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TUCSON, AZ -- (Marketwired) -- 08/11/14 -- AudioEye®, Inc. (OTCQB: AEYE) ("AudioEye"), creator of the Audio Internet® patented audio browsing and automated publishing technology platform, today announced its operating results for the second quarter and first half of 2014. The Company will host an investor conference call to discuss its operating results and other topics of interest today, August 11, 2014, at 11:00 a.m. Eastern Time (see details below).

Revenue for the three months ended June 30, 2014 totaled $3,013,033, which represented a 1,405% increase when compared with revenue of $200,232 in the second quarter of 2013. On a sequential basis, revenue for the second quarter of 2014 increased 192% when compared with revenue of $1,032,886 in the first quarter of 2014.

The Company's annualized revenue "run rate" in the second quarter of 2014 approximated $12 million.

Costs of services totaled $334,312 in the second quarter of 2014, compared with $50,767 in the quarter ended June 30, 2013. Gross profit of $2,678,721 in the second quarter of 2014 compared with gross profit of $149,465 in the quarter ended June 30, 2013. Gross profit margin approximated 89% of sales in the most recent quarter, compared with approximately 75% of sales in the prior-year period and 96% of sales in the quarter ended March 31, 2014.

Selling and marketing costs for the three months ended June 30, 2014 and 2013 totaled $259,719 and $41,866, respectively. Such costs totaled $755,100 and $49,616 for the six months ended June 30, 2014 and 2013, respectively.

Research, technology and development costs for the three and six months ended June 30, 2014 totaled $108,146 and $238,770, respectively. No such expenses were recorded in the prior-year periods.

General and administrative ("G&A") expenses totaled $1,135,947 in the most recent quarter, compared with $547,574 in the second quarter of 2013. For the first half of 2014, G&A expenses totaled $2,803,547, versus $991,618 in the year-earlier period. The increases were primarily related to changes in staffing, legal and other expense categories necessary to support AudioEye's anticipated growth.

On a sequential basis, G&A expenses declined 32% in the second quarter of 2014 when compared with the first quarter of 2014 (to $1,135,947 vs. $1,667,600). The decrease was primarily due to a $387,304 reduction in cash stock option compensation expense.

Depreciation and amortization costs for the three months ended June 30, 2014 and 2013 totaled $172,827 and $89,726, respectively. For the first half of 2014, depreciation and amortization costs totaled $272,724, versus $179,325 in the corresponding period of the previous year.

For the three months ended June 30, 2014, AudioEye recorded net income of $1,001,621, or $0.02 per diluted share, compared with a prior-year net loss of ($529,900), or ($0.01) per share. For the six months ended June 30, 2014, the Company reported a net loss of ($407,131), or ($0.01) per share, versus a net loss of ($925,986), or ($0.02) per share in the six months ended June 30, 2013.

"AudioEye's compliance solution provides website and mobile site publishers a clear advantage relative to traditional accessibility compliance modalities," stated Nathaniel Bradley, the Company's Chief Executive Officer. "AudioEye's focus on equivalent facilitation and a practical approach to Web Accessibility transcends the more traditional 'check-the-box' Web solutions. Our second quarter operating results illustrate the scalability of our business model and the growing appreciation among government agencies, educational institutions and commercial enterprises of the importance of universal accessibility to Internet content, in accordance with federal mandates and without placing undue burdens upon the disabled."

"We as a team are committed to the realization of our Company's full potential, scalability and profitability within high growth and underserved vertical markets. We look forward to further progress during the balance of the year. Based upon the Company's financial performance during the first half of 2014 and anticipated new business opportunities, we have increased our revenue guidance from $8 million previously to $12 million for the full year ending December 31, 2014," concluded Bradley.

Highlights of the second quarter and the period subsequent to the end of June 30, 2014 include the following:

• The Company secured approximately $1 million in contracts with leading national health care companies during the second quarter of 2014.
• The Company executed licenses for its technology with organizations involved in the consumer packaged goods (CPG), retail and couponing, and online job posting verticals during the most recent quarter.
• The Company initiated a pilot program to audio-enable websites for one of the largest telecommunications companies in the U.S.
• The Company executed customer applications involving security, container tracking, mobile asset monitoring, GPS tracking and mobile communications within the logistics, transportation, maritime, shipping, vending, trucking, rail and freight industries.
• The Company has identified opportunities and is involved in discussions with over 50% of all federal government agencies regarding the procurement of its services.
• The Company has identified opportunities and is involved in early discussions with numerous state, local and municipal governments for the procurement of its services.
• The Company has obtained scope of work parameters and identified business opportunities with multiple professional sports teams/leagues, one of the largest biopharmaceutical companies in the U.S., and numerous other enterprises that are expected to result in contract signings over the next several months.
• The Company has contracted its services out to several non-profit advocacy groups that are involved with the disabled community.
• Warrants for approximately 10 million shares of the Company's common stock were exercised for cash by insider and existing investors.
• The Company increased the amount of cash available to approximately $3.1 million at the time of this release.
• The Company expects to be cash flow positive before year-end.
• The Company has engaged a commercial specialist from the U.S. Department of Commerce, U.S. Global Markets Agency and their counterparts in U.S. embassies abroad to engage in the study, strategy and development of targeted International markets.
• The Company upgraded its platform technologies to introduce its proprietary Real-Time Auto-Discovery & Enablement feature, which allows AudioEye to greatly streamline the onboarding process of new customers, while providing additional solution flexibility.
• The Company welcomed Congressman Tony Coelho and Matthew Mellon as the newest independent members of its Board of Directors.
• The Company has developed five new patents covering new inventions in the areas of interactive networked voice technology, voice analytics, real-time content normalization and auto discovery technologies.
• The Company has developed and is executing a strategy to apply its patented voice technology platform in the field of virtual currency payments processing.

Investor Conference Call

AudioEye has scheduled an investor conference call for 11:00 a.m. Eastern Time today, Monday, August 11, 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. EDT on Monday, August 11, 2014.

A replay of the conference call will be available one hour after the call through Monday, August 18, 2014 at 9:00 a.m. EDT by dialing 877-344-7529 (international participants dial 412-317-0088) and entering the conference ID # 10050553.

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)
                                                     June 30,     December
                                                       2014       31, 2013
                                                   -----------  -----------
                      ASSETS
Current Assets
  Cash                                             $   514,165  $ 1,847,004
  Accounts receivable, net                             645,119      569,297
  Related party receivables                             26,375       82,250
  Prepaid assets & security deposits                 2,985,924            -
  Stock subscriptions receivable                        60,000            -
  Marketable securities                                 60,000            -
    Total Current Assets                             4,291,583    2,498,551
Property and equipment, net                              2,249        3,847
Intangible assets, net                               3,898,530    3,073,945
Goodwill                                               700,528      700,528
                                                   -----------  -----------
  Total Assets                                     $ 8,892,890  $ 6,276,871
                                                   ===========  ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
  Current Liabilities
  Accounts payable and accrued expenses            $ 1,165,633  $   416,531
  Deferred revenue                                 $       600  $         -
  Notes and loans payable-current, net of discount
   of $0 and $1,155, respectively                       24,000      172,845
  Related party payable                                 87,000      243,424
  Related party loans                                   35,000       35,000
                                                   -----------  -----------
Total Current Liabilities                            1,312,233      867,800
                                                   -----------  -----------

  Long Term Liabilities
  Notes and loans payable-long term                     65,800       79,800
                                                   -----------  -----------
    Total Long Term Liabilities                         65,800       79,800
                                                   -----------  -----------
Total Liabilities                                    1,378,033      947,600
                                                   -----------  -----------

STOCKHOLDERS' EQUITY
Preferred stock, $0.00001 par value, 10,000,000
 shares authorized, none issued and outstanding,
 as of June 30,                                              -            -
2014 and December31, 2013, respectively
Common stock, $0.00001 par value, 250,000,000
 shares authorized, 59,256,291 and 53,239,369
 issued and outstanding, as of March 31, 2014 and
 December 31, 2013 respectively                            593          532

  Treasury stock                                      (623,000     (623,000)
  Additional paid in capital                        15,823,868   13,231,212
Accumulated deficit                                 (7,686,604)  (7,279,473)
                                                   -----------  -----------
Total Stockholders' Deficit                          7,514,857    5,329,271
                                                   -----------  -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT        $ 8,892,890  $ 6,276,871
                                                   ===========  ===========

                               AUDIOEYE, INC.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)

                            Three Months Ended         Six Months Ended
                         ------------------------  ------------------------
                           June 30,     June 30,     June 30,     June 30,
                             2014         2013         2014         2013
                         -----------  -----------  -----------  -----------

Revenue                  $ 3,011,908  $   182,232  $ 4,041,669  $   406,529
Revenue from related
 party                         1,125       18,000        4,250       18,000
                         -----------  -----------  -----------  -----------
Total revenues             3,013,033      200,232    4,045,919      424,529

Cost of revenues             334,312       50,767      375,465       95,790
                         -----------  -----------  -----------  -----------

Gross profit               2,678,721      149,465    3,670,454      328,739

Operating expenses:
Selling and marketing        259,719       41,866      755,100       49,616
Research and development     108,146            -      238,770            -
General and
 administrative expenses   1,135,947      547,574    2,803,547      991,618
Amortization and
 depreciation                172,827       89,726      272,724      179,325
                         -----------  -----------  -----------  -----------
Total operating expenses   1,676,639      679,166    4,070,141    1,220,559
                         -----------  -----------  -----------  -----------

Operating income (loss)    1,002,082     (529,701)    (399,687)    (891,820)

Other income (expense)
Unrealized loss on
 marketable securities             -            -            -       (9,000)
Interest expense                (461)        (199)      (7,444)     (25,166)
                         -----------  -----------  -----------  -----------
Total other income
 (expense)                      (461)        (199)      (7,444)     (34,166)
                         -----------  -----------  -----------  -----------

Net income (loss)        $ 1,001,621  $  (529,900) $  (407,131) $  (925,986)
                         ===========  ===========  ===========  ===========

Net income (loss) per
 common share - basic    $      0.02  $     (0.01) $     (0.01) $     (0.02)
                         ===========  ===========  ===========  ===========
Net income (loss) per
 common share - diluted  $      0.02  $     (0.01) $     (0.01) $     (0.02)
                         ===========  ===========  ===========  ===========
Weighted average common
 shares outstanding -
 basic                    55,484,007   43,324,188   54,946,209   40,287,985
                         ===========  ===========  ===========  ===========
Weighted average common
 shares outstanding -
 diluted                  57,957,031   43,324,188   54,946,209   40,287,985
                         ===========  ===========  ===========  ===========