Nevada | 333-167960 | 37-1530765 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
480 N. Orlando Avenue, Suite 200 Winter Park, Florida | 32789 | |
(Address of principal executive offices) | (Zip Code) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits |
Exhibit No. | Description |
99.1 | Financial Results Press Release issued by IZEA, Inc. on November 16, 2015. |
IZEA, INC. | ||
Date: November 17, 2015 | By:/s/ Edward H. (Ted) Murphy Edward H. (Ted) Murphy President and Chief Executive Officer |
• | Closed on $12.9 Million Warrant Conversion with 81.5% participation. |
• | Revenue for the quarter increased 182% to a record $5.4 million compared to Q3 2014, the highest quarterly revenue in company history. |
• | Bookings for the quarter grew over 230% year-over-year to a record $6.7 million, up from $2.0 million in Q3 2014. |
• | Sponsored Social revenue for the quarter grew 80% year-over-year to $3.2 million, up from $1.8 million; Content revenue was $2.2 in Q3 2015. |
• | New opportunity pipeline, a representation of new client proposals generated within the quarter, grew to $36.2 million, up from $16.4 million in Q3 2014, an increase of 120%. |
• | Gross profit was 40% in Q3 2015. |
• | IZEAx aggregate network reach increased to 3.18 billion fans and followers at the end of the quarter, up 7% compared to Q2 2015 and 240% year-over-year. |
• | IZEAx registered users increased 13% to 583,000 in Q3 2015 compared to Q2 2015, and increased 507% from Q3 2014. |
• | Settled patent dispute with Blue Calypso. |
September 30, 2015 | December 31, 2014 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current: | |||||||
Cash and cash equivalents | $ | 13,273,048 | $ | 6,521,930 | |||
Accounts receivable, net | 3,048,299 | 2,156,378 | |||||
Prepaid expenses | 745,426 | 190,604 | |||||
Other current assets | 13,317 | 61,424 | |||||
Total current assets | 17,080,090 | 8,930,336 | |||||
Property and equipment, net of accumulated depreciation of $389,174 and $239,521 | 595,549 | 588,919 | |||||
Goodwill | 2,468,289 | — | |||||
Intangible assets, net of accumulated amortization of $395,333 and $0 | 1,974,667 | — | |||||
Software development costs, net of accumulated amortization of $171,185 and $85,331 | 413,365 | 483,544 | |||||
Security deposits | 119,671 | 100,641 | |||||
Total assets | $ | 22,651,631 | $ | 10,103,440 |
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 940,993 | $ | 310,611 | |||
Accrued expenses | 1,151,468 | 394,617 | |||||
Unearned revenue | 2,358,895 | 1,767,074 | |||||
Current portion of deferred rent | 10,772 | — | |||||
Current portion of capital lease obligations | 15,602 | 54,376 | |||||
Current portion of acquisition costs payable | 833,227 | — | |||||
Total current liabilities | 5,310,957 | 2,526,678 | |||||
Deferred rent, less current portion | 107,303 | 106,531 | |||||
Capital lease obligations, less current portion | — | 7,291 | |||||
Acquisition costs payable, less current portion | 977,669 | — | |||||
Warrant liability | 10,780 | 3,203,465 | |||||
Total liabilities | 6,406,709 | 5,843,965 | |||||
Stockholders’ equity: | |||||||
Common stock, $.0001 par value; 200,000,000 shares authorized; 104,002,308 and 57,697,666, respectively, issued and outstanding | 10,400 | 5,770 | |||||
Additional paid-in capital | 48,077,162 | 27,195,055 | |||||
Accumulated deficit | (31,842,640 | ) | (22,941,350 | ) | |||
Total stockholders’ equity | 16,244,922 | 4,259,475 | |||||
Total liabilities and stockholders’ equity | $ | 22,651,631 | $ | 10,103,440 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue | $ | 5,442,457 | $ | 1,931,671 | $ | 14,205,693 | $ | 5,857,946 | |||||||
Cost of sales | 3,290,457 | 692,217 | 8,649,308 | 1,998,406 | |||||||||||
Gross profit | 2,152,000 | 1,239,454 | 5,556,385 | 3,859,540 | |||||||||||
Operating expenses: | |||||||||||||||
General and administrative | 1,056,473 | 1,287,048 | 5,081,367 | 3,600,621 | |||||||||||
Sales and marketing | 1,982,088 | 1,515,139 | 5,310,124 | 3,726,370 | |||||||||||
Total operating expenses | 3,038,561 | 2,802,187 | 10,391,491 | 7,326,991 | |||||||||||
Loss from operations | (886,561 | ) | (1,562,733 | ) | (4,835,106 | ) | (3,467,451 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest expense | (31,191 | ) | (5,519 | ) | (86,354 | ) | (20,587 | ) | |||||||
Loss on exchange of warrants | (1,845,810 | ) | — | (1,845,810 | ) | — | |||||||||
Change in fair value of derivatives, net | 115,904 | 2,250,344 | (2,139,540 | ) | 5,625,555 | ||||||||||
Other income, net | 2,571 | 3,278 | 5,520 | 7,677 | |||||||||||
Total other income (expense) | (1,758,526 | ) | 2,248,103 | (4,066,184 | ) | 5,612,645 | |||||||||
Net income (loss) | $ | (2,645,087 | ) | $ | 685,370 | $ | (8,901,290 | ) | $ | 2,145,194 | |||||
Weighted average common shares outstanding – basic | 81,512,092 | 57,350,743 | 65,728,626 | 50,584,635 | |||||||||||
Basic income (loss) per common share | $ | (0.03 | ) | $ | 0.01 | $ | (0.14 | ) | $ | 0.04 | |||||
Weighted average common shares outstanding – diluted | 81,512,092 | 69,428,993 | 65,728,626 | 63,663,192 | |||||||||||
Diluted income (loss) per common share | $ | (0.03 | ) | $ | 0.01 | $ | (0.14 | ) | $ | 0.03 |
Nine Months Ended September 30, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (8,901,290 | ) | $ | 2,145,194 | ||
Adjustments to reconcile net income (loss) to net cash used for operating activities: | |||||||
Depreciation | 149,873 | 65,683 | |||||
Amortization of software development costs and other intangible assets | 481,187 | 103,529 | |||||
Loss on disposal of equipment | 595 | 16,192 | |||||
Provision for losses on accounts receivable | 36,000 | — | |||||
Stock-based compensation | 511,202 | 389,002 | |||||
Value of stock and warrants issued or to be issued for payment of services | 136,592 | 147,860 | |||||
Gain on change in value of contingent acquisition costs payable | (1,734,300 | ) | — | ||||
Loss on exchange of warrants | 1,845,810 | — | |||||
Change in fair value of derivatives, net | 2,139,540 | (5,625,555 | ) | ||||
Cash provided by (used for): | |||||||
Accounts receivable | (611,400 | ) | 183,968 | ||||
Prepaid expenses and other current assets | (465,191 | ) | (454,839 | ) | |||
Accounts payable | 87,043 | (174,386 | ) | ||||
Accrued expenses | 726,643 | 30,326 | |||||
Unearned revenue | 557,927 | (156,156 | ) | ||||
Deferred rent | 1,644 | 60,508 | |||||
Net cash used for operating activities | (5,038,125 | ) | (3,268,674 | ) | |||
Cash flows from investing activities: | |||||||
Purchase of equipment | (145,579 | ) | (159,974 | ) | |||
Increase in software development costs | — | (206,529 | ) | ||||
Acquisition, net of cash acquired | (905,586 | ) | — | ||||
Security deposits | (477 | ) | (11,067 | ) | |||
Net cash used for investing activities | (1,051,642 | ) | (377,570 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock and warrants, net | — | 10,932,912 | |||||
Proceeds from exercise of options & warrants | 12,886,950 | 112,800 | |||||
Payments on notes payable and capital leases | (46,065 | ) | (49,602 | ) | |||
Net cash provided by financing activities | 12,840,885 | 10,996,110 | |||||
Net increase in cash and cash equivalents | 6,751,118 | 7,349,866 | |||||
Cash and cash equivalents, beginning of year | 6,521,930 | 530,052 | |||||
Cash and cash equivalents, end of period | $ | 13,273,048 | $ | 7,879,918 | |||
Supplemental cash flow information: | |||||||
Cash paid during period for interest | $ | 5,805 | $ | 11,870 | |||
Non-cash financing and investing activities: | |||||||
Fair value of warrants issued | $ | 51,950 | $ | 12,382,216 | |||
Acquisition costs payable for assets acquired | $ | 3,942,639 | $ | — | |||
Acquisition costs paid through issuance of common stock | $ | 250,000 | $ | — | |||
Fair value of warrants reclassified from liability to equity | $ | 6,530,046 | $ | 3,166,482 | |||
Acquisition of assets through capital lease | $ | — | $ | 41,339 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Net income (loss) | $ | (2,645,087 | ) | $ | 685,370 | $ | (8,901,290 | ) | $ | 2,145,194 | |||||||||||||
Non-cash stock-based compensation | 188,458 | 142,252 | 511,202 | 389,002 | |||||||||||||||||||
Non-cash stock issued for payment of services | 31,251 | 18,750 | 136,592 | 147,860 | |||||||||||||||||||
Change in the fair value of derivatives | (115,904 | ) | (2,250,344 | ) | 2,139,540 | (5,625,555 | ) | ||||||||||||||||
Loss on exchange of warrants | 1,845,810 | — | 1,845,810 | — | |||||||||||||||||||
Loss on disposal of equipment | 595 | 16,593 | 595 | 16,192 | |||||||||||||||||||
Gain on change in value of contingent acquisition costs payable | (1,734,300) | — | (1,734,300) | — | |||||||||||||||||||
Interest expense | 31,191 | 5,519 | 86,354 | 20,587 | |||||||||||||||||||
Depreciation & amortization | 230,553 | 72,309 | 631,060 | 160,495 | |||||||||||||||||||
Operating EBITDA | $ | (2,167,433 | ) | $ | (1,309,551 | ) | $ | (5,284,437 | ) | $ | (2,746,225 | ) |