Financial Data and Key Metrics Changes - For Q4 2019, the company reported revenue of $18.2 million, a sequential increase of 32% and a year-over-year increase of 7% [9] - Full year revenue was $61.5 million, down approximately 16% year-over-year [9] - Gross profit for Q4 increased by roughly 42%, while full year gross profit decreased by 11% [12] - Adjusted EBITDA for Q4 was $47,000, up from a loss of $1.2 million year-over-year; full year adjusted EBITDA was a loss of $2.3 million compared to a loss of $1.4 million year-over-year [13] Business Line Data and Key Metrics Changes - ValidClick revenue for Q4 was approximately $15.5 million, a year-over-year increase of about 4%; full year revenue was down roughly $11.2 million [11] - IntentKey revenue for Q4 was $2.7 million, with full year revenue at $8.5 million, showing significant growth [9][17] - IntentKey gross margins improved from 10% in January 2019 to 46% in December 2019 [17] Market Data and Key Metrics Changes - The company noted a modest reduction in Q1 2020 revenue expectations due to the impact of COVID-19, with a forecast of flat year-over-year performance [25] - The company experienced a reduction in costs associated with the IntentKey business due to increased website traffic during quarantine [24] Company Strategy and Development Direction - The company aims to improve gross margins and capitalize on growth opportunities within ValidClick [15] - IntentKey is expected to double its business year-over-year, with a focus on expanding its client base across various industries [20][18] - The company is taking a just-in-time approach to management in light of the economic contraction caused by COVID-19 [26] Management Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the long-term impacts of COVID-19 on the business, noting that it is too early to predict outcomes [22] - The company is proactively managing its balance sheet and exploring ways to reduce operating expenses [28] - Management indicated that marketing budgets typically decline during economic downturns, but the current situation is unprecedented [26] Other Important Information - The company closed a loan agreement providing a $5 million line of credit to enhance working capital [45] - Insider purchases of stock totaled approximately $688,000, indicating confidence from management and the board [27] Q&A Session Summary Question: Outlook for Q1 and impact of new clients - Management confirmed that the revised expectation for IntentKey revenue growth to 48% was due to two new clients pausing their campaigns [51][53] Question: ValidClick traffic issues - Management indicated that the impact on ValidClick was traffic-related, with publishers facing challenges due to workforce issues [54][56] Question: Operating expenses and hiring strategy - Management stated that hiring has been paused across the company, with a focus on assessing market conditions before proceeding [64] Question: Cash situation and share count - Management projected cash to remain relatively flat exiting Q1, with an estimated share count of about 57 million [67]

Financial Data and Key Metrics Changes - For Q3 2019, the company reported revenue of $13.8 million, a decrease from $14 million in Q2 2019 and $16.8 million in Q3 2018 [6][20] - For the nine months ended September 30, 2019, revenue was $43.3 million, down from $56.3 million in the same period of 2018 [6][20] - Gross margins for Q3 2019 were approximately 64%, compared to 63% in the same quarter last year [23] Business Line Data and Key Metrics Changes - ValidClick revenue streams generated $11.2 million in Q3 2019, down from approximately $12 million in Q2 2019 [10] - IntentKey revenue was $2.6 million in Q3 2019, representing a 30% sequential growth [13][22] - The publishing component of the business generated approximately $320,000 in revenue, which is being deemed less strategic [11] Market Data and Key Metrics Changes - ValidClick revenue for July, August, and September was $3.2 million, $3.7 million, and $4.3 million respectively, with unaudited October revenue around $5.2 million [12][34] - IntentKey's client base has been growing at roughly 20% month-over-month, with performance results averaging over 30% above client expectations [16] Company Strategy and Development Direction - The company aims to manage towards stable revenue sources that can deliver roughly $50 million annually with improving gross margins [9] - There is a focus on hiring sales professionals for the IntentKey business, with plans to hire 10 by June 2020 [14] - The company is exploring the potential sale of the publishing component of its business as resources shift towards IntentKey [11] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro-level trends in media, marketing, and data are favorable, as third-party data providers face increasing pressure [34] - The company expects to burn an average of $100,000 per month starting in January 2020 until Q3 2020, when gross margins from new IntentKey revenue are anticipated to outpace sales costs [32] Other Important Information - The company reported a net income of approximately $800,000 for Q3 2019, positively impacted by other income associated with the termination of a merger [8][29] - Cash and cash equivalents at September 30 were $714,000, with outstanding bank debt of $2.4 million [30] Q&A Session Summary Question: Guidance on IntentKey revenue - Management acknowledged a downward adjustment in guidance for IntentKey revenue due to a client pushing their budget to Q1 2020, but noted potential for higher revenues [36][38] Question: Sales hiring plans - The target number of IntentKey sales representatives was reduced from 14 to 10 based on reassessment of needs to meet 2020 goals [39][40] Question: Connected TV capabilities - The company confirmed that it has integrated Connected TV media inventory into its offerings through the IntentCloud, enhancing targeting capabilities for clients [42][43]

Revenue Performance - Net revenue for Q3 2019 was $13.79 million, a decrease of 17.9% compared to Q3 2018, and for the nine months ended September 30, 2019, revenue was $43.30 million, down 23.1% year-over-year [97]. - The IntentKey business generated approximately $2.6 million in revenue for Q3 2019, representing a 61.6% increase compared to the same period last year, partially offsetting declines in other operations [99]. Operating Expenses - Operating expenses for the nine months ended September 30, 2019, decreased by 14.1% to $32.42 million compared to the same period in 2018 [100]. - Marketing costs decreased by 16.2% in Q3 2019 and by 20.0% for the nine months ended September 30, 2019, due to adjustments in traffic acquisition campaigns [101]. Net Loss and Cash Flow - The company reported a net loss of approximately $6.23 million for the nine months ended September 30, 2019, which included $1 million in merger-related costs [108]. - Net cash used in operating activities was $4.64 million for the nine months ended September 30, 2019, compared to $0.28 million in the same period of 2018 [114]. - The company expects to return to positive cash flow by the second half of 2020, focusing on growing the IntentKey technology [109]. Working Capital and Other Income - As of September 30, 2019, the company's net working capital was negative $8.1 million, compared to negative $6.9 million at the end of 2018 [107]. - Other income for the nine months ended September 30, 2019, was $3.3 million, primarily from a one-time gain related to the CPT Merger Termination fee [105]. Market Overview - The U.S. digital advertising market is projected to grow 19% in 2019, reaching $129 billion, with Facebook and Google capturing nearly 60% of the investment [94]. Financing Activities - Net cash provided by financing activities was $6,020,718 during the nine months ended September 30, 2019, primarily from proceeds from the sale of common stock and Convertible Promissory Notes [117]. - Net cash provided by financing activities was $1,689,889 during the nine months ended September 30, 2018, primarily from proceeds of the secondary public offering in May 2018 [117]. Off-Balance Sheet Arrangements - As of September 30, 2019, the company does not have any off-balance sheet arrangements that are material to investors [118].

Financial Data and Key Metrics Changes - For Q2 2019, the company reported revenue of $14 million, down from $15.5 million in Q1 2019 and $19 million in Q2 2018 [7] - For the first half of 2019, revenue was $29.5 million, compared to $39.5 million in the same period of 2018 [34] - Gross margins for Q2 2019 were 59.6%, a decrease from 63.2% in Q2 2018 [37] - Adjusted EBITDA loss was approximately $850,000 in Q2 2019 [17] Business Line Data and Key Metrics Changes - The IntentKey revenue for Q2 2019 was $2 million, with the media component generating over $900,000 in June alone, up from approximately $95,000 in January [18][61] - The ValidClick business experienced a revenue decline due to slow adaptation to pricing fluctuations and reduced emphasis on the supply side, resulting in a revenue decrease of $963,000 in Q2 2019 compared to the same quarter last year [36] Market Data and Key Metrics Changes - The IntentKey has seen a greater than 200% increase in the number of RFPs it is competing for year-over-year through July 2019, with a win rate increasing from 38% in 2018 to over 55% in 2019 [24] - The largest client, a major insurance provider, is spending an average of $150,000 per month with the IntentKey, with $400,000 spent in June [26] Company Strategy and Development Direction - The company is focusing resources and investments towards scaling the IntentKey while ensuring a stable ValidClick business [51] - The IntentKey is viewed as a unique and powerful data product for the 21st century, with plans to challenge existing marketing information providers [50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the Q2 results are not indicative of the larger opportunity ahead, citing the impact of the terminated merger and product defocusing [8][9] - The company expects the IntentKey business to contribute positively to cash flow in 2020 and be a major contributor thereafter [30] Other Important Information - The company raised $4.4 million in July 2019 to fund working capital and IntentKey growth, primarily through hiring additional sales professionals [32] - The balance sheet at June 30, 2019, showed cash and cash equivalents of $995,000, with outstanding bank debt of $2.9 million and notes of $2.5 million [42] Q&A Session Summary Question: Has anyone new been hired in the sales force? - No new hires have occurred yet, but plans include hiring one in August and a total of roughly 14 salespeople by mid-2020 [53] Question: Can progress on IntentKey leverage ValidClick? - The focus will be on IntentKey due to its higher growth and margin potential, rather than leveraging ValidClick [54] Question: What was the IntentKey contribution in the first quarter? - The IntentKey contributed $2 million in Q2, with a materially lower contribution in Q1 [61] Question: What is the expected cash position post-capital raise? - Pro forma cash is approximately $2.5 million, with roughly $5 million in debt [76]

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________________ to ______________________ Commission file number: 001-32442 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Inuvo, Inc. (Exact Name of Registrant as Specified in its Charter) (State or other juris ...

Part I - Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited consolidated financial statements for Inuvo, Inc. for the quarterly period ended March 31, 2019, including balance sheets, statements of operations, cash flows, and detailed notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2019, total assets slightly increased to **$28.7 million**, while rising liabilities to **$20.0 million** reduced stockholders' equity from **$11.0 million** to **$8.7 million** Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $6,672,396 | $7,212,017 | | Total assets | $28,686,088 | $28,665,882 | | **Liabilities & Equity** | | | | Total current liabilities | $14,582,477 | $14,099,228 | | Total long-term liabilities | $5,435,318 | $3,532,839 | | Total stockholders' equity | $8,668,293 | $11,033,815 | | Total liabilities and stockholders' equity | $28,686,088 | $28,665,882 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2019, net loss increased to **$2.46 million** from **$1.41 million** in Q1 2018, driven by a **24.6% revenue decline** to **$15.5 million** and a **25.1% gross profit decrease** Q1 2019 vs Q1 2018 Statement of Operations (Unaudited) | Metric | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Net revenue | $15,464,569 | $20,503,985 | | Gross profit | $8,783,941 | $11,725,391 | | Operating loss | ($1,945,685) | ($1,314,780) | | Net loss | ($2,462,393) | ($1,408,024) | | Net loss per share (Basic & Diluted) | ($0.08) | ($0.05) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2019 saw **$1.05 million** net cash used in operations, a shift from **$0.63 million** provided in Q1 2018, with financing activities providing **$1.38 million** resulting in a net cash increase of **$19,441** Q1 2019 vs Q1 2018 Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($1,047,835) | $629,096 | | Net cash used in investing activities | ($310,221) | ($514,065) | | Net cash provided by (used in) financing activities | $1,377,497 | ($53,839) | | **Net change – cash** | **$19,441** | **$61,192** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the pending merger with CPT, significant liquidity concerns raising going concern doubt, high revenue concentration with Yahoo! and Google, and the adoption of new lease accounting standards - The company entered into a merger agreement with ConversionPoint Technologies (CPT) on November 2, 2018; stockholders approved the merger on May 8, 2019[32](index=32&type=chunk)[41](index=41&type=chunk) - Due to a **24.6%** revenue decline in Q1 2019, a **$2.5 million** net loss, and reliance on credit facilities, there is substantial doubt about the Company's ability to continue as a going concern[43](index=43&type=chunk)[44](index=44&type=chunk) Customer Revenue Concentration | Customer | Q1 2019 Revenue % | Q1 2018 Revenue % | | :--- | :--- | :--- | | Yahoo! | 73.6% | 70.5% | | Google | 11.7% | 9.5% | | **Total** | **85.3%** | **80.0%** | - In March 2019, the company sold **$1,440,000** of Original Issue Discount Unsecured Subordinated Convertible Notes and received **$1,200,000** in proceeds for working capital[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes the **24.6% revenue decline** to strategic shifts and lower monetization, while operating expenses decreased **17.7%** despite merger costs, leading to significant going concern doubt Q1 2019 vs Q1 2018 Performance | Metric | 2019 | 2018 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $15,464,569 | $20,503,985 | $(5,039,416) | (24.6%) | | Gross Profit | $8,783,941 | $11,725,391 | $(2,941,450) | (25.1%) | - The revenue decline was caused by a strategy to reduce focus on non-strategic publisher technologies and reduced monetization from largest Demand partners[103](index=103&type=chunk) - Compensation expense decreased **31.0%** due to a reduction in headcount from **91** at March 31, 2018 to **66** at March 31, 2019[107](index=107&type=chunk) - Selling, general and administrative costs increased by **11.8%**, which included **$501,000** in costs related to the pending merger[107](index=107&type=chunk) - The company's financial condition has raised substantial doubt about its ability to continue as a going concern, necessitating reliance on financing and the successful closing of the merger[110](index=110&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section is not applicable as Inuvo, Inc. qualifies as a smaller reporting company - Disclosure is not applicable to a smaller reporting company[118](index=118&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls and procedures were effective as of March 31, 2019, with no material changes to internal control over financial reporting during the quarter - As of March 31, 2019, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[121](index=121&type=chunk) - No changes in internal control over financial reporting occurred during the period that have materially affected, or are reasonably likely to materially affect, internal controls[122](index=122&type=chunk) Part II - Other Information [Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings.) The company and its board faced putative class action lawsuits challenging merger disclosures, which the company believes are without merit and were mooted by an amended S-4 filing - Multiple putative class action lawsuits were filed by stockholders in December 2018 and January 2019, challenging the adequacy of disclosures related to the merger transactions[124](index=124&type=chunk)[126](index=126&type=chunk)[129](index=129&type=chunk) - The company believes the claims are without merit and that the allegations were mooted by the filing of an amended S-4 Registration Statement on March 15, 2019[127](index=127&type=chunk)[130](index=130&type=chunk) [Risk Factors](index=24&type=page&id=Item%201A.%20Risk%20Factors.) Key risks include potential merger delays or failure, significant revenue concentration with Yahoo! and Google, and the risk of non-compliance with credit facility covenants impacting liquidity - The merger is subject to closing conditions that, if not satisfied, could delay or prevent its completion, potentially causing the stock price to decline and impacting business relationships[133](index=133&type=chunk) - The company relies on Yahoo! and Google for a significant portion of its revenue (**85.3%** combined in Q1 2019), and the loss of either would have a material adverse impact[134](index=134&type=chunk)[135](index=135&type=chunk) - Failure to comply with covenants in the credit facility with Western Alliance Bank could result in a default, jeopardizing the company's ability to access capital and conduct business[136](index=136&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) None, except as previously disclosed in other reports - None, except as previously disclosed[137](index=137&type=chunk) [Defaults upon Senior Securities](index=26&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities.) The company reported no defaults upon senior securities - None[138](index=138&type=chunk) [Mine Safety and Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20and%20Disclosures.) This item is not applicable to the company - Not applicable[139](index=139&type=chunk) [Other Information](index=26&type=section&id=Item%205.%20Other%20Information.) None, except as previously reported - None, except as previously reported[140](index=140&type=chunk) [Exhibits](index=27&type=section&id=Item%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, financing agreements, and CEO/CFO certifications - Lists exhibits filed with the report, including financing agreements, corporate documents, and required certifications[142](index=142&type=chunk)

For the fiscal year ended December 31, 2018 o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to __________________________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Commission file number: 001-32442 FORM 10-K INUVO, INC. (Mark One) þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact name of registrant as specified in its charter) Nevada 87-0450450 (St ...