Good day. Welcome to the Inuvo Inc 2017 First Quarter Earnings Conference. Today’s conference is being recorded. And at this time, I would like to turn the conference over to Mr. Valter Pinto of KSCA Strategic Communications. Please go ahead, sir.

Thank you, operator and good afternoon. I’d like to thank everyone for joining us today for the Inuvo first quarter 2017 shareholders update conference call. Today, Mr. Richard Howe, Chief Executive Officer; and Mr. Wally Ruiz, Chief Financial Officer of Inuvo will be your presenters on the call. 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 are as such 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 now, I’d like to now congratulate management on the swift integration of the NetSeer business and turn the call over to Mr. Richard Howe, CEO of Inuvo. Rich, the floor is yours.

Thank you, Valter and thanks everyone for joining us today. We had a very busy first quarter following acquisition of NetSeer in February, we’ve been working very hard to get to this point in our business and we are bullish about our prospects for the future. Later on this call, I'm going to spend more time than I have historically connecting the dots of our go forward strategy post the recent acquisition. We have an adjusted EBITDA loss of $663,000 in the first quarter, this was very close to what we have expected based on our financial modeling of the NetSeer business prior to its integration. We’ve made tremendous progress in cooperating the business into Inuvo and have numerous additional cost savings still available. Realizing these cost savings depends upon expiring contractual obligations, establishing new contracts and the physical moving of the equipment in offices. And an excellent example of such an expense reduction involve the consolidation of datacenters where we expect to realized up to $50,000 per month in potential savings. In this case, our plan trims three datacenters down to two, one in Little Rock and another backup center in California. We expect to be able to begin benefiting from this consolidation in June, with most of the benefit kicking in between August and December. Our success depends on our ability to find patterns within data and these datacenters are key to our ability to do that efficiently. The amount of data we deal with is staggering and we currently store more than six petabytes of information. We currently process over 200,000 transactions per second in those datacenters which means over 16 billion times a day we interrogate opportunity where we could show our ads. This is data we use to make smarter decisions about which, when, where…

Thank you, Rich. Good afternoon everyone. We reported today the results of our first quarter. Inuvo reported revenue of $17.2 million for the quarters that ended March 31, 2017. An 8% decrease from the $18.7 million reported in the same quarter of last year. EBITDA adjusted for stock-based compensation expense, a non-GAAP financial measure was a negative $663,000 in the quarter that ended March 31, 2017, that compares with $1.3 million in the same quarter of the prior year. On a GAAP basis, Inuvo reported a net loss of $1.7 or $0.06 net loss per share in the quarter ended March 31, 2017. In the same quarter last year, we reported a net income of $374,000 or $0.02 per diluted share. As mentioned, a third of the way into this year’s quarter we acquired the NetSeer operation. We acquired their assets which included technology, patents, supply and demand side relationships and 21 very talented developers, sales and support people. And exchange, we issue 3,529,000 shares of our common stock about 12% dilution. We also assumed their networking capital deficit of approximately $4 million. The capital deficit -- the networking capital deficit was funded from our revolving credit line at rate of prime was 0.5% [ph]. For the two months that we owned NetSeer in the first quarter is provided $1.9 million of additional revenue. As anticipated it lowered the overall gross margin as the average gross margins for the NetSeer operation run 30% to 35% range. Also as anticipated we incurred an additional $1.6 million of operating expense in the quarter associated with the acquired property. Of the incurred expense, approximately $350,000 was one-time costs. We expect to complete the integration of the NetSeer operations in particular the data centers and computing assets by the second half of this year,…

Thanks Wally. We’ve never been more excited about our company's prospects. We’ve never had as clear a vision for who we are and what we do. We’ve never been in a better position to be a significant player within our industry. That industry is currently on consolidation paid with capital availability constraints that will make it difficult for non-cash flow producing companies to prosper. I will remind you that Inuvo has a cash flow positive now on an annual basis for over the five years. We believe this industry shake up means, the smart competitors who lack Inuvo-like scale will be unable to make the investment necessary to win. And it means the larger companies that were back by significant capital that maybe close to depleted were no longer be able to subsidize their purchase of market share. Inuvo’s demand and supply relationships underlying technology, optimized cost based, experienced team, these things stand us out in the crowd. We managed to grow our company and produce cash flow to appear were competitor were far better capitalized. We feel confident about our process and continuing to doing so, as our playing field levels and as competitor valuations continue decline, we will be opportunistic, on lookout for businesses by next year, that can add value to our marketplace. We’re expecting 2017 revenue to be in the range $88 million to $93 million with positive cash flow on the year. At the low-end of the range that 23% year-over-year growth rate. With that, I’d like to turn the call over to the operator for questions.

Thank you. [Operator Instructions]. We’ll take our first question from William Gibson with ROTH Capital Partners. Please go ahead.

I actually like to start with a comment. The new names digital publishing and ad-tech didn’t last very long. Now that we’re one marketplace, in terms of, what do you think is the range of quarterly or what we could expect, and maybe you gave that but I might have missed on gross profit margins by quarter?

Well, this quarter was about 54% on our gross margin and we anticipate that we'll be in the mid-50s for the rest of the year.

Good.

And on revenue, Bill, we don’t give a breakdown by the quarter. But our typical quarterly distribution is lower Q1 and rising Q2, Q3, Q4.

Good and I appreciate that. So it sounds like maybe less swing and with experience historic?

Yes.

Okay. Thank you.

We’ll take our next question from Lisa Thompson of Zacks Investment Research. Please go ahead.

I got a few questions about expenses. First off, I wanted to clarify, shouldn’t you have taken out the $350,000 out of adjusted EBITDA?

Yes. We thought about that and we went back and forth on it, and in the end we decided not to change our ongoing definition, which is EBITDA just less stock-based compensation. But we thought that maybe yourself and other analysts might want to do that.

Okay, then we will. And let’s go back to expenses and try to get handle on what’s going to happen going forward. So spent a lot less on marketing. Is that because, you're emphasizing your own content site, or that you found that the cash is better served other places? Or is that just an aberration for this quarter?

It might be a little bit of both of those, Lisa. I think like I said in my script, we used our website resources strategically as a meaningful as a means to try to fulfill demand and we are spending more of our time and more of our focus, which means more of our resources right now at putting our marketplace in position to be able to scale at a faster rate of growth. So, the answer is a little bit of both, we could seek -- it doesn’t mean we’re not paying attention to our own website, in fact quite the contrary, we have the very strong group of people who are continuing to write content and develop content for those properties. But, I would expect that as it relates to our web properties being one component of our supply that the ratio there will continue probably to drop overtime.

Okay. Did you say that the revenue from your own properties was 42% this quarter, is that some way to figure out what digital publishers want?

Yes.

Okay. Caught that then.

Yes.

Okay. And when to get -- so obviously we take the 350,000 out of expense for next quarter, but add another month of NetSeer on. And then how much will you save on a monthly basis once you consolidate the datacenter and move?

I think in my call script I said it could be up $50,000 a month, which is what we’ve modeled from going from three datacenters down to two. And we think we’ll start seeing some of that benefit in June, already June with the bulk of it in probably in the last part of the year as we standup the machines that transition from the system they had in place to our own datacenters.

Okay.

And there is other synergy to for example, we’re moving facilities as Rich mentioned we’re going to -- we found a new office San Jose, that we'll be relocating to in June or July. So, there is a number of cost synergies while we build up the NetSeer business and increase revenues.

So, is that savings in addition to $50,000 a month that you're talking about?

Well, certainly. Yeah.

Okay. And it sounds like you didn’t get anybody to move to Arkansas, did you?

I guess. I don’t know why they wouldn’t. Living like kings down here.

Yeah right, I could tell that the 19 number that nobody seemed to move. All right so what should we be looking for going forward I mean in those two metrics standards to see how well you're doing there, how [indiscernible] doing there. How the new product is?

I think that’s why we’re eliminating some of those at old nomenclature because it's not really to the way that we run our business, our search length was essentially a content based ad unit, we now have a family of ad unit, we can -- to revive this content and video and images, so it becomes sort of the purpose is to break them all up and provide people with metrics, because we don’t want the business that way, we make money from the images, the video, the content. So, I don’t think its material. I do think that the RPM and associated metrics that we’re providing actually gives our stockholders a much better view of the business, in fact probably as good a view as they've ever had into our business. Example to that, this might be in the past, which is always been difficult for us, when we deal we get ad [indiscernible] producing more content, how much more content, are you going to put up more verticals. And in a way, those are the wrong questions to ask. How much money you’re making, every time, you have an opportunity to make a pay, that’s an important number. Unlike I said on the call, that was $5.75 and with any last that will continue to rise. And then as Wally said in his comments, we didn’t do at this time, in part because we don’t get fully -- we have all of business intelligence data to run the business on integrated well enough to be confident in the data to supply it to you. But there is a lot of ancillary information that we could be providing around RPM, like what is RPM in a third vertical or how is the concentration on the pages that we showed or ads on distribute. And compensation means how does it look at by vertical health or the travel or entertainment. I think those will be more interesting metrics and frankly more valuable as it relates to understanding how our business runs.

Okay. Is RPM then directly proportional to margin?

It’s not necessarily a reflection of margin, because it’s a revenue based number.

Okay. All right. Okay. Thanks. That’s all the questions I had. Thank you so much and I’m glad to working out so smoothly.

[Operator Instructions]. Our next question will come from Andy King [ph]. Please go ahead.

I'm a long-time shareholder and I’m not going to sugar coat it, it looks like a disaster call and possibly disaster 2017. And I’m basing that off of late last -- as recently, I think as maybe even into this year, you were still guiding for $100 million revenue run rate by 2017 and that didn’t include the NetSeer acquisition. And some, I’m trying to break down and look at a little bit of guidance, you did give and you’re guiding now for $88 million, $92 million in revenue for 2017. So it kind of feel like not only did our original business miss big, but NetSeer which had done 20 million last year. I think, you guys were looking for 15 million out of it for 2017, so it looks like they’re missing two in the next area side. So now can you give me some clarity first of all, which was a bigger disaster and how we're fixing it? And I have a few other questions after that, but I’d like to you address that first.

Yes sir. So we don’t see it the way that you’re suggested. In fact, if anything, we don’t see the first quarter as a disaster at all. We had messaged that we would buying NetSeer, we had also messaged that there would be costs synergy take out that would be required as part of that. And like I said in my opening comments in fact the modeling associated with the acquisition is falling directly in line with what we thought. So, on that front we don’t see it that way. In fact I think the integration has gone as well as I've seen integration go and so far as how we’ve integrated the people and the technology and the plant we’re doing that and how rapidly that that has occurred based on my 25 or 30 years doing M&A transactions. So, I'm pretty pleased with that actually. As it relates to the guidance that we said, we’ve been pretty clear from the first quarter of 2014, when we first came out, when we were doing $10 million in the quarter and told everybody that it would be a $25 million by the fourth quarter of 2017. We did not give any indication we first gave that guidance whether that would be acquired or organic. We didn’t actually think we would be buying businesses at that time. So, there was an implied organic growth there. But we feel like we’re right on track with that, in fact we continue to be on track with that. So, in that regard, as we have done in the past and we’ll continue to do in the future. We haven't misled anybody as to what we think we can do and we’ve pretty much done everything we thought we would do. As it relates to…

And there are no further questions at this time. [Operator Instructions] And there are no further questions. I’d like to turn the conference back over for any additional and closing remarks.

Thank you, operator. With that I’d like to thank everyone who joined us on today's call. We appreciate your continued interest in Inuvo and we very much look forward to reporting our progress here over the next quarter.

This concludes today's call. Thank you for your participation. You may now disconnect.