Greetings and welcome to the IZEA Worldwide Incorporated First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Ryan Schram, President and Chief Operating Officer. Thank you, Ryan. You may begin.

Good afternoon and welcome to IZEA's Q1 2022 Earnings Call. I'm Ryan Schram, President and Chief Operating Officer at IZEA. And with me on the call today is IZEA Chief Financial Officer, Peter Biere; and IZEA Founder, Chairman and Chief Executive Officer, Ted Murphy. Thanks for joining us. Earlier this afternoon the company issued a press release with details pertaining to our first quarter performance for fiscal year 2022. If you would like to review those details, all of our investor information can be found on IZEA's Investor Relations website at izea.com/investors. Before we begin, please take note of the Safe Harbor paragraph included in today's press release, covering the company's financial results and be advised that during today's earnings call, our management team will discuss IZEA's business outlook and make forward-looking statements. These statements are predictions based on our team's expectations as of today that are subject to inherent risks and uncertainties and should not be unduly relied upon. Actual events, results or trends could differ materially from our forecast due to a number of factors, including those mentioned in our most recently filed periodic reports with the SEC. The company and our management team assume no obligations to update any forward-looking statements made in today's call. In addition, our update today will refer to a non-GAAP financial measure, adjusted EBITDA and key financial metrics, such as gross billings and bookings. A detailed explanation of these measures is included in our earnings release and in our most recent Form 10-Q. With the appropriate disclosures taken care of, I would now like to turn the call over to my colleague and IZEA's Chief Financial Officer, Peter Biere. Peter?

Thank you, Ryan, and good afternoon, everyone. I'd like to review our operating results and highlight our first quarter accomplishments. Revenue for the first quarter of 2022 totaled $8.9 million, which was 61% higher than Q1 of 2021. We recorded $518,000 in net revenue from our SaaS offerings during the current quarter, up 5% from the prior year quarter. Revenue from Managed Services improved to $8.4 million during the first quarter, up 66% over the prior year on the strength of steady quarterly bookings growth and an increase in completed campaigns during the quarter. As we previously announced, managed services bookings, a key metric measuring sales orders we received, net of cancellations and refunds during the period, reached another all-time high of $12.1 million for the first quarter of 2022, an 88% increase over Q1 of 2021. Our steady quarterly bookings growth enhanced revenue growth, demonstrates the demand for managed services continues to increase as new and existing customers are shifting more of their marketing spend to influence our marketing campaigns. We record revenue on most of our managed service contracts over time, based on completion percentage and delivery timing can vary greatly. Since Q2 of 2021, our average time from contract booking day to completion is nine months. We continue to win larger contracts with new and repeat customers. And while some of these contracts are as long as 12 months in length, subcontracts with influencers may stretch over 18 months, before all the revenue can be recognized. Our managed service backlog, which represents a total of unrecognized revenue for underway contracts, as well as recent bookings that have yet to begin invoicing, totaled $24.2 million on March 31 2022. We expect to record most of this backlog as revenue in the following three quarters. SaaS services revenue consisting of license fees, self-service marketplace spend fees and other fees was $25,000 higher for the first quarter of 2022 than the prior year quarter. While licensee counts continue to grow year-over-year, this growth is yet to translate in an increased fee revenues. License fee revenue in the first quarter was about flat with the prior year quarter, while marketplace spend fees were up 45% from Q1 2021, as gross billings fell 39% from the prior year quarter. Our cost of revenue was $5.2 million in Q1 of 2022 or 58% of revenue, compared to $2.5 million or 44% in the prior year quarter. Accordingly, gross margin in the first quarter averaged 41.7% compared to 55.6% in the prior year quarter. The increase in the cost of revenue and therefore, lower blended gross margins was due to a high cost delivery, with one customer contract that made up approximately 14% of current core revenues. This significant contract aside the cost of revenue for our other customer contracts, was within the recent historical range. Expenses other than the cost of revenue totaled $6.2 million for the quarter compared to $5 million for the prior year quarter. Sales and marketing costs were $2.5 million in the first quarter of 2022, or 21% above the comparative quarter due primarily to higher sales compensation, which varies with higher bookings and increased marketing costs, including additional head count associated with driving customer growth. General and administrative costs totaled $3.5 million during the quarter, or 38% above the prior year quarter due primarily to higher compensation and contractor costs to support operations and product investments. Our net loss was $2.5 million for the first quarter of 2022, or negative $0.04 per share compared to a net loss of $1.9 million in the prior year quarter, or negative $0.03 per share. Adjusted EBITDA was negative $2.1 million for the first quarter compared to a negative $1.3 million for the prior year quarter. As of March 31 2022, we had $72.6 million in cash on hand, down from $75.4 million at the beginning of the year, partly due to negative EBITDA during the quarter and also to creator cash advances ahead of customer billings, late in the quarter. We do not have any debt on our balance sheet. In June of 2021, the company entered into an at-the-market sales agreement under, which it may offer up to 100 million of its common stock from time to time. We have not sold any shares to date under that agreement. With cash on hand, continued strong growth in our core business and a financing vehicle in place should we require it. We're in a solid position, to execute on business growth and any opportunities that may lie ahead. With that, I'll turn the call back over to Ryan.

Thanks, Peter. Since our last call with shareholders on March 30, we continued to execute against our 2022 operating plan inline with guidance shared in previous updates. Management continues to be pleased with the spring of records delivered to the benefit of our shareholders and the execution against various platforms for future growth progressing at/or ahead of schedule. These efforts range in scope and size to further diversify our customer base and increase the variety of opportunities for creators at large. As a result, IZEA's first quarter was not only successful from a business standpoint, but equally productive on the strategic front as we laid the foundation for driving long-term value for our clients and shareholders alike. On January the 18th, we announced the appointment of Ross Yellowlees, as our GM for Emerging Markets, a newly created role at IZEA. Ross joined our Managed Services Leadership Council and is the person responsible for building a team of influencer marketing professionals who will identify and scale new market opportunities for the company on a geographic and/or sector basis. The overarching strategy related to emerging markets was connected to many of the quarter's key announcements including the February 15, 1 billion of MetaMod our specialized unit that will use IZEA's capabilities, relationships, creator network and innovative lineage to bring sponsored collaborations to virtual worlds tied to the promise of Web 3.0. MetaMod builds our extensive influencer network, offering brands and agencies, the opportunity to partner with influencers inside of popular gaming platforms such as Roblox or Fortnite as well as with artists on key NFT marketplaces. From various client conversations this quarter, we are seeing very early returns from brands wanting our help to drive awareness of metaverse activations creating metaverse experiences to help promote a product having our team develop and distribute branding virtual objects and even hosting sponsored virtual events in the metaverse, such as concerts and parties. Then in the month of March, we celebrated two geographic expansions starting with IZEA entering the Chinese market for the first time ever. Our efforts based in Beijing and led by industry veteran Zhifu Yan provides a tremendous opportunity to partner with China-based companies who desire to reach consumers across North America and around the globe. Shortly thereafter, we commemorated our seventh year as a pioneer in the Canadian marketplace by announcing the appointment of Mike Libis to serve as our country GM. Through his efforts and experience we intend to increase IZEA's market share and make strategic investments to bolster the next chapter of growth across the country to serve leading brands and agencies. All told, these initiatives and others still information will serve to further expand our client base and the types of relationships we enjoy with branding agencies, whether it's through professional managed services, enterprise software or self-service offerings. We recognize the need and opportunity to meet customers where they are and extend opportunity by providing a variety of solutions that exceed their expectations. As Peter mentioned in his remarks, this approach to have various financial side effects related to timing of revenue recognition, costs and the like. While our average deal sizes continue to increase for one-off campaign investments. We're also thrilled winning relationships that trends in multiple quarters or even fiscal years at substantially higher amounts of investment. Given the scope of dynamics of those types of arrangements, it can impact results within a certain quarter if our clients' business circumstances changed and we shift deliverables timing accordingly in an effort to be accommodated as a partner. That said, our focus remains on the things that we can continue to directly control, thoughtfully growing our customer base, driving innovation forward in a highly competitive category and expanding our market share wherever and whenever possible with an opportunistic mindset. Now, for some additional commentary on IZEA's first quarter from his perspective, I'd like to turn the call over to our Founder, Chairman and CEO, Ted Murphy. Ted?

On our last conference call, I shared that our team is nearly a full year ahead on our three-year plan to deliver a 30% revenue growth rate each year from 2021 to 2023. I'm happy to report that this is still the case. We believe we remain on track to hit our 2022 revenue target of $39 million based on our current trajectory. Bookings did not slow down from our record-breaking fourth quarter in Q4 2021. In fact, in Q1 2022, we set yet another all-time managed services bookings record, growing quarterly bookings by 88% year-over-year, and Q2 is off to a strong start as well. Based on the growth percentages we are seeing, we believe we continue to gain market share in the influencer marketing industry, which market or forecast will grow 11% this year alone, our 30% revenue growth would be nearly 3x the industry growth rate. I want to take a moment to recognize the changes that are happening in the global financial markets and the potential impacts on marketing spend moving forward. We are well aware that some categories of marketing have already seen a slowdown or have even shrunk year-over-year. The influencer marketing space grew dramatically during the pandemic at a time when many other forms of marketing and advertising were adversely affected, we believe the space will continue to grow but we are not relying on overall growth in advertising spend to propel our own growth. While we are a leader in our space, we also recognize that the influencer marketing industry is vast with many competitors, most of which are small in size. We believe that IZEA's primary growth will come from the conquest of new customers, who are already investing in influencer marketing with other solution providers, or struggling to execute and optimize influencer marketing initiatives on their own. We are not expecting to be able to grow existing relationships 30% year-over-year at a time when GDP is shrinking. We are going to grow by increasing our share of the overall industry by adding customers and there is room for growth, even in a time of economic slowdown in some industries. A slowdown may actually prove to be a positive thing for IZEA long-term. Smaller competitors simply wanted the resources to compete for talent or invest in marketing and technology, which will create opportunities for us given our fortified balance sheet and prudent expense management in the same way that COVID-19 forced many players out of business. We believe any extended recession scenario would likely bring another wave of consolidation. Less viable competitors is a good thing for us, as we set our sights on gaining market share, we are well positioned to weather a near-term financial store and we have been focusing on employee efficiency even before the pandemic. We had 15% less employees now than we did in 2016 at our all-time peak, but those employees are generating significantly more revenue per person. IZEA intends to prudently invest in sales, marketing and technology this year. However, any headcount growth will be more tempered as we continue to monitor the global economy and make adjustments as needed. This will also give us some time to allow our revenues to catch up with some of the investments that had impacted us here in this quarter. And our recent IZEA survey of more than 1,000 social media users, we found that 44% of respondents between the ages of 18 and 29 identify themselves as influencers or aspire to become one. This aligns with the tremendous growth we expect to continue seeing in content creation across various platforms and the number of brands looking to benefit from partnering with these emerging influencers, working with influencers can provide incredible value for brands versus other forms of marketing, which continue to push the space forward If there is one constant in the world it has changed. Things have changed a lot since 2006, when we created the influencer marketing industry and they will continue to change as new platforms and creators emerge. It is incumbent on our team to anticipate and lead those changes on all fronts. One component of that changes the emerging geographic markets that Ryan spoke about. We are seeing a growing opportunity outside of the US and we want to be able to capitalize on it by offering our services to customers beyond our current geographic footprint today. The other change is broader and more global in nature, we are starting to see more influencer marketing dollars shift away from traditional web 2.0 social platforms, such as Instagram and begin to embrace wholly new types of activations on other platforms across the metaverse. In fact some of the biggest contracts we have signed in recent months include activations on these platforms and we believe that trend is still in the very early stages. I have always had a fundamental belief that IZEA should be as platform-agnostic as possible. I have seen many social platforms come and go over time. And if we were to hitch our success to just one of them, we would rise or fall with their popularity. The challenge that every creator platform faces is that the next generation of creators rarely wants to haunt the same corners of the Internet as their older siblings, parents or grandparents, in many ways the more successive platform has with the general public, the less cool it becomes to the most influential users. It is a difficult balance to maintain and one that IZEA chooses to avoid by being platform agnostic, as we set our sights on the future, we believe it is more important than ever to look at the influencer marketing industry through this lens. Influencer marketing is so much more than just Instagram or TikTok posts, and yet so much of the landscape today is fixated only on these platforms paired with a short-term mindset. There are influencers in every online community and messages are spread via platforms ranging from telegram to discourse. While we are able to capture some of the dollars being spent on alternative platforms, we also recognize we are not fully optimized to do so. IZEA and our software offerings must be in a position to embrace this cornucopia of influence and empower our customers to drive the best possible outcomes for their marketing dollars. We also believe it is imperative to provide demonstrative return on investment data, beyond vanity statistics like engagements. Marketers are seeking more quantifiable sales analysis and we are going to make it easier than ever to track performance and close the purchase loop. To that end, our product teams have been hard at work to reimagine our software from the ground up. And later this year, you will see in all new idea, supercharged ready for Web3 and beyond. Our leadership team remains committed to innovation, growth and expansion and continues to champion the creators that have helped us be so successful. We are thankful for your support thus far in 2022 and look forward to reaching new heights this year. Thank you all for joining us. I will now open up the call for your questions.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Ryan Schram, President and Chief Operating Officer. Thank you, Ryan. Our first question comes from Jon Hickman. Please proceed with your question.

Hi. Nice revenue quarter there, Ted.

Thank you.

Can you elaborate a little bit on this contract that caused your gross margins declined by more than 10%. And then I have a follow-up.

Yes, that contract involved a lot of much larger influencer activations some celebrity level activations. And for those types of activations we just don't have the same type of margin. So that's really what impacted that overall contract.

So like are those was that like a one-off thing, or how frequent do you run into that?

With this particular client who has been a client now for two years they tend to involve more celebrity or bigger name influencers. And that has had an impact -- it had an impact last year and has also had an impact this year on the overall margins.

Any comments about like how we should model for the rest of the year?

I think that you're going to still see some impact from that moving forward. A lot of those activations are still in progress and we haven't recognized all the revenue from them. And as Peter had mentioned we expect to see some of that revenue come in the next couple of quarters. So it is going to impact overall margin in Q2 and Q3, but it will also have an impact on revenue from those bookings that we previously made.

So is that business that you want or you just take it because it's a big line?

It is definitely a business that we want. It is a marquee brand and the activations that we're doing there are absolutely incredible. It is just that those types of influencers in particular, we can't get the same type of markup or margin on those types of relationships.

What do you mean by incredible? What way are they incredible?

The content is incredible and the people that we are working with are incredible. It's very much so a marquee brand a top global spender of marketing dollars and someone that we're very excited to be working with.

Okay. So from your comments about potential recession and being careful it sounds like you're going to maybe not spend as heavily on sales and marketing and engineering as maybe you talked about the last couple of quarters. Is that -- should I do interpret that correctly?

I think that we're going to continue to invest in those areas, but it will be more tempered in the growth of those departments and any sort of long-term commitments that we make there. A lot of our engineering dollars now are being spent with contractors to give us some flexibility in the case that something more prolonged happens with the economy, but we do intend to continue to grow and make investments and capture share. And in order to do that, we've got to have the people to grow.

And so -- and then from Ryan's comments, I'm trying to interpret a little bit what he said. Competitively can you talk about like when you're up on marquee contracts, potential contracts, are you seeing less competition these days or is it point solution--?

The competition has never been more fierce. And I think it's part of the thought process tying back to what Ted shared in his remarks also that we think that other companies that are smaller competitors, but given the fragmented nature of influencer marketing, are still taking share that we don't have, but we're reluctant to pull too heavily off the preverbal gas because we think that can be a real opportunity for IZEA strategically, Jon. But what I was referring to in my remarks was really the fact that we're continuing to see average deal sizes increasing for one-off campaign. But one of the other trends inside of our industry is ambassadorships, meaning that campaigns that have durations that aren't just counted in weeks or months, but quarters and years in some cases. And so that can have an implicit effect on some of the issues you've already talked about related to the timing of revenue in particular and recognizing the costs that come with those costs as well.

Is there anybody else that has an automated network like you guys do that you know of?

An automated network in terms of the way that we have public marketplace?

Yes.

There are many companies that compete with us in various aspects of our business. Inside of the managed services space, there are upwards by our count close to 200 companies of varying size alone in only North America to claim to do some kind of influence or marketing managed service. So, therefore, what the opportunity is for us is to continue to find and focus on market share and consolidate that fragmentation effect.

Okay. Thanks.

You're welcome.

Thank you. Our next question is from [indiscernible], private investor. Please proceed with your question.

Hi, thank you for taking my question. Going back to the marquee contracts that you mentioned, can you give us a sense of what kind of take rate. I thought that the industry average was about anywhere from 10%, 15%, 20% kind of thing. Is that where this marquee deal kind of shook out at, or was it different?

Yes. It's actually a bit higher than that, but even with it being higher, it's lower than our normal margins. So that's why it impacted our margins overall negatively.

And then, can you then speak to what that difference is percentage points then I guess at least between those two or the marquee versus your average? Are we talking about 10 percentage points, 20 percentage points?

No. It's more significant than that. Historically, our margin has been about 50%. And so this is significantly less than that but more than 10% or 15%.

Got it. Got it. And then, can you update us on how many employees you have? I know as of December 31, you had 131 employees. And then I just happened to look into LinkedIn today and it says you have 282 employees. Are you at about 280 employees or thereabout?

No. We are about 130 employees. I don't know why LinkedIn would report that inflated number. Perhaps that's creators that are saying that they work for us.

Got it. And so you haven't grown number of employees is that what you're saying because you started off with 131 this year?

Yes. It's right about the same level.

Got it. Got it. And then can you remind me the average spend per brand for your typical contract?

We haven't shared a number in recent years. But what I would say directionally is, it really depends on the type of engagement Pablo. So, when you think about the ambassadorship aspect that we were talking about with Jon that's how we get into seven-digit investments from brands or their agencies, whereas a one-off campaign. We have a publicly listed minimum on our website. You can work with us for as little as $25000 on that end, but those also can be on a one-off basis in the high six-digit realm. It just depends on the brand how competitive their segment is and also what their outcomes that they're looking for happen to be for that campaign investment.

Got it. Got it. And just a couple of more questions real quick. On the Shake and sort of your SaaS offering, I see that the SaaS numbers at least weren't that great this year. I mean year-over-year, it was declined as much as I think 25%. And I'm kind of curious, how much resources are being dedicated to that platform? Is that basically all of or much of the tech folks?

Yes. All the technology folks are focused on -- well not let me make sure. So we have IZEAx and we have Shake. The majority of people are focused on IZEAx right now as well as the next-generation platform that I spoke about on our last conference call. We are ultimately going to be transitioning from that platform to this new platform, that's designed to give us a lot more flexibility in terms of the way that clients manage their campaigns and what platforms that they are activating on, but it's important to understand that IZEAx really services our managed services team, as well as the SaaS customers that are licensing our software on the other side.

Okay. And so when we see that the gross billings for the SaaS unit has declined by 25% year-over-year that I assume is that outside of the scope of the management services part? And why the decline as well?

Yeah it is outside of the scope of the managed services billings, but also recognize that some customers have moved from SaaS to managed services, because they simply just do not have the staff on hand to manage those campaigns and do them in the same way that we can using the same software.

Got it. Got it. Very last question. And that is the negative EBITDA that you generated this quarter, I mean, it's quite substantive. I mean, it's almost as much as what you generated all of last year. And so I'm just kind of curious is there a plan? Is there some target to at least breakeven?

That really is not, yeah. There's – that's not the priority right now, especially this year. We're making a lot of investments in marketing and growing out our sales team and also these new technology platforms. So that is not the primary focus this year. It is very much so growth. And we have a strong balance sheet right now, and we're really focused on trying to create long-term value with that balance sheet.

Got it. Okay. Thank you. Appreciate it.

Thank you.

Thanks, Pablo.

Thank you. Our next question comes from Elliot Shaw [ph], Private Investor. Please proceed with your question.

Good afternoon. Thanks for taking my call. On this SaaS side, is that income shown in – from Shake. Does Shake fall under that?

Yes, Shake would be included in the SaaS revenue.

Okay. And how many employees, do you plan to ramp up in Canada, or salespeople, or team members? And how many do you have now?

We're not sharing that number publicly right now Elliott. It's a very competitive environment. So it's not really to our benefit to share that externally at this time.

Okay. So do you have a number now that you have, or is it just the one I think you said he was a Director or something or a Manager?

We have a country GM in place, who is continuing to understand that team, but it's important to understand we've been in Canada as a business since 2015. This is a further investment in the geography.

Okay. So you just have the one GM in Canada on your payroll?

No. We have additional Canadian employees.

Okay. And then how many additional team members or employees do you have in China now since you started that division?

Again, we are not sharing specific numbers, but I'll tell you that, it is more than one and also something that we can share in later calls.

Okay. And then on the employee count, the other gentleman asked it was 130 employees in all of 2021. Is that correct?

I believe that is correct. I don't have that exact number right in front of me, but directionally that's correct.

Okay. And then, you don't have a cap on how many employees you want to have as a company, it could go upwards of $150. You don't have a number that you want to cap your permanent employees out?

I don't think any company ever really looks at capping the number of employees that they would ever have. I will say that the headcount that we are at right now is, still 15% smaller than where we were at our peak in 2016. So we are very much so focused on delivering more revenue per employee but, we're going to make hires as needed and as we see opportunities in given areas. I think everybody is aware of the job market right now, and how difficult it is in recruiting and retaining team members. But we are very much so in a mode where we are looking to add talent if we can find the right talent.

Okay. And obviously, this year you don't expect to be consistently profitable. Do you have a goal in mind as a group the three of you to be profitable in 2023? Have you guys discussed that?

No. The goals that we have set out are really much more focused on revenue. We obviously -- we do have a target internally of what we're looking at in terms of the investment that we're making this year. But the focus this year is to get to that 30% revenue growth rate and to do so in a way where we're managing our expenses the best we possibly can.

Okay. And are you guys looking at all the industries like, the marijuana, the alcohol, the beverage, the hunting and fishing, Bass boat job, Cabela's. Do you guys look at everything as far as coming on board, or do you selectively pull out a group like the marijuana industry?

Well, unfortunately cannabis is challenging because of the federal climate, but I imagine that that could be in time something that no different than the other regulated spaces that we've served, could fall into the influencer marketing industry Elliot. We do a lot of work in the core advertising sectors. And these would be ones that are not surprising, because it's where the most money is. Certainly, consumer non-discretionary and consumer affordable luxury discretionary are two of the macro categories and all of advertising and indexes very much with where we've seen success and continue to look for success. But we're also taking bets on new categories all the way around. It's the reason why we have formed a B2B team to focus on, helping businesses that are not trying to reach consumers but other professionals. It's the same reason why we established MetaMod, as I mentioned in my prepared remarks, to be able to be forward looking for a very aggressive and ambitious future in Web3. We really pride ourselves as an organization, being sector-agnostic, but sector intelligent. We don't want to just go chasing everything, if it doesn't have a payday attached for the creators that we serve or the brands who are our clients.

Okay. And then, you've mentioned Web3 a few times. How do I study up on that? How am I going to read up on that and get information? Is that part of MetaMod when you say Web3?

Yeah. MetaMod, yeah, really is the operational units that we've created to help service businesses in Web3 or those that are not in the Metaverse themselves or in cryptocurrency or other related topics, but looking to involve their brands in such methods. So what I would suggest for you if you're interested is firstly there's no shortage of material online that talks about the various aspects of Web 3.0. But the overarching one, of course, is the idea of blending the physical world with a virtual and/or augmented virtual one. And that's where you're starting to see this confluence of social networks and the software that powers them with different forms of hardware, whereas, today most of the experiences that IZEA helps facilitate are taking place on a mobile device or on a laptop perhaps, we envision a future not too far down the road where that could be just as much a connected contact lens or a pair of smart sunglasses that would be both on the content creation as well as the content engagement side Elliott. And that is just a practical -- one of the practical examples of the promise of Web 3.0. There's a lot more to it than just that.

Okay. Because the Snapchat glasses didn't pan out to way and Zuckerberg he's trying to come up with Ray-Ban and partner with them on the virtual reality glass.

Yeah I mean, they're still in very early days. Those glasses I've tried them on myself and they're really cool at taking video and photos that are attached to your phone but the metaverse is far more than that. Imagine a parent glass is that suddenly could onlay information to the lens in front of you that looked no different than something that would happen in the physical world. We think that that is inevitable. And we also think that brands of all shapes and sizes will want to find a way to facilitate relationships no different than they do today on a platform like TikTok or Instagram.

Okay. I got two more questions on the crypto side of it. I'm glad you guys are taking crypto. And how do you -- how long do you keep it on your balance sheet before you turn it into real US dollars? Do you book it and bank it, or do you hold it like Square is doing or Block?

We haven't published any formal policy on that. We have held some cryptocurrency. We have sold some cryptocurrency. We have bought some cryptocurrency. So, obviously, the market right now is very fluid and volatile and we're going to just stay flexible and nimble in terms of the way that we look at managing those holdings.

Okay. And then the $100 million shelf offering you started that last year and that runs through 2023. Is that correct?

I believe that…

It’s correct. It's two-year proposition.

So that would end at the end of this year?

No 2023. It will run through the summer of 2023.

Okay. So do you guys feel you need that? And why do you need it?

Well, we haven't today raised any money on it and there's no immediate plans to do so. It's there as a tool, if we need it. Ryan mentioned, consolidation possibilities it could be there to help us with that. We just wanted it to be out there and let us move quickly at the capital markets, and open up opportunity. But there's -- so we haven't raised anything today, Andrew.

Right, because -- I mean since our last earnings call, just from an investor standpoint, we've gone from -- we've steadily gone down in the overall market in the tech sector steadily gone down. And we're kind of hanging on to the dollar mark again. Is there any way, you guys can get some more visibility out there like with trade shows and road shows and get it to where the stock becomes more consistent, instead of balancing between $0.90 and $1.05?

Yes, that is certainly, one of the plans we've been building up the marketing team here to assist with that. Part of that is visibility to our end customers and creators, but the other component of that is investor awareness. So, I would expect to see more of IZEA in the back half of this year and that will really coordinate, with the launch of the new platform that I spoke about earlier.

And the new platform that's the 3.0?

That is -- no that is something wholly different from IZEAx today.

When do you plan to launch that?

That will be in the back half. We haven't provided the exact date yet, but it will certainly be something that we share with investors in advance of its launch.

Okay. Thank you for your time.

Thank you.

Our next question comes from Dan Yusen [ph] with Cyrus Equity Partners. Please proceed with your question

Thank you very much for having me on your call. I had a question about your cash reserve. If I understand it correctly, you have about $72 million right now and you've had over $70 million for almost a year or so. What are you doing with the money while it sits there? What kind of returns are you getting on that cash?

Just with volatile markets over the last year, I'd say, we just decided early this year to start making some investments. So you'll see a portfolio approach pop up at the end of the quarter. We're just investing in the most secure areas of the bond market nothing except very high quality. And we'll make basis points better than we did with the bank. Money is dead when it sits in the bank. And so all we're doing there is making offsetting fees and such in money market returns are not good. So we're going to be able to do better with it, but that's more just to offset it's going to earn some revenue for us, but it's not why we're holding the money. The money is there to help us grow and be 1an opportunity to fund growth opportunities, right? So the idea isn't to keep a ton of cash and hoard that and make a point or two points if the interest rates are going up, so we're short enough we can take opportunities or advance on that. But it's not our business to do that, but at the same time we have to be good with the money we have and earn as much as we can of a bit.

Thank you. A follow-up question on that one is, how much cash do you expect to use to grow and fund your investments over the next year?

Well, we haven't made any sort of forecast on cash flow. We spent around $2 million or more than $2 million in the first quarter. The fourth quarter you saw was opposite of that. And so the business faces differently, we're going to grow revenue this year. Expenses will grow at a lower rate, so we have an opportunity to get closer to profitability. But then at the same time, large customers the costs on those may swing more in one quarter than the less the margins may be a little bit different for the really large contracts that we talked about earlier. And our investments aren't even either. The investments in product tend to be a little bit more even in the ramp, but marketing can be different. So it really depends how much cash we need based on the opportunities we have.

Understood. So, I guess, my last question is, if you don't have a forecast for how much cash you're going to use, you've been holding it for a year, investing yourselves, why wouldn't you give that back to the investor community in the form of a stock buyback or dividend, and let the investors invest at themselves at least some portion of the $70 million if you don't expect to use it all?

So, one thing I would clarify is, we do have a forecast for what we're going to do with that cash. We just haven't made that available. And so we're not in the business of throwing out future outcomes. We do have the money and we have some plans for it, but it's not being disclosed. And I'll let Ted handle the second part of that question.

In terms of any sort of stock buyback or dividend, we want to maintain a healthy balance sheet to give us the ability to invest in organic growth or be able to be acquisitive if the right opportunity presents itself. I think that we are heading into what could be a prolonged period of economic strain, which could have a pretty material impact on some of our competitive set. And typically through times like this, this is where you want to have a large balance sheet and be able to consolidate or have some optionality. So, we're not really looking towards any sort of stock buyback or dividend at this time.

So would it be safe to say that you're expecting to use some large proportion of that $70 million within the next 12 months?

I do not think that we're looking to use a large proportion of it now.

Then again, I would still question, if you're not expecting to use it and there is some excess cash there that's not generating a positive return, why would you not return that to the shareholders, so they could generate positive return for themselves?

We had been in a position in the past where we have not had a large balance sheet and needed access to capital and had to do so out of a position of weakness. And our posture moving forward is that we want to preserve our cash and our optionality as much as possible.

Okay. Thank you.

Thank you. There are no further questions at this time. I'd like to turn the floor back over to Ryan Schram for any closing comments.

Like to thank everyone for joining us this evening, and as a friendly reminder, all of IZEA's investor information is available on our IR website, that's at izea.com/investors. Thanks again for joining us and have a wonderful evening.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.