Inuvo, Inc.

Good afternoon, ladies and gentlemen, and welcome to Innovo, Inc. second quarter 2023 conference call. At this time, note that all participant lines are in a listen-only mode. But following the presentation, we will conduct a question and answer session. And if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that the call is being recorded on Thursday, August 10, 2023. And I would like to turn the conference over to Natalia Rudman, Investor Relations. Please go ahead.

Thank you, Sylvie. And good afternoon, everyone. I'd like to thank everyone for joining us today for the Nouveau Second Quarter 2023 Shareholder Update Call. Today, Nouveau's Chief Executive Officer, Richard Howe, and Chief Financial Officer, Wally Ruiz, will be your presencers on the call. We would also like to remind our shareholders that we filed a 10-key with the Securities and Exchange Commission this afternoon to 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 using this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, projects and similar expressions as they relate to ANUVA Inc. are such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, which may cause actual results to differ from those anticipated by ANUVA at this time. In addition, other risks are more fully described in ANUVA's public filings with the U.S. Security and Exchange Commission, which can be reviewed at www.sec.gov. Company makes no commitment to disclose any revisions to forward-looking statements or any facts, events, or circumstances after the date hereof that bear upon forward-looking statements. In addition, today's discussion will include reference to non-GAAP measures. Company believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website. With that, I'll now turn the call over to CEO Richard Howe. Go ahead, Richard.

Thank you so much, Natalia. Thank you, everybody, for joining us today. We are pleased to report that for the quarter ended June 30th, 2023, ANUVA revenue has grown 40% sequentially, having delivered $16.7 million in revenue as compared to $11.8 million in the first quarter. On a year-over-year basis, Q2 2023 was down roughly 26%. However, as I will discuss later in my closing remarks, Current trends suggest that we could be back to year-over-year growth within the third quarter. We had a roughly $1.8 million adjusted EBITDA loss in the quarter, and while it's yet not audited, the July and August trends for revenue and adjusted EBITDA have continued to improve as we head into the typically stronger second half of the year. At 86%, Gross margins were quite strong at the end of the quarter. Also, as reported at the end of May, we raised an additional $4 million within the quarter. As a result, we have a strong, solid balance sheet with approximately $5 million of cash and cash equivalents, no debt, and an unused borrowing facility of $5 million, which provides us with the resources to support our aggressive growth strategy. Let me now turn to some of the operational highlights. In 2021, we began working with one of our larger indirect clients on a new product they were planning to launch. Throughout 2022, we were beta testing media performance associated with that product and building out the various custom capabilities required to support the anticipated growth and deliverables associated with the launch. The project was launched at the beginning of 2023. The scalability potential of this initiative is now reflected within the increase in our indirect sales, which represented roughly 80% of overall revenue in the second quarter. Included in this development project for ANOVA was design of a system for the customization and enhancement of landing pages that has led to improvements in conversion and performance. Concurrently, and also as part of this initiative, we made investments that have improved our media buying tools and supporting infrastructure. These collective capabilities become increasingly important as the demand for these kinds of marketing services continues to grow. Client in question has also required the scalability of content and ad copy, including video. We have adopted several AI-based third-party tools for these services that have significantly decreased the resources required to deliver these capabilities while also allowing us to leverage this development for future customers. Across our client base and excluding our largest customer, we are currently delivering roughly 80 revenue-generating campaigns, 20 of which are new in the quarter. Performance against client KPIs remains very strong across these campaigns. We added 10 new advertisers to the Enugo roster in the second quarter across industries that include financial services, entertainment, government, and travel and tourism. As we have stated in the past, we've yet to find an industry where the intent key has not been able to perform. Notably, We also had two clients return to ANUVO during the quarter. Those clients cited the insights generated by our AI combined with our support as the key reasons behind their return. Throughout 2023, we have seen a steady increase in the frequency of articles and interviews that feature ANUVO. Most recently, we were interviewed for a national segment on artificial intelligence within advertising on Yahoo Finance. Collectively, we have been interviewed and or cited at least a dozen times already this year in notable publications like Ad Exchanger, Digiday, Media Post, and more. In our home state, Arkansas Business had an excellent cover story about our company and how we are changing the advertising paradigm. We've continued to increase the number of associates within the sales, marketing, and account management team. The total number within that organization now stands at 21. At the end of the second quarter, we had 84 associates. Leading our go-to-market strategy and execution and a member of the executive team is our newly appointed President Barry Lowenthal. Barry brings a significant collection of knowledge, and relationships across the advertising industry, having most recently been the CEO of the agency Media Kitchen. Among Barry's considerable successes includes the distinction of having been a founding member of one of the industry's first programmatic advertising trading desks. As mentioned in the announcement that accompanied Barry's appointment, Anubo is at an important milestone in its evolution. We were well ahead of the competition with our vision that using consumer data and identity for advertising was to become obsolete. In the nearly six years since we started building out our large language model generative AI to meet that future, various governmental and technological changes have made this prediction a virtual certainty. Technologically, Apple has been systematically incorporating changes designed specifically to eliminate all methods used to identify consumers. They now, for example, allow their users to access a private VPN, which obfuscates the consumer's IP address. They have completely eliminated third party cookies, which has been the place where identity has historically been stored. They now allow their users to generate alias email addresses, and in their latest iOS release, have now also added changes that prevent consumer tracking within the URL address. Legislatively, the General Data Protection Regulations in Europe was enacted in 2018, followed shortly thereafter by the California Consumer Privacy Act, and now there are at least 11 states with consumer data privacy laws and another state with five of them actually with active bills heading through the legislature. Barrie's short-term mission is to ensure we have the pipeline, organization, products, and services to meet the growing demands of this changing industry. Specifically for the identification and targeting of audiences without identity, we remain many years ahead of any other comparable solution. As a technology company at the forefront of artificial intelligence, we continue to make significant product advancements. We launched an enhanced version of our client GUI that includes an integration with ChatGPT. We launched the first online portal where any audience can be generated on demand for any product service, or brand. We designed the first of its kind AI system that predicts suitable television programs based on the reasons behind why audiences are interested in any brand. And we made generally available a significant advancement in machine learning, wherein our AI can now predict and report the performance contribution of media across channels. This latter development addresses the number two industry challenge behind finding and targeting audiences facing marketers in a cookie-less, privacy-first future. All these developments, and many more to come, are increasing the technological barriers between Inuvo and its competitors. I would now like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter. Wally?