# EDGAR Filing Document

**Accession Number:** 0001362190
**File Stem:** 0001104659-25-106406
**Filing Date:** 2025-11
**Character Count:** 129309
**Document Hash:** 231924833cbbf30b7220c9ccfecdcae4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-106406.hdr.sgml**: 20251104

**ACCESSION NUMBER**: 0001104659-25-106406

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 57

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251104

**DATE AS OF CHANGE**: 20251104

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** AUDIOEYE INC
- **CENTRAL INDEX KEY:** 0001362190
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38640
- **FILM NUMBER:** 251450651

**BUSINESS ADDRESS:**
- **STREET 1:** 5210 E. WILLIAMS CIRCLE
- **STREET 2:** SUITE 750
- **CITY:** TUCSON
- **STATE:** AZ
- **ZIP:** 85711
- **BUSINESS PHONE:** 866-331-5324

**MAIL ADDRESS:**
- **STREET 1:** 5210 E. WILLIAMS CIRCLE
- **STREET 2:** SUITE 750
- **CITY:** TUCSON
- **STATE:** AZ
- **ZIP:** 85711

?xml version='1.0' encoding='ASCII'? AUDIOEYE INC_September 30, 2025

[**Table of Contents**](#TOC)

------

**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 September 30, 2025**

**or**

☐&nbsp;&nbsp;&nbsp;&nbsp; **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ] to [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ]**

**Commission File Number: 001-38640**

![Graphic](aeye-20250930x10q001.jpg)

**AudioEye, Inc.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **20-2939845** |
| (State or other jurisdiction of incorporation or <br>organization) | (I.R.S. Employer Identification No.) |
| **5210 East Williams Circle, Suite 750,**<br>**Tucson, Arizona** | **85711** |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code: **866-331-5324**

**Securities registered pursuant to Section 12(b) of the Act:**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Title of each class | &nbsp;&nbsp;Trading Symbol(s) | &nbsp;&nbsp;Name of each exchange on which registered |
| &nbsp;&nbsp;Common Stock, par value $0.00001 per share | &nbsp;&nbsp;AEYE | &nbsp;&nbsp;The Nasdaq Capital Market |

---

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2025, 12,418,617 shares of the registrant's common stock were issued and outstanding.

------

[**Table of Contents**](#TOC)

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| [PART I](#PARTIFINANCIALINFORMATION_320278) | [FINANCIAL INFORMATION](#PARTIFINANCIALINFORMATION_320278) | 1 |
| [Item 1.](#Item1FinancialStatements_666434) | [Financial Statements](#Item1FinancialStatements_666434) | 1 |
|  | [Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 (unaudited)](#BALANCESHEETS_547169) | 2 |
|  | [Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 (unaudited)](#STATEMENTSOFOPERATIONS_243755) | 3 |
|  | [Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 (unaudited)](#STATEMENTSOFSTOCKHOLDERSEQUITY_981879) | 4 |
|  | [Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (unaudited)](#STATEMENTSOFCASHFLOWS_143407) | 6 |
|  | [Notes to Consolidated Financial Statements (unaudited)](#NOTE1BASISOFPRESENTATION_895243) | 7 |
| [Item 2.](#Item2ManagementsDiscussionandAnalysisofF) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#Item2ManagementsDiscussionandAnalysisofF) | 19 |
| [Item 3.](#Item3QuantitativeandQualitativeDisclosur) | [Quantitative and Qualitative Disclosures About Market Risk](#Item3QuantitativeandQualitativeDisclosur) | 26 |
| [Item 4.](#Item4ControlsandProcedures_646888) | [Controls and Procedures](#Item4ControlsandProcedures_646888) | 26 |
| [PART II](#PARTIIOTHERINFORMATION_446353) | [OTHER INFORMATION](#PARTIIOTHERINFORMATION_446353) | 28 |
| [Item 1.](#Item1LegalProceedings_772171) | [Legal Proceedings](#Item1LegalProceedings_772171) | 28 |
| [Item 1A.](#Item1ARiskFactors_38888) | [Risk Factors](#Item1ARiskFactors_38888) | 28 |
| [Item 2.](#Item2IssuerPurchasesofEquitySecurities_1) | [Issuer Purchases of Equity Securities](#Item2IssuerPurchasesofEquitySecurities_1) | 28 |
| [Item 5.](#Other_Information) | [Other Information](#Other_Information) | 29 |
| [Item 6.](#Item6Exhibits_819451) | [Exhibits](#Item6Exhibits_819451) | 29 |
| [SIGNATURES](#SIGNATURES_602997) |  | 30 |

---

[**Table of Contents**](#TOC)

**PART I — FINANCIAL INFORMATION**

**Item 1. Financial Statements**

The financial information set forth below with respect to the consolidated financial statements as of September 30, 2025 and December 31, 2024 and for the three- and nine-month periods ended September 30, 2025 and 2024 is unaudited. This financial information, in the opinion of our management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the three- and nine-month periods ended September 30, 2025 are not necessarily indicative of results to be expected for any subsequent period. Our fiscal year end is December 31. The Company presents its unaudited consolidated financial statements, notes, and other financial information rounded to the nearest thousand United States Dollars ("U.S. Dollar"), except for per share data.

[**Table of Contents**](#TOC)

#### AUDIOEYE, INC.

#### CONSOLIDATED BALANCE SHEETS
**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **September 30,**  | **December 31,**  |
| **(in thousands, except per share data)** | **2025** | **2024** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $4550 | $5651 |
| &nbsp;&nbsp;Accounts receivable, net of allowance for doubtful accounts of $749 and $511, respectively | 6341 | 5932 |
| &nbsp;&nbsp;Prepaid expenses and other current assets | 970 | 537 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 11861 | 12120 |
| &nbsp;&nbsp;Property and equipment, net of accumulated depreciation of $353 and $294, respectively | 160 | 215 |
| &nbsp;&nbsp;Right of use assets | 208 | 385 |
| &nbsp;&nbsp;Intangible assets, net of accumulated amortization of $12,293 and $9,793, respectively | 11486 | 10276 |
| &nbsp;&nbsp;Goodwill | 6682 | 6661 |
| &nbsp;&nbsp;Other | 81 | 109 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $30478 | $29766 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;Accounts payable and accrued expenses | $3873 | $3870 |
| &nbsp;&nbsp;Operating lease liabilities | 213 | 199 |
| &nbsp;&nbsp;Deferred revenue | 7463 | 7502 |
| &nbsp;&nbsp;Term loan, current | 335 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 11884 | 11571 |
| Long term liabilities: |  |  |
| &nbsp;&nbsp;Term loan, net | 12622 | 6820 |
| &nbsp;&nbsp;Operating lease liabilities | 56 | 218 |
| &nbsp;&nbsp;Deferred revenue | 3 | 16 |
| &nbsp;&nbsp;Contingent consideration, long term | 225 | 1350 |
| &nbsp;&nbsp;Other | 37 | 355 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 24827 | 20330 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;Preferred stock, $0.00001 par value, 10,000 shares authorized |  |  |
| &nbsp;&nbsp;Common stock, $0.00001 par value, 50,000 shares authorized, 12,414 and 12,285 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 1 | 1 |
| &nbsp;&nbsp;Additional paid-in capital | 107007 | 105181 |
| &nbsp;&nbsp;Accumulated deficit | (101357) | (95746) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 5651 | 9436 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $30478 | $29766 |

---

See Notes to Unaudited Consolidated Financial Statements

[**Table of Contents**](#TOC)

#### AUDIOEYE, INC.

#### CONSOLIDATED STATEMENTS OF OPERATIONS
**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Nine months ended September 30,**  | **Nine months ended September 30,**  |
| **(in thousands, except per share data)** | **2025** | **2024** | **2025** | **2024** |
| Revenue | $10227 | $8925 | $29817 | $25478 |
| Cost of revenue | 2312 | 1823 | 6545 | 5348 |
| Gross profit | 7915 | 7102 | 23272 | 20130 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;Selling and marketing | 3649 | 3148 | 11169 | 9122 |
| &nbsp;&nbsp;Research and development | 1118 | 1151 | 3471 | 3694 |
| &nbsp;&nbsp;General and administrative | 3506 | 3794 | 10998 | 9445 |
| &nbsp;&nbsp;Change in fair value of contingent consideration | (40) |  | (1350) | (12) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 8233 | 8093 | 24288 | 22249 |
| Operating loss | (318) | (991) | (1016) | (2119) |
| Other expense: |  |  |  |  |
| &nbsp;&nbsp;Interest expense, net | (236) | (211) | (709) | (647) |
| &nbsp;&nbsp;Loss on extinguishment of debt |  |  | (300) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other expense | (236) | (211) | (1009) | (647) |
| Net loss | $(554) | $(1202) | $(2025) | $(2766) |
| Net loss per common share-basic and diluted | $(0.04) | $(0.10) | $(0.16) | $(0.23) |
| Weighted average common shares outstanding-basic and diluted | 12414 | 11960 | 12417 | 11791 |

---

See Notes to Unaudited Consolidated Financial Statements

[**Table of Contents**](#TOC)

#### AUDIOEYE, INC.

#### CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

#### THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(unaudited)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | **Additional** |  |  |
|  | **Common stock** | **Common stock** | **Paid-in** | **Accumulated** |  |
| **(in thousands)** | **Shares** | **Amount** | **Capital** | **Deficit** | **Total** |
| Balance, December 31, 2024 | 12285 | $1 | $105181 | $(95746) | $9436 |
| &nbsp;&nbsp;Common stock issued upon settlement of restricted stock units | 207 |  |  |  |  |
| &nbsp;&nbsp;Common stock issued upon exercise of options on a cash basis | 6 |  | 38 |  | 38 |
| &nbsp;&nbsp;Issuance of common stock for services | 7 |  |  |  |  |
| &nbsp;&nbsp;Surrender of stock to cover tax liability on settlement of employee stock-based awards | (60) |  | (966) |  | (966) |
| &nbsp;&nbsp;Stock-based compensation |  |  | 907 |  | 907 |
| &nbsp;&nbsp;Net loss |  |  |  | (1469) | (1469) |
| Balance, March 31, 2025 | 12445 | $1 | $105160 | $(97215) | $7946 |
| &nbsp;&nbsp;Common stock issued upon exercise of options on a cashless basis | 5 |  |  |  |  |
| &nbsp;&nbsp;Common stock issued upon settlement of restricted stock units | 155 |  |  |  |  |
| &nbsp;&nbsp;Issuance of common stock for services | 9 |  |  |  |  |
| &nbsp;&nbsp;Common stock issued pursuant to employee stock purchase plan | 4 |  | 39 |  | 39 |
| &nbsp;&nbsp;Surrender of stock to cover tax liability on settlement of employee stock-based awards | (31) |  | (374) |  | (374) |
| &nbsp;&nbsp;Common stock repurchased for retirement | (144) |  |  | (1765) | (1765) |
| &nbsp;&nbsp;Stock-based compensation |  |  | 1505 |  | 1505 |
| &nbsp;&nbsp;Net loss |  |  |  | (2) | (2) |
| Balance, June 30, 2025 | 12443 | $1 | $106330 | $(98982) | $7349 |
| &nbsp;&nbsp;Common stock issued upon settlement of restricted stock units | 168 |  |  |  |  |
| &nbsp;&nbsp;Issuance of common stock for services | 7 |  |  |  |  |
| &nbsp;&nbsp;Surrender of stock to cover tax liability on settlement of employee stock-based awards | (51) |  | (604) |  | (604) |
| &nbsp;&nbsp;Common stock repurchased for retirement | (153) |  |  | (1821) | (1821) |
| &nbsp;&nbsp;Stock-based compensation |  |  | 1281 |  | 1281 |
| &nbsp;&nbsp;Net loss |  |  |  | (554) | (554) |
| Balance, September 30, 2025 | 12414 | $1 | $107007 | $(101357) | $5651 |

---

[**Table of Contents**](#TOC)

#### AUDIOEYE, INC.

#### CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

#### THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
(unaudited) (continued)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common stock** | **Common stock** | | | |
| **(in thousands)** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** | <br>**Accumulated**<br>**Deficit** | <br>**Total** |
| Balance, December 31, 2023 | 11711 | $1 | $96182 | $(89476) | $6707 |
| &nbsp;&nbsp;Common stock issued upon settlement of restricted stock units | 235 |  |  |  |  |
| &nbsp;&nbsp;Issuance of common stock for services | 7 |  |  |  |  |
| &nbsp;&nbsp;Surrender of stock to cover tax liability on settlement of employee stock-based awards | (25) |  | (160) |  | (160) |
| &nbsp;&nbsp;Common stock repurchased for retirement | (266) |  |  | (1686) | (1686) |
| &nbsp;&nbsp;Stock-based compensation |  |  | 883 |  | 883 |
| &nbsp;&nbsp;Net loss |  |  |  | (829) | (829) |
| Balance, March 31, 2024 | 11662 | $1 | $96905 | $(91991) | $4915 |
| &nbsp;&nbsp;Issuance of common stock for cash, net of transaction expenses | 40 |  | 563 |  | 563 |
| &nbsp;&nbsp;Common stock issued upon exercise of options on a cashless basis | 17 |  |  |  |  |
| &nbsp;&nbsp;Common stock issued upon settlement of restricted stock units | 141 |  |  |  |  |
| &nbsp;&nbsp;Issuance of common stock for services | 5 |  |  |  |  |
| &nbsp;&nbsp;Common stock issued pursuant to employee stock purchase plan | 4 |  | 53 |  | 53 |
| &nbsp;&nbsp;Surrender of stock to cover tax liability on settlement of employee stock-based awards | (28) |  | (584) |  | (584) |
| &nbsp;&nbsp;Common stock repurchased for retirement | (33) |  |  | (330) | (330) |
| &nbsp;&nbsp;Stock-based compensation |  |  | 975 |  | 975 |
| &nbsp;&nbsp;Net loss |  |  |  | (735) | (735) |
| Balance, June 30, 2024 | 11808 | $1 | $97912 | $(93056) | $4857 |
| &nbsp;&nbsp;Issuance of common stock for cash, net of transaction expenses | 123 |  | 2910 |  | 2910 |
| &nbsp;&nbsp;Common stock issued upon exercise of options on a cashless basis | 1 |  |  |  |  |
| &nbsp;&nbsp;Common stock issued upon settlement of restricted stock units | 117 |  |  |  |  |
| &nbsp;&nbsp;Issuance of common stock for services | 4 |  |  |  |  |
| &nbsp;&nbsp;Surrender of stock to cover tax liability on settlement of employee stock-based awards | (19) |  | (403) |  | (403) |
| &nbsp;&nbsp;Stock-based compensation |  |  | 1190 |  | 1190 |
| &nbsp;&nbsp;Net loss |  |  |  | (1202) | (1202) |
| Balance, September 30, 2024 | 12034 | $1 | $101609 | $(94258) | $7352 |

---

See Notes to Unaudited Consolidated Financial Statements

[**Table of Contents**](#TOC)

#### AUDIOEYE, INC.

#### CONSOLIDATED STATEMENTS OF CASH FLOWS
**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  |
| **(in thousands)** | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| Net loss | $(2025) | $(2766) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;Depreciation and amortization | 2581 | 1764 |
| &nbsp;&nbsp;Loss on disposal or impairment of long-lived assets | 61 | 5 |
| &nbsp;&nbsp;Loss on extinguishment of debt | 300 |  |
| &nbsp;&nbsp;Stock-based compensation expense | 3693 | 3048 |
| &nbsp;&nbsp;Amortization of deferred commissions | 26 | 27 |
| &nbsp;&nbsp;Amortization of debt discount and issuance costs | 73 | 70 |
| &nbsp;&nbsp;Amortization of right-of-use assets | 127 | 181 |
| &nbsp;&nbsp;Change in fair value of contingent consideration | (1350) | (12) |
| &nbsp;&nbsp;Provision for accounts receivable | 382 | 150 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (788) | 202 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (384) | (365) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accruals | (136) | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability | (148) | (266) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (192) | 36 |
| Net cash provided by operating activities | 2220 | 2166 |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;Purchase of equipment | (26) | (88) |
| &nbsp;&nbsp;Software development costs | (1430) | (1379) |
| &nbsp;&nbsp;Patent costs | (39) | (13) |
| &nbsp;&nbsp;Payment for acquisitions, net | (2032) | (3123) |
| Net cash used in investing activities | (3527) | (4603) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;Proceeds from common stock offering, net of transaction costs |  | 3473 |
| &nbsp;&nbsp;Proceeds from term loan, net of lender fees | 13351 |  |
| &nbsp;&nbsp;Payments for costs directly attributable to the issuance of term loan | (443) |  |
| &nbsp;&nbsp;Repayment of term loan | (7000) |  |
| &nbsp;&nbsp;Payments for debt extinguishment costs | (249) |  |
| &nbsp;&nbsp;Proceeds from exercise of options | 38 |  |
| &nbsp;&nbsp;Proceeds from employee stock purchase plan | 39 | 53 |
| &nbsp;&nbsp;Payments related to settlement of employee shared-based awards | (1944) | (1147) |
| &nbsp;&nbsp;Settlement of contingent consideration |  | (1677) |
| &nbsp;&nbsp;Repurchase of common stock | (3586) | (2016) |
| &nbsp;&nbsp;Repayments of finance leases |  | (7) |
| Net cash provided by (used in) financing activities | 206 | (1321) |
| Net decrease in cash and cash equivalents | (1101) | (3758) |
| Cash and cash equivalents - beginning of period | 5651 | 9236 |
| Cash and cash equivalents - end of period | $4550 | $5478 |

---

See Notes to Unaudited Consolidated Financial Statements

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

#### NOTE 1 — BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of AudioEye, Inc. and its wholly-owned subsidiaries, ADA Site Compliance, LLC, Criterion 508 Solutions, Inc., and Ability, Inc. ("we", "our" or the "Company"), have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") and the rules of the Securities and Exchange Commission (the "SEC"), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Form 10-K"), as filed with the SEC on March 12, 2025.

In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Certain information and disclosures normally contained in the audited consolidated financial statements as reported in the Company's Annual Report on Form 10-K have been condensed or omitted in accordance with the SEC's rules and regulations for interim reporting.

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

Our significant accounting policies are presented in "Note 2 – Significant Accounting Policies" in the 2024 Form 10-K. Users of financial information for interim periods are encouraged to refer to the footnotes to the consolidated financial statements contained in the 2024 Form 10-K when reviewing interim financial results.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the consolidated financial statements and during the reporting period. On an ongoing basis, management evaluates its estimates and judgments, including those related to stock-based compensation, allowance for doubtful accounts, intangible assets, and contingent consideration. Actual results may differ from these estimates.

Revenue Recognition

We derive our revenue primarily from the sale of internally developed software by a software-as-a-service ("SaaS") delivery model, as well as from professional services, through our direct sales force or through third-party resellers. Our SaaS fees include support and maintenance.

We recognize revenue in accordance with Accounting Standards Codification ("ASC") 606, *Revenue from Contracts with Customers* ("ASC 606"). The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

We determine revenue recognition through the following five steps:

● Identify the contract with the customer;

● Identify the performance obligations in the contract;

● Determine the transaction price;

● Allocate the transaction price to the performance obligations in the contract; and

● Recognize revenue when, or as, the performance obligations are satisfied.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer.

Our SaaS revenue is comprised of fixed subscription fees from customer accounts on our platform related to our software products. Our support revenue is comprised of subscription fees for customers for periodic auditing, human-assisted technological remediations, legal support, and other professional support services. SaaS and support (also referred to as "subscription") revenue is recognized on a ratable basis over the contractual subscription term of the arrangement beginning on the date that our service is made available to the customer. Certain SaaS and support fees are invoiced in advance on an annual, semi-annual, or quarterly basis. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when the related performance obligations have been satisfied. Our subscription agreements are generally non-cancelable, although clients typically have the right to terminate their contracts for cause if we fail to perform material obligations.

Non-subscription revenue consists primarily of PDF remediation and one-time website and mobile application reporting services and is recognized upon delivery. Consideration payable under PDF remediation arrangements is based on usage. Consideration payable under non-subscription website and mobile application reporting services arrangements is based on fixed fees.

The following tables present our revenues disaggregated by sales channel:

---

| | | |
|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  |
| **(in thousands)** | **2025** | **2024** |
| Partner and Marketplace | $5582 | $5226 |
| Enterprise | 4645 | 3699 |
| &nbsp;&nbsp;Total revenues | $10227 | $8925 |

---

---

| | | |
|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  |
| **(in thousands)** | **2025** | **2024** |
| Partner and Marketplace | $16501 | $14930 |
| Enterprise | 13316 | 10548 |
| &nbsp;&nbsp;Total revenues | $29817 | $25478 |

---

The Company records accounts receivable for amounts invoiced to customers for which the Company has an unconditional right to consideration as provided under the contractual arrangement. Deferred revenue includes payments received in advance of performance under the contract and is reported on an individual contract basis at the end of each reporting period. Deferred revenue is classified as current or noncurrent based on the timing of when we expect to recognize revenue.

The table below summarizes our deferred revenue as of September 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **September 30,**  | **December 31,**  |
| **(in thousands)** | **2025** | **2024** |
| Deferred revenue - current | $7463 | $7502 |
| Deferred revenue - noncurrent | 3 | 16 |
| &nbsp;&nbsp;Total deferred revenue | $7466 | $7518 |

---

In the three-month period ended September 30, 2025, we recognized $1,076,000, or 14%, in revenue from deferred revenue outstanding as of December 31, 2024. In the nine-month period ended September 30, 2025, we recognized $7,027,000, or 94%, in revenue from deferred revenue outstanding as of December 31, 2024.

We had one customer (including the customer's affiliates reflecting multiple contracts and a partnership with the Company) which accounted for approximately 13% of our total revenue in each of the three and nine months ended September 30, 2025, and 15% and 16% of our total revenue in the three and nine months ended September 30, 2024, respectively.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

As of September 30, 2025 and December 31, 2024, one customer represented 13% and 14% of total accounts receivable, respectively.

Deferred Costs (Contract Acquisition Costs)

We capitalize initial and renewal sales commissions in the period the commission is earned, which generally occurs when a customer contract is obtained, and amortize deferred commission costs on a straight-line basis over the expected period of benefit, which we have deemed to be the contract term. As a practical expedient, we expense sales commissions as incurred when the amortization period of related deferred commission costs would have been one year or less.

The table below summarizes the deferred commission costs as of September 30, 2025 and December 31, 2024, which are included in Prepaid expenses and other current assets (current portion) and Other assets (noncurrent portion) on our consolidated balance sheets:

---

| | | |
|:---|:---|:---|
|  | **September 30,**  | **December 31,**  |
| **(in thousands)** | **2025** | **2024** |
| Deferred costs – current | $30 | $28 |
| Deferred costs - noncurrent | 30 | 32 |
| &nbsp;&nbsp;Total deferred costs | $60 | $60 |

---

Amortization expense associated with sales commissions was included in Selling and marketing expenses on the consolidated statements of operations and totaled $9,000 and $26,000 for the three and nine months ended September 30, 2025, respectively, and $11,000 and $27,000 for the three and nine months ended September 30, 2024, respectively.

Business Combinations

The assets acquired, liabilities assumed and any contingent consideration in business combinations are recorded at their estimated fair value on the acquisition date with subsequent changes recognized in earnings. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the business combination date. As a result, the Company may recognize adjustments to provisional amounts of assets acquired or liabilities assumed in earnings in the reporting period in which the adjustments are determined.

Acquisition-related expenses primarily consist of legal, accounting, and other advisory fees and are recorded in the period in which they are incurred.

Asset Acquisitions

Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions. The Company allocates the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis and goodwill is not recognized in an asset acquisition. Direct transaction costs are capitalized as a component of the cost of the acquisition.

Intangible Assets

Intangible assets include patents, capitalized software development costs, and customer relationships. Intangible assets with finite lives are amortized on a straight-line basis over their respective estimated useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Intangible assets determined to have indefinite useful lives are not amortized but are tested for impairment annually and more frequently if events occur or circumstances change that indicate an asset may be impaired.

As of September 30, 2025 and December 31, 2024, intangible assets included $8,265,000 and $7,091,000 in customer relationships, respectively, and $3,079,000 and $3,054,000 in capitalized software development costs, respectively, net of accumulated amortization.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

Debt Discount and Debt Issuance Costs

Costs related to the issuance of debt due to the lender (debt discount) or to third parties (debt issuance costs) are capitalized and amortized to interest expense over the term of the related debt on a straight-line basis, which is not materially different from the effective interest method. Debt discount and debt issuance costs are presented on the Company's consolidated balance sheets as a direct deduction from the carrying amount of our term loan.

Employee Stock Purchase Plan

In May 2022, the stockholders of the Company approved the Company's Employee Stock Purchase Plan (the "ESPP"), which provides for the issuance of up to 500,000 shares of common stock. Eligible employees may elect to have a percentage of eligible compensation withheld to purchase shares of our common stock at the end of each purchase period. The Company expects each purchase period to be the six-month periods ending on June 30 or December 31 of each calendar year. Beginning in 2025, the purchase price per share equals 85% of the fair market value of our common stock on the first trading day or the last trading day of each purchase period, whichever amount is lower. As a result, the fair value of shares of common stock to be issued under the ESPP is measured on the first day of each offering period using a Black-Scholes option pricing model.

Under the ESPP, a participant may not be granted rights to purchase more than $25,000 worth of common stock for each calendar year and no participant may purchase more than 1,500 shares of our common stock (or such other number as the Compensation Committee may designate) on any one purchase date. As of September 30, 2025, 27,530 shares had been issued under the ESPP and 472,470 shares remained available under the plan.

Stock-Based Compensation

The Company periodically issues options, restricted stock units ("RSUs"), and shares of its common stock as compensation for services received from its employees, directors, and consultants. The fair value of the award is measured on the grant date. The fair value amount is then recognized as expense over the requisite vesting period during which services are required to be provided in exchange for the award. We recognize forfeitures as they occur. Stock-based compensation expense is recorded in the same expense classifications in the consolidated statements of operations as if such amounts were paid in cash.

The fair value of option awards is measured on the grant date using a Black-Scholes option pricing model, which includes assumptions that are subjective and are generally derived from external data (such as risk-free rate of interest) and historical data (such as volatility factor and expected term).

We estimate the fair value of restricted stock unit awards with time- or performance-based vesting using the value of our common stock on the grant date. We estimate the fair value of market-based restricted stock unit awards as of the grant date using the Monte Carlo simulation model.

We expense the compensation cost associated with time-based options and RSUs as the restriction period lapses, which is typically a one- to three-year service period with the Company. Compensation expense related to performance-based RSUs is recognized on a straight-line basis over the requisite service period, provided that it is probable that performance conditions will be achieved, with probability assessed on a quarterly basis and any changes in expectations recognized as an adjustment to earnings in the period of the change. Compensation cost is not recognized for service- and performance-based awards that do not vest because service or performance conditions are not satisfied, and any previously recognized compensation cost is reversed. Compensation costs related to awards with market conditions are recognized on a straight-line basis over the requisite service period regardless of whether the market condition is satisfied and is not reversed provided that the requisite service period derived from the Monte-Carlo simulation has been completed. If vesting occurs prior to the end of the requisite service period, expense is accelerated and fully recognized through the vesting date.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

The following table summarizes the stock-based compensation expense recorded for the three and nine months ended September 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Nine months ended September 30,**  | **Nine months ended September 30,**  |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Options | $— | $— | $— | $5 |
| RSUs | 1194 | 1077 | 3431 | 2743 |
| Unrestricted shares of common stock | 87 | 113 | 242 | 291 |
| Employee stock purchase plan |  |  | 20 | 9 |
| Total | $1281 | $1190 | $3693 | $3048 |

---

As of September 30, 2025, the unrecognized stock-based compensation expense related to outstanding RSUs totaled $4,200,000, which may be recognized through February 2028, subject to achievement of service, performance, and market conditions.

The following table summarizes the stock option and RSUs activity for the nine months ended September 30, 2025:

---

| | | |
|:---|:---|:---|
|  | **Options** | **RSUs** |
| Outstanding at December 31, 2024 | 36467 | 1314755 |
| &nbsp;&nbsp;Granted |  | 424853 |
| &nbsp;&nbsp;Exercised/Settled | (20451) | (530261) |
| &nbsp;&nbsp;Forfeited/Expired | (5670) | (286749) |
| Outstanding at September 30, 2025 | 10346 | 922598 |
| Vested at September 30, 2025 | 10346 | 319688 |
| Unvested at September 30, 2025 |  | 602910 |

---

Earnings (Loss) Per Share ("EPS")

Basic EPS is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of the Company's common stock outstanding during the period. Diluted EPS is calculated based on the net income (loss) available to common stockholders and the weighted average number of shares of common stock outstanding during the period, adjusted for the effects of all potential dilutive common stock issuances related to options and restricted stock units. The dilutive effect of our stock-based awards is computed using the treasury stock method, which assumes all stock-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (i.e., the difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. However, when a net loss exists, no potential common stock equivalents are included in the computation of the diluted per-share amount because the computation would result in an anti-dilutive per-share amount.

Potentially dilutive securities outstanding as of September 30, 2025 and 2024, which were excluded from the computation of basic and diluted net loss per share for the periods then ended, are as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30,**  | **September 30,**  |
| **(in thousands)** | **2025** | **2024** |
| Options | 10 | 76 |
| Restricted stock units | 923 | 1402 |
| &nbsp;&nbsp;Total | 933 | 1478 |

---

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

Stock Repurchases

In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027. The program may be amended, suspended, or discontinued at any time and does not commit the Company to repurchase any shares of its common stock. In the three and nine months ended September 30, 2025, we used $1.82 million and $3.59 million of the program to repurchase shares, respectively. As of September 30, 2025, we had $8.91 million remaining for the repurchase of shares.

Shares repurchased by the Company are immediately retired. The Company made an accounting policy election to charge the excess of repurchase price over par value entirely to retained earnings.

Fair Value of Financial Instruments

Fair value is an estimate of the exit price, representing the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market participant assumptions in the absence of observable market information. Assets and liabilities required to be measured at fair value are categorized based upon the level of judgment associated with the inputs used to measure their value in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.

Level 3: Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments.

The table below provides information on our Level 3 liabilities that are measured at fair value on a recurring basis:

---

| | |
|:---|:---|
| **(in thousands)** | **Nine Months Ended**  |
| Contingent consideration | **September 30, 2025** |
| &nbsp;&nbsp;Balance at December 31, 2024 | $1350 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions (1) | 225 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration (2) | (1350) |
| &nbsp;&nbsp;Balance at September 30, 2025 | $225 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents the value of the contingent consideration liability recorded in connection with an asset acquisition in the second quarter of 2025. The fair value of the contingent consideration was determined by management based on estimated recurring revenue from acquired customer relationships. We expect to settle the liability in the fourth quarter of 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Represents the change in fair value of contingent consideration recorded in connection with the acquisition of ADA Site Compliance, LLC ("ADA Site Compliance") in the third quarter of 2024. The fair value of the contingent consideration was determined by management with the assistance of an independent third-party valuation specialist using the Monte-Carlo simulation. Refer to Note 3 – Acquisitions for additional information on the ADA Site Compliance acquisition.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

**NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

Recent Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-06, *Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software*, which modernizes the recognition and disclosure framework for internal-use software costs, removing the previous "development stage" model and introducing a more judgment-based approach. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated condensed financial statements and related disclosures.

In July 2025, FASB issued ASU 2025-05, *Measurement of Credit Losses for Accounts Receivable and Contract Assets*, which provides a practical expedient to measure credit losses on accounts receivable and contract assets. This ASU is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the timing of the adoption and the impact of this ASU on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures,* which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. The ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We plan to adopt ASU 2023-09 in our fiscal year 2025 annual financial statements. The adoption of this ASU will not affect the Company's consolidated results of operations, financial position or cash flows.

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures* to enhance disclosures about significant segment expenses for public entities reporting segment information under ASC Topic 280. The amendments require public entities to disclose significant expense categories for each reportable segment, other segment items, the title and position of the chief operating decision-maker, and interim disclosures of certain segment-related information previously required only on an annual basis. The amendments clarify that entities reporting single segments must disclose both the new and existing segment disclosures under Topic 280, and a public entity is permitted to disclose multiple measures of segment profit or loss if certain criteria are met. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 did not have a significant impact on the Company's consolidated financial statements. See Note 7, *Segment Information*, for the required disclosures.

In November 2024, the FASB issued ASU 2024-03, *Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40)* to improve the disclosures about a public entity's expenses and provide more detailed information about the types of expenses included in certain expense captions in the consolidated financial statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and the amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the impact of the new standard on the disclosures in its consolidated financial statements.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

**NOTE 3 — ACQUISITIONS**

*ADA Site Compliance, LLC*

On September 27, 2024, we entered into a Membership Interest Purchase Agreement and acquired all the outstanding equity interests of ADA Site Compliance, LLC ("ADA Site Compliance"), which provides audits and best practices to help organizations create websites that are accessible and compliant to Web Content Accessibility Guidelines ("WCAG") standards. The acquisition provided an opportunity to expand on ADA Site Compliance's existing customer relationships by migrating customers to AudioEye's products and further expanding revenue. The aggregate consideration for the purchase of ADA Site Compliance was approximately $7.0 million (at fair value), consisting of a $3.4 million cash payment at closing, $2.35 million in unsecured promissory notes payable to the sellers within 60 days following the closing (collectively, the "Note Payable"), and an estimated $1.25 million in aggregate contingent consideration to be paid in cash in the second quarter of 2026 if and to the extent certain earn-outs are satisfied. Actual contingent consideration is based on satisfaction of the earn-out conditions related to certain annual recurring revenue ("ARR") and non-recurring revenue ("NRR") targets measured as of December 31, 2025 and may differ from estimated contingent consideration recognized at acquisition, therefore a range of undiscounted payment outcomes cannot be estimated.

We accounted for the acquisition of ADA Site Compliance as a business combination in accordance with FASB ASC 805, "Business Combinations" ("ASC 805"). Accordingly, under the acquisition method of accounting, we completed the purchase price allocation to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date as follows:

---

| | |
|:---|:---|
| **(in thousands)** | **Balance at September 27, 2024** |
| Assets purchased: |  |
| &nbsp;&nbsp;Cash | $284 |
| &nbsp;&nbsp;Accounts receivable, net | 357 |
| &nbsp;&nbsp;Other assets | 15 |
| &nbsp;&nbsp;Customer relationships (1) | 5100 |
| &nbsp;&nbsp;Goodwill (2) | 2682 |
| Total assets purchased | 8438 |
| Liabilities assumed: |  |
| &nbsp;&nbsp;Accounts payable and accrued liabilities | 362 |
| &nbsp;&nbsp;Deferred revenue | 1071 |
| Total liabilities assumed | 1433 |
| Net assets acquired | 7005 |
| Consideration: |  |
| &nbsp;&nbsp;Cash paid | 3407 |
| &nbsp;&nbsp;Note payable (3) | 2348 |
| &nbsp;&nbsp;Contingent consideration liability (4) | 1250 |
| Total consideration | $7005 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents an acquired intangible asset that will be amortized on a straight-line basis over its estimated useful life of 8 years .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Goodwill represents the excess of purchase price over the estimated fair value of net tangible and intangible assets acquired. The amount of goodwill expected to be deductible for tax purposes is $2,682,000 . Goodwill primarily relates to the expected synergies from combining operations of the Company and ADA Site Compliance and the value of the acquired workforce.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Represents the fair value of the Note Payable in the aggregate principal amount of $2,400,000 .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The fair value of the ADA Site Compliance contingent consideration liability was determined using the Monte-Carlo simulation. The key assumptions used in the Monte-Carlo simulation were as follows: ARR and NRR metrics for the earn-out period, NRR discount rate of 7.5% , ARR discount rate of 6.5% , expected NRR volatility of 12.5% , expected ARR volatility of 7.5% , risk-free rate of 3.9% , buyer specific counterparty credit risk of 14.25% , and discount period of 1.62 years.

*Pro Forma Financials*

The following unaudited pro forma results of operations for the three and nine months ended September 30, 2025 and 2024 assumes ADA Site Compliance had been acquired on January 1, 2024.

The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized if the acquisition had been completed on January 1, 2024, nor does it purport to project the results of operations of the combined Company in future periods. The pro forma financial information does not give effect to any anticipated integration costs savings or expenses related to the acquired company.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Pro Forma Combined Financials (unaudited)** | **Pro Forma Combined Financials (unaudited)** | **Pro Forma Combined Financials (unaudited)** | **Pro Forma Combined Financials (unaudited)** |
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Nine months ended September 30,**  | **Nine months ended September 30,**  |
| **(in thousands)** | **2025** | **2024** | **2025** | **2024** |
| Revenue | $10227 | $9471 | $29817 | $27127 |
| Net loss attributed to common shareholders | (554) | (660) | (1992) | (1994) |

---

For purposes of the pro forma disclosures above, results for the nine months ended September 30, 2025 exclude $33,000 in acquisition expense and results for the three and nine months ended September 30, 2024 exclude $394,000 in acquisition expense.

*Asset Acquisition*

In the second quarter of 2025, we completed an acquisition that does not meet the definition of a business based on our assessment of the screening test as required by ASU 2017-01, as substantially all the fair value of the gross assets acquired is concentrated in one single identifiable intangible asset, customer relationships. In connection with this asset acquisition, we recognized $1.8 million in customer relationships, which will be amortized on a straight line basis over their estimated useful life of 8 years.

**NOTE 4 — DEBT**

Term Loan and Revolving Credit Facility with Western Alliance Bank

On March 31, 2025, the Company entered into a Loan and Security Agreement (the "Credit Facility Agreement") with Western Alliance Bank, an Arizona corporation (the "Lender"). The Credit Facility Agreement provides for borrowings of up to $20.0 million, including (i) a term loan facility, comprising of a $12.0 million term loan advance funded on March 31, 2025, and subsequent term loan advances at the Company's request within the Draw Period (March 31, 2025 through March 31, 2026) subject to the terms and conditions of the Credit Facility Agreement, in a minimum amount of $1.0 million and an aggregate principal amount not to exceed $5.0 million (the "Term Advances"); and (ii) a revolving line of credit in an aggregate outstanding amount not to exceed $3.0 million (the "Revolving Facility"). The Term Advances and the Revolving Facility have a maturity date of March 31, 2030. In the nine months ended September 30, 2025, we drew $1.4 million from the $5.0 million available as subsequent term loan advances.

The outstanding Term Advances and the Revolving Facility bear interest on the outstanding daily balance at a floating rate equal to 3.25% above the term SOFR rate, which is defined as the greater of (i) 2.30% and (ii) the 1-month Term SOFR Reference Rate.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

For each Term Advance, the Company is obligated to pay interest-only payments with respect to such Term Advance through April 9, 2026. Beginning on April 10, 2026, the Company shall repay each outstanding Term Advance in (i) quarterly principal payments in the amount of 1.25% of the aggregate principal amount of Term Advances outstanding as of April 10, 2026, payable on the tenth (10th) day of each calendar quarter, plus (ii) monthly payments of accrued interest, payable on the tenth (10th) day of each month. The final payment for each Term Advance, due on March 31, 2030, shall include all outstanding principal and accrued and unpaid interest under such Term Advance. Once repaid, the Term Advances may not be reborrowed. The interest on the Revolving Facility is payable monthly with the principal outstanding amount due at maturity.

The Company incurred $50,000 in facility fees on the closing date, which were recorded as debt discount. The Company also incurred in $443,000 third-party expenses in connection with the term loan, which were recorded as debt issuance costs. Debt discount and debt issuance costs are presented as a direct deduction from the carrying amount of our term loan and are amortized to interest expense over the term of the loan on a straight-line basis, which is not materially different from the effective interest method.

In the three months ended September 30, 2025, amortization of debt discount and debt issuance costs (associated with the Western Alliance Bank credit facility) totaled $3,000 and $22,000, respectively. In the nine months ended September 30, 2025, amortization of debt discount and debt issuance costs (associated with the Western Alliance Bank credit facility and the SG Credit Partners term loan, discussed below) totaled $23,000 and $50,000, respectively.

The Credit Facility Agreement is secured by substantially all of our assets and contains certain customary financial covenants, including the requirements that the Company maintain at all times from the closing date through and including the calendar quarter ended June 30, 2026, (a) unrestricted and unencumbered cash held in accounts with the Lender equal to at least $3.0 million measured as of the last day of each calendar month, and (b) a ratio of certain total committed debt to its Annual Recurring Revenue between 0.70 to 0.55, depending on the testing date, measured as of the last day of each calendar quarter. During the period of time commencing on September 30, 2026, and continuing through and including March 31, 2030, the Company shall maintain (a) a ratio of its aggregate funded indebtedness to its adjusted EBITDA for the prior twelve months of no greater than (i) 2.50 to 1.00 for the calendar quarters commencing September 30, 2026 through and including June 30, 2027, and (ii) 2.00 to 1.00 at all times thereafter, in each case measured as of the last day of each calendar quarter, and (b) a Fixed Charge Coverage Ratio of at least 1.50 to 1.00.

As of September 30, 2025, the outstanding principal balance of our term loan totaled $13,401,000 and there were no outstanding borrowings under the revolving line of credit. As of September 30, 2025, term loan advances and revolving line of credit available for future draws totaled $3.6 million and $3.0 million, respectively.

As of September 30, 2025, future principal payments of debt based on the principal balance then outstanding are as follows (in thousands):

---

| | |
|:---|:---|
| **Year ending December 31,**  | **Term Loan** |
| &nbsp;&nbsp;2025 | $— |
| &nbsp;&nbsp;2026 | 503 |
| &nbsp;&nbsp;2027 | 670 |
| &nbsp;&nbsp;2028 | 670 |
| &nbsp;&nbsp;2029 | 670 |
| &nbsp;&nbsp;2030 | 10888 |
| Total repayments | $13401 |

---

Term Loan with SG Credit Partners

On November 30, 2023, the Company entered into a Loan and Security Agreement (the "Loan Agreement") with SG Credit Partners, Inc., a Delaware corporation. The Loan Agreement provided for a $7.0 million term loan, which was due and payable on the maturity date of November 30, 2026. The interest rate was 6.25% in excess of the base rate, which is defined as the greater of the prime rate and 7.00% per annum. Interest was payable in cash on a monthly basis.

[**Table of Contents**](#TOC)

**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

The Company paid a commitment fee equal to $105,000 on the closing date of the Loan Agreement and was required to pay an exit fee equal to $105,000 upon the earlier of repayment in full of the obligations, the maturity date and the occurrence of a liquidity event. The commitment and exit fees payable to the lender were recorded as debt discount. The Company also incurred $71,000 in third-party expenses in connection with the term loan, which were recorded as debt issuance costs. Debt discount and debt issuance costs are presented as a direct deduction from the carrying amount of our term loan and were being amortized to interest expense over the term of the loan.

On March 31, 2025, the Company paid $7.0 million in outstanding principal, $105,000 in exit fees and $144,000 in prepayment and other fees with the proceeds from the Credit Facility Agreement to repay in full all indebtedness, liabilities and other obligations outstanding under, and terminated, the Loan Agreement. In the nine months ended September 30, 2025, we recognized a $300,000 loss in connection with the termination of the term loan under the Loan Agreement, which included the unamortized portion of related debt discount and debt issuance costs, and we recorded this loss in Loss on extinguishment of debt on the consolidated statements of operations.

#### NOTE 5 — COMMITMENTS AND CONTINGENCIES
Litigation

We may become involved in various routine disputes and allegations incidental to our business operations. While it is not possible to determine the ultimate disposition of these matters, management believes that the resolution of any such matters, should they arise, is not likely to have a material adverse effect on our financial position or results of operations.

Operating Leases

The Company has operating leases for office space in Tucson, Arizona, and New York, New York. The following summarizes the total lease liabilities and remaining future minimum lease payments at September 30, 2025 (in thousands):

---

| | |
|:---|:---|
| **Year ending December 31,**  | **Operating Leases** |
| &nbsp;&nbsp;2025 (3 months remaining) | $55 |
| &nbsp;&nbsp;2026 | 225 |
| Total minimum lease payments | 280 |
| &nbsp;&nbsp;Less: present value discount | (11) |
| Total lease liabilities | $269 |
| &nbsp;&nbsp;Current portion of lease liabilities | $213 |
| &nbsp;&nbsp;Long term portion of lease liabilities | $56 |

---

**NOTE 6 — SEGMENT INFORMATION**

The Company has a single reportable segment focused around the sale of similar products and related services. This reportable segment derives revenues from customers by selling subscriptions for our digital accessibility platform delivering website accessibility compliance and providing services related to digital accessibility.

The Company's chief operating decision-maker (the "CODM"), who is the chief executive officer, assesses performance for the reportable segment and decides how to allocate resources using net income as the primary measure of profitability. The CODM is not regularly provided with specific segment expenses, but focuses on revenue, gross margin, and net income. Expense information, including cost of revenue, can be easily computed from the provided information. These segment measures of profitability are shown in the consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheets as total assets.

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**AUDIOEYE, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**September 30, 2025**

**(Unaudited)**

**NOTE 7 — SUBSEQUENT EVENTS**

We have evaluated subsequent events occurring after September 30, 2025, and based on our evaluation we did not identify any events that would have required recognition or disclosure in these consolidated financial statements.

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, should be read in conjunction with our consolidated financial statements and related notes in Part I, Item 1 of this report.*

*As used in this quarterly report, the terms "we," "us," "our" and similar references refer to AudioEye, Inc., unless otherwise indicated.*

**Cautionary Note Regarding Forward-Looking Statements**

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In some cases, you may be able to identify forward-looking statements by terms such as "may," "should," "will," "forecasts," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "projects," "potential" or "continue," the negative of these terms and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements, and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions and speak only as of the date on which they are made.

Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements, including our plans, objectives, expectations and intentions and other factors discussed in "Part I, Item 1A. Risk Factors" contained in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Risk factors that could cause actual results to differ from those contained in the forward-looking statements include but are not limited to risks related to:

● the uncertain market acceptance of our existing and future products;

● our need for, and the availability of, additional capital in the future to fund our operations and the development of new products;

● the success, timing and financial consequences of new strategic relationships, acquisitions or licensing agreements we may enter into;

● rapid changes in Internet-based applications that may affect the utility and commercial viability of our products;

● the timing and magnitude of expenditures we may incur in connection with our ongoing product development activities;

● judicial applications of accessibility laws to the internet;

● the level of competition from our existing competitors and from new competitors in our marketplace; and

● the regulatory environment for our products and services.

Readers of this report are cautioned not to rely on these forward-looking statements, since there can be no assurance that these forward-looking statements will prove to be accurate. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. This cautionary note is applicable to all forward-looking statements contained in this report.

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**AudioEye Solutions**

At its core, AudioEye's offering provides ongoing testing, automated fixes, and 24/7 monitoring that continually improves conformance with Web Content Accessibility Guidelines ("WCAG"). This in turn helps businesses and organizations comply with WCAG standards as well as applicable U.S. and foreign accessibility laws. Our technology is capable of immediately identifying and fixing most of the common accessibility errors and addresses a wide range of disabilities including dyslexia, color blindness, epilepsy and more. AudioEye also offers additional solutions to provide for enhanced compliance and accessibility, including periodic auditing, custom fixes by experts, and legal support services. Our solutions may be purchased through a subscription service on a month-to-month basis or with one or multi-year terms. We also offer PDF remediation services and mobile application and audit reporting services to help our customers with their digital accessibility needs.

**Intellectual Property**

Our intellectual property is primarily comprised of copyrights, trademarks, trade secrets, issued patents and pending patent applications. We have a patent portfolio comprised of twenty-five (25) issued patents in the United States and three (3) pending US patent applications. The commercial value of these patents is unknown.

We plan to continue to invest in research and development and expand our portfolio of proprietary intellectual property.

Our Annual Report filed on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 12, 2025 provides additional information about our business and operations.

**Executive Overview**

AudioEye is an industry-leading digital accessibility platform delivering Americans with Disabilities Act ("ADA") and WCAG compliance at scale. Our solutions advance accessibility with patented technology that reduces barriers, expands access for individuals with disabilities, and enhances the user experience for a broader audience. In the three months ended September 30, 2025, we continued to focus on product innovation and expanding revenue.

We have two sales channels to deliver our product, the Partner and Marketplace channel and the Enterprise channel. AudioEye continues to focus on recurring revenue growth in both channels, while still offering our website and mobile application reporting services and PDF remediation services that provide non-recurring revenue.

In the nine months ended September 30, 2025, total revenue increased by 17% over the prior year comparable period. As of September 30, 2025, Annual Recurring Revenue ("ARR") was approximately $38.7 million, which represented an increase of 7% year-over-year. Refer to Other Key Operating Metrics below for details on how we calculate ARR.

As of September 30, 2025, AudioEye had approximately 123,000 customers, a 2% decrease from 126,000 customers at September 30, 2024. The decrease in customer count was attributable to a contract renegotiation within our Partner and Marketplace channel.

In the nine months ended September 30, 2025, revenue from our Partner and Marketplace channel grew 11% over the prior year comparable period. This channel represented about 58% of ARR as of September 30, 2025. In nine months ended September 30, 2025, total Enterprise channel revenue grew 26% over the prior year comparable period. The Enterprise channel represented about 42% of ARR as of September 30, 2025.

We had one customer (including the customer's affiliates reflecting multiple contracts and a partnership with the Company) which accounted for approximately 13% of our total revenue in each of the three and nine months ended September 30, 2025.

The Company continued to invest in research and development in the third quarter of 2025. Total research and development cost, as defined under Research and Development Expenses section in the Results of Operations below, was 16% of total revenue in the nine months ended September 30, 2025. Total research and development cost in the nine months ended September 30, 2025 decreased from the prior year comparable period primarily due to lower personnel cost.

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In the nine months ended September 30, 2025, selling and marketing expense and general and administrative expense increased from the prior year comparable period. The increase in selling and marketing expense was mainly driven by higher third-party marketing expense. The increase in general and administrative expenses in the nine months ended September 30, 2025 was due primarily to higher amortization expense associated with our intangible assets, as well as increases in personnel costs, including stock compensation expense, and in litigation expenses.

We provide further commentary on our Results of Operations below.

**Results of Operations**

Our unaudited consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP" or "GAAP"). The discussion of the results of our operations compares the three and nine months ended September 30, 2025 with the three and nine months ended September 30, 2024.

Our results of operations in these interim periods are not necessarily indicative of the results which may be expected for any subsequent period. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Revenue | $10227 | $8925 | 15% |
| Cost of revenue | 2312 | 1823 | 27% |
| Gross profit | 7915 | 7102 | 11% |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;Selling and marketing | 3649 | 3148 | 16% |
| &nbsp;&nbsp;Research and development | 1118 | 1151 | (3)% |
| &nbsp;&nbsp;General and administrative | 3506 | 3794 | (8)% |
| &nbsp;&nbsp;Change in fair value of contingent consideration | (40) |  | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 8233 | 8093 | 2% |
| Operating loss | (318) | (991) | (68)% |
| &nbsp;&nbsp;Interest expense, net | (236) | (211) | 12% |
| Net loss | $(554) | $(1202) | (54)% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Revenue | $29817 | $25478 | 17% |
| Cost of revenue | 6545 | 5348 | 22% |
| Gross profit | 23272 | 20130 | 16% |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling and marketing | 11169 | 9122 | 22% |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 3471 | 3694 | (6)% |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 10998 | 9445 | 16% |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration | (1350) | (12) | 11150% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 24288 | 22249 | 9% |
| Operating loss | (1016) | (2119) | (52)% |
| Other expense: |  |  |  |
| &nbsp;&nbsp;Interest expense, net | (709) | (647) | 10% |
| &nbsp;&nbsp;Loss on extinguishment of debt | (300) |  | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other expense | (1009) | (647) | 56% |
| Net loss | $(2025) | $(2766) | (27)% |

---

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Revenue

The following table presents our revenues disaggregated by sales channel:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Partner and Marketplace | $5582 | $5226 | 7% |
| Enterprise | 4645 | 3699 | 26% |
| &nbsp;&nbsp;Total revenues | $10227 | $8925 | 15% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Partner and Marketplace | $16501 | $14930 | 11% |
| Enterprise | 13316 | 10548 | 26% |
| &nbsp;&nbsp;Total revenue | $29817 | $25478 | 17% |

---

The Partner and Marketplace channel consists of our CMS partners, platform & agency partners, authorized resellers and the Marketplace. This channel serves small and medium sized businesses that are on a partner or reseller's web-hosting platform or that purchase our solutions from our Marketplace.

The Enterprise channel consists of our larger customers and organizations, including those with non-platform custom websites, who generally engage directly with AudioEye sales personnel for custom pricing and solutions. This channel also includes federal, state and local government agencies.

For the three and nine months ended September 30, 2025, total revenue increased by 15% and 17%, respectively, over the prior year comparable periods. The increase in Partner and Marketplace channel revenue for the three and nine months ended September 30, 2025 was primarily due to continued expansion with existing partners. The increase in Enterprise channel revenue for the three and nine months ended September 30, 2025 was driven primarily by new customer relationships, including additions from business and asset acquisitions.

Cost of Revenue and Gross Profit

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Revenue | $10227 | $8925 | 15% |
| Cost of Revenue | 2312 | 1823 | 27% |
| &nbsp;&nbsp;Gross profit | $7915 | $7102 | 11% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Revenue | $29817 | $25478 | 17% |
| Cost of Revenue | 6545 | 5348 | 22% |
| Gross profit | $23272 | $20130 | 16% |

---

Cost of revenue consists primarily of compensation and related benefits costs for our customer experience team, as well as a portion of our technology operations team that supports the delivery of our services, fees paid to our managed hosting and other third-party service providers, amortization of capitalized software development costs and patent costs, and allocated overhead costs.

For the three and nine months ended September 30, 2025, cost of revenue increased by 27% and 22%, respectively, over the prior year comparable periods. The increase in cost of revenue for each period was primarily due to increased costs incurred for service delivery, additional costs attributable to business and asset acquisitions, and higher amortization expense related to our capitalized software development costs.

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For the three and nine months ended September 30, 2025, gross profit increased by 11% and 16%, respectively, over the prior year comparable periods. The increase in gross profit for each period was a result of increased revenue.

Selling and Marketing Expenses

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Selling and marketing | $3649 | $3148 | 16% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%**  |
| Selling and marketing | $11169 | $9122 | 22% |

---

Selling and marketing expenses consist primarily of compensation and benefits related to our sales and marketing staff, as well as third-party advertising and marketing expenses.

For the three and nine months ended September 30, 2025, selling and marketing expenses increased by 16% and 22%, respectively, over the prior year comparable periods. The increase in selling and marketing expenses for each period resulted primarily from higher third-party marketing expenses, additional costs associated with business and asset acquisitions, and higher personnel costs.

Research and Development Expenses

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Research and development expense | $1118 | $1151 | (3)% |
| Plus: Capitalized research and development cost | 452 | 432 | 5% |
| &nbsp;&nbsp;Total research and development cost | $1570 | $1583 | (1)% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Research and development expense | $3471 | $3694 | (6)% |
| Plus: Capitalized research and development cost | 1430 | 1379 | 4% |
| &nbsp;&nbsp;Total research and development cost | $4901 | 5073 | (3)% |

---

Research and development ("R&D") expenses consist primarily of compensation and related benefits, independent contractor costs, and an allocated portion of general overhead costs related to our employees involved in research and development activities. Total research and development cost includes the amount of research and development expense reported within operating expenses as well as research and development cost that was capitalized during the fiscal period.

For the three and nine months ended September 30, 2025, R&D expenses decreased by 3% and 6%, respectively, from the prior year comparable periods. The decrease for each period was driven by lower personnel cost. For the three and nine months ended September 30, 2025, capitalized R&D cost increased by 5% and 4%, respectively, over the prior year comparable periods due to engineering personnel spending more time on product development than in the prior year comparable periods. For the three months ended September 30, 2025, total R&D cost, which includes both R&D expenses and capitalized R&D costs, decreased by 1% from the prior year comparable period. For the nine months ended September 30, 2025, total R&D cost decreased by 3% from the prior year comparable period.

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General and Administrative Expenses

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| General and administrative | $3506 | $3794 | (8)% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change&nbsp;&nbsp;&nbsp;&nbsp;** |
| **(in thousands)** | **2025** | **2024** | $**%**  |
| General and administrative | $10998 | $9445 | 16% |

---

General and administrative expenses consist primarily of compensation and benefits related to our executives, directors and corporate support functions, and general corporate expenses including legal fees, occupancy and transaction costs.

For the three months ended September 30, 2025, general and administrative expenses decreased by 8% from the prior year comparable period. The decrease in general and administrative expense was due primarily to business combination costs incurred in connection with the ADA Site Compliance acquisition in the third quarter of 2024 and a decrease in litigation expense by $233,000. For the nine months ended September 30, 2025, general and administrative expenses increased by 16% over the prior year comparable period. The increase in general and administrative expense was due primarily to higher amortization expense associated with our intangible assets, as well as higher personnel cost, including stock compensation expense, and an increase in litigation expense by $597,000.

Change in Fair Value of Contingent Consideration

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Change in fair value of contingent consideration | $(40) | $— | 100% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change&nbsp;&nbsp;&nbsp;&nbsp;** |
| **(in thousands)** | **2025** | **2024** | $**%**  |
| Change in fair value of contingent consideration | $(1350) | $(12) | 11150% |

---

Change in fair value of contingent consideration consists of non-cash valuation adjustments to contingent consideration liabilities recognized in connection with a business combination or an asset acquisition.

For the three and nine months ended September 30, 2025, the change in fair value of contingent consideration was due to a reduction in the estimated earnout payable in connection with the acquisition of ADA Site Compliance in the third quarter of 2024.

Interest Expense

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Interest expense, net | $(236) | $(211) | 12% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%**  |
| Interest expense, net | $(709) | $(647) | 10% |

---

Interest expense, net consists primarily of interest on our term loan, offset by interest income from investment in money market funds.

For the three and nine months ended September 30, 2025, interest expense, net increased by 12% and 10%, respectively, over the prior year comparable periods. The increase in interest expense, net for each period was primarily attributable to a reduction in interest income from investment in money market funds.

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Loss on Extinguishment of Debt

---

| | | | |
|:---|:---|:---|:---|
|  | **Three months ended September 30,**  | **Three months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Loss on extinguishment of debt | $— | $— | —% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  | **Change** |
| **(in thousands)** | **2025** | **2024** | $**%** |
| Loss on extinguishment of debt | $(300) | $— | 100% |

---

On March 31, 2025, upon entering into a new credit facility with Western Alliance Bank, the Company paid the full $7.0 million in outstanding principal on its previous term loan with SG Credit Partners. In the nine months ended September 30, 2025, in connection with the termination of this term loan, we recognized a $300,000 loss on extinguishment of debt, which included $144,000 in prepayment and other fees and the unamortized portion of related debt discount and debt issuance costs.

**Other Key Operating Metrics**

We consider annual recurring revenue ("ARR") as a key operating metric and a key indicator of our overall business. We also use ARR as one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations.

We define ARR as the sum of (i) for our Enterprise channel, the total of the annualized recurring fee at the date of determination under each active contract, plus (ii) for our Partner and Marketplace channel, the annual or monthly recurring fee for all active customers at the date of determination, in each case, assuming no changes to the subscription, multiplied by 12 if applicable. Recurring fees are defined as revenues expected to be generated from services typically offered as a subscription service or annual service offering such as our automation and platform, periodic auditing, human-assisted technological fixes, legal support and professional service offerings and other services that reoccur on a multi-year contract. This determination includes both annual and monthly contracts for recurring products. Some of our contracts are terminable prior to the expected term, which may impact future ARR. ARR excludes non-recurring fees, which are defined as revenue expected to be generated from services typically not offered as a subscription service or annual service offering such as our PDF remediation services business, one-time mobile application reports, and other miscellaneous services that are offered as non-subscription services or are expected to be one-time in nature. As of September 30, 2025, ARR was $38.7 million, which represents an increase of 7% year-over-year, driven by growth in both our Partner and Marketplace channel and Enterprise channel.

**Liquidity and Capital Resources**

Working Capital

---

| | | |
|:---|:---|:---|
| **(in thousands)** | **September 30, 2025** | **December 31, 2024** |
| Current assets | $11861 | $12120 |
| Current liabilities | (11884) | (11571) |
| &nbsp;&nbsp;Working capital | $(23) | $549 |

---

As of September 30, 2025, we had $4,550,000 in cash and cash equivalents and working capital of ($23,000). The $0.6 million decrease in working capital in the nine months ended September 30, 2025 was primarily due to a portion of our term loan being classified as a current liability.

In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027. The program may be amended, suspended, or discontinued at any time and does not commit the Company to repurchase any shares of its common stock. Shares repurchased under the program are subsequently retired and restored to the status of authorized but unissued shares of common stock. In the nine months ended September 30, 2025, we used $3.59 million of the program to repurchase shares. As of September 30, 2025, we had $8.91 million remaining for the repurchase of shares.

As of September 30, 2025, we had $13.4 million outstanding under the term loan, $13.0 million of which is classified as a noncurrent liability. The term loan matures on March 31, 2030, and has required quarterly principal payments due beginning on April 10, 2026.

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As of November 4, 2025, we had no off-balance sheet arrangements, and we believe that the Company has sufficient liquidity to continue as a going concern through the next twelve months.

While the Company has been successful in raising capital, there is no assurance that it will be successful at raising additional capital in the future. Additionally, if the Company's plans are not achieved and/or if significant unanticipated events occur, the Company may have to further modify its business plan, which may require us to raise additional capital or reduce expenses.

Cash Flows

---

| | | |
|:---|:---|:---|
|  | **Nine months ended September 30,**  | **Nine months ended September 30,**  |
| **(in thousands)** | **2025** | **2024** |
| Net cash provided by operating activities | $2220 | $2166 |
| Net cash used in investing activities | (3527) | (4603) |
| Net cash provided by (used in) financing activities | 206 | (1321) |
| &nbsp;&nbsp;Net decrease in cash and cash equivalents | $(1101) | $(3758) |

---

For the nine months ended September 30, 2025, in relation to the prior year comparable period, cash provided by operating activities increased primarily due to payments in the prior year period towards our contingent consideration associated with a business acquisition, of which $710,000 was classified as cash used in operating activities, whereas no payment of contingent consideration occurred in the current year period. The increase was partially offset by timing of collections on accounts receivable in the current year period.

For the nine months ended September 30, 2025, in relation to the prior year comparable period, cash used in investing activities decreased primarily due to the acquisition of ADA Site Compliance in the third quarter of 2024, for which we paid $3.1 million, net of cash acquired, whereas payments towards asset acquisitions in the current year period totaled $2.0 million.

For the nine months ended September 30, 2025, in relation to the prior year comparable period, cash provided by financing activities increased primarily due to $13.4 million in proceeds from term loan borrowings under the new credit facility with Western Alliance Bank, which were partially offset by the repayment of our previous $7.0 million term loan. The increase was partially offset by a $3.5 million capital raised under an ATM offering in the nine months ended September 30, 2024, whereas there were no offering proceeds in the nine months ended September 30, 2025, as well as by a $1.8 million increase in stock repurchases in the current period.

**Critical Accounting Policies and Estimates**

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported and disclosed in our consolidated financial statements and the accompanying notes. Actual results could differ materially from these estimates under different assumptions or conditions.

Our critical accounting estimates, as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, relate to goodwill, intangible assets and contingent consideration recognized in connection with a business combination. There have been no material changes to our critical accounting policies and estimates as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

Not applicable.

**Item 4. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures**

The Company maintains disclosure controls and procedures that are designed to ensure that there is reasonable assurance that the information required to be disclosed in the Company's reports under the Securities Exchange Act of 1934, as amended (the "Exchange

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Act"), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of "disclosure controls and procedures" in Exchange Act Rules 13a-15(e) and 15d-15(e). In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, projections of any evaluation of effectiveness of our disclosure controls and procedures to future periods are subject to the risk that controls or procedures may become inadequate because of changes in conditions, or that the degree of compliance with the controls or procedures may deteriorate.

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company's senior management, including the Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of the Company's disclosure controls and procedures to provide reasonable assurance of achieving the desired objectives of the disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2025.

**Changes in Internal Controls over Financial Reporting**

During the quarter ended September 30, 2025, there were no material changes in our internal control over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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**PART II — OTHER INFORMATION**

**Item 1. Legal Proceedings**

We may become involved in various routine disputes and allegations incidental to our business operations. While it is not possible to determine the ultimate disposition of these matters, our management believes that the resolution of any such matters, should they arise, is not likely to have a material adverse effect on our financial position or results of operations.

**Item 1A. Risk Factors**

You should carefully consider the factors discussed in Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"), which could materially affect our business, financial condition and results of operations. There have been no material changes to the risk factors set forth in the 2024 Form 10-K. The risks described in our 2024 Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

**Item 2. Issuer Purchases of Equity Securities**

The following table sets forth information with respect to our repurchases of common stock during the three months ended September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Total Number of**<br>**Shares Purchased** | <br>**Average Price**<br>**Paid per Share** | <br>**Total Number of**<br>**Shares Purchased**<br>**as Part of Publicly**<br>**Announced Plans or**<br>**Programs** | **Maximum Number**<br>**of Shares (or**<br> **Approximate Dollar** <br>**Value) that May**<br>**Yet Be Purchased**<br>**under the Plans or**<br>**Programs (2)** |
| July 1 - July 31, 2025: |  |  |  |  |
| &nbsp;&nbsp;Employee transactions (1) | 7349 | $11.81 |  | $— |
| &nbsp;&nbsp;Share repurchase program (2) | 65813 | 12.10 | 65813 | 9939000 |
| August 1 - August 31, 2025: |  |  |  |  |
| &nbsp;&nbsp;Employee transactions (1) | 30276 | 11.49 |  |  |
| &nbsp;&nbsp;Share repurchase program (2) | 73728 | 11.53 | 73728 | 9089000 |
| September 1 - September 30, 2025: |  |  |  |  |
| &nbsp;&nbsp;Employee transactions (1) | 13002 | 13.01 |  |  |
| &nbsp;&nbsp;Share repurchase program (2) | 14000 | 12.49 | 14000 | 8914000 |
| Total: |  |  |  |  |
| &nbsp;&nbsp;Employee transactions (1) | 50627 | $11.93 |  | $— |
| &nbsp;&nbsp;Share repurchase program (2) | 153541 | $11.86 | 153541 | $8914000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Consists of shares surrendered by employees to satisfy tax withholding obligations in connection with the settlement of restricted stock units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027. Shares repurchased under the program will be subsequently retired. The average price paid per share includes any broker fees .

[**Table of Contents**](#TOC)

**Item 5. Other Information**

**Rule 10b5-1 Trading Plans**

During the three months ended September 30, 2025, no director or executive officer adopted, modified or terminated a "10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement", as each term is defined in Item 408(a) of Regulation S-K.

**Item 6. Exhibits**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  | **Incorporation by Reference** | **Incorporation by Reference** | **Incorporation by Reference** | **Incorporation by Reference** |
| **Exhibit No.** | **Description** | **Form** | **Date of Filing** | **Exhibit No.** | **Filed Herewith** |
| 3.1 | [Restated Certificate of Incorporation of AudioEye, Inc., dated as of May 24, 2024](https://www.sec.gov/Archives/edgar/data/1362190/000110465924065146/tm2415408d1_ex3-3.htm) | 8-K | May 24, 2024 | 3.3 |  |
| 3.2 | [By-Laws of AudioEye, Inc. (as amended as of May 22, 2024)](https://www.sec.gov/Archives/edgar/data/1362190/000141057824001118/aeye-20240630xex3d3.htm) | 10-Q | July 29, 2024 | 3.3 |  |
| 10.1 | [Second Loan Modification Agreement, dated as of August 13, 2025, by and among Western Alliance Bank, AudioEye, Inc., ADA Site Compliance, LLC and Criterion 508 Solutions, Inc.](aeye-20250930xex10d1.htm) |  |  |  | X |
| 31.1 | [Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](aeye-20250930xex31d1.htm) |  |  |  | X |
| 31.2 | [Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](aeye-20250930xex31d2.htm) |  |  |  | X |
| 32.1 | [Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](aeye-20250930xex32d1.htm) |  |  |  | X |
| 101.INS | Inline XBRL Instance Document |  |  |  |  |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |  |  |  | X |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  | X |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  | X |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  | X |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  | X |
| 104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |  |  |  |  |

---

[**Table of Contents**](#TOC)

**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 thereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
|  |  | **AUDIOEYE, INC.** | **AUDIOEYE, INC.** |
| Date: | November 4, 2025 | By: | /*s/ David Moradi* |
|  |  |  | David Moradi |
|  |  |  | Principal Executive Officer |
| Date: | November 4, 2025 | By: | /*s/ Kelly Georgevich* |
|  |  |  | Kelly Georgevich |
|  |  |  | Principal Financial Officer |

---

## Exhibit 10.1

**Exhibit 10.1**

**SECOND LOAN MODIFICATION AGREEMENT**

This Second Loan Modification Agreement (this "Amendment") is entered into this 13<sup>th</sup> day of August, 2025, by and among (a) **WESTERN ALLIANCE BANK**, an Arizona corporation ("Bank") and (b) (i) **AUDIOEYE, INC.**, a Delaware corporation ("AudioEye"), (ii) **ADA SITE COMPLIANCE, LLC**, a Delaware limited liability company ("ADA"), and (iii) **CRITERION 508 SOLUTIONS, INC.**, an Iowa corporation ("Criterion", together with AudioEye and ADA, individually and collectively, jointly and severally, "Borrower").

**RECITALS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.**Among other indebtedness which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other documents, that certain Loan and Security Agreement, dated as of March 31, 2025, by and between Borrower and Bank, as amended by that certain Consent and First Loan Modification Agreement dated as of May 22, 2025 by and between Bank and Borrower (as may be further amended, modified, supplemented, or restated from time to time, the "**Loan and Security Agreement**"). Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as the "Indebtedness" and the Loan and Security Agreement and any and all other documents executed by Borrower in favor of Bank shall be referred to as the "Existing Documents."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.**Borrower has requested that Bank amend the Loan and Security Agreement to make certain revisions to the Loan and Security Agreement as more fully set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.**Bank has agreed to so amend the Loan and Security Agreement, subject to the conditions and in reliance upon the representations and warranties set forth below.

**AGREEMENT**

**NOW, THEREFORE,** in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** <u>DEFINITIONS</u>. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan and Security Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** <u>MODIFICATIONS TO LOAN AND SECURITY AGREEMENT</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1** **Section 1.1 (Definitions)**. The following defined term and its definition set forth in Section 1.1 of the Loan and Security Agreement is amended in its entirety and replaced with the following:

""Permitted Stock Buyback Amount" means an aggregate amount not to exceed (i) Four Million Dollars ($4,000,000.00) for Borrower's 2025 fiscal year, (ii) One Million Dollars ($1,000,000.00) for Borrower's 2026 fiscal year, and (iii) Two Million Dollars ($2,000,000.00) for Borrower's 2027 fiscal year and each fiscal year thereafter."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2** **Section 7.6 (Distributions)**. Section 7.6(ii) is amended in its entirety and replaced with the following:

"(ii)the repurchase the stock of former employees pursuant to stock repurchase agreements in an aggregate amount not to exceed (A) during any twelve (12) month period

------

prior to July 31, 2026, One Hundred Thirty-Five Thousand Dollars ($135,000.00) and (B) during any twelve (12) month period after August 1, 2026, One Hundred Thousand Dollars ($100,000.00), in each case, as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase;"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** <u>LIMITATION OF AMENDMENTS.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1**The amendments set forth in Section 2 above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2**This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** <u>CONSISTENT CHANGES</u>. The Existing Documents are each hereby amended wherever necessary to reflect the changes described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** <u>CONTINUING VALIDITY</u>. Borrower understands and agrees that in modifying the existing Indebtedness, Bank is relying upon Borrower's representations, warranties, and agreements, as set forth in the Existing Documents. Except as expressly modified pursuant to this Amendment, the terms of the Existing Documents remain unchanged and in full force and effect. Bank's agreement to modifications to the existing Indebtedness pursuant to this Amendment in no way shall obligate Bank to make any future modifications to the Indebtedness. Nothing in this Amendment shall constitute a satisfaction of the Indebtedness. It is the intention of Bank and Borrower to retain as liable parties all makers and endorsers of Existing Documents, unless the party is expressly released by Bank in writing. No maker, endorser, or guarantor will be released by virtue of this Amendment. The terms of this paragraph apply not only to this Amendment, but also to any subsequent loan and security modification agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** <u>RATIFICATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENT</u>. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and conditions of a certain Intellectual Property Security Agreement dated as of March 31, 2025 between Borrower and Bank, and acknowledges, confirms and agrees that said Intellectual Property Security Agreement (a) contains an accurate and complete listing of all Intellectual Property Collateral, as defined in said Intellectual Property Security Agreement, and (b) shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** <u>RELEASE BY BORROWER.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1**FOR GOOD AND VALUABLE CONSIDERATION, Borrower hereby forever relieves, releases, and discharges Bank and its present or former employees, officers, directors, agents, representatives, attorneys, and each of them, from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions and causes of action, of every type, kind, nature, description or character whatsoever, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of or in any manner whatsoever connected with or related to facts, circumstances, issues, controversies or claims existing or arising from the beginning of time through and including the date of execution of this Amendment (collectively "Released Claims"). Without limiting the foregoing, the Released Claims shall include any and all liabilities or claims arising out of or in any manner whatsoever connected with or related to the Loan Documents, the recitals hereto, any instruments,

------

agreements or documents executed in connection with any of the foregoing or the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2**In furtherance of this release, Borrower expressly acknowledges and waives any and all rights under Section 1542 of the California Civil Code, which provides as follows:

"**A general release** does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party." (Emphasis added.)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3**By entering into this release, Borrower recognizes that no facts or representations are ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the intention of Borrower hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if Borrower should subsequently discover that any fact that it relied upon in entering into this release was untrue, or that any understanding of the facts was incorrect, Borrower shall not be entitled to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances whatsoever. Borrower acknowledges that it is not relying upon and has not relied upon any representation or statement made by Bank with respect to the facts underlying this release or with regard to any of such party's rights or asserted rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.4**This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release. Borrower acknowledges that the release contained herein constitutes a material inducement to Bank to enter into this Amendment, and that Bank would not have done so but for Bank's expectation that such release is valid and enforceable in all events.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.5**Borrower hereby represents and warrants to Bank, and Bank is relying thereon, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)**Except as expressly stated in this Amendment, neither Bank nor any agent, employee or representative of Bank has made any statement or representation to Borrower regarding any fact relied upon by Borrower in entering into this Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)**Borrower has made such investigation of the facts pertaining to this Amendment and all of the matters appertaining thereto, as it deems necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(c)**The terms of this Amendment are contractual and not a mere recital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d)**This Amendment has been carefully read by Borrower, the contents hereof are known and understood by Borrower, and this Amendment is signed freely, and without duress, by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(e)**Borrower represents and warrants that it is the sole and lawful owner of all right, title and interest in and to every claim and every other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein released. Borrower shall indemnify Bank, defend and hold it harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters released herein.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** <u>CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; REFERENCE PROVISION</u>. This Amendment constitutes a "Loan Document" as defined and set forth in the Loan and Security Agreement, and is subject to Sections 11 and 12 of the Loan and Security Agreement, which are incorporated by reference herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** <u>PAYMENT OF BANK EXPENSES</u>. Borrower agrees to promptly pay all Bank Expenses incurred by Bank in connection with this Amendment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** <u>NOTICE OF FINAL AGREEMENT</u>. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** <u>EFFECTIVENESS</u>. This Agreement shall be deemed effective upon (a) the due execution and delivery to Bank of this Agreement by each party hereto and (b) Borrower's payment to Bank of Bank's legal fees and expenses incurred in connection with this Amendment. This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

[Signature page follows.]

------

**IN WITNESS WHEREOF,** the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

---

| | |
|:---|:---|
| **AUDIOEYE, INC.** | **AUDIOEYE, INC.** |
| By: | */s/ Kelly Georgevich* |
| Name: | Kelly Georgevich |
| Title: | Chief Financial Officer |

---

---

| | |
|:---|:---|
| **ADA SITE COMPLIANCE, LLC** | **ADA SITE COMPLIANCE, LLC** |
| By: | */s/ Kelly Georgevich* |
| Name: | Kelly Georgevich |
| Title: | Chief Financial Officer |

---

---

| | |
|:---|:---|
| **CRITERION 508 SOLUTIONS, INC.** | **CRITERION 508 SOLUTIONS, INC.** |
| By: | */s/ Kelly Georgevich* |
| Name: | Kelly Georgevich |
| Title: | Chief Financial Officer |

---

---

| | |
|:---|:---|
| **WESTERN ALLIANCE BANK, AN ARIZONA CORPORATION** | **WESTERN ALLIANCE BANK, AN ARIZONA CORPORATION** |
| By: | */s/ Francesco Corradino* |
| Name: | Francesco Corradino |
| Title: | Director |

---

------

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, David Moradi, Principal Executive Officer of AudioEye, Inc. (the "<u>Registrant</u>"), certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2025 of AudioEye, Inc. (the "<u>Quarterly Report</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Date: November 4, 2025 | By: | */s/ David Moradi* | */s/ David Moradi* |
|  |  | Name: | David Moradi |
|  |  | Title: | Chief Executive Officer |
|  |  |  | (Principal Executive Officer) |

---

------

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Kelly Georgevich, Principal Financial Officer of AudioEye, Inc. (the "<u>Registrant</u>"), certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2025 of AudioEye, Inc. (the "<u>Quarterly Report</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

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| | | | |
|:---|:---|:---|:---|
| Date: November 4, 2025 | By: | */s/ Kelly Georgevich* | */s/ Kelly Georgevich* |
|  |  | Name: | Kelly Georgevich |
|  |  | Title: | Chief Financial Officer |
|  |  |  | (Principal Financial Officer) |

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the filing by AudioEye, Inc. (the "<u>Registrant</u>") of its Quarterly Report on Form 10-Q for the period ended September 30, 2025 (the "<u>Quarterly Report</u>") with the Securities and Exchange Commission, we, David Moradi and Kelly Georgevich, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Quarterly Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

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| | | | |
|:---|:---|:---|:---|
| Date: November 4, 2025 | By: | */s/ David Moradi* | */s/ David Moradi* |
|  |  | Name: | David Moradi |
|  |  | Title: | Chief Executive Officer |
|  |  |  | (Principal Executive Officer) |

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| | | | |
|:---|:---|:---|:---|
| Date: November 4, 2025 | By: | */s/ Kelly Georgevich* | */s/ Kelly Georgevich* |
|  |  | Name: | Kelly Georgevich |
|  |  | Title: | Chief Financial Officer |
|  |  |  | (Principal Financial Officer) |

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