Vocal, Inc. Announces Launch of a Regulation CF Campaign

Published on August 17, 2023

NEW YORK, Aug. 18, 2023 /PRNewswire/ -- Creatd, Inc. $VOCL; ("Creatd" or the "Company") today announced that its subsidiary Vocal, Inc., has filed a Form C with the SEC initiating the launch of a Regulation Crowdfunding (Reg CF) campaign. The details of the Reg CF can be found here: https://invest.vocal.media/

This move signals a part of Creatd, Inc.'s ongoing strategy to reduce reliance on the holding company to fund its subsidiary companies. This has the effect of creating value for shareholders by reducing dilution and avoiding toxic lending structures. If successful, the Company intends on pursuing Reg CF and Reg A structures for its subsidiaries with the objective of eventually spinning them out into separate publicly listed companies.

Overview of Vocal, Inc.'s Reg CF Terms:

Vocal, Inc.'s Reg CF participating preferred security presents favorable terms to entice both creators and traditional investors associated with Vocal's parent company. Here are the terms:

  • Quarterly Dividend: Each share has a quarterly dividend based on 2.5% of Vocal's GAAP quarterly net revenues assuming 123,500 shares are sold of the participating preferred offering. Calculation: GAAP Net Revenue * 2.5% / 123,500.
  • Redemption: Each participating preferred share will have a redemption right after 5 years to redeem each share with Vocal at the face value of the security, $20.00, which is above the purchase price of $10.00. For example, if redeemed in year 5, the Internal Rate of Return (IRR) would be 14.87%, which does not include quarterly dividends, which participating preferred shareholders are entitled to each year (total of 20 dividends). The dividends could substantially add to the IRR calculated above since they are tied to GAAP net revenue.
  • Conversion Option: Each participating preferred share face value is convertible into Vocal common shares at a conversion ratio of 33.33. The conversion price is thus $20.00 / 33.33 = $0.60 per share (100 million shares outstanding, implying conversion at $60 million valuation).
  • Bonus Shares: Investment levels of $1,000 or higher receive bonus shares of escalating amounts based on the value of the investment.

This Reg CF drive symbolizes more than just an investment opportunity; it's a paradigm shift. By this initiative, Vocal's vast community of creators is not merely limited to artistic contributions. They're now empowered to take a financial stake, investing in a platform that they've helped flourish. Simultaneously, traditional investors are given a unique chance to be part of a dynamic, growing platform, enhancing both value and potential.

Jeremy Frommer, Creatd's CEO, commented, "The introduction of Reg CF into our strategic framework is both timely and essential. It mirrors our vision for a robust, community-driven future. By staunchly countering dilution and toxic lending, we're reinforcing our foundation for the benefit of creators and investors. We foresee this approach permeating our entire asset portfolio."

Justin Maury, Vocal's CEO, also commented, "In this new chapter, we're doing more than just expanding our business model; we're inviting our most valued asset—our community of creators—to invest alongside us. This is your platform as much as it is ours, and it's only fitting that you have the opportunity to partake in the value creation that your content, engagement, and loyalty bring. You've been instrumental in shaping Vocal, and now, you can share in Vocal's financial future as well."

To learn more about Vocal's Reg CF, please visit: https://invest.vocal.media/

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