Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Note 15 - Commitments and Contingencies

Litigation and Settlement

We were a party to litigation with a former director, John Giura, pursuant to which Mr. Giura filed an action alleging that we breached a consulting agreement.   On April 1, 2011, we entered into an agreement to settle this litigation wherein we agreed to pay $25,000 and issue 40,000 shares of our common stock valued at $114,800 in full settlement of all claims in this lawsuit. We recorded a one-time charge of approximately $140,000 related to this settlement and it is included in litigation settlement in the 2011 consolidated statement of operations.

We were also a party to litigation with an owner of property leased by a subsidiary of Inuvo pursuant to which the owner alleged a breach of a lease agreement, in addition to claims of unfair and deceptive trade practices, fraud and misrepresentation were alleged.  On April 6, 2011, we entered into an agreement to settle this litigation wherein we agreed to pay a total of $340,000 in installments over the next 2 years and issued 40,000 shares of the our common stock valued at $115,600 in full settlement of all claims in this lawsuit.  We recorded a one-time credit of approximately $257,000 included in income from discontinued operations net of tax expense in the 2011 consolidated statement of operations, related to this settlement due to the write-off of accrued rent 

We were a party to litigation with a former employee, for alleged breach of an employment agreement and other contract and tort claims.  On April 7, 2011, we entered into an agreement to settle this litigation pursuant to which we agreed to pay an aggregate of $125,000, partially covered by insurance, over six months and issue 50,000 shares of the our common stock valued at approximately $135,000 in full settlement of this litigation.  We recorded a one-time charge of $235,000 related to this settlement and it is included in litigation settlement in the 2011 consolidated statements of operations.