Ted Murphy - CEO Donna Mackenzie - CFO Jon Cunningham - RedChip, IR

Thomas Pfister - RedChip Company

Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the IZEA, Inc. Fiscal 2012 Earnings Conference Call. At this time, all participants are in a listen only mode. Following the presentation, we will conduct a question-and-answer session with instructions as provided. (Operator Instructions) I'll now turn the presentation over to Jon Cunningham with RedChip Company. Please go ahead.

Thank you [John] (ph). Good afternoon everybody and welcome to IZEA's fiscal 2012 earnings call. With us today are IZEA's founder and CEO, Ted Murphy; Chief Financial Officer, Donna Mackenzie; and Chief Operating Officer, Ryan Schram. Before I hand the call over to Donna, may I remind our listeners that on this call, management's prepared remarks contain forward-looking statements which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore, the Company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today and therefore refer to a more detailed discussion of the risks and uncertainties in the Company's filings with the Securities and Exchange Commission. In addition, any projections as to the Company's future performance represent management's estimates as of today, April 2, 2013. IZEA assumes no obligation to update these projections in the future as market conditions change. To supplement its financial results presented in accordance with the U.S. GAAP, management may make reference to certain non-GAAP financial measures which the Company believes provides meaningful additional information to understand the Company's operating performance. And now, it's my pleasure to turn the call over to IZEA's CFO, Donna Mackenzie. Donna, please go ahead.

Thank you, Jon, and good afternoon everyone. Last week, the Company filed its 10-K for the fiscal year ended December 31, 2012. I will briefly highlight a few key points during our call today. For the 12 months ended December 31, 2012, the Company recorded record revenues of $4.95 million compared to revenues of $4.3 million for the prior fiscal year, an increase of 14%. The increase in sponsor revenue was primarily attributable to increased sales growth utilizing our premier social media platforms, SocialSpark and SponsoredTweets. Our gross profit percentage increased 17% compared to the prior year. In addition, our gross margin increased 2 points from 55% in the prior year to 57% in 2012. The gross margin increase was primarily attributable to increased campaign management of our advertiser account which generates a higher profit margin in those managed directly by an advertiser. Total operating expenses for the 12 months ended December 31, 2012 increased by 8.8% compared to the same period in 2011. The increase was primarily attributable to increased payroll expenses, professional fees, cost of being a public company, and increases in sales and marketing expenses, primarily promotional marketing expenses. This was offset by a decrease in investor relations fees. Our cash position was $658,000 as of December 31, 2012 as compared to $225,000 as of the prior fiscal year. The increase is attributable to 2012 financing transactions. Finally, on March 1, 2013, we entered into a secured credit facility agreement with Bridge Bank out of San Jose, California to assist our working capital needs. Pursuant to this agreement, we made the necessary steps for funding up to 80% of our eligible accounts receivable up to a maximum advance of $1.5 million. Now, I will turn it over to our CEO, Mr. Ted Murphy.

Thank you, Donna. As Donna shared, we had record revenues and gross profit margins in 2012. While I'm pleased with our forward progress on both fronts, I believe that there is significant opportunity for growth beyond our 2012 trajectory. As most of you know, 2012 was a turbulent year for our Company and our shareholders. The micro-cap market provided – proved a challenging space for fund raising, causing the Company to piece together a series of financings over the year, which in turn caused the level of uncertainty and speculation among our investors, clients, and team members. The Company stocks are competing throughout 2012 and I recognize that some of our investors are currently underwater. It reeks heavily on me, and I want you to know that I am committed to creating value for you. With 7.2 million shares outstanding, the Company has a market cap of less than $2 million on approximately $5 million in annual revenue. My goal is to get our market cap in line with comparable companies in our space over the coming year. Most companies in our space have market caps of at least one times revenue and many more have much higher multiples. We've been systematically attacking our weaknesses and bolstering our strengths throughout the organization. We retooled our sales team and approach, reduced operational expenses, and refocused our efforts on our core technology platforms. Some of these positively affected our performance in 2012, but many of the improvements and operational efficiencies we put in place are just starting to be realized in 2013. January of 2013 was a big month for the Company. We moved our headquarters in Orlando resulting in an annual savings of over $200,000. We appointed Mitchel Laskey as Chairman of the Board, bringing additional experience and government to the Company. We also eliminated the overhang on the stock in the market of $550,000 convertible debenture upon its conversion, which was secured against all of our intellectual property and other assets. As a result of these efforts and others, we secured a $1.5 million credit facility with Bridge Bank in early March to assist the Company in financing its working capital needs. We continue to see growth in demand for the Social Media Sponsorships through increased rate of recurring business and larger sales opportunities. For the first time in the Company's history, we've been invited to bid on seven-figure campaigns, both directly with brands and through our agency partners. While we have not yet closed one of these opportunities, I am confident in our ability to do so over time. For the remainder of the 2013 fiscal year, our management team will continue to focus on three areas; number one, its financial stability; number two, its revenue growth; and number three, its technology innovation. Now, I'd like to open the line for five minutes of Q&A.

(Operator Instructions) Your first question today comes from Thomas Pfister with RedChip Company. Please go ahead, sir. Thomas Pfister - RedChip Company: Congratulations on the growth you've seen here last year over the past year. Just my first question here is, I think you mentioned earlier about potentially having some million-dollar sales opportunities, is there anything you guys need to do, like add additional salespeople or increase any expenses to obtain these opportunities?

No, these opportunities are with our current team that's already in place and we are working through those opportunities to hopefully bring as many of them to closure as possible. Thomas Pfister - RedChip Company: Okay, great. And then my next question here, looks like you guys increased margins this past year by, it looks like having a higher percentage of your revenue attributable to some internal campaign management. Is there anything you guys are doing maybe to shift more of the revenue mix that way?

The majority of larger brands and agencies prefer managed campaigns. So, these are the companies that we're targeting already as a sales organization, and over time, they've come to represent the majority of our revenue. Thomas Pfister - RedChip Company: Okay, great, good to hear. Then, just my last question here, I think you said here in your 10-K, you currently have 94,000 registered advertisers, and it looks like you said here about 5,800 of them created a social media opportunity with you guys in 2012. Are there any issues that your Company is doing maybe to try to engage some of these initial advertisers that are not currently using social media?

Yes, a lot of that has to do with education, and that's really an ongoing process for us. We do a lot of that with our internal sales team as well as providing the support that they need through e-mail communications and also through our online community. Thomas Pfister - RedChip Company: Okay, great, good to hear. That's all the questions for me today, so just thanks for taking my questions. I look forward to seeing the continued growth of your Company.

(Operator Instructions)

Alright, Ted, I'm not seeing any further questions. If you'd like to maybe we'll turn it back to you for some closing comments.

Alright, thank you everybody for joining us for this call. I appreciate your support in the Company and I look forward to creating value for you in the future.

Thank you.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation. You may now disconnect your lines.