Greetings, and welcome to the Inuvo, Inc. Investor Teleconference for the First Quarter 2020. This conference is being recorded on Thursday, May 14, 2020. I will now hand it over to Laura Blank. Please proceed.

Thank you, operator, and good afternoon. I'd like to thank everyone for joining us today for the Inuvo First Quarter 2020 Shareholder Update Call. Today, Inuvo's Chief Executive Officer, Richard Howe; and Chief Financial Officer, Wally Ruiz, will be your presenters on the call. I would like to start by letting listeners know that as a consequence of the COVID-19 pandemic, both our offices in San Jose, California and Little Rock, Arkansas remain closed. We are monitoring the federal and state recommendations for reopening and expect to do so only when we feel comfortable that we have all the safeguards in place to protect our employees and their families from any potential virus transmissions among coworkers. We would also like to remind our shareholders that we filed our 10-K on Tuesday, May 12, 2020, having taken advantage of the 45-day regulatory relief provided by the Securities and Exchange Commission. We plan to file our first quarter 2020 10-Q tomorrow. 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 forward-looking statements. 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 U.S. Securities and Exchange Commission, which can be reviewed at www.sec.gov.

Thanks, Laura, and thanks, everyone, for joining us today. For the 3 months ended March 31, 2020, we delivered roughly $15 million in revenue, with approximately $13.1 million coming from the ValidClick platform and $1.9 million from the IntentKey platform. ValidClick was down 8% and the IntentKey was up 45% year-over-year, reflecting our continued focus on growing the higher growth and margin potential associated with the IntentKey. As we had mentioned on our year-end 2019 conference call, Q1 is typically our weakest quarter seasonally. Adjusted EBITDA in the first quarter was a loss of $1.4 million. Now this adjusted EBITDA does not include a $500,000 ValidClick licensing fee that was received in the first quarter and will be recognized over time. We did not experience a material impact on our business from COVID-19 in the first quarter. We did begin to experience a significant pullback in marketing budget within the ValidClick business beginning in April and expect that to continue throughout Q2. The IntentKey was roughly flat year-over-year in April and is tracking in May above 70% year-over-year. Gross margins within the IntentKey were 49% in the first quarter, up almost 10% sequentially and up 80% year-over-year. We believe this is a positive indication of the potential of this business as it scales. Because of the impact of COVID-19 on our business, we are unable at this time to predict, with any certainty, how 2020 will play out, given our business generally depends on marketing budget allocations, which tend to go up or down based on economic productivity. If the economy could be generally back up by the end of Q2, we might expect, but are not counting on, our typical seasonal upswing in the second half of the year. As a result of this uncertainty, we are focusing our resources on areas we believe have immediate revenue potential and attempting to reduce expenses where necessary, so as to have as little disruption on our daily operations as possible in these times. As best we can, we are shoring up our balance sheet, having raised about $1.5 million towards the end of Q1. We have taken advantage of the government's PPP program, the funds from which will be used in April and May to cover payroll costs during those months of the economic downturn. Bank debt at the end of the first quarter was down sequentially from approximately $3.4 million at the end of December to $1.5 million at the end of March. The second quarter's weak economic environment is providing an opportunity to rethink the balance of resources and capital across our 2 business lines. With a go-forward strategy, it is likely to result in lower ValidClick revenues at higher margins with a greater allocation of resources towards the IntentKey. Up through mid-March, the success of our IntentKey salespeople could easily be correlated with the quantity and frequency of their face-to-face meetings with prospects. Of course, all of that changed when travel and in-person meetings could no longer be scheduled. Now, rather than simply waiting for COVID to pass, we went ahead and used this time to increase the volume of our digital outreach program. While this has resulted in fewer meetings than we would have expected, the quality of the meetings we are having has actually improved. What we think is happening here is that our prospects, because they are at home, have more time to give us and are more relaxed and attentive during the discussion. The engagement with prospects appears to have increased as a result. We've had 30% more RFPs in April compared to the prior year. The team has closed several new brand clients in the past few weeks, including a fiber Internet provider, several nonprofits, a public service announcement for one of the largest dairy boards in the country, a virtual art museum, and we added another tourism client to the portfolio. While in this environment, any sales wins are worth celebrating, it has been rewarding to see how the IntentKey can be put to work, helping some of the best nonprofits make a difference. This category of client for Inuvo now includes a top children's hospital, the largest foundation for people over 50, one of the best-known cardiovascular medical research organizations, a leading animal welfare organization, and an international humanitarian aid organization. With a few exceptions where marketing budgets have been paused because of COVID, most of our existing IntentKey clients have either stabilized or grown. One of the largest insurance clients we have is in the process of testing the IntentKey on a new channel, which, if successful, could result in up to a 30% increase in their monthly spend with us. The same client has been evaluating their quarterly ad effectiveness across providers, and the IntentKey results remain strong. This should bode well for an increasing second half of the year budget allocation towards the IntentKey. Our largest auto client recently had to dramatically cut budget in light of COVID. However, they shared with us the news that we were their top performer. We expect this performance to result in a strong comeback for this client when things pick back up for the auto industry. Similarly, one of our real estate clients has been dissatisfied with the performance of their various marketing programs versus the performance of the IntentKey and has indicated to us that they are planning on reallocating more of their budget to Inuvo as a result. On a year-over-year basis, performance against client goals has, on average, exceeded those goals by 50%, up from 33% in the prior year. IntentKey gross margins through mid-May in Q2 are up yet again sequentially. We are also taking advantage of this time to advance product capabilities and differentiation. We expect to be in full production when we enter Q3 with our latest advancement for the IntentKey. This real-time deployment will collapse the time it takes the IntentKey to capture information, analyze it analytically, and message an audience from 2 hours down to minutes. Given the scale of the information processing required for this kind of artificial intelligence, this advancement will bring us as close as is possible to capturing and acting on audience intent signals almost immediately after those signals become available. With this new capability, we will be able to identify and act on end market purchasers on behalf of our clients, well before any of our competitors have even realized that there was an opportunity. We expect this capability to materially increase the value delivered to clients while adding significant difficulty, expense, and time to our competitors' abilities to feature match. Inuvo is rapidly becoming one of a very small group of technology companies that can evaluate each of the tens of billions of ad requests that occur every day in real time and is part of an even smaller group whose technology not only possesses the information but has the means to both understand and build models against that information automatically. The go-to-market strategy for the IntentKey has been to demonstrate the value associated with the technology by initially offering the product as a data-differentiated media buying service. The high success rate on RFPs tells us this strategy is working. The 2020 goal has been to complement that media buying service with a data modeling platform offering. In this latter product, we would allow clients to access the information and intelligence of the IntentKey while running the media campaigns themselves. We expect this offering to be ready for testing towards the end of 2020. This complementary strategy will allow Inuvo to serve a broader market with an even higher margin, more SaaS-oriented business model. We have already had a number of prospects and potential partners request this product. I would now like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter.

Thank you, Rich. Good afternoon, everyone. I will recap the financial results of our first quarter 2020. As Rich mentioned, Inuvo reported revenue of $14.9 million for the quarter ended March 31, 2020. This compares to $15.5 million reported in the first quarter of last year. The decrease in this year's revenue is due to lower ValidClick monetization from advertising inventory sold to our largest demand partners where first quarter seasonality typically results in marketing budget reductions. The lower ValidClick revenue is partially offset by a 45% increase in the IntentKey revenue. Gross margins increased in the first quarter to 77% compared to 57% in the same quarter last year due primarily to revenue mix and to the IntentKey, where gross margins continue to increase. IntentKey margins for the first quarter of 2020 were 49% compared to 27% in the same quarter last year. Operating expenses were $3.3 million higher in the first quarter of this year compared to the prior year, primarily due to increased marketing costs. Marketing costs are primarily traffic acquisition costs associated with ValidClick. Marketing costs were $9.6 million in the first quarter this year compared to $6.5 million in the same quarter last year due to higher cost of traffic acquisition for ValidClick. ValidClick revenue is generated predominantly from ads served to websites and therefore has a lower cost of revenue associated with it as the expense is mostly marketing or traffic acquisition costs. Compensation expense was $2.3 million in the first quarter of this year compared to $1.8 million in the prior year due to higher stock compensation, incentive expense, and to the hiring of salespeople for the IntentKey. The full-time headcount at the end of March was 64, that compares with 61 in the prior year. At March 31, we had on-boarded 9 IntentKey salespersons. At the same time last year, we had 4. Selling, general and administrative expense decreased $318,000 in the first quarter this year compared to the prior year due primarily to lower legal expense, largely incurred last year from the merger agreement which we terminated in June 2019. Interest expense was $153,000 in the first quarter of 2020 compared to $517,000 in the same quarter last year. Last year included a $333,000 noncash derivative liability impact to income associated with the convertible promissory notes that we issued in March 2019. We had other expense of $140,000 in the first quarter of this year due to the loss associated with the mark-to-market of the previously mentioned derivative liability. We reported a net loss of $2.8 million or $0.05 per basic share. Adjusted EBITDA for the first quarter of 2020 totaled a loss of $1.4 million as compared to an adjusted EBITDA loss last year of $194,000. Adjusted EBITDA does not include a $500,000 ValidClick licensing fee that we received in the current quarter and, as Rich mentioned, will be recognized over time. Our balance sheet at March 31, 2020, had cash and cash equivalents of $471,000 and an outstanding bank debt of $1.5 million and convertible notes payable of $271,000. In the month of March, we engaged in a number of capital-raising activities, including: a loan and security agreement with Hitachi Capital America Corp., providing us with a $5 million line of credit; a private placement of common stock to the company's Directors receiving $688,000; the closing of a first tranche of a registered direct offering for gross proceeds of $545,000; and we also received $500,000 as I mentioned, a $500,000 fee for the use of our ValidClick platform that will be recognized over time. Subsequent to March, we closed the second tranche of a registered direct offering for gross proceeds of $245,000. We also obtained an unsecured $1.1 million loan under the Paycheck Protection Program, pursuant to the Coronavirus Aid, Relief, and Economic Security Act. We are using the proceeds for payroll costs, and we intend to apply for debt forgiveness as provided by the program. Finally, as of May 2020, all Inuvo promissory noteholders have converted their notes, and as such, we have no notes outstanding currently.

Thanks, Wally. We are navigating our way through the economic turmoil resulting from COVID-19 and we're taking this opportunity to better align ourselves around higher value, higher margin components of our business. The IntentKey markets, as we have said in the past, is large. Our client proof points are numerous now. Our performance results have been outstanding. Our differentiation and competitive advantage are strong, and our product roadmap is exciting. All that is needed for this business to be significantly larger is more exposure to prospects through sales the product itself delivers.

Our first question is from Ryan Meyers with Lake Street Capital Markets.

I just want to make sure I understand this correctly. You didn't see a lot of weakness in March for IntentKey, correct?

Yes. Actually, what happened for us in March was that we signed two very notable brands. The answer to your question is no, we didn't experience significant weakness in March. This is important to note because we signed two notable brands: one was a well-known airline and the other was a well-known hotel. Neither of them launched their programs; they paused them. So they remain our clients but have paused due to the impact on their industries. However, we did not see any impact from the IntentKey aside from those two clients, which we had anticipated would contribute to Q1's numbers for March. The impact we felt was the loss of expected revenue from them. As I mentioned earlier, we saw a flat year-over-year revenue for April, but for May, we already have commitments that suggest a year-over-year increase of about 70%.

Okay. That's helpful. And then you guys announced last call that you would freeze hiring across the company. So when do you guys expect to kind of ramp this back up and get some sales reps out there?

We're going to wait, I think, like everybody else is, and see what is the government's plans both at the federal level and the state level to reopen the economy. If we see that happening, then we'll hire some more salespeople, but it doesn't make a lot of sense for us to hire trained salespeople who, for the most part in our business model, are on the road in front of prospects, while the country is still working from home. That's why we paused that.

Sure. Yes. And then what have you heard from some of your bigger advertising partners as far as what sort of recovery they are expecting?

It's challenging for us to assess that. As we mentioned during the call, the ValidClick segment is a more accurate reflection of the market and the country, as the marketplace itself is considerably larger. On average, we have noticed some pullback there. This suggests that people are behaving in a typical manner during economic downturns by holding onto their budgets and waiting for the situation to improve. That's why I indicated in my remarks that it's difficult to predict what will happen in the aftermath of COVID and whether the government and economy will reopen, because if things do return to some level of normalcy, we would anticipate those budgets to be reinstated, similar to what we typically observe hard in the third and fourth quarters. Regarding the IntentKey, we aren't seeing significant changes. There is some sporadic activity with certain clients, but the growth of the IntentKey and the pipeline indicates that we are still experiencing growth overall.

And I'm showing no further questions at this time.

Okay. Thank you very much, operator, and I'd like to thank everyone who joined us today on the call, and we appreciate your continued interest in our company.

Thank you. Ladies and gentlemen, that does conclude today's call. We thank you for your participation and ask that you please disconnect your line.