions as are not material to, and do not interfere with, the use made and proposed to be made as described in the Registration Statement and Prospectus of such property and buildings by the Company or such Subsidiary. Neither the Company nor any Subsidiary has received any notice of any material claim adverse to its ownership of any real or personal property or of any material claim against the continued possession of any real property, whether owned or held under lease or sublease by the Company or any Subsidiary.

 

 

(m) The Company and its Subsidiaries have all material consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other Governmental Authorities and all third parties, foreign and domestic (collectively with the Licensing Requirements described below, the “Consents”), to own, lease and operate their properties and conduct their businesses as presently being conducted and as disclosed in the Registration Statement and the Prospectus, and each such Consent is valid and in full force and effect. The Company has not received notice of any investigation or proceedings which results in or, if decided adversely to the Company, could reasonably be expected to result in, the revocation of any Consent or reasonably be expected to have a Material Adverse Effect. No Consent contains a materially burdensome restriction not adequately disclosed in the Registration Statement and the Prospectus.

 

(n) The execution, delivery and performance of this Agreement by the Company, the issuance of the Rights in accordance with the terms of the Offer Documents, the issuance of the Units, Rights Shares, Warrants and Common Stock underlying the Warrants in accordance with the terms of the Rights Offering, and the consummation by the Company of the transactions contemplated hereby, the Subscription Agency Agreement and the Information Agency Agreement, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries or any of its Affiliates is a party or by which the Company or any of its Subsidiaries or its Affiliates is bound or to which any of the properties or assets of the Company or any of its Subsidiaries or its Affiliates is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of its Subsidiaries or any statute or any order, rule or regulation of any Governmental Authority; and except for the registration of the Rights, Units, Rights Shares, Warrants and Common Stock underlying the Warrants under the Securities Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the distribution of the Rights and the sale of the Units by the Company, no consent, approval, authorization or order of, or filing or registration with, any such court or Governmental Authority is required for the execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby.

 

(o) Except as otherwise set forth in the Prospectus, there are no contracts, agreements or understandings between the Company and any Person granting such Person the right to require the Company to include such securities in the securities registered pursuant to the Registration Statement. No holder of any security of the Company has any rights of rescission or similar rights with respect to such securities held by them.

 

(p) Neither the Company nor any of its Subsidiaries has sustained, since the date of the latest balance sheet included in the Prospectus or after such date and as disclosed in the Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and, since such date or after such date and as disclosed in the Prospectus, there has not been any change in the capital stock or long-term debt of the Company or any of its Subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity, results of operations or prospects (as such prospects are disclosed or described in the Prospectus) of the Company and its Subsidiaries (a “Material Adverse Change”). Since the date of the latest balance sheet presented in the Prospectus, the Company has not incurred or undertaken any liabilities or obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered into any transactions, including any acquisition or disposition of any business or asset, which are material to the Company, except for liabilities, obligations and transactions which are disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus.

 

 

(q) Rosenberg Rich Baker Berman, P.A. (“RRBB”), whose reports relating to the Company and its Subsidiaries are included in the Registration Statement, are independent registered public accountants as required by the Securities Act, the Exchange Act and the rules and regulations promulgated by the Public Company Accounting Oversight Board (the “PCAOB”). RRBB, to the best of the Company’s knowledge, is duly registered and in good standing with the PCAOB. RRBB has not, during the periods covered by the financial statements included in the Registration Statement, the Preliminary Prospectus and the Prospectus, provided to the Company or its Subsidiaries any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

 

(r) The financial statements, including the notes thereto, and any supporting schedules included in the Registration Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the financial position as of the dates indicated and the cash flows and results of operations for the periods specified of the Company. Except as otherwise stated in the Registration Statement, any Preliminary Prospectus and the Prospectus, said financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis throughout the periods involved. Any supporting schedules included in the Registration Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the information required to be stated therein. No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement. The other financial and statistical information included in the Registration Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the information included therein and have been prepared on a basis consistent with that of the financial statements that are included in the Registration Statement, such Preliminary Prospectus and the Prospectus and the books and records of the respective entities presented therein.

 

(s) There are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement, any Preliminary Prospectus and the Prospectus in accordance with Regulation S-X under the Securities Act which have not been included as so required. The pro forma and/or as adjusted financial information included in the Registration Statement, any Preliminary Prospectus and the Prospectus has been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and include all adjustments necessary to present fairly, in all material respects, in accordance with generally accepted accounting principles the pro forma and as adjusted financial position of the respective entity or entities presented therein at the respective dates indicated and their cash flows and the results of operations for the respective periods specified. The assumptions used in preparing the pro forma and as adjusted financial information included in the Registration Statement, any Preliminary Prospectus and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein. The related pro forma and pro forma as adjusted adjustments give appropriate effect to those assumptions; and the pro forma and pro forma as adjusted financial information reflect the proper application of those adjustments to the corresponding historical financial statement amounts.

 

 

(t) The statistical, industry-related and market-related data included in the Registration Statement, any Preliminary Prospectus and the Prospectus are based on or derived from sources which the Company reasonably believes are reliable and accurate, and such data agree with the sources from which they are derived. All applicable third party consents have been obtained in order for such data to be included in the Registration Statement, any Preliminary Prospectus and the Prospectus.

 

(u) Except as disclosed in the Registration Statement and the Prospectus, the Company maintains a system of internal accounting and other controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with United States generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accounting for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(v) The Company’s Board of Directors has validly appointed an audit committee, compensation committee and nominating and corporate governance committee whose composition satisfies the requirements of the rules and regulations of the Commission and the Company’s Board of Directors and/or audit committee, compensation committee and the nominating corporate governance committee has each adopted a charter as described in the Registration Statement, and such charters are in full force and effect as of the date hereof. Neither the Company’s Board of Directors nor the audit committee thereof has been informed, nor is any director of the Company aware, of: (i) except as disclosed in the Registration Statement and the Prospectus, any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

 

(w) The Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”), applicable to the Company, and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any other Governmental Authority or self-regulatory entity or agency, except for violations which, singly or in the aggregate, are disclosed in the Prospectus or would not have a Material Adverse Effect.

 

 

(x) No relationship, direct or indirect, exists between or among any of the Company or any Affiliate of the Company, on the one hand, and any director, officer, shareholder, customer or supplier of the Company or any Affiliate of the Company, on the other hand, which is required by the Securities Act or the Exchange Act to be described in the Registration Statement or the Prospectus which is not so described as required. Except as disclosed in the Registration Statement and the Prospectus, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members. The Company has not, in violation of Sarbanes-Oxley, directly or indirectly, including through any Affiliate of the Company (other than as permitted under Sarbanes-Oxley for depositary institutions), extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company.

 

(y) Except as described in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property or asset of the Company or any of its Subsidiaries is the subject, including with respect to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances, including any asbestos-related claims, which if determined adversely to the Company or any of its Subsidiaries, are reasonably likely to have a Material Adverse Effect; and to the best of the Company’s knowledge, except as disclosed in the Prospectus, no such proceedings are threatened or contemplated by Governmental Authorities or threatened by others.

 

(z) The Company and its Subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except where the failure to make such filings or make such payments, either individually or in the aggregate, could not reasonably be expected to have, a Material Adverse Effect. The Company has made adequate charges, accruals and reserves in its financial statements above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its Subsidiaries has not been finally determined.

 

(aa) Each of the Company and its Subsidiaries maintains insurance of the types and in the amounts which the Company believes to be reasonable and sufficient for a company of its size operating in the Company’s industry, including, but not limited to: (i) directors’ and officers’ insurance (including insurance covering the Company, its directors and officers for liabilities or losses arising in connection with the Rights Offering, including, without limitation, liabilities or losses arising under the Securities Act, the Exchange Act and applicable foreign securities laws), (ii) insurance covering real and personal property owned or leased against theft, damage, destruction, acts of vandalism and all other risks customarily insured against and (iii) business interruption insurance. There are no claims by the Company or any of its Subsidiaries under any policy or instrument described in this paragraph as to which any insurance company is denying liability or defending under a reservation of rights clause. All of the insurance policies described in this paragraph are in full force and effect. Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

 

(bb) The Company and its Subsidiaries own or possess or have the right to use on reasonable terms all patents, patent rights, patent applications, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names, service names and other intellectual property (collectively, “Intellectual Property”) necessary to carry on their respective businesses as described in the Prospectus and as proposed to be conducted; and neither the Company nor any of its Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interests of the Company or any of its Subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually or in the aggregate, might result in a Material Adverse Effect. All former and current employees of the Company or any of its Subsidiaries (and, to the Company’s knowledge, all other agents, consultants and contractors of the Company or any of its subsidiaries who contributed to or participated in the conception or development of any Intellectual Property for the Company or any of its Subsidiaries) have executed written contracts or agreements that assign to the Company all rights to any inventions, improvements, discoveries or information relating to the business of the Company and its subsidiaries, including without limitation all Intellectual Property owned, controlled by or in the possession of the Company or any of its subsidiaries. To the knowledge of the Company, there is no unauthorized use, infringement or misappropriation of any of the Intellectual Property by any third party, employee or former employee. Each agreement and instrument (each, a “License Agreement”) pursuant to which any Intellectual Property is licensed to the Company or any of its subsidiaries is in full force and effect, has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company or the applicable subsidiary, as the case may be, enforceable against the Company or such subsidiary in accordance with its terms, except as enforcement thereof may be subject to bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles; the Company and its subsidiaries are in compliance with their respective obligations under all License Agreements and, to the knowledge of the Company, all other parties to any of the License Agreements are in compliance with all of their respective obligations thereunder; no event or condition has occurred or exists that gives or would give any party to any License Agreement the right, either immediately or with notice or passage of time or both, to terminate or limit (in whole or in part) any such License Agreement or any rights of the Company or any of its subsidiaries thereunder, to exercise any of such party’s remedies thereunder, or to take any action that would adversely affect any rights of the Company or any of its subsidiaries thereunder or that might have a Material Adverse Effect and the Company is not aware of any facts or circumstances that would result in any of the foregoing or give any party to any License Agreement any such right; and neither the Company nor any of its subsidiaries has received any notice of default, breach or non-compliance under any License Agreement.

 

(cc) Except as described in any Preliminary Prospectus, the Prospectus and the Registration Statement, the Company: (i) is and at all times has been in full compliance with all statutes, rules, regulations or guidance applicable to (A) the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured, distributed or sold by the Company or any component thereof and (B) the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (such statutes, rules, regulations or guidance, collectively, “Applicable Laws”); (ii) has not received any notice of adverse finding, warning letter, untitled letter or other correspondence or notice from any Governmental Authority alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (iii) possesses all Authorizations and such Authorizations are valid and in full force and effect and are not in violation of any term of any such Authorizations; (iv) has not received notice of any claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action from any Governmental Authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental Authority or third party is considering any such claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action; (v) has not received notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Authority is considering such action; (vi) has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission), except, in the case of each of clauses (i), (ii) and (iii), for any default, violation or event that would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

 

 

(dd) Neither the Company nor, to the Company’s knowledge, any of the Company’s directors, officers or employees has violated: (i) the Bank Secrecy Act, as amended, (ii) the Money Laundering Control Act of 1986, as amended, (iii) the Foreign Corrupt Practices Act, or (iv) the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and regulations promulgated under any such law, or any successor law, except for such violations which, singly or in the aggregate, would not have a Material Adverse Effect.

 

(ee) Neither the Company nor any of its Affiliates has, prior to the date hereof, made any offer or sale of any securities which are required to be “integrated” pursuant to the Securities Act with the offer and sale of the Units, Rights Shares, Warrants and Common Stock underlying the Warrants pursuant to the Registration Statement.

 

(ff) Except as described in the Registration Statement and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee or other compensation by the Company with respect to the issuance or exercise of the Rights or the sale of the Units, Rights Shares and Warrants or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, the Company’s officers, directors and employees or Affiliates that may affect the Dealer-Manager’s compensation, as determined by the Financial Industry Regulatory Authority, Inc. (“FINRA”). Except as previously disclosed by the Company to the Dealer-Manager in writing, no officer, director, or beneficial owner of 5% or more of any class of the Company’s securities (whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived) or any other Affiliate is a member or a Person associated, or affiliated with a member of FINRA. No proceeds from the exercise of the Rights will be paid to any FINRA member, or any Persons associated or affiliated with a member of FINRA, except as specifically contemplated herein. Except as previously disclosed by the Company to the Dealer-Manager, to the Company’s knowledge, no Person to whom securities of the Company have been privately issued within the 180-day period prior to the initial filing date of the Registration Statement has any relationship or affiliation or association with any member of FINRA.

 

(gg) There are no contracts, agreements or understandings between the Company and any Person that would give rise to a valid claim against the Company or the Dealer-Manager for a brokerage commission, finder’s fee or other like payment in connection with the transactions contemplated by this Agreement. Other than the Dealer-Manager, the Company has not employed any brokers, dealers or underwriters in connection with solicitation of exercise of Rights in the Rights Offering, and except provided for in Sections 6 and 7 hereof, no other commissions, fees or discounts will be paid by the Company in connection with solicitation of the exercise of Rights in the Rights Offering.

 

(hh) Neither the Company nor, to the Company’s knowledge, any of the Company’s officers, directors, employees or agents has at any time during the last five (5) years: (i) made any unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in violation of law, or (ii) made any payment to any federal or state governmental officer or official, or other Person charged with similar public or quasi-public duties, other than payments that are not prohibited by the laws of the United States of any jurisdiction thereof.

 

(ii) The Company has not and will not, directly or indirectly through any officer, director or Affiliate of the Company or through any other Person: (i) taken any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Units, Rights Shares, Warrants or Common Stock underlying the Warrants, (ii) since the filing of the Registration Statement sold, bid for or purchased, or paid any Person (other than the Dealer-Manager) any compensation for soliciting exercises or purchases of, the Rights or the Rights Units and (iii) until the later of the expiration of the Rights or the completion of the distribution (within the meaning of Regulation M under the Exchange Act) of the Units, sell, bid for or purchase, apply or agree to pay to any Person (other than the Dealer-Manager) any compensation for soliciting another to purchase any other securities of the Company (except for the solicitation of the exercises of Rights pursuant to this Agreement). The foregoing shall not apply to the offer, sale, agreement to sell or delivery with respect to: (i) Units offered and sold upon exercise of the Rights, as described in the Prospectus, or (ii) any shares of Common Stock sold pursuant to the Company’s employee benefit plans.

 

 

(jj) Each “forward-looking statement” (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) included in the Registration Statement and the Prospectus has been made or reaffirmed with a reasonable basis and has been disclosed in good faith.

 

As used in this Agreement, references to matters being “material” with respect to the Company or any matter relating to the Company shall mean a material item, event, change, condition, status or effect related to the condition (financial or otherwise), properties, assets (including intangible assets), liabilities, business, prospects (as such prospects are disclosed or described in any Preliminary Prospectus or the Prospectus), operations or results of operations of the Company and its Subsidiaries, taken as a whole.

 

As used in this Agreement, the term “knowledge of the Company” (or similar language) shall mean the knowledge of the officers of the Company who are named in the Prospectus, with the assumption that such officers shall have made reasonable and diligent inquiry of the matters presented (with reference to what is customary and prudent for the applicable individuals in connection with the discharge by the applicable individuals of their duties as officers or directors of the Company).

 

6. Compensation. In consideration for its services in the Rights Offering, the Dealer-Manager shall receive a cash fee equal to 6.0%, a non-accountable expense fee of 1.8% and an out-of-pocket accountable expense allowance of 0.2% of the aggregate subscription prices received by the Company from any cash exercise of the Rights issued to investors in the Rights Offering. The Company has previously paid the Dealer-Manager a $25,000 advance against such out-of-pocket accountable expense allowance (the “Advance”). If the Rights Offering is not consummated, the portion of the Advance not used for the Dealer-Manager’s actual out-of-pocket expenses shall be promptly reimbursed to the Company as required under FINRA Rule 5110(f)(2)(D). For any unsubscribed Rights Shares and Warrants placed by the Dealer-Manager after the conclusion of the Rights Offering, the Dealer-Manager shall receive a placement fee equal to 6.0%, in lieu of the dealer-manager fee, along with continuing non-accountable and accountable expense allowances of 1.8% and 0.2%, respectively, with such placement fee and expenses to be calculated in respect of the total gross proceeds paid to and received by the Company for subscriptions accepted by the Company from investors in connection with such placement and such placement fee and expenses not to exceed the aggregate amounts that would have been otherwise received by the Dealer-Manager if the Rights Offering were fully subscribed. Neither the placement fee or expense allowances in connection with the placement of shares and warrants by the Dealer-Manager shall be payable with respect to any securities purchased as result of the exercise of any Basic Subscription Right or Over-Subscription Privilege. All payments to be made by the Company pursuant to this Section 6 shall be made, with respect to the Rights Offering, on the date of the consummation of the subscriptions for the Units pursuant to the exercise of Rights (the “Closing Date”) or, with respect to the post-Rights Offering placement of Rights Shares and Warrants by the Dealer-Manager, at the conclusion of such placement, by wire transfer of immediately available funds.

 

 

7. Expenses. Subject to Section 6 hereof and notwithstanding anything to the contrary contained in the Engagement Letter, the Company shall pay or cause to be paid:

 

(a) all expenses (including any taxes) incurred by the Company in connection with the Rights Offering and the preparation, issuance, execution, authentication and delivery of the Rights and the Units;

 

(b) all fees, expenses and disbursements of the Company’s accountants, legal counsel and other third party advisors;

 

(c) all reasonable and documented costs and expenses of the Dealer-Manager as set forth in Section 6 above and reimbursable upon any termination of this Agreement only as permitted by FINRA Rule 5110(f)(2)(D);

 

(d) all fees and expenses of the Subscription Agent and the Information Agent;

 

(e) all fees, expenses and disbursements (including, without limitation, fees and expenses of the Company’s accountants and counsel) in connection with the preparation, printing, filing, delivery and shipping of the Registration Statement (including the financial statements therein and all amendments and exhibits thereto), each Preliminary Prospectus, the Prospectus, the other Offer Documents and any amendments or supplements of the foregoing and any printing, delivery and shipping of this Agreement, the costs of distributing the terms of any agreement relating to any organization of soliciting dealers, if any, to the members thereof by mail, fax or other means of communications;

 

(f) all reasonable fees, expenses and disbursements relating to the registration or qualification of the Rights, Units, Rights Shares, Warrants and Common Stock underlying the Warrants under the “blue sky” securities laws of any states or other jurisdictions;

 

(g) all filing fees of the Commission;

 

(h) all filing fees relating to the review of the Rights Offering by FINRA;

 

(i) any applicable listing or other fees;

 

(j) the cost of printing certificates representing the Rights, Units, Rights Shares, Warrants and Common Stock underlying the Warrants;

 

(k) all advertising charges pertaining to the Rights Offering that have been pre-approved by the Company in writing;

 

(l) all fees and expenses relating to the listing of the Common Stock and/or the Warrants for trading on any stock exchange or quotation on any marketplace;

 

(m) the cost and charges of the Company’s transfer agent(s) or registrar(s); and

 

 

(n) all other costs and expenses incident to the performance of the Company’s obligations hereunder for which provision is not otherwise made in this Section.

 

(o) All payments to be made by the Company pursuant to this Section 7 shall be made promptly after the termination or expiration of the Rights Offering or, if later, promptly after the related fees, expenses or charges accrue and an invoice therefor is sent by the Dealer-Manager. The Company shall perform its obligations set forth in this Section 7 whether or not the Rights Offering commences or any Rights are exercised pursuant to the Rights Offering, except that the Dealer-Manager’s non-accountable expenses may only be reimbursed upon Closing. For the avoidance of doubt, except as reimbursed pursuant to the non-accountable expense fee, the Dealer-Manager shall be responsible for expenses it incurs with respect to the performance of its obligations under this Agreement, including without limitation expenses it incurs with respect to travel and lodging expenses in connection with “road show” trips and legal counsel and other third parties engaged by the Dealer-Manager.

 

8. Shareholder Lists; Subscription Agent; Information Agent.

 

(a) The Company will cause the Dealer-Manager to be provided with any cards or lists showing the names and addresses of, and the number of shares of Common Stock held by, the holders of shares of Common Stock, Preferred Shares, Eligible Warrants and Eligible Options as of a recent date and will use its best efforts to cause the Dealer-Manager to be advised from time to time during the period, as the Dealer-Manager shall request, of the Rights Offering as to any transfers of record of shares of Common Stock.

 

(b) The Company (i) has arranged for the Subscription Agent to serve as subscription agent in connection with the Rights Offering, (ii) will arrange for the Subscription Agent to advise the Dealer-Manager regularly as to such matters as the Dealer-Manager may reasonably request, including the number of Rights that have been exercised, and (iii) will arrange for the Subscription Agent to be responsible for receiving subscription funds paid.

 

(c) The Company has arranged for D.F. King & Co. to serve as the Information Agent in connection with the Rights Offering (together with the Subscription Agent, the “Agents”) and to perform services in connection with the Rights Offering that are customary for an information agent.

 

9. Covenants of the Company. The Company covenants and agrees with the Dealer-Manager:

 

(a) To use its best efforts to cause the Registration Statement and any amendments thereto to become effective; to advise the Dealer-Manager, promptly after it receives notice thereof, of the time when the Registration Statement, or any amendment thereto, becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Dealer-Manager with copies thereof; to prepare a Prospectus in a form approved by the Dealer-Manager (such approval not to be unreasonably withheld or delayed) and to file such Prospectus pursuant to Rule 424(b) under the Securities Act within the time prescribed by such rule; to advise the Dealer-Manager, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, of the suspension of the qualification of the Rights for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification, to use promptly its reasonable best efforts to obtain its withdrawal.

 

 

(b) To deliver promptly to the Dealer-Manager, at any such location as requested by the Dealer-Manager, such number of the following documents as the Dealer-Manager shall reasonably request: (i) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits other than this Agreement, any other Offer Documents filed as exhibits, the computation of the ratio of earnings to fixed charges and the computation of per share earnings), (ii) each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus and (iii) any document incorporated by reference in the Prospectus (excluding exhibits thereto); and, if the delivery of a prospectus is required at any time during which the Prospectus relating to the Rights, Units, Rights Shares, Warrants or Common Stock underlying the Warrants is required to be delivered under the Securities Act and if at such time any events shall have occurred as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify the Dealer-Manager and, upon its request, to file such document and to prepare and furnish without charge to the Dealer-Manager as many copies as the Dealer-Manager may from time to time reasonably request of an amended or supplemented Prospectus which will correct such statement or omission or effect such compliance.

 

(c) To file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that may, in the judgment of the Company or the Dealer-Manager, be necessary or advisable in connection with the distribution of the Rights or the sale of the Units or be requested by the Commission.

 

(d) Prior to filing with the Commission any: (i) Preliminary Prospectus, (ii) amendment to the Registration Statement, any document incorporated by reference in the Prospectus or (iii) any Prospectus pursuant to Rule 424 of the Securities Act, to furnish a copy thereof to the Dealer-Manager and counsel for the Dealer-Manager and obtain the consent of the Dealer-Manager to the filing (which consent shall not be unreasonably withheld).

 

(e) To furnish to the Dealer-Manager copies of all materials not available via EDGAR furnished by the Company to its shareholders and all public reports and all reports and financial statements furnished by the Company to the principal national securities exchange upon which any of the Company’s securities may be listed pursuant to requirements of or agreements with such exchange or to the Commission pursuant to the Exchange Act or any rule or regulation of the Commission thereunder.

 

(f) To qualify or register the Rights, Units, Rights Shares, Warrants and Common Stock underlying the Warrants for sale under (or obtain exemptions from the application of) the state securities or blue sky laws of those jurisdictions designated by the Dealer-Manager, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Rights, Units, Rights Shares, Warrants and Common Stock underlying the Warrants. The Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. The Company will advise the Dealer-Manager promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Rights, Units, Rights Shares, Warrants and Common Stock underlying the Warrants for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.

 

(g) To apply the net proceeds from the exercise of the Rights in the manner described under the caption “Use of Proceeds” in the Prospectus.

 

(h) Prior to the effective date of the Registration Statement, to list for trading the Rights Shares on Nasdaq and to apply for trading or quotation of the Warrants on Nasdaq or BOX Exchange, LLC or, if the Company does not meet their required listing standards, the Company will use its commercially reasonable efforts to list the Warrants on tZERO or another suitable securities exchange or recognized trading system.

 

(i) To take such steps as shall be necessary to ensure that neither the Company nor any Subsidiary shall become an “investment company” within the meaning of such term under the Investment Company Act of 1940 and the rules and regulations of the Commission thereunder.

 

 

(j) To advise the Dealer-Manager, directly or through the Subscription Agent, from time to time, as the Dealer-Manager shall request, of the number of Units subscribed for, and arrange for the Subscription Agent to furnish the Dealer-Manager with copies of written reports it furnishes to the Company concerning the Rights Offering.

 

(k) To commence mailing the Offer Documents to record holders of the Common Stock, Preferred Shares, Eligible Warrants and Eligible Options not later than the second business day following the Record Date for the Rights Offering, and complete such mailing as soon as practicable.

 

(l) To reserve and keep available for issue upon the exercise of the Rights such number of authorized but unissued shares of Common Stock underlying the Warrants as will be sufficient to permit the exercise in full of all Rights, except as otherwise contemplated by the Prospectus.

 

(m) To not take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Units, Rights Shares, Warrants and Common Stock underlying the Warrants.

 

10.  Conditions of Dealer-Manager’s Obligations. The obligations of the Dealer-Manager hereunder are subject to (and the occurrence of any Closing shall be conditioned upon) the accuracy, as of the date hereof and at all times during the Rights Offering, of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder and to the following additional conditions:

 

(a) (i) The Registration Statement shall have become effective and the Prospectus shall have been timely filed with the Commission in accordance with the Securities Act; (ii) all post-effective amendments to the Registration Statement shall have become effective; (iii) no stop order suspending the effectiveness of the Registration Statement or any amendment or supplement thereto shall have been issued and no proceedings for the issuance of any such order shall have been initiated or threatened, and (iv) any request of the Commission for additional information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been disclosed to the Dealer-Manager and complied with to the Dealer-Manager’s reasonable satisfaction.

 

(b) The Dealer-Manager shall not have been advised by the Company or shall have discovered and disclosed to the Company that the Registration Statement or the Prospectus or any amendment or supplement thereto, contains an untrue statement of fact which in the Dealer-Manager’s opinion, or in the opinion of counsel to the Dealer-Manager, is material, or omits to state a fact which, in the Dealer-Manager’s opinion, or in the opinion of counsel to the Dealer-Manager, is material and is required to be stated therein or is necessary to make the statements therein not misleading.

 

(c) All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Rights, Units, Rights Shares, Warrants, Common Stock underlying the Warrants, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Dealer-Manager, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.

 

(d) On the Closing Date, there shall have been furnished to the Dealer-Manager the signed opinion (addressed to the Dealer-Manager) of Lucosky Brookman LLP, counsel for the Company, dated as of the Closing Date and in form and substance satisfactory to counsel for the Dealer-Manager.

 

 

(e) The Company shall have furnished to the Dealer-Manager a certificate, dated as of the Closing Date, of its Chief Executive Officer or President and its Chief Financial Officer stating that:

 

i.

To the best of their knowledge after reasonable investigation, the representations, warranties, covenants and agreements of the Company hereof are true and correct in all material respects;

 

ii.

The conditions set forth in this Agreement have been fulfilled;

 

iii.

Neither the Company nor any of its Subsidiaries has sustained any material loss or interference with its business, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding;

 

iv.

Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any Material Adverse Change or any development involving a prospective Material Adverse Change; and

 

v.

They have carefully examined the Registration Statement and the Prospectus and, in their opinion (A) the Registration Statement and the Prospectus, as of the Effective Date, did not include any untrue statement of a material fact and did not omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) since the Effective Date no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement or the Prospectus.

 

(f) Neither the Company nor any of its Subsidiaries shall have sustained since the date of the latest audited financial statements included in the Prospectus any Material Adverse Change, the effect of which is, in the judgment of the Dealer-Manager, so material and adverse as to make it impracticable or inadvisable to proceed with the Rights Offering.

 

(g) Neither FINRA nor Nasdaq shall have objected to the Rights Offering.

 

(h) All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Dealer-Manager. If any of the conditions specified in this Section 10 shall not have been fulfilled when and as required by this Agreement, this Agreement and all obligations of the Dealer-Manager hereunder may be canceled at, or at any time during the Rights Offering, by the Dealer-Manager. Any such cancellation shall be without liability of the Dealer-Manager to the Company. Notice of such cancellation shall be given the Company in writing, or by telegraph or telephone and confirmed in writing.

 

11.  Indemnification and Contribution.

 

(a) The Company agrees to indemnify and hold harmless the Dealer-Manager and its affiliates and any officer, director, employee or agent of RHK or any such affiliates and any Person controlling (within the meaning of Section 20(a) of the Exchange Act) the Dealer-Manager or any of such affiliates (collectively, the “Indemnified Parties”) from and against any and all losses, claims, damages, liabilities and expenses whatsoever, under the Securities Act or otherwise (as incurred or suffered and including, but not limited to, any and all legal or other expenses incurred in connection with investigating, preparing to defend or defending any lawsuit, claim or other proceeding, commenced or threatened, whether or not resulting in any liability, which legal or other expenses shall be reimbursed by the Company promptly after receipt of any invoices therefore from the Dealer-Manager), (A) arising out of or based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Offer Documents or any amendment or supplement thereto, in any other solicitation material used by the Company or authorized by it for use in connection with the Rights Offering, or in any blue sky application or other document prepared or executed by the Company (or based on any written information furnished by the Company) specifically for the purpose of qualifying any or all of the Rights, Units, Rights Shares, Warrants or Common Stock underlying the Warrants under the securities laws of any state or other jurisdiction (any such application, document or information being hereinafter called a “Blue Sky Application”) or arising out of or based upon the omission or alleged omission to state in any such document a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (other than statements or omissions made in reliance upon and in conformity with the Dealer-Manager Information), (ii) any withdrawal or termination by the Company of, or failure by the Company to make or consummate, the Rights Offering, (iii) any actions taken or omitted to be taken by an Indemnified Party with the consent of the Company or in conformity with actions taken or omitted to be taken by the Company or (iv) any failure by the Company to comply with any agreement or covenant, contained in this Agreement or (B) arising out of, relating to or in connection with or alleged to arise out of, relate to or be in connection with, the Rights Offering, any of the other transactions contemplated thereby or the performance of RHK’s services to the Company with respect to the Rights Offering; provided, however, that in the case of clause (B) only, the Company shall not be responsible for any liabilities or expenses of any Indemnified Party that have resulted primarily from such Indemnified Party’s (x) gross negligence, bad faith or willful misconduct in connection with any of the advice, actions, inactions or services referred to herein or (y) use of any Offering materials or information concerning the Company in connection with the Offer that were not authorized for such use by the Company and which use constitutes negligence, bad faith or willful misconduct.

 

 

(b) If the indemnification provided for in the foregoing paragraph is judicially determined to be unavailable (other than in accordance with the terms hereof) to any Indemnified Party otherwise entitled to indemnity in respect of any losses, claims, damages or liabilities referred to herein, then, in lieu of indemnifying such person hereunder, whether or not the Dealer-Manager is the person entitled to indemnification or reimbursement, the Company shall contribute to the amount paid or payable by the Indemnified Party as a result of such losses, claims, damages or liabilities (and expenses relating thereto) (i) in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and the Dealer-Manager, on the other hand, of the Rights Offering or (ii) if the allocation provided for in clause (i) above is not available, in such proportion as is appropriate to reflect not only the relative benefits referred to in such clause (i) but also the relative fault of each of the Company and the Dealer-Manager, as well as any other relevant equitable considerations; provided, however, in no event shall the Dealer-Manager’s aggregate contribution to the amount paid or payable exceed the aggregate amount of fees actually received by the Dealer-Manager under this Agreement. For the purposes of this Agreement, the relative benefits to the Company and to the Dealer-Manager of the engagement shall be deemed to be in the same proportion as (a) the total value paid or contemplated to be paid or received or contemplated to be received by the Company in the Rights Offering, whether or not the Rights Offering is consummated, bears to (b) the fees paid or to be paid to the Dealer-Manager under this Agreement.

 

(c) The Company also agrees that neither the Dealer-Manager, nor any other Indemnified Party, shall have any liability to the Company for or in connection with the Dealer-Manager’s engagement as Dealer-Manager, except for any such liability for losses, claims, damages, liabilities or expenses incurred by the Company which have resulted primarily from the Dealer-Manager’s bad faith, willful misconduct, or gross negligence. The foregoing agreement shall be in addition to any rights that the Dealer-Manager, the Company or any Indemnified Party may have at common law or otherwise, including, but not limited to, any right to contribution. For the sole purpose of enforcing and otherwise giving effect to the provisions of this Agreement, the Company hereby consents to personal jurisdiction and service and venue in any court in which any claim which is subject to this agreement is brought against the Dealer-Manager or any other indemnified party.

 

(d) The Company agrees that it will not, without the prior written consent of the Dealer-Manager, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the Dealer-Manager is an actual or potential party to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release, reasonably satisfactory in form and substance to the Dealer-Manager, releasing the Dealer-Manager from all liability arising out of such claim, action, suit or proceeding.

 

(e) The Company agrees to reimburse each Indemnified Party for all expenses as they are incurred in connection with enforcing such Indemnified Party’s rights hereunder.

 

12.   Effective Date of Agreement; Termination.

 

(a) This Agreement shall become effective upon the later of the time on which the Dealer-Manager shall have received notification of the effectiveness of the Registration Statement and the time which this Agreement shall have been executed by all of the parties hereto.

 

(b) This Agreement shall terminate upon the earliest to occur of (a) the consummation, termination or withdrawal of the Rights Offering, and (b) the withdrawal by the Dealer-Manager pursuant to Section 4.

 

13.  Survival of Certain Provisions. The agreements contained in Sections 3, 6, 7 and 13 through 21 hereof and the representations, warranties and agreements of the Company contained in Section 5 hereof shall survive the consummation of or failure to commence the Rights Offering and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party; provided, that the Company’s obligations under Section 7 to reimburse the Dealer-Manager for accountable expenses are subject to FINRA Rule 5110 (f)(2)(D) in that such expenses are only reimbursable to the extent actually incurred and only if the Offering actually closes.

 

 

14.  Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) sent by facsimile with immediate telephonic confirmation or (c) sent by registered or certified mail, return receipt requested, postage prepaid, to the parties hereto as follows:

 

If to the Dealer-Manager:

 

RHK Capital, LLC doing business as RHK Noble

88 Post Road West

Westport, CT 06880

Attention: Mr. Richard H. Kreger, Senior Managing Director

Email: [email protected]

 

With a copy to:

 

Olshan Frome Wolosky LLP

1325 Avenue of the Americas, 15^th Floor

New York, NY 10019

Attention: Spencer G. Feldman, Esq.

Email: [email protected]

Facsimile: (212) 451-2222

 

If to the Company:

 

Creatd, Inc.

419 Lafayette Street, 6^th Floor

New York, New York 10003

Attention: Ms. Laurie Weisberg, Chief Executive Officer

Email: [email protected]

Facsimile: (___) ___-____

 

With a copy to:

 

Lucosky Brookman LLP

101 Wood Avenue South, 5th Floor

Iselin, New Jersey 08830

Attention: Joseph M. Lucosky, Esq.

Email: [email protected]

Facsimile: (732) 395-4401

 

15. Parties. This Agreement shall inure to the benefit of and be binding upon the Dealer-Manager, the Company and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those Persons, except that the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the Person or Persons, if any, who control the Dealer-Manager within the meaning of Section 15 of the Act. Nothing in this Agreement shall be construed to give any Person, other than the Persons referred to in this Section 15, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.

 

 

16. Amendment. This Agreement may not be amended or modified except in writing signed by each of the parties hereto.

 

17. Governing Law; Venue. This Agreement shall be deemed to have been executed and delivered in New York and both this Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect, and in all other respects by the laws of the State of New York, without regard to the conflicts of laws principles thereof (other than Section 5-1401 of the New York General Obligations Law). Each of the Dealer-Manager and the Company: (a) agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York, (b) waives any objection which it may have or hereafter to the venue of any such suit, action or proceeding, and (c) irrevocably consents to the jurisdiction of Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York in any such suit, action or proceeding. Each of the Dealer-Manager and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail to the Company’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding, and service of process upon the underwriters mailed by certified mail to the Dealer-Manager’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service process upon the Dealer-Manager, in any such suit, action or proceeding. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, ANY PRELIMINARY PROSPECTUS AND THE PROSPECTUS.

 

18.  Entire Agreement. This Agreement, together with the exhibit attached hereto and as the same may be amended from time to time in accordance with the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and there are no other or further agreements outstanding not specifically mentioned herein. Notwithstanding anything herein to the contrary, the engagement letter entered into by and between the Company and the Dealer-Manager, dated May 1, 2022 (the “Engagement Letter”), shall continue to be effective and the terms therein shall continue to survive and be enforceable by the parties thereto, in accordance with its terms.

 

19. Assignment. Neither this Agreement nor any right or interest hereunder shall be assignable by the Company or the Dealer-Manager without the prior written consent of the other party hereto; provided, however, that nothing in this Section 19 shall preclude the Dealer-Manager from (i) assigning any rights hereunder to a corporation or other entity acquiring all or substantially all the assets and business, whether by operation of law or otherwise, of the Dealer-Manager, provided such entity is a registered broker-dealer, or (ii) designating another broker-dealer to perform services hereunder if the Dealer-Manager is unable to do so, provided such firm includes some or all of the Dealer-Manager’s former investment banking staff.

 

20. Severability. If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.

 

21. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

 

22. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or other electronic transmission shall constitute valid and sufficient delivery thereof. If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

 

[Signature Page Follows]

 

 

			Very truly yours,
			CREATD, INC.
			By:
			Name:
			Title:
Accepted and Agreed as of the date first written above:
RHK CAPITAL, LLC
doing business as RHK Noble
By:
Name:	Richard H. Kreger
Title:	Senior Managing Director

 

 

[Signature Page to Dealer-Manager Agreement]

 

 

23

Exhibit 4.6

 

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS DATED JULY 13, 2022 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM D.F. KING, THE INFORMATION AGENT, BY CALLING (212) 269-5550 (BANKERS AND BROKERS) OR (877) 283-0323 (ALL OTHERS) OR BY EMAIL AT [email protected].

 

CREATD, INC.
Incorporated under the laws of the State of Nevada

 

NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE

 

Evidencing Non-Transferable Subscription Rights to Purchase Units of Creatd, Inc.

 

Subscription Price: $2.00

THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE
5:00 P.M., EASTERN TIME, ON AUGUST 22, 2022 (AS IT MAY BE EXTENDED,
THE “EXPIRATION DATE”)

 

REGISTERED OWNER:

 

THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of non-transferable subscription rights (“Rights”) set forth above. The Rights entitle the holder thereof to subscribe for and purchase units of Creatd, Inc., a Nevada corporation (the “Company”), each unit (the “Units,” and each, a “Unit”) consisting of one share of common stock of the Company par value $0.001 per share (“Common Stock”), a Series A redeemable warrant exercisable for one share of Common Stock at an exercise price of $3.00 (the “Series A Warrants” and each, a “Series A Warrant”), and a Series B redeemable warrant exercisable for one share of Common Stock at an exercise price of $6.00 (the “Series B Warrants” and each, a “Series B Warrant”), at a subscription price per full Unit equal to $2.00 pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus.

 

Each Right includes two subscription rights. Under the subscription right, holders of common stock owned as of the record date of the Rights Offering and holders of certain shares Series E Preferred Stock (the “Preferred Shares”), common stock warrants (the “Eligible Warrants”) and options (the “Eligible Options”) are entitled to purchase a number of units equal to two times the number of shares of common stock and common stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options such holder holds as of the record date.

 

The Rights represented by this Subscription Rights Certificate may be exercised by completing Section 1 and any other appropriate forms on the reverse side hereof and by returning the full payment of the subscription price for each Unit in accordance with the instructions contained herein.

 

This Non-Transferable Subscription Rights Certificate is not valid unless countersigned by Continental Stock Transfer & Trust, the Subscription Agent. Witness the seal of Creatd, Inc. and the signatures of its duly authorized officers.

 

DATED: July 13, 2022

 

/s/ Laurie Weisberg		/s/ Chelsea Pullano
Chief Executive Officer		Corporate Secretary

 

 

DELIVERY OPTIONS FOR NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE

 

Deliver other than in the manner or to the addresses listed below will not constitute valid delivery.

 

If delivering by hand or overnight courier:   Continental Stock Transfer & Trust Attn: Corporate Actions 1 State Street, 30th Floor New York, NY 10004

If delivering by first class mail:   Continental Stock Transfer & Trust Attn: Corporate Actions 1 State Street, 30th Floor New York, NY 10004

 

 

PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY.

 

SECTION 1 - EXERCISE OF SUBSCRIPTION RIGHTS

 

To subscribe for Units pursuant to your subscription right, please complete lines (a) and (b) and sign in part (c). If you do not indicate the number of Rights being exercised, or if you do not forward the full subscription payment for the number of Rights that you indicate are being exercised, then you will be deemed to have exercised the maximum number of Rights that may be exercised with the aggregate subscription payment you delivered to the Subscription Agent. Fractional Units resulting from the exercise of the subscription rights will be eliminated by rounding down to the nearest whole number, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the Subscription Agent will be returned, without interest, as soon as practicable. The Common Stock, Series A Warrants and Series B Warrants comprising the Units will separate upon the closing of the rights offering and will be issued separately, however, they may only be purchased as a Unit and the Unit will not trade as a separate security. Each Series A Warrant will be exercisable for one of Common Stock at an exercise price of $3.00, and each Series A Warrant will be exercisable for one of Common Stock at an exercise price of $6.00.

 

For each share of Common Stock owned or issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options as of the record date of the Rights Offering, the holder hereof is entitled to purchase a number of Units equal to two times the number of shares of Common Stock and Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options the holder holds as of the record date.

 

(a)	EXERCISE OF SUBSCRIPTION RIGHT:

 

(i)

Basic Subscription Rights:

 

I exercise

x

$2.00

=

$

(Up to 2 x No. of shares owned)

x

(Subscription Price)

(Amount Enclosed)

 

(ii)	Over-Subscription Right: If you fully exercise your Basic Subscription Right, above, and wish to subscribe for additional shares, you may exercise your Over-Subscription Right below.

 

I exercise

x

$2.00

=

$

(No. of Over-Subscription Units Subscribed For)

x

(Subscription Price)

(Amount Enclosed)

 

 

(b)

PAYMENT:

 

		Amount Enclosed
Basic Subscription Right:		$			☐ ☐ Check or bank draft drawn on a U.S. bank, or postal or express money order payable to Continental Stock Transfer & Trust, as Subscription Agent.
Over-Subscription Right:		$			☐ ☐ Wire transfer directly to the escrow account maintained by an escrow agent retained by Continental Stock Transfer & Trust, as Subscription Agent, on our behalf.
Total Amount Enclosed:		$

 

Method of Payment: All payments must be made in U.S. dollars by wire transfer of funds, U.S. Postal money order or cashier’s, certified, or uncertified check drawn upon a U.S. bank payable to “Continental Stock Transfer & Trust (acting as Subscription Agent for Creatd, Inc. The Subscription Agent will not accept payment by any other means.

 

(c)	SIGNATURE(S):

 

TO SUBSCRIBE: I acknowledge that I have received the Prospectus for the Rights Offering and I hereby irrevocably subscribe for the number of Units indicated above on the terms and conditions specified in the Prospectus. I hereby agree that if I fail to pay for the Units for which I have subscribed, Creatd, Inc. may exercise its legal remedies against me.

 

This form must be signed by the registered holder(s) exactly as their name(s) appear(s) on the certificate(s) or book entry or by person(s) authorized to sign on behalf of the registered holder(s) by documents transmitted herewith.

 

Signature(s) of Subscriber(s)			Date			Daytime Telephone Number(s)

 

 

If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of a corporation or another acting in a fiduciary or representative capacity, please provide the following information (please print). See the instructions.

 

Name(s)			Full Title			Taxpayer ID # or Social Security #			Date

 

 

SECTION 2 - SPECIAL ISSUANCE OR DELIVERY INSTRUCTIONS FOR SUBSCRIPTION RIGHTS HOLDERS

 

(a) To be completed ONLY if the book-entry representing the Common Stock is to be issued in a name other than that of the registered holder. (See the Instructions.) DO NOT FORGET TO COMPLETE THE GUARANTEE OF SIGNATURE(S) SECTION BELOW.

(b) To be completed ONLY if the book-entry representing the Common Stock is to be issued to an address other than that shown on the front of this certificate. (See the Instructions.) DO NOT FORGET TO COMPLETE THE GUARANTEE OF SIGNATURE(S) SECTION BELOW.

 

Print Full Name:				Print Full Name:
Print Full Address:				Print Full Address:
Taxpayer ID # or Social Security #:				Taxpayer ID # or Social Security #:

 

SIGNATURE GUARANTEE

 

This must be completed if you have completed any portion of Section 2.

 

Signature Guaranteed:
			(Name of Bank or Form)

 

By:
			(Signature of Officer)

 

IMPORTANT: The signature(s) should be guaranteed by an eligible guarantor institution (bank, stock broker, savings & loan association or credit union) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15.

 

FOR INSTRUCTIONS ON THE USE OF NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATES, CONSULT D.F. KING, THE INFORMATION AGENT, BY CALLING (212) 269-5550 (BANKERS AND BROKERS) OR (877) 283-0323 (ALL OTHERS) OR BY EMAIL AT [email protected]. THE RIGHTS OFFERING EXPIRES AT 5:00 P.M., EASTERN TIME, ON AUGUST 22, 2022 (UNLESS EXTENDED BY THE COMPANY AS DESCRIBED IN THE PROSPECTUS), AND THIS NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE IS VOID THEREAFTER.

 

THE RIGHTS OFFERING HAS BEEN REGISTERED OR QUALIFIED OR IS BELIEVED TO BE EXEMPT FROM REGISTRATION OR QUALIFICATION ONLY UNDER THE FEDERAL LAWS OF THE UNITED STATES AND THE LAWS OF THE STATES IN THE UNITED STATES. RESIDENTS OF OTHER JURISDICTIONS MAY NOT PURCHASE THE SECURITIES OFFERED HEREBY UNLESS THEY CERTIFY THAT THEIR PURCHASES OF SUCH SECURITIES ARE EFFECTED IN ACCORDANCE WITH THE APPLICABLE LAWS OF SUCH JURISDICTIONS.

 

 

5

 

Exhibit 5.1

 

 

July 13, 2022

 

Creatd, Inc.

419 Lafayette Street, 6th Floor

New York, NY 10003

 

Re: Registration Statement on Form S-1

 

Ladies and Gentlemen:

 

We have acted as counsel to you, Creatd, Inc. (the “Company”), a Nevada corporation, in connection with the public offering contemplated by the registration statement on Form S-1 filed by the Company on May 26, 2022 (as amended to date, the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), for proposed distribution with respect to each outstanding share of common stock of the Company, par value $0.001 per share (“Common Stock”), by the Company to each holder of Common Stock and/or holder of certain classes of instruments or securities convertible into Common Stock of a nontransferable subscription right (collectively with all such rights, the “Rights”)  to purchase two units (collectively with all such units, the “Units”) each consisting of (i) one share of Common Stock (such shares of Common Stock, as issued, the “Initial Shares”); (ii) one Series A warrant to purchase one share of Common Stock (the “Series A Warrants”); and (iii) one Series B warrant to purchase one share of Common Stock (the “Series B Warrants” collectively, the “Warrants” and the shares of Common Stock issuable upon exercise of the Warrants, the “Warrant Shares”).  The aggregate Rights may be exercised for an aggregate amount of up to 60,000,000 shares of Common Stock underlying the Units, comprised of (i) up to 20,000,000 Initial Shares of Common Stock; (ii) up to 20,000,000 shares of Common Stock underlying the Series A Warrants and (iii) up to 20,000,000 shares of Common Stock underlying the Series B Warrants. This opinion is being furnished pursuant to the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.

 

This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.

 

In connection with this opinion, we have examined the originals or copies certified or otherwise identified to our satisfaction of the following: (a) the articles of incorporation of the Company, as amended to date; (b) the bylaws of the Company, as amended to date, and (c) the Registration Statement and all exhibits thereto. In addition to the foregoing, we also have relied as to matters of fact upon the representations made by the Company and its representatives and we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us certified or photostatic copies.

 

 

 

Based upon the foregoing and in reliance thereon, and subject to the qualifications, limitations, exceptions and assumptions set forth herein, we are of the opinion that (i) the Initial Shares, when issued, will be validly issued, fully paid and non-assessable, (ii) the Warrants included in the Units, when issued as set forth in the Registration Statement, will be legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms; (iii) the Warrant Shares, when issued upon exercise of the Warrants against payment therefor as set forth in the Registration Statement, will be validly issued, fully paid and non-assessable; and (iv) the Units, when issued against payment thereof as set forth in the Registration Statement, will be validly issued, fully paid and non-assessable, and will be legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms;

 

We are opining herein as to the Nevada Revised Statutes, and we express no opinion with respect to any other laws. This opinion is limited to the laws in effect as of the date the Registration Statement is declared effective by the Commission and is provided exclusively in connection with the public offering contemplated by the Registration Statement.

 

This opinion letter speaks only as of the date hereof and we assume no obligation to update or supplement this opinion letter if any applicable laws change after the date of this opinion letter or if we become aware after the date of this opinion letter of any facts, whether existing before or arising after the date hereof, that might change the opinions expressed above.

 

This opinion letter is furnished in connection with the filing of the Registration Statement and may not be relied upon for any other purpose without our prior written consent in each instance. Further, no portion of this letter may be quoted, circulated or referred to in any other document for any other purpose without our prior written consent.

 

We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the use of our name as it appears in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.

 

Very truly yours,
/s/ Lucosky Brookman LLP
Lucosky Brookman LLP

 

 

Exhibit 8.1

 

 

July 13, 2022

 

Creatd, Inc.

419 Lafayette Street, 6th Floor

New York, NY 10003

 

Re: Registration Statement on Form S-1

 

Ladies and Gentlemen:

 

We have acted as counsel to Creatd, Inc., a Nevada corporation (the “Company”), in connection with the preparation and filing of a Registration Statement on Form S-1 (File No. 333-264908), including the prospectus contained therein, originally filed with the Securities and Exchange Commission by the Company on May 26, 2022 (as amended, the “Registration Statement”), under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder. The Registration Statement relates to the proposed distribution with respect to each outstanding share of common stock of the Company, par value $0.001 per share (“Common Stock”), by the Company to each shareholder (the “Offering”) of a nontransferable subscription right (collectively with all such rights, the “Rights”) to purchase one unit consisting of (i) shares of Common Stock (such initial shares of Common Stock as issued, the “Initial Shares”), (ii) a Series A warrant to purchase Common Stock in accordance with its terms; and (iii) a Series B warrant to purchase Common Stock in accordance with its terms (collectively with all such warrants and the Series A warrants, the “Warrants”). The aggregate Rights may be exercised for an aggregate amount of up to $40,000,000. This opinion is being furnished pursuant to the requirements of Item 601(b)(8) of Regulation S-K under the Securities Act.

 

As counsel for the Company and for purposes of our opinion set forth below, we have assumed with your permission and without independent investigation that the statements of the Company contained in the Registration Statement (including any exhibits thereto) and such other documents, certificates, records, statements and representations as we have deemed necessary or appropriate as a basis for the opinion set forth below are true, correct and complete as to all factual matters stated therein.

 

 

In addition, we have assumed, with your permission, (i) that the Offering will be consummated as described in the Registration Statement, (ii) that the statements concerning the terms of the Offering contained in the Registration Statement are true, correct and complete and will remain true, correct and complete at all relevant times, (iii) the authenticity of original documents submitted to us and the conformity to the originals of documents submitted to us as copies and (iv) that any statement or representation contained in the certificate of the Company with the qualification “to the knowledge of” or “based on the belief of” or other similar qualification, is true, correct and complete and will remain true, correct and complete at all relevant times, in each case without such qualification.

 

Based upon the foregoing, and subject to the limitations, qualifications, assumptions and caveats set forth herein and in the Registration Statement, we hereby confirm that the statements set forth under the heading “Material U.S. Federal Income Tax Considerations” in the Registration Statement, to the extent such statements summarize U.S. federal income tax law, constitute our opinion as to the material United States federal income tax consequences of the Offering of the receipt and exercise (or expiration) of the Rights and owning and disposing of the Initial Shares and Warrants received upon exercise of the Rights.

 

This opinion addresses only the matters of United States federal income taxation specifically described under the heading “Material U.S. Federal Income Tax Considerations” in the Registration Statement. This opinion does not address any other United States federal tax consequences or any state, local or foreign tax consequences that may be relevant to prospective unitholders.

 

We hereby consent to the discussion of this opinion in the Registration Statement, to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the captions “Legal Matters” in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, nor do we admit that we are experts with respect to any part of the Registration Statement within the meaning of the term “expert” as used in the Securities Act or the rules and regulations promulgated thereunder.

 

Very truly yours,
/s/ Lucosky Brookman LLP
Lucosky Brookman LLP

 

 

Exhibit 23.1

 

CONSENT AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

 

We hereby consent to the use in this Registration Statement on Amendment No. 2 to Form S-1 (Registration No. 333-264908) of our report dated April 6, 2022, relating to the consolidated financial statements of Creatd, Inc. for the years ended December 31, 2021 and 2020, and to the reference to our Firm under the caption “Experts” in the Registration Statement.

 

/s/ Rosenberg Rich Baker Berman, P.A.

 

Somerset, New Jersey

July 13, 2022

Exhibit 99.1

 

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS DATED JULY 13, 2022 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM D.F. KING, THE INFORMATION AGENT, BY CALLING (212) 269-5550 (BANKERS AND BROKERS) OR (877) 283-0323 (ALL OTHERS) OR BY EMAIL AT [email protected].

 

FORM OF INSTRUCTIONS AS TO USE OF CREATD, INC.
NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATES

 

PLEASE CONSULT THE SUBSCRIPTION AND INFORMATION AGENT,
YOUR BANK OR BROKER FOR ANY QUESTIONS

 

The following instructions relate to a rights offering by CREATD, INC., a Nevada corporation (“we,” “us,” “our,” or the “Company”), to the shareholders (the “holder”, or “you”) of its common stock, par value $0.001 per share (the “Common Stock”), as described in the prospectus dated July 13, 2022 (the “Prospectus”). Holders of our Common Stock, certain shares of Series E Preferred Stock (the “Preferred Shares”), common stock warrants (the “Eligible Warrants”) and options (the “Eligible Options”), as of 5:00 p.m., Eastern Time, on July 29, 2022 (the “Record Date”) are receiving, at no charge, two non-transferable subscription rights (each, a “Basic Subscription Right”) entitling holders of Common Stock and Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options to purchase a number of units (the “Units” and each, a “Unit”), equal to two times the number of shares of Common Stock and Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options held by that holder as of the record date as of the record date; and the over-subscription privilege, which will be exercisable only if holder exercises his Basic Subscription Right in full and will entitle holder to purchase additional units for which other rights holders do not subscribe, subject to certain pro rata allocations and ownership limitations. Each Unit will consist of one of Common Stock, a Series A redeemable warrant exercisable for one of Common Stock at an exercise price of $3.00 (the “Series A Warrants” and each, a “Series A Warrant”), and a Series B redeemable warrant exercisable for one of Common Stock at an exercise price of $6.00 (the “Series B Warrants” each, a “Series B Warrant”, and together with Series A Warrants, the “Warrants”) at a subscription price full Unit equal to $2.00.

 

The Subscription Rights will be evidenced by non-transferable subscription rights certificates (the “Non-Transferable Subscription Rights Certificate”). The number of Basic Subscription Rights to which you are entitled is printed on the face of your Non-Transferable Subscription Rights Certificate.

 

Over-Subscription Privilege

 

If a holder purchases all of the Units available to it pursuant to its Basic Subscription Rights, it may also exercise an over-subscription privilege (the “Over-Subscription Privilege” collectively with the Basic Subscription Rights, the “Subscription Rights”) to purchase additional Units to the extent other rights holders do not exercise their basic rights in full (the “Unsubscribed Units”). Over Subscription Privilege will be allocated pro rata among rights holders who over-subscribe, based on the number of over-subscription Units for which the rights holders have subscribed. If you exercise fewer than all of your Basic Subscription Rights, however, you will not be entitled to purchase any additional Units pursuant to the Over-Subscription Privilege.

 

If you wish to exercise your Over Subscription Privilege, you should deliver a completed Non-Transferable Subscription Rights Certificate indicating the number of additional Units that you would like to purchase as well as the number of shares of Common Stock that you beneficially own without giving effect to any Units to be purchased in this rights offering and the required payment to the Subscription Agent by the expiration date or, if your shares of Common Stock or Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options are held in an account with a broker-dealer, trust company, bank or other nominee that qualifies as an Eligible Guarantor Institution deliver a notice of guaranteed delivery to the subscription agent by the expiration date. When you send in your Non-Transferable Subscription Rights Certificate, you must also send the full subscription price in cash, as provided herein, for the number of additional Units that you have requested to purchase (in addition to the payment in cash, as provided herein, due for Units purchased through your Basic Subscription Rights).

 

 

If the number of Units remaining after the exercise of all Subscription Rights is not sufficient to satisfy all requests for Units pursuant to Over-Subscription Privilege, we will allocate the Unsubscribed Units pro rata among rights holders who oversubscribe based on the number of over-subscription Units for which the rights holders have subscribed. The Subscription Agent will return any excess payments in the form in which made. To the extent your aggregate subscription payment for the actual number of unsubscribed units available to you pursuant to the over-subscription privilege is less than the amount actually paid in connection with the exercise of the over-subscription privilege, you will be allocated only the number of unsubscribed units available to you, and any excess subscription payment will be promptly returned to you, without interest or deduction, after the expiration of this offering.

 

As soon as practicable after the Expiration Time (defined blow), the Subscription Agent will determine Units that you may purchase pursuant to the Over-Subscription Right. If you request and pay for more Units than are allocated to you, we will refund the overpayment in the form in which made. In connection with the exercise of the Over-Subscription Right, banks, brokers and other nominee holders of Basic Subscription Rights who act on behalf of beneficial owners will be required to certify to us and to the Subscription Agent as to the aggregate number of Basic Subscription Rights exercised, and the number of Units requested through the Over-Subscription Right, by each beneficial owner on whose behalf the nominee holder is acting.

 

Subscription Rights may only be exercised in aggregate for whole numbers of Units. Only whole numbers of shares of Common Stock and Warrants exercisable for whole numbers of shares will be issuable to you in this offering; any right to a fractional share to which you would otherwise be entitled will be terminated, without consideration to you. You are not required to exercise any or all of your Basic Subscription Rights. If you do not exercise your Subscription Rights, you will lose any value represented by your Subscription Rights, and if you do not exercise your Subscription Rights in full, your percentage ownership interest and related rights in the Company will be diluted. Your percentage ownership of our voting stock may also decrease if you do not exercise your Subscription Rights in full. Please see the discussion of dilution relating to the subscription rights in the Question and Answer section of the Prospectus entitled “Am I required to exercise the subscription rights I receive in this offering?”

 

Expiration Time

 

THE BASIC SUBSCRIPTION RIGHTS WILL EXPIRE AND WILL HAVE NO VALUE AT 5:00 P.M., EASTERN TIME, AUGUST 22, 2022, SUBJECT TO EXTENSION OR EARLIER TERMINATION (THE “EXPIRATION DATE”). YOUR NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE AND SUBSCRIPTION PAYMENT FOR EACH RIGHT THAT IS EXERCISED PURSUANT TO THE SUBSCRIPTION RIGHT MUST BE RECEIVED BY THE SUBSCRIPTION AGENT ON OR BEFORE 5:00 P.M., EASTERN TIME, ON THE EXPIRATION DATE. ONCE YOU HAVE EXERCISED YOUR SUBSCRIPTION RIGHT, SUCH EXERCISE MAY NOT BE REVOKED OR CHANGED, EVEN IF YOU LATER LEARN INFORMATION THAT YOU CONSIDER TO BE UNFAVORABLE TO THE EXERCISE OF YOUR SUBSCRIPTION RIGHTS. SUBSCRIPTION RIGHTS NOT EXERCISED PRIOR TO 5:00 P.M., EASTERN TIME, ON THE EXPIRATION DATE WILL EXPIRE WITHOUT VALUE.

 

If you do not exercise your Subscription Rights prior to that time, your Subscription Rights will expire and will no longer be exercisable. We will not be required to sell Units to you if the Subscription Agent receives your Non-Transferable Subscription Rights Certificate(s) or your subscription payment after 5:00 P.M., Eastern Time on the Expiration Date (the “Expiration Time”), regardless of when the Non-Transferable Subscription Rights Certificate(s) and subscription payment were sent. If you send your Non-Transferable Subscription Rights Certificate(s) and payment of the subscription price by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested, and that a sufficient number of days be allowed to ensure delivery to the Subscription Agent and clearance of payment prior to the expiration of the subscription period or the date guaranteed payments are due under a notice of guaranteed delivery (as applicable). See “The Rights Offering-Expiration of Offer” in the Prospectus.

 

The Common Stock and Warrants issued upon exercise of the Subscription Rights to purchase Units will be delivered as soon as practicable after the Expiration Time, and after all pro rata allocations and adjustments have been completed.

 

 

1.	If you have any questions concerning the rights offering, please contact the Information Agent, D.F. King by telephone at (212) 269-5550 (bankers and brokers) or (877) 283-0323 (all others) or by email at [email protected]. Method of Subscription-Exercise of Subscription Rights.

 

To exercise your Subscription Rights, please: (1) complete Section 1 on your Non-Transferable Subscription Rights Certificate, attached to these instructions; (2) sign Section 1 of your Non-Transferable Subscription Rights Certificate; and (3) mail the properly completed and executed Non-Transferable Subscription Rights Certificate evidencing such Basic Subscription Rights and, if applicable, Over-Subscription Privilege subscribed, together with payment in full of the subscription price for each Unit subscribed for pursuant to the Basic Subscription Rights and, if applicable, Over-Subscription Privilege, to the Subscription Agent, on or prior to the Expiration Time.

 

Additionally, if the Common Stock and Warrants issued pursuant to the Units to be sold pursuant to the Subscription Rights are to be issued in a name other than that of the registered holder, or sent to an address other than that shown on the front of the Non-Transferable Subscription Rights Certificate, please complete Section 2 of the Non-Transferable Subscription Rights Certificate and obtain a signature guarantee as described below prior to mailing the Non-Transferable Subscription Rights Certificate to the Subscription Agent, prior to the Expiration Time. Payment of the subscription price will be held in escrow by an escrow agent retained by the Subscription Agent, on our behalf, in a segregated account.

 

(a) Method of Execution

 

(i) Execution by Registered Holder. Your signature on the Non-Transferable Subscription Rights Certificate must correspond with the name of the registered holder exactly as it appears on the face of the Non-Transferable Subscription Rights Certificate without any alteration or change whatsoever. Persons who sign the Non-Transferable Subscription Rights Certificate in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Subscription Agent in its sole and absolute discretion, must present to the Subscription Agent satisfactory evidence of their authority to so act.

 

(ii) Execution by Person Other than Registered Holder. If the Non-Transferable Subscription Rights Certificate is executed by a person other than the holder named on the face of the Non-Transferable Subscription Rights Certificate, proper evidence of authority of the person executing the Non-Transferable Subscription Rights Certificate must accompany the same unless, for good cause, the Subscription Agent dispenses with proof of authority.

 

(iii) Signature Guarantees. If you completed any part of Section 2 of the Non-Transferable Subscription Rights Certificate to provide that the Common Stock and Warrants issued pursuant to the Units sold pursuant to your exercise of Subscription Rights to be (x) issued in a name other than that of the registered holder, or (y) sent to an address other than that shown on the front of the Non-Transferable Subscription Rights Certificate, your signature in Section 1 must be guaranteed in Section 2 by an “Eligible Guarantor Institution,” as such term is defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, (as amended, the “Exchange Act”) such as a member firm of a registered national securities exchange or a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office or correspondent in the United States, or by a member of a Stock Transfer Association approved medallion program such as STAMP, SEMP or MSP, subject to standards and procedures adopted by the Subscription Agent.

 

(b)	Method of Payment and Delivery

 

You may choose between the following methods of payment:

 

(1)

You may send to the Subscription Agent (a) payment of the subscription price for units acquired in the basic right and any additional units subscribed for pursuant to the over-subscription privilege and (b) a properly completed and duly executed Non-Transferable Subscription Rights Certificate, which must be received by the Subscription Agent at the subscription agent’s offices set forth above, at or prior to 5:00 p.m. (Eastern time) on the Expiration Date. A properly completed and duly executed Non-Transferable Subscription Rights Certificate and full payment for the Units must be received by the Subscription Agent at or prior to 5:00 p.m. (Eastern time) on August 22, 2022, unless the offering is extended by us.

 

 

(2)

A participating rights holder may request an Eligible Guarantor Institution as that term is defined in Rule 17Ad-15 under the Exchange Act to send a notice of guaranteed delivery or otherwise guaranteeing delivery of (a) payment of the full subscription price for the Units subscribed for in the basic right and any additional Units subscribed for pursuant to the Over-Subscription Privilege, and (b) a properly completed and duly executed Non-Transferable Subscription Rights Certificate. The Subscription Agent will not honor a notice of guaranteed delivery unless a properly completed and duly executed Non-Transferable Subscription Rights Certificate and full payment for the Units is received by the Subscription Agent at or prior to 5:00 p.m. (Eastern time) on August 22, 2022, unless the offering is extended by us.

 

All payments by a participating rights holder must be in U.S. dollars by money order or check or bank draft drawn on a bank or branch located in the United States and payable to the order of “Continental Stock Transfer & Trust as Agent for Creatd, Inc..” Payment also may be made by wire transfer to the account maintained by Continental Stock Transfer & Trust, as subscription agent, for purposes of accepting subscriptions in this offering at JPMorgan Chase Bank, ABA # 021000021, Account # 475-466-845, with reference to the rights holder’s name. The subscription agent will deposit all funds received by it prior to the final payment date in escrow in a segregated account maintained by an escrow agent retained by the Subscription Agent on our behalf, pending pro-ration and distribution of the Units.

 

	Beneficiary Account Name: Continental Stock Transfer & Trust
	Account Number:	475-466-845
	ABA#:	021000021
	Bank:	JPMorgan Chase Bank
		4 Metrotech Center, 14th Floor
		Brooklyn, NY 11245
		United States
	Account Number:	475-466-845

 

Non-Transferable Subscription Rights Certificate and payments of subscription price must be delivered to the Subscription Agent by one of the methods described below:

 

If delivering by hand or overnight courier:   Continental Stock Transfer & Trust Attn: Corporate Actions 1 State Street, 30th Floor New York, NY 10004

If delivering by first class mail:   Continental Stock Transfer & Trust Attn: Corporate Actions 1 State Street, 30th Floor New York, NY 10004

 

Delivery to an address or by a method other than those above will not constitute valid delivery.

 

2.	Issuance of Common Stock and Warrants.

 

The following deliveries and payments will be made and/or issued to the address shown on the face of your Non-Transferable Subscription Rights Certificate, unless you provide instructions to the contrary in your Non-Transferable Subscription Rights Certificate.

 

(a)

Basic Subscription Rights. As soon as practicable following the Expiration Time and the valid exercise of the Basic Subscription Rights, we will issue to each holder exercising Basic Subscription Rights shares in book-entry, or uncertificated, form representing shares of Common Stock, Series A Warrants, and Series B Warrants included in the Units purchased pursuant to the Basic Subscription Rights.

 

 

(b)

Over-Subscription Privilege. As soon as practicable following the Expiration Time and after all prorations and adjustments contemplated by the terms of the rights offering have been effected, we will issue to each holder of Subscription Rights that validly exercises the Over-Subscription Privilege shares in book-entry, or uncertificated, form representing the number of shares of Common Stock, Series A Warrants, and Series B Warrants included in the Units, if any, allocated to such holder of Subscription Rights pursuant to the Over-Subscription Privilege.

 

(c)

Excess Cash Payments. As soon as practicable following the Expiration Time and after all prorations and adjustments contemplated by the terms of the rights offering have been effected, any excess subscription payments received in payment of the subscription price will be mailed by the Subscription Agent to each holder of Subscription Rights, without interest.

 

3.	No Sale or Transfer of Subscription Rights.

 

The Basic Subscription Rights granted to you are non-transferable and, therefore, you may not sell, transfer or assign your Basic Subscription Rights to anyone.

 

4.	Special Provisions Relating to the Delivery of Subscription Rights through the Depository Trust Company.

 

Banks, trust companies, securities dealers and brokers (each, a “Nominee”) that hold shares of our Common Stock on the Record Date as nominee for more than one beneficial owner may, upon proper showing to the Subscription Agent, exercise such beneficial owner’s Subscription Right through DTC on the same basis as if the beneficial owners were shareholders on the Record Date. Such Nominee may exercise the Basic Subscription Rights on behalf of the exercising beneficial owner through DTC’s PSOP Function on the “agents subscription over PTS” procedure by (1) providing a certification as to the aggregate number of Basic Subscription Rights exercised by the beneficial owner on whose behalf such Nominee is acting, and (2) instruct DTC to charge the Nominee’s applicable DTC account for the subscription payment for the new Units to facilitate the delivery of the full subscription payment to the Subscription Agent. DTC must receive the subscription instructions and payment for the new Units no later than the Expiration Time.

 

5.

Form W-9.

 

Each Basic Subscription Rights holder who elects to exercise Basic Subscription Rights should provide the Subscription Agent with a correct Taxpayer Identification Number (TIN) on IRS Form W-9. See “Material U.S. Federal Income Tax Consequences - Information Reporting and Backup Withholding” in the Prospectus. Failure to provide the information on the form may subject such holder to a $50 penalty for each such failure and to 24% federal income tax withholding with respect to dividends (including deemed dividends) that may be paid by the Company on shares of its Common Stock. Foreign Persons are generally required to provide an appropriate IRS Form W-8 rather than IRS Form W-9 and may be subject to withholding on dividends (including deemed dividends) at a rate of up to 30%.

 

 

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6 

 

Exhibit 99.2

 

FORM OF LETTER TO SHAREHOLDERS WHO ARE RECORD HOLDERS

 

CREATD, INC.

 

20,000,000 Units
Offered Pursuant to Subscription Rights
Distributed to Shareholders
of Creatd, Inc.

 

July ___, 2022

 

Dear Shareholder:

 

Enclosed are materials relating to a rights offering by Creatd, Inc. a Nevada corporation (“we,” “us,” “our,” or the “Company”), including the Prospectus dated July 13, 2022 (the “Prospectus”). Please carefully review the Prospectus, which describes how you can participate in the rights offering. You will be able to exercise your subscription rights to purchase units (the “Units,” and each, a “Unit”), each unit consisting of one share of common stock of the Company par value $0.001 per share (“Common Stock”), a Series A redeemable warrant exercisable for one share of Common Stock at an exercise price of $3.00 (the “Series A Warrants” and each, a “Series A Warrant”), and a Series B redeemable warrant exercisable for one share of Common Stock at an exercise price of $6.00 (the “Series B Warrants” and each, a “Series B Warrant”), only during a limited period. Answers to some frequently asked questions about the rights offering can be found under the heading “Questions and Answers Relating to This Offering” in the Prospectus. Any prospective purchaser of Units pursuant to the exercise of the subscription rights should read the Prospectus, including without limitation the risk factors contained therein, prior to making any decision to invest in the Company.

 

In the rights offering, we are offering the rights to purchase an aggregate of up to 20,000,000 Units, as described in the Prospectus. The subscription rights will expire if not exercised prior to 5:00 p.m., Eastern Time, on August 22, 2022 (as it may be extended, the “Expiration Date,” and such time, the “Expiration Time”).

 

As described in the Prospectus, you will receive subscription rights which entitle holders of Common Stock as of the record date of 5:00 p.m. (Eastern time) on July 29, 2022 (the “Record Date”) and holders of certain shares Series E Preferred Stock (the “Preferred Shares”), common stock warrants (the “Eligible Warrants”) and options (the “Eligible Options”), to basic subscription rights (each, a “Basic Subscription Right”), which entitle holders to purchase a number of Units equal to two times the number of shares of Common Stock and Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options held by that holder as of the Record Date and an over-subscription privilege (an “Over Subscription Privilege”) which will be exercisable only if holder exercises his Basic Subscription Right in full and will entitle holder to purchase additional Units for which other rights holders do not subscribe, subject to pro rata allocation of those additional Units to participating rights holders in proportion to the number of over-subscription privilege for which they subscribed.

 

To the extent the Unsubscribed Units are not sufficient to satisfy all of the properly exercised Over-Subscription Privilege, then the Unsubscribed Units will be allocated pro rata among rights holders who over-subscribe, based on the number of over-subscription units for which the rights holders have subscribed. Broadridge Corporate Issuer Solutions, Inc. (the “Subscription Agent”), which will act as the subscription agent in connection with this offering and which we refer to as the subscription agent, will determine the over-subscription allocation based on the formula described above.

 

You will be required to submit payment in full for all the Units you wish to buy in the rights offering. If you wish to maximize the number of Units you may purchase pursuant to your Over-Subscription Privilege, you will need to deliver payment in an amount equal to estimated subscription price for the maximum number of Units available to you, assuming that no shareholder other than you has purchased any Units pursuant to the Basic Subscription Rights and Over-Subscription Privilege. The Company will eliminate fractional Units resulting from the exercise of the Over-Subscription Privilege by rounding down to the nearest whole number, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the Subscription Agent will be promptly returned, without interest or deduction, after the expiration of this offering.

 

 

The Company can provide no assurances that you will actually be entitled to purchase the number of Units subscribed for pursuant to the exercise of your Over-Subscription Privilege in full at the expiration of the rights offering. The Company will not be able to satisfy your exercise of the Over-Subscription Privilege if all of our shareholders exercise their Basic Subscription Rights in full, and we will only honor an Over-Subscription Privilege to the extent sufficient Units are available following the exercise of Basic Subscription Rights.

 

●

To the extent the aggregate price of the maximum number of Unsubscribed Units available to you pursuant to the Over-Subscription Right is less than the amount you actually paid in connection with the exercise of the Over-Subscription Right, you will be allocated only the number of Unsubscribed Units available to you as soon as practicable after the Expiration Time, and your excess subscription payment received by the Subscription Agent will be returned, without interest, as soon as practicable.

 

●

To the extent the amount you actually paid in connection with the exercise of the Over-Subscription Right is less than the aggregate price of the maximum number of Unsubscribed Units available to you pursuant to the Over-Subscription Right; you will be allocated the number of Unsubscribed Units for which you actually paid in connection with the Over-Subscription Right. See the discussion under the heading “The Rights Offering -Over-Subscription Privilege” in the Prospectus.

 

You are not required to exercise any or all of your Subscription Rights. If you do not exercise your Subscription Rights and the rights offering is completed, the number of shares of our Common Stock you own will not change but your percentage ownership of our total outstanding voting stock may decrease because shares may be purchased by other shareholders in the rights offering. Your percentage ownership of our voting stock may also decrease if you do not exercise your Subscription Right in full. Please see the discussion of risk factors related to the rights offering, including dilution, under the heading “Risk Factors - “Your interest in our company may be diluted as a result of this offering” in the Prospectus.

 

The Subscription Rights will be evidenced by a Non-Transferable Subscription Rights Certificate issued to shareholders of record and will cease to have any value after the Expiration Time.

 

Enclosed are copies of the following documents:

 

1.

Prospectus;

 

2.

Non-Transferable Subscription Rights Certificate;

 

3.

Instructions as to Use of Creatd, Inc. Non-Transferable Subscription Rights Certificates; and

 

4.

A return envelope addressed to Broadridge Corporate Issuer Solutions, Inc., the Subscription Agent.

 

Your prompt action is requested. To exercise the Subscription Rights, as indicated in the Prospectus, you should deliver to the Subscription Agent the properly completed and signed Non-Transferable Subscription Rights Certificate with payment of the Subscription Price in full for each Unit subscribed for pursuant to the Subscription Right. The Subscription Agent must receive the Non-Transferable Subscription Rights Certificate with payment of the Subscription Price prior to the Expiration Time. If you send your Non-Transferable Subscription Rights Certificate(s) and Subscription Price payment by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. We will not be required to sell Units to you if the Subscription Agent receives your Non-Transferable Subscription Rights Certificate or your subscription payment after that time, regardless of when the Non-Transferable Subscription Rights Certificate and subscription payment were sent. See the discussion under the heading “The Rights Offering-Expiration of Offer” in the Prospectus.

 

Once you have exercised your Subscription Rights, such exercise may not be revoked, even if you later learn information that you consider to be unfavorable to the exercise of your Subscription Rights.

 

Additional copies of the enclosed materials may be obtained from D.F. King the Information Agent for this rights offering, by calling (212) 269-5550 (bankers and brokers) OR (877) 283-0323 (all others). Any questions or requests for assistance concerning the rights offering should be directed to the Information Agent.

 

	​	Very truly yours,
	​	/s/ Laurie Weisberg
	​	Creatd, Inc.

 

 

 

Exhibit 99.3

 

FORM OF LETTER TO BROKERS AND OTHER NOMINEE HOLDERS
CREATD, INC.

 

20,000,000 Units
Offered Pursuant to Subscription Rights
Distributed to Shareholders
of
CREATD, INC.

 

July ___, 2022

 

To Securities Dealers, Commercial Banks, Trust Companies and Other Nominees:

 

This letter is being distributed to securities dealers, commercial banks, trust companies and other nominees in connection with the rights offering by CREATD, INC., a Nevada corporation (“we,” “us,” “our,” or the “Company”), of units (the “Units” and each, a “Unit”), each Unit consisting of one share of common stock of the Company par value $0.001 per share (“Common Stock”), a Series A redeemable warrant exercisable for one share of Common Stock at an exercise price of $3.00 (the “Series A Warrants” and each, a “Series A Warrant”), and a Series B redeemable warrant exercisable for one share of Common Stock at an exercise price of $6.00 (the “Series B Warrants”, each, a “Series B Warrant”, and together with the Series A Warrants, the “Warrants”) at a subscription price of $2.00, pursuant to non-transferable subscription rights distributed to all shareholders of record of the Company (the “Recordholders”) at 5:00 p.m., Eastern Time, July 29, 2022 (the “Record Date”). The subscription rights, Units, Common Stock and Warrants are described in the prospectus dated July 13, 2022 (the “Prospectus”). Any prospective purchaser of Units pursuant to the exercise of the subscription rights should read the Prospectus, including without limitation the risk factors contained therein, prior to making any decision to invest in the Company.

 

In the rights offering, we are offering the rights to purchase an aggregate of up to 20,000,000 Units, as described in the Prospectus. The subscription rights will expire if not exercised prior to 5:00 p.m., Eastern Time, on August 22, 2022 (as it may be extended, the “Expiration Date,” and such time, the “Expiration Time”).

 

As described in the Prospectus, each holder of Common Stock, certain shares Series E Preferred Stock (the “Preferred Shares”), common stock warrants (the “Eligible Warrants”) and options (the “Eligible Options”) registered in your name or the name of your nominee is receiving, at no charge, two non-transferable subscription rights (each, a “Basic Subscription Right”) entitling holders of Common Stock to purchase a number of units equal to two times the number of shares of Common Stock and Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options held by that holder as of 5:00 p.m., Eastern Time, on the Record Date. Each Basic Subscription Right will allow the holder thereof to subscribe for one Unit per shares of Common Stock held or issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options at a cash price per Unit of $2.00. Fractional Units will not be sold.

 

In the event that Recordholder purchases all Units available to it pursuant to its Basic Subscription Rights, Recordholder may also exercise an over-subscription privilege (the “Over-Subscription Privilege,” collectively with the Basic Subscription Rights, the “Subscription Rights”) to purchase a portion of Units that are not purchased by other Recordholders through the exercise of their Basic Subscription Rights (the “Unsubscribed Units”), subject to availability. If the number of Units remaining after the exercise of all Basic Subscription Rights is not sufficient to satisfy all requests for Units pursuant to Over-Subscription Privilege, we will allocate the available Units pro rata among rights holders in proportion to the number of over-subscription Units for which they have subscribed. The Subscription Agent will determine the over-subscription allocation based on the formula described above.

 

Each Recordholder will be required to submit payment in full for all the Units it wishes to buy with its Over-Subscription Privilege. Because we will not know the total number of Unsubscribed Units prior to the Expiration Time, if Recordholder wishes to maximize the number of Units Recordholder may purchase pursuant to its Over-Subscription Privilege, the Recordholder will need to deliver payment in an amount equal to the aggregate subscription price for the maximum number of Units available to Recordholder, assuming that no shareholders other than the Recordholder has purchased any Units pursuant to the Basic Subscription Rights and Over-Subscription Privilege. To the extent Recordholder’s aggregate subscription payment for the actual number of unsubscribed units available to Recordholder pursuant to the over-subscription privilege is less than the amount actually paid in connection with the exercise of the over-subscription privilege, Recordholder will be allocated only the number of unsubscribed units available to Recordholder, and any excess subscription payment will be promptly returned to Recordholder, without interest or deduction, after the expiration of this offering.

 

 

Only whole numbers of shares of common stock, Series A Warrants and Series B Warrants exercisable for whole numbers of shares will be issuable to you in this offering; any right to a fractional share to which you would otherwise be entitled will be terminated, without consideration to you.

 

The Company can provide no assurances that each Recordholder will actually be entitled to purchase the number of Units subscribed for pursuant to the exercise of its Over-Subscription Privilege in full at the expiration of the rights offering. Subject to the ownership limitation described below, we will seek to honor over-subscription requests in full. If over-subscription requests exceed the number of Units available, however, the Company will allocate the available units pro rata among the rights holders in proportion to the number of over-subscription units for which they have subscribed. Broadridge Corporate Issuer Solutions, Inc., which will act as the subscription agent in connection with this offering and will determine the over-subscription allocation based on the formula described above. To the extent Recordholder’s aggregate subscription payment for the actual number of unsubscribed units available to Recordholder pursuant to the Over-Subscription Privilege is less than the amount actually paid in connection with the exercise of the Over-Subscription Privilege, Recordholder will be allocated only the number of unsubscribed units available to Recordholder, and any excess subscription payment will be promptly returned to Recordholder, without interest or deduction, after the expiration of this offering. “The Rights Offering-Subscription Rights-Over-Subscription Privilege” in the Prospectus.

 

The Subscription Rights will be evidenced by a Non-Transferable Subscription Rights Certificate registered in the Recordholder’s name or its nominee and will cease to have any value after the Expiration Time.

 

We are asking persons who hold shares of Common Stock, Preferred Shares, Eligible Warrants and Eligible Options beneficially and who have received the Subscription Rights distributable with respect to those shares through a broker, dealer, custodian bank or other nominee (including any mobile investment platform), as well as persons who hold certificates of Common Stock directly and prefer to have such institutions effect transactions relating to the Subscription Rights on their behalf, to contact the appropriate institution or nominee and request it to effect the transactions for them.

 

All commissions, fees and other expenses (including brokerage commissions and transfer taxes), other than fees and expenses of the Subscription Agent, the information agent, the warrant agent and the dealer-manager, incurred in connection with the exercise of the Subscription Rights will be for the account of the holder of the Subscription Rights, and none of such commissions, fees or expenses will be paid by the Company or the Subscription Agent.

 

Enclosed are copies of the following documents:

 

1.

Prospectus;

 

2.

Instructions as to Use of Creatd, Inc. Non-Transferable Subscription Rights Certificates;

 

3.

A form of letter which may be sent to your clients for whose accounts you hold shares of our Common Stock registered in your name or the name of your nominee;

 

4.

Beneficial Owner Election;

 

5.

Nominee Holder Certification; and

 

6.

A return envelope addressed to Broadridge Corporate Issuer Solutions, Inc., the Subscription Agent.

 

 

Your prompt action is requested. To exercise the Subscription Rights, as indicated in the Prospectus, you should deliver to the Subscription Agent the properly completed and signed Non-Transferable Subscription Rights Certificate with payment of the subscription Price in full for each Unit subscribed for pursuant to the Subscription Right. The Subscription Agent must receive the Non-Transferable Subscription Rights Certificate with payment of the subscription price prior to the Expiration Time. Once a Recordholder has exercised its Subscription Right, such exercise may not be revoked, even if the Recordholder later learns information that it considers to be unfavorable to the exercise of its Subscription Rights.

 

Additional copies of the enclosed materials may be obtained from D.F. King, the information agent, by telephone at (212) 269-5550 (bankers and brokers) OR (877) 283-0323 (all others) or by email at [email protected]. Any questions or requests for assistance concerning the rights offering should be directed to the Information Agent.

 

	Very truly yours,
	/s/ Laurie Weisberg
	Name: Laurie Weisberg
	Creatd, Inc.

 

 

3

 

 

Exhibit 99.4

 

FORM OF LETTER TO CLIENTS OF BROKERS AND OTHER NOMINEE HOLDERS
CREATD, INC.

 

20,000,000 Units
Offered Pursuant to Subscription Rights
Distributed to Stockholders
of Creatd, Inc.

 

July ____, 2022

 

To Our Clients:

 

Enclosed for your consideration are a prospectus, dated July 13, 2022 (the “Prospectus”), and the “Instructions as to Use of Creatd, Inc. Non-Transferable Subscription Rights Certificates” relating to the rights offering by Creatd, Inc., a Nevada corporation (the “Company”), of units (the “Units,” and each, a “Unit”), each unit consisting of one share of common stock of the Company par value $0.001 per share (“Common Stock”), a Series A redeemable warrant exercisable for one share of Common Stock at an exercise price of $3.00 (the “Series A Warrants” and each, a “Series A Warrant”), and a Series B redeemable warrant exercisable for one share of Common Stock at an exercise price of $6.00 (the “Series B Warrants” and each, a “Series B Warrant”), at a subscription price per full Unit equal to $2.00 pursuant to a rights offering. In the rights offering, the Company is offering the rights to purchase an aggregate of up to 20,000,000 Units, as described in the Prospectus. The subscription rights, Units, Common Stock and Warrants are described in the Prospectus.

 

In the rights offering, the Company is offering the rights to purchase an aggregate of up to of Units, as described in the Prospectus. The subscription rights will expire if not exercised prior to 5:00 p.m., Eastern Time, on August 22, 2022 (as it may be extended, the “Expiration Date,” and such time, the “Expiration Time”).

 

As described in the Prospectus, each holder of Common Stock, certain shares Series E Preferred Stock (the “Preferred Shares”), common stock warrants (the “Eligible Warrants”) and options (the “Eligible Options”) will receive two subscription rights, each of which entitles holders of Common Stock and Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options as of the record date of 5:00 p.m. (Eastern time) on July 29, 2022 (the “Record Date”), to two basic rights (each, a “Basic Subscription Right”). Each Basic Subscription Right will allow such holder to purchase a number of Units equal to the number of shares of Common Stock held by that holder as of the Record Date and Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options and an over-subscription privilege (an “Over-Subscription Privilege”) which will be exercisable only if holder exercises his Basic Subscription Right in full and will entitle holder to purchase additional Units for which other rights holders do not subscribe, subject to pro rata allocation of those additional Units to participating rights holders in proportion to the number of Units subscribed under the Over-Subscription Privilege. Fractional Units will not be sold.

 

You will be required to submit payment in full for all the Units you wish to buy in the rights offering. If you wish to maximize the number of Units you may purchase pursuant to your Over-Subscription Privilege, you will need to deliver payment in an amount equal to the estimated subscription price for the maximum number of Units available to you, assuming that no shareholder other than you has purchased any Units pursuant to the Basic Subscription Rights and Over-Subscription Privilege. The Company will eliminate fractional Units resulting from the exercise of the Over-Subscription Privilege by rounding down to the nearest whole number, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the Continental Stock Transfer & Trust (the “Subscription Agent”) will be promptly returned, without interest or deduction.

 

 

The Company can provide no assurances that you will actually be entitled to purchase the number of Units subscribed for pursuant to the exercise of your Over-Subscription Privilege in full at the expiration of the rights offering. Subject to the ownership limitation described below, the Company will seek to honor the over-subscription requests in full. If over-subscription requests exceed the number of units available, however, the Company will allocate the available units pro rata among the rights holders in proportion to the number of over-subscription units for which they have subscribed. Continental Stock Transfer & Trust, which will act as the subscription agent in connection with this offering will determine the over-subscription allocation based on the formula described above. To the extent a holder’s aggregate subscription payment for the actual number of unsubscribed units available to the holder pursuant to the over-subscription privilege is less than the amount actually paid in connection with the exercise of the over-subscription privilege, the holder will be allocated only the number of unsubscribed units available to the holder, and any excess subscription payment will be promptly returned to the holder, without interest or deduction, after the expiration of this offering. See the discussion under the heading “The Rights Offering -Over-Subscription Privilege” in the Prospectus.

 

The Subscription Rights are evidenced by a Non-Transferable Subscription Rights Certificate issued to shareholder of record and will cease to have any value after the Expiration Time.

 

THE MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF COMMON STOCK AND COMMON STOCK ISSUABLE UPON CONVERSION OR EXERCISE OF THE PREFERRED SHARES, ELIGIBLE WARRANTS AND ELIGIBLE OPTIONS CARRIED BY THE COMPANY IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. THE SUBSCRIPTION RIGHTS MAY BE EXERCISED ONLY BY US AS THE RECORD OWNER AND PURSUANT TO YOUR INSTRUCTIONS.

 

Accordingly, we request instructions as to whether you wish us to elect to subscribe for any Units to which you are entitled pursuant to the terms and subject to the conditions set forth in the Prospectus. However, we urge you to read the document carefully before instructing us to exercise your Subscription Rights.

 

If you wish to have us, on your behalf, exercise the Subscription Rights for Units to which you are entitled, please so instruct us by completing, executing and returning to us the Beneficial Owner Election form.

 

Your Beneficial Owner Election form to us should be forwarded as promptly as possible in order to permit us to exercise your Subscription Rights on your behalf in accordance with the provisions of the rights offering. The rights offering will expire at the Expiration Time. Please contact us for our deadline with respect to your submission of the Beneficial Owner Election form. Once you have exercised your Subscription Rights, such exercise may not be revoked, even if you later learn information that you consider to be unfavorable to the exercise of your Subscription Rights.

 

Additional copies of the enclosed materials may be obtained from D.F. King, the information agent, by telephone at (212) 269-5550 (bankers and brokers) or (877) 283-0323 (all others) or by email at [email protected]. Any questions or requests for assistance concerning the rights offering should be directed to the Information Agent.

 

 

 

 

Exhibit 99.5

 

THE TERMS AND CONDITIONS OF THE RIGHTS OPPERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS DATED JULY 13, 2022 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM D.F. KING, THE INFORMATION AGENT, BY CALLING (212) 269-5550 (BANKERS AND BROKERS) OR (877) 283-0323 (ALL OTHERS) OR BY EMAIL AT [email protected].

 

CREATD, INC.

 

BENEFICIAL OWNER ELECTION FORM

 

I (We), the beneficial owner(s) of shares of common stock, par value $0.001 per share (the “Common Stock”), certain shares Series E Preferred Stock (the “Preferred Shares”), common stock warrants (the “Eligible Warrants”) and options (the “Eligible Options”), of Creatd, Inc., a Nevada corporation (the “Company”), acknowledge receipt of your letter, the prospectus dated July 13, 2022 (the “Prospectus”), and the other enclosed materials relating to the offering of (i) Common Stock, (ii) Series A redeemable warrants to purchase Common Stock (“Series A Warrants”), and (ii) Series B redeemable warrants to purchase Common Stock (“Series B Warrants”, and together with Series A Warrants, “Warrants”), issuable upon the exercise of subscription rights to purchase units (“Units,” and such rights, the “Subscription Rights”) as described in the Prospectus.

 

In this form, I (we) instruct you whether to exercise Subscription Rights to purchase Units distributed with respect to the Common Stock and Common Stock issuable upon conversion or exercise of the Preferred Shares, Eligible Warrants and Eligible Options held by you for my (our) account, pursuant to the terms and subject to the conditions set forth in the Prospectus and the related “Form of Instructions as to use of Creatd, Inc. Non-Transferable Subscription Rights Certificates.” Each Unit will consist of one share of Common Stock, a Series A Warrant exercisable for one share of Common Stock at an exercise price of $3.00, and a Series B Warrant exercisable for one share of Common Stock at an exercise price of $6.00, at a subscription price per Unit of $2.00. The Common Stock and Warrants comprising the Units will separate upon the closing of the rights offering and will be issued separately, however, they may only be purchased as a Unit and the Unit will not trade as a separate security. Each Series A Warrant will be exercisable for one of Common Stock at an exercise price equivalent to $3.00 through its expiration November 30, 2027. Each Series B Warrant will be exercisable for one of Common Stock at an exercise price equivalent to $6.00 through its expiration November 30, 2027.

 

I (We) hereby instruct you as follow:

 

(CHECK THE APPLICABLE BOXES AND PROVIDE ALL REQUIRED INFORMATION)

 

Box 1.			☐			Please DO NOT EXERCISE SUBSCRIPTION RIGHTS for Units. If you checked Box 1, please sign and date this form and mail it to your broker, custodian bank or your other nominee that holds your shares.
Box 2.			☐			Please EXERCISE SUBSCRIPTION RIGHTS for Units as set forth below. If you checked Box 2, please fill out the table shown below. Next, please check Box 3 and/or Box 4, as applicable, and fill out the information indicated under Box 3 and/or Box 4, as applicable. Please then sign and date this form and mail it to your broker, custodian bank or other nominee that holds your shares.
						The number of Subscription Rights for which the undersigned gives instructions for exercise under the subscription privilege should not exceed the number of Subscription Rights that the undersigned is entitled to exercise.

 

 

Up to 2 x Number of Shares Owned

Per Unit Subscription Price

Payment

Basic Subscription Right:

x

$2.00

=

$     (Line 1)

Over-Subscription Right:

x

$2.00

=

$     (Line 2)

Total Payment Required:

$     (Sum of Lines 1 and 2)

 

Box 3.			☐			Payment in the following amount is enclosed: $________.
Box 4.			☐			Please deduct payment of $_______ from the following account maintained by you: The total of Box 3 and 4, together, must equal the sum of lines 1 and 2 from Box 2 above.
						Type of Account: __________________ Account No.: ________________

 

I (We) on my (our) behalf, or on behalf of any other person(s) on whose behalf, or under whose directions, I am (we are) signing this form:

 

●

irrevocably elect to purchase the number of Units indicated above upon the terms and conditions specified in the Prospectus; and

 

●

agree that if I (we) fail to pay for the Units I (we) have elected to purchase, you may exercise any remedies available to you under law.

 

Name of beneficial owner(s):
Signature of beneficial owner(s):
Date:

 

If you are signing in your capacity as a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or another acting in a fiduciary or representative capacity, please provide the following information:

 

Name:
Capacity:
Address (including Zip Code):
Telephone Number:

 

PLEASE MAKE SURE THAT YOU USE THE CORRECT ADDRESS. You may want to check this address with your broker.

 

 

 

 

Exhibit 99.6

 

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS DATED JULY 13, 2022 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM D.F. KING, THE INFORMATION AGENT, BY CALLING (212) 269-5550 (BANKERS AND BROKERS) OR (877) 283-0323 (ALL OTHERS) OR BY EMAIL AT [email protected].

 

CREATD, INC.

 

UNITS SUBSCRIBED FOR UPON
EXERCISE OF SUBSCRIPTION RIGHTS

 

NOMINEE HOLDER CERTIFICATION

 

The undersigned, a bank, broker, trustee, depository or other nominee holder of subscription rights (the “Subscription Rights”) to purchase units (the “Units,” and each, a “Unit”), each Unit consisting of one share of common stock of CREATD, INC., a Nevada corporation (the “Company”), par value $0.001 per share (“Common Stock”), a Series A redeemable warrant exercisable for one share of Common Stock at an exercise price of $3.00, and a Series B redeemable warrant exercisable for one share of Common Stock at an exercise price of $6.00, pursuant to the rights offering described in the Company’s prospectus dated July 13, 2022 (the “Prospectus”), hereby certifies to the Company and Continental Stock Transfer & Trust, as subscription agent for the rights offering, that (1) the undersigned has exercised on behalf of the beneficial owners thereof (which may include the undersigned), Subscription Rights for the number of Units specified below pursuant to the basic right (as described in the Prospectus), and on behalf of beneficial owners of subscription rights who have subscribed for the purchase of additional Units pursuant to the over-subscription privilege (as described in the Prospectus), listing separately below a number of Units corresponding to such beneficial owners’ exercised basic right and a number of Units corresponding to such beneficial owners’ exercised over-subscription privilege (without identifying any such beneficial owner), and (2) to the extent any beneficial owner has exercised their oversubscription privilege, each such beneficial owner’s basic right has been exercised in full:

 

	NUMBER OF SHARES OWNED ON RECORD DATE	NUMBER OF UNITS SUBSCRIBED FOR PURSUANT TO BASIC RIGHT	NUMBER OF UNITS SUBSCRIBED FOR PURSUANT TO OVER-SUBSCRIPTION PRIVILEGE
1.
2.
3.
4.
5.

 

Name of Bank, Broker, Trustee, Depository or Other Nominee:

 

By:
	Authorized Signature
Name:
	(Please print or type)
Title:
	(Please print or type)

 

 

Provide the following information if applicable:

 

Depository Trust Company (“DTC”) Participant Number

 

Participant:

 

By
	Authorized Signature
Name:
	(Please print or type)
Title:
	(Please print or type)

 

DTC Subscription Confirmation Number(s)

 

 

 

 

Exhibit 99.7

 

FORM OF NOTICE OF GUARANTEED DELIVERY

 

This form, or one substantially equivalent hereto, must be used to exercise the subscription rights (the “Rights”) pursuant to the rights offering (the “Rights Offering”) as described in the prospectus dated July 13, 2022 (the “Prospectus”) of Creatd, Inc., a Nevada corporation (the “Company”), if a holder of Rights cannot deliver the certificate(s) evidencing the Rights (the “Rights Certificate(s)”), to the subscription agent listed below (the “Subscription Agent”) prior to 5:00 p.m., Eastern time, on August 22, 2022, (as it may be extended, the “Expiration Time”). Such form must be delivered by hand or sent by telegram, facsimile transmission, first class mail or overnight courier to the Subscription Agent, and must be received by the Subscription Agent prior to the Expiration Time. See “The Rights Offering - Method of Exercising Subscription Rights” in the Prospectus.

 

Payment of the cash price (the “Subscription Price”) of $2.00 per unit (each a “Unit”), each Unit consisting of one share of common stock of the Company par value $0.001 per share (“Common Stock”), a Series A redeemable warrant exercisable for one share of Common Stock at an exercise price of $3.00 (the “Series A Warrants”), and a Series B redeemable warrant exercisable for one share of Common Stock at an exercise price of $6.00 (the “Series B Warrants”), subscribed for upon exercise of such Rights must be received by the Subscription Agent in the manner specified in the Prospectus prior to the Expiration Time even if the Rights Certificate(s) evidencing such Rights is (are) being delivered pursuant to the Guaranteed Delivery Procedures thereof. See “The Rights Offering - Method of Exercising Subscription Rights” in the Prospectus.

 

By Mail, Hand Delivery, Express Mail, Courier or Other Expedited Service:

 

Continental Stock Transfer & Trust
Attn: Corporate Actions
1 State Street, 30th Floor
New York, NY 10004

  

By Hand or Overnight Courier:
 

Continental Stock Transfer & Trust
Attn: Corporate Actions
1 State Street, 30th Floor
New York, NY 10004

 

If you have other questions or need assistance, please contact the D.F. King, the Information Agent, by telephone at (212) 269-5550 (bankers and brokers) or (877) 283-0323 (all others) or by email at [email protected].

 

Delivery of this instrument to an address other than as set forth above
or transmission of this instrument via facsimile other than as set forth above
does not constitute a valid delivery

 

Ladies and Gentlemen:

 

The undersigned hereby represents that the undersigned is the holder of Rights Certificate(s) representing Right(s) and that such Rights Certificate(s) cannot be delivered to the Subscription Agent prior to the Expiration Time. Upon the terms and subject to the conditions set forth in the Prospectus, receipt of which is hereby acknowledged, the undersigned hereby elects to (i) exercise the Basic Subscription Privilege to subscribe for     Units with respect to the Rights represented by such Rights Certificate(s) and (ii) exercise the Over-Subscription Privilege relating to such Rights, to the extent that Units that are not otherwise purchased pursuant to the exercise of Rights are available therefore, for an aggregate of up to     Units, subject to availability and allocation as described in the Prospectus.

 

 

The undersigned understands that payment of the Subscription Price of $2.00 per unit subscribed for pursuant to the Basic Subscription Privilege and the Over-Subscription Privilege must be received by the Subscription Agent prior to the Expiration Time, and represents that such payment, in the aggregate amount of $   either (check appropriate box):

 

[ ]	is being delivered to the Subscription Agent herewith
	Or
[ ]	has been delivered separately to the Subscription Agent in the manner set forth below (check appropriate box and complete information relating thereto):
[ ]	Wire transfer of funds
	Name of transferor institution:
	Date of transfer:
	Confirmation number (if available):
[ ]	Uncertified check (Payment by uncertified check will not be deemed to have been received by the Subscription Agent until such check has cleared. Rights holders paying by such means are urged to make payment sufficiently in advance of the Expiration Time to ensure that such payment clears by such date.)
[ ]	Certified check
[ ]	Bank draft (cashier’s check)
[ ]	Money order
	Name of maker:
	Date of check, draft or money order:
	Check, draft or money order number:
	Bank on which check is drawn or issuer or money order:

 

Signature(s)
Names
Address
Area Code and Telephone No.(s)
(Please type or print)
Rights Certificate No(s). (if available)

 

 

GUARANTEE OF DELIVERY
(Not to Be Used for Rights Certificate Signature Guarantee)

 

The undersigned, a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, or a commercial bank or trust company having an office or correspondent in the United States, or a bank, stockbroker, savings and loan association or credit union with membership in an approved signature guarantee medallion program, pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, guarantees that the undersigned will deliver to the Subscription Agent the Rights Certificates representing the Rights being exercised hereby, with any required signature guarantee and any other required documents, all within three (3) business days after the date hereof.

 

Dated:
(Address)
(Name of Firm)
(Area Code and Telephone Number)
(Authorized Signature)

 

The institution that completes this form must communicate the guarantee to the Subscription Agent and must deliver the Rights Certificate(s) to the Subscription Agent within the time period shown in the Prospectus. Failure to do so could result in a financial loss to such institution.

 

 

3

 

Exhibit 99.8

 

FORM OF
NOTICE OF IMPORTANT TAX INFORMATION
CREATD, INC.

 

This notice is provided in connection with the prospectus of CREATD, INC. (the “Company”) dated July 13, 2022. Under the U.S. federal income tax laws, distributions (including constructive distributions) that may be made by the Company in respect of units (the “Units”) consisting of one share of common stock of the Company par value $0.001 per share (“Common Stock”), a Series A redeemable warrant exercisable for one share of Common Stock at an exercise price of $3.00 (the “Series A Warrants”), and a Series B redeemable warrant exercisable for one share of Common Stock at an exercise price of $6.00 (the “Series B Warrants”, and together with Series A Warrants, the “Warrants”), acquired through the exercise of the subscription rights or exercise of the Warrants, themselves issued through the exercise of the subscription rights at a subscription price of $2.00, may be subject to backup withholding. Generally such payments will be subject to backup withholding unless the holder (i) is exempt from backup withholding and timely and properly establishes an exemption from backup withholding or (ii) furnishes the payer with its correct taxpayer identification number (“TIN”) and certifies, under penalties of perjury, that the number provided is correct and provides certain other certifications. Each holder that exercises subscription rights and wants to avoid backup withholding must, unless an exemption applies, provide the subscription agent, as the Company’s agent in respect of the exercised subscription rights, with such holder’s correct TIN and certain other certifications by completing the enclosed Form W-9 (Request for Taxpayer Identification Number and Certification). The TIN that must be provided is the TIN of the record owner of the subscription rights. If such record owner is an individual, the TIN is generally the taxpayer’s social security number. For most entities, the TIN is the employer identification number. If the subscription rights are in more than one name or are not in the name of the actual owner, consult the enclosed Form W-9 (Request for Taxpayer Identification Number and Certification) for additional guidelines on which number to report. If the subscription agent is not provided with the correct TIN in connection with such payments, the holder may be subject to a penalty imposed by the Internal Revenue Service (“IRS”).

 

Certain holders (including, among others, certain corporations and foreign persons) are not subject to these backup withholding rules. In general, in order for a holder that is a “U.S. person” for U.S. federal income tax purposes to qualify as an exempt recipient, that holder must timely submit a properly completed Form W-9 attesting to such holder’s exempt status. See the enclosed Form W-9 (Request for Taxpayer Identification Number and Certification) for additional instructions. In general, in order for a holder that is not a “U.S. person” for U.S. federal income tax purposes to qualify as an exempt recipient, that holder must timely submit a properly completed Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), Form W-8BENE, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) or other appropriate Form W-8, signed under the penalties of perjury, attesting to such holder’s foreign status. Such Form W-8BEN or Form W-8BEN-E may be obtained from the subscription agent. Holders are urged to consult their own tax advisors to determine whether they are exempt from withholding and reporting requirements. If backup withholding applies, the Company or the subscription agent, as the case may be, will be required to withhold (currently at a 24% rate) on any reportable payments made to a holder that exercises subscription rights. Backup withholding is not an additional tax. Rather, the amount of backup withholding can be credited against the U.S. federal income tax liability of the holder subject to backup withholding, provided that the required information is timely provided to the IRS. If backup withholding results in an overpayment of taxes, a refund may be obtained, provided that the required information is timely provided to the IRS.

 

THIS DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE BACKUP WITHHOLDING RULES TO THEM.

 

 

 

 

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