EXHIBIT 10.1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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 1.01 Entry into a Material Definitive Agreement.
The disclosures in Item 2.03 below relating to the Financing Agreement (as defined below) are incorporated by reference into this Item 1.01.
Item 1.02 Termination of a Material Definitive Agreement.
The disclosures in Item 2.03 below relating to the termination of the Loan and Security Agreement, dated February 28, 2020, effective March 12, 2020, as amended by that certain Amendment No. 1 to Loan and Security Agreement and Collateral Documents, dated March 1, 2023 (collectively, the “Existing Loan Agreement”), between Inuvo, Inc. (the “Company”), and Mitsubishi HC Capital America, Inc. (“MHCA”), in connection with the closing of the Financing Agreement, are incorporated by reference into this Item 1.02.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On July 31, 2024, the Company reported that it and its wholly owned subsidiaries, Vertro, Inc., ValidClick Inc., Think Relevant Media, LLC, Kowabugna Marketing, Inc., Bonfire Publishing Group, LLC, Southern Muse Media, LLC, Netseer, Inc., Emerald Brands, LLC, Alot, Inc., and Daily Reads, LLC, on a joint and several basis (collectively, “Borrower”), entered into a Financing and Security Agreement (the “Financing Agreement”) with SLR Digital Finance LLC (“SLR”), dated July 30, 2024. Pursuant to the terms of the Financing Agreement, SLR will finance up to ten million dollars ($10,000,000) (the “Maximum Line Amount”).
The term of the Financing Agreement is 36 months (the “Initial Term”) and shall be automatically extended for successive one-year terms (each, a “Renewal Term”) unless Borrower shall provide 60 days prior written notice to Lender of its intention to terminate at the end of the Initial Term or any then current Renewal Term. Under the terms of the Financing Agreement, the Company is permitted to borrow up to 90% of eligible accounts receivable up to the maximum line amount, subject to customer concentration limits of 30% (which is extended to 80% for the Company’s largest customer). All obligations to MHCA have been satisfied and the Existing Loan Agreement was terminated as of July 31, 2024.
For the initial 30-day period after each advance of an account under the Financing Agreement, such advance is subject to a flat fee equal to 1/12 multiplied by the Prime Rate plus 1.00% per annum (but in no event less than 7.00% per annum). After the initial 30-day period, each advance is subject to a monthly rate equivalent to 1/12 multiplied by the Prime Rate plus 1.00% per annum, but in no event less than 7.00% per annum, prorated daily on the net amount advanced outstanding with respect to any invoice for a financed account.
Upon the occurrence of any event of default, Lender, at its option, and without notice or demand of any kind may exercise its rights, including but not limited to (a) cease advancing money or extending credit to or for the benefit of Borrower under the Financing Agreement; (b) accelerate and declare all or any part of the obligations due under the Financing Agreement to be immediately due, payable, and performable; and (c) take possession of any or all of the collateral. As collateral securing the obligations under the Financing Agreement, Borrower granted to Lender a continuing first priority security interest in all of such Borrower’s collateral. The Financing Agreement also contains customary representations and warranties and certain customary affirmative and negative covenants.
The Company agreed to pay SLR an annual facility fee (the “Facility Fee”) in the amount of 0.80% of the Maximum Line Amount. The Company is also obligated to pay SLR a monthly servicing fee of 0.15% of the average net amount of obligations outstanding during each month.
The foregoing description of the Financing Agreement does not purport to be complete is qualified in its entirety by reference to the complete text of the Financing Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On July 31, 2024, the Company issued a press release regarding the Financing Agreement. A copy of the press release is being furnished as Exhibit 99.1. The information in this Current Report on Form 8-K under this caption and the accompanying Exhibit 991.1 are being furnished under Item 7.01 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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, as amended, 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.
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* Exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules or exhibits upon request of the U.S. Securities and Exchange Commission.
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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: July 31, 2024 | By: | /s/ John B. Pisaris | |
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| John B. Pisaris, General Counsel | |
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EXHIBIT 10.1
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EXHIBIT 99.1
Inuvo Secures $10 Million Credit Line from SLR Digital Finance
LITTLE ROCK, AR, July 31, 2024 -- Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing technology, powered by its proprietary IntentKey® artificial intelligence (AI) that serves brands and agencies, has announced that it has secured a new $10 million asset-based credit facility to support its continued growth and operations.
The credit facility, provided by SLR Digital Finance, provides Inuvo with enhanced liquidity and the financial flexibility to accelerate the adoption of its large language generative artificial intelligence, the only solution of its kind for the discovery and targeting of audiences that does not require the tracking of consumers around the internet.
Wally Ruiz, CFO of Inuvo, commented, "We are pleased to secure this new credit facility, which strengthens our financial position and provides us with additional resources to execute our growth strategy. This financing demonstrates the confidence our lenders have in Inuvo's business model and future prospects."
The Company intends to use the proceeds from the credit facility for general corporate purposes, including working capital, capital expenditures, and potential strategic investments.
Ashvin Viswanathan, VP at SLR Digital Finance, also commented “We are thrilled to partner with Inuvo as they continue to accelerate revenue growth and scale their IntentKey AI platform. As the advertising industry evolves around privacy concerns and regulatory pressures, Inuvo is uniquely positioned in their ability to target relevant audiences without relying on cookies or consumer data.”
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.
About SLR Digital Finance
SLR Digital Finance is the leading asset-based lender serving digital media companies looking for an alternative to traditional bank financing. SLRDF offers factoring and asset-based loans up to $100 million and finds ways to provide borrowers with maximum availability and flexibility. SLRDF serves advertising technology companies, publishers, ad networks, creative studios, agencies, and digital platforms. SLRDF is a wholly owned subsidiary of SLR Business Credit, an SLR Investment Corp company [NASDAQ: SLRC].
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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, 2023 as filed on February 29, 2024, 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
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