IZEA Announces Record Q2 Bookings, up 40% Year Over Year

ORLANDO, FL--(Marketwired - Aug 13, 2014) - IZEA, Inc. (OTCQB: IZEA), the leader in Social Sponsorship, today announced record results for its second quarter ending June 30, 2014.

Second Quarter 2014 Financial Highlights:

• Bookings reached a record $2.57 million in Q2 2014, up from $1.84 million in Q2 2013 -- the highest amount in the history of the company.

• Revenue increased 14.8% to a record $1.97 million during Q2 2014 compared to Q2 2013.

• Gross profit margin for the quarter was 67%, up from 55% during the same period in 2013.

• Gross profit for the quarter grew 39% to $1.31 million, up from $0.94 in Q2 2013.

• New opportunity pipeline, a representation of new client proposals generated within the quarter, grew to $12.8 million, up from $8.9 million in Q2 2013, an increase of 44%.

Second Quarter Operational Highlights:

• 68 full time team members; added 8 net new staff in client services and 2 in engineering in Q2.

• 66,000 registered users in IZEAx -- up from 50,000 in Q1 2014, an increase of 32%.

• IZEAx aggregate network reach grew from 392 million to 530 million during the quarter, an increase of 35%.

• Four new IZEAx partners, including one of the top 10 global media companies and Fullscreen.

"We had record bookings and gross profit in Q2, largely fueled by the tenured members of our sales team generating more repeat business and receiving larger campaign budgets from our managed clients," said Ted Murphy, IZEA's Chairman and Chief Executive Officer. "I am enthusiastic about our prospects for the second half of this year and beyond. We are actively onboarding and training our new IZEAx partners, growing our internal sales and development team and transitioning our business operations to the IZEAx technology platform."

During the quarter, the Company initiated campaigns on behalf of brands such as Bacardi, Unilever, Walmart, ConAgra Foods, Bloomin' Brands, adidas, Clorox, Hollister, Kimberly Clark and Scott's, as well as the world's leading agencies including Starcom MediaVest, Ketchum, MEC, Crispin Porter + Bogusky and Horizon Media. IZEA also gained preferred vendor status with one of the world's top-five consumer package goods companies along with preferred partner status at one of the nation's top media buying agencies.

"IZEA is growing our relationships with the world's leading brands and the agencies that support them," said Murphy. "We are pleased to see Social Sponsorship adoption and awareness increasing, with IZEA at the very center of the industry we created in 2006."

Second Quarter 2014 Results
Revenue for the second quarter of 2014 was $1,969,235 compared to $1,715,273 for the first quarter of 2013, an increase of 14.8%. Gross profit for the quarter was $1,312,579, up from $944,372 during the same period in 2013, an increase of 39.0%. Operating expenses for the quarter ended June 30, 2014 were $2,519,797, compared to $1,479,659 in the same period in 2013, due to investments in sales, marketing and engineering.

Net income for the quarter was $2,029,135 compared to a net loss of $(893,470) during the same period last year, primarily due to a $3,239,610 gain on the change in the fair value of derivatives. Operating EBITDA was $(932,344) for the quarter compared to $(321,344) during the same period of last year, primarily due to investments in marketing and new hires.

Basic and diluted income per common share were $.04 and $.03 for the first quarter of 2014, respectively, compared to basic and diluted loss per common share of $(.12) for the second quarter of 2013.

Investor Conference Call
The Company will host a conference call today at 4:30pm ET, during which IZEA management will discuss the financial results and be available to answer any questions from the investment community.

Toll-Free (Domestic): (888) 364-3109
International (Toll): (719) 457-1512

Webcast Link: http://public.viavid.com/index.php?id=110559

Electronic replay of the conference call will be available through August 20, 2014 by dialing (877) 870-5176 and entering PIN number 9783185. IZEA will also post a downloadable file onto the Investor Relations area of http://corp.izea.com.

About IZEA
Founded in 2006, IZEA is the pioneer of Social Sponsorship. The company builds cloud-based marketplaces that connect brands with creators who blog, tweet, pin, and post on their behalf. Brands receive influential consumer content and engaging shareable stories that drive awareness. Creators are compensated for their participation and partnership. For more information about IZEA, visit http://corp.izea.com.

Financial Methodology & Related Disclosures
"Operating EBITDA" is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. EBITDA is commonly defined as "earnings before interest, taxes, depreciation and amortization." We believe that Operating EBITDA provides useful information to investors as it excludes transactions not related to the core cash operating business activities including non-cash transactions.

We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations. All companies do not calculate EBITDA in the same manner, and Operating EBITDA as presented by IZEA may not be comparable to EBITDA presented by other companies. IZEA defines Operating EBITDA as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock related compensation, gain or loss on asset disposals or impairment and all other income and expense items such as loss on exchanges and changes in fair value of derivatives, if applicable.

Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Statements in this press release that are forward-looking include the company's estimated levels of revenues, gross profit margin and net operating loss for the 2014 fiscal year. These forward-looking statements are based largely on IZEA's expectations and are subject to a number of risks and uncertainties, certain of which are beyond IZEA's control. Actual results could differ materially from these forward-looking statements as a result of, among other factors, competitive conditions in the social sponsorship segment in which IZEA operates, failure to popularize one or more of the marketplace platforms of IZEA, inability to obtain additional capital, and changing economic conditions that are less favorable than expected. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this respect will in fact occur. Please read the full statement and disclosures here: http://corp.izea.com/safe-harbor-statement.

IZEA, Inc.
Consolidated Balance Sheets
				June 30, 2014				December 31, 2013
				(Unaudited)
Assets
Current:
	Cash and cash equivalents			$	9,753,049			$	530,052
	Accounts receivable				1,342,510				1,659,802
	Prepaid expenses				197,067				109,960
	Other current assets				70,340				83,486
		Total current assets			11,362,966				2,383,300
Property and equipment, net of accumulated depreciation of $245,850 and $205,070					243,346				156,482
Software development costs, net of accumulated amortization of $47,406 and $0					521,469				362,346
Security deposits					52,391				46,574
		Total assets		$	12,180,172			$	2,948,702

Liabilities and Stockholders' Deficit
Current liabilities:
	Accounts payable				$	719,128			$	817,057
	Accrued expenses					457,506				365,454
	Unearned revenue					1,102,015				1,292,228
	Current portion of capital lease obligations					57,114				43,852
		Total current liabilities				2,335,763				2,518,591
Capital lease obligations, less current portion						31,798				34,013
Deferred rent						71,587				14,179
Warrant liability						10,839,950				1,832,945
		Total liabilities				13,279,098				4,399,728
Stockholders' deficit:
	Series A convertible preferred stock; $.0001 par value; 240 shares authorized; no shares issued and outstanding					--				--
	Common stock, $.0001 par value; 200,000,000 shares authorized; 57,046,381 and 22,560,653 issued and outstanding					5,705				2,256
	Additional paid-in capital					23,560,959				24,672,132
	Accumulated deficit					(24,665,590	)			(26,125,414	)
		Total stockholders' deficit				(1,098,926	)			(1,451,026	)
			Total liabilities and stockholders' deficit		$	12,180,172			$	2,948,702

IZEA, Inc.
Consolidated Statements of Operations
(Unaudited)
				Three Months Ended June 30,								Six Months Ended June 30,
				2014				2013				2014				2013
Revenue				$	1,969,235			$	1,715,273			$	3,926,275			$	3,100,548
Cost of sales					656,656				770,901				1,306,189				1,347,003
		Gross profit			1,312,579				944,372				2,620,086				1,753,545
Operating expenses:
	General and administrative				2,176,514				1,364,569				4,020,654				2,939,161
	Sales and marketing				343,283				115,090				504,150				209,259
		Total operating expenses			2,519,797				1,479,659				4,524,804				3,148,420
Loss from operations					(1,207,218	)			(535,287	)			(1,904,718	)			(1,394,875	)
Other income (expense):
	Interest expense				(6,051	)			(22,530	)			(15,068	)			(37,996	)
	Loss on exchange of warrants and debt				--				--				--				(732	)
	Change in fair value of derivatives and notes payable carried at fair value, net				3,239,610				(335,653	)			3,375,211				(343,777	)
	Other income (expense), net				2,794				--				4,399				80
		Total other income (expense)			3,236,353				(358,183	)			3,364,542				(382,425	)
Net income (loss)				$	2,029,135			$	(893,470	)		$	1,459,824			$	(1,777,300	)
Weighted average common shares outstanding - basic					57,045,282				7,226,745				47,145,510				7,020,347
Basic income (loss) per common share				$	0.04			$	(0.12	)		$	0.03			$	(0.25	)
Weighted average common shares outstanding - diluted					72,962,524				7,226,745				62,035,915				7,020,347
Diluted income (loss) per common share				$	0.03			$	(0.12	)		$	0.02			$	(0.25	)

IZEA, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
					Six Months Ended June 30,
					2014				2013
Cash flows from operating activities:
	Net income (loss)				$	1,459,824			$	(1,777,300	)
	Adjustments to reconcile net income (loss) to net cash used for operating activities:
		Depreciation				40,780				24,928
		Amortization of software development costs and other assets				54,623				21,310
		Stock-based compensation				246,750				168,374
		Stock issued or to be issued for payment of services				129,110				114,965
		Loss on exchange of warrants and debt				--				732
		Change in fair value of derivatives and notes payable carried at fair value, net				(3,375,211	)			343,777
		Cash provided by (used for):
			Accounts receivable			317,292				(543,485	)
			Prepaid expenses and other current assets			(84,678	)			(147,326	)
			Accounts payable			(97,929	)			137,983
			Accrued expenses			54,552				260,247
			Unearned revenue			(190,213	)			45,114
			Deferred rent			57,408				--
Net cash used for operating activities						(1,387,692	)			(1,350,681	)
Cash flows from investing activities:
	Purchase of equipment					(86,305	)			(9,767	)
	Increase in software development costs					(206,529	)			(98,847	)
	Security deposits					(5,817	)			3,870
Net cash used for investing activities						(298,651	)			(104,744	)
Cash flows from financing activities:
	Proceeds from issuance of notes payable, net					--				1,089,798
	Proceeds from issuance of common stock and warrants, net					10,945,632				--
	Payments on notes payable and capital leases					(36,292	)			(202,277	)
Net cash provided by financing activities						10,909,340				887,521
Net increase (decrease) in cash and cash equivalents						9,222,997				(567,904	)
Cash and cash equivalents, beginning of year						530,052				657,946
Cash and cash equivalents, end of period					$	9,753,049			$	90,042
Supplemental cash flow information:
	Cash paid during period for interest				$	7,851			$	7,286
Non-cash financing and investing activities:
	Fair value of common stock issued for future services				$	--			$	47,220
	Fair value of warrants issued				$	12,382,216			$	95,209
	Conversion of notes payable into common stock				$	--			$	124,611
	Acquisition of assets through capital lease				$	41,339			$	--

IZEA, Inc.
Reconciliation of GAAP to Non-GAAP Operating EBITDA
(Unaudited)
			Three Months Ended June 30,								Six Months Ended June 30,
			2014				2013				2014				2013
Net income (loss)			$	2,029,135			$	(893,470	)		$	1,459,824			$	(1,777,300	)
Non-cash stock-based compensation				131,412				128,914				246,750				168,374
Non-cash stock issued for payment of services				70,750				68,180				129,110				114,965
Change in the fair value of derivatives				(3,239,610	)			335,653				(3,375,211	)			343,777
Loss on exchange of warrants				--				--				--				732
Gain on disposal of equipment				(401	)			--				(401	)			--
Interest expense				6,051				22,530				15,068				37,996
Depreciation				22,913				12,349				40,780				24,928
Amortization of software development costs and other assets				47,406				4,500				47,406				9,000
	Operating EBITDA			(932,344	)			(321,344	)			(1,436,674	)			(1,077,528	)