Please stand by, we're about to begin. Good day and welcome to the Inuvo, Inc. 2021 Third Quarter results -- Financial Results Conference Call. Today's conference 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, sir.

Thank you, Operator, and good afternoon. I'd like to thank everyone for joining us today for the Inuvo Third Quarter 2021 shareholder update conference call. Today, Inuvo's Chief Executive Officer, Richard Howe, and Chief Financial Officer, Wally Ruiz, will be your presenters on the call. We'd like to remind our shareholders that we anticipate filing our 10-Q (ph) with Securities and Exchange Commission’s tomorrow morning. Before I 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 related 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 they relate to Inuvo, Inc are such a forward-looking statement. Investors are cautioned that all forward-looking statements involve risks and uncertainties which may cause actual results Commissions 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.

Thank you Valter, and thanks everyone for joining us today. We had a very strong third quarter where for the 3 months ended September 30th, 2021, we delivered $16.8 million in revenue, which was up 83% year-over-year and up 33% sequentially. As we have messaged throughout the year, we expect it to be back to positive adjusted EBITDA in the back half of 2021. I'm pleased to report that Adjusted EBITDA in the month of September was in fact positive. For the third quarter, it was a loss of $338,000. The Balance Sheet remains strong with no debt and roughly $14.6 million in cash and marketable securities along with an unused $5 million financing facility. The Company is not currently in need of additional capital. Of the $16.8 million we delivered, the ValidClick platform contributed approximately $11.7 million, which was up year-over-year by 88%, and up 21% sequentially. The platform's growth rate has been a steady 8% compounded monthly through September of 2021 off the COVID-related low in May of 2020. ValidClick 's services include multichannel media buying in support of our largest clients. The product line has continued to enhance these competencies, having recently added Twitter to the stable of social media relationships. Much of the technological enhancements to then ValidClick revolved around automating the numerous traffic sources under management, which are necessary to ensure the best quality consumers are delivered to our clients at the lowest cost. This automation continues to have a positive impact, most notably on the time resources spend manually adjusting campaigns. We've seen a 50% reduction in this time spent optimizing campaigns because of these continuous enhancements to the platform. Additionally, we've continued to enhance our publishing technologies within ValidClick. Within the quarter, we were able to dynamically insert related articles into content at…

Thank you, Rich. Good afternoon. I'll recap the financial results of the Third Quarter of 2021. As Rich mentioned, Inuvo reported revenue of $16.8 million for the quarter ended September 30th, 2021. This compares to $9.2 million reported in the third quarter of last year. Both platforms, ValidClick and IntentKey, exceeded the prior year. ValidClick revenue exceeded the revenue in the third quarter of last year by 88% and the IntentKey revenue for the 3 months ended September 30th, 2021 exceeded the prior year quarter by approximately 71%, primarily due to the acquisition of new customers. IntentKey revenue represented 30% of total revenue in this year's quarter, compared to 32% in the same quarter last year. This year's quarters, a bit of an anomaly in that ValidClick being the most affected by the COVID-19 pandemic last year, came roaring back starting in the Second Quarter this year. However, due to the strong growth we are seeing in the intend key, in the fourth quarter we expect the IntentKey revenue to continue to grow as a percent of the total revenue. Inuvo gross margins decreased in the Third Quarter to 78% compared to 82% in the same quarter last year. The IntentKey gross margins were 36% in the third quarter compared to 49% in the same quarter last year. Our new customers are requiring us to deliver ads in a multi-channel environment. The different channels have different gross margins. Though we attempt to optimize gross margins, we want to deliver to the customers the multi-channel campaigns that they want. Going forward, IntentKey gross margins may increase due to the increased use of the SaaS version of IntentKey where margins are expected to be significantly higher as a result of the mostly fixed costs associated with operating just the A.I. modeling and…

Thanks, Wally. We had a very strong Third Quarter, with 83% year-over-year and 33% sequential growth. We signed over $10 million worth of IntentKey or orders within the quarter, an all-time high. We expect to report strong year-over-year growth in the Fourth Quarter. We expect both product lines to so -- to show sequential growth in the Fourth Quarter. We are forecasting adjusted EBITDA to be positive in the Fourth Quarter coming off a positive month in September. We expect the IntentKey notable client performance to continue alongside of growing pipeline with improving win rates. Our Balance sheet is currently strong enough to accommodate the working capital needs of the growing business. And as a result, we have no immediate plans to raise capital. With that, I will now turn the call over to the Operator for questions. Operator?

Thank you. [Operator Instructions]. And we'll pause for just a moment to give everyone the opportunity to signal. We'll take our first question from Brian Kinstlinger with Alliance Global Partners.

Great, thanks. The third quarter seem to be a breakout quarter for IntentKey. I'm sure it's very satisfying as it's been a long time coming. As you mentioned, the leverage on ValidClick that you're using, as well as the clear changes in privacy that drove some of the performance. Can you talk about the number of RFP in the fourth quarter you're bidding or tracking? Is it tracking higher than the third quarter? And just maybe from a higher perspective, talk about how the pipeline is building?

I don't know the exact number of where we stand today, Brian, for the fourth quarter, but the third quarter's RFP counts, I think, were somewhere near 100 or ish, if memory serves. And it has been increasing sort of steadily. I think I referred to that in the call notes. We feel good about the way the pipeline is evolving to the product. I don't know if I would categorize the IntentKey 's quarter as a breakout quarter. Certainly, it was a good quarter, but the IntentKey has grown pretty much continuously since it was launched in 2019. So, sure, it was a -- it took a bump up in Q3 of this year, but really has not ever grown since it was launched at that point.

I guess I'd look at it differently. By far the best quarter in revenue and I think more to come, but we'll see. You guys were in preparing for new privacy roles by Apple and others for some time and first-party data. Can you talk about how you're offering is resonating with customers? And then with that and how demand and more RFPs are being bid on. Maybe a -- what's a reasonable goal for either 12 or 24 months of growth for IntentKey with this trend?

Yes. So, I think like to any change that affects an industry. There are individuals within clients that we will sell to those we directly or agencies who are ahead of the curve. Let's call them early adopters and then there will be others to aren't. and I would say to a large degree we're getting the early adopter phase of the disruptive changes coming. As privacy rules continue to get more stringent and as the cookie issue comes to a head in 2023, and as companies like Apple continue to basically just forge ahead and try to create the world that they want created, people are going to be forced to have to deal with the situation. And good news, we'll be ready, willing and able to help when so, they get there.

You gave $10 million in 10-Q orders from the third quarter. I can't remember or I didn't look quickly through my model. Can you provide what that was in the second quarter and the first quarter just to see how that's progressed?

We didn't give it in those quarters, so I'd actually don't even know what it is. By the way, a significantly larger -- yes, it's significantly larger. That's why I said it's the largest we've had on record.

Okay.

I'm sorry. I can't give you those. I don't know what they are. We don't track -- I didn't track it back then.

The last question is on the seasonal strength in the fourth quarter and if you're seeing the impact at all from supply chain issues to demand for CPM -- demand or CPMs. Some companies who said ad budgets will not be as strong as usual on the fourth quarter, others are saying it's unimpacted. I'd look at it as its portfolio-specific on which companies are suffering, so maybe you can talk about how, if at all, you're seeing any impact of the supply chain challenges on your customers.

It's really hard to predict these things leading into Thanksgiving and Christmas. They do have some variability to them. It's not really affecting us if you mean like companies in auto or whatnot that have chip problems or other where -- I don't think we're seeing the impact of that. If anything, it seems like advertising is coming back and coming back nicely, from our perspective. Most of the people we're talking to, either as prospects or clients, are trying to figure out how to increase their budgets, not decrease them. Now, with that being said, I think as you know, Brian, our business has seasonality in it. It's typically weaker in

the first half of the year and stronger in the second half.

Great. Thank you.

Thank you, Brian.

[Operator Instructions]. Moving on. Go to Aaron Warwick with Breakout Investors.

Hey, Rich and Wally. I hope you're doing well today --

Hey, Aaron.

-- quarter. Hey, I wanted to ask you a little bit more about the Twitter deal, if you could comment on that, maybe expand just in terms of what you expect, in terms of the potential there compared to the previous and current business you have like with some of your other clients on ValidClick?

Yes, maybe -- importantly for context that -- I think we know we live in this digital modern world where there are a lot of places you can advertise. The more adept you are at understanding the nuances of each channel, Twitter being one of them, obviously it has a number of uniqueness’s to it that are different than other social media channels. Then the better you'll be at that meeting that needs your clients. So, the answer is we've been adding -- we add new channels, I don't know, a semi-regular basis because you can't do everything. But we did in Twitter find a pretty responsive Company, Twitter, interested in working more with companies like ours, and actually allocating internally resources that could help us become better at using their channel. And that's not as common in the other larger social media platforms where we have relationships. So as a result, we've seen good performance, good results, and we expect to scale it.

That sounds very promising. Thank you. With IntentKey, you had mentioned that $10 million sounds really good, and then the additional whatever it was, 70% to $0.80% in RFPs year-over-year in terms of the dollar amount. What are you seeing though in terms of client retention and then even current clients expanding their campaigns? Are you pretty well keeping all of your clients and getting them to expand? What do you see in there?

Yeah. The interesting thing about media is the clients can actually come and go, and of course they don't always spend their money continuously. They might spend it in 1 quarter and then take a pause for another and then start up in another quarter. In fact, we've had clients who spent maybe for 2 quarters and then stopped and then started back up the next year, so it's a little difficult to figure out what constitutes a lost client versus a not lost a client. We have certainly lost some clients, but there are so few of them that I don't even remember who they are. How's that. And when we do lose clients, we've tended to lose them because we're working with an agency and that agency loss of them. Because when we work with agencies, they maintain the relationship with the client and we're really just a service provider in that environment. so, I think -- as I've said, maybe time and again with the IntentKey, the performance is strong and the approach we have produces such valuable, strategic and it's because it's really honing in on the reasons why people are doing things as opposed to who they are. That we tend to keep the clients because they see things they've never seen before, and it opens up the ability to market to things they've never been able to market to before because of the constraints of the existing consumer data.

Thank you for that. Appreciate that. Did I hear you correctly? I know you've been saying here recently that you can sort of leverage some of the clients at IntentKey, get them over to ValidClick, but did I hear you mentioned something in your opening remarks about integrating certain aspects of IntentKey and the AI into ValidClick or was that a misunderstanding on my part?

No, that's exactly right. Social and search. ValidClick has an extremely robust competency in media buying in social and search. Been doing that for many years. And so now we're offering that in combination with all of the other channels that the IntentKey provides. A connected TV, and display and video, and streaming audio, etc. And yes, and we've now incorporated the AI directly into the social and search-based media campaigns that we're running, which was pretty cool. To be able to add that value-add into those channels and as a result, identify audiences within those platforms and then market to those audiences’ using identifiers created by our artificial intelligence. So that was a big step in our mines towards our desire to want to go in and sell directly to clients, recognizing that we have a huge competitive differentiation within the so-called programmatic space. But recognizing also that when you try to sell us bigger deals, you've got clients who don't want to have multiple vendors. It becomes difficult for them to manage. Let's just say I do my social buying somewhere, my search buying somewhere else, and I do better known video somewhere else and programmatic somewhere else. There's a lot of sorts of call it 0.5 billion to a billion dollars a year companies, it would rather just have the single providers of those services. And we find, as a result of the clients that we were able to sign and work on in the third quarter, we now have this ability which we've wanted to have, to go out and sell these bigger deals which we plan to start doing in 2022.

Yes. Fantastic. Sounds like you're set up for that. The final thing for me, then, would be -- you talked on the last 1 or 2 calls about potential acquisition with the cash that you have and just wondering what the -- what your thinking is on that right now. Is that something that's still on the radar or is it something that you pushed aside for now?

We did push it aside, Aaron, but not because we don't want to do it. It's more like the growth, as you can tell, has been so strong that we find ourselves in a good position of having to be 100% focused on not dropping the ball on client relationships that we've now closed. We don't want to be distracted and we don't want the resources of the Company to be distracted to have to work on an integration as a result of the acquisition of a Company, not right now. With that said, we still believe that an acquisition of some kind should be in our future. And as I've said on prior calls, my preference right now would be to acquire marketing and advertising -- a digital marketing and advertising consultancy in large part because the resources in those consultancies tend to be more knowledgeable about the complexities associated with advertising. And as a result, tend to be more successful at selling bigger deals or client's value, the sort of the consulting that comes with a sale.

Guys, I appreciate your time, and I'm looking forward to the end of this year in '22. Keep up the good work. Thank you.

Thanks, Aaron.

And that does conclude the question-and-answer session. I'd like to turn it back to management for any additional or closing comments.

Thank you, Operator. I'd like to thank everyone who joined us on today's call. We appreciate your continued interest in our Company.

Thank you. That does conclude today's conference. We'd like to thank everyone for their participation. You may now disconnect.