SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

Bettis Carr

(Last)

(First)

(Middle)

5210 E. WILLIAMS CIRCLE, SUITE 750

(Street)

TUCSON

85711

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
AUDIOEYE INC [ AEYE ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	X	10% Owner
X	Officer (give title below)		Other (specify below)
	Exec Chrmn/Chrmn of the Board

3. Date of Earliest Transaction (Month/Day/Year)
01/14/2019

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	01/14/2019		M		20,000	A	$0.95	120,000	D
Common Stock								508,988	I	CSB IV US Holdings LLC⁽¹⁾
Common Stock								18,600	I	Carr Bettis IRA⁽²⁾
Common Stock								54,856	I	J. Carr & Stephanie V. Bettis Revocable Trust, Dated 1/1/03⁽³⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Stock Options (right to buy)	$0.95	01/14/2019		M			20,000	01/15/2016	01/15/2019⁽⁴⁾	Common Stock	20,000	$0	0	D
Stock Options (right to buy)	$11.25							⁽⁵⁾	03/24/2019	Common Stock	12,000		12,000	D
Stock Options (right to buy)	$0.95							⁽⁶⁾	12/31/2021	Common Stock	80,000		80,000	D
Warrants (right to buy)	$4							06/02/2015	06/02/2020	Common Stock	80,000		80,000	D
Warrants (right to buy)	$0.95							01/15/2016	02/14/2019	Common Stock	10,000		10,000	D
Warrants (right to buy)	$1.925							02/29/2016	02/28/2019	Common Stock	20,000		20,000	D
Warrants (right to buy)	$4.475							04/15/2016	04/14/2019	Common Stock	13,920		13,920	D
Warrants (right to buy)	$3.9							07/15/2016	07/15/2019	Common Stock	15,785		15,785	D
Warrants (right to buy)	$6.25							04/18/2016	04/17/2021	Common Stock	4,000		4,000	I	CSB IV US Holdings LLC⁽¹⁾
Warrants (right to buy)	$6.25							05/17/2016	05/16/2021	Common Stock	4,480		4,480	I	CSB IV US Holdings LLC⁽¹⁾
Warrants (right to buy)	$6.25							12/19/2016	12/19/2021	Common Stock	3,200		3,200	I	CSB IV US Holdings LLC⁽¹⁾
Warrants (right to buy)	$15							12/31/2014	12/31/2019	Common Stock	1,875		1,875	I	J. Carr & Stephanie V. Bettis Revocable Trust, Dated 1/1/03⁽³⁾
Series A Convertible Preferred Stock	⁽⁸⁾⁽⁹⁾							⁽⁷⁾	⁽⁷⁾	Common Stock	26,801		26,801	I	J. Carr & Stephanie V. Bettis Revocable Trust, Dated 1/1/03⁽³⁾

Explanation of Responses:

1. Dr. Bettis is deemed the sole manager of CSB IV US Holdings LLC. J. Carr & Stephanie V. Bettis Revocable Trust, Dated 1/1/03 (3) is deemed the beneficial owner of CSB IV US Holdings LLC.

2. Dr. Bettis is deemed the beneficial owner of Carr Bettis IRA.

3. Dr. Bettis is deemed the beneficial owner of J. Carr & Stephanie V. Bettis Revocable Trust, Dated 1/1/03.

4. On January 14, 2019, AudioEye, Inc. issued 20,000 shares of common stock to Dr. Bettis upon the cash exercise of Stock Options at an exercise price of $0.95.

5. The stock option vested as follows: 1/2 on the one-year anniversary of the date of grant; 1/48th on the monthly anniversary of the date of grant on each of the 24 months following the one-year anniversary of the date of grant.

6. The stock option vested as follows: subject to performance schedule and determined at the end of each calendar year.

7. The shares of Series A Convertible Preferred Stock of the Issuer ("Series A Preferred Stock") were immediately convertible upon issuance and do not expire.

8. Each share of Series A Preferred Stock shall be convertible, at any time and from time to time into that number of shares of the Issuer's common stock determined by dividing $10 (the "Stated Value") plus any accrued dividends with respect to such share by the Conversion Price of $4.385, subject to adjustment as described in the Certificate of Designations for the Series A Preferred Stock (the "Series A COD").

9. Holders of shares of Series A Preferred Stock are entitled to receive, when, as and if declared by the Board of Directors of the Issuer, cumulative dividends at the annual rate of 5% of the Stated Value per share of Series A Preferred Stock. Such dividends shall accrue on each such share commencing on the date of issue, and shall accrue from day to day, whether or not earned or declared. Subject to the terms of the Series A COD, at any time the Issuer shall be entitled to redeem any or all of the outstanding shares of Series A Preferred Stock at a per share price equal to 125% of the Stated Value plus accumulated dividends, payable in cash.

Remarks:

This Form 4 reports the acquisition of 20,000 shares of the Issuer's common stock by the reporting person upon the exercise of 20,000 stock options that were expiring in January 2019.

	/s/ Carr Bettis	01/16/2019
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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