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
OMB APPROVAL
OMB Number: 3235-0287
Estimated average burden
hours per response: 0.5
  
 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 AZ 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)
12/28/2018
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)
Code V Amount (A) or (D) Price
Common Stock 12/28/2018 M 30,000 A $1.025 80,000 D
Common Stock 12/31/2018 A(1) 20,000 A (1) 100,000 D
Common Stock 508,988 I CSB IV US Holdings LLC(2)
Common Stock 18,600 I Carr Bettis IRA(3)
Common Stock 54,856 I J. Carr & Stephanie V. Bettis Revocable Trust, Dated 1/1/03(4)
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)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Stock Options (right to buy) $1.025 12/28/2018 M 20,000 10/26/2015 12/31/2018(5) Common Stock 20,000 $0 0 D
Warrants (right to buy) $1.025 12/28/2018 M 10,000 10/26/2015 12/31/2018(6) Common Stock 10,000 $0 0 D
Stock Options (right to buy) $11.25 (7) 03/24/2019 Common Stock 12,000 12,000 D
Stock Options (right to buy) $0.95 01/04/2016 01/14/2019 Common Stock 20,000 20,000 D
Stock Options (right to buy) $0.95 (8) 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(2)
Warrants (right to buy) $6.25 05/17/2016 05/16/2021 Common Stock 4,480 4,480 I CSB IV US Holdings LLC(2)
Warrants (right to buy) $6.25 12/19/2016 12/19/2021 Common Stock 3,200 3,200 I CSB IV US Holdings LLC(2)
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(4)
Series A Convertible Preferred Stock (10)(11) (9) (9) Common Stock 26,801 26,801 I J. Carr & Stephanie V. Bettis Revocable Trust, Dated 1/1/03(4)
Explanation of Responses:
1. The reported transaction constitutes a grant of restricted stock units, which were granted under the Issuer's Stock Incentive Plan, subject to vesting and settlement conditions.
2. 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.
3. Dr. Bettis is deemed the beneficial owner of Carr Bettis IRA.
4. Dr. Bettis is deemed the beneficial owner of J. Carr & Stephanie V. Bettis Revocable Trust, Dated 1/1/03.
5. On December 28, 2018, AudioEye, Inc. issued 20,000 shares of common stock to Dr. Bettis upon the cash exercise of Stock Options at an exercise price of $1.025. The option was originally granted on October 26, 2015 with an extended expiration date to December 31, 2018.
6. On December 28, 2018, AudioEye, Inc. issued 10,000 shares of common stock to Dr. Bettis upon the cash exercise of Warrants at an exercise price of $1.025. The option was originally granted on October 26, 2015 with an extended expiration date to December 31, 2018.
7. The stock option vests 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.
8. The stock option vests as follows: subject to performance schedule and determined at the end of each calendar year.
9. The shares of Series A Convertible Preferred Stock of the Issuer ("Series A Preferred Stock") were immediately convertible upon issuance and do not expire.
10. 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").
11. 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 30,000 shares of the Issuer's common stock by the reporting person upon the exercise of 20,000 stock options and 10,000 warrants that were expiring in December 2018. In addition, this Form 4 reports a grant of restricted stock units pursuant to footnote 1.
/s/ Carr Bettis 12/31/2018
** 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 4 (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.