What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-27 compared with 2024-02-29 · 212 added, 232 removed, 575 unchanged (44% of the section changed)

14 unchanged sentences

As of the evaluation date, our Chief Executive Officer and Chief Financial Officer concluded that we maintain disclosure controls and procedures that are effective in providing reasonable assurance that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Securities Exchange Act of 1934 Rule 13a-15(f).

108 unchanged sentences

Sales Agreement, dated May 28, 2021 by and between A.G.P./Alliance Global Partners and Inuvo, Inc.

Financing and Security, by and among Inuvo, Inc., Vertro, Inc., ValidClick, Inc., Think Relevant Media, LLC, Kowabunga Marketing, Inc., Bonfire Publishing Group, LLC, Southern Muse Media, LLC, NetSeer, Inc., Emerald Brands, LLC, Alot, Inc.

and Daily Reads, LLC, and SLR Digital Finance LLC, effective as of July 30, 2024.

Insider Trading Policy

Subsidiaries of the Registrant

47 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

To the Board of Directors and Stockholders of Inuvo, Inc.:

Opinion on the Financial Statements

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

(the “Company”) as of December 31, 2023 and 2022, 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”).

(the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

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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.

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

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.

Allowance for credit losses

As discussed in Note 2 to the consolidated financial statements, the Company estimates an allowance for expected credit losses on accounts receivable by reviewing comprehensive historical data and taking into consideration current conditions of the Company and the impact of relevant current and projected economic conditions on their ability to collect accounts receivable balances.

As part of that process, management identified specific risks related to customers where changes in payment experience occurred.

The evaluation of expected losses for these specific customers required further judgement.

At December 31, 2023, the Company recorded an allowance for credit losses of

We identified the estimate of allowance for credit losses as a critical audit matter due to the subjective judgments required of management in evaluating risk characteristics for those specific customer accounts receivables where changes in payment experiences have occurred and in developing its estimate of expected losses on those accounts.

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 these judgements.

Capitalized software development costs

As reflected in Note 2 and Note 4 to the 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 estimated amount of time spent by software developers and engineers during the application development stage of software development projects identified by the Company.

The amount of capitalized software development costs was approximately $1.8 million for the year ended December 31, 2024.

We identified the estimate of time and related costs eligible for capitalization as capitalized software development costs as a critical audit matter due to the subjective judgements required of management when determining the amount of time that qualifies to be capitalized for development projects.

This, in turn, led to a high degree of auditor judgement, subjectivity, and effort in performing procedures for evaluating management’s significant assumptions related to these judgements.

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 gaining an understanding of the controls relating to management’s estimate of allowance for credit losses, testing management’s process for developing the estimate, including evaluating management’s process for identifying risk characteristics for customers.

Our procedures included examination of payment terms and agreements with the customers, testing payments in accordance with those agreements and evaluation of payments subsequent to the Company’s reporting date.

In addition, evaluating the reasonableness of management’s judgements included performing inquiries of management and examination of other information related to the intent and ability of the customers to make payment.

The procedures we performed included gaining an understanding of the controls relating to capitalized software development costs, testing management’s process for developing the estimate including the amount of 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 and inputs 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 and engineers regarding the nature, timing, and extent of time worked on development activities.

/s/ EisnerAmper LLP

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Cash and cash equivalents

Marketable securities - short term

Accounts receivable, net of allowance for doubtful accounts of $ 1,645,045 and $ 1,440,678 , respectively

Accounts receivable, net of allowance for credit losses of $ 144,625 and $ 1,645,045 , respectively

Prepaid expenses and other current assets

4 unchanged sentences

Referral and support services agreement advance

Marketable securities - long term

Intangible assets, net of accumulated amortization

37 unchanged sentences

( 10,392,515 )

Income tax benefit (expense)

Financing, other

Other (expense)/income, net

Other income/(expense):

Financing expense, net of interest income

Loss before taxes

Income tax (expense)/benefit

Loss from continuing operations

$ ( 5,761,801 )

1 unchanged sentence

Other comprehensive income:

Unrealized (loss)/gain on marketable securities

Unrealized loss on marketable securities

Comprehensive loss

3 unchanged sentences

Basic and diluted

Net loss from continuing operations

Net income from discontinued operations

Weighted average shares:

2 unchanged sentences

For the Years Ended December 31, 2024 and 2023

Additional Paid

Additional Paid in

Accumulated Other Comprehensive

4 unchanged sentences

( 10,389,653 )

Unrealized loss on debt securities

Unrealized gain on debt securities

Stock-based compensation

Stock issued for vested restricted stock awards

Shares withheld for taxes on vested restricted stock

Stock warrants issued for referral agreement

AGP Closing of at-the-market sale of common stock

Stock issued for vested restricted stock unit

Proceeds from sale of common stock, net of expenses

Shares withheld for taxes on vested restricted stock units

Change in fair value of warrants related to vesting

Balances as of December 31, 2023

2 unchanged sentences

( 5,761,801 )

Unrealized gain on debt securities

Issuance of restricted stock units

Stock-based compensation

Stock issued for vested restricted stock awards

Proceeds from sale of common stock, net of expenses

Shares withheld for taxes on vested restricted stock

AGP Closing of at-the-market sale of common stock

Change in fair value of warrants related to vesting

Stock issued for vested restricted stock unit

Shares withheld for taxes on vested restricted stock units

Balances as of December 31, 2024

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Depreciation and amortization

Amortization of Right of Use Assets-Finance Leases

Amortization of right of use assets - financing

Amortization of right of use assets - operating lease

Stock based compensation

(Gain) Loss on marketable securities

Gain on marketable securities

Amortization of financing fees

Provision for doubtful accounts

Stock warrant (income) expense

Deferred income tax benefit

Derecognition of contingencies and grant

Impairment and amortization of referral and support services agreement advance

Adjustment to expected losses on accounts receivable

( 1,442,533 )

Stock warrant income

Deferred income tax expense (benefit)

Derecognition of contingency and grant

Change in operating assets and liabilities:

1 unchanged sentence

( 1,876,282 )

Referral and support services agreement advance

Prepaid expenses, other current assets and other assets

2 unchanged sentences

Accrued expenses and other liabilities

Net cash used in operating activities

( 2,554,075 )

Lease liability - operating lease

Net cash provided by/(used in) operating activities

( 2,554,075 )

Investing activities:

Purchases of equipment and capitalized development costs

( 1,682,683 )

Capitalized software development costs and purchases of equipment

( 1,857,375 )

Purchase of marketable securities

( 1,682,683 )

12 unchanged sentences

( 1,981,209 )

Cash, beginning of year

Cash, end of year

Cash and cash equivalent, beginning of year

Cash and cash equivalent, end of year

Supplemental information:

Interest paid

Non-cash investing and financing activities:

Assets purchased under finance lease obligations

Noncash investing and financing activities:

Acquisition of right of use asset for operating lease liability

Issuance of 3,287,537 restricted stock units to settle accrued incentive liability

See accompanying notes to the consolidated financial statements.

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Company Overview

Inuvo is an advertising technology and services business selling information technology solutions to brands, agencies and large consolidators of advertising demand (“Platforms”).

Inuvo’s revenue is derived from the placement of digital advertising throughout devices, websites, applications and browsers across social, search and programmatic advertising channels.

Inuvo facilitates, and gets paid, to deliver millions of advertising messages monthly and counts among its client's numerous world-renowned companies across industries.

Inuvo’s primary mission is to disrupt the advertising industry with its proprietary and patented generative large language artificial intelligence (AI), a technology capable of identifying and targeting audiences without using a consumer’s identity or data.

The AI was designed to replace the consumer data, analytics, segmentation and lookalike modeling technologies that have traditionally served the advertising industry as it transitions to a new paradigm where a consumer’s identity and data are no longer available for advertising decisions due to legislative and technological changes.

Rather than targeting people, the AI targets the reasons behind why people are interested in products, services and brands.

Inuvo’s AI technology solves this challenge and can be consumed by clients both as a managed service and software-as-a-service.

For certain clients, Inuvo has also developed various proprietary technology and assets that include digital content, websites, automated campaigns, ad fraud detection, performance reporting and predictive media mix modeling.

The Inuvo products and services use analytics, data and artificial intelligence in a manner that optimizes the purchase and placement of advertising in real time.

Inuvo is an advertising technology and services company that has developed and commercialized large language generative artificial intelligence (AI) capable of discovering and targeting digital audiences.

Inuvo’s innovative technology positions it as a leader within the advertising industry, offering a valuable solution to marketers seeking to navigate the evolving landscape of consumer privacy.

The AI targets the reasons behind why people are interested in products, services and brands.

Inuvo sells its information technology solutions to agencies and brands (collectively, “Agencies & Brands”) along with large consolidators of advertising demand (“Platforms”).

Inuvo’s revenue is derived from the placement of digital advertising across devices, websites, applications and browsers within social, search and programmatic advertising channels.

Inuvo facilitates and gets paid to deliver advertising messages and counts among its client's numerous world-renowned companies across industries.

The AI, marketed as IntentKey was designed to replace the consumer data, analytics, segmentation and lookalike modeling technologies that have traditionally served the advertising industry as it transitions to a new paradigm where targeting based on a consumer’s identity and data are no longer possible due to the legislative and technological changes occurring.

Inuvo’s AI technology solves the identity challenge by leveraging artificial intelligence, data analytics, and automation that can optimize the purchase and placement of advertising in real time without consumer data.

The technology can be consumed by clients as a managed service or self-service (SaaS).

Additionally, Inuvo has developed proprietary technology and assets tailored to certain clients that include digital content, websites, automated campaigns, ad fraud detection, performance reporting, and predictive media mix modeling.

Both Agencies & Brands and Platforms benefit from Inuvo’s ability to intelligently process vast amounts of data, detect patterns in behavior, and enhance advertising efficiency whether through direct media execution or integration into existing campaign management systems.

These capabilities are typically sold with services both individually and in combination with each other based on client needs.

These products and services include:

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

A marketing and advertising solution which can be provided directly to brands and where a collection of data, analytics, software and publishing is used to align advertising messages with consumers across websites online.

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

Agencies & Brands utilize our artificial intelligence-based consumer intent recognition system to reach highly targeted mobile and desktop In-Market audiences with precision.

The solution 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 technology can be consumed by clients as a managed service or self-service (SaaS).

For our Platform clients we utilize a collection of data, analytics, software, content management and website creation technologies to align merchant advertising messages with online content.

Inuvo’s intellectual property is protected by 19 issued and eight pending patents.

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.

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 needs.

We placed $2 million in cash equivalent accounts and $ 10 million in an interest-bearing account.

At December 31, 2022, our funds with the investment management company were approximately $2 million and were invested in cash equivalent accounts and marketable debt and equity securities.

A detail of the activity is described in Note 3 to our Consolidated Financial Statements.

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, 2023, we sold 173,558 shares of common stock for gross proceeds totaling $63,136 under the ATM Program and paid the Sales Agent a commission of $1,902, all of which occurred during the second quarter of 2023.

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.

Our principal sources of liquidity are the sale of our common stock and our credit facility discussed in Note 6 – Bank Debt.

On May 30, 2023, we raised $ 4.0 million in gross proceeds in a registered direct offering, before expenses, through the sale of an aggregate of 16,000,000 shares of our common stock.

The shares were offered pursuant to an effective shelf registration statement on Form S-3 (the “Shelf Registration Statement”) and a prospectus supplement relating to the offering was filed with the SEC on May 26, 2023.

We have focused our resources behind a plan to market our collective multi-channel advertising capabilities differentiated by 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.

On May 7, 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C.

Wainwright & Co.

LLC (“Wainwright”), to sell shares of our common stock, par value $ 0.001 per share (the “Shares”), having an aggregate sales price of up to $ 15,000,000 , from time to time, through an “at the market offering” program under which Wainwright will act as sales agent.

The sales, if any, of the Shares made under the ATM Agreement will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended.

The Company will pay Wainwright a commission rate of up to 3.0 % of the aggregate gross proceeds from each sale of Shares.

For the year ended December 31, 2024, the Company has not sold any shares of common stock under the ATM Agreement.

In January 2025, the Company utilized the ATM Agreement and sold 1,594,313 shares of common stock for gross proceeds of $ 1,163,491 .

See Note 16 – Subsequent Events.

On July 31, 2024, we entered into a Financing and Security Agreement (the "Financing Agreement”) with SLR Digital Finance LLC ("SLR”), effective July 30, 2024.

Pursuant to the terms of the Financing Agreement, SLR will finance up to $ 10 million dependent upon eligible receivables.

See Note 6– Bank Debt.

As of December 31, 2024, we have approximately $ 2.5 million in cash, and cash equivalents.

Our net working capital was $ 211.1 thousand.

Our net working capital deficit was $ 2.2 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, 2023 we had a net loss of $ 10.3 million and net cash outflows from operations of $ 2.6 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, 2023.

For the year ended December 31, 2024 we had a net loss of $ 5.8 million and net cash flow provided by operations of $ 0.2 million.

Additionally, our investment in investing activities totaled approximately $ 1.9 million for the year ended December 31, 2024.

This amount primarily consists of internally developed software costs, which are largely comprised of fixed labor costs, along with other capitalized expenditures.

Through December 31, 2024, our accumulated deficit was $ 173.2 million.

Management plans to support the Company’s future operations and capital expenditures primarily through cash raised through the sale of stock in May 2023, cash generated from future operations and borrowings from the 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.

Our collection period is less than 30 days and can also be used to meet accrued obligations.

We believe our current cash position and credit facility will be sufficient to sustain operations for at least the twelve months from the date of this filing.

Management plans to support the Company’s future operations and capital expenditures primarily through cash generated from its credit facility until such time as we reach profitability.

Any repayments of the financing agreement will be made through collections from eligible accounts receivable.

We believe that our current cash position, credit facility, and the equity raised through our ATM program in January 2025 will be sufficient liquidity 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.

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All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications - Certain amounts in the 2023 statement of cash flows have been reclassified to conform with the 2024 presentation.

The impact to the 2023 change in accrued expenses and other liabilities was a decrease of $ 67,870 , and there was no impact to net cash used in operating activities for the year ended December 31, 2023.

Cash and cash equivalents - Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less.

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

Equity securities are marked to market with changes recorded as other income on the income statement.

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

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

We provide our products, technologies and services to Agencies & Brands and Platforms (large consolidators of advertising demand).

Currently, revenue from our IntentKey products and services are primarily from Agencies & Brands, and revenue from our Bonfire products and services are primarily from platforms.

We provide our products, technologies and services to Agencies & Brands and Platforms.

Currently, revenue from Agencies & Brands is primarily through our IntentKey products and services and revenue from Platforms is primarily through our Bonfire products and services.

Our revenue is derived from the placements of advertisements across advertising channels, browsers, applications and devices.

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We determine revenue recognition through (i) identification of a contract with a customer, (ii) identification of the performance obligations in the contract, (iii) determination of the transaction price, (iv) allocation of the transaction price to the performance obligations in the contract, and (v) recognition of revenue when or as the performance obligations are satisfied.

For Agencies and Brands, the terms of an agreement are captured in an Insertion Order ("IO") where revenue is recognized upon delivery of services during the period covered by the IO.

For Agencies & Brands, the terms of an agreement are captured in an Insertion Order ("IO") where revenue is recognized upon delivery of services during the period covered by the IO.

For Platforms, terms are generally captured in multi-year master service agreements and revenue is recognized based on the number of advertisements placed or clicked on in the period they occur.

We settle advertisement placement prices with our customers net of any adjustments for quality.

In the year ended December 31, 2023, we generated $ 73,911,528 in revenue of which 79.1% was from Platforms, 20.9% from Agencies and Brands.

In the year ended December 31, 2022, we generated $ 75,603,745 in revenue of which 51.7% was from Platforms, 48.3% from Agencies and Brands.

In the year ended December 31, 2024, we generated $ 83,793,859 in revenue of which 82.8 % was from Platforms, 17.2 % from Agencies & Brands.

In the year ended December 31, 2023, we generated $ 73,911,528 in revenue of which 79.1 % was from Platforms, 20.9% from Agencies & Brands.

Accounts receivable - Accounts receivable consist of trade receivables from customers.

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Management has reviewed comprehensive historical data, any relevant economic indicator, and estimated our estimated credit loss based off these probabilities.

In the year ended December 31, 2023, 2022, and 2021, we recorded accounts receivable, net allowance for doubtful accounts of, $ 9,226,956 , $ 11,119,892 , and $ 9,265,813 respectively .

For the twelve months ended December 31,

The following table presents accounts receivable, net of allowance for credit losses:

At December 31,

Balance at the end of the year

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Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the remaining term of the lease .

Depreciation expense was $ 1,670,868 and $ 1,527,663 , respectively, for the years ended December 31, 2023 and 2022.

Depreciation and amortization expense was $ 1,745,261 and $ 1,670,868 , respectively, for the years ended December 31, 2024 and 2023.

Capitalized Software Costs - We capitalize certain labor costs related to internally developed software and amortize these costs using the straight-line method over the estimated useful life of the software, generally two years.

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Certain development costs not meeting the criteria for capitalization, in accordance with ASC 350-40 Internal-Use Software , are expensed as incurred.

Capitalized software development costs were $ 1.8 million and $ 1.7 million, respectively, for the years ended December 31, 2024 and 2023.

Goodwill - Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired.

We periodically conduct a review of long-lived assets to assess potential triggering events for impairment within the Inuvo reporting unit.

We perform an impairment test annually as of December 31, 2024.

As a result, we perform our annual goodwill impairment test by comparing the fair value of our reporting unit with its carrying amount.

We generally determine the fair value of our reporting unit using the income approach methodology of valuation that includes the undiscounted cash flow method as well as other generally accepted valuation methodologies.

We have only one reporting unit and generally determine the fair value of this reporting unit using the income approach methodology of valuation that includes the undiscounted cash flow method as well as other generally accepted valuation methodologies.

If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, the amount it exceeds fair value is equivalent to the amount of impairment loss.

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Stock-based compensation - We recognize stock compensation based on the recognition provisions ASC 718 , Compensation – Stock Compensation, which establishes accounting for stock-based awards exchanged for employee and non-employee services and requires companies to expense the estimated grant date fair value of stock awards over the requisite employee service period.

The fair value of restricted stock awards is based on the market price of our common stock on the date of the grant.

The fair value of restricted stock unit awards is based on the market price of our common stock on the date of the grant.

To value stock option awards, we use the Black-Scholes-Merton option pricing model.

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We deferred grant funds related to capitalized costs and classified them as current or long-term liabilities on the balance sheet according to the classification of the associated asset.

As of December 31, 2023, there were 43 full-time employees in Arkansas, seven employees under the required 50 .

As such, we recorded a contingent liability of $ 35,000 .

As of December 31, 2022, there were 48 full-time employees in Arkansas, two employees under the required 50 .

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

The agreement concluded on March 31, 2024, and as of December 31, 2024, all obligations were satisfied, and no liability remains outstanding.

As of December 31, 2023, we recorded a $ 35,000 liability which was satisfied in 2024.

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.

We reported a net loss for 2023 and 2022 and therefore, shares associated with stock options, restricted stock and convertible debt are not included because they are anti-dilutive.

We reported a net loss for 2024 and 2023 and therefore, shares associated with stock options, restricted stock units and convertible debt are not included because they are anti-dilutive.

Basic and diluted net loss per share is the same for all periods presented.

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We maintain allowances for potential credit losses.

Customer concentrations - In 2023, we had two individual customers with revenue concentration greater than 10 % of our total revenues accounting for 60.4 % and 12.8 %, respectively.

Customer concentrations - In 2024, we had one individual customer with revenue concentration greater than 10% of our total revenues accounting for 75.0 %, respectively.

At December 31, 2024, we had two individual customers greater than 10% of our total accounts receivable balance accounting for 58.5 % and 12.6 %, respectively.

In 2023, we had two individual customers with revenue concentration greater than 10% of our total revenue accounting for 60.4 % and 12.8 %, respectively.

At December 31, 2023, we had one customer greater than 10% of our total accounts receivable balance accounting for 50.5 %.

In 2022, we had three individual customers with revenue concentration greater than 10 % of our total revenue accounting for 29.1 %, 24.1 %, and 12.9 %, respectively.

At December 31, 2022, we had two customers greater than 10% of our total accounts receivable balance accounting for 50.6% and 12.7%, respectively.

Vendor concentrations - In 2023, we had two individual vendors with cost of revenue concentration greater than 10% of our total cost of revenue accounting for 67.6 % and 15.3 % of the total cost of revenue, respectively.

In 2022, we had four individual vendors with cost of revenue concentration greater than 10% of our total cost of revenue accounting for 33.8%, 30.4%, 14.5% and 11.1%, of the total cost of revenue, respectively.

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

GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues and expenses and disclosure of contingent assets and liabilities.

Vendor concentrations - In 2024, we had three individual vendors with cost of revenue concentration greater than 10% of our total cost of revenue accounting for 59.6 %, 25.6 %, and 10.3 % of the total cost of revenue, respectively.

In 2023, we had two individual vendors with cost of revenue concentration greater than 10% of our total cost of revenue accounting for 67.6 % and 15.3 % of the total cost of revenue, respectively.

Use of estimates - The preparation of financial statements, in accordance with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues and expenses and disclosure of contingent assets and liabilities.

The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s regular evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements.

We regularly evaluate estimates and assumptions related to goodwill and purchased intangible asset valuations and income tax valuation allowance.

The most significant estimates and assumptions affecting the financial statements relate to capitalized software, allowance for credit losses, and income tax valuation allowance.

Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, and such differences could be material.

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Recently Adopted Accounting Pronouncements

On January 1, 2023, we adopted Accounting Standards Code (ASC) No.

326, Financial Instruments-Credit Losses.

ASC 326 requires a financial asset (loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financials assets not excluded from scope) measured at amortized cost basis to be presented at the net amount expected to be collected.

The adoption of this new standard did not have a material impact on our consolidated financial statements and primarily resulted in enhanced disclosures only.

Note 3 – Fair Value Measurements

The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term nature of these items.

In accordance with accounting principles generally accepted in the United States, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

A three-level hierarchy prioritizes the inputs used to measure fair value as follows:

Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities.

Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market.

Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 – Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The following table summarizes our cash equivalents and marketable securities measured at fair value.

Certain marketable securities consist of investments in debt and equity securities.

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, 2023 and 2022 were as follows:

Investment Assets at Fair Value

As of December 31, 2023

As of December 31, 2022

Debt securities

Equity securities

Cash equivalents

Total Investments at Fair Value

As of December 31, 2023

As of December 31, 2022

Marketable securities

Debt securities

Equity securities

Total marketable securities

The realized loss on the securities for the year ended December 31, 2023 was approximately $ 510,000 .

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires retrospective disclosure of significant segment expenses and other segment items on an annual and interim basis.

Additionally, it requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”).

This ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

See Note 12 for the impact of adoption of this accounting pronouncement.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires an annual tabular effective tax rate reconciliation disclosure including information for specified categories and jurisdiction levels, as well as, disclosure of income taxes paid, net of refunds received, disaggregated by federal, state/local, and significant foreign jurisdiction.

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The adoption will have an impact on disclosures and not impact the Company’s consolidated results of operations, cash flows, nor financial position.

N ote 3 – Allowance for Credit Losses

The activity in the allowance for doubtful accounts was as follows during the years ended December 31, 2023 and 2022:

The activity in the allowance for credit losses was as follows during the years ended December 31, 2024 and 2023:

Balance at the beginning of the year

Provision for bad debts

Provision/(reversal of provision) for bad debts

( 1,442,533 )

Balance at the end of the year

The allowance for doubtful accounts at December 31, 2023 was $ 1,645,045 , an increase of $ 204,367 from December 31, 2022.

During 2022, we expanded our business in part by acquiring new customers with whom we contract directly.

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

One of these customers was a significant portion, 24.1 % of our total 2022 revenue, and has stretched its payments to 120 days and beyond.

Ultimately, we agreed to extended payments from the customer through September 2024.

All amounts due from this customer have been fully reserved as of December 31, 2023.

The allowance for credit losses at December 31, 2024 was $ 144,625 , a decrease of $ 1,500,420 from December 31, 2023.

During 2024, we made an adjustment to the allowance for expected credit losses for a balance due from a former client in 2022.

The client has since paid off their full outstanding balance and no longer has any obligation to us as of December 31, 2024.

Note 4– Property and Equipment

6 unchanged sentences

( 16,523,294 )

Depreciation expense was $ 1,670,868 and $ 1,527,663 , respectively, for the years ended December 31, 2023 and 2022.

Depreciation and amortization expense was $ 1,745,261 and $ 1,670,868 , respectively, for the years ended December 31, 2024 and 2023.

During the year ended December 31, 2024, we disposed of approximately $ 169,000 of fully depreciated equipment that was no longer in use.

There was no cash inflow or outflow associated with this transaction, and no gain or loss was recorded.

Note 5 – Intangible Assets and Goodwill

1 unchanged sentence

Accumulated Amortization and Impairment

Net Carrying Value

Customer list, Google

$ ( 5,659,500 )

( 3,600,000 )

Customer list, ReTargeter

( 1,705,938 )

Customer list, all other

Customer list

( 1,931,250 )

Brand name, ReTargeter

Customer relationships

5 unchanged sentences

Accumulated Amortization

Net Carrying Value

Customer list, Google

1 unchanged sentence

( 3,600,000 )

Customer list, ReTargeter

Customer list

( 1,705,938 )

1 unchanged sentence

( 1,610,000 )

Brand name, ReTargeter

Customer relationships

6 unchanged sentences

Note 6 - Bank Debt

On March 12, 2020, we closed on the Loan and Security Agreement dated February 28, 2020 with Hitachi.

We've undergone several amendments to this agreement.

On March 1, 2023, we entered into Amendment No.

1 to Loan and Security Agreement and Collateral Documents (“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 MHCA 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 terminate 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 .

The Loan and Security Agreement continues for an indefinite term.

At December 31, 2023 and 2022, there were no outstanding balances due under the Loan and Security Agreement.

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

We were permitted to borrow up to 85 % of the aggregate Eligible Accounts Receivable, up to the maximum credit commitment of $ 5,000,000 .

We paid MHCA monthly interest at the rate of 1.75 % in excess of the Wall Street Journal Prime Rate.

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

We also paid MHCA a quarterly service fee of 0.20 % on the monthly unused amount of the maximum credit line.

All obligations to MHCA have been satisfied and the Agreement was terminated on July 31, 2024.

At December 31, 2024 and 2023, there were no outstanding balances due under the Agreement.

On July 30, 2024, we entered into a Financing and Security Agreement and Collateral Documents (“Financing Agreement”) with SLR Digital Finance LLC (“SLR”).

Under the terms of the Financing Agreement, SLR has provided us with a $ 10,000,000 line of credit commitment.

We are permitted to borrow up to 90 % of eligible accounts receivable as defined in the Financing Agreement, up to the maximum credit commitment of $ 10,000,000 .

Availability as of December 31, 2024 equaled the maximum credit commitment of $10,000,000.

We will pay SLR monthly interest at the rate of 1.0% in excess of the Prime Rate but not less than 7% .

The Prime Rate was 7.5% as of December 31, 2024.

The Financing Agreement has a three year term.

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

We agreed to pay SLR an annual facility fee of 0.80 % of the maximum credit commitment.

We also agreed to pay a minimum utilization amount of the interest rate multiplied by difference between $ 500,000 and the average daily outstanding loan during a month.

We are obligated to pay SLR a monthly service fee of 0.15 % of the average net amount of outstanding loans during each month.

If we terminate the Financing Agreement prior to the second anniversary of the effective date, an amount equal to 1.0% of the maximum credit commitment will be due as an early termination payment and if we terminate after the second anniversary of the effective date but prior to the end of the term, an amount equal to 0.25% of the maximum credit commitment will be due.

Repayment of the financing agreement will be made through collections from eligible accounts receivable.

At December 31, 2024, the outstanding balances due under the Financing Agreement was $0.

Note 7 – Accrued Expenses and Other Current Liabilities

7 unchanged sentences

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 with $ 300,000 recorded as a current asset.

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

As of December 31, 2023, $ 700,000 has been amortized and the total current and non-current 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 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.

In addition, effective September 26, 2023, Inuvo and the business development partner entered into an Offset Agreement whereby the parties agreed that the commission due to the partner be offset against the outstanding receivable balances due to Inuvo.

We offset approximately $ 960,852 in commissions due to the partner against the outstanding receivable of $ 642,202 .

The total amount of commission recognized, net of the $ 67 K commission adjustment per our offset agreement, for the year ended December 31, 2023 was approximately $ 52 K.

The agreement required an advance fee of $ 1.5 million.

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

During the year ended December 31, 2024, we recorded an impairment to the asset bringing the balance to $ 0 , as no significant revenue has been realized within 2024 and therefore management determined future revenue under this arrangement is uncertain.

As of December 31, 2023, $ 700,000 had been amortized and the balance was $ 800,000 .

Note 9 - Income Taxes

1 unchanged sentence

Current tax provision

Deferred tax benefit

Deferred tax (expense)/benefit

Total tax benefit

6 unchanged sentences

Deferred income taxes are the result of temporary differences between book and tax basis of certain assets and liabilities, timing of income and expense recognition of certain items and net operating loss carry-forwards.

For the year ended December 31, 2023, we recognized a deferred tax benefit of approximately $ 17.8 thousand.

For the year ended December 31, 2024, we recognized a deferred tax expense of $ 8,030 .

For the year ended December 31, 2023, we recognized a deferred tax benefit of $ 17,764 .

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.

2 unchanged sentences

We have no uncertain tax positions that require us to record a liability.

Our federal income tax returns are subject to examination by the IRS, generally for three years after they are filed.

We assess temporary differences resulting from different treatments of items for tax and accounting purposes.

9 unchanged sentences

Deferred rent

Allowance for doubtful accounts

Allowance for credit losses

Stock compensation expense

Unrecognized Income/Loss

Interest expense

Less valuation allowance

3 unchanged sentences

Intangible assets and property and equipment

Amortization of Goodwill

Net deferred tax liabilities

$ ( 107,000 )

The net operating losses amounted to approximately $ 107,908,005 and expire beginning 2024 through 2037 .

The net operating losses amounted to approximately $ 112.8 million and expire beginning 2026 through 2038 .

Included in the federal net operating loss carryforwards are $ 44.3 million generated from 2018 to 2024 that will not expire and are limited to offset 80 % of our taxable income for years beginning after December 31, 2020.

1 unchanged sentence

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.

The deferred tax liability relating to goodwill and trade name can only be offset by 30% of interest limited by 163(j), the remainder, can be offset by up to 80 % by NOLs generated in tax years ending December 31, 2018 and beyond, subject to IRC Section 382 limitations.

The remaining portion that cannot be used remains as a liability.

9 unchanged sentences

Further, until a study is completed by the Company and any limitation is known, no amounts are being presented as an uncertain tax position.

The Company remains open to examination by the Internal Revenue Service for the years ending December 31, 2019 through 2022.

The Company’s tax returns are subject to tax examinations by U.S.

federal and state tax authorities until the respective statutes of limitation expire.

The Company is subject to tax examinations by tax authorities for all taxation years commencing on or after 2006.

Carryforward attributes generated in all years since inception remain subject to adjustment.

5 unchanged sentences

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.

On June 16, 2022, our stockholders approved an amendment to the 2017 ECP to cease the annual increase of 150,000 shares and a one time increase of the number of shares of our common stock reserved for issuance by 15,000,000 shares .

As of December 31, 2024, the total number of shares of our common stock reserved for issuance under the 2017 ECP was 24,550,000 .

1 unchanged sentence

We recorded stock-based compensation expense for all equity incentive plans of $ 1,501,444 and $ 1,986,296 for the years ended December 31, 2024 and 2023, respectively.

Total compensation cost not yet recognized at December 31, 2023 was $ 1,571,436 to be recognized over a weighted-average recognition period of one year.

Total compensation cost not yet recognized at December 31, 2024 was $ 2,192,992 which will be recognized over the next three years.

The following table summarizes the stock grants outstanding under our 2017 ECP plan as of December 31, 2024:

Options Outstanding

RSUs Outstanding

Options and RSUs Exercised

Available Shares

RSUs Exercised/Vested

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.

The following table summarizes our stock option activity during 2023:

Weighted Average Exercise Price

Outstanding, beginning of year

Stock options, granted

Stock options exercised

Stock options canceled

Outstanding, end of year

Exercisable, end of year

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.

The expected life of the options is based on the vesting schedule of the option in relation to the overall term of the option.

The risk free interest rate is based on the market yield of the U.S.

Treasury Bill with a term equal to the expected term of the option awarded.

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.

1 unchanged sentence

The following table summarizes our restricted stock unit activity for 2024:

Restricted Stock Unit

Weighted Average Fair Value

Outstanding, beginning of year

4 unchanged sentences

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 8 – Commitments).

As part of that agreement, we granted a warrant exercisable into 300,000 shares of our common stock, which vests in two tranches when certain performance metrics are achieved.

As part of that agreement, we granted a seven year warrant exercisable into 300,000 shares of our common stock, at $ 0.72 per share, which vests in two tranches when certain performance metrics are achieved.

The warrant was valued using the Black Scholes option pricing model at a total of $ 149,551 based on a seven-year term, an implied volatility of 100 %, a risk-free equivalent yield of 1.17 %, and a stock price of $ 0.71 .

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

The warrant is classified as equity and will be expensed over the vesting period of each tranche if the performance criteria are achieved.

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

On August 31, 2023, 21,136 shares vested.

For the second tranche, we reversed approximately $ 7.9 thousand for the year ended December 31, 2023 due to a change in the probability of performance criteria being achieved.

In accordance with our agreement, after the second anniversary of the Original Issue Date, any interests in Warrant shares that have not vested pursuant to the terms and conditions of the agreement shall be deemed forfeited and shall never become exercisable.

At the period ended December 31, 2023, approximately 193 thousand shares have been forfeited.

For the second tranche, we reversed approximately $ 7,900 for the year ended December 31, 2023 due to a change in the probability of performance criteria being achieved.

In accordance with our agreement, after the second anniversary of the original issue date of the warrants, any interests in warrant shares that have not vested pursuant to the terms and conditions of the agreement were deemed forfeited and shall never become exercisable.

At the period ended December 31, 2024, approximately 193,000 shares have been forfeited and approximately 107,000 shares underlying the warrant have vested.

Earnings per Share

During the 2024 and 2023, we generated a net loss from continuing operations and as a result, all of our shares are anti-dilutive.

Note 12 – Segment Reporting

(the "Company") operates as a single reportable segment that places digital advertising throughout devices, websites, applications and browsers across social, search and programmatic advertising channels, facilitating the delivery of millions of advertising messages monthly.

The Chief Operating Decision Maker ("CODM"), identified as the Chief Executive Officer, evaluates the Company's financial performance and makes resource allocation decisions based on consolidated financial information

Measure of Segment Profit or Loss

The CODM evaluates performance and allocates resources based on contribution margin, which is calculated as revenue after deducting marketing expenses, exchange fees, and publisher payments.

Exchange fees and publisher payments are classified as cost of revenue.

The resulting contribution margin covers Inuvo's fixed costs and profit.

Significant Segment Expenses

The Company reports total revenue and significant expenses provided to the CODM, which include cost of revenue, marketing, and compensation expenses.

These expenses are regularly reviewed to assess operating performance.

The following table presents these expenses:

For the year ended December 31,

Cost of Revenue

Professional Fees

Provision/(reversal of provision) for bad debts

Depreciation and Amortization

Segment Operating Profit (Loss)

$ ( 5,513,811 )

$ ( 10,392,515 )

Other segment expenses include facilities costs, travel and entertainment expenses and various other corporate expenses.

Geographic Information

The Company's operations are based in the United States, and substantially all revenue is derived from U.S.

Note 13 – Retirement Plan Costs

12 unchanged sentences

Thereafter, the lease payments increase by 3 %.

In January 2024, we amended and renewed our lease at our corporate headquarters in Little Rock, Arkansas.

The lease was extended for thirty-six months commencing on February 1, 2024 and expiring on January 31, 2027 and will cost approximately $ 127,000 during its first year.

Thereafter, the lease payments increase by 2 % annually.

Because the rate implicit in each lease is not readily determinable, we use our incremental borrowing rate to determine the present value of the lease payments.

Information related to our operating lease liabilities for are as follows:

December 31, 2024

Cash paid for operating lease liabilities

5 unchanged sentences

Information related to our financed lease liabilities are as follows:

December 31, 2024

Cash paid for finance lease liabilities

5 unchanged sentences

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 $ 0 and $ 2,189,590 as of December 31, 2023 and 2022, 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 $ 0 and $ 18.3 million for the years ended December 31, 2023 and 2022, respectively, and accounts receivable was approximately $ 1.2 million as of December 31, 2023.

During August 2023, we entered into a referral agreement with a board member of the Company.

4 unchanged sentences

For the twelve months ended December 31, 2024, we recognized approximately $ 15,000 in expense.

For the twelve months ended December 31, 2023, we recognized approximately $ 35,000 in expense.

During the year ended December 31, 2024, the Company engaged in a transaction with First Orion Corp., a company in which one of our directors holds a significant interest.

The transaction involved the sale of services amounting to approximately $ 95,000 .

These transactions were conducted in the ordinary course of business.

During the year ended December 31, 2024, the Company engaged in a transaction with James & James, a company in which one of our directors holds a significant interest.

The transaction involved the sale of services amounting to approximately $ 170,000 .

These transactions were conducted in the ordinary course of business.

Note 16 - Subsequent Event

On January 11, 2024, we amended and renewed our lease at our corporate headquarters in Little Rock, Arkansas.

The lease was extended for thirty-six months commencing on February 1, 2024 and expiring on January 31, 2027 and will cost approximately $ 127,000 during its first year.

Thereafter, the lease payments increase by 2 % annually.

In January 2025, Inuvo, Inc.

utilized the ATM Agreement (see Note 1 – Organization and Business) and we sold 1,594,313 shares of common stock for gross proceeds of $ 1,163,491 .

The ATM program allows the Company to raise capital from time to time through sales of common stock at prevailing market prices, subject to volume limitations and market conditions.

The proceeds from the ATM offering are intended to be used for general corporate purposes, including working capital, strategic investments, and operational expansion.

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