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~~

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,~~6, 2023, there were ~~5,726,336~~15,454,166 shares of our common stock outstanding.

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

Table of Contents



			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			1
Unaudited Consolidated Balance Sheets as of September 30, ~~2017~~2023 and December 31, ~~2016~~2022			1
Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September 30, ~~2017~~2023 and ~~2016~~2022			2
Unaudited Consolidated ~~Statement~~Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022			3
Unaudited Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, ~~2017~~2023 and 2022			34
Unaudited Consolidated ~~Statements~~Statement of Cash Flows for the Nine Months Ended September 30, ~~2017~~2023 and ~~2016~~2022			46
Notes to the Unaudited Consolidated Financial Statements			57
Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operation			2123
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			34

PART II. OTHER INFORMATION
~~Item 1.~~Item1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchasers of Equity Securities			3723
Item 3. Defaults Upon Senior Securities			37
Item 4. Mine Safety Disclosures			37
Item 5. Other Information			37
Item 6. Exhibits			38

Signatures			39

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PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

IZEA Worldwide, Inc.

Unaudited Consolidated Balance Sheets


	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	35,196,198	$	24,600,960
Accounts receivable, net	6,684,958		5,664,727
Prepaid expenses	1,084,289		3,927,453
Short term investments	14,842,420		16,106,758
Other current assets	62,396		66,441
Total current assets	57,870,261		50,366,339

Property and equipment, net of accumulated depreciation	216,272		156,774
Goodwill	4,016,722		4,016,722
Intangible assets, net	64,953		64,953
Software development costs, net	1,944,377		1,774,033
Long term investments	12,670,494		29,296,069
Total assets	$	76,783,079	$	85,674,890

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,461,732	$	1,968,322
Accrued expenses	2,070,747		2,130,702
Contract liabilities	8,704,332		11,247,746
Total current liabilities	12,236,811		15,346,770

Finance obligation, less current portion	78,266		62,173
Total liabilities	$	12,315,077	$	15,408,943

Commitments and Contingencies (Note 8)	—		—

Stockholders’ equity:
Preferred stock; $0.0001 par value; 2,500,000 shares authorized; no shares issued and outstanding	—		—
Common stock; $0.0001 par value; 50,000,000 shares authorized; shares issued: 15,797,724 and 15,603,435, respectively; shares outstanding: 15,431,869 and 15,603,435 respectively	1,580		1,560
Treasury stock at cost: 365,855 and 0 shares at September 30, 2023 and December 31, 2022, respectively	(1,019,997)		—
Additional paid-in capital	149,925,505		149,148,248
Accumulated deficit	(83,925,769)		(78,103,066)
Accumulated other comprehensive income (loss)	(513,317)		(780,795)
Total stockholders’ equity	64,468,002		70,265,947
Total liabilities and stockholders’ equity	$	76,783,079	$	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 September 30,				Nine Months Ended September 30,
														2023		2022		2023		2022
Revenue	$	8,154,674		$	7,496,972		$	21,337,401		$	19,876,611		Revenue	$	7,894,901	$	10,826,335	$	27,321,682	$	32,293,682
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	4,685,437		6,597,430		16,900,116		18,989,076
Sales and marketing													Sales and marketing	2,700,301		2,502,128		7,936,801		7,312,240
General and administrative	2,687,266			2,454,555			8,021,420			7,559,302			General and administrative	3,032,759		2,928,679		9,604,308		9,810,102
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	117,544		127,535		574,238		404,856
Total costs and expenses													Total costs and expenses	10,536,041		12,155,772		35,015,463		36,516,274

Loss from operations	(633,215		)	(1,469,149		)	(4,747,067		)	(5,686,390		)	Loss from operations	(2,641,140)		(1,329,437)		(7,693,781)		(4,222,592)

Other income (expense):													Other income (expense):
Interest expense	(15,058		)	(25,511		)	(45,406		)	(58,261		)	Interest expense	(1,654)		(814)		(6,373)		(2,594)
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	659,856		424,019		1,877,451		672,821
Total other income (expense), net	74,410			(42,454		)	22,444			(44,178		)
Other income (expense), net													Other income (expense), net	658,202		423,205		1,871,078		670,227

Net loss	$	(558,805	)	$	(1,511,603	)	$	(4,724,623	)	$	(5,730,568	)	Net loss	$	(1,982,938)	$	(906,232)	$	(5,822,703)	$	(3,552,365)

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	15,463,334		15,568,356		15,525,636		15,540,627
Basic and diluted loss per common share	$	(0.10	)	$	(0.28	)	$	(0.83	)	$	(1.07	)	Basic and diluted loss per common share	$	(0.13)	$	(0.06)	$	(0.38)	$	(0.23)

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net loss	$	(1,982,938)	$	(906,232)	$	(5,822,703)	$	(3,552,365)

Other comprehensive income
Unrealized gain/(loss) on securities held	131,198		(597,113)		267,478		(864,595)
Total other comprehensive income	131,198		(597,113)		267,478		(864,595)

Total comprehensive income (loss)	$	(1,851,740)	$	(1,503,345)	$	(5,555,225)	$	(4,416,960)

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
Three Months Ended September 30, 2023 and 2022


	Common Stock			Additional Paid-In		Treasury		Accumulated		Accumulated Other Comprehensive		Total Stockholders’
	Shares	Amount		Capital		Stock		Deficit		Income (Loss)		Equity
Balance, June 30, 2022	15,551,729	$	1,555	$	148,773,722	$	—	$	(76,279,701)	$	(267,482)	$	72,228,094
Stock purchase plan & option exercise issuances	—	$	—	—		—		—		—		—
Stock issued for payment of services	6,623	$	1	31,259		—		—		—		31,260
Stock-based compensation	15,784	$	1	154,114		—		—		—		154,115
Shares withheld to cover statutory taxes	(5,667)	$	—	(18,934)		—		—		—		(18,934)
Other comprehensive income (loss)	—	$	—	—		—		—		(597,113)		(597,113)
Net comprehensive income (loss)	—	$	—	—		—		(906,232)		—		(906,232)
Balance, September 30, 2022	15,568,469	$	1,557	$	148,940,161	$	—	$	(77,185,933)	$	(864,595)	$	70,891,190


	Common Stock			Additional Paid-In		Treasury		Accumulated		Accumulated Other Comprehensive		Total Stockholders’
	Shares	Amount		Capital		Stock		Deficit		Income (Loss)		Equity
Balance, June 30, 2023	15,734,680	$	1,574	$	149,646,200	$	(705,403)	$	(81,942,831)	$	(644,515)	$	66,355,025
Stock purchase plan & option exercise issuances	—	—		—		—		—		—		—
Stock issued for payment of services	34,405	4		74,999		—		—		—		75,003
Stock-based compensation	43,211	4		239,349		—		—		—		239,353
Shares withheld to cover statutory taxes	(14,572)	(2)		(35,043)		—		—		—		(35,045)
Reverse stock split fractional share adjustment	—	—		—		—		—		—		—
Treasury stock	—	—		—		(314,594)		—		—		(314,594)
Other comprehensive income (loss)	—	—		—		—		—		131,198		131,198
Net comprehensive income (loss)	—	—		—		—		(1,982,938)		—		(1,982,938)
Balance, September 30, 2023	15,797,724	$	1,580	$	149,925,505	$	(1,019,997)	$	(83,925,769)	$	(513,317)	$	64,468,002

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

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IZEA Worldwide, Inc.

Unaudited Consolidated Statements of Stockholders’ Equity

Nine Months Ended September 30, 2023 and 2022


	Common Stock			Additional Paid-In		Treasury		Accumulated		Accumulated Other Comprehensive		Total Stockholders’
	Shares	Amount		Capital		Stock		Deficit		Income (Loss)		Equity
Balance, December 31, 2021	15,511,332	$	1,551	$	148,457,152	$	—	$	(73,633,568)	$	—	$	74,825,135
Stock purchase plan & option exercise issuances	9,519	1		18,726		—		—		—		18,727
Stock issued for payment of services	19,861	2		93,740		—		—		—		93,742
Stock-based compensation	42,183	4		428,009		—		—		—		428,013
Shares withheld to cover statutory taxes	(14,426)	(1)		(57,466)		—		—		—		(57,467)
Other comprehensive income (loss)	—	—		—		—		—		(864,595)		(864,595)
Net comprehensive income (loss)	—	—		—		—		(3,552,365)		—		(3,552,365)
Balance, September 30, 2022	15,568,469	$	1,557	$	148,940,161	$	—	$	(77,185,933)	$	(864,595)	$	70,891,190


	Common Stock			Additional Paid-In		Treasury		Accumulated		Accumulated Other Comprehensive		Total Stockholders’
	Shares	Amount		Capital		Stock		Deficit		Income (Loss)		Equity
Balance, December 31, 2022	15,603,597	$	1,560	$	149,148,248	$	—	$	(78,103,066)	$	(780,795)	$	70,265,947
Stock purchase plan & option exercise issuances	4,329	1		7,991		—		—		—		7,992
Stock issued for payment of services	94,202	10		225,002		—		—		—		225,012
Stock-based compensation	110,657	11		642,741		—		—		—		642,752
Shares withheld to cover statutory taxes	(38,850)	(4)		(98,475)		—		—		—		(98,479)
Reverse stock split fractional share adjustment	23,789	2		(2)		—		—		—		—
Treasury stock	—	—		—		(1,019,997)		—		—		(1,019,997)
Other comprehensive income (loss)	—	—		—		—		—		267,478		267,478
Net comprehensive income (loss)	—	—		—		—		(5,822,703)		—		(5,822,703)
Balance, September 30, 2023	15,797,724	$	1,580	$	149,925,505	$	(1,019,997)	$	(83,925,769)	$	(513,317)	$	64,468,002

See accompanying notes to the consolidated financial statements.

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IZEA Worldwide, Inc.

Unaudited Consolidated Statements of Cash Flows


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	(5,822,703)	$	(3,552,365)
Adjustments to reconcile net income (loss) to net cash used for operating activities:
Impairment of digital assets	—		141,808
Depreciation	72,529		91,200
Amortization	501,709		313,656
Stock-based compensation	642,752		428,013
Value of stock issued for payment of services	225,012		93,742
(Gain)/Loss on disposal of equipment	304		18,555
Bad debt	50,000		—
Changes in operating assets and liabilities:
Accounts receivable	(1,070,231)		(1,044,406)
Prepaid expenses and other current assets	2,847,209		(552,006)
Accounts payable	(506,590)		(294,445)
Accrued expenses	(76,482)		(458,431)
Contract liabilities	(2,543,414)		(2,101,876)
Net cash used for operating activities	(5,679,905)		(6,916,555)
Cash flows from investing activities:
Purchase of short term investments	(265,887,875)		(89,220,431)
Proceeds from the sale of short term investments	267,069,677		67,171,356
Purchase of long term investments	—		(26,278,590)
Proceeds from the sale of long term investments	16,975,589		477,438
Purchase of property and equipment, net	(99,711)		(41,097)
Proceeds from sale of property and equipment	—		10,344
Increase in software development costs	(672,053)		(558,599)
Net cash provided by and (used for) investing activities	17,385,627		(48,439,579)
Cash flows from financing activities:
Proceeds from exercise of stock options & ESPP issuances	7,992		18,727
Payments on notes payable and capital leases	—		(11,944)
Purchase of treasury stock	(1,019,997)		—
Payments on shares withheld for statutory taxes	(98,479)		(57,467)
Net cash provided by financing activities	(1,110,484)		(50,684)

Net increase (decrease) in cash and cash equivalents	10,595,238		(55,406,818)
Cash and cash equivalents, beginning of period	24,600,960		75,433,295
Cash and cash equivalents, end of period	$	35,196,198	$	20,026,477

Supplemental cash flow information:
Interest paid	$	6,208	$	1,894
Equipment acquired with financing arrangement	80,843		$	—

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 Financial Information~~Nature of Business

IZEA Worldwide, Inc. (“IZEA,” “we,” “us,” or “our”) innovates in the creator economy, connecting marketers—including brands, agencies, and publishers—with a diverse range of content creators, such as TikTokers, Gamers, and other social media influencers (“creators”). Our technology platforms are designed to bring these groups together efficiently, facilitating transactions at scale by managing custom content workflow, creator search and targeting, bidding, analytics, and payment processing.

Our mission is to Champion the Creators, enabling individuals from various backgrounds—from college students and stay-at-home parents to celebrities and professional journalists—to monetize their digital content, creativity, and influence. We compensate creators for their unique contributions, such as producing and distributing various forms of content (e.g., text, videos, photos, status updates, illustrations) on behalf of marketers across different websites, blogs, and social media channels.

We primarily provide value through our managed services, whereby most marketers engage us to handle these services (the “Managed Services”) on their behalf. However, marketers also have the option to use our marketplaces for self-service influencer marketing campaigns or content production by licensing our technology.

The IZEA Exchange (“IZEAx”), our primary technology platform until mid-2023, was integral to managing influencer marketing campaigns and facilitating the creation and distribution of content across creators’ websites, blogs, and social media channels, including Twitter, Facebook, YouTube, Twitch, and Instagram. However, in 2023, IZEAx was sunset and is currently operational only to allow for final legal and accounting closeout, with anticipated discontinuation of live access for IZEA team members and outside auditors early next year.

In response to evolving user needs, we developed and introduced IZEA Flex (“Flex”) as our new flagship platform for enterprise influencer marketing. Flex was initially rolled out in September 2022, with its commercial launch in January 2023. Flex is designed to allow marketers to use any combination of its eight core modules—Discover, ContentMine, ShareMonitor, Integrations, Tracking Links, Contacts, Transactions, and Campaigns—independently or together to supercharge their influencer marketing efforts.

Flex enables marketers to precisely measure the impact of influencers on e-commerce revenue at scale and includes advanced features such as end-to-end tracking of social commerce. It integrates data gathered from The Creator Marketplace on IZEA.com and offers a suite of tools like Discover for advanced search capabilities, ContentMine for content management and insights, ShareMonitor for social monitoring, Integrations for tracking campaign metrics via platforms like Google Analytics and Shopify, and Tracking Links for detailed influencer marketing metrics.

In the third quarter of 2023, additional features like Flex Offers, Creator Content Requests, and Offer Negotiations were introduced to IZEA Flex. Moreover, The Creator Marketplace has been enhanced with new functionalities such as Form AI incorporating OpenAI’s GPT-4 and an AI Video Generator Tool, demonstrating our commitment to integrating AI technology into our services.

Prior to these developments, we launched BrandGraph and Shake in 2020. BrandGraph, a social media intelligence platform, has been heavily integrated with both IZEAx and now Flex. It maps and classifies corporation-to-brand relationships and associates social content with brands through a proprietary content analysis engine. Shake, aimed at digital creatives for freelance work, was sunset in October 2022, concurrent with the launch of The Creator Marketplace, which offered upgraded functionalities to replace Shake.

In October 2022, The Creator Marketplace on IZEA.com was launched, providing creators with powerful tools to present their work and marketers with robust search capabilities to find suitable influencers for their campaigns. Features like Casting Calls offer a dynamic two-way connection for marketers and creators, facilitating everything from influencer campaigns to full-time employment opportunities, with creators responding to these calls through video and text responses. These advancements reflect our ongoing investment in technology and commitment to supporting the creator economy.

Basis of Presentation

The accompanying consolidated balance sheet as of September 30, ~~2017,~~2023, the consolidated statements of operations for the three and nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, the consolidated ~~statement~~statements of comprehensive loss for the three and nine months ended September 30, 2023 and 2022, the consolidated statements of stockholders' equity for the three and nine months ended September 30, ~~2017~~2023 and 2022, and the consolidated statements of cash flows for the nine months ended September 30, ~~2017~~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")~~(GAAP). The consolidated balance sheet as of

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

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~~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 operate31, 2023, 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.

amended April 19, 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’s bank accounts up to a maximum of $250,000 at each bank. The CDIC insures deposits made to the Company’s bank accounts in Canada up to CAD 100,000. Deposit balances exceeding these limits were approximately $34.6 million and $24.4 million as of September 30, 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~~$6.6 million at September 30, 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 receivable 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~~$205,000 and ~~$237,000 for doubtful accounts~~$155,000 as of September 30, ~~2017~~2023, and December 31, ~~2016,~~2022, respectively. Management believes ~~that~~ this estimate is reasonable, but there can be no assurance that the estimate will not change ~~as a result of~~due to a change in economic conditions or business conditions within the industry, the individual customers, or the Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. The Company recognized $50,000 in bad debt expense for the three and nine months ended September 30, 2023 and did not recognize any bad debt expense in the three and nine months ended September 30, 2022. Bad debt expense was less than 1% of revenue for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~.2022.

~~Concentrations of credit~~Credit risk ~~with respect to~~concentration concerning accounts receivable ~~are~~has been typically limited because ~~a large number of~~many geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. However, the Company’s addition of SaaS customers has increased credit exposure for 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 three customers that each accounted for ~~14%~~more than 10% of total accounts receivable at September 30, ~~2017~~2023, and nothree customers that each accounted for more than 10% of total accounts receivable at December 31, ~~2016.~~

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

2022. The Company had ~~one customer that accounted for 11% of its revenue during the three months ended September 30, 2017 and no~~two customers that accounted for more than 10% of its Managed Services revenue during the three months ended September 30, ~~2016.~~2023. The Company had nothree customers that each accounted for more than 10% of its Managed Services revenue during the three months ended September 30, 2022. The Company had one customer that accounted for more than 10% of its Managed Services revenue during the nine months ended September 30, ~~2017 and one customer~~2023. The Company had two customers that each accounted for ~~11%~~more than 10% of its Managed Services revenue during the nine months ended September 30, ~~2016.~~

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~~expenses in ~~general and administrative expense in~~ the ~~accompanying unaudited~~ consolidated statements of operations was $50,168 and $65,106 for the three months ended September 30, 2017 and 2016, respectively. Depreciation expense on property and equipment recorded in general and administrative expense in the accompanying unaudited consolidated statements of operations was $163,597 and $190,338 for the nine months ended September 30, 2017 and 2016, respectively. Property and equipment is recorded net of accumulated depreciation and amortization amounts of $763,632 and $616,056 as of September 30, 2017 and December 31, 2016, respectively.

~~Intangible Assets~~

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

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

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

~~Software Development Costs~~

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

operations.

Goodwill

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

The Company performs its annual impairment tests of goodwill ~~during the fourth quarter~~as of October 1 of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, ~~which is~~ referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information ~~available;~~available, (ii) engage in business ~~activities;~~activities, and (iii) whether a segment manager regularly reviews the ~~component's~~component’s operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company ~~has determined that prior to~~had one reporting unit as of September 30, 2023. No indicators were present, and ~~after~~no impairment was recorded during the ~~acquisition~~three and nine months ended September 30, 2023.

Intangible Assets

The Company acquired most of its intangible assets through its acquisitions of Ebyline, ZenContent, and ~~ZenContent, it had,~~TapInfluence and ~~continues~~amortized the identifiable intangible assets over periods of 12 to ~~have, one reporting unit.~~60 months. See Note 4 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 and nine months ended September 30, 2023. The Company recognized an impairment of $141,808 on digital assets during the nine months ended September 30, 2022.

The Company reviews long-lived assets, including software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset's carrying amount to determine if there has been an impairment, calculated as the difference between the assets fair value and the carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions, and estimates of residual values. Fair values depend upon management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. The Company did not recognize any impairment charges associated with the Company’s acquired intangible assets during the three and nine months ended September 30, 2023, and 2022.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Software Development Costs

In accordance with Accounting Standards Codification (“ASC”) 350-40, Internal Use Software, the Company capitalizes certain internal-use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the research and 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 on certain costs related to cloud computing arrangements (“CCAs”). These software developments, acquired technology, and CCA costs are amortized on a straight-line basis over the estimated useful life of five years upon the initial release of the software or additional features. The Company reviews the software development costs for impairment when circumstances indicate their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, the Company recognizes an impairment loss for the excess of carrying value over the fair value in its consolidated statements of operations. See Note 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 balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company does not record leases on the balance sheet with a lease term of 12 months or less at the commencement date.

Revenue Recognition

~~In January 2017, the~~The Company ~~revised the way it categorizes~~generates revenue from four primary sources: (1) revenue from its revenue streams to more closely align the revenue based on margin profiles and how it currently analyzes the business. The revised categories are as follows: Managed Services, Content Workflow, and Service Fee Revenue. Managed Services ismanaged services when a marketer ~~typically~~(typically a brand, agency, or ~~partner, contracts IZEA~~partner) pays the Company to provide custom content, influencer marketing, amplification, or ~~amplification services. Content Workflow is~~other campaign management services (“Managed Services”); (2) revenue from fees charged to software customers on their marketplace spend within the Company's 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 ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized based on a five-step model as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. The core principle of ASC 606 is that revenue is recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are distinct performance obligations.

The Company also determines whether it acts as an agent or principal for each identified performance obligation. The determination of whether the Company acts as principal or agent is highly subjective and requires the Company to evaluate 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 statements of work, which specify 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 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.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

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 toward 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~~2023 and ~~2016~~2022 were approximately ~~$79,000~~$0.7 million and ~~$74,000,~~$0.6 million, respectively. Advertising costs charged to operations for the nine months ended September 30, ~~2017~~2023, and ~~2016~~2022 were approximately ~~$248,000~~$2.0 million and ~~$291,000~~,$1.6 million, respectively. Advertising costs are included in sales and marketing expense in the accompanying ~~unaudited~~ consolidated statements of operations.

~~Deferred Rent~~

~~The Company’s operating leases for its office facilities contain rent abatements and predetermined fixed increases of~~

IZEA Worldwide, Inc.

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~~yet to record 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~~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 Company does not have any Level 1 or 2 financial assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted of its acquisition cost liability (see Note 2) asAs 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,2023, the Company ~~considered publicly available bond rates~~holds Level 1 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~~Level 2 financial assets; this is discussed further in the model. During all periods, management estimated that the Company's standing was in the speculative to high-risk grades (BB- to CCC in the Standard and Poor's Rating). Significant increases or decreases in the estimated remaining period to exercise or the risk-adjusted interest rate could result in a significantly lower or higher fair value measurement.

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

Note 2 - Financial Instruments.

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 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~~Plan during the three and nine months ended September 30, ~~2017~~2023, and ~~2016~~:

2022:

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements


						Three Months Ended September 30,		Nine Months Ended September 30,
	Three Months Ended		Nine Months Ended
2011 Equity Incentive Plans Assumptions	September 30, 2017	September 30, 2016	September 30, 2017	September 30, 2016
2011 Equity Incentive Plan Assumptions					2011 Equity Incentive Plan Assumptions	2023	2022	2023	2022
Expected term	6 years	6 years	6 years	6 years	Expected term	5 years	6 years	5 years	6 years
Weighted average volatility	43.08%	45.02%	43.49%	50.01%	Weighted average volatility	—%	—%	124.19%	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	5.50%	3.33%	4.60%	1.70%
Expected dividends	—	—	—	—	Expected dividends	—	—	—	—
Weighted average expected forfeiture rate					Weighted average expected forfeiture rate	37.00%	37.00%	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 specific 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 September 30, 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 September 30, 2023, the Company has no significant amounts of loans, receivables, or debt securities with expected credit losses and ~~operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the~~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.

September 30, 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	$	6,263,685	$	—	$	—	$	6,263,685	$	6,263,685	$	—	$	—
Level 1 (3)
Commercial paper	20,936,298		2,131		(7,859)		20,930,570		20,930,570		—		—

Mutual Funds	8,001,943		—		—		8,001,943		8,001,943		—		—
US Treasury securities	7,051,392		70,916		(210,150)		6,912,158		—		5,939,777		972,381
Subtotal	35,989,633		73,047		(218,009)		35,844,671		28,932,513		5,939,777		972,381
Level 2 (4)
Asset backed securities	4,684,069		73,664		(154,576)		4,603,157		—		2,071,947		2,531,210
Corporate debt securities	16,285,042		143,701		(431,144)		15,997,599		—		6,830,696		9,166,903
Subtotal	20,969,111		217,365		(585,720)		20,600,756		—		8,902,643		11,698,113
Total	$	63,222,429	$	290,412	$	(803,729)	$	62,709,112	$	35,196,198	$	14,842,420	$	12,670,494

~~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.~~2023. The ~~ZenContent operations contributed revenue~~Company recognized $104 realized gains (net of ~~$3,070,697 and gross profit of $1,930,281 in the consolidated statement of operations~~losses) for the nine months ended September 30, ~~2017.~~2023. The ~~ZenContent operations contributed revenue~~Company did not recognize any realized gains (net of ~~$465,574 and gross profit of $219,313 in the consolidated statement of operations~~losses) for the three and nine months ended September 30, ~~2016. There~~2022. Realized gains and losses are ~~$29,621~~a component of other income (expense), net. Unrealized gains and ~~$40,918~~losses are a component of ~~acquisition-related costs which are included~~other comprehensive income (loss) (“OCI”).

The following table summarizes the estimated fair value of investments in ~~general~~marketable debt securities by stated contractual maturity dates:


	September 30, 2023		December 31, 2022
Due in 1 year or less	$	14,842,420	$	16,106,758
Due in 1 year through 5 years	12,670,494		29,296,069
Total	$	27,512,914	$	45,402,827

The following table presents fair values and ~~administrative expense on the Company's consolidated statement of operations for~~net unrealized gains (losses) recorded to OCI, aggregated by investment category:


	September 30, 2023				December 31, 2022
	Fair Value		Net Unrealized Gain (Loss)		Fair Value		Net Unrealized Gain (Loss)
Cash and cash equivalents	$	35,196,198	$	(5,728)	$	24,600,960	$	(2,131)
Government bonds	6,912,158		(139,234)		11,765,597		(206,439)
Corporate debt securities	15,997,599		(287,443)		21,618,613		(417,649)
Asset backed securities	4,603,157		(80,912)		12,018,617		(154,576)
Total	$	62,709,112	$	(513,317)	$	70,003,787	$	(780,795)

During the three and nine months ended September 30, ~~2016,~~2023 and 2022, 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 the following:


	September 30, 2023		December 31, 2022
Furniture and fixtures	$	29,848	$	—
Office equipment	3,880		3,843
Computer equipment	316,897		323,700
Total	350,625		327,543
Less accumulated depreciation	(134,353)		(170,769)
Property and equipment, net	$	216,272	$	156,774

Depreciation expense on property and equipment recorded in depreciation and amortization expense in the consolidated statements of operations and comprehensive loss was $26,583 and $25,672 for the three months ended September 30, 2023 and 2022, respectively, and was $72,529 and $91,200 for the nine months ended September 30, 2023 and 2022, respectively.

NOTE 3.4. INTANGIBLE ASSETS

~~The identifiable~~Purchased Intangible Assets. Purchased intangible assets ~~consists~~represent the estimated acquisition date fair value of ~~the following assets:~~

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~~acquired intangible assets ~~from the Ebyline and ZenContent purchase price allocation and other acquired assets net of accumulated~~used in our business.

No amortization ~~thereon consists of the following:~~

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 the identifiable~~expense related to purchased intangible assets ~~over a weighted average period of three years. Amortization expense~~was recorded in ~~general and administrative expense~~amortization in the accompanying consolidated statements of operations ~~was $247,907~~ and ~~$229,934~~comprehensive loss for the three and nine months ended September 30, 2023, and 2022. All purchased intangible assets, including those acquired through its acquisitions of Ebyline, ZenContent, and TapInfluence have been fully amortized since 2021.

There were no impairment charges associated with the Company’s purchased intangible assets in the three and nine months ended September 30, 2023 and 2022.

Indefinite-Lived Intangible Assets. Digital assets held by the Company consist of Bitcoin and Ethereum and are included in intangible assets on the balance sheet. 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 have been determined to be the principal market for such assets (Level 1 inputs). The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that the digital assets are impaired. In determining if an impairment has occurred, the Company considers the lowest market price of one unit of the digital asset quoted on the active exchange since acquiring the digital asset. If the then-current carrying value of a digital asset exceeds the fair value so determined, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying value and the price determined.

During the three months ended September 30, ~~2017~~2023 and ~~2016, respectively. Amortization expense recorded in general and administrative expense~~2022, the Company did not purchase, receive, or sell any digital assets. No impairment of the Company’s digital assets was required in the ~~accompanying consolidated statements of operations was $747,720~~three and ~~$615,748 for the~~ nine months ended September 30, ~~2017~~2023. The Company impaired the value of its digital assets by $1,081 and ~~2016, respectively.~~$141,808 in the three and nine months ended September 30, 2022 as the fair market value decreased from its carrying value. The impairment of digital assets is presented as a non-cash operating expense within general and administrative on the consolidated statements of operations and comprehensive loss. The fair market value of such digital assets held as of September 30, 2023, was $64,953.

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 only recorded once realized upon sale, at which point they are presented net of any impairment losses for the same digital assets held. In determining the gain to be recognized upon sale, the Company calculates the difference between the sales price and the carrying value of the digital assets sold immediately prior to the sale.

Goodwill. The Company’s goodwill balance has not changed for the periods presented in this Quarterly Report on Form 10-Q. The Company’s goodwill balance as of September 30, 2023 was $4,016,722.

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~~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 Worldwide, Inc.

Notes to the ~~Unaudited~~ Consolidated Financial Statements

NOTE 4.5. SOFTWARE DEVELOPMENT COSTS

Software development costs consists of the following:


	September 30, 2023		December 31, 2022
Software development costs	$	5,181,857	$	4,509,804
Less accumulated amortization	(3,237,480)		(2,735,771)
Software development costs, net	$	1,944,377	$	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,~~In 2022, the Company developed ~~its~~two new web-based ~~advertising exchange platform,~~ ~~IZEAx~~influencer marketing platforms, Flex and The CreatorMarketplace. ~~On March 17, 2014,~~These new platforms have replaced IZEAx and Shake. IZEAx was sunset in the ~~Company launched a public beta~~third quarter of ~~IZEA.com powered by~~ ~~IZEAx. This platform is being utilized both internally~~2023, and ~~externally to facilitate native advertising campaigns on a greater scale.~~Shake was sunset in the fourth quarter of 2022. The Company ~~continues to add new features~~capitalized software development costs of $234,176 and ~~additional functionality to this platform each year. These new features will enable~~ ~~IZEAx~~ ~~to facilitate~~$672,053 during the ~~contracting, workflow,~~three and ~~delivery~~nine months ended September 30, 2023. The Company capitalized software development costs of ~~direct content as well as provide for invoicing, collaborating,~~$281,230 and ~~direct payments for~~$558,599 during the ~~Company's software as a service ("SaaS") customers. In accordance with ASC 350-40,~~ ~~Internal Use Software~~three 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.~~nine months ended September 30, 2022, respectively. As a result, the Company has capitalized ~~$1,578,125~~$5,181,857 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.~~ 2023.

The Company amortizes its software development costs, commencing upon the 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 $90,961 and ~~administrative expense in the accompanying consolidated statements of operations was $76,890 and $44,549 for~~$101,863 during the three months ended September 30, ~~2017~~2023, and ~~2016,~~2022, respectively. ~~Amortization~~The Company recorded amortization expense onassociated with its capitalized software development ~~costs recorded in general~~cost of $501,709 and ~~administrative expense in the accompanying consolidated statements of operations was $184,514 and $128,977 for~~$313,657 during the nine months ended September 30, ~~2017~~2023, and ~~2016,~~2022, respectively.

As of September 30, ~~2017,~~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	$	102,195
2024	452,710
2025	437,515
2026	431,766
2027	397,731
2028	122,460
Total	$	1,944,377

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~~


	September 30, 2023		December 31, 2022
Accrued payroll liabilities	$	1,717,151	$	1,967,677
Accrued taxes	56,546		39,405
Current portion of finance obligation	59,386		42,858
Accrued other	237,664		80,762
Total accrued expenses	$	2,070,747	$	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~~record

IZEA Worldwide, Inc.

Notes to the ~~Company's accounts receivable and substantially all of~~Consolidated Financial Statements

interest expense over 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.plan term. The Company ~~had no advances outstanding under this agreement as~~refreshed a portion of ~~December 31, 2016. As~~its computer inventory during the fourth quarter of ~~September 30, 2017,~~2022 and the ~~Company had a net accounts receivable~~first quarter of 2023, entering into two new three-year payment plans with the same vendor. The total balance ~~of $5,253,423. Assuming that all of the Company's accounts receivable balance~~owed was ~~eligible for funding, it had $3,392,362 in remaining available credit under the agreement~~$137,652 and $105,031 as of September 30, ~~2017.~~

~~The annual fees are capitalized~~2023, and December 31, 2022, respectively, with the short-term portion of $59,386 and $42,858 recorded under accrued expenses in the ~~Company's~~ consolidated balance ~~sheet within other current assets and are amortized to interest expense over one year. The Company amortized $5,250 and $8,750~~sheets as of ~~the annual costs through interest expense during the three months ended~~ September 30, ~~2017~~2023, and ~~2016,~~December 31, 2022, respectively. ~~The Company amortized $15,750~~

Summary

Interest expense on financing arrangements recorded in the Company’s unaudited consolidated statements of operations was $4,757 and ~~$14,546 of the annual costs through interest expense~~$2,594 during the nine months ended September 30, ~~2017~~2023, and ~~2016,~~2022, respectively. ~~The remaining value~~As of September 30, 2023, the future contractual maturities of the ~~capitalized loan costs related to~~Company’s long-term payment obligations by year is set forth in the ~~Bridge Bank Credit Agreement~~following schedule:


2023	$	14,846
2024	59,386
2025	56,683
2026	6,737
Total	$	137,652

NOTE 8. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company has no operating or finance leases greater than 12 months in duration, or any leasehold rent or operating lease expenses as of September 30, ~~2017 is $12,250. This~~2023.

Retirement Plans

The Company offers a 401(k) plan to all of its eligible employees. The Company matches participant contributions in an amount ~~will be amortized~~equal to ~~interest~~50% of each participant’s contribution up to 8% of the participant’s salary. The participants become vested in 20% annual increments after two years of service or fully vest upon the age of 60. Total expense ~~over~~for employer matching contributions during the ~~next seven months.~~three and nine months ended September 30, 2023, and 2022 was recorded in the Company’s consolidated statements of operations as follows:


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Cost of revenue	$	16,752	$	24,910	$	61,028	$	69,877
Sales and marketing	18,384		31,186		51,800		104,667
General and administrative	39,136		21,874		116,963		95,491
Total contribution expense	$	74,272	$	77,970	$	229,791	$	270,035

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~~unaware 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.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

NOTE ~~6. STOCKHOLDERS'~~9. STOCKHOLDERS’ EQUITY

Reverse Stock Split

In June 2023, the number of authorized shares and shares of common stock held by each stockholder of the Company were consolidated automatically into the number of shares of common stock equal to the number of issued and outstanding shares of common stock held by each such stockholder immediately prior to the reverse split divided by four (4): effecting a four (4) old for one (1) new reverse stock split. Any fractional shares resulting from the reverse stock split were rounded up to the nearest whole share, resulting in 23,789 additional shares being issued. No shares of preferred stock were outstanding at the time of the reverse stock split.

Additionally, all options and unvested restricted share grants of the Company outstanding immediately prior to the reverse split were adjusted by dividing the number of shares of common stock into which the options are exercisable by four (4) and multiplying the exercise price by four (4), in accordance with the terms of the plans and agreements governing such options and subject to rounding up to the nearest whole share.

All shares of common stock, stock options, restricted stock, and restricted stock unit grants, and their corresponding price per share amounts have been presented to reflect the reverse split in all periods presented within this Quarterly Report on Form 10-Q.

Authorized Shares

The Company has ~~200,000,000~~50,000,000 authorized shares of common stock and ~~10,000,000~~2,500,000 authorized shares of preferred stock, each with a par value of ~~$0.0001~~$0.0001 per ~~share.~~share, post the four-for-one reverse stock split.

~~Reverse Stock Split~~Share Repurchase

On ~~January 6, 2016,~~March 30, 2023, the Company ~~filed~~announced that its Board of Directors had authorized a ~~Certificate of Amendment with the Secretary of State of Nevada to effect a reverse stock split~~$1.0 million share repurchase program of the ~~issued and outstanding~~Company’s common stock. IZEA may repurchase shares of ~~its~~ common stock atfrom time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, under applicable securities laws and other restrictions.

As of September 30, 2023, the Company had purchased 365,855 shares of the Company’s common stock on the open market with an average price per share of $1.23, for a ~~ratio~~total of ~~one share~~$1.0 million. Shares purchased before June 16, 2023, have been adjusted for ~~every 20 shares outstanding prior to the effective date of~~ the reverse stock split. ~~All current~~Repurchased shares have the status of treasury shares and ~~historical information contained herein related to~~may be used, if and when needed, for general corporate purposes. The repurchase program was completed in August, 2023.

Equity Incentive Plan

In May 2011, the ~~share~~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 ~~per share information for the Company's common stock or stock equivalents reflects the 1-for-20 reverse stock split~~restatement of the ~~Company's outstanding~~2011 Equity Incentive Plan at the Company’s 2020 Annual Meeting of Stockholders held on December 18, 2020, to allow the Company to award restricted stock, restricted stock units, and stock options covering up to 1,875,000 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 September 30, 2023, the ~~number of the Company's authorized shares of common stock.~~

~~Nasdaq Uplisting~~

~~On January 26, 2016, the Company's~~Company had 68,254 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.

At the ~~Company's~~October 17, 2023 Annual Meeting of Shareholders, holders of common stock ~~was quoted on~~approved an amendment and restatement of IZEA’s Amended and Restated 2011 Equity Incentive Plan to, among other things, increase the ~~OTCQB marketplace under the same symbol.~~

~~Stock Issued for Purchases~~

~~As further discussed in Note 2, the Company issued 31,821 shares~~number of its 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 $848,832 annual guaranteed payment of $938,532 less $89,700 in closing related expenses owed as part of the Ebyline Stock Purchase Agreement and on January 30, 2017, the Company issued 200,542 shares of common stock ~~to satisfy~~authorized for issuance thereunder by 1,800,000.

Restricted Stock

Under the ~~final annual guaranteed payment~~2011 Plan, the Board determines the terms and conditions of ~~$938,532. On July 31, 2016,~~each restricted stock issuance, including any future vesting restrictions.

In 2022, the ~~Company issued 86,207 shares of IZEA common stock valued at $600,000 as a partial payment of the guaranteed purchase price per the ZenContent Stock Purchase Agreement.~~

~~Stock Issued for Services~~

~~The~~ Company issued its five independent directors a total of ~~32,385~~26,483 shares of restricted common stock initially valued at ~~$93,750~~$125,000 for their annual service as directors of the Company. The stock is vested in equal monthly installments from January through December 2022.

In the three and nine months ended September 30, 2023, the Company issued its five independent directors a total of 34,405 and 94,205 shares of restricted common stock, respectively, valued at $225,012, for their service as directors of the ~~Company during~~Company. Approximately $75,000 worth of shares are granted on the ~~nine months~~ ~~ended September 30, 2017. The stock vested monthly from January through September 2017. On February 12, 2017,~~last day of each quarter and vest immediately.

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 issued during the year ended December 31, 2022 and nine months ended September 30, 2023:


Restricted Stock	Common Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2021	888	$	7.31	0.7
Granted	26,483	4.72
Vested	(27,299)	4.80
Nonvested at December 31, 2022	72	$	5.36	0.3
Granted	94,205	2.39
Vested	(94,277)	2.39
Nonvested at September 30, 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.

Expense recognized on restricted stock issued to directors for services was $75,003 and $32,068 during the three months ended September 30, 2023, and 2022, respectively, and $225,012 and $94,550 for the nine months ended September 30, 2023, and 2022, respectively. Expense recognized on restricted stock issued to employees was $0 and $380 during the three months ended September 30, 2023, and 2022, respectively, and $376 and $5,735 for the nine months ended September 30, 2023, and 2022, respectively.

On September 30, 2023, the fair value of the Company’s common stock was approximately $2.18 per share, and the intrinsic value of the non-vested restricted stock was $0. Future compensation expense related to issued but non-vested, restricted stock awards as of September 30, 2023, is $0.

Restricted Stock Units

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

During the nine months ended September 30, 2023, the Company issued a total of 357,922 restricted stock units initially valued at $927,628 to non-executive employees as additional incentive compensation. The restricted stock units vest between 12 and 36 months from issuance. During the nine months ended September 30, 2023, the Company issued a total of 259,649 restricted stock units initially valued at $594,119 to executive employees as additional incentive compensation. 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 restricted stock units have 100% cliff vesting one year from issuance.

The following table contains summarized information about restricted stock units during the year ended December 31, 2022 and the nine months ended September 30, 2023:


Restricted Stock Units	Common Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2021	93,994	$	3.83	1.8
Granted	344,108	3.87
Vested	(63,269)	3.52
Forfeited	(45,763)	4.87
Nonvested at December 31, 2022	329,070	$	3.79	2.5
Granted	617,571	2.47
Vested	(110,868)	3.74
Forfeited	(73,327)	3.19
Nonvested at September 30, 2023	762,446	$	2.78	1.37

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Expense recognized on restricted stock units issued to employees was $183,665 and $103,863 during the three months ended September 30, 2023, and 2022, respectively. Expense recognized on restricted stock units issued to employees was $464,964 and $227,937 during the nine months ended September 30, ~~2017:~~

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

Granted 42,968
3.04

Vested (39,713 ) 3.61

Forfeited —
—

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

~~Total expense recognized for stock-based payments for services during the three months ended~~2023, and 2022, respectively. On September 30, ~~2017 and 2016 was $60,074 and $34,969, respectively. Total expense recognized for stock-based payments for services during~~2023, the ~~nine months ended September 30, 2017 and 2016 was $143,536 and $107,439, respectively. The~~ fair value of the ~~services is based on~~Company’s common stock was approximately $2.18 per share, and the intrinsic value of the ~~Company's common~~non-vested restricted units was $1,640,938. Future compensation related to the non-vested restricted stock over the term of service. The Company recognized a gain of $45,160 and $36,122 as a change in the fair value of derivatives during the three and nine months ended September 30, 2017, based on the change between the Company's stock price upon issuance and the Company's stock price upon the date of vesting. The fair value of the remaining nonvested, but issued, 3,255 shares of restricted stockunits as of September 30, ~~2017~~2023, is ~~$23,110,~~$2,150,030, 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.~~Plan.

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~~Plan during the ~~year~~years ended December 31, ~~2016~~2022, and September 30, 2023, is presented below:


Options Outstanding	Common Shares	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)
Outstanding at December 31, 2021	448,204	$	11.13	6.4
Granted	32	4.60
Exercised	(17,772)	1.01
Expired	(9,349)	21.49
Forfeited	(5,553)	13.12
Outstanding at December 31, 2022	415,562	$	11.31	5.25
Granted	—	—
Exercised	—	—
Expired	(70,831)	20.02
Forfeited	(362)	7.75
Outstanding at September 30, 2023	344,369	$	9.52	5.47

Exercisable at September 30, 2023	310,437	$	9.63	5.24

During the nine months ended September 30, ~~2017, is presented below:~~

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

2023, no options were exercised. During the ~~three and~~ nine months ended September 30, ~~2017 and 2016, no~~2022, 6,834 options were ~~exercised.~~exercised for gross proceeds of $10,528. The intrinsic value of the exercised options was $28,335. The fair value of the Company's common stock on September 30, ~~2017~~2023, was ~~$7.10~~approximately $2.18 per ~~share. The~~share, and the intrinsic value on outstanding options as of September 30, ~~2017~~2023, was ~~$1,354,688.~~$63,774. The intrinsic value onof the exercisable options as of September 30, ~~2017~~2023, was ~~$815,179.~~$63,331.

There were outstanding options to purchase 344,369 shareswith a weighted average exercise price of $9.52 per share, of which options to purchase 310,437 shares were exercisable with a weighted average exercise price of $9.63 per share as of September 30, 2023.

~~A summary of the nonvested~~Expense recognized on stock ~~option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2016 and~~options issued to employees during 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 stock options granted under~~2023, and 2022 was $172,773 and $200,721, respectively, and $53,649 and $60,762 for 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 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 operations during the three ~~and nine~~ months ended September 30, ~~2016.~~2023, and

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

2022, respectively. Future compensation related to ~~nonvested~~non-vested awards ~~expected to vest~~as of ~~$753,299~~September 30, 2023, is $231,326, 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 Plan and the assumptions used to determine the fair value of those options using a Black-Scholes option-pricing model during the nine months. ended September 30, 2022; no stock options have been granted in 2023:


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
September 30, 2022	32	$	4.60	6 years	—%	3.33%	—	$	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 125,000 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~~exceeding $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 $2,039 and $2,355 for the ~~nine~~three months ended September 30, ~~2017. Employees paid $34,587 to purchase 5,340 shares of common stock during~~2023, and 2022, respectively, and $4,638 and $6,866 for the nine months ended September 30, ~~2016.~~2023, and 2022, respectively. As of September 30, ~~2017, the Company had 39,764~~2023, there were 86,439 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 and nine months ended September 30, 2023, and 2022 was recorded in the Company’s unaudited consolidated statements of operations as follows:


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Cost of revenue	$	24,202	$	9,650	$	59,457	$	27,299
Sales and marketing	44,761		15,011		92,352		39,723
General and administrative	170,390		129,454		490,943		360,991
Total stock-based compensation	$	239,353	$	154,115	$	642,752	$	428,013

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~~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~~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.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements


	Three Months Ended						Nine Months Ended							Three Months Ended				Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016				September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Net loss	$	(558,805	)	$	(1,511,603	)	$	(4,724,623	)	$	(5,730,568	)	Net loss	$	(1,982,938)	$	(906,232)	$	(5,822,703)	$	(3,552,365)
Weighted average shares outstanding - basic and diluted	5,702,297			5,420,020			5,659,423			5,357,119			Weighted average shares outstanding - basic and diluted	15,463,334		15,568,356		15,525,636		15,540,627
Basic and diluted loss per common share	$	(0.10	)	$	(0.28	)	$	(0.83	)	$	(1.07	)	Basic and diluted loss per common share	$	(0.13)	$	(0.06)	$	(0.38)	$	(0.23)

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:


	Three Months Ended		Nine Months Ended
	September 30, 2023	September 30, 2022	September 30, 2023	September 30, 2022
Stock options	344,401	430,001	310,815	436,361
Restricted stock units	590,250	224,961	461,615	165,274
Restricted stock	—	11,228	16	15,126
Total excluded shares	934,651	666,190	772,446	616,761

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				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Managed Services Revenue	$	7,837,725	$	10,476,278	$	26,958,860	$	31,025,350


Marketplace Spend Fees	2,385		16,019		40,173		122,243
License Fees	55,331		320,349		304,938		1,030,718
Other Fees	(540)		13,689		17,711		115,371
SaaS Services Revenue	57,176		350,057		362,822		1,268,332

Total Revenue	$	7,894,901	$	10,826,335	$	27,321,682	$	32,293,682

Managed Services revenue is comprised of two types of revenue, Sponsored Social and Content. Sponsored Social revenue, which totaled $7.4 million and $25.6 million for the three and nine months ended September 30, 2023, is recognized over time. Content revenue, which totaled $0.4 million and $1.4 million during the three and nine months ended September 30, 2023, is recognized at a point in time.

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


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
United States	$	7,030,759	$	10,660,311	$	25,202,585	$	31,914,735
Canada	864,142		166,024		2,119,097		378,947
Total	$	7,894,901	$	10,826,335	$	27,321,682	$	32,293,682

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30,
2017 September 30,
2016 September 30,
2017 September 30,
2016
Stock options 993,546
904,706
979,775
874,363
Warrants 520,147
557,423
537,039
550,002
Restricted stock units —
—
—
—
Total excluded shares 1,513,693
1,462,129
1,516,814
1,424,365
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:


	September 30, 2023		December 31, 2022
Accounts receivable, net	$	6,684,958	$	5,664,727
Contract liabilities (unearned revenue)	8,704,332		11,247,746

The Company does not typically engage in contracts 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 the contract liability balance was $11,247,746; of that balance, $8.8 million was carried to revenue during the first three quarters 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 extend the campaign completion dates. The Company expects to recognize the associated revenue in the fourth quarter of 2023. The accounts receivable balance as of December 31, 2022 was $5,664,727. $0.1 million of the outstanding receivables balance from the prior year is still outstanding as of September 30, 2023. The past due portion of the carryforward receivables balance is fully reserved as of September 30, 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 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 November 6, 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 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; including supply-chain issues, labor distribution, business closures, and inflationary pressures;

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

•the impact of the conflict between Israel and Hamas on the world economy;

•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;

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•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;

•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;

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

•our 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, the~~ customers;

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

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

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

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

SEC on March 31, 2023, and as amended 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 ~~creates~~Worldwide, Inc. (“IZEA”, “Company,” “we”, “us” or “our”) innovates in the creator economy, connecting marketers—including brands, agencies, and ~~operates online marketplaces that connect marketers~~ publishers—with ~~influential~~a diverse range of content ~~creators.~~creators, such as TikTokers, Gamers and other social media influencers (“creators”). Our technology ~~brings the marketers and creators~~platforms are designed to bring these groups together ~~enabling their~~efficiently, facilitating 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~~Our mission is to Champion the ~~creator economy, allowing everyone~~ Creators, enabling individuals from various backgrounds—from college students and ~~stay at home moms~~stay-at-home parents to celebrities and ~~accredited journalists the opportunity~~ professional journalists—to monetize their digital content, creativity, and influence. ~~These~~We compensate creators ~~are compensated by IZEA~~ for ~~producing~~their unique ~~content~~contributions, such as ~~long-form text,~~producing and distributing various forms of content (text, videos, photos, ~~illustrations, and~~ status ~~updates. In addition to creating content for~~updates, illustrations) on behalf of marketers ~~our creators are also compensated for distribution of that content through their personal~~across different websites, blogs, and social ~~channels such as Twitter, Facebook and YouTube.~~media channels.

~~Marketers, including brands, agencies, and partners,~~We primarily provide value through our managed services, whereby most marketers engage us to ~~gain~~handle these services (the “Managed Services”) on their behalf. However, marketers also have the option to use our marketplaces for self-service influencer marketing campaigns or content production by licensing our technology.

The IZEA Exchange (“IZEAx”), our primary technology platform until mid 2023, was integral to managing influencer marketing campaigns and facilitating the creation and distribution of content across creators’ websites, blogs, and social media channels, including Twitter, Facebook, YouTube, Twitch, and Instagram. However, in 2023, IZEAx was sunset and is currently

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operational only to allow for final legal and accounting closeout, with anticipated discontinuation of live access for IZEA team members and outside auditors early next year.

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 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 ~~industry expertise, technology, analytics, and network of creators. These companies are~~third-party creators who provide the custom content, influencer marketing, or amplification services for our ~~primary~~Managed Service customers, where we ~~generate~~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 ~~majority~~personnel responsible for supporting our customers and ultimately fulfilling our obligations under our customer contracts.

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 ~~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-alone custom content for the marketer's own use,~~sales, and sales support personnel, as well as ~~third party content~~ marketing expenses such as brand marketing, public relations events, trade shows, and ~~native advertising efforts~~marketing materials, and travel.

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General and Administrative

Our general and administrative (“~~custom content”~~G&A”)~~. Marketers receive influential consumer content~~ expense consists primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and ~~engaging, shareable stories~~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 ~~drive awareness.~~they are associated with internal-use software that qualifies for capitalization, which is then recorded as software development costs in the consolidated balance sheet. We also capitalize costs that are related to our acquired intangible assets. Depreciation and amortization related to these costs are separately stated under depreciation and amortization in our consolidated statements of operations and comprehensive loss. G&A expense also includes current period gains and losses on our acquisition costs payable and gains and losses from the sale of fixed assets. Impairments on fixed assets, intangible assets, and goodwill are included as part of general and administrative expense when they are not material and broken out separately in our consolidated statements of operations, and comprehensive loss when they are material.

Depreciation and Amortization

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

~~Our primary technology platform,~~Other Income (Expense)

Interest Expense. Interest expense is primarily related to the ~~IZEA Exchange (“IZEAx”), enables~~payment plans for the purchase of computer equipment.

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 ~~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 to be provided and further distributed through a wide variety of social channels including blogs, Twitter, Facebook, Instagram and Tumblr, among others.Canadian Dollar.

~~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 for the Three Months Ended September 30, ~~2017 Compared to the Three Months Ended September 30, 2016~~2023 and 2022

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

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 September 30,
	2023		2022		$ Change		% Change
Revenue	$	7,894,901	$	10,826,335	$	(2,931,434)	(27)	%

Costs and expenses:
Cost of revenue	4,685,437		6,597,430		(1,911,993)		(29)	%
Sales and marketing	2,700,301		2,502,128		198,173		8	%
General and administrative	3,032,759		2,928,679		104,080		4	%
Depreciation and amortization	117,544		127,535		(9,991)		(8)	%
Total costs and expenses	10,536,041		12,155,772		(1,619,731)		(13)	%
Loss from operations	(2,641,140)		(1,329,437)		(1,311,703)		99	%
Other income (expense):
Interest expense	(1,654)		(814)		(840)		103	%
Other income (expense), net	659,856		424,019		235,837		56	%
Total other income (expense), net	658,202		423,205		234,997		56	%
Net Loss	$	(1,982,938)	$	(906,232)	$	(1,076,706)	119	%

Revenue

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

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



	Three Months Ended September 30,
	2023				2022				$ Change		% Change
Managed Services Revenue	$	7,837,725	99.3	%	$	10,476,278	96.8	%	$	(2,638,553)	(25.2)	%

Marketplace Spend Fees	2,385		—	%	16,019		0.1	%	(13,634)		(85.1)	%
License Fees	55,331		0.7	%	320,349		3.0	%	(265,018)		(82.7)	%
Other Fees	(540)		—	%	13,689		0.1	%	(14,229)		(103.9)	%
SaaS Services Revenue	57,176		0.7	%	350,057		3.2	%	(292,881)		(83.7)	%

Total Revenue	$	7,894,901	100.0	%	$	10,826,335	100.0	%	$	(2,931,434)	(27.1)	%

Managed Services revenue during the three months ended September 30, 2023, decreased 25.2% from the same period in 2022. In January 2023, we announced that we began parting ways with one large customer (“the non-recurring customer”). Managed Services revenue from this non-recurring customer totaled approximately $0.9 million during the three months ended September 30, 2023, and explains 90% of the decline in Managed Services revenue from the same period in 2022. Managed Services revenue from our ongoing customer base (our “core customers”) totaled approximately $6.9 million in the current period, or 3.9% lower than the same period in 2022, primarily due to weaker bookings from these core customers in the current quarter.

~~Operating Expenses~~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 83.7% from the same period in 2022 due to:

~~Operating expenses consist of general and administrative expenses and sales and marketing expenses. Total operating expenses~~•Marketplace Spend Fees decreased by $13.6 thousand for the three months ended September 30, ~~2017 decreased by $9,574~~2023, compared to the same period in ~~2016.~~2022 due to lower overall spending levels from our marketers and to the closure of IZEAx. Revenue from Marketplace Spend Fees represents our net margins received on this business.

•License Fees revenue decreased by $0.3 million for the three months ended September 30, 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 sunsetting our legacy IZEAx and BrandGraph platforms while we transition to Flex, which was launched in January 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 104% for the three months ended September 30, 2023 compared to the same period in 2022, due primarily to fewer creators requesting early cash-outs and higher plan fees.

Cost of Revenue

Cost of revenue for the three months ended September 30, 2023 decreased by $1.9 million, or approximately 29.0%, compared to the same period in 2022, primarily due to lower contract deliveries related to our non-recurring customer. Cost of revenue as a percentage of revenue decreased from 60.9% in 2022 to 59.3% in 2023, partly due to fewer comparative cost deliveries for our non-recurring customer.

Sales and Marketing

Sales and marketing expense for the three months ended September 30, 2023 increased by $0.2 million, or approximately 7.9%, compared to the same period in 2022, due to increased spend on tradeshows and promotions to drive demand for managed services and increased contractor expense to develop sales in new global markets.

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. Administrative

General and administrative expense for the three months ended September 30, ~~2017~~2023 increased by ~~$232,711~~$0.1 million, or approximately 3.6%, compared to the same period in ~~2016. We posted a $129,000~~2022, primarily due to an increase in ~~fixed personnel costs~~web hosting fees and infees paid to consultants partially offset by lower professional and accounting fees.

Depreciation and Amortization

Depreciation and amortization expense for 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 personnelthree months ended September 30, 2023 decreased by $10.0 thousand, or approximately 7.8%, compared to the ~~prior year period. General~~same period in 2022.

Depreciation expense on property and ~~administrative~~equipment was $26.6 thousand and $25.7 thousand for the three months ended September 30, 2023 and 2022, respectively. Depreciation expense ~~also~~increased due to the purchase of new computer

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equipment in the fourth quarter of 2022 and the first quarter of 2023, offset partially by the disposal of aging equipment in the third quarter of 2023.

Amortization expense related to internal use software development was $91.0 thousand and $101.9 thousand for the three months ended September 30, 2023 and 2022, respectively. The intangible assets acquired in acquisitions were fully amortized as of July 31, 2021.

Other Income (Expense)

Interest expense increased by ~~approximately $153,000 as a result of the change in our acquisition cost liability related~~$0.8 thousand to ~~the ZenContent acquisition in July 2016 as further discussed below. The increases in general and administrative expenses~~$1.7 thousand 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~~2023, compared to the ~~non-renewal of~~same period in 2022 due primarily to interest incurred on our ~~investor relations firm agreement (effective May 1, 2017).~~financed computers.

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

Sales and marketing expenses consist primarily of personnel costs related to employees and consultants who support sales and marketing efforts, promotional and advertising costs, and trade show expenses. Sales and marketing expensesOther income, net totaled $0.7 million for the three months ended September 30, ~~2017 decreased by $242,285, or approximately 9%, compared to the same period in 2016. The decrease in sales and marketing expense was~~2023, primarily attributable to a $134,000 decrease in public relations, tradeshows and marketing event attendance in 2017 as a result of our cost reduction efforts for near term profitability, as well as a $74,000 decrease in salaries and variable costs related to sales and sales support personnel due to a 25% reduction in the number of personnel following our implementation of marketing automation and ongoing performance optimization during 2017.

~~Other Income (Expense)~~

from investment portfolio interest income. Other income, ~~(expense) consists primarily of 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 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. Duringnet totaled $0.4 million for the three months ended September 30, ~~2017 and 2016, we recorded income of $45,160 and expense of $15,936, respectively,~~2022, primarily 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 recordedinterest 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.earned.

~~The $46,546 change in other income (expense) is primarily the result of currency exchange losses related to our Canadian transactions during the three months ended September 30, 2017.~~

Net Loss

Net loss for the three months ended September 30, ~~2017~~2023 was ~~$558,805, which decreased from~~$2.0 million, a $1.1 million increase compared to the net loss of ~~$1,511,603~~$0.9 million 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.

Results of Operations for the Nine Months Ended September 30, ~~2017 Compared to the Nine Months EndedSeptember 30, 2016~~

~~Revenues~~

~~The following table illustrates our approximate revenue, cost of sales~~2023 and ~~gross profit by revenue stream for the nine months ended September 30, 2017 and 2016:~~

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, or approximately 7%, compared to the same period in~~ ~~2016~~. Managed Services revenue increased $2,532,778, Content Workflow revenue decreased $901,951 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 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 $901,951, or 19%, in the nine 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 revenue up to 35% compared to prior year levels due to the overall decline in this industry. Service Fee revenue decreased in the nine months ended September 30, 2017 due to lower licensing fees generated from partners using our platforms.

We estimate that 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 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 revenue increased from 47% for the~~ ~~nine months~~ ~~ended~~ ~~September 30, 2016~~ ~~to 51% for the same period in~~ ~~2017. The gross margin on our Managed Services for influencer marketing or custom content services was 61%, while the 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 from our higher margin, Managed Services versus reduced 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 on our overall gross profit percentage.~~

2022

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



	Nine Months Ended September 30,
	2023		2022		$ Change		% Change
Revenue	$	27,321,682	$	32,293,682	$	(4,972,000)	(15.4)	%

Costs and expenses:
Cost of revenue	16,900,116		18,989,076		(2,088,960)		(11.0)	%
Sales and marketing	7,936,801		7,312,240		624,561		8.5	%
General and administrative	9,604,308		9,810,102		(205,794)		(2.1)	%
Depreciation and amortization	574,238		404,856		169,382		41.8	%
Total costs and expenses	35,015,463		36,516,274		(1,500,811)		(4.1)	%
Loss from operations	(7,693,781)		(4,222,592)		(3,471,189)		82.2	%
Other income (expense):
Interest expense	(6,373)		(2,594)		(3,779)		145.7	%
Other income (expense), net	1,877,451		672,821		1,204,630		179.0	%
Total other income (expense), net	1,871,078		670,227		1,200,851		179.2	%
Net Loss	$	(5,822,703)	$	(3,552,365)	$	(2,270,338)	63.9	%

Revenue

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

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(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 %



	Nine Months Ended September 30,
	2023				2022				$ Change		% Change
Managed Services Revenue	$	26,958,860	98.7	%	$	31,025,350	96.1	%	$	(4,066,490)	(13.1)	%

Marketplace Spend Fees	40,173		1.1	%	122,243		0.4	%	(82,070)		(67.1)	%
License Fees	304,938		1.1	%	1,030,718		3.2	%	(725,780)		(70.4)	%
Other Fees	17,711		0.1	%	115,371		0.4	%	(97,660)		(84.6)	%
SaaS Services Revenue	362,822		1.3	%	1,268,332		3.9	%	(905,510)		(71.4)	%

Total Revenue	$	27,321,682	100.0	%	$	32,293,682	100.0	%	$	(4,972,000)	(15.4)	%

~~Operating Expenses~~Managed Services revenue during the nine months ended September 30, 2023 decreased 13.1% from the same period in 2022. Approximately 28.7% of the period’s Managed Services revenue comes from the non-recurring customer. The revenue received from such customer in the nine months ended September 30, 2023 was 25.3% lower than in the same period in 2022. In January 2023, we announced that we were parting ways with this customer as soon as our related contract backlog is completed during 2023. Managed Services revenue from our core customers totaled approximately $19.2 million in the current period, or 7.0% lower than the same period in 2022, primarily due to weaker bookings from these core customers in the current period.

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 71.4% from the same period in 2022 due to:

~~Operating expenses consist of general and administrative expenses and sales and marketing expenses. Total operating expenses~~•Marketplace Spend Fees decreased by approximately $0.1 million for the nine months ended September 30, ~~2017~~2023, when compared with the same period in 2022, primarily as a result of lower spend levels from our marketers and lower fees assessed on those spends as a result of competitive pricing efforts. Revenue from Marketplace Spend Fees represents our net margins received on this business.

•License Fees revenue decreased by approximately $0.7 million for the nine months ended September 30, 2023, 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 was completed for customer use in the second quarter of 2023.

•Other Fees revenue decreased by approximately $0.1 million for the nine months ended September 30, 2023, compared to the same period in 2022 due to a customer deposit forfeiture. Nonrefundable deposits are collected from certain customers due to the 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 nine months ended September 30, 2023 decreased 11.0% compared to the same period in 2022 primarily due to the decrease in Managed Services revenue. Cost of revenue as a percentage of revenue increased from 58.8% in 2022 to 61.9% in 2023, due primarily to several large contracts in the current period that carry a lower average margin.

Sales and Marketing

Sales and marketing expense for the nine months ended September 30, 2023 increased by ~~$572,174,~~$0.6 million, or approximately 4%8.5%, compared to the same period in ~~2016. The increase was primarily attributable to~~2022. Advertising and tradeshow expense increased ~~personnel costs~~over the prior year, with continued efforts promoting brand awareness and ~~additional marketing costs related to our IZEAFest Conference held in February 2017.~~improving customer acquisition, satisfaction, and retention.

General and administrative expense for the nine months ended September 30, ~~2017 increased~~2023 decreased by ~~$462,118,~~$0.2 million, or approximately 6%2%, compared to the same period in ~~2016.~~2022. 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 increasedecrease in general and administrative ~~expense.~~ expense was primarily due to savings on contractor costs of $0.3 million due to the capitalization of software development hours and the reduction of engineers used to supplement the team developing our technology offerings as well as lower overall compensation costs of $0.3 million. This savings was partially offset by an increase of $0.07 million higher spend on professional services related to accounting services and $0.3 million higher spend on software, licenses, and web hosting services.

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Depreciation and Amortization

Depreciation and amortization expense for the nine months ended September 30, 2023 increased by $0.2 million, or approximately 42%, compared to the same period in 2022.

Depreciation expense on property and equipment was approximately $0.1 million for the nine months ended September 30, 2023, and 2022. Depreciation expense decreased due to the disposal of aging equipment.

Amortization expense was approximately $0.5 million and $0.3 million for the nine months ended September 30, 2023, and 2022, respectively. Amortization on our internal software costs is increasing due to further development of Flex and The ~~increases~~Creator Marketplace in ~~general and administrative~~2023. Significant development on Flex will continue through the fourth quarter of 2023.

Other Income (Expense)

Interest expense totaled $6.4 thousand 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~~2023. Interest 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 liabilitytotaled $2.6 thousand during the nine months ended September 30, ~~2017 and 2016~~2022. Interest expense 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 changeincurred on our computer purchase financing arrangements.

Other income, net totaled $1.9 million 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 expensesinvestment portfolio interest income for the nine months ended September 30, ~~2017 increased by $110,056, or approximately 1%,~~2023, compared to $0.7 million in the ~~same period in 2016. The increase~~prior year period. Our investment portfolio 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 $377,000added in the second ~~and third quarters~~quarter 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.~~

~~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.~~

2022.

Net Loss from Operations

Net loss for the nine months ended September 30, ~~2017~~2023 was ~~$4,724,623, which decreased from~~$5.8 million, a $2.3 million increase to the net loss of ~~$5,730,568~~$3.6 million for the same period in ~~2016~~.2022. The ~~decrease~~increase in net loss was ~~primarily~~ the result of the changes discussed above. Net loss from operations increased by $3.5 million over the prior year.

Key Metrics

We review the information provided by our key financial metrics, Managed Services Bookings, and gross billings to assess the progress of our business and 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

Managed Services Bookings is a measure of all sales orders received during a time period, less any cancellations received or refunds given during the same time period. Sales order contracts vary in complexity with each customer and range from custom content delivery to integrated marketing services; our contracts generally run from several months for smaller contracts up to twelve months for larger contracts. We recognize revenue ~~and profit margins on~~from our Managed Services ~~offset~~contracts on 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 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 number of orders received in one period, even though revenue from 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 three months ended September 30, 2023, and 2022 were $7.1 million and $8.2 million, respectively. Managed Services Bookings for the nine months ended September 30, 2023, and 2022 was $20.5 million and $29.7 million, respectively.

During the fourth quarter of 2022, the Company began the process of parting ways with a large customer. During the three months ended September 30, 2023, and 2022, net Managed Services Bookings for this customer led to a refund of $0.3 million and bookings of $2.0 million, respectively. During the nine months ended September 30, 2023, and 2022, net Managed Services Bookings for this customer totaled $0.03 million and $8.2 million, respectively.

Gross Billings by Revenue Type

We evaluate our operations and make strategic decisions based, in part, on our key metric of gross billings from our two primary types of revenue, Managed Services and 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 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

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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 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 (including our third-party creator costs on those billings netted against revenue for GAAP reporting purposes).

We consider gross billings 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 we retain after creators’ payments. 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 ~~increase in personnel expenses as discussed above.~~creators. Finally, gross billings allow us to evaluate our transaction totals on an equal basis to see our contribution margins by revenue stream to better understand where we should be allocating our resources.

The following tables set forth our gross billings by revenue type, the percentage of total gross billings by type, and the change between the periods:


	Three Months Ended September 30,
	2023			2022			$ Change		% Change
Managed Services Gross Billings	$	7,837,725	96.6%	$	10,476,278	90.4%	$	(2,638,553)	(25.2)%

Marketplace Spend Fees	217,534		2.7%	775,055		6.7%	(557,521)		(71.9)%
License Fees	55,331		0.7%	320,349		2.8%	(265,018)		(82.7)%
Other Fees	(540)		—%	13,689		0.1%	(14,229)		(103.9)%
SaaS Services Gross Billings	272,325		3.4%	1,109,093		9.6%	(836,768)		(75.4)%

Total Gross Billings	$	8,110,050	100.0%	$	11,585,371	100.0%	$	(3,475,321)	(30.0)%


	Nine Months Ended September 30,
	2023			2022			$ Change		% Change
Managed Services Gross Billings	$	26,958,860	93.7%	$	31,025,350	89.9%	$	(4,066,490)	(13.1)%

Marketplace Spend Fees	1,476,982		5.1%	2,355,534		6.8%	(878,552)		(37.3)%
License Fees	304,938		1.1%	1,030,718		3.0%	(725,780)		(70.4)%
Other Fees	17,711		0.1%	115,371		1.3%	(97,660)		(84.6)%
SaaS Services Gross Billings	1,799,631		6.3%	3,501,623		10.1%	(1,701,992)		(48.6)%

Total Gross Billings	$	28,758,491	100.0%	$	34,526,973	100.0%	$	(5,768,482)	(16.7)%

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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~~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~~are not ~~believe are~~ 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.

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~~2023 and ~~2016:~~2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net loss	$	(1,982,938)		$	(906,232)		$	(5,822,703)		$	(3,552,365)
Impairment of digital assets	—			1,081			—			141,808
Non-cash stock-based compensation	239,353			154,115			642,752			428,013
Non-cash stock issued for payment of services	75,003			31,260			225,012			93,742
Interest expense	1,654			814			6,373			2,594
Depreciation and amortization	117,544			127,535			574,238			404,856
Other non-cash items	304			—			304			18,555
Adjusted EBITDA	$	(1,549,080)		$	(591,427)		$	(4,374,024)		$	(2,462,797)

Revenue	$	7,894,901		$	10,826,335		$	27,321,682		$	32,293,682
Adjusted EBITDA as a % of Revenue	(19.6)		%	(5.5)		%	(16.0)		%	(7.6)		%

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~~Table 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.Contents

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~~$83.9 million as of September 30, ~~2017. To date,~~2023. While we have ~~financed our operations through internally generated revenue from~~not achieved profitability, 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 $35.2 million as of September 30, 2023, as compared to $24.6 million as of December 31, 2022. This increase of $10.6 million is primarily due to shortening maturities in our ~~equity securities.~~investment portfolio, partly offset by cash used to fund operating losses.

~~Cash~~


	Nine Months Ended September 30,
	2023		2022
Net cash (used for)/provided by:
Operating activities	$	(5,679,905)	$	(6,916,555)
Investing activities	17,385,627		(48,439,579)
Financing activities	(1,110,484)		(50,684)
Net increase in cash and cash equivalents	$	10,595,238	$	(55,406,818)

Net cash used for operating activities was ~~$3,227,788~~$5.7 million during the nine months ended September 30, ~~2017~~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~~$17.4 million during the nine months ended September 30, ~~2017~~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 months ended September 30, ~~2017~~2023, was ~~$815,695~~,$1.1 million, which ~~amount~~ consisted ~~primarily of advances received from 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, we purchased all~~ of the ~~outstanding~~purchase of treasury stock and payments on shares withheld for taxes.

Long-Term Liquidity

We anticipate that our operating expenses will increase in the foreseeable future as we continue to pursue the expansion of our business. We currently believe that we have adequate cash and invested resources to fund our business growth initiatives; however, should additional capital ~~stock~~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 profitable and sustain our ongoing capital needs. As a result, our business success could significantly depend on our ability to obtain the funding necessary to support our operations.

Financial Condition and Outlook

Since 2020, supply-chain issues, labor disruption, business closures, and inflationary pressures have impacted our business operations and results. 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 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 on2022, the first quarter of 2023, and, ~~second anniversaries of the closing. On January 29, 2016, we issued 114,398 shares 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~~a lesser extent, the second and ~~final annual guaranteed payment~~third quarters 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~~2023. We 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 ~~targets in~~growth, carried significantly lower gross margins than our core business. Apart from this single large customer, demand from ongoing customers during the ~~three years following~~third quarter of 2023 grew 18.2% from the ~~closing. None of these targets were met in~~prior year’s third quarter, grew 26.4% from the first ~~two years following the closing~~quarter of 2023 and it0.9% second quarter of 2023. While our recent bookings have yet to met internal expectations, we see evidence of improving demand for influencer marketing services in our pipeline, and despite opportunities taking longer to close, we believe our base business is not expected that they will be met in the third year. Therefore, we do not believe that we will be required to make any of the $5,500,000 in contingent performance payments 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. Ofstrengthening. However, these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of our common stock (determined at our option). If we decide to issue stock rather than make cash payments, this may result in the issuance of substantial amount of shares because the number of shares will be determined using the 30 trading-day volume-weighted average closing price of our common stock prior to the payment. On July 31, 2017, we paid $266,898 all in cash for the first annual installment of $333,333 less $66,435 in working capital adjustments.

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

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

~~Off-Balance Sheet Arrangements~~

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

Critical Accounting Policies and Use of Estimates

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

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

~~Throughout 2013 and the first quarter of 2014, we developed our new web-based advertising exchange platform,~~ ~~IZEAx. This platform is being utilized both internally and externally to facilitate native advertising campaigns on~~December 31, 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~~Table 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.~~Contents

~~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,~~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.~~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.

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 the 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 toin 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~~

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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 September 30, 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 1 – LEGAL PROCEEDINGS

From time to time, we may become involved in various other lawsuits and legal proceedings that arise in the ordinary course of our business. Litigation is ~~however,~~ subject to inherent uncertainties and an adverse result in ~~these or other matters~~any such litigation that may arise from time to time that may harm our business. WeAs of November 6, 2023, we are ~~currently not aware~~unaware 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 rates~~ or ~~realize sufficient revenue to achieve profitability. If we achieve profitability, we may not be able to sustain it.~~

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

~~We depend on our ability to attract and retain customers that are prepared to offer products or services on compelling terms through~~ ~~IZEAx~~. Additionally, we rely on customers who purchase direct custom content from our creators in our platforms. We must continue to attract and retain customers in order to increase revenue and achieve profitability. We had no customers that accounted for more than 10% of our revenue and one customer that accounted for 11% of our revenue during the nine months ended September 30, 2017 and 2016, respectively. The loss of customers or a significant reduction in revenue from our 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. On September 30, 2023, one customer accounted for more than 10% of gross billings for the quarter, and three customers ~~do not find~~each accounted for more than 10% of total accounts receivable. During the three months ended September 30, 2022, two customers each accounted for more than 10% of gross billings, and two customers each accounted for more than 10% 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 year ended December 31, 2022. 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 that 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, AND ISSUER PURCHASES OF EQUITY SHARES

~~None~~Company repurchases shares of equity securities

On March 30, 2023, the Company announced that its Board of Directors had authorized a $1.0 million share repurchase program of the Company’s common stock. IZEA may repurchase shares of common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b-18 under the Securities Exchange Act of 1934, as amended, under applicable securities laws and other restrictions. The extent to which the Company repurchases its shares and the timing of such repurchases depend on market conditions and other corporate considerations.

As of September 30, 2023, the Company completed its repurchase of 365,855 shares of the Company’s common stock on the open market with an average price per share of $1.23, for a total of $1.0 million. Shares purchased before June 16, 2023, have been adjusted for the reverse stock split. Repurchased shares have the status of treasury shares and may be used, if and when needed, for general corporate purposes.

The following table presents information with respect to purchases of common stock of the Company made during the nine months ended September 30, 2023 by the Company.

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	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Approximate Dollar Value of Shares Available under Repurchase Plan
July 1 - July 31, 2023	101,095	$	2.6574	101,095	$	25,949
August 1 - August 31, 2023	19,482	$	2.3600	19,482	$	—

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).
3.11		Certificate of Change of IZEA Worldwide, Inc., dated June 14, 2023 and effective June 16, 2023 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 15, 2023.)
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~~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.
104	*	Cover Page Interactive File (formatted as inline XBRL and contained within Exhibit 101).


*	* 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.

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SIGNATURES

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


			IZEA Worldwide, Inc. a Nevada corporation

November 14, 2023			By:	/s/ Edward H. Murphy
				Edward H. Murphy Chairman and Chief Executive Officer (Principal Executive Officer)

November 14, 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



			Accumulated Amortization				Useful Life (in years)
	Balance		September 30, 2017		December 31, 2016		Useful Life (in years)
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



	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



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	%