AudioEye, Inc. (NASDAQ:AEYE) Q2 2024 Earnings Conference Call July 25, 2024 4:30 PM ET Company Participants David Moradi - Chief Executive Officer Kelly Georgevich - Chief Financial Officer Conference Call Participants Richard Baldry - ROTH Zach Cummins - B. Riley Securities Scott Buck - H.C. Wainwright Operator Good afternoon and welcome to AudioEye's Second Quarter 2024 Earnings Conference Call. Joining us for today's call are AudioEye's CEO, Mr. David Moradi; and CFO, Ms. Kelly Georgevich. Following thei ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from [ ] to [ ] Commission File Number: 001-38640 AudioEye, Inc. (Exact name of registrant as specified in its charter) Delaware 20-2939845 (State or o ...

AudioEye, Inc. (NASDAQ:AEYE) Q1 2024 Earnings Conference Call April 23, 2024 4:30 PM ET Company Participants David Moradi - CEO Kelly Georgevich - CFO Conference Call Participants George Sutton - Craig-Hallum Zach Cummins - B. Riley Securities Scott Buck - H.C. Wainwright Operator Good afternoon and welcome to AudioEye's First Quarter 2024 Earnings Conference Call. Joining us today are AudioEye's CEO, Mr. David Moradi, and CFO, Ms. Kelly Georgevich. Following their remarks, we will open the call for questio ...

Exhibit 99.1 AudioEye Reports Record First Quarter 2024 Results Thirty-Third Consecutive Period of Record Revenue TUCSON, Ariz. — April 23, 2024 — AudioEye, Inc. (Nasdaq: AEYE) ("AudioEye" or the "Company"), the industry-leading digital accessibility company, reported financial results for the first quarter ended March 31, 2024. Date: Tuesday, April 23, 2024 Time: 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) U.S. dial-in number: 888-348-8931 International number: 412-317-0453 Webcast: Q124 Webcast Link " ...

AudioEye, Inc. (NASDAQ:AEYE) Q4 2023 Earnings Conference Call February 6, 2024 4:30 PM ET Company Participants David Moradi - CEO Kelly Georgevich - CFO Conference Call Participants George Sutton - Craig-Hallum Zach Cummins - B. Riley FBR Scott Buck - H.C. Wainwright Operator Good afternoon and welcome to AudioEye's Fourth Quarter and Full Year 2023 Earnings Conference Call. Joining us today on today's call are AudioEye's CEO, Mr. David Moradi; and CFO, Ms. Kelly Georgevich. Following their remarks, we will ...

Exhibit 99.1 AudioEye Reports Record Fourth Quarter and Full Year 2023 Results Thirty-Second Consecutive Period of Record Revenue TUCSON, Ariz. — March 6, 2024 — AudioEye, Inc. (NASDAQ: AEYE) ("AudioEye" or the "Company"), the industry-leading enterprise SaaS accessibility company, reported financial results for the fourth quarter and full year ended December 31, 2023. "I want to thank our employees for all their hard work in dramatically improving our efficiency, including revenue per employee, gross margi ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) AudioEye, Inc. offers SaaS digital accessibility solutions, leveraging AI and human expertise to ensure website compliance through Enterprise and Partner channels - AudioEye's business model focuses on **SaaS subscriptions** for its digital accessibility platform, combining **AI-driven automation** and **human expertise** for WCAG compliance[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) - The company operates through two primary sales channels: **Enterprise** for large organizations and **Partner and Marketplace** for small and medium-sized businesses[24](index=24&type=chunk) - A single major customer and its affiliates contributed approximately **17% of total revenue** in both 2023 and 2022, indicating significant customer concentration[25](index=25&type=chunk) - The company's intellectual property portfolio includes **22 issued U.S. patents**, considered a key competitive strength[26](index=26&type=chunk) - As of December 31, 2023, the company employed **114 full-time employees** and utilizes independent contractors as needed[38](index=38&type=chunk)[39](index=39&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including historical net losses, capital needs, loan covenants, intense competition, and cybersecurity - The company has a history of significant losses, reporting a **net loss of $5.87 million** in 2023 and an **accumulated deficit of $89.48 million**[43](index=43&type=chunk) - A **$7.0 million loan** obtained in November 2023 includes financial covenants such as maintaining **$2.0 million minimum liquidity** and meeting monthly recurring revenue levels[46](index=46&type=chunk)[47](index=47&type=chunk) - The company faces intense competition from larger, better-financed entities, established consultants, and emerging AI technologies[58](index=58&type=chunk)[59](index=59&type=chunk) - The uncertain and evolving legal framework for website accessibility could impact product demand or require offering changes[74](index=74&type=chunk) - As of December 31, 2023, four stockholders, including key executives, beneficially owned **over 45% of voting power**, indicating significant ownership concentration[118](index=118&type=chunk) [Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) AudioEye maintains a cybersecurity risk management program with internal audits, penetration testing, and an incident response team - The company's cybersecurity strategy includes proactive reviews, **external penetration testing**, employee training, and data protection law monitoring[127](index=127&type=chunk) - The **Audit Committee** oversees cyber threat risks, receiving regular updates from senior management[130](index=130&type=chunk) - An **incident response team**, including key officers, manages and remediates cybersecurity threats[130](index=130&type=chunk)[131](index=131&type=chunk) [Properties](index=38&type=section&id=Item%202.%20Properties) The company's principal office is a leased space in Tucson, Arizona, expiring October 2024, with additional leased and shared offices - The main corporate office in Tucson, Arizona, is under a lease agreement expiring in **October 2024**[134](index=134&type=chunk) [Legal Proceedings](index=38&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal proceedings, but management does not anticipate a material adverse financial impact - The company does not anticipate any material financial impact from routine legal proceedings beyond existing provisions[136](index=136&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) AudioEye's common stock is listed on Nasdaq, with a $5 million share repurchase program authorized, and no dividends paid or anticipated - In November 2023, the Board approved a new **$5 million share repurchase program** valid through December 31, 2025[141](index=141&type=chunk) Share Repurchase Activity (Q4 2023, in thousands) | Period | Total Shares Purchased | Average Price Paid per Share | Remaining Authorization | | :--- | :--- | :--- | :--- | | **Employee Transactions** | 21,096 | $4.49 | N/A | | **Share Repurchase Program** | 248,205 | $4.52 | $3,878 | - The company has not paid dividends since inception and plans to retain future earnings for business development[145](index=145&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) AudioEye's 2023 revenue grew 5% to $31.3 million, with reduced operating and net losses, and positive Adjusted EBITDA - **Annual Recurring Revenue (ARR)** grew **7%** to **$31.2 million** as of December 31, 2023, driven by the Partner and Marketplace channel[148](index=148&type=chunk)[173](index=173&type=chunk) Consolidated Statements of Operations (in thousands) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | **$31,316** | **$29,913** | **5%** | | Gross Profit | $24,342 | $22,694 | 7% | | Total Operating Expenses | $30,307 | $33,123 | (9)% | | **Operating Loss** | **$(5,965)** | **$(10,429)** | **(43)%** | | **Net Loss** | **$(5,872)** | **$(10,433)** | **(44)%** | Revenue by Channel (in thousands) | Channel | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Partner and Marketplace | $18,027 | $15,972 | 13% | | Enterprise | $13,289 | $13,941 | (5)% | | **Total Revenues** | **$31,316** | **$29,913** | **5%** | Non-GAAP Adjusted EBITDA Reconciliation (in thousands) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net loss (GAAP) | $(5,872) | $(10,433) | | **Adjusted EBITDA** | **$1,340** | **$(946)** | | Adjusted EBITDA margin | 4% | (3)% | - Cash flow from operating activities significantly improved to a source of **$0.32 million** in 2023 from a use of **$(5.00) million** in 2022[187](index=187&type=chunk) - The company secured a **$7.0 million term loan** in November 2023, maturing in November 2026, increasing year-end cash to **$9.2 million**[182](index=182&type=chunk)[189](index=189&type=chunk) [Financial Statements and Supplementary Data](index=53&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents AudioEye's consolidated financial statements, detailing balance sheet, income statement, and cash flow performance for 2023 and 2022 [Consolidated Balance Sheets](index=68&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, total assets increased to $25.5 million, driven by cash from a new term loan, while liabilities rose and equity decreased Key Balance Sheet Items (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash | $9,236 | $6,904 | | Total Current Assets | $14,776 | $12,966 | | Goodwill & Intangibles, net | $9,784 | $10,042 | | **Total Assets** | **$25,495** | **$24,428** | | Total Current Liabilities | $11,529 | $11,062 | | Term loan, net | $6,727 | $— | | **Total Liabilities** | **$18,788** | **$13,839** | | **Total Stockholders' Equity** | **$6,707** | **$10,589** | [Consolidated Statements of Operations](index=69&type=section&id=Consolidated%20Statements%20of%20Operations) For 2023, revenue increased 5% to $31.3 million, gross profit rose 7%, and operating and net losses significantly narrowed due to reduced expenses Key Income Statement Data (in thousands) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Revenue | $31,316 | $29,913 | | Gross Profit | $24,342 | $22,694 | | Operating Loss | $(5,965) | $(10,429) | | Net Loss | $(5,872) | $(10,433) | | Net Loss per Share | $(0.50) | $(0.91) | [Consolidated Statements of Cash Flows](index=71&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In 2023, operating cash flow turned positive at $0.3 million, investing activities used $2.2 million, and financing provided $4.2 million, increasing cash to $9.2 million Cash Flow Summary (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $318 | $(4,999) | | Net cash used in investing activities | $(2,156) | $(5,733) | | Net cash provided by (used in) financing activities | $4,170 | $(1,330) | | **Net increase (decrease) in cash** | **$2,332** | **$(12,062)** | | **Cash at end of period** | **$9,236** | **$6,904** | [Controls and Procedures](index=55&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2023, the CEO and CFO concluded that disclosure controls and internal control over financial reporting were effective - Management, including the **CEO and CFO**, concluded that disclosure controls and internal control over financial reporting were **effective** as of December 31, 2023[204](index=204&type=chunk)[206](index=206&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Executive Compensation, and Other Matters](index=57&type=section&id=Items%2010-14) Information for Items 10-14, covering governance, executive compensation, and related matters, is incorporated by reference from the forthcoming 2024 proxy statement - Detailed information on corporate governance, executive compensation, and related party transactions will be available in the forthcoming **2024 proxy statement**[214](index=214&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=58&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K, including consolidated financial statements, corporate governance, and material contracts - The financial statements are filed as part of this report, beginning on **page F-1**[222](index=222&type=chunk) - A key exhibit is the **Loan and Security Agreement** dated November 30, 2023, related to the **$7.0 million term loan**[224](index=224&type=chunk)

Financial Performance - For the nine months ended September 30, 2023, total revenue increased by 6% to $23.446 million compared to $22.175 million in the prior year[90]. - As of September 30, 2023, Annual Recurring Revenue (ARR) was approximately $30.5 million, representing a 4% year-over-year increase[81]. - The customer count increased by 32% to approximately 107,000 as of September 30, 2023, up from 81,000 at the same time last year[82]. - Revenue from the Partner and Marketplace channel grew by 14% for the nine months ended September 30, 2023, contributing $13.365 million[91]. - Gross profit for the nine months ended September 30, 2023, increased by 9% to $18.169 million, up from $16.701 million[95]. - The operating loss for the nine months ended September 30, 2023, improved by 36% to $5.472 million from $8.505 million in the prior year[90]. - Non-GAAP earnings for the three months ended September 30, 2023, were $291,000, compared to a loss of $1,355,000 under GAAP[116]. - Non-GAAP earnings per diluted share for the three months ended September 30, 2023, was $0.02, compared to a GAAP loss per diluted share of $(0.11)[116]. Operating Expenses - Total operating expenses decreased by 6% to $23.641 million for the nine months ended September 30, 2023, compared to $25.206 million in the prior year[90]. - Selling and marketing expenses decreased by 11% to $9.387 million for the nine months ended September 30, 2023, compared to $10.502 million in the prior year[98]. - Selling and marketing expenses decreased by 14% and 11% for the three and nine months ended September 30, 2023, respectively, primarily due to reductions in online media and third-party marketing expenses[99]. - General and administrative expenses decreased by 18% and 17% for the three and nine months ended September 30, 2023, respectively, due to lower legal expenses and stock compensation expenses[103]. - Research and development costs represented 31% of total revenue for the three months ended September 30, 2023[85]. - Research and development expenses increased by 27% and 28% for the three and nine months ended September 30, 2023, respectively, driven by higher personnel costs associated with increased investment in the platform[101]. - Total research and development costs rose by 33% and 35% for the three and nine months ended September 30, 2023, respectively, totaling $2.437 million and $7.215 million[100][101]. Cash Flow and Liquidity - Cash as of September 30, 2023, was $3.274 million, with working capital of $(2.673) million, primarily due to investments in the internally-developed platform[120]. - Current assets decreased from $12,966,000 in December 2022 to $8,343,000 as of September 30, 2023, while current liabilities remained relatively stable[124]. - Working capital turned negative, decreasing from $1,904,000 in December 2022 to $(2,673,000) in September 2023[124]. - Net cash used in operating activities improved significantly, decreasing from $(4,492,000) in the nine months ended September 30, 2022, to $(515,000) in the same period of 2023[125]. - Cash used in investing activities decreased from $(5,426,000) in 2022 to $(1,654,000) in 2023, primarily due to the prior year's acquisition of BOIA[126]. - Cash used in financing activities increased to $(1,461,000) in 2023, influenced by a $974,000 payment related to the contingent consideration from the BOIA acquisition[127]. - The company has no debt obligations and believes it has sufficient liquidity to continue operations for the next twelve months[122]. - There is uncertainty regarding the ability to raise additional capital in the future, which may necessitate modifications to the business plan[123]. - The company’s cash decrease for the nine months ended September 30, 2023, was $3,630,000, compared to a decrease of $11,143,000 in the prior year[125]. Other Financial Information - Interest income increased significantly to $35,000 for the three months ended September 30, 2023, compared to an expense of $1,000 in the prior year, marking a change of 3,600%[104]. - Contingent consideration classified as a current liability was $2.2 million, expected to be paid in the second quarter of 2024[120]. - The company raised $16,534,000 from the issuance of 471,970 shares under the At The Market offering in 2021, with no shares sold in 2022 or 2023[121]. - There have been no material changes to the company's critical accounting policies and estimates since the last annual report[129]. - The decrease in Enterprise channel revenue for the nine months ended September 30, 2023, was primarily driven by a reduction in revenue from one large customer[94].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from [ ] to [ ] Commission File Number: 001-38640 AudioEye, Inc. (Exact name of registrant as specified in its charter) Delaware 20-2939845 (I.R.S. Empl ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from [ ] to [ ] Commission File Number: 001-38640 AudioEye, Inc. (Exact name of registrant as specified in its charter) Delaware 20-2939845 (I.R.S. Emp ...