ITEM 1.01
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
May 28, 2021, Inuvo, Inc. (the “Company”) entered into
a Sales Agreement (the “Sales Agreement”) with
A.G.P./Alliance Global Partners, as sales agent (the
“Agent”), pursuant to which the Company may offer and
sell, from time to time, through or to the Agent, as sales agent
and/or principal (the “Offering”) shares of its common
stock (the “Shares”). Any Shares offered and sold in
the Offering will be issued pursuant to the Company’s
Registration Statement on Form S-3 (File No. 333-253018) filed with
the Securities and Exchange Commission (the “SEC”) on
February 12, 2021 and declared effective on March 15, 2021 (the
“Form S-3”), the base prospectus included in the Form
S-3 and the prospectus supplement relating to the Offering, dated
May 28, 2021, that will be filed with the SEC providing for up to
$35,000,000 of sales of shares of common stock. The issuance and
sale, if any, of the Shares held by the Company under the Sales
Agreement is subject to the continued effectiveness of the Form
S-3.
Subject
to the terms and conditions of the Sales Agreement, the Agent will
use its commercially reasonable efforts to sell the Shares from
time to time, based upon the Company’s instructions. Under
the Sales Agreement, the Agent may sell the Shares by any method
permitted by law deemed to be an “at the market
offering” as defined in Rule 415 promulgated under the
Securities Act of 1933, as amended (the “Securities
Act”).
The
Company has no obligation to sell any of the Shares, and may at any
time suspend offers under the Sales Agreement. The Offering will
terminate upon
(a)
the election of the Agent upon the occurrence of certain adverse
events, (b) 10 days’ advance notice from one party to the
other, or (c) the sale of all of the Shares.
Under
the terms of the Sales Agreement, the Agent will be entitled to a
commission at a fixed rate of 3.0% of the gross proceeds from each
sale of Shares under the Sales Agreement. The Company will also
reimburse the Agent for certain expenses incurred in connection
with the Sales Agreement, and agreed to provide indemnification and
contribution to the Agent with respect to certain liabilities,
including liabilities under the Securities Act and the Securities
Exchange Act of 1934, as amended.
The
Company currently intends to use the net proceeds from the Offering
for general corporate purposes, which may include additions to
working capital and financing potential acquisitions.
The
foregoing description of the Sales Agreement does not purport to be
complete and is qualified in its entirety by reference to the full
text of the Sales Agreement, a copy of which is filed as Exhibit
1.1 hereto and is incorporated herein by reference.
A
copy of the opinion of McDonald Carano LLP relating to the validity
of the Shares that may be offered and sold under the Registration
Statement, is filed with this Current Report on Form 8-K as
Exhibit 5.1.
This
Current Report on Form 8-K shall not constitute an offer to sell or
the solicitation of an offer to buy the Shares, nor shall there be
any offer, solicitation or sale of the Shares in any state or
country in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of
any such state or country.
Forward- Looking Statements
This
Current Report on Form 8-K contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934 and
Private Securities Litigation Reform Act, as amended, including
those relating to the expected consummation of the Offering and
other statements that are predictive in nature. These
forward-looking statements are based on current expectations,
estimates, forecasts and projections about the industry and markets
in which we operate and management’s current beliefs and
assumptions.
These statements may be identified by the use of forward-looking
expressions, including, but not limited to, “expect,”
“anticipate,” “intend,” “plan,”
“believe,” “estimate,”
“potential,” “predict,”
“project,” “should,” “would”
and similar expressions and the negatives of those terms. These
statements relate to future events or our financial performance and
involve known and unknown risks, uncertainties, and other factors
which may cause actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include those set forth in the
Company’s filings with the SEC. Prospective investors are
cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date of this press release.
The Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.