Item 8.01 Other Events.
Inuvo, Inc. (the "Company") will be relying on the Securities and Exchange
Commission's Order under Section 36 of the Securities Exchange Act of 1934
Granting Exemptions From Specified Provisions of the Exchange Act and Certain
Rules Thereunder dated March 25, 2020 (Release No. 34-88465) (the "Order") to
delay the filing of its Annual Report on Form 10-K for the year ended December
31, 2019 (the "2019 10-K") due to the circumstances related to COVID-19. In
particular, COVID-19 has caused our office in San Jose, California to close due
to a stay at home order in place for California residents and we have closed our
Little Rock, Arkansas office and issued a work from home policy to protect our
employees and their families from potential virus transmission among co-workers.
The office closures and work from home policy have in turn caused a delay in the
completion our 2019 10-K reporting process and we are in the process of working
on a remote basis to complete our audit and our internal and external review of
our Form 10-K. Notwithstanding the foregoing, the Company expects to file the
2019 10-K no later than May 14, 2020 (which is 45 days from the 2019 10-K's
original filing deadline of March 30, 2020).
In light of the current COVID-19 pandemic, the Company will be including the
following Risk Factor in its 2019 10-K, as may be updated to reflect subsequent
events impacting the Company:
We are unable to predict the impact of COVID-19 on our company.
Because our company operates in the digital advertising industry, unlike a brick
and mortar-based company, predicting the impact of the coronavirus pandemic on
our company is difficult at this early stage in the viruses US expansion. Thus
far, we have experienced a pause in marketing campaigns for two new IntentKey
clients signed in March 2020 and a potential impact from a number of suppliers
within ValidClick. Our office in San Jose, California is closed due to the stay
at home order in place for California residents. We closed our Little Rock,
Arkansas office and have issued a work from home policy to protect our employees
and their families from potential virus transmission among co- workers.
Generally, marketing budgets tend to decline in times of a recession. We have
started to curtail expenses, including travel and we have issued a work from
home policy to protect our employees and their families from virus transmission
associated with co-workers. We are beginning to experience interruptions in our
daily operations, including our 10-K reporting process, as a result of these
policies. We expect the revenue impact on our industry could vary dramatically
by vertical. For example, we would expect to see less advertising demand from
the travel, leisure and hospitality verticals and more advertising demand in the
health, technology, insurance and pharmaceutical verticals. We also maintain
long-standing relationships with Yahoo!, Google and Microsoft Online that
provide access to hundreds of thousands of advertisers from which most of our
ValidClick and digital publishing revenue originates. Any adverse impact on the
operations of those companies would have a correspondingly adverse impact on our
revenues in future periods. We will continue to assess the impact of the
COVID-19 pandemic on our company, however, at this time we are unable to predict
all possible impacts on our company, our operations and our revenues. Should
revenues turn downwards both quickly and dramatically, we would not be in a
strong position to offset equally as quickly with expenses.
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