Inuvo, Inc.

Ladies and gentlemen, and welcome to the Innovo 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 Walter Pinto, Managing Director of KCSA Strategic Communication. Please go ahead, sir.

Thank you, operator, and good afternoon. I'd like to thank everyone for joining us today for the Innovo 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. 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 a new vote 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 ANUVO at this time. In addition, other risks are more fully described in ANUVO's public filings with the U.S. Securities and Exchange Commission, which can be reviewed at sec.gov. With that, I'd now like to turn the call over to CEO Richard Howe.

Thanks, Walter, and thanks, everyone, for joining us today. We had another very strong fourth quarter. where for the three months ended December 31st, 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. 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 valid click and the intent key platforms were up materially year over year. Additionally, and as we had been messaging throughout 2021, we were successful at 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 31st, 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 who 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. Now, we had a number of significant firsts 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 64% of our company revenue was concentrated in a single client. We had a strategy to reduce that risk, and I'm pleased to report for the first time in the company's history, revenue was more evenly distributed across clients. In fact, in the fourth quarter, the top five clients amounted to roughly 22%, 19%, 13%, 12%, and 8% respectively of the revenue in that fourth quarter. As was mentioned in my opening remarks, we also grew an impressive 66%, 83%, and 53% year over year in the second through fourth quarters. And this was in part because we also had an average cash balance of roughly $16 million in the year. Both of these growth rates and the availability of cash to fund those growth rates were firsts for Enuvo. Strategically, we've long recognized that the solutions provided by the ValidClick and IntentKey platforms were not all that dissimilar. As such, we knew we could command larger media budgets by packaging a media and technology service that included the social and search channels of ValidClick with the programmatic channels of the intent key. In 2021, the ValidClick team delivered over $3 million of revenue that was attributable to clients shared with the intent key. This was a first for our company. Additionally, and as part of serving these multi-channel solutions to several clients in 2021, we learned that many of those clients wanted to also place ads within traditional television. We saw this as an opportunity to ensure as traditional television continues to migrate to connected television, that we would be the company that could move that budget across those channels for that client. We delivered roughly two and a half million dollars of linear television for clients in 2021 using the power of the intent keys artificial intelligence to help us make decisions about program placements. This was a first for Anupo. Now, one of the consequences of running multi-channel media solutions is the development and management of the various client-based data warehousing reporting and optimization technologies associated with reporting on the performance of these solutions for those clients. These capabilities were successfully deployed for our clients in 2021, and this in turn has given us the confidence that we can now scale these services. The deployment of systems necessary to support this level of media complexity was also a first for our company. in 2021. Larger media clients all have creative agencies they work with who provide us with the creative assets necessary to deliver our service using our artificial intelligence. As the intent key has grown, so too has our involvement with these creative agencies, where we are routinely being asked by our clients to present the insights from the intent key to these creative agencies so they can have ideas from which to develop those assets. This shift from creative assets focused on who people are to creative assets using the intent key based on why people are interested is having a meaningful effect on our clients' businesses and is another significant differentiator associated with our technology. This level of creative involvement was yet another first for Anuvo. As it relates to the marketing of our own company, we signed a deal in 2021 wherein Anuvo will be a premier sponsor for a new category of conference within advertising built specifically around artificial intelligence. We expect this event to occur around mid-year and in New York. This will be a first in our company's history. Shifting now to a few technical firsts. As you all know, the intent-key brain works much like a human brain in that our brains are giant libraries and the neurons in our brains are the books in that library. We make decisions by linking together these books. Now, while the human brain is limited to understanding only the things it has ever been taught, the intent key understands the collective knowledge contained within the internet because the internet was, in effect, its teacher. Updating the core intent key brain is not something that needs to happen frequently as it already possesses trillions of individual connections between known concepts. So while, for example, the intent key would be able to link an iPhone with Apple, it might only be able to indirectly link the newest iPhone 13 with Apple because that direct connection had not been trained. In 2021, we expanded the number of concepts understood by the intent key, and in so doing, also designed a framework for enhancing, yet again, the intent key in a way that would allow it to be able to understand some of the newer elements of our lexicon. I'm talking about things like hashtags and emojis, for example. This major revision to the brain behind the intent key was a first for us. In 2021, we also deployed and signed new clients for the SaaS version of the Intent Key. This product was primarily designed to serve the needs of the agency market, where media agencies typically want to run campaigns for their clients directly. This was a first for Enuvo, and it has provided the means to expand our markets and our gross profits. Within our ValidClick platform, We have recognized that media buying opportunities in search and social tend to be opportunistic and of limited duration. This meant that we needed to develop technologies that could adapt to these opportunities by automatically accelerating and decelerating media purchasing on behalf of clients so we could take advantage of these just-in-time changes. We implemented this technological capability in 2021, and it was a first for the ValidClicks platform. Now, we also had some client firsts in 2021. In the fourth quarter, we delivered an intent key driven multi-channel media program for a universal pictures adaptation of a successful book. This was particularly challenging because the marketing program itself required execution over a short period of time. It was a great test of the intent key's ability to deploy quickly and a testament to the AI's proficiency at identifying and marketing to prospective moviegoers in real time. This was another first for Renuvo. In addition to this movie client, We had several other wins in the year that included an electric vehicle manufacturer, a pet technology provider, an enterprise software vendor, universities, a bank, an online game manufacturer, a high-end gym, and many, many more. Across all these and other customers, the intent key continued to exceed expectations having delivered on average roughly 50% improvement over the goals these clients set for us within the year. What our performance and these first should signal is that we have a technology, we have the people, we have the services, and the market required to build a large company. When this readiness is complemented by a once-in-a-decade consumer privacy-driven catalyst for which our technology has a solution, we get excited about our potential. The use of consumer data has been the foundation of advertising for decades. Privacy concerns among consumers is going to eliminate the use of that consumer data for prospecting new clients. And when it takes hold, It will impact $200 billion of media spend. We have a solution to this industry challenge. With that, I'd like to now turn the call over to Wally for a more detailed assessment of our financial performance.