IZEA · Read the filing

ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Company Overview

IZEA Worldwide, Inc. (“IZEA”, “Company,” “we”, “us” or “our”) is a leading innovator in the creator economy, specializing in providing value through managing custom content workflow, creator search and targeting, bidding, analytics, and payment processing. The Company’s mission is to make creator economy solutions for marketers. We offer solutions that range from creator agency services to creator technologies to a marketplace that connects marketers with creators. By fostering these connections, we light up the creator economy with IZEAs - social-first content, made by creators, that are culturally relevant and move at the speed of culture. champion the creators, empowering individuals to monetize their creativity, content, and influence.

IZEA made a significant mark in the industry by launching the first influencer marketplace, PayPerPost, in 2006, setting a precedent for the evolution of digital marketing platforms. Today, the Company caters to a diverse range of clients, including independent creators and Fortune 10 brands, offering services in influencer marketing, customer-generated content, and custom content creation. IZEA provides tech-enabled managed services and self-service software tools, accommodating the varying needs of its clientele and ensuring mutually beneficial collaborations within its ecosystem.

IZEA Flex is a robust suite of tools that enhance IZEA’s ability to manage influencer marketing at scale. Beyond enabling seamless campaign execution, Flex empowers IZEA’s internal teams to measure influencer marketing performance with precision. The platform boasts a suite of core modules, which together provide a comprehensive toolkit for optimizing influencer marketing campaigns. Flex is distinguished by its ability to quantify the ROI of marketing efforts at scale, complemented by the introduction of AI-powered tools that streamline content and creative campaign ideation.

On IZEA.com, the Company offers a dynamic environment where creators can showcase their work to marketers, and marketers can directly engage and hire influencers, simplifying the collaboration process. This platform, alongside the innovative use of generative AI tools in FormAI, underscores IZEA's commitment to facilitating content creation and enhancing the efficiency of digital marketing strategies.

Leadership and Strategy Transition

On September 6, 2024, the Board appointed Patrick J. Venetucci as the new Chief Executive Officer following the resignation of Edward H. (Ted) Murphy.Under the terms of their respective separation agreements, both Mr. Murphy and Ryan S. Schram, President, Chief Operating Officer, and Director, resigned their Director positions as of September 6, 2024, and their executive positions effective September 15, 2024. Neither resignation stemmed from any disagreement with the Company's management or Board.Concurrently, the Company entered into a cooperation agreement (the “Cooperation Agreement”) with GP Cash Management, Ltd., GP Investments, Ltd., Rodrigo Boscolo, and Antonio Bonchristiano (collectively, the "GP Parties"). As part of this agreement, the Company’s Board of Directors (the “Board”) appointed Mr. Bonchristiano and Mr. Boscolo as directors, filling the vacancies created by the departures of Ted Murphy and Ryan Schram. Mr. Bonchristiano serves on the Compensation Committee and Nominations and Corporate Governance Committee. Messers Bonchristiano and Boscolo serve on the newly created Strategy and Capital Allocation Committee.

In December 2024, the Company implemented elements of a strategic shift intended to accelerate its path to profitability, including the divestiture of unprofitable investments and targeted workforce reductions, primarily in product development and marketing, and aligning its sales and customer delivery teams into industry verticals to target growth opportunities and improve account management and customer retention. We also completed the divestiture of Hoozu Holdings on December 18, 2024 and realigned our sales and client development teams to serve all markets, including international, from our North American hub. The Company believes that related cost reductions and efficiency improvements will impact short and long-term profitability measures.

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 primarily 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”). Additionally, we generate revenue from subscription fees charged to access our software platforms, license and transaction fees from self-service customers, and fees from such as inactivity fees, early cash-out fees, and other miscellaneous fees charged to users of our platforms (collectively, “SaaS Services Revenue”).

Table of Contents

Cost of Revenue

Our cost of revenue consists of direct costs paid to our third-party creators who provide the custom content, influencer marketing, or amplification services for our Managed Service customers, where we report revenue on a gross basis. It also includes internal costs for our campaign fulfillment and SaaS support departments. These costs include salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and miscellaneous departmental costs related to the personnel responsible for supporting our customers and ultimately fulfilling our obligations under our contracts with customers.

Sales and Marketing

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

General and Administrative

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

Within G&A, we incorporate technology and development costs, consisting primarily of our payroll costs for our internal engineers and contractors responsible for developing, maintaining, and improving our technology, as well as hosting and software subscription costs. These costs are expensed as incurred, except to the extent that they are associated with internal-use software that qualifies for capitalization, which is then recorded as software development costs in the consolidated balance sheet. When major software components are developed, we capitalize these as 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 expenses include 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 G&A expenses presented separately in our consolidated statements of operations and comprehensive loss when deemed material.

Depreciation and Amortization

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

Other Income (Expense)

Interest Expense. Interest expense is primarily related to the payment plans for purchasing computer equipment.

Other Income. Other income consists primarily of interest income earned on investments, as well as realized gains and losses on foreign currency exchange transactions, primarily related to the Canadian and Australian Dollar..

Results of Operations for the Twelve Months Ended December 31, 2024 and 2023

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

Table of Contents

Twelve Months Ended December 31,

Costs and expenses:

Other income (expense):

Revenue

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

Twelve Months Ended December 31,

Managed Services revenue during the twelve months ended December 31, 2024, decreased by $0.7 million, or 1.9%, from the same period in 2023. In January 2023, we announced the discontinuation of our relationship with a significant customer (referred to as the “non-recurring customer”). Managed Services revenue attributable to this non-recurring customer totaled approximately $8.1 million for the twelve months ended December 31, 2023. For the year ending December 31, 2024, Managed Services revenue from our recurring customer base reached $31.7 million, while Hoozu, which we divested in December 2024, contributed approximately $3.4 million.

SaaS Services revenue is generated by the self-service use of our technology platforms by marketers to manage their own content workflow, influencer marketing campaigns and associated fees. SaaS Service revenue increased to $0.8 million during the twelve months ended December 31, 2024, compared to $0.5 million in the same period of 2023. The increase is primarily due to a growing number of licensees but at lower average license pricing.

Cost of Revenue

Cost of revenue for the twelve months ended December 31, 2024, was $21.2 million, a decrease of $0.4 million, or approximately 1.9%, compared to the same period in 2023. The cost of revenue associated with our non-recurring customer was approximately $6.0 million for the twelve months ended December 31, 2023. For the year ending December 31, 2024, the cost of revenue from our recurring customer base totaled $18.2 million, with Hoozu contributing approximately $3.0 million. Excluding costs related to Hoozu and our non-recurring customer in both periods, adjusted cost of revenue reflects a net increase of $3.0 million, or 19.5%, which was driven by lower average margins from our ongoing customer base.

Table of Contents

Sales and Marketing

Sales and marketing expenses for the twelve months ended December 31, 2024, increased by $1.6 million, or approximately 15.0%, compared to the same period in 2023. The increase was primarily driven by higher sales and related international contract sales compensation costs.

General and Administrative

General and administrative expenses for the twelve months ended December 31, 2024, increased by $3.5 million, or approximately 26.7%, compared to the same period in 2023. The expense increase was primarily attributable to $1.3 million in severance costs related to executive departures and targeted workforce reductions, and $1.6 million in stock compensation mainly related to the accelerated vesting of equity awards. Additionally, professional services increased by $0.4 million, and contractor expenses rose by $0.6 million. These increases were partially offset by a $0.4 million reduction in software and licensing costs and $0.2 million in public company costs.

Impairment of Goodwill

In September 2024, the Company identified a triggering event related to changes in executive management and Board-level changes, including the Cooperation Agreement. As a result, the Company performed an interim goodwill impairment assessment using both the income approach (discounted cash flow method) and the market approach (guideline transaction method). The assessment determined that the carrying value of the Company’s IZEA reporting segment as of September 30, 2024, exceeded its fair value. Consequently, the Company recorded a $4.0 million impairment of goodwill related to prior IZEA acquisitions in September 30, 2024. Additionally, the Company conducted a qualitative assessment of the carrying value of its Hoozu reporting unit, which did not indicate impairment as of September 30, 2024.

Depreciation and Amortization

Depreciation and amortization expenses for the twelve months ended December 31, 2024, increased by $0.4 million, or approximately 62.5%, compared to the same period in 2023.

Depreciation expense on property and equipment was approximately $0.1 million for the twelve months ended December 31, 2024, and $0.1 million for 2023, respectively.

Amortization expenses were approximately $1.1 million and $0.6 million for the twelve months ended December 31, 2024 and 2023, respectively. Amortization expense related to internal-use software development costs was $0.8 million for 2024, up from $0.6 million in 2023, primarily due to $0.2 million of accelerated amortization for certain software assets no longer in use. This adjustment reflects the Company’s ongoing review of its software portfolio to align with current operational needs and strategic objectives, ensuring that the carrying value of these assets accurately reflects their utility and contribution to the business.

Other Income (Expense)

Interest expense totaled $8,129 during the twelve months ended December 31, 2024, compared to $8,226 in the prior year period.

Loss from divestiture of assets totaled $2.3 million during the twelve months ended December 31, 2024. This loss resulted from the sale of the Hoozu business unit, including the derecognition of goodwill, intangible assets, and other associated assets. The divestiture was part of the Company’s strategic initiative to streamline its portfolio and focus resources on core growth areas.

Other income net totaled $2.5 million in investment portfolio interest income for the twelve months ended December 31, 2024, compared to $2.5 million in the prior year. Despite the stable income, the average return on invested capital increased from 4.3% in 2023 to 4.7% in 2024, driven by changes in portfolio composition and prevailing interest rates.

Net Loss

Net loss for the twelve months ended December 31, 2024 was $19.2 million, a 11.9 million increase from the net loss of $7.4 million for the same period in 2023. The increase in net loss was primarily driven by the impairment and derecognition of goodwill during the year, as well as a loss from the divestiture of Hoozu. Additionally, higher personnel costs related to executive departures and targeted workforce reductions, including severance and accelerated vesting of equity awards, as applicable, contributed to the increase in expenses.

Other Comprehensive Loss

Comprehensive loss includes unrealized gains on investment securities of $0.3 million for the twelve months ended December 31, 2024, and unrealized losses of $0.5 million for the twelve months ended December 31, 2023.

Table of Contents

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 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 from our Managed Services 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 received 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. During 2024, the time between bookings and revenue improved to an average of 7.5 months. 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 adjustments. 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 twelve months ended December 31, 2024 and 2023, was $39.1 million and $28.1 million, respectively.

Non-GAAP Financial Measure

Net Managed Services Revenue

Net managed services revenue is a non-GAAP measure of total managed services revenues less the external direct costs associated with this revenue. Direct costs include the cost of creators and outside services, such as technical and content production costs. We exclude labor and other internal expenses from this measure to determine our labor efficiency rate. We have a principal relationship in our managed services contracts, which requires us to recognize revenues on a gross basis. We track net managed services revenue by customer and customer vertical to aid in resource allocation and our efforts to accelerate our path to profitability; however, this does not impact how we recognize gross managed services revenue.

Adjusted EBITDA

Following the September 2024 change in management, our Chief Operating Decision Maker (“CODM”) and Board of Directors have emphasized our operating results for planning purposes to allocate resources to enhance the financial performance of our business. Adjusted EBITDA is a “non-GAAP financial measure” under the rules of the Securities and Exchange Commission (the “SEC”). We define Adjusted EBITDA as operating income (or loss) from operations before depreciation and amortization, non-cash stock-based compensation, and other operating adjustments that are non-recurring or unusual to our core ongoing operations.

We use Adjusted EBITDA as 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 Adjusted EBITDA also provides valuable information to investors as it excludes non-cash transactions, and it provides consistency to facilitate period-to-period comparisons.

You should not consider Adjusted EBITDA in isolation or as a substitute for an analysis of our results of operations as under GAAP. Not all companies calculate Adjusted EBITDA similarly, limiting its usefulness as a comparative measure. Moreover, Adjusted OCF has limitations as an analytical tool, including that Adjusted EBITDA:

•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 essential part of our compensation strategy;

Table of Contents

•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;

•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; and

•does not include non-operating activity, including interest income and other gains, losses, and expenses that we believe are not indicative of our ongoing core operating results, but these items may represent a reduction or increase in cash available to us.

Because of these limitations, Adjusted EBITDA should not be considered 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 this non-GAAP financial 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. Our presentation of this non-GAAP financial 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 net loss to our non-GAAP financial measure of Adjusted EBITDA for the twelve months ended December 31, 2024, and 2023:

Twelve Months Ended December 31,

Impairment of goodwill and intangible assets 4,130,477 —

Adjustment to fair market value of digital assets (28,414) (90,320)

Non-cash stock issued for payment of services 319,070 300,015

Loss on sale of subsidiary 2,286,083 —

Non-recurring charges 7,668 —

Other non-cash items — (4,505)

Adjusted EBITDA as a % of Revenue (24.1) % (15.1) %

Liquidity and Capital Resources

Near-Term Liquidity and Capital Resources

The Company’s primary cash needs have historically been funding the development and integration of our technology platforms used in its business, marketing expenses, and general and administrative (“G&A”) expenses, including salaries, bonuses, and commissions. The Company has incurred losses and negative cash flow from operations for most periods since 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 $104.3 million as of December 31, 2024. We anticipate a decline in near-term operating expenses as a result of our recent workforce reductions, the divestiture of unprofitable international business activities, and reduced investments in product development, marketing, and administrative functions. While we have not yet achieved profitability, and we will likely continue to invest in areas we expect will help us grow, we believe we have sufficient resources to fund operations and planned investments for at least the next twelve months.

Table of Contents

We had cash and cash equivalents of $44.6 million as of December 31, 2024, compared to $37.4 million as of December 31, 2023. This increase of $7.2 million is primarily the result of the maturing of certain investments, including $6.4 million classified as short-term investments.

Twelve Months Ended December 31,

Net cash (used for)/provided by:

Net cash used for operating activities was $11.5 million during the twelve months ended December 31, 2024, primarily driven by the continued use of cash to fund operating cash flow and to fund increases in net working capital. Net cash provided by investing activities was $19.8 million during the twelve months ended December 31, 2024, primarily due to the maturity of marketable securities. Net cash used for financing activities during the twelve months ended December 31, 2024 was $1.1 million, primarily driven by stock repurchase activity.

Long-Term Liquidity

We anticipate that our operating expenses will increase over time to support higher levels of revenue and required working capital financing as we continue to pursue the expansion of our business. We currently believe that we have adequate cash and long-term investments to fund our business growth for the next twelve months; however, should additional capital 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 upon our ability to obtain the funding necessary to support our operations.

Financial Condition and Outlook

The Company has a strong Balance Sheet, including $51.1 million in cash and short-term investments, and no debt. Our capital expenditures represent the cost of developing new features for our internal-use technology and licensed products. Operating cash flows reflect our continued investment in the growth of our product licensing and managed services businesses.

As a part of our plan to reduce costs and accelerate our pathway to profitability, we exited unprofitable international initiatives, including the divestiture of Hoozu and the cessation of on-shore operations in China and the U.K. Additionally, we significantly lowered human capital costs through targeted reductions in product engineering, sales, and marketing. We have begun reorganizing our go-to-market teams to enhance account growth, improve retention, and drive new business growth.

We believe our core market is experiencing double-digit growth, presenting significant opportunities to expand within our current account base and acquire new accounts. While managed services revenue is down slightly in 2024, adjusting for the loss of a major customer in 2023 and the non-recurring Hoozu revenues in 2024, managed services revenue was approximately $31.7 million, reflecting a 16.3% year-over-year increase.

Our net loss in 2024 was significantly impacted by goodwill write-downs, one-time losses associated with exiting unprofitable operations, and staffing reduction costs. However, we expect that these strategic cost reductions will meaningfully reduce cash losses in the near term, strengthening our financial position and accelerating our path to profitability.

In 2024, we announced a stock buyback program of up to $10.0 million in value. Our 10b5-1 plan remains in place through May 15, 2025, subject to average trading volume limitations. Through March 25, 2025, we’ve purchased 385,947 shares at an average price per share of $2.70, investing $1.0 million. We plan to continue our buyback program as long as we believe our stock to be under-valued, either by extension of our 10b5-1 plan or by other methods available.

Critical Accounting Policies and Use of Estimates

We prepare our financial statements according to GAAP. Certain accounting policies require us to apply significant judgment defining the appropriate assumptions for calculating financial estimates. These judgments will be subject to an inherent degree of uncertainty by their nature. Our judgments are based upon the historical experience of the Company, terms of existing contracts, observance of trends in the industry, the information provided by our customers, and information available from other outside sources, as appropriate. For a summary of our significant accounting policies, please refer to Note 1 — Company and Summary of Significant Accounting Policies of this Annual Report. We consider accounting estimates to be critical accounting policies when:

Table of Contents

•The estimates involve matters that are highly uncertain at the time the accounting estimate are based, and

•Different estimates or changes to estimates could have a material impact on the reported financial position, changes in financial position, or results of operations.

When more than one accounting principle or method of its application is generally accepted, we select the principle or method that we consider the most appropriate when given the specific circumstances. Applying these accounting principles requires us to estimate the future resolution of existing uncertainties. Due to the inherent uncertainty involving estimates, actual results reported in the future may differ from our estimates. The following critical accounting policies are significantly affected by judgments, assumptions, and estimates used to prepare the financial statements.

Accounts Receivable and Concentration of Credit Risk

Accounts receivable are customer obligations due under normal trade terms. We consider an account delinquent when the customer has not paid its balance due by the associated due date. We assess collectability risk both generally and by specific aged invoices. Our loss history informs a general reserve percentage, which we apply to all invoices less than 90 days from the invoice due date, currently 1.1% of the outstanding balance. This general reserve, which we update periodically, recognizes that some invoices will likely become a collection risk. When an invoice ages 90 days past its due date, we consider each invoice to determine a reserve for collectability based on our prior history and recent communications with the customer, to determine a reserve amount. Generally, our reserve will approach 100% of the invoice amount.

We had a reserve of $0.2 million for doubtful accounts as of December 31, 2024. We believe this estimate is reasonable, but there can be no assurance that the estimate will not change due to a shift in economic 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 revenue for the twelve months ending December 31, 2024, and 2023.

The concentration of credit risk in accounts receivable is typically limited because many geographically diverse customers make up our customer base, thus spreading the trade credit risk. We control credit risk through credit approvals, credit limits, and monitoring procedures. We perform credit evaluations of our customers but generally do not require collateral to support accounts receivable. Two customers each accounted for more than 10% of accounts receivable on December 31, 2024. One customer accounted for more than 10% of our revenue during the twelve months ended December 31, 2024. One customer accounted for more than 10% of our accounts receivable on December 31, 2023. One customer accounted for more than 10% of our revenue during the twelve months ended December 31, 2023.

Software Development Costs and Acquired Intangible Software

In accordance with Accounting Standards Codification (“ASC”) 350-40, Internal Use Software, we capitalize certain internal-use software development costs associated with creating and enhancing internally developed software related to our 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 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. We also capitalize certain costs related to cloud computing arrangements (“CCAs”). We have capitalized software development costs of $2.1 million, net of amortization, in the consolidated balance sheet as of December 31, 2024. These costs are reflected as intangible assets in the consolidated balance sheet as of December 31, 2024. We do not transfer ownership of our software to third parties. These software developments 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. We review the software development costs for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the fair value in our consolidated statements of operations and comprehensive loss.

Goodwill

Goodwill represents the excess of the consideration transferred for an acquired business over the fair value of the underlying identifiable net assets. Goodwill is not amortized: instead, it is tested for impairment at least annually. Should management determine that the value of goodwill has become impaired, we will record a charge for the amount of impairment during the fiscal quarter in which the determination is made.

Before the acquisition of Hoozu on December 1, 2023, IZEA had one business operating segment with one reporting unit for purposes of goodwill impairment testing. Until its disposition on December 18, 2024, Hoozu was treated as a second, separate reporting unit for goodwill impairment testing purposes.

Table of Contents

In accordance with ASC 350-20, management’s practice is to assess the carrying value of the Company’s goodwill for impairment annually as of October 1, or more frequently during interim periods if events or changes in circumstances indicate it may be impaired.

In September 2024, the Company identified a triggering event related to changes in executive management and Board-level changes, including the Cooperation Agreement. As a result, the Company conducted an interim goodwill impairment test. The test utilized the income approach (discounted cash flow method) and the market approach (guideline transaction method) to evaluate the fair value of the Company’s IZEA reporting unit. The assessment determined that the carrying value of goodwill exceeded the fair value, resulting in a $4.0 million goodwill impairment charge recorded in the three and nine months ended September 30, 2024.

The Company completed the divestiture of the Hoozu business unit on December 31, 2024, resulting in the derecognition of $1.3 million in goodwill attributed to the unitas a part of the net loss on divestiture. As a result, the Company had no goodwill on its balance sheet as of December 31, 2024.

Purchase, Disposal, and Impairment of Digital Assets

Historically, we mined digital assets (mining operations ceased in 2019) and purchased digital assets on exchanges.

We record our digital assets in accordance with ASC 350, Intangibles - Goodwill and Other, which required acquired intangible assets to be recorded at cost. Under FASB ASC 350, an entity should determine whether an intangible asset has a finite or indefinite life. FASB ASC 350-30-35-4 states that if no legal, regulatory, contractual, competitive, economic, or other factors limit the useful life of an intangible asset to the reporting entity, the useful life of the asset should be considered indefinite. We will record our digital assets as indefinite-lived intangible assets.

We use the Coinbase platform for transactions and to determine the fair value of our digital assets. Based on the fair value level hierarchy, we have determined the market to be observable and Level 1.

In September 2024. we converted all our digital assets to USD, following ASC 610-20 guidance to record the excess over carrying value as a gain.

Digital assets may be disposed of through Coinbase. The conversion of digital assets to USD or other fiat currency will not be considered ordinary business activities and will follow the guidance within ASC 610-20. Proceeds are not reported as revenue; the excess over carrying value will be reported as a gain. We use FIFO to track our digital assets.

Indefinite-lived intangible assets are initially carried at the value determined in accordance with FASB ASC 350-30-30-1 and are not subject to amortization. Historically, they have been tested for impairment annually or more frequently if events or changes in circumstance indicate that the assets is more likely than not impaired. In December 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires fair value measurement of certain crypto assets each reporting period, with the changes in fair value reflected in net income. The new guidance is effective for fiscal years and interim periods within those fiscal years, beginning December 15, 2024, with early adoption permitted. The Company has opted to adopt this guidance early. Expanded disclosures for crypto assets have been added to Note 5 - Intangible Assets. When an identical digital asset is bought and sold at a price different than the entity’s current carrying value, this will indicate that the asset’s carrying value must be adjusted. We will adjust the carrying value, and the gain or loss will be reflected as an operating expense.

Revenue Recognition

We generate revenue primarily 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”); additionally, we generate revenue from subscription fees charged to access our software platforms, license and transaction fees from self-service customers, and fees from such as inactivity fees, early cash-out fees, and other miscellaneous fees charged to users of our platforms (collectively, “SaaS Services Revenue”).

We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized based on a five-step model as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. The core principle of ASC 606 is that revenue is recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We apply 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, we assess the goods or services promised within each contract and determine those that are distinct performance obligations. We also determine whether it acts as an agent or a principal for each identified

Table of Contents

performance obligation. For transactions in which we act 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 we record the amounts we pay to third-party creators as cost of revenue. For transactions in which we act as an agent, revenue is reported on a net basis as the amount charged to the self-service marketer using our platforms, less the amounts paid to the third-party creators providing the service.

We maintain 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 our platforms or by a statement of work, which sets the price and the services to be performed, along with other terms. The transaction price is determined based on the fixed fee stated in the statement of work and does not contain variable consideration. Marketers who contract with us to manage their advertising campaigns or custom content requests may prepay for services or request credit terms, and 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 prior to completing the services. Billings in advance of completed services are recorded as a contract liability until earned. We assess collectability based on several factors, including the creditworthiness of the customer and payment and transaction history.

Managed Services Revenue

For Managed Services Revenue, we agree to provide services that may include multiple distinct performance obligations in the form 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 and content promotion, such as click-through advertisements appearing in websites and social media channels, and (ii) custom content items, such as a research or news article, informational material or 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. We may provide one type or a combination of all types of these performance obligations on a statement of work for a lump sum fee. We allocate revenue to each performance obligation in the contract at inception based on its relative standalone selling price. These performance obligations are to be provided over a stated period that generally ranges from one day to one year. Revenue is accounted for when the performance obligation has been satisfied, depending on the type of service provided. We view our obligation to deliver influencer marketing services, including management services, as a single performance obligation that is satisfied over time as the customer receives the benefits from the services. The majority of 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’s performance obligation in certain contracts with customers may be a stand-ready promise to provide influencer marketing services for an unknown or unspecified quantity of deliverables for a specified term. Under a stand-ready obligation, the Company’s performance obligation is satisfied over time throughout the contract term, and therefore, revenue is recognized straight-line during the life of the contract. Custom content delivery represents a distinct performance obligation that is satisfied over time when each piece of content is delivered to the customer. Revenue is recognized over time using an output method based on when each piece of content is delivered to the customer. Based on our evaluations, revenue from Managed Services is reported on a gross basis because we have the primary obligation to fulfill the performance obligations, and we create, review, and control the services. We take on the risk of payment to third-party creators and establish the contract price directly with our customers based on the services requested in the statement of work.

SaaS Services Revenue

SaaS services revenue includes subscription fees charged to access our software platforms, license and transaction fees from self-service customers, inactivity fees, early cash-out fees, and other miscellaneous fees charged to users of our platforms (collectively, “SaaS Services Revenue”).

Subscription and License Fee Revenue is generated by granting limited, non-exclusive, non-transferable access for customers to use our technology platforms for an agreed-upon subscription period. Customers access the platforms to manage their influencer marketing campaigns. Fees for subscription or licensing services are recognized straight-line over the term of the service.

Self-service customers instruct creators found through our platforms to provide and/or distribute custom content for an agreed-upon transaction price. Our platforms control the contracting, description of services, acceptance, and payment for the requested content. This service is used primarily by news agencies or marketers to manage the outsourcing of their content and advertising needs. We charge 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 or, if related to influencer marketing services, over the content posting period verified by the platform. This revenue is reported on a net basis since we act as an agent through our 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.

Table of Contents

Other Fees Revenue is generated when fees are charged to our platform users, which are 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.

We do not typically engage in contracts longer than one year. Therefore, we do not capitalize costs to obtain its customer contracts as these amounts generally would be recognized over less than one year.

Stock-Based Compensation

Stock-based compensation is measured at the grant date, based on the award’s fair value, 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 having five or ten-year contract lives. We use the simplified method to estimate the expected term of employee stock options. We do 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. We use the closing stock price of our common stock on the date of the grant as the associated fair value of our common stock. For issuances after June 30, 2019, we estimate the volatility of our common stock at the date of grant based on the volatility of our stock during the period. For issuances on or before June 30, 2019, we estimated the volatility of our common stock at the date of grant based on the volatility of comparable peer companies that were publicly traded and had a longer trading history than us. We determine the expected life based on historical experience with similar awards, considering 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. 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.

Total stock-based compensation expense recorded in our consolidated statements of operations during the twelve months ended December 31, 2024, and 2023 were $2.7 million and $1.0 million, respectively.

There were outstanding options to purchase 33,339 shares with a weighted average exercise price of $18.60 per share, of which options to purchase 32,214 shares were exercisable with a weighted average exercise price of $18.82 per share as of December 31, 2024. As of December 31, 2024, the intrinsic value of outstanding options was $304. The intrinsic value of exercisable options as of December 31, 2024, was $304.

As of December 31, 2024, we had unvested restricted stock units representing 1,558,372 shares of common stock with an intrinsic value of $4.3 million and zero unvested shares of issued restricted stock with an intrinsic value of $0.

As of December 31, 2024, we had time-based restricted stock unit awards granted under the Company’s 2023 Inducement Plan with certain new hires, representing 50,000 shares of common stock with an intrinsic value of $0.1 million.

Business Combinations and Asset Acquisitions

The Company follows Accounting Standards Codification (ASC) Topic 805, "Business Combinations," to handle business combinations. The acquisition method of accounting is utilized for all business combinations. This method involves recognizing and measuring identifiable assets acquired, liabilities assumed, and any non-controlling interests at their fair values on the acquisition date. Goodwill signifies the surplus of the purchase price over the fair value of net identifiable assets acquired and liabilities assumed. It is assigned to reporting units expected to benefit from the combination's synergies and undergoes annual impairment testing. Acquisition-related costs, such as advisory, legal, and due diligence fees, are expensed as incurred and are included in general and administrative expenses for acquisition period. The financial statements incorporate the results of operations and financial position of acquired businesses from their respective acquisition dates. Any adjustments to preliminary fair values of assets acquired and liabilities assumed, referred to as measurement period adjustments, are recorded in the period of adjustment.

Recent Accounting Pronouncements

See “Note 1. Company and Summary of Significant Accounting Policies,” under Part II, Item 8 of this Annual Report for information on additional recent pronouncements.

Table of Contents

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

Table of Contents

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Page

Consolidated Balance Sheets 37

Consolidated Statements of Operations 37

Consolidated Statements of Comprehensive Loss 39

Consolidated Statements of Stockholders’ Equity 40

Consolidated Statements of Cash Flows 41

Notes to Consolidated Financial Statements 43

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

IZEA Worldwide, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of IZEA Worldwide, Inc. (a Nevada corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the (“financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2022.

Charlotte, North Carolina

March 27, 2025

IZEA Worldwide, Inc.

Consolidated Balance Sheets

Assets

Current assets:

Property and equipment, net of accumulated depreciation 103,574 205,377

Intangible assets, net of accumulated depreciation — 1,749,441

Software development costs, net of accumulated depreciation 2,086,660 2,056,972

Liabilities and Stockholders’ Equity

Current liabilities:

Finance obligation, less current portion 4,034 63,419

Deferred purchase price, less current portion — 60,600

Deferred tax liability — 394,646

Commitments and Contingencies (Note 9)

Stockholders’ equity:

Accumulated other comprehensive income (loss) 105,287 (250,591)

See accompanying notes to the consolidated financial statements.

IZEA Worldwide, Inc.

Consolidated Statements of Operations

Twelve Months Ended December 31,

Costs and expenses:

Other income (expense):

Change in the fair value of digital assets 28,414 —

Basic and diluted loss per common share $ (1.10) $ (0.45)

See accompanying notes to the consolidated financial statements.

IZEA Worldwide, Inc.

Consolidated Statements of Comprehensive Loss

Twelve Months Ended December 31,

Other comprehensive income

Unrealized gain (loss) on securities held $ — 530,204

Unrealized gain (loss) on currency translation 127,296 262,800

Reclassification of foreign currency translation adjustment to income (34,218) —

See accompanying notes to the consolidated financial statements.

IZEA Worldwide, Inc.

Consolidated Statements of Stockholders’ Equity

Shares Amount Capital Stock Deficit Income (Loss) Equity

Reverse stock split fractional share adjustment 23,789 2 (2) — — — —

Unrealized gain (loss) on securities held — — — — — 530,204 530,204

Foreign currency translation adjustment — — — — — 93,078 93,078

Unrealized gain (loss) on securities held — — — — — 262,800 262,800

See accompanying notes to the consolidated financial statements.

IZEA Worldwide, Inc.

Consolidated Statements of Cash Flows

Twelve Months Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used for operating activities:

Adjustment to fair market value of digital assets (28,414) (90,320)

Deferred tax benefit, divestiture (400,750) (6,104)

Value of stock issued or to be issued for payment of services 319,070 300,015

(Gain)/Loss on disposal of equipment — (4,505)

Changes in operating assets and liabilities:

Cash flows from investing activities:

Payment for divestiture 73,528 —

Purchase of short term investments — (285,236,952)

Proceeds from the sale of digital assets 191,318 —

Capitalization of software development costs (789,001) (880,598)

Proceeds from the sale of PPE 1,092 —

Cash flows from financing activities:

Proceeds from exercise of stock options & ESPP issuances 92,901 17,885

Payments on shares withheld for statutory taxes (589,726) (136,242)

Effect of exchange rate changes on cash (24,757) —

Supplemental cash flow information:

Contingent Consideration $ — $ 175,000

Twelve Months Ended December 31,

Supplemental non-cash activities:

Equipment acquired with financing arrangement $ — $ 80,843

Fair Value of common stock issued for services $ 319,070 $ 300,015

Common stock issued for payment of acquisition $ — $ 1,746,535

See accompanying notes to the consolidated financial statements.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

NOTE 1. COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Corporate Information and Nature of Business

IZEA Worldwide, Inc. (together with its wholly-owned subsidiaries, “IZEA” or the “Company”) is a Nevada corporation founded in February 2006 under the name PayPerPost, Inc. and became a public company in May 2011. In March 2016, the Company formed IZEA Canada, Inc., a wholly-owned subsidiary incorporated in Ontario, Canada. In December 2023, IZEA purchased all of Hoozu Holdings' outstanding shares of capital stock, which it subsequently divested in December 2024.

The Company helps power the creator economy by enabling individuals to monetize their content, creativity and influence through global brands and marketers. IZEA compensates these creators for producing unique content, such as long and short-form text, videos, photos, status updates, and illustrations for marketers or distributing such content on behalf of marketers through their websites, blogs, and social media channels.

The Company also provides value through managing custom content workflow, creator search and targeting, bidding, analytics, and payment processing (the “Managed Services”). While the majority of the marketers engage the Company to perform the Managed Services on their behalf, marketers may also access IZEA’s marketplaces to engage creators for influencer marketing campaigns or to produce custom content on a self-service basis by licensing the Company’s technology.

Executive Leadership and Board Changes

On September 6, 2024, the Board appointed Patrick J. Venetucci as the new Chief Executive Officer following the resignation of Edward H. (Ted) Murphy.Under the terms of their respective Separation Agreements, both Mr. Murphy and Ryan S. Schram, President, Chief Operating Officer, and Director, resigned their Director positions as of September 6, 2024, and their executive positions effective September 15, 2024. Neither resignation stemmed from any disagreement with the Company's management or Board.Concurrently, the Company entered into a cooperation agreement (the “Cooperation Agreement”) with GP Cash Management, Ltd., GP Investments, Ltd., Rodrigo Boscolo, and Antonio Bonchristiano (collectively, the "GP Parties"). As part of this agreement, the Company’s Board of Directors (the “Board”) has appointed Mr. Bonchristiano and Mr. Boscolo as directors, filling the vacancies created by the departures of Ted Murphy and Ryan Schram. Mr. Bonchristiano serves on the Compensation Committee, Nominations and Corporate Governance Committee. Messers Bonchristiano and Boscolo both serve on the newly created Strategy and Capital Allocation Committee.

Principles of Consolidation

The consolidated financial statements include the accounts of IZEA Worldwide, Inc. and its wholly-owned subsidiaries subsequent to the subsidiaries’ acquisition, merger, or formation dates, as applicable. All significant intercompany balances and transactions have been eliminated in consolidation.

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.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less from the date of purchase to be cash equivalents. Deposits made to Company bank accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to a maximum amount of $250,000. The Canada Deposit Insurance Corporation (“CDIC”) insures deposits made to the Company’s bank accounts in Canada up to CAD 100,000. The Australian Financial Claims Scheme insures deposits made to the Company’s pre-divestiture accounts in Australia up to AUD $250,000. Deposit balances exceeding the various limits were approximately $44.2 million and $36.7 million as of December 31, 2024 and December 31, 2023, respectively.

Accounts Receivable and Concentration of Credit Risk

The Company’s accounts receivable balance consists of trade receivables, contract assets, and a reserve for doubtful accounts. Trade receivables are customer obligations due under normal trade terms. Contract assets represent amounts owed for work performed but not yet billed. The Company had net trade receivables of $7.8 million, including $7.6 million of accounts receivable and contract assets of $0.2 million on December 31, 2024. The Company had net trade receivables of $5.0 million, including $4.9 million of accounts receivable and contract assets of $83,697 on December 31, 2023.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

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 will continue to monitor these factors and adjust our credit and collection policies as necessary to address evolving market conditions and potential risks to financial performance. 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. We assess collectability risk both generally and by specific aged invoices. Our loss history informs a general reserve percentage, which we apply to all invoices less than 90 days from the invoice due date, currently 1% of the outstanding balance. The general reserve, which we update periodically, recognizes that some invoices will likely become a collection risk. When an invoice ages 90 past its due date, we consider each invoice to determine a reserve for collectability based on our prior history and recent communications with the customer, to determine a reserve amount. Generally, our reserve for such aged invoices will approach 100% of the invoice amount.

The Company had a reserve for doubtful accounts of $0.2 million as of December 31, 2024, and $0.2 million as of December 31, 2023. Management believes this estimate is reasonable, but there can be no assurance that the estimate will not change due to economic 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 did not recognize any bad debt expense in the twelve months ended December 31, 2024 and recognized $50,000 in the twelve months ended December 31, 2023.

Concentrations of credit risk with respect to accounts receivable have been typically limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company 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 two customers that each accounted for more than 10% of total accounts receivable on December 31, 2024 and one customer that accounted for more than 10% of total accounts receivable on December 31, 2023. The Company had one customer that accounted for more than 10% of its revenue during the twelve months ended December 31, 2024, and one customer that accounted for more than 10% of its revenue during the twelve months ended December 31, 2023.

Property and Equipment

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

Computer Equipment 3 years

Office Equipment 3 - 10 years

Furniture and Fixtures 5 - 10 years

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 in the consolidated statements of operations.

Goodwill

Goodwill represents the excess of the consideration transferred for an acquired business over the fair value of the underlying identifiable net assets. Goodwill is not amortized but must be tested for impairment at least annually at the reporting unit level. Management identifies its reporting units by assessing whether components (i) have discrete financial information available, (ii) engage in business activities, and (iii) whether a segment manager regularly reviews the component’s operating results. Before the acquisition of Hoozu on December 1, 2023, IZEA had one business operating segment with one reporting unit for purposes of goodwill impairment testing. Following its acquisition, Hoozu was treated as a second, separate reporting unit for goodwill impairment testing until its sale.

The Company performs its annual impairment tests of goodwill as of October 1 each year, or more frequently if certain indicators are present. In the event management determines that the value of goodwill has become impaired, the Company will record a charge in an amount equal to the excess of the reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit during the fiscal quarter in which the determination is made.

As described in “Note 5 Intangible Assets,” in September 2024, the Company identified a triggering event related to the executive management and Board-level changes, including the Cooperation Agreement, and performed an interim assessment of goodwill, precipitating the write-off of its $4.0 million balance of goodwill related to acquisitions of Ebyline, ZenContent, TapInfluence.The Company completed the sale of Hoozu in December 2024, resulting in the derecognition of goodwill of the remaining $1.3 million. As a result, the Company had no outstanding goodwill balance as of December 31, 2024.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Intangible Assets

The Company acquired the majority of its intangible assets through its acquisition of Hoozu. The Company amortizes identifiable intangible assets over periods of 12 to 60 months. See “Note 5 Intangible Assets” for further details.

Before liquidating its holdings in September 2024, the Company accounted for its digital assets held as indefinite-lived intangible assets under ASC 350, Intangibles—Goodwill and Other. The Company maintained ownership of and control over its digital assets and used third-party custodial services to secure them. The digital assets are initially recorded at cost and are subsequently evaluated for any changes in the fair market value.

In December 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires fair value measurement of certain crypto assets each reporting period, with the changes in fair value reflected in net income. The amendments also require disclosures of the name, fair value, units held, and cost bases for each significant crypto asset held and annual reconciliations of crypto asset holdings. The new guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2024, with early adoption permitted. The Company opted to adopt this guidance early.

A cumulative effect adjustment to retained earnings was recognized as of January 1, 2023, for $7,632. This adjustment brought the carrying value in line with the fair market value as of December 31, 2022. Adjustments were recognized for all quarterly reporting periods for 2023 as of December 31, 2023, to restate the carrying value at the end of each period for the Company’s digital assets, as described in “Note 5 Intangible Assets.”

In September 2024, the Company sold all its digital assets for total proceeds of $0.2 million, net of de minimis fees. As of December 31, 2024, the Company no longer held any Bitcoin or Ethereum, as all digital assets were sold during the period. The Company did not recognize any impairment of digital assets during the twelve months ended December 31, 2024, and 2023.

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 asset’s fair value and the carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions, and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. In connection with the strategic reorganization and divestitures completed during the twelve months ended December 31, 2024, all intangible assets associated with acquired intangible assets were written off. Further details on these write-offs are provided in "Note 5 - Intangible Assets."

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 certain costs associated with cloud computing arrangements (“CCAs”). These software developments, acquired technology, and CCA costs are amortized on a straight-line basis over the estimated useful life of five years upon the initial release of the software or additional features. The Company reviews the software development costs for impairment when circumstances indicate 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 carrying value over the fair value in its consolidated statements of operations. In December 2024, the Company reviewed its software assets, wrote off fully amortized balances no longer active, and accelerated the amortization of certain software assets no longer in use, with further details provided in "Note 6 - Software Development Costs.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

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

The Company generates revenue primarily from 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”); additionally, we generate revenue from subscription fees charged to access our software platforms, license and transaction fees from self-service customers, and fees from such as inactivity fees, early cash-out fees, and other miscellaneous fees charged to users of our platforms (collectively, “SaaS Services Revenue”).

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

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

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

The Company does not typically engage in contracts that are longer than one year. Therefore, the Company does not capitalize costs to obtain its customer contracts as these amounts generally would be recognized over a period of less than one year and are not material.

Managed Services Revenue

For Managed Services Revenue, the Company enters into an agreement to provide services that may include multiple distinct performance obligations in the form 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 and content promotion, such as click-through advertisements appearing in websites and social media channels, and (ii) custom content items, such as a research or news articles, informational material or 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 is satisfied over time as the customer receives the benefits from the services. The majority of revenue is recognized using an input method of costs incurred compared to total expected costs to measure the progress toward

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

satisfying the overall performance obligation of the marketing campaign. The Company’s performance obligation in certain contracts with customers may be a stand-ready promise to provide influencer marketing services for an unknown or unspecified quantity of deliverables for a specified term. Under a stand-ready obligation, the Company’s performance obligation is satisfied over time throughout the contract term, and therefore, revenue is recognized straight-line over the life of the contract. The Company may provide one type or a combination of all types of these influencer marketing services on a statement of work for a lump sum fee. When multiple 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 performance obligations are to be provided over a period that generally ranges from one day to one year. The delivery of custom content represents a distinct performance obligation that is satisfied at a point in time when each piece of content is delivered to the customer. Based on the Company’s evaluations, revenue from Managed Services is reported on a gross basis because the Company 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 establishes the contract price directly with its customers based on the services requested in the statement of work.

SaaS Services Revenue

Subscription and license revenue is generated by granting customers limited, non-exclusive, non-transferable access to the Company’s technology platforms for an agreed-upon subscription period. Customers access the platforms to manage their influencer marketing campaigns. Fees for subscription or licensing services are recognized straight-line over the term of the service.

Self-service customers instruct creators found through the Company’s platforms to provide and/or distribute custom content for an agreed-upon transaction price. The 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 (“Marketplace Spend Fees”). Revenue is recognized when the transaction is completed by the creator and accepted by the 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.

Other Fees Revenue is generated when fees are charged to the Company’s platform users primarily related to monthly plan fees, which are recognized within the month they relate to.

Advertising Costs

Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising costs charged to operations for the twelve months ended December 31, 2024, and 2023 were approximately $2.3 million and $2.6 million, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statements of operations.

Income Taxes

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 state franchise tax in ten states, which is included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits, and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s tax years subject to examination based on the statute of limitations by the IRS is generally three years; however, the IRS may examine records and other evidence from the year the net operating loss was generated when the Company utilizes net operating loss carryforwards in future periods. The Company’s tax years subject to examination by the Canadian Revenue Agency and the Australian Taxation Office is generally four years.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Fair Value of Financial Instruments

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

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

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

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

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. As of December 31, 2024, the Company holds Level 1 and Level 2 financial assets; this is discussed further in Note 3 - Financial Instruments of Notes to the Consolidated Financial Statements.

Stock-Based Compensation

Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan, as amended (the “2011 Equity Incentive Plan”), and the IZEA Worldwide, Inc. 2023 Inducement Plan (the “Inducement Plan”) (see “Note 10 Stockholder’s Equity”) is measured at the grant date, based on the fair value of the award. It is recognized as an expense over the employee’s requisite service 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 uses the simplified method to estimate the expected term of employee stock 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 as the associated fair value of its common stock. 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 estimates forfeitures when recognizing compensation expense, and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods.

The Company may issue shares of restricted stock or restricted stock units (“RSUs”) that vest over future periods. The value of shares is recorded as the fair value of the stock or units upon the issuance date and is expensed on a straight-line basis over the vesting period. See “Note 10 Stockholder’s Equity” for additional information related to these shares.

On November 30, 2023, the IZEA Board of Directors adopted the Inducement Plan to accommodate equity grants to new employees hired by IZEA in connection with acquisition transactions, including the Hoozu acquisition. Under the Inducement Plan, IZEA may grant, subject to certain requirements, RSUs, including performance-based and time-based RSUs, covering up to a total of 1,800,000 shares of IZEA common stock to new employees of IZEA or its subsidiaries. See “Note 10 Stockholder’s Equity” for additional information related to shares issued under both plans.

On December 12, 2024, the Company's stockholders approved an amendment to the Amended and Restated 2011 Equity Incentive Plan. The approved amendment increased the total number of shares available for issuance under the Plan by an additional 700,000 shares. This increase is intended to support the Company’s ongoing efforts to attract, retain, and incentivize employees, directors, and other eligible participants, aligning their interests with those of the stockholders and further driving the Company’s long-term growth and success.

Business Combinations and Asset Acquisitions

The Company accounts for business combinations in accordance with Accounting Standards Codification (ASC) Topic 805, “Business Combinations.” The acquisition method of accounting is applied to all business combinations, whereby the identifiable assets acquired, liabilities assumed, and any non-controlling interests in the acquiree are recognized and measured at their fair values as of the acquisition date. Goodwill represents the excess of the purchase price over the fair value of net identifiable assets acquired and liabilities assumed in a business combination. Goodwill is allocated to reporting units, which are expected to benefit from the synergies of the combination and is subject to annual impairment testing. Acquisition-

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

related costs, including advisory, legal, and due diligence fees, are expensed as incurred and are included in general and administrative expenses in the period in which the acquisition occurs. The financial statements include the results of operations and the financial position of businesses acquired from their respective acquisition dates. Any adjustments to the preliminary fair values of assets acquired and liabilities assumed, known as measurement period adjustments, are recorded during the period of the adjustment.

Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Accounting for and Disclosure of Crypto Assets: In December 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires fair value measurement of certain crypto assets each reporting period, with the changes in fair value reflected in net income. The amendments also require disclosures of the name, fair value, units held, and cost bases for each significant crypto asset held and annual reconciliations of crypto asset holdings. The new guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2024, with early adoption permitted. The Company has opted adopt this guidance early. A cumulative effect adjustment to retained earnings was booked as of January 1, 2023 for $7,632. Interim and annual periods for 2022 and 2023 have been presented with the change reflected in fair market value. Expanded disclosures for crypto assets have been added to Note 5 - Intangible Assets.

Segment Reporting: Improvements to Reportable Segment Disclosures: In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improving Reportable Segment Disclosures. This update is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU also requires all annual disclosures currently required by Topic 280 to be included in the interim periods. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024, with early adoption permitted and requiring retrospective application to all prior periods presented in the financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

Income Taxes: Improvements to Income Tax Disclosures: In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires additional disclosures of income tax components that affect the rate reconciliation and income taxes paid, broken out by the applicable taxing jurisdictions. The Company expects to adopt this ASU for the annual period beginning on January 1, 2025 and does not expect a material impact on the consolidated financial statements.

Disaggregation of Income Expenses: In November 2024, the FASB issued ASU No. 2024-03 (Subtopic 220-40) Disaggregation of Income Expenses, which requires entities to provide enhanced disclosures related to certain disclosures related to certain expense categories included in the income statement. The update is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently assessing the timing and impact of adopting the updated provisions.

NOTE 2. BUSINESS ACQUISITIONS AND DIVESTITURES

Divestiture of Hoozu Holdings PTY Ltd.

On December 18, 2024, the Company completed the divestiture of Hoozu Holdings PTY Ltd. (“Hoozu”) through its sale to a private Australian company, as part of a strategy to optimize its market focus and enhance the profitability of its North American operations.

The sale, which was consummated on a cash-free, debt-free basis, resulted in cash proceeds of $73,529, net of approximately $28,000 transaction costs, and resulted in a net loss of $1.9 million, net of a $0.3 million deferred tax benefit, which, together with the year-to-date results of operations through the sale date, is reflected in the Company’s financial statements for the period ended December 31, 2024.

Acquisition of Hoozu Holdings, LTD.

On December 1, 2023, the Company completed the announced acquisition of Hoozu Holdings, LTD, subsequently privatized and restructured to become Hoozu Holdings Pty, Ltd., from Hoozu investors. Hoozu is an Australian influencer marketing company headquartered in Sydney. The net purchase price was approximately $2.5 million, including cash consideration of $0.6 million and 726,210 shares of common stock, valued at approximately $1.7 million at the acquisition date, based on the closing market share price on the acquisition date. Approximately $0.2 million of transaction-related costs are separately recorded in general and administrative costs in the accompanying consolidated statement of operations for the year ended December 31, 2023. The Company accounted for the acquisition in accordance with ASC 805, which requires the assets acquired and liabilities assumed to be recognized on the balance sheet at their fair values as of the acquisition date.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Gross Purchase Consideration

First deferred purchase price installment (1) 114,400

Second deferred purchase price installment (1) 60,600

Total estimated consideration $ 2,516,946

(1)The Company’s acquisition of Hoozu on December 1, 2023, included four equal contingent cash consideration payments totaling $0.4 million, with twelve-month measurement periods ending December 31, 2024 and 2025. The contingent payments are based on meeting minimum Revenue and Adjusted Earnings before Taxes and Depreciation thresholds for each measurement period. The contingent payments are hit-or-miss, with the first measurement period payments carrying a make-up provision during the second measurement period. The Company determined the fair value of these contingent payments, using Monte Carlo simulation methods, to be $0.2 million at the acquisition date, subject to periodic adjustment until both measurement periods are completed. During the quarter that ended June 30, 2024, the Company determined that based upon the lag behind Hoozu’s revenue and profitability growth, achieving the deferred purchase price targets for both 2024 and 2025 is not probable and accordingly reduced these installment balances to their expected payout value.

The table below presents the fair values on December 1, 2023, allocated to the assets acquired and liabilities assumed. The purchase accounting and purchase price allocation for Hoozu are complete. The fair values are presented in the following table:

Fair Value

Property and equipment, net 9,033

Deferred tax liability (400,750)

Purchase consideration, excluding cash received $ 1,262,354

Total purchase consideration $ 2,516,946

Accounts receivable shown in the table above represent their gross amount, which approximates the fair value, and are expected to be collected in full. The significant fair value estimates included in the allocation of purchase price are discussed below.

Other intangible assets with definite lives include acquired customer relationships of $0.9 million and tradename of $0.7 million. The preliminary fair value of customer-related intangible assets was determined by using the income approach, while the tradename fair value was determined using the relief from the royalty method. Acquired customer relationships and tradename generally have useful lives of 10 years, unless shorter periods are warranted and are amortized to operating costs on an accelerated basis.

The excess of consideration for Hoozu over the preliminary net fair value of assets acquired and liabilities assumed resulted in the provisional recognition of $1.3 million of goodwill, which is not deductible for tax purposes. Goodwill is primarily attributable to the assembled workforce and synergies.

Contingent liability purchase price installments, which total $0.4 million based on meeting certain revenue and EBITDA milestones for 2024 and 2025, were recorded at their fair value of $0.2 million at the acquisition date. The contingent

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

liability value is subject to periodic adjustment until both measurement dates are completed. No adjustment was recorded in December 2023.

As of June 30, 2024, the Company reassessed the fair value of the contingent performance-based consideration related to the earnout provision of the acquisition of Hoozu. Based on actual performance to date and revised projections of Hoozu’s business performance, it was determined that the contingent milestones were no longer probable of being achieved. Consequently, the contingent liability was adjusted to the expected payout value, resulting in a gain of $0.2 million recognized as a reduction to general and administrative expenses in the consolidated statements of income. This adjustment reflects our updated expectation of future performance and aligns with the requirements of ASC 805.

On March 27, 2024, Hoozu Holdings, Ltd was privatized and restructured to become Hoozu Holdings Pty, Ltd. This administrative change reflects a desire to streamline financial operations.

Acquisition of 26 Talent

On July 1, 2024, the Company, through its subsidiary Hoozu, completed the acquisition of 26 Talent in connection with the Company’s strategic expansion efforts in the Asia-Pacific (APAC) region. 26 Talent was subsumed by Hoozu’s Huume talent management division following the acquisition, making it part of the December 18, 2024 sale of Hoozu. Consideration for the acquisition consisted of cash of $0.2 million and contingent consideration totaling up to $0.1 million, with twelve-month measurement periods ending July 31, 2025, and 2026. The contingent payments are based on meeting minimum Revenue thresholds for each measurement period. The contingent payments are hit-or-miss. The Company accounted for the acquisition in accordance with ASC 805, which requires the assets acquired and liabilities to be assumed to be recognized on the balance sheet at their fair market value as of the acquisition date.

Gross Purchase Considerations

First deferred purchase price installment(1) 38,000

Second deferred purchase price installment(1) 48,000

Total estimated consideration $ 236,000

(1)The Company’s acquisition of 26 Talent on July 1, 2024, included two equal contingent cash consideration payments totaling up to $0.1 million, with twelve-month measurement periods ending July 31, 2025 and 2026. The contingent payments are based on meeting minimum Revenue and Adjusted Earnings before Taxes and Depreciation thresholds for each measurement period. The contingent payments are hit-or-miss. The Company determined the fair value of these contingent payments, using Monte Carlo simulation methods, to be $86,000 at the acquisition date, subject to periodic adjustment until both measurement periods are complete.

The table below presents the provisional fair values on July 1, 2024, allocated to the assets acquired and liabilities assumed. The fair values are presented in the following table:

Purchase Price Allocation

Prepaid expenses 8,480

Purchase consideration, excluding cash received $ 143,606

Total purchase consideration $ 236,000

Accounts receivable shown in the above table represent their gross amount, which approximates the fair value, and are expected to be collected in full.

Other intangible assets with definite lives include acquired customer relationships of $0.2 million. The preliminary fair value of customer-related intangible assets fair value was determined by using the income approach. Acquired customer

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

relationships generally have useful lives of 10 years unless shorter periods are warranted, and are amortized to operating costs on an accelerated basis.

Contingent liability purchase price installments, which total $0.1 million based on meeting certain revenue and EBITDA milestones for 2025 and 2026, were recorded at their fair value of $86,000 at the acquisition date. The contingent liability value is subject to periodic adjustment until both measurement dates are completed.

Acquisition of Zuberance

On December 1, 2023, the Company entered into an Asset Purchase Agreement (the “Agreement”) with Zuberance, Inc., a Delaware corporation (“Zuberance”). Zuberance is a pioneering advocate marketing software platform. Zuberance provides marketers with the tools to build white-label communities of their customers and influencers while engaging these communities to serve as advocates for their brand, leading to low-cost content creation. The net purchase price was $18,400 in cash consideration, allocated to the fair value of assets acquired and liabilities assumed, as shown in the following table:

Estimated Fair Value

Intangibles-customer relationships $ 162,725

Current liabilities (58,138)

Total purchase price $ 18,400

The customer-related intangible assets’ fair value was determined using the income approach, has an estimated useful life of 5 years, and will be amortized to operating expenses on an accelerated basis.

During the fourth quarter of 2024, the Company determined to sunset the Zuberance platform on December 31, 2024, aligning with its commitment to reduce unprofitable investments and to hasten improved financial performance.

Other

On July 24, 2024, the Company entered into an agreement with The Reiman Agency (“TRA”) and subsequently terminated this agreement, effective September 30, 2024.All consideration paid to TRA upon closing has been returned, and the inducement grant issued in connection with Mr. Reiman’s employment was forfeited, including a termination fee. The operating results of TRA, which are immaterial, are included in the Company’s operating results for the September 30, 2024 quarter.

NOTE 3. FINANCIAL INSTRUMENTS

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

The Company has appointed a leading national bank for custody services with respect to investment securities. Investments comply with the Company’s revised investment strategy policy, designed to preserve capital, minimize investment risks, and maximize returns.

The following table shows the Company’s cash, cash equivalents, and marketable securities by significant investment category as of December 31, 2024:

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

Level 1 (2)

Commercial paper — — — — — —

Level 2 (3)

(1) Current Marketable Securities have a holding period under one year.

(2) Level 1 fair value estimates are based on quoted prices in active markets for identical assets and liabilities.

(3)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 full term of the assets and liabilities.

The Company records the fair value of cash equivalents and marketable securities on the balance sheet. The adjusted cost, which includes unrealized gains and losses, reflects settlement amounts if all investments are held to maturity. The Company recognized a loss of $4,323 for the twelve months ended December 31, 2024, and recognized a gain of $104 for the twelve months ended December 31, 2023, respectively. Realized gains and losses are a component of other income (expense), net. Unrealized gains and losses are a component of other comprehensive income (loss) (“OCI”).

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

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

Fair Value Net Unrealized Gain (Loss) Fair Value Net Unrealized Gain (Loss)

During the twelve months ended December 31, 2024, the Company did not recognize any credit losses and had no ending allowance balance for credit losses.

IZEA Worldwide, Inc.

Notes to the Consolidated Financial Statements

NOTE 4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

Depreciation expense on property and equipment recorded in depreciation and amortization expense in the consolidated statements of operations and comprehensive loss was $0.1 million and $99,408 for the twelve months ended December 31, 2024 and 2023, respectively.

NOTE 5. INTANGIBLE ASSETS

Definite Lived Intangible Assets

Definite lived intangible assets, net of amortization as of December 31, 2024, and December 31, 2023, totaled $0 and $1.7 million, respectively.

As of December 31, 2024, the Company concluded the divestiture of its Hoozu business and the sunsetting of its Zuberance platform. In connection with these strategic decisions, all related intangible assets, including software, intellectual property, and other intangible assets associated with Hoozu and Zuberance, were fully written off. This write-off reflects the cessation of operations related to these assets and the Company’s commitment to streamlining its portfolio in alignment with its evolving business strategy. The write-off was recorded in the Company’s financial statements for the year ending December 31, 2024, resulting in a non-cash income statement charge.

Customer lists

Total intangible assets from the Company’s acquisitions and other acquired assets net of accumulated amortization thereon consisted of the following:

Hoozu intangible assets $ — $ 1,603,000

Zuberance intangible assets — 162,508

Less accumulated amortization — (16,067)

Intangible assets, net $ — $ 1,749,441

Amortization expense recorded in depreciation and amortization in the accompanying consolidated statements of operations and comprehensive loss was $0.3 million and $16,068 for the twelve months ended December 31, 2024 and 2023, respectively.

Digital Assets

In September 2024, the Company sold all its digital assets for total proceeds of $0.2 million, net of de minimis fees.

As of December 31, 2024, the Company no longer held any digital assets. The Company recorded a gain of $28,414 for the twelve months ended December 31, 2024, respectively.

The Company determines the fair value of its digital assets on a recurring basis in accordance with ASU 2023-8, Accounting for and Disclosure of Crypto Assets, 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 monthly to identify whether the fair market value of the digital assets has changed. If the then-current carrying value of a digital asset is different from the fair value so determined, an adjustment in the amount equal to the difference between their carrying value and the price determined is recognized.

Gains and losses on digital assets are recognized within other income in the consolidated statements of operations and comprehensive loss in the period in which the change to fair market value is identified. 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 changed as follows:

Amount

Currency translation adjustment $ (1,505)

Divestiture of subsidiary (1,266,393)

Currency translation adjustment 2,743

Balance on December 31, 2024 $ —

The Company completed its acquisition of Hoozu on December 1, 2023. While Hoozu’s business is reported together with our Managed Services business, it will be treated as a separate component for goodwill impairment testing.

The Company performs an annual impairment assessment of goodwill on October 1 each year or more frequently if certain indicators are present. In September 2024, the Company identified a triggering event related to changes in executive management and Board-level changes, including the Cooperation Agreement. As a result, the Company performed an interim assessment of goodwill using the income approach of the discounted cash flow method and the market approach of the guideline transaction method. This assessment determined that the carrying value of the Company’s IZEA reporting segment exceeded its fair value, leading to a $4.0 million goodwill impairment recorded in September 2024.

In December 2024, in conjunction with recording a loss on the divestiture of its Hoozu reporting unit, the Company recognized a 1.3 million impairment related to intangible assets from the divested business, bringing the consolidated goodwill impairment for the year ended December 31, 2024, to $5.3 million.

The Company had no goodwill balance remaining as of December 31, 2024.

NOTE 6. SOFTWARE DEVELOPMENT COSTS

Software development costs consist of the following:

In 2022, the Company began developing two new web-based influencer marketing platforms, IZEA Flex and Marketplace,to replace IZEAx and Shake, respectively. IZEAx was sunset in mid-2023, and Shake was sunset in Q4 of 2022. The Company capitalized software development costs of $0.8 million during the twelve months ended December 31, 2024. The Company capitalized software development costs of $0.9 million during the twelve months ended December 31, 2023. As a result, the Company has capitalized $2.9 million in direct materials, consulting, payroll, and benefit costs to its internal-use software development costs in the consolidated balance sheet as of December 31, 2024.

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 useful life of five years, which is consistent with the amount of time its legacy platforms were in service or its actual useful life, if shorter. The Company recorded amortization expenses associated with its capitalized software development cost of $0.8 million and $0.6 million during the twelve months ended December 31, 2024 and 2023, respectively.

In December 2024, the Company completed a review of its software assets and wrote off fully amortized balances that were no longer active. Additionally, the Company accelerated approximately $0.2 million of amortization of certain software assets that were determined to be no longer in use. These adjustments align with the Company’s commitment to maintaining accurate financial reporting and reflect the updated status of its intangible assets.

As of December 31, 2024, future estimated amortization expense related to software development costs is set forth in the following schedule:

Software Development Amortization Expense

NOTE 7. ACCRUED EXPENSES

Accrued expenses consist of the following:

Current portion of finance obligation 59,386 59,386

(1)During the quarter ended September 30, 2024, the Company announced the departure of two executives. In accordance with their Separation Agreements and the payments they are entitled to receive, a severance amount of $0.9 million was accrued and will be paid over a twelve-month period. In December 2024, in conjunction with a targeted workforce reduction, the Company accrued $0.3 million in severance costs to be paid in January 2025.

NOTE 8. NOTES PAYABLE

Finance Obligation

The Company pays for its laptop computer equipment through long-term payment plans, using an imputed interest rate of 8%, based on its incremental borrowing rate, to determine the present value of its financial obligation and to record interest expense over the term of the plan. The Company refreshed a portion of its computer inventory during the fourth quarter of 2022, entering a new three-year payment plan with the same vendor. The total balance owed was $63,420 and $122,805 as of December 31, 2024 and December 31, 2023, respectively, with the short-term portion of $59,386 and $59,386 recorded under accrued expenses in the consolidated balance sheets as of December 31, 2024, and December 31, 2023, respectively.

Summary

Interest expense on financing arrangements recorded in the Company’s consolidated statements of operations was $8,129 and $8,226 during the twelve months ended December 31, 2024 and 2023, respectively. As of December 31, 2024, the future contractual maturities of the Company’s long-term payment obligations by year are set forth in the following schedule:

NOTE 9. COMMITMENTS AND CONTINGENCIES

Deferred Purchase Price

On December 18, 2024, the Company completed its divestiture of Hoozu, including its future obligations related to consolidated Hoozu and 26 Talent contingent liabilities.

The Company’s acquisition of Hoozu on December 1, 2023, included four equal contingent cash consideration payments totaling $0.4 million, with twelve-month measurement periods ending December 31, 2024 and 2025. The Company recorded a contingent liability of $0.2 million, the initial fair value of these contingent payments at the purchase date, subject to quarterly adjustment until both measurement periods are completed. On June 30, 2024, the Company determined that achieving the contingent milestones was no longer possible based on current and projected business performance. Accordingly, it adjusted the fair value to zero, resulting in a gain of $0.2 million recognized as a reduction to general and administrative expenses in the consolidated statements of income. This adjustment reflects our updated expectation of future performance and aligns with the requirements of ASC 805.

The Company’s acquisition of 26 Talent through its subsidiary Hoozu on July 1, 2024, included two equal contingent cash consideration payments totaling $0.1 million, with twelve-month measurement periods ending July 31, 2025, and 2026. The contingent payments are based on meeting minimum Revenue thresholds for each measurement period. The contingent payments are hit-or-miss. The Company determined the fair value of these contingent payments to be $86,000 at the acquisition date, subject to periodic adjustment until both measurement periods are completed.

Lease Commitments

The Company does not have any operating or finance leases greater than 12 months in duration as of December 31, 2024.

Retirement Plans

The Company offers a 401(k) plan to its eligible employees. The Company matches participant contributions in an amount equal to 50% of each participant’s contribution up to 8% of the participant’s salary. The participants become vested in 20% annual increments after two years of service or fully vest upon the age of 60. Total expense for employer matching contributions during the twelve months ended December 31, 2024, and 2023 was recorded in the Company’s consolidated statements of operations as follows:

Twelve Months Ended

Litigation

From time to time, the Company may become involved in lawsuits and various other legal proceedings that arise in the ordinary course of its business. Litigation is, however, subject to inherent uncertainties and an adverse result in any such litigation that may arise from time to time that may harm the Company’s business. The Company is currently not party to any legal proceedings or claims that it believes would or could have, individually or in the aggregate, a material adverse effect on the Company.

NOTE 10. STOCKHOLDERS’ EQUITY

Authorized Shares

The Company has 50,000,000 authorized shares of common stock and 10,000,000 authorized shares of preferred stock, each with a par value of $0.0001 per share. 500,000 shares of preferred stock are designated as Series A Junior Participating Preferred Stock.

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 Annual Report on Form 10-K.

Share Repurchase

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.

During the repurchase program, the Company 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 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 issued, if and when needed, for general corporate purposes. The repurchase program was completed in August 2023.

On June 28, 2024, the Company announced that its Board of Directors had authorized a $5.0 million share repurchase program of the Company’s common stock. In conjunction with the cooperation agreement signed on September 6, 2024, the repurchase maximum was raised to $10.0 million. On September 30, 2024, the Company entered into an agreement adopted under the safe harbor provided by Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The agreement assists the Company in implementing its stock repurchase programs, providing for the purchase of up to $9.9 million, the remaining amount under its $10.0 million share repurchase program. Purchases under the Rule 10b5-1 plan commenced on November 1, 2024, and terminate on the earliest of May 15, 2025, until the aggregate number of shares are repurchased or upon certain other events. Purchases will be made from time to time, depending on market conditions, in open market or privately negotiated transactions, at prices deemed appropriate by management. As of December 31, 2024, 220,994 shares had been repurchased under the program with an average price per share of $2.70, for a total of $0.6 million.

Equity Incentive Plan

The Company’s stockholders approved an amendment and restatement of the 2011 Equity Incentive Plan at the Company’s 2024 Annual Meeting of Stockholders held on December 12, 2024, to increase the number of plan shares by 700,000 shares, from 3,675,000 to 4,375,000 shares. As of December 31, 2024, the Company had 1,112,242 remaining shares of common stock available for issuance pursuant to future grants under the 2011 Equity Incentive Plan.

Restricted Stock

Under the 2011 Equity Incentive Plan, the Board determines the terms and conditions of each restricted stock issuance, including any future vesting restrictions.

In 2023, the Company issued its five independent directors a total of 131,520 shares of restricted common stock with a grant date fair value of $0.3 million for their annual service as directors of the Company. The stock was granted in installments on the last day of each quarter and vested immediately.

In the twelve months ended December 31, 2024, the Company issued its seven independent directors a total of 125,863 shares of restricted common stock, respectively, with an aggregate grant date valuation of $0.3 million for their service as directors of the Company.

The following table contains summarized information about restricted stock issued during the years ended December 31, 2023 and December 31, 2024:

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.

Expenses recognized on restricted stock issued to directors for services were $0.3 million and $0.3 million during the twelve months ended December 31, 2024, and 2023, respectively. There were $0 and $376 during the twelve months ended December 31, 2024, and 2023, recognized on restricted stock issued to employees, respectively.

On December 31, 2024, the fair value of the Company’s common stock was approximately $2.75 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 December 31, 2024, is $0.

Restricted Stock Units

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

During the twelve months ended December 31, 2023, the Company issued a total of 870,191 time-based restricted stock units, initially valued at $2.1 million, as additional compensation: 491,482 restricted stock units initially valued at $1.2 million to non-executive employees and 378,709 restricted stock units initially valued at $0.9 million to executives. These restricted stock units have vesting periods ranging from 36 to 48 months from issuance.

During the twelve months ended December 31, 2024, the Company issued a total of 2,348,423 time-based and performance-based restricted stock units, initially valued at $4.8 million, as additional compensation: 971,391 time-based restricted stock units, initially valued at $2.3 million, to non-executive employees and 886,632 time-based restricted stock units, initially valued at $2.0 million, to executives. These time-based restricted stock units have vesting periods ranging from 36 to 48 months from issuance. Additionally, 490,400 performance-based restricted stock units (“PBRSUs”) were granted with an initial fair value of $0.5 million. The vesting of these awards will occur annually over a four-year period and is contingent upon the achievement of specified performance measures, including a market condition.

The fair value of the awards is estimated on the grant date using a Monte Carlo simulation model due to the market condition for the performance-based restricted stock units. The fair value assumptions using the Monte Carlo simulation model for awards granted in 2024 and 2023 were:

Risk-free rate 4 % — %

Simulation term (in years) 3.3 —

Annual volatility (rounded) 55 % — %

The following table contains summarized information about restricted stock units during the years ended December 31, 2023, and the twelve months ended December 31, 2024:

(1)During the quarter ended September 30, 2024, the Company announced the departure of two executives. In accordance with their Separation Agreements, all outstanding equity awards, including stock options and restricted stock units (RSUs), held by the departing executives vested immediately upon separation, resulting in the vesting of 523,683 RSUs.

Expenses recognized on restricted stock units issued to employees were $2.6 million and $0.7 million during the twelve months ended December 31, 2024 and 2023, respectively. On December 31, 2024, the fair value of the Company’s common stock was approximately $2.75 per share, and the intrinsic value of the non-vested restricted units was $4.3 million. Future compensation related to the non-vested restricted stock units as of December 31, 2024, is $3.1 million, and it is estimated to be recognized over the weighted-average vesting period of approximately 2.6 years.

Stock Options

Under the 2011 Equity Incentive Plan, the Board 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 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 at the time of grant, the 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 option typically vest on a straight-line basis over the requisite service period as follows: 25% one year from the date of grant with the remaining vesting monthly in equal increments over the following three years. The Company issues new shares for any stock awards or options exercised under its 2011 Equity Incentive Plan.

A summary of option activity under the 2011 Equity Incentive Plan during the years ended December 31, 2023, and the December 31, 2024, is presented below:

During the twelve months ended December 31, 2024, 65,154 options were exercised for gross proceeds of $79,083. The intrinsic value of the exercised options was $86,360. During the twelve months ended December 31, 2023, 586 options were exercised for gross proceeds of $563. The intrinsic value of the exercised options was $838. The fair value of the Company's common stock on December 31, 2024, was approximately $2.75 per share, and the intrinsic value on outstanding options as of December 31, 2024, was $304. The intrinsic value of the exercisable options as of December 31, 2024, was $304.

A summary of the nonvested stock option activity under the 2011 Equity Incentive Plan during the years ended December 31, 2023, and December 31, 2024, is presented below:

Expenses recognized on stock options issued to employees during the twelve months ended December 31, 2024 and 2023 were $0.2 million and $0.2 million, respectively. Future compensation related to non-vested awards as of December 31, 2024, is $9,002, and it is estimated to be recognized over the weighted-average vesting period of approximately 3.7 years.

Zero stock options were granted under the 2011 Equity Incentive Plan in the twelve months ended December 31, 2024, and 2023.

Inducement Plan

On November 30, 2023, the Board of Directors adopted the IZEA Worldwide, Inc. 2023 Inducement Plan (the “Inducement Plan”) to accommodate equity grants to new employees hired by IZEA in connection with acquisition transactions, including the Hoozu acquisition. Under the Inducement Plan, IZEA may grant restricted stock units (“RSUs”), including performance-based and time-based RSUs, with respect to up to a total of 1,800,000 shares of IZEA common stock to new employees of IZEA or its subsidiaries. Pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules, the Inducement Plan was adopted without stockholder approval. In accordance with Rule 5635(c)(4) of the NASDAQ Listing Rules, awards under the Inducement Plan can only be made to individuals not previously employees or non-employee directors of IZEA (or following such individuals’ bona fide period of non-employment with IZEA), as an inducement material to the individuals’

entry into employment with IZEA or in connection with a merger or acquisition, to the extent permitted by Rule 5635(c)(3) of the NASDAQ Listing Rules.

On December 1, 2023, the Board approved the grant of inducement awards under the Inducement Plan to five employees of Hoozu consisting of an aggregate of 328,354 unregistered performance-based RSUs as inducement awards material to such employees’ entering into employment with IZEA, pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules. The RSU grants, which vest in annual increments over a three-year performance period based upon the achievement of certain revenue and profitability metrics, represent the maximum number of shares that can be earned under the awards. Vesting is also subject to the receipt’s continued service through each annual vesting date. Unearned RSUs will be forfeited if the minimum revenue in each period is not achieved. Each award is subject to the terms and conditions of the Inducement Plan and the terms and conditions of the applicable RSU award agreement covering the grant. These grants were forfeited in connection with the December 18, 2024 Hoozu divestiture. On October 15, 2024, the Company granted 50,000 unregistered shares in conjunction with the employment of our Chief Talent Officer. The shares associated with the Inducement Plan were registered on March 27th, 2025, under Form S-8.

The following table contains summarized information about inducement grant-related RSUs during the years ended December 31, 2023, and December 31, 2024.

Inducement Shares Time-Based Performance Based Total

Forfeited — — —

Employee Stock Purchase Plan

The amended and restated IZEA Worldwide, Inc. 2014 Employee Stock Purchase Plan (the “ESPP”) provides for the issuance of up to 125,000 shares of the Company’s common stock 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). The ESPP operates in successive six-month periods commencing at the beginning of each fiscal year half. Each eligible employee who elects to participate may purchase up to 10% of their annual compensation in common stock, not to exceed $21,250 annually or 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 day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last day of the offering period. The ESPP will continue until January 1, 2028, unless otherwise terminated by the Board.

The stock compensation expense on ESPP options was $5,008 and $8,716 for the twelve months ended December 31, 2024, and 2023, respectively. As of December 31, 2024, there were 77,931 remaining shares of common stock available for future issuance under the ESPP. Cash received from employee contributions for ESPP Options was $13,818 and $17,322 for the twelve months ended December 31, 2024, and 2023, respectively.

Shareholder Rights Plan

On May 28, 2024, the Board of Directors declared a dividend to the holders of the Company’s common stock outstanding at the close of business on June 7, 2024 (the “Record Date”) of one preferred share purchase right (a “Right”) for each share of common stock. Each Right initially entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share (the “Preferred Shares”), at a price of $8.25 per one one-thousandth of a Preferred Share (the “Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in a rights agreement (the “Rights Agreement”), dated May 28, 2024, between the Company and Broadridge Corporate Issuer Solutions, LLC, as rights agent (the “Rights Agent”).

Initially, the Rights are attached to all common stock certificates outstanding as of the Record Date and evidenced by such shares being registered in the name of the holder thereof together with the Summary of Rights (as defined in the Rights Agreement), and no separate certificates evidencing the Rights (“Right Certificates”) will be issued. The Rights Agreement provides that, until the Distribution Date (as defined below), or earlier expiration or redemption of the Rights, (i) the Rights will be transferred with and only with the common stock, (ii) new common share certificates issued after the Record Date or upon transfer or new issuance of common stock will contain a legend incorporating the Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for common stock outstanding as of the Record Date, even without such legend or a

copy of the Summary of Rights, will also constitute the transfer of the Rights associated with the common stock represented by such certificate.

The Rights would separate and begin trading separately from the common stock, and Right Certificates will be caused to evidence the rights on the earlier to occur of (i) the close of business on the tenth (10th) business day after a public announcement that a person or group of affiliated or associated persons (with certain exceptions noted below, an “Acquiring Person”) has acquired beneficial ownership of 15% or more of the outstanding common stock and (ii) the close of business on the tenth (10th) business day after the commencement by any person of, or of the first public announcement of the intention of any person to commence, a tender or exchange offer the consummation of which would result in such person becoming the beneficial owner of 15% or more of the outstanding shares of common stock (the earlier of such dates being called the “Distribution Date”). As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (the “Rights Certificates”) will be mailed to holders of record of common stock as of the close of business on the Distribution Date, and such separate Rights Certificates alone will evidence the Rights.

“Acquiring Person” shall not include (i) any person who became an “Acquiring Person” as a result of the events described in (i) through (v) of Section 1 of the Rights Agreement, (ii) any Excluded Persons or Grandfathered Persons, each as defined under the Rights Agreement and (iii) any Exempt Persons (as defined below).

The Rights are not exercisable until the Distribution Date. The Rights will expire at the earliest of (i) the close of business on May 28, 2025, or such later date as may be established by the Board of the Company prior to the expiration of the Rights, (ii) the time at which the Rights are redeemed or exchanged by the Company, and (iii) upon the occurrence of certain transactions.

This description of the Rights Agreement herein does not purport to be complete and is qualified in its entirety by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 28, 2024.

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 Company and Summary of Significant Accounting Policies.” Total stock-based compensation expense recognized on restricted stock, restricted stock units, stock options, and employee stock purchase plan issuances during the twelve months ended December 31, 2024, and 2023 was recorded in the Company’s consolidated statements of operations as follows:

Twelve Months Ended

Accumulated Other Comprehensive Income (Loss)

We recognize activity in other comprehensive income (loss) for unrealized gains and losses on securities and foreign currency translation adjustments. The activity in accumulated other comprehensive income (loss) for the three and twelve months ended December 31, 2024, and 2023, respectively, was as follows:

Twelve Months Ended

NOTE 11. LOSS PER COMMON SHARE

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

Twelve Months Ended

Basic and diluted loss per common share $ (1.10) $ (0.45)

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:

Twelve Months Ended

Restricted stock — 12

NOTE 12. REVENUE

The following table illustrates the Company’s revenue by product service type:

Twelve Months Ended

Managed Services revenue is comprised of two types of revenue, Sponsored Social and Content. Sponsored Social revenue, which totaled $30.6 million for the twelve months ended December 31, 2024, respectively, is recognized over time. Content revenue, which totaled $4.5 million during the twelve months ended December 31, 2024, respectively, is recognized at a point in time and includes approximately $1.0 million related to Hoozu

SaaS Revenue is comprised of three types of revenue, License Fees, Marketplace Spend Fees, and Other Fees. License Fees revenue, which totaled $0.6 million for the twelve months ended December 31, 2024, respectively, is recognized over time. Marketplace Spend Fees revenue totaled $30,261, and Other Fees revenue totaled 0.2 million during the twelve months ended December 31, 2024 respectively, both recognized at a point in time.

The following table provides the Company’s revenues as determined by customer geographic region:

Twelve Months Ended

Contract Assets and Liabilities

IZEA US Equity

IZEA · 10-K · period ended 2024-12-31

ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

IZEA US Equity☆

IZEA · 10-K · period ended 2024-12-31

ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

IZEA US Equity