Inuvo, Inc.

Thank you. Good day, everyone, and welcome to the Anufo Incorporated Third Quarter Financial Results Conference Call. Today's call is being recorded. At this time, I would like to turn the conference over to Walter Pinto, Managing Director of KCSA Strategic Communications. Please go ahead.

Thank you, operator, and good afternoon. I'd like to thank everyone for joining us today for the ANUVO Third Quarter 2020 Shareholder Update Conference Call. Today, ANUVO's Chief Executive Officer, Richard Howe, and Chief Financial Officer, Waller-Louise, will be your presenters on the call. I would like to start by letting listeners know that as a consequence of the COVID-19 pandemic, our office in San Jose, California, has remained closed. In our Little Rock facility, we are rotating teams in and out of the office on a voluntary basis in a manner that limits the potential risk of infection through interaction with colleagues. We would also like to remind our shareholders that we anticipate filing a 10-Q with the Securities and Exchange Commission tomorrow, Tuesday, November 10, 2020. 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 using this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, reject, and similar expressions, as they relate to a new link, are as such a 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 a new law at this time. In addition, other risks are more fully described in the public filings with the U.S. Securities and Exchange Commission, which can be reviewed at SEC.gov. With that, I'd like to now turn the call over to CEO Richard Howe.

Thank you, Walter, and thanks, everyone, for joining us today. For the three months ended September 30, 2020, we delivered roughly $9.2 million in revenue, with approximately $6.2 million coming from the valid click platform and $3 million coming from the intent key platform. Sequentially, NUVO grew 21.4%, valid click grew 10.4%, and the intent key grew 53.4%. We think these sequential growth rates are a strong signal that we are coming out of the COVID-19-related downturn that hit us hard in the second quarter of 2020. Year over year, while we are still down 33% this quarter, the decline has been significantly curtailed from the 46% we experienced in Q2, and we anticipate this will be further reduced in the fourth quarter. For the nine-month year-over-year period, we are down roughly 27%. As we have mentioned on previous calls, COVID-19 impacted both the intent key and ValidClick. The pandemic resulted in significant reductions in advertising budgets across the industry. However, we have been able to continue to grow the intent key through these difficult times, and that platform is now up 16% year over year, both within the third quarter and through the first nine months of 2020. For the intent key, the consequence of COVID-19 has been more about a slowdown in the 2020 expected growth that was forecasted to come from new accounts. The existing intent key clients have continued to grow in spite of COVID-19. which we think is a strong indication of the performance we've delivered for clients. On an adjusted EBITDA basis, while we lost $1.3 million in the quarter, both revenue and margin trends heading into the fourth quarter are pointing towards improvement here. As a result of progress in the third quarter, we have recently started hiring again, with active searches underway for campaign managers account managers, and sales professionals. We currently have 66 full-time employees, up from 57 in the prior year period. The Valacos platform had its lowest revenue month of the year in May. Since then, we have experienced steady, sequential monthly improvements, with October revenue expected to be roughly 115% when compared to this May low point of 2020. Our largest clients within Valisic are Yahoo and Google. The Valisic team has used this downturn to rethink the overall strategy within this marketing services component of our business, concentrating on diversification with a focus on cash generation which in a pre-COVID world has historically been strong and consistent. In the third quarter, revenue from Yahoo contributed roughly 33% of valid click, Google roughly 43%. The remaining 23% of valid click revenues came from a collection of other clients. These same two clients accounted for roughly 22% and 29% of total renewable revenues within the third quarter. This diversification represents a big change in our historical revenue dependencies as a company. We were also recently successful in renewing our Yahoo agreement for another two years within the quarter. We believe all other client relationships associated with ValueClick currently remain secure. The objective within Valtech has always been to deliver high quality consumers to our major clients. Media buying and the technology to facilitate optimized media buying have always been an important component of this business model. Scalability within the business has at times been delayed due to limitations of credit lines with media partners. We have recently been successful at expanding those credit lines, a direct consequence of our stronger balance sheet. Valid net margin, after including these media buying costs, has continued to improve following a low in April. The Intenkey platform has continued to deliver exceptional results for clients, where on average in the third quarter, that performance exceeded our clients' goals by over 30%. Gross margins for the Intenki platform were roughly 50% in the quarter, and we had over 30% more active campaigns running within the quarter sequentially. In the third quarter, we have been successfully expanding existing clients and onboarding new clients within industries that include education, automotive, tourism, insurance, health, retail, and nonprofits. We recently put out a press release related to political campaigns, and while this was a small budget, we learned much from this campaign that should prepare us to capture a larger share of advertising dollars the next time we go through a political cycle. As mentioned on our second quarter conference call, we ran an important and significant connected TV campaign early in the third quarter. The results were strong and we were able to prove that the intent key AI and data work equally as well within this media placement as it does for us within display and video advertising. This in turn not only allows us to offer this capability to existing and prospective clients but do so in a manner that unifies the data and insights we can bring to those clients across these three different choices for media placement. In the coming quarters, we anticipate the launch of a software as a service version of the intent key. We are actively recruiting beta clients for that product now. This product is designed to expand the intentee's market reach by packaging the core technological components of the platform in a manner that allows clients to use their own resources, marketing, and campaign platforms. This is particularly important for our agency clients who prefer more direct control over these services. Concurrently, And because this strategy allows for greater distribution of the technology and data, we expect to be disrupting what is currently a $19 billion annual third-party marketing data market with a product designed and compliant with expected future data and privacy constraints. When fully deployed, this capability will be available to clients across the various demand side or campaign platforms they may be using with an initial launch integration through AppNexus. We recently signed an amendment to our current agreement with AppNexus for this purpose. The intent key is already a technological marvel adept at generating custom artificial intelligence models capable of continuously evaluating in excess of 20 million different audience features, while simultaneously now capable of evaluating up to 2 million requests for advertisements from publishers per second. This version of the Intenki platform will put the power of our artificial intelligence, the data created by that AI, its sophisticated modeling capabilities and these insights about audiences directly in the hands of our clients. With that, I would now like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter.