Delaware
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6794
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20-2939845
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(State or other jurisdiction of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.) |
9070 S. Rita Road, Suite 1450
Tucson, Arizona 85747
(866) 331-5324
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Nathaniel T. Bradley
9070 S. Rita Road, Suite 1450
Tucson, Arizona 85747
(866) 331-5324
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(Address, including zip code and telephone number,
including area code, of registrant’s principal executive offices) |
(Name, address, including zip code and telephone
number, including area code, of agent for service) |
Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
x
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(Do not check if a smaller
reporting company) |
CALCULATION OF REGISTRATION FEE
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||||
Title of each Class of Security being registered
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Amount to be Registered
(1)
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Proposed Maximum Offering Price
Per Security
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Proposed Maximum Aggregate
Offering Price
(2)
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Amount of Registration Fee
(3)
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Shares of Common Stock, $0.00001 par value
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1,500,259
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$0.00001
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$15.00
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$7.00
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(1)
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This registration statement relates to shares of common stock, par value $0.00001 per share, of AudioEye, Inc., which will be distributed pursuant to a spin-off transaction to holders of common stock of CMG Holdings Group, Inc. The amount of the Registrant’s common stock to be registered is 1,500,259 shares of common stock. To the extent additional shares of common stock may be issued or become issuable as a result of a stock split, stock dividend, or similar transaction involving the common stock while this registration statement is in effect, this registration statement hereby is deemed to cover all such additional shares of common stock in accordance with Rule 416 under the Securities Act of 1933.
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(2)
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Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(f)(2) under the Securities Act, based on the book value of the common stock as of September 30, 2012, the most recent practicable date.
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(3)
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Previously paid.
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Page | |||
i
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COVER PAGE | ii | ||
iii
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5
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17
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67
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67
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68
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●
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Audio Internet™
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AudioEye™ Mobile
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AudioEye™ Advertising
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AudioEye™ Technology Licensing
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●
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AE’s revenue and collections may be materially adversely affected by the economic downturn.
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AE has a limited operating history and its future performance is uncertain.
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AE needs additional funds to implement its business plan.
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AE’s level of indebtedness and financial condition , including historical losses, may adversely affect its ability to continue as a going concern following the separation of AE from CMGO as described below.
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improve strategic planning, increase management focus and streamline decision-making by providing the flexibility to implement the unique strategic plans of AE and CMGO, and to respond more effectively to different financial needs of each company and the changing economic environment.
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allow AE and CMGO to adopt the capital structure, investment policy and dividend policy best suited to each business’ financial profile and business needs.
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eliminate the financial overhang to AE from the existence of the Rights.
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Prior to March 31, 2010, the business of AE was operated as a privately held stand-alone company until its acquisition by CMGO on that date, at which time AE’s operations were consolidated into CMGO as part of one publicly traded corporate organization;
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●
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Significant changes may occur in the cost structure, financing and business operations as a result of AE operating as a stand-alone company pursuant to the Separation. These changes may result in increased costs associated with reduced economies of scale, stand-alone costs for services currently provided and the legal, accounting, compliance and other costs associated with being a public company.
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Pre-Separation
(at 08/17/12)
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Post-Separation
(at 09/30/12)
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[3] | ||||||||
Assets
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$ | 117,209 | $ | 4,445,071 | ||||||
Liabilities
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3,079,551 | [1] | 4,081,740 | [1] [2] | ||||||
Debt Ratio
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2627 | % | 92 | % |
[1] |
Includes debt owed to Nathaniel T. Bradley of $1,296,544, which was convertible into common stock of AE by August 31, 2013. On December 20, 2012, the entire related party debt was converted into AE common stock at a price of $.25 per share, and 5,186,860 shares of AE’s common stock were issued to Mr. Bradley’s designees.
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[2] |
Includes debentures of $ 1,012,700 issued by AEAC (convertible into common stock within 2 years of issuance) plus accrued interest of $42,952, and a note payable of $425,000 issued by AE to secure the release of the CMGO Senior Debt. Upon the AEAC Distribution, the debentures will be exchanged for AE Debentures
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[3] |
Date of Separation is August 17, 2012. Pro Forma financial information provided as of September 30, 2012, after the Separation took place.
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AE may not be successful in entering into licensing relationships with its targeted customers on commercially acceptable terms; and
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challenges to the validity of certain of AE’s patents underlying AE’s licensing opportunities.
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substantially greater financial, technical and marketing resources;
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a larger customer base;
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better name recognition; and
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more expansive product offerings.
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AE’s applications for patents, trademarks and copyrights relating to its business may not be granted and, if granted, may be challenged or invalidated;
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issued trademarks, copyrights, or patents may not provide AE with any competitive advantages;
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AE’s efforts to protect AE’s intellectual property rights may not be effective in preventing misappropriation of AE’s technology; or
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AE’s efforts may not prevent the development and design by others of products or technologies similar to, competitive with, or superior to those AE develops.
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unwillingness of consumers to shift to and use other such next-generation internet-based audio applications;
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refusal to purchase AE’s products;
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perception by the licensees of product quality and performance;
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limitations on access and ease of use;
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congestion leading to delayed or extended response times;
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inadequate development of internet infrastructure to keep pace with increased levels of use; and
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increased government regulations.
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the need to educate potential customers about AE’s patent rights and AE’s product and service capabilities;
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customers’ willingness to invest potentially substantial resources and infrastructures to take advantage of AE’s products;
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customers’ budgetary constraints;
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the timing of customers’ budget cycles; and
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delays caused by customers’ internal review processes.
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design, develop, launch and/or license AE’s planned products, services and technologies that address the increasingly sophisticated and varied needs of AE’s prospective customers; and
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respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis.
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the price of AE’s products or services relative to other competitive products;
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the perception by users of the effectiveness of AE’s products and services;
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AE’s ability to fund AE’s sales and marketing efforts; and
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the effectiveness of AE’s sales and marketing efforts.
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power loss, transmission cable cuts and other telecommunications failures;
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damage or interruption caused by fire, earthquake, and other natural disasters;
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computer viruses or software defects; and
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physical or electronic break-ins, sabotage, intentional acts of vandalism, terrorist attacks and other events beyond AE’s control.
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the need for continued development of its financial and information management systems;
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the need to manage relationships with future licensees, resellers, distributors and strategic partners;
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the need to hire and retain skilled management, technical and other personnel necessary to support and manage AE’s business; and
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the need to train and manage its employee base.
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regulatory developments in the United States and any foreign countries where AE may operate;
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the recruitment or departure of key personnel;
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quarterly or annual variations in AE’s financial results or those of companies that are perceived to be similar to AE;
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market conditions in the industries in which AE competes and issuance of new or changed securities;
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analysts’ reports or recommendations;
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the failure of securities analysts to cover AE’s common stock or changes in financial estimates by analysts;
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the inability to meet the financial estimates of analysts who follow AE’s common stock;
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the issuance of any additional securities by AE;
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investor perception of AE and of the industry in which AE competes; and
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general economic, political and market conditions.
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Post-Separation
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|||||||||
Class
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Name
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Shares
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Pct
(1)
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||||||
Common
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Bradley Brothers, LLC
(2)
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11,296,067 | 32.09 | % | |||||
Common
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James Crawford
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340,689 | 0.96 | % | |||||
Common
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Edward W. Withrow III
(3)
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1,129,607 | 3.20 | % | |||||
Common
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Carr Bettis
(4)
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2,228,131 | 6.50 | % | |||||
Common
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Constantine S. Potamianos
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- | - | ||||||
TOTAL |
15,054,494
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42.75 | % |
(1) |
Percentages are b ased on 35,192,045 shares outstanding , which include the 5,186,860 shares issued on December 20, 2012 related to the conversion of Nathaniel T. Bradley’s debt.
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(2) |
Nathaniel T. Bradley and Sean Bradley are each 50% owners of Bradley Brothers, LLC, the record owner of 11,296,067 shares, and share investment power with respect to such shares. The Bradley Brothers, LLC shares do not include the 5,186,860 shares issued on December 20, 2012 related to the conversion of AE’s debt owed to Nathaniel T. Bradley. The conversion shares were issued to Mr. Bradley’s designees. Mr. Bradley has no investment or voting power over said shares and is not deemed to be the beneficial owner thereof.
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(3) |
Mr. Withrow is the Managing Member of Huntington Chase Financial Group, LLC, the record owner of 1,129,607 shares
.
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(4) |
Mr. Bettis is Managing Member of CSB IV Us Holdings, LLC, the record owner of 1,723,328 shares. Mr. Bettis is also co-trustee of the J. Carr & Stephanie V. Bettis Revocable Trust, the record owner of 564,803 shares. The total shares beneficially held by Mr. Bettis are 2,288,131 shares.
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●
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an individual citizen or resident of the United States,
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a corporation (including any entity treated as a corporation for U.S. federal income tax purposes), partnership or other entity created or organized in or under the laws of the United States, any state or any political subdivision thereof,
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an estate, the income of which is subject to United States federal income taxation regardless of the source of the income, or
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a trust whose administration is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all of its substantial decisions or which has elected to be treated as a United States person.
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Audio Internet™
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AudioEye™ Mobile
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AudioEye™ Advertising
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AudioEye™ Technology Licensing
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The IP Group is charged with the development of additional intellectual property, development and implementation of a licensing strategy, and the prosecution and enforcement of AE’s existing patent portfolio.
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The Services Group is charged with the commercialization of AE’s intellectual property, business development, and sales and marketing of AE’s services and product offerings.
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Generate revenue through the sale of services and products to corporate publishers.
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Generate revenue from the sale of services and products to consumer websites.
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Generate revenue from the sale of services and products to federal, state and local governments.
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Generate revenue from the sales of AudioEye Advertising technology.
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Generate revenue from royalties from licensees of AE’s technology.
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Generate revenue from settlements and judgments in connection with patent infringement enforcement of AE’s intellectual property.
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Implementing a technology-licensing program to commercialize AE’s intellectual property, including the AE patented technology.
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Developing revenues from licensing royalties from organizations that utilize AE’s patented technology and systems, to include potentially taking equity in or entering into joint ventures with such organizations.
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Leveraging AE’s existing technology to develop a suite of products and services that can be sold directly to governments and corporate enterprises.
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AE Communications Technology Platform – Offered as Internet Cloud Software as a Service (SaaS) | ||
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Audio Internet™
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AudioEye™ Mobile
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AudioEye™ Advertising
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AE Technology Licensing – Offered on an Equity and/or Royalty Licensing Basis | ||
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Digital Coupon
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Mobile Advertising Solutions
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Mobile Marketing Solutions
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Counseling/Behavioral Health Care
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Medical Applications
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Content Delivery Networks (CDN)
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Mobile Networks
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Others
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AE Patent Enforcement and Patent Portfolio Licensing Program | ||
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Establishing Enforcement and Licensing Protocols to Combat Widespread Infringement
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Pricing Models/Early Adopter License Strategy
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Mobile Device Manufacturers
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Mobile Marketing Providers
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Other Device and Hardware Manufacturers
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AE Support and Interactive Services | ||
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Support Infrastructure for SaaS Model – Operated as a Revenue Center
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Customized Software and Development – Operated as a Revenue Center
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Sales and Commercialization Support for all Divisions.
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Corporate Publishers
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Consumer Websites
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Federal, State and Local Governments and Agencies
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Mobile Advertisers
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Mobile Device Manufacturers
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Mobile Device Software Providers
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Mobile Device Operating System Providers
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Mobile Marketing Operations
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Mobile Internet Access Providers
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Internet Device Manufacturers
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Satellite, GPS and Automotive Device Manufacturers
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Internet Browser Providers
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Internet Media Service Providers
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Internet Content Publishers
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Internet Media Publishers
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Internet Service Providers
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Internet Search Providers
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Internet E-commerce Providers
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Internet Marketing Operations
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Internet Accessibility Services Providers
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U.S. Federal Government Internet Operations
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U.S. State Governments Internet Operations
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U.S. Departments, Bureaus, Agencies and Territories Internet Operations
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Native American Business Operations
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Native American Governments
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Content Delivery Networks (CDN)
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Foreign Governments
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Appliance Manufacturers
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Healthcare Products Manufacturers
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Prescription Medication Pharmacy Operations
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Pharmaceutical Companies
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“How To” Operations
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User Manual Publishers
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1.
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Mobile and Internet Browser Solutions. A serious competitive threat to AE comes from the internet browsers that have already begun to infringe upon AE’s technology and have started to provide voice navigation and multi-format content consumption.
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2.
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Mobile Device Operating Solutions. AE’s management believes that this segment involves the highest volume and presence of technology infringement of apparatus and device claims of AE’s portfolio. In view of this segment also offering competing audio navigation and audio control of device features and functions, AE’s management has determined that this segment has the highest priority.
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3.
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Tablets and E-readers. Internet e-readers and tablet computers with competing functionalities and audio navigation commands and controls pose a potential competitive threat. Competitive analysis is ongoing; licensing strategy requires additional investment and focus in this area of ongoing competitive analysis.
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#
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ID
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Status
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Title
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|||
1
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US7966184 B2
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Issued
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System and method for audible website navigation
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2
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US7653544 B2
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Issued
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Method and apparatus for website navigation by the visually impaired
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3
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US8260616
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Issued
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System and method for Audio Content Generation
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4
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US8046229
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Issued
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Method and Apparatus for website navigation by the visually impaired
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5
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13/483758
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Pending
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System and Method for Audio Content Generation
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6
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13/280184
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Pending
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System and Method for Audio Content Management
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7
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13/214347
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Pending
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System and Method for Audio Content Navigation
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8
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13/545417
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Pending
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System and Method for Audio Content Navigation
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●
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Unique patented technology
. AE is focused on developing innovations in the field of networked and device-embedded audio technology. AE’s first patent family entitled “Method and Apparatus for Website Navigation by the Visually Impaired” U.S. patent #7653544 filed in 2003 and issued on January 29, 2010 provides technology claims that cover audio content navigation. AE’s second family of patents is entitled “System and Method for Audible Web Site Navigation.” AE’s key foundational patent, U.S. patent #7966184 filed in 2007 and issued on June, 23 2011, includes additional mobile smartphone navigation and audio publishing capabilities. AE has filed continuations within both patent families keeping both open for the filing of continuations and continuations in part. AE owns a unique patent portfolio comprised of four issued patents in the United States, and five U.S. patents pending with three additional patents being drafted for filing with the U.S. Patent and Trademark Office in 2012/2013. AE’s portfolio includes patents and pending patent applications in the United States with over 60 issued claims that canvass internet and mobile markets that support AE’s business and technology licensing process
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●
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Licensing business model
. AE is pursuing agreements under which AE will license its technology within key identified vertical end-markets including but not limited to the U.S. government, mobile carrier, higher education, digital couponing, content delivery networks, marketing organizations, e-learning organizations, e-commerce operations, device manufactures, internet technology, and communications.
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●
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Highly experienced inventors, technologists and product development team
. AE’s research and development team is comprised of experienced software, e-commerce, mobile marketing and internet broadcasting developers and technologists that have worked together as a team for over fifteen years. During their careers, this team has developed several technologies programs for Fortune 500 organizations; federal, state and local governments in the United States; and several leading organizations in a wide range of end-markets.
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Pro Forma Capitalization
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Pro Forma
September 30, 2012
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Long term debt
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$ | 2,455,99 6 | (1) (2) | |
Preferred Stock, $0.00001 par value, 10,000,000 shares authorized, none issued and outstanding
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$ | — | ||
Common stock, $0.00001 par value, 100,000,000 shares authorized, 30,005,185 issued and outstanding as of September 30, 2012
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300 | |||
Additional paid in capital
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394,700 | |||
Accumulated deficit
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(31,669 | ) | ||
Total Stockholders’ Equity
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$ | 363,331 | ||
Total Liabilities and Stockholders’ Equity
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$ | 2,819,32 7 |
(1) |
Includes debt owed to Nathaniel T. Bradley of $1,296,544, which was convertible into common stock of AE by August 31, 2013. On December 20, 2012, the entire related party debt was converted into AE common stock at a price of $.25 per share, and 5,186,860 shares of AE’s common stock were issued to Mr. Bradley’s designees.
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(2) |
Includes debentures of $1,012,700 issued by AEAC (convertible into common stock within 2 years of issuance) plus accrued interest of $42,952, and a note payable of $425,000 issued by AE to secure the release of the CMGO Senior Debt. Upon the AEAC Distribution, the debentures will be exchanged for AE Debentures.
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Page
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35
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36
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37
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38
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41
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42
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43
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44
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45
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Statement of Stockholders’ Equity from December 31, 2009 to September 30, 2012
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46
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As of September 30, 2012**
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Historical
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Consolidated
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|||||||||||||||
September 30,
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AEAC
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Pro Forma
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September 30,
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|||||||||||||
2012
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Consolidation
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Adjustments
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2012
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|||||||||||||
(unaudited)
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||||||||||||||||
ASSETS
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||||||||||||||||
Current Assets
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$ | 132,353 | $ | 37,582 | $ | — | $ | 169,935 | ||||||||
Loans to affiliate
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200,000 | — | (200,000 | ) [3] | — | |||||||||||
Related party receivable
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15,500 | — | — | 15,500 | ||||||||||||
Property and equipment, net
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7,294 | 7,294 | ||||||||||||||
Intangible asset, net
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— | 3,522,216 | [5][7][9] | 29,598 | [10] | 3,551,814 | ||||||||||
Goodwill
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— | 700,528 | [9] | 700,528 | ||||||||||||
TOTAL ASSETS
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$ | 355,147 | $ | 4,260,326 | $ | (170,402 | ) | $ | 4,445,071 | |||||||
Current Liabilities
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$ | 1,603,10 5 | [6] [8] | $ | 226,983 | $ | (200,000 | )[3] | $ | 1,625,74 4 | ||||||
(4,344 | ) [11] | |||||||||||||||
Long-term liabilities
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1,400,34 4 | 1,055,652 | [4] | — | 2,455,99 6 | |||||||||||
Total Liabilities
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3,003,449 | 1,282,635 | (204,344 | ) | 4,081,740 | |||||||||||
Stockholders’ Deficit
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||||||||||||||||
Preferred Stock
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— | [1] | — | — | ||||||||||||
Common stock
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300 | [2] | 15 | [7 ] | (15 | ) [12] | 300 | |||||||||
Additional paid in capital
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1,123,982 | 3,127,327 | [7][9] | (3,856,609 | ) [12] | 394,700 | ||||||||||
Retained earnings
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(3,772,584 | ) | (149,651 | ) | 29,598 | [10] | (31,669 | ) | ||||||||
4,344 | [11] | |||||||||||||||
3,856,624 | [12] | |||||||||||||||
Total Stockholders’ Deficit
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(2,648,302 | ) | 2,977,691 | 33,942 | 363,331 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
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$ | 355,147 | $ | 4,260,326 | $ | (170,402 | ) | $ | 4,445,071 |
[1]
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10,000,000 shares authorized , none issued
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[2]
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100,000,000 shares authorized, 30,005,185 shares issued and outstanding
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[3]
|
Intercompany eliminations
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[4]
|
Includes issuance by AEAC of $1,012,700 Convertible Debentures and accrued interest of $42,952
|
[5]
|
Includes partial payment of $700,000 to CMGO upon Separation for Senior Notes
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[6]
|
Includes issuance by AE of $425,000 Note Payable to Senior Noteholders upon Separation
|
[7]
|
Includes issuance of 1,500,000 shares of AEAC common stock to lien holders of the CMGO senior notes at $0.25 per share = $375,000 (Note 1)
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[8]
|
Includes expenses to be incurred by AE of $155,007 in connection with the issuance and distribution of securities registered
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[9]
|
Adjust patent valuation and record goodwill (Note 1)
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[10]
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Reversal of 1.5 mos amortization of patent - transaction assumed 09/30/12
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[11]
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Reversal of accrued interest on CMGO Note - transaction assumed 09/30/12
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[12]
|
Elimination of subsidiary equity due to business combination
. Share Exchange between AE and AEAC incomplete as of 09/30/12
|
** |
As if the transaction took place September 30, 2012
|
AUDIOEYE, INC.
|
||||||||||||||
As of and for the Nine Months Ended September 30, 2012**
|
AudioEye
|
||||||||||||||||
Historical
|
Pro Forma
|
|||||||||||||||
September 30,
|
AEAC
|
Pro Forma
|
September 30,
|
|||||||||||||
2012
|
Consolidation
|
Adjustments
|
2012
|
|||||||||||||
|
|
|
|
|||||||||||||
Revenue
|
$ | 276,587 | $ | — | $ | — | $ | 276,587 | ||||||||
Revenue from related party
|
2,250 | 2,250 | ||||||||||||||
Cost of revenues
|
(226,849 | ) | (226,849 | ) | ||||||||||||
Gross Profit
|
51,988 | — | — | 51,988 | ||||||||||||
General and administrative expenses
|
657,534 | 44,534 | (155,007 | ) [3] | 547,061 | |||||||||||
Operating income (loss)
|
(605,546 | ) | (44,534 | ) | 155,007 | (495,073 | ) | |||||||||
Amortization expense
|
— | (29,598 | ) | (147,993 | ) [4] | (177,591 | ) | |||||||||
Unrealized Gain (loss)
|
36,000 | 36,000 | ||||||||||||||
Interest Expense-Loans/Debentures
|
(5,048 | ) [1] | (42,952 | ) [2] | (26,675 | ) [1] | (105,636 | ) | ||||||||
(30,961 | ) [2] | |||||||||||||||
Net (loss)
|
$ | (574,594 | ) | $ | (117,084 | ) | $ | (50,622 | ) | $ | (742,300 | ) | ||||
Net (loss) per common share - basic and diluted
|
$ | (0.06 | ) | $ | (0.02 | ) | ||||||||||
Weighted average common shares outstanding -
basic and diluted
|
30,005,185 | 30,005,185 |
[1]
|
Interest on Note Payable $425,000 x 8% x 333 days (360 day/yr) = $31,019 - $4,344 previously recorded = $26,675
|
[2]
|
Interest on Debentures = $1,012,700 x 8% x 333 days (365 day/yr) = $73,913 - $42,952 previously recorded = $30,961
|
[3]
|
$155,007 of expenses to be incurred by AE in connection with the issuance and distribution of securities registered are not included because they are non-recurring and are not expected to have a continuing impact on the registrant
|
[4]
|
Amortization of Patent -$3,551,814 / 180 mos (patent expires 2027) x 9 mos $177,591 - $29,598 previously recorded = $147,993
|
**
|
As if the transaction took place at January 1, 2012
|
AUDIOEYE, INC.
|
|||||||||||||
As of and for the Year Ended December 31, 2011**
|
AudioEye
|
||||||||||||||||
Historical
|
Pro Forma
|
|||||||||||||||
December 31,
|
AEAC
|
Pro Forma
|
December 31,
|
|||||||||||||
2011
|
Consolidation
|
Adjustments
|
2011
|
|||||||||||||
|
|
|
|
|||||||||||||
Revenue
|
$ | 125,521 | $ | — | $ | — | $ | 125,521 | ||||||||
Revenue from related party
|
12,500 | 12,500 | ||||||||||||||
Cost of revenues
|
(641,124 | ) | (641,124 | ) | ||||||||||||
Gross Profit
|
(503,103 | ) | — | — | (503,103 | ) | ||||||||||
General and administrative expenses
|
810,341 | — | — | [3] | 810,341 | |||||||||||
Patent impairment expense
|
147,908 | (147,908 | )[5] | — | ||||||||||||
Operating income (loss)
|
(1,461,352 | ) | — | 147,908 | (1,313,444 | ) | ||||||||||
Amortization expense
|
— | (236,788 | )[4] | (236,788 | ) | |||||||||||
Other income (expense)
|
(283,050 | ) | — | (34,000 | )[1] | (398,066 | ) | |||||||||
(81,016 | )[2] | |||||||||||||||
Net (loss)
|
$ | (1,744,402 | ) | $ | — | $ | (203,896 | ) | $ | (1,948,298 | ) | |||||
Net (loss) per common share - basic and diluted
|
$ | (0. 06 | ) | $ | (0.06 | ) | ||||||||||
Weighted average common shares outstanding -
basic and diluted
|
30,005,185 | 30,005,185 |
[1]
|
Interest on Note Payable = $425,000 x 8% = $34,000
|
[2]
|
Interest on Debentures = $1,012,700 x 8% = $81,016
|
[3]
|
$155,007 of expenses to be incurred by AE in connection with the issuance and distribution of securities registered are not included because they are non-recurring and are not expected to have a continuing impact on the registrant
|
[4]
|
Amortization of Patent - $3,551,814 / 180 mos (patent expires 2027) x 12 mos = $236,788
|
[5]
|
Reversal of Patent Impairment due to valuation of patent
|
**
|
As if the transaction took place at January 1, 2011
|
Purchase Price Allocation
|
|||||||||
Purchase Price:
|
Senior Notes
|
$ | 1,075,000 | ||||||
Extension Fee
|
50,000 | ||||||||
Value of 1.5M shares issued @ $.25 **
|
375,000 | $ | 1,500,000 | ||||||
Less: Net Assets (deficit)
|
2,752,342 | * | |||||||
Less: Identifiable Intangibles - Patents
|
(3,551,814 | ) | |||||||
Goodwill
|
$ | 700,528 | |||||||
Net Assets (deficit)
|
||||
Book Value
|
||||
at 08/17/12*
|
||||
Current Assets
|
$
|
109,521
|
||
Property, Plant & Equipment, net
|
7,688
|
|||
Patents
|
—
|
|||
Current Liabilities
|
(1,517,724
|
)
|
||
L/T Liabilities
|
(1,351,827
|
)
|
||
Contingent Liabilities (Note 2)
|
—
|
|||
Net Assets (deficit)
|
$
|
(2,752,342
|
) *
|
|
* Date of Separation
|
AUDIOEYE, INC.
|
|||||||||
September 30,
|
December 31,
|
December 31,
|
||||||||||
2012
|
2011
|
2010
|
||||||||||
(unaudited)
|
||||||||||||
ASSETS
|
||||||||||||
Current Assets
|
||||||||||||
Cash
|
$ | 45,307 | 27,426 | $ | 3,611 | |||||||
Accounts receivable, net
|
29,873 | 11,637 | 22,343 | |||||||||
Loan to affiliate | 200,000 | — | — | |||||||||
Related party receivables
|
15,500 | 13,125 | — | |||||||||
Prepaid expenses
|
3,173 | — | — | |||||||||
Marketable securities
|
54,000 | 18,000 | 14,000 | |||||||||
Total Current Assets
|
347,853 | 70,188 | 39,954 | |||||||||
Property and equipment, net
|
7,294 | 7,998 | 13,551 | |||||||||
Intangible assets, net
|
— | — | 52,839 | |||||||||
TOTAL ASSETS
|
$ | 355,147 | 78,186 | $ | 106,344 | |||||||
Current Liabilities
|
||||||||||||
Accounts payable and accrued expenses
|
$ | 552,872 | 368,790 | $ | 502,685 | |||||||
Unearned income
|
2,002 | 13,195 | — | |||||||||
Notes and loans payable-current
|
449,000 | 24,000 | 74,900 | |||||||||
Related party payable
|
599,231 | 398,270 | — | |||||||||
Total Current Liabilities
|
1,603,105 | 804,255 | 577,585 | |||||||||
Long term liabilities
|
||||||||||||
Notes and loans payable-long term
|
103,800 | 121,800 | — | |||||||||
Related party loans
|
1,296,544 | 1,245,840 | — | |||||||||
Total Long term Liabilities
|
1,400,344 | 1,367,640 | — | |||||||||
Total Liabilities
|
3,003,449 | 2,171,895 | 577,585 | |||||||||
STOCKHOLDERS’ DEFICIT
|
||||||||||||
Preferred Stock, $0.00001 par value, 10,000,000, 500,000 and 500,000 shares authorized, none issued and outstanding as of September 30, 2012, December 31, 2011 and December 31, 2010, respectively
|
— | — | — | |||||||||
Common stock, $0.00001 par value, 100,000,000 shares authorized, 30,005,185 issued and outstanding as of September 30, 2012, December 31, 2011 and December 31, 2010
|
300 | 300 | 300 | |||||||||
Additional paid in capital
|
1,123,982 | 1,118,683 | 996,749 | |||||||||
Accumulated deficit
|
(3,772,584 | ) | (3,197,991 | ) | (1,453,589 | ) | ||||||
Total AudioEye, Inc. Stockholders’ Deficit
|
(2,648,302 | ) | (2,079,008 | ) | (456,540 | ) | ||||||
Non-controlling interest
|
— | (14,701 | ) | (14,701 | ) | |||||||
Total Stockholders’ Deficit
|
(2,648,302 | ) | (2,093,709 | ) | (471,241 | ) | ||||||
TOTAL LIABILITIES AND
STOCKHOLDERS’ DEFICIT
|
$ | 355,147 | $ | 78,186 | $ | 106,344 |
See Notes to Consolidated Financial Statements
|
(unaudited)
|
||||||||||||||||
For the 9 months ended
|
For the 12 months ended
|
|||||||||||||||
|
09/30/2012
|
09/30/2011
|
12/31/2011
|
12/31/2010
|
||||||||||||
Revenue
|
$ | 276,587 | $ | 107,634 | $ | 125,521 | $ | 328,397 | ||||||||
Revenue from related party
|
2,250 | 11,750 | 12,500 | 19,850 | ||||||||||||
Cost of revenues
|
226,849 | 509,105 | 641,124 | 429,705 | ||||||||||||
Gross Profit
|
51,988 | (389,721 | ) | (503,103 | ) | (81,458 | ) | |||||||||
General and administrative expenses
|
657,534 | 588,231 | 810,341 | 644,908 | ||||||||||||
Patent impairment expense
|
— | 147,908 | — | |||||||||||||
Operating income (loss)
|
(605,546 | ) | (977,952 | ) | (1,461,352 | ) | (726,366 | ) | ||||||||
Other Expenses
|
||||||||||||||||
Unrealized gain (loss) on marketable securities
|
36,000 | 6,000 | (3,000 | ) | (78,000 | ) | ||||||||||
Loss attributable to non-controlling interest
|
— | — | — | 14,701 | ||||||||||||
Interest expense
|
(5,048 | ) | (280,050 | ) | (280,050 | ) | (42,641 | ) | ||||||||
Total Other Expenses
|
30,952 | (274,050 | ) | (283,050 | ) | (105,940 | ) | |||||||||
Net (loss)
|
$ | (574,594 | ) | $ | (1,252,002 | ) | $ | (1,744,402 | ) | $ | (832,306 | ) | ||||
Net (loss) per common share - basic and diluted
|
$ | (0.02 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.03 | ) | ||||
Weighted average common shares outstanding -
basic and diluted
|
30,005,185 | 30,005,185 | 30,005,185 | 30,005,185 |
AUDIOEYE, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
For the 9 months ended
|
For the 12 months ended
|
|||||||||||||||
09/30/2012
|
09/30/2011
|
12/31/2011
|
12/31/2010
|
|||||||||||||
Cash Flows from Operating Activities:
|
||||||||||||||||
Net (loss)
|
$ | (574,594 | ) | $ | (1,252,002 | ) | $ | (1,744,402 | ) | $ | (832,306 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||||||||||
Depreciation and amortization
|
2,472 | 4,793 | 12,672 | 7,933 | ||||||||||||
Unrealized (gain) loss on investments
|
(36,000 | ) | (6,000 | ) | 15,875 | 78,000 | ||||||||||
Bad debt expense
|
(3,750 | ) | 15,000 | 15,000 | 87,000 | |||||||||||
Patent Impairment expense
|
— | — | 147,908 | — | ||||||||||||
Interest expense related to debt modification
|
— | 121,934 | 121,934 | — | ||||||||||||
Loss attributable to non-controlling interest
|
— | — | — | (14,701 | ) | |||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
(Increase) in accounts receivable
|
(14,486 | ) | (46,338 | ) | (24,169 | ) | (99,464 | ) | ||||||||
(Increase) in prepaid expenses
|
(3,173 | ) | — | — | — | |||||||||||
(Increase) in related party receivable
|
(2,375 | ) | (11,750 | ) | (13,125 | ) | — | |||||||||
Increase in accounts payable and accrued expenses
|
184,083 | 13,291 | 89,082 | 443,827 | ||||||||||||
Increase (decrease) in unearned income
|
(11,193 | ) | — | 13,195 | — | |||||||||||
Increase in related party payables
|
201,665 | 121,153 | 250,192 | — | ||||||||||||
Net cash provided by (used in) operating activities
|
(257,351 | ) | (1,039,919 | ) | (1,115,838 | ) | (329,711 | ) | ||||||||
Cash Flows from Investing Activities:
|
||||||||||||||||
Cash (paid for) computer equipment
|
(1,768 | ) | — | — | (11,287 | ) | ||||||||||
Cash provided by (paid for) patent costs
|
— | (93,886 | ) | (102,187 | ) | (31,447 | ) | |||||||||
Net cash used in financing activities
|
(1,768 | ) | (93,886 | ) | (102,187 | ) | (42,734 | ) | ||||||||
Cash Flow from financing activities:
|
||||||||||||||||
Proceeds from related party loans
|
50,000 | 1,242,340 | 1,245,840 | — | ||||||||||||
Repayment of note payable
|
(18,000 | ) | — | (4,000 | ) | — | ||||||||||
Repayment of related party loans
|
— | — | — | (100,000 | ) | |||||||||||
Loan from affiliate
|
(225,000 | ) | — | — | — | |||||||||||
Stockholder contributions
|
20,000 | — | — | — | ||||||||||||
Cash contribution from parent
|
— | — | — | 470,000 | ||||||||||||
Net cash provided by financing activities
|
277,000 | 1,242,340 | 1,241,840 | 370,000 | ||||||||||||
Increase (decrease) in cash
|
17,881 | 108,535 | 23,815 | (2,445 | ) | |||||||||||
Cash - beginning of period
|
27,426 | 3,611 | 3,611 | 6,056 | ||||||||||||
Cash - end of period
|
$ | 45,307 | $ | 112,146 | $ | 27,426 | $ | 3,611 | ||||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES
|
||||||||||||||||
Conversion of debt for common stock
|
$ | — | $ | — | $ | — | $ | 112,500 | ||||||||
Marketable securities received for accounts receivable
|
$ | — | $ | 7,000 | $ | 7,000 | $ | 33,000 | ||||||||
Note payable related to acquisition
|
$ | 425,000 | $ | — | $ | — | $ | — | ||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||||||||||
Interest paid
|
$ | — | $ | — | $ | — | $ | 23,916 | ||||||||
Income taxes paid
|
$ | — | $ | — | $ | — | $ | — |
AUDIOEYE, INC.
|
||||||||||||||||
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
|
||||||||||||||||
PERIOD FROM DECEMBER 31, 2009 TO SEPTEMBER 30, 2012
|
COMMON STOCK
|
PAID IN
|
NON-CONTROLLING
|
ACCUMULATED
|
|||||||||||||||||||||
SHARES
|
AMOUNT
|
CAPITAL
|
INTEREST
|
(DEFICIT)
|
TOTAL
|
|||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Balance, December 31, 2009
|
2,241,626 | 22 | 414,527 | - | (621,283 | ) | (206,734 | ) | ||||||||||||||||
Conversion of debt for common stock
|
304,857 | 3 | 112,497 | - | - | 112,500 | ||||||||||||||||||
Issuance of common stock re: forward split
|
27,458,702 | 275 | (275 | ) | - | - | ||||||||||||||||||
Capital contribution from parent
|
- | - | 470,000 | - | - | 470,000 | ||||||||||||||||||
Loss attributable to non-controlling interest
|
- | - | - | (14,701 | ) | - | (14,701 | ) | ||||||||||||||||
Net loss
|
- | - | - | - | (832,306 | ) | (832,306 | ) | ||||||||||||||||
Balance, December 31, 2010
|
30,005,185 | 300 | 996,749 | (14,701 | ) | (1,453,589 | ) | (471,241 | ) | |||||||||||||||
Gain on troubled debt restructuring with related party
|
- | - | 121,934 | - | 121,934 | |||||||||||||||||||
Net loss
|
- | - | - | - | (1,744,402 | ) | (1,744,402 | ) | ||||||||||||||||
Balance, December 31, 2011
|
30,005,185 | 300 | 1,118,683 | (14,701 | ) | (3,197,991 | ) | (2,093,709 | ) | |||||||||||||||
Consolidation of equity due to acquisition
|
- | - | (14,701 | ) | 14,701 | - | ||||||||||||||||||
Contributed capital | - | - | 20,000 | - | - | 20,000 | ||||||||||||||||||
Rounding
|
- | - | - | - | - | 1 | ||||||||||||||||||
Net loss
|
- | - | - | - | (574,594 | ) | (574,594 | ) | ||||||||||||||||
Balance, September 30, 2012
|
30,005,185 | 300 | 1,123,982 | - | (3772,584 | ) | (2,648,302 | ) | ||||||||||||||||
See Notes to Consolidated Financial Statements
|
||||||||||||||||
1.
|
CMG will retain 15% of the Company subject to transfer restrictions following the Spin-off.
|
|
2.
|
Pursuant to the Spin-off, CMG will distribute to its stockholders, in the form of a dividend, 5% of the capital stock of the Company.
|
|
3.
|
The Company entered into a Royalty Agreement with CMG to pay to CMG 10% of cash received from income earned, settlements or judgments directly resulting from the Company’s patent enforcement and licensing strategy whether received by the Company or any of its affiliates, net of any direct costs or tax implications incurred in pursuit of such strategy pertaining to the patents as fully described in the agreement.
|
|
4.
|
The Company entered into a Services Agreement with CMG whereby CMG will receive a commission of not less than 7.5% of all revenues received by the Company after the closing date from all business, clients, or other sources of revenue procured by CMG or its employees, officers or subsidiaries, and directed to the Company, and 10% of net revenues obtained from a third party described in the agreement.
|
|
5.
|
The Company was obligated to obtain the release of the obligations of CMG under CMG’s 13% Senior Secured Convertible Extendible Notes with an aggregate principal balance of $1,075,000.
|
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.
|
Fair Value
|
Fair Value
Hierarchy
|
|||
Marketable securities, September 30, 2012
|
$54,000
|
Level 1
|
||
Marketable securities, December 31, 2011
|
$18,000
|
Level 1
|
||
Marketable securities, December 31, 2010
|
$14,000
|
Level 1
|
September 30
|
December 31
|
December 31
|
||||||||||
2012
|
2011
|
2010
|
||||||||||
Computer & Peripherals
|
$ | 24,318 | $ | 22,550 | $ | 22,550 | ||||||
Accumulated Deprecation
|
(17,024 | ) | (14,552 | ) | (8.999 | ) | ||||||
Property Plant & Equipment, Net
|
$ | 7,294 | $ | 7,998 | $ | 13,551 |
September 30,
|
December 31,
|
December 31,
|
||||||||||
2012
|
2011
|
2010
|
||||||||||
Patents
|
$ | — | $ | 157,865 | $ | 55,678 | ||||||
Domains
|
— | 440 | — | |||||||||
Accumulated Amortization
|
— | (10,397 | ) | (2,839 | ) | |||||||
Intangible Assets, Net
|
$ | — | $ | 147,908 | $ | 52,839 |
Deferred tax assets:
|
September 30, 2012
|
December 31, 2011
|
December 31, 2010
|
|||||||||
Net operating loss carry forwards
|
$ | 1,050,000 | $ | 870,000 | $ | 325,000 | ||||||
Less valuation allowance
|
(1,050,000 | ) | (870,000 | ) | (325,000 | ) | ||||||
Net deferred tax asset
|
$ | — | $ | — | $ | — |
Nine Months Ended
|
Year Ended
|
|||||||||||||||
September 30,
|
December 31,
|
|||||||||||||||
2012
|
2011
|
2011
|
2010
|
|||||||||||||
Revenue
|
$ | 276,587 | $ | 107,634 | $ | 125,521 | $ | 328,397 | ||||||||
Revenue from related party
|
2,250 | 11,750 | 12,500 | 19,850 | ||||||||||||
Cost of Sales
|
226,849 | 509,105 | 641,124 | 429,705 | ||||||||||||
Gross profit (loss)
|
51,988 | (389,721 | ) | (503,103 | ) | (81,458 | ) | |||||||||
General and administrative expenses
|
657,534 | 588,231 | 810,341 | 644,908 | ||||||||||||
Patent impairment expense
|
— | — | 147,908 | — | ||||||||||||
Operating (loss)
|
(605,546 | ) | (977,952 | ) | (1,461,352 | ) | (726,366 | ) | ||||||||
Unrealized gain (loss) on marketable securities
|
36,000 | 6,000 | (3,000 | ) | (78,000 | ) | ||||||||||
Loss attributable to non-controlling interest
|
— | — | — | 14,701 | ||||||||||||
Interest expense
|
(5,048 | ) | (280,050 | ) | (280,050 | ) | (42,641 | ) | ||||||||
Net (loss)
|
$ | (574,594 | ) | $ | (1,252,002 | ) | $ | (1,744,402 | ) | $ | (832,306 | ) |
·
|
an increase in website design services of $172,172;
|
|
·
|
a decrease in website hosting fees of $12,719 for monthly hosting of client websites;
|
|
·
|
a decrease in sub-contracted design fees of $275,360 due to the creation and development of additional software; and
|
|
·
|
a decrease in direct labor and other related expenses of $1,777 for additional staff support .
|
·
|
a decrease in website development services of $102,113;
|
|
·
|
a decrease in website hosting fees of $108,114 for monthly hosting of client websites;
|
|
·
|
an increase in amortization expense related to patent costs of $4,454;
|
|
·
|
an increase in sub-contracted design fees of $75,733 due to the creation and development of additional software;
|
|
·
|
a decrease in bartered services expense of $23,249;
|
|
·
|
an increase in direct labor of $138,562 for additional staff support; and
|
|
·
|
an increase in website hosting expenses of $15,918.
|
·
|
a decrease in professional fees of $97,302, primarily due to $97,500 for the services of a valuation consultant in 2011 that did not recur in 2012;
|
|
·
|
an increase in legal, accounting and audit fees of $176,060 resulting from the additional legal costs of $139,148 and accounting costs of $18,059, both related to the S-1 registration and CMGO acquisition in March 2010 and additional audit requirements during 2011;
|
|
·
|
a decrease in staff salaries and wages of $29,698, primarily due to a decrease in staffing;
|
|
·
|
an increase in rent expense of $27,439 due to additional office space leased; and
|
|
·
|
an increase in other general and administrative expenses of $11,657.
|
·
|
an increase in professional fees of $127,500 due primarily to $97,500 for the services of a valuation consultant in 2011;
|
|
·
|
an increase in legal, accounting and audit fees of $23,161 resulting from the CMGO acquisition in March 2010 and additional audit requirements;
|
|
·
|
a decrease in bad debt expense of $84,847, resulting from the initial allowance for doubtful accounts in expensed in 2010 of $87,000, compared to $2,153 of uncollectible receivables expensed in 2011;
|
|
·
|
an increase in executive salaries and wages of $77,615, primarily due to an increase in executive compensation as provided for in the employment agreements entered into and commencing April 1, 2010;
|
|
·
|
an increase in rent expense of $15,611 due to additional office space leased in 2011; and
|
|
·
|
a decrease in other general and administrative expenses of $6,391.
|
Name
|
Age
|
Director/Position
|
||
Edward W. Withrow III
|
47
|
Director
|
||
Nathaniel T. Bradley
|
36
|
Director, Chief Executive Officer, President
|
||
Sean Bradley
|
31
|
Director, Chief Technology Officer, Vice President, Secretary
|
||
James Crawford
|
31
|
Director, Chief Operating Officer, Treasurer
|
||
Carr Bettis | 49 | Director | ||
Constantine S. Potamianos
|
47
|
Chief Legal Officer, General Counsel
|
Options Granted
|
Exercise Price
|
Vesting Period
|
Expiration Date
|
|||||||
Directors and Officers
|
950,000 | $ | 0.250 |
Each 6 mos
|
12/19/2017
|
|||||
Directors and Officers
|
250,000 | $ | 0.275 |
Each 6 mos
|
12/19/2017
|
|||||
Employees and Consultants
|
1,620,000 | $ | 0.250 |
Each 6 mos
|
12/19/2017
|
|||||
Total Options Granted
|
2,820,000 |
Post Separation/
Pre-Debt Conversion
|
|||||||||
Class
|
Name
|
Shares
|
Pct
(1)
|
||||||
Common
|
Nathaniel T. Bradley
|
5,648,034 | (2) (3) | 16.05 | % | ||||
Common
|
Sean Bradley
|
5,648,03 3 | (3) | 16.04 | % | ||||
Common
|
Edward W. Withrow III
|
1,129,607 | (4) | 3.20 | % | ||||
Common
|
James Crawford
|
340,689 | 0.96 | % | |||||
Common
|
Carr Bettis
|
2,288,131 | (5) | 6.50 | % | ||||
Common
|
Constantine S. Potamianos
|
- | - | ||||||
TOTAL
|
15,054,494 | 42.75 | % |
(1) |
Percentages are based on 35,192,045 shares outstanding, which include the 5,186,860 shares issued on December 20, 2012 related to the conversion of Nathaniel T. Bradley’s debt.
|
(2) |
Does not include the 5,186,860 shares issued on December 20, 2012 related to the conversion of AE’s debt owed to Nathaniel T. Bradley. The conversion shares were issued to Mr. Bradley’s designees. Mr. Bradley has no investment or voting power over said shares and is not deemed to be the beneficial owner thereof.
|
(3) |
Bradley Brothers, LLC is the record owner of 11,296,067 shares; Nathaniel T, Bradley and Sean Bradley are each 50% owners of Bradley Brothers, LLC, and share investment power with respect to such shares.
|
(4) |
Mr. Withrow is the Managing Member of Huntington Chase Financial Group, LLC, the record owner of 1,129,607 shares.
|
(5) |
Mr. Bettis is Managing Member of CSB IV Us Holdings, LLC, the record owner of 1,723,328 shares. Mr. Bettis is also co-trustee of the
J. Carr & Stephanie V. Bettis Revocable Trust,
the record owner of 564,803 shares. The total shares beneficially held by Mr. Bettis are 2,288,131 shares.
|
Post Separation/
Pre-Debt Conversion
|
|||||||||
Class
|
Name
|
Shares
|
Pct
(1)
|
||||||
Common
|
Nathaniel T. Bradley
|
5,648,034 | (2) (3) | 18.82 | % | ||||
Common
|
Sean Bradley
|
5,648,034 | (3) | 18.82 | % | ||||
Common
|
Edward W. Withrow III
|
1,129,607 | (4) | 3.76 | % | ||||
Common
|
James Crawford
|
340,689 | 1.14 | % | |||||
Common
|
Constantine S. Potamianos
|
— | — |
(1)
|
Based on 30,005,185 shares outstanding.
|
(2)
|
Does not include any shares issuable upon conversion of AE’s convertible notes issued to Nathaniel T. Bradley or the AE Debentures. Mr. Bradley delivered to AE on Decmber 5, 2012, notice of his intention to convert his convertible notes in full. A total of 5,186,860 additional shares of common stock are to be issued to Mr. Bradley’s designees by December 20, 2012.
|
(3)
|
Bradley Brothers, LLC is the record owner of 11,296,067 shares; Nathaniel T, Bradley and Sean Bradley are each 50% owners of Bradley Brothers, LLC, and share investment power with respect to such shares.
|
(4)
|
Huntington Chase Financial Group, LLC is the record owner of the shares. Mr. Withrow is its Managing Member.
|
·
|
the board of directors approved the transaction in which the stockholder became an interested stockholder prior to the date the interested stockholder attained such status;
|
|
·
|
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholders owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by persons who are directors and also officers and employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
|
|
·
|
the business combination is approved by a majority of the board of directors and by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
|
Item
|
Amount
|
|||
SEC Registration Fee
|
$ | 7.00 | ||
Printing Fees and Expenses
|
10,000.00 | |||
Accounting Fees and Expenses
|
35,000.00 | |||
Legal Fees and Expenses
|
100,000.00 | |||
Transfer Agent Fees
|
5,000.00 | |||
Miscellaneous
|
5,000.00 | |||
Total
|
$ | 155,007.00 |
Exhibit No.
|
Description
|
|
3.1
|
Certificate of Incorporation of AudioEye, Inc., as amended (included in the Company’s Registration on Form S-1 filed on October 21, 2011)
|
|
3.2
|
By-laws of AudioEye, Inc. (included in the Company’s Registration on Form S-1 filed on October 21, 2011)
|
|
3.3
|
Certificate of Amendment of the Certificate of Incorporation (included in the Company’s Registration filed on Form S-1/A on October 1, 2012)
|
|
5.1*
|
||
10.1
|
Master Agreement dated as of September 22, 2011 between CMG Holdings Group, Inc. and AudioEye Acquisition Corporation (included in the Company’s Registration on Form S-1 filed on October 21, 2011)
|
|
10.2
|
Form of Royalty Agreement between CMG Holdings Group, Inc. and AudioEye, Inc. (included in the Company’s Registration on Form S-1 filed on October 21, 2011)
|
|
10.3
|
Form of Services Agreement between CMG Holdings Group, Inc. and AudioEye, Inc. (included in the Company’s Registration on Form S-1 filed on October 21, 2011)
|
|
10.4
|
Form of Share Exchange Agreement among the stockholders of AudioEye Acquisition Corporation and CMG Holdings Group, Inc.
|
|
10.5
|
Convertible Promissory Note dated August 31, 2011 between AudioEye, Inc. and Nathaniel T. Bradley (included in the Company’s Registration on Form S-1/A filed on January 3, 2012)
|
|
10.6
|
Termination and Release Agreement dated October 24, 2011 between Maryland Technology Development Corp. and AudioEye, Inc. (included in the Company’s Registration on Form S-1/A filed on February 10, 2012)
|
10.7
|
Promissory Note dated October 24, 2011 between Maryland Technology Development Corp. and AudioEye, Inc. (included in the Company’s Registration on Form S-1/A filed on February 10, 2012)
|
|
10.8
|
Customer Contract dated August 24, 2011 between Kenneth G. Mills Foundation and AudioEye, Inc. for E-Commerce Multi-Media Development Services (included in the Company’s Registration on Form S-1/A filed on February 10, 2012)
|
|
10.9
|
Customer Contract dated December 29, 2010 between NextMed Management Services Inc. and AudioEye, Inc, for Software Development Services (included in the Company’s Registration on Form S-1/A filed on February 10, 2012)
|
|
10.10
|
Customer Contract dated June 9, 2010 between Southern Arizona Attraction Alliance and AudioEye, Inc. for Custom Website Development (included in the Company’s Registration on Form S-1/A filed on February 10, 2012)
|
|
10.11
|
Senior Secured Promissory Note of AudioEye, Inc., dated August 15, 2012 (included in the Company’s Registration filed on Form S-1/A on October 1, 2012)
|
|
10.12
|
Security Agreement, dated as of August 15, 2012, among AudioEye, Inc., AudioEye Acquisition Corporation and CMGO Investors, LLC (included in the Company’s Registration filed on Form S-1/A on October 1, 2012)
|
|
10.13* | ||
23.1*
|
Consent of MaloneBailey, LLP
|
|
23.2*
|
Consent of TroyGould PC (included in Exhibit 5.1, above)
|
|
* Filed herewith
|
AUDIOEYE, INC.
|
||
By: |
/
s/ Nathaniel T. Bradley
|
|
Name: Nathaniel T. Bradley
|
||
Title: President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
/s/ Carr Bettis | Director | January 11, 2013 |
Carr Bettis | ||
/s/ Nathaniel T. Bradley
|
President and Chief Executive Officer
|
January 11, 2013
|
Nathaniel T. Bradley
|
(Principal Executive Officer)
|
|
/s/ Sean Bradley
|
Chief Technical Officer, Vice President, Secretary and Director
|
January 11, 2013
|
Sean Bradley
|
||
/s/ James Crawford
|
Chief Operating Officer, Treasurer and Director
|
January 11, 2013
|
James Crawford
|
||
/s/ Edward W. Withrow III
|
Director
|
January 11, 2013
|
Edward W. Withrow III
|
Very truly yours,
|
|
/s/ TROYGOULD PC
|
1.
|
Purpose
|
1
|
2.
|
Definitions
|
1
|
3.
|
Administration.
|
6
|
4.
|
Shares Subject to Plan.
|
7
|
5.
|
Eligibility; Per-Person Award Limitations
|
8
|
6.
|
Specific Terms of Awards.
|
8
|
7.
|
Certain Provisions Applicable to Awards.
|
14
|
8.
|
Code Section 162(m) Provisions.
|
16
|
9.
|
Change in Control.
|
18
|
10.
|
General Provisions.
|
19
|