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TUCSON, AZ -- (Marketwired) -- 11/10/14 -- AudioEye®, Inc. (OTCQB: AEYE) ("AudioEye") (the "Company"), creator of the Audio Internet® patented audio browsing and automated publishing technology platform, today announced its operating results for the third quarter and first nine months of 2014. The Company will host an investor conference call to discuss its operating results and other topics of interest today, November 10, 2014, at 11:00 a.m. Eastern Time (see details below).

Revenue for the three months ended September 30, 2014 totaled $4,837,411, which represented a 1,168% increase when compared with revenue of $381,539 in the third quarter of 2013. On a sequential basis, revenue for the third quarter of 2014 increased 61% when compared with revenue of $3,013,033 in the second quarter of 2014.

The Company's annualized revenue "run rate" in the third quarter of 2014 approximated $19.3 million.

AudioEye executed contracts valued at approximately $5.3 million during the most recent quarter, compared with contracts valued at approximately $2.9 million that were executed in the second quarter of 2014.

Costs of services totaled $1,084,988 in the third quarter of 2014, compared with $130,771 in the quarter ended September 30, 2013. Gross profit of $3,752,423 in the third quarter of 2014 compared with gross profit of $250,768 in the prior-year quarter. Gross profit margin approximated 78% of sales in the most recent quarter, compared with approximately 66% of sales in the prior-year period and 89% of sales in the quarter ended June 30, 2014.

Selling and marketing costs for the three months ended September 30, 2014 and 2013 totaled $546,265 and $117,893, respectively. Such costs totaled $1,301,365 and $167,509 for the nine months ended September 30, 2014 and 2013, respectively.

Research, technology and development costs for the three and nine months ended September 30, 2014 totaled $153,188 and $391,958, respectively. No such expenses were recorded in the prior-year periods.

General and administrative ("G&A") expenses totaled $1,548,581 in the most recent quarter, compared with $889,095 in the third quarter of 2013. For the first nine months of 2014, G&A expenses totaled $4,352,398, versus $1,880,726 in the year-earlier period. The increases were primarily related to changes in staffing, legal, stock option and warrant expense as well as other expense categories necessary to support AudioEye's growth.

On a sequential basis, G&A expenses increased to $1,548,851 in the third quarter of 2014 when compared with $1,135,947 in the second quarter of 2014.

Depreciation and amortization expense for the three months ended September 30, 2014 and 2013 totaled $189,602 and $89,823, respectively. For the first nine months of 2014, depreciation and amortization expense totaled $462,326, versus $269,135 in the corresponding period of the previous year.

For the three months ended September 30, 2014, AudioEye recorded net income of $1,302,101, or $0.02 per diluted share, compared with a prior-year net loss of ($870,810), or ($0.02) per share. For the nine months ended September 30, 2014, the Company reported a net profit of $894,970, or $0.02 per diluted share, versus a net loss of ($1,796,796), or ($0.04) per share in the nine months ended September 30, 2013.

SaaS and development revenue for the three months ended September 30, 2014 totaled $561,286, which represented a 47% increase when compared with similar revenue of $381,539 in the third quarter of 2013. On a sequential basis, intellectual property ("IP") licensing revenue totaled $4,275,000 in the third quarter of 2014, for an increase of 46% when compared with IP revenue of $2,925,000 in the second quarter of 2014.

"We are establishing AudioEye's patented accessibility technology platform within key strategic market verticals and proving out our revenue model in each," stated Nathaniel Bradley, the Company's Chief Executive Officer. "We will now transition to scaling these opportunities with a focus on providing the highest quality solutions for our customers. While the adoption of our technology by multiple federal, state and local government agencies has been achieved, we have also developed corporate verticals that provide efficacy and reference accounts that are now being leveraged in support of our continued rapid growth."

Highlights of the third quarter and the period subsequent to the end of September 30, 2014 include the following:

• Contracted and launched our technology with University California, Merced, thereby positioning the Company to pursue relationships within the University of California system and at over 10,000 higher education institutions in the U.S.
  
  
• Developed and audio-enabled websites within the community healthcare system in Massachuetts, with over 300 sites being addressed and 1,500 website candidates throughout the U.S.
  
  
• Established U.S. Congressional partnership that, following the election of November 4, 2014, will begin to faciliate, manage and activate over 75% of all U.S. Senate and Congressional websites by January 2015.
  
  
• Activated pilot programs within five state government agencies and developed sales and marketing strategy to target agencies in all 50 states.
  
  
• Established relationship and launched website systems with the Amputee Coalition.
  
  
• Launched the Fountain Medical Centers website, proving out a model that is being marketed to over 25,000 private medical centers in the U.S.
  
  
• Launched GoErie.com and established relationship with News in Education initiative.
  
  
• Welcomed Matthew Mellon, a highly regarded businessman, fundraiser and entrepreneur, to the Company's Board of Directors, thereby increasing the independence, strength and business connectivity of AudioEye's board.
  
  
• Added disability community and business leader Joyce Bender and accomplished business executive Bernie Kossar to AudioEye's Advisory Board.
  
  
• Executed pilot program with one of the three largest wireless telecommunications providers in the U.S.
  
  
• Executed contract with one of the three largest biomedical companies in the U.S.
  
  
• Executed contract with one of the five largest television networks in the U.S.
  
  

Investor Conference Call

AudioEye has scheduled an investor conference call for 11:00 a.m. Eastern Time today, Monday, November 10, 2014, to discuss its operating results and other topics of interest.

Shareholders and other interested parties may participate in the conference call by dialing 877-374-8416 (international/local participants dial 412-317-6716) and requesting participation in the "AudioEye Conference Call" a few minutes before 11:00 a.m. EST on Monday, November 10, 2014.

A replay of the conference call will be available one hour after the call through Monday, November 17, 2014 at 9:00 a.m. EST by dialing 877-344-7529 (international participants dial 412-317-0088) and entering the conference ID # 10055574.

About AudioEye, Inc.

Incorporated in 2005, AudioEye focuses on working to improve the mobility, usability and accessibility of all Internet-based content through the development, sale, licensing and use of its proprietary accessibility technologies. Audio Internet® is a technology that utilizes patented architecture to deliver a fully accessible audio equivalent of a visual or mobile website in a compliant format that can be navigated, utilized, interacted with and transacted from, without the use of a monitor or mouse, by individuals with visual impairments. For individuals with hearing impairments, Audio Internet® provides captioning for websites, and the challenges of reaching those with other impairments are also addressed by the technology platform.

Complete with an ever-growing suite of utilities tailored to the needs of different disabled users, the AudioEye® Audio Internet® Accessibility Platform is a fully scalable cloud-based solution designed and developed to meet the needs and compliance mandates for an ever-growing demographic.

AudioEye's common stock trades on the OTCQB under the symbol "AEYE". Please visit www.audioeye.com for more information.

Forward-Looking Statements

This release includes forward-looking statements contained within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding AudioEye's expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions, are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond AudioEye's control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in AudioEye's Form 10-K and other report filings with the SEC. AudioEye is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

(Financial Highlights Follow)

                               AUDIOEYE, INC.
                        CONSOLIDATED BALANCE SHEETS
                                (UNAUDITED)

                                              September 30,   December 31,
                                                  2014            2013
                                             --------------  --------------
                   ASSETS
Current Assets
  Cash                                       $    2,151,849  $    1,847,004
  Accounts receivable, net                          695,744         569,297
  Related party receivables                          27,500          82,250
  Prepaid assets and security deposits            5,189,330               -
  Marketable securities                              48,000               -
                                             --------------  --------------
    Total Current Assets                          8,112,423       2,498,551

Property and equipment, net                           1,450           3,847
Intangible assets, net                            5,195,627       3,073,945
Goodwill                                            700,528         700,528
                                             --------------  --------------
  Total Assets                                   14,010,028  $    6,276,871
                                             ==============  ==============

    LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable and accrued expenses      $      534,779  $      416,531
  Notes and loans payable-current, net of
   unamortized discounts of $0 and $1,155,
   respectively                                      24,000         172,845
  Related party payables                                  -         243,424
  Related party loans                                     -          35,000
                                             --------------  --------------
    Total Current Liabilities                       558,779         867,800

  Long Term Liabilities
  Notes and loans payable-long term                  57,800          79,800
                                             --------------  --------------
    Total Long Term Liabilities                      57,800          79,800
                                             --------------  --------------
Total Liabilities                                   616,579         947,600
                                             --------------  --------------

STOCKHOLDERS' EQUITY
  Preferred stock, $0.00001 par value,
   10,000,000 shares authorized, none issued
   and outstanding, as of September 30, 2014
   and December 31, 2013                                  -               -
  Common stock, $0.00001 par value,
   250,000,000 shares authorized, 70,552,753
   and 53,239,369 issued and outstanding, as
   of September 30, 2014 and December 31,
   2013 respectively                                    705             532
  Treasury stock                                   (623,000)       (623,000)
  Additional paid-in capital                     20,400,247      13,231,212
  Accumulated deficit                            (6,384,503)     (7,279,473)
                                             --------------  --------------
    Total Stockholders' Equity                   13,393,449       5,329,271
                                             --------------  --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $   14,010,028  $    6,276,871
                                             ==============  ==============



                               AUDIOEYE, INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)

                            Three Months Ended         Nine Months Ended
                         ------------------------  ------------------------
                          September    September    September    September
                           30, 2014     30, 2013     30, 2014     30, 2013
                         -----------  -----------  -----------  -----------

Revenue                  $ 4,836,286  $   344,414  $ 8,877,955  $   748,693
Revenue from related
 party                         1,125       37,125        5,375       57,375
                         -----------  -----------  -----------  -----------
Total revenues             4,837,411      381,539    8,883,330      806,068

Cost of revenues           1,084,988      130,771    1,460,453      226,561
                         -----------  -----------  -----------  -----------

Gross profit               3,752,423      250,768    7,422,877      579,507

Operating expenses:
  Selling and marketing      546,265      117,893    1,301,365      167,509
  Research and
   development               153,188            -      391,958            -
  General and
   administrative
   expenses                1,548,851      889,095    4,352,398    1,880,726
  Amortization and
   depreciation              189,602       89,823      462,326      269,135
                         -----------  -----------  -----------  -----------
    Total operating
     expenses              2,437,906    1,096,811    6,508,047    2,317,370
                         -----------  -----------  -----------  -----------

Operating income (loss)    1,314,517     (846,043)     914,830   (1,737,863)

Other income (expense)
  Unrealized loss on
   marketable securities     (12,000)      (9,000)     (12,000)     (18,000)
  Interest expense              (416)     (15,767)      (7,860)     (40,933)
                         -----------  -----------  -----------  -----------
    Total other income
     (expense)               (12,416)     (24,767)     (19,860)     (58,933)
                         -----------  -----------  -----------  -----------

Net income (loss)        $ 1,302,101  $  (870,810) $   894,970  $(1,796,796)
                         ===========  ===========  ===========  ===========

Net income (loss) per
 common share - basic    $      0.02  $     (0.02) $      0.02  $     (0.04)
                         ===========  ===========  ===========  ===========
Net income (loss) per
 common share - diluted  $      0.02  $     (0.02) $      0.01  $     (0.04)
                         ===========  ===========  ===========  ===========
Weighted average common
 shares outstanding -
 basic                    61,062,150   44,385,177   55,993,097   41,668,724
                         ===========  ===========  ===========  ===========
Weighted average common
 shares outstanding -
 diluted                  70,568,775   44,385,177   68,499,722   41,668,724
                         ===========  ===========  ===========  ===========