Inuvo(INUV) - 2019 Q2 - Quarterly Report

Front Matter Filing Information Details Inuvo, Inc.'s Form 10-Q filing, registrant identification, and common stock information - Registrant: Inuvo, Inc., a Nevada corporation, with Commission file number 001-32442[2] - Filing Type: Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the period ended June 30, 2019[2] Common Stock Outstanding as of August 9, 2019 | Title of Class | August 9, 2019 | | :------------- | :------------- | | Common Stock | 48,500,689 | Cautionary Statement Regarding Forward-Looking Information Warns that forward-looking statements are subject to risks and uncertainties, potentially altering actual results - Forward-looking statements are identified by terms such as 'will,' 'should,' 'intend,' 'expect,' 'plan,' 'anticipate,' 'believe,' 'estimate,' 'predict,' 'potential,' or 'continue,' or their negatives[12] - Key risks include: history of losses, declining revenues, working capital deficit, ability to continue as a going concern, reliance on limited customers, seasonality, dependence on supply partners, ability to acquire profitable traffic, technology changes, network infrastructure interruption, dependence on key personnel, regulatory/legal uncertainties, privacy/data security compliance, third-party infringement claims, fraudulent clicks, global economy downturn, impact of quarterly results on stock price, difficulties in meeting credit agreement covenants, and dilution from stock options/RSUs[16] - The company undertakes no obligation to publicly release revisions to forward-looking statements or report unanticipated events, except as required by Federal securities laws[14] PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Presents Inuvo, Inc.'s unaudited consolidated financial statements, including balance sheets, operations, cash flows, and equity, with detailed notes Consolidated Balance Sheets Consolidated Balance Sheet Highlights | Metric | June 30, 2019 (Unaudited) | December 31, 2018 | | :---------------------- | :------------------------ | :---------------- | | Cash | $995,467 | $228,956 | | Total Current Assets | $6,274,831 | $7,212,017 | | Total Assets | $27,644,127 | $28,665,882 | | Total Current Liabilities | $15,667,269 | $14,099,228 | | Total Long-Term Liabilities | $5,222,781 | $3,532,839 | | Total Stockholders' Equity | $6,754,077 | $11,033,815 | - Cash increased significantly from $228,956 at December 31, 2018, to $995,467 at June 30, 2019[18] - Total stockholders' equity decreased from $11,033,815 at December 31, 2018, to $6,754,077 at June 30, 2019[18] Consolidated Statements of Operations Consolidated Statements of Operations Highlights | Metric (Unaudited) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Revenue | $14,047,907 | $19,004,851 | $29,512,476 | $39,508,836 | | Gross Profit | $8,373,547 | $12,013,547 | $17,157,488 | $23,738,938 | | Operating Loss | $(2,103,785) | $(739,121) | $(4,049,470) | $(2,053,901) | | Net Loss | $(1,954,993) | $(832,697) | $(4,417,386) | $(2,240,721) | | Basic and Diluted EPS | $(0.06) | $(0.03) | $(0.14) | $(0.08) | - Net revenue decreased by 26.1% for the three months ended June 30, 2019, and by 25.3% for the six months ended June 30, 2019, compared to the respective prior year periods[21][88][89] - Net loss more than doubled for both the three-month and six-month periods ended June 30, 2019, compared to the same periods in 2018[21] Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Activity | 2019 | 2018 | | :------------------- | :------------ | :------------ | | Net cash used in operating activities | $(709,846) | $(154,238) | | Net cash used in investing activities | $(581,839) | $(941,636) | | Net cash provided by financing activities | $2,058,196 | $1,128,576 | | Net change – cash | $766,511 | $32,702 | | Cash, end of period | $995,467 | $4,117,388 | - Net cash used in operating activities increased significantly in 2019, primarily due to a higher net loss, partially offset by changes in working capital[23][100] - Net cash provided by financing activities increased in 2019, driven by proceeds from convertible promissory notes[23][103] Consolidated Statements of Stockholders' Equity Stockholders' Equity Changes (Six Months Ended June 30, 2019) | Metric | Balance as of Dec 31, 2018 | Net Loss | Stock-based Compensation | Stock Issued for Vested RSUs | Shares Withheld for Taxes | Balance as of June 30, 2019 | | :---------------------- | :------------------------- | :------------ | :----------------------- | :--------------------------- | :------------------------ | :-------------------------- | | Common Stock (Shares) | 32,381,290 | — | — | 233,244 | — | 32,614,534 | | Common Stock (Value) | $32,759 | — | — | $233 | — | $32,992 | | Additional Paid-in Capital | $138,867,509 | — | $146,693 | $(233) | $(9,045) | $139,004,924 | | Accumulated Deficit | $(126,469,894) | $(4,417,386) | — | — | — | $(130,887,280) | | Treasury Stock | $(1,396,559) | — | — | — | — | $(1,396,559) | | Total Equity | $11,033,815 | $(4,417,386) | $146,693 | — | $(9,045) | $6,754,077 | - The accumulated deficit increased by $4,417,386 during the six months ended June 30, 2019, primarily due to the net loss[25] - Stock-based compensation added $146,693 to additional paid-in capital during the six months ended June 30, 2019[25] Notes to Consolidated Financial Statements Note 1 – Organization and Business - Inuvo is a technology company providing data-driven platforms that use proprietary AI (IntentKey) to identify and message online audiences across various channels, facilitating over a billion marketing messages monthly[28][29] - The company terminated its Merger Agreement with ConversionPoint Technologies Inc. on June 20, 2019, due to the acquirer's inability to fulfill the $36 million financing condition, resulting in a $2.8 million termination fee, partially satisfied by the cancellation of the CPTI Note[32][33][34][41] - Liquidity concerns exist due to a 25.3% revenue decline for the six months ended June 30, 2019, a $4.4 million net loss, lower credit availability, and negative cash flows from operations, raising doubt about the company's ability to continue as a going concern[41][42] Customer Revenue Concentration | Customer | Q2 2019 Revenue % | Q2 2018 Revenue % | H1 2019 Revenue % | H1 2018 Revenue % | | :------- | :---------------- | :---------------- | :---------------- | :---------------- | | Yahoo! | 69.7% | 73.1% | 71.8% | 71.7% | | Google | 11.3% | 9.0% | 11.5% | 9.2% | | Total | 81.0% | 82.1% | 83.3% | 80.9% | Note 2 – Summary of Significant Accounting Policies - The financial statements are unaudited and prepared under SEC rules for interim periods, with certain disclosures condensed or omitted[45] - Revenue recognition follows Topic 606, recognizing revenue when control of promised goods/services is transferred, with most revenue generated from clicks on advertisements[47][48] Revenue Disaggregation by Source | Source | Q2 2019 Revenue | Q2 2019 % | Q2 2018 Revenue | Q2 2018 % | H1 2019 Revenue | H1 2019 % | H1 2018 Revenue | H1 2018 % | | :------- | :-------------- | :-------- | :-------------- | :-------- | :-------------- | :-------- | :-------------- | :-------- | | Partners | $10,478,313 | 74.6% | $13,542,270 | 71.3% | $21,976,771 | 74.5% | $27,448,202 | 69.5% | | O&O | $3,569,594 | 25.4% | $5,462,581 | 28.7% | $7,535,705 | 25.5% | $12,060,634 | 30.5% | | Total | $14,047,907 | 100.0% | $19,004,851 | 100.0% | $29,512,476 | 100.0% | $39,508,836 | 100.0% | Revenue Disaggregation by Channel | Channel | Q2 2019 Revenue | Q2 2018 Revenue | H1 2019 Revenue | H1 2018 Revenue | | :------ | :-------------- | :-------------- | :-------------- | :-------------- | | Mobile | $8,823,577 | $12,946,533 | $19,370,199 | $27,268,202 | | Desktop | $4,935,654 | $5,693,452 | $9,530,276 | $11,657,328 | | Other | $288,676 | $364,866 | $612,001 | $583,306 | | Total | $14,047,907 | $19,004,851 | $29,512,476 | $39,508,836 | - The company adopted ASC 842 (Leases) effective January 1, 2019, on a modified retrospective basis, recognizing operating and finance lease liabilities and corresponding right-of-use assets[51][52] Note 3 – Property and Equipment Net Carrying Value of Property and Equipment | Category | June 30, 2019 | December 31, 2018 | | :-------------------------------------- | :------------ | :---------------- | | Furniture and fixtures | $293,152 | $293,152 | | Equipment | $1,004,022 | $1,527,054 | | Capitalized internal use and purchased software | $9,718,308 | $9,142,075 | | Leasehold improvements | $421,016 | $421,016 | | Less: accumulated depreciation and amortization | $(9,867,993) | $(9,259,625) | | Total | $1,568,505 | $2,123,672 | - Depreciation expense was $873,426 for the six months ended June 30, 2019, a slight decrease from $885,975 in the prior year period[53] Note 4 – Other Intangible Assets and Goodwill Intangible Assets and Goodwill as of June 30, 2019 | Asset Category | Term | Carrying Value | Accumulated Amortization and Impairment | Net Carrying Value | Year-to-date Amortization | | :-------------------- | :------- | :------------- | :-------------------------------------- | :----------------- | :------------------------ | | Customer list, Google | 20 years | $8,820,000 | $(3,234,000) | $5,586,000 | $220,500 | | Technology | 5 years | $3,600,000 | $(1,740,000) | $1,860,000 | $360,000 | | Customer list, all other | 10 years | $1,610,000 | $(1,180,696) | $429,304 | $80,502 | | Customer relationships | 20 years | $570,000 | $(68,875) | $501,125 | $14,250 | | Trade names, web properties | Indefinite | $390,000 | — | $390,000 | — | | Total Intangible Assets | | $14,990,000 | $(6,223,571) | $8,766,429 | $675,252 | | Goodwill | Indefinite | $9,853,342 | — | $9,853,342 | — | Amortization Expense Schedule | Year | Amortization Expense | | :-------- | :------------------- | | 2019 | $675,252 | | 2020 | $1,350,504 | | 2021 | $1,350,504 | | 2022 | $556,294 | | 2023 | $469,500 | | Thereafter | $3,974,375 | | Total | $8,376,429 | Note 5 - Bank Debt Bank Debt (Financed Receivables) | Metric | June 30, 2019 | December 31, 2018 | | :---------------------- | :------------ | :---------------- | | Financed receivables | $2,856,428 | $1,859,853 | - The Amended and Restated Business Financing Agreement with Western Alliance Bank, secured by all company assets, provides a revolving credit line with an advance rate of 85% on invoiced receivables (prime plus 1% interest) and a sub-limit on uninvoiced receivables (prime plus 2% interest)[57] - Amendments in May and June 2019 extended and then modified the $2.5 million sub-limit for uninvoiced eligible receivables, granting the lender discretion and the right to terminate financing upon notice[57][58] Note 6 - Notes Payable - Four directors of the Company lent an aggregate of $250,000 under 10% Promissory Notes on November 2, 2018, to cover merger-related costs, with these unsecured notes due November 2, 2019[60] Note 7 – Accrued Expenses and Other Current Liabilities Accrued Expenses and Other Current Liabilities | Category | June 30, 2019 | December 31, 2018 | | :-------------------------------- | :------------ | :---------------- | | Accrued marketing costs (TAC) | $1,453,827 | $1,509,843 | | Accrued expenses and other | $791,301 | $461,823 | | Operating lease liability | $433,908 | $198,769 | | Financing lease liability | $174,815 | — | | Accrued payroll and commission liabilities | $73,126 | $200,290 | | Arkansas grant contingency | $50,000 | $55,000 | | Accrued sales allowance | $50,000 | $50,000 | | Accrued taxes | $8,840 | $14,109 | | Total | $3,035,817 | $2,489,834 | - Total accrued expenses and other current liabilities increased from $2,489,834 at December 31, 2018, to $3,035,817 at June 30, 2019, primarily due to increases in accrued expenses and other, and operating/financing lease liabilities[61] Note 8 - Convertible Promissory Notes - In March 2019, Inuvo issued $1,440,000 principal of Original Issue Discount Unsecured Subordinated Convertible Notes (Calvary Notes) in a private placement, receiving $1,200,000 in proceeds for working capital[62] - The CPTI Note ($1,000,000 principal) issued to CPT Investments in November 2018 was terminated and cancelled on June 20, 2019, as partial satisfaction of the merger termination fee[63] Note 9 – Other Long-Term Liabilities Other Long-Term Liabilities | Category | June 30, 2019 | December 31, 2018 | | :---------------------------- | :------------ | :---------------- | | Capital leases, less current portion | — | $80,969 | | Deferred rent | $79,628 | $98,276 | | Accrued taxes, less current portion | $13,762 | $13,762 | | Total | $93,390 | $193,007 | - Total other long-term liabilities decreased from $193,007 at December 31, 2018, to $93,390 at June 30, 2019, primarily due to the elimination of capital leases[65] Note 10 – Income Taxes - The company has a deferred tax liability of $2,339,832 as of June 30, 2019, and December 31, 2018, related to acquired intangible assets[66] - A valuation allowance has been recorded for the net deferred tax assets of approximately $32,663,706, as it is deemed unlikely that these assets will be realized[66] Note 11 - Stock-Based Compensation Stock-Based Compensation Expense | Period | 2019 | 2018 | | :----------------------------------- | :------------ | :------------ | | Three months ended June 30 | $49,823 | $289,950 | | Six months ended June 30 | $146,693 | $667,797 | - Total compensation cost not yet recognized at June 30, 2019, was $866,528, to be recognized over a weighted-average period of 1.44 years[68] Unvested RSUs Activity (Three Months Ended June 30, 2019) | Activity | Number of Shares | Weighted Average Grant Date Fair Value | | :---------------------------- | :--------------- | :------------------------------------- | | Unvested as of December 31, 2018 | 1,571,864 | $0.79 | | Granted | 112,773 | $1.40 | | Vested | 254,782 | $0.86 | | Forfeited | 40,688 | $0.93 | | Unvested as of June 30, 2019 | 1,389,167 | $0.83 | Note 12 - Earnings per Share - Due to a net loss from continuing operations for the three and six months ended June 30, 2019 and 2018, all shares are considered anti-dilutive[71] Note 13 - Leases - Upon adoption of ASC 842 on January 1, 2019, the company recognized approximately $1.2 million in right-of-use assets and lease liabilities for operating leases, and $265,000 for finance leases[72] - For the six months ended June 30, 2019, total lease costs were approximately $309 thousand, comprising $204 thousand in operating lease costs and $105 thousand in finance lease costs[72] Operating Lease Liabilities Information (Six Months Ended June 30, 2019) | Metric | Value | | :------------------------------ | :---------- | | Cash paid for operating lease liabilities | $219,534 | | Weighted-average remaining lease term | 2.6 years | | Weighted-average discount rate | 6.25% | | Total lease liabilities | $970,016 | Financed Lease Liabilities Information (Six Months Ended June 30, 2019) | Metric | Value | | :------------------------------ | :---------- | | Cash paid for finance lease liabilities | $136,539 | | Weighted-average remaining lease term | 1.1 years | | Weighted-average discount rate | 6.25% | | Total lease liabilities | $174,933 | Note 14 - Related Party Transactions - In June 2019, the company entered into a six-month office space lease agreement with First Orion Corp., partially owned by two directors, for $60,000 (prepaid)[76] - Four directors provided $250,000 in 10% Promissory Notes on November 2, 2018, to cover merger-related costs[77] Note 15 - Subsequent Events - On July 15, 2019, the company closed an underwritten public offering of 15,812,500 shares of common stock at $0.30 per share, generating approximately $4.7 million in gross proceeds[78] - The conversion price of the Calvary Notes was adjusted from $1.08 to $0.30 per share on July 15, 2019, to match the equity offering price[79] - On July 23, 2019, the CPTI Note was officially cancelled and terminated, extinguishing all related obligations[80] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on Inuvo's financial performance and condition, detailing business operations, industry trends, critical accounting policies, and a comprehensive analysis of results of operations, liquidity, and cash flows for the reported periods Company Overview - Inuvo is a technology company that uses data-driven platforms and its proprietary AI (IntentKey) to identify and message online audiences across various digital channels[81][82] - The company owns websites (e.g., alot.com, earnspendlive.com) to test technologies and deliver high-quality consumers through proprietary content[83] - Inuvo's intellectual property is protected by 15 issued and eight pending patents, creating significant barriers to entry[84] Industry Trends - The U.S. digital advertising market is projected to grow 19% to $129 billion in 2019, with Facebook and Google capturing nearly 60% of the investment[85] - Mobile advertising spend is expected to increase from $71 billion in 2018 to $87 billion in 2019[85] - Programmatic display advertising spend is forecasted to exceed $59 billion in 2019, growing to $81 billion by 2021[85] Critical Accounting Policies and Estimates - Key accounting estimates include revenue recognition, allowances for doubtful accounts, goodwill and intangible asset valuations, long-lived asset valuation, deferred income tax asset valuation allowances, contingent liabilities, and stock compensation[86][87] - Management regularly evaluates these estimates and assumptions, with historical differences between estimates and actual results being immaterial[87] Results of Operations Key Financial Results (YoY Change) | Metric | Q2 2019 | Q2 2018 | Q2 Change | Q2 % Change | H1 2019 | H1 2018 | H1 Change | H1 % Change | | :-------------- | :----------- | :----------- | :----------- | :---------- | :----------- | :----------- | :----------- | :---------- | | Net Revenue | $14,047,907 | $19,004,851 | $(4,956,944) | (26.1%) | $29,512,476 | $39,508,836 | $(9,996,360) | (25.3%) | | Cost of Revenue | $5,674,360 | $6,991,304 | $(1,316,944) | (18.8%) | $12,354,988 | $15,769,898 | $(3,414,910) | (21.7%) | | Gross Profit | $8,373,547 | $12,013,547 | $(3,640,000) | (30.3%) | $17,157,488 | $23,738,938 | $(6,581,450) | (27.7%) | - Net revenue declined due to a strategic reduction in focus on non-strategic publisher-side technologies and reduced monetization from advertising inventory sold to largest Demand partners, partly influenced by the terminated merger[89] Operating Expenses (YoY Change) | Expense Category | Q2 2019 | Q2 2018 | Q2 Change | Q2 % Change | H1 2019 | H1 2018 | H1 Change | H1 % Change | | :------------------------ | :----------- | :----------- | :----------- | :---------- | :----------- | :----------- | :----------- | :---------- | | Marketing costs (TAC) | $6,528,336 | $8,446,163 | $(1,917,827) | (22.7%) | $13,072,345 | $16,740,457 | $(3,668,112) | (21.9%) | | Compensation | $1,735,489 | $2,323,654 | $(588,165) | (25.3%) | $3,544,045 | $4,943,169 | $(1,399,124) | (28.3%) | | Selling, general and administrative | $2,213,507 | $1,982,851 | $230,656 | 11.6% | $4,590,568 | $4,109,213 | $481,355 | 11.7% | | Total Operating Expenses | $10,477,332 | $12,752,668 | $(2,275,336) | (17.8%) | $21,206,958 | $25,792,839 | $(4,585,881) | (17.8%) | - Selling, general and administrative costs increased due to $887 thousand in merger-related professional fees for the first six months of 2019[94] - Interest expense, net, was lower for Q2 2019 due to the derivative liability associated with the Calvary Notes reducing to $0, but higher for H1 2019 due to higher interest rates on financed receivables[95] Liquidity and Capital Resources - The company's liquidity is impacted by a 25.3% revenue decline and a $4.4 million net loss for the six months ended June 30, 2019, leading to lower credit availability and negative cash flows from operations[99] - The termination of the Merger Agreement resulted in a $2.8 million termination fee, partially satisfied by the cancellation of the CPTI Note[99] - Recent financing activities include $1.2 million in proceeds from Calvary Notes in March 2019 and an additional $4.7 million (gross) from a public offering of common stock in July 2019[99] - Given current conditions, there is doubt about the company's ability to continue as a going concern without additional credit or substantial reductions in operating expenses[99] Cash Flows - Operating - Net cash used in operating activities was $709,846 for the six months ended June 30, 2019, compared to $154,238 in the prior year period[100][101] - The net loss of $4,417,386 was partially offset by non-cash expenses (depreciation, amortization, stock-based compensation) totaling approximately $1.99 million[100] - Changes in operating assets and liabilities provided $1,656,973 in cash, primarily due to a decrease in accounts receivable[100] Cash Flows - Investing - Net cash used in investing activities was $581,839 for the six months ended June 30, 2019, primarily for capitalized internal development costs[102] Cash Flows - Financing - Net cash provided by financing activities was $2,058,196 for the six months ended June 30, 2019, mainly from proceeds of the Calvary Notes[103] - In the comparable 2018 period, net cash provided by financing activities was $1,128,576, primarily from a secondary public offering[103] Off Balance Sheet Arrangements - As of June 30, 2019, Inuvo had no material off-balance sheet arrangements that would significantly affect its financial condition or results of operations[104] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. This section states that quantitative and qualitative disclosures about market risk are not applicable to Inuvo, Inc. as it qualifies as a smaller reporting company - This item is not applicable to a smaller reporting company[105] ITEM 4. CONTROLS AND PROCEDURES. This section addresses the effectiveness of the company's disclosure controls and procedures and confirms that there have been no material changes in internal control over financial reporting during the period Evaluation of Disclosure Controls and Procedures - Management, including the CEO and CFO, concluded that Inuvo's disclosure controls and procedures were effective as of June 30, 2019, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[106][109] - The company acknowledges that no control system can provide absolute assurance against all errors and fraud due to inherent limitations like resource constraints, human judgment, and potential circumvention[107][108] Changes in Internal Control over Financial Reporting - There were no changes in internal control over financial reporting during the period ended June 30, 2019, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[110] PART II Item 1 - Legal Proceedings This section details several class action lawsuits filed against Inuvo and its directors related to the terminated merger, and their subsequent resolution through dismissal or confidential settlement - Multiple putative class action lawsuits were filed by stockholders in late 2018 and early 2019, challenging the Merger Transactions and adequacy of disclosures[112][113][114][116] - Most lawsuits were dismissed following the filing of Parent's amended S-4 Registration Statement or voluntary dismissal by plaintiffs[115][117] - On June 20, 2019, Inuvo entered into a Confidential Settlement Agreement resolving outstanding litigation, contingent on Inuvo paying a settlement fee by September 30, 2019[118] ITEM 1A. RISK FACTORS This section highlights key risks, including the adverse effects of the terminated merger, significant customer concentration, and potential impacts of non-compliance with credit facility covenants, supplementing the risks disclosed in the annual report - The termination of the Mergers on June 20, 2019, has had continuing adverse effects, including a decline in stock price, impaired business operations due to pending restrictions, and negative impacts on relationships with employees, suppliers, and partners[120] Customer Revenue Concentration Risk | Customer | Q2 2019 Revenue % | Q2 2018 Revenue % | | :------- | :---------------- | :---------------- | | Yahoo! | 69.7% | 73.1% | | Google | 11.3% | 9.0% | - A significant decline in revenue and harm to business operations could occur if key customers (Yahoo! and Google) do not approve new websites/applications, if guidelines are violated, or if guidelines change, and suitable alternatives cannot be found[122] - Failure to comply with covenants in the credit facility with Western Alliance Bank could lead to a default, acceleration of outstanding borrowings, and potential seizure of collateral, jeopardizing the company's ability to conduct business[123][124][125] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. This section states that there were no unregistered sales of equity securities or use of proceeds to report, except as previously disclosed - No unregistered sales of equity securities or use of proceeds, except as previously disclosed[126] ITEM 3. DEFAULTS UPON SENIOR SECURITIES. This section reports that there were no defaults upon senior securities during the period - No defaults upon senior securities[127] ITEM 4. MINE SAFETY AND DISCLOSURES. This section states that mine safety and disclosures are not applicable to the company - Not applicable[128] ITEM 5. OTHER INFORMATION. This section details resolutions adopted by the Nominating, Corporate Governance and Compensation Committee regarding the vesting of outstanding restricted stock unit (RSU) grants, aimed at employee attraction and retention - On August 14, 2019, the Committee resolved that performance criteria for 319,198 performance-based RSU grants were met, making them vested as of June 30, 2019[129] - Additionally, 1,122,724 service-based RSU grants will vest in three equal installments: August 19, 2019, January 1, 2020, and July 1, 2020[129] ITEM 6. EXHIBITS This section lists all exhibits filed as part of the Form 10-Q, including various agreements, corporate documents, and certifications - Exhibits include the Underwriting Agreement, Merger Termination Agreement, Inuvo Note Termination Agreement, Articles of Incorporation, Amended and Restated By-Laws, Business Financing Modification Agreement, and certifications from the CEO and CFO[130] SIGNATURES This section contains the official signatures of the company's principal executive and financial officers, certifying the accuracy and completeness of the Form 10-Q report - The report was signed on August 14, 2019, by Richard K. Howe, Chief Executive Officer, and Wallace D. Ruiz, Chief Financial Officer[133]