Good day, everyone, and welcome to the Inuvo, Inc. Third Quarter Financial Results Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Valter Pinto, Managing Director of KCSA Strategic Communications. Please go ahead.

Thank you, operator, and good afternoon. I'd like to thank everyone for joining us today for the Inuvo Third Quarter 2020 Shareholder Update Conference Call. Today, Inuvo's Chief Executive Officer, Richard Howe; and Chief Financial Officer, Wallace 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, our office in San Jose, California has remained closed. Our Little Rock facility, we are rotating teams in and out of the office on a voluntary basis in a manner that leads to potential risk of infection through interaction with colleagues. We would also like to remind our shareholders that we anticipate filing our 10-Q with the Securities and Exchange Commission tomorrow, Tuesday, November 10, 2020. Before we begin, I'm going to review the company's safe harbor statement. 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 using this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project and similar expressions, as it relates 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 sec.gov. With that, I'd like to now turn the call over to CEO, Richard Howe.

Thank you, Valter, and thanks, everyone, for joining us today. For the 3 months ended September 30, 2020, we delivered roughly $9.2 million in revenue with approximately $6.2 million coming from the ValidClick platform and $3 million coming from the IntentKey platform. Sequentially, Inuvo grew 21.4%, ValidClick grew 10.4% and the IntentKey grew 53.4%. We think these sequential growth rates are a strong signal that we are coming out of the COVID-19-related downturn that hit us hard in the second quarter of 2020. Year-over-year, while we are still down 33% this quarter, the decline has been significantly curtailed from the 46% we experienced in Q2. We anticipate this will be further reduced in the fourth quarter. For the 9-month year-over-year period, we are down roughly 27%. As we have mentioned on previous calls, COVID-19 impacted both the IntentKey and ValidClick. The pandemic resulted in significant reductions in advertising budgets across the industry. However, we have been able to continue to grow the IntentKey through these difficult times, and that platform is now up 16% year-over-year, both within the third quarter and through the first 9 months of 2020. For the IntentKey, the consequence of COVID-19 has been more about a slowdown in the expected growth that was forecasted to come from new accounts. The existing IntentKey clients have continued to grow in spite of COVID-19, which we think is a strong indication of the performance we've delivered for clients. On an adjusted EBITDA basis, while we lost $1.3 million in the quarter, both revenue and margin trends heading into the fourth quarter are pointing towards improvements here. As a result of progress in the third quarter, we have recently started hiring again, with active searches underway for campaign managers, account managers, and sales professionals. We currently have 66 full-time employees, up from 57 in the prior year period. The ValidClick platform had its lowest revenue month of the year in May. Since then, we have experienced steady sequential monthly improvements with October revenue expected to be roughly 115% when compared to this May low point of 2020. Our largest clients within ValidClick are Yahoo! and Google. The ValidClick team has used this downturn to rethink the overall strategy within this marketing services component of our business, concentrating on diversification with a focus on cash generation, which, in a pre-COVID world, has historically been strong and consistent. In the third quarter, revenues from Yahoo! contributed roughly 33% of ValidClick, Google roughly 43%. The remaining 23% of ValidClick revenues came from a collection of other clients. The top clients accounted for roughly 22% and 29% of total Inuvo revenues within the third quarter. This diversification represents a big change in our historical revenue dependencies as a company. We were also recently successful in renewing our Yahoo agreement for another two years within the quarter. We believe all other client relationships associated with ValidClick currently remain secure. The objective within ValidClick has always been to deliver high-quality consumers to our major clients. Media buying and the technology to facilitate optimized media buying have always been an important component of this business model. Scalability within the business has, at times, been delayed due to limitations of credit lines with media partners. We have recently been successful at expanding those credit lines, a direct consequence of our stronger balance sheet. ValidClick net margin after including these media buying costs has continued to improve following a low in April. The IntentKey platform has continued to deliver exceptional results for clients, where, on average, in the third quarter, that performance exceeded our clients' goals by over 30%. Gross margins for the IntentKey platform were roughly 50% in the quarter, and we had over 30% more active campaigns running within the quarter sequentially. In the third quarter, we have been successfully expanding existing clients and onboarding new clients within industries that include education, automotive, tourism, insurance, health, retail, and nonprofits. We recently put out a press release related to political campaigns. While this was a small budget, we learned much from this campaign that should prepare us to capture a larger share of advertising dollars the next time we go through a political cycle. As mentioned on our second quarter conference call, we ran an important and significant Connected TV campaign early in the third quarter. The results were strong, and we were able to prove that the IntentKey AI and data work equally well within this media placement as they do for us within display and video advertising. This, in turn, not only allows us to offer this capability to existing and prospective clients but do so in a manner that unifies the data and insights we can bring to those clients across these three different choices for media placements. In the coming quarters, we anticipate the launch of a Software-as-a-Service version of the IntentKey. We are actively recruiting beta clients for that product now. This product is designed to expand the IntentKey's market reach by packaging the core technological components of the platform in a manner that allows clients to use their own resources and marketing and campaign platforms. This is particularly important for our agency clients who perform direct control over these services. Concurrently, because the strategy allows for greater distribution of the technology and data, we expect to be disrupting what is currently a $19 billion annual third-party marketing data market with a product designed and compliant with expected future data and privacy constraints. When fully deployed, this capability will be available to clients across the various demand-side or campaign platforms they may be using, with an initial launch integration throughout AppNexus. We recently signed an amendment to our current agreement with AppNexus for this purpose. The IntentKey is already a technological marvel and depth of generating custom artificial intelligence models, capable of continuously evaluating in excess of 20 million different audience features, while simultaneously now capable of evaluating up to 2 million requests for advertisements from publishers per second. This version of the IntentKey platform will put the power of our artificial intelligence, the data created by that AI, its sophisticated modeling capabilities, and these insights about audiences directly in the hands of our clients. With that, 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'll recap the financial results of the third quarter. As Rich mentioned, Inuvo reported revenue of $9.2 million for the quarter ended September 30 this year. This compares to $13.8 million reported in the third quarter of last year. The decrease in this year's revenue is due to lower ValidClick revenue, partially offset by higher IntentKey revenue. ValidClick revenue in the third quarter this year was $6.2 million, which compares to $11.2 million in the same quarter last year. This lower ValidClick revenue was primarily due to reduced advertising budgets associated with the COVID pandemic. In spite of reporting lower year-over-year revenue, ValidClick's recovery began in June following May's low. As of October, as Rich mentioned, we're up 115% from that low. IntentKey revenue was 16% higher in the third quarter this year compared with last year. Inuvo gross margins increased in the third quarter to 82% compared to 64% in the same quarter of last year due to the IntentKey, where gross margins had increased to 49% in the third quarter compared to 29% in the prior year. The IntentKey represented 32% of the overall third quarter revenue this year compared to 19% last year, resulting in its higher margin having a greater weight on the overall Inuvo gross margin this year. ValidClick revenue is generated predominantly from ads served to websites, and therefore, as a result, there's only a small loss associated with the cost of revenue associated with ValidClick revenue. Operating expenses were $1.2 million lower in the third quarter of 2020 compared to the prior year. The largest component of operating expenses is marketing costs. Marketing costs are primarily traffic acquisition costs associated with ValidClick. It is the largest expense associated with this service. Marketing costs were $5.7 million in the third quarter this year compared to $6.9 million in the same quarter last year. The lower expense this year compared to last year is primarily due to the lower ValidClick revenue that we experienced this year. Compensation expense was $2.5 million in the third quarter this year compared to $2.2 million in the prior year, again, primarily due to the higher employee salary costs. As mentioned, our full-time employment at September 30 of this year was 66 employees, compared to 57 employees at September 30 of last year. We expect compensation expense to remain relatively flat for the remainder of the year. Selling, general and administrative expenses decreased by $211,000 in the third quarter this year compared to the prior year, due primarily to lower IT costs, where we completed our computing facilities' consolidation program earlier this year. Interest expense was $26,000 in the third quarter of 2020 compared to $144,000 in the same quarter last year. The interest expense in this year's quarter is primarily related to the outstanding debt on our line of credit, which we now have fully paid off as of the end of July. We had other income of $54,000 in the third quarter of this year, and that was associated with the recognition of deferred revenue from a contract to license ValidClick technology. Other income in the third quarter last year was $3.3 million, associated with the breakup fee received from a merger that did not close. We reported a net loss of $2.4 million or $0.03 per basic share compared to $788,000 net income or $0.02 per share in the same quarter last year. The adjusted EBITDA for the quarter ended September 30, 2020, was a loss of $1.2 million compared to a loss of $769,000 last year. This year's adjusted EBITDA loss reflects, in part, the lower operating margins that occur within ValidClick as the platform begins to recover and scale. Those margins continue to be up in October, and should they hold, we would expect adjusted EBITDA to improve significantly in the fourth quarter. Our balance sheet at September 30, 2020, had cash and cash equivalents of $5.5 million and outstanding financing debt of $2.3 million, which included a PPP loan of $1.1 million, a related loan of $150,000, and financing leases for IT equipment. In September, we applied for forgiveness of the PPP loan as made available under the CARES Act. We expect to receive a decision from the FDA by year-end or early January. In the quarter, we completed our capital raising activities with an underwritten follow-on public offering of 21.5 million shares of common stock. We raised gross proceeds of $10.75 million. And with that, I'd like to turn it back over to Rich for closing remarks.

Thanks, Wally. We've seen a steady upwards trend in our business since its COVID-impacted low point in May of this year. The IntentKey platform has continued to grow throughout 2020 despite COVID. While ValidClick is down year-over-year, it is expected to be up in October roughly 115% from its low point in the year, which was in May. Strategically, Inuvo has been using this time to develop the technologies necessary to facilitate our transition into a technology-enabled services and, ultimately, SaaS-based business model. Now while COVID continues to make forecasting difficult and unpredictable, based on the revenue run rate coming out of October, we would expect sequential growth in the fourth quarter between 25% and 40%, which, in turn, should also improve adjusted EBITDA heading into 2020. And with that, I will turn the call over to the operator for your questions. Christy?

And we'll go first to Brian Kinstlinger from Alliance Global Partners.

This is Jacob on for Brian. You mentioned 25% to 40% sequential growth for IntentKey in 4Q. Can you give us an idea of where this is coming from? Is there a reason that new customer wins have been slower in 3Q? Also, can you give the average campaign size compared to the year-ago period?

There were quite a few questions in there. The growth rate that we're seeing is coming both from new clients and from existing clients. I don't know what the exact distribution is between those two as I'm sitting here on this call, but I can tell you that the majority of it is coming from existing clients that we had leading into COVID, which, as I mentioned, in our minds, given the way budgets had been declining across the industry for marketing, probably is a greater testament to the performance of the technology than anything. And so what was the second question, Brian? I'm sorry.

Yes, this is Jacob. Is there a reason you can provide the average campaign size compared to a year-ago period?

I don’t have that number available right now, but we can definitely provide it to you later. As a general point, like many companies, we have a range of customers from large ones to smaller ones. I don’t recall the average number at the moment, but I will make sure to get that information to you.

That's okay. And then is there a reason that new customer wins have been slower just because of advertising budgets?

The question is whether there is a reason why the signing of new clients has been slower than anticipated. The answer to that is primarily due to COVID. When COVID emerged, many organizations paused their budgets and reconsidered their strategies, which affected our sales efforts. This included natural constraints related to marketing budgets. Additionally, in a world impacted by COVID, the shift from face-to-face selling to video conferencing has also had an impact, as our technology requires some direct interaction. These two factors contributed to a decline in new sales related to IntentKey compared to our forecasts. However, we have managed to compensate for this and even exceed expectations with the growth rates we have seen during COVID, particularly with new and existing clients.

Have you started to see a recovery in advertising budgets? If so, which industries are involved, and what are customers saying about new campaigns?

Yes. The answer is yes, and that's probably more evident on the ValidClick side of our business, given ValidClick serves a much larger audience of brands and advertisers because our two biggest clients there are among the two biggest marketing platforms on the platform, Yahoo! and Google. So the answer is yes, we've definitely seen an increased number of budgetary movements upwards and money coming back into marketing. And so, again, sorry, Jacob, what was the second part of the question?

Just what are customers communicating about new campaigns?

I think we're seeing customers revisiting their marketing budgets and preparing, I guess, inevitably for a world less dependent on what's going on with COVID. We think, actually, today's announcement with Firefox is probably a good indication that 2021 may be at least partially back on track. I'm not sure. We would say it's going to be on track, back to normal. But I think these are good indications that marketers will start spending money again given that there's some hope at the end of the tunnel, if you would, as it relates to COVID.

Yes. And you talked a little bit about political contributions, political ads. Can you give a little idea of how that's contributed to each segment?

Yes. The political work that we did was entirely related to the IntentKey. We get it indirectly through ValidClick, but we don't track it that well. So when I was making that statement, it was really related to the IntentKey. We know for a fact that the IntentKey is a powerful tool for politics. And so the campaign that we ran this year, which was small, just reinforced enough that we have a product there that we can sell to whatever party it is that wants to use it. The next time around, when the budgets become available, we'll be actively recruiting for that given we have now some history of success and results they can point to.

Okay. And can you quantify year-over-year revenue trends in the last couple of months, August, September, October for both segments?

I don't have that information readily available. Wally, I'm not sure if you have those numbers memorized. Typically, we don't provide details on a month-by-month basis; usually, we report quarterly. However, I can say that both revenue and margins have been steadily increasing since the lowest point in May.

Okay. And then one last one. How do you expect the holidays to impact revenue?

Typically, you see an increase in demand for advertising during the holidays, and that seems to be happening again this year. Albeit with the COVID backdrop, you're not quite sure if it's budgets coming back in because of the holidays or just budgets coming back in because people are starting to think that there's an end to COVID in sight. Generally, the fourth quarter tends to be up, which we are seeing.

And that's the end of our questions today. Thank you so much for your participation today. We do appreciate your participation, and please, you may now disconnect.

Thank you, operator, and thank you, everyone.