þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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INUVO, INC.
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(Exact name of registrant as specified in its charter)
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Nevada
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87-0450450
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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500 President Clinton Ave., Suite 300, Little Rock, AR
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72201
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock
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NYSE MKT
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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þ
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Page No.
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Part I
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Item 1.
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Business.
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Item 1A.
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Risk Factors.
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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Part II
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Item 6.
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Selected Financial Data.
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operation.
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk.
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Item 8.
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Financial Statements and Supplementary Data.
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Item 9.
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Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.
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Item 9A.
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Controls and Procedures.
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Item 9B.
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Other Information.
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Part III
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Item 10.
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Directors, Executive Officers and Corporate Governance.
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Item 11.
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Executive Compensation.
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence.
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Item 14.
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Principal Accounting Fees and Services.
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Part IV
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Item 15.
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Exhibits, Financial Statement Schedules.
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•
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material dependence on our relationships with Yahoo! and Google;
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•
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dependence of our Partner Network segment on relationships with distribution partners, and on the introduction of new products and services, which require significant investment;
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•
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dependence of our Owned and Operated Network segment on our ability to effectively market and attract traffic;
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•
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need to keep pace with technology changes;
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•
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fluctuations of quarterly financial results and the trading price of our common stock;
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•
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vulnerability to interruptions of services;
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•
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dependence on key personnel;
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•
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vulnerability to regulatory and legal uncertainties and our ability to comply with applicable laws and regulations;
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•
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need to protect our intellectual property;
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•
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vulnerability to publishers who could fabricate clicks;
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•
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vulnerability to a downturn and to uncertainty in global economic conditions;
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•
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integration of our recent NetSeer asset acquisition.
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•
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dependence on our financing arrangements with Western Alliance Bank, which is collateralized by our assets;
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•
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requirement to adhere to the covenants and restrictions in our grant agreement with the state of Arkansas;
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•
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the dilutive impact to our stockholders from outstanding restricted stock grants, warrants and options; and
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•
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the seasonality of our business.
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•
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the ability to serve hundreds of millions of advertisements to any device or browser in milliseconds;
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•
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the power to both self-market and self-monetize our own publishing business;
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•
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the capability to test advertising technology within our own publishing business;
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•
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the power to target advertisements based on website content, past behavior or to redirect users back to Inuvo content when the economics and alignment are optimized;
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•
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the capacity to expand to other geographies where appropriate;
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•
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the capability to develop and publish content just-in-time to meet demand from advertisers; and
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•
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a low cost operation in central Arkansas with access to numerous universities, and a proprietary technology infrastructure developed by, and in some cases patented by Inuvo.
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•
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SearchLinks: A proprietary platform to deliver ads to digital publisher webpages and apps using natural language technology to identify a site’s content, subject matter and context. It serves advertisements with text, images or video with a high relevancy to the identified content. The technology decides whether to serve the contextual advertisement or a behavioral advertisement based upon the greater monetization. The platform allows publishers to visualize the performance of advertising on their pages and manages the remuneration associated with that advertising.
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•
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ValidClick: A legacy software as a service and delivery platform that is being replaced by the SearchLinks platform. It offers a pay-per-click solution where advertisements are targeted to consumers based on content and behaviors.
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•
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MYAP: A proprietary online affiliate management solution that provides advertisers with the ability to sign up, manage and track the activities of publishers through a privately-branded platform with full data transparency. Typically, each MYAP customer is supported by a customized software implementation.
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•
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ALOT: Branded web properties with content developed, edited and published by ALOT in categories like health, finance, travel, entertainment, careers, education and automotive.
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•
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"System and Method for Enabling Information Associations" which was issued on April 1, 2008, and the expiration date of which as determined based on patent term adjustment as calculated by the U.S. Patent and Trademark Office ("USPTO") is September 11, 2021.
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•
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"Method for Preventing Real Time Click Fraud Detection, Prevention and Reporting for Online Advertising" which was issued on November 27, 2012, and the expiration date of which is January 22, 2030, as determined based on patent term adjustment as calculated by the USPTO.
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•
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The applied for SearchLinks provisional patent relates to pairing relevant advertisements with established web page content and more particularly to processing page content and retrieving relevant advertisements based on optimal comparisons and scoring criteria.
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•
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our ability to attract new distribution partners, including the length of our sales cycles, or to sell increased usage of our service to existing distribution partners;
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•
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technical difficulties or interruptions in our services;
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•
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changes in privacy protection and other governmental regulations applicable to our industry;
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•
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changes in our pricing policies or the pricing policies of our competitors;
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•
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the financial condition and business success of our distribution partners;
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•
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purchasing and budgeting cycles of our distribution partners;
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•
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acquisitions of businesses and products by us or our competitors;
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•
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competition, including entry into the market by new competitors or new offerings by existing competitors;
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•
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discounts offered to advertisers by upstream advertising networks;
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•
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our history of litigation;
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•
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our ability to hire, train and retain sufficient sales, client management and other personnel;
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•
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timing of development, introduction and market acceptance of new services or service enhancements by us or our competitors;
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•
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concentration of marketing expenses for activities such as trade shows and advertising campaigns;
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•
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expenses related to any new or expanded data centers; and
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•
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general economic and financial market conditions.
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•
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unexpected increases in usage of our services;
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•
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computer viruses and other security issues;
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•
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interruption or other loss of connectivity provided by third-party internet service providers;
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•
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natural disasters or other catastrophic events; and
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•
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server failures or other hardware problems.
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•
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pay fees to the lender associated with the credit facility;
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•
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meet prescribed financial covenants;
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•
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maintain our corporate existence in good standing;
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•
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grant the lender a security interest in our assets;
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•
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provide financial information to the lender; and
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•
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refrain from any transfer of any of our business or property, subject to customary exceptions.
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High
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Low
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||||
Year Ended December 31, 2016:
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|
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First Quarter
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$
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2.77
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$
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1.67
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Second Quarter
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$
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2.13
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$
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1.33
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Third Quarter
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$
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1.78
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$
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1.05
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Fourth Quarter
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$
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2.31
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$
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1.00
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Year Ended December 31, 2015
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|
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First Quarter
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$
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2.14
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$
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1.04
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Second Quarter
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$
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3.57
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$
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1.81
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Third Quarter
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$
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3.29
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|
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$
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2.19
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Fourth Quarter
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$
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3.25
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$
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2.55
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Period
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Total Number of Shares Purchased
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Average Price Paid per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Maximum number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
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||||||
December 9 - December 31
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15,883
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$
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1.42
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15,883
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$
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477,498
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Total
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15,883
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15,883
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477,498
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|
•
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expanded the technology in our native advertising solution, SearchLinks, by including a behavioral target decision matrix;
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•
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launched the performance marketing management platform for merchants, MYAP10;
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•
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expanded the ALOT.com brand introducing an auto site; and
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•
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renewed our Yahoo agreement.
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For the Years Ended December 31,
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|||||||||||||
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2016
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2015
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Change
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% Change
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|||||||
Partner Network
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$
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26,011,543
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$
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30,298,532
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$
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(4,286,989
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)
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(14.1
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%)
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Owned and Operated Network
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45,518,559
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40,139,584
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5,378,975
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13.4
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%
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|||
Total net revenue
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$
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71,530,102
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$
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70,438,116
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$
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1,091,986
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1.6
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%
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For the Year Ended December 31,
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|||||||||||||
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2016
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2015
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Change
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% Change
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|||||||
Partner Network
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$
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21,277,303
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$
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23,652,942
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|
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$
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(2,375,639
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)
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(10.0
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%)
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Owned and Operated Network
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87,492
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69,054
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18,438
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26.7
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%
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|||
Cost of revenue
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$
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21,364,795
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$
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23,721,996
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$
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(2,357,201
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)
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(9.9
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%)
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For the Year Ended December 31,
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|||||||||||||
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2016
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2015
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Change
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% Change
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|||||||
Marketing costs
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$
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39,195,653
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|
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$
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34,324,646
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$
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4,871,007
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14.2
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%
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Compensation
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6,830,338
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|
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5,598,804
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|
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1,231,534
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|
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22.0
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%
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|||
Selling, general and administrative
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4,996,482
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4,645,697
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350,785
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7.6
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%
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|||
Operating expenses
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$
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51,022,473
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$
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44,569,147
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$
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6,453,326
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14.5
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%
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•
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pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
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•
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provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
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•
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provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
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Exhibit No.
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Description of Exhibit
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2.1
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Agreement and Plan of Merger dated June 5, 2009 between Inuvo, Inc. and Kowabunga! Inc. (Incorporated by reference and filed as an exhibit to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2009.)
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2.2
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Agreement and Plan of Merger dated October 16, 2011 between Inuvo, Inc., Anhinga Merger Subsidiary, Inc. and Vertro, Inc. (Incorporated by reference to the Registrant's Current Report on Form 8-K as fled on October 17, 2011.)
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3(i).1
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Articles of Incorporation, as amended)Incorporated by reference and filed as an exhibit to the Registrant's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on March 1, 2004.)
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3(i).2
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Amended to Articles of Incorporation filed March 14, 2005 (Incorporated by reference and filed as an exhibit to the Registrant's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on March 31, 2006.)
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3(i).3
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Articles of Merger between Inuvo, Inc. and Kowabunga! Inc. (Incorporated by reference and filed as an exhibit to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2009.)
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3(i).4
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Certificate of Change Filed Pursuant to NRS 78.209 (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on September 30, 2010.)
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3(i).5
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Certificate of Merger as filed with the Secretary of State of Nevada on February 29, 2012 (Incorporated by reference to the Registrant's Annual Report on Form 10-K as filed on March 29, 2012.)
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3(i).6
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Articles of Amendment to Amended Articles of Incorporation as filed on February 29, 2012 (Incorporated by reference to the Registrant's Annual Report on Form 10-K as filed on March 29, 2012.)
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3(ii).1
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Amended and Restated By-Laws (Incorporated by reference to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2010.)
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3(ii).2
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Bylaw amendment adopted February 29, 2012 (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on March 6, 2012.)
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4.1
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Form of warrant to purchase shares of Registrant for 2011 offering. (Incorporated by reference and filed as an exhibit to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 22, 2011.)
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4.2
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Form of warrant to purchase 40,000 shares of common stock issued to Alliance Advisors, LLC (Incorporated by reference to the Registrant's Annual Report on Form 10-K as filed on March 29, 2012.)
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4.3
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Form of warrant to purchase 10,000 shares of common stock issued to Alliance Advisors, LLC (Incorporated by reference to the Registrant's Annual Report on Form 10-K as filed on March 29, 2012.)
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4.4
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Form of warrant to purchase 51,724 shares pursuant to the Second Business Financing Modification Agreement with Bridge Bank, National Association, dated October 11, 2012. (Incorporated by reference to Form 10-Q filed with the Securities and Exchange Commission on November 8, 2012.)
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10.1
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2005 Long-Term Incentive Plan (Incorporated by reference to the Current Report on Form 8-K as filed on December 10, 2010.)
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10.2
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2015 Long Term Equity Incentive Program (Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q as filed on July 29, 2015.)
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10.3
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Lease dated February 29, 2000 by and between Alot, Inc. (formerly Comet Systems, Inc.) and The Rector, Church-Wardens and Vestrymen of Trinity Church in New York, a religious corporation in the State of New York, including the previous amendment dated August 8, 2000. (Incorporated by reference to the Registrant's Annual Report on Form 10-K as filed on March 29, 2012.)
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10.4
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Lease Modification and Extension Agreement by and between Alot, Inc.(formerly known as MIVA Direct, Inc.) and The Rector, Church-Wardens and Vestrymen of Trinity Church in New York, dated February 23, 2006. (Incorporated by reference to the Registrant's Annual Report on Form 10-K as filed on March 29, 2012.)
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10.5
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Consent to Sublease with Trinity Church effective April 12, 2013 regarding the Company's New York office. (Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q as filed on May 9, 2013).
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10.6
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Third Business Financing Modification Agreement, dated March 29, 2013, effective May 1, 2013, with Bridge Bank, National Association. (Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q as filed on May 9, 2013).
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10.7
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Lease with First Orion Corp. effective March 1, 2013 regarding the Company's Conway, AR office. (Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q as filed on May 9, 2013).
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10.8
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Amendment No. 8 to Yahoo! Publisher Network Contract effective as of September 1, 2013, executed and delivered October 10, 2013. (Incorporated by reference to Registrant's Amendment No. 1 to Quarterly Report on Form 10-Q as filed on January 17, 2014).
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10.9
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2010 Equity Compensation Plan (Incorporated by reference to the Registrant's definitive proxy statement on Schedule 14A as filed on April 30, 2010.)
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10.10
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Lease Agreement, dated April 8, 2015, with Arkansas Democrat-Gazette, Inc. (Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q as filed on April 29, 2015.)
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10.11
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First Business Financing Modification Agreement with Bridge Bank, National Association, dated June 29, 2012. (Incorporated by reference to Form 10-Q filed with the Securities and Exchange Commission on August 9, 2012.)
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10.12
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Employment Agreement dated March 1, 2012 between Inuvo, Inc. and Richard K. Howe (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on March 6, 2012.)
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10.13
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Second Business Financing Modification Agreement with Bridge Bank, National Association, dated October 11, 2012. (Incorporated by reference to Form 10-Q filed with the Securities and Exchange Commission on November 8, 2012.)
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10.14
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Employment Agreement dated March 1, 2012 between Inuvo, Inc. and Wallace D. Ruiz (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on March 6, 2012.)
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10.15
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Employment Agreement dated March 1, 2012 between Inuvo, Inc. and John B. Pisaris (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on March 6, 2012.)
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10.16
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Amendment dated February 29, 2012 to 2010 Equity Compensation Plan (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on March 6, 2012.)
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10.17
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Business Financing Agreement, dated March 1, 2012, with Bridge Bank, National Association (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on March 6, 2012.)
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10.18
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Intellectual Property Security Agreement, dated March 1, 2012, between Inuvo, Inc. and Bridge Bank, National Association (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on March 6, 2012.)
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10.19
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Intellectual Property Security Agreement, dated March 1, 2012, between subsidiaries and Bridge Bank, National Association (Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on March 6, 2012.)
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10.20
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Release Agreement dated December 19, 2012 by and between Peter A. Corrao and Inuvo, Inc. (Incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 19, 2012.)
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10.21
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Quick Action Closing Fund Grant Agreement, dated January 25, 2013, with the Arkansas Economic Development Commission. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 13, 2013).
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10.22
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Grant Reimbursement Agreement, dated January 25, 2013, with the Arkansas Economic Development Commission. (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 13, 2013).
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10.23
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Google Services Agreement, effective February 1, 2015, with Google, Inc. (Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q as filed on April 29, 2015.)
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10.24
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|
Amendment #11 to Yahoo! Publisher Network Contract, effective January 15, 2016, executed and delivered January 26, 2015.(Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2015).
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10.25
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Yahoo! Publisher Network Contract, dated April 4, 2009, as amended. (Incorporated by reference to Amendment No. 1 to Form 10-Q filed with the Securities and Exchange Commission on December 28, 2012).
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10.26
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Fourth Business Financing Modification Agreement, dated March 6, 2014, with Bridge Bank, National Association. (Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2013).
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10.27
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Fifth Business Financing Modification Agreement, dated September 29, 2014 with Bridge Bank N.A. (Incorporated by reference to the Quarterly Report on Form 10-Q for the period ended September 30, 2014).
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10.28
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|
Bridge Bank BFA Modification, dated October 9, 2014 (Incorporated by reference to the Quarterly Report on Form 10-Q for the period ended September 30, 2014).
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10.29
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|
Amendment #12 to Yahoo! Publisher Network Contract, effective March 2, 2016. (Incorporated by reference to Form 10-Q for the period ended March 31, 2016).
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10.30
|
|
Sixth Business Financing Modification Agreement, dated September 27, 2016 with Bridge Bank N.A. (Incorporated by reference to the quarterly report on Form 10-Q for the period ended September 30, 2016).
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10.31
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|
Seventh Business Financing Modification Agreement, dated December 9, 2016 with Bridge Bank N.A.*
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10.32
|
|
Google Services Agreement, dated February 28, 2017.*
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21.1
|
|
Subsidiaries of the Registrant (Incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on March 13, 2013).*
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23.1
|
|
Consent of Mayer Hoffman McCann P.C.*
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31.1
|
|
Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer *
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31.2
|
|
Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer *
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32.1
|
|
Section 1350 certification of Chief Executive Officer *
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32.2
|
|
Section 1350 certification of Chief Financial Officer *
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101.INS
|
|
XBRL Instance Document *
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101.SCH
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|
XBRL Taxonomy Extension Schema Document
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1010.CAL
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|
XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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|
XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Inuvo, Inc.
|
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|
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|
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|
February 16, 2017
|
By:
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/s/ Wallace D. Ruiz
|
|
|
|
Chief Financial Officer
|
|
Signature
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Title
|
|
Date
|
|
|
|
|
|
/s/ Richard K. Howe
|
|
Chairman of the Board of Directors, Chief Executive Officer, and principal executive officer
|
|
February 16, 2017
|
Richard K. Howe
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|
|
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|
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|
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/s/ Wallace D. Ruiz
|
|
Chief Financial Officer, principal financial and accounting officer
|
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February 16, 2017
|
Wallace D. Ruiz
|
|
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|
|
|
|
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/s/ G. Kent Burnett
|
|
Director
|
|
February 16, 2017
|
G. Kent Burnett
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|
|
/s/ Gordon J. Cameron
|
|
Director
|
|
February 16, 2017
|
Gordon J. Cameron
|
|
|
|
|
|
|
|
|
|
/s/ Charles D. Morgan
|
|
Director
|
|
February 16, 2017
|
Charles D. Morgan
|
|
|
|
|
|
|
|
|
|
/s/ Charles L. Pope
|
|
Director
|
|
February 16, 2017
|
Charles L. Pope
|
|
|
|
|
|
|
|
|
|
/s/ Patrick Terrell
|
|
Director
|
|
February 16, 2017
|
Patrick Terrell
|
|
|
|
|
|
CONTENTS
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
Consolidated Financial Statements:
|
|
|
Consolidated Balance Sheets
|
|
|
Consolidated Statements of Operations
|
|
|
Consolidated Statements of Stockholders’ Equity
|
|
|
Consolidated Statements of Cash Flows
|
|
|
Notes to Consolidated Financial Statements
|
|
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash
|
$
|
3,946,804
|
|
|
$
|
4,257,204
|
|
Accounts receivable, net of allowance for doubtful accounts of $23,000 and $17,200, respectively
|
7,586,129
|
|
|
7,001,337
|
|
||
Unbilled revenue
|
8,644
|
|
|
16,154
|
|
||
Prepaid expenses and other current assets
|
284,469
|
|
|
345,752
|
|
||
Total current assets
|
11,826,046
|
|
|
11,620,447
|
|
||
Property and equipment, net
|
1,615,223
|
|
|
1,805,561
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
5,760,808
|
|
|
5,760,808
|
|
||
Intangible assets, net of accumulated amortization
|
8,343,876
|
|
|
9,320,951
|
|
||
Other assets
|
15,186
|
|
|
224,759
|
|
||
Total other assets
|
14,119,870
|
|
|
15,306,518
|
|
||
Total assets
|
$
|
27,561,139
|
|
|
$
|
28,732,526
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
9,280,779
|
|
|
$
|
10,080,315
|
|
Accrued expenses and other current liabilities
|
2,689,640
|
|
|
3,169,445
|
|
||
Total current liabilities
|
11,970,419
|
|
|
13,249,760
|
|
||
|
|
|
|
||||
Long-term liabilities
|
|
|
|
||||
Deferred tax liability
|
3,738,500
|
|
|
3,799,600
|
|
||
Other long-term liabilities
|
326,428
|
|
|
722,722
|
|
||
Total long-term liabilities
|
4,064,928
|
|
|
4,522,322
|
|
||
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Preferred stock, $.001 par value:
|
|
|
|
||||
Authorized shares 500,000, none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.001 par value:
|
|
|
|
|
|
||
Authorized shares 40,000,000; issued shares 25,300,189 and 24,752,408 respectively; outstanding shares 24,923,662 and 24,375,881, respectively
|
25,300
|
|
|
24,752
|
|
||
Additional paid-in capital
|
130,418,413
|
|
|
129,081,029
|
|
||
Accumulated deficit
|
(117,521,362
|
)
|
|
(116,748,778
|
)
|
||
Treasury stock, at cost - 376,527 shares
|
(1,396,559
|
)
|
|
(1,396,559
|
)
|
||
Total stockholders' equity
|
11,525,792
|
|
|
10,960,444
|
|
||
Total liabilities and stockholders' equity
|
$
|
27,561,139
|
|
|
$
|
28,732,526
|
|
|
For the Years Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net revenue
|
$
|
71,530,102
|
|
|
$
|
70,438,116
|
|
Cost of revenue
|
21,364,795
|
|
|
23,721,996
|
|
||
Gross profit
|
50,165,307
|
|
|
46,716,120
|
|
||
Operating expenses
|
|
|
|
||||
Marketing costs
|
39,195,653
|
|
|
34,324,646
|
|
||
Compensation
|
6,830,338
|
|
|
5,598,804
|
|
||
Selling, general and administrative
|
4,996,482
|
|
|
4,645,697
|
|
||
Total operating expenses
|
51,022,473
|
|
|
44,569,147
|
|
||
Operating (loss) income
|
(857,166
|
)
|
|
2,146,973
|
|
||
Interest expense, net
|
(99,965
|
)
|
|
(141,311
|
)
|
||
(Loss) income from continuing operations before taxes
|
(957,131
|
)
|
|
2,005,662
|
|
||
Income tax benefit
|
29,260
|
|
|
300,143
|
|
||
Net (loss) income from continuing operations
|
(927,871
|
)
|
|
2,305,805
|
|
||
Net income from discontinued operations
|
155,287
|
|
|
33,969
|
|
||
Net (loss) income
|
$
|
(772,584
|
)
|
|
$
|
2,339,774
|
|
|
|
|
|
||||
Per common share data
|
|
|
|
||||
Basic and diluted
|
|
|
|
||||
Net (loss) income from continuing operations
|
$
|
(0.04
|
)
|
|
$
|
0.10
|
|
Net income from discontinued operations
|
0.01
|
|
|
—
|
|
||
Net (loss) income
|
$
|
(0.03
|
)
|
|
$
|
0.10
|
|
|
|
|
|
||||
Weighted average shares
|
|
|
|
||||
Basic
|
24,660,995
|
|
|
24,249,852
|
|
||
Diluted
|
24,660,995
|
|
|
24,539,555
|
|
|
Common Stock
|
|
Additional Paid in Capital
|
|
Accumulated Deficit
|
|
Treasury Stock
|
|
Total
|
|||||||||||||
|
Shares
|
|
Stock
|
|
|
|
|
|||||||||||||||
Balances as of December 31, 2014
|
23,711,100
|
|
|
$
|
24,087
|
|
|
$
|
128,734,759
|
|
|
$
|
(119,088,552
|
)
|
|
$
|
(1,396,559
|
)
|
|
$
|
8,273,735
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
2,339,774
|
|
|
—
|
|
|
2,339,774
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
707,544
|
|
|
—
|
|
|
—
|
|
|
707,544
|
|
|||||
Stock issued for vested restricted stock awards
|
664,781
|
|
|
665
|
|
|
(110,192
|
)
|
|
—
|
|
|
—
|
|
|
(109,527
|
)
|
|||||
Taxes withheld on vested restricted stock
|
—
|
|
|
—
|
|
|
(251,082
|
)
|
|
—
|
|
|
—
|
|
|
(251,082
|
)
|
|||||
Balances as of December 31, 2015
|
24,375,881
|
|
|
$
|
24,752
|
|
|
$
|
129,081,029
|
|
|
$
|
(116,748,778
|
)
|
|
$
|
(1,396,559
|
)
|
|
$
|
10,960,444
|
|
Net (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(772,584
|
)
|
|
—
|
|
|
(772,584
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,264,266
|
|
|
—
|
|
|
—
|
|
|
1,264,266
|
|
|||||
Stock issued for vested restricted stock awards
|
396,997
|
|
|
397
|
|
|
(397
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Taxes withheld on vested restricted stock
|
—
|
|
|
—
|
|
|
(203,836
|
)
|
|
—
|
|
|
—
|
|
|
(203,836
|
)
|
|||||
Contingent stock issuance
|
166,667
|
|
|
167
|
|
|
299,834
|
|
|
—
|
|
|
—
|
|
|
300,001
|
|
|||||
Treasury Stock Repurchase
|
(15,883
|
)
|
|
(16
|
)
|
|
(22,483
|
)
|
|
—
|
|
|
—
|
|
|
(22,499
|
)
|
|||||
Balances as of December 31, 2016
|
24,923,662
|
|
|
$
|
25,300
|
|
|
$
|
130,418,413
|
|
|
$
|
(117,521,362
|
)
|
|
$
|
(1,396,559
|
)
|
|
$
|
11,525,792
|
|
|
2016
|
|
2015
|
||||
Operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(772,584
|
)
|
|
$
|
2,339,774
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
2,209,738
|
|
|
1,807,350
|
|
||
Stock based compensation
|
1,264,266
|
|
|
707,544
|
|
||
Provision (Recovery) for doubtful accounts
|
5,800
|
|
|
(6,036
|
)
|
||
Adjustment of European liabilities related to discontinued operations
|
(176,988
|
)
|
|
(59,751
|
)
|
||
Deferred income taxes
|
(61,100
|
)
|
|
233,480
|
|
||
Amortization of financing fees
|
25,600
|
|
|
19,804
|
|
||
Settlement of tax liability
|
—
|
|
|
(406,453
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Prepaid expenses and other assets
|
219,656
|
|
|
(19,370
|
)
|
||
Accounts payable
|
(622,548
|
)
|
|
4,545,906
|
|
||
Accounts receivable and unbilled revenue
|
(583,082
|
)
|
|
(2,001,613
|
)
|
||
Accrued expenses and other liabilities
|
(420,875
|
)
|
|
(1,054,363
|
)
|
||
Other
|
(34,864
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
1,053,019
|
|
|
6,106,272
|
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Purchases of equipment and capitalized development costs
|
(1,116,371
|
)
|
|
(1,525,888
|
)
|
||
Net cash used in investing activities
|
(1,116,371
|
)
|
|
(1,525,888
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Proceeds from revolving line of credit
|
7,950,000
|
|
|
4,000,000
|
|
||
Prepaid financing fees
|
25,600
|
|
|
25,600
|
|
||
Payments on revolving line of credit
|
(7,950,000
|
)
|
|
(5,793,275
|
)
|
||
Net taxes paid on RSU grants exercised
|
(203,836
|
)
|
|
(360,608
|
)
|
||
Payments on term note payable and capital leases
|
(46,313
|
)
|
|
(1,909,422
|
)
|
||
Treasury Stock Repurchase
|
(22,499
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(247,048
|
)
|
|
(4,037,705
|
)
|
||
|
|
|
|
||||
Net change – cash
|
(310,400
|
)
|
|
542,679
|
|
||
Cash, beginning of year
|
4,257,204
|
|
|
3,714,525
|
|
||
Cash, end of year
|
$
|
3,946,804
|
|
|
$
|
4,257,204
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
||||
Interest paid
|
$
|
72,751
|
|
|
$
|
122,136
|
|
Income taxes paid, net of refund
|
$
|
26,000
|
|
|
$
|
280,453
|
|
Cash received from construction allowance
|
$
|
—
|
|
|
200,000
|
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Purchase of property and equipment under capital lease
|
$
|
—
|
|
|
$
|
103,609
|
|
Purchase of intangible assets through a contingent liability
|
$
|
—
|
|
|
$
|
715,874
|
|
Stock issuance for partial settlement of contingent liability
|
$
|
300,001
|
|
|
$
|
—
|
|
Write-down of domain names due to partial settlement of contingent liability
|
$
|
46,367
|
|
|
$
|
—
|
|
|
2016
|
|
2015
|
||||
Balance at the beginning of the year
|
$
|
17,200
|
|
|
$
|
86,722
|
|
Provision for bad debts
|
6,557
|
|
|
(6,036
|
)
|
||
Charge-offs
|
(874
|
)
|
|
(67,126
|
)
|
||
Recoveries
|
117
|
|
|
3,640
|
|
||
Balance at the end of the year
|
$
|
23,000
|
|
|
$
|
17,200
|
|
|
2016
|
|
2015
|
||||
Furniture and fixtures
|
$
|
241,876
|
|
|
$
|
230,637
|
|
Equipment
|
811,948
|
|
|
2,815,748
|
|
||
Software
|
6,132,626
|
|
|
9,856,947
|
|
||
Leasehold improvements
|
441,382
|
|
|
436,311
|
|
||
Subtotal
|
$
|
7,627,832
|
|
|
$
|
13,339,643
|
|
Less: accumulated depreciation and amortization
|
(6,012,609
|
)
|
|
(11,534,082
|
)
|
||
Total
|
$
|
1,615,223
|
|
|
$
|
1,805,561
|
|
|
Term
|
|
Carrying
Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
2016
Amortization
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Customer list, Google
|
20 years
|
|
$
|
8,820,000
|
|
|
$
|
(2,131,500
|
)
|
|
$
|
6,688,500
|
|
|
$
|
441,000
|
|
Customer list, all other
|
10 years
|
|
1,610,000
|
|
|
(778,186
|
)
|
|
831,814
|
|
|
161,004
|
|
||||
Exclusivity agreement
|
1 year
|
|
120,000
|
|
|
(120,000
|
)
|
|
—
|
|
|
—
|
|
||||
Trade names, ALOT (1)
|
5 years
|
|
960,000
|
|
|
(928,000
|
)
|
|
32,000
|
|
|
192,000
|
|
||||
Domain websites (2)
|
5 years
|
|
669,507
|
|
|
(267,945
|
)
|
|
401,562
|
|
|
136,704
|
|
||||
Trade names, web properties (1)
|
-
|
|
390,000
|
|
|
—
|
|
|
390,000
|
|
|
—
|
|
||||
Intangible assets classified as long-term
|
|
|
$
|
12,569,507
|
|
|
$
|
(4,225,631
|
)
|
|
$
|
8,343,876
|
|
|
$
|
930,708
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Goodwill, Partner Network
|
|
|
$
|
1,776,544
|
|
|
$
|
—
|
|
|
$
|
1,776,544
|
|
|
$
|
—
|
|
Goodwill, Owned and Operated Network
|
|
|
3,984,264
|
|
|
—
|
|
|
3,984,264
|
|
|
—
|
|
||||
Goodwill, total
|
|
|
$
|
5,760,808
|
|
|
$
|
—
|
|
|
$
|
5,760,808
|
|
|
$
|
—
|
|
|
Term
|
|
Carrying
Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
2015
Amortization
|
||||||||
Names database
|
9 months
|
|
$
|
17,417,397
|
|
|
$
|
(17,417,397
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Bundled downloads
|
4.5 months
|
|
2,447,075
|
|
|
(2,447,075
|
)
|
|
—
|
|
|
—
|
|
||||
Intangible assets classified as current
|
|
|
19,864,472
|
|
|
(19,864,472
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Customer list, Google
|
20 years
|
|
$
|
8,820,000
|
|
|
$
|
(1,690,500
|
)
|
|
$
|
7,129,500
|
|
|
$
|
441,000
|
|
Customer list, all other
|
10 years
|
|
1,610,000
|
|
|
(617,182
|
)
|
|
992,818
|
|
|
161,004
|
|
||||
Exclusivity agreement
|
1 year
|
|
120,000
|
|
|
(120,000
|
)
|
|
—
|
|
|
—
|
|
||||
Trade names, ALOT (1)
|
5 years
|
|
960,000
|
|
|
(736,000
|
)
|
|
224,000
|
|
|
192,000
|
|
||||
Domain websites (2)
|
5 years
|
|
715,874
|
|
|
(131,241
|
)
|
|
584,633
|
|
|
131,241
|
|
||||
Tradenames, web properties (1)
|
-
|
|
390,000
|
|
|
—
|
|
|
390,000
|
|
|
—
|
|
||||
Intangible assets classified as long-term
|
|
|
$
|
12,615,874
|
|
|
$
|
(3,294,923
|
)
|
|
$
|
9,320,951
|
|
|
$
|
925,245
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Goodwill, Partner Network
|
|
|
$
|
1,776,544
|
|
|
$
|
—
|
|
|
$
|
1,776,544
|
|
|
$
|
—
|
|
Goodwill, Owned and Operated Network
|
|
|
3,984,264
|
|
|
—
|
|
|
3,984,264
|
|
|
—
|
|
||||
Goodwill, total
|
|
|
$
|
5,760,808
|
|
|
$
|
—
|
|
|
$
|
5,760,808
|
|
|
$
|
—
|
|
(1)
|
We have determined ALOT trade name should be amortized over
five
years and the trade names related to our web properties have an indefinite life and as such are not amortized.
|
(2)
|
On May 8, 2015, we purchased
two
domain websites with a fair value of
$715,874
. We determined they should be amortized over
5
years (see Note 8). On May 8, 2016, the carrying value was adjusted by approximately
$46,000
to reflect the lower price paid as compared to the contingent liability recorded as a result of the change in the price of Inuvo stock from the date of acquisition to the first contingent release of shares.
|
2017
|
$
|
764,240
|
|
2018
|
732,240
|
|
|
2019
|
732,240
|
|
|
2020
|
612,858
|
|
|
2021
|
602,004
|
|
|
Thereafter
|
$
|
4,510,294
|
|
Total
|
$
|
7,953,876
|
|
|
2016
|
|
2015
|
||||
Accrued marketing costs
|
$
|
1,622,737
|
|
|
$
|
1,404,488
|
|
Accrued expenses and other
|
289,435
|
|
|
294,629
|
|
||
Accrued payroll and commission liabilities
|
250,000
|
|
|
643,908
|
|
||
Accrued sales allowance
|
250,000
|
|
|
500,000
|
|
||
Contingent stock due for acquired domains, current portion
|
222,477
|
|
|
238,625
|
|
||
Capital leases, current portion
|
31,210
|
|
|
46,313
|
|
||
Deferred Arkansas grant, current portion and accrued reserve
|
13,468
|
|
|
27,679
|
|
||
Accrued taxes
|
10,313
|
|
|
13,803
|
|
||
Total
|
$
|
2,689,640
|
|
|
$
|
3,169,445
|
|
|
2016
|
|
2015
|
||||
Deferred rent
|
$
|
163,165
|
|
|
$
|
198,323
|
|
Contingent stock due for acquired domains, less current portion
|
147,029
|
|
|
477,249
|
|
||
Accrued taxes, less current portion
|
13,763
|
|
|
—
|
|
||
Deferred Arkansas grant, less current portion
|
2,471
|
|
|
15,940
|
|
||
Capital leases, less current portion
|
—
|
|
|
31,210
|
|
||
Total
|
$
|
326,428
|
|
|
$
|
722,722
|
|
|
2016
|
|
2015
|
||||
Current tax provision
|
$
|
5,180
|
|
|
$
|
4,081
|
|
Deferred tax benefit
|
(34,440
|
)
|
|
(304,224
|
)
|
||
Total tax benefit
|
$
|
(29,260
|
)
|
|
$
|
(300,143
|
)
|
|
2016
|
|
2015
|
||
Federal statutory rate
|
34
|
%
|
|
34
|
%
|
State income tax rate, net of federal benefit
|
(1
|
%)
|
|
—
|
%
|
Permanent differences
|
(2
|
%)
|
|
1
|
%
|
Temporary differences
|
(5
|
%)
|
|
4
|
%
|
New Jersey tax settlement and other
|
—
|
%
|
|
11
|
%
|
Change in valuation allowance
|
(22
|
%)
|
|
(65
|
%)
|
|
4
|
%
|
|
(15
|
%)
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carry forward
|
$
|
27,202,348
|
|
|
$
|
34,164,267
|
|
Intangible assets
|
2,239,700
|
|
|
3,909,300
|
|
||
Stock based expenses
|
1,484,900
|
|
|
1,201,800
|
|
||
Accrued expense
|
311,000
|
|
|
552,500
|
|
||
Deferred rent
|
69,300
|
|
|
2,200
|
|
||
Other
|
14,200
|
|
|
15,000
|
|
||
Allowance for doubtful accounts
|
9,800
|
|
|
6,900
|
|
||
Subtotal
|
31,331,248
|
|
|
39,851,967
|
|
||
Less valuation allowance
|
(31,331,248
|
)
|
|
(39,838,347
|
)
|
||
Total
|
—
|
|
|
13,620
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Intangibles and Property and Equipment
|
3,702,300
|
|
|
3,435,700
|
|
||
Other
|
36,200
|
|
|
363,900
|
|
||
Total
|
3,738,500
|
|
|
3,799,600
|
|
||
Total deferred tax assets (liabilities)
|
$
|
(3,738,500
|
)
|
|
$
|
(3,785,980
|
)
|
|
Options Outstanding
|
|
RSUs Outstanding
|
|
Options and RSUs Exercised
|
|
Available Shares
|
|
Total
|
|||||
2010 ECP
|
250,498
|
|
|
755,507
|
|
|
2,365,373
|
|
|
614,567
|
|
|
3,985,945
|
|
2005 LTIP (*)
|
13,748
|
|
|
—
|
|
|
950,085
|
|
|
—
|
|
|
963,833
|
|
Total
|
264,246
|
|
|
755,507
|
|
|
3,315,458
|
|
|
614,567
|
|
|
4,949,778
|
|
|
Restricted Stock
|
|
Weighted Average Fair Value
|
|||
Outstanding, beginning of year
|
1,229,769
|
|
|
$
|
1.02
|
|
Granted
|
96,096
|
|
|
$
|
1.71
|
|
Exercised
|
(539,612
|
)
|
|
$
|
2.34
|
|
Forfeited
|
(30,746
|
)
|
|
$
|
2.10
|
|
Outstanding, end of year
|
755,507
|
|
|
$
|
2.84
|
|
|
Lease Payments
|
||
2017
|
$
|
182,456
|
|
2018
|
183,858
|
|
|
2019
|
184,852
|
|
|
2020
|
140,749
|
|
|
Total
|
$
|
691,915
|
|
|
2016
|
|
2015
|
||||||||
|
$
|
|
% of Revenue
|
|
$
|
|
% of Revenue
|
||||
Partner Network
|
26,011,543
|
|
|
36.4
|
%
|
|
30,298,532
|
|
|
43.0
|
%
|
Owned and Operated Network
|
45,518,559
|
|
|
63.6
|
%
|
|
40,139,584
|
|
|
57.0
|
%
|
Total net revenue
|
71,530,102
|
|
|
100.0
|
%
|
|
70,438,116
|
|
|
100.0
|
%
|
|
2016
|
|
2015
|
||||||||
|
$
|
|
Gross Profit %
|
|
$
|
|
Gross Profit %
|
||||
Partner Network
|
4,734,240
|
|
|
18.2
|
%
|
|
6,645,590
|
|
|
21.9
|
%
|
Owned and Operated Network
|
45,431,067
|
|
|
99.8
|
%
|
|
40,070,530
|
|
|
99.8
|
%
|
Total gross profit
|
50,165,307
|
|
|
70.1
|
%
|
|
46,716,120
|
|
|
66.3
|
%
|
EXHIBIT 21.1-SUBSIDIARIES OF THE REGISTRANT
|
|
Inuvo, Inc.
|
Nevada Corporation
|
|
|
ValidClick
|
Missouri Corporation
|
|
|
Vintacom Florida, Inc.
|
Florida Corporation
|
|
|
iLead Media, LLC
|
Delaware Limited Liability Company
|
|
|
Kowabunga Marketing, Inc.
|
Michigan Corporation
|
|
|
Vertro, Inc.
|
Delaware Corporation
|
|
|
ALOT, Inc.
|
Delaware Corporation
|
|
|
Varick & Spring I, Inc.
|
Delaware Corporation
|
|
|
Who Midco Corporation
|
Delaware Corporation
|
|
|
Varick and Spring II, Inc.
|
Delaware Corporation
|
|
|
Think Relevant Media, LLC.
|
Arkansas Corporation
|
|
|
Bonfire Publishing Group, LLC.
|
Florida Corporation
|
|
|
NetSeer Acquisition, Inc.
|
Nevada Corporation
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Inuvo, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 10-K of Inuvo, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.
|