UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

~~(Mark~~(Mark One)



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~

March 31, 2022



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

Commission File No.: 001-37703

IZEA WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)



Nevada						37-1530765
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)



~~480 N. Orlando Avenue, Suite 200~~1317 Edgewater Dr., # 1880, 0 ~~Winter Park,~~Orlando, FL						~~32789~~32804
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (407) 674-6911

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol (s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

IZEA

The Nasdaq Capital Market

Indicate by check mark whether the ~~registrant:~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T ~~(§ 232.405 of this chapter)~~ during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting ~~company”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-Accelerated Filer

☐

Smaller reporting company

☒

~~Large accelerated filer~~ o

~~Accelerated filer~~ o

~~Smaller reporting company~~ x

~~Non-accelerated filer~~ o

~~(Do not check if a smaller reporting company)~~

Emerging growth companyo

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

~~APPLICABLE ONLY TO CORPORATE REGISTRANTS~~

As of ~~November 3, 2017,~~May 13, 2022, there were ~~5,726,336~~62,225,449 shares of our common stock outstanding.

Table of Contents

Quarterly Report on Form 10-Q for the period ended ~~September 30, 2017~~March 31, 2022

Table of Contents



			~~Page~~
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			1
Unaudited Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021			1
Unaudited Consolidated Statements of Operations and Comprehensive Loss for the ~~Three~~three months ended March 31, 2022 and ~~Nine Months Ended September 30, 2017 and 2016~~2021			2
Unaudited Consolidated ~~Statement~~Statements of Stockholders’ Equity for the ~~Nine Months Ended September 30, 2017~~three months ended March 31, 2022 and 2021			3
Unaudited Consolidated Statements of Cash Flows for the ~~Nine Months Ended September 30, 2017~~three months ended March 31, 2022 and ~~2016~~2021			4
Notes to the Unaudited Consolidated Financial Statements			5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3430
Item 4. Controls and Procedures			3430

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			3632
Item 1A. Risk Factors			3632
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3732
Item 3. Defaults Upon Senior Securities			3732
Item 4. Mine Safety Disclosures			3732
Item 5. Other Information			3732
Item 6. Exhibits			3832

Signatures			3935

Table of Contents

PART I ~~- FINANCIAL INFORMATION~~

ITEM ~~1 -~~8 – FINANCIAL STATEMENTS

IZEA Worldwide, Inc.

Unaudited Consolidated Balance Sheets


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	72,558,846	$	75,433,295
Accounts receivable, net	7,259,891		7,599,103
Prepaid expenses	4,067,328		2,257,382
Other current assets	19,183		100,522
Total current assets	83,905,248		85,390,302

Property and equipment, net	151,402		155,185
Goodwill	4,016,722		4,016,722
Intangible assets, net	150,287		213,263
Software development costs, net	1,013,130		1,019,600
Total assets	$	89,236,789	$	90,795,072

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,858,215	$	2,086,892
Accrued expenses	2,087,281		2,502,882
Contract liabilities	12,772,552		11,338,095
Current portion of notes payable	31,985		—
Total current liabilities	16,750,033		15,927,869

Finance obligation, less current portion	—		10,420
Notes payable, less current portion	—		31,648
Total liabilities	16,750,033		15,969,937

Commitments and Contingencies (Note 7)	—		—

Stockholders’ equity:
Preferred stock; $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock; $.0001 par value; 200,000,000 shares authorized; 62,112,054 and 62,044,883, respectively, issued, and outstanding	6,211		6,205
Additional paid-in capital	148,590,356		148,452,498
Accumulated deficit	(76,109,811)		(73,633,568)
Total stockholders’ equity	72,486,756		74,825,135
Total liabilities and stockholders’ equity	$	89,236,789	$	90,795,072

September 30,
2017 December 31,
2016
Assets
Current:
Cash and cash equivalents $ 3,447,998
$ 5,949,004
Accounts receivable, net 5,253,423
3,745,695
Prepaid expenses 414,619
322,377
Other current assets 27,606
11,940
Total current assets 9,143,646
10,029,016

Property and equipment, net 310,277
460,650
Goodwill 3,604,720
3,604,720
Intangible assets, net 914,816
1,662,536
Software development costs, net 1,004,905
1,103,959
Security deposits 157,427
161,736
Total assets $ 15,135,791
$ 17,022,617

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 1,680,422
$ 1,438,389
Accrued expenses 1,888,985
1,242,889
Unearned revenue 3,750,617
3,315,563
Line of credit 810,376
—
Current portion of deferred rent 41,886
34,290
Current portion of acquisition costs payable 619,834
1,252,885
Total current liabilities 8,792,120
7,284,016

Deferred rent, less current portion 29,187
62,547
Acquisition costs payable, less current portion 477,718
688,191
Warrant liability —
—
Total liabilities 9,299,025
8,034,754

Commitments and Contingencies —
—

Stockholders’ equity:

Preferred stock; $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding —
—
Common stock, $.0001 par value; 200,000,000 shares authorized; 5,709,626 and 5,456,118, respectively, issued and outstanding 571
545
Additional paid-in capital 52,370,539
50,797,039
Accumulated deficit (46,534,344 ) (41,809,721 )
Total stockholders’ equity 5,836,766
8,987,863

Total liabilities and stockholders’ equity $ 15,135,791
$ 17,022,617

See accompanying notes to the ~~unaudited~~ consolidated financial statements.

IZEA Worldwide, Inc.

Unaudited Consolidated Statements of Operations

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016

Revenue $ 8,154,674
$ 7,496,972
$ 21,337,401
$ 19,876,611
Cost of sales 3,758,621
3,927,279
10,396,328
10,447,035
Gross profit 4,396,053
3,569,693
10,941,073
9,429,576

Operating expenses:

General and administrative 2,687,266
2,454,555
8,021,420
7,559,302
Sales and marketing 2,342,002
2,584,287
7,666,720
7,556,664
Total operating expenses 5,029,268
5,038,842
15,688,140
15,115,966

Loss from operations (633,215 ) (1,469,149 ) (4,747,067 ) (5,686,390 )

Other income (expense):

Interest expense (15,058 ) (25,511 ) (45,406 ) (58,261 )
Change in fair value of derivatives, net 45,160
(14,705 ) 36,122
14,568
Other income (expense), net 44,308
(2,238 ) 31,728
(485 )
Total other income (expense), net 74,410
(42,454 ) 22,444
(44,178 )

Net loss $ (558,805 ) $ (1,511,603 ) $ (4,724,623 ) $ (5,730,568 )

Weighted average common shares outstanding – basic and diluted 5,702,297
5,420,020
5,659,423
5,357,119
Basic and diluted loss per common share $ (0.10 ) $ (0.28 ) $ (0.83 ) $ (1.07 )
and Comprehensive Loss


	Three Months Ended March 31,
		2022		2021
Revenue		$	8,890,336	$	5,528,166

Costs and expenses:
Cost of revenue		5,179,724		2,457,785
Sales and marketing		2,520,343		2,078,323
General and administrative		3,502,435		2,535,147
Depreciation and amortization		138,829		365,529
Total costs and expenses		11,341,331		7,436,784

Loss from operations		(2,450,995)		(1,908,618)

Other income (expense):
Interest expense		(965)		(13,793)
Other income (expense), net		(24,283)		29,474
Total other income (expense), net		(25,248)		15,681

Net Loss		$	(2,476,243)	$	(1,892,937)

Weighted average common shares outstanding – basic and diluted		62,065,768		56,334,219
Basic and diluted loss per common share		$	(0.04)	$	(0.03)

See accompanying notes to the ~~unaudited~~ consolidated financial statements.

IZEA Worldwide, Inc.

Unaudited Consolidated ~~Statement~~Statements of Stockholders’ Equity


	Common Stock			Additional Paid-In		Accumulated		Total Stockholders’
	Shares	Amount		Capital		Deficit		Equity
Balance, December 31, 2021	62,044,883	$	6,205	$	148,452,498	$	(73,633,568)	$	74,825,135
Stock purchase plan & option exercise issuances	5,000	1		6,699		—		6,700
Stock issued for payment of services	26,460	2		31,221		—		31,223
Stock-based compensation	49,197	4		117,188		—		117,192
Shares withheld to cover statutory taxes	(13,486)	(1)		(17,250)		—		(17,251)
Net loss	—	—		—		(2,476,243)		(2,476,243)
Balance, March 31, 2022	62,112,054	$	6,211	$	148,590,356	$	(76,109,811)	$	72,486,756


														Common Stock			Additional Paid-In		Accumulated		Total Stockholders’
	Common Stock			Additional Paid-In			Accumulated			Total Stockholders’				Shares	Amount		Capital		Deficit		Equity
	Shares	Amount		Capital			Deficit			Equity
Balance, December 31, 2016	5,456,118	$	545	$	50,797,039		$	(41,809,721	)	$	8,987,863
Stock issued for payment of acquisition liability	200,542	20		928,021			—			928,041
Stock purchase plan issuances	9,998	1		16,231			—			16,232
Balance, December 31, 2020													Balance, December 31, 2020	50,050,167	$	5,005	$	102,416,131	$	(70,492,947)	$	31,928,189
Sale of securities													Sale of securities	8,701,691	870		34,357,142		—		34,358,012
Stock purchase plan & option exercise issuances													Stock purchase plan & option exercise issuances	1,510	—		2,144		—		2,144
Stock issued for payment of services	42,968	5		130,519			—			130,524			Stock issued for payment of services	7,176	1		34,695		—		34,696
Stock issuance costs	—	—		(10,913		)	—			(10,913		)	Stock issuance costs	—	—		(746,957)		—		(746,957)
Stock-based compensation	—	—		509,642			—			509,642			Stock-based compensation	526,903	52		197,934		—		197,986
Shares withheld to cover statutory taxes													Shares withheld to cover statutory taxes	(163,998)	(16)		(341,560)		—		(341,576)
Net loss	—	—		—			(4,724,623		)	(4,724,623		)	Net loss	—	—		—		(1,892,937)		(1,892,937)
Balance, September 30, 2017	5,709,626	$	571	$	52,370,539		$	(46,534,344	)	$	5,836,766
Balance, March 31, 2021													Balance, March 31, 2021	59,123,449	$	5,912	$	135,919,529	$	(72,385,884)	$	63,539,557

See accompanying notes to the ~~unaudited~~ consolidated financial statements.

IZEA Worldwide, Inc.

Unaudited Consolidated Statements of Cash Flows


	Nine Months Ended September 30,							Three Months Ended March 31,
	2017			2016				2022		2021
Cash flows from operating activities:							Cash flows from operating activities:
Net loss	$	(4,724,623	)	$	(5,730,568	)	Net loss	$	(2,476,243)	$	(1,892,937)
Adjustments to reconcile net loss to net cash used for operating activities:							Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	163,597			190,338			Depreciation and amortization	32,933		32,486
Amortization of software development costs and other intangible assets	932,234			744,725			Amortization of software development costs and other intangible assets	105,896		333,043
Impairment of digital assets							Impairment of digital assets	62,976		—
Gain on disposal of equipment	(5,462		)	(484		)	Gain on disposal of equipment	(663)		(7,914)
Provision for losses on accounts receivable	44,827			155,000
Stock-based compensation	509,642			576,144			Stock-based compensation	117,192		197,986
Fair value of stock and warrants issued or to be issued for payment of services	143,536			107,440
Increase (decrease) in fair value of contingent acquisition costs payable	62,000			—
Gain on settlement of acquisition costs payable	(10,491		)	—
Change in fair value of derivatives, net	(36,122		)	(14,568		)
Changes in operating assets and liabilities, net of effects of business acquired:
Fair value of stock issued for payment of services							Fair value of stock issued for payment of services	31,223		34,696
Changes in operating assets and liabilities:							Changes in operating assets and liabilities:
Accounts receivable	(1,552,555		)	(472,612		)	Accounts receivable	339,213		1,135,265
Prepaid expenses and other current assets	(84,798		)	(51,792		)	Prepaid expenses and other current assets	(1,728,607)		(134,322)
Accounts payable	242,033			263,706			Accounts payable	(228,677)		(287,213)
Accrued expenses	679,104			(142,156		)	Accrued expenses	(416,505)		(245,077)
Unearned revenue	435,054			161,967
Deferred rent	(25,764		)	(2,948		)
Contract liabilities							Contract liabilities	1,434,456		4,280
Net cash used for operating activities	(3,227,788		)	(4,215,808		)	Net cash used for operating activities	(2,726,806)		(829,707)

Cash flows from investing activities:							Cash flows from investing activities:
Purchase of equipment	(7,762		)	(121,651		)	Purchase of equipment	(29,150)		(22,109)
Increase in software development costs	(85,460		)	(304,790		)
Acquisition, net of cash acquired	—			(329,468		)
Security deposits	4,309			(42,637		)
Proceeds from sale of equipment							Proceeds from sale of equipment	663		8,892
Software development costs							Software development costs	(99,426)		—
Net cash used for investing activities	(88,913		)	(798,546		)	Net cash used for investing activities	(127,913)		(13,217)
Cash flows from financing activities:							Cash flows from financing activities:
Proceeds from sale of securities							Proceeds from sale of securities	—		34,358,012
Proceeds from stock purchase plan and option exercise issuances							Proceeds from stock purchase plan and option exercise issuances	6,700		2,144
Payments on finance obligation							Payments on finance obligation	(9,179)		(8,336)
Stock issuance costs							Stock issuance costs	—		(746,957)
Payments on shares withheld for statutory taxes							Payments on shares withheld for statutory taxes	(17,251)		(341,576)
Net cash provided by (used for) financing activities							Net cash provided by (used for) financing activities	(19,730)		33,263,287

Cash flows from financing activities:
Proceeds from line of credit	810,376			—
Proceeds from stock purchase plan issuances	16,232			34,587
Stock issuance costs	(10,913		)	(22,493		)
Payments on capital lease obligations	—			(7,291		)
Net cash from financing activities	815,695			4,803

Net decrease in cash and cash equivalents	(2,501,006		)	(5,009,551		)
Cash and cash equivalents, beginning of year	5,949,004			11,608,452

Net increase (decrease) in cash and cash equivalents							Net increase (decrease) in cash and cash equivalents	(2,874,449)		32,420,363
Cash and cash equivalents, beginning of period							Cash and cash equivalents, beginning of period	75,433,295		33,045,225
Cash and cash equivalents, end of period	$	3,447,998		$	6,598,901		Cash and cash equivalents, end of period	$	72,558,846	$	65,465,588

Supplemental cash flow information:							Supplemental cash flow information:
Cash paid during the period for interest	$	29,700		$	21,230
Interest paid							Interest paid	$	1,894	$	4,792

Non-cash financing and investing activities:							Non-cash financing and investing activities:
Acquisition costs paid through issuance of common stock	$	938,532		$	1,448,832
Fair value of common stock issued for future services	$	23,110		$	31,962		Fair value of common stock issued for future services	$	125,000	$	147,329

See accompanying notes to the ~~unaudited~~ consolidated financial statements.

IZEA Worldwide, Inc.

Notes to the ~~Unaudited~~ Consolidated Financial Statements

NOTE 1. COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~Unaudited Interim Financial Information~~Nature of Business

IZEA Worldwide, Inc. (“IZEA,” “we,” “us,” or “our”) creates and operates online marketplaces that connect marketers, including brands, agencies, and publishers, with content creators such as bloggers and tweeters (“creators”). Our technology brings the marketers and creators together, enabling their transactions to be completed at scale by managing custom content workflow, creator search and targeting, bidding, analytics, and payment processing.

We help power the creator economy, allowing everyone from college students and stay-at-home individuals to celebrities and accredited journalists the opportunity to monetize their content, creativity, and influence through our marketers. IZEA compensates these creators for producing unique content such as long and short-form text, videos, photos, status updates, and illustrations for marketers or distributing such content on behalf of marketers through their websites, blogs, and social media channels.

We provide value through managing custom content workflow, creator search and targeting, bidding, analytics, and payment processing. While the majority of the marketers engage us to perform these services (the “Managed Services”) on their behalf, they may also use our marketplaces to engage creators for influencer marketing campaigns or to produce custom content on a self-service basis by licensing our technology.

Our primary technology platform, The IZEA Exchange (“IZEAx”), is designed to provide a unified ecosystem that enables the creation and publication of multiple types of custom content through our creators’ websites, blogs, and social media channels, including, among others, Twitter, Facebook, YouTube, Twitch, and Instagram. We extensively use this platform to manage influencer marketing campaigns on behalf of our marketers. This platform is also available directly to our marketers as a self-service tool and a licensed white label product. IZEAx was engineered from the ground up to replace all of our previous platforms with an integrated offering that is improved and more efficient.

In 2020, we launched two new platforms, BrandGraph and Shake. BrandGraph is a social media intelligence platform offering marketers an analysis of share-of-voice, engagement benchmarking, category spending estimates, influencer identification, and sentiment analysis.The BrandGraph platform maps and classifies the complex hierarchy of corporation-to-brand relationships by category and associates social content with brands through a proprietary content analysis engine. Shake is an online marketplace where buyers can quickly and easily hire creators of all types for influencer marketing, photography, design, and other digital services. The Shake platform is aimed at digital creatives seeking freelance “gig” work. Creator’s list available “Shakes” in their accounts on the platform. Marketers select and purchase creative packages from them through a streamlined chat experience, assisted by ShakeBot - a proprietary artificial intelligence assistant.

Impact of COVID-19

The COVID-19 pandemic impacted our operations, sales, and finances beginning in 2020. To protect the health and safety of our employees, we took precautionary action and directed all staff to work from home effective March 16, 2020. We allowed the leases for our company headquarters and temporary office spaces to expire at the end of their terms throughout 2020. We have not experienced any major declines in operating efficiency in our remote working environment and have decided to continue our work-from-home policy indefinitely as a virtual-first employer.

We will continue to monitor the COVID-19 situation actively and may take further actions altering the business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by federal, state, or local authorities. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, employees, and prospects, or on our future financial results.

Basis of Presentation

The accompanying consolidated balance sheet as of ~~September 30, 2017,~~March 31, 2022, the consolidated statements of operations and comprehensive loss for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, the consolidated ~~statement~~statements of stockholders' equity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and 2021, and the consolidated statements of cash flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 are unaudited but include all adjustments that are, in the opinion of management, necessary for a fair presentation of its financial position at such dates and its results of operations and cash flows for the periods then ended in conformity with generally accepted accounting principles in the United States ("GAAP"). The consolidated balance sheet as of December 31, ~~2016~~2021 has been derived from the audited consolidated financial statements at that date but, in accordance with the rules and regulations of the ~~Securities and Exchange Commission ("SEC"),~~SEC, does not include all of the information and notes required by GAAP for complete financial statements. Operating results for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 are not necessarily indicative of results that may be expected for the entire fiscal year. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, ~~2016~~2021, included in the Company's Annual Report on Form 10-K filed with the SEC on March ~~28, 2017.~~31, 2022.

~~Nature of Business~~

IZEA Worldwide, Inc. ~~(together with its wholly-owned subsidiaries, "we," "us," "our," "IZEA" or~~

Notes to the "Company") was founded in February 2006 under the name PayPerPost, Inc. and became a public company incorporated in the state of Nevada in May 2011. In January 2015, IZEA purchased all of the outstanding shares of capital stock of Ebyline, Inc. (“Ebyline”) and in July 2016, IZEA purchased all the outstanding shares of capital stock of ZenContent, Inc. ("ZenContent"). Both of these entities now operate as wholly-owned subsidiaries under IZEA, Inc. On March 9, 2016, the Company formed IZEA Canada, Inc., a wholly-owned subsidiary, incorporated in Ontario, Canada to operate as a sales office for IZEA's Canadian customers and partners. The Company is headquartered near Orlando, Florida with additional offices in Illinois, California and Canada and a sales presence in New York, Michigan and Massachusetts.Consolidated Financial Statements

The Company operates online marketplaces that facilitate transactions between marketers and influential content creators. These creators are compensated by IZEA for producing and distributing unique content such as long-form text, videos, photos, illustrations, and status updates on behalf of marketers through websites, blogs and social media channels. Marketers receive influential consumer content and engaging, shareable stories that drive awareness.

~~The Company's primary technology platform, the IZEA Exchange (“IZEAx”), enables transactions to be completed at scale through the management of custom content development, creator search and targeting, bidding, analytics, and payment processing.~~ ~~IZEAx~~ is designed to provide a unified ecosystem that enables the creation of multiple types of content including blog posts, status updates, videos and photos through a wide variety of social channels including blogs, Twitter, Facebook, Instagram and Tumblr, among others.

~~In addition to~~ ~~IZEAx~~, the Company operates the Ebyline technology platform, which it acquired in January 2015. The Ebyline platform is a self-service content marketplace which was originally designed to replace editorial newsrooms located within newspapers with a “virtual newsroom” to handle their content workflow.

Principles of Consolidation

The ~~unaudited~~ consolidated financial statements include the accounts of IZEA Worldwide, Inc. and its wholly-owned subsidiaries, ~~Ebyline after its~~subsequent to the subsidiaries’ individual acquisition, ~~on January 31, 2015, ZenContent, Inc. after its acquisition on July 31, 2016, and IZEA Canada, Inc. after its~~merger or formation ~~in March 2016.~~dates, as applicable. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The ~~unaudited~~preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to the magnitude and duration of COVID-19, the extent to which it impacts worldwide macroeconomic conditions, the speed of the anticipated recovery, access to capital markets, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of March 31, 2022, and through the date of the filing of this Quarterly Report on Form 10-Q. The accounting matters assessed included but were not limited to estimates related to revenue, the accounting for potential liabilities and accrued expenses, the assumptions utilized in valuing stock-based compensation issued for services, the realization of deferred tax assets, and assessments of impairment related to long-lived assets, intangible assets, and goodwill. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in additional material impacts on the Company’s consolidated financial statements ~~were prepared using~~in future reporting periods.

Despite the ~~acquisition method~~Company’s efforts, the ultimate impact of ~~accounting with IZEA considered~~COVID-19 depends on factors beyond the ~~accounting acquirer~~Company’s knowledge or control, including the duration and severity of ~~Ebyline~~the outbreak, as well as third-party actions taken to contain its spread and ~~ZenContent. Under~~mitigate its public health effects. As a result, the ~~acquisition method of accounting,~~Company is unable to estimate the ~~purchase price is allocated~~full extent to ~~the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill.~~

which COVID-19 will negatively impact its financial results or liquidity.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with aan original maturity of three months or less from the date of purchase to be cash equivalents.

The FDIC insures deposits made to the Company bank accounts up to $250,000. The CDIC insures deposits made to the Company bank account in Canada up to CAD 100,000. Deposit balances exceeding these limits were approximately $71.7 million and $74.9 million as of March 31, 2022 and December 31, 2021, respectively.

Accounts Receivable and Concentration of Credit Risk

~~Accounts~~The Company’s accounts receivable balance consists of trade receivables, unbilled receivables, and a reserve for doubtful accounts. Trade receivables are customer obligations due under ~~normal~~standard trade terms. ~~Uncollectability~~Unbilled receivables represent amounts owed for work that has been performed but not yet billed. The Company had net trade receivables of ~~accounts receivable is not significant since most customers are bound by contract~~$7,232,501 and ~~are required to fund the~~unbilled receivables of $27,390 at March 31, 2022. The Company ~~for all the costs~~had net trade receivables of ~~an “opportunity,” defined as an order created by a marketer for a creator to develop or share content on behalf~~$7,577,177 and unbilled receivables of ~~a marketer. If a portion of the account balance is deemed uncollectible, the Company will either write-off the amount owed or provide a reserve based on the uncollectible portion of the account.~~ $21,926 at December 31, 2021.

Management determines the collectability of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. An account is delinquent when the customer has not paid an amount due by its associated due date. If a portion of the account balance is deemed uncollectible, the Company will either write off the amount owed or provide a reserve based on its best estimate of the uncollectible portion of the account. The Company had a reserve ~~of $220,000 and $237,000~~ for doubtful accounts of $155,000 and $155,000 as of ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, respectively. Management believes that this estimate is reasonable, but there can be no assurance that the estimate will not change ~~as a result of~~due to a change in economic conditions or business conditions within the industry, the individual customers, or the Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. Bad debt expense was less than 1%0.1% of revenue for each of the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~.2021.

Concentrations of credit risk ~~with respect to~~for accounts receivable ~~are~~have typically been limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. However, the Company’s addition of SaaS customers has increased credit exposure on certain customers who carry significant credit balances related to their marketplace spend. The Company ~~also~~ controls credit risk through credit approvals, credit limits, and monitoring procedures. The Company performs credit evaluations of its customers but generally does not require collateral to support accounts receivable. The Company ~~had one customer~~currently has two customers that each accounted for ~~14%~~more than 10% of total accounts receivable at ~~September 30, 2017~~March 31, 2022, and nozero customers that accounted for more than 10% of total accounts receivable at December 31, ~~2016.~~2021. The Company had ~~one customer~~three customers that each accounted for ~~11%~~more than 10% of its ~~revenue~~gross billings during the

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

three months ended ~~September 30, 2017~~March 31, 2022, and no customers that accounted for more than 10% of its ~~revenue~~gross billings during the three months ended ~~September 30, 2016. The Company had~~ no ~~customers that accounted for more than 10% of its revenue during the~~ ~~nine months~~ ~~ended September 30, 2017 and one customer that accounted for 11% of its revenue during the~~ ~~nine months~~ ~~ended September 30, 2016.~~March 31, 2021.

Property and Equipment

Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation ~~and amortization~~ is computed using the straight-line method over the estimated useful lives of the assets as follows:



Computer Equipment		3 years
~~Software Costs~~		~~3 - 5 years~~
Office Equipment	3 - 10 years
Furniture and Fixtures		5 - 10 years

Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. Property and equipment under capital leases are depreciated over their estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for betterments and major improvements are capitalized and depreciated over the remaining useful lives of the assets. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in general and administrative ~~expense. Depreciation expense on property and equipment recorded in general and administrative~~ expense in the ~~accompanying unaudited~~ consolidated statements of operations was $50,168 and $65,106 for the three months ended September 30, 2017 and 2016, respectively. Depreciation expense on property and equipment recorded in general and administrative expense in the accompanying unaudited consolidated statements of operations was $163,597 and $190,338 for the nine months ended September 30, 2017 and 2016, respectively. Property and equipment is recorded net of accumulated depreciation and amortization amounts of $763,632 and $616,056 as of September 30, 2017 and December 31, 2016, respectively.

~~Intangible Assets~~

The Company acquired the majority of its intangible assets through its acquisition of Ebyline on January 30, 2015 and its acquisition of ZenContent on July 31, 2016. The Company is amortizing the identifiable intangible assets over a period of 12 to 60 months. See Note 3 for further details.

Management reviews long-lived assets, including property and equipment, software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset's carrying amount to determine if there has been an impairment, which is calculated as the difference between the fair value of an asset and its carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their

~~estimates of fair value. For the three and nine months ended September 30, 2017 and 2016, there were no impairment charges associated with the Company's long-lived assets.~~

~~Software Development Costs~~

~~In accordance with Accounting Standards Codification ("ASC") 350-40,~~ ~~Internal Use Software~~ ~~and ASC 985-730,~~ ~~Computer Software Research and Development~~, research phase costs related to internal use software should be expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs may be capitalized. The Company amortizes software development costs equally over 5 years upon initial launch of the software or additional features. See Note 4 for further details.

operations.

Goodwill

Goodwill represents the excess of the ~~purchase~~ consideration oftransferred for an acquired business over the fair value of the underlying identifiable net ~~tangible and intangible~~ assets. The Company has goodwill in connection with its ~~acquisition~~acquisitions of Ebyline, ZenContent, and ~~ZenContent.~~TapInfluence. Goodwill is not amortized but instead, it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge ~~for~~in an amount equal to the excess of the reporting unit’s carrying amount over its fair value, not to exceed the total amount of ~~impairment~~goodwill allocated to the reporting unit during the fiscal quarter in which the determination is made.

The Company performs its annual impairment tests of goodwill ~~during the fourth quarter~~as of October 1 of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, ~~which is~~ referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information ~~available;~~available, (ii) engage in business ~~activities;~~activities, and (iii) whether a segment manager regularly reviews the ~~component's~~component’s operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company ~~has determined that prior to and after~~had 1 reporting unit as of March 31, 2022.

Intangible Assets

The Company acquired the ~~acquisition~~majority of its intangible assets through its acquisitions of Ebyline, ZenContent, and ~~ZenContent, it had,~~TapInfluence. The Company amortized the identifiable intangible assets over 12 to 60 months. See Note 3 for further details.

The Company accounts for its digital assets held as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and ~~continues~~Other. The Company maintains ownership of and control over its digital assets and may use third-party custodial services to ~~have, one reporting unit.~~secure them. The digital assets are initially recorded at cost and are subsequently evaluated for any impairment losses incurred since acquisition.

The Company reviews long-lived assets, including software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset’s carrying amount to determine if there has been an impairment, which is calculated as the difference between the asset’s fair value and the carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions, and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. The Company did not recognize any impairment charges associated with the Company’s acquired identifiable intangible assets in the three months ended March 31, 2022, and 2021. The Company did recognize an impairment of $62,976 on digital assets held as indefinite-lived intangible assets in the three months ended March 31, 2022. There were no impairment charges on digital assets for the three months ended March 31, 2021.

Software Development Costs

In accordance with Accounting Standards Codification (“ASC”) 350-40, Internal Use Software, the Company capitalizes certain internal-use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the research and

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

planning stage and in the post-implementation stage of software development or other maintenance and development expenses that do not meet the qualification for capitalization are expensed as incurred. Costs incurred in the application and development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects and external direct costs of materials obtained in developing the software. The Company also capitalizes certain costs associated with cloud computing arrangements ("CCAs"). These software developments, acquired technology, and CCA costs are amortized on a straight-line basis over the estimated useful life of five years upon the initial release of the software or additional features. The Company reviews the software development costs for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, the Company recognizes an impairment loss for the excess of carrying value over the fair value in its consolidated statements of operations. See Note 4 for further details.

Leases

Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), established a right-of-use model that requires a lessee to record a right-of-use asset and a right-of-use liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company does not record leases on the balance sheet with a lease term of 12 months or less at the commencement date.

Revenue Recognition

~~In January 2017, the~~The Company ~~revised the way it categorizes~~generates revenue from four primary sources: (1) revenue from its revenue streams to more closely align the revenue based on margin profiles and how it currently analyzes the business. The revised categories are as follows: Managed Services, Content Workflow, and Service Fee Revenue. Managed Services ismanaged services when a marketer ~~typically~~(typically a brand, agency, or ~~partner, contracts IZEA~~partner) pays the Company to provide custom content, influencer marketing, amplification, or ~~amplification services. Content Workflow is~~other campaign management services (“Managed Services”); (2) revenue from fees charged to software customers on their marketplace spend within the Company's IZEAx and Shake platforms (“Marketplace Spend Fees”); (3) revenue from license and subscription fees charged to access the IZEAx and BrandGraph platforms (“License Fees”); and, (4) revenue derived from ~~the self-service use of the Ebyline platform by news agencies to handle their content workflow from initial content request to payment of content received. Service Fee Revenue is generated when~~other fees ~~are charged to customers primarily related to subscription~~such as inactivity fees, ~~for different levels of service within a platform, licensing fees for white-label use of~~ ~~IZEAx~~, early cash-out fees, ~~if a creator wishes~~and other miscellaneous fees charged to ~~take proceeds earned for services from their account when~~users of the ~~account balance is below certain minimum balance thresholds and inactivity fees for dormant accounts.~~ Company's platforms (“Other Fees”).

The Company recognizes revenue ~~at various times depending~~in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized based on a five-step model as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. The core principle of ASC 606 is that revenue is recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are distinct performance obligations.

The Company also determines whether it acts as an agent or a principal for each identified performance obligation. The determination of whether the Company acts as principal or agent is highly subjective and requires the Company to evaluate a number of indicators individually and as a whole in order to make its determination. For transactions in which the Company acts as a principal, revenue is reported on a gross basis as the amount paid by the marketer for the purchase of content or sponsorship, promotion, and other related services, and the Company records the amounts it pays to third-party creators as cost of revenue. For transactions in which the Company acts as an agent, revenue is reported on a net basis as the amount the Company charged to the self-service marketer using the Company’s platforms, less the amounts paid to the third-party creators providing the service.

The Company maintains separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specify the terms of the relationship and access to its platforms, or by statement of work, which specifies the price and the services to be performed, along with other terms. The transaction price is determined based on the ~~service that~~fixed fee stated in the statement of work and does not contain variable consideration. Marketers who contract with the Company to manage their advertising campaigns or custom content requests may prepay for services or request credit terms. Payment terms are typically 30 days from the invoice date. The agreement typically provides for either a non-refundable deposit or a cancellation fee if the agreement is ~~being performed.~~canceled by the customer prior to the completion of services. Billings in advance of completed services are recorded as a contract liability until earned. The Company assesses collectability based on several factors, including the creditworthiness of the customer and payment and transaction history.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Managed Services Revenue

For Managed Services Revenue, the Company enters into an agreement to provide services that may ~~require~~include multiple ~~deliverables~~distinct performance obligations in the form ~~of: (a) sponsored social items, such as~~of (i) an integrated marketing campaign to provide influencer marketing services, which may include the provision of blogs, tweets, photos, or videos shared through social network offerings ~~that provide awareness or advertising buzz regarding the marketer's brand; (b)~~and content promotion, such as click-through advertisements appearing in websites and social media ~~channels;~~channels, and ~~(c) original~~(ii) custom content items, such as a research or news article, informational material or ~~videos that a publisher~~videos. Marketers typically purchase influencer marketing services to provide public awareness or ~~other marketer can~~advertising buzz regarding the marketer’s brand and purchase custom content for internal and external use. The Company may provide one type or a combination of all types of these ~~deliverables including a management fee~~performance obligations on a statement of work for a lump sum fee. The Company allocates revenue to each performance obligation in the contract at inception based on its relative standalone selling price. These ~~deliverables~~performance obligations are to be provided over a stated period that ~~may range~~generally ranges from one day to one year. ~~Each item~~The Company views its obligation to deliver influencer marketing services, including management services, as a single performance obligation that is ~~considered delivered once~~satisfied over time as the customer receives the benefits from the services. Revenue is recognized using an input method of costs incurred compared to total expected costs to measure the progress towards satisfying the overall performance obligation of the marketing campaign. The delivery of custom content represents a distinct performance obligation that is satisfied over time as the Company has no alternative for the custom content, and the Company has ~~been delivered~~an enforceable right to payment for performance completed to date under the contracts. The Company considers custom content to be a series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, or once the content is distributed live through a public or social network. Revenue is accounted for separately on each of the deliverables depending on the type of service provided. The Company recognizesand revenue ~~related to influencer marketing services after a marketer's sponsored content is posted through~~ ~~IZEAx~~ ~~and shared through a creator's social network for a requisite period of time. The requisite period ranges from~~ ~~3 days~~ ~~for a tweet to~~ ~~30 days~~ for a blog, video or other form of content. Management fees from advertising campaigns managed by the Company are recognized ratably over the term of the campaign which may range from a few days to one year. Revenue related to custom content provided to a marketer is recognized over time using an output method based on when ~~the~~each individual piece of content is delivered to ~~and accepted by~~ the customer. ~~Payment terms are typically 30 days~~Based on the Company’s evaluations, revenue from ~~the invoice date. If~~Managed Services is reported on a gross basis because the Company ~~is unable~~has the primary obligation to fulfill the performance obligations, and it creates, reviews, and controls the services. The Company takes on the risk of payment to any third-party creators, and it establishes the contract price directly with its customers based on the services requested in the statement of work.

Marketplace Spend Fees Revenue

For Marketplace Spend Fees Revenue, the self-service customers instruct creators found through the Company’s IZEAx and Shake platforms to provide ~~a portion of the services, it may agree with the customer to provide a different type of service or to provide a credit~~and distribute custom content for ~~the value of those services, which may be applied to the existing order or used for future services.~~an agreed-upon transaction price. The ~~statement of work typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services.~~

~~For Content Workflow services, the self-service marketer contracts the creators directly to provide custom content. The Ebyline platform controls~~Company’s platforms control the contracting, description of services, acceptance of, and payment for the requested content. This service is used primarily by news agencies or marketers to control the outsourcing of their content and advertising needs. The Company charges the self-service customer the transaction price plus a fee based on the contract. Revenue is recognized when the transaction is completed by the creator and accepted by the ~~marketer.~~marketer or verified as posted by the system. Based on the Company’s evaluations, this revenue is reported on a net basis since the Company is acting as an agent through its platform for the third-party creator to provide the services or content directly to the self-service customer or post approved content through one or more social media platforms.

License Fees Revenue

~~Service Fee~~License Fees Revenue is ~~recognized immediately when~~generated by granting limited, non-exclusive, non-transferable licenses to customers for the ~~service is performed or at~~use of the ~~time~~IZEAx, BrandGraph, and until February 2020, the TapInfluence technology platforms for an ~~account becomes dormant or is cashed out. Service Fee Revenue~~agreed-upon subscription period. Customers license the platforms to manage their influencer marketing campaigns. Fees for subscription or licensing ~~fees is~~services are recognized straight-line over the term of the service.

Other Fees Revenue

~~Marketers who use~~Other Fees Revenue is generated when fees are charged to the Company’s platform users, primarily related to monthly plan fees, inactivity fees, and early cash-out fees. Plan fees are recognized within the month they relate to, inactivity fees are recognized at a point in time when the account is deemed inactive, and early cash-out fees are recognized when a cash-out is either below certain minimum thresholds or when accelerated payout timing is requested.

The Company does not typically engage in contracts that are longer than one year. Therefore, the Company does not capitalize costs to ~~manage their social advertising campaigns or custom content requests may prepay for services or request credit terms. Payments received or billings in advance of completed services are recorded~~obtain its customer contracts as ~~unearned revenue until earned as described above.~~

All of the Company's revenues are generated through the rendering of services. The Company recognizes revenue under the general guidelines of Staff Accounting Bulletin Topic 13 A.1, which states that revenue willthese amounts generally would be recognized ~~when it is realized or realizable~~over a period of less than one year and earned. The Company considers its revenue as generally realized or realizable and earned once (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to the marketer or customer is fixed (required to be paid at a set amount that isare not subject to refund or adjustment) and determinable, and (iv) collectability is reasonably assured. The Company records revenue on the gross amount earned since it generally is the primary obligor in the arrangement, takes on credit risk, establishes the pricing and determines the service specifications.

material.

Advertising Costs

Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising costs charged to operations for the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~2021 were approximately ~~$79,000~~$0.5 million and ~~$74,000, respectively. Advertising costs charged to operations for the~~ ~~nine months~~ ~~ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~ ~~were approximately~~ ~~$248,000~~ ~~and~~ ~~$291,000~~,$0.4 million, respectively. Advertising costs are included in sales and marketing expense in the accompanying ~~unaudited~~ consolidated statements of operations.

~~Deferred Rent~~

IZEA Worldwide, Inc.

~~The Company’s operating leases for its office facilities contain rent abatements and predetermined fixed increases of~~Notes to the base rental rate during the lease terms. The Company accounts for rental expense on a straight-line basis over the lease terms. The Company records the difference between the straight-line expense and the actual amounts paid under the lease as deferred rent in the accompanying unaudited consolidated balance sheets.Consolidated Financial Statements

Income Taxes

The Company has not recorded federal income tax expense due to ~~the generation~~its history of net operating losses. Deferred income taxes are accounted for using the balance sheet approach, which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. The Company incurs minimal state franchise tax in four states, which is included in general and administrative ~~expenses~~expense in the consolidated statements of ~~operations.~~operations and comprehensive loss.

The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits, and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s tax years subject to examination by the Internal Revenue Service are ~~2013, 2014 and 2015.~~

~~Derivative Financial Instruments~~

Derivative financial instruments are defined as financial instruments or other contracts that contain a notional amount and one or more underlying factors (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or assets. The Company accounts for derivative instruments in accordance with ASC 815, ~~Derivatives and Hedging~~ (“ASC 815”), which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under

ASC 815 to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. The Company had 5,502 warrant shares issued in its September 2012 public offering that required classification as a liability due to certain registration rights and listing requirements in the agreements. These warrants expired in September 2017 with no value. The fair value and outstanding derivative warrant liability related to these warrant shares as of December 31, 2016 was $0. During the three and nine months ended September 30, 2016, the Company recorded a gain of $1,231 and $4,960, respectively, due to the change in the fair value of its warrant liability.

2018 through 2021.

Fair Value of Financial Instruments

The Company’s financial instruments are recorded at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value:

•Level 1 – Valuation based on quoted market prices in active markets for identical assets and liabilities.

•Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets.

•Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. ~~The~~As of March 31, 2022, the Company does not have any Level 1, 2, or 23 financial assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted of its acquisition cost liability (see Note 2) as of September 30, 2017 and December 31, 2016, and a warrant liability as of December 31, 2016. Significant unobservable inputs used in the fair value measurement of the warrants include the estimated term and risk-adjusted interest rates. In developing its credit risk assumption used in the fair value of warrants, the Company considered publicly available bond rates and US Treasury Yields. However, since the Company does not have a formal credit-standing, management estimated its standing among various reported levels and grades for use in the model. During all periods, management estimated that the Company's standing was in the speculative to high-risk grades (BB- to CCC in the Standard and Poor's Rating). Significant increases or decreases in the estimated remaining period to exercise or the risk-adjusted interest rate could result in a significantly lower or higher fair value measurement.

The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable, unearned revenue, and accrued expenses. Unless otherwise disclosed, the fair value of the Company’s notes payable obligations approximate their carrying value based upon current rates available to the Company.

Stock-Based Compensation

Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan, as amended, and the 2011 B Equity Incentive Plan (together, the ~~"2011~~“2011 Equity Incentive ~~Plans"~~Plans”) (see Note 6)8) is measured at the grant date, based on the fair value of the award, and is recognized as ~~a straight-lined~~ expense over the employee’s requisite service ~~period.~~period on a straight-line basis. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions noted in the table below. The Company ~~estimates~~uses the ~~fair value~~simplified method to estimate the expected term of ~~its common~~employee stock ~~using~~options because it does not believe historical exercise data will provide a reasonable basis for estimating the expected term for the current share options granted. The simplified method assumes that employees will exercise share options evenly between the period when the share options are vested and ending on the date when the options would expire. The Company uses the closing stock price of its common stock on the date of the ~~grant. The~~grant as the associated fair value of its common stock. For issuances after June 30, 2019, the Company estimates the volatility of its common stock at the date of grant based on the volatility of its stock during the period. For issuances on or prior to June 30, 2019, the Company estimated the volatility of its common stock at the date of grant based on the volatility of comparable peer companies that ~~are~~were publicly traded and ~~have~~ had a longer trading history than ~~itself. The Company determines~~ the ~~expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures.~~Company. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future.

The Company used the following assumptions for stock options granted under the 2011 Equity Incentive Plans during the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~:

2021:

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements


	Three Months Ended		Nine Months Ended			Three Months Ended
2011 Equity Incentive Plans Assumptions	September 30, 2017	September 30, 2016	September 30, 2017	September 30, 2016	2011 Equity Incentive Plans Assumptions		March 31, 2022	March 31, 2021
Expected term	6 years	6 years	6 years	6 years	Expected term		6 years	6 years
Weighted average volatility	43.08%	45.02%	43.49%	50.01%	Weighted average volatility		120.48%	117.97%
Weighted average risk free interest rate	1.91%	1.23%	1.98%	1.42%
Weighted average risk-free interest rate					Weighted average risk-free interest rate		1.70%	0.70%
Expected dividends	—	—	—	—	Expected dividends		—	—
Weighted average expected forfeiture rate					Weighted average expected forfeiture rate		37.00%	19.64%

~~Effective January 1, 2017, the Company considered its accounting for stock options pursuant to Accounting Standards Update ("ASU") No. 2016-09,~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~. This ASU is intended to reduce the cost and complexity of accounting for employee share-based payments primarily surrounding the accounting for income taxes upon vesting or exercise of share-based payments and accounting for forfeitures, as well as related financial statement classifications. Although the new standard allows for the non-use of forfeiture estimates, the Company elected to continue the use of estimated forfeitures when accounting for stock-based compensation, because it has an established history of forfeitures for non-vested options. There was no effect on the Company's financial statements as a result of the adoption of this standard.

The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods. ~~Average expected forfeiture rates were 6.79% and 7.87% during the three months ended September 30, 2017 and 2016, respectively. Average expected forfeiture rates were~~ ~~9.01%~~ ~~and 10.74% during the nine months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016, respectively.~~

~~Non-Employee Stock-Based Payments~~

The ~~Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions~~Company may issue shares of ~~ASC 505,~~ ~~“Equity-Based Payments to Non-Employees.”~~restricted stock or restricted stock units that vest over future periods. The ~~measurement date for~~value of shares is recorded as the fair value of the ~~equity instruments issued is determined at~~stock or units upon the ~~earlier of (i) the~~issuance date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. The fair value of equity instruments issued to consultants that vest immediatelyand is expensed ~~when issued. The fair value of equity instruments issued to consultants that have future vesting and are subject to forfeiture if performance does not occur is recognized as expense~~on a straight-line basis over the vesting period. ~~Fair values~~See Note 8 for ~~the unvested portion of issued instruments are adjusted each reporting period. The change in fair value is recorded in the accompanying consolidated statements of operations. Stock-based payments~~additional information related to ~~non-employees is accounted for based on~~these shares.

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Reference Rate Reform: In March 2020, the ~~fair value~~FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the ~~related stock~~Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), and further issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), in January 2021 to provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 and ASU 2021-01 also provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions impacted by reference rate reform if certain criteria are met. Additionally, they only apply to contracts and hedging relationships that reference LIBOR or ~~the fair value~~another reference rate expected to be discontinued due to reference rate reform. ASU 2020-04 is effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. As of March 31, 2022, the ~~services, whichever is more readily determinable.~~

~~Segment Information~~

~~The~~ Company does not ~~identify separate operating segments for management reporting purposes. The results of consolidated operations are the basis~~have any contracts that reference LIBOR rates and this guidance has not had a material impact on ~~which management evaluates operations and makes business decisions.~~its financial statements.

~~Use of Estimates~~

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Recent~~Recently Issued Accounting Pronouncements Not Yet Adopted

Credit Losses: In ~~May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers~~ ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures).

~~In March~~June 2016, the FASB issued ASU No. ~~2016-08,~~ ~~Revenue from Contracts~~2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 replaces the incurred loss impairment methodology under current GAAP with ~~Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)~~ ("a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU ~~2016-08"). The amendments in ASU 2016-08 are intended to improve~~2016-13 requires the ~~understanding~~use of ~~the implementation guidance on principal versus agent considerations by amending certain existing illustrative examples~~a forward-looking expected credit loss model for accounts receivables, loans, and ~~adding additional illustrative examples to assist in the application of the guidance. The effective date for ASU 2016-08 is the same as for ASU 2014-09 stated above.~~

other financial instruments. In ~~April 2016,~~May 2019, the FASB issued ASU 2019-05, which provides transition relief for entities adopting ASU 2016-13. For entities that have adopted ASU 2016-13, the amendments in ASU 2019-05 are effective for fiscal years beginning after December 15, 2019, including interim periods therein. An entity may early adopt ASU No. ~~2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing~~ ("2019-05 in any interim period after its issuance if the entity has adopted ASU ~~2016-10"). ASU 2016-10 is intended to reduce~~2016-13. For all other entities, the cost and complexity of applying the guidance in the FASB's new revenue standard on identifying performance obligations, and is also intended to improve the understanding of the licensing implementation guidance. The effective date ~~for ASU 2016-10 is~~will be the same as ~~for ASU 2014-09 stated above.~~

~~In May 2016,~~ the ~~FASB issued ASU No. 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients~~ ~~("ASU 2016-12"). ASU 2016-12 does not change the core principles~~effective date of ASU ~~2014-09 but is intended to improve the guidance on collectability, noncash consideration, and completed contracts at transition. Additionally, the amendments in this~~2016-13. ASU provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The effective date for ASU 2016-10 is the same as for ASU 2014-09 stated above.

These new revenue recognition standards will be effective for the Company on January 1, 2018. The Company is continuing to work towards establishing policies, updating its processes and implementing necessary changes to be able to comply with the new requirements. The Company is reviewing each of the five steps in the new revenue recognition model, which are as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) performance obligations are satisfied. The Company is currently focusing its assessment on revenue related to Managed Services or Content Workflow, which accounts for over 99% of the Company's revenue. The Company anticipates completing its assessment by December 31, 2017 and expects that any required change in accounting will be reflected retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). While the Company is continuing to assess all potential impacts of the standard, it currently believes the most significant impact relates to additional disclosures related to qualitative and quantitative information concerning the nature, amount, timing, and any uncertainty of revenue and cash flows from contracts with customers.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842)~~. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard2016-13 is effective for fiscal years beginning after December 15, ~~2018,~~2022, including interim periods within those fiscal years. ~~A modified retrospective transition approach~~The Company is ~~required~~currently evaluating the expected impact of adopting ASU 2016-13 on its consolidated financial statements and disclosures.

Convertible Instruments:In August 2020, the FASB issued ASU No. 2020-06, Accounting for ~~lessees~~Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the guidance on the issuer’s accounting for ~~capital~~convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and ~~operating leases existing at, or entered into after,~~(2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that was within the ~~beginning~~scope of those models before the adoption of ASU 2020-06. Also, ASU 2020-06 requires the application of the ~~earliest comparative period presented in~~if-converted method for calculating diluted earnings per share and the ~~financial statements,~~treasury stock method will be no longer available. The provisions of ASU 2020-06 are applicable for the Company as a smaller reporting company for fiscal years beginning after December 15, 2023, with ~~certain practical expedients available.~~early adoption permitted no earlier than

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact ~~that this~~of ASU ~~will have~~2020-06 on its consolidated financial ~~statements.~~statements and related disclosures.

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers:In ~~August 2016,~~October 2021, the FASB issued ASU ~~2016-15,~~ ~~Statement~~No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). Under ASU 2021-08, an acquirer in a business combination must apply ASC 606 principles when recognizing and measuring acquired contract assets and contract liabilities. The provisions of ~~Cash Flows (Topic 230):Classification of Certain Cash Receipts and Cash Payments.~~ ~~The new standard addresses eight specific cash flow issues and provides guidance~~ASU 2021-08 are applicable for ~~classification. The new standard is effective~~the Company for fiscal years and interim periods beginning after December 15, ~~2017.~~2022. The Company is currently evaluating the impact ~~that this~~of ASU ~~will have~~2021-08 on its consolidated financial ~~statements.~~statements and related disclosures.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment.~~ To address concerns over the cost and complexity of the two-step goodwill impairment test, the new standard removes the requirement for the second step of the goodwill impairment test for certain entities. An entity may apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new standard is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact that this ASU will have on its consolidated financial statements.

~~IZEA, Inc.~~

~~Notes to the Unaudited Consolidated Financial Statements~~

NOTE 2. ~~BUSINESS ACQUISITIONS~~PROPERTY AND EQUIPMENT

~~EBYLINE, INC.~~

~~On January 30, 2015, the Company purchased all~~Property and equipment consist of the ~~outstanding shares of capital stock of Ebyline pursuant to the terms of a Stock Purchase Agreement, dated as of January 27, 2015, by~~following:


	March 31, 2022		December 31, 2021
Furniture and fixtures	$	208,583	$	208,583
Office equipment	65,844		66,417
Computer equipment	570,480		541,330

Total	844,907		816,330
Less accumulated depreciation	(693,505)		(661,145)
Property and equipment, net	$	151,402	$	155,185

Depreciation expense on property and ~~among IZEA, Ebyline~~equipment recorded in depreciation and the stockholders of Ebyline (the “Ebyline Stock Purchase Agreement”) for a maximum purchase price of $8,850,000. The Ebyline Stock Purchase Agreement was made up of a combination of guaranteed payments and contingent performance payments to be paid if Ebyline met certain revenue targets in the three years following the closing. None of these targets were met in the first two years following the closing and it is not expected that they will be met in the third year. Therefore, the total consideration to be paid for the Ebyline acquisition is expected to be $3,327,064.

~~Purchase Price and Acquisition Costs Payable~~

Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value Remaining Present and Fair Value
1/30/2015 1/30/2015 12/31/2016 9/30/2017
Cash paid at closing (a) $ 1,200,000
$ 1,200,000
$ —
$ —
Guaranteed purchase price (a) 2,127,064
1,982,639
934,728
—
Contingent performance payments (b) 2,210,000
1,834,300
—
—
Acquisition costs payable by Ebyline shareholders (c) —
—
—
—
Total estimated consideration $ 5,537,064
$ 5,016,939
$ 934,728
$ —

Current portion of acquisition costs payable $ 934,728
$ —
Long term portion of acquisition costs payable —
—
Total acquisition costs payable $ 934,728
$ —

~~(a)~~

The Ebyline Stock Purchase Agreement required a $1,200,000 cash payment at closing, a $250,000 stock payment on July 30, 2015 and a cash or stock payment of up to an additional $1,900,000 (subject to proportional reduction in the event Ebyline’s final 2014 revenue was below $8,000,000). Ebyline's final gross revenue for 2014 was $7,903,429. As such, the additional amount owed became $1,877,064 payable in two equal installments of $938,532 on January 30, 2016 and January 30, 2017. This guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2%. Interestamortization expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $0 and $11,412 for the three months ended September 30, 2017 and 2016, respectively. Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $3,804 and $38,137 for the ~~nine months~~ ended September 30, 2017 and 2016, respectively. Per the Ebyline Stock Purchase Agreement, the Company issued 31,821 shares of its common stock to satisfy the $250,000 guaranteed purchase price payment obligation on July 30, 2015. On January 29, 2016, the Company issued 114,398 shares of its common stock to satisfy the $848,832 annual guaranteed payment of $938,532 less $89,700 in closing related expenses (see item (c) below). On January 30, 2017, the Company issued 200,542 shares of common stock to satisfy the final annual guaranteed payment of $938,532. The Company recorded a $10,491 gain on the settlement of the acquisition costs payable in the accompanying consolidated statements of operations as a result of the difference between the market price of the stock on the settlement date and the 30-day average price of the stock required by the Ebyline Stock Purchase Agreement.

~~(b)~~

Total contingent performance payments up to $5,500,000 are to be paid based on Ebyline meeting certain revenue targets. The performance payments are to be made only if Ebyline achieves at least 90% of Content Revenue targets of $17,000,000 in 2015, $27,000,000 in 2016 and $32,000,000 in 2017. The initial fair value of the $5,500,000 of contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over three years. Since the contingent consideration has an option like structure, a risk-neutral framework was considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 8.5%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 100,000 simulation trials. The volatility used for the simulation was 35%. The Monte Carlo simulation resulted in an initial calculated fair value of contingent performance payments of $2,210,000 on January 30, 2015. Because the contingent performance payments are subject

~~IZEA, Inc.~~

~~Notes to the Unaudited Consolidated Financial Statements~~

to a 17% reduction related to the continued employment of certain key employees, ASC 805-10-55-25 indicates that a portion of these payments be treated as potential compensation to be accrued over the term rather than allocated to the purchase price. Therefore, the Company reduced its overall purchase price consideration by $357,700 and recorded the initial present value of the contingent performance payments at $1,834,300. Based on actual results for and projections for Content Revenue for 2015-2017, the Content Revenue for every year is expected to be below 90% of the required Content Revenues targets. Therefore, the Company reduced the fair value of contingent performance payments to zero by the end of 2015, as no further payments are expected to be owed.


~~(c)~~	According to the Ebyline Stock Purchase Agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016.

~~ZENCONTENT, INC.~~

On July 31, 2016, the Company purchased all of the outstanding shares of capital stock of ZenContent pursuant to the terms of a Stock Purchase Agreement, by and among IZEA, ZenContent and the stockholders of ZenContent (the “ZenContent Stock Purchase Agreement”) for a maximum purchase price to be paid over the next three years of $4,500,000.

~~Purchase Price and Acquisition Costs Payable~~

Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value Remaining Present and Fair Value
7/31/2016 7/31/2016 12/31/2016 9/30/2017
Cash paid at closing (a) $ 400,000
$ 400,000
$ —
$ —
Stock paid at closing (a) 600,000
600,000
—
—
Guaranteed purchase price (b) 933,565
566,547
682,348
589,108
Contingent performance payments (c) 2,500,000
230,000
324,000
508,444
Total estimated consideration $ 4,433,565
$ 1,796,547
$ 1,006,348
$ 1,097,552

Current portion of acquisition costs payable $ 318,157
$ 619,833
Long-term portion of acquisition costs payable 688,191
477,719
Total acquisition costs payable $ 1,006,348
$ 1,097,552


~~(a)~~	~~The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000.~~

~~(b)~~

Aggregate future consideration consists of (i) three equal annual installment payments totaling $1,000,000, commencing 12 months following the closing, less a reduction of $66,435 due to a customary closing date working capital adjustment ("guaranteed purchase price"), and (ii) contingent performance payments up to an aggregate of $2,500,000 over the three 12-month periods following the closing. These payments are also subject to a downward adjustment up to 30% if Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or if she terminates her employment without good reason. As a result, the Company initially reduced its acquisition cost liability by $300,000 to be accrued as compensation expense over the three-year term rather than allocated to the initial purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $28,125 and $151,042 for the three and nine months ended September 30, 2017, respectively. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $40,972 for the three and nine months ended September 30, 2016. The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% (5.5% on July 31, 2016). Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $6,572 and $22,616 for the three and nine months ended September 30, 2017. Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $5,348 for the three and nine months ended September 30, 2016.

~~IZEA, Inc.~~

~~Notes to the Unaudited Consolidated Financial Statements~~

~~(c)~~

The contingent performance payments are subject to ZenContent achieving certain minimum revenue thresholds over 36 months. ZenContent is required to meet minimum revenues of $2.5 million, $3.5 million and $4.5 million in the first, second and third, respective 12-month periods following the closing in order to receive any portion of the contingent performance payments. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of IZEA common stock at then average stock prices (determined at IZEA’s option). Additionally, these payments are subject to downward adjustment of up to 30% if Brianna DeMike is terminated by IZEA for cause or she terminates her employment without good reason. We initially determined the fair value of the $2,500,000 contingent payments to be $230,000. The fair value of the contingent performance payments is required to be revalued each quarter and is calculated using a Monte-Carlo simulation to simulate revenue over the future periods. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 17%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45%. The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% (6.25%). The Company revalued its estimate of the contingent performance payment as of September 30, 2017 based on actual results and projections and the rates noted above and determined that current fair value of the contingent performance payments was $508,444 compared to $324,000 as of December 31, 2016. The change in the estimated fair value of contingent performance payable resulted in a $184,444 increase to general and administrative expense in the Company's consolidated statement of operations during the ~~nine months~~ ended September 30, 2017. Of this amount, $122,444 was allocated to compensation expense and a gain of $62,000 was allocated as a change in the fair value of the contingent performance payments. The change the estimated fair value of contingent performance payable from $342,861 as of June 30, 2017 to $508,444 as of September 30, 2017 resulted in a $165,583 decrease to general and administrative expense in the Company's consolidated statement of operations during the three months ended September 30, 2017. Of this amount, a gain of $47,583 was allocated as a decrease in compensation expense and a gain of $118,000 was allocated as a change in the fair value of the contingent performance payments.

~~Purchase Price Allocation~~

The consolidated financial statements reflect the allocation of the purchase price to the underlying ZenContent tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill.

~~The allocation of the purchase price as of July 31, 2016 is summarized as follows:~~

Final Purchase Price Allocation
Current assets $ 415,798
Property and equipment 4,551
Identifiable intangible assets 722,000
Goodwill 1,136,431
Current liabilities (482,233 )
Total estimated consideration $ 1,796,547

~~The ZenContent operations are included~~ in the consolidated ~~financial~~ statements ~~beginning on the date of acquisition of July 31, 2016. The ZenContent operations contributed revenue of $1,332,877 and gross profit of $840,891 in the consolidated statement~~ of operations and comprehensive loss was $32,933 and $32,486 for the three months ended ~~September 30, 2017. The ZenContent operations contributed revenue of $3,070,697~~March 31, 2022 and ~~gross profit of $1,930,281 in the consolidated statement of operations for the~~ ~~nine months~~ ended September 30, 2017. The ZenContent operations contributed revenue of $465,574 and gross profit of $219,313 in the consolidated statement of operations for the three and nine months ended September 30, 2016. There are $29,621 and $40,918 of acquisition-related costs which are included in general and administrative expense on the Company's consolidated statement of operations for the three and nine months ended September 30, 2016,2021, respectively.

NOTE 3. INTANGIBLE ASSETS

The identifiable intangible assets, other than Goodwill, consists of the following assets:


			Accumulated Amortization				Useful Life (in years)		March 31, 2022				December 31, 2021
	Balance		September 30, 2017		December 31, 2016				Balance		Accumulated Amortization		Balance		Accumulated Amortization		Useful Life (in years)
Content provider networks	$	160,000	$	105,833	$	57,083	1	Content provider networks	$	160,000	$	160,000	$	160,000	$	160,000	2
Trade names	52,000		52,000		45,000		1	Trade names	87,000		87,000		87,000		87,000		1
Developed technology	530,000		213,667		134,167		3	Developed technology	820,000		820,000		820,000		820,000		5
Self-service content customers	210,000		186,667		134,167		5	Self-service content customers	2,810,000		2,810,000		2,810,000		2,810,000		3
Managed content customers	2,140,000		1,727,222		1,192,222		3	Managed content customers	2,140,000		2,140,000		2,140,000		2,140,000		3
Domains	166,469		58,264		33,294		5	Domains	166,469		166,469		166,469		166,469		5
Total identifiable intangible assets	$	3,258,469	$	2,343,653	$	1,595,933
Embedded non-compete provision								Embedded non-compete provision	28,000		28,000		28,000		28,000		2
Digital Assets								Digital Assets	150,287		—		213,263		—		Indefinite
Total								Total	$	6,361,756	$	6,211,469	$	6,424,732	$	6,211,469

Total identifiable intangible assets from the ~~Ebyline and ZenContent purchase price allocation~~Company’s acquisitions and other acquired assets net of accumulated amortization thereon consists of the following:

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements


	September 30, 2017			December 31, 2016				March 31, 2022		December 31, 2021
Ebyline Intangible Assets	$	2,370,000		$	2,370,000		Ebyline Intangible Assets	$	2,370,000	$	2,370,000
ZenContent Intangible Assets	722,000			722,000			ZenContent Intangible Assets	722,000		722,000
Domains	166,469			166,469			Domains	166,469		166,469
Total Intangible Assets	3,258,469			3,258,469
Accumulated amortization	(2,343,653		)	(1,595,933		)
Intangible Assets, net	$	914,816		$	1,662,536
TapInfluence Intangible Assets							TapInfluence Intangible Assets	2,953,000		2,953,000
Digital Assets							Digital Assets	150,287		213,263
Total							Total	$	6,361,756	$	6,424,732
Less accumulated amortization							Less accumulated amortization	(6,211,469)		(6,211,469)
Intangible assets, net							Intangible assets, net	$	150,287	$	213,263

~~The Company is amortizing~~There were no impairment charges associated with the Company’s identifiable intangible assets, ~~over~~other than digital assets, in the three months ended March 31, 2022 and 2021.

During the three months ended March 31, 2022, the Company did not conduct any transactions in digital assets. The Company impaired the value of its digital assets by $62,976 on January 22, 2022, as the fair market value decreased from the purchase value. The impairment of digital assets is presented as a ~~weighted average period~~non-cash operating expense within general and administrative on the consolidated statements of ~~three years.~~ operations and comprehensive loss. The fair market value of such digital assets held as of March 31, 2022 was $150,287.

Amortization expense recorded in ~~general~~depreciation and ~~administrative expense~~amortization in the accompanying consolidated statements of operations and comprehensive loss was ~~$247,907~~$0 and ~~$229,934~~$216,667 for the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, respectively. ~~Amortization expense recorded~~

The Company determines the fair value of its digital assets on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that has been determined to be the principal market for such assets (Level 1 inputs). The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that the digital assets are impaired. In determining if an impairment has occurred, the Company considers the lowest market price of one unit of the digital asset quoted on the active exchange since acquiring the digital asset. If the then-current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying value and the price determined.

Impairment losses on digital assets are recognized within general and administrative ~~expense~~expenses in the ~~accompanying~~ consolidated statements of operations ~~was $747,720~~ and ~~$615,748~~comprehensive loss in the period in which the impairment is identified. The impaired digital assets are written down to the lowest market price at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale, at which point they are presented net of any impairment losses for the ~~nine months ended September 30, 2017~~same digital assets held. In determining the gain to be recognized upon sale, the Company calculates the difference between the sales price and ~~2016, respectively.~~carrying value of the digital assets sold immediately prior to sale.

In the first quarter of 2022, the Company performed an interim impairment assessment of goodwill that did not indicate that an impairment existed; therefore, 0 impairment of goodwill has been recorded.

~~As of September 30, 2017, future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule:~~

Year ending December 31: Amortization Expense
2017 (three months remaining) $ 246,908
2018 349,432
2019 207,349
2020 84,293
2021 26,834
Total $ 914,816

~~IZEA, Inc.~~

~~Notes to the Unaudited Consolidated Financial Statements~~

NOTE 4. SOFTWARE DEVELOPMENT COSTS

Software development costs consists of the following:


	March 31, 2022		December 31, 2021
Software development costs	$	3,136,237	$	3,036,810
Less accumulated amortization	(2,123,107)		(2,017,210)
Software development costs, net	$	1,013,130	$	1,019,600

September 30,
2017 December 31,
2016
Software development costs $ 1,578,125
$ 1,492,665
Less accumulated depreciation and amortization (573,220 ) (388,706 )
Software development costs, net $ 1,004,905
$ 1,103,959

The ~~Company determined that on April 15, 2013, its project to create~~ ~~IZEAx~~ ~~became technologically feasible and the development phase began. Throughout 2013 and the first quarter of 2014, the~~ Company developed its ~~new~~ web-based ~~advertising exchange~~influencer marketing platform, IZEAx,~~. On March 17, 2014, the Company launched a public beta of IZEA.com powered by~~ ~~IZEAx. This platform is being utilized both internally~~to enable influencer marketing and ~~externally to facilitate native advertising~~content creation campaigns on a greater scale. The Company continues to add new features and additional functionality to ~~this platform each year. These new features will enable~~ IZEAx and developed additional platforms in 2022, BrandGraph and Shake, to facilitate the contracting, workflow, and delivery or posting of ~~direct~~ content as well as provide for invoicing, collaborating, and direct payments for the ~~Company's~~Company’s customers and creators. The Company capitalized software ~~as a service ("SaaS") customers. In accordance with ASC 350-40,~~ ~~Internal Use Software~~development costs of $99,426 and ~~ASC 985-730,~~ ~~Computer Software Research~~$0 during the three months ended March 31, 2022 and ~~Development, research phase costs should be expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs may be capitalized.~~2021, respectively. As a result, the Company has capitalized ~~$1,578,125~~a total of $3,136,237 in direct materials, consulting, payroll, and benefit costs to its internal-use software development costs in the March 31, 2022 consolidated balance ~~sheet as of September 30, 2017.~~ sheet.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

The Company amortizes its software development costs, commencing upon initial release of the software or additional features, on a straight-line basis over the estimated ~~the~~ useful life of ~~its developed software to be 5~~five years, which is consistent with the amount of time its legacy platforms were ~~in-service.~~

~~Amortization expense on software development costs recorded~~ in general and administrative expense in the accompanying consolidated statements of operations was $76,890 and $44,549 for the three months ended September 30, 2017 and 2016, respectively. Amortization expense on software development costs recorded in general and administrative expense in the accompanying consolidated statements of operations was $184,514 and $128,977 for the nine months ended September 30, 2017 and 2016, respectively.

service.

As of ~~September 30, 2017,~~March 31, 2022, future estimated amortization expense related to software development costs ~~over the next five years~~ is set forth in the following schedule:


	Software Development Amortization Expense
Remainder of 2022	$	304,520
2023	379,571
2024	197,649
2025	98,805
2026	22,642
2027	9,943
Total	$	1,013,130

Year ending December 31: Software Amortization Expense
2017 (three months remaining) $ 98,259
2018 304,241
2019 218,910
2020 183,956
2021 134,432
2022 65,107
$ 1,004,905

NOTE 5. ~~COMMITMENTS & CONTINGENCIES~~ACCRUED EXPENSES

Accrued expenses consist of the following:

~~Credit Agreement~~


	March 31, 2022		December 31, 2021
Accrued payroll liabilities	$	1,849,776	$	2,251,284
Accrued taxes	68,296		76,079
Current portion of finance obligation	34,292		33,388
Accrued other	134,917		142,131
Total accrued expenses	$	2,087,281	$	2,502,882

NOTE 6. NOTES PAYABLE

Canada Emergency Business Account (“CEBA”) Loan

On April 22, 2020, the Company received a Canadian dollar loan in the principal amount of 40,000 CAD ($31,985 USD as of March 31, 2022), from TD Canada Trust Bank pursuant to a CEBA term loan agreement (the “CEBA Loan”). The CEBA Loan has an initial term from inception through December 31, 2022 (the “Initial Term”) and an extended-term from January 1, 2023 through December 31, 2025 (the “Extended Term”). No interest is accrued, and no payments are due on the loan during the Initial Term. If the Company repays 75% of the CEBA Loan (30,000 CAD) on or prior to December 31, 2022, which the Company plans to do, the remaining 10,000 CAD balance will be forgiven. Otherwise, interest will begin to accrue on the unpaid balance on January 1, 2023, with monthly interest payments commencing on January 31, 2023, until the CEBA Loan is paid in full on or before the end of the Extended Term.

Finance Obligation

The Company has 2 long-term payment plans with a vendor to pay for its computer equipment in 4 annual payments between October 2019 and February 2023. The Company used an imputed interest rate of 9.5%, based on its incremental borrowing rate, to determine the present value of its financial obligation. The total balance owed was $34,292 and $43,808 as of March 31, 2022 and 2021, respectively, with the short-term portion of $34,292 and $33,388 recorded under accrued expenses in the consolidated balance sheets as of March 31, 2022 and 2021, respectively.

Secured Credit Facility

The Company had a secured credit facility agreement (also referred to herein as “line of credit”) with Western Alliance Bank, the parent company of Bridge Bank, N.A. of San Jose, California, which itwas obtained on March 1, 2013, and expanded on April 13, 2015. ~~Pursuant to this~~The line of credit agreement the Company may submit requests for funding up to 80% of its eligible accounts receivable up to a maximum credit limit of $5 million. This agreement is secured by the Company's accounts receivable and substantially all of the Company's other assets. The agreement renews annually and requiresrequired the Company to pay an annual facility fee of $20,000 ~~(0.4% of the credit limit)~~ and an annual due diligence fee of ~~$1,000. Interest accrues on~~$1,000 upon renewal. During the ~~advances at the rate of prime plus 2% per annum. The default rate of interest is prime plus 7%. As of September 30, 2017,~~three months ended March 31, 2021, the Company ~~had $810,376 outstanding under this~~amortized $5,250 of such costs through interest expense. The Company terminated its line of credit ~~agreement. The Company had no advances outstanding under this agreement as of December 31, 2016. As of September 30, 2017,~~in April 2021.

IZEA Worldwide, Inc.

Notes to the Company had a net accounts receivable balance of $5,253,423. Assuming that all of the Company's accounts receivable balance was eligible for funding, it had $3,392,362 in remaining available credit under the agreement as of September 30, 2017.Consolidated Financial Statements

~~The annual fees are capitalized~~Summary

Interest expense on financing arrangements recorded in the ~~Company's~~Company’s consolidated ~~balance sheet within other current assets~~statements of operations and ~~are amortized to interest expense over one year. The Company amortized $5,250~~comprehensive loss was $965 and ~~$8,750 of the annual costs through interest expense~~$13,793 during the three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, respectively.

As of March 31, 2022, the future contractual maturities of the Company’s debt obligations by year is set forth in the following schedule:


Remainder of 2022	$	66,277
Total	$	66,277

NOTE 7. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company ~~amortized $15,750~~does not have any operating or finance leases greater than 12 months in duration as of March 31, 2022. The Company did not have any leasehold rent or operating lease expenses during the three months ended March 31, 2022 and ~~$14,546~~2021.

Retirement Plans

The Company offers a 401(k) plan to all of its eligible employees. The Company matches participant contributions in an amount equal to 50% of each participant’s contribution up to 8% of the participant’s salary. The participants become vested in 20% annual ~~costs through interest~~increments after two years of service. Total expense for employer matching contributions during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, respectively. The remaining value~~2021 was recorded in the Company’s consolidated statements of ~~the capitalized loan costs related to the Bridge Bank Credit Agreement~~operations as ~~of September 30, 2017 is $12,250. This amount will be amortized to interest expense over the next seven months.~~follows:


	Three Months Ended
		March 31, 2022		March 31, 2021
Cost of revenue		$	29,073	$	10,148
Sales and marketing		43,732		27,666
General and administrative		44,762		24,848
Total contribution expense		$	117,567	$	62,662

Litigation

From time to time, the Company may become involved in various other lawsuits and legal proceedings that arise in the ordinary course of its business. Litigation is, however, subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the ~~Company's~~Company’s business. The Company is currently not aware of any legal proceedings or claims that it believes would or could have, individually or in the aggregate, a material adverse effect on ~~its operations~~the Company. Regardless of the outcome, however, any such proceedings or ~~financial position.~~claims may nonetheless impose a significant burden on management and employees and may come with costly defense costs or unfavorable preliminary interim rulings.

NOTE ~~6. STOCKHOLDERS'~~8. STOCKHOLDERS’ EQUITY

Authorized Shares

The Company has 200,000,000 authorized shares of common stock and 10,000,000 authorized shares of preferred stock, each with a par value of ~~$0.0001~~$0.0001 per share.

~~Reverse Stock Split~~Sale of Securities

~~On January 6, 2016,~~The Company entered into an ATM Sales Agreement in June 2020, which was amended in July 2020 (the “2020 Sales Agreement”), with National Securities Corporation, as sales agent (“National Securities”), pursuant to which the Company ~~filed a Certificate of Amendment with~~could offer and sell, from time to time, through National Securities, up to $40 million in the ~~Secretary of State of Nevada to effect a reverse stock split of the issued and outstanding~~aggregate shares of its common stock, ~~at a ratio of one share for every 20 shares outstanding prior~~by any method deemed to be an “at the ~~effective date~~market offering” under Rule 415 of the ~~reverse stock split. All current~~Securities Act (the “ATM Offering”). The 2020 Sales Agreement was fulfilled in April 2021 and historical information contained herein related to the share and per share information for the Company's common stock or stock equivalents reflects the 1-for-20 reverse stock split of the Company's outstanding shares of common stock that became market effective on January 11, 2016. There was no change in the number of the Company's authorized shares of common stock.

~~Nasdaq Uplisting~~terminated thereafter.

On January 26, 2016, the Company's shares of common stock commenced trading on the Nasdaq Capital Market under the symbol IZEA. Prior thereto, the Company's common stock was quoted on the OTCQB marketplace under the same symbol.

~~Stock Issued for Purchases~~

~~As further discussed in Note 2,~~25, 2021, the Company ~~issued 31,821~~entered into a new ATM Sales Agreement (the “January 2021 Sales Agreement”) with National Securities, pursuant to which the Company may offer and sell, from time to time, through National Securities up to $35 million shares of its common stock, by any method determined to ~~satisfy~~be an “at the $250,000 guaranteed purchase price payment obligation on July 30, 2015 per the Ebyline Stock Purchase Agreement. On January 29, 2016, the Company issued 114,398 shares of its common stock to satisfy the $848,832 annual guaranteed payment of $938,532 less $89,700 in closing related expenses owed as partmarket offering” under Rule 415 of the ~~Ebyline Stock Purchase~~Securities Act. The January 2021 Sales Agreement was fulfilled in April 2021 and on January 30, 2017, the Company issued 200,542 shares of common stock to satisfy the final annual guaranteed payment of $938,532. On July 31, 2016, the Company issued 86,207 shares of IZEA common stock valued at $600,000 as a partial payment of the guaranteed purchase price per the ZenContent Stock Purchase Agreement.

~~Stock Issued for Services~~

~~The Company issued its five independent directors a total of 32,385 shares of restricted common stock initially valued at $93,750 for their service as directors of the Company during the~~ ~~nine months~~ ended September 30, 2017. The stock vested monthly from January through September 2017. On February 12, 2017, the Company issued 7,109 shares valued at $30,000 as compensation for services a contractor provided. On August 14, 2017, the Company issued 2,812 shares of restricted stock to Mr. Edward Murphy, its Chief Executive Officer, as partial payment for his second quarter bonus. The stock was initially valued at $5,483 and vests in equal monthly installments over 48 months. On August 14, 2017, the Company issued 662 shares of restricted stock to Mr. Ryan Schram, its Chief Operating Officer, as partial payment for his second quarter bonus. The stock was initially valued at $1,291 and vests in equal monthly installments over 48 months.

~~The following table contains summarized information about nonvested restricted stock outstanding during the nine months ended September 30, 2017:~~

terminated thereafter.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Restricted Stock Common Shares Weighted Average
Grant Date
Fair Value Weighted Average
Remaining Years
to Vest
Nonvested at December 31, 2016 —
$ —

Granted 42,968
3.04

Vested (39,713 ) 3.61

Forfeited —
—

Nonvested at September 30, 2017 3,255
$ 7.10
3.8

~~Total expense recognized for stock-based payments for services during~~During the three months ended ~~September 30, 2017~~March 31, 2021, the Company sold a total of 8,701,691 shares at an average price of $3.95 per share for total gross proceeds of $34,358,012 pursuant to the 2020 Sales Agreement and ~~2016 was $60,074~~the January 2021 Sales Agreement with National Securities.

On June 21, 2021, the Company entered into a third ATM Sales Agreement (the “June 2021 Sales Agreement”) with National Securities, as sales agent, pursuant to which the Company can offer and ~~$34,969, respectively. Total expense recognized for stock-based payments for services during the nine months ended September 30, 2017 and 2016 was $143,536 and $107,439, respectively. The fair value~~sell, from time to time, through National Securities, up to $100 million shares of the ~~services is based on~~Company’s common stock by any method deemed to be an “at the ~~value~~market offering” under Rule 415 of the Company's common stock over the term of service. The Company recognized a gain of $45,160 and $36,122 as a change in the fair value of derivatives during the three and nine months ended September 30, 2017, based on the change between the Company's stock price upon issuance and the Company's stock price upon the date of vesting. The fair value of the remaining nonvested, but issued, 3,255 shares of restricted stockSecurities Act. No sales have been made under this agreement as of September 30, 2017 is $23,110, and it is included in prepaid expenses in the accompanying unaudited consolidated balance sheets. This value is the current estimate of future compensation expense that is expected to be recognized over the remaining individual vesting periods up to 46 months.March 31, 2022.

Equity Incentive Plans

~~Stock Options~~

In May 2011, the Company’s Board of Directors (the “Board”) adopted the 2011 Equity Incentive Plan of IZEA Worldwide, Inc. ~~(the “May 2011~~(as amended, the “2011 Equity Incentive Plan”). AtThe Company’s stockholders approved an amendment and restatement of the ~~Company's 2017~~2011 Equity Incentive Plan at the Company’s 2020 Annual Meeting of Stockholders held on ~~June 21, 2017,~~December 18, 2020, to allow the ~~stockholders approved~~Company to award restricted stock, restricted stock units, and stock options covering up to 7,500,000 shares of common stock as incentive compensation for its employees and consultants. As of March 31, 2022, the ~~amendment and restatement of the May 2011 Plan which increased the number of~~Company had 3,312,081 remaining shares of common stock available for issuance ~~under the May 2011 Plan by 500,000 shares. The amended May 2011 Plan allows the Company~~pursuant to ~~grant options to purchase up to 1,500,000 shares as an incentive for its employees and consultants. As of~~ ~~September 30, 2017, the Company had 438,636 shares of common stock available for~~ future grants under the ~~May~~ 2011 Equity Incentive Plan.

OnIn August ~~22,~~ 2011, the Company adopted the 2011 B Equity Incentive Plan (the “August 2011 Plan”) reserving 4,375 shares of common stock for issuance under the August 2011 Plan. AsThe August 2011 Plan expired in 2021 and no new grants may be made thereunder.

Restricted Stock

Under the 2011 Plan, the Board determines the terms and conditions of ~~September 30, 2017~~,each restricted stock issuance, including any future vesting restrictions.

In 2021, the Company ~~had 1,875~~issued its 6 independent directors a total of 30,324 shares of restricted common stock ~~available~~initially valued at $147,329 for ~~future grants~~their annual service as directors of the Company. The stock vests in equal monthly installments from January through December 2021. A new board member started on February 9, 2021 and the annual stock compensation was pro-rated.

In 2022, the Company issued each of its 5 independent directors a total of 105,930 shares of restricted common stock initially valued at $125,000 for their annual service as directors of the Company. The stock vests in equal monthly installments from January through December 2022.

The following table contains summarized information about restricted stock issued during the year ended December 31, 2021 and the three months ended March 31, 2022:


Restricted Stock	Common Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2020	13,666	$	2.28	1.4
Granted	30,324	4.86
Vested	(40,437)	4.25
Forfeited	—	—
Nonvested at December 31, 2021	3,553	$	1.83	0.7
Granted	105,930	1.18
Vested	(28,340)	1.24
Forfeited	—	—
Nonvested at March 31, 2022	81,143	$	1.19	0.8

Although restricted stock is issued upon the grant of an award, the Company excludes restricted stock from the computations within the financial statements of total shares outstanding and basic earnings per share until such time as the restricted stock vests.

Expense recognized on restricted stock issued to directors for services was $31,223 and $34,696 for the three months ended March 31, 2022 and 2021, respectively. Expense recognized on restricted stock issued to employees was $3,829 and $6,507 during the three months ended March 31, 2022 and 2021, respectively.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

On March 31, 2022, the fair value of the Company’s common stock was approximately $1.66 per share and the intrinsic value on the non-vested restricted stock was $134,699. Future compensation expense related to issued, but non-vested, restricted stock awards as of March 31, 2022, is $96,453. This value is estimated to be recognized over the weighted-average vesting period of approximately nine months.

Restricted Stock Units

The Board determines the terms and conditions of each restricted stock unit award issued under ~~the August 2011 Plan.~~

~~Under both~~ the May 2011 ~~Plan~~Plan.

During the three months ended March 31, 2022, the Company issued a total of 200,867 restricted stock units initially valued at $235,928 to non-executive employees as additional incentive compensation. The restricted stock units vest over 36 months from issuance.

The following table contains summarized information about restricted stock units during the year ended December 31, 2021 and the ~~August~~three months ended March 31, 2022:


Restricted Stock Units	Common Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2020	970,349	$	0.39	1.2
Granted	229,638	2.93
Vested	(817,417)	0.83
Forfeited	(7,126)	1.77
Nonvested at December 31, 2021	375,444	$	0.96	1.8
Granted	200,867	1.17
Vested	(47,318)	0.47
Forfeited	(52,091)	1.56
Nonvested at March 31, 2022	476,902	$	1.03	2.2

Expense recognized on restricted stock units issued to employees was $42,624 and $137,808 during the three months ended March 31, 2022, and 2021, respectively. On March 31, 2022, the fair value of the Company’s common stock was approximately $1.66 per share and the intrinsic value on the non-vested restricted units was $783,829. Future compensation related to the non-vested restricted stock units as of March 31, 2022, is $432,869 and it is estimated to be recognized over the weighted-average vesting period of approximately 2.2 years.

Stock Options

Under the 2011 ~~Plan (together, the "2011~~ Equity Incentive ~~Plans"),~~Plan, the Board ~~of Directors~~ determines the exercise price to be paid for the stock option shares, the period within which each stock option may be exercised, and the terms and conditions of each stock option. The exercise price of ~~the~~ incentive and non-qualified stock options may not be less than 100% of the fair market value per share of the Company’s common stock on the grant date. If an individual owns stock representing more than 10% of the outstanding shares, the exercise price of each share of an incentive stock option must be equal to or exceed 110% of fair market value. Unless otherwise determined by the Board ~~of Directors~~ at the time of grant, the ~~purchase~~exercise price is set at the fair market value of the Company’s common stock on the grant date (or the last trading day prior to the grant date, if it is awarded on a non-trading day). Additionally, the term is set at ten years and the ~~options~~option typically ~~vest~~vests on a straight-line basis over the requisite service period as follows: 25% ~~of options shall vest~~ one year from the date of grant ~~and~~with the remaining ~~options shall vest~~vesting monthly in equal increments over the following three ~~years~~. years. The Company issues new shares ~~to the optionee~~ for any stock awards or options exercised ~~pursuant to~~under its 2011 Equity Incentive Plans.

On January 28, 2022, in connection with a shift in the Company’s employee compensation strategy toward restricted stock units, the Board of Directors amended the employment agreement for each of Edward Murphy, Ryan Schram, and Peter Biere to provide for grants of restricted stock units instead of stock options. One service agreement providing for the issuance of 125 stock options was pending from 2021 pursuant to completion of a defined performance obligation. These stock options were issued on January 20, 2022. Otherwise, the Company intends to issue restricted stock units rather than stock options for equity compensation purposes going forward.

A summary of option activity under the 2011 Equity Incentive Plans ~~for~~during the ~~year~~periods ended December 31, ~~2016~~2021, and ~~the nine months ended September 30, 2017,~~March 31, 2022, is presented below:

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements


Options Outstanding	Common Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Options Outstanding	Common Shares	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)
Outstanding at December 31, 2015	830,599		$	8.65	6.5
Outstanding at December 31, 2020						Outstanding at December 31, 2020	1,712,806	$	2.56	6.9
Granted	179,998		6.16			Granted	296,569	2.60
Exercised	—		—			Exercised	(182,722)	3.26
Forfeited	(50,733	)	10.15			Forfeited	(30,990)	0.32
Outstanding at December 31, 2016	959,864		$	8.11	6.4
Outstanding at December 31, 2021						Outstanding at December 31, 2021	1,795,663	$	2.79	6.4
Granted	94,246		3.64			Granted	125	1.15
Exercised	—		—			Exercised	(5,000)	1.34
Forfeited	(42,535	)	50.15			Forfeited	(16,883)	3.96
Outstanding at September 30, 2017	1,011,575		$	6.05	6.1
Outstanding at March 31, 2022						Outstanding at March 31, 2022	1,773,905	$	2.78	6.0

Exercisable at September 30, 2017	683,642		$	6.24	5.1
Exercisable at March 31, 2022						Exercisable at March 31, 2022	1,223,516	$	3.37	5.1

During the three ~~and nine~~ months ended ~~September 30, 2017 and 2016, no~~March 31, 2022, 5,000 options were ~~exercised.~~exercised for gross proceeds of $6,700. The intrinsic value of the exercised options was $0. During the three months ended March 31, 2021, 1510 options were exercised for gross proceeds of $2,144. The intrinsic value of the exercised options was $4,651. The fair value of the Company's common stock on ~~September 30, 2017~~March 31, 2022, was ~~$7.10~~approximately $1.66 per ~~share. The~~share, and the intrinsic value on outstanding options as of ~~September 30, 2017~~March 31, 2022, was ~~$1,354,688.~~$708,393. The intrinsic value onof the exercisable options as of ~~September 30, 2017~~March 31, 2022, was ~~$815,179.~~

$411,981.

A summary of the nonvested stock option activity under the 2011 Equity Incentive ~~Plans for~~Plan during the ~~year~~periods ended December 31, ~~2016~~2021, and ~~the nine months ended September 30, 2017,~~March 31, 2022, is presented below:


Nonvested Options	Common Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2020	715,486	$	0.56	2.5
Granted	296,569	2.25
Vested	(339,099)	0.73
Forfeited	(17,152)	1.38
Nonvested at December 31, 2021	655,804	$	1.22	2.3
Granted	125	1.00
Vested	(91,316)	0.87
Forfeited	(14,224)	3.31
Nonvested at March 31, 2022	550,389	$	1.22	2.1

Nonvested Options Common Shares
Weighted Average
Grant Date
Fair Value

Weighted Average
Remaining Years
to Vest
Nonvested at December 31, 2015 461,926
$ 3.84
2.8
Granted 179,998
2.88

Vested (187,181 ) 4.00

Forfeited (40,437 ) 3.76

Nonvested at December 31, 2016 414,306
$ 3.60
2.6
Granted 94,246
1.28

Vested (161,321 ) 3.52

Forfeited (19,298 ) 3.12

Nonvested at September 30, 2017 327,933
$ 2.72
2.6
There were outstanding options to purchase 1,773,905 shareswith a weighted average exercise price of $2.78 per share, of which options to purchase 1,223,516 shares were exercisable with a weighted average exercise price of $3.37 per share as of March 31, 2022.

~~Stock-based compensation cost related to~~Expense recognized on stock options granted under the 2011 Equity Incentive Plans is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions stated in Note 1. Total stock-based compensation expense recognized on option awards outstanding during the ~~nine months~~ ~~ended~~ ~~September 30, 2017~~ ~~and 2016 was~~ ~~$509,642~~ ~~and~~ ~~$576,144, respectively. Stock-based compensation expense was recorded as $45,331~~issued to ~~sales and marketing and $464,311 to general and administrative expense in the Company's consolidated statement of operations during the~~ ~~nine months~~ ended September 30, 2017. Stock-based compensation expense was recorded as $67,586 to sales and marketing and $508,558 to general and administrative expense in the Company's consolidated statement of operationsemployees during the three ~~and nine~~ months ended ~~September 30, 2016.~~March 31, 2022, and 2021 was $68,656 and $52,407, respectively. Future compensation related to ~~nonvested~~non-vested awards ~~expected to vest~~as of ~~$753,299~~March 31, 2022, is $644,133, and it is estimated to be recognized over the weighted-average vesting period of approximately ~~two years, six~~2.1 years.

The following table shows the number of stock options granted under the Company’s 2011 Equity Incentive Plans and the assumptions used to determine the fair value of those options using a Black-Scholes option-pricing model during the three months. ended March 31, 2022, and 2021:

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements


Period Ended	Total Options Granted	Weighted Average Exercise Price		Weighted Average Expected Term	Weighted Average Volatility	Weighted Average Risk-Free Interest Rate	Expected Dividends	Weighted Average Grant Date Fair Value		Weighted average expected forfeiture rate
March 31, 2021	44,155	$	2.61	6.0 years	117.97%	0.70%	—	$	2.24	19.64%
March 31, 2022	125	$	1.15	6.0 years	120.48%	1.70%	—	$	1.00	37.00%

Employee Stock Purchase Plan

~~On April 16, 2014, stockholders holding a majority of the Company's outstanding shares of common stock, upon previous recommendation~~The amended and ~~approval of the Board of Directors, adopted the~~restated IZEA Worldwide, Inc. 2014 Employee Stock Purchase Plan (the “ESPP”) ~~and reserved 75,000~~provides for the issuance of up to 500,000 shares of the ~~Company's~~Company’s common stock ~~for issuance thereunder. Any employee~~to employees regularly employed by the Company for 90 days or more on a full-time or part-time basis (20 hours or more per week on a regular schedule) ~~is eligible to participate in the ESPP.~~. The ESPP operates in successive six ~~month offering~~-month periods commencing at the beginning of each fiscal

year half. Each eligible employee who elects to participate may purchase up to 10% of their annual compensation in common stock not to exceed $21,250 annually or ~~1,000~~2,000 shares per offering period. The purchase price will be the lower of (i) 85% of the fair market value of a share of common stock on the first ~~trading~~ day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last ~~trading~~ day of the offering period. The ESPP will continue until January 1, 2024, unless otherwise terminated by the Board. ~~Employees paid $16,232 to purchase 9,998 shares of common stock during~~

Stock compensation expense on ESPP issuances was $2,082 and $1,264 for the ~~nine~~three months ended ~~September 30, 2017. Employees paid $34,587 to purchase 5,340 shares of common stock during the~~ ~~nine months~~ ~~ended September 30, 2016.~~March 31, 2022 and 2021, respectively. As of ~~September 30, 2017,~~March 31, 2022, the Company had ~~39,764~~387,500 remaining shares of common stock available for future ~~grants~~issuances under the ESPP.

Summary Stock-Based Compensation

The stock-based compensation cost related to all awards granted to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period utilizing the weighted-average forfeiture rates as disclosed in Note 1. Total stock-based compensation expense recognized on restricted stock, restricted stock units, stock options, and employee stock purchase plan issuances during the three months ended March 31, 2022 and 2021 was recorded in the Company’s consolidated statements of operations as follows:


	Three Months Ended
		March 31, 2022		March 31, 2021
Cost of revenue		$	7,105	$	1,454
Sales and marketing		9,859		5,430
General and administrative		100,228		191,102
Total stock-based compensation		$	117,192	$	197,986

NOTE ~~7. EARNINGS (LOSS)~~9. LOSS PER COMMON SHARE

Basic earnings (loss) per common share is computed by dividing the net income or loss by the basic weighted-average number of shares of common stock outstanding during each period presented. Although restricted stock is issued upon the grant of an award, the Company excludes restricted stock from the computations of the weighted-average number of shares of common stock outstanding until the stock vests. Diluted ~~earnings~~loss per common share is computed by dividing the net ~~income or~~ loss by the sum of the total of the basic weighted-average number of shares of common stock outstanding plus the additional dilutive securities that could be exercised or converted into common shares during each period presented less the amount of shares that could be repurchased using the proceeds from the exercises.


	Three Months Ended
		March 31, 2022		March 31, 2021
Net loss		$	(2,476,243)	$	(1,892,937)
Weighted average shares outstanding - basic and diluted		62,065,768		56,334,219
Basic and diluted loss per common share		$	(0.04)	$	(0.03)

Three Months Ended Nine Months Ended
September 30,
2017 September 30,
2016 September 30,
2017 September 30,
2016
Net loss $ (558,805 ) $ (1,511,603 ) $ (4,724,623 ) $ (5,730,568 )
Weighted average shares outstanding - basic and diluted 5,702,297
5,420,020
5,659,423
5,357,119
Basic and diluted loss per common share $ (0.10 ) $ (0.28 ) $ (0.83 ) $ (1.07 )

The Company excluded the following weighted average items from the above computation of diluted loss per common share, as their effect would be anti-dilutive:

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements


	Three Months Ended		Nine Months Ended			Three Months Ended
	September 30, 2017	September 30, 2016	September 30, 2017	September 30, 2016			March 31, 2022	March 31, 2021
Stock options	993,546	904,706	979,775	874,363	Stock options		1,785,038	1,738,854
Warrants	520,147	557,423	537,039	550,002
Restricted stock units	—	—	—	—	Restricted stock units		454,558	654,209
Restricted stock					Restricted stock		64,736	29,331
Total excluded shares	1,513,693	1,462,129	1,516,814	1,424,365	Total excluded shares		2,304,332	2,422,394

NOTE ~~8. SUBSEQUENT EVENTS~~10. REVENUE

~~No material events have occurred after September 30, 2017 that require recognition or disclosure~~The Company has consistently applied its accounting policies with respect to revenue to all periods presented in the consolidated financial ~~statements.~~statements contained herein. The following table illustrates the Company’s revenue by product service type:


	Three Months Ended
		March 31, 2022		March 31, 2021
Managed Services Revenue		$	8,372,456	$	5,034,993


Marketplace Spend Fees		54,100		98,371
License Fees		374,441		383,041
Other Fees		89,339		11,761
SaaS Services Revenue		517,880		493,173

Total Revenue		$	8,890,336	$	5,528,166

The following table provides the Company’s revenues as determined by the country of domicile:


	Three Months Ended
		March 31, 2022		March 31, 2021
United States		$	8,869,638	$	5,301,343
Canada		20,698		226,823
Total		$	8,890,336	$	5,528,166

Contract Balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers reported in the Company’s consolidated balance sheet:


	March 31, 2022		December 31, 2021
Accounts receivable, net	$	7,259,891	$	7,599,103
Contract liabilities (unearned revenue)	$	12,772,552	$	11,338,095

Contract liabilities represent amounts billed on customer contracts that have yet to be fully delivered. Typically, contract periods are up to twelve months in length. We expect that the balance of unearned revenues in contract liabilities will be recognized within the following twelve-month period.

Contract receivables are recognized when the receipt of consideration is unconditional. Contract liabilities relate to the consideration received from customers in advance of the Company satisfying performance obligations under the terms of the contracts, which will be earned in future periods. Contract liabilities increase as a result of receiving new advance payments from customers and decrease as revenue is recognized upon the Company meeting the performance obligations. As a practical expedient, the Company expenses the costs of sales commissions that are paid to its sales force associated with obtaining contracts less than 1 year in length in the period incurred.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Remaining Performance Obligations

The Company typically enters into contracts that are one year or less in length. As such, the remaining performance obligations at March 31, 2022 and December 31, 2021, are equal to the contract liabilities disclosed above. The Company expects to recognize the full balance of the unearned revenue on March 31, 2022 within the next year.

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Special~~Cautionary Note Regarding Forward-Looking Information

The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, our consolidated financial statements and related notes included elsewhere in this report. Historical results and percentage relationships among any amounts in these financial statements are not necessarily indicative of trends in operating results for any future period. This ~~report~~Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking ~~statements.”~~statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. The statements, which are not historical facts contained in this report, including ~~this Management's~~those contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the notes to our consolidated financial statements, particularly those that utilize terminology such as “may,” “will,” “would,” “could,” “should,” ~~“should,”~~ “expects,” “anticipates,” “estimates,” “believes,” “thinks,” “intends,” “likely,” “projects,” “plans,” “pursue,” “strategy” or “future,” or ~~“plans”~~the negative of these words or ~~comparable terminology~~other words or expressions of similar meaning, are forward-looking statements. Such statements are based on currently available operating, financial and competitive information, and are subject to ~~various~~inherent risks, uncertainties, and ~~uncertainties.~~changes in circumstances that are difficult to predict and many of which are outside of our control. Future events and our actual results and financial condition may differ materially from ~~the results~~those reflected in these forward-looking statements. ~~Factors~~Therefore, you should not rely on any of these forward-looking statements. Important factors that ~~might~~could cause ~~such a difference~~these differences include, but are not limited to, the following:

•risks related to the restatement of the Company’s previously issued interim financial statements for the quarterly periods ended March 31, 2020, June 30, 2020, and September 30, 2020 (the “Restatement”) included in our Annual Report for the year ended December 31, 2021, including, without limitation, potential inquiries from the SEC and/or the Nasdaq Capital Markets, the potential adverse effect on the price of our common stock, and possible claims by our stockholders or otherwise;

•the impact of the COVID-19 pandemic on our operations, financial condition, and the worldwide economy;

•the impact of the Ukraine crisis and ramifications of sanctions against Russia;

•customer cancellations;

•any erroneous or inaccurate estimates or judgments relating to our critical accounting policies;

•our ability to raise the additional funding ~~customer cancellations,~~ needed to fund our business operation in the future;

•our ability to satisfy the requirements for continued listing of our common stock on the Nasdaq Capital Market;

•our ability to maintain effective disclosure controls and procedures and internal control over financial reporting;

•our ability to protect our intellectual property and other proprietary rights;

•our ability to maintain and grow our ~~business,~~ business;

•results of any future litigation and costs incurred in connection with any such litigation;

•competition in the industry;

•variability of operating ~~results,~~ results;

•our ability to maintain and enhance our ~~brand,~~ brand;

•accuracy of tracking the number of user accounts;

•any security breaches or other disruptions compromising our proprietary information and exposing us to liability;

•our development and introduction of new products and ~~services,~~ services;

•the successful integration of acquired companies, technologies, and assets into our portfolio of software and ~~services,~~ services;

•marketing and other business development ~~initiatives, competition in the industry,~~ initiatives;

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•general government ~~regulation,~~ regulation;

•economic conditions, including as a result of health and safety concerns;

•dependence on key ~~personnel,~~ personnel;

•the ability to attract, hire, and retain personnel who possess the technical skills and experience necessary to meet the service requirements of our ~~customers, our ability to protect our intellectual property,~~ customers;

•the potential liability ~~with respect to~~concerning actions taken by our existing and past ~~employees,~~ employees;

•any losses or issues we may encounter as a consequence of accepting or holding digital assets;

•risks associated with ~~international sales,~~doing business internationally; and

•the other risks and uncertainties described ~~herein and~~ in the Risk Factors section of our ~~other filings~~Annual Report for the year ended December 31, 2021, filed with the ~~SEC.~~

SEC on March 31, 2022.

All forward-looking statements in this document are based on ~~our~~ current expectations, intentions, and beliefs using information ~~currently~~ available to us as of the date of this ~~report, and~~Quarterly Report; we assume no obligation to update any forward-looking statements, except as required by law. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements.

~~Company History~~

IZEA was founded in February 2006 under the name PayPerPost, Inc. and became a public company incorporated in the state of Nevada in May 2011. In January 2015, we purchased all of the outstanding shares of capital stock of Ebyline, Inc. and in July 2016, we purchased all the outstanding shares of capital stock of ZenContent, Inc. These entities, which aid in our management and production of custom branded content, now operate as wholly-owned subsidiaries under IZEA, Inc. On March 9, 2016, we formed IZEA Canada, Inc., a wholly-owned subsidiary of IZEA, Inc. incorporated in Ontario, Canada to operate as a sales and support office for our Canadian customers and partners.

Company Overview

IZEA Worldwide, Inc. (“IZEA”, “we”, “us” or “our”) creates and operates online marketplaces that connect marketers, including brands, agencies, and publishers, with ~~influential~~ content ~~creators.~~creators such as Instagram influencers, TikTok influencers, YouTube stars, designers, photographers, and writers (“creators”). Marketers also engage us to gain access to our industry expertise, data, and analytics. Our primary technology ~~brings~~platform, the ~~marketers~~IZEA Exchange (“IZEAx”), is designed to provide a unified ecosystem that enables the creation and ~~creators together, enabling their transactions~~publication of multiple types of content to be completed at ~~scale~~scale.

We provide value through ~~the management of~~managing custom content workflow, creator search and targeting, bidding, analytics, and payment processing.

~~We help power~~ While the ~~creator economy, allowing everyone from college students and stay at home moms to celebrities and accredited journalists~~majority of the opportunity to monetize their content, creativity and influence. These creators are compensated by IZEA for producing unique content such as long-form text, videos, photos, illustrations, and status updates. In addition to creating content for marketers ~~our creators are also compensated for distribution of that content through their personal blogs and social channels such as Twitter, Facebook and YouTube.~~

~~Marketers, including brands, agencies, and partners,~~ engage us to ~~gain access to our industry expertise, technology, analytics, and network of creators. These companies are our primary customers where we generate the majority of our revenue. They~~perform these services (the “Managed Services”) on their behalf, they may also use our ~~services for two primary purposes: the engagement of~~marketplaces to engage creators for influencer marketing campaigns ~~(also~~or to produce custom content on a self-service basis by licensing our technology.

Influencer Marketing. We work with marketers to enable influencer marketing campaigns at scale. A subset of influencer marketing known as ~~“influencer marketing”~~“Sponsored Social” is when a company compensates creators to share sponsored content with the creators’ social network followings. This sponsored content is within the body of the content stream. We believe that we pioneered the concept of a marketplace for sponsorships on the social web in 2006 with the launch of our first platform, PayPerPost. We have focused on scaling our product and service offerings ever since, including by acquiring TapInfluence in July 2018 and launching Shake and BrandGraph in 2020.

Custom Content.We also work with marketers to augment or ~~"sponsored social"), or the engagement~~replace their content development efforts. Our network of creators produces editorial and marketing content that can be published both online and offline. Our network of creators includes professional journalists, subject matter experts, bloggers, and everyday content creators, allowing our customers to produce content ranging from complex white papers to simple product descriptions. Many of our content customers use this service to create ~~stand-alone~~a steady stream of posts for their corporate blogs. We first began offering custom content ~~for~~services in 2015 after acquiring Ebyline, a leading marketplace in the ~~marketer's own use, as well as third party~~editorial content ~~marketing~~space, and ~~native advertising efforts (“custom content”). Marketers receive influential consumer content and engaging, shareable stories~~continued to expand this offering with our acquisition of ZenContent in July 2016, a company that ~~drive awareness.~~predominantly focused on e-commerce-related asset creation.

Our Platforms

~~Our primary technology~~IZEAx. The platform ~~the IZEA Exchange (“IZEAx”), enables transactions to be completed at scale through the management of custom content development, creator search and targeting, bidding, analytics, and payment processing.~~ ~~IZEAx~~ is designed to provide a unified ecosystem that enables the creation and publication of multiple types of custom content through our creators’ websites, blogs, and social media channels, including, ~~blog posts, status updates, videos,~~among others, Twitter, Facebook, YouTube, Twitch, and ~~photos~~Instagram. We extensively use this platform to ~~be provided~~manage influencer marketing campaigns on behalf of our marketers. This platform is also available directly to our marketers as a self-service tool and ~~further distributed~~a licensed white label product. IZEAx was engineered from the ground up to replace all of our previous platforms with an integrated offering that is improved and more efficient.

BrandGraph. In March 2020, we launched BrandGraph, a social media intelligence platform. BrandGraph is heavily integrated with IZEAx, and both platforms rely heavily on data from each other, but it is also available as a stand-alone platform. BrandGraph offers marketers an analysis of share-of-voice, engagement benchmarking, category spending estimates, influencer identification, and sentiment analysis. The platform maps and classifies the complex hierarchy of corporation-to-brand relationships by category and associates social content with brands through a ~~wide variety~~proprietary content analysis engine. It

Table of ~~social channels~~Contents

aggregates and analyzes content data to provide insights for marketers across their competitive landscapes that are particularly useful to influencer marketing professionals, including ~~blogs, Twitter, Facebook, Instagram~~our managed services team.

Shake. In November 2020, we launched Shake, a new online marketplace where buyers can quickly and ~~Tumblr, among others.~~

~~In addition to~~ ~~IZEAx, we operate the Ebyline technology platform, which we acquired in January 2015.~~easily hire creators of all types for influencer marketing, photography, design, and other digital services. The ~~Ebyline~~Shake platform is aimed at digital creators seeking freelance “gig” work. Creator’s list available “Shakes” on their accounts on the platform. Marketers select and purchase creative packages from them through a ~~self-service content marketplace which was originally designed~~streamlined chat experience, assisted by ShakeBot - a proprietary, artificial intelligence assistant.

Impact of COVID-19 on our Business

The COVID-19 pandemic impacted our operations, sales, and finances beginning in 2020. To protect the health and safety of our employees, we took precautionary action and directed all staff to ~~replace editorial newsrooms located within newspapers with~~work from home effective March 16, 2020. We allowed the leases for our company headquarters and temporary office spaces to expire at the end of their terms throughout 2020. We have not experienced any major declines in operating efficiency in our remote working environment and have decided to continue our work-from-home policy indefinitely as a ~~“virtual newsroom”~~virtual-first employer.

We will continue to ~~handle their content workflow.~~actively monitor the COVID-19 situation and may take further actions altering the business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by federal, state, or local authorities. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, employees, and prospects, or on our future financial results.

Key Components of Results of Operations

Overall consolidated results of operations are evaluated based on Revenue, Cost of Revenue, Sales and Marketing expenses, General and Administrative expenses, Depreciation and Amortization, and Other Income (Expense), net.

Revenue

We generate revenue from four primary sources: (1) revenue from our managed services when a marketer (typically a brand, agency, or partner) pays us to provide custom content, influencer marketing, amplification, or other campaign management services (“Managed Services”); (2) revenue from fees charged to software customers on their marketplace spend within our IZEAx and Shake platforms (“Marketplace Spend Fees”); (3) revenue from license and subscription fees charged to access the IZEAx and BrandGraph platforms (“License Fees”); and (4) revenue derived from other fees such as inactivity fees, early cash-out fees, and other miscellaneous fees charged to users of our platforms (“Other Fees”).

As discussed in more detail within “Critical Accounting Policies and Use of Estimates” under “Note 1. Company and Summary of Significant Accounting Policies,” under Part I, Item 1 herein, revenue from Marketplace Spend Fees are reported on a net basis, and revenue from all other sources, including Managed Services, License Fees, and Other Fees are reported on a gross basis. We further categorize these sources into two primary groups: (1) Managed Services and (2) SaaS Services, which includes revenue from Marketplace Spend Fees, License Fees, and Other Fees.

Cost of Revenue

Our cost of revenue consists of direct costs paid to our third-party creators who provide the custom content, influencer marketing, or amplification services for our Managed Service customers, where we report revenue on a gross basis. It also includes internal costs related to our campaign fulfillment and SaaS support departments. These costs include salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and miscellaneous departmental costs related to the personnel responsible for providing support to our customers and ultimately fulfilling our obligations under our contracts with customers. Where appropriate, we capitalize costs incurred with software developed or acquired for our revenue-supporting platforms and amortize these costs over the estimated useful lives of those platforms. This amortization is separately stated under depreciation and amortization in our consolidated statements of operations and comprehensive loss.

Sales and Marketing

Our sales and marketing expenses consist primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, travel and miscellaneous departmental costs for our marketing, sales, and sales support personnel, as well as marketing expenses such as brand marketing, public relations events, trade shows, and marketing materials, and travel expenses.

General and Administrative

Our general and administrative (“G&A”) expense consists primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and miscellaneous departmental costs related to our executive, finance, legal, human resources, and other administrative personnel. It also includes travel, public company, investor relations expenses, accounting,

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legal professional services fees, leasehold facilities, and other corporate-related expenses. G&A expense also includes our technology and development costs consisting primarily of our payroll costs for our internal engineers and contractors responsible for developing, maintaining, and improving our technology, as well as hosting and software subscription costs. These costs are expensed as incurred, except to the extent that they are associated with internal-use software that qualifies for capitalization, which is then recorded as software development costs in the consolidated balance sheet. We also capitalize costs that are related to our acquired intangible assets. Depreciation and amortization related to these costs are separately stated under depreciation and amortization in our consolidated statements of operations and comprehensive loss. G&A expense also includes current period gains and losses on our acquisition costs payable and gains and losses from the sale of fixed assets. Impairments on fixed assets, intangible assets, and goodwill are included as part of general and administrative expense when they are not material and broken out separately in our consolidated statements of operations and comprehensive loss when they are material.

Depreciation and Amortization

Depreciation and amortization expense consists primarily of amortization of our internal-use software and acquired intangible assets from our business acquisitions. To a lesser extent, we also have depreciation and amortization on equipment and leasehold improvements used by our personnel. Costs are amortized or depreciated over the estimated useful lives of the associated assets.

Other Income (Expense)

Interest Expense. Interest expense is prior years has primarily been related to the imputed interest on our secured credit facility, accrued interest for the ~~Three Months Ended September 30, 2017 Compared~~PPP loan, and interest on the financing of computers. The Company is only recognizing interest expense on the financing of computers in the current year.

Other Income. Other income consists primarily of interest income for interest earned on investments, or changes in the value of our foreign assets and liabilities and foreign currency exchange gains and losses on foreign currency transactions, primarily related to the ~~Three Months Ended September 30, 2016~~Canadian Dollar.

~~Revenues~~

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Historically, we broke out our revenue into categories labeled Sponsored Revenue, Content Revenue and Service Fees. In January 2017, we revised the way we categorize our revenue streams to more closely align the revenue based on margin profiles and how we currently analyze our business. For the revised chart classification by quarterly historical periods in 2015 and 2016, see our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 filed with the SEC on May 10, 2017 and the information set forth under Management's Discussion and Analysis entitled"Results of Operations for the Three Months Ended March 31, ~~2017 Compared to the Three Months Ended March 31, 2016." Our prior period revenue~~2022 and ~~cost categories included herein have been reclassified to conform to the current period presentation.~~2021

We derive revenue from three sources: revenue from our managed services when a marketer, typically a brand, agency or partner, pays us to provide custom content, influencer marketing or amplification services ("Managed Services"), revenue from the self-service use of our Ebyline platform by news agencies to handle their content workflow from initial content request to payment of content received ("Content Workflow"), and revenue derived from various service and license fees charged to users of our platforms ("Service Fee Revenue").

~~The following table illustrates our approximate revenue, cost of sales and gross profit by revenue stream for the three months ended September 30, 2017 and 2016:~~

Three Months Ended
September 30, 2017 September 30, 2016 $ Change % Change
Revenue & % of Total
Managed Services $ 6,997,391
86 % $ 5,838,139
78 % $ 1,159,252
20 %
Content Workflow 1,141,795
14 % 1,576,001
21 % (434,206 ) (28 )%
Service Fees & Other Revenue 15,488
— % 82,832
1 % (67,344 ) (81 )%
Total Revenue $ 8,154,674
100 % $ 7,496,972
100 % $ 657,702
9 %

Cost of Sales & % of Total
Managed Services COS $ 2,693,803
72 % $ 2,464,238
63 % $ 229,565
9 %
Content Workflow COS 1,064,818
28 % 1,463,041
37 % (398,223 ) (27 )%
Service Fees & Other COS —
— % —
— % —
100 %
Total Cost of Sales $ 3,758,621
100 % $ 3,927,279
100 % $ (168,658 ) (4 )%

Gross Profit & Profit %
Managed Services $ 4,303,588
62 % $ 3,373,901
58 % $ 929,687
28 %
Content Workflow 76,977
7 % 112,960
7 % (35,983 ) (32 )%
Service Fees & Other Revenue 15,488
100 % 82,832
100 % (67,344 ) (81 )%
Total Gross Profit $ 4,396,053
54 % $ 3,569,693
48 % $ 826,360
23 %

Revenues for the three months ended September 30, 2017 increased by $657,702, or approximately 9%, compared to the same period in 2016. Managed Services revenue increased primarily due to concentrated sales efforts toward larger IZEA-managed campaigns that have components of both custom content and influencer marketing resulting in higher revenue per

salesperson, and repeat business from existing customers. Content Workflow revenue generated from newspaper and traditional publishers through the Ebyline platform on a self-service basis declined compared to the same period in 2016 due to the ongoing consolidation and cutbacks in the newspaper industry. Although revenue from Content Workflow decreased by $434,206, or approximately 28%, in the three months ended September 30, 2017, our gross margin only declined by $35,983, because the margins are fixed at only 7% to 9% with these customers. We expect to see continued declines in Content Workflow revenue up to 35% compared to prior year levels due to the overall decline in this industry. Service Fee revenue decreased in the three months ended September 30, 2017 due to lower licensing fees generated from partners using our platforms.

Our net bookings of $7.9 million for the three months ended September 30, 2017 were 2% higher than the net bookings of $7.7 million for the three months ended September 30, 2016. Net bookings is a measure of sales orders received minus any cancellations or changes in a given period. Management uses net bookings as a leading indicator of future revenue recognition as revenue is typically recognized within 90-120 days of booking, though larger contracts may be recognized over twelve months from the original booking date. Net bookings can be affected by, among other things, cancellations or changes to orders that occur in future periods. Reductions in net bookings or changes in the expected timing of delivery for services due to delays and customer preferences or other considerations may result in fluctuations in expected future revenue.

~~Cost of Sales and Gross Profit~~

Our cost of sales is comprised primarily of amounts paid to our content creators to provide custom content or advertising services through the promotion or amplification of sponsored content in a blog post, tweet, click or action.

Cost of sales for the three months ended September 30, 2017 decreased by $168,658, or approximately 4%, compared to the same period in 2016. Cost of sales decreased overall due to the decrease in Content Workflow. However, this decrease was tempered by the increase in costs on Managed Services as a result of the higher revenues generated during the quarter.

Gross profit for the three months ended September 30, 2017 increased by $826,360, or approximately 23%, compared to the same period in 2016. Our gross profit percentage increased nearly 600 basis points in the three months ended September 30, 2017 compared to the same period in 2016. This increase is a result of the increased margins we are receiving on our managed customer content services in 2017. Content Workflow gross margin was consistent at 7% for the three months ended September 30, 2017 and 2016.

The total gross profit increase was primarily attributable to the increase in revenue and contribution margin from our higher margin, Managed Services offset by reduced revenue from our lower margin, Content Workflow. Managed Services contributed approximately 98% to the gross profit during the three months ended September 30, 2017 compared to 95% during the three months ended September 30, 2016. The mix of sales between our higher margin, Managed Services and lower margin, Content Workflow has a significant effect on our overall gross profit percentage.

The following table sets forth a summary of our consolidated statements of operations and the change between the periods:



	Three Months Ended March 31,
	2022		2021		$ Change		% Change
Revenue	$	8,890,336	$	5,528,166	$	3,362,170	61	%

Costs and expenses:
Cost of revenue	5,179,724		2,457,785		2,721,939		111	%
Sales and marketing	2,520,343		2,078,323		442,020		21	%
General and administrative	3,502,435		2,535,147		967,288		38	%
Depreciation and amortization	138,829		365,529		(226,700)		(62)	%
Total costs and expenses	11,341,331		7,436,784		3,904,547		53	%
Loss from operations	(2,450,995)		(1,908,618)		(542,377)		28	%
Other income (expense):
Interest expense	(965)		(13,793)		12,828		(93)	%
Other income, net	(24,283)		29,474		(53,757)		(182)	%
Total other income (expense), net	(25,248)		15,681		(40,929)		(261)	%
Net Loss	$	(2,476,243)	$	(1,892,937)	$	(583,306)	31	%

Revenue

The following table illustrates our revenue by type, the percentage of total revenue by type, and the change between the periods:



	Three Months Ended March 31,
	2022				2021				$ Change		% Change
Managed Services Revenue	$	8,372,456	94	%	$	5,034,993	91	%	$	3,337,463	66	%

Marketplace Spend Fees	54,100		1	%	98,371		2	%	(44,271)		(45)	%
License Fees	374,441		4	%	383,041		7	%	(8,600)		(2)	%
Other Fees	89,339		1	%	11,761		—	%	77,578		660	%
SaaS Services Revenue	517,880		6	%	493,173		9	%	24,707		5	%

Total Revenue	$	8,890,336	100	%	$	5,528,166	100	%	$	3,362,170	61	%

Historically, we have invested the majority of our time and resources in our Managed Services business, which provides the majority of our revenue. Our acquisitions of Ebyline and ZenContent allowed us to expand our product offerings to provide custom content in addition to and in combination with our influencer marketing campaigns to expand our Managed Services. Our July 2018 merger with TapInfluence expanded our SaaS Services to derive revenue from Marketplace Spend Fees and License Fees.

Managed Services revenue is generated when a marketer (typically a brand, agency, or partner) pays us to provide custom content, influencer marketing, amplification, or other campaign management services. Managed Services revenue during the three months ended March 31, 2022, increased by $3.3 million or 66% to $8.4 million compared to $5.0 million for the same period in 2021; nearly half of the increase comes from one large customer contract dating to early in the second quarter of 2021, with the balance of the increase due to growth in orders from new and existing customers expanding their marketing efforts through sponsored social marketing as compared to the prior-year period.

SaaS Services revenue is generated by the self-service use of our technology platforms by marketers to manage their own content workflow and influencer marketing campaigns. It consists of fees earned on the marketer’s spend within the IZEAx,TapInfluence and Ebyline platforms, along with the license and support fees to access the platform services.

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(Unaudited)
Three Months Ended
September 30,
2017 September 30,
2016 $ Change % Change
Revenue $ 8,154,674
$ 7,496,972
$ 657,702
9 %
Cost of sales 3,758,621
3,927,279
(168,658 ) (4 )%
Gross profit 4,396,053
3,569,693
826,360
23 %
Operating expenses:
General and administrative 2,687,266
2,454,555
232,711
9 %
Sales and marketing 2,342,002
2,584,287
(242,285 ) (9 )%
Total operating expenses 5,029,268
5,038,842
(9,574 ) — %
Loss from operations (633,215 ) (1,469,149 ) 835,934
57 %
Other income (expense):
Interest expense (15,058 ) (25,511 ) 10,453
(41 )%
Loss on exchange of warrants —
—
—
100 %
Change in fair value of derivatives, net 45,160
(14,705 ) 59,865
(407 )%
Other income (expense), net 44,308
(2,238 ) 46,546
(2,080 )%
Total other income (expense), net 74,410
(42,454 ) 116,864
275 %
Net loss $ (558,805 ) $ (1,511,603 ) $ 952,798
63 %

~~Operating Expenses~~

~~Operating expenses consist of general and administrative expenses and sales and marketing expenses. Total operating expenses~~•Marketplace Spend Fees decreased by $44,271 to $54,100 for the three months ended ~~September 30, 2017~~March 31, 2022 compared to $98,371 for the same period in 2021. The fee decrease was due to lower spend levels from our marketers and lower average fees assessed on those spends as a result of competitive pricing efforts in IZEAx. Revenue from Marketplace Spend Fees represents our net margins received on this business.

•License Fees revenue decreased during the three months ended March 31, 2022 to $374,441 compared to $383,041 in the same period of 2021. The decrease in IZEAx license fees was offset by ~~$9,574~~an increase in subscriptions for BrandGraph and IZEAx Discovery services.

•Other Fees revenue increased by $77,578 during the three months ended March 31, 2022 compared to the same period in ~~2016.~~2021 due to the recognition of a large forfeited customer deposit offset by lower plan fees accessed on customer accounts. Nonrefundable deposits are collected from certain customers due to defined minimum spend per the contract or prepayment required for any identified credit issues. Customers do not typically forfeit deposits held on account.

Cost of Revenue

Cost of revenue for the three months ended March 31, 2022 totaled $5.2 million, or 58.3% of revenue, compared to $2.5 million, or 44.5% of revenue for the same period in 2021. The increase in the cost of revenue is primarily due to higher cost deliveries on one large customer contract dating to early in the second quarter of 2021, which made up approximately 14% of current quarter revenues, as well as by the overall increase in revenue from other new and existing customers. Aside from the large customer contract, the cost of revenue was in range with recent historical averages.

Sales and Marketing

Sales and marketing expense for the three months ended March 31, 2022 increased by $442,020, or approximately 21%, compared to the same period in 2021. The increase over prior year is primarily driven by additional headcount and the associated payroll costs.

General and administrative expense for the three months ended ~~September 30, 2017~~March 31, 2022 increased by $232,711 compared to the same period in 2016. We posted a $129,000 increase in fixed personnel costs and in the variable costs related to personnel such as stock based compensation expense, software and subscription costs, communication, travel and supply costs due to higher average salaries and higher bonuses for our administrative and engineering personnel compared to the prior year period. General and administrative expense also increased by approximately $153,000 as a result of the change in our acquisition cost liability related to the ZenContent acquisition in July 2016 as further discussed below. The increases in general and administrative expenses during the three months ended September 30, 2017 were offset by a $27,000 decrease in contractor and professional fees and a $31,000 decrease in investor relation expenses due to the non-renewal of our investor relations firm agreement (effective May 1, 2017).

On July 31, 2016, we purchased all of the outstanding shares of capital stock of ZenContent, Inc. for aggregate consideration up to $4,500,000, consisting of guaranteed payments of $2,000,000 and contingent performance payments up to $2,500,000 based on ZenContent meeting certain revenue targets for each of the three years ending July 31, 2017, 2018 and 2019. These payments are subject to downward adjustment of up to 30% if Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or if she terminates her employment without good reason. As a result, the Company initially reduced its acquisition cost liability by $300,000 to be accrued as compensation expense over the three-year term rather than allocated to the purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense was $28,125 and $40,972 during the three months ended September 30, 2017 and 2016, respectively. We estimate the fair value of the $2,500,000 of the future contingent performance payments for the ZenContent purchase each quarter using a Monte-Carlo simulation to simulate revenue based on actual results and future projections. Based on this calculation, we determined that the current fair value of the contingent performance payments was $508,444 as of September 30, 2017 compared to $342,861 as of June 30, 2017. As a result of the change in the value, we recorded a $165,583 non-cash increase in general and administrative expense during the three months ended September 30, 2017. Of this amount, $47,583 was allocated to compensation expense and $118,000 was allocated as an increase in the fair value of the contingent performance payments. To the extent that our future estimates in the value of contingent performance payments changes, this will continue to affect our general and administrative expense.

Sales and marketing expenses consist primarily of personnel costs related to employees and consultants who support sales and marketing efforts, promotional and advertising costs, and trade show expenses. Sales and marketing expenses for the three months ended September 30, 2017 decreased by $242,285,$967,288, or approximately 9%38%, compared to the same period in ~~2016. The decrease in sales~~2021. General and ~~marketing~~administrative expense ~~was primarily attributable~~for the three months ended March 31, 2022 increased $467,000 due to ~~a $134,000 decrease in public relations, tradeshows~~higher payroll and ~~marketing event attendance in 2017~~personnel related expenses as a result of ~~our cost reduction efforts for near term profitability,~~an increase in headcount as well as ~~a $74,000 decrease in~~increased salaries and ~~variable costs related to sales and sales support personnel~~higher bonus expense due to ~~a 25% reduction in~~the improved company performance. Contractor expenses increased $220,000 as we are increasing the number of ~~personnel following~~internal and external engineers working on our technology offerings. Software & licenses increased $190,000 due to increased hosting and software subscription costs. Professional services, including legal and accounting contractors, increased $90,000 over the prior year. This was due in part to the implementation of ~~marketing automation~~a new ERP system and ~~ongoing performance optimization~~audit fees related to the Restatement.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended March 31, 2022 decreased by $226,700, or approximately 62%, compared to the same period in 2021.

Depreciation and amortization expense on property and equipment was $32,932 and $32,486 for the three months ended March 31, 2022 and 2021, respectively. Depreciation expense has increased slightly due to the purchase of new equipment in the first quarter of 2022.

Amortization expense was $105,896 and $333,043 for the three months ended March 31, 2022 and 2021, respectively. Amortization expense related to intangible assets acquired in the Ebyline, ZenContent, and TapInfluence acquisitions was $216,667 for the three months ended March 31, 2021. There was no amortization expense related to intangible acquired assets for the three months ended March 31, 2022, as they were fully amortized during ~~2017.~~

fiscal year 2021. Amortization expense related to internal use software development costs was $105,896 and $116,376 for the three months ended March 31, 2022 and 2021, respectively. Amortization on our intangible acquisition assets decreased in the three months ended March 31, 2022 due to completion of amortization on certain intangible assets acquired in prior years.

Other Income (Expense)

~~Other income (expense) consists primarily of interest~~Interest expense ~~loss on exchange of warrants and the change in the fair value of derivatives.~~

~~In prior years, we entered into financing transactions that gave rise~~decreased by $12,828 to derivative liabilities. Additionally, we issue restricted stock that vests over future periods. These financial instruments are carried at fair value in our financial statements. Changes in the fair value of these instruments are required to be recorded in other income (expense) in the period of change. During the three months ended September 30, 2017 and 2016, we recorded income of $45,160 and expense of $15,936, respectively, due to the change in the fair value of our restricted stock as a result of the fluctuation in our stock price between the time of issuance and the time when the stock vested. During the three months ended September 30, 2016, we recorded income of $1,231, related to the change in the fair value of our remaining warrant liability. We have no control over the amount of change in the fair value of our derivative instruments as this is a factor based on fluctuating interest rates and stock prices and other market conditions outside of our control.

~~The $46,546 change in other income (expense) is primarily the result of currency exchange losses related to our Canadian transactions~~$965 during the three months ended ~~September 30, 2017.~~March 31, 2022 compared to the same period in 2021 due to the elimination of amounts owed on our acquisition costs payable and the PPP loan.

The $53,757 decrease in other income during the three months ended March 31, 2022 when compared to the same period in 2021 resulted primarily due to reduced interest income received on cash balances due to lower interest rates and the write down of digital assets.

Table of Contents

Net Loss

Net loss for the three months ended ~~September 30, 2017~~March 31, 2022 was ~~$558,805, which decreased from~~$2,476,243, a $583,306 increase compared to the net loss of ~~$1,511,603~~$1,892,937 for the same period in ~~2016.~~2021. The ~~decrease~~increase in net loss was ~~primarily the~~a result of the ~~increase in our gross profit contribution as~~changes discussed above.

~~Results of Operations for~~Key Metric

We review the ~~Nine Months Ended September 30, 2017 Compared to the Nine Months EndedSeptember 30, 2016~~

~~Revenues~~

~~The following table illustrates~~information provided by our ~~approximate revenue, cost of sales~~key financial metrics, Managed Services Bookings, and gross ~~profit by revenue stream for~~billings, to assess the ~~nine months ended September 30, 2017~~progress of our business and ~~2016:~~make decisions on where to allocate our resources. As our business evolves, we may change the key financial metrics in future periods.

Managed Services Bookings

Nine Months Ended
September 30, 2017 September 30, 2016 $ Change % Change
Revenue & % of Total
Managed Services $ 17,274,314
81 % $ 14,741,536
74 % $ 2,532,778
17 %
Content Workflow 3,973,286
19 % 4,875,237
25 % (901,951 ) (19 )%
Service Fees & Other Revenue 89,801
— % 259,838
1 % (170,037 ) (65 )%
Total Revenue $ 21,337,401
100 % $ 19,876,611
100 % $ 1,460,790
7 %

Cost of Sales & % of Total
Managed Services COS $ 6,696,191
64 % $ 5,921,107
57 % $ 775,084
13 %
Content Workflow COS 3,700,137
36 % 4,525,928
43 % (825,791 ) (18 )%
Service Fees & Other COS —
— % —
— % —
100 %
Total Cost of Sales $ 10,396,328
100 % $ 10,447,035
100 % $ (50,707 ) — %

Gross Profit & Profit %
Managed Services $ 10,578,123
61 % $ 8,820,429
60 % $ 1,757,694
20 %
Content Workflow 273,149
7 % 349,309
7 % (76,160 ) (22 )%
Service Fees & Other Revenue 89,801
100 % 259,838
100 % (170,037 ) (65 )%
Total Gross Profit $ 10,941,073
51 % $ 9,429,576
47 % $ 1,511,497
16 %

~~Revenues for the~~ ~~nine months~~ ~~ended~~ ~~September 30, 2017increased~~ ~~by $1,460,790,~~Managed Services Bookings is a measure of all sales orders received during a time period less any cancellations received, or ~~approximately 7%, compared to~~refunds given during the same ~~period~~time period. Sales order contracts vary in ~~2016. Managed Services revenue increased $2,532,778, Content Workflow revenue decreased $901,951~~complexity with each customer and Service Fee Revenue decreased $170,037 during the nine months ended September 30, 2017 compared to the same period in 2016. Managed Services revenue increased primarily due to concentrated sales efforts toward larger IZEA-managed campaigns that have components of bothrange from custom content ~~and influencer~~delivery to integrated marketing ~~resulting in higher revenue per salesperson, and repeat business~~services; our contracts generally run from existing customers. Content Workflow revenue generated from newspaper and traditional publishers through the Ebyline platform on a self-service basis declined compared to the same period in 2016 due to the ongoing consolidation and cutbacks in the newspaper industry. Although revenue from Content Workflow decreased by $901,951, or 19%, in the nineseveral months ended September 30, 2017, our gross margin only declined by $76,160, because the margins are fixed with these customers at only 7% to 9%. We expect to see continued declines in Content Workflow revenuefor smaller contracts up to ~~35% compared to prior year levels due to the overall decline in this industry. Service Fee revenue decreased in the nine~~twelve months ~~ended September 30, 2017 due to lower licensing fees generated from partners using our platforms.~~

for larger contracts. We ~~estimate that~~recognize revenue from our Managed Services will continue to increase over the prior year, but this increase will be offset by the declines in the self-service Content Workflow revenue noted above. We estimate that total revenue will be between $29-$30 million, with gross margins ranging between 49% to 50% for 2017.

Our net bookings of $22.3 million for the nine months ended September 30, 2017 were higher than the net bookings of $21.9 million for the nine months ended September 30, 2016. This minimal increase is due to a $1.2 million reduction in 2017 bookings from Content Workflow as discussed above.

~~Cost of Sales and Gross Profit~~

~~Cost of sales for the~~ ~~nine months~~ ~~ended~~ ~~September 30, 2017decreased~~ ~~by $50,707 compared to the same period in~~ ~~2016. Cost of sales decreased due to the decrease in higher cost Content Workflow revenue. However, this decrease was tempered by the increase in costs spent~~contracts on ~~Managed Services as a result of the higher revenues generated during the quarter.~~

~~Gross profit for the~~ ~~nine months~~ ~~ended~~ ~~September 30, 2017increased~~ ~~by $1,511,497, or approximately 16%, compared to the same period in~~ ~~2016. Our gross profit as~~ a percentage of completion basis as we deliver the content or services over time, which can vary greatly. Historically, bookings have converted to revenues over a 6-month period on average. However, since late 2020, we have been receiving increasingly larger and more complex sales orders which, in turn, has lengthened the average revenue ~~increased~~period to approximately 9-months, with the largest contracts taking longer to complete. For this reason, Managed Services Bookings, while an overall indicator of the health of our business, may not be used to predict quarterly revenues, and could be subject to future adjustment. Managed Services Bookings is useful information as it reflects the amount of orders received in one period, even though revenue from ~~47%~~those orders may be reflected over varying amounts of time. Management uses the Managed Services Bookings metric to plan its operating staff, to identify key customer group trends to enlighten go-to-market activities, and to inform its product development efforts. Managed Services Bookings for the ~~nine~~three months ended ~~September 30, 2016~~ ~~to 51% for the same period~~March 31, 2022 and 2021 was $12.1 million and $6.4 million, respectively.

Gross Billings by Revenue Type

Company management evaluates our operations and makes strategic decisions based, in ~~2017. The gross margin~~part, on our ~~Managed Services for influencer marketing or custom content services was 61%, while the~~key metric of gross ~~margin on Content Workflow was 7% for the~~ ~~nine months~~ ended September 30, 2017. Prior to being acquired by IZEA in 2015, Ebyline generated revenue primarily from newspaper and traditional publishers through their workflow platform on a self-service basis at a fixed 7% to 9% profit. We do not actively sell or market Content Workflow to new customers due to the low margins and challenges facing the newspaper industry. After the acquisition, this revenue stream still contributes a significant portion of our revenue, but we utilize the content creators to promote the sale of custom content to our marketers on a managed basis. These services are sold at comparable margins to our influencer marketing services.

~~The total gross profit increase was primarily attributable to the increase in revenue and contribution margin~~billings from our ~~higher margin, Managed Services versus reduced~~two primary types of revenue, ~~from our lower margin, Content Workflow. Managed Services contributed approximately 96% to the gross profit during the~~ ~~nine months~~ ~~ended September 30, 2017 compared to 93% during the~~ ~~nine months~~ ~~ended September 30, 2016. The mix of sales between our higher margin,~~ Managed Services, and ~~lower margin, Content Workflow has a significant effect~~SaaS Services. We define gross billings as the total dollar value of the amounts charged to our customers for the services we perform, and the amounts billed to our SaaS customers for their self-service purchase of goods and services on our ~~overall~~platforms. The amounts billed to our SaaS customers are on a cost-plus basis. Gross billings are the amounts of our reported revenue plus the cost of payments we made to third-party creators providing the content or sponsorship services, which are netted against revenue for generally accepted accounting principles in the United States (“GAAP”) reporting purposes.

Managed Services gross ~~profit percentage.~~billings include the total dollar value of the amounts billed to our customers for the services we perform. Gross billings for Managed Services are the same as Managed Services Revenue reported for those services in our consolidated statements of operations and comprehensive loss in accordance with GAAP.

SaaS Service gross billings include license and other fees together with the total amounts billed to our SaaS customers for their self-service purchase of goods and services on our platforms, termed ‘Marketplace Spend Fees.’ Our SaaS customers’ marketplace spend is billed on a cost-plus basis. SaaS Services Revenue includes the total of License and Other Fees gross billings, plus the Marketplace Spend Fees gross billings (which includes our third-party creator costs on those billings that are netted against revenue for GAAP reporting purposes).

We consider gross billings to be an important indicator of our potential performance as it measures the total dollar volume of transactions generated through our marketplaces. Tracking gross billings allows us to monitor the percentage of gross billings that we retain after payments to our creators. Additionally, tracking gross billings is critical as it pertains to our credit risk and cash flows. We invoice our customers based on our services performed or based on their self-service transactions plus our fee. Then we remit the agreed-upon transaction price to the creators. If we do not collect the money from our customers prior to paying our creators, we could experience large swings in our cash flows. Additionally, we incur the credit risk to collect amounts owed from our customers for all services performed by us or by the creators. Finally, gross billings allow us to evaluate our transaction totals on an equal basis to see our contribution margins by revenue stream so that we can better understand where we should be allocating our resources.

The following ~~table sets~~tables set forth ~~a summary~~our gross billings by revenue type, the percentage of ~~our statements of operations~~total gross billings by type, and the change between the periods:

Table of Contents

(Unaudited)
Nine Months Ended
September 30,
2017 September 30,
2016 $ Change % Change
Revenue $ 21,337,401
$ 19,876,611
$ 1,460,790
7 %
Cost of sales 10,396,328
10,447,035
(50,707 ) — %
Gross profit 10,941,073
9,429,576
1,511,497
16 %
Operating expenses:
General and administrative 8,021,420
7,559,302
462,118
6 %
Sales and marketing 7,666,720
7,556,664
110,056
1 %
Total operating expenses 15,688,140
15,115,966
572,174
4 %
Loss from operations (4,747,067 ) (5,686,390 ) 939,323
17 %
Other income (expense):
Interest expense (45,406 ) (58,261 ) 12,855
(22 )%
Loss on exchange of warrants —
—
—
100 %
Change in fair value of derivatives, net 36,122
14,568
21,554
148 %
Other income (expense), net 31,728
(485 ) 32,213
(6,642 )%
Total other income (expense), net 22,444
(44,178 ) 66,622
151 %
Net loss $ (4,724,623 ) $ (5,730,568 ) $ 1,005,945
18 %

~~Operating Expenses~~

Operating expenses consist of general and administrative expenses and sales and marketing expenses. Total operating expenses for the nine months ended September 30, 2017 increased by $572,174, or approximately 4%, compared to the same period in 2016. The increase was primarily attributable to increased personnel costs and additional marketing costs related to our IZEAFest Conference held in February 2017.

General and administrative expenses consist primarily of administrative and engineering personnel costs, general operating costs, public company costs, including non-cash stock compensation, acquisition costs, facilities costs, insurance, depreciation, professional fees, and investor relations costs. General and administrative expense for the nine months ended September 30, 2017 increased by $462,118, or approximately 6%, compared to the same period in 2016. The increase was primarily attributable to a $234,000 increase in base salary and personnel costs and in variable costs related to personnel such as bonuses, stock-based compensation expense, software and subscription costs, communication, travel and supply costs. Our

depreciation and amortization expense increased by $161,000 as a result of additional amortization on the increase in our intangible assets from software costs and the intangibles acquired in the ZenContent acquisition. As further discussed below, the change in our acquisition cost liability related to the ZenContent acquisition in July 2016 contributed $295,000 to the increase in general and administrative expense. The increases in general and administrative expense during the nine months ended September 30, 2017 were partially offset by a $99,000 decrease in contractor fees related to our software platforms and a $91,000 decrease in investor relation expenses due to the non-renewal of our investor relations firm after April 2017 and lower NASDAQ filing fees.

General and administrative expense is affected by the changes in our ZenContent acquisition liability valuation that are allocated to compensation expense each period. On July 31, 2016, we reduced our acquisition cost liability for guaranteed purchase price payments by $300,000 to be accrued as compensation expense over the three-year payment term. The compensation expense recorded as general and administrative expense and accrued to the acquisition cost liability during the nine months ended September 30, 2017 and 2016 was $151,042 and $40,972, respectively. We also determined that the current fair value of the $2,500,000 contingent performance payments for the ZenContent was $508,444 as of September 30, 2017 compared to $324,000 as of December 31, 2016. As a result of the change in the value, we recorded a $184,444 non-cash expense during the nine months ended September 30, 2017. Of this amount, $122,444 was allocated to compensation expense and $62,000 was allocated as an increase in the fair value of the contingent performance payments. To the extent that our future estimates in the value of contingent performance payments changes, this will continue to affect our general and administrative expense.

~~Other Income (Expense)~~

~~Other income (expense) consists primarily of interest expense and the change in the fair value of derivatives.~~

~~Interest expense during the~~ ~~nine months~~ ~~ended~~ ~~September 30, 2017decreased~~ ~~by $12,855 to $45,406 compared to the same period in~~ ~~2016~~ ~~primarily due to the lower imputed interest on the remaining balance of acquisition costs payable.~~

In prior years, we entered into financing transactions that gave rise to derivative liabilities. Additionally, we issue restricted stock that vests over future periods. These financial instruments are carried at fair value in our financial statements. Changes in the fair value of derivative financial instruments are required to be recorded in other income (expense) in the period of change. We recorded income of $36,122 and $14,568 resulting from the change in the fair value of certain warrants and restricted stock during the ~~nine months~~ ~~ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016, respectively.~~

~~The $32,213 change in other income (expense) is primarily the result of currency exchange losses related to our Canadian transactions during the~~ ~~nine months~~ ~~ended September 30, 2017.~~

~~Net Loss~~

~~Net loss for the~~ ~~nine months~~ ~~ended~~ ~~September 30, 2017~~ ~~was~~ ~~$4,724,623, which decreased from a net loss of~~ ~~$5,730,568~~ ~~for the same period in~~ ~~2016. The decrease in net loss was primarily the result of the increased revenue and profit margins on our Managed Services offset by the increase in personnel expenses as discussed above.~~


	Three Months Ended March 31,
	2022			2021			$ Change		% Change
Managed Services Gross Billings	$	8,372,456	87%	$	5,034,993	76%	$	3,337,463	66%

Marketplace Spend Fees	747,244		8%	1,226,208		18%	(478,964)		(39)%
License Fees	374,441		4%	383,041		6%	(8,600)		(2)%
Other Fees	89,339		1%	11,761		1%	77,578		660%
SaaS Services Gross Billings	1,211,024		13%	1,621,010		24%	(409,986)		(25)%

Total Gross Billings	$	9,583,480	100%	$	6,656,003	100%	$	2,927,477	44%

Non-GAAP Financial ~~Measures~~Measure

Adjusted EBITDA

~~Below are financial measures of cash based operating expenses (“Cash Opex”) and~~ Adjusted ~~EBITDA. These are~~EBITDA is a “non-GAAP financial ~~measures” as defined~~measure” under the rules of the Securities and Exchange Commission (the “SEC”).

We define Cash Opex as total operating expenses exclusive of unusual or non-cash expenses such as depreciation and amortization, non-cash stock related compensation, gain or loss on asset disposals or impairment and changes in acquisition cost estimates, and gains or losses on settlement of liabilities, if applicable.

We define Adjusted EBITDA as earnings or loss before interest, taxes, depreciation and amortization, non-cash ~~stock related~~stock-based compensation, gain or loss on asset disposals or impairment, ~~changes in acquisition cost estimates,~~ and ~~all~~certain other unusual or non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in the fair value of derivatives, if applicable.

We use ~~Cash Opex as a percentage of revenue and~~ Adjusted EBITDA as ~~measures~~a measure of operating performance, for planning purposes, to allocate resources to enhance the financial performance of our business and in communications with our Board of Directors regarding our financial performance. We believe that ~~Cash Opex as a percentage of revenue and~~ Adjusted EBITDA also ~~provide useful~~provides valuable information to investors as ~~they exclude transactions not related to our core cash operating business activities, including~~it excludes non-cash transactions, and ~~they provide~~it provides consistency ~~and~~to facilitate period-to-period comparisons. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations. All companies do not calculate Cash Opex and Adjusted EBITDA in the same manner, and Cash Opex and Adjusted EBITDA as presented by us may not be comparable to Cash Opex and Adjusted EBITDA presented by other companies, which limits their usefulness as comparative measures.

~~Moreover, Cash Opex and Adjusted EBITDA have limitations as analytical tools, and you~~You should not consider ~~them~~Adjusted EBITDA in isolation or as a substitute for an analysis of our results of operations as ~~reported~~ under ~~generally accepted accounting principles~~GAAP. All companies do not calculate Adjusted EBITDA in the ~~United States (“GAAP”). These~~same manner, limiting its usefulness as a comparative measure. Moreover, Adjusted EBITDA has limitations ~~include~~as an analytical tool, including that ~~Cash Opex and~~ Adjusted EBITDA:

do•does not include stock-based compensation expense, which is a non-cash expense, but has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an ~~important~~essential part of our compensation strategy;

do•does not include stock issued for payment of services, which is a non-cash expense, but has been, and is expected to be for the foreseeable future, an important means for us to compensate our directors, vendors, and other parties who provide us with services;

do not include changes in acquisition cost estimates as a result of the allocation of acquisition costs payable to compensation expense or changes in the estimate of contingent acquisition costs payable, which may or may not ever be paid, but may be a significant recurring expense for our business if we continue to make business acquisitions;

do not include gains or losses on the settlement of acquisition costs payable or liabilities when the stock value, as agreed upon in the agreement, varies from the market price of our stock on the settlement date, which is a non-cash expense, but will continue to be a recurring expense for our business on certain business contracts where the amounts can vary; and

do•does not include depreciation and intangible assets amortization expense, impairment charges and gains or losses on disposal of equipment, which is not always a current period cash expense, but the assets being depreciated and amortized may have to be replaced in the ~~future.~~future; and

~~Furthermore, Adjusted EBITDA excludes changes in fair value of derivatives,~~•does not include interest expense and other gains, losses, and expenses that we ~~do not~~ believe are not indicative of our ongoing core operating results, but these items may represent a reduction or increase in cash available to us.

Because of these limitations, ~~Cash Opex should not be considered as a measure of our total operating expenses, and~~ Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the operation and growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP financial measures as supplements. In evaluating ~~these~~this non-GAAP financial ~~measures,~~measure, you should be aware that in the future, we may incur expenses similar to those for which adjustments are made in calculating Adjusted ~~EBITDA and Cash Opex.~~EBITDA. Our presentation of ~~these~~this non-GAAP financial ~~measures~~measure should also not be construed to infer that our future results will be unaffected by unusual or non-recurring items.

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The following table sets forth a reconciliation from the GAAP measurement of ~~Operating Expenses to our non-GAAP financial measure of Cash Opex and Cash Opex as a percentage of revenue for the three and nine months ended September 30, 2017 and 2016:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Total operating expenses $ 5,029,268
$ 5,038,842
$ 15,688,140
$ 15,115,966
Less:
Non-cash stock-based compensation 182,796
170,818
509,642
576,144
Non-cash stock issued for payment of services 60,074
34,970
143,536
107,440
(Gain) loss on disposal of equipment (1,775 ) (484 ) (5,462 ) (484 )
(Gain) loss on settlement of acquisition costs payable —
—
(10,491 ) —
Increase (decrease) in value of acquisition costs payable 193,708
40,972
335,486
40,972
Depreciation and amortization 374,965
339,589
1,095,831
935,063
Total excluded expenses 809,768
585,865
2,068,542
1,659,135

Cash Opex $ 4,219,500
$ 4,452,977
$ 13,619,598
$ 13,456,831

Revenue $ 8,154,674
$ 7,496,972
$ 21,337,401
$ 19,876,611
Cash Opex / Revenue 52 % 59 % 64 % 68 %

~~The following table sets forth a reconciliation from the GAAP measurement of Net Loss~~net loss to our non-GAAP financial measure of Adjusted EBITDA for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022, and ~~2016:~~2021:


	Three Months Ended March 31,
		2022			2021
Net loss		$	(2,476,243)		$	(1,892,937)
Write down of digital assets		62,976			—
Non-cash stock-based compensation		117,192			197,986
Non-cash stock issued for payment of services		31,223			34,696
Interest expense		965			13,793
Depreciation and amortization		138,829			365,529
Other non-cash items		(663)			(7,914)
Adjusted EBITDA		$	(2,125,721)		$	(1,288,847)

Revenue		$	8,890,336		$	5,528,166
Adjusted EBITDA as a % of Revenue		(24)		%	(23)		%

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Net loss $ (558,805 ) $ (1,511,603 ) $ (4,724,623 ) $ (5,730,568 )
Non-cash stock-based compensation 182,796
170,818
509,642
576,144
Non-cash stock issued for payment of services 60,074
34,970
143,536
107,440
(Gain) loss on disposal of equipment (1,775 ) (484 ) (5,462 ) (484 )
(Gain) loss on settlement of acquisition costs payable —
—
(10,491 ) —
Increase (decrease) in value of acquisition costs payable 193,708
40,972
335,486
40,972
Depreciation and amortization 374,965
339,589
1,095,831
935,063
Interest expense 15,058
25,511
45,406
58,261
Change in fair value of derivatives (45,160 ) 14,705
(36,122 ) (14,568 )
Adjusted EBITDA $ 220,861
$ (885,522 ) $ (2,646,797 ) $ (4,027,740 )

Although we estimate that operating expenses will increase for the year ending December 31, 2017 as a result of our continued expansion and investment in future growth, we expect that our Cash Opex as a percentage of revenue will decline in future quarters. We estimate that Adjusted EBITDA for the year ending December 31, 2017 will be approximately negative $3.0 million as a result of our continued investment in sales and engineering staff necessary to increase our revenue and support our customers.

Liquidity and Capital Resources

Near-Term Liquidity and Capital Resources

~~We had~~The Company’s primary cash needs have historically been funding the development and ~~cash equivalents~~integration of ~~$3,447,998~~ ~~as of~~ ~~September 30, 2017~~ ~~as compared to~~ ~~$5,949,004~~ ~~as of December 31, 2016, a decrease of~~ ~~$2,501,006~~ ~~primarily due to the funding of our operating losses.~~IZEAx and other technology platforms used in its business, marketing expenses, and general and administrative (“G&A”) expenses including salaries, bonuses, commissions and stock-based compensation. We have also engaged in acquisitions from time to time in the past, most recently of TapInfluence in July 2018. The Company has incurred ~~significant net~~ losses and negative cash flow from operations for most periods since ~~our~~ inception, primarily the result of costs associated with third-party creators, salaries, bonuses and stock-based compensation, and other G&A expenses, including technology and development costs, which has resulted in a total accumulated deficit of ~~$46,534,344~~$72.5 million as of ~~September 30, 2017. To date, we~~March 31, 2022. We have ~~financed our operations~~not achieved profitability and, therefore, may need to raise capital through ~~internally generated revenue from operations~~new financings.

We had cash and ~~the sale and exercise~~cash equivalents of ~~our equity securities.~~$72.6 million as of March 31, 2022, as compared to $75.4 million as of December 31, 2021, an decrease of $2.9 million, primarily due to operating losses.


	March 31, 2022		December 31, 2021
Net cash (used for) provided by:
Operating activities	$	(2,726,806)	$	(829,707)
Investing activities	(127,913)		(13,217)
Financing activities	(19,730)		33,263,287
Net (decrease) increase in cash and cash equivalents	$	(2,874,449)	$	32,420,363

Cash used for operating activities was ~~$3,227,788~~$2.7 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and is primarily the result of ~~expenses exceeding the amount~~continued use of ~~gross margin provided from our revenues. Cash~~cash to cover operating losses and changes in working capital. Net cash used for investing activities was ~~$88,913~~$127,913 during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022, primarily due to the ~~payment~~purchase of ~~$93,000 related to the development of our proprietary software and purchases of computer and office equipment~~digital assets. Net cash used for ~~our expanded staff. These payments were offset by a net decrease of $4,000 in leasehold deposits on our California and Canadian space. Cash provided by~~ financing activities during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022, was ~~$815,695~~,$19,730, which ~~amount~~ consisted primarily of ~~advances received from our line~~payments on shares withheld for taxes.

In June 2020 and January 2021, we entered into ATM Sales Agreements with National Securities Corporation, as sales agent (“National Securities”), pursuant to which we could offer and sell up to $40 million and $35 million, respectively, of ~~credit~~common stock (the “ATM Offerings”). From June 4, 2020 through April 15, 2021, we sold a total of 26,005,824 shares at an average price of $2.88 per share for total gross proceeds of $75.0 million in the ATM Offerings . On June 21, 2021, we entered into a third ATM Sales Agreement with ~~Western Alliance Bank. We also received cash of $16,232 from employee stock purchases offset by stock issuance costs of $10,913.~~

~~On January 30, 2015,~~National Securities, as sales agent, pursuant to which we purchased all of the outstanding shares of capital stock of Ebyline. The Ebyline Stock Purchase Agreement required a cash payment at closing of $1,200,000, a stock issuance of $250,000 paid on July 30, 2015,can offer and ~~$1,877,064 paid in cash or stock in two equal installments of $938,532 on the first and second anniversaries of the closing. On January 29, 2016, we issued 114,398~~sell shares of our common stock, from time to ~~satisfy~~time for aggregate purchase prices up to $100 million by any method deemed to be an “at the ~~first annual guaranteed payment~~market offering” as defined in Rule 415 under the Securities Act under our shelf registration statement on Form S-3 (File No. 333-256078). No sales had been made under this agreement as of ~~$938,532 less $89,700~~March 31, 2022.

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General Liquidity

We anticipate that our operating expenses will increase in ~~closing related expenses. On January 30, 2017,~~the foreseeable future as we ~~issued 200,542 shares~~continue to pursue expansion of our ~~common stock~~business. We currently expect that we have adequate cash resources to ~~satisfy~~fund our business growth, however, should additional capital become necessary, we expect these funds would be financed predominately through proceeds from future equity, equity-based, or debt offerings by us, unless and until our operations are profitable and sustain our ongoing capital needs. As a result, our business success could depend, to a significant extent, upon our ability to obtain the ~~second~~funding necessary to support our operations.

Financial Condition

Our business operations and final annual guaranteed payment of $938,532. The Ebyline Stock Purchase Agreement also required contingent performance payments up to $5,500,000 to be paid if Ebyline met certain revenue targets in the three years following the closing. None of these targets were metresults have been impacted by COVID-19, which in the first ~~two years following~~half of 2020 had a material effect on our customers, their advertising commitments, bookings cancellations, revenues, and cash flows. Since late 2020, while the ~~closing~~economy continues to feel the impacts of supply-chain, labor disruption, and business closures, the Company has seen a material increase in the overall social media marketing spend by large and small customers, which has benefited our bookings and revenue growth rates, cash flows and future prospects. We are still feeling some effects of the pandemic in our daily operations, despite the growth we are experiencing. While the disruption caused by COVID-19 is currently expected to be temporary, it is ~~not expected that they will be met in~~generally outside of our control, and there is uncertainty around the ~~third year. Therefore, we do not believe that we will be required to make any of the $5,500,000 in contingent performance payments~~duration and ~~we currently expect that~~ the total ~~consideration to be paid for the Ebyline acquisition will be $3,327,064.~~

On July 31, 2016, we purchased all of the outstanding shares of capital stock of ZenContent. Upon closing we paid a cash payment of $400,000 and issued 86,207 shares of our common stock valued at $600,000. The agreement also requires (i) three equal annual installment payments totaling $1,000,000, commencing 12 months following the closing and (ii) contingent performance payments of up to an aggregate of $2,500,000 over the three 12-month periods following the closing, based upon ZenContent achieving certain minimum revenue thresholds. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of our common stock (determined at our option). If we decide to issue stock rather than make cash payments,economic impact. Therefore, this may result in the issuance of substantial amount of shares because the number of shares will be determined using the 30 trading-day volume-weighted average closing price of our common stock prior to the payment. On July 31, 2017, we paid $266,898 all in cash for the first annual installment of $333,333 less $66,435 in working capital adjustments.

Wematter could have a ~~secured credit facility agreement with Western Alliance Bank. Pursuant to this agreement, we may submit requests for funding up to 80%~~further material adverse impact on our business, results of our eligible accounts receivable up to a maximum credit limit of $5 million. As of September 30, 2017, we had $810,376 outstanding under this agreement. Assuming that all of our accounts receivable balance was eligible for funding, we had remaining available credit of $3,392,362 under the agreement as of September 30, 2017.operations, and financial position in future periods.

We believe that, with our current cash and our available credit line with Western Alliance Bank, we will have sufficient cash reserves available to cover expenses for longer than the next twelve months. Given the volatility in U.S. equity markets and our normal working capital fluctuations, we may seek to raise additional capital at any time to supplement our operating cash flows to the extent we can do so on competitive market terms. In such event, an equity financing may dilute the ownership interests of our common stockholders.

~~Off-Balance Sheet Arrangements~~

~~As of September 30, 2017, we do not engage in any activities involving variable interest entities or off-balance sheet arrangements.~~

Critical Accounting Policies and Use of Estimates

~~The preparation of the accompanying financial statements and related disclosures in conformity with GAAP requires us~~There have been no material changes to make judgments, assumptions and estimates that affect the amounts reported in the accompanying financial statements and the accompanying notes. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, tax positions and stock-based compensation. When making these estimates and assumptions, we consider our historical experience, our knowledge of economic and market factors and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The following critical accounting policies ~~are significantly affected by judgments, assumptions~~as set forth in Item 7, “Management’s Discussion and ~~estimates used~~Analysis of Financial Condition and Results of Operations,” included in ~~the preparation of the financial statements.~~

Accounts receivable are customer obligations due under normal trade terms. Uncollectability of accounts receivable is not significant since most customers are bound by contract and are required to fund us for all the costs of an “opportunity,” defined as an order created by a marketer for a creator to develop or share contentour Annual Report on behalf of a marketer. If a portion of the account balance is deemed uncollectible, we will either write-off the amount owed or provide a reserve based on the uncollectible portion of the account. Management determines the collectability of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. We have a reserve of $220,000 for doubtful accounts as of September 30, 2017. We believe that this estimate is reasonable, but there can be no assurance that the estimate will not change as a result of a change in economic conditions or business conditions within the industry, the individual customers or our Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. Bad debt expense was less than 1% of revenueForm 10-K for the ~~three and nine months~~year ended ~~September 30, 2017 and~~ ~~2016~~.

~~Throughout 2013 and the first quarter of 2014, we developed our new web-based advertising exchange platform,~~ ~~IZEAx. This platform is being utilized both internally and externally to facilitate native advertising campaigns on~~December 31, 2021. For a ~~greater scale. We continue to add new features and additional functionality to this platform each year. These new features will enable~~ ~~IZEAx~~ to facilitate the contracting, workflow, and delivery of direct custom content as well as provide for invoicing, collaborating, and direct payments for our SaaS customers. In accordance with ASC 350-40, ~~Internal Use Software~~ ~~and ASC 985-730,~~ ~~Computer Software Research and Development~~, research phase costs should be expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs may be capitalized. As a result, we have capitalized $1,578,125 in direct materials, consulting, payroll and benefit costs to software development costs in the consolidated balance sheet as of September 30, 2017. We estimate the useful lifesummary of our ~~software~~significant accounting policies, please refer to ~~be 5 years, consistent with the amount~~Note 1 — Company and Summary of ~~time our legacy platforms were in-service, and we are amortizing the software development costs over~~Significant Accounting Policies included in Item 1 of this ~~period.~~Quarterly Report.

We derive revenue from three sources: Managed Services, Content Workflow, and Service Fee Revenue. Managed Services is when a marketer, typically a brand, agency or partner, contracts IZEA to provide custom content, influencer marketing or amplification services. Content Workflow is derived from the self-service use of our Ebyline platform by news agencies to handle their content workflow from initial content request to payment of content received. Service Fee Revenue is generated when fees are charged to customers primarily related to subscription fees for different levels of service within a platform, licensing fees for white-label use of ~~IZEAx~~, early cash-out fees if a creator wishes to take proceeds earned for services from their account when the account balance is below certain minimum balance thresholds and inactivity fees for dormant accounts. We recognize revenue at various times depending on the service that is being performed.

For our Managed Services, we enter into an agreement to provide services that may require multiple deliverables in the form of: (a) sponsored social items, such as blogs, tweets, photos or videos shared through social network offerings that provide awareness or advertising buzz regarding the marketer's brand; (b) content promotion, such as click-through advertisements appearing in websites and social media channels and (c) original content items, such as a research or news article, informational material or videos that a publisher or other marketer can use. We may provide one type or a combination of all types of these deliverables including a management fee on a statement of work for a lump sum fee. These deliverables are to be provided over a stated period that may range from one day to one year. Each item is considered delivered once the custom content has been delivered to the customer or once the content is distributed live through a public or social network. Revenue is accounted for separately on each of the deliverables depending on the type of service provided. We recognize revenue related to influencer marketing services after a marketer's sponsored content is posted through ~~IZEAx~~ and shared through a creator's social network for a requisite period of time. The requisite period ranges from 3 days for a tweet to 30 days for a blog, video or other form of content. Management fees from advertising campaigns managed by us are recognized ratably over the term of the campaign which may range from a few days to one year. Revenue related to custom content provided to a

marketer is recognized when the content is delivered to and accepted by the customer. Payment terms are typically 30 days from the invoice date. If we are unable to provide a portion of the services, we may agree with the customer to provide a different type of service or to provide a credit for the value of those services, which may be applied to the existing order or used for future services. The statement of work typically provides for a cancellation fee if the agreement is canceled by the customer prior to our completion of services.

For Content Workflow services, the self-service marketer contracts the creators directly to provide custom content. The Ebyline platform controls the contracting, description of services, acceptance of and payment for the requested content. This service is used primarily by news agencies to control the outsourcing of their content needs. Revenue is recognized when the transaction is completed by the creator and accepted by the marketer.

Service Fee Revenue is recognized immediately when the service is performed or at the time an account becomes dormant or is cashed out. Service Fee Revenue for subscription or licensing fees is recognized straight-line over the term of service.

Marketers who use us to manage their social advertising campaigns or custom content requests may prepay for services or request credit terms. Payments received or billings in advance of completed services are recorded as unearned revenue until earned as described above.

All of our revenues are generated through the rendering of services. We recognize revenue under the general guidelines of Staff Accounting Bulletin Topic 13 A.1, which states that revenue will be recognized when it is realized or realizable and earned. We consider our revenue as generally realized or realizable and earned once (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to the marketer or customer is fixed (required to be paid at a set amount that is not subject to refund or adjustment) and determinable, and (iv) collectability is reasonably assured. We record revenue on the gross amount earned since we generally are the primary obligor in the arrangement, take on credit risk, establish the pricing and determine the service specifications.

Stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. We estimate the fair value of each stock option as of the date of grant using the Black-Scholes pricing model. Options typically vest ratably over four years with one-fourth of options vesting one year from the date of grant and the remaining options vesting monthly, in equal increments over the remaining three-year period and generally have five or ten-year contract lives. We estimate the fair value of our common stock using the closing stock price of our common stock on the date of the grant. We estimate the volatility of our common stock at the date of grant based on the volatility of comparable peer companies that are publicly traded and have had a longer trading history than us. We determine the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. We use the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. We have never paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. We estimate forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods.

The following table shows the number of options granted under our 2011 Equity Incentive Plans and the assumptions used to determine the fair value of those options during the nine months ended September 30, 2017 and 2016:

~~2011 Equity Incentive Plans - Options Granted~~

Period Ended Total Options Granted Weighted Average Exercise Price Weighted Average Expected Term Weighted Average Volatility Weighted Average Risk Free Interest Rate Weighted Average
Grant Date
Fair Value
December 31, 2016 179,998
$6.16 6.0 years 47.95% 1.58% $2.88
September 30, 2017 94,246
$3.64 6.0 years 43.49% 1.98% $1.28

There were outstanding options to purchase 1,011,575 shares with a weighted average exercise price of $6.05 per share, of which options to purchase 683,642 shares were exercisable with a weighted average exercise price of $6.24 per share as of ~~September 30, 2017. The intrinsic value on outstanding options as of September 30, 2017 was $1,354,688. The intrinsic value on exercisable options as of September 30, 2017 was $815,179.~~

~~We account for derivative instruments in accordance with ASC 815,~~ ~~Derivatives and Hedging~~, which requires additional disclosures about the objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability.

Recent Accounting Pronouncements

See ~~"Note~~“Note 1. Company and Summary of Significant Accounting Policies,~~" under Item 1 in Part I~~” of this ~~Form 10-Q.~~Quarterly Report for information on additional recent pronouncements.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4 – CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that ~~we file~~the Company files or ~~submit~~submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the ~~time~~ periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that ~~we file~~the Company files under the Exchange Act is accumulated and communicated to ~~our~~ management, including ~~our~~its principal executive and principal financial ~~officer,~~officers, as appropriate to allow timely decisions regarding required disclosures.

In designing and evaluating the disclosure controls and procedures, ~~our~~ management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and ~~our~~ management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Furthermore, controls and procedures could be circumvented by the individual acts of some persons, by collusion orof two or more people, or by management override of the control. Misstatements due to error or fraud may occur and not be detected on a timely basis.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this quarterly report on Form 10-Q for the period ended September 30, 2017, an evaluation was performed under the supervision and with the participation of our management including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") to determine the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2017. Based on this evaluation, our management concluded that our disclosure controls and procedures were effective as of September 30, 2017 to provide reasonable assurance that the information required to be disclosed by us in reports or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management, including the Company's CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

~~Changes in Internal Control over Financial Reporting~~

Our management is responsible for establishing and maintaining ~~adequate~~effective internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes policies and procedures that:

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(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the Company’s transactions;

(ii) provide reasonable assurance that transactions are recorded as necessary for the preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are made only in accordance with authorizations of our management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of any unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect financial statement misstatements. Also, projections of any evaluation of internal control effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In connection with the preparation of this Quarterly Report on Form 10-Q for the period ended March 31, 2022, an evaluation was performed under the supervision and with the participation of the Company’s management team including its principal executive officer and principal financial and accounting officer to determine the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2022. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Due to the material weakness outlined below, our principal executive and principal financial officers concluded that our disclosure controls and procedures were not effective as of March 31, 2022. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

During the preparation of the Company’s Annual Report for the year ended December 31, 2021, management conducted a review of the Company’s recognition of liabilities and associated costs relating to the Company’s Managed Services within its IZEAx platform ("Managed Services"), in connection with which the Company enters into contracts with marketers for creators to produce sponsored social services content (“Sponsored Content”) and post it on one or more approved social media platforms. The Company determined that a portion of the liability, associated cost, and related revenue from Sponsored Content should have been accrued upon its initial posting (delivery) based on the number of posting days during the reporting period in which such Sponsored Content was posted. Since the Company recognizes its Managed Services revenue using an input method of costs incurred compared to the total of expected costs, the timing of the accrual of Sponsored Content costs affected the related Managed Services revenue recognized during each period. In light of this determination, the Company restated its interim financial statements for the quarterly periods ended March 31, 2020, June 30, 2020, and September 30, 2020, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. As a result of the restatement, we determined that we have a material weakness in our internal control over financial reporting relating to the inadequate design and operation of management’s controls over identifying the appropriate timing of cost recognition related to creator content deliveries used in the input method of costs incurred compared to total expected costs.

Remediation of Material Weakness

To remediate the material weakness described above, we are working to identify additional controls, including the possible engagement of an independent third-party technical accounting expert to assist management with the review and evaluation of our processes and pertinent controls, and to design additional processes and controls as deemed necessary. We believe that we will be able to design additional measures to remediate the material weakness identified and strengthen the Company's internal control over financial reporting.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended ~~September 30, 2017,~~March 31, 2022, the Company completed the implementation of a new Enterprise Resource Planning (“ERP”) system. The implementation of this ERP system is expected to, among other things, improve user access security and automate a number of accounting, back office, and reporting processes and activities, thereby decreasing the amount of manual processes previously required. Except for the implementation of the new ERP system and related controls, there ~~were~~was no ~~significant changes~~change in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the period ended March 31, 2022, that ~~have~~ materially affected, or ~~are~~is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

From time to time, we may become involved in various other lawsuits and legal proceedings that arise in the ordinary course of our business. Litigation is, however, subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. WeAs of May 16, 2022, we are ~~currently~~ not aware of any legal proceedings or claims that we believe would or could have, individually or in the aggregate, a material adverse effect on us. Regardless of ~~final~~ outcomes, however, any such proceedings or claims may nonetheless impose a significant burden on management and employees and may come with costly defense costs or unfavorable preliminary interim rulings.

ITEM 1A – RISK FACTORS

~~In addition to~~You should carefully consider the ~~information set forth~~factors discussed under Item 1A of Part I to our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2021 regarding the information set forth at the beginning of Management's Discussion and Analysis entitled "Special Note Regarding Forward-Looking Information," and updates noted below, you should consider that there are numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition or results of operation may be materially and adversely affected. In such case, the trading price of our common stock could decline, and investors could lose all or part of their investment. These risk factors may not identify all risks that we face, and our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations.

~~Risks Related to our Business and Industry~~

~~We have a history of annual net losses, expect future losses and cannot assure you that we will achieve profitability.~~

~~We have incurred significant net losses and negative cash flow from operations for most periods since our inception, which has resulted in a total accumulated deficit of~~ ~~$46,534,344~~ ~~as of~~ ~~September 30, 2017~~. For the nine months ended September 30, 2017, we had a net loss of $4,724,623, including a $4,747,067 loss from operations and we expect to incur a net loss for the fiscal year 2017. Although our revenue has increased since inception, we have not achieved profitability and cannot be certain that we will be able to maintain these growth rates or realize sufficient revenue to achieve profitability. If we achieve profitability, we may not be able to sustain it.

~~If we fail to retain existing customers or add new customers, our revenue and business will be harmed.~~

~~We depend on our ability to attract and retain customers that are prepared to offer products or services on compelling terms through~~ ~~IZEAx~~. Additionally, we rely on customers who purchase direct custom content from our creators in our platforms. We must continue to attract and retain customers in order to increase revenue and achieve profitability. We had no customers that accounted for more than 10% of our revenue and one customer that accounted for 11% of our revenue during the nine months ended September 30, 2017 and 2016, respectively. The loss of customers or a significant reduction in revenue from our major customers could have a material adverse effect on our results of operation. Moreover, if customers do not find our marketing and promotional services effective, they are not satisfied with content they receive, or if they do not believe that utilizing our platforms provides them with a long-term increase in value, revenue or profit, they may stop using our platforms or managed services. In addition, we may experience attrition in our customers in the ordinary course of business resulting from several factors, including losses to competitors, mergers, closures or bankruptcies. If we are unable to attract new customers in numbers sufficient to grow our business, or if too many customers are unwilling to offer products or services with compelling terms to our creators through our platforms or if too many large customers seek extended payment terms, our operating results will be adversely affected.

~~Risks Relating to our Common Stock~~

~~Exercise of stock options, warrants and other securities will dilute your percentage of ownership and could cause our stock price to fall.~~

~~As of~~ ~~November 3, 2017~~, we had 5,726,336 shares of common stock issued, outstanding stock options to purchase 1,009,191 shares of our common stock at an average exercise price of $6.03 per share, and outstanding warrants to purchase 516,919 shares of our common stock at an average exercise price of $8.45 per share.

We also have reserved shares to issue stock options, restricted stock or other awards to purchase or receive up to 441,020 shares of common stock under our May 2011 Equity Incentive Plan and 39,764 shares of common stock under our 2014 Employee Stock Purchase Plan. In the future, we may grant additional stock options, restricted stock units, warrants and convertible securities, as well as issue additional shares of common stock pursuant to the earn-out provisions of the stock purchase agreements in connection with our Ebyline and ZenContent acquisitions. The exercise, conversion or exchange by holders of stock options, restricted stock units, warrants or convertible securities for shares of common stock, and the issuance of new shares pursuant to acquisition earn-out provisions, will dilute the percentage ownership of our other stockholders. Sales of a substantial number of shares of our common stock could cause the price of our common stock to fall and could impair our ability to raise capital by selling additional securities.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None~~Not applicable.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

~~None~~Not applicable.

ITEM 4 – MINE SAFETY DISCLOSURES

Not ~~applicable~~applicable.

ITEM 5 -– OTHER INFORMATION

~~None~~None.

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ITEM 6 – EXHIBITS



~~31.1~~Exhibit No.		*Description
3.1		Amended and Restated Articles of Incorporation of IZEA, Inc., filed with the Nevada Secretary of State on November 28, 2011 (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on November 23, 2011).
3.2		Certificate of Change of IZEA, Inc., filed with the Nevada Secretary of State on July 30, 2012 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 1, 2012).
3.3		Certificate of Amendment to Articles of Incorporation filed with the Secretary of State of the State of Nevada on April 17, 2014 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2014).
3.4		Certificate of Withdrawal of Certificate of Designation filed with the Secretary of State of the State of Nevada effective January 23, 2015 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2015).
3.5		Certificate of Amendment filed with the Secretary of State of the State of Nevada effective January 11, 2016 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 12, 2016).
3.6		Amended and Restated Bylaws of IZEA, Inc. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on November 23, 2011).
3.7		Certificate of Designation (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 27, 2011).
3.8		Articles of Merger of IZEA Innovations, Inc. filed with the Secretary of State of the State of Nevada effective April 5, 2016 (Incorporated by reference to Exhibit 3.11 to the Company's Quarterly Report on Form 10-Q filed with the SEC on May 11, 2016).
3.9		Articles of Merger of IZEA Worldwide, Inc. filed with the Secretary of State of the State of Nevada effective August 20, 2018 (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on August 23, 2018).
3.10		Articles of Merger of IZEA Worldwide, Inc. filed with the Secretary of State of the State of Nevada effective December 17, 2019 (Incorporated by reference to Exhibit 3.10 to the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2020).
3.11		Articles of Merger of IZEA Worldwide, Inc. filed with the Secretary of State of the State of Nevada effective December 14, 2020 (Incorporated by reference to Exhibit 3.10 to the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2021).
10.1	(a)	First Amendment to Amended and Restated Executive Employment Agreement, dated January 28, 2022 between IZEA Worldwide, Inc. and Edward H. Murphy (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2022).
10.2	(a)	First Amendment to Amended and Restated Executive Employment Agreement, dated January 28, 2022 between IZEA Worldwide, Inc and Ryan S. Schram(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2022).
10.3	(a)	First Amendment to Executive Employment Agreement, dated January 28, 2022 between IZEA Worldwide, Inc and Peter J. Biere (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2022).
31.1	*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	* ~~(a)~~(b)	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	* ~~(a)~~(b)	Certification of Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	*(c)	The following materials from IZEA Worldwide, Inc.'s Annual Report ~~on Form 10-Q~~ for the ~~quarter~~year ended ~~September 30, 2017~~March 31, 2022 are formatted in XBRL (eXtensible Business Reporting Language): (i) the ~~Unaudited~~ Consolidated Balance Sheets, (ii) the ~~Unaudited~~ Consolidated Statements of Operations and Comprehensive Loss, (iii) the ~~Unaudited~~ Consolidated Statement of Stockholders' Equity, (iv) the ~~Unaudited~~ Consolidated Statements of Cash Flow, and (iv) the Notes to the ~~Unaudited~~ Consolidated Financial Statements.


*	~~Filed or furnished herewith.~~

~~(a)~~

In accordance with Item 601of Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

* Filed or furnished herewith.

(a) Denotes management contract or compensatory plan or arrangement.

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(b) In accordance with Item 601of Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

(c) In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			IZEA Worldwide, Inc. a Nevada corporation

May 16, 2022			By:	/s/ Edward H. Murphy
				Edward H. Murphy Chairman and Chief Executive Officer (Principal Executive Officer)

May 16, 2022			~~IZEA, Inc.~~ ~~a Nevada corporation~~By:	/s/ Peter J. Biere

~~November 7, 2017~~	~~By:~~	~~/s/ Edward H. Murphy~~
		~~Edward H. Murphy~~ ~~Chairman, President and Chief Executive Officer~~ ~~(Principal Executive Officer)~~

~~November 7, 2017~~	~~By:~~	~~/s/ LeAnn C. Hitchcock~~
		~~LeAnn C. Hitchcock~~Peter J. Biere Chief Financial Officer (Principal Financial and Accounting Officer)

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Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


/s/ Edward H. Murphy						May 16, 2022
Edward H. Murphy
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
/s/ Peter J. Biere						May 16, 2022
Peter J. Biere
Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Ryan S. Schram						May 16, 2022
Ryan S. Schram
President, Chief Operating Officer and Director
/s/ Brian W. Brady						May 16, 2022
Brian W. Brady
Director
/s/ John H. Caron						May 16, 2022
John H. Caron
Director
/s/ Lindsay A. Gardner						May 16, 2022
Lindsay A. Gardner
Director
/s/ Daniel R. Rua						May 16, 2022
Daniel R. Rua
Director
/s/ Patrick J. Venetucci						May 16, 2022
Patrick J. Venetucci
Director



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016

Revenue	$	8,154,674		$	7,496,972		$	21,337,401		$	19,876,611
Cost of sales	3,758,621			3,927,279			10,396,328			10,447,035
Gross profit	4,396,053			3,569,693			10,941,073			9,429,576

Operating expenses:
General and administrative	2,687,266			2,454,555			8,021,420			7,559,302
Sales and marketing	2,342,002			2,584,287			7,666,720			7,556,664
Total operating expenses	5,029,268			5,038,842			15,688,140			15,115,966

Loss from operations	(633,215		)	(1,469,149		)	(4,747,067		)	(5,686,390		)

Other income (expense):
Interest expense	(15,058		)	(25,511		)	(45,406		)	(58,261		)
Change in fair value of derivatives, net	45,160			(14,705		)	36,122			14,568
Other income (expense), net	44,308			(2,238		)	31,728			(485		)
Total other income (expense), net	74,410			(42,454		)	22,444			(44,178		)

Net loss	$	(558,805	)	$	(1,511,603	)	$	(4,724,623	)	$	(5,730,568	)

Weighted average common shares outstanding – basic and diluted	5,702,297			5,420,020			5,659,423			5,357,119
Basic and diluted loss per common share	$	(0.10	)	$	(0.28	)	$	(0.83	)	$	(1.07	)



	Estimated Gross Purchase Consideration		Initial Present and Fair Value		Remaining Present and Fair Value		Remaining Present and Fair Value
	1/30/2015		1/30/2015		12/31/2016		9/30/2017
Cash paid at closing (a)	$	1,200,000	$	1,200,000	$	—	$	—
Guaranteed purchase price (a)	2,127,064		1,982,639		934,728		—
Contingent performance payments (b)	2,210,000		1,834,300		—		—
Acquisition costs payable by Ebyline shareholders (c)	—		—		—		—
Total estimated consideration	$	5,537,064	$	5,016,939	$	934,728	$	—

Current portion of acquisition costs payable					$	934,728	$	—
Long term portion of acquisition costs payable					—		—
Total acquisition costs payable					$	934,728	$	—



	Final Purchase Price Allocation
Current assets	$	415,798
Property and equipment	4,551
Identifiable intangible assets	722,000
Goodwill	1,136,431
Current liabilities	(482,233		)
Total estimated consideration	$	1,796,547



Year ending December 31:	Amortization Expense
2017 (three months remaining)	$	246,908
2018	349,432
2019	207,349
2020	84,293
2021	26,834
Total	$	914,816



Year ending December 31:	Software Amortization Expense
2017 (three months remaining)	$	98,259
2018	304,241
2019	218,910
2020	183,956
2021	134,432
2022	65,107
	$	1,004,905



	Three Months Ended
	September 30, 2017				September 30, 2016				$ Change			% Change
Revenue & % of Total
Managed Services	$	6,997,391	86	%	$	5,838,139	78	%	$	1,159,252		20	%
Content Workflow	1,141,795		14	%	1,576,001		21	%	(434,206		)	(28	)%
Service Fees & Other Revenue	15,488		—	%	82,832		1	%	(67,344		)	(81	)%
Total Revenue	$	8,154,674	100	%	$	7,496,972	100	%	$	657,702		9	%

Cost of Sales & % of Total
Managed Services COS	$	2,693,803	72	%	$	2,464,238	63	%	$	229,565		9	%
Content Workflow COS	1,064,818		28	%	1,463,041		37	%	(398,223		)	(27	)%
Service Fees & Other COS	—		—	%	—		—	%	—			100	%
Total Cost of Sales	$	3,758,621	100	%	$	3,927,279	100	%	$	(168,658	)	(4	)%

Gross Profit & Profit %
Managed Services	$	4,303,588	62	%	$	3,373,901	58	%	$	929,687		28	%
Content Workflow	76,977		7	%	112,960		7	%	(35,983		)	(32	)%
Service Fees & Other Revenue	15,488		100	%	82,832		100	%	(67,344		)	(81	)%
Total Gross Profit	$	4,396,053	54	%	$	3,569,693	48	%	$	826,360		23	%



	(Unaudited)
	Three Months Ended
	September 30, 2017			September 30, 2016			$ Change			% Change
Revenue	$	8,154,674		$	7,496,972		$	657,702		9	%
Cost of sales	3,758,621			3,927,279			(168,658		)	(4	)%
Gross profit	4,396,053			3,569,693			826,360			23	%
Operating expenses:
General and administrative	2,687,266			2,454,555			232,711			9	%
Sales and marketing	2,342,002			2,584,287			(242,285		)	(9	)%
Total operating expenses	5,029,268			5,038,842			(9,574		)	—	%
Loss from operations	(633,215		)	(1,469,149		)	835,934			57	%
Other income (expense):
Interest expense	(15,058		)	(25,511		)	10,453			(41	)%
Loss on exchange of warrants	—			—			—			100	%
Change in fair value of derivatives, net	45,160			(14,705		)	59,865			(407	)%
Other income (expense), net	44,308			(2,238		)	46,546			(2,080	)%
Total other income (expense), net	74,410			(42,454		)	116,864			275	%
Net loss	$	(558,805	)	$	(1,511,603	)	$	952,798		63	%