424B5 1 izeas-3prosupp20200612.htm 424B5 Document
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-238619
AMENDMENT NO. 1 DATED JUNE 12, 2020
To Prospectus Supplement dated June 4, 2020
(To Prospectus dated June 2, 2020)
izealogoa13.jpg
IZEA Worldwide, Inc.
Up to $40,000,000
Shares of Common Stock
__________________________________________
This Amendment No. 1 to Prospectus Supplement, or this amendment, amends our prospectus supplement dated June 4, 2020, or the prospectus supplement. This amendment should be read in conjunction with the prospectus supplement and the prospectus dated June 2, 2020, both of which are to be delivered with this amendment. This amendment amends only those sections of the prospectus supplement listed in this amendment; all other sections of the prospectus supplement remain as is.
    
On June 4, 2020, we entered into an At the Market (ATM) sales agreement with National Securities Corporation, acting as the sales agent, relating to the sale of shares of our common stock offered by this prospectus supplement, as amended by this amendment. In accordance with the terms of the ATM sales agreement, we may offer and sell shares of our common stock, $0.0001 par value per share, having an aggregate offering price of up to $40,000,000 (which amount includes shares we have already sold pursuant to the sales agreement prior to the date of this amendment) from time to time through the sales agent. As of June 11, 2020, we have sold an aggregate of 4,451,901 shares of our common stock pursuant to the sales agreement for gross proceeds of $10,000,000.

Sales of our common stock, if any, under this prospectus supplement will be made by any method permitted that is deemed an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended, or the Securities Act. The sales agent is not required to sell any specific amount, but will act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
 
Our common stock is traded on The Nasdaq Capital Market, or the Exchange, under the symbol “IZEA.” The last reported sale price of our common stock on June 11, 2020 was approximately $2.82 per share.

As of the date of the prospectus supplement on June 4, 2020, we were subject to General Instruction I.B.6 of Form S-3 as a result of our public float being less than $75.0 million, which limited the amount of securities we could sell under the registration statement of which the prospectus supplement forms a part during any 12-month period. The aggregate market value of our common stock held by non-affiliates has subsequently increased above $75.0 million. As of June 11, 2020, the aggregate market value of our outstanding common stock held by non-affiliates, or public float, was $104,573,361, based on 37,082,752 shares of outstanding common stock held by non-affiliates as of June 11, 2020 and the last reported sale price of our common stock on June 11, 2020 of $2.82.

The sales agent will be entitled to compensation at a commission rate of 2% of the gross sales price per share sold. In connection with the sale of the common stock on our behalf, the sales agent will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of the sales agent will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to the sales agent with respect to certain liabilities, including liabilities under the Securities Act.

We are a smaller reporting company under Rule 405 of the Securities Act and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus supplement, the documents incorporated by reference herein and future filings.

 __________________________________________

Investing in our common stock involves a high degree of risk. Before buying shares of our common stock, you should carefully consider the risk factors described in “Risk Factors” beginning on page S-2 of this amendment and under similar headings in the prospectus supplement dated June 4, 2020 and other documents incorporated by reference into the prospectus supplement, the accompanying prospectus, and any free writing prospectus that we have authorized for use in connection with this offering.
    
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined if this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

National Securities Corporation

The date of this Amendment No. 1 to Prospectus Supplement is June 12, 2020.



TABLE OF CONTENTS
Amendment No. 1 to Prospectus Supplement


__________________________________________
We have not, and the sales agent has not, authorized anyone to provide you with information different than that which is contained in or incorporated by reference in this amendment, the prospectus supplement, the accompanying prospectus, and in any free writing prospectus that we have authorized for use in connection with this offering. We are not, and the sales agent is not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this amendment, the prospectus supplement, the accompanying prospectus, the documents incorporated by reference in this amendment, and in any free writing prospectus that we have authorized for use in connection with this offering, is accurate only as of the date of those respective documents. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read this amendment, the prospectus supplement, the accompanying prospectus, the documents incorporated by reference in this amendment, and any free writing prospectus that we have authorized for use in connection with this offering, in their entirety before making an investment decision. You should also read and consider the information in the documents to which we have referred you in the sections of the prospectus supplement and the accompanying prospectus titled “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference.”

For investors outside the United States: We have not and the sales agent has not done anything that would permit this offering or possession or distribution of this amendment, the prospectus supplement or the accompanying prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside of the United States who come into possession of this amendment or the prospectus supplement and the accompanying prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this amendment, the prospectus supplement or the accompanying prospectus outside of the United States.



ABOUT THIS AMENDMENT TO PROSPECTUS SUPPLEMENT
This amendment, the prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the U.S. Securities and Exchange Commission (the “SEC”), using a “shelf” registration process on Form S-3 (File No. 333-238619), and that was declared effective by the SEC on June 2, 2020. Under the shelf registration process, we may offer shares of our common stock having an aggregate offering price of up to $75.0 million. Under the prospectus supplement dated June 4, 2020, as amended by this amendment, we may offer shares of our common stock having an aggregate sales price of up to $40.0 million (which amount includes the value of the shares we have already sold prior to the date of this amendment) from time to time at prices and on terms to be determined by market conditions at the time of offering.
This amendment describes the specific details regarding this offering, including the price, the amount of our common stock being offered, certain risks of investing in our common stock and other items. You should read this entire amendment, the prospectus supplement, as well as the accompanying prospectus, together with the additional information described therein under the headings “Incorporation of Certain Documents by Reference” and “Where You Can Find More Information” carefully before making an investment decision. Generally, when we refer to this prospectus, we are referring to both parts of this document combined.
To the extent there is a conflict between the information contained in this amendment, on the one hand, and the information contained in the prospectus supplement and the accompanying prospectus or in any document incorporated by reference that was filed with the SEC before the date of this prospectus supplement, on the other hand, you should rely on the information in this amendment. If any statement in one of these documents is inconsistent with a statement in another document having a later date - for example, a document incorporated by reference in the accompanying prospectus - the statement in the document having the later date modifies or supersedes the earlier statement.
You should assume that the information contained in this amendment is accurate as of the date on the front cover of this amendment only and that any information we have incorporated by reference or included in the accompanying prospectus is accurate only as of the date given in the document incorporated by reference or as of the date of the prospectus, as applicable, regardless of the time of delivery of this amendment, the prospectus supplement or the accompanying prospectus or any sale of our common stock. Our business, financial condition, liquidity, results of operations and prospects may have changed since that date.
All references to “we,” “us,” “our,” the “company” and “IZEA” mean IZEA Worldwide, Inc., including its subsidiaries, except where it is clear that the term refers only to IZEA Worldwide, Inc.
This amendment, the prospectus supplement, the accompanying prospectus, and the information incorporated herein and thereby by reference include trademarks, service marks and tradenames owned by us or other companies. All trademarks, service marks and tradenames included or incorporated by reference in this amendment, the prospectus supplement or the accompanying prospectus are the property of their respective owners.



i


SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), provide a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about their companies. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included or incorporated by reference in this amendment, the prospectus supplement and the accompanying prospectus regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives of management, including, without limitation, the discussion of changes and expectations concerning IZEA’s business operations during the COVID-19 pandemic, expectations regarding financing, and expectations concerning IZEA’s business strategy, under “Prospectus Supplement Summary - Recent Developments,” are forward‑looking statements that involve risks and uncertainties. In some cases, you can identify forward-looking statements by our use of words such as “may,” “will,” “would,” “could,” “should,” “projects” “believes,” “anticipates,” “expects,” “plans,” “estimates,” “forecast,” “potential,” “thinks,” “intends,” “likely,” “continue,” “pursue,” “strategy” or “future,” or the negative of these words or other words or expressions of similar meaning. These statements are only predictions. Such statements are based on currently available operating, financial and competitive information, and are subject to inherent risks, uncertainties and changes in circumstances that are difficult to predict and many of which are outside of our control. Future events and our actual results and financial condition may differ materially from those reflected in these forward-looking statements. Therefore, you should not place undue reliance on our forward‑looking statements. There are a number of important factors that could cause our actual results, performance, achievements or industry to differ materially from those indicated by these forward-looking statements. These important factors include the factors that we identify under the heading “Risk Factors” and elsewhere in this amendment, the prospectus supplement and the accompanying prospectus. Our forward-looking statements are based on our current expectations, intentions and beliefs as of the date of this amendment or the date of the documents incorporated by reference in this amendment, as the case may be, and except as required by federal securities laws, we do not undertake, and specifically decline, any obligation to update any of these statements or to publicly announce the results of any revisions to these statements to reflect future events or developments.



ii


THE OFFERING
The following summary contains general information about this offering. The summary is not intended to be complete. You should read the full text and more specific details contained elsewhere in this amendment, the prospectus supplement and the accompanying prospectus.

Common stock offered by us pursuant to this amendment
Shares of our common stock having an aggregate offering price of up to $40 million, which includes $10 million in gross proceeds from the prior sale of common stock under the sales agreement.
Plan of distribution
 “At the market offering” that may be made from time to time on The Nasdaq Capital Market or other market for our common stock in the United States through the sales agent. See the section titled “Plan of Distribution” on page S-5 of this amendment.
Use of proceeds
We intend to use the net proceeds of this offering to finance our growth strategy and for working capital and general corporate purposes. See the section titled “Use of Proceeds” on page S-3 of this amendment.
Risk factors
See the section titled “Risk Factors” beginning on page S-2 of this amendment, page S-5 of the prospectus supplement, and the other information included in, or incorporated by reference into this amendment for a discussion of certain factors you should carefully consider before deciding to invest in shares of our common stock.
Nasdaq Capital Market symbol
IZEA





S-1


RISK FACTORS
 
An investment in our common stock involves a high degree of risk. You should consider carefully the risks discussed below as well as those described under Risk Factors of the prospectus supplement and the accompanying prospectus and in the documents we have incorporated by reference herein and therein. In addition to the following risk factors, you should carefully consider the risks, uncertainties and assumptions discussed in our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and in other documents that we subsequently file with the SEC that update, supplement or supersede such information, which documents are incorporated by reference into this prospectus. See “Where You Can Find More Information.” If any of the events actually occur, our business, financial condition or results of operation may be materially and adversely affected. In such 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 to be immaterial to our operations.


Additional Risks Related to This Offering

You will experience immediate and substantial dilution.
 
The offering price per share in this offering will exceed the net tangible book value per share of our common stock outstanding prior to this offering. Assuming that shares of our common stock are sold at a price of approximately $2.82 per share, based on the last reported sale price of our common stock on The Nasdaq Capital Market on June 11, 2020, for aggregate gross proceeds of $40,000,000, and after deducting commissions and estimated offering expenses payable by us, you will experience immediate dilution of $2.00 per share, representing the difference between our as adjusted net tangible book value per share as of March 31, 2020 after giving effect to this offering and the assumed offering price, net of commissions and offering expenses. The vesting of restricted stock units and the exercise of stock options and warrants will result in further dilution of your investment. See the section entitled “Dilution” below for a more detailed illustration of the dilution you would incur if you participate in this offering.


S-2


USE OF PROCEEDS
We may issue and sell shares of our common stock having aggregate sales proceeds of up to $40,000,000 (which amount includes $10,000,000 of gross proceeds from shares we have already sold pursuant to the sales agreement prior to the date of this amendment) from time to time. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions, expenses, and proceeds to us, if any, are not determinable at this time but will be reported in our periodic reports.

We intend to use the net proceeds of this offering to finance our growth strategy, including new product development, and for working capital and general corporate purposes. Working capital may be used to pay for, among other things, salaries, professional fees, public reporting costs, office-related expenses and other corporate expenses, including interest and overhead.

The amount and timing of our actual expenditures for these purposes may vary significantly and will depend on a number of factors, including our future revenue and cash generated by operations and other factors described under the heading “Risk Factors” in this amendment and the prospectus supplement.  Accordingly, our management will have broad discretion in applying the net proceeds of this offering. Pending these uses, we intend to invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities.

Any portion of the $40,000,000 included in this amendment not previously sold or included in an active placement notice pursuant to the ATM sales agreement, may be later made available for sale in other offerings pursuant to the accompanying base prospectus, and if no additional shares are sold under the ATM sales agreement, $30,000,000 of shares of common stock may be later made available for sale in other offerings pursuant to the accompanying base prospectus.




S-3


DILUTION
If you purchase shares of our common stock in this offering, you will experience dilution to the extent of the difference between the public offering price per share in this offering and our as adjusted net tangible book value per share immediately after this offering. Net tangible book value per share is equal to the amount of our total tangible assets, less our total liabilities, divided by the number of outstanding shares of our common stock. As of March 31, 2020, our net tangible book value was approximately $979,475, or $0.03 per share based on 34,773,051 shares outstanding.
After giving effect to the sale of our common stock in the aggregate amount of $40,000,000 at an assumed public offering price of approximately $2.82 per share, after deducting the underwriting discount and estimated offering expenses payable by us, our as adjusted net tangible book value as of March 31, 2020 would have been approximately $40,079,475. This represents an immediate increase in net tangible book value of $0.79 per share to existing stockholders and an immediate dilution of $2.00 per share to new investors purchasing shares of our common stock in this offering at the public offering price. The following table illustrates this per share dilution:

Assumed public offering price per share
 
 
$
2.82

Net tangible book value per share as of March 31, 2020
$
0.03

 
 
Increase in net tangible book value per share after giving effect to this offering
0.79

 
 
As adjusted net tangible book value per share after giving effect to this offering
 
 
0.82

Dilution per share to new investors in this offering
 
 
$
2.00

The foregoing discussion and table do not take into account further dilution to new investors that could occur upon the exercise of outstanding stock options or warrants having a per share exercise price less than the per share offering price to the public in this offering. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or equity-linked securities, the issuance of these securities could result in further dilution to our stockholders.

The table and discussion above are based on 34,773,051 shares outstanding as of March 31, 2020 and excludes, as of that date, the following:
317,074 shares of our common stock that are outstanding but are unvested shares of restricted stock;
1,012,760 shares of our common stock issuable upon the vesting of outstanding restricted stock units;
1,346,355 shares of our common stock issuable upon the exercise of outstanding stock options having an average exercise price of $3.18 per share;
12,500 shares of our common stock issuable upon the exercise of outstanding warrants having an average exercise price of $10.20 per share;
1,275,732 shares of common stock reserved for future issuance under our May 2011 Equity Incentive Plan;
4,375 shares of common stock reserved for future issuance under our August 2011 Equity Incentive Plan; and
410,817 shares of common stock reserved for future issuance under our 2014 Employee Stock Purchase Plan.




S-4


PLAN OF DISTRIBUTION

We have entered into an At the Market (ATM) sales agreement, as amended, with National Securities Corporation (the “Agent”), under which we may issue and sell shares of our common stock having an aggregate gross sales price of up to $40,000,000, from time to time, through the Agent. The sales agreement has been filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 4, 2020, and the amendment to the sales agreement has been filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 12, 2020, both of which are incorporated by reference in this amendment.
 
Upon delivery of a placement notice and subject to the terms and conditions of the ATM sales agreement, the Agent may sell our common stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on the NASDAQ Capital Market or any other existing trading market for our common stock. We may instruct the Agent not to sell our common stock if the sales cannot be effected at or above the price designated by us from time to time. We or the Agent may suspend the offering of common stock upon notice and subject to other conditions.
 
We will pay the Agent commissions, in cash, for its services in acting as the agent in the sale of our common stock. The Agent will be entitled to compensation at a commission rate of 2% of the gross sales price per share sold. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions, expenses, and proceeds to us, if any, are not determinable at this time but will be reported in our periodic reports. We have also agreed to reimburse the Agent for certain specified expenses, including the fees and disbursements of its legal counsel in an amount not to exceed $40,000.
 
Settlement for sales of common stock will generally occur on the second business day following the date on which any sales are made (or such earlier day as is industry practice for regular-way trading), or on some other date that is agreed upon by us and the Agent in connection with a particular transaction, in return for payment of the net proceeds to us. Sales of our common stock as contemplated in the prospectus supplement, as amended, by this amendment will be settled through the facilities of The Depository Trust Company or by such other means as we and the Agent may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
 
The Agent will use its commercially reasonable efforts, consistent with its normal sales and trading practices, to solicit offers to purchase the common stock under the terms and subject to the conditions set forth in the ATM sales agreement. In connection with the sale of the common stock on our behalf, the Agent will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of the Agent will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to the Agent against certain civil liabilities, including liabilities under the Securities Act.
 
The offering of our common stock pursuant to the ATM sales agreement will terminate upon the earlier of (1) the sale of all shares of our common stock subject to the sales agreement having an aggregate offering price of $40,000,000, (unless the parties agree to modify and extend the sales agreement), or (2) termination of the sales agreement as permitted therein. We may terminate the ATM sales agreement at any time upon five days' prior notice and the Agent may terminate the ATM sales agreement at any time upon ten days' prior notice.
 
The Agent and its affiliates may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services they may in the future receive customary fees. To the extent required by Regulation M promulgated under the Exchange Act, the Agent will not engage in any market making activities involving our common stock while the offering is ongoing under the prospectus supplement, as amended by this amendment.
 
The prospectus supplement, as amended by this amendment, and the accompanying base prospectus in electronic format may be made available on a website maintained by the Agent, and the Agent may distribute this amendment, the prospectus supplement and the accompanying base prospectus electronically.



S-5


LEGAL MATTERS

Olshan Frome Wolosky LLP, New York, New York, as our counsel, will pass upon the validity of the common stock offered by this amendment and the prospectus supplement. Golenbock Eiseman Assor Bell & Peskoe LLP, New York, New York, is counsel for the Agent in connection with this offering.
 


S-6