IZEA Worldwide, Inc.

Previous wording

On September 6, 2024, the Board appointed Patrick J. Venetucci as the new Chief Executive Officer following the resignation of Edward H. (Ted) Murphy. Under the terms of their respective separation agreements, both Mr. Murphy and Ryan S. Schram, President, Chief Operating Officer, and Director, resigned their Director positions as of September 6, 2024, and their executive positions effective September 15, 2024. Neither resignation stemmed from any disagreement with the Company's management or Board. Concurrently, the Company entered into a cooperation agreement (the “Cooperation Agreement”) with GP Cash Management, Ltd., GP Investments, Ltd., Rodrigo Boscolo, and Antonio Bonchristiano (collectively, the "GP Parties"). As part of this agreement, the Company’s Board of Directors (the “Board”) appointed Mr. Bonchristiano and Mr. Boscolo as directors, filling the vacancies created by the departures of Ted Murphy and Ryan Schram. Mr. Bonchristiano serves on the Compensation Committee and Nominations and Corporate Governance Committee. Messers Bonchristiano and Boscolo serve on the newly created Strategy and Capital Allocation Committee.

Current wording

Concurrently, the Company entered into a cooperation agreement (the “Cooperation Agreement”) with GP Cash Management, Ltd., GP Investments, Ltd., Rodrigo Boscolo, and Antonio Bonchristiano (collectively, the "GP Parties"). As part of this agreement, the Company’s Board of Directors (the “Board”) appointed Mr. Bonchristiano and Mr. Boscolo as directors, filling the vacancies created by the departures of Ted Murphy and Ryan Schram. Mr. Bonchristiano serves on the Compensation Committee and the Nominations and Corporate Governance Committee. Messers Bonchristiano and Boscolo serve on the newly created Strategy and Capital Allocation Committee.

Previous wording

In December 2024, the Company implemented elements of a strategic shift intended to accelerate its path to profitability, including the divestiture of unprofitable investments and targeted workforce reductions, primarily in product development and marketing, and aligning its sales and customer delivery teams into industry verticals to target growth opportunities and improve account management and customer retention. We also completed the divestiture of Hoozu Holdings on December 18, 2024 and realigned our sales and client development teams to serve all markets, including international, from our North American hub. The Company believes that related cost reductions and efficiency improvements will impact short and long-term profitability measures.

Current wording

During the fourth quarter of 2024, the Company began executing a strategic realignment intended to accelerate its path to profitability and improve operational focus. These actions included the divestiture of non-core and unprofitable investments, targeted workforce reductions, primarily in product development and marketing functions, and organizational changes to better align sales and customer delivery teams into industry verticals to target growth opportunities and improve account management and customer retention. As a part of the realignment, the Company completed the divestiture of Hoozu Holdings on December 18, 2024 and centralized its sales and client development operations to serve domestic and international markets primarily from its North American hub.

Previous wording

We generate revenue primarily from our managed services, when a marketer (typically a brand, agency, or partner) pays us to provide custom content, influencer marketing, amplification, or other campaign management services (“Managed Services”). Additionally, we generate revenue from subscription fees charged to access our software platforms, license and transaction fees from self-service customers, and fees from such as inactivity fees, early cash-out fees, and other miscellaneous fees charged to users of our platforms (collectively, “SaaS Services Revenue”).

Current wording

We generate revenue primarily from our Managed Services, when a marketer (typically a brand, agency, or partner) pays us to provide custom content, influencer marketing, amplification, or other campaign management services. We also generate a limited amount of SaaS Services Revenue, which is revenue from access to certain features of our proprietary platforms, as well as related transaction and miscellaneous fees.

Previous wording

Our cost of revenue consists of direct costs paid to our third-party creators who provide the custom content, influencer marketing, or amplification services for our Managed Service customers, where we report revenue on a gross basis. It also includes internal costs for our campaign fulfillment and SaaS support departments. These costs include salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and miscellaneous departmental costs related to the personnel responsible for supporting our customers and ultimately fulfilling our obligations under our contracts with customers.

Current wording

Our cost of revenue consists primarily of direct costs paid to our third-party creators who provide the custom content, influencer marketing, or amplification services for our Managed Service customers, for which revenue is reported on a gross basis. Cost of revenue also includes internal costs for our campaign fulfillment and customer support, including salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and personnel-related costs incurred to support service delivery and fulfill our customer contractual obligations.

Previous wording

Our sales and marketing expenses consist primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, travel, and miscellaneous departmental costs for our marketing, sales, and sales support personnel. They also include marketing expenses such as brand marketing, public relations events, trade shows, marketing materials, and travel expenses.

Current wording

Our sales and marketing expenses consist primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, travel, and other personnel-related costs for our sales, account management, and marketing teams. These expenses also include costs for brand marketing activities, public relations, industry events, marketing materials, and other demand-generation efforts to support customer acquisition and account expansion.

Previous wording

Our general and administrative (“G&A”) expense consists primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and miscellaneous departmental costs related to our executive, finance, legal, human resources, and other administrative personnel. It also includes travel, public company, investor relations expenses, accounting, legal professional services fees, leasehold facilities, and other corporate-related expenses.

Current wording

Our general and administrative (“G&A”) expenses consist primarily of salaries, bonuses, commissions, stock-based compensation, employee benefits, and other personnel-related expenses for our executive, finance, legal, human resources, and other administrative functions. G&A also includes travel, public company and investor relations costs, accounting and legal professional services fees, and other corporate-related expenses.

Previous wording

Within G&A, we incorporate technology and development costs, consisting primarily of our payroll costs for our internal engineers and contractors responsible for developing, maintaining, and improving our technology, as well as hosting and software subscription costs. These costs are expensed as incurred, except to the extent that they are associated with internal-use software that qualifies for capitalization, which is then recorded as software development costs in the consolidated balance sheet. When major software components are developed, we capitalize these as intangible assets. Depreciation and amortization related to these costs are separately stated under depreciation and amortization in our consolidated statements of operations and comprehensive loss.

Current wording

G&A includes technology and development costs associated with maintaining and enhancing our proprietary technology platform. These costs consist primarily of payroll costs for internal engineers and contractors, as well as hosting and software subscription expenses. Technology and development costs are expensed as incurred, except for qualifying internal-use software development costs, which are capitalized and recorded as software development costs on the consolidated balance sheet. Depreciation and amortization related to these capitalized costs are reflected separately in the consolidated statements of operations and comprehensive loss.

Previous wording

G&A expenses include current period gains and losses on our acquisition costs payable and gains and losses from the sale of fixed assets. Impairments on fixed assets, intangible assets, and goodwill, are included as part of G&A expenses presented separately in our consolidated statements of operations and comprehensive loss when deemed material.

Current wording

G&A expenses include current-period gains and losses on our acquisition costs payable and on the sale of fixed assets. Impairments on fixed assets, intangible assets, and goodwill, are included as part of G&A expenses presented separately in our consolidated statements of operations and comprehensive loss when deemed material.

Previous wording

Results of Operations for the Twelve Months Ended December 31, 2024 and 2023

Current wording

Results of Operations for the Years Ended December 31, 2025 and 2024

Previous wording

In September 2024, the Company identified a triggering event related to changes in executive management and Board-level changes, including the Cooperation Agreement. As a result, the Company performed an interim goodwill impairment assessment using both the income approach (discounted cash flow method) and the market approach (guideline transaction method). The assessment determined that the carrying value of the Company’s IZEA reporting segment as of September 30, 2024, exceeded its fair value. Consequently, the Company recorded a $4.0 million impairment of goodwill related to prior IZEA acquisitions in September 30, 2024. Additionally, the Company conducted a qualitative assessment of the carrying value of its Hoozu reporting unit, which did not indicate impairment as of September 30, 2024.

Current wording

In September 2024, the Company identified a triggering event related to changes in executive management and Board-level changes, including the Cooperation Agreement. As a result, the Company performed an interim goodwill impairment assessment using both the income approach (discounted cash flow method) and the market approach (guideline transaction method). The assessment determined that the carrying value of the Company’s IZEA reporting unit as of September 30, 2024, exceeded its fair value. Consequently, the Company recorded a $4.0 million impairment of goodwill related to prior IZEA acquisitions in September 30, 2024. Additionally, the Company conducted a qualitative assessment of the carrying value of its Hoozu reporting unit, which did not indicate impairment as of September 30, 2024.

Previous wording

Depreciation and amortization expenses for the twelve months ended December 31, 2024, increased by $0.4 million, or approximately 62.5%, compared to the same period in 2023.

Current wording

Depreciation and amortization expenses for the year ended December 31, 2025, decreased by $0.5 million, or approximately 45.1%, compared to the same period in 2024.

Previous wording

Depreciation expense on property and equipment was approximately $0.1 million for the twelve months ended December 31, 2024, and $0.1 million for 2023, respectively.

Current wording

Depreciation expense on property and equipment was approximately $0.1 million for the year ended December 31, 2025, and $0.1 million for 2024, respectively.

Previous wording

Amortization expenses were approximately $1.1 million and $0.6 million for the twelve months ended December 31, 2024 and 2023, respectively. Amortization expense related to internal-use software development costs was $0.8 million for 2024, up from $0.6 million in 2023, primarily due to $0.2 million of accelerated amortization for certain software assets no longer in use. This adjustment reflects the Company’s ongoing review of its software portfolio to align with current operational needs and strategic objectives, ensuring that the carrying value of these assets accurately reflects their utility and contribution to the business.

Current wording

Amortization expenses were approximately $0.5 million and $1.1 million for the year ended December 31, 2025 and 2024, respectively. Amortization expense related to internal-use software development costs was $0.5 million for 2025, down from $0.8 million in 2024, primarily due to accelerated amortization for certain software assets no longer in use in 2024. This adjustment reflects the Company’s ongoing review of its software portfolio to align with current operational needs and strategic objectives, ensuring that the carrying value of these assets accurately reflects their utility and contribution to the business.

Previous wording

Loss from divestiture of assets totaled $2.3 million during the twelve months ended December 31, 2024. This loss resulted from the sale of the Hoozu business unit, including the derecognition of goodwill, intangible assets, and other associated assets. The divestiture was part of the Company’s strategic initiative to streamline its portfolio and focus resources on core growth areas.

Current wording

Loss from divestiture of assets totaled $2.3 million during the year ended December 31, 2024. This loss resulted from the sale of the Hoozu business unit, including the derecognition of goodwill, intangible assets, and other associated assets. The divestiture was part of the Company’s strategic initiative to streamline its portfolio and focus resources on core growth areas.

Previous wording

We review the information provided by our key financial metrics, Managed Services Bookings, and gross billings to assess the progress of our business and make decisions on where to allocate our resources. As our business evolves, we may change the key financial metrics in future periods.

Current wording

We review the information provided by our key financial metric, Managed Services Bookings, to assess the progress of our business and make decisions on where to allocate our resources including sales capacity, marketing investments, and product development. As our business evolves, we may change the key financial metrics in future periods.

Previous wording

Managed Services Bookings is a measure of all sales orders received during a time period, less any cancellations received or refunds given during the same period. Sales order contracts vary in complexity with each customer and range from custom content delivery to integrated marketing services; our contracts generally run from several months for smaller contracts up to twelve months for larger contracts. We recognize revenue from our Managed Services contracts on a percentage of completion basis as we deliver the content or services over time, which can vary greatly. Historically, bookings have converted to revenues over a 6 month period on average. However, since late 2020, we have received increasingly larger and more complex sales orders, which, in turn, has lengthened the average revenue period to approximately 9 months, with the largest contracts taking longer to complete. During 2024, the time between bookings and revenue improved to an average of 7.5 months. For this reason, Managed Services Bookings, while an overall indicator of the health of our business, may not be used to predict quarterly revenues and could be subject to future adjustments. Managed Services Bookings is useful information as it reflects the number of orders received in one period, even though revenue from those orders may be reflected over varying amounts of time. We use the Managed Services Bookings metric to plan operational staffing, to identify key customer group trends to enlighten go-to-market activities, and to inform its product development efforts. Managed Services Bookings for the twelve months ended December 31, 2024 and 2023, was $39.1 million and $28.1 million, respectively.

Current wording

Managed Services Bookings is a measure of all sales orders received during a time period, less any cancellations received or refunds issued during the same period. Our sales contracts vary in complexity by customer and range from custom content delivery to integrated marketing services, with contract terms generally ranging from several months for smaller contracts up to twelve months for larger contracts.

Previous wording

You should not consider Adjusted EBITDA in isolation or as a substitute for an analysis of our results of operations as under GAAP. Not all companies calculate Adjusted EBITDA similarly, limiting its usefulness as a comparative measure. Moreover, Adjusted OCF has limitations as an analytical tool, including that Adjusted EBITDA:

Current wording

You should not consider Adjusted EBITDA in isolation or as a substitute for an analysis of our results of operations under GAAP. In addition, not all companies calculate Adjusted EBITDA in the same manner, which limits its usefulness as a comparative measure. Moreover, Adjusted EBITDA has limitations as an analytical tool, including that it:

Previous wording

The following table sets forth a reconciliation from the GAAP measurement of net loss to our non-GAAP financial measure of Adjusted EBITDA for the twelve months ended December 31, 2024, and 2023:

Current wording

The following table sets forth a reconciliation from the GAAP measurement of net income (loss) to our non-GAAP financial measure of Adjusted EBITDA for the years ended December 31, 2025, and 2024:

Previous wording

The Company’s primary cash needs have historically been funding the development and integration of our technology platforms used in its business, marketing expenses, and general and administrative (“G&A”) expenses, including salaries, bonuses, and commissions. The Company has incurred losses and negative cash flow from operations for most periods since inception, primarily the result of costs associated with third-party creators, salaries, bonuses and stock-based compensation, and other G&A expenses, including technology and development costs, which has resulted in a total accumulated deficit of $104.3 million as of December 31, 2024. We anticipate a decline in near-term operating expenses as a result of our recent workforce reductions, the divestiture of unprofitable international business activities, and reduced investments in product development, marketing, and administrative functions. While we have not yet achieved profitability, and we will likely continue to invest in areas we expect will help us grow, we believe we have sufficient resources to fund operations and planned investments for at least the next twelve months.

Current wording

The Company’s primary cash needs have historically been funding the development and integration of our technology platforms, marketing expenses, and general and administrative (“G&A”) expenses, including salaries, bonuses, and commissions. The Company has incurred losses and negative cash flow from operations for most periods since inception, primarily the result of costs associated with third-party creators, salaries, bonuses and stock-based compensation, and other G&A expenses, including technology and development costs, which has resulted in a total accumulated deficit of $104.3 million as of December 31, 2025. While we have not yet achieved profitability, and we will continue to invest in areas we expect will help us grow, we believe we have sufficient resources to fund operations and planned investments for at least the next twelve months.

Previous wording

We had cash and cash equivalents of $44.6 million as of December 31, 2024, compared to $37.4 million as of December 31, 2023. This increase of $7.2 million is primarily the result of the maturing of certain investments, including $6.4 million classified as short-term investments.

Current wording

We had cash and cash equivalents of $50.9 million as of December 31, 2025, compared to $44.6 million as of December 31, 2024. This increase of $6.2 million is primarily due to the maturation of certain investments.

Previous wording

Net cash used for operating activities was $11.5 million during the twelve months ended December 31, 2024, primarily driven by the continued use of cash to fund operating cash flow and to fund increases in net working capital. Net cash provided by investing activities was $19.8 million during the twelve months ended December 31, 2024, primarily due to the maturity of marketable securities. Net cash used for financing activities during the twelve months ended December 31, 2024 was $1.1 million, primarily driven by stock repurchase activity.

Current wording

Net cash provided by operating activities was $2.4 million during the year ended December 31, 2025, primarily driven by non-cash expenses, including stock-based compensation and depreciation and amortization, as well as improved collections reflected in a decrease in accounts receivable. Net cash provided by investing activities was $5.6 million during the year ended December 31, 2025, primarily due to the maturity of marketable securities. Net cash used for financing activities during the year ended December 31, 2025 was $1.6 million, primarily driven by stock repurchase activity and payments on shares withheld for statutory taxes.

Previous wording

We anticipate that our operating expenses will increase over time to support higher levels of revenue and required working capital financing as we continue to pursue the expansion of our business. We currently believe that we have adequate cash and long-term investments to fund our business growth for the next twelve months; however, should additional capital become necessary, we expect these funds would be financed predominately through proceeds from future equity, equity-based, or debt offerings, unless and until our operations are profitable and sustain our ongoing capital needs. As a result, our business success could significantly depend upon our ability to obtain the funding necessary to support our operations.

Current wording

We anticipate that our operating expenses will increase over time to support higher revenue and the working capital financing required as we continue to expand our business. We currently believe that we have adequate cash and long-term investments to fund our business growth for the next twelve months; however, should additional capital become necessary, we expect these funds would be financed predominantly through proceeds from future equity, equity-based, or debt offerings, unless and until our operations are profitable and sustain our ongoing capital needs. As a result, our business success could significantly depend upon our ability to obtain the funding necessary to support our operations.

Previous wording

Accounts receivable are customer obligations due under normal trade terms. We consider an account delinquent when the customer has not paid its balance due by the associated due date. We assess collectability risk both generally and by specific aged invoices. Our loss history informs a general reserve percentage, which we apply to all invoices less than 90 days from the invoice due date, currently 1.1% of the outstanding balance. This general reserve, which we update periodically, recognizes that some invoices will likely become a collection risk. When an invoice ages 90 days past its due date, we consider each invoice to determine a reserve for collectability based on our prior history and recent communications with the customer, to determine a reserve amount. Generally, our reserve will approach 100% of the invoice amount.

Current wording

We determine the collectability of accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. We continue to monitor these factors and adjust our credit and collection policies as necessary to address evolving market conditions and potential risks to financial performance. An account is deemed delinquent when the customer has not paid an amount due by its associated due date. If a portion of the account balance is deemed uncollectible, we will either write off the amount owed or provide a reserve based on our best estimate of the uncollectible portion of the account. We assess collectability risk both generally and by specific aged invoices. Our loss history informs a general reserve percentage, which we apply to all invoices less than 90 days from the invoice due date, currently 1% of the outstanding balance. The general reserve, which we update periodically, recognizes that some invoices will likely become a collection risk. When an invoice ages 90 days past its due date, we consider each invoice to determine a reserve for collectability based on our prior history and recent communications with the customer, to determine a reserve amount. Generally, our reserve for such aged invoices will approach 100% of the invoice amount.

Previous wording

The concentration of credit risk in accounts receivable is typically limited because many geographically diverse customers make up our customer base, thus spreading the trade credit risk. We control credit risk through credit approvals, credit limits, and monitoring procedures. We perform credit evaluations of our customers but generally do not require collateral to support accounts receivable. Two customers each accounted for more than 10% of accounts receivable on December 31, 2024. One customer accounted for more than 10% of our revenue during the twelve months ended December 31, 2024. One customer accounted for more than 10% of our accounts receivable on December 31, 2023. One customer accounted for more than 10% of our revenue during the twelve months ended December 31, 2023.

Current wording

The concentration of credit risk in accounts receivable is typically limited because many geographically diverse customers make up our customer base, thus spreading the trade credit risk. We manage credit risk through credit approvals, credit limits, and ongoing monitoring of customer balances, and generally do not require collateral. While the customer base is diversified, certain concentrations exist. At December 31, 2025, we had two customers each who accounted for 12.4% and 12.5% of total accounts receivable. At December 31, 2024, we had two customers each who accounted for 14.2% and 23.5% of total accounts receivable. These concentrations are monitored closely as part of the Company’s overall credit risk management process.

Previous wording

In accordance with Accounting Standards Codification (“ASC”) 350-40, Internal Use Software, we capitalize certain internal-use software development costs associated with creating and enhancing internally developed software related to our 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 research and planning stage and the post-implementation stage 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 development stage, including significant enhancements and upgrades, are capitalized. These costs include personnel and related employee benefits expenses for employees or consultants directly associated with and who devote time to software projects and external direct costs of materials obtained in developing the software. We also capitalize certain costs related to cloud computing arrangements (“CCAs”). We have capitalized software development costs of $2.1 million, net of amortization, in the consolidated balance sheet as of December 31, 2024. These costs are reflected as intangible assets in the consolidated balance sheet as of December 31, 2024. We do not transfer ownership of our software to third parties. These software developments and CCA costs are amortized on a straight-line basis over the estimated useful life of five years upon the initial release of the software or additional features. We review the software development costs for impairment when circumstances indicate that their carrying amounts may not be recoverable. If the carrying value of an asset group is not recoverable, we recognize an impairment loss for the excess of carrying value over the fair value in our consolidated statements of operations and comprehensive loss.

Current wording

In accordance with ASC 350-40, Internal-Use Software, we capitalize certain costs incurred to develop and enhance internally developed software used to support our managed services and internal operations. Software development activities are generally categorized into three stages: (i) the research and planning stage, (ii) the application and development stage, and (iii) the post-implementation stage.

Previous wording

In September 2024, the Company identified a triggering event related to changes in executive management and Board-level changes, including the Cooperation Agreement. As a result, the Company conducted an interim goodwill impairment test. The test utilized the income approach (discounted cash flow method) and the market approach (guideline transaction method) to evaluate the fair value of the Company’s IZEA reporting unit. The assessment determined that the carrying value of goodwill exceeded the fair value, resulting in a $4.0 million goodwill impairment charge recorded in the three and nine months ended September 30, 2024.

Current wording

In September 2024, the Company identified a triggering event related to changes in executive management and Board-level changes, including the Cooperation Agreement. As a result, the Company conducted an interim goodwill impairment test. The test utilized the income approach (discounted cash flow method) and the market approach (guideline transaction method) to evaluate the fair value of the Company’s IZEA reporting unit. The assessment determined that the carrying value of goodwill exceeded the fair value, resulting in a $4.0 million goodwill impairment charge recorded in the year ended December 31, 2024.

Previous wording

The Company completed the divestiture of the Hoozu business unit on December 31, 2024, resulting in the derecognition of $1.3 million in goodwill attributed to the unit as a part of the net loss on divestiture. As a result, the Company had no goodwill on its balance sheet as of December 31, 2024.

Current wording

The Company completed the divestiture of the Hoozu business unit in December 2024, resulting in the derecognition of $1.3 million in goodwill attributed to the unit as a part of the net loss on divestiture. As a result, the Company had no goodwill on its balance sheet as of December 31, 2025 and 2024.

Previous wording

Indefinite-lived intangible assets are initially carried at the value determined in accordance with FASB ASC 350-30-30-1 and are not subject to amortization. Historically, they have been tested for impairment annually or more frequently if events or changes in circumstance indicate that the assets is more likely than not impaired. In December 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires fair value measurement of certain crypto assets each reporting period, with the changes in fair value reflected in net income. The new guidance is effective for fiscal years and interim periods within those fiscal years, beginning December 15, 2024, with early adoption permitted. The Company has opted to adopt this guidance early. Expanded disclosures for crypto assets have been added to Note 5 - Intangible Assets. When an identical digital asset is bought and sold at a price different than the entity’s current carrying value, this will indicate that the asset’s carrying value must be adjusted. We will adjust the carrying value, and the gain or loss will be reflected as an operating expense.

Current wording

Indefinite-lived intangible assets are initially carried at the value determined in accordance with FASB ASC 350-30-30-1 and are not subject to amortization. Historically, they have been tested for impairment annually or more frequently if events or changes in circumstance indicate that the assets are more likely than not impaired. In December 2023, the FASB issued ASU No. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires fair value measurement of certain crypto assets each reporting period, with the changes in fair value reflected in net income. The new guidance is effective for fiscal years and interim periods within those fiscal years, beginning December 15, 2024, with early adoption permitted. The Company adopted this guidance effective January 1, 2025.

Previous wording

We generate revenue primarily from our managed services when a marketer (typically a brand, agency, or partner) pays us to provide custom content, influencer marketing, amplification, or other campaign management services (“Managed Services”); additionally, we generate revenue from subscription fees charged to access our software platforms, license and transaction fees from self-service customers, and fees from such as inactivity fees, early cash-out fees, and other miscellaneous fees charged to users of our platforms (collectively, “SaaS Services Revenue”).

Current wording

We generate revenue primarily from our Managed Services when a marketer (typically a brand, agency, or partner) pays us to provide custom content, influencer marketing, amplification, or other campaign management services (“Managed Services”); we also generate a limited amount of SaaS Services Revenue, which is revenue from access to certain features of our proprietary technology platforms and related transaction-based fees.

Previous wording

We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers(“ASC 606”). Under ASC 606, revenue is recognized based on a five-step model 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 is 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. We apply 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, we assess the goods or services promised within each contract and determine those that are distinct performance obligations. We also determine whether it acts as an agent or a principal for each identified performance obligation. For transactions in which we act 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 we record the amounts we pay to third-party creators as cost of revenue. For transactions in which we act as an agent, revenue is reported on a net basis as the amount charged to the self-service marketer using our platforms, less the amounts paid to the third-party creators providing the service.

Current wording

We recognize revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers(“ASC 606”). Under ASC 606, revenue is recognized when control of promised services or access to platform capabilities is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services.

Previous wording

We maintain separate arrangements with each marketer and content creator either in the form of a master agreement or terms of service, which specify the terms of the relationship and access to our platforms or by a statement of work, which sets 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 contract with us to manage their advertising campaigns or custom content requests may prepay for services or request credit terms, and payment terms are typically 30 days from the invoice date. The agreement typically provides for either a non-refundable deposit or a cancellation fee if the customer cancels the agreement prior to completing the services. Billings in advance of completed services are recorded as a contract liability until earned. We assess collectability based on several factors, including the creditworthiness of the customer and payment and transaction history.

Current wording

Marketers who contract with us to manage their advertising campaigns or custom content requests may prepay for services or request credit terms, and payment terms are typically 30 days from the invoice date. Contractual arrangements may provide for a non-refundable deposit or a cancellation fee if the customer cancels the agreement prior to completion of the services. Amounts billed in advance of completed services are recorded as contract liabilities and recognized as revenue as the related performance obligations are satisfied. We assess collectability at contract inception and on an ongoing basis, considering factors such as the customer’s creditworthiness, payment history, and transaction history.

Previous wording

Stock-based compensation is measured at the grant date, based on the award’s fair value, and is recognized as an expense over the employee’s requisite service period. We estimate the fair value of each stock option as of the date of grant using the Black-Scholes pricing model. Options typically vest ratably over four years, with one-fourth of options vesting one year from the date of grant and the remaining options vesting monthly, in equal increments over the remaining three-year period and generally having five or ten-year contract lives. We use the simplified method to estimate the expected term of employee stock options. We do not believe historical exercise data will provide a reasonable basis for estimating the expected term for the current share options granted. The simplified method assumes that employees will exercise share options evenly between the period when the share options are vested and ending on the date when the options expire. We use the closing stock price of our common stock on the date of the grant as the associated fair value of our common stock. For issuances after June 30, 2019, we estimate the volatility of our common stock at the date of grant based on the volatility of our stock during the period. For issuances on or before June 30, 2019, we estimated the volatility of our common stock at the date of grant based on the volatility of comparable peer companies that were publicly traded and had a longer trading history than us. We determine the expected life based on historical experience with similar awards, considering the contractual terms, vesting schedules, and post-vesting forfeitures. We use 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. We have never paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. We estimate forfeitures when recognizing compensation expense. 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.

Current wording

Stock-based compensation is measured at the grant date, based on the award’s fair value, and is recognized as an expense over the employee’s requisite service period. We estimate the fair value of each stock option as of the date of grant using the Black-Scholes pricing model. Options typically vest ratably over four years, with one-fourth of options vesting one year from the date of grant and the remaining options vesting monthly, in equal increments over the remaining three-year period and generally having five or ten-year contract lives. We use the simplified method to estimate the expected term of employee stock options. We do not believe historical exercise data will provide a reasonable basis for estimating the expected term for the current share options granted. The simplified method assumes employees exercise share options evenly over the period from vesting through expiration. We use the closing price of our common stock on the grant date as the fair value of our common stock. For issuances after June 30, 2019, we estimate the volatility of our common stock at the grant date based on the stock's volatility over the period. For issuances on or before June 30, 2019, we estimated the volatility of our common stock at the date of grant based on the volatility of comparable peer companies that were publicly traded and had a longer trading history than us. We determine the expected life based on historical experience with similar awards, considering the contractual terms, vesting schedules, and post-vesting forfeitures. We use the risk-free interest rate implied by the current yield on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected life of the award. We have never paid cash dividends on our common stock and do not anticipate paying any in the foreseeable future. We estimate forfeitures when recognizing compensation expense. 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.

Previous wording

Total stock-based compensation expense recorded in our consolidated statements of operations during the twelve months ended December 31, 2024, and 2023 were $2.7 million and $1.0 million, respectively.

Current wording

Total stock-based compensation expense recorded in our consolidated statements of operations during the years ended December 31, 2025, and 2024 were $1.5 million and $2.3 million, respectively.

Previous wording

As of December 31, 2024, we had unvested restricted stock units representing 1,558,372 shares of common stock with an intrinsic value of $4.3 million and zero unvested shares of issued restricted stock with an intrinsic value of $0.

Current wording

As of December 31, 2025, we had unvested restricted stock units representing 1,770,927 shares of common stock with an intrinsic value of $6.4 million and we did not have any unvested shares of restricted stock.