Business Context and Reporting Period
Company: AudioEye, Inc. (AEYE)
Filing Type: Form 8-K (Current Report)
Date of Report: September 18, 2026
Event: Entry into a Material Definitive Agreement (Fourth Loan Modification Agreement) with Western Alliance Bank.
Key Financial Metrics and Debt
This filing does not report revenue, profit, cash flow, or liquidity metrics. It focuses on amendments to debt covenants and definitions within the existing Loan and Security Agreement.
- Debt Covenant Adjustment (Adjusted EBITDA): The agreement permits the add-back of litigation expenses not part of ongoing operations, up to $5.0 million on a trailing twelve-month basis through December 31, 2026, and up to $3.0 million on a trailing twelve-month basis from January 1, 2027, through December 31, 2027.
- Stock Buyback Limit: The "Permitted Stock Buyback Amount" for fiscal years 2025, 2026, and 2027 is capped at $7.0 million in the aggregate (replacing previous annual limits that totaled $7.0 million). The annual limit for fiscal year 2028 and thereafter remains $2.0 million.
Material Changes Versus Prior Period
The filing details a modification to the Loan Agreement originally dated March 31, 2025, which had previously been amended three times (May 2025, August 2025, and January 2026). The material changes in this Fourth Amendment include:
- Expansion of Adjusted EBITDA definitions to include specific litigation expense add-backs.
- Restructuring of stock buyback limits from annual caps to an aggregate cap for the 2025-2027 period.
Guidance, Outlook, and Risks
Management Commentary: The filing indicates the Company is managing its financial covenants to accommodate litigation expenses and maintain flexibility for stock repurchases over a multi-year horizon.
Risks and Contingencies: The ability to add back litigation expenses suggests ongoing or anticipated legal proceedings that could impact reported earnings. The aggregate buyback limit implies a strategic shift in capital allocation flexibility compared to the prior annual structure.
Unusual Items: The specific inclusion of litigation expense add-backs up to $5.0 million is a significant covenant modification.
Investor Verification Checklist
- Verify the nature and status of the litigation expenses referenced in the EBITDA add-back provision.
- Review the full text of the Fourth Loan Modification Agreement (Exhibit 10.1) for other potential covenants or restrictions.
- Confirm the Company's current cash position to assess the feasibility of utilizing the $7.0 million aggregate buyback allowance.
- Monitor future filings for updates on the litigation expenses and their impact on the Company's compliance with debt covenants.