STOCKHOLDERS’ EQUITY

Authorized Shares

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

Stock Issued for Acquisitions

On January 26, 2019, pursuant to a Merger Agreement with TapInfluence, the Company issued 660,136 shares of its common stock valued at $884,583, or $1.34 per share, using the 30-day VWAP as reported by the Nasdaq Capital Market prior to the issuance date. The Company recorded a $191,439 loss on the settlement of this acquisition cost payable as a result of the difference between the actual closing market price of the common stock of $1.63 on the settlement date and the 30-day VWAP of $1.34 required by the Merger Agreement.

Equity Incentive Plans

In May 2011, the Company’s Board of Directors (the “Board”) adopted the 2011 Equity Incentive Plan of IZEA Worldwide, Inc. (the “May 2011 Plan”). At the Company’s 2019 Annual Meeting of Stockholders held on December 12, 2019, the stockholders approved an amendment and restatement of the May 2011 Plan which increased the number of shares of common stock available for issuance under the May 2011 Plan. The amended and restated May 2011 Plan allows the Company to award restricted stock, restricted stock units and stock options covering up to 4,500,000 shares of common stock as incentive compensation for its employees and consultants. As of March 31, 2020, the Company had 1,275,732 shares of common stock available for issuance pursuant to future grants under the May 2011 Plan.

In August 2011, the Company adopted the 2011 B Equity Incentive Plan (the “August 2011 Plan”) reserving 4,375 shares of common stock for issuance under the August 2011 Plan. As of March 31, 2020, the Company had 4,375 shares of common stock available for future grants under the August 2011 Plan.

Restricted Stock

Under both the May 2011 Plan and the August 2011 Plan (together, the “2011 Equity Incentive Plans”), the Board determines the terms and conditions of each restricted stock issuance, including any future vesting restrictions.

The Company issued 27,184 shares of restricted stock on March 28, 2019 to Mr. Edward Murphy, its Chief Executive Officer, for amounts owed on his fourth quarter 2018 performance bonus. The stock was initially valued at $36,427 and vests in equal monthly installments over 12 months from issuance. The Company issued 4,570 shares of restricted stock on March 28, 2019 to Mr. Ryan Schram, its Chief Operating Officer, for amounts owed on his fourth quarter 2018 performance bonus. The stock was initially valued at $6,124 and vests in equal monthly installments over 48 months from issuance.

On January 31, 2019, the Company issued its six independent directors a total of 88,758 shares of restricted common stock initially valued at $150,000 for their annual service as directors of the Company. The stock vested in equal monthly installments from January through December 2019. Ms. Golder forfeited 4,932 of these shares valued at $8,335 upon her resignation from the board of directors in September 2019.

On January 31, 2020, the Company issued its five independent directors a total of 390,625 shares of restricted common stock initially valued at $125,000 for their annual service as directors of the Company. The stock vests in equal monthly installments from January through December 2020.

The following table contains summarized information about restricted stock issued during the year ended December 31, 2019 and the three months ended March 31, 2020:



Restricted Stock	Common Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2018	57,984		$	3.70	1.4
Granted	120,512		1.60
Vested	(139,157	)	2.24
Forfeited	(8,057	)	3.18
Nonvested at December 31, 2019	31,282		$	2.15	1.9
Granted	390,625		0.32
Vested	(104,833	)	0.42
Forfeited	—
Nonvested at March 31, 2020	317,074		$	0.47	0.8

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

Expense recognized on restricted stock issued to non-employees for services during the three months ended March 31, 2020 and 2019 was $31,250 and $37,498, respectively. Expense recognized on restricted stock issued to employees during the three months ended March 31, 2020 and 2019 was $13,535 and $38,412, respectively.

The fair value of the Company’s common stock on March 31, 2020 was $0.20 per share and the intrinsic value on the non-vested restricted stock as of March 31, 2020 was $63,415. Future compensation expense related to issued, but nonvested restricted stock awards as of March 31, 2020 is $148,282. This value is estimated to be recognized over the weighted-average vesting period of approximately 10 months.

Restricted Stock Units

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

The Company issued 84,994 restricted stock units on January 3, 2020 to Mr. Ryan Schram, its Chief Operating Officer, under the terms of his employment agreement. The restricted stock units were initially valued at $23,739 and vest in equal monthly installments over 48 months from issuance. The Company also issued 100,000 restricted stock units on January 3, 2020 to Mr. Schram as additional incentive compensation. The restricted stock units were initially valued at $27,930 and vest in a lump sum 12 months from issuance.

On January 3, 2020, the Company issued a total of 500,000 shares of restricted common stock initially valued at $139,650 to twenty employees as additional incentive compensation. The restricted stock units vest in a lump sum 12 months from issuance.

The following table contains summarized information about restricted stock units during the year ended December 31, 2019 and the three months ended March 31, 2020:



Restricted Stock Units	Common Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2018	160,000		$	1.04	1.0
Granted	410,437		0.40
Vested	(149,290	)	0.79
Forfeited	(54,335	)	1.04
Nonvested at December 31, 2019	366,812		$	0.42	3.2
Granted	684,994		0.28
Vested	(34,046	)	0.31
Forfeited	(5,000	)	0.28
Nonvested at March 31, 2020	1,012,760		$	0.32	1.8

The fair value of the Company’s common stock on March 31, 2020 was $0.20 per share and the intrinsic value on the non-vested restricted units as of March 31, 2020 was $202,552. Expense recognized on restricted stock units issued to employees during the three months ended March 31, 2020 and 2019 was $56,607 and $32,465, respectively. As of March 31, 2020, future compensation related to restricted stock units expected to vest of $327,493 is estimated to be recognized over the weighted-average vesting period of approximately 1.8 years.

Stock Options

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

A summary of option activity under the 2011 Equity Incentive Plans during the year ended December 31, 2019 and the three months ended March 31, 2020, is presented below:



Options Outstanding	Common Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)
Outstanding at December 31, 2018	1,040,477		$	5.23	6.5
Granted	586,552		0.67
Expired	(147,313	)	7.59
Forfeited	(121,879	)	2.70
Outstanding at December 31, 2019	1,357,837		$	3.24	7.2
Granted	8,917		0.25
Expired	—		—
Forfeited	(20,399	)	5.36
Outstanding at March 31, 2020	1,346,355		$	3.18	7.0

Exercisable at March 31, 2020	795,928		$	4.64	5.7

During the three months ended March 31, 2020 and 2019, no options were exercised. The fair value of the Company's common stock on March 31, 2020 was $0.20 per share and the intrinsic value on outstanding options as of March 31, 2020 was $0. The intrinsic value on exercisable options as of March 31, 2020 was $0.

A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans during the year ended December 31, 2019 and the three months ended March 31, 2020, is presented below:



Nonvested Options	Common Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Years to Vest
Nonvested at December 31, 2018	300,510		$	0.80	2.4
Granted	586,552		0.40
Vested	(197,202	)	1.44
Forfeited	(89,081	)	0.80
Nonvested at December 31, 2019	600,779		$	0.64	3.0
Granted	8,917		0.16
Vested	(56,128	)	1.20
Forfeited	(3,141	)	0.88
Nonvested at March 31, 2020	550,427		$	0.56	2.8

Expense recognized on stock options issued to employees during the three months ended March 31, 2020 and 2019 was $59,051 and $90,000, respectively. Future compensation related to nonvested awards as of March 31, 2020 expected to vest of $285,236 is estimated to be recognized over the weighted-average vesting period of approximately 3.0 years.

The following table shows the number of stock options granted under the Company’s 2011 Equity Incentive Plans and the assumptions used to determine the fair value of those options during the three months ended March 31, 2020 and 2019:



Period Ended	Total Stock Options Granted	Weighted-Average Exercise Price	Weighted-Average Expected Term	Weighted-Average Volatility	Weighted-Average Risk-Free Interest Rate	Weighted-Average Grant Date Fair Value
March 31, 2019	30,542	$1.46	6 years	63.37%	2.52%	$0.91
March 31, 2020	8,917	$0.25	6 years	101.92%	1.71%	$0.16

There were outstanding options to purchase 1,346,355 shares with a weighted average exercise price of $3.18 per share, of which options to purchase 795,928 shares were exercisable with a weighted average exercise price of $4.64 per share as of March 31, 2020.

Employee Stock Purchase Plan

At the Company’s 2018 Annual Meeting of Stockholders held on December 18, 2018, stockholders holding a majority of the Company’s outstanding shares of common stock, upon previous recommendation and approval of the Board, adopted the amended and restated IZEA Worldwide, Inc. 2014 Employee Stock Purchase Plan (the “ESPP”), which provides for the issuance of up to 500,000 shares of the Company’s common stock thereunder. Any employee regularly employed by the Company for 90 days or more on a full-time or part-time basis (20 hours or more per week on a regular schedule) is eligible to participate in the ESPP. The ESPP operates in successive six months offering periods commencing at the beginning of each fiscal year half. Each eligible employee who elects to participate may purchase up to 10% of their annual compensation in common stock not to exceed $21,250 annually or 2,000 shares per offering period. The purchase price will be the lower of (i) 85% of the fair market value of a share of common stock on the first day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last day of the offering period. The ESPP will continue until January 1, 2024, unless otherwise terminated by the Board.

As of March 31, 2020, the Company had 410,817 remaining shares of common stock available for future grants under the ESPP.

Summary Stock-Based Compensation

Stock-based compensation cost related to all awards granted to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. The Company estimates the fair value of each option award on the date of grant using a Black-Scholes option-pricing model that uses the assumptions stated in Note 1.

Total stock-based compensation expense recognized on restricted stock, restricted stock units, stock options and the employee stock purchase plan issuances during the three months ended March 31, 2020 and 2019 was recorded in the Company’s consolidated statements of operations as follows:



	Three Months Ended March 31,
	2020		2019
Cost of revenue	$	7,004	$	2,886
Sales and marketing	$	22,056	$	6,336
General and administrative	$	100,511	$	151,655
Total stock-based compensation	$	129,571	$	160,877

Share Repurchase Program

On July 1, 2019, the Board authorized and approved a share repurchase program under which the Company may repurchase up to $3,500,000 of its common stock from time to time through December 31, 2020, subject to market conditions. As of March 31, 2020, the Company had not repurchased any shares of common stock under the share repurchase program.