ITEM 1A – RISK FACTORS
You should carefully consider the factors discussed under this item regarding the numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If any of these risks occur, our business, financial condition, or results of operation may be materially and adversely affected. In such a case, the trading price of our common stock could decline, and investors could lose all or part of their investment. These risk factors may not identify all risks that we face, and our operations could also be affected by factors that are not presently known to us or that we currently consider immaterial to our operations. These risk factors reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
Risks Related to our Business and Industry
We have a history of annual net losses, expect future losses, and cannot assure you that we will achieve profitability.
We have incurred significant net losses and negative cash flow from operations for most periods since our inception, resulting in an accumulated deficit of $104.3 million as of December 31, 2025. For the year ended December 31, 2025, we reported a comprehensive loss of $116,641, which includes $42,326 of income from operations. We have not achieved annual profitability and cannot be certain that we will be able to generate sufficient revenue to do so in the future. Even if we achieve profitability, we may not be able to sustain it.
As a result, we may need to raise additional capital through new financings. This could include equity offerings, such as additional issuances of common stock under our “at the market offering” program, which may dilute existing stockholders, or debt financing, which could restrict our ability to borrow from other sources. Any securities we issue may have rights, preferences, or privileges senior to those of our current stockholders.
There can be no assurance that additional funds will be available on terms acceptable to us, or at all. If we are unable to obtain adequate funding, we may need to curtail or reduce our operations or sell or dispose of certain rights or assets. A failure to raise sufficient funds on commercially reasonable terms could ultimately result in our business failing and liquidating with little or no return to investors.
A few of our customers account for a significant portion of our gross revenue and accounts receivable, and the loss of, or reduced purchases from, these or other customers could have a material adverse effect on our operating results.
A significant portion of our revenue and accounts is concentrated among a small number of customers. During the year
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ended December 31, 2025, two customers each accounted for more than 10% of our gross revenue, and two customers each accounted for more than 10% of total accounts receivable. During the year ended December 31, 2024, two customers each accounted for more than 10% of gross revenue, and two customers each accounted for more than 10% of accounts receivable.
This concentration makes us dependent on the continued business of these customers. If demand for our services from these customers increases, our results may be positively impacted; however, if their demand decreases or they cease doing business with us, our operating results could be adversely affected. In addition, we typically do not enter into contracts with terms longer than one year, which allows most customers to reduce or discontinue their purchases from us on relatively short notice.
The loss of one or more of these significant customers, or our inability to replace the associated revenue with new customer relationships, could have a material adverse effect on our business, financial condition, and results of operations.
We may engage in acquisitions that could be difficult to integrate, divert the attention of key personnel, cause dilution to our shareholders and harm our financial condition and operating results.
We may make acquisitions of, or investments in, companies that we believe have products or capabilities that are a strategic or commercial fit with our current business or otherwise offer opportunities for our Company. In connection with these acquisitions or investments, we may issue common stock or other forms of equity that would dilute our existing shareholders’ percentage of ownership, incur debt and assume liabilities, and incur amortization expenses related to intangible assets or incur associated write-offs.
We may not be able to complete acquisitions on favorable terms. Even if we successfully integrate an acquired business, into our operations, there can be no assurance that we will realize the anticipated benefits. In the future, we may seek to acquire other businesses, with the expectation that the acquisition would result in various benefits for the combined Company, including, among others, business and growth opportunities and significant synergies from increased efficiency in client conversion and corporate support. Increased competition and/or deterioration in business conditions may limit our ability to expand the acquired business. As such, we may not realize the synergies, goodwill, business opportunities, and growth prospects anticipated with any acquisition.
Acquisitions may also have unanticipated tax, legal, regulatory, and accounting ramifications, including recording goodwill and non-amortizable intangible assets subject to impairment testing and potential periodic impairment charges and incurring amortization expenses related to certain intangible assets. For instance, if the acquired company has significant customer relationships or proprietary technology, these assets may be recorded as intangible assets and amortized over their estimated useful lives. Additionally, if the purchase price exceeds the fair value of the net assets acquired, the excess amount is recorded as goodwill, which must be tested for impairment at least annually. Unexpected changes in market conditions, financial performance, or synergies from the acquisition not materializing as expected could lead to impairment charges, impacting financial results. See Part II, Note 2 of Notes to Consolidated Financial Statements, Business Acquisitions and Divestitures for a related discussion of our acquisition and subsequent divestiture of Hoozu Holdings PTY, Ltd (“Hoozu”).
We are a remote workforce, which subjects us to certain operational challenges, costs, risks, and potential harm to our business.
In 2020, our workforce shifted from in-person to remote work, and we have since maintained this operating structure. We are therefore subject to the challenges, costs, and risks of having a remote workforce. For example, certain security systems in homes or other remote workplaces may be less secure than those previously used in our offices, which may subject us to increased security risks, including cybersecurity-related events, and expose us to data or financial loss risks associated with disruptions to our business operations. Members of our workforce who access Company data and systems remotely may not have access to robust technology, which could cause the networks, information systems, applications, and other tools available to those workers to be more limited or less reliable. We may also be exposed to risks associated with the locations of remote workers, including compliance with local laws and regulations or exposure to compromised internet infrastructure. Pursuant to various state laws, we are required to reimburse reasonable connectivity expenses for certain remote workers. Additionally, allowing members of our workforce to work remotely may create intellectual property risk if employees create intellectual property on our behalf while residing in a jurisdiction with unenforced or uncertain intellectual property laws. Further, if employees fail to inform us of changes in their work location, we may be exposed to additional risks without our knowledge. Remote working may also subject us to other operational challenges and risks. For example, remote working may adversely affect our ability to recruit and retain personnel who prefer an in-person work environment. If we cannot effectively maintain an entirely remote workforce, manage the cybersecurity and other risks of remote work, and maintain our corporate culture and workforce morale, our business could be harmed or otherwise negatively impacted.
We make numerous estimates or judgments relating to our critical accounting policies and these estimates create complexity in our accounting. If our accounting is erroneous or based on assumptions that change or prove to be incorrect, our operating results could change from investor expectations, which could cause our stock price to fall.
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We are required to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes in conformity with generally accepted accounting principles (“GAAP”) in the U.S. Such estimates and assumptions include, but are not limited to, judgments related to revenue recognition, stock-based compensation, credit risk, and values surrounding software development, intangible assets and goodwill, and their economic useful lives.
Various factors contribute to the complexity of our accounting. For example, the recognition of our revenue is governed by certain criteria that determine whether we report revenue either on a gross basis, as a principal, or on a net basis, as an agent, depending upon the nature of the sales transaction. Changes in how we control and manage our platforms, contractual terms, our business practices, or other changes in accounting standards or interpretations may change the reporting of our revenue on a gross-to-net or net-to-gross basis. As a result, we may experience significant fluctuations in our revenue depending on the nature of our sales and our reporting of such revenue and related accounting treatment without any change in our underlying business or net income. Our guidance or estimates about the combination of gross or net revenue are based upon the volumes and characteristics of the revenue mix during the period. Those estimates and assumptions may be inaccurate when made or rendered incorrect by subsequent changes in circumstances, such as changing the characteristics of our offerings or particular transactions in response to client demands, market developments, regulatory pressures, acquisitions, and other factors. In addition, we may incorrectly extrapolate from the revenue recognition treatment of prior transactions to future transactions that we believe are similar but that ultimately are determined to have different characteristics that dictate different revenue reporting treatment. These factors may make our financial reporting more complex and challenging for investors to understand, may make a comparison of our results of operations to prior periods or other companies more difficult, may make it more difficult for us to give accurate guidance, and could increase the potential for reporting errors.
Further, our acquisitions have imposed purchase accounting requirements, required us to integrate accounting personnel, systems, and processes, necessitated various consolidation and elimination adjustments, and imposed additional filing and audit requirements. Our business's ongoing evolution, underlying GAAP changes, and any future acquisitions will compound these complexities. Our operating results may be adversely affected if we make accounting errors or our judgments prove to be wrong, assumptions change, or actual circumstances differ from those in our assumptions, which could cause our operating results to fall below investor expectations or guidance we may have provided, resulting in a decline in our stock price and potential legal claims.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
If we fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations or prevent fraud, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. We cannot assure you that any existing material weaknesses have been identified or that we will not identify material weaknesses in the future. Any failure to maintain adequate disclosure controls and internal control over financial reporting could adversely affect our business and results of operations and adversely impact our business, operating results, and financial condition.
If we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC. Furthermore, investor perceptions of our Company may suffer if, in the future, material weaknesses are found, and this could cause the price of our common stock to decline.
Historically, we have not relied upon patents to protect our proprietary technology, and our competitors may be able to offer similar products andservices, which would harm our competitive position.
Our success depends upon our proprietary technology. We do not have registered patents on any of our current platforms because we have determined that the costs of patent prosecution outweigh the benefits given the alternative of reliance upon copyright law to protect our computer code and other proprietary technology and properties. In addition to copyright laws, we rely upon service mark and trade secret laws, confidentiality procedures, and contractual provisions to establish and protect our proprietary rights. We enter into non-disclosure agreements with our employees and consultants as part of our confidentiality procedures. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products to obtain and use information that consider proprietary or develop similar technology independently. Policing unauthorized use of our products is complex. While we cannot determine the extent to which piracy of our software products exists, software piracy can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the U.S., and effective copyright, trademark, trade secret, and patent protection may not be available in those jurisdictions. Our means of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights by others, and we cannot assure you
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that our competitors will not independently develop similar technology, duplicate our products and services, or design around any intellectual property rights we hold.
We cannot provide any assurance that our proprietary rights with respect to our products or services will be viable or have value in the future since the validity, enforceability, and type of protection of proprietary rights in Internet-related industries are uncertain and still evolving.
If third parties claim that we infringe their intellectual property rights, it may result in costly litigation.
We cannot assure you that third parties will not claim our current or future products or services infringe on their intellectual property rights. Any such claims, with or without merit, could cause costly litigation that could consume significant management time. As the number of product and services offerings in our market increases and functionalities increasingly overlap, companies such as ours may become increasingly subject to infringement claims. These claims, even if not meritorious, could be expensive to defend and could divert management’s attention from operating our business. These claims also might require us to enter into royalty or license agreements. If required, we may not be able to obtain such royalty or license agreements or obtain them on terms acceptable to us.
Further, in recent years, there has been significant litigation in the U.S. involving patents and other intellectual property rights, particularly in the software and Internet-related industries. If we become liable to third parties for infringing their intellectual property rights, we could be required to pay a substantial award of damages and develop non-infringing technology, obtain a license or cease selling the products that contain the infringing intellectual property. We may not be able to develop non-infringing technology or obtain a license, on commercially reasonable terms.
Intense competition in our target markets could impair our ability to grow and to achieve profitability.
The market for influencer and content marketing is highly competitive. We expect this competition to continue to increase, partly because there are no significant barriers to entry to our industry for operating in a Managed Services or an agency-type model. Increased competition may result in reduced pricing for managed campaigns, reduced margins, and reduced revenue due to lost market share. Our principal competitors include other companies that provide marketers with Internet advertising solutions and companies that offer pay-per-click search services.
Within SaaS Services, while there is a higher technological barrier to entry, IZEA is vulnerable to new entrants with access to fresh capital and the ability to capitalize upon previous research and development investments made by us. This is particularly challenging given the minimal opportunity to protect our internet-based software via patents.
We also compete with traditional advertising media, such as direct mail, television, radio, cable, and print, for a share of marketers' total advertising budgets. Many current and potential competitors enjoy competitive advantages over us, such as longer operating histories, greater name recognition, larger customer bases, greater access to advertising space on high-traffic websites, and significantly greater financial, technical, sales, and marketing resources. As a result, we may be unable to compete successfully. If we fail to compete successfully, we could lose customers, and our revenue and results of operations could decline.
In addition, as we continue our efforts to expand the scope of our services, we may compete with a greater number of other media companies across an increasing range of different services, including in vertical markets where competitors may have advantages in expertise, brand recognition, and other areas. If existing or future competitors develop or offer products or services that provide significant performance, price, creative or other advantages over those offered by us, our business, prospects, results of operations, and financial condition could be negatively affected.
Our total number of user accounts may be higher than the number of our actual individual marketers or creators and may not be representative of the number of persons who are active users.
Our total number of user accounts on ourplatforms may be higher than the number of our actual individual marketers and creators because some may have created multiple accounts for different purposes, including other user connections. We define a user connection as a social account or blog added to our platforms under a user account. One user can add as many user connections as they like, and it is common for talent managers and large publishers to add several connections under a single account. Given the inherent challenges in identifying these creators, we do not have a reliable system to accurately determine the number of actual individual creators. Thus, we rely on the number of total user connections and user accounts to measure the size of our user base. In addition, the number of user accounts includes the total number of individuals who have completed registration through a specific date, minus those who have unsubscribed, and should not be considered representative of the number of persons who continue create to fulfill the sponsorships offered through our platforms actively. Many users may create an account but not actively participate in marketplace activities.
Delays in releasing enhanced versions of our products and services could adversely affect our competitive position.
As part of our strategy, we expect to periodically release enhanced versions of our platforms and related services. Even
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if our new versions contain the features and functionality our customers want, in the event we are unable to timely introduce these new product releases, our competitive position may be harmed. We cannot assure you that we will be able to complete the development of currently planned or future products in a timely and efficient manner. Due to the complexity of these products, internal quality assurance testing and customer testing of pre-commercial releases may reveal product performance issues, undesirable feature enhancements, or additional desirable feature enhancements that could lead us to postpone the release of these new versions. In addition, the reallocation of resources associated with any postponement would likely cause delays in the development and release of other future products or enhancements to our currently available products. Any delay in releasing other future products or enhancements of our products could adversely impact our financial results.
We rely on third-party social media platforms to provide the mechanism necessary to deliver influencer marketing, and any change in the platform terms, costs, availability, access, algorithmic ranking, or display policies could adversely affect our business.
We rely on third-party social media platforms such as Facebook/Instagram (collectively known as Meta), TikTok, X (formerly Twitter), and YouTube for core aspects of influencer data. These platforms include technologies that provide some of the functionality required to operate the influencer marketing portion of our platform, as well as functionalities such as user traffic reporting, ad-serving, content delivery services, discovering services, and metrics. There can be no assurance that these providers will continue to make all or any of their technologies available to us on reasonable terms, or at all. Many of the social platforms offer their own competing marketplaces or services and may design their search and discovery algorithms to favor their own native content, advertising products, or creator marketplace offerings over third-party solutions such as ours. Changes to platform algorithms, ranking signals, or content discovery and display logic, including decisions to self-preference competing products in search results or reduce organic reach for content associated with third-party marketing platforms, could materially reduce traffic, content performance, and measurable return on investment for our marketers. Third-party social media platforms may start charging fees or otherwise change their business models in a manner that impedes our ability to use their technologies. In any event, we have no control over these companies or their decision-making for granting us access to their social media platforms or providing us with analytical data, and any material change in the current terms, costs, availability, algorithmic policy or use of their social media platforms or analytical data could adversely affect our business.
In response to U.S. regulatory actions, TikTok’s U.S. operations were divested into a majority-American-owned joint venture in January 2026 under the Protecting Americans from Foreign Adversary Controlled Applications Act, allowing the platform to continue operating in the United States with new governance and data security responsibilities. However, this transition and ongoing regulatory scrutiny could still result in changes to platform functionality, data access, costs, user engagement, or competitive dynamics that materially impact our business, and there can be no assurance that any platform will not impose restrictions or modify terms in a manner that adversely affects our operations or results of operations.
We are also dependent on search engines to drive discovery of, and traffic to, our platforms. Search engines may alter their ranking algorithms in ways that reduce the visibility of our platforms and services and disadvantages our website relative to competitors. Any such changes, or any determination by a search engine operator to self-preference its own competing marketplace or influencer marketing products in search or discovery results, could reduce traffic to our platforms, impair creator and marketer acquisition, and adversely affect our business and results of operations.
Our business depends on continued and unimpeded access to the Internet by us and by our customers and their end-users. Internet access providers or distributors may be able to block, degrade or charge for access to our content, which could lead to additional expenses to us and our customers and the loss of end-users and advertisers.
Products and services such as ours depend on our ability and the ability of our customers’ users to access the Internet. Currently, this access is provided by companies that have, or may have in the future, significant market power in the broadband and Internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, and government-owned service providers. Some of these providers may take or have stated that they may take measures that could degrade, disrupt, or increase the cost of user access to products or services such as ours by restricting or prohibiting the use of their infrastructure to support or facilitate product or service offerings such as ours, or by charging increased fees to businesses such as ours to provide content or to have users access that content. In 2015, the Federal Communications Commission (“FCC”) released an order, commonly referred to as net neutrality, that, among other things, prohibited (i) the impairment or degradation of lawful Internet traffic based on content, application, or service and (ii) the practice of favoring some Internet traffic over other Internet traffic based on the payment of higher fees. In December 2017, the FCC voted to overturn the net neutrality regulations imposed by the 2015 order. In April 2024, the FCC voted to reinstate the net neutrality regulations, but the reinstated rules were temporarily blocked by the Sixth Circuit U.S. Court of Appeals in August 2024 pending the resolution of legal challenges brought by internet service providers. This area of the law remains uncertain, and we cannot predict the final outcome of the challenges to legal protections of net neutrality at the state and federal level. In this regulatory environment, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.
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Fluctuations in foreign currency exchange rates could result in unanticipated losses that could adversely affect our results of operations and financial position.
We are exposed to foreign currency exchange rate fluctuations because a portion of our sales, expenses, assets, and liabilities are denominated in foreign currencies. Changes in the value of foreign currencies, particularly the Canadian and Australian dollars, affect our results of operations and financial position. With respect to international sales initially priced using U.S. dollars as a cost basis, a decrease in the value of foreign currencies relative to the U.S. dollar would make our products less price competitive. Once the product is sold at a fixed foreign currency price, we could experience foreign currency gains or losses that could have a material effect on our operating results.
New tax treatment of companies engaged in Internet commerce may adversely affect the commercial use of our services and our financial results.
Due to the global nature of social media and our services, various states or foreign countries might attempt to regulate our transmissions or levy sales, income, or other taxes relating to our activities. Tax authorities at the international, federal, state, and local levels are reviewing the appropriate treatment of companies engaged in Internet commerce. New or revised international, federal, state, or local tax regulations may subject us or our creators to additional sales, income, and other taxes. We cannot predict the effect of current attempts to impose sales, income, or other taxes on commerce over social media. New or revised taxes, specifically sales taxes, VAT, and similar taxes would likely increase the cost of doing business online and decrease the attractiveness of advertising and selling goods and services over social media. New taxes could also increase the internal costs necessary to capture data and collect and remit taxes. Any of these events could have an adverse effect on our business and the results of operations.
We may become subject to government regulation and legal uncertainties that could reduce demand for our products and services orincrease the cost of doing business, thereby adversely affecting our financial results.
As described in the section “Business - Government Regulation,” we are subject to laws and regulations applicable to businesses generally and certain laws or regulations directly applicable to service providers for advertising and marketing Internet commerce. Due to the increasing popularity and use of social media, it is possible that some laws and regulations may become applicable to us or social media platforms on which we are dependent, or may be adopted in the future concerning social media covering issues such as:
•truth-in-advertising;
•user privacy;
•taxation;
•right to access personal information;
•copyrights;
•distribution; and
•characteristics and quality of services.
The applicability of laws governing property ownership, copyrights, and other intellectual property, encryption, taxation, libel, and export or import matters to social media platforms is uncertain. Most of these laws were adopted before the broad commercial use of social media platforms and related technologies. As a result, they do not contemplate or address the unique issues of social media and associated technologies. Changes to these laws intended to address these issues, including recently proposed changes, could create uncertainty in the social media marketplace. Such uncertainty could reduce demand for our services or increase the cost of doing business due to increased litigation or service delivery costs.
Our influencer marketing business is subject to the risks associated with word-of-mouth advertising and endorsements, suchas violations of “truth-in-advertising” laws, the FTC Endorsement Guide, and other similar global regulatory requirements and, more generally, loss of consumer confidence.
As targeted advertising is increasingly scrutinized by regulators and the industry alike, a greater emphasis has been placed on educating consumers about their privacy choices on the Internet and providing them with the right to opt in or out of targeted advertising. The common thread throughout both targeted advertising and the FTC requirements described in detail in the section “Business - Government Regulation” is the increased importance placed on transparency between the marketer and the consumer to ensure that consumers know the difference between “information” and “advertising” on the Internet and are allowed to decide how their personal information will be used in the manner to which they are marketed. There is a risk regarding negative consumer perception of the practice of “undisclosed compensation” of social media users to endorse specific products. As described in the section “Business - Government Regulation,” we undertake various measures through controls across our platforms and by monitoring and enforcing our code of ethics to ensure that marketers and creators comply with the
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FTC's Endorsement Guide (and analogous laws and guidance in other countries) when utilizing our websites, but if competitors and other companies do not, it could create a negative overall perception for the industry. Not only will readers stop relying on social media and blogs for useful, timely, and insightful information that enriches their lives by having access to up-to-the-minute information that often bears different perspectives and philosophies, but a lack of compliance will almost inevitably result in greater governmental oversight and involvement in an already-highly regulated marketplace. A pervasive overall negative perception caused by a failure of our preventative measures or by others not complying with the FTC’s Endorsement Guide (among the FTC’s other acts, regulations, and policies, and analogous laws and guidance in different countries) could result in reduced revenue and results of operations and higher compliance costs for us.
Failure to comply with federal, state, and international privacy laws and regulations, or the expansion of current or the enactment of new privacy laws or regulations, could adversely affect our business.
A variety of federal, state, and international laws and regulations govern the collection, use, retention, sharing, and security of personal information (“Privacy Laws”), as described in the section “Business - Government Regulation.” Privacy Laws are evolving and subject to potentially differing interpretations. The EU’s GDPR requires companies to satisfy stricter requirements regarding the handling of personal and sensitive data, including its collection, use, protection, and the ability of persons whose data is stored to correct or delete such data about themselves. Other countries have or are expanding their Privacy Laws to follow suit, such as India’s Digital Personal Data Protection Act and China’s Personal Information Protection Law. Complying with these new and expanded Privacy Laws will cause us to incur substantial operational costs or may require us to change our business practices. For example, noncompliance with the GDPR could result in proceedings against us by governmental entities or others, fines up to the greater of €20 million or 4% of annual global revenues, and damage to our reputation and brand. We also may find it necessary to establish systems to effectuate cross-border personal data transfers of personal information originating from the European Economic Area, Australia, Japan, and other non-U.S. jurisdictions, which may involve substantial expense and distraction from other aspects of our business.
We have made certain public statements about our privacy practices concerning collecting, using, and disclosing creators’ personal information on our websites and platforms. Several Internet companies have incurred penalties for failing to abide by the representations made in their public-facing privacy notices. In addition, the United States state privacy law landscape has expanded significantly and continues to evolve at a pace that creates uncertainty and compliance complexity. All fifty states have enacted data breach notification laws that require businesses to implement and maintain reasonable security procedures and practices to protect sensitive personal information and to provide timely notice to consumers in the event of a security breach, with varying notice timing requirements, content specifications, and regulatory reporting obligations. Beyond breach notification, a growing number of states have enacted comprehensive consumer privacy rights laws, including the CCPA, as amended by the CPRA, and analogous laws in Virginia, Colorado, Connecticut, Utah, Florida, Texas, Oregon, Montana, Iowa, Delaware, Nebraska, New Hampshire, New Jersey, Tennessee, Minnesota, Maryland, Indiana, Kentucky, and Rhode Island that grant consumers rights to access, correct, delete, opt out of the sale or sharing of their personal data and opt out of profiling and targeted advertising. Several of these state statutes provide consumers with a private right of action for specified violations, which increases our potential litigation exposure independent of regulatory enforcement. The requirements of these laws vary by state and are subject to ongoing regulatory guidance and litigation that may alter compliance obligations. We are required to maintain privacy notices, honor consumer rights requests, conduct data processing assessments in certain jurisdictions, and implement technical and contractual safeguards with our vendors that satisfy these requirements. As more states enact or expand consumer privacy legislation, our compliance costs will increase, and our failure to comply, or to comply on a timely basis as new requirements take effect, could result in regulatory investigations, civil penalties, private litigation, and reputational harm that adversely affect our business and results of operations.
Any failure, or perceived failure, by us to comply with our public-facing privacy notices, FTC requirements or orders, or other federal, state, or international privacy or consumer protection-related laws, regulations, or industry self-regulatory principles could result in claims, proceedings, or actions against us by governmental or other entities or the incurring by us of other liabilities, which could adversely affect our business. In addition, a failure or perceived failure to comply with industry standards or our privacy policies and practices could result in losing creators or marketers and adversely affect our business. Federal, state, and international governmental authorities continue to evaluate the privacy implications of targeted advertising, such as cookies and other tracking technology. The regulation of these cookies and other current online advertising practices could adversely affect our business.
Our business depends on third-party tracking mechanisms in order to measure the performance of sponsored content and influencer campaigns.To the extent that the industry shifts away from third-party tracking mechanisms, our business could be adversely affected.
In addition to regulatory action regarding online privacy, the industry is also experiencing a structural shift away from third-party tracking mechanisms independent of regulatory mandates. Major web browser developers have announced or implemented the deprecation of third-party cookies, and mobile operating system providers, including Apple through its App
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Tracking Transparency framework, have introduced opt-in consent requirements for cross-app tracking that have materially reduced the availability of device-level advertising identifiers. These changes limit our ability and the ability of our marketer customers to target, measure, and attribute the performance of sponsored content and influencer-driven campaigns. The loss of third-party cookies and persistent device identifiers may impair campaign measurement accuracy, reduce the precision of audience targeting, and increase the cost and difficulty of demonstrating marketing return on investment to our customers. To the extent our competitors are better positioned to operate in a cookieless or identifier-restricted environment, our competitive position may be adversely affected. In addition, changes to email platform policies, including the tightening of spam classification thresholds implemented by major inbox providers in 2024, have increased the risk that our email communications to creators and marketers, including campaign notifications, platform alerts, and marketing outreach, may be delayed, filtered, or blocked. Any deterioration in email deliverability could impair our ability to communicate with and retain platform participants, adversely affecting our business.
Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, or if we receive unfavorable media coverage, our ability to expand our base of creators and marketers will be impaired and our business and operating results will be harmed.
The brand identity that we have developed has significantly contributed to the success of our business. We also believe that maintaining and enhancing the “IZEA” brand is critical to expanding our base of creators and marketers. Maintaining and enhancing our brand may require us to make substantial investments, and these investments may not be successful. If we fail to promote, maintain, and protect the “IZEA” brand or incur excessive expenses in this effort, our business, prospects, operating results, and financial condition will be materially and adversely affected. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly complex and expensive. Unfavorable publicity or consumer perception of our platforms, applications, practices or service offerings, or the offerings of our marketers, could adversely affect our reputation, resulting in difficulties in recruiting, decreased revenue, and a negative impact on the number of marketers and the size of our creator base, the loyalty of our creators and the number and variety of sponsorships we offer each day. As a result, our business, prospects, results of operation, and financial condition could be materially and adversely affected.
Our business depends on our ability to maintain and scale the network infrastructure necessary to operate our platforms and applications, and any significant disruption in service on our platforms and applications could result in a loss of creators or marketers.
Creators and marketers access our services through our platforms and applications. Our reputation and ability to acquire, retain, and serve our creators and marketers depend on the reliable performance of our platforms and applications and the underlying network infrastructure. If our creator base continues to grow, we will need increasing network capacity and computing power. We have and will continue to spend substantial amounts for cloud storage and computing power to handle the traffic on our platforms and data processing capabilities of our applications. The operation of these systems is expensive and complex and could result in operational failures. If our creator base or the amount of traffic on our platforms and applications grows more quickly than anticipated, we may incur significant additional costs. Interruptions in these systems, whether due to system failures, computer viruses, or physical or electronic break-ins, could affect the security or availability of our platforms and applications and prevent our creators and marketers from accessing our services. Third-party providers host our entire network infrastructure. Any disruption in these services or any failure of these providers to handle existing or increased traffic could significantly harm our business. Any financial or other difficulties these providers face may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide. If we do not maintain or expand our network infrastructure successfully or experience operational failures, we could lose current and potential creators and marketers or transactions between the two groups, which could harm our operating results and financial condition.
If our security measures are breached, or if our services are subject to attacks that degrade or deny the ability of users to access our platforms, our platforms and applications may be perceived as not being secure, marketers and creators may curtail or stop using our services, and we may incur significant legal and financial exposure.
Our platforms and applications and the network infrastructure that third-party providers host involve the storage and transmission of marketer and creator proprietary information, and security breaches could expose us to a risk of loss of this information, litigation, and potential liability. Our security measures may be breached due to the actions of outside parties, employee error, malfeasance, security flaws in the third-party hosting service that we rely upon, or any number of other reasons, and, as a result, an unauthorized party may obtain access to our data or our marketers’ or creators’ data. Additionally, outside parties may attempt to fraudulently induce employees, marketers, or creators to disclose sensitive information to gain access to our data or our marketers’ or creators’ data. Although we do have security measures in place, we have had instances where some customers have used fraudulent credit cards to pay for our services. While these breaches of our security did not result in material harm to our business, any future breach or unauthorized access could result in significant legal and financial exposure, damage to our reputation, and a loss of confidence in the security of our platforms and applications that could
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potentially hurt our business. Because the techniques used to obtain and use unauthorized credit cards, obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures on a timely basis. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed, and we could lose marketers, creators, and vendors and have difficulty obtaining merchant processors or insurance coverage essential for our operations.
If our technology platforms contain defects, we may need to suspend their availability and our business and reputation would beharmed.
Platforms as complex as ours often contain unknown and undetected defects or performance problems. Many serious defects are frequently found immediately following the introduction and initial release of new platforms or enhancements to existing platforms. Although we attempt to resolve all defects that our customers believe would be considered serious before making our platforms available to them, our products are not defect-free. We may be unable to detect and correct defects before releasing our product commercially. We cannot ensure that undetected defects or performance problems in our existing or future products will not be discovered in the future or that known defects, considered minor by us, will not result in serious issues for our customers. Any such defects or performance problems may be considered serious by our customers, resulting in a decrease in our revenues.
Some aspects of our business processes include open-source software, which poses risks that could have a material and adverse effect on our business, financial condition, and results of operations. In addition, any failure to comply with the terms of one or more of these open-source licenses, or lawsuits enjoining the use of such licensed software, could negatively affect our business.
We incorporate open-source software into processes supporting our business and anticipate using open-source software in the future. Such open-source software may include software covered by licenses like the GNU General Public License, CreativeML, and Open RAIL-M. Certain aspects of various open-source licenses to which we are subject, as well as third-party services that use these licenses, have not been interpreted by U.S. courts. There is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to operate certain features of our systems, limits our use of the software, inhibits certain aspects of our systems, and negatively affects our business operations.
Some open-source licenses contain requirements that we make source code modifications or derivative works we create publicly available or available on unfavorable terms or at no cost, based upon the type of open-source software we use.
While we monitor our use of open-source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open-source license, such use could inadvertently occur or could be claimed to have occurred, in part because open-source license terms are often ambiguous. We may face claims from third parties claiming ownership of, or demanding the release or license of, modifications or derivative works that we have developed using such open-source software (which could include our proprietary source code or models) or otherwise seeking to enforce the terms of the applicable open-source license. These claims could result in litigation, and if portions of our proprietary AI models or software are determined to be subject to an open-source license, or if the license terms for the open-source software that we incorporate change, we could be required to publicly release all or affected portions of our source code, purchase a costly license, cease offering the implicated products or services unless and until we can re-engineer such source code in a manner that avoids infringement, discontinue or delay the provision of our offerings if re-engineering could not be accomplished on a timely basis or change our business activities, any of which could negatively affect our business operations and potentially our intellectual property rights. In addition, the re-engineering process could require us to expend significant additional research and development resources, and we may not be able to complete the re-engineering process successfully. If we were required to disclose any portion of our proprietary models publicly, we could lose the benefit of trade secret protection for our models.
In addition to risks related to license requirements, the use of certain open-source software can lead to more significant risks than the use of third-party commercial software, as open-source licensors generally do not provide support, warranties, indemnification, controls, or other contractual protections regarding infringement claims or the quality of the origin of the software. There is little legal precedent in this area, and any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract could harm our business and could help third parties, including our competitors, develop products and services similar to or better than ours. The use of open-source software may also present additional security risks because the public availability of such software may make it easier for hackers and other third parties to determine how to breach our website and systems that rely on open-source software. Any of these risks associated with the use of open-source software could be challenging to eliminate or manage and, if not addressed, could materially and adversely affect our business, financial condition, and results of operations.
Our use of AI in our solutions may expose us to heightened cybersecurity risks, regulatory uncertainty and potential liability that could adversely affect our business.
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We incorporate AI and machine learning capabilities into certain of our solutions offerings and internal business processes. The use of AI introduces risks that are distinct from, and in some respects greater than, those associated with traditional software, and these risks are rapidly evolving as the regulatory landscape, the technology, and adversarial exploitation techniques develop.
From a cybersecurity perspective, the proliferation of AI tools has materially expanded the sophistication and scale of cyberattacks. AI-enabled techniques are increasingly used to generate phishing communications, social engineering attacks, and credential-theft schemes that are harder to detect than prior methods. Our systems and those of our third-party vendors and platform partners may be targeted by such AI-enabled attacks, and our existing security controls may not be sufficient to detect or contain them. A successful attack leveraging AI-generated or AI-assisted techniques could result in unauthorized access to our systems or data, disruption of our operations, and significant financial and reputational harm.
From a legal and regulatory perspective, the development and deployment of AI is subject to an increasingly complex and rapidly evolving body of law. In the United States, federal agencies and a growing number of states have proposed or enacted requirements governing the use of AI in automated decision-making, content generation, and consumer-facing applications, including requirements related to transparency, bias assessment and testing, human oversight, and consumer notification. The European Union’s AI Act imposes requirements on AI systems used in certain high-risk contexts and may affect our operations or the operations of our marketer and creator customers to the extent they use our AI-assisted tools in regulated contexts. We cannot predict the final form, scope, or timing of these regulatory developments, and compliance may require us to alter our products, modify our data practices, or incur significant additional costs.
AI-generated content used in influencer marketing campaigns, including copy, images, video and other creative assets produced with the assistance of generative AI tools, may also implicate intellectual property rights of third parties. AI models trained on third-party data or content may generate outputs that infringe existing copyrights, trademarks, or other proprietary rights, and the legal frameworks governing such infringement are unsettled. We or our customers and third-party contractors could be subject to claims of IP infringement arising from AI-generated campaign content, and the defense or resolution of such claims could be costly and time-consuming.
Additionally, AI systems can reflect biases present in their training data, which could result in outputs that are discriminatory, misleading, or otherwise harmful, potentially exposing us to claims under consumer protection, civil rights, or advertising standards laws. If our AI-assisted tools or our customers' use of them results in discriminatory outcomes or other harms, we could face regulatory action, litigation, or reputational damage that adversely affects our business.
We may be subject to lawsuits for information published on our websites or by our marketers or creators, which may adversely affect our business.
Laws relating to the liability of providers of online services for the activities of their marketers or their social media creators and the content of their marketers’ listings are currently unsettled. It is unclear whether we could be subject to claims for defamation, negligence, copyright or trademark infringement, or claims based on other theories relating to the information we publish on our websites, or the information published across our platforms. These claims have been brought, sometimes successfully, against online services and print publications. We may not successfully avoid civil or criminal liability for unlawful activities carried out by our marketers or our creators. Our potential liability for illegal activities of our marketers or our creators or the content of our marketers’ listings could require us to implement measures to reduce our exposure to such liability, which may require us, among other things, to spend substantial resources or to discontinue certain service offerings. Our insurance may not adequately protect us against these types of claims, and the defense of such claims may divert our management's attention from our operations. If we are subject to such lawsuits, it may adversely affect our business.
If we fail to detect click-fraud or other invalid clicks, we could lose the confidence of our marketers and advertising partners as a result of lost revenue to marketers or misappropriation of proprietary and confidential information, thereby causing ourbusiness to suffer.
“Click-fraud” is a form of online fraud when a person or computer program imitates a legitimate user by intentionally clicking on an advertisement to generate a charge per click without having actual interest in the target of the advertisement's link. We are exposed to the risk of fraudulent or illegitimate clicks on our sponsored listings. The security measures we have in place, designed to reduce the likelihood of click-fraud, detect click-fraud from occasionally. Although we do not charge customers on a cost-per-click basis, and the instances of click-fraud that we have detected to date have not had a material effect on our business, click-fraud could result in a marketer experiencing a reduced return on their investment in our advertising programs because the fraudulent clicks will not lead to revenue for the marketers. As a result, our marketers and advertising partners may become dissatisfied with our advertising programs, leading to losing marketers, advertising partners, and revenue. In addition, anyone who can circumvent our security measures could misappropriate proprietary and confidential information or cause interruptions in our operations. We may be required to expend significant capital and other resources to protect against such security breaches or to address problems caused by such breaches. Concerns over the security of the Internet and other
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online transactions and users' privacy may also deter people from using the Internet to conduct transactions that involve transmitting confidential information.
The influencer and content marketing industry is subject to rapid technological change and, to compete, we must continually enhance our products and services.
We must continue enhancing and improving our products and services' performance, functionality, and reliability. The influencer and content marketing industry is characterized by rapid technological change, changes in user requirements and preferences, frequent new product and service introductions embodying new technologies, and the emergence of new industry standards and practices that could render our products and services obsolete. In the past, we discovered that some of our customers desired additional performance and functionality not currently offered by our products. Our success will depend, in part, on our ability to develop new products and services that address our customers' increasingly sophisticated and varied needs and respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. Developing our technology and other proprietary technology involves significant technical and business risks. We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customer requirements or emerging industry standards. If we cannot adapt to changing market conditions, customer requirements, or emerging industry standards, we may not be able to increase our revenue and expand our business.
If we are unable to attract and retain qualified personnel, we may not be able to successfully manage our business and achieve our objectives.
We believe our future success will depend upon our ability to retain our key management personnel, who have unique knowledge regarding the influencer marketing space, business contacts, system design, and development expertise regarding our platforms that would be difficult to replace. If we are unable to retain key members of our management team, it could be viewed negatively by our customers, employees or investors and could have an adverse impact on our business and strategic decisions, if we do not successfully manage the subsequent transition to new leadership.
Our future success and our ability to expand our operations depends in large part on our ability to attract and retain qualified engineers, sales and marketing, and senior management personnel. Competition for these types of employees is intense due to the limited number of qualified professionals and the high demand for them. We have in the past experienced difficulty in recruiting qualified personnel. In addition, current or future immigration laws may make it more difficult to hire or retain qualified engineers, further limiting the pool of available talent. Failure to attract, assimilate and retain personnel, including key management, technical, sales, and marketing personnel, would have a material adverse effect on our business and potential growth.
Provisions in our charter, Nevada law and our Rights Agreement may discourage potential acquirers of the Company.
Our charter documents contain provisions that may have the effect of making it more difficult for a third party to acquire or attempt to acquire control of the Company, including enabling the Board to issue preferred stock with voting, conversion and exchange rights that may negatively affect the voting power or other rights of our common stockholders. In addition, we are subject to certain provisions of Nevada law that limit, in some cases, our ability to engage in certain business combinations with significant shareholders. In addition, on May 28, 2024, the Board declared a dividend to the holders of the Company’s common stock of one preferred share purchase right (a “Right”) per share of common stock. Each Right initially entitled 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, of the Company (the “Preferred Shares”) at a price of $8.25 per one one-thousandth of a Preferred Share, subject to adjustment. The Rights expired on May 28, 2025. The Board declared the dividend and adopted the rights agreement containing the description and terms of the Rights, to protect stockholders from coercive or otherwise unfair takeover tactics. If we were to declare a dividend of preferred share purchase rights again in the future, such rights may have the effect of delaying or discouraging a merger, tender offer, or assumption of control of the Company not approved by the Board. As a result, whether due to an issuance of preferred share purchase rights or provisions in our charter and under Nevada law, acquisitions of us that our shareholders may consider in their best interests may not occur.
Risks Relating to our Common Stock
Our common stock may be delisted if we fail to maintain compliance with the requirements for continued listing on the Nasdaq Capital Market, and the price of our common stock and our ability to access the capital markets could be negatively impacted.
Our common stock is listed for trading on the Nasdaq Capital Market (“Nasdaq”) under the symbol “IZEA.” To maintain this listing, we must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share for continued inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). In 2022, we fell out of compliance with the Bid Price Rule and regained compliance in 2023 by enacting a reverse stock split of our common stock at a ratio of 4 for 1.
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Although we are currently in compliance with the Bid Price Rule, if we fail to meet this or any of the other continued listing requirements in the future, our common stock may be delisted from Nasdaq, which could reduce the liquidity of our common stock materially and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us or at all and may result in the potential loss of confidence by investors, employees, and business development opportunities. Such a delisting likely would impair your ability to sell or purchase our common stock when you wish to do so. Further, if we were to be delisted from Nasdaq, our common stock may no longer be recognized as a “covered security,” we would be subject to regulation in each state in which we offer our securities. Thus, delisting from Nasdaq could adversely affect our ability to raise additional financing through the public or private sale of equity securities, significantly impact the ability of investors to trade our securities, and negatively impact the value and liquidity of our common stock.
We have raised and may raise in the future, additional capital to meet our business requirements and such capital raising may be costly or difficult to obtain and could dilute current stockholders’ ownership interests.
We have incurred losses since inception and expect to continue to incur losses until we can significantly grow our revenues. Therefore, we may need additional financing to maintain and expand our business.
The terms of any securities issued by us in future capital transactions may be more favorable to new investors and may include preferences, superior voting rights, and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then outstanding. In addition, we may incur substantial costs in pursuing future capital financing, including investment banking, legal, accounting, securities law compliance fees, printing and distribution expenses, and other costs. We may be required to bear the costs even if we are unable to complete any such capital financing. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible promissory notes and warrants, which may adversely impact our financial results.
Exercises of stock options, warrants, and other securities will dilute your percentage of ownership and could cause our stock price to fall.
As of March 12, 2026, we had 17,336,121 shares of our common stock issued and outstanding, which excludes outstanding stock options to purchase 14,518 shares of our common stock at an average exercise price of $13.00 per share and unvested restricted stock units of 1,676,939 shares with an intrinsic value of $4.9 million. We also have reserved 315,759 shares of common stock under our May 2011 Equity Incentive Plan for issuing stock options, restricted stock, or other awards to purchase or receive, and 52,992 shares of common stock available for issuance under our 2014 Employee Stock Purchase Plan.
On November 30, 2023, the IZEA Board of Directors adopted the IZEA Worldwide, Inc. 2023 Inducement Plan (the “Inducement Plan”) to accommodate equity grants to new employees hired by IZEA or its subsidiaries, including employment inducements in connection with acquisition transactions. 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. As permitted by Rule 5635(c)(4) of the Nasdaq Listing Rules, the Inducement Plan was adopted without stockholder approval. As of March 12, 2026, an aggregate of 50,000 RSUs, net of forfeitures are outstanding under the Inducement Plan.
In the future, we may grant these additional shares or issue new securities per terms defined in employment agreements or as part of additional incentive programs. The exercise, conversion, or exchange by holders of stock options, RSUs, or warrants for shares of common stock, or the issuance of new shares of common stock for additional compensation will dilute the percentage ownership of our stockholders. Issuance of a substantial number of shares of our common stock could cause the price of our common stock to fall and could impair our ability to raise capital by selling additional securities.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they adversely change their recommendations regarding our stock, our stock price and trading volume could decline.
The trading market for our common stock is influenced by the research and reports that securities or industry analysts may publish about us, our business, our market, or our competitors. No person is under any obligation to publish research or reports on us, and any person publishing research or reports on us may discontinue doing so at any time without notice. If adequate research coverage is not maintained on our Company or if any of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business or provide relatively more favorable recommendations about our competitors, our stock price would likely decline. If any analysts who cover us were to cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
Our earnings are subject to substantial quarterly and annual fluctuations and to market downturns.
Our revenues and earnings may fluctuate significantly in the future. General economic or other political conditions
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may cause a downturn in the market for our products or services. A future downturn in the market for our products or services could adversely affect our operating results and increase the risk of substantial quarterly and annual fluctuations in our earnings. Our future operating results may be affected by many factors, including, but not limited, to our ability to retain existing or secure anticipated marketers and creators; our ability to develop, introduce, and market new products and services on a timely basis; changes in the mix of products developed, produced, and sold; disputes with our marketers and creators; and general economic conditions causing a reduction in spending by our customers. These factors affecting our future earnings are difficult to forecast and could harm our quarterly and/or annual operating results. The change in our earnings or general economic conditions may cause the market price of our common stock to fluctuate.
The price of our common stock in the public markets has experienced, and may in the future experience, extreme volatility due to a variety of factors, many of which are beyond our control.
Since our common stock started trading on the Nasdaq Capital Market, it has been relatively thinly traded, and at times, been subject to price volatility. Recently, from January 1, 2025, to December 31, 2025, the closing price of our common stock ranged from a low of $1.71 on April 21, 2025, to a high of $5.70 on October 15, 2025. During the year ended December 31, 2025, the closing price of our common stock averaged $3.35 with an average daily trading volume of 92,842 shares.
In addition to shares of our common stock, the stock market in general, and the stock prices of technology-based companies in particular, have experienced volatility that often has been unrelated to the operating performance of any specific public company. The market price of our common stock has historically experienced and may continue to experience significant volatility. As a result, the market price could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:
•changes in our industry;
•competitive pricing pressures;
•our ability to obtain working capital financing;
•additions or departures of key personnel;
•limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market prices of our common stock;
•speculative trading practices of certain market participants;
•actual or purported “short squeeze” trading activity;
•expiration of any Rule 144 holding periods or registration of unregistered securities issued by us;
•sales of our common stock;
•our ability to execute our business plan;
•operating results that fall below expectations;
•loss of any strategic relationship or significant customer;
•regulatory developments; and
•economic and other external factors.
These and other market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock.
Further, on some occasions, our stock price may be, or may be purported to be, subject to “short squeeze” activity. A “short squeeze” is a technical market condition that occurs when the price of a stock increases substantially, forcing market participants who had taken a position that its price would fall (i.e., who had sold the stock “short,”) to buy it, which in turn may create significant, short-term demand for the stock not for fundamental reasons, but rather due to the need for such market participants to acquire the stock to forestall the risk of even more significant losses. A “short squeeze” condition in the market for a stock can lead to short-term conditions involving very high volatility and trading that may or may not track fundamental valuation models.
In addition, in the past, class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Securities litigation brought against us following volatility in our stock price, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and operating results and divert management’s attention and resources from our business.
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General Risks
Adverse macroeconomic or market conditions may harm our business.
Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs and other barriers to trade, changes to fiscal and monetary policy, tighter credit, higher interest rates, high unemployment, and currency fluctuations, can materially adversely affect demand for the Company’s services. In addition, consumer confidence and spending can be adversely affected in response to financial market volatility, negative financial news, declines in income or asset values, changes to labor and healthcare costs, and other economic factors.
A downturn in the economic environment can also lead to increased credit and collectability risk on the Company’s trade receivables and declines in the fair value of the Company’s financial instruments. These and other economic factors can materially adversely affect the Company’s business, results of operations, and financial condition.
Geopolitical instability, including ongoing conflicts in Ukraine and the Middle East and broader global tensions, may adversely affect global economic conditions and capital markets, which could have a material negative impact on our business, results of operations, financial condition, and cash flows in the future.
Geopolitical instability continues to create uncertainty and risk for global economic conditions and business operations. While we do not conduct business directly in Ukraine or Russia and only conduct limited business connected to the Middle East, ongoing conflicts and broader geopolitical tensions may result in sanctions, trade restrictions, supply chain disruptions, and increased regulatory complexity affecting companies operating in the United States and internationally. These developments may adversely impact global economic conditions and capital markets. A sustained economic slowdown could lead our customers to reduce or delay marketing spend, cancel or scale back existing bookings, and otherwise limit discretionary expenditures, which could negatively affect our revenue and operating results.
In addition, heightened geopolitical tensions have increased the risk of cyber threats from both state-sponsored and non-state actors. Government agencies, including the U.S. Cybersecurity and Infrastructure Security Agency (“CISA”), continue to warn of elevated cyber risks to U.S. companies and critical infrastructure. Although we do not believe we are a specific target, the overall threat environment has intensified, and we must remain vigilant in maintaining strong information security controls and protecting our systems and data, including the information of our employees, vendors, and customers. A successful cyber-attack, data breach, or other security incident could disrupt our operations, result in financial loss, damage our reputation, and have an adverse effect on our business, financial condition, and results of operations.
Public company compliance may make it more difficult to attract and retain officers and directors.
The Sarbanes-Oxley Act and rules subsequently implemented by the SEC have required changes in the corporate governance practices of public companies. As a public company, we expect these rules and regulations to create compliance costs and make certain activities more time-consuming and costly. As a public company, we also expect that these rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more complex and costly for us to attract and retain qualified persons to serve on our Board of Directors or as executive officers.
ITEM 1B - UNRESOLVED STAFF COMMENTS
None.
ITEM 1C - CYBERSECURITY
Risk Management and Strategy
We have developed a cybersecurity program based on internationally recognized frameworks, such as SOC-2 compliance for systems and organization controls related to our software development, and maps to standards published by Center for Internet Security (CIS) for our day-to-day operational stance. We conduct regular scans, penetration tests, and vulnerability assessments to identify any potential threats or vulnerabilities in our systems. Our processes to assess, identify and manage the material risks from cyber threats include assessing the risks arising from threats associated with third party service providers, including cloud-based platforms.
We have developed a cyber crisis response plan for handling high severity security incidents and coordinating across multiple parts of the company. Our incident response team monitors threat intelligence feeds, handles vulnerability management and responds to incidents. In addition, we routinely perform training, simulations, and drills across company personnel.
Internally, we have a security awareness program which includes training that reinforces our information technology and security policies, standards and practices, and we require that our employees comply with these policies. The security
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awareness program offers training on how to identify potential cybersecurity risks and protect our resources and information. This training is mandatory for all employees on an annual basis, and it is supplemented by testing initiatives, including periodic phishing tests. We also provide specialized security training for certain employee roles, such as application developers. Finally, our privacy program requires all employees to take periodic awareness training on data privacy. This training includes information about confidentiality and security, as well as responding to unauthorized access to or use of information.
From time to time, we engage third-party service providers to enhance our risk mitigation efforts. For instance, we have engaged an independent cybersecurity advisor to lead a cybersecurity crisis simulation exercise that has been used by our senior leaders to prepare for a possible cyber crisis. In addition, we have engaged a security auditor and advisor in systems administration and penetration testing, a systems auditor and advisor for cybersecurity and compliance, an IT Systems auditor and assurance vendor and an email security and cybersecurity training partner. We also purchase insurance to protect us against the risk of cybersecurity breaches.
To date, risks from cybersecurity threats have not previously materially affected us, and we currently are not aware of risks from cybersecurity threats that are reasonably likely to materially affect us, including our business, strategy, results of operations or financial condition. However, as discussed more fully under “Item 1A – Risk Factors”, the sophistication of cyber threats continues to increase, and the preventative actions we take to reduce the risk of cyber incidents and protect our systems and information may be insufficient. Accordingly, no matter how well designed or implemented our controls are, we will not be able to anticipate all cyber security breaches, and we may not be able to implement effective preventive measures against such security breaches in a timely manner.
Governance
Role of Management
IZEA’s Chief Executive Officer, General Counsel, Senior Vice President of Engineering, and Senior Manager of Development Operations (“DevOps”) jointly manage our cybersecurity risk management processes. Our CEO and SVP of Engineering have extensive experience in information technology.
We have established a Security Council, which includes our CEO, CFO, General Counsel, SVP of Engineering, Senior Manager of DevOps, and other senior participants as appropriate. The Security Council meets quarterly to review cybersecurity and information security matters and has primary management oversight responsibility for assessing and managing information security, fraud prevention, vendor compliance, data protection and privacy, and cybersecurity risks. The Security Council also provides periodic updates to senior leadership and the Board regarding cybersecurity risk management and related matters.
We have a security incident response framework in place and we refer to it as part of our process to keep our management and Board of Directors informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents. The framework is a set of coordinated procedures and tasks that our incident response team, under our CEO's direction, executes to ensure timely and accurate resolution of cybersecurity incidents. Our cybersecurity framework includes regular compliance assessments with our policies, standards, and applicable state and federal statutes and regulations. In addition, we validate compliance with our internal data security controls through security monitoring utilities and internal and external audits.
Role of the Board of Directors
The Board of Directors Audit Committee is responsible for the primary oversight of our information security and cybersecurity programs.The Audit Committee receives periodic reports from our CEO and General Counsel on cyber risks and threats, the status of initiatives to enhance our information security systems, assessments of our security posture across the enterprise, and insights into emerging threats. Additionally, the CEO reports to the Audit Committee on our Company-wide enterprise risk assessment, including evaluating cyber risks and threats. The Chair of the Audit Committee subsequently informs the full Board of these cybersecurity matters and key discussion topics and meeting materials and recommends updates to our information security policies and programs for Board approval.
ITEM 2 - PROPERTIES
As a virtual-first employer, we do not have any leased properties. Our corporate mailing address is 1317 Edgewater Dr. #1880, Orlando, Florida 32804.
ITEM 3 – LEGAL PROCEEDINGS
From time to time, we may become involved in lawsuits and other legal proceedings arising in the ordinary course of our business. Litigation is subject to inherent uncertainties and adverse results in any litigation that may occur from time to time that may harm our business. As of March 12, 2026, we are not party to any legal proceedings or claims that we believe would or could have, individually or in the aggregate, a material adverse effect on us.
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ITEM 4 – MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Common Stock Information
Our common stock is listed on the Nasdaq Capital Market under the symbol IZEA. As of March 12, 2026, we had approximately 115 shareholders of record of our common stock. This figure does not include beneficial owners whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies.
Dividend Policy
We have never paid cash dividends to holders of our common stock, and we do not anticipate paying any cash dividends in the foreseeable future as we intend to retain any earnings for use in our business. Any future determination to pay dividends will be at the discretion of the Board of Directors and will depend upon our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law, and other factors the Board of Directors deems relevant.
Securities Authorized for Issuance under Equity Compensation Plans
See the section “Securities Authorized For Issuance Under Equity Compensation Plans,” under Part III, Item 12 of this Annual Report.
Recent Sales of Unregistered Securities
On November 30, 2023, the Board of Directors adopted the IZEA Worldwide, Inc. 2023 Inducement Plan (the “Inducement Plan”), allowing for the issuance of a total of 1.8 million shares of IZEA common stock to new employees of IZEA and its subsidiaries. On December 1, 2023, the Company issued 328,354 performance-based grants under the Inducement Plan to five employees of Hoozu in conjunction with the acquisition of Hoozu, which grants were subsequently deemed to be forfeited for non-performance in conjunction with the December 2024 Hoozu divestiture.On October 15, 2024, the Company granted 50,000 shares in conjunction with the employment of our Chief Talent Officer. The shares issued under the Inducement Plan were issued in reliance up on exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended. Shares associated with the Inducement Plan were registered on March 27th, 2025, under Form S-8.
Issuer Repurchases of Equity Securities
(1) On June 28, 2024, the Company announced the Board’s authorization of a stock repurchase program under which the Company may repurchase up to $5.0 million of its common stock from time to time through open market transactions, privately negotiated transactions, block trades or any combination thereof, subject to market conditions (the “Repurchase Program”). In conjunction with the Cooperation Agreement, the maximum authorized repurchase amount under the Repurchase Program was increased to $10.0 million. On June 16, 2025, the Company entered into an agreement adopted under the safe harbors provided by Rule 10b5-1 and Rule 10b-18 of the Exchange Act to purchase shares of common stock, terminating on the earliest of May 31, 2026, or at such time as the aggregate number of shares are repurchased or upon certain other events. The agreement provides for the purchase of up to $8.6 million of common stock, which was the remainder of the Board’s authorization under the Repurchase Program at the time of entry into such agreement.
(2) Dollar amounts in this column equal the number of shares remaining available for purchase under the stock repurchase program as of the last date of the applicable period month multiplied by the monthly average price paid per share.
ITEM 6 - RESERVED
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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 technology-enabled influencer marketing company that delivers creator economy solutions for marketers through managed services supported by proprietary technology. We provide value by managing custom content workflows, creator discovery and engagement, campaign execution, analytics, and payment processing. Our mission is to deliver creator economy solutions for marketers by facilitating effective collaboration between brands and creators.
IZEA pioneered the concept of an influencer marketplace in 2006 with the launch of PayPerPost, helping establish the foundation for modern influencer marketing. Today, we primarily serve enterprise brands and agencies across a range of industries, while also supporting small- and mid-sized businesses and independent creators. Our services include influencer marketing programs, customer-generated content, and custom content creation, delivered through technology-enabled managed services.
Our proprietary technology platform supports the delivery and management of influencer marketing programs at scale. IZEA Flex is our flagship platform and is used primarily by our internal teams to manage campaign workflows, creator relationships, compliance, budgeting controls, and performance measurement. Customers may be provided access to certain platform capabilities in connection with managed services engagements to facilitate collaboration, approvals, and visibility into campaign activity and results.
Our technology platform also includes capabilities that facilitate creator discovery and engagement, including functionality historically made available through online marketplace environments such as IZEA.com. In addition, we have developed AI-enabled tools, including FormAI, designed to support content creation and operational efficiency within the influencer marketing process. These technology capabilities are integrated into our broader platform and are primarily used to support the delivery of managed services.
Leadership and Strategy Transition
On September 6, 2024, the Board of Directors appointed Patrick J. Venetucci as 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 the Nominations and Corporate Governance Committee. Messers Bonchristiano and Boscolo serve on the newly created Strategy and Capital Allocation Committee.
During the fourth quarter of 2024, the Company began executing a strategic realignment intended to accelerate its path to profitability and improve operational focus. These actions included the divestiture of non-core and unprofitable investments, targeted workforce reductions, primarily in product development and marketing functions, and organizational changes to better align sales and customer delivery teams into industry verticals to target growth opportunities and improve account management and customer retention. As a part of the realignment, the Company completed the divestiture of Hoozu Holdings on December 18, 2024 and centralized its sales and client development operations to serve domestic and international markets primarily from its North American hub.
Throughout 2025, management continued to operate under this revised organizational and strategic framework, with an emphasis on cost discipline, operational efficiency, enterprise customer focus, and technology-enabled service delivery. In connection with these efforts, the Company strengthened its sales and enterprise service delivery organizations by adding experienced industry professionals to support enterprise customer engagement and ensure consistent, higher-level execution. The Company believes these actions have improved its ability to manage expenses, align resources with near-term opportunities, and support sustainable profitability.
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.
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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. We also generate a limited amount of SaaS Services Revenue, which is revenue from access to certain features of our proprietary platforms, as well as related transaction and miscellaneous fees.
Cost of Revenue
Our cost of revenue consists primarily of direct costs paid to our third-party creators who provide the custom content, influencer marketing, or amplification services for our Managed Service customers, for which revenue is reported on a gross basis. Cost of revenue also includes internal costs for our campaign fulfillment and customer support, including salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and personnel-related costs incurred to support service delivery and fulfill our customer contractual obligations.
Sales and Marketing
Our sales and marketing expenses consist primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, travel, and other personnel-related costs for our sales, account management, and marketing teams. These expenses also include costs for brand marketing activities, public relations, industry events, marketing materials, and other demand-generation efforts to support customer acquisition and account expansion.
General and Administrative
Our general and administrative (“G&A”) expenses consist primarily of salaries, bonuses, commissions, stock-based compensation, employee benefits, and other personnel-related expenses for our executive, finance, legal, human resources, and other administrative functions. G&A also includes travel, public company and investor relations costs, accounting and legal professional services fees, and other corporate-related expenses.
G&A includes technology and development costsassociated with maintaining and enhancing our proprietary technology platform. These costs consist primarily of payroll costs for internal engineers and contractors, as well as hosting and software subscription expenses. Technology and development costs are expensed as incurred, except for qualifying internal-use software development costs, which are capitalized and recorded as software development costs on the consolidated balance sheet. Depreciation and amortization related to these capitalized costs are reflected separately in the consolidated statements of operations and comprehensive loss.
G&A expenses include current-period gains and losses on our acquisition costs payable and on 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.
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Results of Operations for the Years Ended December 31, 2025 and 2024
The following table summarizes our consolidated statements of operations and presents the period-to-period changes.
Twelve Months Ended December 31,
Costs and expenses:
Other income (expense):
Revenue
Revenue totaled $31.2 million for the year ended December 31, 2025, compared to $35.9 million for the year ended December 31, 2024. This represents a decrease of $4.6 million, or 12.9%, year over year. The prior-year period included $3.4 million from Hoozu, which was divested in December 2024 and did not contribute in 2025. The decline primarily reflects the absence of Hoozu revenue, along with the Company’s deliberate shift toward growing our core enterprise customer base and reducing reliance on non-core, lower-margin customers. This shift supports our continued focus on enhancing the quality, sustainability, and long-term profitability of our revenue.
Cost of Revenue
For the year ended December 31, 2025, cost of revenue was $16.2 million, a decrease of $5.0 million, or approximately 23.5%, compared to the same period in 2024. The reduction was primarily attributable due to the absence of Hoozu, which was included in the prior year period. Cost trends were also influenced by changes in customer mix resulting from the Company’s strategic repositioning, including the exit of certain lower-margin customer relationships. As a result, the Company’s remaining core enterprise business generated an improved gross margin percentage of 48.1% compared to 40.9% in the prior year.
Sales and Marketing
Sales and marketing expenses for the year ended December 31, 2025, decreased by $7.8 million, or approximately 64.4%, compared to the same period in 2024. Advertising expenses decreased due to a pause in current period advertising and promotional spending, lower payroll and related costs following our December 2024 targeted workforce reduction and decreased general contractor fees.
General and Administrative
General and administrative expenses for the year ended December 31, 2025, decreased by $4.8 million, or approximately 28.8%, compared to the same period in 2024. The decrease is primarily due to lower employee-related costs
following executive departures in September 2024 and the targeted workforce reduction in December 2024, reduced use of external contractors, decreased professional service fees, and lower software licensing expenses.
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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 unit 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 year ended December 31, 2025, decreased by $0.5 million, or approximately 45.1%, compared to the same period in 2024.
Depreciation expense on property and equipment was approximately $0.1 million for the year ended December 31, 2025, and $0.1 million for 2024, respectively.
Amortization expenses were approximately $0.5 million and $1.1 million for the year ended December 31, 2025 and 2024, respectively. Amortization expense related to internal-use software development costs was $0.5 million for 2025, down from $0.8 million in 2024, primarily due to accelerated amortization for certain software assets no longer in use in 2024. 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 $6,403 during the year ended December 31, 2025, compared to $8,129 in the prior year period.
Loss from divestiture of assets totaled $2.3 million during the year 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 $1.9 million for the year ended December 31, 2025, compared to $2.5 million in the prior year, primarily due to lower investment portfolio income and a decline in money-market rates.
Net Income (Loss)
Net income (loss) for the year ended December 31, 2025 was $42,326, a $19.3 million improvement from the net loss of $19.2 million for the same period in 2024. The increase in net income was primarily driven by decreased operating costs in the current period.
Other Comprehensive Income (Loss)
Other comprehensive loss for the year ended December 31, 2025 was $0.2 million, a $0.5 million change from the prior year period. Changes to other comprehensive loss are primarily driven by changes in the fair value of our marketable securities and foreign currency translation adjustments.
Key Metric
We review the information provided by our key financial metric, Managed Services Bookings, to assess the progress of our business and make decisions on where to allocate our resources including sales capacity, marketing investments, and product development. 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 issued during the same period. Our sales contracts vary in complexity by customer and range from custom content delivery to integrated marketing services, with contract terms generally ranging 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 and services over time. Historically, bookings have converted to revenue over an average of approximately six months. As we have entered into increasingly larger and more complex contracts, the average revenue conversion period lengthened to approximately 9 months, with the largest contracts taking longer to complete. For the years ended December 31, 2025 and 2024, the average time between bookings and revenue improved to an average of approximately seven months. Accordingly, while Managed Services Bookings is an indicator of the health of our business, it may not be used to predict quarterly revenues and may be subject to future adjustments.
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We use the Managed Services Bookings metric to plan operational staffing, identify key customer group trends to enlighten go-to-market activities, and to support product development efforts. Managed Services Bookings for the years ended December 31, 2025 and 2024, were $25.7 million and $37.5 million excluding Hoozu, respectively. This decline reflects our intentional reduction in non-core customer activity, which accounted for the majority of the decline, rather than weakness in our enterprise business.
Non-GAAP Financial Measure
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 under GAAP. In addition, not all companies calculate Adjusted EBITDA in the same manner, which limits its usefulness as a comparative measure. Moreover, Adjusted EBITDA has limitations as an analytical tool, including that it:
•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;
•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.
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The following table sets forth a reconciliation from the GAAP measurement of net income (loss) to our non-GAAP financial measure of Adjusted EBITDA for the years ended December 31, 2025, and 2024:
Twelve Months Ended December 31,
Impairment of goodwill and intangible assets — 4,130,477
Adjustment to fair market value of digital assets — (28,414)
Non-cash stock issued for payment of services 360,000 319,070
Loss on sale of subsidiary — 2,286,083
Non-recurring charges — 7,668
Tax benefit (expense) — (400,750)
Adjusted EBITDA as a % of Revenue 2.1 % (30.9) %
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, 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, 2025. While we have not yet achieved profitability, and we will 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.
We had cash and cash equivalents of $50.9 million as of December 31, 2025, compared to $44.6 million as of December 31, 2024. This increase of $6.2 million is primarily due to the maturation of certain investments.
Twelve Months Ended December 31,
Net cash (used for)/provided by:
Effect of exchange rate changes on cash (158,967) (24,757)
Net cash provided by operating activities was $2.4 million during the year ended December 31, 2025, primarily driven by non-cash expenses, including stock-based compensation and depreciation and amortization, as well as improved collections reflected in a decrease in accounts receivable. Net cash provided by investing activities was $5.6 million during the year ended December 31, 2025, primarily due to the maturity of marketable securities. Net cash used for financing activities during the year ended December 31, 2025 was $1.6 million, primarily driven by stock repurchase activity and payments on shares withheld for statutory taxes.
Long-Term Liquidity
We anticipate that our operating expenses will increase over time to support higher revenue and the working capital financing required as we continue to expand our business. We currently believe that we have adequate cash and long-term
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investments to fund our business growth for the next twelve months; however, should additional capital become necessary, we expect these funds would be financed predominantly 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
Beginning in early in 2025, we implemented a new account management model, redirecting our focus and resources primarily toward larger, more valuable recurring accounts - our core enterprise customers - while reducing the selling and delivery resources previously devoted to cost-intensive, lower-value or project-based accounts with limited repeat business. This strategic realignment reduced current-year contract bookings while significantly improving profitability and strengthening our foundation for sustainable growth. We believe that our bookings will show comparative growth beginning in early 2026.
We initiated a structured transition during the fourth quarter of 2025 for our non-enterprise customers into a new small and mid-sized business (“SMB”) service model; this targeted approach will allow us to serve a narrower set of these customers profitably, while maintaining strategic alignment with our enterprise objectives.
Revenue from Managed Services, excluding Hoozu, decreased 2.1% for the year ended December 31, 2025, compared to the prior-year period. This decrease reflects a deliberate shift away from smaller, non-strategic accounts and a greater focus on growing our enterprise customer base.
We implemented significant cost savings beginning in December 2024 and continuing into 2025 to align operating expenses with anticipated revenue and accelerate our path to profitability. These actions were effective, resulting in a $11.8 million improvement in EBITDA during the year ended December 31, 2025, improving from a $11.1 million negative adjusted EBITDA in 2024 to a positive $0.7 million adjusted EBITDA in 2025.
We expect growth opportunities in our core enterprise accounts, along with other business development activities, to support profitable organic growth over the next twelve months, although growth may not occur consistently each quarter. As managed services revenue is recognized over time and typically lags contract bookings by approximately seven months, our results for the first half of 2025 included revenue recognized from non-core customer contracts booked in 2024 that remained in backlog at the start of 2025. As those contracts have rolled off, we expect year-over-year revenue comparisons in the first half of 2026 to be lower. We anticipate more favorable comparisons in the second half of 2026 as revenue increasingly reflects our current mix of core enterprise engagements.
Operating expenses are expected to increase gradually as we invest in expansion; however, we believe our current cost structure is better aligned to scale efficiently, limiting the recurrence of historical cash losses and reducing the strain on working capital as the business grows.
We believe our cash and cash equivalents are sufficient to fund planned growth initiatives over the next twelve months. If additional capital is needed, we expect to obtain it primarily through equity, equity-linked, or debt financing until our operations generate sufficient profitability to meet ongoing capital requirements.
Off-Balance Sheet Arrangements
The Company did not engage in any “off-balance sheet arrangements” (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of December 31, 2025.
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:
•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
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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 includes trade receivables, contract assets, and an allowance for credit losses. Trade receivables represent customer obligations arising from standard credit terms, which contract assets reflect revenue earned but not yet invoiced.
We determine the collectability of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. We 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, we will either write off the amount owed or provide a reserve based on our 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 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 for such aged invoices will approach 100% of the invoice amount.
At December 31, 2025, our allowance for credit losses was $0.1 million, compared to $0.2 million at December 31, 2024. During the year, we wrote off approximately $0.1 million of accounts receivable that had been fully reserved in prior periods by applying the related allowance for credit losses. As a result, this activity had no impact on the consolidated statements of operations. We believe the allowance is reasonable; however, actual results may differ based on changes in customer financial condition or broader economic conditions.
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 manage credit risk through credit approvals, credit limits, and ongoing monitoring of customer balances, and generally do not require collateral. While the customer base is diversified, certain concentrations exist. At December 31, 2025, we had two customers each who accounted for 12.4% and 12.5% of total accounts receivable. At December 31, 2024, we had two customers each who accounted for 14.2% and 23.5% of total accounts receivable. These concentrations are monitored closely as part of the Company’s overall credit risk management process.
Software Development Costs
In accordance with ASC 350-40, Internal-Use Software, we capitalize certain costs incurred to develop and enhance internally developed software used to support our managed services and internal operations. Software development activities are generally categorized into three stages: (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage.
Costs incurred during the research and planning stage and the post-implementation stage, as well as maintenance and other development costs that do not qualify for capitalization, are expensed as incurred. Costs incurred during the application and development stage, including those related to significant enhancements and upgrades, are capitalized. Capitalized costs include personnel and related employee benefit costs for employees and consultants directly involved in software development, as well as external direct costs of materials used in developing the software. The Company also capitalizes qualifying costs associated with cloud computing arrangements (“CCAs”).
As of December 31, 2025, capitalized software development costs, net of accumulated amortization, totaled $2.3 million and are recorded as Software Development Costs in the consolidated balance sheet. The Company does not transfer ownership of its software to third parties. Capitalized software development costs and CCA-related assets are amortized on a straight-line basis over an estimated useful life of five years, beginning when the software or related functionality is available for its intended use.
The Company evaluates capitalized software development costs for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If an asset group is determined to be impaired, an impairment loss is recognized for the amount by which the carrying value exceeds fair value in the 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
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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.
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 year ended December 31, 2024.
The Company completed the divestiture of the Hoozu business unit in December 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, 2025 and 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.
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 are 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 adopted this guidance effective January 1, 2025.
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”); we also generate a limited amount of SaaS Services Revenue, which is revenue from access to certain features of our proprietary technology platforms and related transaction-based fees.
We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized when control of promised services or access to platform capabilities is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services.
In applying ASC 606, the Company identifies the contract with the customer, determines the performance obligations within the contract, establishes the transaction price, allocates the transaction price to the identified performance obligations, and recognizes revenue as those performance obligations are satisfied. The Company applies this model only to contracts for which it is probable that the consideration to which it is entitled will be collected.
At contract inception, the Company evaluates whether it acts as a principal or an agent for each identified performance obligation. For arrangements in which the Company acts as a principal, revenue is reported on a gross basis and reflects the amount paid by the marketer for campaign execution, content creation, sponsorship, promotion, and other related services, with
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amounts paid to third-party creators recorded as cost of revenue. For arrangements in which the Company acts as an agent, revenue is reported on a net basis and reflects the Company’s fee for facilitating the transaction between marketers and creators.
We enter into separate contractual arrangements with marketers and content creators, typically in the form of master agreements or terms of service that govern the overall relationship, supplemented by statements of work that define the specific services to be performed, pricing, and other relevant terms. Statements of work generally establish a fixed transaction price for the services provided.
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. Contractual arrangements may provide for a non-refundable deposit or a cancellation fee if the customer cancels the agreement prior to completion of the services. Amounts billed in advance of completed services are recorded as contract liabilities and recognized as revenue as the related performance obligations are satisfied. We assess collectability at contract inception and on an ongoing basis, considering factors such as the customer’s creditworthiness, payment history, and transaction history.
Managed Services Revenue
Managed Services arrangements where we act as principal generally involve integrated influencer marketing campaigns and custom content delivered over contractual periods that typically range from one day to one year. These arrangements may include campaign strategy, creator sourcing and management, content development, amplification, and performance measurement.
Managed Services are generally accounted for as a single performance obligation that is satisfied over time as customers simultaneously receive and consume the benefits of the services. Revenue is typically recognized using an input method based on costs relative to total expected costs. Services are generally performed over periods ranging from one day to 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 employees exercise share options evenly over the period from vesting through expiration. We use the closing price of our common stock on the grant date as the fair value of our common stock. For issuances after June 30, 2019, we estimate the volatility of our common stock at the grant date based on the stock's volatility over 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 implied by the current yield on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. We have never paid cash dividends on our common stock and do not anticipate paying any 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 years ended December 31, 2025, and 2024 were $1.5 million and $2.3 million, respectively.
At December 31, 2025, 19,269 stock options were outstanding with a weighted-average exercise price of $11.76 per share. All outstanding options were fully exercisable at the same weighted-average price. The intrinsic value of both the outstanding and exercisable options was $535 at December 31, 2025.
As of December 31, 2025, we had unvested restricted stock units representing 1,770,927 shares of common stock with an intrinsic value of $6.4 million and we did not have any unvested shares of restricted stock.
As of December 31, 2025, 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
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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.
ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to smaller reporting companies.
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ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements
Page
Consolidated Balance Sheets 37
Consolidated Statements of Operations 38
Consolidated Statements of Comprehensive Loss 39
Consolidated Statements of Stockholders’ Equity 40
Consolidated Statements of Cash Flows 41
Notes to Consolidated Financial Statements 42
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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, 2025 and 2024, the related consolidated statements of operations, comprehensive income ( loss), stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, 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 17, 2026
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IZEA Worldwide, Inc.
Consolidated Balance Sheets
Assets
Current assets:
Property and equipment, net of accumulated depreciation 17,131 103,574
Software development costs, net of accumulated amortization 2,335,745 2,086,660
Liabilities and Stockholders’ Equity
Current liabilities:
Finance obligation, less current portion — 4,034
Commitments and Contingencies (Note 9)
Stockholders’ equity:
Accumulated other comprehensive income (loss) (53,680) 105,287
See accompanying notes to the consolidated financial statements.
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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 income (loss) per common share $ 0.00 $ (1.10)
Diluted income (loss) per common share $ 0.00 $ (1.10)
See accompanying notes to the consolidated financial statements.
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IZEA Worldwide, Inc.
Consolidated Statements of Comprehensive Income (Loss)
Twelve Months Ended December 31,
Other comprehensive income (loss)
Unrealized gain (loss) on securities held (12,209) 262,800
Unrealized gain (loss) on currency translation (146,758) 127,296
Reclassification of foreign currency translation adjustment to income — (34,218)
See accompanying notes to the consolidated financial statements.
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IZEA Worldwide, Inc.
Consolidated Statements of Stockholders’ Equity
Shares Amount Capital Stock Deficit Income (Loss) Equity
Foreign currency translation adjustment — — — — — 93,078 93,078
Unrealized gain (loss) on securities held — — — — — 262,800 262,800
Foreign currency translation adjustment — — — — — (146,758) (146,758)
Unrealized gain (loss) on securities held — — — — — (12,209) (12,209)
See accompanying notes to the consolidated financial statements.
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IZEA Worldwide, Inc.
Consolidated Statements of Cash Flows
Twelve Months Ended December 31,
Cash flows from operating activities:
Adjustment to fair market value of digital assets — (28,414)
Deferred tax benefit — (400,750)
Value of stock issued for payment of services 360,000 319,070
Changes in operating assets and liabilities:
Cash flows from investing activities:
Acquisitions, net of cash acquired — (203,403)
Payment for divestiture — 73,528
Proceeds from the sale of digital assets — 191,318
Capitalization of software development costs (799,028) (789,001)
Proceeds from the sale of PPE — 1,092
Cash flows from financing activities:
Proceeds from exercise of stock options & ESPP issuances 46,742 92,901
Stock issuance costs (134,017) —
Payments on shares withheld for statutory taxes (791,238) (589,726)
Effect of exchange rate changes on cash (158,967) (24,757)
Supplemental cash flow information:
Supplemental non-cash activities:
Fair Value of common stock issued for services $ 360,000 $ 319,070
See accompanying notes to the consolidated financial statements.
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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 marketers to engage creators to produce and distribute content across digital channels through technology-enabled managed services that support influencer and content marketing campaigns. The Company’s current focus is on delivering full-service solutions tailored to client needs.
Principles of Consolidation
The consolidated financial statements include the accounts of IZEA Worldwide, Inc. and its wholly-owned subsidiaries from their 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, the 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 may 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. Deposit balances exceeding the various limits were approximately $50.3 million and $44.2 million as of December 31, 2025 and December 31, 2024, respectively.
Investment in Debt Securities
The Company’s investments in debt securities are carried at either amortized cost or fair value, with the cost basis determined by the specific identification method. Debt securities for which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and carried at amortized cost. All other debt securities are classified as either trading or available-for-sale and carried at fair value.
Realized and unrealized gains and losses on trading debt securities, as well as realized gains and losses on available-for-sale debt securities, are included in net income. Unrealized gains and losses on available-for-sale debt securities, net of tax, are included in our consolidated balance sheet as a component of accumulated other comprehensive income (loss).
All debt securities matured as of June 30, 2025.
Accounts Receivable and Concentration of Credit Risk
The Company’s accounts receivable balance consists of trade receivables and contract assets, net of an allowance for credit losses. Trade receivables represent customer obligations arising from standard credit terms, while contract assets reflect revenue recognized but not yet invoiced. As of December 31, 2025, the Company reported net trade receivables of $3.4 million, comprised entirely of accounts receivable, with no contract assets. As of December 31, 2024, the Company had net trade receivables of $7.8 million, including $7.6 million of accounts receivable and $0.2 million in contract assets.
Management determines the collectability of accounts receivable by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. The Company continues to monitor these factors and will adjust 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. The Company assesses collectability risk both generally and by specific aged invoices. The Company’s loss history informs a general reserve percentage, which is applied to all invoices less than 90 days from the invoice due date, currently 1% of the outstanding balance. The general reserve, which is updated periodically, recognizes that some invoices will likely become a collection risk. When an invoice ages 90 days past its due date, the Company considers each invoice to determine a reserve for
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Notes to the Consolidated Financial Statements
collectability based on prior history and recent communications with the customer, to determine a reserve amount. Generally, the Company’s reserve for such aged invoices will approach 100% of the invoice amount.
The Company’s allowance for credit losses was $0.1 million as of December 31, 2025, compared to a reserve of $0.2 million at December 31, 2024. During the year, the Company wrote off approximately $0.1 million of accounts receivable that had been fully reserved in prior periods by applying the related allowance for credit losses. As a result, the allowance balance decreased, with no impact on the consolidated statements of operations. 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.
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 accounted for 12.4% and 12.5%, respectively, of total accounts receivable as of December 31, 2025 and two customers that accounted for 14.2% and 23.5%, respectively, of total accounts receivable as of December 31, 2024. The Company had two customers that accounted for 13.4% and 13.8%, respectively, of its revenue during the year ended December 31, 2025, and two customers that accounted for 10.3% and 12.8% of its revenue during the year ended December 31, 2024.
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 and is assigned to reporting units that are expected to benefit from the synergies of the business combination.
The Company tests goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. An impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the carrying amount 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 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 unit as a part of the net loss on divestiture.
As of December 31, 2025 and 2024, the Company had no goodwill recorded on its consolidated balance sheets.
Intangible Assets