Business Context and Reporting Period
Company: AudioEye, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 15, 2020
Event: Entry into a Material Definitive Agreement under the Paycheck Protection Program (PPP).
Key Financial Metrics
This filing reports a specific financing event rather than comprehensive financial performance metrics. The following details pertain to the new debt instrument:
- Loan Amount: $1.3 million
- Lender: Liberty Capital Bank
- Interest Rate: 1%
- Maturity: 2 years
- Payment Deferral: 6 months
- Collateral/Guarantees: None (unsecured and no personal guarantees)
- Fees: None
Material Changes
The Company entered into a new note agreement on April 15, 2020, funded under the CARES Act. This represents a new liability on the balance sheet, though it carries potential for forgiveness. The filing does not provide comparative financial data against prior periods.
Guidance, Outlook, and Management Commentary
Use of Proceeds: The Company intends to use all proceeds to retain employees, maintain payroll, and cover lease, mortgage interest, and utility payments.
Forgiveness Terms: All or a portion of the loan may be forgiven by the SBA if used for eligible costs (payroll, rent, mortgage interest, utilities) during the eight-week period following approval. Forgiveness is subject to maintaining full-time headcount and limiting salary reductions for employees earning $100,000 or less annually. No more than 25% of the forgiven amount may be attributed to non-payroll costs.
Investor Verification Checklist
- Verify the final amount of loan forgiveness granted by the SBA.
- Confirm whether the Company maintained required headcount and salary levels to maximize forgiveness.
- Monitor future filings for any covenant breaches or changes in repayment terms.
- Review subsequent 10-Q or 10-K filings to see how this loan is classified (current vs. long-term liability) based on forgiveness status.