Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Inuvo, Inc., Second Quarter 2013. During today's presentation all parties will be in a listen-only mode. Following the presentation the conference will be open for questions. (Operator Instructions). This conference is being recorded today, Thursday, August, 8, 2013. I would now like to turn the conference over to Mr. Alan Sheinwald of Alliance Advisors. Please go ahead sir.

Thank you, operator and good afternoon. I'd like to thank everyone for joining us today for the Inuvo second quarter 2013 shareholder update conference call. Mr. Richard Howe, Chief Executive Officer and Mr. Wally Ruiz, Chief Financial Officer of Inuvo will be your presenters on the call today. 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 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., or such are forward-looking statement. 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. With that out of the way, I'd now like to congratulate management on their profitable quarter and introduce Mr. Richard Howe, CEO of Inuvo. Rich, the floor is yours.

Thank you, Alan, and thanks, everyone for joining us today. For the second quarter of 2013 we are pleased to report a net income of $381,000 or $0.02 of share on $13.1 million of revenue and $848,000 of adjusted EBITDA. These quarterly results reflect positively the significant operating improvement we have made within the business and the improving margins associated with our growth. Revenues for the first half of the year have totaled $29 million, up 34% over the previous year and adjusted EBITDA with $2.2 million, up over 400% from the previous year. Net income through the first half of the year was $91,000, up from a loss of $4.8 million through the first half of 2012. On today’s call I would like to provide some updates on information communicated on the first quarter call, offer some additional insight about the second quarter and highlight some initiatives underway within the segment. Following my opening statement, I’ll turn the call over to Wally for a more detailed accounting of our financial results after which I’ll have some closing remarks. As a reminder to those you who are new to the company, we organize and report our business along two segments. Our Network segment is an ad delivery service provided to websites and applications owners on both desktop and mobile device. And we also account for our ad-based revenue from our growing suite of owned and operated websites in this segment. And the Application segment, where Inuvo delivers ad into company-owned applications, which are marketed directly to consumers through various online marketing methods. Growth in the second quarter and through the first half of the year has come from within the Network segment, which accounted for about 77% of second quarter revenue and about 72% of first half revenue. The decline…

Thank you, Rich. Good afternoon, everyone. Thank you for joining us today to discuss the company's financial results for second quarter of 2013. My comments will refer to this morning’s press release and the 10-Q that we are filed today. As Rich mentioned, Inuvo, today reported net revenue of $13.1 million in the second quarter of 2013, a $256,000 increase over the same quarter of last year. For the first six months of 2013 we reported $29.1 million, which is $7.4 million ahead of the same period last year. The Network segment reported $10.1 million of revenue in the current quarter, an increase of 86% over the same quarter of last year. The network segment represents 77% of the company’s total revenue. The increase in the second quarter of 2013 over the same quarter last year is due to the strong increase in the delivery of advertisements to partner website, our own website and the delivery of advertisement to mobile devices. Revenue from the partner’s website increased 85% compared to the second quarter of last year; the result of expansion across publisher segment and improvement in quality and the growth in mobile. Revenue from our owned and operated websites increased 346% compared to the second quarter of last year, largely due to the expansion of websites, particularly the local search directory at local.alot.com. All other revenue in the segment non-core operations declined $439,000 in the second quarter compared to the same quarter last year primarily due to the closing the low margin data business in the first quarter of this year. The Application segment, representing 23% of the company’s total revenue in the second quarter reported $3 million of revenue. This segment is mostly comprised of operations acquired in March of last year. The Application segment revenue in the second…

Thanks Wally. In closing I would like to summarize we delivered $381,000 of net income or $0.02 a share in Q2. It was up from a loss of $3 million in the prior year. Revenue, gross profit, cash flow, operating expense and net income and debt were all improved in the second quarter. Through the first half of the year 2013 revenues are up 34% and adjusted EBITDA is up over 400% over the comparable period. Net income for the first half of the year amounted to $91,000, up from a loss of $4.8 million in the prior year. Within the Application segment and in particularly for the Appbar, we’re focused on optimizing for profitability and quality and it’s important to know that our owned and operated websites business which is growing is an extension of this direct-to-consumer business. Our move to Arkansas is now completed. We are ahead of our expense reduction goal of a $120,000 a month and based on commitment we’ve made already we met our March 2014 goal to the state for hires. Our unaudited revenue for the first month of the third quarter July exceeded $5 million and that’s up from 4.6 million in the prior year. And finally we continue to be focused on mobile expansion within network. Mobile web traffic is increasing 55% per year. And the market place itself remains in its infancy. Shareholders should be assured that Inuvo is well positioned to take advantage of this growth opportunity. And with that I would like to now turn the call over to the operator for questions-and-answers. Operator?

Thank you, sir. (Operator Instructions). Our first question is from the line of George Kelly with Craig-Hallum Capital Group. Please go ahead.

Hi, guys. Two questions both on the Network segment. First, could talk a little bit just about what your expectations are for the next couple of quarters there? And then secondly if you could provide any additional color just on what’s driving the big growth in the segment, especially in this quarter? Thank you.

So the first answer as you know we don’t provide future looking guidance but we did provide July results for this very reason as we wanted to give people an indication of the fact that the third quarter was looking good and in fact looking better that it did at the start of last year. And we don’t see any reason to believe that, that trend won’t continue. And the question is related both to actually three things. We did see just general expansion in the network associated with existing accounts and some accounts that we signed, website publishers at these would be. So that was one, two as we mentioned and continue to mention we are focused and as a result we’re starting to see some traction associated with our mobile activities. And this includes both mobile web and mobile application where we’re serving ads into those. And the third is we continue to push hard to launch new sites. As we suggested the next site we’re going to be launching it’s Alot help. And we think this could be continues to be actually a nice driver of growth for us.

Right. Thank you.

(Operator Instructions) Our next question is from the line of Eric Martinuzzi with Lake Street Capital Markets. Please go ahead.

Thanks for taking my questions and congratulations on the good progress guys. Nice to see the top line movement again and the cash from ops since a year ago, that’s also welcome. As far as the marketing policy and changes there it's been and I am just curious to know what was driving that was there any monetization partner that was driving that or is that just regulatory authority.

Marketing partner.

Okay, and when is that going to affect and will be it just sort of overnight decide or is it were you given an opportunity to just engage. Obviously you've still got the installed base it’s very profitable for you but what was the timing?

Typically Eric we don’t get much if any for wanting that changes to the marketplace. And in this particular case the changes were really related to what you are allowed or not allowed to do to try to get consumers to download your application. And so we have to make changes associated with that and those changes resulted in a different return on investment. And so that we’re not happened you are forced into an optimization process again. So it’s kind of like the roles have change on what you are allowed to and not to do, that’s step one. And then step two is you got to reduce your spend and start spending more and more slowly while you see the return on investment start to be good enough to put more gap on it I guess.

You talked a little bit about the growth on the network side and now you’ve really extended these relationships both for the existing and new publishers. what kind of metrics are you using is there a number of publishers and number of pages a number answers. How are you measuring the progress there besides your revenue up?

Almost all of the above; Click, add search, pay per click, number of publishers we track it at a very granular level and in fact we review it daily.

As far as the demand site goes obviously as you guys get growth on the publisher side and establish a certain equality you are going to track certain demand, curious to know if you are still, is it are you working with small list players on the demand side or has that grown as well?

No, Small, same small major contributors on the demand side.

And is there a development effort to try and increase there or is kind of a limited deal, just how it's been?

No, you can always go direct to averters in this season’s model so at some point that may make sense for us. We don’t view at this point to make the investment necessary to go out and have those direct relationships. And then we’ve got good relationship in place now where we feel like we’re getting fair revenue share so that’s a business model.

No, I totally appreciate the cost structure and I know that you guys have done a nice job of minding the OpEx so I don’t want you to change at all. On the balance sheet, good progress there a little bit of progress as we extend the note payables what’s the expectation seasonally for -- I know you are not giving guidance for the revenue, trying to say based on forward-looking statements but is there anything seasonal expenses that we should anticipate for Q3 or Q4 that we change the good progress that we’ve made on cash per month.

I don’t think so Eric. Most of our operating expenses our SG&A and compensation certainly is, generally of a fixed nature. So there is very little seasonality associated with it. The other thing I would point out is that in the second quarter we didn’t enjoy the entire benefit of the relocation yet. We in fact the compensation we had some doubling up, quite a bit of doubling up on employees because of the transition. It was a knowledge transfer going on still into the second quarter.

So then given that total operating expense for Q2 was, if I am looking at $6.1 million I am not sure how much of that is non-cash but what -- do you have your arms around how much more, what the incremental improvement could be for OpEx?

Sure and it’s going to be you’re going to see in the third quarter that it’s below that. This is what we’re trending to.

Okay. And then as far as you talked about the staffing and having guidance to the headcount, that gets you, that fulfills your obligation with State of Arkansas, is that, is this being driven by the demand by the growth in the top line, or did you have kind of a target that you are going to ramp up to regardless of the top line?

The latter. We have an obligation under the terms of our grant agreement with the state to bring -- it is 50-50 both on employee by 2016 instead of 2015, right Wally, is that right.

Four years from now through 2017.

2017, yeah, and so yes to your point Eric there were milestones every year that we put together with the state and the first milestone is actually March of 2014 and that was to make sure we had 20 bolt-on employees in the state with an average compensation of $90,000 as salary and benefit.

Understand. Okay. I appreciate you taking my questions.

You bet, thank you, Eric.

(Operator Instructions). Our next question is from the line of John Gilliam with Point Clear Strategic Capital. Please go ahead.

Good afternoon, gentlemen.

Hi, John.

Could you give us an idea of -- you mentioned that the full benefit of the reallocation and all of the cost reductions would not be felt until the end of Q3, I believe you said that earlier in the call. And could you give us an idea on a month-to-month basis where that would put us in the OpEx minus the discretionary ad spend?

Yeah. So there were couple of things in the second quarter that and into the beginning of the third quarter that we won’t see by the end of the third quarter. And part of it is the like I said doubling up some of the compensation due to the knowledge transfer. And the other one is the closing of the New York datacenter which we finally accomplished days ago. So and that has -- to give you an idea that has an impact of approximately $40,000 a month.

That’s fantastic. Okay. So it comes back into the -- can you give us an idea on the Application side of business how many Alot Appbar users do we currently have?

I think we’re running I’d say I think because when we hit that cost over here recently the datacenters, John we messed up the numbers a little bit on some of the accounts. But we have been talking around 4 million.

About 4 million. And can you break that down between what we call I guess the region one, the core region, U.S., UK and such and international?

Yeah I don’t have them John but we can follow up with as you will, I think as you recall we do have five tiers in our English speaking nations and then others Brazil's a big for us. We’ve got to call back and give them to you if you'd like.

Okay. And did do guys -- are you still tracking the Bargain Match, I think a lot of discussion is of Bargain Match, do you track for live users in the same way that you track the right users of Appbar?

It’s similar, the answer is its similar and at last count we had 150,000 to 200,000 users for the Bargain Match application.

Okay. Is that -- you mentioned I know for that segment overall you were pretty clear that this is, the real focus there is on maintaining and where the opportunity presents itself and ROIs there to we might possibly see some growth. In the past we’ve seen substantial benefit from that segment in that Q4 period where you got the shopping season for the holiday and such, and do you see the possibility that we might ramp that up in anticipation of the similar occurrence this year?

It’s possible. However, as I said when we look at our business right now we see growth opportunities in the Network segment that produced an ROI that’s better than what we’re seeing in the Application segment. And that’s why I was very cautious in my opening note to say that we do think there will be some return to growth in Q4 but we don’t at this point have any plans to spend significant money to drive more downloads and the only reason why we’re not is because the ROI not attractive enough to do that right now.

Just got it. And would you say I don’t think you got back the ad spend at least in the release this morning. What was the ad spend for the Application segment this quarter?

I don’t know if we break that out that way.

We haven’t, no, we haven’t been right"

Because it’s probably I am guessing combined with the spend for the owned and operated sites, it would just be a total figure?

That's right. And I think if you look at the three months ended June 30 we've got about 2.9 million of search cost. That’s correct so that follow your point.

Got you. On the network side the I think you mentioned that you have added around 300 new websites to the publisher network is that correct?

Yeah, we had 300 add, is different from signing someone up, because when we sign up new customers they go through a process they have to be approved and then they have to be implemented. And so we’ve got 300 that are queued up that are in various stages of being launched, some of them by the way have been launched already.

Okay. And obviously the third party these are not even in the discretion of our owned and operated?

That’s correct.

That's great. Great job gentlemen. Thank you very much.

Thank you, John.

Mr. Howe, I show there are no further questions at this time. Please continue with any closing remarks.

All right thank you. I would like to thank everyone who joined us on today’s call. We appreciate your continued interest in Inuvo and we look forward to a steady progress over the coming quarters.

Ladies and gentlemen, this concludes the Inuvo, Inc. second quarter 2013 conference call. Thank you for your participation. You may now disconnect.