AUDIOEYE INC — Director's Dealing 2019

Jan 16, 2019

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: AUDIOEYE INC (AEYE)
CIK: 0001362190
Period of Report: 2019-01-15

Reporting Person: Bradley Sean D. (President, CTO, Co-Founder)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2019-01-15	Common Stock	M	6000	$0.95	Acquired	25517	Direct
2019-01-15	Common Stock	F	729	$7.822	Disposed	24788	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2019-01-15	Stock Options (right to buy)	$0.95	M	6000	Disposed	2019-01-15	Common Stock (6000)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	173864	Indirect

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Stock Options (right to buy)	$0.95	2021-01-15	Common Stock (60000)	60000	Direct
Stock Options (right to buy)	$4.475	2019-04-15	Common Stock (1989)	1989	Direct
Stock Options (right to buy)	$3.90	2019-07-15	Common Stock (2255)	2255	Direct
Stock Options (right to buy)	$3.125	2019-10-15	Common Stock (2464)	2464	Direct
Warrants (right to buy)	$10	2018-11-12	Common Stock (128)	128	Direct
Series A Convertible Preferred Stock	$		Common Stock (11007)	11007	Direct

Footnotes

F1: Reflects the exercise of stock options.

F2: Represents 729 shares withheld by the Issuer upon the exercise of stock options to cover the exercise price of the options based on a weighted average market price of $7.822 per share.

F3: Mr. Bradley is deemed the beneficial owner of Banyon Tree LLC.

F4: The stock option vested as follows: subject to performance schedule and determined at the end of each calendar year.

F5: 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").

F6: 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.

F7: The shares of Series A Convertible Preferred Stock of the Issuer ("Series A Preferred Stock") were immediately convertible upon issuance and do not expire.