Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 12, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-32442 | |
Entity Registrant Name | Inuvo, Inc. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 87-0450450 | |
Entity Address, Address Line One | 500 President Clinton Ave., | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Little Rock | |
Entity Address, State or Province | AR | |
Entity Address, Postal Zip Code | 72201 | |
City Area Code | 501 | |
Local Phone Number | 205-8508 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | INUV | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 118,518,445 | |
Entity Central Index Key | 0000829323 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalent | $ 17,805,324 | $ 7,890,665 |
Accounts receivable, net of allowance for doubtful accounts of $191,667 and $209,667, respectively. | 5,749,261 | 6,227,610 |
Prepaid expenses and other current assets | 534,471 | 413,435 |
Total current assets | 24,089,056 | 14,531,710 |
Property and equipment, net | 1,292,933 | 1,187,061 |
Other assets | ||
Goodwill | 9,853,342 | 9,853,342 |
Intangible assets, net of accumulated amortization | 8,119,713 | 8,586,089 |
Right of use assets - operating lease | 843,573 | 606,573 |
Right of use assets - finance lease | 315,793 | 395,910 |
Other assets | 35,185 | 20,886 |
Total other assets | 19,167,606 | 19,462,800 |
Total assets | 44,549,595 | 35,181,571 |
Current liabilities | ||
Accounts payable | 2,790,432 | 4,048,260 |
Accrued expenses and other current liabilities | 4,006,124 | 4,216,448 |
Lease liability - operating lease | 305,637 | 217,671 |
Lease liability - finance lease | 197,100 | 246,793 |
Total current liabilities | 7,299,293 | 8,729,172 |
Long-term liabilities | ||
Deferred tax liability | 107,000 | 107,000 |
Lease liability - operating lease | 537,936 | 388,902 |
Lease liability - finance lease | 83,900 | 93,426 |
Other long-term liabilities | 6,925 | 573,957 |
Total long-term liabilities | 735,761 | 1,163,285 |
Preferred stock, $0.001 par value: | ||
Authorized shares 500,000, none issued and outstanding | 0 | 0 |
Common stock, $0.001 par value: | ||
Authorized shares 150,000,000 and 100,000,000, respectively; issued and outstanding shares 118,518,445 and 98,035,829, respectively. | 118,519 | 98,036 |
Additional paid-in capital | 174,893,660 | 161,541,448 |
Accumulated deficit | (138,497,638) | (136,350,370) |
Total stockholders' equity | 36,514,541 | 25,289,114 |
Total liabilities and stockholders' equity | $ 44,549,595 | $ 35,181,571 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 191,667 | $ 209,667 |
Preferred stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized (in shares) | 150,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 118,518,445 | 98,035,829 |
Common stock shares outstanding (in shares) | 118,518,445 | 98,035,829 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net revenue | $ 10,617,809 | $ 14,932,983 |
Cost of revenue | 1,444,059 | 3,439,501 |
Gross profit | 9,173,750 | 11,493,482 |
Operating expenses | ||
Marketing costs (traffic acquisition costs or TAC) | 7,305,784 | 9,622,823 |
Compensation | 2,737,867 | 2,344,235 |
Selling, general and administrative | 1,724,978 | 2,058,842 |
Total operating expenses | 11,768,629 | 14,025,900 |
Operating loss | (2,594,879) | (2,532,418) |
Interest expense, net | (22,389) | (152,511) |
Other income (expense), net | 470,000 | (140,307) |
Net loss | $ (2,147,268) | $ (2,825,236) |
Per common share data: Basic and diluted | ||
Net loss (in dollars per share) | $ (0.02) | $ (0.05) |
Weighted average shares | ||
Basic (in shares) | 114,430,201 | 53,642,787 |
Diluted (in shares) | 114,430,201 | 53,642,787 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities: | ||
Net loss | $ (2,147,268) | $ (2,825,236) |
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities: | ||
Third party rights agreement termination | (420,000) | 0 |
Derecognition of contingencies | (110,000) | 0 |
Depreciation and amortization | 771,904 | 835,748 |
Depreciation-Right of Use Assets | 80,117 | 105,678 |
Stock based compensation | 394,870 | 208,897 |
Amortization of financing fees | 1,250 | 10,198 |
Provision for doubtful accounts | (18,000) | 0 |
Amortization of debt discount | 0 | 14,982 |
Amortization of OID interest expense | 0 | 10,787 |
Mark to market fair value of derivative | 0 | 71,550 |
Loss on extinguishment of convertible debt | 0 | 68,757 |
Change in operating assets and liabilities: | ||
Accounts receivable | 496,349 | 1,737,568 |
Prepaid expenses, unbilled revenue and other current assets | (136,586) | (120,360) |
Accrued expenses and other liabilities | (97,455) | 108,172 |
Accounts payable | (1,257,828) | 594,759 |
Net cash (used in)/provided by operating activities | (2,442,647) | 821,500 |
Investing activities: | ||
Purchases of equipment and capitalized development costs | (411,400) | (310,853) |
Net cash used in investing activities | (411,400) | (310,853) |
Financing activities: | ||
Proceeds from sale of common stock, net | 13,137,500 | 1,206,788 |
Proceeds from ValidClick licensing agreement | 0 | 500,000 |
Net payments on line of credit | 0 | (1,878,217) |
Payments on finance lease obligations | (59,219) | (220,216) |
Proceeds from exercise of options | 1,569 | 0 |
SBA loan repayment | (149,900) | 0 |
Net taxes paid on restricted stock unit grants exercised | (161,244) | (21,184) |
Net cash provided by/(used in) financing activities | 12,768,706 | (412,829) |
Net change – cash | 9,914,659 | 97,818 |
Cash and cash equivalent, beginning of year | 7,890,665 | 372,989 |
Cash and cash equivalent, end of period | 17,805,324 | 470,807 |
Supplemental information: | ||
Interest paid | 21,656 | 126,236 |
Non cash investing and financing activities: | ||
Conversion of Debt and derecognition of derivative and discounts to common stock | 0 | 468,667 |
Assets purchased under finance lease obligations | 0 | 364,545 |
Assets purchased under operating lease obligations | $ 303,031 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Common Stock | Additional Paid in Capital | Accumulated Deficit | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2019 | 51,846,011 | ||||
Beginning balance at Dec. 31, 2019 | $ 14,453,550 | $ 52,223 | $ 144,843,687 | $ (129,045,801) | $ (1,396,559) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (2,825,236) | (2,825,236) | |||
Stock-based compensation | 208,897 | 208,897 | |||
Stock issued for vested restricted stock awards (in shares) | 260,719 | ||||
Stock issued for vested restricted stock awards | 0 | $ 261 | (261) | ||
Shares withheld for taxes on vest restricted stock | (21,184) | (21,184) | |||
Convertible Note Conversion (in shares) | 1,200,000 | ||||
Convertible Note Conversion | 468,667 | $ 1,200 | 467,467 | ||
Sale of common stock, net (in shares) | 7,046,429 | ||||
Sale of common stock, net | 1,206,788 | $ 7,046 | 1,199,742 | ||
Ending balance (in shares) at Mar. 31, 2020 | 60,353,159 | ||||
Ending balance at Mar. 31, 2020 | 13,491,482 | $ 60,730 | 146,698,348 | (131,871,037) | $ (1,396,559) |
Beginning balance (in shares) at Dec. 31, 2020 | 98,035,829 | ||||
Beginning balance at Dec. 31, 2020 | 25,289,114 | $ 98,036 | 161,541,448 | (136,350,370) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (2,147,268) | (2,147,268) | |||
Stock-based compensation | 394,870 | 394,870 | |||
Stock issued for vested restricted stock awards (in shares) | 1,467,465 | ||||
Stock issued for vested restricted stock awards | 0 | $ 1,467 | (1,467) | ||
Shares withheld for taxes on vest restricted stock | (161,244) | (161,244) | |||
Sale of common stock, net (in shares) | 19,015,151 | ||||
Proceeds from exercise of options | 1,569 | 1,569 | |||
Sale of common stock, net | 13,137,500 | $ 19,016 | 13,118,484 | ||
Ending balance (in shares) at Mar. 31, 2021 | 118,518,445 | ||||
Ending balance at Mar. 31, 2021 | $ 36,514,541 | $ 118,519 | $ 174,893,660 | $ (138,497,638) |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Company Overview Inuvo is a technology company that develops and sells information technology solutions for marketing and advertising. These platforms predictively identify and message online audiences for any product or service across devices, channels and formats, including video, mobile, connected TV, display, social and native. These capabilities allow Inuvo’s clients to engage with their customers and prospects in a manner that drives engagement from the first contact with the consumer. Inuvo facilitates the delivery of hundreds of millions of marketing messages to consumers every single month and counts among its clients numerous world- renowned names in industries that have included retail, automotive, insurance, health care, technology, telecommunications and finance. The Inuvo solution incorporates a proprietary form of artificial intelligence, or AI, branded the IntentKey. This sophisticated machine learning technology uses interactions with Internet content as a source of information from which to predict consumer intent. The AI includes a continually updated database of over 500 million machine profiles which Inuvo utilizes to deliver highly aligned online audiences to its clients. Inuvo earns revenue when consumers view or click on its client’s messages. The Inuvo business scales through account management activity with existing clients and by adding new clients through sales activity. As part of the Inuvo technology strategy, it owns a collection of websites including alot.com and earnspendlive.com, where Inuvo creates content in health, finance, travel, careers, auto, education and living categories. These sites provide the means to test the Inuvo technologies, while also delivering high quality consumers to clients through the interaction with proprietary content in the form of images, videos, slideshows and articles. There are many barriers to entry associated with the Inuvo business model, including a proficiency in large scale information processing, predictive software development, marketing data products, analytics, artificial intelligence, integration to the internet of things ("IOT"), and the relationships required to execute within the IOT. Inuvo’s intellectual property is protected by 18 issued and seven pending patents. Liquidity Throughout 2020 and the first quarter of 2021, we raised capital reversing an historical net working capital deficit. Our principal sources of liquidity come as a result of the sale of common stock and use of a credit facility through Hitachi Capital America Corp. (“Hitachi”) described in Note 5. On March 20, 2020, we sold an aggregate of 3,931,428 shares of our common stock to the five members of our Board of Directors in a private placement exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D under the Securities Act of 1933, as amended. We received proceeds of $688,000 in this offering. On March 27, 2020, we closed on the first tranche of a registered direct offering in which we sold 3,115,001 shares of our common stock for gross proceeds of $545,125. On April 2, 2020, we closed on a second tranche of the registered direct offering in which we sold 1,400,285 shares of our common stock for gross proceeds of $245,050. On April 10, 2020, we obtained an unsecured $1.1 million loan under the Paycheck Protection Program (the “PPP Loan”) pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and which is administered by the United States Small Business Administration ("SBA"). In accordance with the requirements of the CARES Act, proceeds from the PPP Loan were used for payroll costs. The PPP Loan was fully forgiven on November 2, 2020. On May 15, 2020, we received a COVID-19 Economic Injury Disaster Loan ("EIDL") from the SBA for $149,900. We repaid the EIDL in full on January 28, 2021. On June 8, 2020, we closed an additional registered direct offering of an aggregate of 12,222,222 shares of our common stock for gross proceeds of $5.5 million. On July 27, 2020, we closed a firm commitment underwritten follow-on public offering of an aggregate of 21,500,000 shares of our common stock for gross proceeds of $10.75 million. On January 19, 2021, we raised $8.0 million in gross proceeds in a registered direct offering, before expenses, through the sale of an aggregate of 13,333,334 shares of our common stock, and on January 22, 2021, we raised an additional $6.25 million in gross proceeds in a registered direct offering, before expenses, through the sale of an aggregate of 5,681,817 shares of our common stock. On January 7, 2021, we filed the Articles of Amendment to our Articles of Incorporation in the state of Nevada increasing the number of authorized shares from 100,000,000 to 150,000,000. Though we believe our current cash position and credit facility will be sufficient to sustain operations for the next twelve months, if our plan to grow the IntentKey business is unsuccessful, we may need to fund operations through private or public sales of securities, debt financings or partnering/licensing transactions. Customer concentration Our three largest customers are Google, Proper Media and Yahoo! and all are clients of the ValidClick platform. The percentages of overall Inuvo revenue associated with these clients is noted below: For the Three Months Ended March 31, 2021 2020 Google 40.0% 18.4 % Proper Media 19.2% — % Yahoo! 16.5% 51.4 % Total 75.7% 69.8 % As of March 31, 2021, Google, Proper Media and Yahoo! accounted for 64.5% of our gross accounts receivable balance. As of December 31, 2020, the same three customers accounted for 38.4% of our gross accounts receivable balance. We still source the majority of our ValidClick revenue through these relationships where we have access to advertiser budgets indirectly. While this strategy creates a concentration risk, we believe that it also provides upside opportunities including; access to hundreds of thousands of advertisers across geographies; the ability to scale our business across verticals; an avoidance of the sales costs associated with a large direct to advertisers’ sales force; access to innovation; overall media budget market insights; attractive payment terms; and low risk on receivables. Impact of COVID-19 Pandemic First identified in late 2019 and known now as COVID-19, the outbreak has impacted millions of individuals and businesses worldwide. In response, many countries have implemented measures to combat the outbreak which has had an unprecedented economic consequence. We did not experience an impact from COVID-19 through the end of fiscal year 2019 and had only minor impact from COVID-19 in the first quarter of 2020. Because we operate in the digital advertising industry, unlike a brick and mortar-based company, predicting the impact of the coronavirus pandemic on our company is difficult. Beginning in late April 2020, we experienced a significant reduction in marketing budgets and a decrease in monetization rates which impacted ValidClick more severely than IntentKey. This resulted in a significant reduction in our overall revenue run rates during 2020 with the low point occurring during May 2020. In response to COVID-19, we curtailed expenses, including compensation and travel throughout 2020, in addition to other actions. Additionally, in April 2020, we obtained an unsecured PPP Loan under the CARES Act of $1.1 million which we used primarily for payroll costs. The loan was fully forgiven by the SBA on November 2, 2020. Beginning mid-June 2020, we began to experience an improvement in overall daily revenue. Though there has been a steady month by month improvement in the revenue run rates, by the end of the first quarter 2021 we still have not reached pre-pandemic levels. Due to the unprecedented sustainability of COVID-19 on our business, we were unable to predict with any certainty how our clients will adapt their business strategies within the context of COVID-19 and therefore how our revenue run rate would change as a result. We, therefore, were focusing our resources on areas we believe could have more immediate revenue potential, attempting to reduce expenses and raising additional capital so as to mitigate operating disruptions while the impact of COVID-19 abates. Since the start of the year with the roll out of vaccinations, we see an increase in client’s willingness to spend on advertising and thereby an improvement in our revenue run rates. Our net working capital was a positive $16.8 million as of March 31, 2021. During January 2021, we raised approximately $14.3 million, before expenses, through the sale of our securities in two offerings. During the second and third quarters of 2020, we raised approximately $16.5 million, before expenses, through the sale of our securities and in April 2020, we obtained a $1.1 million PPP Loan. With the reduction in our revenue run rate, there is an increased need for working capital to fund our operations. There is no assurance that we will be successful in obtaining additional funding to continue operations, particularly |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation The consolidated financial statements presented are for Inuvo and its consolidated subsidiaries. The accompanying unaudited consolidated financial statements have been prepared based upon SEC rules that permit reduced disclosure for interim periods. Certain information and footnote disclosures have been condensed or omitted in accordance with those rules and regulations. The accompanying consolidated balance sheet as of December 31, 2020, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States ("GAAP"). In our opinion, these consolidated financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year. For a more complete discussion of significant accounting policies and certain other information, this report should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 11, 2021, as amended on Form 10-K/A as filed with the SEC on March 10, 2021. Use of estimates The preparation of financial statements, in accordance with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s regular evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements. We regularly evaluate estimates and assumptions related to goodwill and purchased intangible asset valuations and income tax valuation allowance. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, and such differences could be material. Revenue Recognition Most of our revenue is generated through clicks on advertisements presented on our properties or those of our partners. We recognize revenue from clicks in the period in which the click occurs. Payments to partners who display advertisements on our behalf are recognized as cost of revenue. Revenue from data sales and commissions is recognized in the period in which the transaction occurs and the other revenue recognition criteria are met. Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We also recognize revenue from serving impressions when we complete all or a part of an order from an advertiser. The revenue is recognized in the period that the impression is served. The below table is the proportion of revenue that is generated through advertisements on our ValidClick and IntentKey platforms: For the Three Months Ended March 31, 2021 2020 ValidClick Platform $ 8,484,813 79.9 % $ 13,076,990 87.6 % IntentKey Platform 2,132,996 20.1 % 1,855,993 12.4 % Total $ 10,617,809 100.0 % $ 14,932,983 100.0 % Recent Accounting Pronouncements Not Yet Adopted |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment The net carrying value of property and equipment was as follows as of: March 31, 2021 December 31, 2020 Furniture and fixtures $ 293,152 $ 293,152 Equipment 1,108,686 1,052,199 Capitalized internal use and purchased software 11,798,641 11,475,683 Leasehold improvements 445,080 421,016 Subtotal 13,645,559 13,242,050 Less: accumulated depreciation and amortization (12,352,626) (12,054,989) Total $ 1,292,933 $ 1,187,061 |
Other Intangible Assets and Goo
Other Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets and Goodwill | Other Intangible Assets and Goodwill The following is a schedule of intangible assets and goodwill as of March 31, 2021: Term Carrying Accumulated Amortization and Impairment Net Carrying Value Year-to-date Amortization Customer list, Google 20 years $ 8,820,000 $ (4,005,751) $ 4,814,249 $ 110,250 Technology 5 years 3,600,000 (3,000,000) $ 600,000 180,000 Customer list, ReTargeter 5 years 1,931,250 (643,750) $ 1,287,500 96,562 Customer list, all other 10 years 1,610,000 (1,462,453) $ 147,547 40,251 Brand name, ReTargeter 5 years 643,750 (214,583) $ 429,167 32,188 Customer relationships 20 years 570,000 (118,750) $ 451,250 7,125 Trade names, web properties (1) - 390,000 — $ 390,000 — Intangible assets classified as long-term $ 17,565,000 $ (9,445,287) $ 8,119,713 $ 466,376 Goodwill, total - $ 9,853,342 $ — $ 9,853,342 $ — (1) The trade names related to our web properties have an indefinite life, and as such are not amortized. Amortization expense over the next five years and thereafter is as follows: 2021 $ 1,399,128 2022 1,071,294 2023 984,500 2024 769,917 2025 469,500 Thereafter 3,035,374 Total $ 7,729,713 |
Bank Debt
Bank Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Bank Debt | Bank Debt On March 1, 2012 we entered into a Business Financing Agreement with Bridge Bank, which is now owned by Western Alliance Bank. The agreement provided us with a revolving credit line of up to $10 million which we used to help satisfy our working capital needs. On October 11, 2018, we entered into the Amended and Restated Financing Agreement with Western Alliance Bank which superseded the Business Financing Agreement, as amended. All obligations under the Amended and Restated Financing Agreement, as amended, with Western Alliance Bank have been met and all agreements with Western Alliance Bank have been terminated. On March 12, 2020, we closed on the Loan and Security Agreement dated February 28, 2020 with Hitachi. Under the terms of the Loan and Security Agreement, Hitachi has provided us with a $5,000,000 line of credit commitment. We are permitted to borrow (i) 90% of the aggregate Eligible Accounts Receivable, plus (ii) the lesser of (A) 75% of the aggregate Unbilled Accounts Receivable or (B) 50% of the amount available to borrow under (i), up to the maximum credit commitment. On March 12, 2020 we drew $5,000,000 under this agreement, using $2,959,573 of these proceeds to satisfy all of our obligations under the Western Alliance Bank credit agreement and the balance was used for working capital. We pay Hitachi a monthly interest at the rate of 2% in excess of the Wall Street Journal Prime Rate, with a minimum rate of 6.75% per annum, on outstanding amounts. The principal and all accrued but unpaid interest are due on demand. We agreed to pay Hitachi a commitment fee of $50,000, with one half due upon the execution of the agreement and the balance due six months thereafter. Thereafter, we are obligated to pay Hitachi a commitment fee of $15,000 annually. We are also obligated to pay Hitachi a quarterly service fee of 0.30% on the monthly unused amount of the maximum credit line. In addition to a $2,000 document fee we have paid to Hitachi, if we exit our relationship with Hitachi before March 1, 2022, we are obligated to pay Hitachi an exit fee of $50,000. At March 31, 2021, there were no outstanding balances due under the Loan and Security Agreement with Hitachi. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities The accrued expenses and other current liabilities consist of the following as of: March 31, 2021 December 31, 2020 Accrued marketing costs (TAC) $ 2,989,778 $ 3,234,192 Accrued expenses and other 571,676 440,578 Accrued payroll and commission liabilities 436,573 423,373 Accrued taxes 8,097 8,305 Arkansas grant contingency — 60,000 Accrued sales allowance — 50,000 Total $ 4,006,124 $ 4,216,448 |
Convertible Promissory Notes
Convertible Promissory Notes | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | Convertible Promissory Notes On March 1, 2019, Inuvo entered into a Securities Purchase Agreement with three accredited investors for the purchase and sale of an aggregate of $1,440,000 of principal of Original Issue Discount Unsecured Subordinated Convertible Notes due September 1, 2020 (the “Calvary Notes”) to fund working capital and additional expenses resulting from the delay in closing of certain planned, and since terminated, mergers with ConversionPoint Technologies Inc. and ConversionPoint Holdings Inc. The initial conversion price of the Calvary Notes was $1.08 per share which would have made the Calvary Notes then convertible into 1,333,333 unregistered shares of Inuvo’s common stock upon conversion. The Calvary Notes were issued in a private placement and the shares of common stock issuable upon conversion are restricted, subject to resale under Rule 144. The proceeds to Inuvo from the offering were $1,200,000. Inuvo did not pay any commissions or finders fees in connection with the sale of the Calvary Notes and Inuvo utilized the proceeds for working capital. On November 11, 2019 we entered into Note Modification and Release Agreements with the holders of $1,080,000 principal amount of the Calvary Notes. Under the terms of the Note Modification and Release Agreement, the parties agreed that in consideration of such noteholder’s agreement to convert a minimum of 50% of the outstanding amount of the note (the “First Conversion Amount”) that the conversion price for the First Conversion Amount would be $0.265 per share and that the conversion price for any remaining amount due under the note would be $0.30 per share, subject to future adjustments under the terms of the note including dilutive issuances at a price below $0.30 per share, subject to a floor of $0.23 per share. The agreement contains mutual general releases. These holders converted an aggregate of $765,000 due under the Calvary Notes into 2,886,792 shares of our common stock. In January 2020, a noteholder of a $360,000 principal amount Calvary note converted the note into 1,200,000 shares of our common stock. On April 21, 2020, a noteholder converted $200,000 principal amount due under the Calvary Notes into 1,142,857 shares of our common stock. On May 5, 2020, a noteholder converted the final $115,000 principal amount due under |
Other Long-Term Liabilities
Other Long-Term Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities The lease liabilities and other long-term liabilities consist of the following as of: March 31, 2021 December 31, 2020 Deferred rent 6,925 4,057 Deferred revenue — 420,000 SBA loan — 149,900 Total $ 6,925 $ 573,957 |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments In March 2020, we entered into an agreement to allow a third party to license and use ValidClick technology. The agreement required a nonrefundable fee of $500,000 in March with subsequent fees as earned in later quarters. The $500,000 fee was recorded as deferred revenue in March 2020. Effective March 1, 2021, the agreement was canceled and the remaining deferred revenue balance of $420,000 was recognized as other income. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesWe have a deferred tax assets of $37,693,100. We believe it is more likely than not that essentially none of our deferred tax assets will be realized, and we have recorded a valuation allowance of $35,848,400 for the deferred tax assets that may not be realized as of March 31, 2021 and December 31, 2020. We also have deferred tax liabilities totaling $1,951,700 as of March 31, 2021, related to intangible assets acquired in March 2012. These balances are presented as a net deferred tax liability of $107,000 composed of indefinite lived intangible assets. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We maintain a stock-based compensation program intended to attract, retain and provide incentives for talented employees and directors and align stockholder and employee interests. During the 2021 and 2020 periods, we granted restricted stock units ("RSUs") from the 2017 Equity Compensation Plan, as amended (“2017 ECP”). RSU vesting periods are generally up to three years and/or achieving certain financial targets. On January 1, 2021, in accordance with the plan provisions, the number of shares available for issuance under the 2017 ECP plan was increased by 150,000 shares. Compensation Expense For the three months ended March 31, 2021 and 2020, we recorded stock-based compensation expense for all equity incentive plans of $394,870 and $208,897, respectively. Total compensation cost not yet recognized at March 31, 2021 was $5,634,951 to be recognized over a weighted-average recognition period of approximately two years. The following table summarizes the stock grants outstanding under the 2017 ECP and the 2010 Equity Compensation Plan (“2010 ECP”), which expired on its terms in April 2020, for the three months ended March 31, 2021: Options Outstanding RSUs Outstanding Options and RSUs Exercised Available Shares Total 2017 ECP — 4,376,667 2,367,472 2,655,861 9,400,000 2010 ECP (*) 1,500 — 5,011,511 — 5,013,011 Total 1,500 4,376,667 7,378,983 2,655,861 14,413,011 (*) Expired April 2020 The following table summarizes the activity of stock option awards under the 2010 ECP for the three months ended March 31, 2021: Shares Subject to Options Outstanding Number of Shares Weighted Average Exercise Price Balance as of December 31, 2020 9,500 $ 0.56 Stock options exercised 4,750 $ 0.56 Stock options canceled 3,250 $ 0.56 Balance as of March 31, 2021 1,500 0.56 Stock options exercisable as of March 31, 2021 1,500 0.56 The following table summarizes the activities for our unvested RSUs for the three months ended March 31, 2021: Unvested RSUs Number of Shares Weighted Average Grant Date Fair Value Unvested as of December 31, 2020 1,930,526 $ 0.28 Granted 4,310,000 $ 1.40 Vested 1,804,665 $ 0.28 Forfeited 59,194 $ 0.29 Unvested as of March 31, 2021 4,376,667 $ 1.38 |
Stockholders Equity
Stockholders Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders Equity | Stockholders Equity Earnings per Share For the three months ended March 31, 2021 and 2020, we generated a net loss from continuing operations and as a result, all of our shares are anti-dilutive. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into operating and finance leases primarily for real estate and equipment rental. These leases have terms which range from two years to four years, and often include one or more options to renew or in the case of equipment rental, to purchase the equipment. These operating and finance leases are listed as separate line items on the Company's consolidated balance sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as separate line items on the Company's consolidated balance sheets. As of March 31, 2021 and December 31, 2020, total operating and financed right-of-use assets were $843,573 and $315,793, and $606,573 and $395,910, respectively. As of March 31, 2021 and 2020, the Company recorded $80,117 and $105,678, respectively, in amortization expense related to finance leases. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Information related to the Company's operating lease liabilities are as follows: For the Three Months Ended March 31, Cash paid for operating lease liabilities $ 182,807 Weighted-average remaining lease term 2.4 years Weighted-average discount rate 6.25 % Minimum future lease payments ended March 31, 2021 2021 285,922 2022 378,339 2023 295,778 2024 10,983 971,022 Less imputed interest (127,449) Total lease liabilities $ 843,573 Information related to the Company's financed lease liabilities are as follows: For the Three Months Ended March 31, Cash paid for finance lease liabilities $ 69,291 Weighted-average remaining lease term 2.3 years Weighted-average discount rate 6.25 % Minimum future lease payments ended March 31, 2021 2021 $ 200,518 2022 72,982 2023 37,658 311,158 Less imputed interest (30,158) Total lease liabilities $ 281,000 |
Leases | Leases The Company has entered into operating and finance leases primarily for real estate and equipment rental. These leases have terms which range from two years to four years, and often include one or more options to renew or in the case of equipment rental, to purchase the equipment. These operating and finance leases are listed as separate line items on the Company's consolidated balance sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as separate line items on the Company's consolidated balance sheets. As of March 31, 2021 and December 31, 2020, total operating and financed right-of-use assets were $843,573 and $315,793, and $606,573 and $395,910, respectively. As of March 31, 2021 and 2020, the Company recorded $80,117 and $105,678, respectively, in amortization expense related to finance leases. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Information related to the Company's operating lease liabilities are as follows: For the Three Months Ended March 31, Cash paid for operating lease liabilities $ 182,807 Weighted-average remaining lease term 2.4 years Weighted-average discount rate 6.25 % Minimum future lease payments ended March 31, 2021 2021 285,922 2022 378,339 2023 295,778 2024 10,983 971,022 Less imputed interest (127,449) Total lease liabilities $ 843,573 Information related to the Company's financed lease liabilities are as follows: For the Three Months Ended March 31, Cash paid for finance lease liabilities $ 69,291 Weighted-average remaining lease term 2.3 years Weighted-average discount rate 6.25 % Minimum future lease payments ended March 31, 2021 2021 $ 200,518 2022 72,982 2023 37,658 311,158 Less imputed interest (30,158) Total lease liabilities $ 281,000 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsOn March 20, 2020, we sold an aggregate of 3,931,428 shares of our common stock at a purchase price of $0.175 per share to the five members of our Board of Directors in a private placement exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D under the Securities Act of 1933, as amended. We received proceeds of $688,000 in this offering. The purchase price of the shares of our common stock sold in the offering exceeded the closing market price of our common stock on March 19, 2020, the trading day immediately preceding the day the binding Insider Subscription Agreements were executed by the purchasers. The purchasers were all accredited investors. We did not pay any commissions or finder’s fees, and we used the proceeds for general working capital. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The consolidated financial statements presented are for Inuvo and its consolidated subsidiaries. The accompanying unaudited consolidated financial statements have been prepared based upon SEC rules that permit reduced disclosure for interim periods. Certain information and footnote disclosures have been condensed or omitted in accordance with those rules and regulations. The accompanying consolidated balance sheet as of December 31, 2020, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States ("GAAP"). In our opinion, these consolidated financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year. For a more complete discussion of significant accounting policies and certain other information, this report should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 11, 2021, as amended on Form 10-K/A as filed with the SEC on March 10, 2021. |
Use of Estimates | Use of estimates The preparation of financial statements, in accordance with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s regular evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements. We regularly evaluate estimates and assumptions related to goodwill and purchased intangible asset valuations and income tax valuation allowance. Actual results may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements, and such differences could be material. |
Revenue Recognition | Revenue Recognition Most of our revenue is generated through clicks on advertisements presented on our properties or those of our partners. We recognize revenue from clicks in the period in which the click occurs. Payments to partners who display advertisements on our behalf are recognized as cost of revenue. Revenue from data sales and commissions is recognized in the period in which the |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet AdoptedIn June 2016, (FASB) issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses. On November 15, 2019, the FASB delayed the effective date for certain small public companies and other private companies. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities. |
Organization and Business (Tabl
Organization and Business (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Customer Concentration | The percentages of overall Inuvo revenue associated with these clients is noted below: For the Three Months Ended March 31, 2021 2020 Google 40.0% 18.4 % Proper Media 19.2% — % Yahoo! 16.5% 51.4 % Total 75.7% 69.8 % |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Revenue from Products and Services | The below table is the proportion of revenue that is generated through advertisements on our ValidClick and IntentKey platforms: For the Three Months Ended March 31, 2021 2020 ValidClick Platform $ 8,484,813 79.9 % $ 13,076,990 87.6 % IntentKey Platform 2,132,996 20.1 % 1,855,993 12.4 % Total $ 10,617,809 100.0 % $ 14,932,983 100.0 % |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Net Carrying Value of Property and Equipment | The net carrying value of property and equipment was as follows as of: March 31, 2021 December 31, 2020 Furniture and fixtures $ 293,152 $ 293,152 Equipment 1,108,686 1,052,199 Capitalized internal use and purchased software 11,798,641 11,475,683 Leasehold improvements 445,080 421,016 Subtotal 13,645,559 13,242,050 Less: accumulated depreciation and amortization (12,352,626) (12,054,989) Total $ 1,292,933 $ 1,187,061 |
Other Intangible Assets and G_2
Other Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets from Continuing Operations | The following is a schedule of intangible assets and goodwill as of March 31, 2021: Term Carrying Accumulated Amortization and Impairment Net Carrying Value Year-to-date Amortization Customer list, Google 20 years $ 8,820,000 $ (4,005,751) $ 4,814,249 $ 110,250 Technology 5 years 3,600,000 (3,000,000) $ 600,000 180,000 Customer list, ReTargeter 5 years 1,931,250 (643,750) $ 1,287,500 96,562 Customer list, all other 10 years 1,610,000 (1,462,453) $ 147,547 40,251 Brand name, ReTargeter 5 years 643,750 (214,583) $ 429,167 32,188 Customer relationships 20 years 570,000 (118,750) $ 451,250 7,125 Trade names, web properties (1) - 390,000 — $ 390,000 — Intangible assets classified as long-term $ 17,565,000 $ (9,445,287) $ 8,119,713 $ 466,376 Goodwill, total - $ 9,853,342 $ — $ 9,853,342 $ — (1) The trade names related to our web properties have an indefinite life, and as such are not amortized. |
Schedule of Amortization Expense | Amortization expense over the next five years and thereafter is as follows: 2021 $ 1,399,128 2022 1,071,294 2023 984,500 2024 769,917 2025 469,500 Thereafter 3,035,374 Total $ 7,729,713 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | The accrued expenses and other current liabilities consist of the following as of: March 31, 2021 December 31, 2020 Accrued marketing costs (TAC) $ 2,989,778 $ 3,234,192 Accrued expenses and other 571,676 440,578 Accrued payroll and commission liabilities 436,573 423,373 Accrued taxes 8,097 8,305 Arkansas grant contingency — 60,000 Accrued sales allowance — 50,000 Total $ 4,006,124 $ 4,216,448 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Long-Term Liabilities | The lease liabilities and other long-term liabilities consist of the following as of: March 31, 2021 December 31, 2020 Deferred rent 6,925 4,057 Deferred revenue — 420,000 SBA loan — 149,900 Total $ 6,925 $ 573,957 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Grants Outstanding | The following table summarizes the stock grants outstanding under the 2017 ECP and the 2010 Equity Compensation Plan (“2010 ECP”), which expired on its terms in April 2020, for the three months ended March 31, 2021: Options Outstanding RSUs Outstanding Options and RSUs Exercised Available Shares Total 2017 ECP — 4,376,667 2,367,472 2,655,861 9,400,000 2010 ECP (*) 1,500 — 5,011,511 — 5,013,011 Total 1,500 4,376,667 7,378,983 2,655,861 14,413,011 (*) Expired April 2020 |
Schedule of Stock Option Award Activity | The following table summarizes the activity of stock option awards under the 2010 ECP for the three months ended March 31, 2021: Shares Subject to Options Outstanding Number of Shares Weighted Average Exercise Price Balance as of December 31, 2020 9,500 $ 0.56 Stock options exercised 4,750 $ 0.56 Stock options canceled 3,250 $ 0.56 Balance as of March 31, 2021 1,500 0.56 Stock options exercisable as of March 31, 2021 1,500 0.56 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the activities for our unvested RSUs for the three months ended March 31, 2021: Unvested RSUs Number of Shares Weighted Average Grant Date Fair Value Unvested as of December 31, 2020 1,930,526 $ 0.28 Granted 4,310,000 $ 1.40 Vested 1,804,665 $ 0.28 Forfeited 59,194 $ 0.29 Unvested as of March 31, 2021 4,376,667 $ 1.38 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Information Relating to Leases | Information related to the Company's operating lease liabilities are as follows: For the Three Months Ended March 31, Cash paid for operating lease liabilities $ 182,807 Weighted-average remaining lease term 2.4 years Weighted-average discount rate 6.25 % Information related to the Company's financed lease liabilities are as follows: For the Three Months Ended March 31, Cash paid for finance lease liabilities $ 69,291 Weighted-average remaining lease term 2.3 years Weighted-average discount rate 6.25 % |
Schedule of Operating Lease Maturity | Minimum future lease payments ended March 31, 2021 2021 285,922 2022 378,339 2023 295,778 2024 10,983 971,022 Less imputed interest (127,449) Total lease liabilities $ 843,573 |
Schedule of Finance Lease Liability | Minimum future lease payments ended March 31, 2021 2021 $ 200,518 2022 72,982 2023 37,658 311,158 Less imputed interest (30,158) Total lease liabilities $ 281,000 |
Organization and Business - Nar
Organization and Business - Narrative (Details) | Jan. 22, 2021USD ($)shares | Jan. 19, 2021USD ($)shares | Jul. 27, 2020USD ($)shares | Jun. 08, 2020USD ($)shares | May 15, 2020USD ($) | Apr. 10, 2020USD ($) | Apr. 02, 2020USD ($)shares | Mar. 27, 2020USD ($)shares | Mar. 20, 2020USD ($)shares | Jan. 31, 2021USD ($) | Mar. 31, 2021USD ($)patentmachineProfileshares | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020shares | Jan. 07, 2021shares | Jan. 06, 2021shares |
Debt Instrument [Line Items] | ||||||||||||||||
Number of machine profiles | machineProfile | 500,000,000 | |||||||||||||||
Number of issued patents | patent | 18 | |||||||||||||||
Number of pending patents | patent | 7 | |||||||||||||||
Shares authorized amount (in shares) | shares | 5,681,817 | 13,333,334 | 21,500,000 | 12,222,222 | 1,400,285 | 3,115,001 | 3,931,428 | |||||||||
Sale of stock, consideration received on transaction | $ 6,250,000 | $ 8,000,000 | $ 10,750,000 | $ 5,500,000 | $ 245,050 | $ 545,125 | $ 688,000 | |||||||||
Common stock shares authorized (in shares) | shares | 150,000,000 | 100,000,000 | 150,000,000 | 100,000,000 | ||||||||||||
Net working capital | $ 16,800,000 | |||||||||||||||
Proceeds from sale of common stock, net | $ 14,300,000 | $ 13,137,500 | $ 1,206,788 | $ 16,500,000 | ||||||||||||
Paycheck Protection Program Loan | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Proceeds from PPP and SBA loans | $ 1,100,000 | |||||||||||||||
Economic Injury Disaster Loan | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Proceeds from PPP and SBA loans | $ 149,900 | |||||||||||||||
Accounts Receivable | Customer Concentration Risk | Yahoo, Proper Media and Google | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of concentration risk | 64.50% | 38.40% |
Organization and Business - Cus
Organization and Business - Customer Concentration (Details) - Customer Concentration Risk - Net Revenue | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Yahoo, Proper Media and Google | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 75.70% | 69.80% |
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 40.00% | 18.40% |
Proper Media | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 19.20% | 0.00% |
Yahoo! | ||
Concentration Risk [Line Items] | ||
Percentage of concentration risk | 16.50% | 51.40% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Revenue from Products and Services (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 10,617,809 | $ 14,932,983 |
Percentage of total revenue | 100.00% | 100.00% |
ValidClick Platform | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 8,484,813 | $ 13,076,990 |
Percentage of total revenue | 79.90% | 87.60% |
IntentKey Platform | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 2,132,996 | $ 1,855,993 |
Percentage of total revenue | 20.10% | 12.40% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 13,645,559 | $ 13,242,050 | |
Less: accumulated depreciation and amortization | (12,352,626) | (12,054,989) | |
Total | 1,292,933 | 1,187,061 | |
Depreciation expense | 305,528 | $ 369,372 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 293,152 | 293,152 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,108,686 | 1,052,199 | |
Capitalized internal use and purchased software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 11,798,641 | 11,475,683 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 445,080 | $ 421,016 |
Other Intangible Assets and G_3
Other Intangible Assets and Goodwill - Schedule of Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||
Net Carrying Value | $ 7,729,713 | |
Year-to-date Amortization | 466,376 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) | 390,000 | |
Intangible assets classified as long-term | ||
Carrying Value | 17,565,000 | |
Accumulated Amortization and Impairment | (9,445,287) | |
Net Carrying Value | 8,119,713 | $ 8,586,089 |
Goodwill, Impaired, Accumulated Impairment Loss | ||
Carrying Value | 9,853,342 | |
Net Carrying Value | $ 9,853,342 | $ 9,853,342 |
Customer list, Google | ||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||
Term | 20 years | |
Carrying Value | $ 8,820,000 | |
Accumulated Amortization and Impairment | (4,005,751) | |
Net Carrying Value | 4,814,249 | |
Year-to-date Amortization | $ 110,250 | |
Technology | ||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||
Term | 5 years | |
Carrying Value | $ 3,600,000 | |
Accumulated Amortization and Impairment | (3,000,000) | |
Net Carrying Value | 600,000 | |
Year-to-date Amortization | $ 180,000 | |
Customer list, ReTargeter | ||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||
Term | 5 years | |
Carrying Value | $ 1,931,250 | |
Accumulated Amortization and Impairment | (643,750) | |
Net Carrying Value | 1,287,500 | |
Year-to-date Amortization | $ 96,562 | |
Customer list, all other | ||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||
Term | 10 years | |
Carrying Value | $ 1,610,000 | |
Accumulated Amortization and Impairment | (1,462,453) | |
Net Carrying Value | 147,547 | |
Year-to-date Amortization | $ 40,251 | |
Brand name, ReTargeter | ||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||
Term | 5 years | |
Carrying Value | $ 643,750 | |
Accumulated Amortization and Impairment | (214,583) | |
Net Carrying Value | 429,167 | |
Year-to-date Amortization | $ 32,188 | |
Customer relationships | ||
Schedule of Finite-Lived Intangible Assets and Goodwill [Line Items] | ||
Term | 20 years | |
Carrying Value | $ 570,000 | |
Accumulated Amortization and Impairment | (118,750) | |
Net Carrying Value | 451,250 | |
Year-to-date Amortization | $ 7,125 |
Other Intangible Assets and G_4
Other Intangible Assets and Goodwill - Amortization Expense (Details) | Mar. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 1,399,128 |
2022 | 1,071,294 |
2023 | 984,500 |
2024 | 769,917 |
2025 | 469,500 |
Thereafter | 3,035,374 |
Net Carrying Value | $ 7,729,713 |
Bank Debt (Details)
Bank Debt (Details) - USD ($) | Mar. 12, 2020 | Feb. 28, 2020 | Mar. 31, 2021 | Mar. 01, 2012 |
Hitachi Capital America Corp. | ||||
Debt Instrument [Line Items] | ||||
Commitment fee | $ 50,000 | |||
Percentage due upon execution of agreement | 50.00% | |||
Balance due, term | 6 months | |||
Annual commitment fee amount | $ 15,000 | |||
Quarterly service fee (as a percentage) | 0.30% | |||
Amendment fee | $ 2,000 | |||
Exit fee | 50,000 | |||
Outstanding balance | $ 0 | |||
Loan And Security Agreement | Hitachi Capital America Corp. | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | |||
Percentage of aggregate eligible accounts receivable | 90.00% | |||
Percentage of aggregate unbilled accounts receivable | 75.00% | |||
Percentage of amount available to borrow under maximum credit commitment | 50.00% | |||
Stated interest rate | 6.75% | |||
Credit Agreement | Western Alliance Bank | ||||
Debt Instrument [Line Items] | ||||
Extinguishment of debt | $ 2,959,573 | |||
Monthly Interest | Loan And Security Agreement | Hitachi Capital America Corp. | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 2.00% | |||
Revolving Credit Facility | Line of Credit | Bridge Bank, N.A. | Bridge Bank – Revolving Credit Line - March 1, 2012 | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued marketing costs (TAC) | $ 2,989,778 | $ 3,234,192 |
Accrued expenses and other | 571,676 | 440,578 |
Accrued payroll and commission liabilities | 436,573 | 423,373 |
Accrued taxes | 8,097 | 8,305 |
Arkansas grant contingency | 0 | 60,000 |
Accrued sales allowance | 0 | 50,000 |
Total | $ 4,006,124 | $ 4,216,448 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details) | May 05, 2020USD ($)shares | Apr. 21, 2020USD ($)shares | Nov. 11, 2019USD ($)$ / sharesshares | Mar. 01, 2019USD ($)accreditedInvestorshares$ / shares | Jan. 31, 2020USD ($)shares | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||||
Conversion of Debt and derecognition of derivative and discounts to common stock | $ 0 | $ 468,667 | |||||
Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from convertible promissory notes | $ 1,200,000 | ||||||
Conversion of Debt and derecognition of derivative and discounts to common stock | $ 115,000 | $ 200,000 | $ 360,000 | ||||
Conversion of stock, common stock issued (in shares) | shares | 657,143 | 1,142,857 | 1,200,000 | ||||
Convertible Debt | Original Issue Discount Unsecured Subordinated Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Number of accredited investors | accreditedInvestor | 3 | ||||||
Gross proceeds | $ 1,440,000 | ||||||
Number of shares convertible (in shares) | shares | 1,333,333 | ||||||
Convertible Debt | Original Issue Discount Unsecured Subordinated Convertible Notes | Initial Conversion | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in usd per share) | $ / shares | $ 1.08 | ||||||
Convertible Debt | Note Modification and Release Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Gross proceeds | $ 1,080,000 | ||||||
Conversion amount (as a percentage) | 50.00% | ||||||
Conversion of Debt and derecognition of derivative and discounts to common stock | $ 765,000 | ||||||
Conversion of stock, common stock issued (in shares) | shares | 2,886,792 | ||||||
Convertible Debt | Note Modification and Release Agreement | Initial Conversion | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in usd per share) | $ / shares | $ 0.265 | ||||||
Convertible Debt | Note Modification and Release Agreement | Remaining conversions after initial | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in usd per share) | $ / shares | 0.30 | ||||||
Convertible Debt | Note Modification and Release Agreement | Remaining conversions after initial | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in usd per share) | $ / shares | 0.30 | ||||||
Convertible Debt | Note Modification and Release Agreement | Remaining conversions after initial | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in usd per share) | $ / shares | $ 0.23 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | ||
Deferred rent | $ 6,925 | $ 4,057 |
Deferred revenue | 0 | 420,000 |
SBA loan | 0 | 149,900 |
Other long-term liabilities | $ 6,925 | $ 573,957 |
Commitments (Details)
Commitments (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Other Commitments [Line Items] | |||
Other income (expense), net | $ 470,000 | $ (140,307) | |
Licensing of ValidClick Technology | |||
Other Commitments [Line Items] | |||
Other income (expense), net | $ 500,000 | $ 420,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset | $ 37,693,100 | $ 37,693,100 |
Valuation allowance | 35,848,400 | $ 35,848,400 |
Deferred tax liability | 1,951,700 | |
Net deferred tax liability composed of indefinite lived intangible assets | $ 107,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | Jan. 01, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option and restricted stock unit vesting period (up to) | 3 years | ||
Stock based compensation | $ 394,870 | $ 208,897 | |
Compensation cost related to non vested awards not yet recognized | $ 5,634,951 | ||
Average remaining expense recognition period | 2 years | ||
2010 ECP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in shares of common stock reserved for grants (in shares) | 150,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Grants (Details) - shares | Mar. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding (in shares) | 1,500 | 9,500 |
RSUs Outstanding (in shares) | 4,376,667 | |
Options and RSUs Exercised (in shares) | 7,378,983 | |
Available Shares (in shares) | 2,655,861 | |
Total (in shares) | 14,413,011 | |
2017 ECP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding (in shares) | 0 | |
RSUs Outstanding (in shares) | 4,376,667 | |
Options and RSUs Exercised (in shares) | 2,367,472 | |
Available Shares (in shares) | 2,655,861 | |
Total (in shares) | 9,400,000 | |
2010 ECP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding (in shares) | 1,500 | |
RSUs Outstanding (in shares) | 0 | |
Options and RSUs Exercised (in shares) | 5,011,511 | |
Available Shares (in shares) | 0 | |
Total (in shares) | 5,013,011 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Outstanding Options (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Shares | |
Beginning balance (in shares) | shares | 9,500 |
Stock options exercised (in shares) | shares | 4,750 |
Stock options canceled (in shares) | shares | 3,250 |
Ending balance (in shares) | shares | 1,500 |
Stock options exercisable (in shares) | shares | 1,500 |
Weighted Average Exercise Price | |
Beginning balance (in usd per share) | $ / shares | $ 0.56 |
Stock options exercised (in usd per share) | $ / shares | 0.56 |
Stock options canceled (in usd per share) | $ / shares | 0.56 |
Ending balance (in usd per share) | $ / shares | 0.56 |
Stock options exercisable (in usd per share) | $ / shares | $ 0.56 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Unvested RSU (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Shares | |
Unvested as of end of period (in shares) | 4,376,667 |
Restricted Stock Units | |
Number of Shares | |
Unvested as of beginning of period (in shares) | 1,930,526 |
Granted (in shares) | 4,310,000 |
Vested (in shares) | 1,804,665 |
Forfeited (in shares) | 59,194 |
Unvested as of end of period (in shares) | 4,376,667 |
Weighted Average Grant Date Fair Value | |
Unvested as of beginning of period (in usd per share) | $ / shares | $ 0.28 |
Grants (in usd per share) | $ / shares | 1.40 |
Vested (in usd per share) | $ / shares | 0.28 |
Forfeited (in usd per share) | $ / shares | 0.29 |
Unvested as of end of period (in usd per share) | $ / shares | $ 1.38 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |||
Right of use assets - operating lease | $ 843,573 | $ 606,573 | |
Right of use assets - finance lease | 315,793 | $ 395,910 | |
Finance lease amortization expense | $ 80,117 | $ 105,678 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 2 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 4 years |
Leases - Operating Leases (Deta
Leases - Operating Leases (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Leases [Abstract] | |
Cash paid for operating lease liabilities | $ 182,807 |
Weighted-average remaining lease term | 2 years 4 months 24 days |
Weighted-average discount rate | 6.25% |
Minimum future lease payments ended March 31, 2021 | |
2021 | $ 285,922 |
2022 | 378,339 |
2023 | 295,778 |
2024 | 10,983 |
Payments due | 971,022 |
Less imputed interest | (127,449) |
Total lease liabilities | $ 843,573 |
Leases - Finance Leases (Detail
Leases - Finance Leases (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Leases [Abstract] | |
Cash paid for finance lease liabilities | $ 69,291 |
Weighted-average remaining lease term | 2 years 3 months 18 days |
Weighted-average discount rate | 6.25% |
Minimum future lease payments ended March 31, 2021 | |
2021 | $ 200,518 |
2022 | 72,982 |
2023 | 37,658 |
Payments due | 311,158 |
Less imputed interest | (30,158) |
Total lease liabilities | $ 281,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jan. 22, 2021 | Jan. 19, 2021 | Jul. 27, 2020 | Jun. 08, 2020 | Apr. 02, 2020 | Mar. 27, 2020 | Mar. 20, 2020 |
Related Party Transactions [Abstract] | |||||||
Shares authorized amount (in shares) | 5,681,817 | 13,333,334 | 21,500,000 | 12,222,222 | 1,400,285 | 3,115,001 | 3,931,428 |
Sale of stock, price per share (in usd per share) | $ 0.175 | ||||||
Sale of stock, consideration received on transaction | $ 6,250,000 | $ 8,000,000 | $ 10,750,000 | $ 5,500,000 | $ 245,050 | $ 545,125 | $ 688,000 |