Summary
- JMDA is a second-mover attempting to capitalize where others have failed to do so profitably.
- The company has been burning cash while building its platform and is now in the early innings of the commercial stage.
- An acquisition added a sales team and completed the company's commercial structure.
- There is a clear path to profitability.
- The stock is pending approval for an uplisting to Nasdaq.
Jerrick Media Holdings (OTCQB:JMDA) is a digital social media publisher with the aim of disrupting its industry. The company will soon be uplisted to the Nasdaq and renamed Creatd with a new stock symbol - CRTD. There is an amended SEC S-1A filed recently which details the company history and the application for a Nasdaq listing. I will refer to the company as Creatd for the rest of this article. This is a follow-up article to 'Jerrick Media Holding: Taking Second Mover Advantage" which was my introductory article to this company. This article is about the company finances and future plans which I had the opportunity to discuss with the company CFO, Chelsea Pullano.
Briefing
The company has a simple plan for capturing its targeted market, once you understand it. I spent a considerable amount of time educating myself on how this company is different. Their premise is to maintain a platform that caters to creators that attract an audience that, in turn, attracts brands that are interested in targeting specific audiences. Creatd uses data analytics to match creators, brands, and audiences. Opportunities for creators increase as more brands are added again attracting a larger audience which, in turn, again attracts more brands.
The company platform is designed to integrate with all of the major social media websites and technologies that creators are encouraged to utilize on the Creatd platform. This utilization of technology supported by other companies saves Creatd a massive amount of money. One other major difference in the company business plan is that there is no display advertising on its platform, nor any cost for audiences. The company relies on creator subscriptions and fees paid by brands for all of its revenues.
Transformation From Development Stage To Commercial Stage
I write predominantly about companies that are in their nascent commercial stage which, usually, means that these companies have a short track record of revenue generation and a history of mounting debt. Creatd has a short track record of revenue generation and a history of mounting debt and along with that share dilution.
If you read the Creatd annual and quarterly filings, you will find the auditor's warning that the company may not have the ability to continue as a growing concern due to a lack of funds to support its operations. Just take a look at the recent S-1A filing. There are loans after loans, almost on a monthly basis. Many of these loans came from the CEO Jeremy Frommer, Arthur Rosen, Chris Gordon, and Leonard Schiller. All of these people have a vested interest and skin in the game as a result of their position with the company, their relationships, and their share ownership.
