Inuvo(US:INUV)2024-08-08 20:31Financial Performance - Net revenue for Q2 2024 reached $18,209,005, a 9.3% increase from $16,651,405 in Q2 2023[11] - Gross profit for the six months ended June 30, 2024, was $30,227,552, compared to $22,939,742 for the same period in 2023, reflecting a 31.5% increase[11] - The net loss for Q2 2024 was $1,747,191, an improvement from a net loss of $3,377,238 in Q2 2023, representing a 48.3% reduction in losses[11] - Revenue for the six-month period ended June 30, 2024, was $35,232,782, up 23.6% from $28,498,845 in the prior year[29] - For the three-month period ended June 30, 2024, net revenue increased by 9.4% to $18,209,005 compared to $16,651,405 in the same period of 2023[61] - For the six months ended June 30, 2024, net cash used in operating activities was $1,160,170, with a net loss of $3,858,849, including non-cash expenses of $1,350,004 for depreciation and amortization[72] Assets and Liabilities - Total current assets decreased from $14,743,531 as of December 31, 2023, to $11,131,268 as of June 30, 2024, representing a decline of approximately 24%[9] - Total liabilities decreased from $32,374,144 to $28,458,098, a decline of about 12%[10] - Stockholders' equity fell from $16,982,186 to $13,539,570, representing a decrease of approximately 20%[10] - The company has a net working capital deficit of approximately $2.8 million as of June 30, 2024[21] - As of June 30, 2024, total intangible assets amounted to $12,355,000 with a net carrying value of $4,172,541 after accumulated amortization of $8,182,459[35] - Goodwill totaled $9,853,342 as of June 30, 2024, with no accumulated amortization[35] Cash Flow - Cash and cash equivalents dropped from $4,440,454 to $2,011,904, a decrease of about 55%[9] - Cash and cash equivalents at the end of the period were $2,011,904, down from $5,045,112 at the end of June 30, 2023[12] - Net cash used in investing activities was $933,955, primarily for capitalized internal development costs[73] - Net cash provided by financing activities was $3,495,105 for the six months ended June 30, 2023, primarily from proceeds from a capital raise[74] Customer Concentration and Risks - As of June 30, 2024, one Platform customer accounted for 72.9% of overall revenue, highlighting significant customer concentration risk[31] - The company has identified risks related to decreased market demand and customer revenue concentration, which could impact future performance[6] - The company relies heavily on one customer, which accounted for 72.9% of overall revenue for the three-month period ending June 30, 2024, and 74.3% for the six-month period[80] Operational Strategies - Future strategies may include identifying and financing potential acquisitions to enhance growth and market presence[7] - The company plans to sustain operations through cash raised from stock sales and its credit facility until profitability is achieved[22] - Management plans to support future operations through cash raised from stock sales and cash generated from its credit facility until profitability is reached[70] - The company has focused resources on marketing its multi-channel advertising capabilities differentiated by AI technology, with expectations to return to positive cash flows from operations[68] Compliance and Corporate Governance - The company is focused on maintaining compliance with NYSE American listing standards amid ongoing operational challenges[7] - The company has filed certifications from both the Chief Executive Officer and Chief Financial Officer, ensuring compliance with regulatory requirements[31.1][31.2][32.1][32.2] - Inuvo, Inc. reported significant corporate changes, including multiple amendments to its Articles of Incorporation and Bylaws filed between 2004 and 2021, indicating ongoing structural adjustments[3(i).1][3(i).2][3(i).3][3(i).5][3(i).9][3(ii).1][3(ii).2] Stock and Compensation - The number of outstanding shares of common stock as of August 2, 2024, was 140,432,087[4] - Stock-based compensation for Q2 2024 amounted to $318,681, down from $396,312 in Q1 2024[13] - Stock-based compensation expense for the six months ended June 30, 2024, was $714,993, down from $935,145 in the same period of 2023[43] - The total number of authorized shares under the 2017 Equity Compensation Plan is 24,550,000, with 6,960,020 RSUs outstanding as of June 30, 2024[44] Marketing and Operating Expenses - Total operating expenses for Q2 2024 were $17,002,204, slightly down from $17,621,917 in Q2 2023, indicating a 3.5% reduction[11] - Operating expenses for the six months ended June 30, 2024 were $34,018,217, an increase of 14.5% compared to $29,714,197 in the same period of 2023[63] - Marketing costs for Q2 2024 were $12,431,580, slightly higher than $12,056,616 in Q2 2023, indicating a 3.1% increase[11] - Marketing costs for the three months ended June 30, 2024 were $12,431,580, an increase of 3.1% from $12,056,616 in the same period of 2023[63]