Document and Entity Information
Document and Entity Information Document - USD ($) | 9 Months Ended | ||
Sep. 30, 2016 | Nov. 07, 2016 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | IZEA, INC. | ||
Entity Central Index Key | 1,495,231 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 5,450,005 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 25,058,698 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Assets, Current [Abstract] | ||
Cash and cash equivalents | $ 6,598,901 | $ 11,608,452 |
Accounts receivable, net of allowance for doubtful accounts of $294,000 and $139,000 | 4,572,721 | 3,917,925 |
Prepaid expenses | 287,604 | 193,455 |
Other current assets | 14,540 | 16,853 |
Total current assets | 11,473,766 | 15,736,685 |
Property and equipment, net of accumulated depreciation of $562,128 and $445,971 | 532,356 | 596,008 |
Goodwill | 3,604,720 | 2,468,289 |
Intangible assets, net of accumulated amortization of $1,346,026 and $730,278 | 1,912,443 | 1,806,191 |
Software development costs, net of accumulated amortization of $336,491 and $207,514 | 989,745 | 813,932 |
Security deposits | 160,583 | 117,946 |
Total assets | 18,673,613 | 21,539,051 |
Liabilities, Current [Abstract] | ||
Accounts payable | 1,258,981 | 995,275 |
Accrued expenses | 1,164,139 | 908,519 |
Unearned revenue | 3,746,494 | 3,584,527 |
Current portion of deferred rent | 43,305 | 14,662 |
Current portion of capital lease obligations | 0 | 7,291 |
Current portion of acquisition costs payable | 1,082,964 | 844,931 |
Total current liabilities | 7,295,883 | 6,355,205 |
Deferred rent, less current portion | 71,074 | 102,665 |
Acquisition costs payable, less current portion | 683,219 | 889,080 |
Warrant liability | 100 | 5,060 |
Total liabilities | 8,050,276 | 7,352,010 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Common stock, $.0001 par value; 200,000,000 shares authorized; 5,450,005 and 5,222,951, respectively, issued and outstanding | 545 | 522 |
Additional paid-in capital | 50,602,881 | 48,436,040 |
Accumulated deficit | (39,980,089) | (34,249,521) |
Total stockholders’ equity | 10,623,337 | 14,187,041 |
Liabilities and Equity | $ 18,673,613 | $ 21,539,051 |
Unaudited Consolidated Balance3
Unaudited Consolidated Balance Sheets Parentheticals - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Parentheticals - Balance Sheet [Abstract] | ||
Allowance for doubtful accounts | $ 294,000 | $ 139,000 |
Property and Equipment, accumulated depreciation | 562,128 | 445,971 |
Intangible assets, accumulated amortization | 1,346,026 | 730,278 |
Software development costs, accumulated amortization | $ 336,491 | $ 207,514 |
Common stock, par value (per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares, issued (shares) | 5,450,005 | 5,222,951 |
Common stock, shares outstanding (shares) | 5,450,005 | 5,222,951 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenue | $ 7,496,972 | $ 5,442,457 | $ 19,876,611 | $ 14,205,693 |
Cost of sales | 3,927,279 | 3,290,457 | 10,447,035 | 8,649,308 |
Gross profit | 3,569,693 | 2,152,000 | 9,429,576 | 5,556,385 |
Operating expenses: | ||||
General and administrative | 2,454,555 | 1,056,473 | 7,559,302 | 5,081,367 |
Sales and marketing | 2,584,287 | 1,982,088 | 7,556,664 | 5,310,124 |
Total operating expenses | 5,038,842 | 3,038,561 | 15,115,966 | 10,391,491 |
Loss from operations | (1,469,149) | (886,561) | (5,686,390) | (4,835,106) |
Other income (expense): | ||||
Interest expense | (25,511) | (31,191) | (58,261) | (86,354) |
Loss on exchange of warrants | 0 | (1,845,810) | 0 | (1,845,810) |
Change in fair value of derivatives, net | (14,705) | 115,904 | 14,568 | (2,139,540) |
Other income (expense), net | (2,238) | 2,571 | (485) | 5,520 |
Total other income (expense) | (42,454) | (1,758,526) | (44,178) | (4,066,184) |
Net loss | $ (1,511,603) | $ (2,645,087) | $ (5,730,568) | $ (8,901,290) |
Weighted average common shares outstanding – basic and diluted | 5,420,020 | 4,075,605 | 5,357,119 | 3,286,431 |
Basic and diluted loss per common share | $ (0.28) | $ (0.65) | $ (1.07) | $ (2.71) |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2016 - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance (shares) at Dec. 31, 2015 | 5,222,951 | |||
Balance at Dec. 31, 2015 | $ 14,187,041 | $ 522 | $ 48,436,040 | $ (34,249,521) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock issued for payment of acquisition liability (shares) | 200,605 | |||
Stock issued for payment of acquisition liability | $ 1,448,832 | $ 20 | 1,448,812 | |
Stock purchase plan issuances (shares) | 5,340 | 5,340 | ||
Stock purchase plan issuances | $ 34,587 | $ 1 | 34,586 | |
Stock issued for payment of services (shares) | 21,109 | |||
Stock issued for payment of services | 129,794 | $ 2 | 129,792 | |
Stock issuance costs | (22,493) | (22,493) | ||
Stock-based compensation | 576,144 | 576,144 | ||
Net loss | (5,730,568) | (5,730,568) | ||
Balance (shares) at Sep. 30, 2016 | 5,450,005 | |||
Balance at Sep. 30, 2016 | $ 10,623,337 | $ 545 | $ 50,602,881 | $ (39,980,089) |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (5,730,568) | $ (8,901,290) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation | 190,338 | 149,873 |
Amortization of software development costs and other intangible assets | 744,725 | 481,187 |
(Gain)/Loss on disposal of equipment | (484) | 595 |
Provision for losses on accounts receivable | 155,000 | 36,000 |
Stock-based compensation | 576,144 | 511,202 |
Fair value of stock and warrants issued or to be issued for payment of services | 107,440 | 136,592 |
Gain on change in value of contingent acquisition costs payable | 0 | (1,734,300) |
Loss on exchange of warrants | 0 | 1,845,810 |
Change in fair value of derivatives, net | (14,568) | 2,139,540 |
Changes in operating assets and liabilities, net of effects of business acquired: | ||
Accounts receivable | (472,612) | (611,400) |
Prepaid expenses and other current assets | (51,792) | (465,191) |
Accounts payable | 263,706 | 87,043 |
Accrued expenses | (142,156) | 726,643 |
Unearned revenue | 161,967 | 557,927 |
Deferred rent | (2,948) | 1,644 |
Net cash used for operating activities | (4,215,808) | (5,038,125) |
Cash flows from investing activities: [Abstract] | ||
Purchase of equipment | (121,651) | (145,579) |
Increase in software development costs | (304,790) | 0 |
Acquisition, net of cash acquired | (329,468) | (905,586) |
Security deposits | (42,637) | (477) |
Net cash used for investing activities | (798,546) | (1,051,642) |
Cash flows from financing activities: [Abstract] | ||
Proceeds from exercise of options and warrants | 34,587 | 12,886,950 |
Stock issuance costs | (22,493) | 0 |
Payments on capital lease obligations | (7,291) | (46,065) |
Net cash provided by financing activities | 4,803 | 12,840,885 |
Net increase (decrease) in cash and cash equivalents | (5,009,551) | 6,751,118 |
Cash and cash equivalents, beginning of year | 11,608,452 | 6,521,930 |
Cash and cash equivalents, end of period | 6,598,901 | 13,273,048 |
Supplemental cash flow information: [Abstract] | ||
Cash paid during the year for interest | 47,045 | 5,805 |
Non-cash financing and investing activities: | ||
Fair value of warrants issued | 0 | 51,950 |
Acquisition costs payable for assets acquired | 0 | 3,942,639 |
Acquisition costs paid through issuance of common stock | 1,448,832 | 250,000 |
Fair value of common stock issued for future services | 31,962 | 0 |
Fair value of warrants reclassified from liability to equity | $ 0 | $ 6,530,046 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Interim Financial Information The accompanying consolidated balance sheet as of September 30, 2016 , the consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015 , the consolidated statement of stockholders' equity for the nine months ended September 30, 2016 and the consolidated statements of cash flows for the nine months ended September 30, 2016 and 2015 are unaudited but include all adjustments that are, in the opinion of management, necessary for a fair presentation of its financial position at such dates and its results of operations and cash flows for the periods then ended in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated balance sheet as of December 31, 2015 has been derived from the audited consolidated financial statements at that date but, in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"), does not include all of the information and notes required by U.S. GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of results that may be expected for the entire fiscal year. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2015 included in the Company's Annual Report on Form 10-K filed with the SEC on March 30, 2016. Nature of Business IZEA, Inc. (together with its wholly-owned subsidiaries, "we," "us," "our," "IZEA" or the "Company") was founded in February 2006 under the name PayPerPost, Inc. and became a public company incorporated in the state of Nevada in May 2011. On March 9, 2016, the Company formed IZEA Canada, Inc., a wholly-owned subsidiary incorporated in Ontario, Canada to operate as a sales office for its Canadian customers beginning in the second half of 2016. On April 5, 2016, the Company filed Articles of Merger with the Secretary of State of Nevada to effect the merger of its wholly-owned, non-operating subsidiary, IZEA Innovations, Inc., a Delaware corporation originally incorporated on September 19, 2006, into the parent operations of IZEA, Inc., a Nevada corporation. The Company is headquartered near Orlando, Florida with additional offices in Chicago, Los Angeles, Mountain View and Toronto, and a sales presence in New York, Detroit and Boston. The Company operates online marketplaces that facilitate transactions between brands and influential content creators. These creators are compensated by IZEA for producing and distributing unique content such as long-form text, videos, photos and status updates on behalf of brands through websites, blogs and social media channels. Brands receive influential consumer content and engaging, shareable stories that drive awareness. These marketplaces are powered by the IZEA Exchange (“ IZEAx ”). The Company's technology enables transactions to be completed at scale through the management of content workflow, creator search and targeting, bidding, analytics and payment processing. IZEAx is designed to provide a unified ecosystem that enables the creation of multiple types of content including blog posts, status updates, videos and photos through a wide variety of social channels including blogs, Twitter, Facebook, Instagram and Tumblr, among others. Reverse Stock Split On January 6, 2016, the Company filed a Certificate of Amendment with the Secretary of State of Nevada to effect a reverse stock split of the issued and outstanding shares of its common stock at a ratio of one share for every 20 shares outstanding prior to the effective date of the reverse stock split. All current and historical information contained herein related to the share and per share information for the Company's common stock or stock equivalents reflects the 1-for-20 reverse stock split of the Company's outstanding shares of common stock that became market effective on January 11, 2016. There was no change in the number of the Company's authorized shares of common stock. Principles of Consolidation The consolidated financial statements include the accounts of IZEA, Inc. and its wholly-owned subsidiaries, Ebyline, Inc. ("Ebyline") after its acquisition on January 31, 2015, ZenContent, Inc. ("ZenContent") after its acquisition on July 31, 2016, and IZEA Canada, Inc. after its formation in March 2016. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements were prepared using the acquisition method of accounting with IZEA considered the accounting acquirer of Ebyline and ZenContent. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Accounts Receivable and Concentration of Credit Risk Accounts receivable are customer obligations due under normal trade terms. Uncollectibility of accounts receivable is not significant since most customers are bound by contract and are required to fund the Company for all the costs of an “opportunity,” defined as an order created by a marketer for a creator to write about the marketer’s product. If a portion of the account balance is deemed uncollectible, the Company will either write-off the amount owed or provide a reserve based on the uncollectible portion of the account. Management determines the collectibility of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. The Company had a reserve of $294,000 and $139,000 for doubtful accounts as of September 30, 2016 and December 31, 2015 , respectively. Management believes that this estimate is reasonable, but there can be no assurance that the estimate will not change as a result of a change in economic conditions or business conditions within the industry, the individual customers or the Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. Bad debt expense was less than 1% of revenue for the three and nine months ended September 30, 2016 and 2015 . Concentrations of credit risk with respect to accounts receivable are typically limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company also controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs credit evaluations of its customers but generally does not require collateral to support accounts receivable. At September 30, 2016 , the Company had one customer which accounted for more than 10% of total accounts receivable. At December 31, 2015 , the Company had one customer which accounted for 13% of total accounts receivable. The Company had no customers that accounted for more than 10% of its revenue during the three months ended September 30, 2016 and one customer that accounted for 14% of its revenue during the three months ended September 30, 2015 . The Company had one customer that accounted for 11% of its revenue during the nine months ended September 30, 2016 and one customer that accounted for 14% of its revenue during the nine months ended September 30, 2015 . Property and Equipment Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer Equipment 3 years Software Costs 3 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years Leasehold improvements are depreciated over the shorter of the term of the lease or the estimated useful lives of the improvements. Property and equipment under capital leases are depreciated over their estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for betterments and major improvements are capitalized and depreciated over the remaining useful lives of the assets. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in general and administrative expense. Depreciation expense on property and equipment recorded in general and administrative expense in the accompanying consolidated statements of operations was $65,106 and $53,337 for the three months ended September 30, 2016 and 2015 , respectively and $190,338 and $149,873 for the nine months ended September 30, 2016 and 2015 , respectively. Software Development Costs In accordance with ASC 350-40, Internal Use Software and ASC 985-730, Computer Software Research and Development , research phase costs related to internal use software should be expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs may be capitalized. The Company amortizes software development costs equally over 5 years upon initial launch of the software or additional features. Amortization expense on software development costs recorded in general and administrative expense in the accompanying consolidated statements of operations was $44,549 and $28,966 for the three months ended September 30, 2016 and 2015 , respectively and $128,977 and $85,854 for the nine months ended September 30, 2016 and 2015 , respectively. As of September 30, 2016 , future estimated amortization expense related to software development costs over the next five years is set forth in the following schedule: Year ending December 31: Software Amortization Expense 2016 (three months remaining) $ 51,417 2017 265,247 2018 265,247 2019 179,916 2020 143,065 Thereafter 84,853 $ 989,745 Intangible Assets The Company acquired the majority of its intangible assets through its acquisition of Ebyline on January 30, 2015 and its acquisition of ZenContent on July 31, 2016. The Company is amortizing the identifiable intangible assets over a period of 12 to 60 months. Management reviews long-lived assets, including property and equipment, software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset's carrying amount to determine if there has been an impairment, which is calculated as the difference between the fair value of an asset and its carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. For the three and nine months ended September 30, 2016 and 2015 , there were no impairment charges associated with the Company's long-lived assets. The Company is amortizing the identifiable intangible assets over a weighted average period of 3 years . Amortization expense recorded in general and administrative expense in the accompanying consolidated statements of operations was $229,934 and $148,250 for the three months ended September 30, 2016 and 2015 , respectively and $615,748 and $395,333 for the nine months ended September 30, 2016 and 2015 , respectively. As of September 30, 2016 , future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule: Year ending December 31: Amortization Expense 2016 (three months remaining) $ 249,906 2017 994,628 2018 349,432 2019 207,350 2020 84,293 Thereafter 26,834 Total $ 1,912,443 Goodwill Goodwill represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company has goodwill that has been recorded in connection with its acquisition of Ebyline and ZenContent. Goodwill is not amortized, but instead it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. The Company performs its annual impairment tests of goodwill during the fourth quarter of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) whether a segment manager regularly reviews the component's operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company has determined that prior to and after the acquisition of Ebyline and ZenContent, it had and continues to have one reporting unit. Revenue Recognition The Company derives its revenue from three sources: revenue from a marketer when it pays for a social media publisher or influencer such as a blogger or tweeter ("creators") to share sponsored content with their social network audience ("Sponsored Revenue"), revenue when a publisher or company purchases custom branded content for its own use, as well as third party content marketing and native advertising efforts ("Content Revenue") and revenue derived from various service and license fees charged to users of the Company's platforms ("Service Fee Revenue"). For managed customers, the Company enters into an agreement to provide services that may require multiple deliverables in the form of (a) sponsored social items, such as blogs, tweets, photos or videos shared through social network offerings that provide awareness or advertising buzz regarding the marketer's brand; (b) media advertisements, such as click-through advertisements appearing in websites and social media channels; and (c) original content items, such as a research or news article, informational material or videos that a publisher or brand can use. The Company may provide one type or a combination of all types of these deliverables including a management fee on a statement of work for a lump sum fee. These deliverables are to be provided over a stated period that may range from one day to one year. Each of these items are considered delivered once the content is live through a public or social network or content has been delivered to the customer for their own use. Revenue is accounted for separately on each of the deliverables in the time frames set forth below. The statement of work typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services. Payment terms are typically 30 days from the invoice date. If the Company is unable to provide a portion of the services, it may agree with the customer to provide a different type of service or to provide a credit for the value of those services that may be applied to the existing order or used for future services. Sponsored Revenue is recognized and considered earned after a marketer's sponsored content is posted through IZEAx and shared through a creator's social network for a requisite period of time. The requisite period ranges from 3 days for a tweet to 30 days for a blog, video or other form of content. Management fees related to Sponsored Revenue from advertising campaigns managed by the Company are recognized ratably over the term of the campaign which may range from a few days to several months. Content Revenue is recognized when the content is delivered to and accepted by the customer. Service Fee Revenue is generated when fees are charged to customers primarily related to subscription fees for different levels of service within a platform, licensing fees for white-label use of IZEAx , early cash-out fees if a creator wishes to take proceeds earned for services from their account when the account balance is below certain minimum balance thresholds and inactivity fees for dormant accounts. Service Fee Revenue is recognized immediately when the service is performed or at the time an account becomes dormant or is cashed out. Service Fee Revenue for subscription or licensing fees is recognized straight-line over the term of service. Self-service marketers must prepay for services by placing a deposit in their account with the Company. The deposits are typically paid by the marketer via credit card. Marketers who use the Company to manage their social advertising campaigns or content requests may prepay for services or request credit terms. Payments received or billings in advance of services are recorded as unearned revenue until earned as described above. All of the Company's revenue is generated through the rendering of services and is recognized under the general guidelines of SAB Topic 13 A.1 which states that revenue will be recognized when it is realized or realizable and earned. The Company considers its revenue as generally realized or realizable and earned once (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to the marketer or customer is fixed (required to be paid at a set amount that is not subject to refund or adjustment) and determinable, and (iv) collectibility is reasonably assured. The Company records revenue on the gross amount earned since it generally is the primary obligor in the arrangement, takes on credit risk, establishes the pricing and determines the service specifications. Advertising Costs Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising expense charged to operations for the three months ended September 30, 2016 and 2015 were approximately $74,000 and $199,000 , respectively. Advertising expense charged to operations for the nine months ended September 30, 2016 and 2015 were approximately $291,000 and $411,000 , respectively. Advertising costs are included in sales and marketing expense in the accompanying consolidated statements of operations. Deferred Rent The Company’s operating leases for its office facilities contain rent abatements and predetermined fixed increases of the base rental rate during the lease term. The Company accounts for rental expense on a straight-line basis over the lease term. The Company records the difference between the straight-line expense and the actual amounts paid under the lease as deferred rent in the accompanying consolidated balance sheets. Income Taxes The Company has not recorded federal income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. The Company incurs minimal state franchise tax in two states which is included in general and administrative expenses in the consolidated statements of operations. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s tax years subject to examination by the Internal Revenue Service are 2013, 2014 and 2015. Derivative Financial Instruments Derivative financial instruments are defined as financial instruments or other contracts that contain a notional amount and one or more underlying factors (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. Fair Value of Financial Instruments The Company’s financial instruments are recorded at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value: • Level 1 – Valuation based on quoted market prices in active markets for identical assets and liabilities. • Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets. • Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The Company does not have any Level 1 or 2 financial assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted of its acquisition cost liability (see Note 2) and a warrant liability (see Note 3) as of September 30, 2016 . Significant unobservable inputs used in the fair value measurement of the warrants include the estimated term and risk-adjusted interest rates. In developing its credit risk assumption used in the fair value of warrants, the Company considered publicly available bond rates and US Treasury Yields. However, since the Company does not have a formal credit-standing, management estimated its standing among various reported levels and grades for use in the model. During all periods, management estimated that the Company's standing was in the speculative to high-risk grades (BB- to CCC in the Standard and Poor's Rating). Significant increases or decreases in the estimated remaining period to exercise or the risk-adjusted interest rate could result in a significantly lower or higher fair value measurement. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable, unearned revenue and accrued expenses. Unless otherwise disclosed, the fair value of the Company’s capital lease obligations approximate their carrying value based upon current rates available to the Company. Stock-Based Compensation Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan and 2011 B Equity Incentive Plan (together, the "2011 Equity Incentive Plans") (see Note 5) is measured at the grant date, based on the fair value of the award, and is recognized as a straight-lined 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 noted in the table below. The Company estimates the fair value of its common stock using the closing stock price of its common stock on the date of the option award. The Company estimates the volatility of its common stock at the date of grant based on the volatility of comparable peer companies that are publicly traded and have had a longer trading history than itself. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company used the following assumptions for options granted under the 2011 Equity Incentive Plans during the three and nine months ended September 30, 2016 and 2015 : Three Months Ended Nine Months Ended 2011 Equity Incentive Plans Assumptions September 30, September 30, September 30, September 30, Expected term 6 years 6 years 6 years 6 years Weighted average volatility 45.02% 53.81% 50.01% 56.62% Weighted average risk free interest rate 1.23% 1.78% 1.42% 1.58% Expected dividends — — — — The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods. Average expected forfeiture rates were 7.87% and 15.37% during the three months ended September 30, 2016 and 2015 , respectively. Average expected forfeiture rates were 10.74% and 12.37% during the nine months ended September 30, 2016 and 2015 , respectively. Non-Employee Stock-Based Payments The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. The fair value of equity instruments issued to consultants that vest immediately is expensed when issued. The fair value of equity instruments issued to consultants that have future vesting and are subject to forfeiture if performance does not occur is recognized as expense over the vesting period. Fair values for the unvested portion of issued instruments are adjusted each reporting period. The change in fair value is recorded to additional paid-in capital. Stock-based payments related to non-employees is accounted for based on the fair value of the related stock or the fair value of the services, whichever is more readily determinable. Segment Information The Company does not identify separate operating segments for management reporting purposes. The results of consolidated operations are the basis on which management evaluates operations and makes business decisions. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers , which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . The amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by amending certain existing illustrative examples and adding additional illustrative examples to assist in the application of the guidance. The effective date and transition of these amendments is the same as the effective date and transition of ASU 2014-09 stated above. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing . ASU 2016-10 is intended to reduce the cost and complexity of applying the guidance in the FASB's new revenue standard on identifying performance obligations, and is also intended to improve the operability and understandability of the licensing implementation guidance. The effective date for ASU 2016-10 is the same as for ASU 2014-09 stated above. The Company is currently evaluating the impact of the adoption of ASU 2014-09, ASU 2016-08 and ASU 2016-10 on its consolidated financial statements and has not yet determined the method by which it will adopt the standards in the first quarter of 2018. In |
Business Acquisitions (Notes)
Business Acquisitions (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | ACQUISITIONS EBYLINE, INC. On January 30, 2015, the Company purchased all of the outstanding shares of capital stock of Ebyline pursuant to the terms of a Stock Purchase Agreement, dated as of January 27, 2015, by and among IZEA, Ebyline and the stockholders of Ebyline for a maximum purchase price to be paid over the next three years of $8,850,000 . Based in Los Angeles, California, Ebyline operates an online marketplace that enables publishers to access a network of over 15,000 content creators ranging from writers to illustrators in 84 countries. Over 2,000 fully vetted individuals in the Ebyline network have professional journalism credentials with backgrounds at well-known media outlets. Ebyline’s proprietary workflow is utilized by leading media organizations to obtain the content they need from professional content creators. In addition to publishers, Ebyline is leveraged by brands to produce custom branded content for use on their owned and operated sites, as well as third party content marketing and native advertising efforts. Purchase Price and Acquisition Costs Payable Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value 1/30/2015 1/30/2015 9/30/2016 Cash paid at closing $ 1,200,000 $ 1,200,000 $ — Guaranteed purchase price (a) 2,127,064 1,982,639 923,316 Contingent performance payments (b) 2,210,000 1,834,300 — Acquisition costs payable by Ebyline shareholders (c) — — — Total estimated consideration $ 5,537,064 $ 5,016,939 $ 923,316 Current portion of acquisition costs payable $ 923,316 Long term portion of acquisition costs payable — Total acquisition costs payable $ 923,316 (a) The Stock Purchase Agreement required a $1,200,000 cash payment at closing, a $250,000 stock payment on July 30, 2015 and a cash or stock payment of up to an additional $1,900,000 ( subject to proportional reduction in the event Ebyline’s final 2014 revenue was below $8,000,000 ). Ebyline's final gross revenue for 2014 was $7,903,429 . As such, the additional amount owed became $1,877,064 payable in two equal installments of $938,532 on January 30, 2016 and January 30, 2017. This guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% . Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $11,412 and $24,168 for the three months ended September 30, 2016 and 2015 , respectively. Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $38,137 and $67,957 for the nine months ended September 30, 2016 and 2015 , respectively. Per the Stock Purchase Agreement, the Company issued 31,821 shares of common stock valued at $250,000 to satisfy a portion of the guaranteed purchase price payment obligation on July 30, 2015. On January 29, 2016, the Company issued 114,398 shares of common stock valued at $848,832 to satisfy the annual installment payment of $938,532 less $89,700 in closing related expenses (see item (c) below). (b) Total contingent performance payments up to $5,500,000 are to be paid based on Ebyline meeting certain revenue targets. The performance payments are to be made only if Ebyline achieves at least 90% of Content Revenue targets of $17,000,000 in 2015, $27,000,000 in 2016 and $32,000,000 in 2017. The fair value of the $5,500,000 of contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over the next three years. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 8.5% ) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 100,000 simulation trials. The volatility used for the simulation was 35% . The Monte Carlo simulation resulted in a calculated fair value of contingent performance payments of $2,210,000 on January 30, 2015 . Because the contingent performance payments are subject to a 17% reduction related to the continued employment of certain key employees, ASC 805-10-55-25 indicates that a portion of these payments be treated as potential compensation to be accrued over the term rather than allocated to the purchase price. Therefore, the Company reduced its overall purchase price consideration by $357,700 and recorded the initial present value of the contingent performance payments at $1,834,300 . Based on actual results for 2015 and projections for Content Revenue for 2016-2017, the Content Revenue for every year is expected to be below 90% of the required Content Revenues targets. Therefore, the Company reduced the fair value of contingent performance payments to zero by the end of 2015. The gain as a result of the decrease in the estimated fair value of contingent performance payments was recorded as a reduction of general and administrative expense in the Company's consolidated statement of operations during the year ended December 31, 2015 . (c) According to the stock purchase agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016. Purchase Price Allocation The final allocation of the purchase price as of January 30, 2015 is summarized as follows: Final Purchase Price Allocation Current assets $ 738,279 Property and equipment 27,194 Identifiable intangible assets 2,370,000 Goodwill 2,468,289 Security deposits 18,553 Current liabilities (605,376 ) Total estimated consideration $ 5,016,939 There are many synergies between the business operations of Ebyline and IZEA including a database of creators that can provide content and advertising and synergies between our online marketplaces that appeal to customers on both sides. The Ebyline operations are included in the consolidated financial statements beginning on the date of acquisition of January 30, 2015. The Ebyline operations contributed revenue of $7,145,537 and gross profit of $1,564,167 in the consolidated statement of operations for the nine months ended September 30, 2016 and revenue of $5,704,622 and gross profit of $624,919 in the consolidated statement of operations during the eight months from January 31, 2015 through September 30, 2015 . The following unaudited pro forma summary presents consolidated information of IZEA, Inc. as if the business combination with Ebyline had occurred on January 1, 2014: Proforma Nine Months Ended 9/30/2015 Pro-Forma Revenue $ 14,915,807 Pro-Forma Cost of Sales 9,299,454 Pro-Forma Gross Profit 5,616,353 Pro-Forma Net Loss (8,991,455 ) IZEA did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The pro forma revenue and earnings calculations have been calculated after applying the Company's accounting policies on revenue recognition and adjusting the results to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied from January 1, 2014. The Company incurred $87,906 in acquisition-related costs which are included in general and administrative expense on the Company's consolidated statement of operations for the nine months ended September 30, 2015 . These costs are reflected in pro forma earnings for the nine months ended September 30, 2015 . ZENCONTENT, INC. On July 31, 2016, the Company purchased all of the outstanding shares of capital stock of ZenContent pursuant to the terms of a Stock Purchase Agreement, by and among IZEA, ZenContent and the stockholders of ZenContent for a maximum purchase price to be paid over the next three years of $4,500,000 . Based in Mountain View, California, ZenContent offers a content marketing technology platform that creates high volume original content for businesses. ZenContent services a strong base of Fortune 500 e-commerce customers, amongst others. ZenContent customers have access to its network of more than 5,000 content creators for large-scale asset production. ZenContent’s proprietary tools ingest full product databases, source creators and provide quality assurance for content projects, making product listings friendlier for consumers and more indexable for search. Outside of e-commerce, ZenContent also works with leading online publishers for the production of articles and text updates, including a real-time application program interface (API) that enables production of assets for rapid publishing of news stories and augmentation of consumer content. Purchase Price and Acquisition Costs Payable Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value 7/31/2016 7/31/2016 9/30/2016 Cash paid at closing (a) $ 400,000 $ 400,000 $ — Stock paid at closing (a) 600,000 600,000 — Guaranteed purchase price (b) 933,565 566,547 612,867 Contingent performance payments (c) 2,500,000 230,000 230,000 Total estimated consideration $ 4,433,565 $ 1,796,547 $ 842,867 Current portion of acquisition costs payable $ 159,648 Long term portion of acquisition costs payable 683,219 Total acquisition costs payable $ 842,867 (a) The aggregate consideration paid at closing for the acquisition of ZenContent consisted of (a) a cash payment of $400,000 and (b) the issuance of 86,207 shares of IZEA common stock valued at $600,000 (using the 30 trading-day volume-weighted average closing price of IZEA's common stock of $6.96 per share as of July 29, 2016). (b) Aggregate future consideration consists of (i) three equal annual installment payments totaling $1,000,000 , commencing 12 months following the closing, less a reduction of $66,435 due to a customary closing date working capital adjustment ("guaranteed purchase price"), and (ii) contingent performance payments of up to an aggregate of $2,500,000 over the three 12-month periods following the closing. These payments are also subject to downward adjustment of up to 30% if IZEA's employment of Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or by Ms. DeMike without good reason. As a result, the Company reduced its guaranteed purchase price consideration by $300,000 to be accrued as compensation expense over the term rather than allocated to the purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $40,972 for the three and nine months ended September 30, 2016 . The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% ( 5.50% ). Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $5,348 for the three and nine months ended September 30, 2016 . (c) The contingent performance payments are subject to ZenContent achieving certain minimum revenue thresholds over 36 months. ZenContent is required to meet minimum revenues of $2.5 million , $3.5 million and $4.5 million in the first, second and third, respective 12-month periods following the closing in order to receive any portion of the contingent performance payments. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of IZEA common stock at then average stock prices (determined at IZEA’s option). The $230,000 fair value of the contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over the next three years. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 16.5% ) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 60% . Purchase Price Allocation The unaudited consolidated financial statements allocates the purchase price to the underlying ZenContent tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. This allocation is dependent upon certain valuations and other studies that are preliminary, based on work performed to date. Accordingly, the adjustments herein are preliminary. IZEA anticipates that all the information needed to identify and measure values assigned to the assets acquired and liabilities assumed will be obtained and finalized during the one-year measurement period following the acquisition date. Differences between these preliminary estimates and the final acquisition accounting may occur, and these differences could have a material impact on the unaudited consolidated financial statements and the allocation presented below. The preliminary allocation of the purchase price as of July 31, 2016 is summarized as follows: Final Purchase Price Allocation Current assets $ 415,798 Property and equipment 4,551 Identifiable intangible assets 722,000 Goodwill 1,136,431 Current liabilities (482,233 ) Total estimated consideration $ 1,796,547 There are many synergies between the business operations of ZenContent and IZEA including a database of creators that can provide content and advertising and synergies between our online marketplaces that appeal to customers on both sides. The ZenContent operations are included in the consolidated financial statements beginning on the date of acquisition of July 31, 2016. The ZenContent operations contributed revenue of $465,574 and gross profit of $219,313 in the consolidated statement of operations for the three and nine months ended September 30, 2016 . The Company incurred $40,918 in acquisition-related costs which are included in general and administrative expense on the Company's consolidated statement of operations for the nine months ended September 30, 2016 . |
Derivative Financial Instrument
Derivative Financial Instruments (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | DERIVATIVE FINANCIAL INSTRUMENTS The Company evaluates its warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 and 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the consolidated statement of operations as other income or expense. Upon registration of the shares, changes in price-based anti-dilution adjustments, conversion or exercise, as applicable, of a derivative instrument, the instrument is marked to fair value at the date of the occurrence of the event and then that fair value is reclassified to equity. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Instruments that are initially classified as equity that become subject to reclassification are reclassified to a liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months after the balance sheet date. The following table summarizes the Company's activity and fair value calculations of its derivative warrants for the year ended December 31, 2015 and nine months ended September 30, 2016 : Linked Common Shares to Derivative Warrants Warrant Liability Balance, December 31, 2014 1,795,564 $ 3,203,465 Exercise of warrants for common stock (1,392,832 ) (5,348,408 ) Loss on exchange of warrants — 1,197,821 Reclassification of fair value of 2014 Private Placement warrants to equity (396,536 ) (1,181,638 ) Change in fair value of derivatives — 2,133,820 Balance, December 31, 2015 6,196 5,060 Expiration of warrants (694 ) — Change in fair value of derivatives — (4,960 ) Balance, September 30, 2016 5,502 $ 100 During the three months ended September 30, 2016 and 2015 , the Company recorded a gain of $1,231 and $115,904 , respectively, due to the change in the fair value of its warrant liability. During the nine months ended September 30, 2016 and 2015 , the Company recorded a gain of $4,960 and a loss of $2,139,540 , respectively, due to the change in the fair value of its warrant liability. The Company's warrants were valued on the applicable dates using a Binomial Lattice Option Valuation Technique (“Binomial”). Significant inputs into this technique as of December 31, 2015 and September 30, 2016 were as follows: Binomial Assumptions December 31, September 30, Fair market value of asset (1) $7.66 $5.87 Exercise price $25.00 $25.00 Term (2) 1.7 years 0.9 years Implied expected life (3) 1.7 years 0.9 years Volatility range of inputs (4) 83.00% 63.20% Equivalent volatility (3) 83.00% 63.20% Risk-free interest rate range of inputs (5) 1.06% 0.59% Equivalent risk-free interest rate (3) 1.06% 0.59% (1) The fair market value of the asset was determined by using the Company's closing stock price as reflected in the OTCQB for the period ended December 31, 2015 and the Nasdaq Capital Market for the period ended September 30, 2016 . (2) The term is the contractual remaining term, allocated among twelve equal intervals for purposes of calculating other inputs, such as volatility and risk-free rate. (3) The implied expected life, and equivalent volatility and risk-free interest rate amounts are derived from the Binomial. (4) The Company does not have a market trading history upon which to base its forward-looking volatility. Accordingly, the Company selected peer companies that provided a reasonable basis upon which to calculate volatility for each of the intervals described in (2), above. (5) The risk-free rates used for inputs represent the yields on zero coupon U.S. Government Securities with periods to maturity consistent with the intervals described in (2), above. |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS & CONTINGENCIES Litigation From time to time, the Company may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Litigation is, however, subject to inherent uncertainties, and an adverse result in these or other matters may harm the Company's business. The Company is currently not aware of any legal proceedings or claims that it believes would or could have, individually or in the aggregate, a material adverse effect on its operations or financial position. |
Stockholders' Equity (Notes)
Stockholders' Equity (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 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. Reverse Stock Split On January 6, 2016, the Company filed a Certificate of Amendment with the Secretary of State of Nevada to effect a reverse stock split of the issued and outstanding shares of its common stock at a ratio of one share for every 20 shares outstanding prior to the effective date of the reverse stock split. All current and historical information contained herein related to the share and per share information for the Company's common stock or stock equivalents reflects the 1-for-20 reverse stock split of the Company's outstanding shares of common stock that became market effective on January 11, 2016. There was no change in the number of the Company's authorized shares of common stock. Nasdaq Uplisting On January 26, 2016, the Company's shares of common stock commenced trading on the Nasdaq Capital Market under the symbol IZEA. Prior thereto, the Company's common stock was quoted on the OTCQB marketplace under the same symbol. Stock Issued for Purchases On January 29, 2016, the Company issued 114,398 shares of common stock valued at $848,832 to the former Ebyline stockholders as settlement of its annual installment payment of $938,532 less $89,700 in closing related expenses owed as part of the January 2015 Stock Purchase Agreement. On July 31, 2016, the Company purchased of all of the outstanding shares of capital stock of ZenContent, pursuant to the terms of a Stock Purchase Agreement, dated as of July 31, 2016, by and among IZEA, ZenContent and the stockholders of ZenContent. Upon closing, the Company (a) paid a cash payment of $400,000 and (b) issued 86,207 shares of common stock valued at $600,000 (using the 30 trading-day volume-weighted average closing price of the Company's common stock of $6.96 per share as of July 29, 2016). Stock Issued for Services The Company issued 4,055 shares of restricted common stock valued at $6,250 to each of its five independent directors for their service as directors of the Company during the first quarter of 2016. On May 16, 2016, the Company issued each of its five independent directors 3,261 shares of restricted common stock valued at $18,750 for their service as directors of the Company for the period of April 2016 through December 2016. The stock vests in equal increments of approximately 362 shares per month. Total shares issued during the nine months ended September 30, 2016 were 20,360 at a total initial value of $125,000 . On April 11, 2016, the Company issued 749 shares of restricted common stock valued at $4,794 to four employees as a contest award. The following table contains summarized information about nonvested restricted stock outstanding during the nine months ended September 30, 2016 : Restricted Stock Common Shares Weighted Average Weighted Average Nonvested at December 31, 2015 — $ — Granted 21,109 6.15 Vested (15,664 ) 6.86 Forfeited — — Nonvested at September 30, 2016 5,445 $ 5.87 0.25 Total expense recognized for stock-based payments for services during the three months ended September 30, 2016 and 2015 was $34,969 and $31,251 , respectively, all of which is included in general and administrative expense in the consolidated statements of operations. Total expense recognized for stock-based payments for services during the nine months ended September 30, 2016 and 2015 was $107,439 and $84,742 , respectively. The fair value of the services is based on the value of the Company's common stock over the term of service. The Company recognized a loss of $15,936 and a gain of $9,608 as a change in the fair value of derivatives during the three and nine months ended September 30, 2016 , respectively, based on the change between the Company's stock price upon issuance and the Company's stock price upon the date of vesting. Estimated future compensation related to nonvested restricted awards of $31,962 is expected to be recognized over the remaining individual vesting periods of up to three months. The fair value of the nonvested, but issued, restricted stock as of September 30, 2016 is $31,962 , and it is included in prepaid expenses in the accompanying consolidated balance sheets. Warrant Transactions Warrant Issuances: On January 22, 2015, the Company issued a warrant to purchase 5,000 shares of common stock to an investor relations consultant. The warrant was fully vested on the date of issuance, has an exercise price of $10.20 per share and expires on January 22, 2020. The fair value of the warrant upon issuance was $7,700 and the Company received $100 as compensation for the warrant. The fair value of the warrant issuance was recorded as an increase in additional paid-in capital in the Company's consolidated balance sheet and the net $7,600 compensation expense was recorded in general and administrative expense during the nine months ended September 30, 2015 . On June 30, 2015, the Company issued a warrant to purchase 12,500 shares of common stock to an investor relations consultant. The warrant was fully vested on the date of issuance, has an exercise price of $10.20 per share and expires on June 30, 2020. The fair value of the warrant upon issuance was $44,250 . The fair value of the warrant issuance was recorded as an increase in additional paid-in capital in the Company's consolidated balance sheet and compensation expense in general and administrative expense during the nine months ended September 30, 2015 . Warrant Exercises: From July 20, 2015 through August 14, 2015, the Company offered a 25% discount on the warrant exercise prices to investors holding the series A and series B warrants to purchase common stock issued in its August - September 2013 private placement (the “2013 Warrants”) and a 26% discount on the warrant exercise prices to investors holding series A and series B warrants to purchase common stock issued in its February 2014 private placement (the “2014 Warrants” and together with the 2013 Warrants, the "Warrants"). If and to the extent a holder did not exercise its Warrants at the reduced exercise prices during this time period, the exercise prices of any unexercised Warrants remain at their original exercise prices of $5.00 and $10.00 per share for the series A and series B 2013 Warrants, respectively, and $7.00 and $10.00 per share for the series A and series B 2014 Warrants, respectively. The warrant exercise offer was made pursuant to the terms of Warrant Amendment and Exercise Agreements, dated July 20, 2015, entered into with holders owning more than 70% of the Company's outstanding 2013 and 2014 Warrants. In exchange for the reduction in the warrant exercise price, the investors holding a majority of the 2014 Warrants agreed to amend the 2014 Warrants to remove the price-based anti-dilution adjustment provisions contained in the 2014 Warrants. The removal of these provisions from the 2014 Warrants eliminated the provision that required liability classification of the 2014 Warrants and quarterly non-cash adjustments reflecting changes in the fair value of the derivative liability on the Company’s financial statements. Except for the temporarily reduced exercise prices and elimination of the anti-dilution adjustment provisions in the 2014 Warrants, the terms of the 2013 Warrants and 2014 Warrants remain unchanged. As a result of the amendment in the 2014 Warrants terms, the 2014 Warrants no longer require liability classification after August 14, 2015 (See Note 3). At the close of the offer period on August 14, 2015, investors exchanged and converted 1,392,832 shares underlying the 2014 Warrants at the 26% discount for total proceeds of $8,760,805 and 798,715 shares of the 2013 Warrants at the 25% discount for total proceeds of $4,100,252 . This resulted in the issuance of a total of 2,191,547 shares of common stock at an average exercise price of $5.87 per share for total proceeds of $12,861,057 . The exercise prices of any Warrants not exercised during the Warrant conversion offer period have reverted back to their original exercise prices. The amendment of the Warrants to reduce the exercise price required the Company to treat the adjustment as an exchange whereby it computed the fair value of the Warrants immediately prior to the price reduction and the fair value of the Warrants after the price reduction. The $1,197,821 and the $647,989 change in the fair value of the 2014 and 2013 Warrants, respectively, as a result of the price reduction, was treated as a $1,845,810 loss on exchange and recorded in the Company's consolidated statement of operations during the nine months ended September 30, 2015 . As a result of the above transactions, the fair value of $5,348,408 on the 1,392,832 exercised 2014 Warrants and the fair value of $1,181,638 on the 396,536 remaining unexercised 2014 Warrants as of August 14, 2015 was moved to equity as of August 14, 2015. This reclassification plus the $647,989 loss on exchange of the 2013 Warrants already classified as equity reflects a $7,178,035 total change recorded in the Company's consolidated statement of stockholders' equity during the nine months ended September 30, 2015 . The resale of the common stock underlying the 2013 and 2014 Warrants is covered by IZEA’s Registration Statements on Form S-1 (Registration Nos. 333-191743, 333-195081 and 333-197482), which are on file with the Securities and Exchange Commission. Stock Options In May 2011, the Board of Directors adopted the 2011 Equity Incentive Plan of IZEA, Inc. (the “May 2011 Plan”). The May 2011 Plan allows the Company to grant options to purchase up to 1,000,000 shares as an incentive for its employees and consultants. As of September 30, 2016 , the Company had 72,967 shares of common stock available for future grants under the May 2011 Plan. On August 22, 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 September 30, 2016 , the Company had no shares of common stock available for future grants under the August 2011 Plan. Under both the May 2011 Plan and the August 2011 Plan (together, the "2011 Equity Incentive Plans"), the Board of Directors determines the exercise price to be paid for the shares, the period within which each option may be exercised, and the terms and conditions of each option. The exercise price of the 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 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 of Directors at the time of grant, the right to purchase shares covered by any options under the 2011 Equity Incentive Plans typically vest on a straight-line basis over the requisite service period as follows: 25% of options shall vest one year from the date of grant and the remaining options shall vest monthly, in equal increments over the following three years . The term of the options is up to ten years . The Company issues new shares to the optionee for any stock awards or options exercised pursuant to its equity incentive plans. A summary of option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2015 and nine months ended September 30, 2016 , is presented below: Options Outstanding Common Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Outstanding at December 31, 2014 595,786 $ 9.20 6.5 Granted 277,059 7.43 Exercised — — Forfeited (42,246 ) 7.70 Outstanding at December 31, 2015 830,599 $ 8.65 6.8 Granted 115,979 6.85 Exercised — — Forfeited (31,600 ) 11.26 Outstanding at September 30, 2016 914,978 $ 8.34 6.4 Exercisable at September 30, 2016 507,213 $ 9.36 5.6 During the three and nine months ended September 30, 2016 and 2015 , no options were exercised. The fair value of the Company's common stock on September 30, 2016 was $5.87 per share. The intrinsic value on outstanding options as of September 30, 2016 was $307,121 . The intrinsic value on exercisable options as of September 30, 2016 was $251,330 . A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2015 and nine months ended September 30, 2016 , is presented below: Nonvested Options Common Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested at December 31, 2014 372,092 $ 4.00 3.0 Granted 277,059 3.84 Vested (147,759 ) 4.32 Forfeited (39,466 ) 3.44 Nonvested at December 31, 2015 461,926 $ 3.84 2.8 Granted 115,979 3.28 Vested (141,573 ) 4.08 Forfeited (28,567 ) 3.84 Nonvested at September 30, 2016 407,765 $ 3.60 2.6 Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plans 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 awards outstanding during the three months ended September 30, 2016 and 2015 was $170,818 and $188,458 , respectively. Total stock-based compensation expense recognized on awards outstanding during the nine months ended September 30, 2016 and 2015 was $576,144 and $511,202 , respectively. Stock-based compensation expense was recorded as $23,071 to sales and marketing and $147,747 to general and administrative expense in the Company's consolidated statement of operations during the three months ended September 30, 2016 and $67,586 to sales and marketing and $508,558 to general and administrative expense in the Company's consolidated statement of operations during the nine months ended September 30, 2016 . Stock-based compensation expense was recorded as $188,458 and $511,202 to general and administrative expense in the Company's consolidated statement of operations during the three and nine months ended September 30, 2015 . Future compensation related to nonvested awards expected to vest of $1,283,402 is estimated to be recognized over the weighted-average vesting period of approximately three years . Employee Stock Purchase Plan On April 16, 2014, stockholders holding a majority of the Company's outstanding shares of common stock, upon previous recommendation and approval of the Board of Directors, adopted the IZEA, Inc. 2014 Employee Stock Purchase Plan (the “ESPP”) and reserved 75,000 shares of the Company's common stock for issuance 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 month 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 1,000 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 trading day of the offering period or (ii) 85% of the fair market value of a share of common stock on the last trading day of the offering period. The ESPP will continue until January 1, 2024, unless otherwise terminated by the Board. Employees paid $34,587 to purchase 5,340 shares of common stock during the nine months ended September 30, 2016 . As of September 30, 2016 , the Company had 55,875 remaining shares of common stock available for future grants under the ESPP. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | EARNINGS (LOSS) PER COMMON SHARE Basic earnings (loss) per common share is computed by dividing the net income or loss by the basic weighted-average number of shares of common stock outstanding during each period presented. Diluted earnings per share is computed by dividing the net income or loss by the total of the basic weighted-average number of shares of common stock outstanding plus the additional dilutive securities that could be exercised or converted into common shares during each period presented less the amount of shares that could be repurchased using the proceeds from the exercises. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Net loss $ (1,511,603 ) $ (2,645,087 ) $ (5,730,568 ) $ (8,901,290 ) Weighted average shares outstanding - basic and diluted 5,420,020 4,075,605 5,357,119 3,286,431 Basic and diluted loss per common share $ (0.28 ) $ (0.65 ) $ (1.07 ) $ (2.71 ) The Company excluded the following weighted average items from the above computation of diluted loss per common share as their effect would be anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Stock options 904,706 738,820 874,363 707,017 Warrants 557,423 1,595,042 550,002 2,328,645 Restricted stock units — 49,421 — 74,738 Total excluded shares 1,462,129 2,383,283 1,424,365 3,110,400 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS No material events have occurred after September 30, 2016 that require recognition or disclosure in the financial statements. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Reverse Stock Split [Policy Text Block] | Reverse Stock Split On January 6, 2016, the Company filed a Certificate of Amendment with the Secretary of State of Nevada to effect a reverse stock split of the issued and outstanding shares of its common stock at a ratio of one share for every 20 shares outstanding prior to the effective date of the reverse stock split. All current and historical information contained herein related to the share and per share information for the Company's common stock or stock equivalents reflects the 1-for-20 reverse stock split of the Company's outstanding shares of common stock that became market effective on January 11, 2016. There was no change in the number of the Company's authorized shares of common stock. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The consolidated financial statements include the accounts of IZEA, Inc. and its wholly-owned subsidiaries, Ebyline, Inc. ("Ebyline") after its acquisition on January 31, 2015, ZenContent, Inc. ("ZenContent") after its acquisition on July 31, 2016, and IZEA Canada, Inc. after its formation in March 2016. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements were prepared using the acquisition method of accounting with IZEA considered the accounting acquirer of Ebyline and ZenContent. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values with any excess purchase price allocated to goodwill. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. |
Receivables, Policy [Policy Text Block] | Accounts Receivable and Concentration of Credit Risk Accounts receivable are customer obligations due under normal trade terms. Uncollectibility of accounts receivable is not significant since most customers are bound by contract and are required to fund the Company for all the costs of an “opportunity,” defined as an order created by a marketer for a creator to write about the marketer’s product. If a portion of the account balance is deemed uncollectible, the Company will either write-off the amount owed or provide a reserve based on the uncollectible portion of the account. Management determines the collectibility of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. The Company had a reserve of $294,000 and $139,000 for doubtful accounts as of September 30, 2016 and December 31, 2015 , respectively. Management believes that this estimate is reasonable, but there can be no assurance that the estimate will not change as a result of a change in economic conditions or business conditions within the industry, the individual customers or the Company. Any adjustments to this account are reflected in the consolidated statements of operations as a general and administrative expense. Bad debt expense was less than 1% of revenue for the three and nine months ended September 30, 2016 and 2015 . |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of credit risk with respect to accounts receivable are typically limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company also controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs credit evaluations of its customers but generally does not require collateral to support accounts receivable. At September 30, 2016 , the Company had one customer which accounted for more than 10% of total accounts receivable. At December 31, 2015 , the Company had one customer which accounted for 13% of total accounts receivable. The Company had no customers that accounted for more than 10% of its revenue during the three months ended September 30, 2016 and one customer that accounted for 14% of its revenue during the three months ended September 30, 2015 . The Company had one customer that accounted for 11% of its revenue during the nine months ended September 30, 2016 and one customer that accounted for 14% of its revenue during the nine months ended September 30, 2015 . |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are recorded at cost, or if acquired in a business combination, at the acquisition date fair value. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer Equipment 3 years Software Costs 3 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years Leasehold improvements are depreciated over the shorter of the term of the lease or the estimated useful lives of the improvements. Property and equipment under capital leases are depreciated over their estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures for betterments and major improvements are capitalized and depreciated over the remaining useful lives of the assets. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the year of disposal, with resulting gains or losses included in general and administrative expense. Depreciation expense on property and equipment recorded in general and administrative expense in the accompanying consolidated statements of operations was $65,106 and $53,337 for the three months ended September 30, 2016 and 2015 , respectively and $190,338 and $149,873 for the nine months ended September 30, 2016 and 2015 , respectively. |
Software Development Costs, Policy [Policy Text Block] | Software Development Costs In accordance with ASC 350-40, Internal Use Software and ASC 985-730, Computer Software Research and Development , research phase costs related to internal use software should be expensed as incurred and development phase costs including direct materials and services, payroll and benefits and interest costs may be capitalized. The Company amortizes software development costs equally over 5 years upon initial launch of the software or additional features. Amortization expense on software development costs recorded in general and administrative expense in the accompanying consolidated statements of operations was $44,549 and $28,966 for the three months ended September 30, 2016 and 2015 , respectively and $128,977 and $85,854 for the nine months ended September 30, 2016 and 2015 , respectively. As of September 30, 2016 , future estimated amortization expense related to software development costs over the next five years is set forth in the following schedule: Year ending December 31: Software Amortization Expense 2016 (three months remaining) $ 51,417 2017 265,247 2018 265,247 2019 179,916 2020 143,065 Thereafter 84,853 $ 989,745 |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets The Company acquired the majority of its intangible assets through its acquisition of Ebyline on January 30, 2015 and its acquisition of ZenContent on July 31, 2016. The Company is amortizing the identifiable intangible assets over a period of 12 to 60 months. Management reviews long-lived assets, including property and equipment, software development costs and other intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared with the asset's carrying amount to determine if there has been an impairment, which is calculated as the difference between the fair value of an asset and its carrying value. Estimates of future undiscounted cash flows are based on expected growth rates for the business, anticipated future economic conditions and estimates of residual values. Fair values take into consideration management estimates of risk-adjusted discount rates, which are believed to be consistent with assumptions that marketplace participants would use in their estimates of fair value. For the three and nine months ended September 30, 2016 and 2015 , there were no impairment charges associated with the Company's long-lived assets. The Company is amortizing the identifiable intangible assets over a weighted average period of 3 years . Amortization expense recorded in general and administrative expense in the accompanying consolidated statements of operations was $229,934 and $148,250 for the three months ended September 30, 2016 and 2015 , respectively and $615,748 and $395,333 for the nine months ended September 30, 2016 and 2015 , respectively. As of September 30, 2016 , future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule: Year ending December 31: Amortization Expense 2016 (three months remaining) $ 249,906 2017 994,628 2018 349,432 2019 207,350 2020 84,293 Thereafter 26,834 Total $ 1,912,443 |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company has goodwill that has been recorded in connection with its acquisition of Ebyline and ZenContent. Goodwill is not amortized, but instead it is tested for impairment at least annually. In the event that management determines that the value of goodwill has become impaired, the Company will record a charge for the amount of impairment during the fiscal quarter in which the determination is made. The Company performs its annual impairment tests of goodwill during the fourth quarter of each year, or more frequently, if certain indicators are present. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment level, which is referred to as a component. Management identifies its reporting units by assessing whether components (i) have discrete financial information available; (ii) engage in business activities; and (iii) whether a segment manager regularly reviews the component's operating results. Net assets and goodwill of acquired businesses are allocated to the reporting unit associated with the acquired business based on the anticipated organizational structure of the combined entities. If two or more components are deemed economically similar, those components are aggregated into one reporting unit when performing the annual goodwill impairment review. The Company has determined that prior to and after the acquisition of Ebyline and ZenContent, it had and continues to have one reporting unit. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company derives its revenue from three sources: revenue from a marketer when it pays for a social media publisher or influencer such as a blogger or tweeter ("creators") to share sponsored content with their social network audience ("Sponsored Revenue"), revenue when a publisher or company purchases custom branded content for its own use, as well as third party content marketing and native advertising efforts ("Content Revenue") and revenue derived from various service and license fees charged to users of the Company's platforms ("Service Fee Revenue"). For managed customers, the Company enters into an agreement to provide services that may require multiple deliverables in the form of (a) sponsored social items, such as blogs, tweets, photos or videos shared through social network offerings that provide awareness or advertising buzz regarding the marketer's brand; (b) media advertisements, such as click-through advertisements appearing in websites and social media channels; and (c) original content items, such as a research or news article, informational material or videos that a publisher or brand can use. The Company may provide one type or a combination of all types of these deliverables including a management fee on a statement of work for a lump sum fee. These deliverables are to be provided over a stated period that may range from one day to one year. Each of these items are considered delivered once the content is live through a public or social network or content has been delivered to the customer for their own use. Revenue is accounted for separately on each of the deliverables in the time frames set forth below. The statement of work typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services. Payment terms are typically 30 days from the invoice date. If the Company is unable to provide a portion of the services, it may agree with the customer to provide a different type of service or to provide a credit for the value of those services that may be applied to the existing order or used for future services. Sponsored Revenue is recognized and considered earned after a marketer's sponsored content is posted through IZEAx and shared through a creator's social network for a requisite period of time. The requisite period ranges from 3 days for a tweet to 30 days for a blog, video or other form of content. Management fees related to Sponsored Revenue from advertising campaigns managed by the Company are recognized ratably over the term of the campaign which may range from a few days to several months. Content Revenue is recognized when the content is delivered to and accepted by the customer. Service Fee Revenue is generated when fees are charged to customers primarily related to subscription fees for different levels of service within a platform, licensing fees for white-label use of IZEAx , early cash-out fees if a creator wishes to take proceeds earned for services from their account when the account balance is below certain minimum balance thresholds and inactivity fees for dormant accounts. Service Fee Revenue is recognized immediately when the service is performed or at the time an account becomes dormant or is cashed out. Service Fee Revenue for subscription or licensing fees is recognized straight-line over the term of service. Self-service marketers must prepay for services by placing a deposit in their account with the Company. The deposits are typically paid by the marketer via credit card. Marketers who use the Company to manage their social advertising campaigns or content requests may prepay for services or request credit terms. Payments received or billings in advance of services are recorded as unearned revenue until earned as described above. All of the Company's revenue is generated through the rendering of services and is recognized under the general guidelines of SAB Topic 13 A.1 which states that revenue will be recognized when it is realized or realizable and earned. The Company considers its revenue as generally realized or realizable and earned once (i) persuasive evidence of an arrangement exists, (ii) services have been rendered, (iii) the price to the marketer or customer is fixed (required to be paid at a set amount that is not subject to refund or adjustment) and determinable, and (iv) collectibility is reasonably assured. The Company records revenue on the gross amount earned since it generally is the primary obligor in the arrangement, takes on credit risk, establishes the pricing and determines the service specifications. |
Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block] | Advertising Costs Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising expense charged to operations for the three months ended September 30, 2016 and 2015 were approximately $74,000 and $199,000 , respectively. Advertising expense charged to operations for the nine months ended September 30, 2016 and 2015 were approximately $291,000 and $411,000 , respectively. Advertising costs are included in sales and marketing expense in the accompanying consolidated statements of operations. |
Deferred Charges, Policy [Policy Text Block] | Deferred Rent The Company’s operating leases for its office facilities contain rent abatements and predetermined fixed increases of the base rental rate during the lease term. The Company accounts for rental expense on a straight-line basis over the lease term. The Company records the difference between the straight-line expense and the actual amounts paid under the lease as deferred rent in the accompanying consolidated balance sheets. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company has not recorded federal income tax expense due to the generation of net operating losses. Deferred income taxes are accounted for using the balance sheet approach which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. The Company incurs minimal state franchise tax in two states which is included in general and administrative expenses in the consolidated statements of operations. The Company identifies and evaluates uncertain tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company’s tax years subject to examination by the Internal Revenue Service are 2013, 2014 and 2015. |
Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments Derivative financial instruments are defined as financial instruments or other contracts that contain a notional amount and one or more underlying factors (e.g., interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which requires additional disclosures about the Company’s objectives and strategies for using derivative instruments, how the derivative instruments and related hedged items are accounted for, and how the derivative instruments and related hedging items affect the financial statements. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company’s financial instruments are recorded at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. There are three levels of inputs that may be used to measure fair value: • Level 1 – Valuation based on quoted market prices in active markets for identical assets and liabilities. • Level 2 – Valuation based on quoted market prices for similar assets and liabilities in active markets. • Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The Company does not have any Level 1 or 2 financial assets or liabilities. The Company’s Level 3 financial liabilities measured at fair value consisted of its acquisition cost liability (see Note 2) and a warrant liability (see Note 3) as of September 30, 2016 . Significant unobservable inputs used in the fair value measurement of the warrants include the estimated term and risk-adjusted interest rates. In developing its credit risk assumption used in the fair value of warrants, the Company considered publicly available bond rates and US Treasury Yields. However, since the Company does not have a formal credit-standing, management estimated its standing among various reported levels and grades for use in the model. During all periods, management estimated that the Company's standing was in the speculative to high-risk grades (BB- to CCC in the Standard and Poor's Rating). Significant increases or decreases in the estimated remaining period to exercise or the risk-adjusted interest rate could result in a significantly lower or higher fair value measurement. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable, unearned revenue and accrued expenses. Unless otherwise disclosed, the fair value of the Company’s capital lease obligations approximate their carrying value based upon current rates available to the Company. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Stock-based compensation cost related to stock options granted under the 2011 Equity Incentive Plan and 2011 B Equity Incentive Plan (together, the "2011 Equity Incentive Plans") (see Note 5) is measured at the grant date, based on the fair value of the award, and is recognized as a straight-lined 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 noted in the table below. The Company estimates the fair value of its common stock using the closing stock price of its common stock on the date of the option award. The Company estimates the volatility of its common stock at the date of grant based on the volatility of comparable peer companies that are publicly traded and have had a longer trading history than itself. The Company determines the expected life based on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules and post-vesting forfeitures. The Company uses the risk-free interest rate on the implied yield currently available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company used the following assumptions for options granted under the 2011 Equity Incentive Plans during the three and nine months ended September 30, 2016 and 2015 : Three Months Ended Nine Months Ended 2011 Equity Incentive Plans Assumptions September 30, September 30, September 30, September 30, Expected term 6 years 6 years 6 years 6 years Weighted average volatility 45.02% 53.81% 50.01% 56.62% Weighted average risk free interest rate 1.23% 1.78% 1.42% 1.58% Expected dividends — — — — The Company estimates forfeitures when recognizing compensation expense and this estimate of forfeitures is adjusted over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures are recognized through a cumulative catch-up adjustment, which is recognized in the period of change, and a revised amount of unamortized compensation expense to be recognized in future periods. Average expected forfeiture rates were 7.87% and 15.37% during the three months ended September 30, 2016 and 2015 , respectively. Average expected forfeiture rates were 10.74% and 12.37% during the nine months ended September 30, 2016 and 2015 , respectively. |
Non-Employee Stock-Based Compensation [Policy Text Block] | Non-Employee Stock-Based Payments The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. The fair value of equity instruments issued to consultants that vest immediately is expensed when issued. The fair value of equity instruments issued to consultants that have future vesting and are subject to forfeiture if performance does not occur is recognized as expense over the vesting period. Fair values for the unvested portion of issued instruments are adjusted each reporting period. The change in fair value is recorded to additional paid-in capital. Stock-based payments related to non-employees is accounted for based on the fair value of the related stock or the fair value of the services, whichever is more readily determinable. |
Segment Reporting, Policy [Policy Text Block] | Segment Information The Company does not identify separate operating segments for management reporting purposes. The results of consolidated operations are the basis on which management evaluates operations and makes business decisions. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers , which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . The amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by amending certain existing illustrative examples and adding additional illustrative examples to assist in the application of the guidance. The effective date and transition of these amendments is the same as the effective date and transition of ASU 2014-09 stated above. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing . ASU 2016-10 is intended to reduce the cost and complexity of applying the guidance in the FASB's new revenue standard on identifying performance obligations, and is also intended to improve the operability and understandability of the licensing implementation guidance. The effective date for ASU 2016-10 is the same as for ASU 2014-09 stated above. The Company is currently evaluating the impact of the adoption of ASU 2014-09, ASU 2016-08 and ASU 2016-10 on its consolidated financial statements and has not yet determined the method by which it will adopt the standards in the first quarter of 2018. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases . The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact that this ASU will have on its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments . ASU 2016-13 removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all current recognition thresholds and will require companies to recognize an allowance for lifetime expected credit losses. Credit losses will be immediately recognized through net income; the amount recognized will be based on the current estimate of contractual cash flows not expected to be collected over the financial asset's contractual term. ASU 2016-13 also amends the credit loss measurement guidance for available-for-sale debt securities. For public business entities, ASU 2016-13 is effective for financial statements issued for fiscal years and for interim periods within those fiscal years beginning after December 15, 2019. Companies will be required to apply the changes through a cumulative-effect adjustment to their retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the impact that this ASU will have on its consolidated financial statements. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Computer Equipment 3 years Software Costs 3 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The Company used the following assumptions for options granted under the 2011 Equity Incentive Plans during the three and nine months ended September 30, 2016 and 2015 : Three Months Ended Nine Months Ended 2011 Equity Incentive Plans Assumptions September 30, September 30, September 30, September 30, Expected term 6 years 6 years 6 years 6 years Weighted average volatility 45.02% 53.81% 50.01% 56.62% Weighted average risk free interest rate 1.23% 1.78% 1.42% 1.58% Expected dividends — — — — |
Software and Software Development Costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | As of September 30, 2016 , future estimated amortization expense related to software development costs over the next five years is set forth in the following schedule: Year ending December 31: Software Amortization Expense 2016 (three months remaining) $ 51,417 2017 265,247 2018 265,247 2019 179,916 2020 143,065 Thereafter 84,853 $ 989,745 |
Ebyline related identifiable intangible assets [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | As of September 30, 2016 , future estimated amortization expense related to identifiable intangible assets over the next five years is set forth in the following schedule: Year ending December 31: Amortization Expense 2016 (three months remaining) $ 249,906 2017 994,628 2018 349,432 2019 207,350 2020 84,293 Thereafter 26,834 Total $ 1,912,443 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The final allocation of the purchase price as of January 30, 2015 is summarized as follows: Final Purchase Price Allocation Current assets $ 738,279 Property and equipment 27,194 Identifiable intangible assets 2,370,000 Goodwill 2,468,289 Security deposits 18,553 Current liabilities (605,376 ) Total estimated consideration $ 5,016,939 |
Ebyline, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions Consideration Payable [Table Text Block] | Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value 1/30/2015 1/30/2015 9/30/2016 Cash paid at closing $ 1,200,000 $ 1,200,000 $ — Guaranteed purchase price (a) 2,127,064 1,982,639 923,316 Contingent performance payments (b) 2,210,000 1,834,300 — Acquisition costs payable by Ebyline shareholders (c) — — — Total estimated consideration $ 5,537,064 $ 5,016,939 $ 923,316 Current portion of acquisition costs payable $ 923,316 Long term portion of acquisition costs payable — Total acquisition costs payable $ 923,316 |
Business Acquisition, Pro Forma Information [Table Text Block] | The following unaudited pro forma summary presents consolidated information of IZEA, Inc. as if the business combination with Ebyline had occurred on January 1, 2014: Proforma Nine Months Ended 9/30/2015 Pro-Forma Revenue $ 14,915,807 Pro-Forma Cost of Sales 9,299,454 Pro-Forma Gross Profit 5,616,353 Pro-Forma Net Loss (8,991,455 ) |
ZenContent [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions Consideration Payable [Table Text Block] | Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value 7/31/2016 7/31/2016 9/30/2016 Cash paid at closing (a) $ 400,000 $ 400,000 $ — Stock paid at closing (a) 600,000 600,000 — Guaranteed purchase price (b) 933,565 566,547 612,867 Contingent performance payments (c) 2,500,000 230,000 230,000 Total estimated consideration $ 4,433,565 $ 1,796,547 $ 842,867 Current portion of acquisition costs payable $ 159,648 Long term portion of acquisition costs payable 683,219 Total acquisition costs payable $ 842,867 |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The preliminary allocation of the purchase price as of July 31, 2016 is summarized as follows: Final Purchase Price Allocation Current assets $ 415,798 Property and equipment 4,551 Identifiable intangible assets 722,000 Goodwill 1,136,431 Current liabilities (482,233 ) Total estimated consideration $ 1,796,547 |
Derivative Financial Instrume17
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Binomial Lattice Option Valuation Technique [Member] | |
Derivative [Line Items] | |
Schedule of Price Risk Derivatives [Table Text Block] | The Company's warrants were valued on the applicable dates using a Binomial Lattice Option Valuation Technique (“Binomial”). Significant inputs into this technique as of December 31, 2015 and September 30, 2016 were as follows: Binomial Assumptions December 31, September 30, Fair market value of asset (1) $7.66 $5.87 Exercise price $25.00 $25.00 Term (2) 1.7 years 0.9 years Implied expected life (3) 1.7 years 0.9 years Volatility range of inputs (4) 83.00% 63.20% Equivalent volatility (3) 83.00% 63.20% Risk-free interest rate range of inputs (5) 1.06% 0.59% Equivalent risk-free interest rate (3) 1.06% 0.59% (1) The fair market value of the asset was determined by using the Company's closing stock price as reflected in the OTCQB for the period ended December 31, 2015 and the Nasdaq Capital Market for the period ended September 30, 2016 . (2) The term is the contractual remaining term, allocated among twelve equal intervals for purposes of calculating other inputs, such as volatility and risk-free rate. (3) The implied expected life, and equivalent volatility and risk-free interest rate amounts are derived from the Binomial. (4) The Company does not have a market trading history upon which to base its forward-looking volatility. Accordingly, the Company selected peer companies that provided a reasonable basis upon which to calculate volatility for each of the intervals described in (2), above. (5) The risk-free rates used for inputs represent the yields on zero coupon U.S. Government Securities with periods to maturity consistent with the intervals described in (2), above. |
Warrant [Member] | |
Derivative [Line Items] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table summarizes the Company's activity and fair value calculations of its derivative warrants for the year ended December 31, 2015 and nine months ended September 30, 2016 : Linked Common Shares to Derivative Warrants Warrant Liability Balance, December 31, 2014 1,795,564 $ 3,203,465 Exercise of warrants for common stock (1,392,832 ) (5,348,408 ) Loss on exchange of warrants — 1,197,821 Reclassification of fair value of 2014 Private Placement warrants to equity (396,536 ) (1,181,638 ) Change in fair value of derivatives — 2,133,820 Balance, December 31, 2015 6,196 5,060 Expiration of warrants (694 ) — Change in fair value of derivatives — (4,960 ) Balance, September 30, 2016 5,502 $ 100 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested Restricted Stock Shares Activity [Table Text Block] | The following table contains summarized information about nonvested restricted stock outstanding during the nine months ended September 30, 2016 : Restricted Stock Common Shares Weighted Average Weighted Average Nonvested at December 31, 2015 — $ — Granted 21,109 6.15 Vested (15,664 ) 6.86 Forfeited — — Nonvested at September 30, 2016 5,445 $ 5.87 0.25 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2015 and nine months ended September 30, 2016 , is presented below: Options Outstanding Common Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Outstanding at December 31, 2014 595,786 $ 9.20 6.5 Granted 277,059 7.43 Exercised — — Forfeited (42,246 ) 7.70 Outstanding at December 31, 2015 830,599 $ 8.65 6.8 Granted 115,979 6.85 Exercised — — Forfeited (31,600 ) 11.26 Outstanding at September 30, 2016 914,978 $ 8.34 6.4 Exercisable at September 30, 2016 507,213 $ 9.36 5.6 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Nonvested Share Activity [Table Text Block] | A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2015 and nine months ended September 30, 2016 , is presented below: Nonvested Options Common Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested at December 31, 2014 372,092 $ 4.00 3.0 Granted 277,059 3.84 Vested (147,759 ) 4.32 Forfeited (39,466 ) 3.44 Nonvested at December 31, 2015 461,926 $ 3.84 2.8 Granted 115,979 3.28 Vested (141,573 ) 4.08 Forfeited (28,567 ) 3.84 Nonvested at September 30, 2016 407,765 $ 3.60 2.6 |
Earnings (Loss) Per Common Sh19
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Basic earnings (loss) per common share is computed by dividing the net income or loss by the basic weighted-average number of shares of common stock outstanding during each period presented. Diluted earnings per share is computed by dividing the net income or loss by the total of the basic weighted-average number of shares of common stock outstanding plus the additional dilutive securities that could be exercised or converted into common shares during each period presented less the amount of shares that could be repurchased using the proceeds from the exercises. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Net loss $ (1,511,603 ) $ (2,645,087 ) $ (5,730,568 ) $ (8,901,290 ) Weighted average shares outstanding - basic and diluted 5,420,020 4,075,605 5,357,119 3,286,431 Basic and diluted loss per common share $ (0.28 ) $ (0.65 ) $ (1.07 ) $ (2.71 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The Company excluded the following weighted average items from the above computation of diluted loss per common share as their effect would be anti-dilutive: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, Stock options 904,706 738,820 874,363 707,017 Warrants 557,423 1,595,042 550,002 2,328,645 Restricted stock units — 49,421 — 74,738 Total excluded shares 1,462,129 2,383,283 1,424,365 3,110,400 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies - Accounts Receivable and Concentration of Credit Risk (Details Textual) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)customer | Sep. 30, 2015customer | Sep. 30, 2016USD ($)customer | Sep. 30, 2015customer | Dec. 31, 2015USD ($)customer | |
Accounting Policies [Abstract] | |||||
Allowance for doubtful accounts receivable | $ | $ 294,000 | $ 294,000 | $ 139,000 | ||
Bad debt expense percentage of revenues (percentage) | 1.00% | 1.00% | 1.00% | 1.00% | |
Accounts receivable, number of major customers (customers) | 1 | 1 | 1 | ||
Accounts receivable, major customer (percentage) | 13.00% | ||||
Revenue, number of major customer (customers) | 0 | 1 | 1 | 1 | |
Concentration Risk, Market Risk | more than 10% | ||||
Revenue, major customer (percentage) | 14.00% | 11.00% | 14.00% |
Summary of Significant Accoun21
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Computer Equipment [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 3 years | |||
Software Costs [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 3 years | |||
Office Equipment [Member] | Minimum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 3 years | |||
Office Equipment [Member] | Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 10 years | |||
Furniture and Fixtures [Member] | Minimum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 5 years | |||
Furniture and Fixtures [Member] | Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Property, plant and equipment, useful life (in years) | 10 years | |||
General and Administrative Expense [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Depreciation, Depletion and Amortization | $ 65,106 | $ 53,337 | $ 190,338 | $ 149,873 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies - Software Development Costs (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Software and Software Development Costs [Member] | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||
2016 (three months remaining) | $ 51,417 | $ 51,417 | ||
2,017 | 265,247 | 265,247 | ||
2,018 | 265,247 | 265,247 | ||
2,019 | 179,916 | 179,916 | ||
2,020 | 143,065 | 143,065 | ||
Thereafter | 84,853 | 84,853 | ||
Finite-Lived Intangible Assets, Net | 989,745 | $ 989,745 | ||
Capitalized Software Development [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Useful Life (in years) | 5 years | |||
General and Administrative Expense [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Software development amortization expense | $ 44,549 | $ 28,966 | $ 128,977 | $ 85,854 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Significant Accounting Policies [Line Items] | ||||
Amortization of software development costs and other intangible assets | $ 744,725 | $ 481,187 | ||
Minimum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Useful Life (in years) | 12 months | |||
Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Useful Life (in years) | 60 months | |||
Ebyline related identifiable intangible assets [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | |||
Amortization of software development costs and other intangible assets | $ 229,934 | $ 148,250 | $ 615,748 | $ 395,333 |
Finite-lived Intangible Assets [Roll Forward] | ||||
2016 (three months remaining) | 249,906 | 249,906 | ||
2,017 | 994,628 | 994,628 | ||
2,018 | 349,432 | 349,432 | ||
2,019 | 207,350 | 207,350 | ||
2,020 | 84,293 | 84,293 | ||
Thereafter | 26,834 | 26,834 | ||
Finite-Lived Intangible Assets, Net | $ 1,912,443 | $ 1,912,443 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Revenue Recognition (Details Textual) | 9 Months Ended |
Sep. 30, 2016 | |
Minimum [Member] | |
Significant Accounting Policies [Line Items] | |
Revenue recognition requisite period (in days) | 3 days |
Maximum [Member] | |
Significant Accounting Policies [Line Items] | |
Revenue recognition requisite period (in days) | 30 days |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Advertising Costs (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Selling and Marketing Expense [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Advertising expense | $ 74,000 | $ 199,000 | $ 291,000 | $ 411,000 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Significant Accounting Policies [Line Items] | ||||
Current average expected forfeiture rate (percentage) | 7.87% | 15.37% | 10.74% | 12.37% |
Equity Incentive 2011 Plan [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Expected term (in years) | 6 years | 6 years | 6 years | 6 years |
Weighted average volatility (percentage) | 45.02% | 53.81% | 50.01% | 56.62% |
Weighted average risk free interest rate (percentage) | 1.23% | 1.78% | 1.42% | 1.58% |
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Business Acquisitions (Details
Business Acquisitions (Details Textual) | Jul. 31, 2016USD ($) | Jan. 30, 2016USD ($)shares | Jul. 31, 2015USD ($)shares | Jan. 30, 2015USD ($) | Sep. 30, 2016USD ($)employeecountriescontent_creator | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)employeecountriescontent_creatorshares | Sep. 30, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | ||
Common Stock [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Stock issued for payment of acquisition liability (shares) | shares | 200,605 | |||||||||||||
Ebyline, Inc. [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business combination, consideration transferred, payment period (years) | 3 years | |||||||||||||
Total estimated consideration | $ 5,016,939 | |||||||||||||
Network of content creators | content_creator | 15,000 | 15,000 | ||||||||||||
Number of Countries Illustrators are Present | countries | 84 | 84 | ||||||||||||
Number of Fully Accredited Journalism Professionals | employee | 2,000 | 2,000 | ||||||||||||
Business combination, contingent consideration arrangements, basis for amount | subject to proportional reduction in the event Ebyline’s final 2014 revenue was below $8,000,000 | |||||||||||||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | $ 7,903,429 | |||||||||||||
Business combination, consideration transferred, liabilities incurred | $ 1,877,064 | |||||||||||||
Stock issued for payment of acquisition liability (shares) | shares | 114,398 | |||||||||||||
Interest expense, acquisition costs | $ 11,412 | $ 24,168 | $ 38,137 | $ 67,957 | ||||||||||
Business Combination, Consideration Transferred, Liabilities Incurred, Installment Payments | $ 938,532 | |||||||||||||
Acquisition Costs, Interest Rate Terms | borrowing rate of prime plus 2% | |||||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 17,000,000 | |||||||||||||
Number of simulation trials | 100,000 | |||||||||||||
Cash paid at closing | 1,200,000 | |||||||||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 250,000 | $ 848,832 | $ 250,000 | |||||||||||
Business Combination, Contingent Consideration Arrangements, Change in Range of Outcomes, Contingent Consideration, Liability, Value, High | 1,900,000 | |||||||||||||
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Costs | 5,500,000 | |||||||||||||
Fair value assumptions, risk adjusted discount | 8.50% | |||||||||||||
Fair value assumption, simulation trials volatility rate | 35.00% | |||||||||||||
Business Combination, Separately Recognized Transactions, Revenues and Gains Recognized | $ 7,145,537 | 5,704,622 | ||||||||||||
Business Combination, Separately Recognized Transactions, Gross Profit | $ 1,564,167 | 624,919 | ||||||||||||
Ebyline, Inc. [Member] | General and Administrative Expense [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business combination, acquisition related costs | $ 87,906 | |||||||||||||
Ebyline, Inc. [Member] | Maximum [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total estimated consideration | 8,850,000 | |||||||||||||
Ebyline, Inc. [Member] | Subsequent Event [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 32,000,000 | $ 27,000,000 | ||||||||||||
Ebyline, Inc. [Member] | Common Stock [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Stock issued for payment of acquisition liability (shares) | shares | 114,398 | 31,821 | ||||||||||||
Ebyline, Inc. [Member] | Achieves at least 90% of Content-Only Revenue [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business Combination, Contingent Consideration Arrangements, Percentage of Performance Payment Owed | 90.00% | |||||||||||||
Ebyline, Inc. [Member] | Achieves less than 90% of Content-Only Revenue [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business combination, contingent consideration arrangement, target revenue rate of reduction | 17.00% | |||||||||||||
Ebyline, Inc. [Member] | Estimated Gross Purchase Consideration [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total estimated consideration | 5,537,064 | |||||||||||||
Acquisition costs payable by Ebyline shareholders | [1] | 0 | ||||||||||||
Cash paid at closing | 1,200,000 | |||||||||||||
Contingent performance payments | [1] | $ 2,210,000 | $ 1,834,300 | |||||||||||
Fair value of contingent performance payment, value, reduction related to continued employment of key employees | [1] | 357,700 | ||||||||||||
Ebyline, Inc. [Member] | Remaining Present and Fair Value [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Total estimated consideration | 923,316 | |||||||||||||
Acquisition costs payable by Ebyline shareholders | $ 89,700 | 0 | [2] | |||||||||||
Cash paid at closing | 0 | |||||||||||||
Contingent performance payments | $ 0 | |||||||||||||
[1] | Total contingent performance payments up to $5,500,000 are to be paid based on Ebyline meeting certain revenue targets. The performance payments are to be made only if Ebyline achieves at least 90% of Content Revenue targets of $17,000,000 in 2015, $27,000,000 in 2016 and $32,000,000 in 2017. The fair value of the $5,500,000 of contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over the next three years. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 8.5%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 100,000 simulation trials. The volatility used for the simulation was 35%. The Monte Carlo simulation resulted in a calculated fair value of contingent performance payments of $2,210,000 on January 30, 2015. Because the contingent performance payments are subject to a 17% reduction related to the continued employment of certain key employees, ASC 805-10-55-25 indicates that a portion of these payments be treated as potential compensation to be accrued over the term rather than allocated to the purchase price. Therefore, the Company reduced its overall purchase price consideration by $357,700 and recorded the initial present value of the contingent performance payments at $1,834,300. Based on actual results for 2015 and projections for Content Revenue for 2016-2017, the Content Revenue for every year is expected to be below 90% of the required Content Revenues targets. Therefore, the Company reduced the fair value of contingent performance payments to zero by the end of 2015. The gain as a result of the decrease in the estimated fair value of contingent performance payments was recorded as a reduction of general and administrative expense in the Company's consolidated statement of operations during the year ended December 31, 2015. | |||||||||||||
[2] | According to the stock purchase agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016. |
Business Acquisitions (Detail28
Business Acquisitions (Details Textual 2) - ZenContent [Member] | Jul. 31, 2016USD ($)content_creator$ / sharesshares | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | |
Business Acquisition [Line Items] | |||||||
Stock issued for payment of acquisition liability (shares) | shares | 86,207 | ||||||
Business Combination, Separately Recognized Transactions, Revenues and Gains Recognized | $ 465,574 | ||||||
Business Combination, Separately Recognized Transactions, Gross Profit | 219,313 | ||||||
Network of content creators | content_creator | 5,000 | ||||||
Business combination, payment amount based on simulation trials | $ 250,000 | 250,000 | |||||
Interest expense, acquisition costs | 5,348 | 5,348 | |||||
Business combination guarantee fee reduction amount | $ 300,000 | ||||||
Volatility range of inputs (percentage) | 60.00% | ||||||
Business combination, consideration transferred, payment period (years) | 3 years | ||||||
Business combination, consideration transferred | $ 1,796,547 | ||||||
Business acquisition, share price | $ / shares | $ 6.96 | ||||||
Business combination, contingent consideration arrangements, description | three equal annual installment payments totaling $1,000,000 | ||||||
Business combination, contingent consideration, liability | $ 2,500,000 | $ 2,500,000 | |||||
Business combination, contingent consideration arrangement, target revenue rate of reduction | 30.00% | ||||||
Business combination, acquisition related costs | $ 40,972 | ||||||
Guarantee purchase price basis spread on variable rate | 2.00% | ||||||
Fair Value Inputs, Discount Rate | 5.50% | ||||||
Business combination, contingent consideration, percentage paid in cash | 33.00% | 33.00% | |||||
Fair value assumptions, risk adjusted discount | 16.50% | ||||||
General and Administrative Expense [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, acquisition related costs | $ 40,918 | ||||||
Maximum [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, consideration transferred | $ 4,500,000 | ||||||
Subsequent Event [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combinations, separately recognized transactions, content only revenue | $ 4,500,000 | $ 3,500,000 | $ 2,500,000 | ||||
Working Capital Adjustment [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, provisional information, initial accounting incomplete, adjustment, consideration transferred | $ 66,435 | ||||||
Estimated Gross Purchase Consideration [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued for payment of acquisition liability (shares) | shares | 86,207 | ||||||
Business combination, consideration transferred | $ 4,433,565 | ||||||
Contingent performance payments | [1] | 2,500,000 | |||||
Initial Present Value [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, consideration transferred | 1,796,547 | ||||||
Contingent performance payments | [1] | $ 230,000 | |||||
[1] | The contingent performance payments are subject to ZenContent achieving certain minimum revenue thresholds over 36 months. ZenContent is required to meet minimum revenues of $2.5 million, $3.5 million and $4.5 million in the first, second and third, respective 12-month periods following the closing in order to receive any portion of the contingent performance payments. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of IZEA common stock at then average stock prices (determined at IZEA’s option). The $230,000 fair value of the contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over the next three years. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 16.5%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 60%. |
Business Acquisitions (Detail29
Business Acquisitions (Details 1) - USD ($) | Jan. 30, 2016 | Jan. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | ||
Business Acquisition [Line Items] | ||||||
Current portion of acquisition costs payable | $ 1,082,964 | $ 844,931 | ||||
Acquisition costs payable, less current portion | 683,219 | $ 889,080 | ||||
Ebyline, Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid at closing | $ 1,200,000 | |||||
Total estimated consideration | 5,016,939 | |||||
Current portion of acquisition costs payable | 923,316 | |||||
Acquisition costs payable, less current portion | 0 | |||||
Total acquisition costs payable | 923,316 | |||||
Ebyline, Inc. [Member] | Estimated Gross Purchase Consideration [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid at closing | 1,200,000 | |||||
Guaranteed purchase price | [1] | 2,127,064 | ||||
Contingent performance payments | [2] | 2,210,000 | 1,834,300 | |||
Acquisition costs payable by Ebyline shareholders | [2] | 0 | ||||
Total estimated consideration | 5,537,064 | |||||
Ebyline, Inc. [Member] | Initial Present Value [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid at closing | 1,200,000 | |||||
Guaranteed purchase price | [1] | 1,982,639 | ||||
Contingent performance payments | [2] | 1,834,300 | ||||
Acquisition costs payable by Ebyline shareholders | [2] | 0 | ||||
Total estimated consideration | $ 5,016,939 | |||||
Ebyline, Inc. [Member] | Remaining Present and Fair Value [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid at closing | 0 | |||||
Guaranteed purchase price | [1] | 923,316 | ||||
Contingent performance payments | 0 | |||||
Acquisition costs payable by Ebyline shareholders | $ 89,700 | 0 | [3] | |||
Total estimated consideration | $ 923,316 | |||||
[1] | The Stock Purchase Agreement required a $1,200,000 cash payment at closing, a $250,000 stock payment on July 30, 2015 and a cash or stock payment of up to an additional $1,900,000 (subject to proportional reduction in the event Ebyline’s final 2014 revenue was below $8,000,000). Ebyline's final gross revenue for 2014 was $7,903,429. As such, the additional amount owed became $1,877,064 payable in two equal installments of $938,532 on January 30, 2016 and January 30, 2017. This guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% . Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $11,412 and $24,168 for the three months ended September 30, 2016 and 2015, respectively. Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $38,137 and $67,957 for the nine months ended September 30, 2016 and 2015, respectively. Per the Stock Purchase Agreement, the Company issued 31,821 shares of common stock valued at $250,000 to satisfy a portion of the guaranteed purchase price payment obligation on July 30, 2015. On January 29, 2016, the Company issued 114,398 shares of common stock valued at $848,832 to satisfy the annual installment payment of $938,532 less $89,700 in closing related expenses (see item (c) below) | |||||
[2] | Total contingent performance payments up to $5,500,000 are to be paid based on Ebyline meeting certain revenue targets. The performance payments are to be made only if Ebyline achieves at least 90% of Content Revenue targets of $17,000,000 in 2015, $27,000,000 in 2016 and $32,000,000 in 2017. The fair value of the $5,500,000 of contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over the next three years. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 8.5%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 100,000 simulation trials. The volatility used for the simulation was 35%. The Monte Carlo simulation resulted in a calculated fair value of contingent performance payments of $2,210,000 on January 30, 2015. Because the contingent performance payments are subject to a 17% reduction related to the continued employment of certain key employees, ASC 805-10-55-25 indicates that a portion of these payments be treated as potential compensation to be accrued over the term rather than allocated to the purchase price. Therefore, the Company reduced its overall purchase price consideration by $357,700 and recorded the initial present value of the contingent performance payments at $1,834,300. Based on actual results for 2015 and projections for Content Revenue for 2016-2017, the Content Revenue for every year is expected to be below 90% of the required Content Revenues targets. Therefore, the Company reduced the fair value of contingent performance payments to zero by the end of 2015. The gain as a result of the decrease in the estimated fair value of contingent performance payments was recorded as a reduction of general and administrative expense in the Company's consolidated statement of operations during the year ended December 31, 2015. | |||||
[3] | According to the stock purchase agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016. |
Business Acquisitions (Detail30
Business Acquisitions (Details 2) - Ebyline, Inc. [Member] - USD ($) | Jan. 30, 2016 | Jan. 30, 2015 |
Business Acquisition [Line Items] | ||
Total estimated consideration | $ 5,016,939 | |
Business combination, consideration transferred, liabilities incurred | $ (1,877,064) | |
Current Assets [Member] | ||
Business Acquisition [Line Items] | ||
Total estimated consideration | 738,279 | |
Property, Plant and Equipment [Member] | ||
Business Acquisition [Line Items] | ||
Total estimated consideration | 27,194 | |
Identifiable intangible assets [Member] | ||
Business Acquisition [Line Items] | ||
Total estimated consideration | 2,370,000 | |
Goodwill [Member] | ||
Business Acquisition [Line Items] | ||
Total estimated consideration | 2,468,289 | |
Security Deposit [Member] | ||
Business Acquisition [Line Items] | ||
Total estimated consideration | 18,553 | |
Current Liabilities [Member] | ||
Business Acquisition [Line Items] | ||
Business combination, consideration transferred, liabilities incurred | $ (605,376) |
Business Acquisitions (Detail31
Business Acquisitions (Details 3) - Ebyline, Inc. [Member] | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Business acquisition, pro forma revenue | $ 14,915,807 |
Proforma cost of sales | 9,299,454 |
Business combination proforma gross profit | 5,616,353 |
Business acquisition, pro forma net income (Loss) | $ (8,991,455) |
Business Acquisitions (Detail32
Business Acquisitions (Details 4) - USD ($) | Jul. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||||
Current portion of acquisition costs payable | $ 1,082,964 | $ 844,931 | ||
Acquisition costs payable, less current portion | 683,219 | $ 889,080 | ||
ZenContent [Member] | ||||
Business Acquisition [Line Items] | ||||
Total estimated consideration | $ 1,796,547 | |||
Current portion of acquisition costs payable | 159,648 | |||
Acquisition costs payable, less current portion | 683,219 | |||
Total acquisition costs payable | 842,867 | |||
Estimated Gross Purchase Consideration [Member] | ZenContent [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash paid at closing | [1] | 400,000 | ||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 600,000 | ||
Guaranteed purchase price | [2] | 933,565 | ||
Contingent performance payments | [3] | 2,500,000 | ||
Total estimated consideration | 4,433,565 | |||
Initial Present Value [Member] | ZenContent [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash paid at closing | [1] | 400,000 | ||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 600,000 | ||
Guaranteed purchase price | [2] | 566,547 | ||
Contingent performance payments | [3] | 230,000 | ||
Total estimated consideration | $ 1,796,547 | |||
Remaining Present and Fair Value [Member] | ZenContent [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash paid at closing | [1] | 0 | ||
Business combination, consideration transferred, equity interests issued and issuable | [1] | 0 | ||
Guaranteed purchase price | [2] | 612,867 | ||
Contingent performance payments | [3] | 230,000 | ||
Total estimated consideration | $ 842,867 | |||
[1] | The aggregate consideration paid at closing for the acquisition of ZenContent consisted of (a) a cash payment of $400,000 and (b) the issuance of 86,207 shares of IZEA common stock valued at $600,000 (using the 30 trading-day volume-weighted average closing price of IZEA's common stock of $6.96 per share as of July 29, 2016). | |||
[2] | Aggregate future consideration consists of (i) three equal annual installment payments totaling $1,000,000, commencing 12 months following the closing, less a reduction of $66,435 due to a customary closing date working capital adjustment ("guaranteed purchase price"), and (ii) contingent performance payments of up to an aggregate of $2,500,000 over the three 12-month periods following the closing. These payments are also subject to downward adjustment of up to 30% if IZEA's employment of Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or by Ms. DeMike without good reason. As a result, the Company reduced its guaranteed purchase price consideration by $300,000 to be accrued as compensation expense over the term rather than allocated to the purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $40,972 for the three and nine months ended September 30, 2016. The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% (5.50%). Interest expense imputed on the acquisition costs payable in the accompanying consolidated statements of operations was $5,348 for the three and nine months ended September 30, 2016. | |||
[3] | The contingent performance payments are subject to ZenContent achieving certain minimum revenue thresholds over 36 months. ZenContent is required to meet minimum revenues of $2.5 million, $3.5 million and $4.5 million in the first, second and third, respective 12-month periods following the closing in order to receive any portion of the contingent performance payments. Of these payments, 33% of each such annual installment or contingent performance payment will be in the form of cash and the remainder of such payment will be in the form of either cash or additional shares of IZEA common stock at then average stock prices (determined at IZEA’s option). The $230,000 fair value of the contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over the next three years. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 16.5%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 60%. |
Business Acquisitions (Detail33
Business Acquisitions (Details 5) - ZenContent [Member] | Jul. 31, 2016USD ($) |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | $ 1,796,547 |
Current Liabilities [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred, liabilities incurred | (482,233) |
Goodwill [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 1,136,431 |
Identifiable intangible assets [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 722,000 |
Current Assets [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 415,798 |
Property, Plant and Equipment [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | $ 4,551 |
Derivative Financial Instrume34
Derivative Financial Instruments (Details) - USD ($) | Aug. 14, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Warrant Liability [Abstract] | |||||||
Warrant liability | $ 100 | $ 100 | $ 5,060 | ||||
Loss on exchange of warrants | 0 | $ 1,845,810 | 0 | $ 1,845,810 | |||
Change in fair value of derivative | $ 14,705 | (115,904) | $ (14,568) | 2,139,540 | |||
Warrant [Member] | |||||||
Linked Common Shares to Derivate Warrants [Abstract] | |||||||
Common shares linked to derivative warrants | 5,502 | 5,502 | 6,196 | 1,795,564 | |||
Exercise of warrants (shares) | (1,392,832) | ||||||
Remaining unexercised warrants, shares | (396,536) | ||||||
Change in fair value of derivative, shares | 0 | ||||||
Expiration of warrants, shares | (694) | ||||||
Warrant Liability [Abstract] | |||||||
Warrant liability | $ 100 | $ 100 | $ 5,060 | $ 3,203,465 | |||
Fair value of warrants exercised | $ (5,348,408) | ||||||
Loss on exchange of warrants | 1,197,821 | ||||||
Fair value of remaining unexercised warrants | $ (1,181,638) | ||||||
Change in fair value of derivative | $ (1,231) | $ (115,904) | $ (4,960) | $ 2,139,540 | $ 2,133,820 |
Derivative Financial Instrume35
Derivative Financial Instruments (Details 1) - Warrant [Member] - Binomial Lattice Option Valuation Technique [Member] - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | ||
Derivative [Line Items] | |||
Fair market value of asset (per share) | [1] | $ 5.87 | $ 7.66 |
Exercise price (per share) | $ 25 | $ 25 | |
Term (in years) | [2] | 11 months | 1 year 8 months |
Implied expected life (in years) | [3] | 11 months | 1 year 8 months |
Volatility range of inputs (percentage) | [4] | 63.20% | 83.00% |
Equivalent volatility (percentage) | [3] | 63.20% | 83.00% |
Risk-free interest rate range of inputs (percentage) | [5] | 0.59% | 1.06% |
Equivalent risk-free interest rate (percentage) | [3] | 0.59% | 1.06% |
[1] | The fair market value of the asset was determined by using the Company's closing stock price as reflected in the OTCQB for the period ended December 31, 2015 and the Nasdaq Capital Market for the period ended September 30, 2016. | ||
[2] | The term is the contractual remaining term, allocated among twelve equal intervals for purposes of calculating other inputs, such as volatility and risk-free rate. | ||
[3] | The implied expected life, and equivalent volatility and risk-free interest rate amounts are derived from the Binomial. | ||
[4] | The Company does not have a market trading history upon which to base its forward-looking volatility. Accordingly, the Company selected peer companies that provided a reasonable basis upon which to calculate volatility for each of the intervals described in (2), above. | ||
[5] | The risk-free rates used for inputs represent the yields on zero coupon U.S. Government Securities with periods to maturity consistent with the intervals described in (2), above. |
Stockholders' Equity - Authoriz
Stockholders' Equity - Authorized Shares (Details Textual) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Series A Preferred stock, shares authorized (shares) | 10,000,000 | |
Series A Preferred stock, par value (per share) | $ 0.0001 |
Stockholders' Equity - Stock Is
Stockholders' Equity - Stock Issued for Purchases (Details) - USD ($) | Jul. 31, 2016 | Jan. 30, 2016 | Jul. 31, 2015 | Jan. 30, 2015 | Sep. 30, 2016 | ||
Ebyline, Inc. [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of acquisition liability (shares) | 114,398 | ||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 250,000 | $ 848,832 | $ 250,000 | ||||
Business Combination, Consideration Transferred, Liabilities Incurred, Installment Payments | 938,532 | ||||||
Payments to Acquire Businesses, Gross | $ 1,200,000 | ||||||
Ebyline, Inc. [Member] | Paid in Two Equal Installments [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Business Combination, Consideration Transferred, Liabilities Incurred, Installment Payments | 938,532 | ||||||
Ebyline, Inc. [Member] | Remaining Present and Fair Value [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Acquisition costs payable by Ebyline shareholders | $ 89,700 | $ 0 | [1] | ||||
Payments to Acquire Businesses, Gross | 0 | ||||||
Ebyline, Inc. [Member] | Estimated Gross Purchase Consideration [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Acquisition costs payable by Ebyline shareholders | [2] | 0 | |||||
Payments to Acquire Businesses, Gross | $ 1,200,000 | ||||||
ZenContent [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of acquisition liability (shares) | 86,207 | ||||||
Business acquisition, share price | $ 6.96 | ||||||
ZenContent [Member] | Remaining Present and Fair Value [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Business combination, consideration transferred, equity interests issued and issuable | [3] | 0 | |||||
Payments to Acquire Businesses, Gross | [3] | $ 0 | |||||
ZenContent [Member] | Estimated Gross Purchase Consideration [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of acquisition liability (shares) | 86,207 | ||||||
Business combination, consideration transferred, equity interests issued and issuable | [3] | $ 600,000 | |||||
Payments to Acquire Businesses, Gross | [3] | $ 400,000 | |||||
[1] | According to the stock purchase agreement, $89,700 in closing related expenses paid by Ebyline during the acquisition process were payable by the selling shareholders. These costs were deducted from the guaranteed payment on January 30, 2016. | ||||||
[2] | Total contingent performance payments up to $5,500,000 are to be paid based on Ebyline meeting certain revenue targets. The performance payments are to be made only if Ebyline achieves at least 90% of Content Revenue targets of $17,000,000 in 2015, $27,000,000 in 2016 and $32,000,000 in 2017. The fair value of the $5,500,000 of contingent performance payments was calculated using a Monte-Carlo simulation to simulate revenue over the next three years. Since the contingent consideration has an option like structure, a risk-neutral framework is considered appropriate for the valuation. The Company started with a risk-adjusted measure of forecasted revenue (using a risk-adjusted discount rate of 8.5%) and assumed it will follow geometric brownian motion to simulate the revenue at future dates. Once the initial revenue was estimated based off of projections made during the acquisition, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's initial value conclusion was based on the average payment from 100,000 simulation trials. The volatility used for the simulation was 35%. The Monte Carlo simulation resulted in a calculated fair value of contingent performance payments of $2,210,000 on January 30, 2015. Because the contingent performance payments are subject to a 17% reduction related to the continued employment of certain key employees, ASC 805-10-55-25 indicates that a portion of these payments be treated as potential compensation to be accrued over the term rather than allocated to the purchase price. Therefore, the Company reduced its overall purchase price consideration by $357,700 and recorded the initial present value of the contingent performance payments at $1,834,300. Based on actual results for 2015 and projections for Content Revenue for 2016-2017, the Content Revenue for every year is expected to be below 90% of the required Content Revenues targets. Therefore, the Company reduced the fair value of contingent performance payments to zero by the end of 2015. The gain as a result of the decrease in the estimated fair value of contingent performance payments was recorded as a reduction of general and administrative expense in the Company's consolidated statement of operations during the year ended December 31, 2015. | ||||||
[3] | The aggregate consideration paid at closing for the acquisition of ZenContent consisted of (a) a cash payment of $400,000 and (b) the issuance of 86,207 shares of IZEA common stock valued at $600,000 (using the 30 trading-day volume-weighted average closing price of IZEA's common stock of $6.96 per share as of July 29, 2016). |
Stockholders' Equity - Stock 38
Stockholders' Equity - Stock issued for Services (Details) - USD ($) | May 16, 2016 | Apr. 11, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued for payment of services | $ 129,794 | |||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 749 | |||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 4,794 | |||||
Derivative, Loss on Derivative | $ (15,936) | |||||
Derivative, Gain on Derivative | 9,608 | |||||
Fair value of common stock issued for future services | $ 31,962 | $ 0 | ||||
General and Administrative Expense [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 7,600 | |||||
Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued for payment of services (shares) | 20,360 | |||||
Stock issued for payment of services | $ 125,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 15,664 | |||||
Restricted Stock [Member] | General and Administrative Expense [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 34,969 | $ 31,251 | $ 107,439 | $ 84,742 | ||
Five Directors [Member] | Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued for payment of services (shares) | 3,261 | 4,055 | ||||
Stock issued for payment of services | $ 18,750 | $ 6,250 | ||||
Monthly in equal installments [Member] | Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 362 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Non-Vested Restricted Stock (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 21,109 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | shares | (15,664) |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | shares | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares | 5,445 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | 6.15 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares | 6.86 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares | $ 5.87 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 3 months |
Stockholders' Equity - Warrant
Stockholders' Equity - Warrant Transactions (Details Textual) - USD ($) | Aug. 14, 2015 | Jan. 22, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jul. 20, 2015 | Jan. 30, 2015 | Feb. 02, 2014 | Sep. 23, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of warrant or right, number of securities called by each warrant or right | 12,500 | 5,000 | ||||||||||
Class of warrant or right, exercise price of warrants or rights (per share) | $ 10.20 | $ 10.20 | ||||||||||
Percentage of warrants held be investors to participate in warrant exercise offer | 70.00% | |||||||||||
Proceeds from issuance of warrants (in dollars) | $ 100 | |||||||||||
Fair value of warrants issued (in dollars) | $ 7,700 | $ 44,250 | ||||||||||
Proceeds from Warrant Exercises | $ 12,861,057 | |||||||||||
Loss on exchange of warrants | $ 0 | $ (1,845,810) | $ 0 | $ (1,845,810) | ||||||||
Number of shares available to be repurchased at end of exercise price offer period | 2,191,547 | |||||||||||
Class of warrant or right, average exercise price of warrants or rights | $ 5.87 | |||||||||||
General and Administrative Expense [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 7,600 | |||||||||||
2014 Warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of warrant or right, discount on exercise price of warrants or rights | 26.00% | 26.00% | ||||||||||
Proceeds from Warrant Exercises | $ 8,760,805 | |||||||||||
2013 Warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Warrants Exercised During Period, Shares | 798,715 | |||||||||||
Class of warrant or right, discount on exercise price of warrants or rights | 25.00% | 25.00% | ||||||||||
Proceeds from Warrant Exercises | $ 4,100,252 | |||||||||||
Warrant [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Warrants Exercised During Period, Shares | 1,392,832 | |||||||||||
Loss on exchange of warrants | $ (1,197,821) | |||||||||||
Fair value of warrants exercised | $ 5,348,408 | |||||||||||
Fair value of remaining unexercised warrants | $ 1,181,638 | |||||||||||
Remaining unexercised warrants, shares | 396,536 | |||||||||||
Warrant [Member] | 2013 Warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Loss on exchange of warrants | $ (647,989) | (647,989) | ||||||||||
Additional Paid-in Capital [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Fair Value Adjustment of Warrants | $ (7,178,035) | |||||||||||
Series A five-year warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of warrant or right, exercise price of warrants or rights (per share) | $ 7 | $ 5 | ||||||||||
Series B five-year warrants [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of warrant or right, exercise price of warrants or rights (per share) | $ 10 | |||||||||||
2013 Activity [Member] | Warrant [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of warrant or right, exercise price of warrants or rights (per share) | $ 10 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details Textual) - USD ($) | Aug. 22, 2011 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Apr. 16, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of individual ownership of common stock (percentage) | 10.00% | |||||
Weighted average exercise price, exercisable | $ 5.87 | $ 5.87 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 307,121 | $ 307,121 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 251,330 | $ 251,330 | ||||
Equity Incentive 2011 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, capital shares reserved for future issuance (shares) | 72,967 | 72,967 | ||||
Expected term (in years) | 6 years | 6 years | 6 years | 6 years | ||
Weighted average exercise price, exercisable | $ 9.36 | $ 9.36 | ||||
Equity Incentive B 2011 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options, shares authorized (shares) | 4,375 | |||||
May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair market value of incentive stock options (percentage) | 100.00% | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 170,818 | $ 188,458 | $ 576,144 | $ 511,202 | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | 1,283,402 | $ 1,283,402 | ||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition (in years) | 3 years | |||||
Employee Stock Option [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expected term (in years) | 10 years | |||||
Investor Relations Services [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for future issuance | 1,000,000 | |||||
Individual Stock Ownership in Excess of 10 Percent [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair market value of incentive stock options (percentage) | 110.00% | |||||
Twelve Months After Grant Date [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, equity instruments options, percentage vested (pecentage) | 25.00% | |||||
Monthly in equal installments [Member] | Employee Stock Option [Member] | May 2011 and August 2011 Equity Incentive Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting period (in years) | 3 years | |||||
Selling and Marketing Expense [Member] | Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | 23,071 | $ 67,586 | ||||
General and Administrative Expense [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | 7,600 | |||||
General and Administrative Expense [Member] | Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Adjustments to additional paid in capital, share-based compensation, requisite service period recognition (in dollars) | $ 147,747 | $ 188,458 | $ 508,558 | $ 511,202 |
Stockholders' Equity - Schedu42
Stockholders' Equity - Schedule of Options Outstanding (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Weighted average exercise price, exercisable | $ 5.87 | |||
Equity Incentive 2011 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Common shares, outstanding beginning of period | 830,599 | 595,786 | ||
Common shares, granted | 115,979 | 277,059 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | ||
Common shares, forfeited | (31,600) | (42,246) | ||
Common shares, outstanding end of period | 914,978 | 830,599 | 595,786 | |
Share-based compensation arrangement by share-based payment award, options, exercisable, number | 507,213 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Weighted average exercise price, beginning of period | $ 8.65 | $ 9.20 | ||
Weighted average exercise price, granted | 6.85 | 7.43 | ||
Weighted average exercise price, exercised | 0 | 0 | ||
Weighted average exercise price, forfeited | 11.26 | 7.70 | ||
Weighted average exercise price, end of period | $ 8.65 | $ 9.20 | $ 9.20 | $ 8.34 |
Weighted average exercise price, exercisable | $ 9.36 | |||
Weighted average remaining life (years), outstanding | 6 years 5 months | 6 years 9 months | 6 years 6 months | |
Weighted average remaining life (years), exercisable | 5 years 7 months |
Stockholders' Equity - Schedu43
Stockholders' Equity - Schedule of Nonvested Stock Option (Details) - Equity Incentive 2011 Plan [Member] - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |||
Common shares, nonvested beginning of period | 461,926 | 372,092 | |
Common shares, granted | 115,979 | 277,059 | |
Common shares, vested | (141,573) | (147,759) | |
Common shares, forfeited | (28,567) | (39,466) | |
Common shares, nonvested end of period | 407,765 | 461,926 | 372,092 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Weighted average grant date fair value, nonvested beginning of period | $ 3.84 | $ 4 | |
Weighted average grant date fair value, granted | 3.28 | 3.84 | |
Weighted average grant date fair value, vested | 4.08 | 4.32 | |
Weighted average grant date fair value, forfeited | 3.84 | 3.44 | |
Weighted average grant date fair value, nonvested end of period | $ 3.60 | $ 3.84 | $ 4 |
Weighted average remaining years to vest | 2 years 7 months | 2 years 9 months | 3 years |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details Textual) - USD ($) | Apr. 16, 2014 | Sep. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock purchase plan issuances | $ 34,587 | |
Stock purchase plan issuances (shares) | 5,340 | |
2014 Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, capital shares reserved for future issuance (shares) | 75,000 | 55,875 |
Share-based compensation arrangement by share-based payment award, award vesting period (in years) | 90 days | |
Annual compensation limit percentage, employee stock purchase plan (percentage) | 10.00% | |
Annual compensation limit, employee stock purchase plan (dollars) | $ 21,250 | |
Shares issuance limit per offering period, employee stock purchase plan | 1,000 | |
Fair market value of shares available for issuance (percentage) | 85.00% |
Earnings (Loss) Per Common Sh45
Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (1,511,603) | $ (2,645,087) | $ (5,730,568) | $ (8,901,290) |
Weighted average common shares outstanding – basic and diluted | 5,420,020 | 4,075,605 | 5,357,119 | 3,286,431 |
Basic and diluted loss per common share | $ (0.28) | $ (0.65) | $ (1.07) | $ (2.71) |
Earnings (Loss) Per Common Sh46
Earnings (Loss) Per Common Share (Details 1) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 1,462,129 | 2,383,283 | 1,424,365 | 3,110,400 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 904,706 | 738,820 | 874,363 | 707,017 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 557,423 | 1,595,042 | 550,002 | 2,328,645 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 0 | 49,421 | 0 | 74,738 |