Document and Entity Information
Document and Entity Information Document - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | May 14, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | IZEA, INC. | ||
Entity Central Index Key | 1,495,231 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-Q | ||
Document Period End Date | Mar. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | Q1 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 5,844,744 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 6,861,087 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Assets, Current [Abstract] | ||
Cash and cash equivalents | $ 2,760,285 | $ 3,906,797 |
Accounts receivable, net | 3,288,576 | 3,647,025 |
Prepaid expenses | 672,273 | 389,104 |
Other current assets | 39,286 | 9,140 |
Total current assets | 6,760,420 | 7,952,066 |
Property and equipment, net | 369,345 | 286,043 |
Goodwill | 3,604,720 | 3,604,720 |
Intangible assets, net | 532,114 | 667,909 |
Software development costs, net | 1,013,657 | 967,927 |
Security deposits | 148,330 | 148,638 |
Total assets | 12,428,586 | 13,627,303 |
Liabilities, Current [Abstract] | ||
Accounts payable | 1,260,531 | 1,756,841 |
Accrued expenses | 1,711,105 | 1,592,356 |
Contract liabilities | (4,014,829) | |
Unearned revenue | 0 | 3,070,502 |
Line of credit | 731,179 | 500,550 |
Current portion of deferred rent | 47,072 | 45,127 |
Current portion of acquisition costs payable | 530,364 | 741,155 |
Total current liabilities | 8,295,080 | 7,706,531 |
Deferred rent, less current portion | 4,355 | 17,419 |
Acquisition costs payable, less current portion | 433,312 | 609,768 |
Total liabilities | 8,732,747 | 8,333,718 |
Commitments and Contingencies | 0 | 0 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock; $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $.0001 par value; 200,000,000 shares authorized; 5,819,246 and 5,733,981, respectively, issued and outstanding | 582 | 573 |
Additional paid-in capital | 53,116,619 | 52,570,432 |
Accumulated deficit | (49,421,362) | (47,277,420) |
Total stockholders’ equity | 3,695,839 | 5,293,585 |
Total liabilities and stockholders’ equity | $ 12,428,586 | $ 13,627,303 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parentheticals - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Parentheticals - Balance Sheet [Abstract] | ||
Preferred stock, par value (per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
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) | 5,819,246 | 5,733,981 |
Common stock, shares outstanding (shares) | 5,819,246 | 5,733,981 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenue | $ 3,896,441 | $ 4,834,505 |
Costs and expenses: | ||
Cost of revenue (exclusive of amortization) | 2,163,142 | 2,337,060 |
Sales and marketing | 1,755,526 | 2,388,820 |
General and administrative | 1,615,222 | 2,446,918 |
Depreciation and amortization | 265,455 | 362,606 |
Total costs and expenses | 5,799,345 | 7,535,404 |
Loss from operations | (1,902,904) | (2,700,899) |
Other income (expense): | ||
Interest expense | (21,311) | (17,076) |
Change in fair value of derivatives, net | (125,595) | (618) |
Other income (expense), net | 4,690 | (627) |
Total other income (expense), net | (142,216) | (18,321) |
Net loss | $ (2,045,120) | $ (2,719,220) |
Weighted average common shares outstanding – basic and diluted | 5,802,099 | 5,598,200 |
Basic and diluted loss per common share | $ (0.35) | $ (0.49) |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2018 - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance (shares) at Dec. 31, 2017 | 5,733,981 | |||
Balance at Dec. 31, 2017 | $ 5,293,585 | $ 573 | $ 52,570,432 | $ (47,277,420) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Cumulative effect of change in accounting policy to ASC 606 | (98,822) | (98,822) | ||
Stock issued for payment of services (shares) | 30,265 | |||
Stock issued for payment of services | 125,000 | $ 3 | 124,997 | |
Stock issuance costs | (616) | (616) | ||
Stock-based compensation (shares) | 55,000 | |||
Stock-based compensation | 421,812 | $ 6 | 421,806 | |
Net loss | (2,045,120) | (2,045,120) | ||
Balance (shares) at Mar. 31, 2018 | 5,819,246 | |||
Balance at Mar. 31, 2018 | $ 3,695,839 | $ 582 | $ 53,116,619 | $ (49,421,362) |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (2,045,120) | $ (2,719,220) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 56,038 | 58,888 |
Amortization of software development costs and other intangible assets | 209,417 | 303,718 |
(Gain) loss on disposal of equipment | 853 | (1,953) |
Provision for losses on accounts receivable | 0 | 8,333 |
Stock-based compensation | 146,281 | 158,976 |
Fair value of stock issued for payment of services | 28,671 | 60,632 |
Decrease in fair value of contingent acquisition costs payable | (304,163) | (39,000) |
Gain on settlement of acquisition costs payable | 0 | (10,491) |
Change in fair value of derivatives, net | 125,595 | 618 |
Changes in operating assets and liabilities, net of effects of business acquired: | ||
Accounts receivable | 358,449 | (717,295) |
Prepaid expenses and other current assets | (67,050) | 25,317 |
Accounts payable | (496,310) | 140,027 |
Accrued expenses | 35,665 | 765,849 |
Contract liabilities | 845,505 | 0 |
Unearned revenue | 0 | 449,916 |
Deferred rent | (11,119) | (8,472) |
Net cash used for operating activities | (1,117,288) | (1,524,157) |
Cash flows from investing activities: [Abstract] | ||
Purchase of equipment | (140,193) | (5,248) |
Increase in software development costs | (119,352) | (82,355) |
Security deposits | 308 | 19,754 |
Net cash used for investing activities | (259,237) | (67,849) |
Cash flows from financing activities: [Abstract] | ||
Proceeds from line of credit, net of repayments | 230,629 | 0 |
Stock issuance costs | (616) | (1,926) |
Net cash provided by (used for) financing activities | 230,013 | (1,926) |
Net decrease in cash and cash equivalents | (1,146,512) | (1,593,932) |
Cash and cash equivalents, beginning of year | 3,906,797 | 5,949,004 |
Cash and cash equivalents, end of period | 2,760,285 | 4,355,072 |
Supplemental cash flow information: [Abstract] | ||
Cash paid during the period for interest | 6,939 | 0 |
Non-cash financing and investing activities: | ||
Acquisition costs paid through issuance of common stock | 0 | 938,532 |
Fair value of common stock issued for future services | $ 299,596 | $ 0 |
Company and Summary of Signific
Company and Summary of Significant Accounting Policies (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Interim Financial Information The accompanying consolidated balance sheet as of March 31, 2018 , the consolidated statements of operations for the three months ended March 31, 2018 and 2017 , the consolidated statement of stockholders' equity for the three months ended March 31, 2018 and the consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 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 generally accepted accounting principles in the United States ("GAAP"). The consolidated balance sheet as of December 31, 2017 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 GAAP for complete financial statements. Operating results for the three months ended March 31, 2018 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, 2017 included in the Company's Annual Report on Form 10-K filed with the SEC on April 17, 2018. 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. In January 2015, IZEA purchased all of the outstanding shares of capital stock of Ebyline, Inc. (“Ebyline”). In July 2016, IZEA purchased all the outstanding shares of capital stock of ZenContent, Inc. (“ZenContent”). The legal entity of ZenContent was dissolved in December 2017 after all assets and transactions were transferred to IZEA. On March 9, 2016, the Company formed IZEA Canada, Inc., a wholly-owned subsidiary, incorporated in Ontario, Canada to operate as a sales and support office for IZEA's Canadian customers. The Company is headquartered near Orlando, Florida with additional offices in Illinois, California and Canada. The Company creates and operates online marketplaces that connect marketers with content creators. The creators are compensated by IZEA for producing unique content such as long and short form text, videos, photos, status updates, and illustrations for marketers or distributing such content on behalf of marketers through their personal websites, blogs, and social media channels. Marketers receive influential consumer content and engaging, shareable stories that drive awareness. The Company's primary technology platform, The IZEA Exchange (“ IZEAx ”), enables transactions to be completed at scale through the management of custom content workflow, creator search and targeting, bidding, analytics, and payment processing. IZEAx is designed to provide a unified ecosystem that enables the creation and publication of multiple types of custom content through a creator's personal websites, blogs, or social media channels including Twitter, Facebook, Instagram, and YouTube, among others. In addition to IZEAx , the Company operates the Ebyline technology platform, which it acquired in January 2015. The Ebyline platform was originally designed as a self-service content marketplace to replace editorial newsrooms in the news agencies with a “virtual newsroom” to handle their content workflow. Liquidity and Going Concern The Company’s financial statements are prepared using GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred significant net losses and negative cash flow from operations for most periods since its inception, which has resulted in a total accumulated deficit of $49,421,362 as of March 31, 2018 . For the three months ended March 31, 2018 , the Company had a net loss of $2,045,120 and the Company expects to incur a net loss for the fiscal year 2018. The Company's cash balance as of March 31, 2018 was $2,760,285 and the Company's operating activities used cash of $1,117,288 for the three months ended March 31, 2018 . The Company’s revenues decreased year-over-year in the first quarter of 2018 and the Company believes revenue will also decrease year-over-year in the second quarter. Current commitments from the Company's customers in the second quarter of 2018 that translate into future revenues are lower than anticipated. If the Company's annual revenue continues to decline from prior year levels at a rate similar to or greater than the decline in the first quarter, the Company’s cash resources will likely be insufficient to meet its obligations as they become due during the next twelve months. Management believes that it will be necessary to raise additional capital to sustain the Company’s operations at a consistent level and/or scale back the Company’s operating plan by limiting its expansion into new projects and initiating reductions in its workforce. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it achieves and maintains profitability. Management’s plans to continue as a going concern include raising additional capital through sales of securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of or eliminate one or more of the Company’s current expansion and development plans or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. Therefore, there is substantial doubt about the ability of the Company to continue as a going concern for one year from the issuance of the accompanying financial statements. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Principles of Consolidation The consolidated financial statements include the accounts of IZEA, Inc. and its wholly-owned subsidiaries, Ebyline after its acquisition on January 27, 2015, ZenContent, Inc. after its acquisition on July 31, 2016 until its closure in December 2017, 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. Restatement As described in its Annual Report on Form 10-K for the year ended December 31, 2017, the Company restated its previously issued financial statements included in its Annual Reports on Form 10-K for the years ended December 31, 2015 and 2016 and Quarterly Reports on Form 10-Q for each quarterly period for the years ended December 31, 2015 and 2016, and for the first three quarters for the year ended December 31, 2017 (collectively, the “Restated Periods”). The restatement reclassified direct costs associated with the Company's Content Workflow transactions previously reported as cost of revenue to instead net them directly against revenue in the Company's consolidated statements of operations. Additionally, the Company reclassified the cost of its campaign fulfillment personnel out of sales and marketing expenses and into cost of revenue. As part of the restatement process, the Company also elected to present depreciation and amortization expense as a separate line item. The restatement of the consolidated statement of operations reflected no change in the Company's previously reported loss from operations, net loss, loss per share, or on any of the Company's consolidated balance sheets, statements of cash flows, and statements of stockholders' equity. All amounts related to the Restated Periods of the consolidated statement of operations included herein reflect the restated amounts as reflected in Notes 2 and 14 of the Audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 filed on April 17, 2018. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less from the date of purchase 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 develop or share content on behalf of a marketer. 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 $189,000 for doubtful accounts as of March 31, 2018 and December 31, 2017 . 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 months ended March 31, 2018 and 2017 . 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. The Company had two customers that accounted for 24% of total accounts receivable at March 31, 2018 and no customer that accounted for more than 10% of total accounts receivable at December 31, 2017 . The Company had no customer that accounted for more than 10% of its revenue during the three months ended March 31, 2018 and one customer that accounted for 15% of its revenue during the three months ended March 31, 2017 . 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 - 5 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years Leasehold improvements are amortized 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 depreciation and amortization expense in the accompanying consolidated statements of operations was $56,038 and $58,888 for the three months ended March 31, 2018 and 2017 , respectively. Property and equipment is recorded net of accumulated depreciation and amortization amounts of $846,067 and $790,029 as of March 31, 2018 and December 31, 2017 , respectively. 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 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. 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. See Note 3 for further details. 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 months ended March 31, 2018 and 2017 , there were no impairment charges associated with the Company's long-lived assets. Software Development Costs In accordance with ASC 350-40, Internal Use Software, the Company capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the planning and post-implementation stages of software development, or other maintenance and development expenses that do not meet the qualification for capitalization are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. These software development and acquired technology costs are amortized on a straight-line basis over the estimated useful life of five years upon initial release of the software or additional features. See Note 4 for further details. Revenue Recognition The Company derives its revenue from providing content services or managing advertising campaigns for its customers, as well as from making its platforms available to allow customers the ability to purchase content directly from its creators. Managed Services is when a marketer (typically a brand, agency or partner) contracts IZEA to provide custom content or sponsored social services (including amplification services). Content Workflow is derived from the self-service use of the Company's platforms by marketers and partners to handle their content workflow, from initial request of a content, sponsorship or amplification service to actual review, approval, tracking and receipt of the content or distribution. Service Fee Revenue is generated from various service and license fees charged to users of the Company's platforms. On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) using the modified retrospective method, under which comparative periods will not be restated and the cumulative effect of applying the standard will be recognized at the date of initial adoption on January 1, 2018. Under the modified retrospective method, the Company only applied the new standard to contracts that were not completed as of January 1, 2018. Under ASC 606, revenue is recognized based on a five-step model and, in doing so, more judgment and estimates may be required within the revenue recognition process than were required under the former rules. The Company has reviewed its sources of revenue in accordance with each of the five steps in the model, which are as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. The core principle of ASC 606 is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the five step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are distinct performance obligations. The Company also determines whether it acts as an agent or a principal for each identified performance obligation. The determination of whether the Company acts as the principal or the agent is highly subjective and requires the Company to evaluate a number of indicators individually and as a whole in order to make its determination . For transactions in which the Company acts as a principal, revenue is reported on a gross basis as the amount paid by the marketer for the purchase of content or sponsorship, promotion and other related services and the Company records the amounts it pays to third-party creators as cost of revenue. For transactions in which the Company acts as an agent, revenue is reported on a net basis as the amount the Company charged to the self-service marketer using the Company's platform, less the amounts paid to the third-party creators providing the service. The Company maintains separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specifies the terms of the relationship and access to its platforms, or by statement of work, which specifies the price and the services to be performed, along with other terms. The transaction price is determined based on the fixed fee stated in the statement of work and does not contain variable consideration. Marketers who use the Company to manage their advertising campaigns or custom content requests may prepay for services or request credit terms. Payment terms are typically 30 days from the invoice date. The agreement typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services. Billings in advance of completed services are recorded as a contract liability until earned. The Company assesses collectibility based on a number of factors, including the creditworthiness of the customer and payment and transaction history. The allocation of the transaction price to the performance obligations in the contract is based on a cost plus methodology. For Managed Services, the Company enters into an agreement to provide services that may include multiple distinct performance obligations in the form of: (i) an integrated marketing campaign to provide sponsored social services, which may include the provision of blogs, tweets, photos or videos shared through social network offerings and content promotion, such as click-through advertisements appearing in websites and social media channels; and (ii) custom content items, such as a research or news article, informational material or videos. Marketers typically purchase sponsored social services for the purpose of providing public awareness or advertising buzz regarding the marketer's brand and they purchase custom content for internal and external needs. The Company may provide one type or a combination of all types of these performance obligations on a statement of work for a lump sum fee. The Company allocates revenue to each performance obligation in the contract at inception based on its relative standalone selling price. These performance obligations are to be provided over a stated period that may range from one day to one year. Revenue is accounted for when the performance obligation has been satisfied depending on the type of service provided. The Company views its obligation to deliver sponsored social services, including management services, as a single performance obligation that is satisfied over time as the customer receives the benefits from the services. Revenue is recognized using an input method of costs incurred compared to total expected costs to measure the progress towards satisfying the overall performance obligation of the marketing campaign. The delivery of custom content represents a distinct performance obligation that is satisfied over time as the Company has no alternative for the custom content and the Company has an enforceable right to payment for performance completed to date under the contracts. The Company considers custom content to be a series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, and revenue is recognized over time using an output method based on when each individual piece of content is delivered to the customer. Based on the Company's evaluations, revenue from Managed Services is reported on a gross basis, because the Company has the primary obligation to fulfill the performance obligations and it creates, reviews and controls the services. The Company takes on the risk of payment to any third-party creators and it establishes the contract price directly with its customers based on the services requested in the statement of work. For Content Workflow services, the self-service customer instructs creators found through the Company's platforms to provide or distribute custom content for an agreed upon transaction fee. The Company's platforms control the contracting, description of services, acceptance of and payment for the requested content. This service is used primarily by news agencies or marketers to control the outsourcing of their content and advertising needs. The Company charges the self-service customer the transaction price plus a fee based on the contract. Revenue is recognized when the transaction is completed by the creator and accepted by the marketer. Based on the Company's evaluations, Content Workflow revenue is reported on a net basis because the Company is acting as an agent solely arranging for the third-party creator to provide the services directly to the self-service customer through the platform. 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 the use of the IZEAx or Ebyline platforms, inactivity fees and early cash-out fees. Fees for subscription or licensing services are recognized straight-line over the term of service, while other fees are recognized at a point in time when the account is deemed inactive or a cash-out below certain minimum thresholds is requested. The Company does not typically engage in contracts that are longer than one year. Therefore, the Company does not capitalize costs to obtain its customer contracts as these amounts would be generally recognized over less than one year and are not material. See Note 8 for further details on the Company's adoption and disclosures related to ASC 606. Advertising Costs Advertising costs are charged to expense as they are incurred, including payments to content creators to promote the Company. Advertising costs charged to operations for the three months ended March 31, 2018 and 2017 were approximately $102,000 and $82,000 , 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 terms. The Company accounts for rental expense on a straight-line basis over the lease terms. 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 four states, which is included in general and administrative expense 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 2014, 2015 and 2016. 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 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. The Company had 5,502 warrant shares issued in its September 2012 public offering that required classification as a liability due to certain registration rights and listing requirements in the agreements. These warrants expired in September 2017 with no value. The Company has also issued shares of restricted stock which vest over future periods. The value of these shares is required to be adjusted over the vesting period. See Note 6 for additional information related to these shares. 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) as of March 31, 2018 and 2017 . 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 reporte |
Business Acquisitions (Notes)
Business Acquisitions (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | BUSINESS ACQUISITIONS 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 (the “ZenContent Stock Purchase Agreement”) for a maximum purchase price to be paid over the next three years of $4,500,000 . Purchase Price and Acquisition Costs Payable Estimated Gross Purchase Consideration Initial Present and Fair Value Remaining Present and Fair Value Remaining Present and Fair Value 7/31/2016 7/31/2016 12/31/2017 3/31/2018 Cash paid at closing (a) $ 400,000 $ 400,000 $ — $ — Stock paid at closing (a) 600,000 600,000 — — Guaranteed purchase price (b) 933,565 566,547 606,413 623,718 Contingent performance payments (c) 2,500,000 230,000 744,510 339,958 Total estimated consideration $ 4,433,565 $ 1,796,547 $ 1,350,923 $ 963,676 Current portion of acquisition costs payable $ 741,155 $ 530,364 Long-term portion of acquisition costs payable 609,768 433,312 Total acquisition costs payable $ 1,350,923 $ 963,676 (a) The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000 . (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 up to an aggregate of $2,500,000 over the three 12-month periods following the closing. These payments are also subject to a downward adjustment up to 30% if Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or if she terminates her employment without good reason. As a result, the Company initially reduced its acquisition cost liability by $300,000 to be accrued as compensation expense over the three-year term rather than allocated to the initial purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $11,458 and $61,458 for the three months ended March 31, 2018 and 2017 , respectively. The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% ( 5.5% on July 31, 2016). Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $5,847 and $8,022 for the three months ended March 31, 2018 and 2017 . (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). Additionally, these payments are subject to downward adjustment of up to 30% if Brianna DeMike is terminated by IZEA for cause or she terminates her employment without good reason. The Company initially determined the fair value of the $2,500,000 contingent payments to be $230,000 . The fair value of the contingent performance payments is required to be revalued each quarter and is calculated using a Monte-Carlo simulation to simulate revenue over the future periods. 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 17% ) 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, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45% . The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% ( 6.75% ). The Company revalued its estimate of the contingent performance payment as of March 31, 2018 based on actual results and projections and the rates noted above and determined that current fair value of the contingent performance payments was $339,958 compared to $744,510 as of December 31, 2017 . The change in the estimated fair value of contingent performance payable resulted in a $404,552 decrease in general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2018 . Of this amount, $100,389 was allocated to compensation expense and $304,163 was allocated as a change in the fair value of the contingent performance payments. The Company revalued its estimate of the contingent performance payment as of March 31, 2017 based on actual results and projections at the time and determined that current fair value of the contingent performance payments was $366,334 compared to $324,000 as of December 31, 2016 . The change in the estimated fair value of contingent performance payable resulted in a $42,334 increase in general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2017 . Of this amount, $81,334 was allocated to compensation expense and a gain of $39,000 was allocated as a change in the fair value of the contingent performance payments. Purchase Price Allocation The consolidated financial statements reflect the allocation of 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. The 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 Upon the acquisition, the majority of the acquired assets were transferred to, and employees were hired by, IZEA. The legal entity of ZenContent was dissolved in December 2017. Post closing acquisition costs related to changes in the acquisition costs payable, including interest, compensation expense and earnout estimate changes, are disclosed in notes (b) and (c) above. |
Intangible Assets (Notes)
Intangible Assets (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | INTANGIBLE ASSETS The identifiable intangible assets consists of the following assets: Balance Accumulated Amortization Balance Accumulated Amortization Useful Life (in years) March 31, 2018 December 31, 2017 Content provider networks $ 160,000 $ 138,333 $ 160,000 $ 122,083 1 Trade names 52,000 52,000 52,000 52,000 1 Developed technology 530,000 266,667 530,000 240,167 3 Self-service content customers 210,000 210,000 210,000 204,167 5 Managed content customers 2,140,000 1,984,444 2,140,000 1,905,555 3 Domains 166,469 74,911 166,469 66,588 5 Total identifiable intangible assets $ 3,258,469 $ 2,726,355 $ 3,258,469 $ 2,590,560 Total identifiable intangible assets from the purchase price allocations from the Company's acquisitions and other acquired assets net of accumulated amortization thereon consists of the following: March 31, December 31, Ebyline Intangible Assets $ 2,370,000 $ 2,370,000 ZenContent Intangible Assets 722,000 722,000 Domains 166,469 166,469 Total Intangible Assets 3,258,469 3,258,469 Accumulated amortization (2,726,355 ) (2,590,560 ) Intangible Assets, net $ 532,114 $ 667,909 The Company is amortizing the identifiable intangible assets over a weighted average period of three years . Amortization expense recorded in depreciation and amortization expense in the accompanying consolidated statements of operations was $135,795 and $249,906 for the three months ended March 31, 2018 and 2017 , respectively. The portion of this amortization expense specifically related to the costs of acquired technology for its platforms that is presented separately from cost of services was $26,500 and $26,500 for the three months ended March 31, 2018 and 2017 , respectively. As of March 31, 2018 , 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 2018 (nine months remaining) $ 213,638 2019 207,349 2020 84,293 2021 26,834 Total $ 532,114 |
Software Development Costs (Not
Software Development Costs (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Research and Development [Abstract] | |
Research, Development, and Computer Software Disclosure [Text Block] | SOFTWARE DEVELOPMENT COSTS Software development costs consists of the following: March 31, December 31, Software development costs $ 1,680,703 $ 1,561,351 Less accumulated depreciation and amortization (667,046 ) (593,424 ) Software development costs, net $ 1,013,657 $ 967,927 The Company developed its web-based advertising and content exchange platform, IZEAx, to enable native advertising campaigns on a greater scale. The Company continues to add new features and additional functionality to IZEAx to facilitate the contracting, workflow, and delivery of direct content as well as provide for invoicing, collaborating, and direct payments for the Company's self-service customers. Research and planning phase costs are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. We incurred and capitalized software development costs of $119,352 and $82,355 during the three months ended March 31, 2018 and 2017 , respectively. As a result, the Company has capitalized a total of $1,680,703 in direct materials, consulting, payroll and benefit costs to its internal use software development costs in the consolidated balance sheet as of March 31, 2018 . The Company amortizes its software development costs, upon initial release of the software or additional features, on a straight-line basis over the estimated the useful life of five years , which is consistent with the amount of time its legacy platforms were in service. Amortization expense on software development costs that is presented separately from cost of services and recorded in depreciation and amortization expense in the accompanying consolidated statements of operations was $73,622 and $53,812 for the three months ended March 31, 2018 and 2017 , respectively. As of March 31, 2018 , 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 2018 (nine months remaining) $ 220,866 2019 250,809 2020 217,481 2021 176,086 2022 106,761 Thereafter 41,654 $ 1,013,657 |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS & CONTINGENCIES Credit Agreement The Company has a secured credit facility agreement with Western Alliance Bank, the parent company of Bridge Bank, N.A. of San Jose, California, which it obtained on March 1, 2013 and expanded on April 13, 2015. Pursuant to this agreement, the Company may submit requests for funding up to 80% of its eligible accounts receivable up to a maximum credit limit of $5 million . This agreement is secured by the Company's accounts receivable and substantially all of the Company's other assets. The agreement renews annually and requires the Company to pay an annual facility fee of $20,000 ( 0.4% of the credit limit) and an annual due diligence fee of $1,000 . Interest accrues on the advances at the rate of prime plus 2% per annum . The default rate of interest is prime plus 7% . The Company had $731,179 and $500,550 outstanding under this line of credit agreement as of March 31, 2018 and December 31, 2017 , respectively. As of March 31, 2018 , the Company had a net accounts receivable balance of $3,288,576 . Assuming that all of the Company's accounts receivable balance was eligible for funding, it had $2,045,918 in remaining available credit under the agreement as of March 31, 2018 . The annual fees are capitalized in the Company's consolidated balance sheet within other current assets and are amortized to interest expense over one year . The Company amortized $5,250 and $5,250 of the annual costs through interest expense during the three months ended March 31, 2018 and 2017 , respectively. The remaining value of the capitalized loan costs related to the Bridge Bank credit agreement as of March 31, 2018 is $1,750 . This amount will be amortized to interest expense over the next four months . Litigation On April 4, 2018, a securities lawsuit, Julian Perez v. IZEA, Inc., et al ., case number 2:18-cv-02784-SVW-GJS was instituted in the U.S. District Court for the Central District of California against the Company and certain of its executive officers on behalf of certain purchasers of the Company's common stock. The plaintiffs seek to recover damages for investors under federal securities laws. The Company believes that the plaintiffs’ allegations are without merit and intends to vigorously defend against the claims. The Company is still in the early stages of this litigation and is unable to estimate a reasonably possible range of loss, if any, that may result from this matter. From time to time, the Company may become involved in various lawsuits and legal proceedings that arise in the ordinary course of the Company's business. Litigation is, however, subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company's business. The Company is currently not aware of any other 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) | 3 Months Ended |
Mar. 31, 2018 | |
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. Stock Issued for Acquisitions On January 30, 2017, the Company issued 200,542 shares of its common stock to satisfy the final annual guaranteed purchase price payment of $938,532 per the terms of a Stock Purchase Agreement dated as of January 27, 2015, by and among IZEA, Ebyline and the stockholders of Ebyline (the “Ebyline Stock Purchase Agreement”). The Company recorded a $10,491 gain on the settlement of the acquisition costs payable for the three months ended March 31, 2017 in the accompanying consolidated statements of operations as a result of the difference between the market price of the stock on the settlement date and the 30 -day average price of the stock required by the Ebyline Stock Purchase Agreement. The guaranteed purchase price consideration was originally recorded on the Company's balance sheet discounted to present value using the Company's borrowing rate of prime plus 2% . Interest expense imputed on the remaining acquisition costs payable was $3,804 in the accompanying consolidated statements of operations for the three months ended March 31, 2017 prior to the final guaranteed payment made on January 30, 2017. Stock Issued for Services During the twelve months ended December 31, 2017, the Company issued its five independent directors a total of 41,770 shares of restricted common stock initially valued at $125,000 for their annual service as directors of the Company. The stock vested in equal monthly installments for the period issued between January and December 2017. On February 12, 2017, the Company issued 7,109 shares valued at $30,000 as compensation for services a contractor provided. The Company issued 2,812 shares and 7,543 shares of restricted stock on August 14, 2017 and November 9, 2017, respectively, to Mr. Edward Murphy, its Chief Executive Officer, for amounts owed on his second and third quarter performance bonus. The stock was initially valued at $36,411 and vests in equal monthly installments over 48 months from issuance. The Company issued 662 shares and 1,257 shares of restricted stock on August 14, 2017 and November 9, 2017, respectively, to Mr. Ryan Schram, its Chief Operating Officer, for amounts owed on his second and third quarter performance bonus. The stock was initially valued at $6,446 and vests in equal monthly installments over 48 months from issuance. During the three months ended March 31, 2018 , the Company issued its five independent directors a total of 30,265 shares of restricted common stock initially valued at $125,000 for their annual service as directors of the Company. The stock vests in equal monthly installments from January through December 2018. On January 11, 2018, the Company issued seventeen employees a total of 55,000 shares of restricted common stock initially valued at $303,600 as incentive compensation for their continued future service. Of these 55,000 shares, 10,000 shares were issued to Ms. LeAnn Hitchcock, the Company's Chief Financial Officer, and 5,000 shares were issued to Mr. Ryan Schram. The stock vests over two years in equal quarterly installments from January 2018 through December 2019. The following table contains summarized information about nonvested restricted stock outstanding during the year ended December 31, 2017 and the three months ended March 31, 2018 : Restricted Stock Common Shares Weighted Average Weighted Average Nonvested at December 31, 2016 — $ — Granted 61,153 3.24 Vested (49,354 ) 3.72 Forfeited — — Nonvested at December 31, 2017 11,799 $ 4.52 3.75 Granted 85,265 5.03 Vested (15,207 ) 3.73 Forfeited — — Nonvested at March 31, 2018 81,857 $ 3.66 1.8 Total expense recognized on restricted stock issued for services to non-employees during the three months ended March 31, 2018 and 2017 was $28,671 and $60,632 , respectively. Total stock-based compensation expense recognized on restricted stock issued to employees during the three months ended March 31, 2018 was $28,069 . There was no stock-based compensation expense recognized on restricted stock issued to employees during the three months ended March 31, 2017 . The fair value of the services is based on the value of the Company's common stock as it vests over the term of service, which may be different that the value of the stock upon issuance. The change between the Company's stock price upon issuance and the Company's stock price upon the date of vesting, results in a change in the fair value of derivatives during the period. The Company recognized a loss of $125,595 and $618 as a change in the fair value of derivatives during the three months ended March 31, 2018 and 2017 , respectively. Future compensation related to issued, but nonvested restricted stock awards as of March 31, 2018 is $301,335 , and it is included in prepaid expenses in the accompanying consolidated balance sheets. This value is estimated to be recognized over the weighted-average vesting period of approximately 1.75 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, 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 months 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. As of March 31, 2018 , the Company had 33,594 remaining shares of common stock available for future grants under the ESPP. Stock Options In May 2011, the Company's Board of Directors (the “Board”) adopted the 2011 Equity Incentive Plan of IZEA, Inc. (the “May 2011 Plan”). At the Company's 2017 Annual Meeting of Stockholders held on June 21, 2017, the stockholders approved the amendment and restatement of the May 2011 Plan which increased the number of shares of common stock available for issuance under the May 2011 Plan by 500,000 shares. The amended May 2011 Plan allows the Company to grant options to purchase up to 1,500,000 shares as an incentive for its employees and consultants. As of March 31, 2018 , the Company had 304,835 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 March 31, 2018 , the Company had 1,875 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 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 at the time of grant, the purchase price is set at the fair market value of the Company’s common stock on the grant date, the term is set at ten years and the options 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 Company issues new shares to the optionee for any stock awards or options exercised pursuant to its 2011 Equity Incentive Plans. A summary of option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2017 and the three months ended March 31, 2018 is presented below: Options Outstanding Common Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Outstanding at December 31, 2016 959,864 $ 8.11 6.4 Granted 141,246 3.49 Exercised — — Forfeited (51,607 ) 38.86 Outstanding at December 31, 2017 1,049,503 $ 5.97 6.0 Granted 14,917 4.33 Exercised — — Forfeited (22,494 ) 6.17 Outstanding at March 31, 2018 1,041,926 $ 5.95 5.8 Exercisable at March 31, 2018 764,181 $ 6.24 4.8 During the three months ended March 31, 2018 and 2017 no options were exercised. The fair value of the Company's common stock on March 31, 2018 was $3.66 per share. The intrinsic value on outstanding options as of March 31, 2018 was $89,540 . The intrinsic value on exercisable options as of March 31, 2018 was $13,393 . A summary of the nonvested stock option activity under the 2011 Equity Incentive Plans for the year ended December 31, 2017 and the three months ended March 31, 2018 is presented below: Nonvested Options Common Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested at December 31, 2016 414,306 $ 3.60 2.6 Granted 141,246 1.76 Vested (205,469 ) 3.36 Forfeited (27,006 ) 3.12 Nonvested at December 31, 2017 323,077 $ 2.64 2.7 Granted 14,917 2.48 Vested (41,585 ) 2.96 Forfeited (18,664 ) 3.04 Nonvested at March 31, 2018 277,745 $ 2.56 2.7 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 stock option issuances, including the restricted stock issuance expense disclosed above, during the three months ended March 31, 2018 and 2017 was $146,281 and $158,976 , respectively. Stock-based compensation expense was recorded as $3,706 to cost of revenue, $16,298 to sales and marketing, and $126,277 to general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2018 . Stock-based compensation expense was recorded as $14,028 to sales and marketing, and $144,948 to general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2017 . Future compensation related to nonvested awards as of March 31, 2018 expected to vest of $599,659 is estimated to be recognized over the weighted-average vesting period of approximately 2.7 years . |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | LOSS PER COMMON SHARE Basic 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 loss per common 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 March 31, March 31, Net loss $ (2,045,120 ) $ (2,719,220 ) Weighted average shares outstanding - basic and diluted 5,802,099 5,598,200 Basic and diluted loss per common share $ (0.35 ) $ (0.49 ) 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 March 31, March 31, Stock options 1,045,264 963,867 Warrants 515,950 557,421 Restricted stock units — — Total excluded shares 1,561,214 1,521,288 |
Revenue (Notes)
Revenue (Notes) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE Except for the changes below, the Company has consistently applied its accounting policies to all periods presented in the consolidated financial statements. On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method, under which comparative periods will not be restated and the cumulative effect of applying the standard will be recognized at the date of initial adoption on January 1, 2018. As a result, the opening balance of retained earnings as of January 1, 2018 decreased by $98,822 and the comparative information in prior year periods continues to be reported under ASC 605. Initial Adoption Change The effects to the condensed consolidated balance sheet as of December 31, 2017, as adjusted for the adoption of ASC 606 on January 1, 2018, are as follows: As Reported 12/31/17 Adjustments As Adjusted 1/1/2018 Assets Current: Cash and cash equivalents $ 3,906,797 $ 3,906,797 Accounts receivable, net 3,647,025 92,405 3,739,430 Prepaid expenses 389,104 389,104 Other current assets 9,140 9,140 Total current assets 7,952,066 92,405 8,044,471 Property and equipment, net 286,043 286,043 Goodwill 3,604,720 3,604,720 Intangible assets, net 667,909 667,909 Software development costs, net 967,927 967,927 Security deposits 148,638 148,638 Total assets $ 13,627,303 $ 92,405 $ 13,719,708 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 1,756,841 $ 1,756,841 Accrued expenses 1,592,356 1,592,356 Unearned revenue 3,070,502 191,227 3,261,729 Line of credit 500,550 500,550 Current portion of deferred rent 45,127 45,127 Current portion of acquisition costs payable 741,155 741,155 Total current liabilities 7,706,531 191,227 7,897,758 Deferred rent, less current portion 17,419 17,419 Acquisition costs payable, less current portion 609,768 609,768 Total liabilities 8,333,718 191,227 8,524,945 Stockholders’ equity: Common stock, $.0001 par value; 200,000,000 shares authorized; 5,733,981 issued and outstanding 573 573 Additional paid-in capital 52,570,432 52,570,432 Accumulated deficit (47,277,420 ) (98,822 ) (47,376,242 ) Total stockholders’ equity 5,293,585 (98,822 ) 5,194,763 Total liabilities and stockholders’ equity $ 13,627,303 $ 92,405 $ 13,719,708 Dual Reporting The effects to the condensed consolidated financial statements as of March 31, 2018, as a result of applying ASC 606, rather than previous GAAP for revenue ("ASC 605") are as follows: As Reported (ASC 606) Adjustments Previous GAAP (ASC 605) Balance Sheet: Accounts receivable, net $ 3,288,576 $ 92,922 $ 3,381,498 Contract liabilities 4,014,829 (4,014,829 ) — Unearned revenue — 3,810,781 3,810,781 Accumulated deficit (49,421,362 ) 296,970 (49,124,392 ) Income Statement: Revenue $ 3,896,441 198,148 4,094,589 The changes reflected above were primarily due to the Company's delivery of its managed services related to sponsored social services. Under ASC 605, these were recognized as separate elements at a point in time as services were delivered to the customer and under ASC 606, these are recognized as a single performance obligation over time based on an input model utilizing cost-to-cost methodology. Disaggregation of Revenue The following table illustrates our revenue by product service type: Three Months Ended March 31, 2018 Managed Services $ 3,796,665 Content Workflow, net 63,548 Service Fees & Other 36,228 Total Revenue from Customers $ 3,896,441 Contract Balances The following table provides information about receivables, contract assets and contract liabilities from contracts with customers. March 31, January 1, Accounts receivable, net 3,288,576 3,739,430 Contract liabilities (unearned revenue) 4,014,829 3,261,729 Contract receivables are recognized when the receipt of consideration is unconditional. The decrease in contract receivables was primarily due to timing of billings and lower revenue during the period. The Company did not recognize any contract assets as of March 31, 2018 or January 1, 2018. Contract liabilities relate to advance consideration received from customers under the terms of our contracts, which will be earned in future periods. The increase in contract liabilities is due to additional orders received during the quarter that are billed in advance and fulfilled throughout the year. During the three months ended March 31, 2018 , the Company recognized revenue of $1,723,271 relating to amounts that were included as a contract liability at January 1, 2018. As a practical expedient, the Company expenses the costs of sales commissions that are paid to its sales force associated with obtaining contracts less than one year in length in the period incurred. Remaining Performance Obligations The Company typically enters into contracts that are one year or less in length. As such, the remaining performance obligations at March 31, 2018 are equal to the contract liabilities disclosed above. The Company expects to recognize the full balance of the unearned revenue at March 31, 2018 within the next year. |
Company and Summary of Signif15
Company and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | Unaudited Interim Financial Information The accompanying consolidated balance sheet as of March 31, 2018 , the consolidated statements of operations for the three months ended March 31, 2018 and 2017 , the consolidated statement of stockholders' equity for the three months ended March 31, 2018 and the consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 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 generally accepted accounting principles in the United States ("GAAP"). The consolidated balance sheet as of December 31, 2017 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 GAAP for complete financial statements. Operating results for the three months ended March 31, 2018 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, 2017 included in the Company's Annual Report on Form 10-K filed with the SEC on April 17, 2018. |
Business Description and Accounting Policies [Text Block] | 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. In January 2015, IZEA purchased all of the outstanding shares of capital stock of Ebyline, Inc. (“Ebyline”). In July 2016, IZEA purchased all the outstanding shares of capital stock of ZenContent, Inc. (“ZenContent”). The legal entity of ZenContent was dissolved in December 2017 after all assets and transactions were transferred to IZEA. On March 9, 2016, the Company formed IZEA Canada, Inc., a wholly-owned subsidiary, incorporated in Ontario, Canada to operate as a sales and support office for IZEA's Canadian customers. The Company is headquartered near Orlando, Florida with additional offices in Illinois, California and Canada. The Company creates and operates online marketplaces that connect marketers with content creators. The creators are compensated by IZEA for producing unique content such as long and short form text, videos, photos, status updates, and illustrations for marketers or distributing such content on behalf of marketers through their personal websites, blogs, and social media channels. Marketers receive influential consumer content and engaging, shareable stories that drive awareness. The Company's primary technology platform, The IZEA Exchange (“ IZEAx ”), enables transactions to be completed at scale through the management of custom content workflow, creator search and targeting, bidding, analytics, and payment processing. IZEAx is designed to provide a unified ecosystem that enables the creation and publication of multiple types of custom content through a creator's personal websites, blogs, or social media channels including Twitter, Facebook, Instagram, and YouTube, among others. In addition to IZEAx , the Company operates the Ebyline technology platform, which it acquired in January 2015. The Ebyline platform was originally designed as a self-service content marketplace to replace editorial newsrooms in the news agencies with a “virtual newsroom” to handle their content workflow. |
Substantial Doubt About Going Concern [Policy Text Block] | The Company’s financial statements are prepared using GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred significant net losses and negative cash flow from operations for most periods since its inception, which has resulted in a total accumulated deficit of $49,421,362 as of March 31, 2018 . For the three months ended March 31, 2018 , the Company had a net loss of $2,045,120 and the Company expects to incur a net loss for the fiscal year 2018. The Company's cash balance as of March 31, 2018 was $2,760,285 and the Company's operating activities used cash of $1,117,288 for the three months ended March 31, 2018 . The Company’s revenues decreased year-over-year in the first quarter of 2018 and the Company believes revenue will also decrease year-over-year in the second quarter. Current commitments from the Company's customers in the second quarter of 2018 that translate into future revenues are lower than anticipated. If the Company's annual revenue continues to decline from prior year levels at a rate similar to or greater than the decline in the first quarter, the Company’s cash resources will likely be insufficient to meet its obligations as they become due during the next twelve months. Management believes that it will be necessary to raise additional capital to sustain the Company’s operations at a consistent level and/or scale back the Company’s operating plan by limiting its expansion into new projects and initiating reductions in its workforce. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it achieves and maintains profitability. Management’s plans to continue as a going concern include raising additional capital through sales of securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of or eliminate one or more of the Company’s current expansion and development plans or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. Therefore, there is substantial doubt about the ability of the Company to continue as a going concern for one year from the issuance of the accompanying financial statements. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The consolidated financial statements include the accounts of IZEA, Inc. and its wholly-owned subsidiaries, Ebyline after its acquisition on January 27, 2015, ZenContent, Inc. after its acquisition on July 31, 2016 until its closure in December 2017, 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. |
Restatement [Policy Text Block] | Restatement As described in its Annual Report on Form 10-K for the year ended December 31, 2017, the Company restated its previously issued financial statements included in its Annual Reports on Form 10-K for the years ended December 31, 2015 and 2016 and Quarterly Reports on Form 10-Q for each quarterly period for the years ended December 31, 2015 and 2016, and for the first three quarters for the year ended December 31, 2017 (collectively, the “Restated Periods”). The restatement reclassified direct costs associated with the Company's Content Workflow transactions previously reported as cost of revenue to instead net them directly against revenue in the Company's consolidated statements of operations. Additionally, the Company reclassified the cost of its campaign fulfillment personnel out of sales and marketing expenses and into cost of revenue. As part of the restatement process, the Company also elected to present depreciation and amortization expense as a separate line item. The restatement of the consolidated statement of operations reflected no change in the Company's previously reported loss from operations, net loss, loss per share, or on any of the Company's consolidated balance sheets, statements of cash flows, and statements of stockholders' equity. All amounts related to the Restated Periods of the consolidated statement of operations included herein reflect the restated amounts as reflected in |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less from the date of purchase 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 develop or share content on behalf of a marketer. 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 $189,000 for doubtful accounts as of March 31, 2018 and December 31, 2017 . 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 months ended March 31, 2018 and 2017 . |
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. The Company had two customers that accounted for 24% of total accounts receivable at March 31, 2018 and no customer that accounted for more than 10% of total accounts receivable at December 31, 2017 . The Company had no customer that accounted for more than 10% of its revenue during the three months ended March 31, 2018 and one customer that accounted for 15% of its revenue during the three months ended March 31, 2017 |
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 - 5 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years Leasehold improvements are amortized 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 depreciation and amortization expense in the accompanying consolidated statements of operations was $56,038 and $58,888 for the three months ended March 31, 2018 and 2017 , respectively. Property and equipment is recorded net of accumulated depreciation and amortization amounts of $846,067 and $790,029 as of March 31, 2018 and December 31, 2017 , respectively. |
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 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. |
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. See Note 3 for further details. 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 months ended March 31, 2018 and 2017 , there were no impairment charges associated with the Company's long-lived assets. |
Software Development Costs, Policy [Policy Text Block] | Software Development Costs In accordance with ASC 350-40, Internal Use Software, the Company capitalizes certain internal use software development costs associated with creating and enhancing internally developed software related to its platforms. Software development activities generally consist of three stages (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage. Costs incurred in the planning and post-implementation stages of software development, or other maintenance and development expenses that do not meet the qualification for capitalization are expensed as incurred. Costs incurred in the application and infrastructure development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants who are directly associated with and who devote time to software projects, and external direct costs of materials obtained in developing the software. These software development and acquired technology costs are amortized on a straight-line basis over the estimated useful life of five years upon initial release of the software or additional features. See Note 4 for further details. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company derives its revenue from providing content services or managing advertising campaigns for its customers, as well as from making its platforms available to allow customers the ability to purchase content directly from its creators. Managed Services is when a marketer (typically a brand, agency or partner) contracts IZEA to provide custom content or sponsored social services (including amplification services). Content Workflow is derived from the self-service use of the Company's platforms by marketers and partners to handle their content workflow, from initial request of a content, sponsorship or amplification service to actual review, approval, tracking and receipt of the content or distribution. Service Fee Revenue is generated from various service and license fees charged to users of the Company's platforms. On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) using the modified retrospective method, under which comparative periods will not be restated and the cumulative effect of applying the standard will be recognized at the date of initial adoption on January 1, 2018. Under the modified retrospective method, the Company only applied the new standard to contracts that were not completed as of January 1, 2018. Under ASC 606, revenue is recognized based on a five-step model and, in doing so, more judgment and estimates may be required within the revenue recognition process than were required under the former rules. The Company has reviewed its sources of revenue in accordance with each of the five steps in the model, which are as follows: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. The core principle of ASC 606 is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the five step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are distinct performance obligations. The Company also determines whether it acts as an agent or a principal for each identified performance obligation. The determination of whether the Company acts as the principal or the agent is highly subjective and requires the Company to evaluate a number of indicators individually and as a whole in order to make its determination . For transactions in which the Company acts as a principal, revenue is reported on a gross basis as the amount paid by the marketer for the purchase of content or sponsorship, promotion and other related services and the Company records the amounts it pays to third-party creators as cost of revenue. For transactions in which the Company acts as an agent, revenue is reported on a net basis as the amount the Company charged to the self-service marketer using the Company's platform, less the amounts paid to the third-party creators providing the service. The Company maintains separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specifies the terms of the relationship and access to its platforms, or by statement of work, which specifies the price and the services to be performed, along with other terms. The transaction price is determined based on the fixed fee stated in the statement of work and does not contain variable consideration. Marketers who use the Company to manage their advertising campaigns or custom content requests may prepay for services or request credit terms. Payment terms are typically 30 days from the invoice date. The agreement typically provides for a cancellation fee if the agreement is canceled by the customer prior to completion of services. Billings in advance of completed services are recorded as a contract liability until earned. The Company assesses collectibility based on a number of factors, including the creditworthiness of the customer and payment and transaction history. The allocation of the transaction price to the performance obligations in the contract is based on a cost plus methodology. For Managed Services, the Company enters into an agreement to provide services that may include multiple distinct performance obligations in the form of: (i) an integrated marketing campaign to provide sponsored social services, which may include the provision of blogs, tweets, photos or videos shared through social network offerings and content promotion, such as click-through advertisements appearing in websites and social media channels; and (ii) custom content items, such as a research or news article, informational material or videos. Marketers typically purchase sponsored social services for the purpose of providing public awareness or advertising buzz regarding the marketer's brand and they purchase custom content for internal and external needs. The Company may provide one type or a combination of all types of these performance obligations on a statement of work for a lump sum fee. The Company allocates revenue to each performance obligation in the contract at inception based on its relative standalone selling price. These performance obligations are to be provided over a stated period that may range from one day to one year. Revenue is accounted for when the performance obligation has been satisfied depending on the type of service provided. The Company views its obligation to deliver sponsored social services, including management services, as a single performance obligation that is satisfied over time as the customer receives the benefits from the services. Revenue is recognized using an input method of costs incurred compared to total expected costs to measure the progress towards satisfying the overall performance obligation of the marketing campaign. The delivery of custom content represents a distinct performance obligation that is satisfied over time as the Company has no alternative for the custom content and the Company has an enforceable right to payment for performance completed to date under the contracts. The Company considers custom content to be a series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, and revenue is recognized over time using an output method based on when each individual piece of content is delivered to the customer. Based on the Company's evaluations, revenue from Managed Services is reported on a gross basis, because the Company has the primary obligation to fulfill the performance obligations and it creates, reviews and controls the services. The Company takes on the risk of payment to any third-party creators and it establishes the contract price directly with its customers based on the services requested in the statement of work. For Content Workflow services, the self-service customer instructs creators found through the Company's platforms to provide or distribute custom content for an agreed upon transaction fee. The Company's platforms control the contracting, description of services, acceptance of and payment for the requested content. This service is used primarily by news agencies or marketers to control the outsourcing of their content and advertising needs. The Company charges the self-service customer the transaction price plus a fee based on the contract. Revenue is recognized when the transaction is completed by the creator and accepted by the marketer. Based on the Company's evaluations, Content Workflow revenue is reported on a net basis because the Company is acting as an agent solely arranging for the third-party creator to provide the services directly to the self-service customer through the platform. 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 the use of the IZEAx or Ebyline platforms, inactivity fees and early cash-out fees. Fees for subscription or licensing services are recognized straight-line over the term of service, while other fees are recognized at a point in time when the account is deemed inactive or a cash-out below certain minimum thresholds is requested. The Company does not typically engage in contracts that are longer than one year. Therefore, the Company does not capitalize costs to obtain its customer contracts as these amounts would be generally recognized over less than one year and are not material. See Note 8 for further details on the Company's adoption and disclosures related to ASC 606. |
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 costs charged to operations for the three months ended March 31, 2018 and 2017 were approximately $102,000 and $82,000 , 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 terms. The Company accounts for rental expense on a straight-line basis over the lease terms. 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 four states, which is included in general and administrative expense 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 2014, 2015 and 2016. |
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 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. The Company had 5,502 warrant shares issued in its September 2012 public offering that required classification as a liability due to certain registration rights and listing requirements in the agreements. These warrants expired in September 2017 with no value. The Company has also issued shares of restricted stock which vest over future periods. The value of these shares is required to be adjusted over the vesting period. See Note 6 for additional information related to these shares. |
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) as of March 31, 2018 and 2017 . 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 notes payable 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 6) 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 grant. 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 months ended March 31, 2018 and 2017 : Three Months Ended 2011 Equity Incentive Plans Assumptions March 31, March 31, Expected term 6 years 6 years Weighted average volatility 60.78% 43.97% Weighted average risk free interest rate 2.46% 2.09% 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. Weighted average expected forfeiture rates were 18.12% and 11.82% during the three months ended March 31, 2018 and 2017 , 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 in the accompanying consolidated statements of operations. 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 GAAP 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 February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . This ASU increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use 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. Since the issuance of the original standard, the FASB has issued a subsequent update, ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842 , which provides a practical expedient for land easements. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. 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 January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) . To address concerns over the cost and complexity of the two-step goodwill impairment test, the new standard removes the requirement for the second step of the goodwill impairment test for certain entities. An entity may apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new standard is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact that ASU 2017-04 will have on its consolidated financial statements. |
Company and Summary of Signif16
Company and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule Of Estimated Useful Lives Of Property Plant And Equipment [Table Text Block] | 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 - 5 years Office Equipment 3 - 10 years Furniture and Fixtures 5 - 10 years |
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 months ended March 31, 2018 and 2017 : Three Months Ended 2011 Equity Incentive Plans Assumptions March 31, March 31, Expected term 6 years 6 years Weighted average volatility 60.78% 43.97% Weighted average risk free interest rate 2.46% 2.09% Expected dividends — — |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Ebyline, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions Consideration Payable [Table Text Block] | |
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 Remaining Present and Fair Value 7/31/2016 7/31/2016 12/31/2017 3/31/2018 Cash paid at closing (a) $ 400,000 $ 400,000 $ — $ — Stock paid at closing (a) 600,000 600,000 — — Guaranteed purchase price (b) 933,565 566,547 606,413 623,718 Contingent performance payments (c) 2,500,000 230,000 744,510 339,958 Total estimated consideration $ 4,433,565 $ 1,796,547 $ 1,350,923 $ 963,676 Current portion of acquisition costs payable $ 741,155 $ 530,364 Long-term portion of acquisition costs payable 609,768 433,312 Total acquisition costs payable $ 1,350,923 $ 963,676 (a) The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000 . (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 up to an aggregate of $2,500,000 over the three 12-month periods following the closing. These payments are also subject to a downward adjustment up to 30% if Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or if she terminates her employment without good reason. As a result, the Company initially reduced its acquisition cost liability by $300,000 to be accrued as compensation expense over the three-year term rather than allocated to the initial purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $11,458 and $61,458 for the three months ended March 31, 2018 and 2017 , respectively. The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% ( 5.5% on July 31, 2016). Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $5,847 and $8,022 for the three months ended March 31, 2018 and 2017 . (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). Additionally, these payments are subject to downward adjustment of up to 30% if Brianna DeMike is terminated by IZEA for cause or she terminates her employment without good reason. The Company initially determined the fair value of the $2,500,000 contingent payments to be $230,000 . The fair value of the contingent performance payments is required to be revalued each quarter and is calculated using a Monte-Carlo simulation to simulate revenue over the future periods. 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 17% ) 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, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45% . The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% ( 6.75% ). The Company revalued its estimate of the contingent performance payment as of March 31, 2018 based on actual results and projections and the rates noted above and determined that current fair value of the contingent performance payments was $339,958 compared to $744,510 as of December 31, 2017 . The change in the estimated fair value of contingent performance payable resulted in a $404,552 decrease in general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2018 . Of this amount, $100,389 was allocated to compensation expense and $304,163 was allocated as a change in the fair value of the contingent performance payments. The Company revalued its estimate of the contingent performance payment as of March 31, 2017 based on actual results and projections at the time and determined that current fair value of the contingent performance payments was $366,334 compared to $324,000 as of December 31, 2016 . The change in the estimated fair value of contingent performance payable resulted in a $42,334 increase in general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2017 . Of this amount, $81,334 was allocated to compensation expense and a gain of $39,000 was allocated as a change in the fair value of the contingent performance payments. |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The 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 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | The identifiable intangible assets consists of the following assets: Balance Accumulated Amortization Balance Accumulated Amortization Useful Life (in years) March 31, 2018 December 31, 2017 Content provider networks $ 160,000 $ 138,333 $ 160,000 $ 122,083 1 Trade names 52,000 52,000 52,000 52,000 1 Developed technology 530,000 266,667 530,000 240,167 3 Self-service content customers 210,000 210,000 210,000 204,167 5 Managed content customers 2,140,000 1,984,444 2,140,000 1,905,555 3 Domains 166,469 74,911 166,469 66,588 5 Total identifiable intangible assets $ 3,258,469 $ 2,726,355 $ 3,258,469 $ 2,590,560 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Total identifiable intangible assets from the purchase price allocations from the Company's acquisitions and other acquired assets net of accumulated amortization thereon consists of the following: March 31, December 31, Ebyline Intangible Assets $ 2,370,000 $ 2,370,000 ZenContent Intangible Assets 722,000 722,000 Domains 166,469 166,469 Total Intangible Assets 3,258,469 3,258,469 Accumulated amortization (2,726,355 ) (2,590,560 ) Intangible Assets, net $ 532,114 $ 667,909 Software development costs consists of the following: March 31, December 31, Software development costs $ 1,680,703 $ 1,561,351 Less accumulated depreciation and amortization (667,046 ) (593,424 ) Software development costs, net $ 1,013,657 $ 967,927 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of March 31, 2018 , 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 2018 (nine months remaining) $ 213,638 2019 207,349 2020 84,293 2021 26,834 Total $ 532,114 As of March 31, 2018 , 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 2018 (nine months remaining) $ 220,866 2019 250,809 2020 217,481 2021 176,086 2022 106,761 Thereafter 41,654 $ 1,013,657 |
Software Development Costs (Tab
Software Development Costs (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Research and Development [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Total identifiable intangible assets from the purchase price allocations from the Company's acquisitions and other acquired assets net of accumulated amortization thereon consists of the following: March 31, December 31, Ebyline Intangible Assets $ 2,370,000 $ 2,370,000 ZenContent Intangible Assets 722,000 722,000 Domains 166,469 166,469 Total Intangible Assets 3,258,469 3,258,469 Accumulated amortization (2,726,355 ) (2,590,560 ) Intangible Assets, net $ 532,114 $ 667,909 Software development costs consists of the following: March 31, December 31, Software development costs $ 1,680,703 $ 1,561,351 Less accumulated depreciation and amortization (667,046 ) (593,424 ) Software development costs, net $ 1,013,657 $ 967,927 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of March 31, 2018 , 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 2018 (nine months remaining) $ 213,638 2019 207,349 2020 84,293 2021 26,834 Total $ 532,114 As of March 31, 2018 , 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 2018 (nine months remaining) $ 220,866 2019 250,809 2020 217,481 2021 176,086 2022 106,761 Thereafter 41,654 $ 1,013,657 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 year ended December 31, 2017 and the three months ended March 31, 2018 : Restricted Stock Common Shares Weighted Average Weighted Average Nonvested at December 31, 2016 — $ — Granted 61,153 3.24 Vested (49,354 ) 3.72 Forfeited — — Nonvested at December 31, 2017 11,799 $ 4.52 3.75 Granted 85,265 5.03 Vested (15,207 ) 3.73 Forfeited — — Nonvested at March 31, 2018 81,857 $ 3.66 1.8 |
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, 2017 and the three months ended March 31, 2018 is presented below: Options Outstanding Common Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Outstanding at December 31, 2016 959,864 $ 8.11 6.4 Granted 141,246 3.49 Exercised — — Forfeited (51,607 ) 38.86 Outstanding at December 31, 2017 1,049,503 $ 5.97 6.0 Granted 14,917 4.33 Exercised — — Forfeited (22,494 ) 6.17 Outstanding at March 31, 2018 1,041,926 $ 5.95 5.8 Exercisable at March 31, 2018 764,181 $ 6.24 4.8 |
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, 2017 and the three months ended March 31, 2018 is presented below: Nonvested Options Common Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Years to Vest Nonvested at December 31, 2016 414,306 $ 3.60 2.6 Granted 141,246 1.76 Vested (205,469 ) 3.36 Forfeited (27,006 ) 3.12 Nonvested at December 31, 2017 323,077 $ 2.64 2.7 Granted 14,917 2.48 Vested (41,585 ) 2.96 Forfeited (18,664 ) 3.04 Nonvested at March 31, 2018 277,745 $ 2.56 2.7 |
Earnings (Loss) Per Common Sh21
Earnings (Loss) Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Basic 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 loss per common 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 March 31, March 31, Net loss $ (2,045,120 ) $ (2,719,220 ) Weighted average shares outstanding - basic and diluted 5,802,099 5,598,200 Basic and diluted loss per common share $ (0.35 ) $ (0.49 ) |
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 March 31, March 31, Stock options 1,045,264 963,867 Warrants 515,950 557,421 Restricted stock units — — Total excluded shares 1,561,214 1,521,288 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Initial Application Period Cumulative Effect Transition [Table Text Block] | The effects to the condensed consolidated balance sheet as of December 31, 2017, as adjusted for the adoption of ASC 606 on January 1, 2018, are as follows: As Reported 12/31/17 Adjustments As Adjusted 1/1/2018 Assets Current: Cash and cash equivalents $ 3,906,797 $ 3,906,797 Accounts receivable, net 3,647,025 92,405 3,739,430 Prepaid expenses 389,104 389,104 Other current assets 9,140 9,140 Total current assets 7,952,066 92,405 8,044,471 Property and equipment, net 286,043 286,043 Goodwill 3,604,720 3,604,720 Intangible assets, net 667,909 667,909 Software development costs, net 967,927 967,927 Security deposits 148,638 148,638 Total assets $ 13,627,303 $ 92,405 $ 13,719,708 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 1,756,841 $ 1,756,841 Accrued expenses 1,592,356 1,592,356 Unearned revenue 3,070,502 191,227 3,261,729 Line of credit 500,550 500,550 Current portion of deferred rent 45,127 45,127 Current portion of acquisition costs payable 741,155 741,155 Total current liabilities 7,706,531 191,227 7,897,758 Deferred rent, less current portion 17,419 17,419 Acquisition costs payable, less current portion 609,768 609,768 Total liabilities 8,333,718 191,227 8,524,945 Stockholders’ equity: Common stock, $.0001 par value; 200,000,000 shares authorized; 5,733,981 issued and outstanding 573 573 Additional paid-in capital 52,570,432 52,570,432 Accumulated deficit (47,277,420 ) (98,822 ) (47,376,242 ) Total stockholders’ equity 5,293,585 (98,822 ) 5,194,763 Total liabilities and stockholders’ equity $ 13,627,303 $ 92,405 $ 13,719,708 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The effects to the condensed consolidated financial statements as of March 31, 2018, as a result of applying ASC 606, rather than previous GAAP for revenue ("ASC 605") are as follows: As Reported (ASC 606) Adjustments Previous GAAP (ASC 605) Balance Sheet: Accounts receivable, net $ 3,288,576 $ 92,922 $ 3,381,498 Contract liabilities 4,014,829 (4,014,829 ) — Unearned revenue — 3,810,781 3,810,781 Accumulated deficit (49,421,362 ) 296,970 (49,124,392 ) Income Statement: Revenue $ 3,896,441 198,148 4,094,589 |
Disaggregation of Revenue [Table Text Block] | The following table illustrates our revenue by product service type: Three Months Ended March 31, 2018 Managed Services $ 3,796,665 Content Workflow, net 63,548 Service Fees & Other 36,228 Total Revenue from Customers $ 3,896,441 |
Contract with Customer, Asset and Liability [Table Text Block] | The following table provides information about receivables, contract assets and contract liabilities from contracts with customers. March 31, January 1, Accounts receivable, net 3,288,576 3,739,430 Contract liabilities (unearned revenue) 4,014,829 3,261,729 |
Company and Summary of Signif23
Company and Summary of Significant Accounting Policies - Going Concern (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||||
Accumulated deficit | $ (49,421,362) | $ (47,277,420) | ||
Net loss | (2,045,120) | $ (2,719,220) | ||
Cash and cash equivalents | $ 2,760,285 | $ 4,355,072 | $ 3,906,797 | $ 5,949,004 |
Company and Summary of Signif24
Company and Summary of Significant Accounting Policies - Accounts Receivable and Concentration of Credit Risk (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | |||||
Allowance for doubtful accounts receivable | $ 189,000 | $ 189,000 | |||
Bad debt expense percentage of revenues (percentage) | 1.00% | 1.00% | 1.00% | ||
Sales Revenue, Net [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, customer | 0 | 1 | |||
Revenue, major customer (percentage) | 15.00% | ||||
Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, customer | 2 | no | |||
Revenue, major customer (percentage) | 10.00% |
Company and Summary of Signif25
Company and Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Significant Accounting Policies [Line Items] | |||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ (846,067) | $ (790,029) | |
Computer Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life (in years) | 3 years | ||
Software Costs [Member] | Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life (in years) | 3 years | ||
Software Costs [Member] | Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life (in years) | 5 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 | ||
Depreciation and Amortization Expense [Member] | |||
Significant Accounting Policies [Line Items] | |||
Depreciation | $ 56,038 | $ 58,888 |
Company and Summary of Signif26
Company and Summary of Significant Accounting Policies - Goodwill (Details) | 3 Months Ended |
Mar. 31, 2018operating_units | |
Accounting Policies [Abstract] | |
Number of Reporting Units | 1 |
Company and Summary of Signif27
Company and Summary of Significant Accounting Policies - Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Other Asset Impairment Charges | $ 0 | $ 0 | $ 0 |
Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life (in years) | 12 months | ||
Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life (in years) | 60 months |
Company and Summary of Signif28
Company and Summary of Significant Accounting Policies - Software Development Costs (Details Textual) | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies [Line Items] | |
Amortization period of software development costs (in years) | 5 years |
Company and Summary of Signif29
Company and Summary of Significant Accounting Policies - Advertising Costs (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Selling and Marketing Expense [Member] | ||
Significant Accounting Policies [Line Items] | ||
Advertising costs | $ 102,000 | $ 82,000 |
Company and Summary of Signif30
Company and Summary of Significant Accounting Policies - Derivative Financial Instruments (Details) - September 2012 Public Offering [Member] - USD ($) | Mar. 31, 2018 | Sep. 30, 2017 |
Significant Accounting Policies [Line Items] | ||
Warrant shares issued | 5,502 | |
Value of expired warrants | $ 0 |
Company and Summary of Signif31
Company and Summary of Significant Accounting Policies - Stock-Based Compensation (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Significant Accounting Policies [Line Items] | ||
Current average expected forfeiture rate (percentage) | 18.12% | 11.82% |
Equity Incentive 2011 Plan [Member] | ||
Significant Accounting Policies [Line Items] | ||
Expected term (in years) | 6 years | 6 years |
Weighted average volatility (percentage) | 60.78% | 43.97% |
Weighted average risk free interest rate (percentage) | 2.46% | 2.09% |
Expected dividends | 0.00% | 0.00% |
Business Acquisitions (Details
Business Acquisitions (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||
Current portion of acquisition costs payable | $ 530,364 | $ 741,155 |
Acquisition costs payable, less current portion | $ 433,312 | $ 609,768 |
Business Acquisitions (Detail33
Business Acquisitions (Details Textual) - USD ($) | Jan. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Business Acquisition [Line Items] | |||
Gain on settlement of acquisitions payable | $ 0 | $ 10,491 | |
Ebyline, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Interest expense, acquisition costs | $ 3,804 | ||
Stock issued for payment of acquisition liability (shares) | 200,542 |
Business Acquisitions (Detail34
Business Acquisitions (Details 2) - USD ($) | Jul. 31, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Business Acquisition [Line Items] | |||||||
Gain on settlement of acquisitions payable | $ 0 | $ 10,491 | |||||
Current portion of acquisition costs payable | 530,364 | $ 741,155 | |||||
Acquisition costs payable, less current portion | 433,312 | 609,768 | |||||
ZenContent [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Increase in estimated fair value of contingent performance payable | 39,000 | ||||||
Total estimated consideration | $ 1,796,547 | ||||||
Current portion of acquisition costs payable | 530,364 | 741,155 | |||||
Acquisition costs payable, less current portion | 433,312 | 609,768 | |||||
Total acquisition costs payable | 963,676 | 1,350,923 | |||||
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 | 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 | 0 | 0 | [1] | ||||
Business combination, consideration transferred, equity interests issued and issuable | 0 | 0 | [1] | ||||
Guaranteed purchase price | [2] | 623,718 | 606,413 | ||||
Contingent performance payments | [3] | 339,958 | 744,510 | ||||
Total estimated consideration | 963,676 | $ 1,350,923 | |||||
General and Administrative Expense [Member] | ZenContent [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Increase in estimated fair value of contingent performance payable | $ 81,334 | $ 42,334 | |||||
[1] | The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000. | ||||||
[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 up to an aggregate of $2,500,000 over the three 12-month periods following the closing. These payments are also subject to a downward adjustment up to 30% if Brianna DeMike, ZenContent’s co-founder, is terminated by IZEA for cause or if she terminates her employment without good reason. As a result, the Company initially reduced its acquisition cost liability by $300,000 to be accrued as compensation expense over the three-year term rather than allocated to the initial purchase price in accordance with ASC 805-10-55-25. Compensation expense added to the guaranteed acquisition costs payable and recorded as general and administrative expense in the Company's consolidated statement of operations was $11,458 and $61,458 for the three months ended March 31, 2018 and 2017, respectively. The initial guaranteed purchase price consideration was discounted to present value using the Company's borrowing rate of prime plus 2% (5.5% on July 31, 2016). Interest expense imputed on the guaranteed acquisition costs payable in the accompanying consolidated statement of operations was $5,847 and $8,022 for the three months ended March 31, 2018 and 2017. | ||||||
[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). Additionally, these payments are subject to downward adjustment of up to 30% if Brianna DeMike is terminated by IZEA for cause or she terminates her employment without good reason. The Company initially determined the fair value of the $2,500,000 contingent payments to be $230,000. The fair value of the contingent performance payments is required to be revalued each quarter and is calculated using a Monte-Carlo simulation to simulate revenue over the future periods. 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 17%) 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, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45%. The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% (6.75%). The Company revalued its estimate of the contingent performance payment as of March 31, 2018 based on actual results and projections and the rates noted above and determined that current fair value of the contingent performance payments was $339,958 compared to $744,510 as of December 31, 2017. The change in the estimated fair value of contingent performance payable resulted in a $404,552 decrease in general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2018. Of this amount, $100,389 was allocated to compensation expense and $304,163 was allocated as a change in the fair value of the contingent performance payments. The Company revalued its estimate of the contingent performance payment as of March 31, 2017 based on actual results and projections at the time and determined that current fair value of the contingent performance payments was $366,334 compared to $324,000 as of December 31, 2016. The change in the estimated fair value of contingent performance payable resulted in a $42,334 increase in general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2017. Of this amount, $81,334 was allocated to compensation expense and a gain of $39,000 was allocated as a change in the fair value of the contingent performance payments. |
Business Acquisitions (Detail35
Business Acquisitions (Details Textual 2) - ZenContent [Member] - USD ($) | Jul. 31, 2016 | Jul. 31, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2017 | Dec. 31, 2016 | ||
Business Acquisition [Line Items] | |||||||||||
Business combination, consideration transferred, payment period (years) | 3 years | ||||||||||
Business combination, consideration transferred | $ 1,796,547 | ||||||||||
Business combination, contingent consideration arrangements, description | three equal annual installment payments totaling $1,000,000 | ||||||||||
Business combination guarantee fee reduction amount | $ 300,000 | ||||||||||
Compensation expense, acquisition guaranteed payments | 11,458 | $ 61,458 | |||||||||
Guarantee purchase price basis spread on variable rate | 2.00% | ||||||||||
Interest expense, acquisition costs | 5,847 | 8,022 | |||||||||
Volatility range of inputs (percentage) | 45.00% | ||||||||||
Business combination, contingent consideration arrangement, target revenue rate of reduction | 30.00% | ||||||||||
Simulation interest rate | 6.80% | ||||||||||
Fair value inputs, discount rate | 5.50% | ||||||||||
Business combinations, separately recognized transactions, content only revenue | $ 2,500,000 | ||||||||||
Business combination, contingent consideration, percentage paid in cash | 33.00% | 33.00% | |||||||||
Fair value assumptions, risk adjusted discount | 17.00% | ||||||||||
Number of simulation trials | 250,000 | ||||||||||
Compensation expense, acquisition contingent payments | (100,389) | ||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | (304,163) | 366,334 | $ 324,000 | ||||||||
Increase in the fair value of the contingent performance payments | (39,000) | ||||||||||
General and Administrative Expense [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | (404,552) | ||||||||||
Increase in the fair value of the contingent performance payments | (81,334) | $ (42,334) | |||||||||
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 | |||||||||
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] | |||||||||||
Business combination, consideration transferred | 4,433,565 | ||||||||||
Payments to acquire businesses, gross | [1] | $ 400,000 | |||||||||
Stock issued for payment of acquisition liability (shares) | 86,207 | ||||||||||
Business combination, consideration transferred, equity interests issued and issuable | $ 600,000 | ||||||||||
Contingent performance payments | [2] | 2,500,000 | |||||||||
Initial Present Value [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business combination, consideration transferred | 1,796,547 | ||||||||||
Payments to acquire businesses, gross | [1] | 400,000 | |||||||||
Business combination, consideration transferred, equity interests issued and issuable | [1] | $ 600,000 | |||||||||
Contingent performance payments | [2] | $ 230,000 | |||||||||
Remaining Present and Fair Value [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business combination, consideration transferred | 963,676 | $ 1,350,923 | |||||||||
Payments to acquire businesses, gross | 0 | 0 | [1] | ||||||||
Business combination, consideration transferred, equity interests issued and issuable | 0 | 0 | [1] | ||||||||
Contingent performance payments | [2] | $ 339,958 | $ 744,510 | ||||||||
[1] | The aggregate consideration paid at closing for the acquisition of ZenContent consisted of a cash payment of $400,000 and the issuance of 86,207 shares of IZEA common stock valued at $600,000. | ||||||||||
[2] | 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). Additionally, these payments are subject to downward adjustment of up to 30% if Brianna DeMike is terminated by IZEA for cause or she terminates her employment without good reason. The Company initially determined the fair value of the $2,500,000 contingent payments to be $230,000. The fair value of the contingent performance payments is required to be revalued each quarter and is calculated using a Monte-Carlo simulation to simulate revenue over the future periods. 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 17%) 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, payout was calculated for each year and present valued to incorporate the credit risk associated with these payments. The Company's fair value conclusion was based on the average payment from 250,000 simulation trials. The volatility used for the simulation was 45%. The interest rate used for the simulation was the Company's current borrowing rate of prime plus 2% (6.75%). The Company revalued its estimate of the contingent performance payment as of March 31, 2018 based on actual results and projections and the rates noted above and determined that current fair value of the contingent performance payments was $339,958 compared to $744,510 as of December 31, 2017. The change in the estimated fair value of contingent performance payable resulted in a $404,552 decrease in general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2018. Of this amount, $100,389 was allocated to compensation expense and $304,163 was allocated as a change in the fair value of the contingent performance payments. The Company revalued its estimate of the contingent performance payment as of March 31, 2017 based on actual results and projections at the time and determined that current fair value of the contingent performance payments was $366,334 compared to $324,000 as of December 31, 2016. The change in the estimated fair value of contingent performance payable resulted in a $42,334 increase in general and administrative expense in the Company's consolidated statement of operations during the three months ended March 31, 2017. Of this amount, $81,334 was allocated to compensation expense and a gain of $39,000 was allocated as a change in the fair value of the contingent performance payments. |
Business Acquisitions (Detail36
Business Acquisitions (Details 3) - ZenContent [Member] | Jul. 31, 2016USD ($) |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | $ 1,796,547 |
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 |
Identifiable intangible assets [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 722,000 |
Goodwill [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred | 1,136,431 |
Current Liabilities [Member] | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred, liabilities incurred | $ (482,233) |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 3,258,469 | $ 3,258,469 |
Finite-lived intangible assets, accumulated amortization | 2,726,355 | 2,590,560 |
Content Provider Network [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 160,000 | 160,000 |
Finite-lived intangible assets, accumulated amortization | $ 138,333 | 122,083 |
Useful life (in years) | 1 year | |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 52,000 | 52,000 |
Finite-lived intangible assets, accumulated amortization | $ 52,000 | 52,000 |
Useful life (in years) | 1 year | |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 530,000 | 530,000 |
Finite-lived intangible assets, accumulated amortization | $ 266,667 | 240,167 |
Useful life (in years) | 3 years | |
Self-service Content Customers [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 210,000 | 210,000 |
Finite-lived intangible assets, accumulated amortization | $ 210,000 | 204,167 |
Useful life (in years) | 5 years | |
Managed Content Customers [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 2,140,000 | 2,140,000 |
Finite-lived intangible assets, accumulated amortization | $ 1,984,444 | 1,905,555 |
Useful life (in years) | 3 years | |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 166,469 | 166,469 |
Finite-lived intangible assets, accumulated amortization | $ 74,911 | $ 66,588 |
Useful life (in years) | 5 years |
Intangible Assets (Details 2)
Intangible Assets (Details 2) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | $ 3,258,469 | $ 3,258,469 |
Accumulated amortization | (2,726,355) | (2,590,560) |
Intangible assets, net | 532,114 | 667,909 |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 166,469 | 166,469 |
Accumulated amortization | (74,911) | (66,588) |
Ebyline, Inc. [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 2,370,000 | 2,370,000 |
ZenContent [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | $ 722,000 | $ 722,000 |
Intangible Assets (Details 3)
Intangible Assets (Details 3) | Mar. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets, 2018 (nine months remaining) | $ 213,638 |
Finite-Lived Intangible Assets, 2019 | 207,349 |
Finite-Lived Intangible Assets, 2020 | 84,293 |
Finite-Lived Intangible Assets, 2021 | 26,834 |
Finite-Lived Intangible Assets, Total | $ 532,114 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Acquired finite-lived intangible assets, weighted average useful life (years) | 3 years | |
Amortization of intangible assets | $ 209,417 | $ 303,718 |
Cost of Acquired Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 26,500 | 26,500 |
Depreciation and Amortization Expense [Member] | Ebyline and ZenContent related identifiable intangible assets[Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 135,795 | $ 249,906 |
Software Development Costs (Det
Software Development Costs (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Research and Development [Abstract] | ||
Software development costs | $ 1,561,351 | |
Less accumulated depreciation and amortization | $ (667,046) | (593,424) |
Software development costs, net | $ 1,013,657 | $ 967,927 |
Software Development Costs (D42
Software Development Costs (Details 1) | Mar. 31, 2018USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Software Amortization Expense, 2019 | $ 213,638 |
Software Amortization Expense, 2020 | 207,349 |
Software Amortization Expense, 2021 | 84,293 |
Software Amortization Expense, 2022 | 26,834 |
Software Amortization Expense, Net | 532,114 |
Software and Software Development Costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Software Amortization Expense, 2018 (nine months remaining) | 220,866 |
Software Amortization Expense, 2019 | 250,809 |
Software Amortization Expense, 2020 | 217,481 |
Software Amortization Expense, 2021 | 176,086 |
Software Amortization Expense, 2022 | 106,761 |
Software Amortization Expense, Thereafter | 41,654 |
Software Amortization Expense, Net | $ 1,013,657 |
Software Development Costs (D43
Software Development Costs (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Capitalized software development costs | $ 119,352 | $ 82,355 | |
Software development costs | $ 1,561,351 | ||
Depreciation and Amortization Expense [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense on software development costs | 73,622 | $ 53,812 | |
Software Development Costs [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Software development costs | $ 1,680,703 | ||
Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life (in years) | 60 months | ||
Maximum [Member] | Software Development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful life (in years) | 5 years |
Commitments and Contingencies44
Commitments and Contingencies (Details Textual) - USD ($) | Apr. 13, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Other Commitments [Line Items] | ||||
Line of credit | $ 731,179 | $ 500,550 | ||
Accounts receivable, net | 3,288,576 | 3,647,025 | ||
Secured Line of Credit Facility [Member] | Credit Agreement [Member] | ||||
Other Commitments [Line Items] | ||||
Eligible securitization percentage of accounts receivable (percentage) | 80.00% | |||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | |||
Debt instrument, annual facility fee | $ 20,000 | |||
Line of credit facility, commitment fee percentage (percentage) | 0.40% | |||
Line of credit facility, annual due diligence fee | $ 1,000 | |||
Debt instrument, description of variable rate basis | prime plus 2% per annum | |||
Debt instrument, description of default rate of interest | prime plus 7% | |||
Line of credit | 731,179 | 500,550 | ||
Accounts receivable, net | $ 3,647,025 | |||
Line of credit facility, current borrowing capacity | $ 2,045,918 | |||
Debt issuance cost amortization period (years) | 1 year | |||
Amortization of debt issuance costs | $ 5,250 | $ 5,250 | ||
Debt issuance costs, net | $ 1,750 | |||
Capitalized loan costs amortization period (month) | 4 months |
Stockholders' Equity - Authoriz
Stockholders' Equity - Authorized Shares (Details Textual) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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 | 10,000,000 |
Series A Preferred stock, par value (per share) | $ 0.0001 | $ 0.0001 |
Stockholders' Equity - Stock Is
Stockholders' Equity - Stock Issued for Acquisitions (Details) - USD ($) | Jan. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Gain on settlement of acquisitions payable | $ 0 | $ 10,491 | |
Average price of stock, number of days | 30 days | ||
Ebyline, Inc. [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock issued for payment of acquisition liability (shares) | 200,542 | ||
Business combination, consideration transferred, liabilities incurred, final installment payment | $ 938,532 | ||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | ||
Interest expense, acquisition costs | $ 3,804 |
Stockholders' Equity - Stock 47
Stockholders' Equity - Stock issued for Services (Details) | Jan. 11, 2018USD ($)employeeshares | Nov. 09, 2017shares | Aug. 14, 2017USD ($)shares | Feb. 12, 2017USD ($)shares | Mar. 31, 2018USD ($)shares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of independent directors | 5 | 5 | |||||
Stock issued for payment of services | $ 125,000 | ||||||
number of employees issued restricted common stock | employee | 17 | ||||||
Derivative, Loss on Derivative | (125,595) | $ (618) | |||||
Fair value of common stock issued for future services (dollars) | 299,596 | 0 | |||||
Restricted Stock [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) | 28,671 | 60,632 | |||||
Allocated Share-based Compensation Expense | $ 28,069 | $ 0 | |||||
Five Independent Directors [Member] | Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of services (shares) | shares | 30,265 | 41,770 | |||||
Stock issued for payment of services | $ 125,000 | $ 125,000 | |||||
Contractor [Member] | Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of services (shares) | shares | 7,109 | ||||||
Stock issued for payment of services | $ 30,000 | ||||||
Chief Executive Officer [Member] | Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of services (shares) | shares | 7,543 | 2,812 | |||||
Stock issued for payment of services | $ 36,411 | ||||||
Stock issued during period, vesting period | 48 months | ||||||
Chief Operating Officer [Member] | Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of services (shares) | shares | 5,000 | 1,257 | 662 | ||||
Stock issued for payment of services | $ 6,446 | ||||||
Stock issued during period, vesting period | 48 months | ||||||
Employees [Member] | Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of services (shares) | shares | 55,000 | ||||||
Stock issued for payment of services | $ 303,600 | ||||||
Vesting period of stock issued to employees | 2 years | ||||||
Chief Financial Officer [Member] | Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued for payment of services (shares) | shares | 10,000 | ||||||
Prepaid Expenses [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value of common stock issued for future services (dollars) | $ 301,335 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Non-Vested Restricted Stock (Details) - Restricted Stock [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
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 | 11,799 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 85,265 | 61,153 |
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period | (15,207) | (49,354) |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 0 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 81,857 | 11,799 |
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 | $ 4.52 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | 5.03 | 3.24 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | 3.73 | 3.72 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | 0 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 3.66 | $ 4.52 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | 1 year 9 months | 3 years 9 months |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details Textual) - 2014 Employee Stock Purchase Plan [Member] | Apr. 16, 2014USD ($)shares | Mar. 31, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, capital shares reserved for future issuance (shares) | 75,000 | 33,594 |
Minimum length of time an employee employed by the company | 90 days | |
Minimum hour requirement for employees participation in the ESSP (hours) | 20 | |
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% |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details Textual) - USD ($) | Aug. 22, 2011 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 21, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | ||||
Fair value of common stock | $ 3.66 | |||||
Percentage of individual ownership of common stock (percentage) | 10.00% | |||||
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | $ 89,540 | |||||
Share-based compensation arrangement by share-based payment award, options, exercisable, intrinsic value | $ 13,393 | |||||
Equity Incentive 2011 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | ||||
Common stock, capital shares reserved for future issuance (shares) | 304,835 | 500,000 | ||||
Weighted average exercise price, exercisable | $ 6.24 | |||||
Weighted average remaining years to vest | 2 years 8 months | 2 years 8 months | 2 years 7 months | |||
Equity Incentive B 2011 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, capital shares reserved for future issuance (shares) | 4,375 | 1,875 | ||||
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% | |||||
Stock option vesting period from grant date | 10 years | |||||
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) | $ 146,281 | $ 158,976 | ||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | 599,659 | |||||
Investor Relations Services [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, capital shares reserved for future issuance (shares) | 1,500,000 | |||||
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] | ||||||
Stock option vesting period from grant date | 1 year | |||||
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) | 16,298 | 14,028 | ||||
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) | 126,277 | $ 144,948 | ||||
Cost of revenue [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) | $ 3,706 |
Stockholders' Equity - Schedu51
Stockholders' Equity - Schedule of Options Outstanding (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | |||
Equity Incentive 2011 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Common shares, outstanding beginning of period | 1,049,503 | 959,864 | 959,864 | ||
Common shares, granted | 14,917 | 141,246 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | |||
Common shares, forfeited | (22,494) | (51,607) | |||
Common shares, outstanding end of period | 1,041,926 | 1,049,503 | 959,864 | ||
Share-based compensation arrangement by share-based payment award, options, exercisable, number | 764,181 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||||
Weighted average exercise price, beginning of period | $ 5.97 | $ 8.11 | $ 8.11 | ||
Weighted average exercise price, granted | 4.33 | 3.49 | |||
Weighted average exercise price, exercised | 0 | 0 | |||
Weighted average exercise price, forfeited | 6.17 | 38.86 | |||
Weighted average exercise price, end of period | $ 5.97 | $ 8.11 | $ 8.11 | $ 8.11 | $ 5.95 |
Weighted average exercise price, exercisable | $ 6.24 | ||||
Weighted average remaining life (years), outstanding | 5 years 9 months | 6 years | 6 years 5 months | ||
Weighted average remaining life (years), exercisable | 4 years 9 months |
Stockholders' Equity - Schedu52
Stockholders' Equity - Schedule of Nonvested Stock Option (Details) - Equity Incentive 2011 Plan [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |||
Common shares, nonvested beginning of period | 323,077 | 414,306 | |
Common shares, granted | 14,917 | 141,246 | |
Common shares, vested | (41,585) | (205,469) | |
Common shares, forfeited | (18,664) | (27,006) | |
Common shares, nonvested end of period | 277,745 | 323,077 | 414,306 |
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 | $ 2.64 | $ 3.60 | |
Weighted average grant date fair value, granted | 2.48 | 1.76 | |
Weighted average grant date fair value, vested | 2.96 | 3.36 | |
Weighted average grant date fair value, forfeited | 3.04 | 3.12 | |
Weighted average grant date fair value, nonvested end of period | $ 2.56 | $ 2.64 | $ 3.60 |
Weighted average remaining years to vest | 2 years 8 months | 2 years 8 months | 2 years 7 months |
Earnings (Loss) Per Common Sh53
Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (2,045,120) | $ (2,719,220) |
Weighted average common shares outstanding – basic and diluted | 5,802,099 | 5,598,200 |
Basic and diluted loss per common share | $ (0.35) | $ (0.49) |
Earnings (Loss) Per Common Sh54
Earnings (Loss) Per Common Share (Details 1) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 1,561,214 | 1,521,288 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 1,045,264 | 963,867 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 515,950 | 557,421 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 0 |
Revenue - Initial Adoption Chan
Revenue - Initial Adoption Change (Details) - USD ($) | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Cash and cash equivalents | $ 2,760,285 | $ 3,906,797 | $ 4,355,072 | $ 5,949,004 | |
Accounts receivable, net | 3,288,576 | 3,647,025 | |||
Prepaid expenses | 672,273 | 389,104 | |||
Other current assets | 39,286 | 9,140 | |||
Total current assets | 6,760,420 | 7,952,066 | |||
Property and equipment, net | 369,345 | 286,043 | |||
Goodwill | 3,604,720 | 3,604,720 | |||
Intangible assets, net | 532,114 | 667,909 | |||
Software development costs, net | 1,013,657 | 967,927 | |||
Security deposits | 148,330 | 148,638 | |||
Total assets | 12,428,586 | 13,627,303 | |||
Accounts payable | 1,260,531 | 1,756,841 | |||
Accrued expenses | 1,711,105 | 1,592,356 | |||
Unearned revenue | 0 | 3,070,502 | |||
Line of credit | 731,179 | 500,550 | |||
Current portion of deferred rent | 47,072 | 45,127 | |||
Current portion of acquisition costs payable | 530,364 | 741,155 | |||
Total current liabilities | 8,295,080 | 7,706,531 | |||
Deferred rent, less current portion | 4,355 | 17,419 | |||
Acquisition costs payable, less current portion | 433,312 | 609,768 | |||
Liabilities | 8,732,747 | 8,333,718 | |||
Common stock, $.0001 par value; 200,000,000 shares authorized; 5,819,246 and 5,733,981, respectively, issued and outstanding | 582 | 573 | |||
Additional paid-in capital | 53,116,619 | 52,570,432 | |||
Accumulated deficit | (49,421,362) | (47,277,420) | |||
Total stockholders’ equity | 3,695,839 | 5,293,585 | |||
Total liabilities and stockholders’ equity | 12,428,586 | 13,627,303 | |||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Cash and cash equivalents | $ 3,906,797 | ||||
Accounts receivable, net | 3,739,430 | ||||
Prepaid expenses | 389,104 | ||||
Other current assets | 9,140 | ||||
Total current assets | 8,044,471 | ||||
Property and equipment, net | 286,043 | ||||
Goodwill | 3,604,720 | ||||
Intangible assets, net | 667,909 | ||||
Software development costs, net | 967,927 | ||||
Security deposits | 148,638 | ||||
Total assets | 13,719,708 | ||||
Accounts payable | 1,756,841 | ||||
Accrued expenses | 1,592,356 | ||||
Unearned revenue | 3,810,781 | 3,261,729 | |||
Line of credit | 500,550 | ||||
Current portion of deferred rent | 45,127 | ||||
Current portion of acquisition costs payable | 741,155 | ||||
Total current liabilities | 7,897,758 | ||||
Deferred rent, less current portion | 17,419 | ||||
Acquisition costs payable, less current portion | 609,768 | ||||
Liabilities | 8,524,945 | ||||
Common stock, $.0001 par value; 200,000,000 shares authorized; 5,819,246 and 5,733,981, respectively, issued and outstanding | 573 | ||||
Additional paid-in capital | 52,570,432 | ||||
Accumulated deficit | (49,124,392) | (47,376,242) | |||
Total stockholders’ equity | 5,194,763 | ||||
Total liabilities and stockholders’ equity | 13,719,708 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable, net | 92,405 | ||||
Total current assets | 92,405 | ||||
Total assets | 92,405 | ||||
Unearned revenue | 3,810,781 | 191,227 | |||
Total current liabilities | 191,227 | ||||
Liabilities | 191,227 | ||||
Accumulated deficit | $ 296,970 | (98,822) | $ 98,822 | ||
Total stockholders’ equity | (98,822) | ||||
Total liabilities and stockholders’ equity | $ 92,405 |
Revenue - Dual Reporting (Detai
Revenue - Dual Reporting (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Accounts receivable, net | $ 3,288,576 | $ 3,739,430 | ||
Contract liabilities | 4,014,829 | 3,261,729 | ||
Unearned revenue | 0 | $ 3,070,502 | ||
Accumulated deficit | (49,421,362) | (47,277,420) | ||
Revenue | 3,896,441 | $ 4,834,505 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Accounts receivable, net | 92,922 | |||
Contract liabilities | 4,014,829 | |||
Unearned revenue | 3,810,781 | 191,227 | ||
Accumulated deficit | 296,970 | (98,822) | $ 98,822 | |
Revenue | 198,148 | |||
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Accounts receivable, net | 3,381,498 | |||
Contract liabilities | 0 | |||
Unearned revenue | 3,810,781 | 3,261,729 | ||
Accumulated deficit | (49,124,392) | $ (47,376,242) | ||
Revenue | 4,094,589 | |||
Bridge Bank Credit Agreement [Member] | Secured Line of Credit Facility [Member] | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Accounts receivable, net | $ 3,288,576 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 3,896,441 |
Managed Services [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue from Contract with Customer, Excluding Assessed Tax | 3,796,665 |
Content Workflow, net [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue from Contract with Customer, Excluding Assessed Tax | 63,548 |
Service Fees and Other [Member] | |
Disaggregation of Revenue [Line Items] | |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 36,228 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) | Jan. 02, 2018 | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | ||||
Contract with Customer, Liability, Revenue Recognized | $ 1,723,271 | |||
Accounts receivable, net | $ 3,288,576 | $ 3,739,430 | ||
Contract liabilities | $ 0 | |||
Contract liabilities | $ 4,014,829 | $ 3,261,729 |