inuv_424b5
PROSPECTUS SUPPLEMENT
|
Filed Pursuant to Rule 424(b)(5)
|
(To Prospectus dated March 15, 2021)
|
Registration
No. 333-253018
|
Inuvo, Inc.
Up to $35,000,000 of Shares of Common Stock
On May
28, 2021, we entered into a certain Sales Agreement, or sales
agreement, with A.G.P./Alliance Global Partners, or A.G.P.,
relating to shares of our common stock offered by this prospectus
supplement. In accordance with the terms of the sales agreement, we
may offer and sell shares of our common stock having an aggregate
offering price of up to $35,000,000 from time to time through
A.G.P., acting as our sales agent.
Our
common stock is listed on the NYSE American under the symbol
“INUV”. The last reported sale price of our common
stock on the NYSE American on May 27, 2021 was $0.74 per
share.
Sales
of our common stock, if any, under this prospectus supplement may
be made in sales deemed to be “at the market
offerings” as defined in Rule 415 promulgated under the
Securities Act of 1933, as amended, or the Securities Act. If
authorized by us in writing, A.G.P. may also sell shares of our
common stock in negotiated transactions at market prices prevailing
at the time of sale or at prices related to
such prevailing market prices. A.G.P. is not required to
sell any specific number or dollar amount of securities, but will
act as a sales agent using commercially reasonable efforts
consistent with its normal trading and sales practices, on mutually
agreed terms between A.G.P. and us. There is no arrangement for
funds to be received in any escrow, trust or similar
arrangement.
The
compensation to A.G.P. for sales of common stock sold pursuant to
the sales agreement will be equal to 3.0% of the gross proceeds of
any shares of common stock sold under the sales agreement, in
addition to reimbursement of certain expenses, see “Plan of
Distribution.” In connection with the sale of the common
stock on our behalf, A.G.P. will be deemed to be an
“underwriter” within the meaning of the Securities Act
and the compensation of A.G.P. will be deemed to be underwriting
commissions or discounts. We have also agreed to provide
indemnification and contribution to A.G.P. with respect to certain
liabilities, including liabilities under the Securities Act or the
Securities Exchange Act of 1934, as amended, or the Exchange
Act.
Investing in our securities involves a high degree of risk. See the
section entitled “Risk Factors” beginning on page S-7
of this prospectus supplement and page 4 of the accompanying
prospectus as well as under similar headings in the other documents
that are incorporated by reference in the prospectus supplement and
the accompanying prospectus for a discussion of information that
should be considered in connection with an investment in our
securities.
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.
A.G.P.
The date of this prospectus supplement is May 28, 2021
TABLE OF CONTENTS
Prospectus Supplement
ABOUT
THIS PROSPECTUS SUPPLEMENT
|
S-2
|
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
S-3
|
PROSPECTUS
SUPPLEMENT SUMMARY
|
S-4
|
THE
OFFERING
|
S-6
|
RISK
FACTORS
|
S-7
|
USE OF
PROCEEDS
|
S-10
|
DILUTION
|
S-10
|
DIVIDEND
POLICY
|
S-11
|
PLAN OF
DISTRIBUTION
|
S-11
|
LEGAL
MATTERS
|
S-12
|
EXPERTS
|
S-12
|
WHERE
YOU CAN FIND MORE INFORMATION
|
S-13
|
INFORMATION
INCORPORATED BY REFERENCE
|
S-13
|
Prospectus
|
|
|
Page
|
ABOUT
THIS PROSPECTUS
|
3
|
AVAILABLE
INFORMATION
|
3
|
OUR
COMPANY
|
4
|
RISK
FACTORS
|
4
|
CAUTIONARY
NOTE REGARDING FORWARD LOOKING STATEMENTS
|
5
|
USE OF
PROCEEDS
|
5
|
DIVIDEND
POLICY
|
5
|
DESCRIPTION
OF CAPITAL STOCK
|
6
|
DESCRIPTION
OF WARRANTS
|
7
|
DESCRIPTION
OF UNITS
|
8
|
LEGAL
OWNERSHIP OF SECURITIES
|
8
|
PLAN OF
DISTRIBUTION
|
11
|
LEGAL
MATTERS
|
12
|
EXPERTS
|
12
|
INFORMATION
INCORPORATED BY REFERENCE
|
12
|
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, or 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-13 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.
This
prospectus supplement relates only to an offering of up to $35.0
million of shares of our common stock through A.G.P. These sales,
if any, will be made pursuant to the terms of the sales agreement
entered into between us and A.G.P. on May 28, 2021, a copy of
which is incorporated by reference into this prospectus
supplement.
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, and A.G.P. has
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.
The
industry and market data and other statistical information
contained in this prospectus supplement, the accompanying
prospectus and the documents we incorporate by reference are based
on management’s estimates, independent publications,
government publications, reports by market research firms or other
published independent sources, and, in each case, are believed by
management to be reasonable estimates. Although we believe these
sources are reliable, we have not independently verified the
information. None of the independent industry publications used in
this prospectus supplement, the accompanying prospectus or the
documents we incorporate by reference were prepared on our or our
affiliates’ behalf and none of the sources cited by us
consented to the inclusion of any data from its reports, nor have
we sought their consent.
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 NOTE REGARDING FORWARD-LOOKING STATEMENTS
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, or the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended, or 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 use of the net
proceeds from this offering;
●
our history of
losses and declining revenues;
●
the known and
unknown impact of the COVID-19 pandemic on our business and
operations;
●
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, 2020, filed with
the SEC on February 11, 2021, as amended on March 10, 2021, and our
other filings with the SEC.
|
PROSPECTUS SUPPLEMENT SUMMARY
The following information below 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
We are 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
our clients to engage with their customers and prospects in a
manner that drives engagement from the first contact with the
consumer. We facilitate the delivery of hundreds of millions of
marketing messages to consumers every single month and count among
our clients numerous world-renowned names in industries that have
included retail, automotive, insurance, health care, technology,
telecommunications and finance.
Our 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 that we utilize to deliver highly aligned online
audiences to its clients. We earn revenue when consumers view or
click on our client’s messages.
Our business scales through account management activity with
existing clients and by adding new clients through sales
activity.
As part of our technology strategy, we own a collection of websites
including 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 our technologies,
while also delivering high quality consumers to clients through the
interaction with proprietary content in the form of images, videos,
slideshows and articles.
We believe there are many barriers to entry associated with our
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, or IOT, and the relationships required to
execute within the IOT. Our intellectual property patent estate as
of May 28, 2021, consists of 18 issued and seven pending
patents.
Please
see our Annual Report on Form 10-K for the fiscal year ended
December 31, 2020 as filed with the SEC on February 11, 2021, as
amended by our Form 10-K/A as filed with the SEC on March 10, 2021,
and our other subsequent filings with the SEC for additional
information about our business, operations and financial
condition.
Corporate information
We are
incorporated in Nevada. 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 that appears on our website at s not
part of the prospectus or this prospectus supplement.
|
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, 2020, as amended, and
our Quarterly Report on Form 10-Q for the period ended on March 31,
2021 which are incorporated by reference in this prospectus. These
risks and uncertainties include, but are not limited to, the
following:
|
|
|
●
|
we have
a history of losses and our revenues declined in 2020 from
2019;
|
|
|
|
|
|
|
|
|
●
|
the
COVID-19 pandemic could have a material adverse impact on our
business, results of operations and financial
condition;
|
|
|
|
|
|
|
|
|
●
|
we rely
on two customers for a significant portion of our
revenues;
|
|
|
|
|
|
|
|
|
●
|
our
ability to maintain our credit facility could impact our ability to
access capital in the future;
|
|
|
|
|
|
|
|
|
●
|
we are
dependent upon relationships with and the success of our supply
partners;
|
|
|
|
|
|
|
|
|
●
|
the
success of our owned sites is dependent on our ability to acquire
traffic in a profitable manner;
|
|
|
|
|
|
|
|
|
●
|
our
business must keep pace with rapid technological change to remain
competitive;
|
|
|
|
|
|
|
|
|
●
|
our
services may be interrupted if we experience problems with our
network infrastructure;
|
|
|
|
|
|
|
|
|
●
|
regulatory
and legal uncertainties could harm our business;
|
|
|
|
|
|
|
|
|
●
|
failure
to comply with federal, state and international privacy and data
security laws and regulations, or the expansion of current or the
enactment of new privacy and data security laws or regulations,
could adversely affect our business;
|
|
|
|
|
|
|
|
|
●
|
we may
face third party intellectual property infringement claims that
could be costly to defend and result in the loss of significant
rights;
|
|
|
|
|
|
|
|
|
●
|
we are
subject to risks from publishers who could fabricate clicks either
manually or technologically;
|
|
|
|
|
|
|
|
|
●
|
our
business is seasonal and our financial results may vary
significantly from period to period;
|
|
|
|
|
|
|
|
|
●
|
failure
to comply with the covenants and restrictions in our grant
agreement with the State of Arkansas could result in the repayment
of a portion of the grant, which we may not be able to repay or
finance on favorable terms;
|
|
|
|
|
|
|
|
|
●
|
we are
subject to the continued listing standards of the NYSE American and
our failure to satisfy these criteria may result in delisting of
our common stock;
|
|
|
|
|
|
|
|
|
●
|
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;
|
|
|
|
|
|
|
|
|
●
|
significant
dilution may occur when outstanding restricted stock units vest;
and
|
|
|
|
|
|
|
|
|
●
|
our
financial condition may be adversely affected if we are unable to
identify and complete future acquisitions, fail to successfully
integrate acquired assets or businesses, or are unable to obtain
financing for acquisitions on acceptable terms.
|
|
|
|
THE
OFFERING
|
|
|
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.
|
|
|
|
|
|
Issuer
|
Inuvo,
Inc.
|
|
|
|
|
|
|
Common stock offered by us
|
Shares of our
common stock having an aggregate offering price of up to $35.0
million pursuant to the sales agreement.
|
|
|
|
|
|
|
Manner of the Offering
|
“At the
market offering” that may be made from time to time through
or to A.G.P. as sales agent. See “Plan of
Distribution”.
|
|
|
|
|
|
|
Common stock outstanding prior to the offering
|
118,516,204
(1)
|
|
|
|
|
|
|
Common stock
outstanding immediately after the
offering
|
165,813,501 shares
assuming sales at a price of $0.74 per share, which was the closing
price on the NYSE American on May 27, 2021. Actual number of shares
issued will vary depending on the price at which shares may be sold
from time to time under this offering and restrictions under
applicable law. Issuances
will not exceed our total authorized amount of shares of common
stock, which is 150,000,000 as of the date of this prospectus
supplement. (1)
|
|
|
|
|
|
|
NYSE American symbol
|
INUV
|
|
|
|
|
|
|
Use of proceeds
|
We intend to use
the proceeds for general corporate purposes, which may include
additions to working capital and financing potential acquisitions.
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-7
and the accompanying base prospectus beginning on page 4 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 118,516,204 shares of common stock
outstanding as of May 28, 2021, and excludes 2,241 shares held in
the name of one of our subsidiaries
and:
●
1,500 shares of our common stock issuable upon the
exercise of outstanding stock options with a weighted average
exercise price of $0.56 per share;
●
4,376,667 shares of our common stock underlying
outstanding restricted stock units; and
●
2,655,861 additional shares of our common stock
reserved for future issuance under our equity incentive
plans.
|
|
RISK FACTORS
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, 2020, 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 may experience immediate and substantial dilution.
The
shares sold in this offering, if any, will be sold from time to
time at various prices. The offering price per share in this
offering may exceed the net tangible book value per share of our
common stock outstanding prior to this offering. Assuming that an
aggregate of 47,297,297 shares of our common stock are sold during
the term of the sales agreement with A.G.P. at a price of $0.74 per
share, the last reported sale price of our common stock on NYSE
American on May 27, 2021, for net
proceeds of approximately $34.0 million, after deducting
commissions and estimated aggregate offering expenses payable by
us, you will experience immediate dilution of $0.43 per share,
representing the difference between our net tangible book value per
share as of March 31, 2021 and the assumed offering price. The
future vesting of outstanding restricted stock units following the
date of this prospectus supplement and the exercise of outstanding
stock options may result in further dilution of your investment.
See the section entitled “Dilution” below for a more
detailed illustration of the dilution you would incur if you
participate in this offering.
The actual number of shares we
will issue under the sales agreement with A.G.P., at any one time
or in total, is uncertain.
Subject
to certain limitations in the sales agreement with A.G.P. and
compliance with applicable law, we have the discretion to deliver
placement notices to A.G.P. at any time throughout the term of the
sales agreement. The number of shares that are sold by A.G.P. after
delivering a placement notice will fluctuate based on the market
price of the common stock during the sales period and limits we set
with A.G.P.
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 that increase our
profitability or market value, or otherwise yield favorable
returns.
We may
to utilize net proceeds of this offering for general working
capital or to finance future acquisitions. 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
that 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, 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;
you should not buy our stock if you expect dividends.
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 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. This offering may contribute to a
depressed 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 also may 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 the ownership of the 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, or restricted stock unit grants vest.
As
of May 27, 2021, we had 4,378,167 shares of our common stock
underlying 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. We expect to continue to grant equity incentives in
the form of restricted stock units and/or stock options to our
employees and members of management as authorized under our equity
incentive plans.
USE OF PROCEEDS
We may
issue and sell shares of our common stock having aggregate gross
proceeds of up to $35.0 million from time to time. Because there is
no minimum offering amount required to be sold in connection with
this offering, the actual total public offering amount, commissions
and proceeds to us, if any, are not determinable at this time. We
currently expect to use the net proceeds from this offering for
working capital, financing of acquisitions, and other general
corporate purposes. Our management will have broad discretion in
the application of the net proceeds and you will be relying on the
judgment of management regarding the application of the net
proceeds from the offering.
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.
DILUTION
A
purchaser of 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 net tangible book value
per share of our common stock upon the closing of this
offering.
Our net
tangible book value as of March 31, 2021, was $17,382,120, or
approximately $0.15 per share of outstanding common stock, based on
118,516,204 shares of common stock outstanding as of March 31,
2021. 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.
After
giving effect to the sale of 47,297,297 shares of our common stock,
representing a
net amount of $33,950,000 after deducting commissions and
expenses, at an assumed offering price of $0.74 per share,
the last reported sale price of our common stock on the NYSE
American on May 27, 2021, our pro forma net tangible book value as
of March 31, 2021 would have been approximately $51,332,120 or
approximately $0.31 per share of outstanding common stock. This
amount represents an immediate increase in net tangible book value
of $0.16 per share of our common stock to our existing stockholders
and an immediate dilution of $0.43 per share of our common stock to
new investors purchasing shares in this offering
The following table illustrates this calculation on a per share
basis. The pro forma as adjusted information is illustrative only
and will adjust based on the actual price to the public, the actual
number of shares sold and other terms of the offering determined at
the time shares of our common stock are sold pursuant to this
prospectus supplement. The shares sold in this offering, if any,
will be sold from time to time at various prices.
We
will not offer and sell shares in excess of any amount that would
cause the number of our outstanding shares to exceed the number of
shares then authorized to be issued under our articles of
incorporation, which is 150,000,000 shares as of the date of this
prospectus supplement.
Assumed offering
price per share
|
|
$0.74
|
|
|
Net tangible book
value per share of common stock as of March 31, 2021
|
$0.15
|
|
|
|
|
Increase in net
tangible book value per share of common stock attributable to this
offering
|
$0.16
|
|
|
|
|
Pro forma net book
value per share of common stock, after giving effect to this
offering
|
|
$0.31
|
|
|
|
Dilution per share
of common stock to new investors in this offering
|
|
$0.43
|
The
foregoing table does not take into account further dilution to new
investors that could occur upon the exercise of outstanding options
having a per share exercise price less than the per share offering
price to the public in this offering and the future vesting of
outstanding restricted stock units following the date of this
prospectus supplement.
The
foregoing table excludes the following as of March 31,
2021:
●
2,241
shares held by our wholly-owned subsidiary;
●
1,500
shares issuable upon the exercise of outstanding stock
options;
●
4,376,667
shares issuable upon the vesting of granted restricted stock units;
and
●
2,655,861
shares reserved for future issuances under our equity compensation
plans.
DIVIDEND POLICY
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.
PLAN OF DISTRIBUTION
We have
entered into the sales agreement with A.G.P. under which we may
issue and sell shares of our common stock from time to time up to
$35.0 million to or through A.G.P., acting as our sales agent. The
sales of our common stock, if any, under this prospectus supplement
will be made at market prices by any method deemed to be an
“at the market offering” as defined in Rule 415(a)(4)
under the Securities Act, including sales made directly on the NYSE
American, on any other existing trading market for our common stock
or to or through a market maker.
Each
time that we wish to issue and sell shares of our common stock
under the sales agreement, we will provide A.G.P. with a placement
notice describing the amount of shares to be sold, the time period
during which sales are requested to be made, any limitation on the
amount of shares of common stock that may be sold in any single
day, any minimum price below which sales may not be made or any
minimum price requested for sales in a given time period and any
other instructions relevant to such requested sales. Upon receipt
of a placement notice, A.G.P., acting as our sales agent, will use
commercially reasonable efforts, consistent with its normal trading
and sales practices and applicable state and federal laws, rules
and regulations and the rules of the NYSE American, to sell shares
of our common stock under the terms and subject to the conditions
of the placement notice and the sales agreement. We or A.G.P. may
suspend the offering of common stock pursuant to a placement notice
upon notice and subject to other conditions.
Settlement
for sales of common stock, unless the parties agree otherwise, will
occur on the second trading day following the date on which any
sales are made in return for payment of the net proceeds to us.
There are no arrangements to place any of the proceeds of this
offering in an escrow, trust or similar account. Sales of our
common stock as contemplated in this prospectus supplement will be
settled through the facilities of The Depository Trust Company or
by such other means as we and A.G.P. may agree upon.
Because
there are no minimum sale requirements as a condition to this
offering, the actual total public offering price, commissions and
net proceeds to us, if any, are not determinable at this time. The
actual dollar amount and number of shares of common stock we sell
through this prospectus supplement will be dependent, among other
things, on market conditions and our capital raising
requirements.
We will
report at least quarterly the number of shares of common stock sold
through A.G.P. under the sales agreement, the net proceeds to us
and the compensation paid by us to A.G.P. in connection with the
sales of common stock under the sales agreement.
The
offering pursuant to the sales agreement will terminate upon the
earlier of (i) the sale of all shares of common stock subject to
the sales agreement and (ii) termination of the sales agreement as
permitted therein. We may terminate the sales agreement in our sole
discretion at any time by giving 10 days’ prior notice to
A.G.P. A.G.P. may terminate the sales agreement under the
circumstances specified in the sales agreement and in its sole
discretion at any time by giving 10 days’ prior notice to
us.
This
prospectus supplement in electronic format may be made available on
a website maintained by A.G.P., and A.G.P. may distribute this
prospectus supplement electronically.
Fees and Expenses
We will
pay A.G.P. commissions for its services in acting as our sales
agent in the sale of our common stock pursuant to the sales
agreement. A.G.P. will be entitled to compensation at a fixed
commission rate of 3.0% of the gross proceeds from the sale of our
common stock on our behalf pursuant to the sales agreement. We have
also agreed to reimburse A.G.P. for its reasonable and documented
out-of-pocket expenses (including but not limited to the reasonable
and documented fees and expenses of its legal counsel) in an amount
not to exceed $35,000 and up to an additional $10,000 per fiscal
year for maintenance.
We
estimate that the total expenses for this offering, excluding
compensation payable to A.G.P. and certain expenses reimbursable to
A.G.P. under the terms of the sales agreement, will be
approximately $25,000. The remaining sales proceeds, after
deducting any expenses payable by us and any transaction fees
imposed by any governmental, regulatory, or self-regulatory
organization in connection with the sales, will equal our net
proceeds for the sale of such common stock.
Regulation M
In
connection with the sale of the common stock on our behalf, A.G.P.
will be deemed to be an “underwriter” within the
meaning of the Securities Act, and the compensation of A.G.P. will
be deemed to be underwriting commissions or discounts.
A.G.P.
will not engage in any market making activities involving our
common stock while the offering is ongoing under this prospectus
supplement if such activity would be prohibited under Regulation M
or other anti-manipulation rules under the Securities Act. As
our sales agent, A.G.P. will not engage in any transactions that
stabilizes our common stock.
Indemnification
We have
agreed to indemnify A.G.P. against certain civil liabilities,
including liabilities under the Securities Act and the Exchange
Act, and to contribute to payments that the A.G.P. may be required
to make in respect of such liabilities.
Other Relationships
A.G.P.
and/or its affiliates have in the past engaged, and 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, A.G.P. 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.
LEGAL MATTERS
Porter,
Wright, Morris & Arthur LLP and McDonald Carano LLP will
provide us with opinions as to certain legal matters in connection
with the shares of common stock offered hereby. The sales agent is
being represented by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., New York, New York.
EXPERTS
Our
audited consolidated balance sheets as of December 31, 2020 and
2019, and the related consolidated statements of income,
stockholders’ equity and cash flows for the years ended
December 31, 2020 and 2019 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, 2020 as
filed with the SEC on February 11, 2021, and amended on March 10,
2021;
|
|
|
●
|
our Quarterly Report on Form 10-Q for the fiscal quarters ended
March 31, 2021 (as filed on May 13, 2021);
|
|
|
●
|
our Current Reports on Form 8-K filed on January 14, 2021, January
19, 2021, January 20, 2021, January 22, 2021, March 1, 2021, May
24, 2021, and May 28, 2021; 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,
as updated by Exhibit 4.1 to our Form
10-K for the year ended 2020, filed with the
SEC on February 11, 2021, and amended on March 10,
2021.
|
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
$75,000,000
Inuvo, Inc.
COMMON STOCK
PREFERRED STOCK
WARRANTS
UNITS
We may
offer and sell up to $75,000,000 in the aggregate of any
combination of the securities identified above from time to time in
one or more offerings. This prospectus provides you with a general
description of the securities.
Each
time we offer and sell securities, we will provide a supplement to
this prospectus that contains specific information about the
offering and the amounts, prices and terms of the securities. The
supplement may also add, update or change information contained in
this prospectus with respect to that offering. You should carefully
read this prospectus and the applicable prospectus supplement and
any related free writing prospectus before you invest in any of our
securities.
We may
offer and sell the securities described in this prospectus and any
prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a
combination of these methods. If any underwriters, dealers or
agents are involved in the sale of any of the securities, their
names and any applicable purchase price, fee, commission or
discount arrangement between or among them will be set forth, or
will be calculable from the information set forth, in the
applicable prospectus supplement. See the sections of this
prospectus entitled “About this Prospectus” and
“Plan of Distribution” for more information. No
securities may be sold without delivery of this prospectus and the
applicable prospectus supplement describing the method and terms of
the offering of such securities.
Our
common stock is listed on the NYSE American LLC under the symbol
“INUV.” The last reported sale price of our common
stock on February 10, 2021 was $1.84 per share.
The
aggregate market value of our outstanding common stock held by
non-affiliates is $197,790,564.48 based on 118,513,403 shares of
common stock outstanding, of which 107,494,872 shares are held by
non-affiliates, and a per share value of $1.84 based on the closing
price of our common stock on the NYSE American on February 10,
2021.
Investing
in our securities involves various risks. See the “Risk Factors” section of our
filings with the Securities and Exchange Commission and the
applicable prospectus supplement.
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 March 15, 2021
TABLE OF CONTENTS
|
|
|
Page
|
|
3
|
AVAILABLE
INFORMATION
|
3
|
OUR
COMPANY
|
4
|
RISK
FACTORS
|
4
|
CAUTIONARY
NOTE REGARDING FORWARD LOOKING STATEMENTS
|
5
|
USE OF
PROCEEDS
|
5
|
DIVIDEND
POLICY
|
5
|
DESCRIPTION
OF CAPITAL STOCK
|
6
|
DESCRIPTION
OF WARRANTS
|
7
|
DESCRIPTION
OF UNITS
|
8
|
LEGAL
OWNERSHIP OF SECURITIES
|
8
|
PLAN OF
DISTRIBUTION
|
11
|
LEGAL
MATTERS
|
12
|
EXPERTS
|
12
|
INFORMATION
INCORPORATED BY REFERENCE
|
12
|
You
should rely only on the information we have provided or
incorporated by reference in this prospectus or in any prospectus
supplement. We have not authorized anyone to provide you with
information different from that contained or incorporated by
reference in this prospectus or in any prospectus supplement. This
prospectus and any prospectus supplement is an offer to sell only
the securities offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. You should assume that
the information contained in this prospectus and in any prospectus
supplement is accurate only as of their respective dates and that
any information we have incorporated by reference is accurate only
as of the date of the document incorporated by reference,
regardless of the time of delivery of this prospectus or any
prospective supplement or any sale of securities. The registration
statement, including the exhibits and the documents incorporated
herein by reference, can be read on the website of the Securities
and Exchange Commission, or “SEC,” or on our corporate
website at www.inuvo.com
as set forth in this prospectus under the heading “Available
Information.”
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we
filed with the SEC 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 $75,000,000.
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 SEC 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 SEC
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.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES
UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT
Neither we, nor any agent, underwriter or dealer has authorized any
person to give any information or to make any representation other
than those contained or incorporated by reference in this
prospectus, any applicable prospectus supplement or any related
free writing prospectus prepared by or on behalf of us or to which
we have referred you. This prospectus, any applicable supplement to
this prospectus or any related free writing prospectus does not
constitute an offer to sell or the solicitation of an offer to buy
any securities other than the registered securities to which they
relate, nor does this prospectus, any applicable supplement to this
prospectus or any related free writing prospectus constitute an
offer to sell or the solicitation of an offer to buy securities in
any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction.
You should not assume that the information contained in this
prospectus, any applicable prospectus supplement or any related
free writing prospectus is accurate on any date subsequent to the
date set forth on the front of the document or that any information
we have incorporated by reference is correct on any date subsequent
to the date of the document incorporated by reference, even though
this prospectus, any applicable prospectus supplement or any
related free writing prospectus is delivered, or securities are
sold, on a later date.
This
prospectus contains summaries of certain provisions contained in
some of the documents described herein, but reference is made to
the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of
some of the documents referred to herein have been filed, will be
filed or will be incorporated by reference as exhibits to the
registration statement of which this prospectus is a part, and you
may obtain copies of those documents as described below under the
section entitled “Available Information.”
Unless the context otherwise indicates, when used
herein, the terms “Inuvo” “we,”
“us,” “our” and similar terms refer to
Inuvo, Inc., a Nevada corporation, and our subsidiaries. In
addition, “2019” refers to the year ended December 31,
2019, “2020” refers to the year ended December 31,
2020, and “2021” refers to the year ended December 31,
2021.
AVAILABLE INFORMATION
We file annual, quarterly and other reports, proxy
statements and other information with the SEC. You may read our
filings on the SEC’s website at www.sec.gov
or on our corporate website at
www.inuvo.com.
The information on our corporate website is not incorporated by
reference into and is not made a part of this
prospectus.
We
have filed a registration statement under the Securities Act of
1933, as amended, or the “Securities Act,” with the SEC
with respect to the securities to be sold 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 SEC. 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.
Our corporate website is located at
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 Securities Exchange Act of 1934 as soon as reasonably
practicable after we electronically file such material with, or
furnish it to, the SEC.
OUR COMPANY
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’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
18 issued and seven pending patents.
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 is not part of the prospectus or this
prospectus supplement.
RISK FACTORS
Investing in our
securities involves a high degree of risk. Before deciding whether
to invest in our securities, you should consider carefully the
risks and uncertainties described under the heading “Risk
Factors” contained in the applicable prospectus supplement
and any related free writing prospectus, and discussed under the
section entitled “Risk Factors” contained in our most
recent Annual Report on Form 10-K, as may be updated by subsequent annual,
quarterly and other reports that are incorporated by reference into
this prospectus in their entirety. The risks described in
these documents are not the only ones we face, but those that we
consider to be material. There may be other unknown or
unpredictable economic, business, competitive, regulatory or other
factors that could have material adverse effects on our future
results. Past financial performance may not be a reliable indicator
of future performance, and historical trends should not be used to
anticipate results or trends in future periods. If any of these
risks actually occurs, our business, financial condition, results
of operations or cash flow could be seriously harmed. Our business, financial position, results of
operations, liquidity or prospects could also be adversely affected
by any continuing adverse impact of the COVID-19 pandemic on our
Company which we are presently unable to predict. These
risks could cause the trading price of our common stock to
decline, resulting in a loss of all or part of your investment.
Please also read carefully the section below entitled
“Cautionary Note Regarding Forward-Looking
Information.”
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
The
information included or incorporated by reference into this
prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of 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 and declining revenues;
●
the known and
unknown impact of the COVID-19 pandemic on our
Company;
●
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.
You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this prospectus. These forward-looking statements are based on
our current expectations and are subject to a number of risks and
uncertainties, including those set forth above. Although we believe
that the expectations reflected in these forward-looking statements
are reasonable, our actual results could differ materially from
those expressed in these forward-looking statements, and any events
anticipated in the forward-looking statements may not actually
occur. Except as required by law, we undertake no duty to update
any forward-looking statements after the date of this prospectus to
conform those statements to actual results or to reflect the
occurrence of unanticipated events. We qualify all forward-looking
statements contained or incorporated by reference in this
prospectus by the foregoing cautionary
statements.
USE OF PROCEEDS
We
intend to use the net proceeds, if any, from the sales of
securities offered by this prospectus for general corporate
purposes, which may include additions to working capital and
financing potential acquisitions. As of the date of this
prospectus, we cannot specify with certainty all of the particular
uses for the net proceeds to be received from this offering. The
amounts and timing of our actual expenditures will depend on
numerous factors including our results of operations in future
periods. Accordingly, our management will have broad discretion in
the application of the net proceeds, and investors will be relying
on the judgment of management regarding the application of the net
proceeds from the offering. We will
set forth in the particular prospectus supplement our intended use
for the net proceeds we receive from the sale of our securities
under such prospectus supplement.
DIVIDEND POLICY
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.
DESCRIPTION OF CAPITAL STOCK
Our
authorized capital is 150,000,000 shares of common stock, par value
$0.001 per share, and 500,000 shares of blank check preferred
stock, par value $0.001 per share. At February 10, 2021, there were
118,513,403 shares of common stock and no shares of preferred stock
issued and outstanding.
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 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.
Commencing
with our 2008 annual meeting, our directors were divided into three
classes and designated Class I, Class II and Class III. Directors
may be assigned to each class in accordance with a resolution or
resolutions adopted by the board of directors. Directors are
elected for a full term of three years. Holders of common stock do
not have cumulative voting rights, which means that the holders of
a majority of the outstanding shares of our common stock can elect
all of the directors then standing for election, and the holders of
the remaining shares will not be able to elect any
directors.
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. Under Nevada law, our stockholders generally are
not liable for our debts and obligations. There are no restrictions on the alienability of
our common stock and there are no provisions discriminating against
holders of a substantial amount of securities.
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.
Options and restricted stock units
At
February 11, 2021, awards for 4,286,167 shares of our common stock
were outstanding, including 9,500 shares of our common stock issuable upon the
exercise of outstanding stock options with a weighted average
exercise price of $0.56 per
share and 4,276,667 shares of
our common stock underlying outstanding restricted stock
units.
Transfer agent
The transfer agent and registrar for our
common stock is Colonial Stock Transfer Company, 66 Exchange Place,
Suite 100, Salt Lake City, UT 84111, and its telephone number is
(801) 355-5740.
The
transfer agent and registrar for any series or class of preferred
stock will be set forth in the applicable prospectus
supplement.
NYSE American LLC listing
Our
common stock is listed on the NYSE American LLC under the symbol
“INUV.”
Anti-Takeover Effects of Various Provisions of Nevada Law and Our
Amended and Restated Articles of Incorporation, as amended, and
Amended and Restated By-Laws.
Blank Check Preferred Stock. Our Amended and Restated Articles
of Incorporation, as amended, permit our board of directors to
issue our preferred stock with voting, conversion and exchange
rights that could negatively affect the voting power or other
rights of our common stock stockholders, and the board of directors
could take that action without stockholder approval. The issuance
of our preferred stock could delay or prevent a change of control
of Inuvo.
Board Vacancies to be Filled by Remaining Directors and Not
Stockholders. Our Amended and Restated By-Laws provide that
any vacancies on the board of directors, including any newly
created directorships, will be filled by the affirmative vote of
the majority of the remaining directors then in office, even if
such directors constitute less than a quorum. We may also assign
such serving director to any class of directors.
Removal of Directors by Stockholders. Our Amended and
Restated By-Laws and the Nevada Corporation Law provide that
directors may be removed by stockholders only by the affirmative
vote of the holders of at least two-thirds of the voting power of
the outstanding capital stock entitled to vote.
Special Meetings of Stockholders. Under the Amended and
Restated By-Laws, only our president or board of directors may call
special meetings of the Company’s stockholders. Stockholders
who in the aggregate beneficially own at least 10% of all the
outstanding shares of the corporation entitled to vote at the
meeting may call a special meeting upon proper request to the
president.
Classified Board. Our Amended and Restated By-Laws provide
for the board of directors to be divided into three classes of
directors serving staggered three-year terms. This provision, when
coupled with the vote required to remove directors, can preclude
even a majority stockholder of common stock from gaining control of
the board of directors in one election.
Nevada Anti-Takeover Statute. We are subject to
Nevada’s Combination with Interested Stockholders Statute
(Nevada Corporation Law Sections 78.411-78.444) which prohibits an
“interested stockholder” from entering into a
“combination” with the corporation, unless certain
conditions are met. An “interested stockholder” is a
person who, together with affiliates and associates, beneficially
owns (or within the prior two years, did beneficially own) 10% or
more of the corporation’s capital stock entitled to
vote.
DESCRIPTION OF WARRANTS
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.
DESCRIPTION OF UNITS
We may
issue units consisting of any combination of our common stock,
preferred stock and warrants. We will issue each unit so that the
holder of the unit is also the holder of each security included in
the unit. As a result, the holder of a unit will have the rights
and obligations of a holder of each included security. The unit
agreement under which a unit is issued may provide that the
securities included in the unit may not be held or transferred
separately, at any time or at any time before a specified
date.
The
summary below and that contained in any prospectus supplement is
qualified in its entirety by reference to all of the provisions of
the unit agreement and/or unit certificate, and depositary
arrangements, if applicable. We urge you to read the applicable
prospectus supplements and any related free writing prospectuses
related to the units that we may offer under this prospectus, as
well as the complete unit agreement and/or unit certificate, and
depositary arrangements, as applicable, that contain the terms of
the units.
The
applicable prospectus supplement, information incorporated by
reference or free writing prospectus may describe:
●
the
designation and terms of the units and of the securities comprising
the units, including whether and under what circumstances those
securities may be held or transferred separately;
any
provisions for the issuance, payment, settlement, transfer, or
exchange of the units or of the securities composing the
units;
whether
the units will be issued in fully registered or global form;
and
●
any
other terms of the units.
The
applicable provisions described in this section, as well as those
described under “Description of Our Capital Stock” and
“Description of Warrants” above will apply to each unit
and to each security included in each unit,
respectively.
LEGAL OWNERSHIP OF SECURITIES
We can
issue securities in registered form or in the form of one or more
global securities. We describe global securities in greater detail
below. We refer to those persons who have securities registered in
their own names on the books that we or any applicable trustee,
depositary or warrant agent maintain for this purpose as the
“holders” of those securities. These persons are the
legal holders of the securities. We refer to those persons who,
indirectly through others, own beneficial interests in securities
that are not registered in their own names, as “indirect
holders” of those securities. As we discuss below, indirect
holders are not legal holders, and investors in securities issued
in book-entry form or in street name will be indirect
holders.
Book-Entry Holders
We may
issue securities in book-entry form only, as we will specify in any
applicable prospectus supplement. This means securities may be
represented by one or more global securities registered in the name
of a financial institution that holds them as depositary on behalf
of other financial institutions that participate in the
depositary’s book-entry system. These participating
institutions, which are referred to as participants, in turn, hold
beneficial interests in the securities on behalf of themselves or
their customers.
Only
the person in whose name a security is registered is recognized as
the holder of that security. Securities issued in global form will
be registered in the name of the depositary or its participants.
Consequently, for securities issued in global form, we will
recognize only the depositary as the holder of the securities, and
we will make all payments on the securities to the depositary. The
depositary passes along the payments it receives to its
participants, which in turn pass the payments along to their
customers who are the beneficial owners. The depositary and its
participants do so under agreements they have made with one another
or with their customers; they are not obligated to do so under the
terms of the securities.
As a
result, investors in a global security will not own securities
directly. Instead, they will own beneficial interests in a global
security, through a bank, broker or other financial institution
that participates in the depositary’s book-entry system or
holds an interest through a participant. As long as the securities
are issued in global form, investors will be indirect holders, and
not legal holders, of the securities.
Street Name Holders
We may
terminate a global security or issue securities in non-global form.
In these cases, investors may choose to hold their securities in
their own names or in “street name.” Securities held by
an investor in street name would be registered in the name of a
bank, broker or other financial institution that the investor
chooses, and the investor would hold only a beneficial interest in
those securities through an account he or she maintains at that
institution.
For
securities held in street name, we or any applicable trustee or
depositary will recognize only the intermediary banks, brokers and
other financial institutions in whose names the securities are
registered as the holders of those securities, and we or any
applicable trustee or depositary will make all payments on those
securities to them. These institutions pass along the payments they
receive to their customers who are the beneficial owners, but only
because they agree to do so in their customer agreements or because
they are legally required to do so. Investors who hold securities
in street name will be indirect holders, not holders, of those
securities.
Legal Holders
Our
obligations, as well as the obligations of any applicable trustee
and of any third parties employed by us or a trustee, run only to
the legal holders of the securities. We do not have obligations to
investors who hold beneficial interests in global securities, in
street name or by any other indirect means. This will be the case
whether an investor chooses to be an indirect holder of a security
or has no choice because we are issuing the securities only in
global form.
For
example, once we make a payment or give a notice to the legal
holder, we have no further responsibility for the payment or notice
even if that legal holder is required, under agreements with its
participants or customers or by law, to pass it along to the
indirect holders but does not do so. Whether and how the legal
holders contact the indirect holders is up to the legal
holders.
Special Considerations for Indirect Holders
If you
hold securities through a bank, broker or other financial
institution, either in book-entry form because the securities are
represented by one or more global securities or in street name, you
should check with your own institution to find out:
●
how it
handles securities payments and notices;
whether
it imposes fees or charges;
how it
would handle a request for the holder’s consent, if ever
required;
whether
and how you can instruct it to send you securities registered in
your own name so you can be a holder, if that is permitted in the
future;
how it
would exercise rights under the securities if there were a default
or other event triggering the need for holders to act to protect
their interests; and
●
if the
securities are in book-entry form, how the depositary’s rules
and procedures will affect these matters.
Global Securities
A
global security is a security that represents one or any other
number of individual securities held by a depositary. Generally,
all securities represented by the same global securities will have
the same terms.
Each
security issued in book-entry form will be represented by a global
security that we issue to, deposit with and register in the name of
a financial institution or its nominee that we select. The
financial institution that we select for this purpose is called the
depositary. Unless we specify otherwise in any applicable
prospectus supplement, DTC will be the depositary for all
securities issued in book-entry form.
A
global security may not be transferred to or registered in the name
of anyone other than the depositary, its nominee or a successor
depositary, unless special termination situations arise. We
describe those situations below under “Special Situations
When a Global Security Will Be Terminated.” As a result of
these arrangements, the depositary, or its nominee, will be the
sole registered owner and legal holder of all securities
represented by a global security, and investors will be permitted
to own only beneficial interests in a global security. Beneficial
interests must be held by means of an account with a broker, bank
or other financial institution that in turn has an account with the
depositary or with another institution that does. Thus, an investor
whose security is represented by a global security will not be a
legal holder of the security, but only an indirect holder of a
beneficial interest in the global security.
If the
prospectus supplement for a particular security indicates that the
security will be issued in global form only, then the security will
be represented by a global security at all times unless and until
the global security is terminated. If termination occurs, we may
issue the securities through another book-entry clearing system or
decide that the securities may no longer be held through any
book-entry clearing system.
Special Considerations for Global Securities
The
rights of an indirect holder relating to a global security will be
governed by the account rules of the investor’s financial
institution and of the depositary, as well as general laws relating
to securities transfers. We do not recognize an indirect holder as
a holder of securities and instead deal only with the depositary
that holds the global security.
If
securities are issued only in the form of a global security, an
investor should be aware of the following:
●
an
investor cannot cause the securities to be registered in his or her
name, and cannot obtain non-global certificates for his or her
interest in the securities, except in the special situations we
describe below;
an
investor will be an indirect holder and must look to his or her own
bank, broker or other financial institution for payments on the
securities and protection of his or her legal rights relating to
the securities, as we describe above;
an
investor may not be able to sell interests in the securities to
some insurance companies and to other institutions that are
required by law to own their securities in non-book-entry
form;
an
investor may not be able to pledge his or her interest in a global
security in circumstances where certificates representing the
securities must be delivered to the lender or other beneficiary of
the pledge in order for the pledge to be effective;
the
depositary’s policies, which may change from time to time,
will govern payments, transfers, exchanges and other matters
relating to an investor’s interest in a global
security;
we and
any applicable trustee have no responsibility for any aspect of the
depositary’s actions or for its records of ownership
interests in a global security, nor do we or any applicable trustee
supervise the depositary in any way;
●
the
depositary may, and we understand that DTC will, require that those
who purchase and sell interests in a global security within its
book-entry system use immediately available funds, and your bank,
broker or other financial institution may require you to do so as
well; and
●
financial
institutions that participate in the depositary’s book-entry
system, and through which an investor holds its interest in a
global security, may also have their own policies affecting
payments, notices and other matters relating to the
securities.
There
may be more than one financial intermediary in the chain of
ownership for an investor. We do not monitor and are not
responsible for the actions of any of those
intermediaries.
Special Situations When a Global Security Will Be
Terminated
In a
few special situations described below, the global security will
terminate and interests in it will be exchanged for physical
certificates representing those interests. After that exchange, the
choice of whether to hold securities directly or in street name
will be up to the investor. Investors must consult their own banks,
brokers or other financial institutions to find out how to have
their interests in securities transferred to their own name, so
that they will be direct holders. We have described the rights of
holders and street name investors above.
Unless
we provide otherwise in any applicable prospectus supplement, the
global security will terminate when the following special
situations occur:
●
if the
depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary for that global security and we
do not appoint another institution to act as depositary within 90
days;
●
if we
notify any applicable trustee that we wish to terminate that global
security; or
●
if an
event of default has occurred with regard to securities represented
by that global security and has not been cured or
waived.
The
prospectus supplement may also list additional situations for
terminating a global security that would apply only to the
particular series of securities covered by any applicable
prospectus supplement. When a global security terminates, the
depositary, and not we or any applicable trustee, is responsible
for deciding the names of the institutions that will be the initial
direct holders.
PLAN OF DISTRIBUTION
We may
sell the securities from time to time pursuant to underwritten
public offerings, negotiated transactions, block trades or a
combination of these methods. We may sell the securities to or
through underwriters or dealers, through agents, or directly to one
or more purchasers. We may distribute securities from time to time
in one or more transactions:
●
at a
fixed price or prices, which may be changed;
●
at
market prices prevailing at the time of sale;
●
at
prices related to such prevailing market prices; or
We may
also sell equity securities covered by this registration statement
in an “at the market” offering as defined in Rule
415(a)(4) under the Securities Act. Such offering may be made into
an existing trading market for such securities in transactions at
other than a fixed price on or through the facilities of the NYSE
American LLC or any other securities exchange or quotation or
trading service on which such securities may be listed, quoted or
traded at the time of sale.
Such at
the market offerings, if any, may be conducted by underwriters
acting as principal or agent.
A
prospectus supplement or supplements (and any related free writing
prospectus that we may authorize to be provided to you) will
describe the terms of the offering of the securities, including, to
the extent applicable:
●
the
name or names of any underwriters, dealers or agents, if
any;
●
the
purchase price of the securities and the proceeds we will receive
from the sale;
●
any
over-allotment options under which underwriters may purchase
additional securities from us;
●
any
agency fees or underwriting discounts and other items constituting
agents’ or underwriters’ compensation;
●
any
public offering price;
●
any
discounts or concessions allowed or reallowed or paid to dealers;
and
●
any
securities exchange or market on which the securities may be
listed.
Only
underwriters named in the prospectus supplement are underwriters of
the securities offered by the prospectus supplement.
If
underwriters are used in the sale, they will acquire the securities
for their own account and may resell the securities from time to
time in one or more transactions at a fixed public offering price
or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the securities will be
subject to the conditions set forth in the applicable underwriting
agreement. We may offer the securities to the public through
underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Subject to certain conditions,
the underwriters will be obligated to purchase all of the
securities offered by the prospectus supplement. Any public
offering price and any discounts or concessions allowed or
reallowed or paid to dealers may change from time to time. We may
use underwriters with whom we have a material relationship. We will
describe in the prospectus supplement, naming the underwriter, the
nature of any such relationship.
We may
sell securities directly or through agents we designate from time
to time. We will name any agent involved in the offering and sale
of securities, and we will describe any commissions we will pay the
agent in the prospectus supplement. Unless the prospectus
supplement states otherwise, our agent will act on a best-efforts
basis for the period of its appointment.
We may
authorize agents or underwriters to solicit offers by certain types
of institutional investors to purchase securities from us at the
public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. We will describe the
conditions to these contracts and the commissions we must pay for
solicitation of these contracts in the prospectus
supplement.
We may
provide agents and underwriters with indemnification against civil
liabilities related to this offering, including liabilities under
the Securities Act, or contribution with respect to payments that
the agents or underwriters may make with respect to these
liabilities. Agents and underwriters may engage in transactions
with, or perform services for, us in the ordinary course of
business.
All
securities we offer, other than common stock, will be new issues of
securities with no established trading market. Any underwriters may
make a market in these securities, but will not be obligated to do
so and may discontinue any market making at any time without
notice. We cannot guarantee the liquidity of the trading markets
for any securities.
Any
underwriter may engage in overallotment, stabilizing transactions,
short covering transactions and penalty bids. Overallotment
involves sales in excess of the offering size, which create a short
position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of
the securities in the open market after the distribution is
completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the
securities originally sold by the dealer are purchased in a
stabilizing or covering transaction to cover short positions. Those
activities may cause the price of the securities to be higher than
it would otherwise be. If commenced, the underwriters may
discontinue any of the activities at any time. These transactions
may be effected on any exchange or over-the-counter market or
otherwise.
Underwriters may
engage in passive market making transactions in the securities in
accordance with Regulation M. Passive market makers must comply
with applicable volume and price limitations and must be identified
as passive market makers. In general, a passive market maker must
display its bid at a price not in excess of the highest independent
bid for such security; if all independent bids are lowered below
the passive market maker’s bid, however, the passive market
maker’s bid must then be lowered when certain purchase limits
are exceeded. Passive market making may stabilize the market price
of the securities at a level above that which might otherwise
prevail in the open market and, if commenced, may be discontinued
at any time.
LEGAL MATTERS
Clark Hill PLC, 1055 West Seventh Street,
24th
Floor, Los Angeles, California
90017, will pass upon certain legal matters relating to the
issuance and sale of the common stock, preferred stock, warrants
and units offered hereby on behalf of Inuvo. Additional legal
matters may be passed upon for us or any underwriters, dealers or
agents, by counsel that we will name in the applicable prospectus
supplement.
EXPERTS
Our
audited consolidated balance sheets as of December 31, 2020 and
2019, and the related consolidated statements of operations,
stockholders’ equity and cash flows for the years ended
December 31, 2020 and 2019 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
We
file annual, quarterly and other reports, proxy statements and
other information with the SEC. 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, 2020 as
filed with the SEC on February 11, 2021;
|
|
|
●
|
our
Current Reports on Form 8-K as filed with the SEC on January 14,
2021, January 19, 2021, January 20, 2021, and January 22, 2021;
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 may contain information that updates, modifies or is
contrary to information in one or more of the documents
incorporated by reference in this prospectus. You should rely only
on the information incorporated by reference or provided in this
prospectus. We have not authorized anyone else to provide you with
different information. You should not assume that the information
in this prospectus is accurate as of any date other than the date
of this prospectus or the date of the documents incorporated by
reference in this prospectus.
We
will provide to each person, including any beneficial owner, to
whom this prospectus 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.
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 on the SEC’s website
at www.sec.gov
or 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.
UP TO $35,000,000 OF SHARES OF COMMON STOCK
PROSPECTUS SUPPLEMENT
A.G.P.
May 28,
2021
|