UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 27, 2019
AUDIOEYE, INC.
(Exact name of registrant as specified in charter)
Delaware | 001-38640 | 20-2939845 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) | ||
5210 E. Williams Circle, Suite 750 Tucson, Arizona 85711 |
(866) 331-5324
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
¨ 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. ¨
Item 2.02 Results of Operations and Financial Condition
On March 27, 2019, AudioEye, Inc. issued a press release reporting its full financial results for the fiscal quarter and fiscal year ended December 31, 2018. A copy of the Company’s press release is furnished herewith as Exhibit 99.1.
The information set forth in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Exhibits
(d) | Exhibits. |
Exhibits | Description |
99.1 | Earnings Release dated March 27, 2019 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 27, 2019 | By: | /s/ Todd Bankofier |
Todd Bankofier | ||
Chief Executive Officer |
Index to Exhibits
Exhibits | Description |
99.1 | Earnings Release dated March 27, 2019 |
AudioEye Reports Fourth Quarter and Full Year 2018 Results
TUCSON, Ariz., March 27, 2019 /PRNewswire/ -- AudioEye, Inc. (NASDAQ: AEYE), a leader in cloud-based software-as-a-service (SaaS) digital accessibility technology solutions that expand website access for all individuals, including those with disabilities, while allowing companies to maintain conformance with ADA-related requirements, reported financial results for the fourth quarter and full year ended December 31, 2018.
Fourth Quarter and Recent Operational Highlights
Key Performance Indicators (KPIs)
Fourth Quarter 2018 Financial Results
Full Year 2018 Financial Results
Full Year 2019 Financial Outlook
Management still expects to be within the range of its previously announced financial guidance for full year 2019. The Company expects revenues to range between $11.0 million and $13.0 million and cash contract bookings for the full year 2019 to range between $20.0 million and $22.0 million.
Management Commentary
AudioEye Executive Chairman Carr Bettis said, "With the fourth quarter's 103% increase in revenues as compared to Q4 2017, we've now realized record revenues for the past twelve consecutive quarters, which translates to three years of consistent growth and improvement. We are off to a good start this year and believe that the new investments we are making this quarter in our sales team, lead generation, marketing and public relations will enable AudioEye to leverage our competitive advantages and continue to improve both mindshare and market share going forward."
AudioEye CEO Todd Bankofier added: "2018 was a banner year for our organization as we continued to generate substantial growth through direct sales as well as our indirect channel partnerships. More specifically, we entered 2019 with nearly 1,000 total customers and a growing number of channel partners. Our current sales pipeline is now more than double where it was just a year ago. We also have new partners coming on board to sell our Ally Managed Service and have made enhancements in our technology to be able to implement our solution on more websites in a more timely and cost-efficient manner."
Conference Call
AudioEye management will hold a conference call today, March 27, 2019 at 4:30 p.m. Eastern time(1:30 p.m. Pacific time) to discuss these results.
AudioEye management will host the call, followed by a question and answer period.
U.S. dial-in number: (877) 407-9208
International number: (201) 493-6784
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at (949) 574-3860.
The conference call will be broadcast live and available for replay here and via the investor relations section of the company's website after 7:30 p.m. Eastern time on the same day through April 3, 2019. A recording will remain available on the company's website for 90 days.
Toll-free replay number: (844) 512-2921
International replay number: (412) 317-6671
Replay ID: 13688235
About AudioEye, Inc.
AudioEye is a technology company serving businesses committed to providing equal access to their digital content. Through patented technology, subject matter expertise and proprietary processes, AudioEye is transforming how the world experiences digital content. Leading with technology, AudioEye identifies and resolves issues of accessibility and enhances the user experience, making digital content more accessible and more usable for more people.
AudioEye's common stock trades on the Nasdaq Capital Market under the symbol "AEYE." The Company maintains offices in Tucson, Scottsdale, Atlanta and Washington D.C. For more information about AudioEye and its online accessibility solutions, please visit www.audioeye.com.
Forward-Looking Statements
Any statements in this press release about AudioEye's expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are "forward-looking statements" as that term is defined under the federal securities laws. Forward-looking statements are often, but not always, made through the use of words or phrases such as "believe", "anticipate", "should", "intend", "plan", "will", "expects", "estimates", "projects", "positioned", "strategy", "outlook" and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements contained herein include, but are not limited to, statements regarding continued rapid expansion in 2019, revenues and
cash contract bookings for the year ending December 31, 2019 and our business focus going forward. These statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements, including the variability of AudioEye's revenues and financial performance; risks associated with product development and technological changes; the acceptance of AudioEye's products in the marketplace by existing and potential future customers; competition; and general economic conditions. These and other risks are described more fully in AudioEye's filings with the Securities and Exchange Commission (the "SEC"), including AudioEye's Registration Statement on Form S-1 filed with the SEC on September 4, 2018 and its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2018. There may be events in the future that AudioEye is not able to predict accurately or over which AudioEye has no control. Forward-looking statements reflect management's view as of the date of this press release, and AudioEye urges you not to place undue reliance on these forward-looking statements. AudioEye does not undertake any obligation to update such forward-looking statements to reflect events or uncertainties after the date hereof.
About Key Operating Metrics
To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (GAAP), we consider certain operating measures that are not prepared in accordance with GAAP, including monthly recurring revenues and cash contract bookings. AudioEye reviews a number of operating metrics such as these to evaluate its business, measure performance, identify trends, formulate business plans, and make strategic decisions. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business and to facilitate comparisons of our performance to that of other similar companies. In this press release, we are reporting results and/or affirming our previously announced guidance on cash contract bookings and monthly recurring revenues.
AudioEye's Cash Contract Bookings is the contracted amount of money the customer commits to spend with the Company over an agreed amount of time, generally ranging from 12 months up to 60 months.
AudioEye's Monthly Recurring Revenues is the Company's annualized spend of a customer divided by 12.
Corporate Contact:
AudioEye, Inc.
Todd Bankofier, Chief Executive Officer
tbankofier@audioeye.com
(520) 308-6140
Investor Contact:
Matt Glover or Tom Colton
AEYE@liolios.com
(949) 574-3860
-Financial Tables to Follow-
AUDIOEYE, INC. | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(unaudited) | ||||
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| Three months ended December 31, | Year ended December 31, | ||
| 2018 | 2017 | 2018 | 2017 |
Revenues | $ 1,781,875 | $ 876,328 | $ 5,660,427 | $ 2,739,439 |
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|
Cost of revenue | 744,117 | 340,332 | 2,626,815 | 1,384,145 |
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Gross profit | 1,037,758 | 535,996 | 3,033,612 | 1,355,294 |
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Operating expenses: |
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Selling and marketing | 649,520 | 440,293 | 2,462,865 | 1,421,127 |
Research and development | 46,540 | 42,630 | 194,429 | 181,303 |
General and administrative | 1,358,134 | 1,658,921 | 4,950,138 | 4,271,510 |
Total operating expenses | 2,054,194 | 2,141,844 | 7,607,432 | 5,873,940 |
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Operating loss | (1,016,436) | (1,605,848) | (4,573,820) | (4,518,646) |
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Other income (expense): |
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Unrealized loss on derivative liabilities | - | (286,882) | - | (155,027) |
Unrealized loss on marketable securities | (210) | (450) | (240) | (450) |
Loss on settlement of debt | (267,812) | (15,724) | (267,812) | (15,724) |
Interest income (expense), net | (145,242) | (860,233) | (178,002) | (917,992) |
Total other (expenses) income | (413,264) | (1,163,289) | (446,054) | (1,089,193) |
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Net loss | (1,429,700) | (2,769,137) | (5,019,874) | (5,607,839) |
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Dividends on Series A convertible preferred stock | (13,233) | (15,206) | (53,740) | (75,206) |
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Net loss available to common stockholders | $ (1,442,933) | $ (2,784,343) | $ (5,073,614) | $ (5,683,045) |
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Net loss per common share-basic and diluted | $ (0.19) | $ (0.53) | $ (0.74) | $ (1.21) |
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Weighted average common shares outstanding-basic and diluted | 7,531,035 | 5,294,063 | 6,892,238 | 4,693,437 |
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AUDIOEYE, INC. | ||
CONSOLIDATED BALANCE SHEETS | ||
DECEMBER 31, 2018 AND 2017 | ||
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| 2018 | 2017 |
ASSETS |
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Current assets: |
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Cash | $ 5,741,549 | $ 1,960,430 |
Accounts receivable, net | 172,384 | 105,817 |
Marketable securities, held in related party | 510 | 750 |
Deferred costs, short term | 176,006 | - |
Prepaid expenses and other current assets | 49,901 | 67,406 |
Total current assets | 6,140,350 | 2,134,403 |
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Property and equipment, net | 108,007 | 34,994 |
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Deferred costs, long term | 93,790 | - |
Intangible assets, net | 2,061,404 | 2,164,463 |
Goodwill | 700,528 | 700,528 |
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Total assets | $ 9,104,079 | $ 5,034,388 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable and accrued expenses | $ 93,544 | $ 82,628 |
Related party payables | 14,467 | 23,535 |
Derivative liabilities | - | 2,984,010 |
Capital leases, short term | 30,172 | - |
Deferred rent | 4,472 | 9,402 |
Deferred revenue | 2,626,712 | 1,233,754 |
Total current liabilities | 2,769,367 | 4,333,329 |
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Long term liabilities: |
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Capital leases, long term | 51,150 | - |
Deferred rent | 6,585 | 5,048 |
Deferred revenue | 402,075 | - |
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Total liabilities | 3,229,177 | 4,338,377 |
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Stockholders' equity: |
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Preferred stock, $0.00001 par value, 10,000,000 shares authorized |
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Series A Convertible Preferred stock, $0.00001 par value, 200,000 shares designated, 105,000 and 110,000 shares issued and outstanding as of December 31, 2018 and 2017, respectively | 1 | 1 |
Common stock, $0.00001 par value, 50,000,000 shares authorized, 7,579,995 and 6,467,066 shares issued and outstanding as of December 31, 2018 and 2017 respectively | 76 | 65 |
Additional paid-in capital | 48,017,926 | 40,121,845 |
Accumulated deficit | (42,143,101) | (39,425,900) |
Total stockholders' equity | 5,874,902 | 696,011 |
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Total liabilities and stockholders' equity | $ 9,104,079 | $ 5,034,388 |
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