This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "will," "should," "intend," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," or "continue," or the negative of such terms or other comparable terminology. This report includes, among others, statements regarding our risks associated with:

These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this report in its entirety, including the risks described in Item 1A - Risk Factors appearing in this report.

Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

Unless specifically set forth to the contrary, when used in this report the terms "Inuvo," the “Company,” "we," "us," "our" and similar terms refer to Inuvo, Inc., a Nevada corporation, and its subsidiaries. When used in this report, “2020”“2022” means the fiscal year ended December 31, 2020, "2021"2022, "2023" means the fiscal year ended December 31, 2021,2023, and “2022”“2024” means the fiscal year ending December 31, 2022.2024. The information which appears on our corporate website at www.inuvo.com and our social media platforms is not part of this report.

The Inuvo platformsproducts and services use analytics, data and artificial intelligence in a manner that optimizes the purchase and placement of advertising in real time. These capabilities are typically sold with services both individually and in combination with each other based on client needs. These products and services include:

In addition to our key customerPlatform relationships, we support agencies and brands. Additionally, we maintain important distribution relationships with owners and publishers of websites and mobile applications. We provide these partners with advertisements which they use to monetize their websites and mobile applications. We continuously monitor consumer trafficour advertising quality with a variety of proprietary and patent protected software tools that can determine the quality of the traffic viewing and clicking on Inuvo served advertisements as a parttools.

In 2023, we had two individual customers with revenue concentration greater than 10% of our service tototal revenues accounting for 60.4% and 12.8%, respectively.

In 2022, we had three individual customers with revenue concentration greater than 10% of our biggest clients.

Our business strategy has been to develop data processing and advertising technologies that can displace intermediaries within the online advertising ecosystem, while cultivating relationships that can provide access to media spend (advertisers) and media inventory (websites). In this regard, we have proprietary demand (media spend) and supply (media inventory) technologies, targeting technologies, on-page or in-appapplication ad-unit technologies, proprietary AI generated data and data management technologies, and advertising fraud detection technologies. We have both direct and indirect relationships atOur goal is to become the engine that powers an advertising transaction decision not the platform that facilitates the advertising placement.

Bonfire mitigates market risk by being contracted with some of the largest media buyers and/or consolidatorsadvertising Platforms in the industry. Forworld. Consequently, Bonfire has the ValidClick platform, wherepotential to scale faster than the focus is searchtypical advertising technology company while concurrently adapting to industry changes when they are led by these Platforms. Bonfire has strong working capital, requires limited go-to-market investments, and social advertising channels, the immediate strategy is to maintain relationships with existing partners and expand the business by supporting IntentKey customers. For the IntentKey platform, where the focus is programmatic advertising channels, the immediatehas very low receivables risk. The Bonfire strategy is to scale throughexisting clients while integrating the hiringIntentKey technology to realize competitive advantages.

IntentKey is a highly differentiated and proprietary technology aligned with the most advanced form of additional sales professionals and partnerships, growing existing accounts and expanding our market footprint. In an increasingly privacy conscious world, we are focused on replacing the current technologies used by advertisers with our artificial intelligence in the world, large language generative AI. IntentKey scales at high margins and displaces entrenched incumbents across the advertising value chain. The technology is revolutionary not derivative, designed specifically to provide advertisers a solution which does not rely onto the usechanges that impact the very fabric of the internet including third party cookies, first party cookies, IP addresses, URL tracking, media measurement, utilization of consumer data.

As part of our growth strategy, we evaluate acquisition candidates from time to time as opportunities arise with a focus on companies that have either advertisers or advertising relationships we do not possess or publishers or publishing partners who have content we do not possess.

We drive general awareness of our brands through various marketing channels including our websites, social media, blogs, public relations, trade shows and conferences. Sales and marketing for our products differs based on whether they are demand or supply facing.

We face significant competition in our industry. Competitors continue to increase their suite of offerings across marketing channels to better compete for total advertising dollars. There are many barriers to entry to Inuvo’s business that would require proficiency in large scale data center management, software development, data products, analytics, artificial intelligence, integration to the internet of things, or IOT, the relationships required to execute within the IOT and the ability to process tens of billions of transactions daily.

We compete, both directly and indirectly with companies who offer demand side platforms, (DSP’s), direct marketing platforms, (DMP’s), Data Suppliersdata suppliers and Aggregators, Media Plannersaggregators, media planners and various Measurementmeasurement and Analyticsanalytics companies. The companies within these categories are defined by LUMA @ https://lumapartners.com/content/lumascapes/display-ad-tech-lumascape.

Our primary competitive advantages include: patented, proprietary generative large language artificial intelligence technology for the categorization and storage of consumer intent (data usedgenerated to discover and match online audiences to product, service or service)brand); real time visibility of a marketing event (recognizing that there is currently a transaction where a match exists between our advertising clients and an interested party for their product on a website)opportunities where our technology is capable of responding to over 200,000 eventsa million such opportunities per second; and patented advertising fraud prevention. Many competitors have greater name recognition and are better capitalized than we are. Our ability to remain competitive in our market segment depends upon our ability to be innovative and to efficiently provide unique solutions to our demand and supply customers. There are no assurances we will be able to remain competitive in our markets in the future.

Our proprietary applications are constructed from established, readily available technologies. Some of the basic elements of our products are built on components from leading software and hardware providers such as Oracle,Amazon AWS, Microsoft, Sun, Dell, EMC, VMWare, and Cisco, while some components are constructed from leading open-source software projects such as Apache Web Server, Apache Spark, HAProxy, MySQL, Java, Perl, and Linux. By seeking to strike the proper balance between using commercially available software and open-source software, our technology expenditures are directed toward maintaining our technology platforms while minimizing third-party technology supplier costs.

We strive to build high-performance, availability and reliability into our product offerings. We safeguard against the potential for service interruptions at our third-party technology vendors by engineering controls into our critical components. We deliver our hosted solutions from facilities, geographically disbursed throughout the United States and maintain ready, on-demand services through third-party cloud providers Microsoft Azure and Amazon Web Services to enhance our business continuity. Our applications are monitored 24 hours a day, 365 days a year by specialized monitoring systems that aggregate alarms to a human-staffed network operations center. If a problem occurs, appropriate engineers are notified, and corrective action is taken.

We own intellectual property (IP) and related IP rights that relate to our products, services and assets. Our IP portfolio includes patents, trade secrets and trademarks. We actively seek to protect our IP rights and to deter unauthorized use of our IP and other assets. While our IP rights are important to our success, our business is not significantly dependent on any single patent, trademark, or other IP right.

To distinguish our products and services from our competitors’ products, we have obtained trademarks and trade names for our products. We also protect details about our processes, products, and strategies as trade secrets, keeping confidential the information that we believe provides us with a competitive advantage.

As of January 31, 2022,2024, we had 8191 full-time employees, none of which are covered by a collective bargaining agreement.

Not applicable to a smaller reporting company.

In addition to our office space, we maintain data center operations in third-party collocation facilities in Los Angeles, CA and Secaucus, NJ.

Not applicable.

Our common stock is listed on the NYSE American LLC under the symbol "INUV.” As of March 11, 2022,February 23, 2024, there were approximately 414421 record owners of our common stock.  This amount does not reflect persons or entities that hold our common stock in nominee or “street” name through various brokerage firms.

We have not declared or paid cash dividends on our common stock since our inception. Under Nevada law, we are prohibited from paying dividends if the distribution would result in our Company not being able to pay its debts as they become due in the normal course of business if our total assets would be less than the sum of our total liabilities plus the amount that would be needed to pay the dividends, or if we were to be dissolved at the time of distribution to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. Our Board of Directors has complete discretion on whether to pay dividends subject to compliance with applicable Nevada law. Even if our Board of Directors decides to pay dividends, the form, the frequency, and the amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the Board of Directors may deem relevant. While our Board of Directors will make any future decisions regarding dividends, as circumstances surrounding us change, it currently does not anticipate that we will pay any cash dividends in the foreseeable future.

None, except as previously reported.

We reported gross marginsnet revenue of 73.4%$73.9 million in 2021 compared2023. In 2023, we heavily invested in the go-to-market team and marketing programs to 81.4% in 2020, primarily dueincrease exposure for our solution.

2023 Highlights:

The Company's solutions are designed to change in revenue mix.

We experienced 34% higher year over yearreported $73.9 million in net revenue for the year ended December 31, 20212023, a slight decrease as compared to $75.6 million during the same period in 2020. Revenue from both platforms, ValidClick and IntentKey, exceeded2022. During 2023, we had lower year-over-year revenue in the prior year. ValidClick YOY revenue was up by 22% and IntentKey YOY revenue by 75%. Both platforms acquired new customers withinearly quarters but gained significant momentum during the year, benefiting from the agreement with a business development partner discussed in Note 11 to our Consolidated Financial Statements and becausesecond half of the economic improvements associated with the COVID-19 pandemic recovery.year. Revenue in 2020 was affected by the COVID-19 pandemic which had a material impact on advertising budgets beginning in April of 2020. The renegotiation of payment terms and conditions as a trade-off for higher gross margins with ValidClick marketing clients in the quarter ended June 30, 2020 alsoDecember 31, 2023 was $20.8 million, 21% higher than the same period in 2022. During 2023 our three largest customers accounted for 60.4%, 12.8%, and 5.7% of our revenues, respectively.  In 2022, two of the same customers and another customer accounted for 29.1%, 24.1% and 12.9% of our revenues, respectively. Unlike 2022, the revenue mix in 2023 showed increases from Platform clients. In 2022 we had some material Agency and Brand clients that were not served in 2023 which contributed to the lowerslight decline in annual revenue. Historically, we have been able to replace lost clients with new clients or by expanding our relationship with existing clients. We would likely experience a significant decline in revenue in 2020.

Cost of revenue for the year ended December 31, 2021 wasis primarily generated bycomposed of payments to advertising exchanges that provide access to a supply of advertisingdigital inventory where we serve advertisements using information predicted by the IntentKey platform and, toadvertisements. To a lesser extent, cost of revenue includes payments to website publishers and app developers that host advertisements we serve through ValidClick. Costadvertisements. The decline in cost of revenue for the year ended December 31, 20202023, compared to the same time periodsperiod in 2022 was primarily generated by payments to website publishers and app developers that host advertisements we serve through ValidClick. The components of the cost of revenue have shifted, as the IntentKey platform revenue becomes a greater percentage of net revenue and as the ValidClick service has continued to expand its owned and operated publishing assets. The increase in the cost of revenue was largely due to the acquisition of new customerschange in revenue mix as mentioneddiscussed in the Net Revenue section aboveabove. The higher gross margin in the current year, 85.8% compared to 60.0% in the prior year, was due to the change in revenue mix.

Operating Expenses

Marketing costs consist mostly of traffic acquisition (i.e., media) costs and include those expenses required to attract audiences to various web properties. Marketing costs year ended December 31, 2023 compared to the renegotiationsame period in 2022 increased due to a higher number of payment terms and conditionscampaigns. As we reported in our Form 10-Q filing for the quarterly period June 30, 2022, we identified certain advertising transactions with a ValidClick marketing partner inprominent advertising network that, during the quarter ended June 30, 2020.

Compensation expense was higher for the year ended December 31, 20212023 compared to the same time period in 20202022 due primarily to higher stock-based compensation expense and to a lesser extent to salaries, benefits, commissionssalary and incentive pay.expense. Our total employment, both full and part-time, was 7893 at December 31, 20212023 compared to 7586 at December 31, 2020.

General and administrative costs were lower for the year ended December 31, 20212023 compared to the same time period in 20202022 primarily due to lower IT costsa decrease in the reserve for doubtful accounts and lower depreciation and amortization costs. In addition, professional fees were lower in 2021 than the prior year.

Finance (expense), net was approximately $87 thousandof interest income, for the year ended December 31, 20212023 was approximately $30 thousand expense and was primarily composeddue to financing expenses of interest expense on finance lease obligations, the Hitachi Loan and Security Agreement and our marketable securities.

Finance expense, on financed receivables, finance lease obligations and the PPP loan.

Net cash used in operating activities was $5,276,257$2,554,075 during 2021.2023. We reported a net loss of $7,600,649,$10,389,653, which included non-cash expenses;expenses: depreciation and amortization of $3,143,168,$2,655,368, amortization of right of use assets $322,746of $96,190 and stock-based compensation of $2,179,254; partially offset by the $1.4 million referral agreement$1,986,296; and the reversal of $420,000 in deferred revenue discussed in Note 11 to our Consolidated Financial Statements. The change in operating assets and liabilities was a net useprovision of cash of $3,077,525$2,325,415 primarily due to an increase in accrued liabilities of $1,264,687 and the accounts payable balance by $796,456, offset by an increasea decrease in the accounts receivable balance by $3,045,690.$1,106,387, offset by a decrease in the accounts payable balance of $1,612,682 and an increase in accrued expenses and other liabilities of $2,813,043. Our terms are such that we generally collect receivables prior to paying trade payables. OurHowever, our Media sales arrangements typically have slower payment terms than the terms of related payables.

During 2020,2022, cash used in operating activities was $5,599,335.$5,573,991.  We reported a net loss of $7,304,569$13,106,539 which included the non-cash expenses of depreciation and amortization of $3,237,930,$2,598,957, amortization of right of use assets $367,981$103,926 and stock-based compensation expenses of $858,683.$2,350,314. The change in operating assets and liabilities was a net useprovision of cash of $656,529.

Net cash provided by investing activities was $606,190 for 2023. Net cash used in investing activities was $4,597,885 and $1,185,335 for 2021 and 2020, respectively.$1,666,125 in 2022. Cash used in investing activities in 20212023 and 2022 consisted of capitalized internal development costs and purchasecash provided in 2023 and 2022 consisted of proceeds from the sale of marketable securities. Cash used in investing activities in 2020 consisted of capitalized internal development costs.

Net cash provided by financing activities was $12,459,441 and $14,302,346$3,456,924 during 2021 and 2020, respectively,2023, primarily from the proceeds from the sale of common stock.

Not applicable to a smaller reporting company.

Our Consolidated Financial Statements begin on page F-1 at the end of this annual report.

We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934.  Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this report, is recorded, processed, summarized and reported within the time periods prescribed by SEC rules and regulations, and to reasonably assure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our management does not expect that our disclosure controls will prevent all errors and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any systems of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Securities Exchange Act of 1934 Rule 13a-15(f).  Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Our internal control over financial reporting includes those policies and procedures that:

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

There were no changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

N/A

1.  Financial Statements

The consolidated financial statements and Report of Independent Registered Accounting Firm are listed in the “Index to Financial Statements and Schedules” beginning on page F-1 and included on pages F-2 through F-22.

2.  Financial Statement Schedules

All schedules for which provision is made in the applicable accounting regulations of the SEC are either not required under the related instructions, are not applicable (and therefore have been omitted), or the required disclosures are contained in the consolidated financial statements herein.

3.   Exhibits (including those incorporated by reference).

*** Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Commission under Rule 24b-2. The omitted material has been filed separately with the Commission. Certain portions of this exhibit have also been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to Inuvo if publicly disclosed. The location of the omitted confidential information is indicated in the exhibit with asterisks (***).