What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-02-11 compared with 2020-05-12 · 40 added, 39 removed, 64 unchanged (55% of the section changed)

4 unchanged sentences

Inuvo facilitates the delivery of hundreds of millions of marketing messages to consumers every single month and counts among its clients numerous world- renowned names in industries that have included retail, automotive, insurance, health care, technology, telecommunications and finance.

Inuvo has contractual relationships with three clients who collectively manage over 50% of all U.S.

digital advertising spend.

Inuvo’s solution incorporates a proprietary form of artificial intelligence, or AI, branded the IntentKey.

The Inuvo solution incorporates a proprietary form of artificial intelligence, or AI, branded the IntentKey.

This sophisticated machine learning technology uses interactions with Internet content as a source of information from which to predict consumer intent.

1 unchanged sentence

Inuvo earns revenue when consumers view or click on its client’s messages.

Inuvo’s business scales through account management activity with existing clients and by adding new clients through sales activity.

As part of Inuvo’s technology strategy, it owns a collection of websites including alot.com and earnspendlive.com, where Inuvo creates content in health, finance, travel, careers, auto, education and living categories.

These sites provide the means to test Inuvo’s technologies, while also delivering high quality consumers to clients through the interaction with proprietary content in the form of images, videos, slideshows and articles.

There are many barriers to entry associated with Inuvo’s business model, including a proficiency in large scale information processing, predictive software development, marketing data products, analytics, artificial intelligence, integration to the internet of things (IOT), and the relationships required to execute within the IOT.

Inuvo’s intellectual property is protected by 17 issued and eight pending patents.

The Inuvo business scales through account management activity with existing clients and by adding new clients through sales activity.

As part of the Inuvo technology strategy, it owns a collection of websites including alot.com and earnspendlive.com, where Inuvo creates content in health, finance, travel, careers, auto, education and living categories.

These sites provide the means to test the Inuvo technologies, while also delivering high quality consumers to clients through the interaction with proprietary content in the form of images, videos, slideshows and articles.

There are many barriers to entry associated with the Inuvo business model, including a proficiency in large scale information processing, predictive software development, marketing data products, analytics, artificial intelligence, integration to the internet of things ("IOT"), and the relationships required to execute within the IOT.

Inuvo's intellectual property is protected by 18 issued and seven pending patents.

Products and Services

1 unchanged sentence

• ValidClick:

A marketing service provided principally to Yahoo!, Google and Microsoft Online and indirectly to thousands of advertisers, where a collection of data, analytics and software gets used to align advertising messages with anonymous consumers online.

A marketing service provided to Yahoo!, Google and other consolidators of advertising demand comprising hundreds of thousands of merchants where a collection of data, analytics and software gets used to align merchant advertising messages with anonymous consumers across various websites online.

The service includes Think Relevant, a wholly owned marketing agency and alot.com, a wholly owned collection of websites;

• IntentKey :

A consumer intent recognition system and service designed to reach highly targeted mobile and desktop In-Market audiences with precision.

This platform serves the display market of advertising/marketing.

An artificial intelligence based consumer intent recognition system designed to reach highly targeted mobile and desktop In- Market audiences with precision.

The platform can serve multiple creative formats including display, video, audio and native across multiple device types including desktop, mobile, tablet, connected/smart TV and game consoles.

The product is sold as both a fully managed service and/or a Software as a Service ("SaaS") solution.

Key Relationships

We maintain long-standing relationships with Yahoo!, Google and Microsoft Online that provide access to hundreds of thousands of advertisers from which most of our ValidClick revenue originates.

We maintain long-standing relationships with Yahoo!

and Google who provide access to hundreds of thousands of advertisers from which a majority of our ValidClick revenue originates.

When an advertisement is clicked, we effectively sell that click to these partners who then sell it to the advertisers.

We maintain multi-year service contracts with these companies.

We also have contracts with OpenX and AppNexus that provide access to advertisers and publishers for the IntentKey.

In 2020, these customers accounted for 60.5% of our total revenue as compared to 78.5% in 2019.

We also have major contracts with Xandr, Inc.

who, in exchange for a fee, provides access to advertisers and publishers for the IntentKey.

In addition to our key customer relationships, we maintain important distribution relationships with owners and publishers of websites and mobile applications.

We provide these partners with advertisements which they use to monetize their websites and mobile applications.

We continuously monitor our partners' traffic with a variety of proprietary and patent protected software tools that can determine the quality of the traffic that is viewing and clicking on served advertisements.

Our business strategy has been to develop data processing technologies that can displace intermediaries within the online advertising ecosystem, while cultivating relationships that can provide access to media spend (advertisers) and media inventory (websites).

We continuously monitor consumer traffic with a variety of proprietary and patent protected software tools

that can determine the quality of the traffic viewing and clicking on Inuvo served advertisements as a part of our service to our biggest clients.

Our business strategy has been to develop data processing and product technologies that can displace intermediaries within the online advertising ecosystem, while cultivating relationships that can provide access to media spend (advertisers) and media inventory (websites).

In this regard, we have proprietary demand (media spend) and supply side (media inventory) technologies, targeting technologies, on-page or in-app ad-unit technologies, proprietary data and data management technologies, and advertising fraud detection technologies.

1 unchanged sentence

For the ValidClick platform, the immediate strategy is to maintain the business at current levels by working with existing partners.

For the IntentKey platform, the immediate strategy is to scale through the hiring of additional sales professionals.

Our industry is currently in a consolidation phase.

Our business strategy aligns with this trend as it is by design an end-to-end complete approach to the value chain.

We evaluate acquisition candidates as opportunities arise that have either advertisers or advertising relationships we do not possess or publishers or publishing partners with whom we do not currently have a relationship.

Our device strategy is to become screen agnostic.

We will continue to develop technologies that allow us to distribute ads across any medium.

For the IntentKey platform, the immediate strategy is to scale through the hiring of additional sales professionals, growing existing accounts and expanding the market size by launching a SaaS version of the IntentKey in 2021.

We have both direct and indirect relationships at some of the largest media buyers and/or consolidators in the industry.

For the ValidClick platform, the immediate strategy is to maintain the business at current levels by working with existing partners where the cash generated from the business can be used to accelerate growth of the IntentKey.

Our business strategy is focused on providing differentiation through the AI analytics and data products we own and protect through patents.

For the marketing and advertising industries we serve, this strategy aligns with the components of the value chain that are the principal drivers of value to our clients.

As part of our growth strategy, we evaluate acquisition candidates from time to time as opportunities arise with a focus on companies that have either advertisers or advertising relationships we do not possess or publishers or publishing partners who have content we do not possess.

Sales and Marketing

9 unchanged sentences

There are many barriers to entry to Inuvo’s business that would require proficiency in large scale data center management, software development, data products, analytics, artificial intelligence, integration to the internet of things, or IOT, the relationships required to execute within the IOT and the ability to process tens of billions of transactions daily.

We compete, both directly and indirectly with companies who offer demand side platforms (DSP’s), direct marketing platforms (DMP’s), Sata Suppliers and Aggregators, Media Planners and various Measurement and Analytics companies.

We compete, both directly and indirectly with companies who offer demand side platforms (DSP’s), direct marketing platforms (DMP’s), Data Suppliers and Aggregators, Media Planners and various Measurement and Analytics companies.

The companies within these categories are defined by LUMA @ https://lumapartners.com/content/lumascapes/display-ad-tech-lumascape.

4 unchanged sentences

Many competitors have greater name recognition and are better capitalized than we are.

Our ability to remain competitive in our market segment depends upon our ability to be innovative and to efficiently provide unique

solutions to our demand and supply customers.

Our ability to remain competitive in our market segment depends upon our ability to be innovative and to efficiently provide unique solutions to our demand and supply customers.

There are no assurances we will be able to remain competitive in our markets in the future.

1 unchanged sentence

Our proprietary applications are constructed from established, readily available technologies.

Some of the basic elements of our products are built on components from leading software and hardware providers such as Oracle, Microsoft, Sun, Dell, EMC, and Cisco, while some components are constructed from leading open source software projects such as Apache Web Server, MySQL, Java, Perl, Java and Linux.

Some of the basic elements of our products are built on components from leading software and hardware providers such as Oracle, Microsoft, Sun, Dell, EMC, and Cisco, while some components are constructed from leading open-source software projects such as Apache Web Server, Apache Spark, HAProxy, MySQL, Java, Perl, and Linux.

By seeking to strike the proper balance between using commercially available software and open-source software, our technology expenditures are directed toward maintaining our technology platforms while minimizing third-party technology supplier costs.

11 unchanged sentences

Federal Registration for our consumer facing brand ALOT® in the United States.

Our intellectual property portfolio includes 17 patents issued by the United States Patent and Trademark Office (“USPTO”) and eight pending patent applications.

Our intellectual property portfolio includes 18 patents issued by the United States Patent and Trademark Office (“USPTO”) and seven pending patent applications.

To distinguish our products and services from our competitors’ products, we have obtained trademarks and trade names for our products.

We also protect details about our processes, products, and strategies as trade secrets, keeping confidential the information that we believe provides us with a competitive advantage.

As of April 30, 2020, we had 64 full-time employees, none of which are covered by a collective bargaining agreement.

As of January 31, 2021, we had 71 full-time employees, none of which are covered by a collective bargaining agreement.

Our future results of operations may be subject to fluctuation because of seasonality.

1 unchanged sentence

If we are not able to appropriately adjust to seasonal or other factors, it could have a material adverse effect on our financial results.

We were incorporated under the laws of the state of Nevada in October 1987 and operated within the oil and gas industry.

This endeavor was not profitable, and from 1993 to 1997 we had essentially no operations.

In 1997 we reorganized and through 2006 we acquired a number of companies involved in advertising and internet marketing.

In 2009, following the weakness in the economy, a new team was called in to assess the array of businesses that had been acquired in the preceding years and as a result between 2009 and 2011, we sold or retired eleven businesses.

In March 2012, as part of a long-term strategy, we acquired Vertro, Inc.

("Vertro"), which owns and operates the ALOT product portfolio.

This acquisition included the ALOT brand, as well as a long-standing relationship with Google.

In 2013, with a grant funded by the State of Arkansas, we moved the headquarters to Arkansas where we have remained.

In February 2017, we entered into an Asset Purchase Agreement with NetSeer, Inc.

("NetSeer") which allowed us to advance our technology strategy while increasing both our number of advertisers and publishers.

The business was incorporated under the laws of the state of Nevada in October 1987 and originally operated within the oil and gas industry.

This endeavor was not profitable, and as a result from 1993 to 1997 the Company had essentially no operations.

In 1997, the business was reorganized and through 2006 a number of companies were acquired from within the advertising and internet marketing industry.

In March 2012, as part of a longer-term strategy, the Company acquired Vertro, Inc., which owned and operated the ALOT product portfolio.

That acquisition included the ALOT brand, as well as a long-standing relationship with Google.

In 2013, with a grant funded by the State of Arkansas, the Company moved its headquarters to Arkansas where we have remained.

In February 2017, the Company entered into an asset purchase agreement with NetSeer, Inc.

which advanced the Company's technology strategy while also increasing the number of advertiser and publisher relationships.

We exchanged 3,529,000 shares of Inuvo common stock and assumed approximately $6.8 million of specified liabilities in this business combination.

More Information

Our web site address is www.inuvo.com.

Our website address is www.inuvo.com.

We file with, or furnish to, the Securities and Exchange Commission (the "SEC") annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports, as well as various other information.

This information can be found on the SEC website at www.sec.gov.

In addition, we make available free of charge through the Investor Relations page of our web site our annual reports, quarterly reports, and current reports, and all amendments to any of those reports, as soon as reasonably practicable after providing such reports to the SEC.

In addition, we make available free of charge through the Investor Relations page of our website our annual reports, quarterly reports, and current reports, and all amendments to any of those reports, as soon as reasonably practicable after providing such reports to the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business