Business Context and Reporting Period
Company: AudioEye, Inc. (OTCQB: AEYE)
Filing Type: Form 8-K (Current Report)
Date of Report: July 30, 2018 (Event Date: July 31, 2018)
Context: The filing reports the entry into a material definitive agreement regarding the pricing of a private placement of common stock.
Key Financial Metrics
This filing does not contain standard financial statements (revenue, profit, cash flow, margins, or debt levels). The primary financial data relates to the capital raise:
- Shares Issued: 26,000,000 shares of common stock.
- Price Per Share: $0.25.
- Aggregate Purchase Price: Approximately $6.5 million.
- Placement Agent Fees: 7% of proceeds from non-existing investors; 4% of proceeds from affiliates; plus a discretionary bonus of up to $150,000.
- Expense Reimbursement: Up to $125,000 for the placement agent.
Material Changes
The material change reported is the execution of a private placement to raise approximately $6.5 million. This represents a significant increase in the company's share count and cash liquidity, though the filing does not provide a comparative analysis against prior periods or specific liquidity ratios.
Guidance, Outlook, and Risks
Management Commentary: The filing confirms the pricing of the private placement and the engagement of B. Riley FBR, Inc. as the exclusive placement agent. The agent is not required to purchase any shares but will use reasonable best efforts to sell them.
Risks and Contingencies: The filing does not explicitly detail new risks or contingencies beyond the standard terms of the placement agreement. The agreement includes a discretionary bonus component and expense reimbursement caps.
Investor Verification Checklist
- Verify the final closing date and actual cash proceeds received from the $6.5 million private placement.
- Confirm the exact breakdown of proceeds between existing investors and new investors to calculate the precise placement agent fee (7% vs. 4%).
- Review the full text of the Placement Agent Agreement (Exhibit 1.1) for any additional covenants or conditions.
- Check subsequent filings for the impact of the 26 million new shares on earnings per share (EPS) dilution.