SEC FORM 3

SEC Form 3

FORM 3

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

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

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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1. Name and Address of Reporting Person^*

Purcell Ernest William

(Last)

(First)

(Middle)

1395 BRICKELL AVENUE, SUITE 1130

(Street)

MIAMI

33131

(City)

(State)

(Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
09/04/2018

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

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

X	Director	10% Owner
	Officer (give title below)	Other (specify below)

5. 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 Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	257,401	D
Common Stock	57,334	I	Ernest W. Purcell & Anne M. Purcell JTTENN⁽¹⁾

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
1. Title of Derivative Security (Instr. 4)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
Stock Options (right to buy)	07/10/2017⁽²⁾	07/10/2022	Common Stock	40,000	$4.15	D
Stock Options (right to buy)	⁽³⁾	03/03/2019	Common Stock	10,000	$10	D
Stock Options (right to buy)	⁽⁴⁾	10/23/2020	Common Stock	30,000	$1.025	D
Stock Options (right to buy)	⁽⁵⁾	05/12/2021	Common Stock	28,000	$4.425	D
Stock Options (right to buy)	⁽⁵⁾	05/12/2021	Common Stock	12,000	$4.425	D
Warrants (right to buy)	06/02/2015	06/02/2020	Common Stock	40,000	$4	D
Warrants (right to buy)	04/19/2016	04/18/2021	Common Stock	4,000	$6.25	D
Warrants (right to buy)	12/19/2016	12/19/2021	Common Stock	3,200	$6.25	D
Series A Convertible Preferred Stock	⁽⁶⁾	⁽⁶⁾	Common Stock	26,801	⁽⁷⁾⁽⁸⁾	D

Explanation of Responses:

1. Mr. Purcell is deemed the beneficial owner of Ernest W. Purcell & Anne M. Purcell JTTENN.

2. The stock option was granted on 7/10/17 and vested immediately.

3. The stock option was granted on 3/3/14 and vests as follows: 20% on grant; 20% every 90 days thereafter.

4. The stock option was granted on 10/19/15 and vests as follows: 50% immediate and 12.5% per quarter thereafter.

5. The stock options were granted on 5/12/16 and vest as follows: 50% immediate; 50% quarterly over succeeding 12 months.

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

7. 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").

8. 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.

	/s/ Ernest William Purcell	09/04/2018
	** 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 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.