What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-10 compared with 2022-03-17 · 184 added, 234 removed, 662 unchanged (39% of the section changed)

9 unchanged sentences

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control.

The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any

design will succeed in achieving its stated goals under all potential future conditions.

The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

119 unchanged sentences

10.16 Amendment No.

1 to 2010 Equity Compensation Plan dated February 29, 2012

S-8 2/29/12 99.2

10.17 2017 Equity Compensation Plan

DEF14A 4/28/17 A

10.18 Amendment No.

1 to the 2017 Equity Compensation Plan

DEF14 9/3/19 B

10.17 Amendment No.

2 to the 2017 Equity Compensation Plan

DEF14 5/2/22 A

10.18 2017 Equity Compensation Plan Non-Qualified Stock Option Agreement

10-Q 8/15/22 10.2

10.19 Quick Action Closing Fund Grant Agreement, dated January 25, 2013, with the Arkansas Economic Development Commission

3 unchanged sentences

10.21 Amendment to Grant Reimbursement Agreement, dated March 2021, with the Arkansas Economic Development Commission.

10-K 3/17/21 10.21

10.22 Employment Agreement dated March 1, 2012 between Inuvo, Inc.

22 unchanged sentences

10-K 2/11/21 21.1

23.1 Consent of E isnerA mper LL P , PCAOB FIRM ID 274

23.2 Consent of Mayer Hoffman McCann P.C ., PCAOB FIRM ID 199

23.1 Consent of EisnerAmper LLP , PCAOB FIRM ID 274

31.1 Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer

23 unchanged sentences

Ruiz Chief Financial Officer, principal financial and accounting officer March 9, 2023

Kent Burnett Director March 17, 2022

/s/ Jonathon Bond Director March 9, 2023

Jonathon Bond

/s/ Gordon J.

Cameron Director March 9, 2023

/s/ Kenneth Lee Director March 9, 2023

/s/ Charles D.

13 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Inuvo, Inc.

(the “Company”) as of December 31, 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Capitalized software development costs

As described in Note 2 to financial statements, the Company capitalizes certain labor costs related to internally developed software.

Management determines the amount of internal software costs to be capitalized based on the amount of time spent by developers on projects in the application stage of development.

There is judgment involved in estimating time allocated to a particular project in the application stage.

The gross balance of capitalized software development costs was $12.9 million as of December 31, 2021.

Related accumulated amortization and the net carrying amount of capitalized software was approximately $11.5 million and $1.4 million, respectively, as of December 31, 2021.

We identified the estimate of time and related costs eligible for capitalization as capitalized software development costs as a critical audit matter due the significant judgment by management when determining the amount of time to capitalize for projects.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s determination of capitalized costs and management’s judgment related to the amount of time incurred by developers on projects in the application stage.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included gaining an understanding of the controls relating to capitalized software development costs, testing management’s process for determining the time and related costs eligible for capitalization in the current year, evaluating whether the time and related costs were eligible for capitalization, testing the completeness and accuracy of underlying data used in management’s estimate of eligible time and related costs, and evaluating the reasonableness of significant assumptions used by management in estimating eligible time and related costs.

Evaluating management’s assumptions related to eligible software development time for capitalization involved performing inquiries with management and with a sample of individual software developers regarding the nature, timing and extent of time worked on development activities.

/s/ EisnerAmper, LLP

We have served as the Company’s auditor since 2021.

March 17, 2022

Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholders of Inuvo, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Inuvo, Inc.

(the “Company”) as of December 31, 2020, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Inuvo, Inc.

(the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

5 unchanged sentences

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgements.

We determined that there are no critical audit matters.

We have served as the Company’s auditors since 2009.

/s/ Mayer Hoffman McCann P.C.

February 11, 2021

Clearwater, Florida

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.

Revenue recognition

As described in Note 2 to the financial statements, the Company recognizes revenue when services are provided to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those services.

The Company evaluated the need to perform a reassessment of the consideration it expects to receive from a customer representing approximately $18 million in revenue for the year ended December 31, 2022 and approximately $6.7 million as of December 31, 2022.

We have identified the Company’s evaluation of the need to perform a reassessment of collectability of amounts due from a customer during the performance of services as a critical audit matter.

This in turn led to a high degree of auditor judgement, subjectivity and effort in performing procedures for evaluating management’s analysis and conclusion of whether or not changes in facts and circumstances of the customer were so significant to require reassessment of collectability.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures included gaining an understanding of the controls relating to revenue

recognition and gaining an understanding of management’s process for monitoring and evaluating the collectability of amounts under contracts with customers.

We also tested management’s judgement that a reassessment of collectability was not required by evaluating the results from accounts receivable confirmation procedures, communications between the customer and management, cash receipts received by the company during and subsequent to the customer relationship period, and limited inquiry of the underlying customer financial information.

Goodwill impairment analysis

As described in Note 2 to financial statements, the Company performs an impairment test of Goodwill annually by comparing fair value of the Company’s reporting unit to its carrying value.

Fair value is determined using various accepted valuation methodologies.

These valuation methodologies utilize growth rates, market multiples and management projections of financial information, which involved significant assumptions and judgment from management relative to expected performance of the Company.

Fair value of the reporting unit was estimated using a market approach that incorporated guideline public company multiples and normalized forecasted operating results for the reporting unit.

Management’s assumptions in estimating fair value include projected revenues, gross margins, marketing, selling and administrative expenses, capital expenditures, earnings, working capital assumptions, growth rates and market multiples.

The gross balance of goodwill was $9.8 million as of December 31, 2022 and no impairments were identified as a result of the Company’s impairment analysis.

We have identified the goodwill impairment analysis as a critical audit matter due to the significant judgment by management when developing the fair value estimate of their reporting unit.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures for evaluating management’s significant assumptions related to projected revenue, gross margins, marketing, selling and administrative expenses, capital expenditures, earnings, working capital assumptions, growth rates and market multiples;

and audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures included gaining an understanding of the controls relating to management’s goodwill impairment analysis, including controls over the valuation of its reporting unit, testing management’s process for developing the fair value estimate of its reporting unit, evaluating whether the market approach for valuation was appropriate, testing the completeness and accuracy of underlying data used in management’s estimates, and evaluating the reasonableness of significant assumptions used by management related to the projected financial information, growth rates and market multiples of its reporting unit.

Evaluating the reasonableness of management’s significant assumptions involved performing inquiries of management, considering current economic conditions, industry trends, and recent operating results of the reporting unit and determining whether the assumptions used by management were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s valuation models utilized and for the evaluation of the reasonableness of management’s significant assumptions related to working capital assumption, growth rates, and market multiples, as applicable.

As discussed in Note 1 to the consolidated financial statements, the Company has incurred a net loss of $13.1 million and net cash outflows from operations of $5.6 million for the year ended December 31, 2022.

At December 31, 2022, the Company believes its cash and cash equivalents and marketable investment securities will be sufficient to fund the Company’s planned operations for at least a year beyond the date of the issuance of the consolidated financial statements.

We identified liquidity as a critical audit matter due to the subjective judgments required of management in developing its business plan with forecasted cash flows and the contemplation of additional long-term financing arrangements to meet its liquidity needs for a year beyond the date of the issuance of the consolidated financial statements.

This in turn led to a high degree of auditor subjectivity and judgment to evaluate the evidence supporting the cash flow forecasts and assess the reasonableness of the estimates and assumptions in supporting the liquidity conclusion.

Additionally, the relevance of management's liquidity conclusion to the users of the consolidated financial statements also impacted our assessment of these circumstances as a critical audit matter.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with our overall opinion on the financial statements.

The procedures we performed included testing the existence of the total liquid assets at December 31, 2022;

evaluating the reasonableness of the amounts and timing of revenue forecasted;

evaluating the reasonableness of the amounts and timing of payments of forecasted cost of revenue, marketing costs, compensation and general and administrative expenses;

reconsidering certain prior management forecasted amounts to evaluate whether those forecasted amounts approximated the ultimate actual results;

understanding the nature and the terms and conditions of existing and planned

financing arrangements, and evaluating the adequacy of the Company’s disclosure of these circumstances in the consolidated financial statements.

/s/ EisnerAmper, LLP

We have served as the Company’s auditor since 2021.

March 9, 2023

Consolidated Balance Sheets

34 unchanged sentences

Common stock, $ 0.001 par value:

Authorized shares 200,000,000 and 100,000,000 , respectively;

Authorized shares 200,000,000 ;

issued and outstanding shares 120,137,124 and 118,747,447 respectively;

5 unchanged sentences

Total liabilities and stockholders' equity $ 35,557,310 $ 43,997,074

See accompanying report of independent registered public accounting firm and notes to the consolidated financial statements.

See accompanying notes to the consolidated financial statements.

Consolidated Statements of Operations and Comprehensive Loss

6 unchanged sentences

Compensation 12,463,095 11,381,279

Selling, general and administrative 7,198,213 7,630,990

General and administrative 8,624,998 7,198,213

Total operating expenses 58,009,232 51,675,492

Operating loss ( 12,649,874 ) ( 7,770,641 )

Interest expense, net ( 86,983 ) ( 253,505 )

Other income, net $ 256,975 $ 997,517

Financing, other ( 21,111 ) ( 86,983 )

Other (expense)/income, net ( 435,554 ) 256,975

Net loss $ ( 13,106,539 ) $ ( 7,600,649 )

Other comprehensive income

Unrealized gain on marketable securities 53,737 —

Unrealized (loss)/gain on marketable securities ( 138,605 ) 53,737

Comprehensive loss $ ( 13,245,144 ) $ ( 7,546,912 )

5 unchanged sentences

Diluted 119,826,036 117,613,845

See accompanying report of independent registered public accounting firm and notes to the consolidated financial statements.

See accompanying notes to the consolidated financial statements.

Consolidated Statements of Stockholders' Equity

1 unchanged sentence

Common Stock Additional Paid in Capital

Accumulated Deficit Treasury Stock Accumulated Other Comprehensive Income Total

Accumulated Deficit Accumulated Other Comprehensive Income Total

Balances as of December 31, 2020 98,035,829 $ 98,036 $ 161,541,448 $ ( 136,350,370 ) — $ 25,289,114

Net loss — — — ( 7,600,649 ) — ( 7,600,649 )

Unrealized gain on debt securities — — — — 53,737 53,737

Stock-based compensation — — 2,179,254 — — 2,179,254

Cancellation of treasury stock — ( 376 ) ( 1,396,183 ) — 1,396,559 — —

Proceeds from exercise of options 1,569 — 1,569

Stock issued for vested restricted stock awards 1,696,467 1,696 ( 1,696 ) — — —

1 unchanged sentence

Shares withheld for taxes on vested restricted stock — — ( 272,049 ) — — ( 272,049 )

Convertible Note Conversion 3,000,000 3,000 920,810 — — 923,810

Stock warrants issued for referral agreement 19,519 — 19,519

Balances as of December 31, 2021 118,747,447 $ 118,748 $ 176,586,529 $ ( 143,951,019 ) $ 53,737 $ 32,807,995

Net loss — — — ( 13,106,539 ) — ( 13,106,539 )

Unrealized gain on debt securities — — — — — 53,737 53,737

Unrealized loss on debt securities — — — — ( 138,605 ) ( 138,605 )

Stock-based compensation — — 2,350,314 — — 2,350,314

1 unchanged sentence

Shares withheld for taxes on vested restricted stock — — ( 196,892 ) — — ( 196,892 )

Proceeds from exercise of options — — 1,569 — — — 1,569

Sale of common stock, net of issuance cost 19,015,151 19,016 13,118,484 — — — 13,137,500

Stock warrants issued for referral agreement — — 33,043 — — 33,043

Balances as of December 31, 2022 120,137,124 $ 120,138 $ 178,771,604 $ ( 157,057,558 ) $ ( 84,868 ) $ 21,749,316

See accompanying report of independent registered public accounting firm and notes to the consolidated financial statements.

See accompanying notes to the consolidated financial statements.

Consolidated Statements of Cash Flows

4 unchanged sentences

Depreciation and amortization 2,598,957 3,143,168

Amortization of Right of Use Assets 322,746 367,981

Amortization of Right of Use Assets-Finance Leases 103,926 322,746

Stock based compensation 2,350,314 2,179,254

2 unchanged sentences

Provision for doubtful accounts 1,265,143 7,487

Third party rights agreement termination ( 420,000 ) —

Stock warrant expense 33,043 —

Derecognition of contingencies ( 10,000 ) ( 110,000 )

PPP loan forgiveness — ( 1,109,000 )

Contract cancellation — ( 1,260,978 )

Loss on extinguishment of convertible debt — 65,700

Mark to market fair value of derivative — 102,664

Amortization of OID interest expense — 13,167

Amortization of debt discount — 18,286

Third party rights agreement — ( 78,762 )

Third party rights agreement termination — ( 420,000 )

Change in operating assets and liabilities:

12 unchanged sentences

Proceeds from sale of common stock, net of expenses — 13,137,500

Proceeds from PPP and SBA loans — 1,258,900

Proceeds from ValidClick licensing agreement — 500,000

SBA loan repayment ( 149,900 ) —

Payments net of proceeds on revolving line of credit — ( 3,381,364 )

Payments on finance/capital leases ( 107,539 ) ( 257,679 )

1 unchanged sentence

Proceeds from exercise of options — 1,569

Net cash provided by financing activities

SBA loan repayment — ( 149,900 )

Net cash (used in)/provided by financing activities

( 304,433 ) 12,459,441

5 unchanged sentences

Non-cash investing and financing activities:

Conversion of Debt and derecognition of derivative and discounts to common stock $ — $ 923,810

Assets purchased under finance lease obligations $ 70,774 $ 125,825

Assets purchased under operating lease obligations $ — $ 344,311

See accompanying report of independent registered public accounting firm and notes to the consolidated financial statements.

See accompanying notes to the consolidated financial statements.

Notes to Consolidated Financial Statements

3 unchanged sentences

Inuvo is a technology company that develops and sells information technology solutions for marketing and advertising.

These solutions predictively identify and message online audiences for any product or service across devices, formats, and channels including video, mobile, connected TV, linear TV, display, social, search and native.

These solutions allow Inuvo’s clients to engage with their customers and prospects in a manner that drives responsiveness.

These solutions predictively identify and message online audiences for any product, service or brand across devices, formats, and channels including video, mobile, connected TV, linear TV, display, social, search and native.

These solutions allow Inuvo’s clients to engage with their audiences in a manner that drives responsiveness.

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 across industries.

1 unchanged sentence

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

The AI can identify and advertise to the reasons why consumers are purchasing products and services not who those consumers are.

In this regard, the technology is designed for a privacy conscious future and focused on the components of the advertising value chain most responsible for return on advertising spend, the intelligence behind the advertising decision.

The AI can identify and advertise to the reasons why consumers are purchasing products and services not to who those consumers are.

In this regard, the technology is designed for a privacy conscious future and is focused on the components of the advertising value chain most responsible for return on advertising spend, the intelligence behind the advertising decision.

Inuvo technology can be consumed both as a managed service and software-as-a-service.

For clients, Inuvo has also developed a collection of propriety websites collectively branded as Bonfire Publishing where content is created specifically to attract qualified consumer traffic for clients through the publication of information across a wide range of topics including health, finance, travel, careers, auto, education and lifestyle.

For clients, Inuvo has also developed a collection of proprietary websites collectively branded as Bonfire Publishing where content is created specifically to attract qualified consumer traffic for clients through the publication of information across a wide range of topics including health, finance, travel, careers, auto, education and lifestyle.

These sites also provide the means to market test various Inuvo advertising technologies.

Further, Inuvo also provides Search and Social advertising services through a proprietary set of technologies branded as CampSight.

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 19 issued and eight pending patents.

As of December 31, 2021, we have approximately $ 13.3 million in cash, cash equivalents and marketable securities.

Our net working capital was $ 12.4 million.

We have encountered recurring losses and cash outflows from operations, which historically we have funded through equity offerings and debt facilities.

In addition, our investment in internally developed software consists primarily of labor costs which are of a fixed nature.

Through December 31, 2021, our accumulated deficit was $ 144.0 million.

Our principal sources of liquidity are the sale of our common stock and our credit facility with Hitachi described in Note 7 to

our Consolidated Financial Statements.

During March 2020 and April 2020, we raised approximately $ 1.5 million in gross

proceeds, before expenses, through sales of our common stock and in April 2020 we received a $ 1.1 million PPP Loan.

8, 2020, we raised an additional $ 5.5 million in gross proceeds, before expenses, through the sale of our common stock and on

July 27, 2020, we raised an additional $ 10.75 million in gross proceeds, before expenses, through sales of our common stock.

On January 19, 2021, we raised an additional $ 8 million in gross proceeds, before expenses, through the sale of our common

stock, and on January 22, 2021, we raised an additional $ 6.25 million in gross proceeds, before expenses, through sales of our

common stock.

On January 19, 2021, we raised $ 8 million in gross proceeds, before expenses, through the sale of our common stock, and on January 22, 2021, we raised an additional $ 6.25 million in gross proceeds, before expenses, through sales of our common stock.

In March 2021, we contracted with an investment management company to manage our cash in excess of current operating

4 unchanged sentences

On May 28, 2021, we entered into a Sales Agreement (the "Sales Agreement") with A.G.P./Alliance Global Partners, as sales agent (the "Sales Agent"), pursuant to which we may offer and sell through or to the Sales Agent shares of our common stock (the "ATM Program") up to an aggregate amount of gross proceeds of $ 35,000,000 .

During the year ended December 31, 2021, we did not issue any shares of common stock or receive any aggregate proceeds under the ATM Program, and we did not pay any commissions to the Sales Agent.

Any shares of common stock offered and sold in the ATM Program will be issued

pursuant to our universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”).

During the year ended December 31, 2022, we did not issue any shares of common stock or receive any aggregate proceeds from the ATM Program, and we did not pay any commissions to the Sales Agent.

Any shares of common stock offered and sold in the ATM Program will be issued pursuant to our universal shelf registration statement on Form S-3 (the “Shelf Registration Statement”).

The ATM Program will terminate upon (a) the election of the Sales Agent upon the occurrence of certain adverse events, (b) 10 days’ advance notice from one party to the other, or (c) the sale of the balance available under our Shelf Registration Statement.

Under the terms of the Sales Agreement, the Sales Agent is entitled to a commission at a fixed rate of 3.0 % of the gross proceeds from each sale of shares under the Sales Agreement.

We have focused our resources behind a plan to grow our AI technology, the IntentKey, where we have a technology advantage

and higher margins.

We have focused our resources behind a plan to grow our AI technology, the IntentKey, where we have a technological advantage and higher margins.

If we are successful in implementing our plan, we expect to return to a positive cash flow from operations.

However, there is no assurance that we will be able to achieve this objective.

We believe our current cash position and credit facility will be sufficient to sustain operations for at least the next twelve

months from the date of this filing.

As of December 31, 2022, we have approximately $ 4.5 million in cash, cash equivalents and short-term marketable securities.

Our net working capital was $ 2.8 million.

We have encountered recurring losses and cash outflows from operations, which historically we have funded through equity offerings and debt facilities.

For the year ended December 31, 2022 we had a net loss of $ 13.1 million and net cash outflows from operations of $ 5.6 million.

In addition, our investment in internally developed software consists primarily of labor costs which are of a fixed nature and amounted to approximately $ 1.7 million for the year ended December 31, 2022.

Through December 31, 2022, our accumulated deficit was $ 157.1 million.

Management plans to support the Company’s future operations and capital expenditures primarily through borrowings from the Hitachi credit facility, until reaching profitability.

The credit facility is due upon demand and therefore there can be no assurances that sufficient borrowings will be available to support future operations until profitability is reached.We believe our current cash position and credit facility will be sufficient to sustain operations for at least the next twelve months from the date of this filing.

If our plan to grow the IntentKey product is unsuccessful, we may need to fund operations through private or public sales of securities, debt financings or partnering/licensing transactions over the long term.

In April 2020, the Company experienced a significant reduction in advertiser marketing budgets across both the ValidClick and

IntentKey platforms as a direct consequence of COVID-19.

These reductions adversely impacted our overall revenue

throughout 2020.

As a result, in May 2020 and June 2020 we implemented a temporary compensation change for senior

officers and employees.

Certain employees with salaries in excess of $ 100,000 per year had forgone a percentage of the cash portion of their salary and instead received an equivalent restricted stock grant.

We curtailed expenses, including compensation and travel and issued a work from home policy to protect our employees and their families from virus transmission associated with co-workers.

Though we continue to monitor the pandemic and related government guidelines and regulations, we have returned to a hybrid working model where employees are working partially from the office and partially from home.

Note 2 – Summary of Significant Accounting Policies

5 unchanged sentences

Any interest income or dividends are recorded as interest income on the income statement.

Revenue recognition - Both of our platforms generate revenue from ad placements and clicks on advertisements on websites, some of which we own.

We recognize revenue from ad placements and clicks in the period in which they occur.

We also recognize revenue from serving impressions when we complete all or a part of an order from an advertiser.

The revenue is recognized in the period that the impression is served.

The Company subsequently settles these transactions with it business partners at which time adjustments for invalid traffic may impact the amount collected.

Payments to publishers who display advertisements on our behalf and payments to ad exchanges are recognized as cost of revenue.

The below table shows the revenue and the proportion of revenue that is generated through advertisements on our ValidClick and IntentKey platforms:

For the Years Ended December 31,

ValidClick Platform $ 41,648,730 69.6 % $ 34,233,638 76.7 %

IntentKey Platform 18,181,958 30.4 % 10,406,369 23.3 %

Revenue recognition - We generate revenue by identifying audiences and presenting advertisements on behalf of our customers.

We may contract directly with a brand, a Direct Customer or we may serve a brand through a contract with an agency, an Indirect Customer.

Revenue is recognized when services are provided to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those services.

We charge our customers on a cents per thousand (CPM) basis, CPC basis, or as a specific dollar charge.

Revenue billed as CPM is generally programmatic digital advertising and is performed under a contract known as an Insertion Order (“IO”).

Programmatic digital advertising revenue is recognized in part or fully in the period the IO is partially or fully executed.

Revenue earned from placing an ad or an impression on websites, some of which we own, may be on a CPM or CPC basis.

We recognize revenue from ad placement and serving impressions in the period in which they occur.

The Company settles ad placement and CPC transactions with its customers net of any adjustments for poor traffic quality.

Payments to advertising exchanges that provide access to digital inventory and to a lesser extent, payments to website publishers and app developers that host advertisements we serve are recognized as cost of revenue.

For the twelve months ended December 31,

Direct customers $ 36,226,223 $ 20,922,750

Indirect customers 39,248,224 38,492,280

Consulting Services and other 129,298 415,658

Total $ 75,603,745 $ 59,830,688

5 unchanged sentences

Property and equipment - Property and equipment are stated at cost, net of accumulated depreciation and amortization.

Major renewals and improvements are capitalized while maintenance and repairs which do not improve or extend the life of the respective assets are expensed as incurred.

Major renewals and improvements are capitalized while maintenance and repairs which do not improve or extend the life of the

respective assets are expensed as incurred.

Costs of assets sold or retired and the related accumulated depreciation are eliminated from accounts and the net gain or loss is reflected as an operating expense in the consolidated statements of operations.

45 unchanged sentences

As such, we recorded a contingent liability $ 10,000 .

As of December 31, 2020, there were 38 employees in Arkansas, twelve employees under the required 50 .

As of December 31, 2021, there were 41 employees in Arkansas, two employees under the required 43 .

As such, we recorded a contingent liability $ 10,000 .

Treasury Stock - The cost method was used in recording the purchase of the treasury stock.

Treasury stock changes as a result of common stock we acquire in the market.

On July 14, 2020, our Board of Directors authorized the cancellation of 376,527 shares of treasury stock.

Earnings per share - During the periods presented, we had securities that could potentially dilute basic earnings per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive.

10 unchanged sentences

We maintain allowances for potential credit losses.

Customer concentrations - At December 31, 2021, we had three individual customers with revenue concentration greater than 10% of the our total revenue.

These customers combined accounted for 62.9 % of our total revenue as of December 31, 2021.

In 2020, we had two individual customers with revenue concentration greater than 10% of our total revenue.

These customers combined accounted for 60.5 % of our revenue for the year ended and December 31, 2020.

Customer concentrations - In 2022, we had three individual customers with revenue concentration greater than 10% of our total revenue combining for 66.1 % of the total revenue.

At December 31, 2022, we had two customers greater than 10% of our total accounts receivable balance combing for a total of 63.3 %.

In 2021, we had three individual customers with revenue concentration greater than 10% of our total revenue combining for 62.9 % of the total revenue.

At December 31, 2021, we had four customers greater than 10% of our total accounts receivable balance combining for a total of 56.7 %.

Use of estimates - The preparation of financial statements, in accordance with accounting principles generally accepted in the United States ("U.S.

28 unchanged sentences

securities consist of investments in debt and equity securities.

Debt securities are classified as available for sale securities.

We classify our cash equivalents and marketable securities within Level 1 because we use quoted market prices models utilizing market observable inputs to determine their fair value.

The cost, gross unrealized gains (losses) and fair value of marketable securities by major security type as of December 31, 2021 were as follows:

Cost Unrealized Gain (Loss) Fair Value

Cash and cash equivalents:

Cash $ 5,253,205 $ — $ 5,253,205

We classify our cash equivalents and marketable securities within Level 1 because we use observable inputs that reflect quoted market prices for identical assets in active markets to determine their fair value.

We have classified debt securities as available for sale securities with unrealized gains and losses recorded as other comprehensive income.

We have classified equity securities as trading and are marked to market with changes recorded as other income on the income statement.

Any interest income or dividends are recorded within financing expense, net on the income statement.

The cost, gross unrealized gains (losses) and fair value of marketable securities by major security type as of December 31, 2022 and 2021 were as follows:

Investment Assets at Fair Value Investment Assets at Fair Value

As of December 31, 2022 As of December 31, 2021

Level 1 Total Level 1 Total

Debt securities $ 936,563 $ 936,563 $ 959,207 $ 959,207

Equity securities 1,253,027 1,253,027 1,828,284 1,828,284

Cash equivalents 801 801 5,222,759 5,222,759

Total cash and cash equivalents $ 10,475,964 $ — $ 10,475,964

Total Investments at Fair Value $ 2,190,391 $ 2,190,391 $ 8,010,250 $ 8,010,250

As of December 31, 2022 As of December 31, 2021

Cost Unrealized Gain (Loss) Fair Value Cost Unrealized Gain (Loss) Fair Value

Marketable securities

2 unchanged sentences

Total marketable securities $ 2,189,590 $ 2,787,491

Total cash and cash equivalents and marketable securities $ 13,263,455

The gross unrealized losses and realized gains on our marketable securities were approximately $ 272 thousand and $ 5 thousand, respectively, for the twelve months ended December 31, 2021.

The realized loss on the securities as of December 31, 2022 was approximately $ 181,000 .

N ote 4 – Allowance for Doubtful Accounts

5 unchanged sentences

Balance at the end of the year $ 1,440,678 $ 202,904

During 2022, we expanded our Direct customer business by 73 % due in part by acquiring new customers (see Note 2).

These customers typically require longer credit terms than traditional CPC based customers.

One of these Direct customers was a significant portion, 24.1 % of our total revenue, and has stretched its payments to 120 days and beyond.

Though the customer is paying amounts due and has significantly reduced the balance since year end, management believed it to be prudent to increase the allowance for doubtful accounts.

Note 5– Property and Equipment

42 unchanged sentences

We are permitted to borrow (i) 90 % of the aggregate Eligible Accounts Receivable, plus (i) the lesser of 75 % of the aggregate Unbilled Accounts Receivable or 50 % of the amount available to borrow under (i), up to the maximum credit commitment.

The amount available to borrow as of December 31, 2022 was approximately $ 4.8 million.

The interest rate of 2 % in excess of the Wall Street Journal Prime Rate, with a minimum rate of 6.75 % per annum, on outstanding amounts.

3 unchanged sentences

We are also obligated to pay Hitachi a quarterly service fee of 0.30 % on the monthly unused amount of the maximum credit line.

In addition to a $ 2,000 document fee we have paid to Hitachi, if we exit our relationship with Hitachi before March 1, 2022, we are obligated to pay Hitachi an exit fee of $ 50,000 .

In addition to a $ 2,000 document fee we have paid to Hitachi, if we had exited our relationship with Hitachi before March 1, 2022, we were obligated to pay Hitachi an exit fee of $ 50,000 .

On March 12, 2020, we drew $ 5,000,000 under this agreement, using $ 2,959,573 of these proceeds to satisfy existing debt obligations and the balance was used for working capital.

At December 31, 2022 and 2021, there were no outstanding balances due under the Loan and Security Agreement.

Note 8 - Convertible Promissory Note

On March 1, 2019, Inuvo entered into a Securities Purchase Agreement with three accredited investors for the purchase and sale

of an aggregate of $ 1,440,000 of principal of Original Issue Discount Unsecured Subordinated Convertible Notes due

September 1, 2020 (the "Calvary Notes") to fund working capital and additional expenses resulting from the delay in closing of

certain planned, and since terminated, mergers with ConversionPoint Technologies Inc.

and ConversionPoint Holdings Inc.

initial conversion price of the Calvary Notes was $ 1.08 per share which would have made the Calvary Notes then convertible

into 1,333,333 unregistered shares of Inuvo’s common stock upon conversion.

The Calvary Notes were issued in a private

placement and the shares of common stock issuable upon conversion are restricted, subject to resale under Rule 144.

proceeds to Inuvo from the offering were $ 1,200,000 .

Inuvo did not pay any commissions or finders fees in connection with

the sale of the Calvary Notes and Inuvo utilized the proceeds for working capital.

On November 11, 2019, we entered into Note Modification and Release Agreements with the holders of $ 1,080,000 principal

amount of the Calvary Notes.

Under the terms of the Note Modification and Release Agreement, the parties agreed that in

consideration of such noteholder’s agreement to convert a minimum of 50 % of the outstanding amount of the note (the "First

Conversion Amount") that the conversion price for the First Conversion Amount would be $ 0.265 per share and that the

conversion price for any remaining amount due under the note would be $ 0.30 per share, subject to future adjustments under the

terms of the note including dilutive issuances at a price below $ 0.30 per share, subject to a floor of $ 0.23 per share.

agreement contains mutual general releases.

These holders converted an aggregate of $ 765,000 due under the Calvary Notes

into 2,886,792 shares of our common stock.

In January 2020, a noteholder of a $ 360,000 principal amount Calvary note converted the note into 1,200,000 shares of our

common stock.

On April 21, 2020, a noteholder converted $ 200,000 principal amount due under the Calvary Notes into

1,142,857 shares of our common stock.

On May 5, 2020, a noteholder converted the final $ 115,000 principal amount due under

the Calvary Notes into 657,143 shares of our common stock, thereby satisfying the Calvary Notes in full and completing the

extinguishment of the Calvary Notes.

Note 8 – Accrued Expenses and Other Current Liabilities

5 unchanged sentences

Accrued taxes, current portion 3,755 17,880

Accrued sales allowance — 50,000

Total $ 5,162,458 $ 5,374,391

Note 10 – Other Long-Term Liabilities

Other long-term liabilities consist of the following at December 31, 2021 and 2020:

Deferred rent 13,302 4,057

Deferred revenue — 420,000

SBA loan — 149,900

Total $ 13,302 $ 573,957

In April 2020, we obtained the $ 1.1 million PPP Loan which we used primarily for payroll costs.

The PPP Loan was fully forgiven by the SBA on November 2, 2020.

On May 15, 2020, we received a COVID-19 Economic Injury Disaster Loan ("EIDL") from the SBA for $ 149,900 .

We repaid the EIDL in full on January 28, 2021.

Note 9 - Commitments

On September 17, 2021, we signed a multi-year agreement with a business development partner to provide referral and support services to us.

The agreement required an advance fee of $ 1.5 million and was recorded as an asset to be amortized as marketing expenses over five years .

As of December 31, 2021, $ 100,000 has been amortized.

As part of the agreement, we granted a warrant exercisable into 300,000 shares of our common stock, which vest over two years upon achieving certain performance metrics (see Note 14 - Stockholders' Equity).

The agreement required an advance fee of $ 1.5 million with $ 300,000 recorded as a current asset.

The advance is being amortized as marketing expenses over five years.

As of December 31, 2022, $ 400,000 has been amortized and the balance is $ 800,000 .

As part of the agreement, we granted a warrant exercisable into 300,000 shares of our common stock, which vests over two years upon achieving certain performance metrics (see Note 12 - Stockholders' Equity).

Additionally, we agreed to pay quarterly support fees upon reaching certain levels of operational activity.

In March 2020, we entered into an agreement to allow a third party to license and use ValidClick technology.

The agreement required a nonrefundable fee of $ 500,000 in March with subsequent fees as earned in later quarters.

The $ 500,000 fee was recorded as deferred revenue in March 2020.

Effective March 1, 2021, the agreement was canceled and the remaining deferred revenue balance of $ 420,000 was recognized as other income.

In April 2022, we agreed to Amendment No.

2 to the agreement.

The amendment replaced the quarterly support fees with a commission on quarterly cumulative programmatic revenue.

The amendment also revised the cumulative target media spend and the associated commission.

The total amount of commission recognized for the year ended December 31, 2022 was approximately $ 645,000 .

Note 10 - Income Taxes

11 unchanged sentences

When required, we record a liability for unrecognized tax positions, defined as the aggregate tax effect of differences between positions taken on tax returns and the benefits recognized in the financial statements.

Tax positions are measured at the largest

amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

Tax positions are measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

No tax benefits are recognized for positions that do not meet this threshold.

14 unchanged sentences

Stock compensation expense 869,900 610,900

Unrecognized Income/Loss 122,100 —

Other 373,100 351,500

9 unchanged sentences

Included in the federal net operating loss carryforwards are $ 22.5 million generated from 2018 to 2022 that will not expire and are limited to offset 80% of our taxable income for years beginning after December 31, 2020.

As of December 31, 2021, the Company has a net deferred tax liability of $ 107,000 , due to having goodwill that is amortized for tax purposes but not for financial reporting.

As of December 31, 2022, the Company has a net deferred tax liability of $ 107,000 .

The net deferred tax liability is due to goodwill that is amortized for tax purposes and a trade name that has an indefinite life, of which both are not being amortized for book purposes.

The deferred tax liability relating to goodwill can only be offset up to 80% by NOLs generated in tax years ending December 31, 2018 and beyond, as well as NOLs available after consideration of IRC Section 382 limitation.

7 unchanged sentences

The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study.

Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required.

If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required.

Any limitation may result in expiration of a portion of the net operating loss carryforwards before utilization.

7 unchanged sentences

RSU vesting periods are generally up to three years and/or achieving certain financial targets.

On January 4, 2021, in accordance with the plan provisions, the number of shares available for issuance under the 2017 ECP plan was increased by 150,000 shares.

On January 1, 2022, in accordance with the plan provisions, the number of shares available for issuance under the 2017 ECP was increased by 150,000 shares.

On June 16, 2022, our stockholders approved an amendment to the 2017 ECP increasing the number of shares of our common stock reserved for issuance by 15,000,000 shares.

As of December 31, 2022, the total number of shares of our common stock reserved for issuance under the 2017 ECP was 24,550,000 .

Compensation Expense

1 unchanged sentence

Total compensation cost not yet recognized at December 31, 2022 was $ 2,323,398 to be recognized over a weighted-average recognition period of one year .

The following table summarizes the stock grants outstanding under our 2010 Employee Compensation Plan ("2010 ECP") and 2017 ECP plans as of December 31, 2021:

The following table summarizes the stock grants outstanding under our 2017 ECP plan as of December 31, 2022:

Options Outstanding RSUs Outstanding Options and RSUs Exercised Available Shares Total

2017 ECP — 3,960,001 2,734,138 2,705,861 9,400,000

2010 ECP (*) 1,500 — 5,011,511 — 5,013,011

Total 100,000 4,913,339 4,560,799 14,975,862 24,550,000

(*) 2010 ECP Expired April 2020

The fair value of restricted stock units is determined using market value of the common stock on the date of the grant.

3 unchanged sentences

The forfeiture rate, which is estimated at a weighted average of 0 % of unvested options outstanding, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

At December 31, 2021, the 2010 ECP plan had 1,500 outstanding options and all were exercisable with an aggregate intrinsic value of $ 0 , a weighted average exercise price of $ 0.56 and a weighted average remaining contractual term of less than a year.

The following table summarizes our stock option activity under the 2010 ECP plan during 2021:

The following table summarizes our stock option activity during 2022:

Options Weighted Average Exercise Price

Outstanding, beginning of year 1,500 $ 0.56

Stock options, granted 100,000 $ 0.52

Stock options exercised — $ —

2 unchanged sentences

Exercisable, end of year — $ —

No options were granted during 2021 or 2020.

Expected volatility is based on the historical volatility of our common stock over the period commensurate with or longer than the expected life of the options.

3 unchanged sentences

We do not anticipate paying any dividends so the dividend yield in the model is zero .

The following table summarizes the weighted average assumptions for our granted options and RSUs.

Award/Strike Price $ 0.52 $ —

Market Price $ 0.52 $ 0.41

Volatility 107 % — %

Dividend Yield — % — %

Expected Life 5.5 years 0 years

Risk Free Rate 3 % — %

The following table summarizes our restricted stock unit activity for 2022:

6 unchanged sentences

Note 12 – Stockholders' Equity

On March 20, 2020, we sold an aggregate of 3,931,428 shares of our common stock to the five members of our Board of

Directors in a private placement exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D under the

Securities Act of 1933, as amended.

We received proceeds of $ 688,000 in this offering.

On March 27, 2020, we closed on the

first tranche of a registered direct offering in which we sold 3,115,001 shares of our common stock for gross proceeds of

On April 2, 2020, we closed on a second tranche of the registered direct offering in which we sold 1,400,285 shares

of our common stock for gross proceeds of $ 245,050 .

On June 8, 2020, we raised $ 5.5 million in gross proceeds, before expenses, through the sale of our common stock and on July 27, 2020, we raised $ 10.75 million in gross proceeds, before expenses, through sales of our common stock.

On January 19, 2021, we raised $ 8 million in gross proceeds, before expenses, through the sale of our common stock, and on January 22, 2021, we raised $ 6.25 million in gross proceeds, before expenses, through sales of our common stock.

In 2020, our convertible promissory notes were converted into $ 3 million of common stock.

See Note 8 - Convertible Promissory Note for details.

On September 17, 2021, we signed an agreement with a marketing platform and consulting company to provide referral and support services to us for a period of five years (see Note 9 - Commitments).

2 unchanged sentences

The warrant is classified as equity and will be expensed on a ratable basis over the vesting period of each tranche.

For the twelve months ended December 31, 2021, we recognized approximately $ 20 thousand in expense and $ 130 thousand is unrealized.

On August 31, 2022, 85,862 shares vested in accordance with the contracted performance criteria.

For the twelve months ended December 31, 2022, we recognized approximately $ 33 thousand in expense.

Earnings per Share

During the 2022 and 2021, we generated a net loss from continuing operations and as a result, all of our shares are anti-dilutive.

Treasury Stock

On July 14, 2020, our Board of Directors authorized the cancellation of the 376,527 shares of treasury stock.

Note 13 – Retirement Plan Costs

32 unchanged sentences

Total lease liabilities $ 171,600

Note 17 – Related Party Transactions

On March 20, 2020, we sold an aggregate of 3,931,428 shares of our common stock at a purchase price of $ 0.175 per share to the five members of our Board of Directors in a private placement exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D under the Securities Act of 1933, as amended.

We received proceeds of $ 688,000 in this offering.

The purchase price of the shares of our common stock sold in the offering exceeded the closing market price of our common stock on March 19, 2020, the trading day immediately preceding the day the binding Insider Subscription Agreements were executed by the purchasers.

The purchasers were all accredited investors.

We did not pay any commissions or finder’s fees, and we used the proceeds for general working capital.

Note 15 - Related Parties

A board member of the Company is employed by the investment company that is the financial advisor and custodian of the Company’s marketable securities.

Marketable securities were $ 2,189,590 and $ 2,787,491 as of December 31, 2022 and 2021, respectively.

The fees paid to the financial advisor were not material.

In addition, a board member of the Company is also a minority shareholder and consultant to one of the Company’s largest customers during 2022.

Revenue from this customer was approximately $ 18.3 million and $ 5.7 million for the years ended December 31, 2022 and 2021, respectively, and accounts receivable was approximately $ 6.7 million as of December 31, 2022.

Note 16 - Subsequent Event

On March 1, 2023, Inuvo, Inc.

(“Inuvo”) entered into Amendment No.

1 to Loan and Security Agreement and Collateral Documents (hereinafter referred to, as amended, as the “Agreement”) with Mitsubishi HC Capital America, Inc., f/k/a/ Hitachi Capital America Corp.

Under the terms of the Agreement, MHCA has provided us with a $ 5,000,000 line of credit commitment.

We are permitted to borrow up to 80 % of the aggregate Eligible Accounts Receivable (which may increase to 85 % if certain conditions are met), up to the maximum credit commitment of $ 5,000,000 .

We will pay Hitachi monthly interest at the rate of 1.75 % in excess of the Wall Street Journal Prime Rate.

The principal and all accrued but unpaid interest are due on demand.

In the event of a default under the terms of the Loan and Security Agreement, the interest rate increases to 6 % greater than the interest rate in effect from time to time prior to a default.

The Agreement contains certain affirmative and negative covenants to which we are also subject.

We agreed to pay MHCA an amendment fee of $ 10,000 on issuance of the Agreement, and thereafter an annual commitment fee of $ 10,000 .

We are also obligated to pay MHCA a quarterly service fee of 0.20 % on the monthly unused amount of the maximum credit line.

If we should repay the amounts due under the Agreement (i) before February 28, 2024, we are obligated to pay MHCA an exit fee of $ 50,000 , or (ii) after February 28, 2024 but before February 28, 2025, we are obligated to pay MHCA an exit fee of $ 25,000 .

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 9A. Controls and Procedures