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Stockholders' Equity (Notes) | 6 Months Ended
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Jun. 30, 2021
Share-based Payment Arrangement [Abstract] |
Shareholders' Equity and Share-based Payments | 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. Sale of Securities On June 4, 2020, the Company entered into an ATM Sales Agreement (the “2020 Sales Agreement”) with National Securities Corporation, as sales agent (“National Securities”), pursuant to which the Company could offer and sell, from time to time, through National Securities, shares of the Company's common stock, by any method deemed to be an “at the market offering” (“ATM Offering”). On June 12, 2020, the Company entered into an amendment to the 2020 Sales Agreement to increase the amount of common stock that could be offered and sold in the ATM Offering to $40 million in the aggregate. On January 25, 2021, the Company entered into a new ATM Sales Agreement (the “January 2021 Sales Agreement”) with National Securities, pursuant to which the Company may offer and sell, from time to time, through National Securities, up to $35 million shares of its common stock, by any method deemed to be an ATM Offering. During the six months ended June 30, 2021, the Company sold 11,186,084 shares at an average price of $4.16 per share for total gross proceeds of $46,544,688 pursuant to the 2020 Sales Agreement and January 2021 Sales Agreement with National Securities. As of June 30, 2021, the Company had sold a total of 26,005,824 shares at an average price of $2.88 per share for total gross proceeds of $74,999,785 pursuant to the 2020 Sales Agreement and January 2021 Sales Agreement with National Securities. The 2020 Sales Agreement and January 2021 Sales Agreement were terminated following the sale of all shares of common stock available to be sold thereunder. On June 21, 2021, the Company entered into a third ATM Sales Agreement (the “June 2021 Sales Agreement”) with National Securities Corporation, as sales agent, pursuant to which the Company could offer and sell, from time to time, through National Securities, up to $100 million of shares of the Company’s common stock by any method deemed to be an ATM Offering. No sales have been made under this agreement as of June 30, 2021. Equity Incentive Plans In May 2011, the Company’s Board of Directors (the “Board”) adopted the 2011 Equity Incentive Plan of IZEA Worldwide, Inc. (as amended, the “May 2011 Plan”). The stockholders approved an amendment and restatement of the Company’s May 2011 Plan at its 2020 Annual Meeting of Stockholders held on December 18, 2020, to allow the Company to award restricted stock, restricted stock units and stock options covering up to 7,500,000 shares of common stock as incentive compensation for its officers, employees, consultants, and advisors, including its non-employee directors. Shares of the Company’s common stock that are withheld (or not issued) to cover the purchase price of an option or any required tax withholding obligation will again be available for issuance under the May 2011 Plan. As of June 30, 2021, the Company had 3,738,173 remaining 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 June 30, 2021, the Company had 4,375 remaining 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. 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 vested in equal monthly installments from January through December 2020. During the six months ended June 30, 2021, the Company issued its six independent directors a total of 30,324 shares of restricted common stock initially valued at $147,329 for their annual service as directors of the Company. The stock vests in equal monthly installments from January through December 2021. The following table contains summarized information about restricted stock issued during the year ended December 31, 2020 and the six months ended June 30, 2021:
Restricted Stock Activity | Common Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Years to Vest
Nonvested at December 31, 2019 | 31,282 |  | $ | 2.15 |  | 1.9
Granted | 390,625 |  | 0.32 |  |
Vested | (408,241) |  | 0.39 |  |
Forfeited | — |  |  |
Nonvested at December 31, 2020 | 13,666 |  | $ | 2.28 |  | 1.4
Granted | 30,324 |  | 4.86 |  |
Vested | (20,184) |  | 4.22 |  |
Forfeited | — |  |  |
Nonvested at June 30, 2021 | 23,806 |  | $ | 3.92 |  | 0.7
Although restricted stock is issued upon the grant of an award, the Company excludes restricted stock from the computations within the financial statements of total shares outstanding and basic earnings per share until such time as the restricted stock vests. Expense recognized on restricted stock issued to non-employees for services was $37,544 and $31,249 for the three months ended June 30, 2021 and 2020, respectively, and $72,240 and $62,499 during the six months ended June 30, 2021 and 2020, respectively. Expense recognized on restricted stock issued to employees was $6,500 and $7,133 for the three months ended June 30, 2021 and 2020, respectively, and $13,007 and $20,668 during the six months ended June 30, 2021 and 2020, respectively. On June 30, 2021, the fair value of the Company’s common stock was approximately $2.55 per share and the intrinsic value on the non-vested restricted stock was $60,705. Future compensation expense related to issued, but non-vested, restricted stock awards as of June 30, 2021 is $93,285. This value is estimated to be recognized over the weighted-average vesting period of approximately eight 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. Schram 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 12 months from issuance. During the twelve months ended December 31, 2020, the Company issued a total of 580,099 restricted stock units initially valued at $215,936 to non-executive employees as additional incentive compensation. The restricted stock units vest 12 months from issuance. During the twelve months ended December 31, 2020, the Company issued Mr. Murphy 123,228 restricted stock units valued at $61,790 for bonuses owed under the terms of his amended employment agreement. The restricted stock units vest in equal monthly installments over 36 months from issuance. During the twelve months ended December 31, 2020, the Company issued Mr. Schram 41,824 restricted stock units initially valued at $14,052 for bonuses owed under the terms of his employment agreement. The restricted stock units vest in equal monthly installments over 48 months from issuance. During the six months ended June 30, 2021 the Company issued Mr. Murphy 100,000 restricted stock units valued at $394,000 as a one-time bonus. The restricted stock units vest in equal monthly installments over 10 months from issuance. During the six months ended June 30, 2021 the Company issued 13,270 restricted stock units valued at $41,124 to 18 non-executive employees related to performance bonuses. The restricted stock units vest 12 months from issuance. The following table contains summarized information about restricted stock units during the year ended December 31, 2020 and the six months ended June 30, 2021:
Restricted Stock Units Activity | Common Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Years to Vest
Nonvested at December 31, 2019 | 366,812 |  | $ | 0.42 |  | 3.2
Granted | 930,145 |  | 0.37 |  |
Vested | (172,441) |  | 0.41 |  |
Forfeited | (154,167) |  | 0.30 |  |
Nonvested at December 31, 2020 | 970,349 |  | $ | 0.39 |  | 1.2
Granted | 113,270 |  | 3.84 |  |
Vested | (599,031) |  | 0.62 |  |
Forfeited | — |  | — |  |
Nonvested at June 30, 2021 | 484,588 |  | $ | 0.92 |  | 1.6
During the three and six months ended June 30, 2021, the Company withheld 18,546 and 182,544 shares of common stock valued at $55,386 and $396,962, respectively, to cover statutory employee withholding taxes due upon the delivery of common stock for the vested restricted stock units. Expense recognized on restricted stock units issued to employees was $142,435 and $58,477 for the three months ended June 30, 2021 and 2020, respectively, and $280,243 and $115,084 during the six months ended June 30, 2021 and 2020, respectively. On June 30, 2021, the fair value of the Company’s common stock was approximately $2.55 per share and the intrinsic value on the non-vested restricted units was $1,235,699. Future compensation related to the non-vested restricted stock units as of June 30, 2021 is $389,897 and it is estimated to be recognized over the weighted-average vesting period of approximately 1.6 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, 2020 and the six months ended June 30, 2021, is presented below:
Options Outstanding | Common Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Life (Years)
Outstanding at December 31, 2019 | 1,357,837 |  |  | $ | 3.24 |  |  | 7.2
Granted | 411,350 |  |  | 0.69 |  |  |
Exercised | (369) |  |  | 1.00 |  |  |
Expired | — |  |  | — |  |  |
Forfeited | (56,012) |  |  | 5.08 |  |  |
Outstanding at December 31, 2020 | 1,712,806 |  |  | $ | 2.56 |  |  | 6.9
Granted | 113,689 |  |  | 3.26 |  |  |
Exercised | (133,275) |  |  | 0.32 |  |  |
Expired | — |  |  | — |  |  |
Forfeited | (12,979) |  |  | 4.09 |  |  |
Outstanding at June 30, 2021 | 1,680,241 |  |  | $ | 2.78 |  |  | 6.6
Exercisable at June 30, 2021 | 1,022,605 |  |  | $ | 3.80 |  |  | 5.3
During the six months ended June 30, 2021, 133,275 options were exercised for gross proceeds of $42,864. The intrinsic value on exercised options was $406,405. There were 369 options exercised during the six months ended June 30, 2020. The fair value of the Company's common stock on June 30, 2021 was approximately $2.55 per share and the intrinsic value on outstanding options as of June 30, 2021 was $1,618,451. The intrinsic value on exercisable options as of June 30, 2021 was $613,906. A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans during the year ended December 31, 2020 and the six months ended June 30, 2021, is presented below:
Nonvested Options | Common Shares |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Years to Vest
Nonvested at December 31, 2019 | 600,779 |  |  | $ | 0.64 |  |  | 3.0
Granted | 411,350 |  |  | 0.56 |  |  |
Vested | (283,766) |  |  | 0.72 |  |  |
Forfeited | (12,877) |  |  | 0.88 |  |  |
Nonvested at December 31, 2020 | 715,486 |  |  | $ | 0.56 |  |  | 2.5
Granted | 113,689 |  |  | 2.81 |  |  |
Vested | (165,522) |  |  | 0.65 |  |  |
Forfeited | (6,017) |  |  | 0.92 |  |  |
Nonvested at June 30, 2021 | 657,636 |  |  | $ | 0.93 |  |  | 2.3
There were outstanding options to purchase 1,680,241 shares with a weighted average exercise price of $2.78 per share, of which options to purchase 1,022,605 shares were exercisable with a weighted average exercise price of $3.80 per share as of June 30, 2021. Expense recognized on stock options issued to employees during the three months ended June 30, 2021 and 2020 was $55,991 and $52,702, respectively. Expense recognized on stock options issued to employees during the six months ended June 30, 2021 and 2020 was $108,398 and $111,753, respectively. Future compensation related to non-vested awards as of June 30, 2021 is $526,420, and it is estimated to be recognized over the weighted-average vesting period of approximately 2.3 years. The following table shows the number of stock options granted under the Company’s 2011 Equity Incentive Plans and the assumptions used to determine the fair value of those options using a Black-Scholes option-pricing model during the six months ended June 30, 2021 and 2020:
Period Ended |  | Total Stock Options Granted |  | Weighted-Average Exercise Price |  | Weighted-Average Expected Term |  | Weighted-Average Volatility |  | Weighted-Average Risk-Free Interest Rate |  | Expected Dividends |  | Weighted-Average Grant Date Fair Value
June 30, 2020 |  | 217,580 |  |  | $0.18 |  | 6 years |  | 101.40% |  | 0.49% |  | — |  |  | $0.16
June 30, 2021 |  | 113,689 |  |  | $3.26 |  | 6 years |  | 119.43% |  | 0.95% |  | — |  |  | $2.81
Employee Stock Purchase Plan The amended and restated IZEA Worldwide, Inc. 2014 Employee Stock Purchase Plan (the “ESPP”), provides for the issuance of up to 500,000 shares of the Company’s common stock to employees regularly employed by the Company for 90 days or more on a full-time or part-time basis (20 hours or more per week on a regular schedule). The ESPP operates in successive six months offering periods commencing January 1 and July 1 each year. 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. During the six months ended June 30, 2021 and 2020, employees paid $5,222 to purchase 3,376 shares of common stock and $1,944 to purchase 9,665 shares of common stock, respectively. Expense recognized on the options to purchase shares under the ESPP was $1,268 and $395 during the three months ended June 30, 2021 and 2020, respectively. Expense recognized on the options to purchase shares under the ESPP was $2,532 and $773 during the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, the Company had 392,237 remaining shares of common stock available for future issuances 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 utilizing the weighted-average forfeiture rates disclosed in Note 1. Total stock-based compensation expense recognized on restricted stock, restricted stock units, stock options, and employee stock purchase plan issuances during the three and six months ended June 30, 2021 and 2020 was recorded in the Company’s consolidated statements of operations and comprehensive loss as follows:
| Three Months Ended |  | Six Months Ended
| June 30, 2021 |  | June 30, 2020 |  | June 30, 2021 |  | June 30, 2020
Cost of revenue | $ | 1,963 |  |  | $ | 7,565 |  |  | $ | 3,417 |  |  | $ | 14,569 |
Sales and marketing | 5,318 |  |  | 17,587 |  |  | 10,748 |  |  | 39,643 |
General and administrative | 198,913 |  |  | 93,555 |  |  | 390,015 |  |  | 194,066 |
Total stock-based compensation | $ | 206,194 |  |  | $ | 118,707 |  |  | $ | 404,180 |  |  | $ | 248,278 |

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