INUVO, INC.
10-Ks and 10-Qs
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SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment
No. )
Filed
by the Registrant
☒
Filed
by a party other than the Registrant
☐
Check
the appropriate box:
☐
Preliminary Proxy
Statement
☐
Confidential, for
Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
☒
Definitive Proxy
Statement
☐
Definitive
Additional Materials
☐
Soliciting Material
Under Rule 14(a)(12)
Inuvo, Inc.
(Name
of Registrant as Specified in Its Charter)
Not
Applicable
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
☒
No fee required.
☐
Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1.
Title of each class
of securities to which transaction applies:
2.
Aggregate number of
securities to which transaction applies:
3.
Per unit price or
other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4.
Proposed maximum
aggregate value of the transaction:
5.
Total fee
paid:
☐
Fee paid previously with preliminary
materials.
☐
Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
1.
Amount Previously
Paid:
2.
Form, Schedule or
Registration Statement No.:
3.
Filing
Party:
4.
Date
Filed:
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
____________________
TO BE HELD ON OCTOBER 7, 2020
Our
Board of Directors (the “Board”) has called and invites
you to attend a special meeting of stockholders of Inuvo, Inc. (the
“Company”, “Inuvo”, “we”,
“us” or “our”)
at the
Courtyard by
Marriott Little Rock Downtown located at 521 President Clinton
Avenue, Little Rock, Arkansas 72201
on October
7, 2020 at 9:00 a.m. local time.
At the
special meeting you will be asked to vote on the following
matters:
●
to approve and
adopt the ratification and validation of the amendment to our
articles of incorporation to increase the number of authorized
shares of our common stock, $0.001 par value per share, that we may
issue from 60,000,000 to 100,000,000 (the “Ratification
Proposal”);
●
to approve an
adjournment of the special meeting, if necessary, to solicit
additional proxies if there are not sufficient votes in favor of
the Ratification Proposal (the “Adjournment Proposal”);
and
●
any other business
as may properly come before the meeting.
The
Board has fixed the close of business on August 21,
2020
as the record date
for determining the stockholders that are entitled to notice of and
to vote at the special meeting and any adjournments
thereof.
The Board has unanimously approved the Ratification Proposal and
the Adjournment Proposal, has determined that the Ratification
Proposal and the Adjournment Proposal are advisable and in the best
interests of the Company and its stockholders, and unanimously
recommends that Inuvo stockholders vote “FOR” the
Ratification Proposal and “FOR” the Adjournment
Proposal.
All
stockholders are invited to attend the special meeting in person.
Your vote is important regardless of the number of shares you own.
Please vote your shares in person, by proxy over the Internet by
following the instructions provided in the Notice of Internet
Availability of Proxy Materials, or, if you request printed copies
of the proxy materials by mail, you can also vote by mail, by
telephone or by facsimile.
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By
Order of the Board of Directors
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/s/ Richard
K. Howe
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Little
Rock, Arkansas
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Richard
K. Howe
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August
31, 2020
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Chairman
and Chief Executive Officer
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Important Notice Regarding the
Availability of Proxy Materials for the special meeting to be held
on October 7, 2020
. This notice of the special meeting and
proxy statement are available free of charge on our website
www.inuvo.com
.
INUVO, INC.
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TABLE OF CONTENTS
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Page No.
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General
Information
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1
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Proposal
1 – Ratification Proposal
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4
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Proposal
2 – Adjournment Proposal
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7
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Other
Matters
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7
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Dissenter’s
Rights
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7
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Principal
Stockholders
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7
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Stockholders
Sharing the Same Last Name and Address
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9
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Stockholder
Proposals To Be Presented At The Next Annual Meeting
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9
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Availability
of Form 10-K
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10
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Where
You Can Find More Information
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10
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Exhibit
A:
Form of Articles of
Amendment
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A-1
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Exhibit
B:
Form of Certificate
of Validation
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B-1
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FORWARD-LOOKING STATEMENTS
This proxy statement contains
“forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These
statements are based on our current expectations and involve risks
and uncertainties which may cause results to differ materially from
those set forth in the statements. The forward-looking statements
may include statements regarding actions to be taken in the future.
We undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. Forward-looking statements should be evaluated together
with the many uncertainties that affect our business, particularly
those set forth in the section on forward-looking statements and in
the risk factors in Item 1A of our Annual Report on Form 10-K for
the fiscal year ended December 31, 2019, as filed with the
Securities and Exchange Commission (the “
SEC
”) on May 12, 2020, as amended as filed with
the SEC on June 22, 2020 (collectively, the
“
2019
10-K
”).
i
Stockholders Should Read the Entire Proxy Statement
Carefully Prior to Returning Their Proxies
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS
General
The
accompanying proxy is solicited by the Board of Inuvo, Inc. for use
at our special meeting of stockholders to be held at
the
Courtyard by
Marriott Little Rock Downtown located at 521 President Clinton
Avenue, Little Rock, Arkansas 72201
on
October 7, 2020, or any adjournment or postponement thereof, for
the purposes set forth in the accompanying Notice of Special
Meeting of Stockholders.The date of this proxy statement is August
26, 2020, and this proxy statement and the enclosed proxy are first
being mailed or otherwise delivered to our stockholders on or about
August 31, 2020.
Recently, it came
to the attention of the Board that the effectiveness of the
amendment to our articles of incorporation to increase the number
of our authorized shares of common stock, par value $0.001 per
share (the “Common Stock”), that we may issue from
60,000,000 to 100,000,000 (the “Share Increase
Amendment”) could be called into question as the
authorization of the Share Increase Amendment may not have complied
with certain requirements of our articles of incorporation and/or
by-laws as well as Chapter 78 of the Nevada Revised Statutes
(“NRS”), as related thereto. The Board reviewed the
issue further, consulted with new outside counsel, and determined
that it would be appropriate and in the best interests of Inuvo and
its stockholders to obtain a vote to ratify and validate the Share
Increase Amendment, which we refer to as the Ratification Proposal,
to confirm and validate its effectiveness, and take any other
necessary actions, as appropriate, pursuant to Section 78.0296 of
the NRS.
The
Board has unanimously approved the Ratification Proposal and the
Adjournment Proposal.
Soliciting Proxies
This
proxy statement and the accompanying proxy card are being mailed to
owners of our Common Stock in connection with the solicitation of
proxies by the Board for the special meeting of stockholders. We
will pay the entire cost of preparing, assembling, printing,
mailing and distributing these proxy materials and soliciting
votes.
Proxies may be solicited,
without extra compensation, by our officers and employees by mail,
telephone, fax, personal interviews or other methods of
communication. We will request brokers, custodians, nominees and
other record holders of Common Stock to forward copies of this
proxy statement and other soliciting materials to persons for whom
they hold Common Stock and to request authority for the exercise of
proxies. In these cases, the Company will, upon the request of the
record holders, reimburse these holders for their reasonable
expenses. The Company has also retained
Alliance Advisors,
LLC,
a proxy solicitation firm, for
assistance in connection with the solicitation of proxies for the
special meeting. Any customary fees of Alliance Advisors, LLC will
be paid by the Company. The Company estimates that its proxy
solicitor fees will be approximately $
7,000
plus reasonable out of pocket
expenses.
If
you have any questions concerning the matters described or this
proxy statement or need assistance voting your shares, please
contact the proxy solicitor at the address or telephone number
listed below:
1
Alliance
Advisors, LLC
200
Broadacres Drive, 3
rd
Floor
Bloomfield,
New Jersey 07003
Shareholders Call Toll Free: (833) 670-0695
Electronic
access
.
To access
our proxy statement electronically, please visit our corporate
website at
www.inuvo.com
. The information
which appears on our website is not part of this proxy
statement.
Voting
securities
.
Only our
stockholders of record as of the close of business on August 21,
2020, the record date for the special meeting, will be entitled to
vote at the meeting and any adjournment thereof. As of that date,
there were 97,544,947 shares of our Common Stock outstanding. Each
holder of record as of that date is entitled to one vote for each
share held, except that pursuant to Section 78.0296 of the NRS, the
voting power of any shares issued or purportedly issued pursuant to
the corporate act being ratified or validated must be disregarded
for all purposes. In other words, for purposes of the ratification
and validation we are seeking, we must disregard all shares of
Common Stock issued above 60,000,000 (the “Disregarded
Shares”) when determining the total number of our outstanding
shares entitled to vote on the ratification and validation of the
Share Increase Amendment and the total number of shares that need
to be voted in favor of such ratification and validation to make
the same effective. All stockholders are encouraged to vote at the
special meeting, as further described herein.
Quorum
. In
accordance with our by-laws, the presence, in person or by proxy,
of the holders of at least 33 1/3% of the Common Stock issued and
outstanding and entitled to vote, without including any Disregarded
Shares, regardless of whether the proxy has authority to vote on
all matters, constitutes a quorum which is required in order to
hold the special meeting and conduct business. Presence may be in
person or by proxy. You will be considered part of the quorum if
you voted on the Internet, by telephone, by facsimile or by
properly submitting a proxy card or voting instruction form by
mail, or if you are present and vote at the special meeting. Votes
for and against, abstentions and “broker non-votes,” if
any, will each be counted as present for purposes of determining
the presence of a quorum.
Broker
non-votes
.
If you
are a beneficial owner whose shares are held of record by a broker,
bank or other nominee, you should instruct the broker, bank or
other nominee how to vote your shares. If you do not provide voting
instructions, your shares will not be voted on any proposal that is
a “non-routine” matter which the broker, bank or other
nominee does not have discretionary authority to vote. This is
called a “broker non-vote.” In these cases, the broker,
bank or other nominee can register your shares as being present at
the special meeting for purposes of determining the presence of a
quorum, but will not be able to vote on those matters for which
specific authorization is required. Your broker, bank or other
nominee has discretionary voting authority to vote your shares on
Proposals 1 and 2 if the broker, bank or other nominee does not
receive voting instructions from you because such proposals are
considered to be “routine” matters under the rules of
the NYSE. Because your broker, bank or other nominee has
discretionary voting authority to vote your shares on Proposal 1
and 2, if the broker, bank or other nominee does not receive voting
instructions from you, the broker, bank, or other nominee may, in
its discretion, vote the shares and, thus, we do not expect any
broker non-votes.
In any event, it
is particularly important that you instruct your broker as to how
you wish to vote your shares as it ensures that your shares will be
voted in accordance with your instructions.
Voting of
proxies
.
All valid
proxies received prior to the meeting will be exercised. All shares
represented by a proxy will be voted, and where a proxy specifies a
stockholder’s choice with respect to any matter to be acted
upon, the shares will be voted in accordance with that
specification. If no choice is indicated on the proxy, the shares
will be voted by the individuals named on the proxy card as
recommended by the Board.
Revocability of
Proxies
. A stockholder giving a proxy has the power to
revoke his or her proxy, at any time prior to the time it is
exercised, by delivering to our corporate secretary a written
instrument revoking the proxy or a duly executed proxy with a later
date, or by attending the meeting and voting in person.
If your shares held in “street
name” through a brokerage firm, bank, nominee, fiduciary or
other custodian, you must check with your brokerage firm, bank,
nominee, fiduciary or other custodian to determine how to revoke
your proxy.
2
Shares Held in Street
Name
. A stockholder wanting to vote in person at the special
meeting and holding shares of our Common Stock in street name must
obtain a proxy card from his or her broker
and bring that proxy card to the special meeting,
together with a copy of a brokerage statement reflecting such share
ownership as of the record date
.
Vote required.
Ratification Proposal
. The Ratification
Proposal requires “FOR” votes from the holders of a
majority of the shares of our Common Stock outstanding as of the
Record Date without including the Disregarded Shares. All
stockholders as of the record date are encouraged to vote at the
meeting. Votes from the Disregarded Shares will not be counted
unless the Ratification Proposal receives at least 67,544,947 votes
in favor which will conclusively demonstrate that the required
majority of the votes for the Ratification Proposal was obtained.
Thus, the Board urges all stockholders to vote their shares
“FOR” the Ratification Proposal, regardless of when
they were acquired.
Additionally, a
stockholder’s failure to submit a proxy card or to vote in
person at the special meeting, an abstention from voting, or a
broker non-vote, if any, will have the same effect as a vote
“AGAINST” the Ratification
Proposal.
Adjournment Proposal
.
Approving the adjournment of the special meeting,
if necessary or appropriate, to solicit additional proxies if there
are not sufficient votes to approve the Ratification Proposal
requires the affirmative vote of holders of a majority of the
shares of Common Stock present, in person or represented by proxy,
at the special meeting and entitled to vote on the Adjournment
Proposal. Accordingly, abstentions will have the same effect as a
vote “AGAINST” the proposal to adjourn the special
meeting, while broker non-votes, if any, and shares not in
attendance at the special meeting will have no effect on the
outcome of any vote to adjourn the special
meeting.
Interests of Directors and
Executive Officers
. Our directors and executive officers
have no substantial interests, directly or indirectly, in the
matters set forth in the proposals, except to the extent of their
ownership of shares of our Common Stock and any outstanding equity
awards or equity awards that may be granted to them under our
equity incentive plans in the future.
Board
recommendations
.
The Board unanimously recommends a vote “FOR” the
Ratification Proposal.
The Board unanimously recommends a vote “FOR” the
Adjournment Proposal.
Attendance at the
meeting
. You are invited to attend the special meeting only
if you were an Inuvo stockholder or joint holder as of the close of
business on August 21, 2020, the record date, or if you hold a
valid proxy for the special meeting.
In addition, if you are a stockholder of record
(owning shares in your own name), your name will be verified
against the list of registered stockholders on the record date
prior to your being admitted to the special meeting. If you are not
a stockholder of record but hold shares through a broker or nominee
(in street name), you will need to provide proof of beneficial
ownership on the record date, such as a recent account statement or
a copy of the voting instruction card provided by your broker or
nominee. The meeting will begin at
9:00 a.m.
local time. Check-in will begin at
8:45
a.m.
local time.
Communications with our
Board.
You may contact any of our directors by writing to
them c/o Inuvo, Inc., 500 President Clinton Avenue, Suite 300,
Little Rock, Arkansas 72201. Each communication should specify the
applicable director or directors to be contacted as well as the
general topic of the communication. We may initially receive and
process communications before forwarding them to the applicable
director. We generally will not forward to the directors a
stockholder communication that is determined to be primarily
commercial in nature, that relates to an improper or irrelevant
topic, or that requests general information about Inuvo. Concerns
about accounting or auditing matters or communications intended for
non-management directors should be sent to the attention of the
Chairman of the Audit Committee at the address above. Our directors
may at any time review a log of all correspondence received by
Inuvo that is addressed to the independent members of the board and
request copies of any such correspondence.
Who can help answer your
questions?
If you have additional questions after reading
this proxy statement, you may seek answers to your questions by
writing, calling or emailing:
John B.
Pisaris, Esq.
General
Counsel
Inuvo,
Inc.
500
President Clinton Avenue
Suite
300
Little
Rock, Arkansas 72201
Telephone:
(501) 205-8508
Telecopier:
(877) 311-5050
email:
john.pisaris@inuvo.com
3
PROPOSAL 1 – RATIFICATION PROPOSAL
RATIFICATION AND VALIDATION OF THE FILING AND EFFECTIVENESS OF
AMENDMENT TO OUR ARTICLES OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF OUR COMMON STOCK THAT WE MAY ISSUE FROM
60,000,000 TO 100,000,000.
Our
Board has determined that it is in the best interests of our
stockholders and us to ratify and validate, pursuant to Section
78.0296 of the NRS, the filing and effectiveness of the Share
Increase Amendment we filed with the Nevada Secretary of State on
October 31, 2019, which effected an increase in the number of
authorized shares of Common Stock from 60,000,000 shares to
100,000,000 shares. If approved, this ratification will be
retroactive to the date of effectiveness of the filing of the Share
Increase Amendment with the Nevada Secretary of State.
Background
As described in the definitive proxy
statement relating to Inuvo’s 2019 Annual Meeting, which was
filed with the SEC on September 3, 2019 (the “Annual Meeting
Proxy Statement”), the Share Increase Amendment was proposed
to increase the authorized number of shares of our Common Stock. On
the advice of outside counsel,
the Annual Meeting Proxy
Statement described the approval standard for the Share Increase
Amendment as requiring the affirmative vote of a majority of the
shares of Common Stock present in person or by proxy at the 2019
Annual Meeting. The purpose of the Share Increase Amendment was
(i) to increase the number of the Company’s authorized
shares of Common Stock from 60,000,000 to 100,000,000; (ii) to
authorize shares of Common Stock holding rights identical to the
then-existing outstanding shares of Common Stock; and (iii) to
provide additional
shares of Common Stock for possible use in connection with
potential public or private financings
to raise additional capital, for the declaration of stock
splits or stock dividends, for acquisitions of other companies, for
the expansion of business operations, or for the issuance of stock
under warrants granted or to be granted in the future, or for other
corporate purposes, though the Company had no commitments at the
time of the Annual Meeting Proxy Statement for the issuance of
additional shares of Common Stock.
At the
2019 Annual Meeting, our inspector of elections, relying on the
advice of outside counsel, determined that the proposal to approve
the Share Increase Amendment was adopted by the requisite vote of
stockholders and certified that the proposal had passed. Inuvo
filed the Share Increase Amendment with the Nevada Secretary of
State on October 31, 2019 and it became effective on the same date.
A question has been raised regarding the validity of the Share
Increase Amendment due to the purported lack of a majority vote of
all of the issued and outstanding shares of Common Stock, which is
the vote required by the NRS to amend the articles of incorporation
of a Nevada corporation.
Our
Board has determined that the description in the 2019 Annual
Meeting Proxy Statement of the voting standard used to adopt the
Share Increase Amendment set forth by the Company’s prior
outside counsel may have been inaccurate and caused uncertainty as
to whether the Share Increase Amendment had been properly
authorized by the stockholders. As a result, our Board has
determined that it is in the best interests of the Company and our
stockholders to ratify and validate the filing and effectiveness of
the Share Increase Amendment pursuant to Section 78.0296 of
the NRS to eliminate any uncertainty related to the effectiveness
of the Share Increase Amendment and any subsequent issuances of
shares of our Common Stock. If the Ratification Proposal is
approved by our stockholders and becomes effective, the Share
Increase Amendment will be retroactive to October 31, 2019, which
was the date of the filing of the Share Increase Amendment with the
Nevada Secretary of State.
Among
other consequences, the
Ratification Proposal
will
(i) confirm that, at all times since the effectiveness of the
Share Increase Amendment on October 31, 2019, the Company had
sufficient authorized and unissued shares of Common Stock to permit
the sales and issuances of our Common Stock that have occurred
since that date in excess of the authorized number of shares prior
to the Share Increase Amendment and confirm the validity of
such shares, (ii) facilitate potential future transactions,
including, without limitation, capital-raising transactions and
strategic transactions, provided, the Company has no such plans at
this time; (iii) have a dilutive effect on the earnings per
share and on the equity and voting power of existing holders of our
Common Stock and may adversely affect the market price of our
Common Stock; and (iv) have an anti-takeover effect on a third
party’s efforts to obtain control of the
Company.
4
Our Board Has Approved the Ratification Proposal
Section
78.0296 of the NRS allows a Nevada corporation, by following
specified procedures, to ratify and validate a corporate act
retroactive to the date the corporate act was originally taken. Our
Board has determined that it would be advisable and in the best
interests of our stockholders and us to ratify the filing and
effectiveness of the Share Increase Amendment pursuant to Section
78.0296 of the NRS to eliminate any uncertainty that may exist
related to its validity or effectiveness and unanimously adopted
resolutions to that effect. Our Board also recommended that our
stockholders approve the Ratification Proposal for purposes of
Section 78.0296, and directed that the Ratification Proposal be
submitted to our stockholders for approval. The text of the Share
Increase Amendment in the form of the articles of amendment is
attached to this proxy statement as
Exhibit A
.
Filing of a Certificate of Validation
Upon
the receipt of the required vote of the stockholders to approve the
Ratification Proposal, we plan to file a certificate of validation
regarding the Share Increase Amendment with the Nevada Secretary of
State (the “Share Increase Amendment Certificate of
Validation”) in the form attached as
Exhibit B
. If required under
NRS, we will also file a Certificate of Correction with the Nevada
Secretary of State. The filing date of the Share Increase Amendment
Certificate of Validation with the Nevada Secretary of State will
be the validation effective time of the Ratification Proposal
within the meaning of Section 78.0296 of the NRS. In addition,
pursuant to Section 78.0296 of the NRS, we will provide notice of
the approval of the Ratification Proposal to each stockholder of
record at the time of such approval not later than 10 days after
the Ratification Proposal is approved by the stockholders as
contemplated in this proxy statement.
Retroactive Ratification of the Share Increase
Amendment
Subject
to the 180-day period for bringing legal challenges discussed
below, when the Share Increase Amendment Certificate of Validation,
or, if necessary, a Certificate of Correction, becomes effective in
accordance with the NRS, it should eliminate any possible
uncertainty as to whether the Share Increase Amendment is void or
voidable as a result of the potential failure of authorization
described above, and the effect of the ratification will be
retroactive to the filing of the Share Increase Amendment with the
Secretary of State on October 31, 2019.
Time Limitations on Legal Challenges to the Ratification
Proposal
If the
Ratification Proposal becomes effective, under the NRS, any claim
that the Share Increase Amendment ratified pursuant to the
Ratification Proposal is void or voidable due to a failure of
authorization, must be brought within 180 days from the date of
notice we give to our stockholders of record of the Ratification
Proposal.
The Consequences if the Ratification Proposal is Not Approved by
Our Stockholders
If the Ratification Proposal is not
approved by the requisite vote of our stockholders, we will not be
able to file the Share Increase Amendment Certificate of Validation
with the Nevada Secretary of State and the Share Increase Amendment
may not be deemed effective in accordance with Section 78.0296 of
the NRS. T
he failure to approve the
Ratification Proposal
may
leave us exposed to potential claims that (i) the vote on the
Share Increase Amendment did not receive requisite stockholder
approval, (ii) the Share Increase Amendment therefore was not
validly adopted, and (iii) as a result, (a) Inuvo would
not have sufficient authorized but unissued shares of Common Stock
to permit future sales and issuances of Common Stock, including
pursuant to outstanding warrants and stock options, (b) past
issuances of Common Stock may not be valid, and (c) Inuvo
would not be able to validate our total outstanding shares of
Common Stock in connection with any strategic transaction that our
Board may determine is advisable. Any inability to issue Common
Stock in the future and any invalidity of past issuances of Common
Stock could expose us to significant claims and have a material
adverse effect on our liquidity.
5
Vote Required; Recommendation of the Board
The
Ratification Proposal requires “FOR” votes from the
holders of a majority of shares of our Common Stock outstanding as
of the Record Date without including any Disregarded Shares. All
stockholders as of the record date are encouraged to vote at the
meeting. Votes from the Disregarded Shares will not be counted
unless the Ratification Proposal receives at least 67,544,947 votes
in favor which will conclusively demonstrate that the required
majority of the votes for the Ratification Proposal was obtained.
Thus, the Board urges all stockholders to vote their shares
“FOR” the Ratification Proposal, regardless of when
they were acquired.
Additionally, a
stockholder’s failure to submit a proxy card or to vote in
person at the special meeting, an abstention from voting, or a
broker non-vote, if any, will have the same effect as a vote
“AGAINST” the Ratification
Proposal.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
RATIFICATION PROPOSAL.
6
PROPOSAL 2 – ADJOURNMENT PROPOSAL
ADJOURNMENT OF THE SPECIAL MEETING TO SOLICIT ADDITIONAL
PROXIES
If there are
insufficient votes at the time of the special meeting to approve
the Ratification Proposal, the Company intends to propose to
adjourn the special meeting for a period of not more than
30 days for the purpose of soliciting additional proxies in
favor of the
Ratification Proposal.
The Company does not
intend to propose adjournment at the special meeting if there are
sufficient votes to approve Ratification
Proposal.
Vote Required; Recommendation of the Board
Approving
the adjournment of the special meeting, if necessary or
appropriate, to solicit additional proxies if there are not
sufficient votes to approve the Ratification Proposal requires the
affirmative vote of holders of a majority of the shares of Common
Stock present, in person or represented by proxy, at the special
meeting and entitled to vote on the Adjournment Proposal.
Accordingly, abstentions will have the same effect as a vote
“AGAINST” the proposal to adjourn the special meeting,
while broker non-votes, if any, and shares not in attendance at the
special meeting will have no effect on the outcome of any vote to
adjourn the special meeting.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
ADJOURNMENT PROPOSAL.
OTHER MATTERS
As of
the date hereof, there are no other matters that we intend to
present, or have reason to believe others will present, at the
special meeting. If, however, other matters properly come before
the special meeting, the accompanying proxy authorizes the person
named as proxy or his substitute to vote on such matters as he
determines appropriate.
DISSENTER’S RIGHTS
Under
Nevada law there are no dissenter’s rights available to our
stockholders in connection with any matter submitted to a vote of
our stockholders at the special meeting.
PRINCIPAL STOCKHOLDERS
As of
record date we had 97,544,947 shares of Common Stock issued and
outstanding. The following table sets forth information known to us
as of July 31, 2020 relating to the beneficial ownership of shares
of our Common Stock by:
●
each person who is
known by us to be the beneficial owner of more than 5% of our
outstanding Common Stock;
●
each
director;
●
each named
executive officer; and
●
all named executive
officers and directors as a group.
Unless
otherwise indicated, the address of each beneficial owner in the
table set forth below is care of 500 President Clinton Avenue,
Suite 300, Little Rock, Arkansas 72201. We believe that all
persons, unless otherwise noted, named in the table have sole
voting and investment power with respect to all shares of Common
Stock shown as being owned by them. Under securities laws, a person
is considered to be the beneficial owner of securities owned by him
(or certain persons whose ownership is attributed to him) and that
can be acquired by him within 60 days from July 31, 2020, including
upon the exercise of options, warrants or convertible securities.
We determine a beneficial owner’s percentage ownership by
assuming that options, warrants or convertible securities that are
held by him, but not those held by any other person, and which are
exercisable within 60 days of the that date, have been exercised or
converted.
7
|
Name of Beneficial
Owner
|
No. of Shares
Beneficially Owned
|
% of
Class
|
|
|
|
|
|
Charles Morgan
(1)
|
5,139,771
|
5.3
%
|
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Richard K. Howe
(1)
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1,874,605
|
1.9
%
|
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Wallace D.
Ruiz
|
420,810
|
*
|
|
Don Walker
“Trey” Barrett III
|
454,273
|
*
|
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G. Kent Burnett
(1)
|
1,442,256
|
1.5
%
|
|
Gordon J. Cameron
(2)
|
406,529
|
*
|
|
All executive
officers and directors as a group (seven persons)
(1) (2)
|
10,110,6511
|
10.4
%
|
|
|
|
|
|
Ionic Ventures LLC
(3)
|
5,425,0000
|
5.6
%
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|
Ingalls &
Snyder, LLC
(4)
|
5,402,486
|
5.5
%
|
|
Herald Investment
Management Limited
(5)
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5,000,000
|
5.1
%
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|
CVI Investments,
Inc.
(6)
|
5,000,000
|
5.1
%
|
*
represents less
than 1%.
(1)
Includes
shares of Common Stock held by Ingalls & Snyder, LLC on his
behalf. See footnote 4.
(2)
Includes
6,630 shares held by Mr. Cameron’s
spouse.
(3)
Pursuant to a Schedule 13G filed with the
SEC by Ionic Ventures LLC, Keith Coulston and Brendan O’Neil
on July 27, 2020, pursuant to a Joint Filing Agreement. Ionic
Ventures LLC has the power to vote and dispose of the shares owned
by it, which power may be exercised by its managers, Mr.
O’Neil and Mr. Coulston, as managers The principal business
address of Ionic Ventures LLC and Messrs. Coulston and O’Neil
is 3053 Fillmore St., Suite 256 San Francisco, CA
94123.
(4)
Pursuant to the Schedule 13D/A filed with the SEC
on February 28, 2020, Ingalls & Snyder, LLC has dispositive
power over shares held by Mr. Charles D. Morgan and Mr. G. Kent
Burnett who serve as members of Inuvo’s Board and Mr. Richard
K. Howe who serves as Inuvo’s Chairman and CEO. The principal
business address of Ingalls & Snyder, LLC is 1325 Avenue of the
Americas, 18th Floor, New York, NY 10019-6066. See footnote
1.
(5)
Pursuant to a Schedule 13G filed with the
SEC by Herald Investment Management Limited on July 18, 2019. The
principal business address of Herald Investment Management Limited
is
10-11 Charterhouse Square, London
EC1M6EE UK
.
(6)
Pursuant to a Schedule 13G filed with
the SEC by CVI Investments, LLC and Heights Capital Management,
Inc. on July 28, 2020, pursuant to a Joint Filing Agreement.
Heights Capital Management, Inc. is the investment manager to CVI
Investments, Inc. and
in such capacity may have the right to
vote and dispose of the securities held by
CVI Investments, Inc. The principal
business address of CVI Investments, LLC is P.O. Box 309GT Ugland
House South Church Street, George Town, Grand Cayman KY1-1104,
Cayman Islands. The principal business address of Heights Capital
Management, Inc. is 101 California Street, Suite 3250, San
Francisco, CA 94111.
8
STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS
The SEC
has adopted rules that permit companies and intermediaries such as
brokers to satisfy delivery requirements for proxy statements with
respect to two or more stockholders sharing the same address by
delivering a single proxy statement addressed to those
stockholders. This process, which is commonly referred to as
“householding,” potentially provides extra convenience
for stockholders and cost savings for companies. We and some
brokers household proxy materials, delivering a single proxy
statement to multiple stockholders sharing an address unless
contrary instructions have been received from the affected
stockholders. Once you have received notice from your broker or us
that they are or we will be householding materials to your address,
householding will continue until you are notified otherwise or
until you revoke your consent. If, at any time, you no longer wish
to participate in householding and would prefer to receive a
separate proxy statement, or if you currently receive multiple
proxy statements and would prefer to participate in householding,
please notify your broker if your shares are held in a brokerage
account or us if you hold registered shares. You can notify us by
sending a written request to Inuvo, Inc., Attention: Corporate
Secretary, 500 President Clinton Avenue, Suite 300, Little Rock,
Arkansas 72201, by faxing a communication to: (877) 311-5050, or by
calling (501) 205-8508.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT THE NEXT ANNUAL
MEETING
As of
the date of this proxy statement, we had not received notice of any
stockholder proposals for the 2020 annual meeting described herein
and proposals received subsequent to the date of this proxy
statement will be considered untimely. For a stockholder proposal
to be considered for inclusion in our proxy statement for the 2020
annual meeting, the corporate secretary must receive the written
proposal at our principal executive offices no later than the
deadline stated below. Such proposals must comply with SEC
regulations under Rule 14a-8 regarding the inclusion of stockholder
proposals in company-sponsored proxy materials. Proposals should be
addressed to:
Inuvo,
Inc.
Attention:
Corporate Secretary
500
President Clinton Avenue
Suite
300
Little
Rock, Arkansas 72201
Facsimile:
(877) 311-5050
Under
Rule 14a-8, to be timely, a stockholder’s notice must be
received at our principal executive offices not less than 120
calendar days before the date of our proxy statement release to
stockholders in connection with the previous year’s annual
meeting. However, if we did not hold an annual meeting in the
previous year or if the date of this year’s annual meeting
has been changed by more than 30 days from the date of the previous
year’s annual meeting, then the deadline is a reasonable time
before we begin to print and send our proxy materials. Therefore,
stockholder proposals intended to be presented at the 2020 annual
meeting must have been received by us at our principal executive
office no later than May 6, 2020, in order to be eligible for
inclusion in our 2020 proxy statement and proxy relating to that
meeting. Upon receipt of any proposal, we will determine whether to
include such proposal in accordance with regulations governing the
solicitation of proxies.
You may
propose director candidates for consideration by the Board’s
Nominating, Corporate Governance and Compensation Committee. Any
such recommendations should include the nominee’s name and
qualifications for board of directors membership, information
regarding the candidate as would be required to be included in a
proxy statement filed pursuant to SEC regulations, and a written
indication by the recommended candidate of her or his willingness
to serve, and should be directed to the Corporate Secretary of
Inuvo at our principal executive offices: Inuvo, Inc., 500
President Clinton Avenue, Suite 300, Little Rock, Arkansas 72201
within the time period described above for proposals brought under
SEC Rule 14a-8.
If you
wish to present a proposal at our 2020 annual meeting or to
nominate one or more director candidates and the proposal outside
of the framework of SEC Rule 14a-8 and was not intended to be
included in our proxy statement relating to that meeting, you must
have given advance written notice to Inuvo by July 20, 2020, as
required by SEC Rule 14a-4(c)(1). Such advance notice should have
been directed to the Corporate Secretary of Inuvo at our principal
executive offices: Inuvo, Inc., 500 President Clinton Avenue, Suite
300, Little Rock, Arkansas 72201.
9
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
As
required, we have filed our 2019 10-K with the SEC. Stockholders
may obtain, free of charge, a copy of the 2019 10-K by writing to
us at 500 President Clinton Avenue, Suite 300, Little Rock,
Arkansas 72201, Attention: Corporate Secretary, or from our
website,
www.inuvo.com
.
WHERE YOU CAN FIND MORE INFORMATION
This
proxy statement refers to certain documents that are not presented
herein or delivered herewith. Such documents are available to any
person, including any beneficial owner of our shares, to whom this
proxy statement is delivered upon oral or written request, without
charge. Requests for such documents should be directed to Corporate
Secretary, Inuvo, Inc., 500 President Clinton Avenue, Suite 300,
Little Rock, Arkansas 72201. Please note that additional
information can be obtained from our website at
www.inuvo.com
.
We file
annual and special reports and other information with the SEC.
Certain of our SEC filings are available over the Internet at the
SEC's web site at http://www.sec.gov.
10
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INUVO, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
SPECIAL MEETING OF STOCKHOLDERS ON
OCTOBER 7, 2020 9:00 A.M. LOCAL TIME
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CONTROL ID:
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REQUEST ID:
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The undersigned, a stockholder of Inuvo, Inc. (the
“Company”), hereby revoking any proxy heretofore given,
does hereby appoint John B. Pisaris and Wallace D. Ruiz, and each
of them, proxy, with power of substitution, for and in the name of
the undersigned to attend the special meeting of stockholders of
the Company to be held at the
Courtyard by
Marriott Little Rock Downtown located at 521 President Clinton
Avenue, Little Rock, Arkansas 72201
on October
7, 2020 at 9:00 a.m. local time, or at any adjournment or
postponement thereof, and there to vote, as designated
below:
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
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Please mark, sign, date, and return this Proxy Card promptly using
the enclosed envelope.
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FAX:
|
Complete the reverse portion of this Proxy Card and Fax to
202-521-3464.
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INTERNET:
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https://www.iproxydirect.com/INUV
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PHONE:
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1-866-752-VOTE(8683)
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SPECIAL MEETING OF THE STOCKHOLDERS OF INUVO, INC.
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PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
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PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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Proposal 1
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FOR
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AGAINST
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ABSTAIN
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To
approve and adopt the ratification and validation of the amendment
to our articles of incorporation to increase the number of
authorized shares of our common stock, $0.001 par value per share,
that we may issue from 60,000,000 to 100,000,000.
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☐
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☐
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☐
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Proposal 2
|
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FOR
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AGAINST
|
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ABSTAIN
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To
approve an adjournment of the special meeting, if necessary, to
solicit additional proxies if there are not sufficient votes in
favor of Proposal 1.
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☐
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☐
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☐
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MARK “X” HERE IF YOU PLAN
TO ATTEND THE MEETING:
☐
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In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the special meeting, and
any adjournment or adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE ‘FOR’ PROPOSAL
1 AND ‘FOR’ PROPOSAL 2.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO CONTRARY INSTRUCTION IS
INDICATED, THE VOTE OF THE UNDERSIGNED WILL BE CAST
“FOR” THE PROPOSALS. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE SPECIAL
MEETING.
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MARK HERE FOR ADDRESS CHANGE
☐
New Address (if
applicable):
_______________________________
IMPORTANT:
Please sign exactly
as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as
such. If signer is a partnership, please sign in partnership name
by authorized person.
Dated: ________________________, 2020
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(Print Name of Stockholder and/or Joint Tenant)
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(Signature of Stockholder)
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(Second Signature if held jointly)
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EXHIBIT
A
A-1
A-2
A-3
EXHIBIT
B
INUVO, INC.
CERTIFICATE OF VALIDATION
[________ __], 2020
This
Certificate of Validation (this “
Certificate
”) is filed on
behalf of Inuvo, Inc., a Nevada corporation (the
“
Corporation
”),
pursuant to NRS 78.0296 which provides that, if a corporate act
ratified or validated pursuant to NRS 78.0296 would have
required any filing with the Nevada Secretary of State pursuant to
NRS Chapter 78, or if such ratification or validation would cause
any such filing to be inaccurate or incomplete in any material
respect, then the corporation shall make, amend or correct each
such filing in accordance with NRS Chapter 78, and that any such
filing, amendment or correction must be accompanied by a
certificate of validation indicating that the filing, amendment or
correction is being made in connection with a ratification or
validation of a corporate act in accordance with NRS 78.0296
and specifying the effective date and time of the filing, amendment
or correction, which may be before the date and time of
filing.
I,
Richard Howe, Chief Executive Officer, hereby certify on behalf of
the Corporation as follows:
1.
This Certificate
accompanies, and has been appended to, those certain Articles of
Amendment (the “
Articles Amendment
”),
which are being concurrently filed on the date hereof with the
Nevada Secretary of State in accordance with NRS Chapter 78 to
ratify and validate the Articles of Amendment filed October 31,
2019.
2.
The Articles
Amendment, or, if necessary, any required Certificate of
Correction, is a filing, amendment or correction being made in
connection with a ratification or validation of a corporate act in
accordance with NRS 78.0296. Such ratification or validation
was adopted and approved by unanimous written consent of the
Corporation’s board of directors on August 11, 2020, and by
the affirmative vote of the requisite majority of the
Corporation’s stockholders entitled to vote thereon
(including after giving effect to the provisions of NRS 78.0296(2))
at a special meeting of Corporation’s stockholders held on
October 7, 2020.
3.
The effective date
and time of the Articles Amendment and/or Certificate of Correction
is October 31, 2019, at 12:01 a.m. (Pacific Time).
[SIGNATURE
PAGE FOLLOWS]
B-1
IN WITNESS WHEREOF, the undersigned
has executed this Certificate on behalf of the Corporation as of
the date set forth above.
INUVO,
INC.,
a
Nevada corporation
By:__________________________
Richard
Howe
Chief
Executive Officer
The
undersigned hereby certifies that the person named above is the
duly elected, qualified and acting Chief Executive Officer, and
that the signature appearing above is his true and genuine
signature.
____________________________
Wallace
Ruiz
Chief
Financial Officer
B-2
TABLE OF CONTENTS