00:05 Good day ladies and gentlemen, and welcome to the Inuvo Fourth Quarter and Full-Year 2021 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.

00:23 Thank you, operator, and good afternoon. I'd like to thank everyone for joining us today for the Inuvo fourth quarter and full-year 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-K with the Securities and Exchange Commission this evening, March 17, 2022. 00:50 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 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 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 or are 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 sec.gov. 01:41 With that, I'd now like to turn the call over to CEO, Richard Howe.

01:46 Thanks Valter and thanks everyone for joining us today. We had another very strong fourth quarter where for the 3 months ended December 31, 2021, we delivered $19.7 million in revenue, which was up 53% year-over-year and up 17% sequentially. Revenue for the year was also up significantly at 34% to $59.8 million for the year. 02:13 Now, what is particularly encouraging about revenue within the year 2021 is how it accelerated between Q2 and Q4, where the company's growth rates year-over-year were 66%, 83% and as previously mentioned a second ago 53% in the fourth quarter. Overall, gross margins remained strong at an average of roughly 73% for the year. On a revenue basis, both the ValidClick and the IntentKey platforms were up materially year-over-year. 02:54 Additionally, and as we had been messaging throughout 2021, we were successful delivering a positive adjusted EBITDA in the fourth quarter of 2021 and I'm pleased to report that that adjusted EBITDA was $466,000. The balance sheet remains strong as of December 31, 2021 with no debt and over $13 million in cash and marketable securities. The company has access to an unused $5 million line of credit and we are currently in the middle of renegotiating that with new terms and conditions with a number of different vendors that we're talking to, and we expect to be able to talk about that more, probably on the Q1 conference call. The company is not currently in need of additional capital. 03:52 Now, we had a number of significant first’s in the company's history in 2021, and I'd like to talk through a number of those with you here today. At the end of 2019 and just before the pandemic, approximately 60% of our company revenue was concentrated in a single client. We…

14:27 Thank you, Rich. Good afternoon, everyone. A recap of the financial results of our fourth quarter -- the fourth quarter of 2021. As Rich mentioned, Inuvo reported revenue of $19.7 million for the quarter ended December 31, 2021, this compares to $12.9 million reported in the fourth quarter of the prior year. Both platforms, ValidClick and IntentKey exceeded the prior year. ValidClick revenue exceeded the revenue in the fourth quarter of the prior year by 26% and the IntentKey revenue for the 3 months that ended December 31, 2021 exceeded the prior-year quarter by approximately 121%, primarily due to the acquisition of new customers, some of the customers that Rich referred to earlier. 15:25 IntentKey revenue represented 41% of the total revenue in this year's quarter compared to 28% in the same quarter last year. We expect IntentKey revenue to continue to grow as a percent of the total revenue. Inuvo gross margins decreased in the fourth quarter to 57% compared to 83% in the same quarter last year. The IntentKey gross margins were 37% in the fourth quarter compared to 45% 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, so we attempt to optimize gross margins, we want to deliver to customers the multi-channel campaigns that they require. 16:19 ValidClick gross margins were 71% in the fourth quarter compared to 99% in the same quarter last year. As mentioned, we have now integrated the ValidClick services with the IntentKey services as part of delivering this multichannel capability to clients. Whereas in the prior year, most of the ValidClick cost was traffic acquisition, and as such, not included in the cost of revenue. In 2021, for clients where we did deliver…

20:58 Okay. Yeah. Thanks, Wally. We had a very strong year with a compounded quarterly growth rate between Q1 and Q4 of approximately 23%. We had a year-over-year overall growth rate of 34% and we had accelerated growth rates between Q2 and Q4 of 66%, 83% and 53% year-over-year. We had a positive adjusted EBITDA in the fourth quarter of $466,000. 21:24 We expect year-over-year growth in the first quarter of 2022 to remain strong. With this once in a decade opportunity associated with privacy, we plan to run the businesses close to breakeven on an adjusted EBITDA basis for the year, so we can optimize towards capturing market share over the next few years, while enterprises are open to a change in service providers because of the challenges facing this industry. 21:54 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 needs to raise capital. 22:03I will now turn the call over to the operator for questions. Kyle?

22:09 Thank you. [Operator Instructions] We take our first question from Brian Kinstlinger with Alliance Global Partners. Your line is open. Please go ahead.

22:41 Hi, this is Matt in for Brian. So first of all, how many active logos did you have running campaigns with IntentKey during the December quarter compared to the end of 2020?

22:56 I don't know the answer. I think we had roughly 90 or so different ones, I don't know how that compares against the prior year, Matt. Up to around 90 now.

23:07 Yeah, understood. And a second part of that question is, can you possibly quantify how much of IntentKey’s growth is related to these new logos compared to larger campaigns or increased usage from existing customers?

23:25 A lot of the growth is on the back of new clients, not existing clients. By the way, existing clients are growing as well, but yes, the growth rate has been accelerated in large part by signing up bigger clients with bigger media budgets.

23:46 Understood. Thank you. And what's the average size of campaign that, like, IntentKey would be running today? And have you seen growth in the average size of a campaign from 6 or 12 months ago?

24:02 I don't know what the average size is, but it's definitely bigger now than it was 12 months ago.

24:09 Okay. And with the changes that prohibit cookies, how are the prospective brands responding to that -- to the AI ad tech that uses first party data and what does the company have to do to accelerate that?

24:24 Yeah. So I'm going to rephrase the question. We don't use any data at all and that's part of the significant advantage of our technology. When you refer to first-party, there is somehow a misnomer that just because of the data is your, you have free reign to use the consumers' data, and technically there are work arounds for doing that and some companies may be designing solutions for that, but we think strongly that you're going to be opposing the desires of the actual consumer themselves. So that's not a path we ever wanted to go to. So our technology does not require any consumer data. No, whether it's for first party, second party, third party, nobody's party, it doesn't use any. And that is the advantage of it. And I'd say the answer is, as a result of the growth rate you're seeing, our message is responding and resounding with clients and prospects, because they recognize: one, that there's this privacy issue; and 2, there is a solution here that works and works better than actually using consumer data, so you might ask yourself, why wouldn't -- why wouldn't everybody want to give it a role.

25:36 Great. Thanks so much.

25:39 You bet.

25:43 [Operator Instructions] We take our next question from Jack Vander Aarde with Maxim Group. Your line is open. Please go ahead.

25:54 Great. Hi, Rich, hi Wally. Congrats on the strong results. Thanks for taking my questions. So last quarter you announced 10 million plus of new IntentKey orders, during the third quarter, I think that was new customer orders received, which are expected to be delivered over the next 9 months or so. Just a couple of things on that. Can you provide what new IntentKey orders were for this fourth quarter? And then of the $10 million from last quarter, how much of that was recognized during the fourth quarter?

26:29 I don't know how much of it was in the first quarter. Wally, you might know that. I don't know. Can you answer some of these questions of the $10 million we signed, how much of it was Q2 and Q1. I don't know the answer to that question.

26:44 Yeah. So, a small portion was actually recognized in December, and -- but it was a small percentage of the $10 million and probably -- we're probably less than 50% by February. So there still 50% to 60% to go on the $10 million.

27:17 Got it. That’s helpful color.

27:18 And maybe Jack -- Yeah, if I could say something else about that. I mean in at least one case that I'm aware of, we've already signed a renewal, if you will, right, for some added number of months as is the case. So I don't think -- I don't want people to think we signed up these deals and they're going away. That's not how it works, right? We've done a pretty good job for these clients and we fully expect to just renew them. And as I said in one case, I know we're renewing one right now.

27:49 Got you. Understood, understood. And then, as far as IntentKey SaaS. I think you guys mentioned some comments on it, I didn't quite catch that. So can you just provide maybe a summary recap of what's going out with the IntentKey SaaS from a revenue perspective, client demand for it and then how you see that growing, IntentKey SaaS going forward?

28:10 Yeah. It's a non-material component of our overall revenue at this point, but we've had a number of clients that we delivered the service for within the year to basically understand what are the nuances associated with having to do that. So that is a bit of a different beast. Our primary demand right now seems to be coming from direct clients who want us to run the service ourselves. And I think candidly over the next little while that’s probably the best idea for us, because if we're in control of the deployment of our own technology and the running of the campaigns associated with our own technology where we're probably going to do better than turning it over to someone else to do that. 29:05 So we will sell and continue to sell to the SaaS version of the product, but that component won't be growing, probably as fast as we might have thought earlier, simply because we think the demand right now is coming from the full service side.

29:21 Okay, understood. And then just maybe are you noticing any pickup in new clients, potential clients knocking on your door because of this looming kind of upcoming cookie less future with Google [indiscernible]? Are you starting to get a sense, like if there is any sort of panic or there's just confusion or any change in behavior from potential clients and existing clients and how they're going to run ad campaigns when they can’t use third-party cookies?

29:56 I think the word you used confusion is probably the best word. I don't know, most of the people that we deal with and the clients we deal with are pretty sophisticated. So panic is probably not a word that you see. But I do think there's a lot of confusion. And in part, I think that confusion is coming from the existing vendors who are telling them that maybe the problem is not as bad and they've got a pretty good solution for it and maybe that's reducing the panic. But confusion, yes, and an increased discussion like an increasing amount of clients who want to have a discussion specifically about this, I would say absolutely on that. But it's kind of what we're leading with these days, so that we lay it right out there on the table that we do have something that can work here.

30:51 Got it. And then just where would you say you are -- it's my last question. In terms of the overall integration or merging of the technologies, IntentKey and ValidClick, maybe there is not a finite plan, but where would you say you are in the -- in terms of like, if we were to do a baseball analogy in terms of merging the capability together? And what you're starting to realize they are capable of doing?

31:16 I hate to say we're there, but we're serving multiple clients now with both sides and it's all working fine. And we just recently signed up another one where we're using both and it's like it's working. In both sides they are doing what they're supposed to do and we -- I don't want to say we've got all figured out, because there's always things that come up. But I'm not worried anymore about that, which is why in my script I said, we're now pretty confident that we can scale this and not have to worry about it. Meaning, if I found another one tomorrow or 2 tomorrow or 10 tomorrow, the teams know how to do it sort of the people issues associated with that. So I think we've got that figured out.

32:02 Excellent. That's great to hear. That's it for me. I appreciate. Congrats again on the results. Thanks.

32:08 You bet, Jack.

32:13 [Operator Instructions] It appears there are no further question at this time. I'd like to turn the conference back to you, Richard Howe, for any additional or closing remarks.

32:29 Thanks, Kyle. And of course, as always I would like to thank everyone who joined us on the call today and we appreciate your continued interest in our company.

32:43 This concludes today's conference. Thank you for your participation. You may now disconnect.