AudioEye Files 8-K: Material Agreement & Financial Update

TL;DR

AudioEye dropped an 8-K detailing a new material agreement and financial results.

AI Summary

AudioEye, Inc. announced on September 27, 2024, that it entered into a material definitive agreement. The company also reported its results of operations and financial condition. This filing also details the creation of a direct financial obligation or an obligation under an off-balance sheet arrangement of the registrant, along with Regulation FD Disclosure and other events.

Why It Matters

This 8-K filing indicates significant corporate actions, including a new material agreement and a review of financial performance, which could impact investor outlook.

Risk Assessment

Risk Level: medium — The filing involves material definitive agreements and financial condition updates, which inherently carry medium risk due to potential impacts on the company's operations and market position.

Key Players & Entities

• AudioEye, Inc. (company) — Registrant
• September 27, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $0.00001 — ch registered Common Stock, par value $0.00001 per share AEYE The Nasdaq Capital M
• $4,000,000 — uisition") for a cash purchase price of $4,000,000 and the issuance by the Company of unse
• $2,400,000 — rs in the aggregate principal amount of $2,400,000 (collectively, the "Promissory Note").
• $250,000 — ct to extension for up to approximately $250,000 of the principal amount of the Promisso
• $1,600,000 — ration payable to Sellers cannot exceed $1,600,000, except the Sellers have the opportunit
• $3,000,000 — nd Borrowers have liquidity of at least $3,000,000 after making such payment. There were n
• $8.9 million — generate revenue of the Company between $8.9 million and $8.95 million, adjusted EBITDA betw
• $8.95 m — of the Company between $8.9 million and $8.95 million, adjusted EBITDA between $1.925 m
• $1.925 million — $8.95 million, adjusted EBITDA between $1.925 million and $1.95 million, and adjusted earning
• $1.95 m — usted EBITDA between $1.925 million and $1.95 million, and adjusted earnings per share
• $0.15 — and adjusted earnings per share between $0.15 and $0.16. The acquisition of ADA is ex
• $0.16 — ed earnings per share between $0.15 and $0.16. The acquisition of ADA is expected to

Filing Documents

• tm2423575d1_8k.htm (8-K) — 42KB
• tm2423575d1_ex10-1.htm (EX-10.1) — 394KB
• tm2423575d1_ex10-2.htm (EX-10.2) — 42KB
• tm2423575d1_ex99-1.htm (EX-99.1) — 11KB
• 0001104659-24-103953.txt ( ) — 762KB
• aeye-20240927.xsd (EX-101.SCH) — 3KB
• aeye-20240927_lab.xml (EX-101.LAB) — 33KB
• aeye-20240927_pre.xml (EX-101.PRE) — 22KB
• tm2423575d1_8k_htm.xml (XML) — 4KB

01

Item 1.01 Entry into a Material Definitive Agreement. On September 27, 2024, AudioEye, Inc. (the "Company") entered into a Membership Interest Purchase Agreement by and among the Company, as Buyer, ADA Site Compliance, LLC, a Delaware limited liability company ("ADA"), the individual sellers of ADA (collectively, the "Sellers"), and Scott Trachtenberg, in his capacity as Sellers' Representative (the "Purchase Agreement"). Pursuant to the Purchase Agreement, on September 27, 2024, the Company purchased all of the issued and outstanding equity of ADA (the "Acquisition") for a cash purchase price of $4,000,000 and the issuance by the Company of unsecured promissory notes to the Sellers in the aggregate principal amount of $2,400,000 (collectively, the "Promissory Note"). Principal under the Promissory Note will become due and payable 60 days following the closing, subject to extension for up to approximately $250,000 of the principal amount of the Promissory Note if necessary to resolve any purchase price adjustment related disputes, The Promissory Note does not bear interest until 60 days following the closing of the Acquisition and may be prepaid without penalty. The final purchase price is subject to customary adjustments for cash, indebtedness, transaction expenses and net working capital at closing, and the Company has the right to offset against the Promissory Note for any amounts owing to it in connection with the purchase price adjustment process or any indemnification claims made pursuant to the Purchase Agreement. Sellers may also be entitled to additional earn-out consideration based on the satisfaction of certain annual recurring revenue and non-recurring revenue achieved by the Company and its subsidiaries, including ADA, from customers of ADA during specified time periods following the closing, which will generally be measured as of December 31, 2025. The total earn-out consideration payable to Sellers cannot exceed $1,600,000, except the Sellers have

02 Results of Operations and Financial

Item 2.02 Results of Operations and Financial Condition. On September 30, 2024, the Company issued a press release announcing, among other things, updated earnings guidance. A copy of the press release is furnished as Exhibit 99.1 to this report. The information in this Item 2.02 (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

03 Creation of a Direct Financial Obligation

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information regarding the Promissory Note included in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure The information in Item 2.02 of this Current Report on Form 8-K is incorporated herein by reference. The information set forth in this Item 7.01 and in Exhibit 99.1 attached hereto is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

01 Other Events

Item 8.01 Other Events Updated Company Financial Outlook For the third quarter of 2024, management expects to generate revenue of the Company between $8.9 million and $8.95 million, adjusted EBITDA between $1.925 million and $1.95 million, and adjusted earnings per share between $0.15 and $0.16. The acquisition of ADA is expected to be accretive in the fourth quarter of 2024.

Forward-Looking Statements

Forward-Looking Statements Any statements in this Form 8-K, or in the press release furnished as Exhibit 99.1 to this report, about the Company's expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are "forward-looking statements" as that term is defined under the federal securities laws. Forward-looking statements are often, but not always, made through the use of words or phrases such as "believe", "anticipate", "should", "confident", "intend", "plan", "will", "expects", "estimates", "projects", "positioned", "strategy", "outlook" and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements contained herein or therein include, but are not limited to, statements regarding future cash flows of the Company and ADA, anticipated contributions from sales generated by the Company or ADA, our expectation that the ADA acquisition will be accretive and synergistic, our ability to integrate ADA into our business and replicate the success we had integrating our 2022 acquisition of the Bureau of Internet Accessibility, our ability to deepen our relationships with ADA customers and increase ARR, our long-term growth prospects, opportunities in the digital accessibility industry, our revenue, adjusted EBITDA and adjusted EPS guidance, our expectation to achieve the Rule of 40' in the third quarter, and our expectation of investments in marketing and sales and acquisitions of accretive businesses. These statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements, including the variability of the Company's revenue and financial performance; product development and technological changes; the acceptance of the Company's products in the marketplace; the effectiveness of our integration e

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits 10.1 Membership Interest Purchase Agreement, by and among AudioEye, Inc., ADA Site Compliance, LLC, a Delaware limited liability company, the Sellers listed on the signature pages thereto, and Scott Trachtenberg, in his capacity as Sellers' Representative, dated as of September 27, 2024.* 10.2 First Amendment, Consent and Joinder to Loan and Security Agreement, by and between AudioEye, Inc., ADA Site Compliance, LLC, and SG Credit Partners, Inc., dated as of September 27, 2024 99.1 Press Release, dated September 30, 2024, issued by AudioEye, Inc. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Schedules and certain exhibits have been omitted pursuant to Items 601(a)(5) and/or 601(b)(10)(iv) of Regulation S-K. The issuer hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U.S. Securities and Exchange Commission upon request. - 4 - SIGNATURE 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. AUDIOEYE, INC. By: /s/ David Moradi Name: David Moradi Title: Chief Executive Officer Date: September 30, 2024 - 5 -

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View this 8-K filing on SEC EDGAR