UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report
(Date of earliest event reported)
October 11, 2018
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INUVO,
INC.
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(Exact
name of registrant as specified in its charter)
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Nevada
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001-32442
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87-0450450
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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500
President Clinton Avenue, Suite 300, Little Rock, AR
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72201
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (501)
205-8508
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not
applicable
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(Former
name or former address, if changed since last report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth
company as defined in in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this
chapter).
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Emerging growth company
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If an
emerging growth company, indicate by checkmark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01
Entry into a Material Definitive Agreement.
On
October 11, 2018 Inuvo, Inc., together with certain of its
wholly-owned subsidiaries as co-borrowers, entered into the Amended
and Restated Business Financing Agreement (the “Amended and
Restated Financing Agreement”) with Western Alliance Bank.
The Amended and Restated Financing Agreement, which is secured by
all of our assets, amended and superseded in its entirety the
Business Financing Agreement, as amended, that we entered into on
March 1, 2012 with Bridge Bank, N.A. which is now owned by Western
Alliance Bank. The Amended and Restated Financing Agreement does
not have a term and either party may terminate upon notice to the
other party. As a result of the amended terms of our lending
relationship with Western Alliance Bank, our borrowing base with
Western Alliance Bank is expected to increase.
The
material amendments to the terms of our lending relationship with
Western Alliance Bank set forth in the Amended and Restated
Financing Agreement include:
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a financed
receivable arrangement which provides:
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85%
of actual issued invoices at prime plus 1%; and
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a
sub-limit on unbilled receivables based on 75% of up to $2,500,000
in unbilled invoices at prime plus 2%. This provision expires at
the end of January 2019.
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certain
fees, including, but not limited to:
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a
facility fee of $11,765 was paid on the date of the agreement.
Thereafter, an annual facility fee of 0.25% of the formula account
balance will be due beginning on April 20, 2019;
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at
the end of each month we are obligated to pay the lender a
maintenance fee of 0.125% per month of the ending daily account
balance for the relevant period;
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we
also paid a fee of $30,000 to the bank upon the execution of the
agreement in lieu of issuing the bank a warrant; and
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$75,000
will be due the bank upon termination of the agreement or repayment
of our obligations under the Amended and Restated Financing
Agreement.
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upon
termination of the agreement by either party or upon an event of
default all of our obligations to Western Alliance Bank become due
and payable. Events of default include:
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our
failure to make any payments when due or our failure to provide the
bank with an enforceable first lien on or a security interest in
the collateral;
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the
filing of a petition for bankruptcy protection, if we make a
general assignment for the benefit of creditors, if a receiver is
appointed for our business or if our business terminates;
or
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of
the capital ownership of our company on the date of the agreement
cease to own and control, directly and indirectly, at least 51% of
the capital ownership of Inuvo, Inc., or if we cease to own and
control, directly and indirectly, at least 100% of the capital
ownership of each of our subsidiaries which are also borrowers;
and
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other
customary events of default related to material adverse changes,
cross defaults and breaches.
The
foregoing description of the terms and conditions of the Amended
and Restated Financing Agreement is qualified in its entirety by
reference to the agreement which will be filed as an exhibit to our
Quarterly Report on Form 10-Q for the period ended September 30,
2018.
Item 8.01
Other Events.
On
October 15, 2018 the board of directors of Inuvo, Inc. appointed G.
Kent Burnett, a member of the board, to the Audit Committee as the
committee’s third member. Biographical information for Mr.
Burnett, who is an independent director within the meaning of
Section 803 of the NYSE American Company Guide and Rule 10A-3 of
the Securities Exchange Act of 1934, is contained in the proxy
statement for our 2018 annual meeting of stockholders as filed with
the Securities and Exchange Commission on May 4, 2018.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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INUVO,
INC.
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Date:
October 17, 2018
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By: /s/
Wallace D.
Ruiz
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Wallace
D. Ruiz, Chief Financial Officer
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