8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 10, 2023

INUVO, INC.

(Exact name of registrant as specified in its charter)

Nevada	001-32442	87-0450450
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

500 President Clinton Ave., Ste. 300, Little Rock, AR	72201
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (501) 205-8508

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 10, 2023, Inuvo, Inc. issued a press release regarding financial performance for Q2 2023. A copy of the earnings release is being furnished herewith as Exhibit 99.1.

The information in this Current Report on Form8-K under this caption and accompanying exhibits are being furnished under Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

The Company made reference to non-GAAP financial information in the press release and a reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the press release.

ITEM 7.01 REGULATION FD DISCLOSURE.

On August 10, 2023, the Company held a management conference call to discuss the Company’s financial results for Q2 2023, the outlook of the Company and certain other matters.

A copy of the script for the conference call is attached as Exhibit 99.2 and is incorporated by reference into this Current Report on Form8-K.

The information in this Current Report on Form 8-K and accompanying exhibit is being furnished and shall not be deemed to be “filed” for the purposes of Section18 of the Exchange Act, or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release for Q2023 financial results.
99.2	Conference Call Script.

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SIGNATURES 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INUVO, INC.
Date: August 10, 2023	By:	/s/ John B. Pisaris
		John B. Pisaris, General Counsel

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EXHIBIT INDEX

99.1	Press Release for Q2 2023 financial results.
99.2	Conference Call Script.

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EX-99.1

EXHIBIT 99.1

Inuvo Revenue Increases 40% Sequentially to $16.7 Million for the Second Quarter of 2023

Management to host conference call at 4:15 PM ET today, Thursday, August 10, 2023

LITTLE ROCK, AR, August 10, 2023 (GLOBE NEWSWIRE) -- Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing technology, powered by artificial intelligence (AI) that serves brands and agencies, today provided a business update, and announced its financial results for the second quarter ended June 30, 2023.

Recent Highlights:

· Signed up 10 new clients and had 2 returning clients

· Launched a new product with a large indirect client that is scaling

· Added the former CEO of MediaKitchen to the Executive team as President

· Enhanced the IntentKey’s suite of AI solutions by adding predictive Media Mix Modeling

· Launched the Audience Discovery Portal at inuvo.com/portal

· Enhanced the Company’s AI generated audience personas using the ChatGPT API integration

· Interviewed in notable publications, including national exposure on Yahoo Finance

Richard Howe, CEO of Inuvo, stated, “I am pleased to report that our revenue increased sequentially by 40% from the first quarter of 2023 with June up roughly 16% year-over-year providing confidence that we could be back to quarterly year-over-year growth in the second half of the year. We made a significant hire, adding a President to the executive team, we strengthen our balance sheet with a $4  million capital raise and launched several transformative AI technologies within the quarter. Our goal remains to be at the forefront of artificial intelligence for advertising.”

Mr. Howe added, “We strongly believe that the industry we serve is on the verge of a material change. We see increasing pressure legislatively and technologically with respect to using consumer identity and data. There are now 11 states with privacy laws and 5 states with active privacy bills. Apple continues to implement browser features that thwart or limit conventional AdTech from using 3^rd and 1^st party cookies, IP addresses, email addresses and in their most recent IOS release, URL tracking. The writing is on the wall.”

Financial Results for the Three and Six Month Ended June 30, 2023

Net revenue for the second quarter of 2023 totaled $16.7 million, compared to $22.7 million for the same period last year.  Net revenue for the six months ended June 30, 2023, totaled $28.5 million compared to $41.3 million for the same period last year. The lower revenue this year compared to last year was attributable to the loss of a Direct Customer in the fourth quarter of last year.

Cost of revenue for the second quarter of 2023 totaled $2.4 million, compared to $9.3 million for the same period last year. Cost of revenue for the six months ended June 30, 2023, totaled $5.6 million as compared to $17.9 million for the same period last year.  The decrease in the cost of revenue for the three months and six months ended June 30, 2023, as compared to the same periods last year, was related to the decline in Direct Customers.

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Gross profit for the three and six months ended June 30, 2023, totaled $14.3 million and $22.9 million, respectively, as compared to $13.4 million and $23.3 million, respectively, for the same periods last year. Gross profit margin for the three and six months ended June 30, 2023, was 85.8% and 80.5%, respectively, as compared to 59.1% and 56.5%, respectively, for the same periods last year. The higher gross margin was due to changes in revenue mix, where a greater percentage of the revenue this year was from Indirect Customers, which typically have higher gross margins.

Operating expenses for the three months ended June 30, 2023, totaled $17.6 million compared to $16.2 million for the same period last year. Operating expenses for the six months ended June 30, 2023, totaled $29.7 million compared to $28.3 million for the same period last year. We had $1.6M and $2.7M of non cash-based expenses for the three and six month periods respectively.

Net loss for the second quarter of 2023 totaled $3.4 million, or $0.03 per basic and diluted share, as compared to net loss of $3.2 million, or $0.03 per basic and diluted share, for the same period last year. Net loss for the six months ended June 30, 2023, totaled $6.8 million, or $0.05 per basic and diluted share, as compared to net loss of $5.3 million, or $0.04 per basic and diluted share, for the same period last year.

Adjusted EBITDA [see reconciliation table below] was a loss of approximately $1.8 million in the second quarter of 2023, compared to a loss of approximately $142 thousand for the same period last year. Adjusted EBITDA was a loss of approximately $4.1 million for the six months ended June 30, 2023, compared to a loss of approximately $863 thousand for the same period last year. 

Liquidity and Capital Resources:

As of June 30, 2023, Inuvo had $5.0 million in cash and cash equivalents, approximately $2.0 million of working capital, and a working capital facility of $5.0 million with no outstanding balance.

As of June 30, 2023, Inuvo had 137,817,253 common shares issued and outstanding.

Conference Call Details:

Date: Thursday, August 10, 2023

Time: 4:15 p.m. Eastern Time

Toll-free Dial-in Number: 1-888-886-7786

International Dial-in Number: +1-416-764-8658

Conference ID: 26719286

Webcast Link: HERE

An audio replay of the call will be available through August 24, 2023, and can be accessed by dialing 844-512-2921 for U.S. callers or +1 412-317-6671 for international callers and by entering the access code: 26719286.

About Inuvo

Inuvo®, Inc. (NYSE American: INUV) is a market leader in Artificial Intelligence built for advertising. Its IntentKey AI solution is a first-of-its-kind proprietary and patented technology capable of identifying and actioning to the reasons why consumers are interested in products, services, or brands, not who those consumers are. To learn more, visit www.inuvo.com.

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Safe Harbor / Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding Inuvo’s quarter-end financial close process and preparation of financial statements for the quarter that are subject to risks and uncertainties that could cause results to be materially different than expectations. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, without limitation risks detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), and represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading "Risk Factors" in Inuvo, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed on March 10, 2023, and our other filings with the SEC.  Additionally, forward looking statements are subject to certain risks, trends, and uncertainties including the continued impact of Covid-19 on Inuvo’s business and operations. Inuvo cannot provide assurances that the assumptions upon which these forward-looking statements are based will prove to have been correct. Should one of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied in any forward-looking statements, and investors are cautioned not to place undue reliance on these forward-looking statements, which are current only as of this date. Inuvo does not intend to update or revise any forward-looking statements made herein or any other forward-looking statements as a result of new information, future events or otherwise. Inuvo further expressly disclaims any written or oral statements made by a third party regarding the subject matter of this press release. The information which appears on our websites and our social media platforms is not part of this press release.

Inuvo Company Contact:

Wally Ruiz 

Chief Financial Officer

Tel (501) 205-8397

wallace.ruiz@inuvo.com

Investor Relations :

David Waldman / Natalya Rudman

Crescendo Communications, LLC

Tel: (212) 671-1020

inuv@crescendo-ir.com

(Tables follow)

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INUVO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended						Six Months Ended
	June 30			June 30			June 30			June 30
	2023			2022			2023			2022
Net revenue	$	16,651,405		$	22,651,305		$	28,498,845		$	41,260,672
Cost of revenue		2,368,540			9,273,589			5,559,103			17,935,095
Gross profit		14,282,865			13,377,716			22,939,742			23,325,577
Operating expenses		85.8	%		59.1	%		80.5	%		56.5	%
Marketing costs		12,056,616			10,988,409			19,144,166			18,157,858
Compensation		3,253,416			3,215,890			6,676,257			6,373,596
Selling, general and administrative		2,311,885			2,011,237			3,893,774			3,737,909
Total operating expenses		17,621,917			16,215,536			29,714,197			28,269,363
Operating loss		(3,339,052	)		(2,837,820	)		(6,774,455	)		(4,943,786	)
Interest (expense) income, net		(38,186	)		3,070			(57,306	)		2,071
Other income (loss) , net		-			(395,177	)		14,418			(377,475	)
Net loss		(3,377,238	)		(3,229,927	)		(6,817,343	)		(5,319,190	)
Other comprehensive income
Unrealized loss on marketable securities		-			(124,253	)		84,868			(222,409	)
Comprehensive loss		(3,377,238	)		(3,354,180	)		(6,732,475	)		(5,541,599	)
Earnings per share, basic and diluted
Net loss income	($0.03)			($0.03)			($0.05)			($0.04)
Weighted average shares outstanding
Basic		127,249,916			119,827,944			124,115,098			118,788,819
Diluted		127,249,916			119,827,944			124,115,098			118,788,819

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INUVO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
	June 30		December 31
	2023		2022
Assets
Cash and cash equivalent	$	5,045,112	$	2,931,415
Marketable securities-short term		-		1,529,464
Accounts receivable, net		10,795,658		11,119,892
Prepaid expenses and other current assets		828,601		798,977
Total current assets		16,669,371		16,379,748
Property and equipment, net		1,680,448		1,668,972
Intangible assets, net of accumulated amortization		9,853,342		9,853,342
Goodwill		5,157,041		5,649,291
Other assets		924,597		2,005,957
Total assets	$	34,284,799	$	35,557,310
Liabilities and Stockholders Equity
Current liabilities
Accounts payable	$	6,192,824	$	8,044,802
Accrued expenses and other current liabilities		8,435,093		5,550,984
Total current liabilities		14,627,917		13,595,786
Long-term liabilities		154,230		212,208
Total stockholders' equity		19,502,652		21,749,316
Total liabilities and stockholders' equity	$	34,284,799	$	35,557,310

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RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE TAXES TO ADJUSTED EBITDA
(unaudited)
	Three Months Ended						Six Months Ended
	June 30			June 30			June 30			June 30
	2023			2022			2023			2022
Net loss		(3,377,238	)	$	(3,229,927	)	$	(6,817,343	)	$	(5,319,190	)
Interest (Income) Expense		38,186			(3,070	)		57,306			(2,071	)
Depreciation		432,053			372,939			824,954			729,732
Amortization		273,495			270,563			550,263			627,741
EBITDA		(2,633,504	)		(2,589,495	)		(5,384,820	)		(3,963,788	)
Stock-based compensation		503,061			684,376			935,145			1,355,534
Non recurring items:
Expense of fraudulent media					1,367,800						1,367,800
Unrealized loss on marketable securities					395,177						377,475
Doubtful account reserve		378,928						361,097
Adjusted EBITDA		(1,751,515	)		(142,142	)		(4,088,578	)		(862,979	)

Reconciliation of Operating Loss to EBITDA and Adjusted EBITDA 

We present EBITDA and Adjusted EBITDA as a supplemental measure of our performance. We defined EBITDA as Net loss plus (i) interest expense, (ii) depreciation, and (iii) amortization. We further define Adjusted EBITDA as EBITDA plus (iv) stock-based compensation and (v) certain identified expenses that are not expected to recur or be representative of future ongoing operation of the business. These adjustments are itemized above. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same or similar to some of the adjustments in the presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

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EX-99.2

EXHIBIT 99.2 

Operator Comments:

Good afternoon, and welcome to INUVO’s 2023 Second Quarter Conference Call. Today’s conference is being recorded. Ms. Natalya Rudman of Crescendo Communications, please go ahead.

Natalya Rudman (Investor Relations) Comments:

Thank you, operator, and good morning.

I’d like to thank everyone for joining us today for the INUVO second quarter 2023 shareholder update call. Today, INUVO’s Chief Executive Officer Richard Howe and Chief Financial Officer Wally Ruiz will be your presenters on the call.

We would also like to remind our shareholders that we filed our 10-Q with the Securities and Exchange Commission this afternoon.

Before we begin, I’m going to review the Company’s Safe Harbor statement. The statements in this conference call that are not descriptions of historical facts are forward-looking statements relating to future events and, as such, all forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. 

These forward-looking statements are subject to risks and uncertainties and actual results may differ materially. When used in this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions as they relate to INUVO, Inc., are, as such, a forward-looking statement. 

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Investors are cautioned that all forward-looking statements involve risks and uncertainties which may cause actual results to differ from those anticipated by INUVO at this time. In addition, other risks are more fully described in INUVO's public filings with the US Securities and Exchange Commission, which can be reviewed at www.sec.gov.

The Company makes no commitment to disclose any revisions to forward-looking statements, or any facts, events, or circumstances after the date hereof that bear upon forward-looking statements.

In addition, today's discussion will include references to non-GAAP measures. The Company believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website.

With that, I’ll now turn the call over to CEO Richard Howe. 

Richard Howe (CEO) Comments:

Thank you, Natalya and thanks, everyone for joining us today.

We are pleased to report that for the quarter ended June 30, 2023 INUVO revenue has grown 40% sequentially having delivered $16.7 million in revenue as compared to $11.8 million in the first quarter. On a year-over-year basis, Q2 2023 was down roughly 26% however, as I will discuss later in my closing remarks, current trends suggest that we could be back to year-over-year growth within the third quarter.

We had a roughly $1.8M AEBITDA loss in the quarter. While not yet audited, the July and August trends for Revenue & Adjusted EBITDA have continued to improve as we head into the typically stronger second half of the year. At 86%, gross margins were quite strong at the end of the quarter.

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Also, as reported, at the end of May, we raised an additional $4 million in the quarter. As a result, we have a solid balance sheet with approximately $5M of cash and cash equivalents, no debt and an unused borrowing facility of $5M, which provides us with the resources to support our aggressive growth strategy.

Let me now turn to some of the operational highlights. In 2021, we began working with one of our larger indirect clients on a new product they were planning to launch.  Throughout 2022 we were beta testing media performance associated with that product and building out the various custom capabilities required to support the anticipated growth and deliverables associated with the launch. The project was launched at the beginning of 2023. The scalability potential of this initiative is now reflected within the increase in our indirect sales, which represented roughly 80% of overall revenue in Q2.

Included in this development project for Inuvo, was the design of a system for the customization and enhancement of landing pages that has led to improvements in conversion and performance. Concurrently, and also as part of this initiative, we made investments that have improved our media buying tools and supporting infrastructure. These collective capabilities become increasingly important as the demand for these kinds of marketing services continues to grow.

The client in question has also required the scalability of content and Ad-Copy, including video. We have adopted several AI based 3^rd party tools for these services that have significantly decreased the resources required to deliver these capabilities while also allowing us to leverage this development for future customers.  

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Across our client base, and excluding our largest customer, we are currently delivering roughly 80 revenue generating campaigns, 20 of which are new in the quarter. Performance against client KPI’s remains very strong across those campaigns.

We added 10 new advertisers to the INUVO roster in the second quarter across industries that included financial services, entertainment, government and travel & tourism. As we have stated in the past, we’ve yet to find an industry where the Intentkey has not been able to perform. Notably, we also had 2 clients return to INUVO during the quarter. Those clients cited the insights generated by our AI combined with our support as the key reasons behind their return.

Throughout 2023, we have seen a steady increase in the frequency of articles and interviews that feature INUVO. Most recently we were interviewed for a national segment on Artificial Intelligence within Advertising on Yahoo Finance. Collectively, we have been interviewed and/or cited at least a dozen times already this year in notable publications like AdExchanger, Digiday, Media Post and more. In our home state, Arkansas Business had an excellent cover story about our company and how we are changing the advertising paradigm.

We’ve continued to increase the number of associates within the sales, marketing and account management teams. The total number within that organization now stands at 21. At the end of the second quarter, we had 84 associates.

Leading our go-to-market strategy and execution, and a member of the executive team is our newly appointed President, Barry Lowenthall. Barry brings a significant collection of knowledge, experience and relationships across the advertising industry, having most recently been the CEO of the Agency MediaKitchen. Among Barry’s considerable successes includes the distinction of having been a founding member of one of the industry's first programmatic advertising trading desks.

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As mentioned in the announcement that accompanied Barry’s appointment, INUVO is at an important milestone in its evolution. We were well ahead of the competition with our vision that using consumer data and identity for advertising was to become obsolete. In the nearly 6 years since we started building out our large language model generative AI to meet that future, various governmental and technological changes have made this prediction a virtual certainty.

Technologically, Apple has been systematically incorporating changes designed specifically to eliminate all methods used to identify consumers. They now for example allow their users to access a private VPN, which obfuscates the consumers IP address; they have completely eliminated third party cookies, which has been the place where identity has historically been stored; they now allow their users to generate alias email addresses and in their latest IOS release, have now also added changes that prevent consumer tracking within the URL address.

Legislatively, the general data protection regulation in Europe was enacted in 2018, followed shortly thereafter by the California consumer privacy act. There are now 11 states with consumer data privacy laws and another 5 states with active bills.

Barry’s short-term mission is to ensure we have the pipeline, organization, products and services to meet the growing demands of this changing industry. Specifically for the identification and targeting of audiences without identity, we remain many years ahead of any other comparable solution.

As a technology company at the forefront of artificial intelligence, we continue to make significant product advancements. We launched an enhanced version of our client GUI that includes an integration with ChatGPT; We launched the first online portal where any audience can be generated on demand for any product service or brand; We designed the first of its kind AI system that predicts suitable television programs based on the reasons behind why audiences are interested in any brand and we made generally available a significant advancement in machine learning wherein our AI can now predict and report the performance contribution of media across channels.

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This latter development addresses the #2 industry challenge behind finding & targeting audiences facing marketers in a cookieless privacy first future. All these developments, and the many more to come, are increasing the technological barriers between INUVO and its competitors.

I would now like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter.

Ruiz (CFO) Comments:

Thank you, Rich, and good afternoon. I will recap the financial results for our second quarter of 2023.

As Rich mentioned, Inuvo reported revenue of $16.7 million for the quarter ended June 30, 2023; $6 million lower than the $22.7 million reported in the second quarter of the prior year.

As has been discussed on prior calls, the lower revenue this year was due mostly to the loss of a Direct Customer in the fourth quarter of last year. Due to the loss of that customer and as Rich discussed, the launch of a new product with an Indirect Customer, the revenue mix has changed. This year’s second quarter revenue is composed of 80% from Indirect Customers compared to 46% last year. The change in revenue mix has had a positive impact on gross margins. As we expect revenue from our Indirect Customers to continue to grow, this revenue mix should persist for the remainder of the year.

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Cost of revenue was $2.4 million in the second quarter of 2023 compared to $9.3 million in the same quarter last year. Cost of revenue is predominately payments to advertising exchanges that provide access to a supply of advertising inventory into which we serve advertisements using information predicted by the IntentKey artificial intelligence. These advertisements are placed on behalf of our clients.

Gross profit for the second quarter ended June 30, 2023 totaled $14.3 million as compared to $13.4 million for the same period last year. Gross profit margin for the second quarter of 2022 was 86% as compared to 59% for the same period last year reflecting the higher margins of the Indirect Customer business. We expect Inuvo gross margins for the remainder of the year to be roughly in line with the results of this quarter.

Operating expenses were $17.6 million in the second quarter of 2023 compared to $16.2 million in the prior year, an increase of $1.4 million. We had roughly $1.1 million of non cash-based expenses in the quarter.

The largest component of operating expense is marketing costs. Marketing costs are predominantly traffic acquisition costs. Marketing costs were $12.1 million in the second quarter of this year compared to $11 million in the same quarter last year. Going forward, we expect marketing costs as a percentage of revenue to continue at a similar pace as in the second quarter of this year.

Compensation expense was $3.3 million in the second quarter this year compared to $3.2 million in the prior year primarily due to higher employee salary cost. Our full-time and part-time employment was 84 on June 30, 2023, compared to 83 on June 30, 2022.

The majority of the increase in headcount occurred within sales, sales support, account management and corporate administration with the hiring of a President.

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General and administrative expense increased by $301 thousand in the second quarter this year compared to the prior year due to higher doubtful account allowance, depreciation and amortization expense and professional fees, partially offset by lower marketing expense and travel & entertainment expense.

Net financing costs were $38 thousand in the second quarter of 2023 compared to a $3 thousand income in the same quarter last year. The expense is primarily associated with the maintenance of the line of credit and various IT equipment leases.

We reported a net loss of $3.4 million or 3¢ per basic share compared to a $3.2 million net loss or 3¢ per basic share in the same quarter last year.

On June 30, 2023, we had cash and cash equivalents of $5 million, and a net working capital of $2 million. In addition, we have a $5 million working capital line of credit which had no outstanding balance.

During the quarter, we raised $4.0 million in gross proceeds in a registered direct offering, through the sale of an aggregate of 16,000,000 shares of our common stock. In addition, in April we sold 174 thousand shares under an at-the-market agreement with an investment banking firm.

We maintain a simple capital structure with 138 million common shares outstanding, 6.9 million employee restricted stock units outstanding through an equity incentive plan and 300,000 warrants to purchase common stock.

Now, I’d like to turn the call back to Rich for closing remarks.

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Richard Howe (CEO) Closing Comments:

Thanks, Wally, we had strong sequential growth for the quarter, up 40% to $16.7M. Within the first half of the year, we continued to make significant advancements both in the technology and the services that will be required to scale our company and we have an initiative with one of our largest clients that is scaling.

Consequently, we are forecasting to be back to year-over-year growth within the third and fourth quarters of 2023 and expect to turn the corner to positive free cash flow within the second half of the year. Both June and July unaudited revenue was up double-digit year-over-year.

We will continue to invest in sales and awareness programs so we can capitalize on the demand associated with a changing market driven by privacy concerns from government, technology and consumers.

To this end, we’ve also recently retained a well-respected New York based PR firm to help us capitalize on this growing demand for information related to AI and its applicability to the Privacy challenge facing the advertising industry.

I will now turn the call over to the operator for questions. Operator?

Richard Howe Final Comments:

I would like to thank everyone who joined us on today’s call. We appreciate your continued interest in our company.  

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XML

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Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false