inuv_424b5
PROSPECTUS SUPPLEMENT
|
Filed Pursuant to Rule 424(b)(5)
|
(To Prospectus dated September 8, 2017)
|
Registration
No. 333-220317
|
Inuvo, Inc.
12,222,222 shares of Common Stock
We are
offering 12,222,222 shares of our common stock pursuant to this
prospectus supplement and the accompanying prospectus.
Our
common stock is listed on the NYSE American LLC under the symbol
“INUV.” On June 3, 2020, the last reported sale price
of our common stock as reported on the NYSE American was $0.6471
per share.
As of
the date of this prospectus supplement, the aggregate market value
of our outstanding voting and non-voting common equity held by
non-affiliates was $33,346,304 based on 63,176,917 shares of common
stock outstanding, of which 51,531,918 shares were held by
non-affiliates, and the last reported sale price of our common
stock of $0.6471 per share on June 3, 2020. Pursuant to General
Instruction I.B.6 of Form S-3, in no event will we sell securities
in a public primary offering with a value exceeding more than
one-third of our public float in any 12-month period so long as our
public float remains below $75,000,000. During the previous 12
calendar months prior to and including the date of this prospectus
supplement, we have offered and sold $5,533,925 of our securities
pursuant to General Instruction I.B.6 of Form S-3.
Investing in our securities involves a high degree of risk. See the
section entitled “Risk Factors” appearing on page S-6
of this prospectus supplement and elsewhere in this prospectus
supplement and the accompanying base prospectus for a discussion of
information that should be considered in connection with an
investment in our securities.
We have
engaged A.G.P./Alliance Global Partners (“AGP”) to act
as our sole placement agent in connection with this offering. The
placement agent has agreed to use its reasonable best efforts to
place the securities offered by this prospectus supplement. We have
agreed to pay the placement agent the fees set forth in the table
below.
|
|
Per Share
|
|
Total
|
Public
offering price
|
|
$
|
0.45
|
|
|
$
|
5,500,0000
|
|
Placement
agent’s fees(1)
|
|
$
|
0.0315
|
|
|
$
|
385,000
|
|
Proceeds,
before expenses, to us
|
|
$
|
0.4185
|
|
|
$
|
5,115,000
|
|
(1)
|
In
addition, we have agreed to reimburse the placement agent for
certain offering-related expenses. See “Plan of Distribution.”
|
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus supplement. Any representation to the contrary is a
criminal offense.
Delivery
of the shares of common stock is expected to be made on or about
June 8, 2020, subject to customary closing conditions.
Sole Placement Agent
A.G.P.
The date of this prospectus supplement is June 4, 2020
TABLE OF CONTENTS
Prospectus Supplement
|
S-2
|
|
S-2
|
|
S-4
|
|
S-5
|
|
S-6
|
|
S-8
|
|
S-8
|
|
S-9
|
|
S-9
|
|
S-10
|
|
S-10
|
|
S-10
|
|
S-10
|
Prospectus
|
2
|
|
2
|
|
3
|
|
3
|
|
4
|
|
5
|
|
5
|
|
6
|
|
7
|
|
7
|
|
8
|
|
8
|
|
8
|
|
9
|
ABOUT THIS PROSPECTUS
SUPPLEMENT
This
document is in two parts, this prospectus supplement and the
accompanying base prospectus, both of which are part of a
registration statement on Form S-3 that we filed with the U.S.
Securities and Exchange Commission (the “SEC”) using a
“shelf” registration process. The first part is the
prospectus supplement, including the documents incorporated by
reference, which describes the specific terms of this offering. The
second part, the accompanying base prospectus, including the
documents incorporated by reference, provides more general
information. Before you invest, you should carefully read this
prospectus supplement, the accompanying base prospectus, all
information incorporated by reference herein and therein, as well
as the additional information described under “Where You Can Find More
Information” on page S-10 of this prospectus
supplement. These documents contain information you should consider
when making your investment decision. This prospectus supplement
may add, update or change information contained in the accompanying
base prospectus. To the extent there is a conflict between the
information contained in this prospectus supplement, on the one
hand, and the information contained in the accompanying base
prospectus or any document incorporated by reference therein filed
prior to the date of this prospectus supplement, on the other hand,
you should rely on the information in this prospectus supplement.
If any statement in one of these documents is inconsistent with a
statement in another document having a later date — for
example, a document filed after the date of this prospectus
supplement and incorporated by reference in this prospectus
supplement and the accompanying base prospectus — the
statement in the document having the later date modifies or
supersedes the earlier statement.
You
should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying base
prospectus and in any free writing prospectuses we may provide to
you in connection with this offering. We have not authorized any
other person to provide you with any information that is different.
If anyone provides you with different or inconsistent information,
you should not rely on it. We are offering to sell, and seeking
offers to buy, shares of our common stock only in jurisdictions
where offers and sales are permitted. The distribution of this
prospectus supplement and the offering of the common stock in
certain jurisdictions may be restricted by law. Persons outside the
United States who come into possession of this prospectus
supplement must inform themselves about, and observe any
restrictions relating to, the offering of the common stock and the
distribution of this prospectus supplement outside the United
States. This prospectus supplement does not constitute, and may not
be used in connection with, an offer to sell, or a solicitation of
an offer to buy, any securities offered by this prospectus
supplement by any person in any jurisdiction in which it is
unlawful for such person to make such an offer or
solicitation.
We
further note that the representations, warranties and covenants
made by us in any agreement that is filed as an exhibit to any
document that is incorporated by reference in the accompanying base
prospectus were made solely for the benefit of the parties to such
agreement, including, in some cases, for the purpose of allocating
risk among the parties to such agreements, and should not be deemed
to be a representation, warranty or covenant to you. Moreover, such
representations, warranties or covenants were accurate only as of
the date when made. Accordingly, such representations, warranties
and covenants should not be relied on as accurately representing
the current state of our affairs.
When
used herein, “Inuvo”, “we”,
“us” or “our” refers to Inuvo, Inc., a
Nevada corporation, and our subsidiaries.
CAUTIONARY STATEMENTS
REGARDING FORWARD-LOOKING INFORMATION
The
information included or incorporated by reference into the base
prospectus and this prospectus supplement contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended (the “Securities Act”) and Section
21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). These forward-looking statements that relate to future
events or our future financial performance and involve known and
unknown risks, uncertainties and other factors that may cause our
actual results, levels of activity, performance or achievements to
differ materially from any future results, levels of activity,
performance or achievements expressed or implied by these
forward-looking statements. Words such as, but not limited to,
“believe,” “expect,”
“anticipate,” “estimate,”
“intend,” “plan,” “targets,”
“likely,” “aim,” “will,”
“would,” “could,” “should,”
“predict,” “potential,”
“continue,” and similar expressions or phrases identify
forward-looking statements. We have based these forward-looking
statements largely on our current expectations and future events
and financial trends that we believe may affect our financial
condition, results of operation, business strategy and financial
needs. Actual results may differ materially from those expressed or
implied in such forward-looking statements as a result of various
factors. We do not undertake, and we disclaim, any obligation to
update any forward-looking statements or to announce any revisions
to any of the forward-looking statements, except as required by
law. Certain factors that could cause results to be materially
different from those projected in the forward-looking statements
include, but are not limited to, statements
about:
●
our history of
losses, declining revenues and working capital
deficit;
●
our ability to
continue as a going concern;
●
the known and
unknown impact of the Covid-19 pandemic on our
company;
●
our ability to
maintain our credit facility;
●
our reliance on
revenues from a limited number of customers;
●
seasonality of our
business which impacts our financial results and cash
availability;
●
dependence on our
supply partners;
●
our ability to
acquire traffic in a profitable manner;
●
failure to keep
pace with technology changes;
●
impact of possible
interruption in our network infrastructure;
●
dependence on our
key personnel;
●
regulatory and
legal uncertainties;
●
failure to comply
with privacy and data security laws and regulations;
●
third party
infringement claims;
●
publishers who
could fabricate fraudulent clicks;
●
our ability to
continue to meet the NYSE American continued listing
standards;
●
the impact of
quarterly results on our common stock price; and
●
dilution to our
stockholders upon the exercise of outstanding common stock options
and restricted stock unit grants.
We urge
you to consider these factors before investing in our common stock.
The forward-looking statements included in this prospectus
supplement, the accompanying base prospectus and any other offering
material, or in the documents incorporated by reference into this
prospectus supplement, the accompanying base prospectus and any
other offering material, are made only as of the date of the
prospectus supplement, the accompanying base prospectus, any other
offering material or the documents incorporated by reference. For
more detail on these and other risks, please see “Risk
Factors” in this prospectus supplement, our Annual Report on
Form 10-K for our fiscal year ended December 31, 2019, filed with
the SEC on May 12, 2020, and our other filings with the
SEC.
|
PROSPECTUS SUPPLEMENT
SUMMARY
The following information is only a summary of more detailed
information included elsewhere in, or incorporated by reference in,
this prospectus supplement and the accompanying base prospectus,
and should be read together with the information contained or
incorporated by reference in other parts of this prospectus
supplement and the accompanying base prospectus. This summary
highlights selected information about us and this offering. This
summary may not contain all of the information that may be
important to you. Before making a decision to invest in our common
stock, you should read carefully all of the information contained
in or incorporated by reference into this prospectus supplement and
the accompanying base prospectus, including the information set
forth under the caption “Risk Factors” in this
prospectus supplement and the accompanying base prospectus as well
as the documents incorporated herein by reference, which are
described under “Where You Can Find More Information”
and “Information Incorporated by Reference” in this
prospectus supplement.
Our Company
Inuvo is a technology company that develops and sells information
technology solutions for marketing. These platforms predictively
identify and message online audiences for any product or service
across devices, channels and formats, including video, mobile,
connected TV, display, social and native. These capabilities allow
Inuvo’s clients to engage with their customers and prospects
in a manner that drives engagement from the first contact with the
consumer. Inuvo facilitates the delivery of hundreds of millions of
marketing messages to consumers every single month and counts among
its clients numerous world-renowned names in industries that have
included retail, automotive, insurance, health care, technology,
telecommunications and finance. Inuvo has contractual relationships
with three clients who collectively manage over 50% of all U.S.
digital advertising spend.
Inuvo’s solution incorporates a proprietary form of
artificial intelligence, or AI, branded the IntentKey. This
sophisticated machine learning technology uses interactions with
Internet content as a source of information from which to predict
consumer intent. The AI includes a continually updated database of
over 500 million machine profiles which Inuvo utilizes to deliver
highly aligned online audiences to its clients. Inuvo earns revenue
when consumers view or click on its client’s messages.
Inuvo’s business scales through account management activity
with existing clients and by adding new clients through sales
activity.
As part of Inuvo’s technology strategy, it owns a collection
of websites including alot.com and earnspendlive.com, where Inuvo
creates content in health, finance, travel, careers, auto,
education and living categories. These sites provide the means to
test Inuvo’s technologies, while also delivering high quality
consumers to clients through the interaction with proprietary
content in the form of images, videos, slideshows and
articles.
There are many barriers to entry associated with Inuvo’s
business model, including a proficiency in large scale information
processing, predictive software development, marketing data
products, analytics, artificial intelligence, integration to the
internet of things (IOT), and the relationships required to execute
within the IOT. Inuvo’s intellectual property is protected by
17 issued and eight pending patents.
Risk Factors
Investing
in our securities involves a high degree of risk. You should
carefully consider all of the information in this prospectus and in
the documents incorporated by reference prior to investing in our
securities. These risks are discussed more fully in the section
titled “Risk Factors” herein and in our Annual Report
on Form 10-K for the year ended December 31, 2019 and our Quarterly
Report on Form 10-Q for the period ended March 31, 2020, both of
which are filed with the SEC and incorporated by reference in this
prospectus. These risks and uncertainties include, but are not
limited to, the following:
●
we have a history of losses, declining revenues, and a working
capital deficit;
●
our ability to continue as a going concern will require us to
obtain additional financing to fund our current operations, which
may be unavailable on acceptable terms, or at all;
●
our business and operations have been adversely impacted by the
Covid-19 pandemic and we are unable to predict its ultimate overall
impact on our company;
●
we are dependent on our ability to maintain our credit facility and
our declining revenues have impacted our availability to access
amounts under the credit facility;
●
we rely on a limited number of customers and the seasonality of our
business impacts our financial results and cash
availability;
●
our revenue is reliant on our third party supply partners to drive
traffic successfully to their websites and mobile applications,
resulting in clicks on advertisements we have
delivered;
●
we use a predictive model to calculate the rate of return for
marketing campaigns on our ALOT-branded websites, and if these
estimates and assumptions are not accurate, we may not be able to
effectively manage our marketing decisions and could acquire
traffic in an unprofitable manner; and
●
we are subject to risks from publishers who could fabricate clicks
either manually or technologically. Although we have click fraud
detection software in place, we cannot guarantee that we will
identify all fraudulent clicks or be able to recover funds
distributed for fabricated clicks.
Corporate information
We were incorporated in Nevada as a corporation on October 29,
1987. Our principal executive offices are located at 500 President
Clinton Boulevard, Suite 300, Little Rock, AR 72210, and our
telephone number is (501) 205-8508. Our fiscal year end is December
31. We maintain a corporate website at www.inuvo.com .
Except as specifically set forth herein, the information which
appears on our website at s not part of the prospectus or this
prospectus supplement.
|
|
|
The
following summary contains basic information about this offering.
The summary is not intended to be complete. You should read the
full text and more specific details contained elsewhere in this
prospectus supplement.
Common stock offered by
us
12,222,222 shares
at a purchase price of $0.45 per share, before deducting placement
agent’s fees.
Common stock outstanding prior to the
offering
63,176,917(1)
Common stock to be outstanding after this
offering
75,399,139 shares
(1)
NYSE American symbol
INUV
Use of proceeds
We intend to use
the next proceeds from this offering for working capital and other
general corporate purposes. See "Use of Proceeds."
Risk factors
This investment
involves a high degree of risk. See "Risk Factors" and other
information included or incorporated by reference in this
prospectus supplement beginning on page S-5 and the accompanying
base prospectus beginning on page 5 for a discussion of certain
factors you should carefully consider before deciding to invest in
shares of our common stock.
(1)
The number of
shares of our common stock outstanding before and after this
offering is based on 63,176,917 shares of common stock outstanding
as of June 3, 2020, and excludes 376,527 treasury shares, 54,030
shares held in the name of one of our subsidiaries
and:
●
14,498 shares of our common stock issuable upon the exercise of
outstanding stock options with a weighted average exercise price of
$1.23 per share;
●
2,399,748 shares of our common stock underlying outstanding
restricted stock units;
●
6,957,301 additional shares of our common stock reserved for future
issuance under our equity incentive plans, including our 2005
Long-Term Incentive Plan, our 2010 Equity Compensation Plan and our
2017 Equity Compensation Plan; and
●
236,776 additional shares of our common stock reserved for future
issuance under our equity director’s plans.
|
|
Investing in our securities involves a high degree of risk. Before
deciding whether to invest in our securities, you should carefully
consider the risk factors we describe in this prospectus supplement
and in any related free writing prospectus that we may authorize to
be provided to you or in any report incorporated by reference into
this prospectus supplement, including our Annual Report on Form
10-K for the year ended December 31, 2019, or any Quarterly Report
on Form 10-Q that is incorporated by reference into this prospectus
supplement. Although we discuss key risks in those risk factor
descriptions, additional risks not currently known to us or that we
currently deem immaterial also may impair our business. Our
subsequent filings with the SEC may contain amended and updated
discussions of significant risks. We cannot predict future risks or
estimate the extent to which they may affect our financial
performance.
Risks Related to this Offering of Securities
You will experience immediate and substantial dilution in the net
tangible book value per share of the common stock you
purchase.
Since
the price per share of our common stock being offered is
substantially higher than the net tangible book value per share of
our common stock, you will suffer immediate and substantial
dilution in the net tangible book value of the common stock you
purchase in this offering. As of March 31, 2020, our net tangible
book value was $11,579,282 or approximately $0.18 per share. Based
on a public offering price of $0.45 per share of common stock, and
our net tangible book value as of March 31, 2020, if you purchase
common stock in this offering, you will suffer immediate and
substantial dilution of $0.23 per share with respect to the net
tangible book value of our common stock.
We have broad discretion in determining how to use the proceeds
from this offering and we cannot assure you that we will be
successful in spending the proceeds in ways which increase our
profitability or market value, or otherwise yield favorable
returns.
We plan
to utilize net proceeds of this offering for general working
capital. Nevertheless, we will have broad discretion in determining
specific expenditures. You will be entrusting your funds to our
management, upon whose judgment you must depend, with limited
information concerning the purposes to which the funds will
ultimately be applied. We may not be successful in spending the
proceeds of this offering in ways which increase our profitability
or market value, or otherwise yield favorable returns.
Fluctuations in the price of our common stock, including as a
result of actual or anticipated sales of shares by stockholders,
may make our common stock more difficult to resell.
The
market price and trading volume of our common stock have been and
may continue to be subject to significant fluctuations due not only
to general stock market conditions, but also to a change in
sentiment in the market regarding the industry in which we operate,
our operations, business prospects or liquidity or this offering.
In addition to the risk factors discussed in our periodic reports
and in this prospectus supplement, the price and volume volatility
of our common stock may be affected by actual or anticipated sales
of common stock by existing stockholders, including of shares
purchased in this offering, whether in the market or in subsequent
public offerings. Stock markets in general may experience extreme
volatility that is unrelated to the operating performance of listed
companies. These broad market fluctuations may adversely affect the
trading price of our common stock, regardless of our operating
results. As a result, these fluctuations in the market price and
trading volume of our common stock may make it difficult to predict
the market price of our common stock in the future, cause the value
of your investment to decline and make it more difficult to resell
our common stock.
We do not anticipate paying dividends in the foreseeable
future.
We have
never paid a dividend on our common stock. The determination of
whether to pay dividends on our common stock in the future will
depend on several factors, including without limitation, our
earnings, financial condition and other business and economic
factors affecting us at such time as our board of directors may
consider relevant. If we do not pay dividends, our common stock may
be less valuable because a return on your investment will only
occur if our stock price appreciates. We currently intend to retain
our future earnings to support operations and to finance expansion
and, therefore, we do not anticipate paying any cash dividends on
our common stock in the foreseeable future.
We could issue “blank check” preferred stock without
stockholder approval with the effect of diluting then current
stockholder interests and impairing their voting rights; and
provisions in our charter documents could discourage a takeover
that stockholders may consider favorable.
Our
articles of incorporation, as amended, authorizes the issuance of
up to 500,000 shares of “blank check”
preferred stock with designations, rights and preferences as
may be determined from time to time by our board of directors. Our
board of directors is empowered, without stockholder approval, to
issue a series of preferred stock with dividend, liquidation,
conversion, voting or other rights which could dilute the interest
of, or impair the voting power of, our common stockholders. The
issuance of a series of preferred stock could be used as a method
of discouraging, delaying or preventing a change in control. For
example, it would be possible for our board of directors to issue
preferred stock with voting or other rights or preferences that
could impede the success of any attempt to change control of our
company.
Sales of a significant number of shares of our common stock in the
public markets or significant short sales of our common stock, or
the perception that such sales could occur, could depress the
market price of our common stock and impair our ability to raise
capital.
Sales
of a substantial number of shares of our common stock or other
equity-related securities in the public markets, could depress the
market price of our common stock. If there are significant short
sales of our common stock, the price decline that could result from
this activity may cause the share price to decline more so, which,
in turn, may cause long holders of the common stock to sell their
shares, thereby contributing to sales of common stock in the
market. Such sales may also impair our ability to raise capital
through the sale of additional equity securities in the future at a
time and price that our management deems acceptable, if at
all.
We may seek to raise additional funds, finance acquisitions or
develop strategic relationships by issuing securities that would
dilute your ownership of our common stock. Depending on the terms
available to us, if these activities result in significant
dilution, it may negatively impact the trading price of our shares
of common stock.
We have
financed our acquisitions and the development of strategic
relationships by issuing equity securities and may continue to do
so in the future, which could significantly reduce the percentage
ownership of our existing stockholders. Further, any additional
financing that we secure may require the granting of rights,
preferences or privileges senior to, or pari passu with, those of
our common stock. Any issuances by us of equity securities may be
at or below the prevailing market price of our common stock and in
any event may have a dilutive impact on your ownership interest,
which could cause the market price of our common stock to decline.
We may also raise additional funds through the incurrence of debt
or the issuance or sale of other securities or instruments senior
to our shares of common stock. The holders of any securities or
instruments we may issue may have rights superior to the rights of
our common stockholders. If we experience dilution from issuance of
additional securities and we grant superior rights to new
securities over common stockholders, it may negatively impact the
trading price of our shares of common stock.
If securities or industry analysts do not publish or cease
publishing research or reports about us, our business or our
market, or if they change their recommendations regarding our
common stock adversely, our common stock price and trading volume
could decline.
The
trading market for our shares of common stock will be influenced by
many factors, including without limitation, the research and
reports that industry or securities analysts may publish about us,
our business, our market or our competitors. If any of the analysts
who may cover us change their recommendation regarding our common
stock adversely, or provide more favorable relative recommendations
about our competitors, our share price would likely decline. If any
analyst who may cover us were to cease coverage of our company or
fail to regularly publish reports on us, we could lose visibility
in the financial markets, which in turn could cause our common
stock price or trading volume to decline.
Our quarterly operating results can be difficult to predict and can
fluctuate substantially, which could result in volatility in the
price of our common stock.
Our
quarterly revenues and other operating results have varied in the
past and are likely to continue to vary significantly from quarter
to quarter. Our agreements with distribution partners and key
customers do not require minimum levels of usage or payments, and
our revenues therefore fluctuate based on the actual usage of our
service each quarter by existing and new distribution partners.
Quarterly fluctuations in our operating results also might be due
to numerous other factors, including:
●
our ability to
attract new distribution partners, including the length of our
sales cycles, or to sell increased usage of our service to existing
distribution partners;
●
technical
difficulties or interruptions in our services;
●
changes in privacy
protection and other governmental regulations applicable to our
industry;
●
changes in our
pricing policies or the pricing policies of our
competitors;
●
the financial
condition and business success of our distribution
partners;
●
purchasing and
budgeting cycles of our distribution partners;
●
acquisitions of
businesses and products by us or our competitors;
●
competition,
including entry into the market by new competitors or new offerings
by existing competitors;
●
discounts offered
to advertisers by upstream advertising networks;
●
our history of
litigation;
●
our ability to
hire, train and retain sufficient sales, client management and
other personnel;
●
timing of
development, introduction and market acceptance of new services or
service enhancements by us or our competitors;
●
concentration of
marketing expenses for activities such as trade shows and
advertising campaigns;
●
expenses related to
any new or expanded data centers; and
●
general economic
and financial market conditions.
Significant dilution will occur if outstanding options are
exercised, restricted stock unit grants vest, or convertible notes
are converted.
As of
June 4, 2020, we had 2,414,246 shares of our common stock underling
outstanding stock options and restricted stock units. If
outstanding stock options are exercised or restricted stock units
vest, dilution will occur to our stockholders, which may be
significant.
Based
upon the public offering price of $0.45 per share of common stock,
we estimate that the net proceeds from the sale of the securities
offered under this prospectus supplement, after deducting placement
agent’s fees and commissions and estimated offering expenses
payable by us will be approximately $5.03 million.
We
currently expect to use the net proceeds from this offering for
working capital and other general corporate purposes.
Pending
our use of the net proceeds from this offering, we intend to invest
the net proceeds in a variety of capital preservation investments,
including short-term, investment-grade, interest-bearing
instruments and U.S. government securities.
A
purchaser of our shares of our common stock in this offering will
be diluted immediately to the extent of the difference between the
offering price per share and the pro forma as adjusted net book
value per share of our common stock upon the closing of this
offering. Our historical net tangible book value per common share
as of March 31, 2020, was $11,579,282, or approximately $0.19 per
share of outstanding common stock, based on 60,353,033 shares of
common stock outstanding as of March 31, 2020. Net tangible book
value per share of our common stock is determined at any date by
subtracting total liabilities from the amount of total tangible
assets, and dividing this amount by the number of shares of common
stock deemed to be outstanding as of that date.
Our pro
forma net tangible book value as of March 31, 2020 was $11,579,282
or approximately $0.18 per share of common stock, based upon
63,176,917 shares outstanding after giving effect to the issuance
and sale of an additional 2,823,884 shares of our common stock
since March 31, 2020. After giving effect to (x) these pro forma
issuances, and (y) the sale of 12,222,222 shares of our common
stock at the offering price of $0.45 per share in this offering,
our pro forma as adjusted net tangible book value of our common
stock as of March 31, 2020 would have been $16,609,282, or
approximately $0.22 per share of outstanding common stock. This
amount represents an immediate increase in net tangible book value
of $0.04 per share of our common stock to our existing common
shareholders and an immediate dilution of $0.23 per share of our
common stock to new investors purchasing common stock in this
offering, as illustrated in the following table:
Public
offering price per common share
|
$0.45
|
Historical net
tangible book value per share of common stock as of March 31,
2020
|
$0.19
|
Pro
forma net tangible book value per share of common stock before this
offering as of March 31, 2020
|
$0.18
|
Increase
in pro forma net tangible book value per share of common stock
attributable to this offering
|
$0.04
|
Pro
forma as adjusted net tangible book value per share of common stock
after giving effect to this offering
|
$0.22
|
Dilution
per share of common stock to new investors in this
offering
|
$0.23
|
The
foregoing table does not take into account the exercise of
outstanding options having a per share exercise price less than the
per common share offering price to the public in this
offering.
The
foregoing table excludes the following as of March 31,
2020:
●
|
14,498 shares of our common stock issuable upon the exercise of
outstanding stock options with a weighted average exercise price of
$1.23 per share;
|
|
●
|
2,399,748 shares of our common stock underlying outstanding
restricted stock units;
|
|
●
|
6,957,301 additional shares of our common stock reserved for future
issuance under our equity incentive plans, including our 2005
Long-Term Incentive Plan, our 2010 Equity Compensation Plan and our
2017 Equity Compensation Plan; and
|
|
●
|
236,776 additional shares of our common stock reserved for future
issuance under our equity director’s
plans.
|
We have
not declared or paid cash dividends on our common stock since our
inception. Under Nevada law, we are prohibited from paying
dividends if the distribution would result in our company not being
able to pay its debts as they become due in the normal course of
business if our total assets would be less than the sum of our
total liabilities plus the amount that would be needed to pay the
dividends, or if we were to be dissolved at the time of
distribution to satisfy the preferential rights upon dissolution of
stockholders whose preferential rights are superior to those
receiving the distribution. Our board of directors has complete
discretion on whether to pay dividends subject to compliance with
applicable Nevada law. Even if our board of directors decides to
pay dividends, the form, the frequency, and the amount will depend
upon our future operations and earnings, capital requirements and
surplus, general financial condition, contractual restrictions and
other factors that the board of directors may deem relevant. While
our board of directors will make any future decisions regarding
dividends, as circumstances surrounding us change, it currently
does not anticipate that we will pay any cash dividends in the
foreseeable future.
A.G.P./Alliance
Global Partners has agreed to act as sole placement agent in
connection with this offering. The placement agent is not
purchasing or selling any of the shares of our common stock offered
by this prospectus supplement, but will use its reasonable best
efforts to arrange for the sale of the securities offered by this
prospectus supplement. We have entered into a securities purchase
agreement directly with investors in connection with this offering.
We will make offers only to a limited number of accredited
investors. The offering is expected to close on or about June 8,
2020, subject to customary closing conditions, without further
notice to you.
Fees and Expenses
We have
agreed to pay the placement agent a placement agent’s fee
equal to 7.0% of the aggregate purchase price of the shares of our
common stock sold in this offering. The following table shows the
per share and total cash placement agent’s fees we will pay
to the placement agent in connection with the sale of the shares of
our common stock offered pursuant to this prospectus supplement and
the accompanying prospectus.
|
|
Per Share
|
|
Total
|
Public
offering price
|
|
$
|
0.45
|
|
|
$
|
5,500,000
|
|
Placement
agent’s fees(1)
|
|
$
|
0.0315
|
|
|
$
|
385,000
|
|
Proceeds
to us before expenses
|
|
$
|
0.4185
|
|
|
$
|
5,115,000
|
|
(1)
We have also agreed
to reimburse the placement agent for certain expenses. See
below.
In
addition, we have agreed to reimburse the placement agent for
accountable legal expenses incurred by it in connection with the
offering up to $50,000 as well as non-accountable expenses up to a
maximum of $15,000. We estimate that the total expenses of the
offering payable by us will be approximately $85,000.
Regulation M
The
placement agent may be deemed to be an underwriter within the
meaning of Section 2(a)(11) of the Securities Act, and any
commissions received by it and any profit realized on the resale of
the shares sold by it while acting as a principal might be deemed
to be underwriting discounts or commissions under the Securities
Act. As an underwriter, the placement agent would be required to
comply with the requirements of the Securities Act and the Exchange
Act, including, without limitation, Rule 415(a)(4) under the
Securities Act and Rule 10b-5 and Regulation M under the Exchange
Act. These rules and regulations may limit the timing of purchases
and sales of shares by the placement agent acting as a principal.
Under these rules and regulations, the placement
agent:
|
●
|
may not
engage in any stabilization activity in connection with our
securities; and
|
|
●
|
may not
bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities, other than as permitted
under the Exchange Act, until they have completed their
participation in the distribution.
|
NYSE American Listing
Our
common stock is listed on the NYSE American LLC under the symbol
"INUV." On June 3, 2020, the last reported sale price of our common
stock as reported on the NYSE America LLC was $0.6471 per
share.
Indemnification
We have
agreed to indemnify the placement agent and other specified persons
against certain civil liabilities, including liabilities under the
Securities Act and the Exchange Act, and to contribute to payments
that the placement agent may be required to make in respect of such
liabilities.
Other Relationships
The
placement agent or its affiliates may in the future engage in
transactions with, and may perform, from time to time, investment
banking and advisory services for us in the ordinary course of
their business and for which it would receive customary fees and
expenses. In addition, in the ordinary course of its business
activities, the placement agent and its affiliates may make or hold
a broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial
instruments (including bank loans) for its own account and for the
accounts of its customers. Such investments and securities
activities may involve securities and/or instruments of ours or our
affiliates.
Pearlman
Law Group LLP, Fort Lauderdale, Florida will provide us with an
opinion as to certain legal matters in connection with the shares
of common stock offered hereby. The placement agent is being
represented by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
New York, New York.
Our
audited consolidated balance sheets as of December 31, 2019 and
2018, and the related consolidated statements of income,
stockholders’ equity and cash flows for the years ended
December 31, 2019 and 2018 incorporated by reference in the
registration statement of which this prospectus is a part have been
audited by Mayer Hoffman McCann P.C., independent registered public
accounting firm, as indicated in their report with respect thereto,
and have been so included in reliance upon the report of such firm
given on their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE
INFORMATION
We file
annual, quarterly and other reports, proxy statements and other
information with the SEC. The SEC maintains a website at
www.sec.gov
that contains reports, proxy and information statements, and other
information regarding issuers such as our company that file
electronically with the SEC.
Our
corporate website address is www.inuvo.com.
We make available free of charge, through the Investor section of
our website, annual reports on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of
the Exchange Act as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the
SEC.
INFORMATION
INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference the information we
file with them, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is considered to be part of
this prospectus supplement, and later information filed with the
SEC will update and supersede this information. We incorporate by
reference the documents listed below that we have previously filed
with the SEC, except that information furnished under Item 2.02 or
Item 7.01 of our Current Reports on Form 8-K or any other filing
where we indicate that such information is being furnished and not
filed under the Exchange Act, is not deemed to be filed and not
incorporated by reference herein:
●
|
our
Annual Report on Form 10-K for the year ended December 31, 2019 as
filed with the SEC on May 12, 2020;
|
|
|
●
|
our
Quarterly Report on Form 10-Q for the period ended March 31, 2020
as filed with the SEC on May 15, 2020;
|
|
|
●
|
our
Current Reports on Form 8-K as filed with the SEC on March 17,
2020, March 20, 2020, March 26, 2020, March 27, 2020, March 30,
2020, April 1, 2020, April 2, 2020, May 1, 2020 and June 4, 2020;
and
|
|
|
●
|
the
description of our common stock contained in the registration
statement on Form 8-A as filed with the SEC on February 28,
2005.
|
We also incorporate by reference into this prospectus supplement
additional documents that we may file with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
completion or termination of the offering, including all such
documents we may file with the SEC after the date of the initial
registration statement and prior to the effectiveness of the
registration statement, but excluding any information deemed
furnished and not filed with the SEC. Any statements contained in a
previously filed document incorporated by reference into this
prospectus supplement is deemed to be modified or superseded for
purposes of this prospectus supplement to the extent that a
statement contained in this prospectus supplement, or in a
subsequently filed document also incorporated by reference herein,
modifies or supersedes that statement.
This prospectus supplement may contain information that updates,
modifies or is contrary to information in one or more of the
documents incorporated by reference in this prospectus supplement.
You should rely only on the information incorporated by reference
or provided in this prospectus supplement. We have not authorized
anyone else to provide you with different information. You should
not assume that the information in this prospectus supplement is
accurate as of any date other than the date of this prospectus
supplement or the date of the documents incorporated by reference
in this prospectus supplement.
We will provide to each person, including any beneficial owner, to
whom this prospectus supplement is delivered, upon written or oral
request, at no cost to the requester, a copy of any and all of the
information that is incorporated by reference in this prospectus
supplement. You may request a copy of these filings, at no cost to
you, by telephoning us at (501) 205-8508 or by writing us at the
following address:
Inuvo,
Inc.
500
President Clinton Boulevard
Suite
300
Little
Rock, Arkansas 72201
Attention:
Investor Relations
You
may also access the documents incorporated by reference in this
prospectus supplement through our website at www.inuvo.com. The
reference to our website is an inactive textual reference only and,
except for the specific incorporated documents listed above, no
information available on or through our website shall be deemed to
be incorporated in this prospectus supplement, the accompanying
prospectus or the registration statement of which it forms a
part.
PROSPECTUS
$15,000,000
Inuvo, Inc.
COMMON STOCK
PREFERRED STOCK
WARRANTS
UNITS
We may
offer and sell, from time to time in one or more offerings, any
combination of common stock, preferred stock, warrants or units
having a maximum aggregate offering price of $15,000,000. When we
decide to sell particular class or series of securities, we will
provide specific terms of the offered securities in a prospectus
supplement.
The
prospectus supplement may also add, update or change information
contained in or incorporated by reference into this prospectus.
However, no prospectus supplement shall offer a security that is
not registered and described in this prospectus at the time of its
effectiveness. You should read this prospectus and any prospectus
supplement, as well as the documents incorporated by reference or
deemed to be incorporated by reference into this prospectus,
carefully before you invest.
This
prospectus may not be used to offer or sell our securities unless
accompanied by a prospectus supplement relating to the offered
securities.
Our
common stock is listed on the NYSE American under the symbol
“INUV.” The last reported sale price of our common
stock on August 29, 2017 was $1.03 per share.
The
aggregate market value of our outstanding common stock held by
non-affiliates is $27,366,115 based on 28,643,960 shares of common
stock outstanding, of which 24,005,364 shares are held by
non-affiliates, and a per share value of $1.14 based on the closing
price of our common stock on the NYSE American on July 28, 2017. We
have not offered any securities pursuant to General Instruction
I.B.6 of Form S-3 during the prior 12 calendar month period that
ends on and includes the date of this prospectus.
These
securities may be sold directly by us, through dealers or agents
designated from time to time, to or through underwriters or through
a combination of these methods. See “Plan of Distribution” beginning
on page 6. We may also describe the plan of distribution for any
particular offering of our securities in a prospectus supplement.
If any agents, underwriters or dealers are involved in the sale of
any securities in respect of which this prospectus is being
delivered, we will disclose their names and the nature of our
arrangements with them in a prospectus supplement. The net proceeds
we expect to receive from any such sale will also be included in a
prospectus supplement.
Investing in our
securities involves various risks. See “Risk Factors” on page 4 for more
information on these risks. Additional risks, if any, will be
described in the prospectus supplement related to a potential
offering under the heading “Risk Factors”. You should
review that section of the related prospectus supplement for a
discussion of matters that investors in such securities should
consider.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or
passed upon the adequacy or accuracy of this prospectus or any
accompanying prospectus supplement. Any representation to the
contrary is a criminal offense.
The
date of this prospectus is September 8, 2017
This
prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission utilizing a
“shelf” registration, or continuous offering, process.
Under the shelf registration process, we may issue and sell any
combination of the securities described in this prospectus in one
or more offerings with a maximum offering price of up to
$15,000,000.
This
prospectus provides you with a general description of the
securities we may offer. Each time we sell securities under this
shelf registration, we will provide a prospectus supplement that
will contain certain specific information about the terms of that
offering, including a description of any risks related to the
offering, if those terms and risks are not described in this
prospectus. A prospectus supplement may also add, update or change
information contained in this prospectus. If there is any
inconsistency between the information in this prospectus and the
applicable prospectus supplement, you should rely on the
information in the prospectus supplement. The registration
statement we filed with the Securities and Exchange Commission
includes exhibits that provide more details on the matters
discussed in this prospectus. You should read this prospectus and
the related exhibits filed with the Securities and Exchange
Commission and the accompanying prospectus supplement together with
additional information described under the headings
“Available
Information” and “Information Incorporated by
Reference” before investing in any of the securities
offered.
We may
sell securities to or through underwriters or dealers, and also may
sell securities directly to other purchasers or through agents. To
the extent not described in this prospectus, the names of any
underwriters, dealers or agents employed by us in the sale of the
securities covered by this prospectus, the principal amounts or
number of shares or other securities, if any, to be purchased by
such underwriters or dealers and the compensation, if any, of such
underwriters, dealers or agents will be set forth in the
accompanying prospectus supplement.
The
information in this prospectus is accurate as of the date on the
front cover. Information incorporated by reference into this
prospectus is accurate as of the date of the document from which
the information is incorporated. You should not assume that the
information contained in this prospectus is accurate as of any
other date.
When
used herein, “Inuvo”, “we”,
“us” or “our” refers to Inuvo, Inc., a
Nevada corporation, and our subsidiaries. Additionally, when used
herein, "2016" refers to the year ended December 31, 2016, "2015"
refers to the year ended December 31, 2015, and "2017" refers to
the year ending December 31, 2017.
We file
annual, quarterly and other reports, proxy statements and other
information with the Securities and Exchange Commission. You may
read and copy any materials that we file at the Securities and
Exchange Commission’s Public Reference Room, 100 F Street,
N.E., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the Securities
and Exchange Commission at 1-800-SEC-0330. The Securities and
Exchange Commission also maintains a website at www.sec.gov that
contains reports, proxy and information statements, and other
information regarding issuers such as our company that file
electronically with the Securities and Exchange
Commission.
We have
filed a registration statement under the Securities Act of 1933
with the Securities and Exchange Commission with respect to the
securities to be sold by pursuant to this prospectus. This
prospectus has been filed as part of the registration statement.
This prospectus does not contain all of the information set forth
in the registration statement because certain parts of the
registration statement are omitted in accordance with the rules and
regulations of the Securities and Exchange Commission. You should
refer to the registration statement, including the exhibits, for
further information about us and the securities being offered
pursuant to this prospectus. Statements in this prospectus
regarding the provisions of certain documents filed with, or
incorporated by reference in, the registration statement are not
necessarily complete and each statement is qualified in all
respects by that reference. You may:
●
|
inspect a copy of the registration statement, including the
exhibits and schedules, without charge at the Securities and
Exchange Commission’s Public Reference Room;
|
|
|
●
|
obtain a copy from the Securities and Exchange Commission upon
payment of the fees prescribed by the Securities and Exchange
Commission; or
|
|
|
●
|
obtain a copy from the Securities and Exchange Commission’s
website at www.sec.gov.
|
Our
Internet address is www.inuvo.com. We make available free of
charge, through the investor relations section of our website,
annual reports on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act
as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the Securities and Exchange
Commission.
We
develop technology that connects advertisers with consumers through
interactions with Inuvo ad-units on websites and apps across
devices. The Inuvo MarketPlace provides the means to interact with
tens of thousands of advertisers (Demand) and tens of thousands of
online publishers (Supply). We interact with Demand/Supply
constituents directly and indirectly. We serve ads within content,
video and images. We target ads to consumers using our proprietary
ConceptGraph machine learning technology that includes a database
of 800 million machine profiles. We earn revenue when consumers
view and click on our ads. We touch 90% of all US households
weekly. Our business scales as we add Demand and Supply
relationships with many barriers to entry including the ability to
process hundreds of thousands of transactions per
second.
Intellectual
property is protected by eleven issued and eight pending patents.
We count among our many contractual relationships, three clients
who collectively manage over 50% of all US digital advertising
budgets. Included within our Supply portfolio is a collection of
owned websites such as alot.com and earnspendlive.com where we
create content in health, finance, travel, careers, auto, education
and living categories. These sites provide the means to test
ad-tech, while also delivering high quality consumers to
advertisers through interaction with proprietary content in the
form of images, videos, slideshows and the written
word.
We are
focused on growth and expect to generate a positive cash flow for
the long term. We expect to continue to make strategic investments
principally in these areas: marketing technology that helps drive
traffic to our owned websites; ad-units that perform better for
publishers; demand technology that optimizes advertiser choices;
supply technology that optimizes publisher yield; and audience
targeting technology that improves the alignment of advertising
with consumer and yield.
Corporate information
We were
incorporated under the laws of the State of Nevada in October 1987
under the name North Star Petroleum, Inc. In May 1990, we changed
our name to Gemstar Enterprises, Inc. In October 1998 we changed
our name to CGI Holding Corp. In March 2006 we changed our name to
Think Partnership Inc. and in September 2008 we changed our name to
Kowabunga! Inc. Lastly, in July 2009 we changed our name to Inuvo,
Inc.
Our
principal executive offices are located at 500 President Clinton
Boulevard, Suite 300, Little Rock, AR 72201. Our telephone number
at this location is (501) 205-8508. The information which appears
on our website at www.inuvo.com is not part of this
prospectus.
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING INFORMATION
This
prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, or the
"Securities Act", and Section 21E of the Securities Exchange Act of
1934, as amended, or the "Exchange Act". These forward-looking
statements are subject to known and unknown risks, uncertainties
and other factors which may cause actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as
“will,” “should,” “intend,”
“expect,” “plan,” “anticipate,”
“believe,” “estimate,”
“predict,” “potential,” or
“continue,” or the negative of such terms or other
comparable terminology. These factors include, but are not limited
to our:
●
|
material
dependence on our relationships with Yahoo! and
Google;
|
|
|
●
|
dependence
on relationships with distribution partners, and on the
introduction of new products and services, which require
significant investment;
|
|
|
●
|
dependence
on our financing arrangements with Western Alliance Bank, which is
collateralized by our assets;
|
|
|
●
|
dependence
on our ability to effectively market and attract
traffic;
|
|
|
●
|
need to
keep pace with technology changes;
|
|
|
●
|
fluctuations
of quarterly financial results and the trading price of our common
stock;
|
|
|
●
|
vulnerability
to interruptions of services;
|
|
|
●
|
dependence
on key personnel;
|
|
|
●
|
vulnerability
to regulatory and legal uncertainties and our ability to comply
with applicable laws and regulations;
|
|
|
●
|
need to
protect our intellectual property;
|
|
|
●
|
vulnerability
to publishers who could fabricate clicks;
|
|
|
●
|
vulnerability
to a downturn and to uncertainty in global economic
conditions;
|
|
|
●
|
integration
of our recent NetSeer asset acquisition;
|
|
|
●
|
requirement
to adhere to the covenants and restrictions in our grant agreement
with the state of Arkansas;
|
|
|
●
|
the
dilutive impact to our stockholders from outstanding restricted
stock grants, warrants and options; and
|
|
|
●
|
the
seasonality of our business.
|
These
forward-looking statements were based on various factors and were
derived utilizing numerous assumptions and other factors that could
cause our actual results to differ materially from those in the
forward-looking statements. Most of these factors are difficult to
predict accurately and are generally beyond our control. You should
consider the areas of risk described in connection with any
forward-looking statements that may be made herein. Readers are
cautioned not to place undue reliance on these forward-looking
statements and readers should carefully review this prospectus in
its entirety, including the risks described in Item 1A - Risk
Factors in our Annual Report on Form 10-K for the year ended
December 31, 2016 as filed with the Securities and Exchange
Commission on February 16, 2017.
Except
for our ongoing obligations to disclose material information under
the Federal securities laws, we undertake no obligation to release
publicly any revisions to any forward-looking statements, to report
events or to report the occurrence of unanticipated events. These
forward-looking statements speak only as of the date of this
prospectus, and you should not rely on these statements without
also considering the risks and uncertainties associated with these
statements and our business.
An
investment in our securities involves a high degree of risk. The
prospectus supplement applicable to each offering of our securities
will contain a discussion of the risks applicable to an investment
in Inuvo and to the particular types of securities that we are
offering under that prospectus supplement. Prior to making a
decision about investing in our securities, you should carefully
consider the specific factors discussed under the heading
“Risk Factors” in the applicable prospectus supplement,
together with all of the other information contained or
incorporated by reference in the prospectus supplement or appearing
or incorporated by reference in this prospectus. You should also
consider the risks, uncertainties and assumptions discussed under
the heading “Risk Factors” included in our most recent
Annual Report on Form 10-K, as revised or supplemented by our most
recent Quarterly Report on Form 10-Q, each of which are on
file with the SEC and are incorporated herein by reference, and
which may be amended, supplemented or superseded from time to time
by other reports we file with the SEC in the future. Additional
risks not presently known to us or that we currently believe to be
immaterial may also adversely affect our business, operating
results and financial condition and the value of an investment in
our securities.
USE OF PROCEEDS
Unless
otherwise indicated in an accompanying prospectus supplement, the
net proceeds from the sale of the securities offered hereby will be
used for general corporate purposes, which may include working
capital, capital expenditures, and development costs. We have not
allocated any portion of the net proceeds for any particular use at
this time. The net proceeds may be invested temporarily until they
are used for their stated purpose. Specific information concerning
the use of proceeds from the sale of any securities will be
included in the prospectus supplement relating to such
securities.
DESCRIPTION OF CAPITAL
STOCK
Our
authorized capital stock consists of 40,000,000 shares of common
stock, par value $0.001 per share, 500,000 shares of preferred
stock, par value $0.001 per share. The following description of our
common stock and our preferred stock is a summary. You should refer
to our articles of incorporation for the actual terms of our
capital stock.
Common stock
As of
August 24, 2017 there were 28,643,960 outstanding shares of our
common stock. Holders of shares of common stock are entitled to one
vote for each share on all matters to be voted on by the
stockholders. Holders of common stock do not have cumulative voting
rights. Holders of common stock are entitled to share ratably in
dividends, if any, as may be declared from time to time by the
board of directors in its discretion from funds legally available
therefor. In the event of a liquidation, dissolution or winding up
of our company, the holders of common stock are entitled to share
pro rata all assets remaining after payment in full of all
liabilities. All of the outstanding shares of common stock are
fully paid and non-assessable. Holders of common stock have no
preemptive rights to purchase our common stock. There are no
conversion or redemption rights or sinking fund provisions with
respect to the common stock.
Preferred stock
The
board of directors is authorized to provide for the issuance of
shares of preferred stock in series and, by filing an amendment
pursuant to the applicable laws of Nevada, to establish from time
to time the number of shares to be included in each such series,
and to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations or
restrictions thereof without any further vote or action by the
stockholders. Any shares of preferred stock so issued would have
priority over the common stock with respect to dividend or
liquidation rights.
Any
future issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of our company without
further action by the stockholders and may adversely affect the
voting and other rights of the holders of common stock. In
addition, the issuance of shares of preferred stock, or the
issuance of rights to purchase such shares, could be used to
discourage an unsolicited acquisition proposal. For instance, the
issuance of a series of preferred stock might impede a business
combination by including class voting rights that would enable the
holder to block such a transaction, or facilitate a business
combination by including voting rights that would provide a
required percentage vote of the stockholders. In addition, under
certain circumstances, the issuance of preferred stock could
adversely affect the voting power of the holders of the common
stock. Although the board of directors is required to make any
determination to issue such stock based on its judgment as to the
best interests of our stockholders, the board of directors could
act in a manner that would discourage an acquisition attempt or
other transaction that some, or a majority, of the stockholders
might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then
market price of such stock. The board of directors does not at
present intend to seek stockholder approval prior to any issuance
of currently authorized stock, unless otherwise required by law or
stock exchange rules.
Transfer agent
Our
transfer agent is Colonial Stock Transfer Company, 66 Exchange
Place, Suite 100, Salt Lake City, UT 84111, and its telephone
number is (801) 355-5740.
We may
issue warrants for the purchase of preferred stock or common stock,
or any combination of these securities. Warrants may be issued
independently or together with other securities and may be attached
to or separate from any offered securities. Each series of warrants
will be issued under a separate warrant agreement. The following
outlines some of the general terms and provisions of the warrants
that we may issue from time to time. Additional terms of the
warrants and the applicable warrant agreement will be set forth in
the applicable prospectus supplement.
The
following descriptions, and any description of the warrants
included in a prospectus supplement, may not be complete and is
subject to and qualified in its entirety by reference to the terms
and provisions of the applicable warrant agreement, which we will
file with the Securities and Exchange Commission in connection with
any offering of warrants.
General
The
prospectus supplement relating to a particular issue of warrants
will describe the terms of the warrants, including the
following:
●
|
the title of the warrants;
|
|
|
●
|
the offering price for the warrants, if any;
|
|
|
●
|
the aggregate number of the warrants;
|
|
|
●
|
the terms of the security that may be purchased upon exercise of
the warrants;
|
|
|
●
|
if applicable, the designation and terms of the securities that the
warrants are issued with and the number of warrants issued with
each security;
|
|
|
●
|
if applicable, the date from and after which the warrants and any
securities issued with the warrants will be separately
transferable;
|
|
|
●
|
the dates on which the right to exercise the warrants commence and
expire;
|
|
|
●
|
if applicable, the minimum or maximum amount of the warrants that
may be exercised at any one time;
|
|
|
●
|
if applicable, a discussion of material United States federal
income tax considerations;
|
|
|
●
|
anti-dilution provisions of the warrants, if any;
|
|
|
●
|
redemption or call provisions, if any, applicable to the warrants;
and
|
|
|
●
|
any additional terms of the warrants, including terms, procedures
and limitations relating to the exchange and exercise of the
warrants.
|
Exercise of warrants
Each
warrant will entitle the holder of the warrant to purchase the
securities that we specify in the applicable prospectus supplement
at the exercise price that we describe in the applicable prospectus
supplement. Holders may exercise warrants at any time up to the
close of business on the expiration date set forth in the
applicable prospectus supplement. After the close of business on
the expiration date, unexercised warrants will be void. Holders may
exercise warrants as set forth in the prospectus supplement
relating to the warrants being offered. Until a holder exercises
the warrants to purchase any securities underlying the warrants,
the holder will not have any rights as a holder of the underlying
securities by virtue of ownership of warrants.
MATERIAL FEDERAL INCOME
TAX CONSEQUENCES
A
summary of any material United States federal income tax
consequences to persons investing in the securities offered by this
prospectus will be set forth in any applicable prospectus
supplement. The summary will be presented for informational
purposes only, however, and will not be intended as legal or tax
advice to prospective purchasers. Prospective purchasers of
securities are urged to consult their own tax advisors prior to any
purchase of securities.
We may
sell the securities from time to time pursuant to underwritten
public offerings, "at-the-market" offerings, negotiated
transactions, block trades, or a combination of these methods. We
may sell the securities in one or more of the following ways from
time to time:
●
|
to or through underwriters or dealers;
|
|
|
●
|
directly to one or more purchasers; or
|
|
|
●
|
through agents.
|
The
prospectus supplement (and any related free writing prospectuses
that we may authorize) will describe the terms of such offering,
including:
●
|
the name or names of any underwriters, dealers or
agents;
|
|
|
●
|
the purchase price of the offered securities and the proceeds to
Inuvo from the sale;
|
|
|
●
|
any over-allotment options under which underwriters may purchase
additional securities from us
|
|
|
●
|
any underwriting discounts and commissions or agency fees and other
items constituting underwriters' or agents' compensation;
and
|
|
|
●
|
any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers and any securities
exchanges on which such offered securities may be
listed.
|
Any
initial public offering prices, discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to
time.
If
underwriters are used in the sale, the underwriters will acquire
the offered securities for their own account and may resell them
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The offered securities may be
offered either to the public through underwriting syndicates
represented by one or more managing underwriters or by one or more
underwriters without a syndicate. Unless otherwise set forth in a
prospectus supplement, the obligations of the underwriters to
purchase any series of securities will be subject to certain
conditions precedent, and the underwriters will be obligated to
purchase all of such series of securities, if any are purchased
(other than securities subject to any over-allotment
option).
In
connection with underwritten offerings of the offered securities
and in accordance with applicable law and industry practice,
underwriters may over-allot or effect transactions that stabilize,
maintain or otherwise affect the market price of the offered
securities at levels above those that might otherwise prevail in
the open market, including by entering stabilizing bids, effecting
syndicate covering transactions or imposing penalty bids, each of
which is described below:
●
|
a stabilizing bid means the placing of any bid, or the effecting of
any purchase, for the purpose of pegging, fixing or maintaining the
price of a security;
|
|
|
●
|
a syndicate covering transaction means the placing of any bid on
behalf of the underwriting syndicate or the effecting of any
purchase to reduce a short position created in connection with the
offering; or
|
|
|
●
|
a penalty bid means an arrangement that permits the managing
underwriter to reclaim a selling concession from a syndicate member
in connection with the offering when offered securities originally
sold by the syndicate member are purchased in syndicate covering
transactions.
|
These
transactions may be effected on the NYSE American, in the
over-the-counter market, or otherwise. Underwriters are not
required to engage in any of these activities, or to continue such
activities if commenced.
If a
dealer is used in the sale, Inuvo will sell such offered securities
to the dealer, as principal. The dealer may then resell the offered
securities to the public at varying prices to be determined by that
dealer at the time for resale. The names of the dealers and the
terms of the transaction will be set forth in the prospectus
supplement relating to that transaction.
Offered
securities may be sold directly by Inuvo to one or more
institutional purchasers, or through agents designated by us from
time to time, at a fixed price or prices, which may be changed, or
at varying prices determined at the time of sale. Any agent
involved in the offer or sale of the offered securities in respect
of which this prospectus is delivered will be named, and any
commissions payable by Inuvo to that agent will be set forth, in
the prospectus supplement relating to that offering. Unless
otherwise indicated in such prospectus supplement, any such agent
will be acting on a best efforts basis for the period of its
appointment.
Underwriters,
dealers and agents may be entitled under agreements entered into
with us to indemnification by us against certain civil liabilities,
including liabilities under the Securities Act, or to contribution
with respect to payments that the underwriters, dealers or agents
may be required to make in respect thereof. Underwriters, dealers
and agents may be customers of, engage in transactions with, or
perform services for us and our affiliates in the ordinary course
of business.
Other
than our common stock, which is listed on the NYSE American, each
of the securities issued hereunder will be a new issue of
securities, will have no prior trading market, and may or may not
be listed on a national securities exchange. Any common stock sold
pursuant to a prospectus supplement will be listed on the NYSE
American, subject to official notice of issuance. Any underwriters
to whom we sell securities for public offering and sale may make a
market in the securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any
time without notice. We cannot assure you that there will be a
market for the offered securities.
The
validity of the securities offered by this prospectus will be
passed upon for us by Pearlman Law Group LLP, 200 South Andrews
Avenue, Suite 901, Fort Lauderdale, FL 33301.
Our
audited consolidated balance sheets as of December 31, 2016 and
2015, and the related consolidated statements of income,
stockholders’ equity and cash flows for the years ended
December 31, 2016 and 2015 incorporated by reference in the
registration statement of which this prospectus is a part have been
audited by Mayer Hoffman McCann P.C., independent registered public
accounting firm, as indicated in their report with respect thereto,
and have been so included in reliance upon the report of such firm
given on their authority as experts in accounting and
auditing.
INFORMATION INCORPORATED
BY REFERENCE
The
Securities and Exchange Commission allows us to “incorporate
by reference” the information we file with them, which means
that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information
filed with the Securities and Exchange Commission will update and
supersede this information. We incorporate by reference the
documents listed below, any of such documents filed since the date
this registration statement was filed and any future filings with
the Securities and Exchange Commission under Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until the
termination of the offering of securities covered by this
prospectus:
●
|
Annual Report on Form 10-K for the year ended December 31, 2016
filed February 16, 2017;
|
|
|
●
|
Quarterly Report on Form 10-Q for the period ended June 30, 2017
filed August 8, 2017; and
|
|
|
●
|
Current Reports on Form 8-K (including 8-K/A) as filed on February
27, 2017, March 30, 2017, April 17, 2017, June 7, 2017 and June 19,
2017.
|
We will
provide without charge to any person to whom this prospectus is
delivered, on the written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference,
excluding exhibits, unless we have specifically incorporated an
exhibit in the incorporated document. Written requests should be
directed to: Corporate Secretary, Inuvo, Inc., 500 President
Clinton Boulevard, Suite 300, Little Rock, AR 72201.
Each
document or report subsequently filed by us pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
after the date hereof and prior to the termination of the offering
of the securities shall be deemed to be incorporated by reference
into this prospectus and to be a part of this prospectus from the
date of filing of such document, unless otherwise provided in the
relevant document. Any statement contained herein, or in a document
all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the registration statement and this
prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of the registration statement or this prospectus.
The
information relating to our company contained in this prospectus
and the accompanying prospectus supplement is not comprehensive,
and you should read it together with the information contained in
the incorporated documents.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Under
our Articles of Incorporation, our directors are not liable for
monetary damages for breach of fiduciary duty, except in connection
with:
●
|
a breach of the director's duty of loyalty to us or our
stockholders;
|
|
|
●
|
acts or omissions not in good faith or which involve intentional
misconduct, fraud or a knowing violation of law;
|
|
|
●
|
a transaction from which our director received an improper benefit;
or
|
|
|
●
|
an act or omission for which the liability of a director is
expressly provided under Nevada law.
|
In
addition, our bylaws provide that we must indemnify our officers
and directors to the fullest extent permitted by Nevada law for all
expenses incurred in the settlement of any actions against such
persons in connection with their having served as officers or
directors.
Insofar
as the limitation of, or indemnification for, liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers, or persons controlling us pursuant to the foregoing, or
otherwise, we have been advised that, in the opinion of the
Securities and Exchange Commission, such limitation or
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore,
unenforceable.
TABLE OF CONTENTS
|
Page
|
|
|
|
|
|
|
|
2
|
|
|
|
2
|
|
$15,000,000
|
|
3
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
|
5
|
|
|
|
6
|
|
COMMON STOCK, PREFERRED STOCK,
|
|
7
|
|
WARRANTS OR UNITS
|
|
7
|
|
|
|
8
|
|
PROSPECTUS
|
|
8
|
|
|
|
8
|
|
September 8, 2017
|
|
9
|
|
|
12,222,222 Shares of Common
Stock
PROSPECTUS SUPPLEMENT
Sole Placement Agent
A.G.P.
The date of this prospectus supplement is June 4, 2020