Inuvo(US:INUV)2025-08-07 20:46Cautionary Statement Regarding Forward-Looking Information Forward-Looking Statements and Risks This section outlines forward-looking statements, subject to risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements identifiable by terms such as 'will,' 'should,' 'intend,' 'expect,' 'plan,' 'anticipate,' 'believe,' 'estimate,' 'predict,' 'potential,' or 'continue'10 - Key risks include a decline in economic conditions, decreased market demand, customer revenue concentration, seasonality, dependence on advertising suppliers, ability to acquire profitable traffic, technological changes, IT infrastructure interruptions, dependence on key personnel, regulatory/legal uncertainties, privacy/data security compliance, third-party infringement claims, fraudulent clicks, NYSE American listing standards, stock price impact from quarterly results, dilution, and ability to integrate future acquisitions1017 - Readers are advised to review risk factors in Part II, Item 1A of this report and the Annual Report on Form 10-K for the year ended December 31, 202411 Other Pertinent Information Company References and Reporting Periods This section clarifies company references and defines reporting periods, excluding corporate website and social media information - Terms like 'Inuvo,' 'the Company,' 'we,' 'us,' 'our' refer to Inuvo, Inc., a Nevada corporation, and its subsidiaries14 - 'Second quarter 2025' refers to the three months ended June 30, 2025, and 'second quarter 2024' to the three months ended June 30, 202414 - Information on the corporate website (www.inuvo.com) and social media platforms is not part of this report14 Part I - Financial Information Item 1. Financial Statements This section presents Inuvo's unaudited consolidated financial statements and notes for periods ended June 30, 2025, and December 31, 2024 Consolidated Balance Sheets Consolidated balance sheets show decreased total assets and equity from December 2024 to June 2025, driven by current asset reduction and accumulated deficit Consolidated Balance Sheet Metrics | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Total assets | $28,689,048 | $32,195,931 | | Total current assets | $12,543,863 | $15,644,821 | | Cash and cash equivalents | $2,135,188 | $2,459,245 | | Accounts receivable, net | $9,737,823 | $12,545,771 | | Total liabilities and stockholders' equity | $28,689,048 | $32,195,931 | | Total current liabilities | $15,915,287 | $17,885,888 | | Total stockholders' equity | $12,079,639 | $13,474,772 | | Accumulated deficit | $(175,970,092) | $(173,209,012) | Consolidated Statements of Operations and Comprehensive Loss In Q2 and H1 2025, Inuvo reported increased net revenue and gross profit, but continued net losses, reduced for the six-month period Consolidated Statements of Operations and Comprehensive Loss Summary | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net revenue | $22,671,333 | $18,209,005 | $49,379,365 | $35,232,782 | | Cost of revenue | $5,576,545 | $2,906,188 | $11,197,486 | $5,005,230 | | Gross profit | $17,094,788 | $15,302,817 | $38,181,879 | $30,227,552 | | Operating loss | $(2,043,557) | $(1,699,387) | $(3,813,344) | $(3,790,665) | | Net loss | $(1,501,263) | $(1,747,191) | $(2,761,084) | $(3,858,849) | | Basic and diluted net loss per share | $(0.10) | $(0.12) | $(0.19) | $(0.28) | Consolidated Statements of Stockholders' Equity Stockholders' equity decreased from December 2024 to June 2025, primarily due to net losses and shares withheld for taxes, partially offset by ATM sales Stockholders' Equity Changes | Metric | December 31, 2024 | June 30, 2025 | | :-------------------------------- | :---------------- | :-------------- | | Total Stockholders' Equity | $13,474,772 | $12,079,639 | | Net loss (6 months) | $(1,259,821) (Q1) / $(1,501,263) (Q2) | $(2,761,084) | | Stock-based compensation (6 months) | $304,284 (Q1) / $291,789 (Q2) | $596,073 | | At-the-market sale of common stock, net | N/A | $1,128,838 | | Shares withheld for taxes on vested restricted stock | N/A | $(358,965) | Consolidated Statements of Cash Flows For H1 2025, net cash used in operating activities decreased, financing activities turned positive due to ATM sales, leading to a smaller overall net cash decrease Cash Flow Activities Summary | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(223,257) | $(1,160,170) | | Net cash used in investing activities | $(858,441) | $(933,955) | | Net cash provided by/(used in) financing activities | $757,641 | $(334,425) | | Net change – cash | $(324,057) | $(2,428,550) | | Cash and cash equivalent, end of period | $2,135,188 | $2,011,904 | Notes to Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the consolidated financial statements, covering organization, accounting policies, assets, liabilities, debt, and other key financial areas Note 1 – Organization and Business Inuvo is an advertising technology and services company specializing in AI-driven digital audience targeting, particularly with its IntentKey product, which addresses consumer privacy changes by targeting interests without identity data - Inuvo is an advertising technology company using generative AI (IntentKey) to target digital audiences without consumer identity data, addressing the evolving privacy landscape283031 - The company's intellectual property is protected by 17 issued and two pending patents3495 - Inuvo's principal sources of liquidity are common stock sales (via ATM Agreement, $1.16 million raised in Jan 2025) and a $10 million credit facility with SLR Digital Finance LLC353637 - As of June 30, 2025, cash and cash equivalents were over $2.1 million, with a net working capital deficit of approximately $3.4 million38 - Management believes current liquidity (cash, credit facility, ATM proceeds) is sufficient for at least the next twelve months, with a plan to grow the IntentKey product to achieve profitability39 Note 2 – Summary of Significant Accounting Policies This note outlines the basis of presentation for Inuvo's unaudited consolidated financial statements, emphasizing the use of estimates in accordance with GAAP and detailing the company's revenue recognition policies, including customer concentration and recently issued accounting standards - Revenue is generated by identifying audiences and presenting advertisements for Agencies & Brands (primarily IntentKey) and Platforms (primarily Bonfire), with pricing typically