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Stockholders' Equity | 3 Months Ended
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Mar. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Authorized Shares The Company has 50,000,000 authorized shares of common stock and 10,000,000 authorized shares of preferred stock, each with a par value of $0.0001 per share. 500,000 shares of preferred stock are designated as Series A Junior Participating Preferred Stock. Share Repurchase On June 28, 2024, the Company announced that its Board of Directors had authorized a $5.0 million share repurchase program of the Company’s common stock. In conjunction with the Cooperation Agreement signed on September 6, 2024, the repurchase maximum was raised to $10.0 million. On September 30, 2024, the Company entered into an agreement adopted under the safe harbor provided by Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The agreement assists the Company in implementing its stock repurchase programs, providing for the purchase of up to $9.0 million, the remaining amount under its $10.0 million share repurchase program. Purchases under the Rule 10b5-1 plan commenced on November 1, 2024, and terminate on the earliest of May 15, 2025, until the aggregate number of shares are repurchased or upon certain other events. Purchases will be made from time to time, depending on market conditions, in open market or privately negotiated transactions, at prices deemed appropriate by management. As of March 31, 2025, 401,480 shares had been repurchased under the active program with an average price per share of $2.61, for a total of $1.0 million. 767,335 shares have been purchased under expired and active programs with an average price per share of $2.65, for a total of $2.0 million. Equity Incentive Plan The Company’s stockholders approved an amendment and restatement of the 2011 Equity Incentive Plan at the Company’s 2024 Annual Meeting of Stockholders held on December 12, 2024, to increase the number of plan shares by 700,000 shares, from 3,675,000 to 4,375,000 shares. As of March 31, 2025, the Company had 1,269,384 remaining shares of common stock available for issuance pursuant to future grants under the 2011 Equity Incentive Plan. Restricted Stock Under the 2011 Equity Incentive Plan, the Board determines the terms and conditions of each restricted stock issuance, including any future vesting restrictions. In 2024, the Company issued a total of 125,863 shares of restricted common stock with a grant date fair value of $0.3 million for their annual service as independent directors of the Company. The stock was granted in installments on the last day of each quarter and vested immediately. In the three months ended March 31, 2025, the Company issued its six independent directors a total of 42,858 shares of restricted common stock, respectively, with an aggregate grant date valuation of $90,002 for their service as directors of the Company. The following table contains summarized information about restricted stock issued during the years ended December 31, 2024 and March 31, 2025:
Restricted Stock | Common Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Years to Vest
Nonvested at December 31, 2023 | — |  | $ | — |  | 0.0
Granted | 125,863 |  | 2.54 |  |
Vested | (125,863) |  | 2.54 |  |
Nonvested at December 31, 2024 | — |  | $ | — |  | 0.0
Granted | 42,858 |  | 2.10 |  |
Vested | (42,858) |  | 2.10 |  |
Nonvested at March 31, 2025 | — |  | $ | — |  | 0.0
Although restricted stock is issued upon the grant of an award, the Company excludes restricted stock from the computations within the financial statements of total shares outstanding and basic earnings per share until such time as the restricted stock vests. Expenses recognized on restricted stock issued to independent directors for services were $90,002 and $75,006 during the three months ended March 31, 2025 and 2024, respectively. On March 31, 2025, the fair value of the Company’s common stock was approximately $2.10 per share, and the intrinsic value of the non-vested restricted stock was $0. Restricted Stock Units The Board determines the terms and conditions of each restricted stock unit award issued under the 2011 Equity Incentive Plan. During the three months ended March 31, 2024, the Company issued a total of 474,195 time-based restricted stock units, initially valued at $980,632, as additional compensation: 346,918 restricted stock units initially valued at $0.7 million to non-executive employees and 127,277 restricted stock units initially valued at $0.3 million to executives. These restricted stock units have vesting periods ranging from 36 to 48 months from issuance. During the three months ended March 31, 2025, the Company issued a total of 47,280 time-based and performance-based restricted stock units, initially valued at $0.1 million, as additional compensation: 23,600 time-based restricted stock units, initially valued at $59,000, to non-executive employees and 23,680 time-based restricted stock units, initially valued at $59,200, to executives. These time-based restricted stock units have vesting periods ranging from 36 to 48 months from issuance. The performance based restricted stock units include a market condition tied to the Company’s stock performance. These awards vest only if certain stock price targets are achieved over a specified performance period. Because the vesting is based on market conditions rather than service or financial performance metrics, the grant-date fair value was estimated using a Monte Carlo simulation model, which factors in stock volatility and other market-based assumptions. The expense is recognized over the requisite service period, regardless of whether the market condition is ultimately met. The following table contains summarized information about restricted stock units during the years ended December 31, 2024, and the three months ended March 31, 2025:
Restricted Stock Units | Common Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Years to Vest
Nonvested at December 31, 2023 | 962,849 |  | $ | 2.60 |  | 2.5
Granted | 1,858,023 |  | 2.31 |  |
Vested | (956,679) |  | 2.54 |  |
Forfeited | (305,821) |  | 2.41 |  |
Nonvested at December 31, 2024 | 1,558,372 |  | $ | 2.33 |  | 2.6
Granted | 47,280 |  | 2.50 |  |
Vested | (167,516) |  | 2.21 |  |
Forfeited | (188,958) |  | 2.56 |  |
Nonvested at March 31, 2025 | 1,249,178 |  | $ | 2.32 |  | 1.3
Expenses recognized on restricted stock units issued to employees were $0.2 million and $0.3 million during the three months ended March 31, 2025 and 2024, respectively. On March 31, 2025, the fair value of the Company’s common stock was approximately $2.10 per share, and the intrinsic value of the non-vested restricted units was $2.6 million. Future compensation related to the non-vested restricted stock units as of March 31, 2025, is $2.5 million, and it is estimated to be recognized over the weighted-average vesting period of approximately 1.25 years. Stock Options Under the 2011 Equity Incentive Plan, the Board determines the exercise price to be paid for the stock option shares, the period within which each stock option may be exercised, and the terms and conditions of each stock option. The exercise price of incentive and non-qualified stock options may not be less than 100% of the fair market value per share of the Company’s common stock on the grant date. If an individual owns stock representing more than 10% of the outstanding shares, the exercise price of each share of an incentive stock option must be equal to or exceed 110% of fair market value. Unless otherwise determined by the Board at the time of grant, the exercise price is set at the fair market value of the Company’s common stock on the grant date (or the last trading day prior to the grant date, if it is awarded on a non-trading day). Additionally, the term is set at ten years, and the option typically vest on a straight-line basis over the requisite service period as follows: 25% one year from the date of grant with the remaining vesting monthly in equal increments over the following three years. The Company issues new shares for any stock awards or options exercised under its 2011 Equity Incentive Plan. A summary of option activity under the 2011 Equity Incentive Plan during the year ended December 31, 2024, and the three months ended March 31, 2025, is presented below:
Options Outstanding | Common Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Life (Years)
Outstanding at December 31, 2023 | 343,601 |  |  | $ | 9.53 |  |  | 5.2
Exercised | (65,154) |  |  | 1.21 |  |  |
Expired | (244,588) |  |  | 10.51 |  |  |
Forfeited | (520) |  |  | 9.24 |  |  |
Outstanding at December 31, 2024 | 33,339 |  |  | $ | 18.60 |  |  | 3.7
Exercised | — |  |  | — |  |  |
Expired | (2,187) |  |  | 27.00 |  |  |
Forfeited | (5) |  |  | 15.44 |  |  |
Outstanding at March 31, 2025 | 31,147 |  |  | $ | 18.01 |  |  | 3.8
Exercisable at March 31, 2025 | 30,736 |  |  | $ | 18.10 |  |  | 3.7
During the three months ended March 31, 2025 and the three months ended March 31, 2024, no options were exercised. The fair value of the Company's common stock on March 31, 2025, was approximately $2.10 per share, and the intrinsic value on outstanding options as of March 31, 2025, was $36. The intrinsic value of the exercisable options as of March 31, 2025, was $36. A summary of the nonvested stock option activity under the 2011 Equity Incentive Plan during the years ended December 31, 2024, and March 31, 2025, is presented below:
Nonvested Options | Common Shares |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Years to Vest
Nonvested at December 31, 2023 | 26,373 |  |  | $ | 8.83 |  |  | 1.1
Vested | (24,728) |  |  | 18.60 |  |  |
Forfeited | (520) |  |  | 9.24 |  |  |
Nonvested at December 31, 2024 | 1,125 |  |  | 18.60 |  |  | 3.7
Vested | (709) |  |  | — |  |  |
Forfeited | (5) |  |  | 9.24 |  |  |
Nonvested at March 31, 2025 | 411 |  |  | $ | 18.01 |  |  | 3.8
There were outstanding options to purchase 31,147 shares with a weighted average exercise price of $18.01 per share, of which options to purchase 30,736 shares were exercisable with a weighted average exercise price of $18.10 per share as of March 31, 2025. Expenses recognized on stock options issued to employees during the three months ended March 31, 2025 and 2024 were $7,501 and $51,965, respectively. Future compensation related to non-vested awards as of March 31, 2025, is $1,862, and it is estimated to be recognized over the weighted-average vesting period of approximately 3.7 years. Inducement Plan On November 30, 2023, the Board of Directors adopted the IZEA Worldwide, Inc. 2023 Inducement Plan (the “Inducement Plan”) to accommodate equity grants to new employees hired by IZEA in connection with acquisition transactions, including the Hoozu acquisition. Under the Inducement Plan, IZEA may grant restricted stock units (“RSUs”), including performance-based and time-based RSUs, with respect to up to a total of 1,800,000 shares of IZEA common stock to new employees of IZEA or its subsidiaries. Pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules, the Inducement Plan was adopted without stockholder approval. In accordance with Rule 5635(c)(4) of the NASDAQ Listing Rules, awards under the Inducement Plan can only be made to individuals not previously employees or non-employee directors of IZEA (or following such individuals’ bona fide period of non-employment with IZEA), as an inducement material to the individuals’ entry into employment with IZEA or in connection with a merger or acquisition, to the extent permitted by Rule 5635(c)(3) of the NASDAQ Listing Rules. The following table contains summarized information about inducement grant-related RSUs during the year ended December 31, 2024, and the three months ended March 31, 2025.
Inducement Shares | Time-Based | Performance Based | Total
Grant Outstanding at December 31, 2023 | 10,000 | 328,354 | 338,354
Granted | 219,355 | — | 219,355
Forfeited (1) | (179,355) | (328,354) | (507,709)
Grant Outstanding at December 31, 2024 | 50,000 | — | 50,000
Granted | — | — | —
Forfeited | — | — | —
Grant Outstanding at March 31, 2025 | 50,000 | — | 50,000
(1) Inducement shares forfeited in 2024 were related to the divestiture of Hoozu in December, 2024. Employee Stock Purchase Plan The amended and restated IZEA Worldwide, Inc. 2014 Employee Stock Purchase Plan (the “ESPP”) provides for the issuance of up to 125,000 shares of the Company’s common stock to employees regularly employed by the Company for 90 days or more on a full-time or part-time basis (20 hours or more per week on a regular schedule). The ESPP operates in successive six-month periods commencing at the beginning of each fiscal year half. Each eligible employee who elects to participate may purchase up to 10% of their annual compensation in common stock, not to exceed $21,250 annually or 2,000 shares per offering period. The purchase price will be the lower of (i) 85% of the fair market value of a share of common stock on the first day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last day of the offering period. The ESPP will continue until January 1, 2028, unless otherwise terminated by the Board. The stock compensation expense on ESPP options was $10,789 and $1,010 for the three months ended March 31, 2025, and 2024, respectively. As of March 31, 2025, there were 77,931 remaining shares of common stock available for future issuance under the ESPP. Shareholder Rights Plan On May 28, 2024, the Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each share of the Company’s common stock as of June 7, 2024 (the “Record Date”), pursuant to a Rights Agreement between the Company and Broadridge Corporate Issuer Solutions, LLC, as Rights Agent. Each Right initially entitles the holder to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock at a price of $8.25, subject to adjustment. The Rights are not exercisable until the earlier of (i) the tenth business day after a person or group acquires 15% or more of the Company’s common stock, or (ii) the tenth business day after a tender or exchange offer is announced that would result in such ownership (the “Distribution Date”). Prior to the Distribution Date, the Rights trade with the common stock and are not evidenced by separate certificates. Following the Distribution Date, the Rights will separate and be evidenced by Right Certificates mailed to the stockholders of record. The Rights will expire on May 28, 2025, unless earlier redeemed, exchanged, or terminated under the terms of the Rights Agreement. This summary is qualified in its entirety by reference to the full Rights Agreement, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 28, 2024. Summary of Stock-Based Compensation The stock-based compensation cost related to all awards granted to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period utilizing the weighted-average forfeiture rates as disclosed in “Note 1 Company and Summary of Significant Accounting Policies.” Total stock-based compensation expense recognized on restricted stock, restricted stock units, stock options, and employee stock purchase plan issuances during the three months ended March 31, 2025 and 2024 was recorded in the Company’s consolidated statements of operations as follows:
|  |  |  | Three Months Ended March 31,
|  |  |  |  |  |  |  | 2025 |  | 2024
Cost of revenue |  |  |  |  |  |  |  | 62,449 |  |  | $ | 51,571 |
Sales and marketing (1) |  |  |  |  |  |  |  | (10,270) |  |  | 56,488 |
General and administrative |  |  |  |  |  |  |  | 232,953 |  |  | 246,130 |
Total stock-based compensation |  |  |  |  |  |  |  | $ | 285,132 |  |  | $ | 354,189 |
(1) Stock-based compensation expense for the Sales and Marketing department due to the targeted workforce reduction that occurred in January 2025. This is due to the reversal of previously recognized expense for unvested awards that are forfeited upon termination. Because we recognize stock compensation on a straight-line basis over the vesting period—rather than when the shares actually vest—expenses related to unvested awards are recorded in advance of full service being rendered. When employees depart before completing their vesting schedules, any unrecognized expense is reversed. Accumulated Other Comprehensive Income (Loss) We recognize activity in other comprehensive income (loss) for unrealized gains and losses on securities and foreign currency translation adjustments. The activity in accumulated other comprehensive income (loss) for the three months ended 2025, and 2024, respectively, was as follows:
| Three Months Ended
| March 31, 2025 |  | March 31, 2024
| Unrealized Gain (Loss) on Securities | Currency Translation Adjustment | Reclassification of foreign currency translation adjustment to income | Total Accumulated Other Comprehensive Income (Loss) |  | Unrealized Gain (Loss) on Securities | Currency Translation Adjustment | Total Accumulated Other Comprehensive Income
Balance at December 31 | $ | 12,209 |  | $ | 127,296 |  | $ | (34,218) |  | $ | 105,287 |  |  | $ | (250,591) |  | $ | — |  | $ | (250,591) |
Other comprehensive income (loss) | (13,903) |  | (109,459) |  | — |  | (123,362) |  |  | 58,177 |  | 4,170 |  | 62,347 |
Balance at March 31 | $ | (1,694) |  | $ | 17,837 |  | $ | (34,218) |  | $ | (18,075) |  |  | $ | (192,414) |  | $ | 4,170 |  | $ | (188,244) |

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