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, 2023



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, ~~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

Securities registered pursuant to Section 12(g) of the Act: None

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

☐

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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 8, 2023, there were ~~5,726,336~~62,654,477 shares of our common stock outstanding.

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Quarterly Report on Form 10-Q for the period ended ~~September 30, 2017~~March 31, 2023

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			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			1
Unaudited Consolidated Balance Sheets as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022			1
Unaudited Consolidated Statements of Operations for the ~~Three~~three months ended March 31, 2023 and ~~Nine Months Ended September 30, 2017 and 2016~~2022			2
Unaudited Consolidated ~~Statement~~Statements of Comprehensive Loss for the three months ended March 31, 2023 and 2022			3
Unaudited Consolidated Statements of Stockholders’ Equity for the ~~Nine Months Ended September 30, 2017~~three months ended March 31, 2023 and 2022			34
Unaudited Consolidated ~~Statements~~Statement of Cash Flows for the ~~Nine Months Ended September 30, 2017~~three months ended March 31, 2023 and ~~2016~~2022			45
Notes to the Unaudited Consolidated Financial Statements			56
Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operation			2122
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3430
Item 4. Controls and Procedures			3430

PART II. OTHER INFORMATION
~~Item 1.~~Item1. Legal Proceedings			3632
Item 1A. Risk Factors			3632
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3722
Item 3. Defaults Upon Senior Securities			3732
Item 4. Mine Safety Disclosures			3732
Item 5. Other Information			3732
Item 6. Exhibits			3833

Signatures			3934

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PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

IZEA Worldwide, Inc.

Unaudited Consolidated Balance Sheets


	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	26,156,210	$	24,600,960
Accounts receivable, net	5,922,467		5,664,727
Prepaid expenses	2,918,684		3,927,453
Short term investments	17,418,187		16,106,758
Other current assets	22,050		66,441
Total current assets	52,437,598		50,366,339

Property and equipment, net of accumulated depreciation	258,151		156,774
Goodwill	4,016,722		4,016,722
Intangible assets, net	64,953		64,953
Software development costs, net	1,603,425		1,774,033
Long term investments	23,883,523		29,296,069
Total assets	$	82,264,372	$	85,674,890

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,468,032	$	1,968,322
Accrued expenses	2,008,160		2,130,702
Contract liabilities	9,854,780		11,247,746
Total current liabilities	14,330,972		15,346,770

Finance obligation, less current portion	107,959		62,173
Total liabilities	$	14,438,931	$	15,408,943

Commitments and Contingencies (Note 8)	—		—

Stockholders’ equity:
Preferred stock; $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock; $0.0001 par value; 200,000,000 shares authorized; 62,600,583 and 62,413,929, respectively, issued, and outstanding	6,260		6,241
Additional paid-in capital	149,383,201		149,143,567
Accumulated deficit	(80,909,405)		(78,103,066)
Accumulated other comprehensive income (loss)	(654,615)		(780,795)
Total stockholders’ equity	67,825,441		70,265,947
Total liabilities and stockholders’ equity	$	82,264,372	$	85,674,890

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.

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IZEA Worldwide, Inc.

Unaudited Consolidated Statements of Operations


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016				Three Months Ended March 31,
															2023		2022
Revenue	$	8,154,674		$	7,496,972		$	21,337,401		$	19,876,611		Revenue		$	8,737,722	$	8,890,336
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:
Costs and expenses:													Costs and expenses:
Cost of revenue													Cost of revenue		5,960,162		5,179,724
Sales and marketing													Sales and marketing		2,404,551		2,520,343
General and administrative	2,687,266			2,454,555			8,021,420			7,559,302			General and administrative		3,403,608		3,502,435
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
Depreciation and amortization													Depreciation and amortization		346,262		138,829
Total costs and expenses													Total costs and expenses		12,114,583		11,341,331

Loss from operations	(633,215		)	(1,469,149		)	(4,747,067		)	(5,686,390		)	Loss from operations		(3,376,861)		(2,450,995)

Other income (expense):													Other income (expense):
Interest expense	(15,058		)	(25,511		)	(45,406		)	(58,261		)	Interest expense		(1,564)		(965)
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		)	Other income (expense), net		572,086		(24,283)
Total other income (expense), net	74,410			(42,454		)	22,444			(44,178		)
Other income (expense), net													Other income (expense), net		570,522		(25,248)

Net loss	$	(558,805	)	$	(1,511,603	)	$	(4,724,623	)	$	(5,730,568	)	Net loss		$	(2,806,339)	$	(2,476,243)

Weighted average common shares outstanding – basic and diluted	5,702,297			5,420,020			5,659,423			5,357,119			Weighted average common shares outstanding – basic and diluted		62,447,538		62,065,768
Basic and diluted loss per common share	$	(0.10	)	$	(0.28	)	$	(0.83	)	$	(1.07	)	Basic and diluted loss per common share		$	(0.04)	$	(0.04)

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

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IZEA Worldwide, Inc.

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


	Three Months Ended March 31,
		2023		2022
Net loss		$	(2,806,339)	$	(2,476,243)

Other comprehensive income
Unrealized gain (loss) on securities held		126,180		—
Total other comprehensive income (loss)		126,180		—

Total comprehensive income (loss)		$	(2,680,159)	$	(2,476,243)

Common Stock
Additional
Paid-In
Accumulated
Total
Stockholders’
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
Stock issued for payment of services 42,968
5
130,519
—
130,524
Stock issuance costs —
—
(10,913 ) —
(10,913 )
Stock-based compensation —
—
509,642
—
509,642
Net loss —
—
—
(4,724,623 ) (4,724,623 )
Balance, September 30, 2017 5,709,626
$ 571
$ 52,370,539
$ (46,534,344 ) $ 5,836,766

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

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IZEA Worldwide, Inc.

Unaudited Consolidated Statements of ~~Cash Flows~~

Stockholders’ Equity

Nine Months Ended
September 30,
2017 2016
Cash flows from operating activities:
Net loss $ (4,724,623 ) $ (5,730,568 )
Adjustments to reconcile net loss to net cash used for operating activities:

Depreciation and amortization 163,597
190,338
Amortization of software development costs and other intangible assets 932,234
744,725
Gain on disposal of equipment (5,462 ) (484 )
Provision for losses on accounts receivable 44,827
155,000
Stock-based compensation 509,642
576,144
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:

Accounts receivable (1,552,555 ) (472,612 )
Prepaid expenses and other current assets (84,798 ) (51,792 )
Accounts payable 242,033
263,706
Accrued expenses 679,104
(142,156 )
Unearned revenue 435,054
161,967
Deferred rent (25,764 ) (2,948 )
Net cash used for operating activities (3,227,788 ) (4,215,808 )

Cash flows from investing activities:
Purchase of equipment (7,762 ) (121,651 )
Increase in software development costs (85,460 ) (304,790 )
Acquisition, net of cash acquired —
(329,468 )
Security deposits 4,309
(42,637 )
Net cash used for investing activities (88,913 ) (798,546 )

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

Cash and cash equivalents, end of period $ 3,447,998
$ 6,598,901

Supplemental cash flow information:

Cash paid during the period for interest $ 29,700
$ 21,230

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


	Common Stock			Additional Paid-In		Accumulated		Accumulated Other Comprehensive		Total Stockholders’
	Shares	Amount		Capital		Deficit		Income (Loss)		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		Accumulated Other Comprehensive		Total Stockholders’
	Shares	Amount		Capital		Deficit		Income (Loss)		Equity
Balance, December 31, 2022	62,413,929	$	6,241	$	149,143,567	$	(78,103,066)	$	(780,795)	$	70,265,947
Stock purchase plan & option exercise issuances	—	—		65,581		—		—		65,581
Stock issued for payment of services	115,225	11		74,989		—		—		75,000
Stock-based compensation	116,972	12		129,931		—		—		129,943
Shares withheld to cover statutory taxes	(45,543)	(4)		(30,867)		—		—		(30,871)
Other comprehensive income (loss)	—	—		—		—		126,180		126,180
Net comprehensive income (loss)	—	—		—		(2,806,339)		—		(2,806,339)
Balance, March 31, 2023	62,600,583	$	6,260	$	149,383,201	$	(80,909,405)	$	(654,615)	$	67,825,441

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

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IZEA Worldwide, Inc.

Unaudited Consolidated Statements of Cash Flows


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	(2,806,339)	$	(2,476,243)
Adjustments to reconcile net income (loss) to net cash used for operating activities:
Impairment of digital assets	—		62,976
Depreciation	18,786		32,933
Amortization	327,476		105,896
Stock-based compensation	195,524		117,192
Value of stock issued for payment of services	75,000		31,223
(Gain)/Loss on disposal of equipment	—		(663)
Changes in operating assets and liabilities:
Accounts receivable	(257,740)		339,213
Prepaid expenses and other current assets	1,053,159		(1,728,607)
Accounts payable	499,710		(228,677)
Accrued expenses	(149,489)		(416,505)
Contract liabilities	(1,392,966)		1,434,456
Net cash used for operating activities	(2,436,879)		(2,726,806)
Cash flows from investing activities:
Purchase of short term investments	(75,492,435)		—
Proceeds from the sale of short term investments	74,159,649		—

Proceeds from the sale of long term investments	5,560,083		—
Purchase of property and equipment, net	(47,429)		(29,150)
Proceeds from sale of property and equipment	—		663
Increase in software development costs	(156,868)		(99,426)
Net cash used for investing activities	4,023,000		(127,913)
Cash flows from financing activities:
Proceeds from exercise of stock options & ESPP issuances	—		6,700
Payments on notes payable and capital leases	—		(9,179)
Payments on shares withheld for statutory taxes	(30,871)		(17,251)
Net cash provided by financing activities	(30,871)		(19,730)

Net increase (decrease) in cash and cash equivalents	1,555,250		(2,874,449)
Cash and cash equivalents, beginning of period	24,600,960		75,433,295
Cash and cash equivalents, end of period	$	26,156,210	$	72,558,846

Supplemental cash flow information:
Interest paid	$	1,399	$	1,894

Non-cash financing and investing activities:
Equipment acquired with financing arrangement	$	61,224	$	—
Fair value of common stock issued for future services	$	75,000	$	125,000

See accompanying notes to the consolidated financial statements.

IZEA Worldwide, Inc.

Notes to the ~~Unaudited~~ Consolidated Financial Statements

NOTE 1. COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~Unaudited Interim~~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 its 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 the Company’s marketers. During 2022, we re-engineered our influencer marketing platform to align more closely with user requirements, announcing the initial rollout of IZEA Flex (“Flex”) in September 2022, and we announced the commercial launch of Flex in January 2023. Flex, which introduces end-to-end tracking of social commerce, enabling influencer impact at scale, includes eight modules allowing pricing plans that meet a range of users, will replace IZEAx as our primary platform. IZEAx will be sunset in the second quarter of 2023.

Flex is designed with flexibility as a core tenet, allowing marketers to use any combination of independent applications as they see fit. The result is a comprehensive suite of tools that, individually, supercharge influencer marketing efforts and become even more powerful when combined. Flex offers eight core modules: Discover, ContentMine, ShareMonitor, Integrations, Tracking Links, Contacts, Transactions, and Campaigns.

Flex allows marketers to easily measure the impact of individual influencers on e-commerce revenue at scale, and integrates key functions of The Creator Marketplace on IZEA.com. Modules in Flex include Discover, which allows marketers to search through content from millions of influencer social profiles while filtering across channels, demographics, and interests; ContentMine, a content management tool that collects and measures influencer content, providing real-time insights and A.I. content analysis from BrandGraph; ShareMonitor, a multi-platform social monitoring tool that allows marketers to monitor hashtags, keywords and brand mentions across leading social platforms; Integrations provides deep integrations such as with Google Analytics and Shopify, providing marketers the capability to track influencer campaign metrics such as time on site, engagement and revenue; and, Tracking Links provides real-time tracking metrics for influencer marketing and can track customer conversions, spend, and purchases when used with other Flex modules.

In 2020, we launched two platforms, BrandGraph and Shake. BrandGraph is a social media intelligence platform that is heavily integrated with IZEAx and now Flex, which relies largely on data from the other platforms but is also available as a stand-alone platform. 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, which was sunset in October of 2022 in conjunction with the launch of The Creator Marketplace, which replaces and improves upon Shake’s functionality. Shake was aimed at digital creatives seeking freelance “gig” work. Creators listed available “Shakes” on their accounts in the platform and marketers could select and purchase creative packages from them through a streamlined chat experience, assisted by ShakeBot - a proprietary, artificial intelligence assistant.

In October 2022, we launched The Creator Marketplace (“Marketplace”) on IZEA.com, which provides powerful tools for creators to showcase their social handles and the brands and topics they post about, and marketers to easily search and filter creator listing that meet requirements of their influencer marketing campaigns, including creator specific predictive audience demographics. Marketplace features include Casting Calls, which give marketers and creators a two-way marketplace to connect and collaborate; marketers use Casting Calls to solicit creators for everything from influencing campaigns to full-time employment; creators respond directly to Casting Calls with video and text responses.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial ~~Information~~Statements

Basis of Presentation

The accompanying consolidated balance sheet as of ~~September 30, 2017,~~March 31, 2023, the consolidated statements of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016,~~2022, the consolidated ~~statement~~statements of comprehensive loss for the three months ended March 31, 2023 and 2022, the consolidated statements of stockholders' equity for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and 2022, and the consolidated statements of cash flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022 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~~2022 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, 2023 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~~2022, included in the Company's Annual Report on Form 10-K filed with the SEC on March ~~28, 2017.~~

~~Nature of Business~~

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

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.

31, 2023.

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 consolidated~~Preparing financial statements ~~were prepared using~~that conform with GAAP may require management to make estimates and assumptions that affect the ~~acquisition method~~reported amounts of ~~accounting with IZEA considered the accounting acquirer of Ebyline and ZenContent. Under the acquisition method of accounting, the purchase price is allocated 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.~~

and disclose 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.

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 a maximum of $250,000 at each bank. The CDIC insures deposits made to the Company bank accounts in Canada up to CAD 100,000. Deposit balances exceeding these limits were approximately $25.6 million and $24.4 million as of March 31, 2023, and December 31, 2022, respectively.

Investment in Debt Securities

Our investments in debt securities are carried at either amortized cost or fair value. The cost basis is determined by the specific identification method. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading debt securities as well as realized gains and losses on available-for-sale debt securities are included in net income. Unrealized gains and losses, net of tax, on available-for-sale debt securities are included in our consolidated balance sheet as a component of accumulated other comprehensive income (loss).

Accounts Receivable and Concentration of Credit Risk

~~Accounts~~The Company’s accounts receivable balance consists of trade receivables and a reserve for credit losses. Trade receivables are customer obligations due under normal trade terms. ~~Uncollectability~~The Company had net trade receivables of ~~accounts receivable is not significant since most customers are bound by contract and are required to fund the~~$5.9 million at March 31, 2023. 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 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. $5.7 million at December 31, 2022.

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 deemed 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 for credit losses of ~~$220,000 and $237,000 for doubtful accounts~~$155,000 as of ~~September 30, 2017~~March 31, 2023, and December 31, ~~2016, respectively.~~2022. 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~~The Company did not recognize any bad debt expense ~~was less than 1%~~for either of ~~revenue for~~ the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~.2022.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Concentrations of credit risk with respect to accounts receivable ~~are~~have been typically limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. However, with the Company’s addition of SaaS customers, it 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 ~~accounted for 14% of total accounts receivable at September 30, 2017 and no customers that~~each accounted for more than 10% of total accounts receivable at March 31, 2023, and three customers that each accounted for more than 10% of total accounts receivable at December 31, ~~2016.~~2022. The Company had one customer that accounted for ~~11%~~more than 10% of its ~~revenue~~gross billings during the three months ended ~~September 30, 2017~~March 31, 2023 and nothree customers that each 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, 2022.

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~~operations.

Goodwill

Goodwill represents the excess of the consideration transferred for an acquired business over the fair value of the underlying identifiable net assets. The Company has goodwill in connection with its acquisitions of Ebyline, ZenContent, and 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 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 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 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, referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available, (ii) engage in business activities, and (iii) whether a segment manager regularly reviews the 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 had one reporting unit as of March 31, 2023. No indicators were present and no impairment was ~~$50,168 and $65,106 for~~recorded during 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 DecemberMarch 31, ~~2016, respectively.~~

2023.

Intangible Assets

The Company acquired the ~~majority~~most of its intangible assets through its ~~acquisition~~acquisitions of Ebyline, ~~on January 30, 2015~~ZenContent, and ~~its acquisition of ZenContent on July 31, 2016. The Company is amortizing~~TapInfluence, and amortized the identifiable intangible assets over ~~a period~~periods of 12 to 60 months. See Note 34 for further details.

The Company accounts for its digital assets held as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. The Company maintains ownership of and control over its digital assets and may use third-party custodial services to secure them. Digital assets are initially recorded at cost and evaluated for any impairment losses incurred since acquisition. The Company did not recognize any impairment of digital assets during the three months ended March 31, 2023. The Company recognized an impairment of $62,976 on digital assets during the three months ended March 31, 2022.

~~Management~~The Company 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 assets fair value ~~of an asset~~ and ~~its~~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~~depend upon management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in ~~their~~

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

their estimates of fair value. ~~For the three and nine months ended September 30, 2017 and 2016, there were no~~The Company did not recognize any impairment charges associated with the ~~Company's long-lived assets.~~

Company’s acquired intangible assets during the three months ended March 31, 2023 and 2022.

Software Development Costs

In accordance with Accounting Standards Codification ~~("ASC"~~(“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 the Company ~~amortizes~~capitalizes certain internal-use software development costs ~~equally~~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 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 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 5the estimated useful life of five years upon initial ~~launch~~release of the software or additional features. ~~See Note 4~~The Company reviews the software development costs for ~~further details.~~

~~Goodwill~~

~~Goodwill represents~~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 ~~the purchase consideration of an acquired business~~carrying value over the fair value in its consolidated statements of operations. See Note 5 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 ~~underlying net tangible and intangible assets.~~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 ~~has goodwill in connection~~does not record leases on the balance sheet with ~~its acquisition~~a lease term of Ebyline and ZenContent. 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 the amount of impairment during the fiscal quarter in which the determination is made.

~~The Company performs its annual impairment tests of goodwill during the fourth quarter of each year,~~12 months or ~~more frequently, if certain indicators are present. Goodwill is required to be tested for impairment~~less 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; (ii) engage in business activities; and (iii) whether a segment manager regularly reviews the 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 the acquisition of Ebyline and ZenContent, it had, and continues to have, one reporting unit.

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 platforms (“Marketplace Spend Fees”); (3) revenue from license and subscription fees charged to access ourplatforms (“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 agents or principals 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 several 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 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 is being performed.~~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

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

or a cancellation fee if the customer cancels the agreement before 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.

Managed Services Revenue

For Managed Services Revenue, the Company enters into ~~an agreement~~agreements 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~~videos. Marketers typically purchase influencer marketing services to provide public awareness or advertising buzz regarding the marketer’s brand and purchase custom content for internal and external use.

The Company views its obligation to deliver influencer marketing services, including management services, as a single performance obligation that ~~a publisher or other marketer can use.~~is 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 Company may provide one type or a combination of all types of these ~~deliverables including a management fee~~influencer marketing services on a statement of work for a lump sum fee. When multiple types of performance obligations exist in a contract, the Company allocates revenue to each distinct performance obligation at contract 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 is considered delivered once the~~The delivery of custom content ~~has been delivered to the customer or once the content~~represents a distinct performance obligation that is ~~distributed live through~~satisfied at a ~~public or social network. Revenue is accounted for separately on~~point in time when each piece of ~~the deliverables depending on the type of service provided. The Company recognizes 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 when the 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 platforms to provide ~~a portion of the services, it may agree with the customer to provide a different type of service~~ and/or ~~to provide a credit~~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 to 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 customers limited, non-exclusive, non-transferable access to the ~~service is performed or at~~Company’s technology platforms for an agreed-upon subscription period. Customers access the ~~time an account becomes dormant or is cashed out. Service Fee Revenue~~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.~~incurred. Advertising costs charged to operations for the three months ended ~~September 30, 2017~~March 31, 2023, and ~~2016~~2022 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~~,$0.5 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~~twelve 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 based on the statute of limitations by the ~~Internal Revenue Service are 2013, 2014~~IRS is generally three years; however, the IRS may examine records 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~~evidence from the ~~host contract, and recorded on~~year 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~~net 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, 2016loss was ~~$0. During the three and nine months ended September 30, 2016,~~generated when the Company ~~recorded a gain of $1,231 and $4,960, respectively, due~~utilizes net operating loss carryforwards in future periods. The tax years subject to examination by the ~~change in the fair value of its warrant liability.~~

Canadian Revenue Agency is generally four years.

Fair Value of Financial Instruments

The ~~Company’s~~Company records investments in financial instruments ~~are recorded~~ at fair ~~value. Fair~~ value, which 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, 2023, the Company ~~does not have any~~holds Level 1 orand Level 2 financial ~~assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted~~assets; this is discussed further in Note 2 - Financial Instruments 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~~Notes 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.

Consolidated Financial Statements.

Stock-Based Compensation

Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan, ~~and 2011 B Equity Incentive Plan (together, the "2011 Equity Incentive Plans")~~as amended, (see Note 6)9) 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.~~grant as the associated fair value of its common stock. The Company estimates the volatility of its 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 itself. The Company determines~~its stock during the ~~expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures.~~period. 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, 2023, and ~~2016~~:

2022:

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements


	Three Months Ended		Nine Months Ended			Three Months Ended March 31,
2011 Equity Incentive Plans Assumptions	September 30, 2017	September 30, 2016	September 30, 2017	September 30, 2016	2011 Equity Incentive Plans Assumptions		2023	2022
Expected term	6 years	6 years	6 years	6 years	Expected term		5 years	6 years
Weighted average volatility	43.08%	45.02%	43.49%	50.01%	Weighted average volatility		121.95%	120.48%
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		1.72%	1.70%
Expected dividends	—	—	—	—	Expected dividends		—	—
Weighted average expected forfeiture rate					Weighted average expected forfeiture rate		37.00%	37.00%

~~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~~adjusts the 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 9 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, 2023, 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 Accounting Pronouncements~~

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 is required for lessees for capital~~As of March 31, 2023, the Company does not have any significant amounts of loans, receivables, and ~~operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the~~debt securities with expected credit losses and this guidance has not had a material impact on its financial ~~statements, with certain practical expedients available.~~statements. The Company ~~is currently evaluating~~will recognize any future expected credit losses as a provision for credit losses on the ~~impact that this ASU will have~~income statement, as needed.

NOTE 2. FINANCIAL INSTRUMENTS

Cash, Cash Equivalents, and Marketable Securities (Available for Sale)

Per a revised investment strategy policy, the Company engaged a third party registered investment advisor and appointed a leading national bank for custody services with respect to investment securities, making an initial deposit of $60 million on ~~its consolidated financial statements.~~April 18, 2022. Investments comply with the Company’s revised investment strategy policy, designed to preserve capital, minimize investment risks, and maximize returns.

~~In August 2016,~~The following table shows the ~~FASB issued ASU 2016-15,~~ ~~Statement~~Company’s cash, cash equivalents, and marketable securities by significant investment category as 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 for classification. The new standard is effective for fiscal years beginning after December 15, 2017. The Company is currently evaluating the impact that this ASU will have on its consolidated financial statements.

~~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.

March 31, 2023:

IZEA Worldwide, Inc.

Notes to the ~~Unaudited~~ Consolidated Financial Statements


	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and Cash Equivalents		Current Marketable Securities (1)		Non-Current Marketable Securities (2)
Cash	$	6,780,791	$	—	$	—	$	6,780,791	$	6,780,791	$	—	$	—
Level 1 (3)
Commercial paper	19,377,951		2,218		(4,750)		19,375,419		19,375,419		—		—
US Treasury securities	12,044,919		58,862		(206,439)		11,897,342		—		4,980,648		6,916,694
Subtotal	31,422,870		61,080		(211,189)		31,272,761		19,375,419		4,980,648		6,916,694
Level 2 (4)
Asset backed securities	9,192,459		40,850		(154,691)		9,078,618		—		3,753,559		5,325,059
Corporate debt securities	20,716,415		84,167		(474,832)		20,325,750		—		8,683,980		11,641,770
Subtotal	29,908,874		125,017		(629,523)		29,404,368		—		12,437,539		16,966,829
Total	$	68,112,535	$	186,097	$	(840,712)	$	67,457,920	$	26,156,210	$	17,418,187	$	23,883,523

~~NOTE 2. BUSINESS ACQUISITIONS~~(1) Current Marketable Securities have a holding period under one year.

(2) Non-Current Marketable Securities have a holding period over one year. The securities held by IZEA Worldwide, Inc. mature between one and five years.

~~EBYLINE, INC.~~(3) Level 1 fair value estimates are based on quoted prices in active markets for identical assets and liabilities.

~~On January 30, 2015,~~(4) Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets and liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the ~~Company purchased all~~full term 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~~assets and ~~among IZEA, Ebyline and the stockholders of Ebyline (the “Ebyline Stock Purchase Agreement”) for a maximum purchase price of $8,850,000.~~ liabilities.

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%. Interest 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 reducedrecords 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~~cash equivalents 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~~marketable securities on the ~~date~~balance sheet. The adjusted cost, which includes unrealized gains and losses, reflects settlement amounts if all investments are held to maturity. The Company did not recognize any realized gains (net 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~~losses) for the three months ended ~~September 30, 2017.~~ March 31, 2023. Realized gains and losses are a component of other income (expense), net. Unrealized gains and losses are a component of other comprehensive income (loss) (“OCI”).

The ~~ZenContent operations contributed revenue~~following table summarizes the estimated fair value of ~~$3,070,697~~investments in marketable debt securities by stated contractual maturity dates:


	March 31, 2023		December 31, 2022
Due in 1 year or less	$	17,418,187	$	16,106,758
Due in 1 year through 5 years	23,883,523		29,296,069
Total	$	41,301,710	$	45,402,827

The following table presents fair values and ~~gross profit~~net unrealized gains (losses) recorded to OCI, aggregated by investment category:


	March 31, 2023				December 31, 2022
	Fair Value		Net Unrealized Gain (Loss)		Fair Value		Net Unrealized Gain (Loss)
Cash and cash equivalents	$	26,156,210	$	(2,532)	$	24,600,960	$	(2,131)
Government bonds	11,897,342		(147,577)		11,765,597		(206,439)
Corporate debt securities	20,325,750		(390,665)		21,618,613		(417,649)
Asset backed securities	9,078,618		(113,841)		12,018,617		(154,576)
Total	$	67,457,920	$	(654,615)	$	70,003,787	$	(780,795)

During the three months ended March 31, 2023, the Company did not recognize any significant credit losses and had no ending allowance balance for credit losses.

NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consist of ~~$1,930,281~~the following:


	March 31, 2023		December 31, 2022
Furniture and fixtures	$	29,848	$	—
Office equipment	3,843		3,843
Computer equipment	408,156		323,700
Total	441,847		327,543
Less accumulated depreciation	(183,696)		(170,769)
Property and equipment, net	$	258,151	$	156,774

Depreciation expense on property and equipment recorded in depreciation and amortization expense in the consolidated ~~statement~~statements 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~~comprehensive loss was $18,786 and $32,933 for the three ~~and nine~~ months ended ~~September 30, 2016. There are $29,621~~March 31, 2023 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, 2016,2022, respectively.

NOTE 3.4. INTANGIBLE ASSETS

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


	March 31, 2023				December 31, 2022
	Balance		Accumulated Amortization		Balance		Accumulated Amortization		Useful Life (in years)
Content provider networks	$	160,000	$	160,000	$	160,000	$	160,000	2
Trade names	87,000		87,000		87,000		87,000		1
Developed technology	820,000		820,000		820,000		820,000		5
Self-service content customers	2,810,000		2,810,000		2,810,000		2,810,000		3
Managed content customers	2,140,000		2,140,000		2,140,000		2,140,000		3
Domains	166,469		166,469		166,469		166,469		5
Embedded non-compete provision	28,000		28,000		28,000		28,000		2
Total definite-lived intangible assets	$	6,211,469	$	6,211,469	$	6,211,469	$	6,211,469
Digital assets	64,953		—		64,953		—		Indefinite
Total intangible assets	$	6,276,422	$	6,211,469	$	6,276,422	$	6,211,469

Accumulated Amortization Useful Life (in years)
Balance September 30, 2017 December 31, 2016
Content provider networks $ 160,000
$ 105,833
$ 57,083
1
Trade names 52,000
52,000
45,000
1
Developed technology 530,000
213,667
134,167
3
Self-service content customers 210,000
186,667
134,167
5
Managed content customers 2,140,000
1,727,222
1,192,222
3
Domains 166,469
58,264
33,294
5
Total identifiable intangible assets $ 3,258,469
$ 2,343,653
$ 1,595,933

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:


	March 31, 2023		December 31, 2022
Ebyline Intangible Assets	$	2,370,000	$	2,370,000
ZenContent Intangible Assets	722,000		722,000
Domains	166,469		166,469
TapInfluence Intangible Assets	2,953,000		2,953,000
Digital Assets	64,953		64,953
Total	$	6,276,422	$	6,276,422
Less accumulated amortization	(6,211,469)		(6,211,469)
Intangible assets, net	$	64,953	$	64,953

September 30,
2017 December 31,
2016
Ebyline Intangible Assets $ 2,370,000
$ 2,370,000
ZenContent Intangible Assets 722,000
722,000
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

~~The Company is amortizing~~There were no impairment charges associated with the Company’s identifiable intangible assets, ~~over a weighted average period of~~other than digital assets mentioned below, in the three ~~years. Amortization~~months ended March 31, 2023 and 2022.

No amortization expense related to intangibles was recorded in ~~general~~depreciation and ~~administrative expense~~amortization in the accompanying consolidated statements of operations ~~was $247,907~~ and ~~$229,934~~comprehensive loss for the three months ended ~~September 30, 2017~~March 31, 2023, and ~~2016,~~2022, respectively. ~~Amortization~~

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

During the three months ended March 31, 2023 and 2022, the Company did not purchase, receive, or sell any digital assets. No impairment of the Company’s digital assets was required in the three months ended March 31, 2023. The Company impaired the value of its digital assets by $62,976 in the three months ended March 31, 2022 as the fair market value decreased from its carrying value. The impairment of digital assets is presented as a non-cash operating expense ~~recorded in~~within general and administrative ~~expense in~~on the ~~accompanying~~ consolidated statements of operations and comprehensive loss. The fair market value of such digital assets held as of March 31, 2023, was ~~$747,720~~$64,953.

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 ~~$615,748~~the price determined.

Impairment losses on digital assets are recognized within general and administrative expenses in the consolidated statements of operations and 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.

The Company performs an annual impairment assessment of goodwill in October each year, or more frequently, if certain indicators are present. As of ~~September 30, 2017, future estimated amortization expense related to identifiable intangible assets over~~March 31, 2023, the ~~next five years is set forth in the following schedule:~~Company determined that no goodwill impairment existed.

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 4.5. SOFTWARE DEVELOPMENT COSTS

Software development costs consists of the following:


	March 31, 2023		December 31, 2022
Software development costs	$	4,666,672	$	4,509,805
Less accumulated amortization	(3,063,247)		(2,735,772)
Software development costs, net	$	1,603,425	$	1,774,033

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. In 2022, the Company developed two new web-based influencer marketing platforms, Flex and Marketplace. These new platforms will replace IZEAx and Shake. IZEAx will be sunset in the second quarter of 2023 and Shake was sunset in the fourth quarter of 2022. The Company ~~continues to add new features~~capitalized software development costs of $156,868 and ~~additional functionality to this platform each year. These new features will enable~~ ~~IZEAx~~ ~~to facilitate~~$99,426 during the ~~contracting, workflow,~~three months ended March 31, 2023, and ~~delivery of direct content as well as provide for invoicing, collaborating, and direct payments for the Company's software as a service ("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.~~2022, respectively. As a result, the Company has capitalized ~~$1,578,125~~a total of $4,666,672 in direct materials, consulting, payroll, and benefit costs to its internal-use software development costs in the consolidated balance sheet as of ~~September 30, 2017.~~ March 31, 2023.

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~~in service, or its actual useful life, if shorter. The Company recorded amortization expense onassociated with its capitalized software development ~~costs recorded in general~~cost of $327,476 and ~~administrative expense in the accompanying consolidated statements of operations was $76,890 and $44,549 for~~$105,896 during the three months ended ~~September 30, 2017~~March 31, 2023, 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 2016,2022, respectively.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

As of ~~September 30, 2017,~~March 31, 2023, 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
2023	$	258,492
2024	349,690
2025	334,494
2026	328,745
2027	294,710
2028	$	37,294
Total	$	1,603,425

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~~6. ACCRUED EXPENSES

Accrued expenses consist of the following:

~~Credit Agreement~~


	March 31, 2023		December 31, 2022
Accrued payroll liabilities	$	1,755,905	$	1,967,677
Accrued taxes	64,395		39,405
Current portion of finance obligation	69,806		42,858
Accrued other	118,054		80,762
Total accrued expenses	$	2,008,160	$	2,130,702

NOTE 7. NOTES PAYABLE

Finance Obligation

The Company ~~has a secured credit facility agreement with Western Alliance Bank,~~pays for its laptop computer equipment through long-term payment plans, using an imputed interest rate of 12.9%, based on its incremental borrowing rate, to determine the parent company of Bridge Bank, N.A. of San Jose, California, which it obtained on March 1, 2013 and expanded on April 13, 2015. Pursuant to this agreement, the Company may submit requests for funding up to 80%present value of its ~~eligible accounts receivable up~~financial obligation and 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 requires 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 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, the Company had $810,376 outstanding under this line of credit agreement. The Company had no advances outstanding under this agreement as of December 31, 2016. As of September 30, 2017, 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.

~~The annual fees are capitalized in the Company's consolidated balance sheet within other current assets and are amortized to~~record interest expense over ~~one year.~~the term of the plan. The Company ~~amortized $5,250~~refreshed a portion of its computer inventory during the fourth quarter of 2022 and ~~$8,750~~in the first quarter of 2023, entering into two new three-year payment plans with the ~~annual costs through interest~~same vendor. The total balance owed was $177,765 and $105,031 as of March 31, 2023, and December 31, 2022, respectively, with the short-term portion of $69,806 and $42,858 recorded under accrued expenses in the consolidated balance sheets as of March 31, 2023, and December 31, 2022, respectively.

Summary

Interest expense on financing arrangements recorded in the Company’s unaudited consolidated statements of operations was $1,564 and $965 during the three months ended ~~September 30, 2017~~March 31, 2023, and ~~2016,~~2022, respectively. As of March 31, 2023, the future contractual maturities of the Company’s long-term payment obligations by year is set forth in the following schedule:


2023	$	54,960
2024	59,386
2025	56,683
2026	6,736
Total	$	177,765

NOTE 8. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company ~~amortized $15,750 and $14,546~~has no operating or finance leases greater than 12 months in duration, or any leasehold rent or operating lease expenses as of March 31, 2023.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

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, or fully vest upon the age of 60. Total expense for employer matching contributions during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023, and ~~2016, respectively. The remaining value~~2022 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, 2023		March 31, 2022
Cost of revenue		$	24,633	$	29,073
Sales and marketing		15,617		43,732
General and administrative		35,952		44,762
Total contribution expense		$	76,202	$	117,567

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~~any such litigation that 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'~~9. 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~~Equity Incentive Plans

~~On January 6, 2016,~~In May 2011, the Company’s Board of Directors (the “Board”) adopted the 2011 Equity Incentive Plan of IZEA Worldwide, Inc. (as amended, the “2011 Equity Incentive Plan”). The Company’s stockholders approved an amendment and restatement of the 2011 Equity Incentive Plan at the Company’s 2020 Annual Meeting of Stockholders held on December 18, 2020, to allow the Company ~~filed a Certificate of Amendment with the Secretary of State of Nevada~~ to ~~effect a reverse~~award restricted stock, ~~split of the issued~~restricted stock units, and ~~outstanding shares of its common~~ stock ~~at a ratio of one share for every 20 shares outstanding prior~~options covering up to the effective date of the reverse stock split. All current 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 outstanding7,500,000 shares of common stock ~~that became market effective on January 11, 2016. There was no change in~~as incentive compensation for its employees and consultants. As of March 31, 2023, the ~~number of the Company's authorized shares of common stock.~~

~~Nasdaq Uplisting~~

~~On January 26, 2016, the Company's~~Company had 2,128,141 remaining shares of common stock ~~commenced trading on the Nasdaq Capital Market~~available for issuance pursuant to future grants under the ~~symbol IZEA. Prior thereto,~~2011 Equity Incentive Plan.

Restricted Stock

Under the ~~Company's common~~2011 Plan, the Board determines the terms and conditions of each restricted stock ~~was quoted on the OTCQB marketplace under the same symbol.~~issuance, including any future vesting restrictions.

~~Stock Issued for Purchases~~

~~As further discussed in Note 2,~~In 2022, the Company issued ~~31,821~~its five independent directors a total of 105,930 shares of ~~its~~restricted common stock to satisfy 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 $848,832initially valued at $125,000 for their annual ~~guaranteed payment of $938,532 less $89,700 in closing related expenses owed~~service as ~~part~~directors of the ~~Ebyline Stock Purchase Agreement and on~~Company. The stock vested in equal monthly installments from 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.through December 2022.

~~Stock Issued for Services~~

The Company issued its five independent directors a total of ~~32,385~~115,225 shares of restricted common stock ~~initially~~ valued at ~~$93,750~~$75,000 for their quarterly service as directors of the Company, ~~during~~which vested on the ~~nine months~~ ~~ended September 30, 2017. The stock vested monthly from January through September 2017. On February 12, 2017,~~March 31, 2023 grant date.

IZEA Worldwide, Inc.

Notes to 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.Consolidated Financial Statements

The following table contains summarized information about ~~nonvested~~ restricted stock ~~outstanding~~issued during the ~~nine months~~years ended ~~September 30, 2017:~~December 31, 2022 and March 31, 2023:


Restricted Stock	Common Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2021	3,553	$	1.83	0.7
Granted	105,930	1.18
Vested	(109,197)	1.20
Nonvested at December 31, 2022	286	$	1.34	0.3
Granted	115,225	0.65
Vested	(115,511)	0.65
Nonvested at March 31, 2023	—	$	—	0

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.

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~~Expense recognized ~~for stock-based payments~~on restricted stock issued to directors for services was $75,000 and $31,223 during the three months ended ~~September 30, 2017~~March 31, 2023, and ~~2016~~2022, respectively. Expense recognized on restricted stock issued to employees was ~~$60,074~~$376 and ~~$34,969, respectively. Total expense recognized for stock-based payments for services~~$3,829 during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023, and ~~2016 was $143,536 and $107,439,~~2022, respectively. ~~The~~

On March 31, 2023, the fair value of the ~~services is based~~Company’s common stock was approximately $0.65 per share and the intrinsic value on the ~~value~~non-vested restricted stock was $0. Future compensation expense related to issued, but non-vested, restricted stock awards as of March 31, 2023, is $0.

Restricted Stock Units

The Company’s Board of Directors determine the terms and conditions of each restricted stock unit award issued under the 2011 Equity Incentive Plan.

The Company issued a total of 284,249 restricted stock units initially valued at $202,886 to non-executive employees as additional incentive compensation. The restricted stock units vest between 12 and 36 months from issuance. The Company issued a total of 46,041 restricted stock units initially valued at $25,000 to executive employees as additional incentive compensation during the three months ended March 31, 2023. The restricted stock units have varying vesting schedules ranging from one to four years, depending on the executive’s employment contract. A small subset of the ~~Company's common~~restricted stock ~~over~~units have 100% cliff vesting one year from issuance.

The following table contains summarized information about restricted stock units during the ~~term of service. The Company~~year ended December 31, 2022 and the three months ended March 31, 2023:


Restricted Stock Units	Common Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2021	375,444	$	0.96	1.8
Granted	1,375,583	0.97
Vested	(252,751)	0.88
Forfeited	(181,123)	1.22
Nonvested at December 31, 2022	1,317,153	$	0.95	2.5
Granted	330,290	0.69
Vested	(116,686)	0.94
Forfeited	(92,259)	0.89
Nonvested at March 31, 2023	1,438,498	$	0.89	2.4

Expense recognized ~~a gain of $45,160~~on restricted stock units issued to employees was $129,566 and ~~$36,122 as a change in~~$42,624 during the three months ended March 31, 2023, and 2022, respectively. On March 31, 2023, the fair value of ~~derivatives during~~ the ~~three~~Company’s common stock was

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

approximately $0.65 per share and ~~nine months ended September 30, 2017, based~~the intrinsic value on the ~~change between~~non-vested restricted units was $936,319. Future compensation related to 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~~non-vested restricted stock units as of ~~September 30, 2017~~March 31, 2023, is ~~$23,110,~~$1,112,132 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~~estimated to be recognized over the ~~remaining individual~~weighted-average vesting ~~periods up to 46 months.~~period of approximately 2.4 years.

Stock Options

~~In May 2011, the Board of Directors adopted~~Under the 2011 Equity Incentive Plan, of IZEA, Inc. (the “May 2011 Plan”). At the Company's 2017 Annual Meeting of Stockholders held on June 21, 2017, the stockholders approved the amendment and restatement of the May 2011 Plan which increased the number of shares of common stock available for issuance under the May 2011 Plan by 500,000 shares. The amended May 2011 Plan allows the Company 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 Plan.~~

~~On 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. As of~~ ~~September 30, 2017, the Company had 1,875 shares of common stock available for future grants under the August 2011 Plan.~~

~~Under both the May 2011 Plan and the August 2011 Plan (together, the "2011 Equity Incentive Plans"),~~ 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 employee compensation strategy toward restricted stock units, the Compensation Committee of 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. 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~~years ended December 31, ~~2016~~2022, and ~~the nine months ended September 30, 2017,~~March 31, 2023, is presented below:


Options Outstanding	Common Shares	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)
Outstanding at December 31, 2021	1,795,663	$	2.79	6.4
Granted	125	1.15
Exercised	(71,086)	0.25
Expired	(37,463)	5.36
Forfeited	(22,075)	3.29
Outstanding at December 31, 2022	1,665,164	$	2.83	5.3
Granted	—	—
Exercised	—	—
Expired	(21)	0.32
Forfeited	(53,845)	4.94
Outstanding at March 31, 2023	1,611,298	$	2.76	5.18

Exercisable at March 31, 2023	1,395,266	$	2.89	4.8

Options Outstanding Common Shares
Weighted Average
Exercise Price

Weighted Average
Remaining Life
(Years)
Outstanding at December 31, 2015 830,599
$ 8.65
6.5
Granted 179,998
6.16

Exercised —
—

Forfeited (50,733 ) 10.15

Outstanding at December 31, 2016 959,864
$ 8.11
6.4
Granted 94,246
3.64

Exercised —
—

Forfeited (42,535 ) 50.15

Outstanding at September 30, 2017 1,011,575
$ 6.05
6.1

Exercisable at September 30, 2017 683,642
$ 6.24
5.1

During the three ~~and nine~~ months ended ~~September 30, 2017 and 2016,~~March 31, 2023, no options were exercised. During the three months ended March 31, 2022, 5,000 options were exercised for gross proceeds of $6,700. The intrinsic value of the exercised options was $0. The fair value of the Company's common stock on ~~September 30, 2017~~March 31, 2023, was ~~$7.10~~approximately $0.65 per ~~share. The~~share, and the intrinsic value on outstanding options as of ~~September 30, 2017~~March 31, 2023, was ~~$1,354,688.~~$91,896. The intrinsic value onof the exercisable options as of ~~September 30, 2017~~March 31, 2023, was ~~$815,179.~~$84,438.

There were outstanding options to purchase 1,611,298 shareswith a weighted average exercise price of $2.76 per share, of which options to purchase 1,395,266 shares were exercisable with a weighted average exercise price of $2.89 per share as of March 31, 2023.

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

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

~~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, 2023, and 2022 was $64,344 and $68,657, respectively. Future compensation related to ~~nonvested~~non-vested awards ~~expected to vest~~as of ~~$753,299~~March 31, 2023, is $328,869, and it is estimated to be recognized over the weighted-average vesting period of approximately ~~two years, six~~1.7 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, 2023, and 2022:

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, 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~~ 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~~Board of ~~common~~Directors.

The stock ~~during~~compensation expense on ESPP Options was $1,238 and $2,082 for the ~~nine~~twelve 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, 2023, and 2022, respectively. As of ~~September 30, 2017, the Company had 39,764~~March 31, 2023, there was 363,072 remaining shares of common stock available for future ~~grants~~issuances under the ESPP.

Summary of 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, 2023, and 2022 was recorded in the Company’s unaudited consolidated statements of operations as follows:


	Three Months Ended
		March 31, 2023		March 31, 2022
Cost of revenue		$	17,170	$	7,105
Sales and marketing		17,848		9,859
General and administrative		160,506		100,228
Total stock-based compensation		$	195,524	$	117,192

NOTE ~~7. EARNINGS (LOSS)~~10. 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 unvested restricted stock from the computations of the weighted-average number of shares of common stock outstanding. Diluted ~~earnings~~loss per 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, 2023		March 31, 2022
Net loss		$	(2,806,339)	$	(2,476,243)
Weighted average shares outstanding - basic and diluted		62,447,538		62,065,768
Basic and diluted loss per common share		$	(0.04)	$	(0.04)

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, 2023	March 31, 2022
Stock options	993,546	904,706	979,775	874,363	Stock options		1,665,164	1,785,038
Warrants	520,147	557,423	537,039	550,002
Restricted stock units	—	—	—	—	Restricted stock units		1,472,388	454,558
Restricted stock					Restricted stock		—	64,736
Total excluded shares	1,513,693	1,462,129	1,516,814	1,424,365	Total excluded shares		3,137,552	2,304,332

NOTE 11. REVENUE

The Company has consistently applied its accounting policies with respect to revenue to all periods presented in the consolidated financial statements contained herein. The following table illustrates the Company’s revenue by product service type:


	Three Months Ended
		March 31, 2023		March 31, 2022
Managed Services Revenue		$	8,502,754	$	8,372,456


Marketplace Spend Fees		36,474		54,100
License Fees		190,382		374,441
Other Fees		8,112		89,339
SaaS Services Revenue		234,968		517,880

Total Revenue		$	8,737,722	$	8,890,336

Managed Services revenue is comprised of two types of revenue, Sponsored Social and Content. Sponsored Social revenue, which totaled $8.2 million for the three months ended March 31, 2023, is recognized over time. Content revenue, which totaled $0.3 million during the three months ended March 31, 2023, is recognized at a point in time.

The following table illustrates revenues as determined by the country of domicile:


	Three Months Ended
		March 31, 2023		March 31, 2022
United States		$	8,136,133	$	8,869,638
Canada		601,589		20,698
Total		$	8,737,722	$	8,890,336

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, 2023		December 31, 2022
Accounts receivable, net	$	5,922,467	$	5,664,727
Contract liabilities (unearned revenue)	9,854,780		11,247,746

The Company does not typically engage in contracts that are longer than one year. Therefore, the Company will recognize substantially all of the contract liabilities recorded at the end of the year in the following year. As of December 31, 2022 was $11,247,746. Of that balance, $7.8 million was carried to revenue during the first quarter of 2023. The majority of the carryover from the prior year is related to one large prepaid customer account and a few smaller accounts that needed to be extend the campaign completion dates. The Company expects to recognize the associated revenue in 2023. The accounts receivable balance as of December 31, 2022 was $5,664,727. $159,795 of the outstanding receivables balance from the prior

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

year is still outstanding as of March 31, 2023. The past due portion of the carryforward receivables balance is fully reserved as of March 31, 2023.

Accounts receivable are recognized when the receipt of consideration is unconditional. Contract liabilities relate to the consideration received from customers before the completion of performance obligations under the terms of the contracts, which will be earned in future periods. Contract liabilities increase due to receiving new advance payments from customers and decrease as revenue is recognized upon the Company completing 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 one year in length in the period incurred.

NOTE 8.12. SUBSEQUENT EVENTS

~~No material~~To ensure that the consolidated financial statements include all necessary disclosures, the Company evaluated all subsequent events ~~have~~up to May 15, 2023. The Company determined that no subsequent events occurred ~~after September 30, 2017~~ that require ~~recognition or~~ disclosure, both for events that have been recognized in the consolidated financial ~~statements.~~statements and for those that have not.

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.” The~~statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements ~~which are not~~other than statements of historical ~~facts~~fact 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,” “can,” “could,” ~~“should,~~“continue,” “design,” “should,” “expects,” “aims,” “anticipates,” “estimates,” “believes,” “thinks,” “intends,” “likely,” “projects,” “plans,” “pursue,” “strategy” or “future,” “forecasts,” “goal,” 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:

•adverse economic or market conditions may harm our business;

•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 remediate the material weakness in our internal control over financial reporting and establish effective disclosure controls and procedures;

•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;

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•our reliance on, and compliance with, open-source software;

•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;

•general government ~~regulation, economic conditions,~~ regulation;

•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~~in the Risk Factors section of our Annual Report for the year ended December 31, 2022, as amended, and ~~in our other filings~~filed with the ~~SEC.~~

SEC on April 19, 2023.

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”, “Company,” “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”). Our technology brings the marketers and creators together, enabling their transactions to be completed at scale ~~through the management of~~by managing custom content workflow, creator search and targeting, bidding, analytics, and payment processing.

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

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 use our services for two primary purposes: the engagement of creators for influencer marketing campaigns (also known as “influencer marketing” or "sponsored social"), or the engagement of creators to create stand-aloneWe provide value through managing custom content for the marketer's own use, as well as third party content marketing and native advertising efforts (“custom content”). Marketers receive influential consumer content and engaging, shareable stories that drive awareness.

~~Our primary technology platform, the IZEA Exchange (“IZEAx”), enables transactions to be completed at scale through the management of custom content development,~~workflow, creator search and targeting, bidding, analytics, and payment processing. ~~IZEAx~~While the majority of the marketers engage us to perform these 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 newest technology platform, IZEA Flex (“Flex”), introduces end-to-end tracking of social commerce, allowing marketers to easily measure the impact of individual influencers on e-commerce revenue at scale, and integrates key functions of The Creator Marketplace (“Marketplace”) on IZEA.com. Modules in Flex include Discover, which allows marketers to search through content from millions of influencer social profiles while filtering across channels, demographics, and interests; ContentMine, a content management tool that collects and measures influencer content, provides real-time insights and A.I. content analysis from BrandGraph; ShareMonitor, a multi-platform social monitoring tool that allows marketers to monitor hashtags, keywords and brand mentions across leading social platforms; Integrations provides deep integrations such as with Google Analytics and Shopify, providing marketers the capability to track influencer campaign metrics such as time on site, engagement and revenue; and Tracking Links provides real-time tracking metrics for influencer marketing and can track customer conversions, spend, and purchases when used with other Flex modules.

In 2022, we also launched Marketplace on IZEA.com, which provides powerful tools for creators to showcase their social handles and the brands and topics they post about, and marketers to easily search and filter creator listings that meet the requirements of their influencer marketing campaigns, including creator-specific predictive audience demographics. Marketplace features include Casting Calls which gives marketers and creators a two-way marketplace to connect and collaborate; marketers use Casting Calls to solicit creators for everything from influencing campaigns to full-time employment; creators respond directly to Casting Calls with video and text responses.

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BrandGraph is ~~designed~~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.

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 platforms (“Marketplace Spend Fees”); (3) revenue from license and subscription fees charged to access our 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 ~~unified ecosystem~~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 for 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 supporting our customers and ultimately fulfilling our obligations under our contracts with customers.

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, 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 ~~enables~~they are associated with internal-use software that qualifies for capitalization, which is then recorded as software development costs in the ~~creation~~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 ~~multiple types~~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 ~~content including blog posts, status updates, videos,~~fixed assets. Impairments on fixed assets, intangible assets, and ~~photos~~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 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 primarily related to ~~be provided and further distributed through a wide variety of social channels including blogs, Twitter, Facebook, Instagram and Tumblr, among others.~~

~~In addition to~~ ~~IZEAx, we operate~~ the Ebyline technology platform, which we 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.

~~Results of Operations~~payment plans for the ~~Three Months Ended September 30, 2017 Compared~~purchase of computer equipment.

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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~~

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~~2023 and ~~cost categories included herein have been reclassified to conform to the current period presentation.~~2022

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,
	2023		2022		$ Change		% Change
Revenue	$	8,737,722	$	8,890,336	$	(152,614)	(2)	%

Costs and expenses:
Cost of revenue	5,960,162		5,179,724		780,438		15	%
Sales and marketing	2,404,551		2,520,343		(115,792)		(5)	%
General and administrative	3,403,608		3,502,435		(98,827)		(3)	%
Depreciation and amortization	346,262		138,829		207,433		149	%
Total costs and expenses	12,114,583		11,341,331		773,252		7	%
Loss from operations	(3,376,861)		(2,450,995)		(925,866)		38	%
Other income (expense):
Interest expense	(1,564)		(965)		(599)		62	%
Other income (expense), net	572,086		(24,283)		596,369		(2,456)	%
Total other income (expense), net	570,522		(25,248)		595,770		(2,360)	%
Net Loss	$	(2,806,339)	$	(2,476,243)	$	(330,096)	13	%

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,
	2023				2022				$ Change		% Change
Managed Services Revenue	8,502,754		97	%	8,372,456		94	%	$	130,298	2	%

Marketplace Spend Fees	36,474		—	%	54,100		1	%	(17,626)		(33)	%
License Fees	190,382		2	%	374,441		4	%	(184,059)		(49)	%
Other Fees	8,112		—	%	89,339		1	%	(81,227)		(91)	%
SaaS Services Revenue	234,968		3	%	517,880		6	%	(282,912)		(55)	%

Total Revenue	$	8,737,722	100	%	$	8,890,336	100	%	$	(152,614)	(2)	%

Managed Services revenue during the three months ended March 31, 2023, increased 2% from the same period in 2022. Approximately $3.5 million of the current period Managed Services revenue comes from one large customer (the ‘non-recurring customer’), which was 95% higher than the revenue received from such customer in the same period in 2022. In January 2023, we announced that we are parting ways with this customer as soon as our related contract backlog, which totaled $7.8 million on December 31, 2022, is completed during 2023.Managed Services revenue from our ongoing customer base (our ‘core customers’) totaled approximately $5.0 million in the current period, or 24% lower than the same period in 2022, primarily due to softer bookings from these core customers in recent quarters.

SaaS Services revenue, which includes license and support fees to access the platform services, and fees earned on the marketers’ self-service use of our technology platforms to manage their content workflow and influencer marketing campaigns declined 55% from the same period in 2022, due to:

Table of Contents

(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 $17,626 for the three months ended ~~September 30, 2017 decreased by $9,574~~March 31, 2023, compared to the same period in ~~2016.~~2022, due to lower overall spending levels from our marketers and to a gradual winding down of IZEAx. Revenue from Marketplace Spend Fees represents our net margins received on this business.

•License Fees revenue decreased by $184,059 for the three months ended March 31, 2023, when compared to the same period of 2022. The decrease in license fees is due to lower licensee counts and lower average revenue per licensee. The decline in both licensee counts and revenues is heavily related to the gradual sunsetting our legacy IZEAx and BrandGraph platforms before we transition to Flex, which is planned for completion in the second quarter of 2023.

•Other Fees revenue consists of other fees, such as inactivity fees, early cash-out fees, and subscription plan fees charged to users of our platforms. Other Fees revenue decreased 91% for the three months ended March 31, 2023 compared to the same period in 2022, due primarily to a customer deposit forfeiture in the prior year quarter. Nonrefundable deposits are collected from certain customers due to defined minimum spend per the contract or prepayment required for 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, 2023 increased by $780,438, or approximately 15%, compared to the same period in 2022 primarily due to contract deliveries related to our non-recurring customer. Cost of revenue as a percentage of revenue increased from 58% in 2022 to 68% in 2023, due to higher cost contract deliveries related to our non-recurring customer in the current period.

Sales and Marketing

Sales and marketing expense for the three months ended March 31, 2023 decreased by $115,792, or approximately 5%, compared to the same period in 2022, due to reduced payroll costs tied to performance.

General and administrative expense for the three months ended September 30, 2017 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~~March 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.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended March 31, 2023 increased by $207,433, or approximately 149%, compared to the same period in 2022.

Depreciation and amortization expense on property and equipment was $18,786 and $32,933 for the three months ended March 31, 2023 and 2022, respectively. Depreciation expense decreased due to the disposal of aging equipment in 2022 offset partially by the purchase of new equipment in the fourth quarter of 2022 and first quarter of 2023.

Amortization expense was ~~primarily attributable to a $134,000 decrease in public relations, tradeshows~~$327,476 and ~~marketing event attendance in 2017 as a result of our cost reduction efforts~~$105,896 for ~~near term profitability, as well as a $74,000 decrease in salaries~~the three months ended March 31, 2023 and ~~variable costs~~2022, respectively. There was no amortization expense related to ~~sales and sales support personnel due to a 25% reduction~~intangible assets acquired in the ~~number~~Ebyline, ZenContent, and TapInfluence acquisitions recognized for the three months ended March 31, 2023 and 2022, respectively. The intangible assets acquired in acquisitions were fully amortized as of ~~personnel following our implementation of marketing automation~~July 31, 2021. Amortization expense related to internal use software development costs was $327,476 and ~~ongoing performance optimization during 2017.~~$105,896 for the three months ended March 31, 2023 and 2022, respectively, higher in the current period to fully amortize capitalized costs associated with IZEAx.

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~~increased by $599 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~~$1,564 during the three months ended ~~September 30, 2017.~~March 31, 2023 compared to the same period in 2022 due primarily to interest incurred on our financed computers.

Other income, net totaled $572,086 for the three months ended March 31, 2023, primarily from investment portfolio interest income, which was funded in the second quarter of 2022. Other income, net totaled a loss of $24,283 for the three months ended March 31, 2022, primarily due to a write-down on digital assets offset by interest income.

Net Loss

Net loss for the three months ended ~~September 30, 2017~~March 31, 2023 was ~~$558,805, which decreased from~~$2,806,339, a $330,096 increase compared to the net loss of ~~$1,511,603~~$2,476,243 for the same period in ~~2016.~~2022. The ~~decrease~~increase in net loss was ~~primarily the~~a result of the ~~increase in our gross profit contribution as~~changes discussed above.

Table of Contents

~~Results of Operations for~~Key Metrics

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. We use the Managed Services Bookings metric to plan operational staffing, 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, 2023 and 2022 was $6.1 million and $12.1 million, respectively.

Gross Billings by Revenue Type

We evaluate 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 therefore 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 U.S. (“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.

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 nine months ended September 30, 2017 increased by $110,056, or approximately 1%, compared to the same period in 2016. The increase was primarily attributable to a $147,000 increase in personnel costs and related variable costs related to those personnel such as software and subscription costs, communication, travel and supply costs. Although we posted a $361,000 increase in public relations and marketing costs as a result of our IZEAFest Conference held in February 2017, we decreased public relations and marketing costs more than $377,000 in the second and third quarters of 2017 compared to 2016. This decrease came from the non-renewal of our public relations firm after July 2016 and a decrease in tradeshow attendance and promotional spending as part of our efforts to reduce costs during 2017.

~~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,
	2023			2022			$ Change		% Change
Managed Services Gross Billings	$	8,502,754	87%	$	8,372,456	87%	$	130,298	2%

Marketplace Spend Fees	1,023,685		11%	747,244		8%	276,441		37%
License Fees	190,382		2%	374,441		4%	(184,059)		(49)%
Other Fees	8,112		—%	89,339		1%	(81,227)		(91)%
SaaS Services Gross Billings	1,222,179		13%	1,211,024		13%	11,155		1%

Total Gross Billings	$	9,724,933	100%	$	9,583,480	100%	$	141,453	1%

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, 2023 and ~~2016:~~2022:


	Three Months Ended March 31,
		2023			2022
Net loss		$	(2,806,339)		$	(2,476,243)
Gain on the forgiveness of debt		—			—
Gain on the sale of digital assets		—			—
Impairment of digital assets		—			62,976
Non-cash stock-based compensation		195,524			117,192
Non-cash stock issued for payment of services		75,000			31,223
Interest expense		1,564			965
Depreciation and amortization		346,262			138,829
Other non-cash items		—			(663)
Adjusted EBITDA		$	(2,187,989)		$	(2,125,721)

Revenue		$	8,737,722		$	8,890,336
Adjusted EBITDA as a % of Revenue		(25)		%	(24)		%

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~~ Historically, our primary cash needs have been funding the development and ~~cash equivalents 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~~integration of our ~~operating losses.~~technology platforms used in its business, marketing expenses, and general and administrative (“G&A”) expenses including salaries, bonuses, and commissions. We have 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~~$80.9 million as of ~~September 30, 2017. To date,~~March 31, 2023. While we have ~~financed our operations through internally generated revenue from~~not achieved profitability, we believe we have sufficient resources to fund operations and planned investments for at least the ~~sale~~next twelve months.

We had cash and ~~exercise~~cash equivalents of $26.2 million as of March 31, 2023, as compared to $24.6 million as of December 31, 2022. This increase of $1.6 million is primarily due to shortening maturities in our ~~equity securities.~~investment portfolio, partly offset by cash used to fund operating losses.

~~Cash~~


	Three Months Ended March 31,
	2023		2022
Net cash (used for)/provided by:
Operating activities	$	(2,436,879)	$	(2,726,806)
Investing activities	4,023,000		(127,913)
Financing activities	(30,871)		(19,730)
Net increase in cash and cash equivalents	$	1,555,250	$	(2,874,449)

Net cash used for operating activities was ~~$3,227,788~~$2.4 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 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 to meet working capital requirements. Net cash used for investing activities was ~~$88,913~~$4.0 million during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023, primarily due to the ~~payment~~purchase and sale of ~~$93,000 related to the development of our proprietary software and purchases of computer and office equipment~~marketable securities. 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, 2023, was ~~$815,695~~,$30.9 thousand, which ~~amount~~ consisted ~~primarily~~ of ~~advances received from~~payments on shares withheld for taxes.

Long-Term Liquidity

We anticipate that our ~~line of credit 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,~~operating expenses will increase in the foreseeable future as we ~~purchased all of~~continue to pursue 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, 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 sharesexpansion of our common stock to satisfy the first annual guaranteed payment of $938,532 less $89,700 in closing related expenses. On January 30, 2017, we issued 200,542 shares of our common stock to satisfy the second 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 met in the first two years following the closing and it is not expected that they will be met in the third year. Therefore, we do notbusiness. We currently believe that we ~~will be required to make any of the $5,500,000 in contingent performance payments 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 ofhave adequate cash and ~~the remainder of such payment will be in the form of either cash or additional shares of~~invested resources to fund our common stock (determined at our option). If we decide to issue stock rather than make cash payments, 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 cashbusiness growth for ~~the first annual installment of $333,333 less $66,435 in working capital adjustments.~~

We have a secured credit facility agreement with Western Alliance Bank. Pursuant to this agreement, we may submit requests for funding up to 80% 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.

~~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~~months; however, should additional capital ~~at any time~~become necessary, we expect these funds would be financed predominately through proceeds from future equity, equity-based, or debt offerings, unless and until our operations are

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profitable and sustain our ongoing capital needs. As a result, our business success could significantly depend on our ability to ~~supplement~~obtain the funding necessary to support our ~~operating cash flows~~operations.

Financial Condition and Outlook

Since 2020, our business operations and results have been impacted by supply-chain issues, labor disruption, business closures, and recently, inflationary pressures. Additionally, the broadening unenthusiastic economic outlook may be affecting marketing budgets as evidenced by the softness in bookings we have experienced through the fourth quarter of 2022 and first quarter of 2023. We also announced in January 2023 that we began the process of parting ways with a single large customer that, while having a significant impact on Managed Services revenue growth, carried significantly lower gross margins than our core business. While our recent bookings have not met expectations, we see evidence of continued demand for influencer marketing services in our pipeline, and despite opportunities taking longer to ~~the extent~~close, we ~~can do so~~believe that our base business remains strong. However, these matters, taken together, could have a further material adverse impact on ~~competitive market terms. In such event, an equity financing may dilute the ownership interests~~our business, results of ~~our common stockholders.~~operations, and financial position in future periods.

~~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, 2022. 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~~Quarterly Report on Form 10-Q for the period ended ~~September 30, 2017,~~March 31, 2023, an

evaluation was performed under the supervision and with the participation of our management including our ~~Chief Executive Officer ("CEO")~~principal executive

officer and ~~Chief Financial Officer ("CFO")~~principal financial officer 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.~~March 31, 2023. Based on this evaluation, our management concluded that our disclosure controls and procedures were effective as ~~of September 30, 2017~~designed to ~~provide reasonable assurance~~ensure that ~~the~~ information required to be disclosed ~~by us~~ in the reports we file or ~~submitted~~submit 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 our management, including ~~the Company's CEO~~our principal executive officer and ~~CFO, as appropriate,~~principal financial officer, to allow timely decisions regarding required ~~disclosure.~~disclosures.

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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:

(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.

~~During the quarter ended September 30, 2017, there~~There were no ~~significant~~ changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) ~~that occurred~~during the fiscal quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 13 – 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~~any such litigation that may arise from time to time that may harm our business. WeAs of May 8, 2023, 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 this item and under Item 1A of Part I to our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022 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 a 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~~A few of our ~~Business~~customers account for a significant portion of our gross billings and ~~Industry~~

~~We have a history of annual net losses, expect future losses~~accounts receivable, 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~~or reduced purchases 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 ratesthis 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 majorother customers could have a material adverse effect on our ~~results~~operating results.

A significant portion of ~~operation. Moreover, if~~our gross billings and accounts receivable are attributable to a small number of customers. At March 31, 2023, one customer accounted for 41% of gross billings for the quarter and three customers ~~do not find~~accounted for 61% of total accounts receivable. During the three months ended March 31, 2022, one customer accounted for 21% of gross billings and two customers accounted for 58% of accounts receivable. In January 2023, we announced that we began the process of parting ways with the customer accounting for the large portion of our ~~marketing~~gross billings and ~~promotional services effective, they are not satisfied with content they receive, or if they do not believe that utilizing~~accounts receivable for the quarter ended March 31, 2023. The concentration of our ~~platforms provides them~~sales with a ~~long-term increase in value, revenue or profit,~~relatively small number of customers makes us particularly dependent on factors, both positive and negative, affecting those customers. If demand for our services from these customers increases, our results are favorably impacted, while if their demand for our services decreases, they may reduce their purchases of, or stop ~~using~~purchasing, 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,~~and our operating results ~~will be adversely affected.~~

~~Risks Relating to our Common Stock~~

~~Exercise of stock options, warrants~~would suffer. The Company does not typically engage in contracts are longer than one year, 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~~so most 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~~customers can cease reduce 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 connectioncease business with ~~our Ebyline and ZenContent acquisitions.~~us on a relatively short basis. 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. Salesloss of a ~~substantial number~~large customer and failure to add new customers to replace lost revenue would have a material adverse effect on our business, financial condition, and results 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.~~operations.

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~~Not applicable.

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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 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).
3.5		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).
3.6		First Amendment to Bylaws of IZEA Worldwide, Inc. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on September 27, 2022).
3.7		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).
3.8		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).
3.9		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).
3.10		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).
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~~Quarterly Report ~~on Form 10-Q~~ for the quarter ended ~~September 30, 2017~~March 31, 2023 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 Unaudited 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.

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

(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 Quarterly Report on Form 10-Q 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.

Table of Contents

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 15, 2023			By:	/s/ Edward H. Murphy
				Edward H. Murphy Chairman and Chief Executive Officer (Principal Executive Officer)

May 15, 2023			~~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)



	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



	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



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



	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	%