AudioEye (AEYE) 10-Q1 Nov 132013 Q3 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2013	Nov. 01, 2013
Document And Entity Information	'	'
Entity Registrant Name	'AUDIOEYE INC	'
Entity Central Index Key	'0001362190	'
Document Type	'10-Q	'
Document Period End Date	30-Sep-13	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Entity Voluntary Filers	'No	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	44,538,949
Document Fiscal Period Focus	'Q3	'
Document Fiscal Year Focus	'2013	'

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current Assets	'	'
Cash	$73,435	$11,710
Accounts receivable, net	120,650	16,256
Related party trade receivables	88,125	16,125
Marketable securities	12,000	30,000
Total Current Assets	294,210	74,091
Property and equipment, net	4,646	7,043
Intangible assets, net	3,161,773	3,418,621
Goodwill	700,528	700,528
Total Assets	4,161,157	4,200,283
Current Liabilities	'	'
Accounts payable and accrued expenses	430,132	498,366
Deferred revenue	'	54,823
Notes and loans payable - current	167,070	1,466,700
Related party payable	91,250	829,418
Total Current Liabilities	688,452	2,849,307
Long Term Liabilities	'	'
Notes and loans payable - long term	79,800	97,800
Related party loans - long term	0	10,000
Total Long Term Liabilities	79,800	107,800
Total Liabilities	768,252	2,957,107
STOCKHOLDERS' EQUITY	'	'
Common stock, $0.00001 par value, 100,000,000 shares authorized, 44,496,699 and 35,192,045 issued and outstanding, as of September 30, 2013 and December 31, 2012, respectively	445	352
Additional paid in capital	9,586,103	5,639,671
Accumulated deficit	-6,193,643	-4,396,847
Total Stockholders' Equity	3,392,905	1,243,176
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$4,161,157	$4,200,283

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
CONSOLIDATED BALANCE SHEETS	'	'
Common Stock, par value (in dollars per share)	$0.00	$0.00
Common Stock, shares authorized	100,000,000	100,000,000
Common Stock, shares issued	44,496,699	35,192,045
Common Stock, shares outstanding	44,496,699	35,192,045

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS	'	'	'	'
Revenue	$344,414	$222,459	$748,693	$276,587
Revenue from related party	37,125	750	57,375	2,250
Cost of revenues	130,771	66,895	226,561	219,926
Gross profit	250,768	156,314	579,507	58,911
OPERATING EXPENSES:	'	'	'	'
Selling & marketing	117,893	'	167,509	'
General and administrative	549,433	405,482	1,287,693	731,515
Amortization and depreciation	429,485	56,112	862,168	57,760
Total operating expenses	1,096,811	461,594	2,317,370	789,275
Operating (loss)	-846,043	-305,280	-1,737,863	-730,364
OTHER INCOME (EXPENSE)	'	'	'	'
Unrealized gain (loss) on marketable securities	-9,000	15,000	-18,000	36,000
Interest expense	-15,767	-24,863	-40,933	-48,000
Total other income (expense)	-24,767	-9,863	-58,933	-12,000
Net (loss)	($870,810)	($315,143)	($1,796,796)	($742,364)
Net (loss) per common share - basic and diluted (in dollars per share)	($0.02)	($0.01)	($0.04)	($0.02)
Weighted average common shares outstanding - basic and diluted (in shares)	44,385,177	30,005,185	41,668,724	30,005,185

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	Sep. 30, 2013	Sep. 30, 2012
Cash Flows from operating activities:	'	'
Net (loss)	($1,796,796)	($742,364)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:	'	'
Depreciation and amortization	269,135	57,760
Stock, option and warrant expense	593,019	'
Shares issued for services	50,000	'
Unrealized (gain) loss on investments	18,000	-36,000
Changes in operating assets and liabilities:	'	'
Accounts receivable	-104,394	-18,361
Related party receivable	-72,000	-2,250
Accounts payable and accruals	146,857	171,730
Deferred revenue	-54,823	-11,193
Other Assets	'	-3,173
Related party payables	274,583	286,652
Net cash (used in) operating activities	-676,419	-297,199
Cash Flows from investing activities:	'	'
Cash (paid for) computer equipment	'	-1,768
Cash (paid for) patent costs	-9,890	'
Net cash (used in) investing activities	-9,890	-1,768
Cash Flows from financing activities:	'	'
Payments on debt	-218,000	-718,000
Borrowings on debt	502,500	1,017,700
Borrowings on debt - related party	'	50,000
Proceeds from exercise of options	37,188	'
Proceeds from shares issued for cash, net	426,346	'
Net cash provided by financing activities	748,034	349,700
Increase in cash	61,725	50,733
Cash - beginning of period	11,710	32,156
Cash - end of period	73,435	82,889
NON-CASH FINANCING ACTIVITIES	'	'
Common stock issued for conversion of debt	1,709,291	'
Warrants issued for accounts payable and related party payables	1,073,751	'
Common stock issued for accounts payable	50,000	'
Accounts payable converted into debt	30,000	'
Debt discount from warrants issued with debt	6,930	'
Intangible asset from the purchase of AudioEye by AEAC	'	4,252,342
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	'	'
Interest paid	$24,967	'

ORGANIZATION_AND_BASIS_OF_PRES

ORGANIZATION AND BASIS OF PRESENTATION	9 Months Ended
ORGANIZATION AND BASIS OF PRESENTATION	Sep. 30, 2013
ORGANIZATION AND BASIS OF PRESENTATION	'
ORGANIZATION AND BASIS OF PRESENTATION	'


	NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

	The accompanying unaudited interim financial statements of AudioEye, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K.

	In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended December 31, 2012 as reported in the Company’s Annual Report on Form 10-K have been omitted.

	Corporate Organization

	The Company was formed as a Delaware corporation on May 20, 2005. On March 31, 2010, CMG Holdings Group, Inc. (“CMGO”) acquired the Company. In connection with the acquisition, the former stockholders of the Company retained rights to receive cash from the exploitation of the Company’s technology (the “Rights”), consisting of 50% of any cash received from income earned, settlements or judgments directly resulting from the Company’s patent strategy and a share of its net income for 2010, 2011 and 2012 from the exploitation of the Company’s technology. The Rights were then contributed to a newly formed Nevada corporation, AudioEye Acquisition Corporation (“AEAC”), in exchange for shares of AEAC. During the period as a wholly-owned subsidiary of CMGO, the Company continued to expand its patent portfolio to protect its proprietary Internet content publication and distribution technology.

	On June 22, 2011, CMGO entered into a Master Agreement with AEAC pursuant to which: (i) the stockholders of AEAC would acquire from the CMGO 80% of the Company’s capital stock (the “Separation”) and (ii) CMGO would distribute to its stockholders, in the form of a dividend, 5% of the Company’s capital stock (the “Spin-off”). Pursuant to the Master Agreement, AEAC was required to arrange for the release of senior secured notes (the “Senior Notes”) issued by CMGO in an aggregate principal amount of $1,025,000, which CMGO had been unable to service. On August 15, 2012, the Company, CMGO and AEAC completed the Separation. In connection with the Separation, AEAC arranged for the release of CMGO under the Senior Notes by payment to the holders thereof of $700,000, the delivery of a secured promissory note in the principal amount of $425,000 and the issuance of 1,500,000 shares of the common stock of AEAC. On January 29, 2013, the Securities and Exchange Commission declared effective the Company’s registration statement on Form S-1 with respect to 1,500,259 shares of its common stock to be issued in the Spin-off. On February 6, 2013, the secured promissory note was repaid in full. On February 22, 2013, CMGO completed the Spin-off.

	In connection with the Separation, the Company entered into a Royalty Agreement with CMGO. Pursuant to the Royalty Agreement, for a period of five years, the Company will pay to CMGO 10% of cash received from income earned or settlements on judgments directly resulting from the Company’s patent enforcement and licensing strategy, whether received by the Company on any of its affiliates, net in either case of any direct costs or tax implications incurred in pursuit of such strategy as they relate to the patents described in the Master Agreement. Additionally, the Company entered into a Services Agreement with CMGO whereby, without duplication to the amounts payable under the Royalty Agreement, for a period of 5 years, CMGO will receive a commission of 7.5% of all revenues received by the Company after the Separation from all business, clients or other sources of revenue procured by CMGO or its employees, officers or subsidiaries and directed to the Company and 10% of net revenues obtained from a specified customer.

	On March 22, 2013, the Company and AEAC entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which AEAC would be merged with and into the Company (the “Merger”) with the Company being the surviving entity. Pursuant to the Merger Agreement, each share of AEAC common stock issued and outstanding immediately prior to the Merger effective date would be converted into .94134 shares of the Company’s common stock and the outstanding convertible debentures of AEAC (the “AEAC Debentures”) in the aggregate principal amount of $1,400,200, together with accrued interest thereon, would be assumed by the Company and then exchanged for the Company’s convertible debentures (the “AE Debentures”).

	Effective March 25, 2013, the Merger was completed. In connection with the Merger, the stockholders of AEAC received on a pro rata basis the 24,004,143 shares of the Company’s common stock that were held by AEAC, and the former holders of the AEAC Debentures received an aggregate of 5,871,752 shares of the Company’s common stock pursuant to their conversion of all of the AE Debentures issued to replace the AEAC Debentures. The principal asset of AEAC was the Rights that had been contributed to AEAC by the Company’s former stockholders. As a result of the Merger, the Rights have been extinguished.

GOING_CONCERN

GOING CONCERN	9 Months Ended
GOING CONCERN	Sep. 30, 2013
GOING CONCERN	'
GOING CONCERN	'


	NOTE 2: GOING CONCERN

	As shown in the accompanying financial statements, the Company has incurred net losses of $1,829,489 and $742,364 for the nine months ended September 30, 2013 and 2012, respectively. In addition, the Company had an accumulated deficit of $6,226,336 and $4,396,847 and a working capital deficit of $394,242 and $2,775,216 as of September 30, 2013 and December 31, 2012, respectively. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. In response to these conditions, the Company is attempting to raise additional capital through the sale of equity securities, an offering of debt securities or borrowings from financial institutions or other third parties, or a combination of the foreoging. No assurance can be given that the Company will be able to raise sufficient financing to implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

RELATED_PARTY_TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
RELATED PARTY TRANSACTIONS	Sep. 30, 2013
RELATED PARTY TRANSACTIONS	'
RELATED PARTY TRANSACTIONS	'


	NOTE 3: RELATED PARTY TRANSACTIONS

	As of September 30, 2013 and December 31, 2012, short-term related party payables totaled $91,250 and $829,418, respectively.

	As of September 30, 2013 and December 31, 2012, there were long-term related party loans of $0 and $10,000, respectively, for services performed by related parties.

	As of September 30, 2013 and December 31, 2012, there were outstanding receivables of $88,125 and $16,125, respectively, for services performed for related parties.

	For the three and nine months ended September 30, 2013 and 2012, there were revenues earned of $37,125 and $750 and $57,375 and $2,250, respectively, for services performed for related parties.

NOTES_PAYABLE

NOTES PAYABLE	9 Months Ended
NOTES PAYABLE	Sep. 30, 2013
NOTES PAYABLE	'
NOTES PAYABLE	'


	NOTE 4: NOTES PAYABLE

	As of December 31, 2012, the Company had an outstanding loan to a third party in the amount of $74,900, which was originally issued during 2006 as part of an Investment Agreement. The loan was unsecured and bore interest at 25% per year for four years. The Company had accrued interest of $74,900, which was included in accounts payable and accrued expenses on the balance sheet. The note was in default until October 24, 2011, at which time the Company entered into a Termination and Release Agreement (“Release”) with the third party. The terms of the Release, among other things, terminated the Investment Agreement between the parties, and required the Company to issue a Promissory Note to the third-party in the combined amount of principal and accrued interest to date, for a total principal amount of $149,800. The note is interest free, and is payable in monthly installments of $2,000 beginning November 1, 2011. As of September 30, 2013 and December 31, 2012, the principal amount owing was $103,800 and $121,800, respectively, of which $24,000 and $24,000, respectively, has been recorded as the current portion of the note, and $79,800 and $97,800, respectively, as the long-term portion of the note, respectively. The Company has paid $18,000 in monthly installments for the nine months ended September 30, 2013.

	On August 15, 2012, the Company issued a Secured Promissory Note to CMGO Investors LLC, the agent for the former holders of CMGO’s senior debt, in the amount of $425,000, related to the separation of the Company from CMGO, which took place on August 17, 2012. The note bore interest at 8% per annum. Pursuant to an extension granted by the noteholder, the note was due on February 6, 2013. The noteholder had the option to convert the principal and interest into 10% of the Company’s total issued and outstanding common shares as of the date of the notice to convert, but in no event more than 6,000,000 shares. On February 6, 2013, the Secured Promissory Note was repaid in full. Payment consisted of cash payments of $200,000, of which $16,339 was interest and $183,661 was principal. The balance of the principal of $241,359 was repaid with the issuance of 1,998,402 common shares of the Company, which represented 5.678562% of the outstanding shares on February 6, 2013.

	During the period ended March 31, 2013, AEAC borrowed an additional $382,500 which was evidenced by the issuance of AEAC Debentures, $30,000 of which was accounts payable converted into debt. These debentures bore interest at 8% per annum and were due one year from the date of issuance. The debenture holders had the option to convert the principal and interest at an exercise price $0.25 per share.

	In connection with the Merger that occurred March 25, 2013, the Company assumed the obligations under the AEAC debentures and issued new AE Debentures which in turn were converted by the holders thereof into an aggregate of 5,871,752 shares of the Company’s common stock. These shares were issued for the conversion of total principal of $1,400,200 and accrued interest of $67,732 on the former AE Debentures.

	On August 3, 2013 the Company borrowed $150,000 with a coupon rate of 10%, due on September 10, 2013 with a warrant to purchase 20,000 common shares, vesting immediately with a strike price of $0.50. The 20,000 common share warrant was valued at $6,930 on August 3, 2013 using a closing price that day of $0.47, a strike price of $0.50, term of 5 years, volatility of 100%, dividends of 0%, and a discount rate of 1.36%. The value of the warrant of $6,930 is reflected as a discount to the note for a net amount of $143,070. For the period ended September 30, 2013, interest was accrued in the amount of $2,384.

COMMITMENTS_AND_CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 30, 2013
COMMITMENTS AND CONTINGENCIES	'
COMMITMENTS AND CONTINGENCIES	'


	NOTE 5: COMMITMENTS AND CONTINGENCIES

	On August 7, 2013, the Company entered into agreements with the following executive officers:

	· Nathaniel Bradley. Pursuant to an Executive Employment Agreement, Nathaniel Bradley was employed as the Company’s Chief Executive Officer. The term of the Executive Employment Agreement is three years commencing August 7, 2013, subject to extension upon mutual agreement. He is to receive a base annual salary of $200,000 during the employment period. He is entitled to receive bonuses at the sole discretion of the Company’s board of directors or the compensation committee. Mr. Bradley is also entitled to equity awards under the Company’s incentive compensation plans. In connection with entry into the Executive Employment Agreement, the Company and Mr. Bradley terminated the existing employment agreement, dated April 1, 2010, between the Company and Mr. Bradley effective as of August 7, 2013.

	· Sean Bradley. Pursuant to an Executive Employment Agreement, Sean Bradley was employed as the Company’s Chief Technology Officer. The term of the Executive Employment Agreement is three years commencing August 7, 2013, subject to extension upon mutual agreement. He is to receive a base annual salary of $195,000 during the employment period. He is entitled to receive bonuses at the sole discretion of the Company’s board of directors or the compensation committee. Mr. Bradley is also entitled to equity awards under the Comoany’s incentive compensation plans. In connection with entry into the Executive Employment Agreement, the Company and Mr. Bradley terminated the existing employment agreement, dated April 1, 2010, between the Company and Mr. Bradley effective as of August 7, 2013.

	· James Crawford. Pursuant to an Executive Employment Agreement, James Crawford was employed as the Company’s Chief Operating Officer. The term of the Executive Employment Agreement is three years commencing August 7, 2013, subject to extension upon mutual agreement. He is to receive a base annual salary of $185,000 during the employment period. He is entitled to receive bonuses at the sole discretion of the Company’s board of directors or the compensation committee. Mr. Crawford is also entitled to equity awards under the Comoany’s incentive compensation plans.

	· Edward O’Donnell. Pursuant to an Executive Employment Agreement, Mr. O’Donnell was employed as the Company’s Chief Financial Officer. The term of the Executive Employment Agreement is two years commencing August 7, 2013, subject to extension upon mutual agreement. He is to receive a base annual salary of $165,000 during the employment period. He is entitled to receive bonuses at the sole discretion of the Company’s board of directors or the compensation committee. Mr. O’Donnell is also entitled to equity awards under the Comoany’s incentive compensation plan.

	· Constantine Potamianos. Pursuant to an Executive Employment Agreement, Constantine Potamianos was employed as the Company’s Chief Legal Officer and General Counsel. The term of the Executive Employment Agreement is two years commencing August 7, 2013, subject to extension upon mutual agreement. He is to receive a base annual salary of $150,000 during the employment period. He is entitled to receive bonuses at the sole discretion of the Company’s board of directors or the compensation committee. Mr. Potamianos is also entitled to equity awards under the Company’s incentive compensation plan.

STOCKHOLDERS_EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
STOCKHOLDERS' EQUITY	Sep. 30, 2013
STOCKHOLDERS' EQUITY	'
STOCKHOLDERS' EQUITY	'


	NOTE 6: STOCKHOLDERS’ EQUITY

	As of September 30, 2013 and December 31, 2012, the Company had 44,496,699 and 35,192,045 shares of common stock issued and outstanding, respectively.

	On February 6, 2013, the Secured Promissory Note to CMGO Investors LLC was repaid in full. Payment consisted of cash payments of $200,000 of which $16,339 was interest and $183,661 was principal. The balance of the principal of $241,359 was repaid with the issuance of 1,998,402 common shares of the Company, which was 5.678562% of the outstanding shares on February 6, 2013.

	In connection with the Merger that occurred March 22, 2013, the former holders of the AEAC Debentures received an aggregate of 5,871,752 shares of the Company’s common stock pursuant to their conversion of all of the AE Debentures issued to replace the AEAC Debentures totalling $1,400,200 of principal and $67,732 of interest. These shares were issued for the conversion of total principal and accrued interest on the former AE Debentures.

	On April 5, 2013, the Company issued 200,000 shares of the Company’s common stock for services valued at $50,000.

	In the quarter ended June 30, 2013, pursuant to a private placement (the “Private Placement”), the Company sold 1,092,000 units to a group of accredited investors, with each unit consisting of one share of the Company’s common stock and and a three-year warrant to purchase one share of the Company’s common stock. The warrants included in the units have an exercise price of $0.50 per share. The purchase price of each unit was $0.50. As of June 30, 2013, 1,092,000 shares of the Company’s common stock and warrants to purchase up to a total of 1,092,000 shares of the Company’s common stock were to be issued in connection with the Private Placement. The Company received net cash of $426,346 and $50,000 of accounts payable were forgiven from the sale of units.

	On September 10, 2013, the Company issued 142,500 common shares for the exercise of options and received proceeds of $37,188.

OPTIONS

OPTIONS	9 Months Ended
OPTIONS	Sep. 30, 2013
OPTIONS	'
OPTIONS	'


	NOTE 7: OPTIONS

	As of September 30, 2013, the Company has 4,427,500 options issued and outstanding. The AudioEye, Inc. 2012 Incentive Compensation Plan has a total of 5,000,000 authorized shares and had a balance of 30,000 shares remaining in the plan as of September 30, 2013. The AudioEye, Inc. 2013 Incentive Compensation Plan has a total of 5,000,000 authorized and had a balance of 4,400,000 shares remaining in the plan as of September 30, 2013. The AudioEye, Inc. 2013 Incentive Compensation Plan was adopted by the Company’s board of directors on August 20, 2013 and approved by the Company’s stockholders thereafter.

	The Company issued 400,000 options on May 10, 2013, which vest 50% on grant date and 12.5% every 90 days thereafter, have an exercise price of $1.00 per share, and expire on May 9, 2016. On July 29, 2013, the Company issued 350,000 options, which vest 50% on July 29, 2014 and 50% on July 29, 2015, have an exercise price of $0.35 and expire on July 29, 2018. On August 20, 2013, the Company issued 300,000 options which vest 50% in February 2014 and 50% in August 2014, have an exercise price of $0.40 to $0.50 and expire on August 20, 2018. On August 20, 2013, the Company issued 100,000 options which vest 50% immediately and 12.5% every 90 days thereafter, have an exercise price of $0.50 and expire on August 20, 2016. On August 20, 2013, the Company issued 600,000 options which vest 50% immediately and 12.5% every 90 days thereafter, have an exercise price of $0.50 and expire on August 20, 2018.

	Below is a table sumarizing the Company’s outstanding options as of December 31, 2012 and September 30, 2013:

		Number of shares	Wtd. Avg.	Wtd. Avg.	Intrinsic
		Shares	Exercise Price	Remaining Term	Value
	Outstanding at December 31, 2012	2,820,000	0.25	5	211,500

	Granted	1,750,000	0.58	—	—

	Exercised	142,500	0.25	—	—

	Outstanding at September 30, 2013	4,427,500	0.38	4.23	177,323

	The 1,750,000 options granted for the nine months ended September 30, 2013 were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation included expected term between 1.42 — 3.25 years, expected volatility of 100%, risk free rate between 0.82% - 1.57%, and expected dividend yield of 0%. The grant date fair value of the options were determined to be $439,748.

	For the nine months ending September 30, 2013, the Company has incurred options based expense of $458,765.

WARRANTS

WARRANTS	9 Months Ended
	Sep. 30, 2013
WARRANTS	'
WARRANTS	'


	NOTE 8: WARRANTS

	On March 19, 2013, the Company’s board of directors approved the issuance of warrants to James Crawford, Nathaniel Bradley and Sean Bradley to purchase up to 464,593, 1,696,155 and 1,491,924, respectively, shares of Company common stock in consideration for the release of an aggregate of $913,168 due to the issuees. The warrants have an issuance date of March 19, 2013, expire on March 19, 2018, have a strike price of $0.25 per share, and vest in 1/3 increments on the annual anniversaries of the issuance. The warrants to purchase up to an aggregate of 3,652,672 shares of common stock were valued at $913,168, which is the same amount as the related party payables forgiven.

	On May 10, 2013, the Company’s board of directors approved the issuance of a warrant to a third party to purchase up to 41,872 shares of Company common stock in settlement of accounts payable. The warrant expires on May 7, 2018, has a strike price of $1.22 per share, and was vested upon grant. The warrant was valued at $51,000, which is the same amount as the accounts payable forgiven.

	On June 30, 2013, the Company’s board of directors approved the issuance of warrants to James Crawford, Nathaniel Bradley and Sean Bradley to purchase up to 38,333, 32,500 and 28,333, respectively, shares of Company common stock in consideration for the release of an aggregate of $38,333 due to the issuees. The warrants have an issuance date of June 30, 2013, expire on June 30, 2016, have a strike price of $0.50 per share, and were vested upon grant. The warrants to purchase up to 99,166 an aggregate of shares of common stock were valued at $38,333, which is the same amount as the related party payables forgiven.

	In the nine months ended September 30, 2013, pursuant to a private placement (the “Private Placement”), the Company sold 1,092,000 units to a group of accredited investors, with each unit consisting of one share of the Company’s common stock and and a three-year warrant to purchase one share of the Company’s common stock. The warrants included in the units have an exercise price of $0.50 per share. The purchase price of each unit was $0.50. As of September 30, 2013, 1,092,000 shares of the Company’s common stock were issued and warrants to purchase up to a total of 1,092,000 shares of the Company’s common stock were to be issued in connection with the Private Placement. These warrants will not be issued until the final closing of the Private Placement.

	On July 29, 2013, the Company’s board of directors approved the issuance of warrants to two entities to purchase up to 250,000, in aggregate, shares of Company common stock as a part of two service contracts. The warrants have an issuance date of July 29, 2013, expire on July 29, 2018, have a strike price of $0.50 - $0.60 per share, and were vested upon grant. The warrants to purchase up to 250,000 an aggregate of shares of common stock were valued at $59,254.

	On August 3, 2013, the Company issued a warrant to purchase up to 20,000 shares of Company common stock to the issuer of the $150,000 note detailed in Note 4. The warrant has an issue date of August 3, 2013, expires on August 3, 2018, has a strike price of $0.50, and was vested upon grant. The warrant was valued at $6,930 and recorded as a debt discount to the note.

	On September 30, 2013, the Company’s board of directors approved the issuance of warrants to James Crawford, Nathaniel Bradley, Sean Bradley and Ted O’Donnell to purchase up to 95,394, 103,128, 67,033, and 28,360, respectively, shares of Company common stock in consideration for the release of an aggregate of $71,250 due to the issuees. The warrants have an issuance date of September 30, 2013, expire on September 30, 2016, have a strike price of $0.39 per share, and were vested upon grant. The warrants to purchase up to 293,915 an aggregate of shares of common stock were valued at $71,250, which is the same amount as the related party payables forgiven.

	Below is a table sumarizing the Company’s outstanding warrants as of December 31, 2012 and September 30, 2013:

		Number of	Wtd Avg.	Wtd Avg.	Intrinsic
		Shares	Exercise Price	Remaining Term	Value
	Outstanding at December 31, 2012	—	—	—	—

	Granted	4,357,625	0.29	—	—

	Outstanding at September 30, 2013	4,357,625	0.29	4.36	—

	The warrants were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 3.5 to 5.0 years, expected volatility of 100% to 250%, risk free interest rate of 0.82% to 1.40%, and expected dividend yield of 0%.

	For the nine months ending September 30, 2013, the Company has incurred warrants based expense of $59,254.

PERFORMANCE_SHARE_UNITS

PERFORMANCE SHARE UNITS	9 Months Ended
PERFORMANCE SHARE UNITS	Sep. 30, 2013
PERFORMANCE SHARE UNITS	'
PERFORMANCE SHARE UNITS	'


	NOTE 9: PERFORMANCE SHARE UNITS

	On August 7, 2013, the Company entered into Performance Share Unit Agreements under the AudioEye, Inc. 2012 Incentive Compensation Plan with Nathaniel Bradley, Sean Bradley and James Crawford:

	· Nathaniel Bradley. Mr. Bradley was granted an award of up to an aggregate of 200,000 Performance Share Units (“PSUs”), subject to increase of up to a total of 400,000 PSUs over a three-year period. Each PSU represents the right to receive one share of the Company’s common stock. The number of PSUs for a performance period will be determined by the level of achievement of performance goals in accordance with the terms and provisions of the Performance Share Unit Agreement.

	· Sean Bradley. Mr. Bradley was granted an award of up to an aggregate of 200,000 PSUs, subject to increase of up to a total of 300,000 PSUs over a three-year period. Each PSU represents the right to receive one share of the Company’s common stock. The number of PSUs for a performance period will be determined by the level of achievement of performance goals in accordance with the terms and provisions of the Performance Share Unit Agreement.

	· James Crawford. Mr. Crawford was granted an award of up to an aggregate of 200,000 PSUs, subject to increase of up to a total of 300,000 PSUs over a three-year period. Each PSU represents the right to receive one share of the Company’s common stock. The number of PSUs for a performance period will be determined by the level of achievement of performance goals in accordance with the terms and provisions of the Performance Share Unit Agreement.

	The Company estimates that 100% of the PSUs or 1,000,000 incentive shares will be issued. The closing stock price on the date of the agreements on August 7, 2013 was $0.45. Total PSUs expense of $450,000 will be amortized over the performance period from grant through March 31, 2016.

	For the nine months ending September 30, 2013, the Company has incurred performance share unit based expense of $75,000.

ACQUISITION_OF_AUDIOEYE_INC_BY

ACQUISITION OF AUDIOEYE, INC. BY AUDIOEYE ACQUISITION CORPORATION	9 Months Ended
	Sep. 30, 2013
ACQUISITION OF AUDIOEYE, INC. BY AUDIOEYE ACQUISITION CORPORATION	'
ACQUISITION OF AUDIOEYE, INC. BY AUDIOEYE ACQUISITION CORPORATION	'


	NOTE 10: ACQUISITION OF AUDIOEYE, INC. BY AUDIOEYE ACQUISITION CORPORATION

	On August 17, 2012, AEAC aquired 80% of AudioEye, Inc. for $1,125,000 and 1,500,000 shares of AEAC common stock with a fair value of $375,000.

	On August 17, 2012, the Company determined the fair value of its patents to be $3,551,814. The following table sets forth the purchase price allocation for the acquisition of AudioEye, Inc. as of August 17, 2012:

	Purchase Price Allocation

	Purchase Price:	Cash		$	1,125,000
		1,500,000 shares of AEAC stock		375,000		$	1,500,000

	Add: Net Assets (deficit)					2,752,342		*
	Less: Identifiable Intangibles - Patents					(3,551,814		)
	Goodwill					$	700,528

	Net Assets (deficit)

			Book Value
			at 08/17/12
	Current Assets		$	109,521
	Property, Plant & Equipment, net		7,688
	Patents		—
	Current Liabilities		(1,517,724		)
	L/T Liabilities		(1,351,827		)
	Contingent Liabilities (Note 2)		—
	Net Assets (deficit)		$	(2,752,342	)*

	In accordance with ASC 805, the Company has accounted for the combination using the Acquisition Method for the purpose of allocating the purchase price and determining goodwill. The fair value of the Company’s current tangible assets, property and equipment and liabilities approximated book value on the date of the acquisition. Therefore no adjustment has been made to the book value of the Company’s existing tangible assets and liabilities. The Company has determined that the value of goodwill is $700,528, based upon the Company’s enterprise allocation, less the Company’s net assets at the time of purchase, less any identifiable intangible assets, and is comprised of the expected synergies and intangible assets that do not qualify for separate recognition. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value net assets as of the Separation date of August 17, 2012, the purchase price allocation could change during the measurement period (not to exceed one year) if new information is obtained about facts and circumstances that existed as of the Separation date that, if known, would have resulted in the recognition of additional, or change in existing, assets and liabilities as of that date.

	The Company has identified its patents as qualifying for separate recognition, in accordance with ASC 820. In determining the fair market value associated with the patents, the Company used the Income Method. Inasmuch as the Company has previously determined that there existed an impairment of the patent based upon an analysis utilizing the Company’s historical cash flows, it was necessary for the Company to consider any identifiable future cash flows that were reliably estimable at the date of Separation. The Company has determined that the only identifiable revenue stream for future cash flows directly related to the patents at the date of the Separation are those related to the licensing of its technology to the U.S. government. All other potential revenue is highly speculative, and/or not directly related to the patents at the date of the Separation. Based on the analysis performed, the Company determined the fair value of the patents on the date of separation to be $3,551,814.

MERGER_OF_AUDIOEYE_INC_AND_AUD

MERGER OF AUDIOEYE, INC. AND AUDIOEYE ACQUISITION CORPORATION	9 Months Ended
	Sep. 30, 2013
MERGER OF AUDIOEYE, INC. AND AUDIOEYE ACQUISITION CORPORATION	'
MERGER OF AUDIOEYE, INC. AND AUDIOEYE ACQUISITION CORPORATION	'


	NOTE 11: MERGER OF AUDIOEYE, INC. AND AUDIOEYE ACQUISITION CORPORATION

	On March 22, 2013, the Company and AEAC entered into the Merger Agreement. Pursuant to the Merger Agreement, each share of AEAC common stock issued and outstanding immediately prior to the Merger effective date would be converted into .94134 shares of the Company’s common stock, and the outstanding AEAC Debentures in the aggregate principal amount of $1,400,200, together with accrued interest thereon of $67,732, would be assumed by the Company and then exchanged for AE Debentures. Effective March 25, 2013, the Merger was completed. In connection with the Merger, the stockholders of AEAC received on a pro-rata basis the 24,004,143 shares of the Company’s common stock that were held by AEAC, and the former holders of the AEAC Debentures received an aggregate of 5,871,752 shares of the Company’s common stock pursuant to their conversion of all of the AE Debentures issued to replace the AEAC Debentures.

	This transaction was accounted for as a combination of entities under common control under ASC 805-10-15. Accordingly, the historical financial statements have been adjusted retroactively assuming the transaction occurred on January 1, 2012. The Company recorded the following net assets after elimination of intercompany receivables and payables:

	Assets
	Cash	4,593
	Intangible Assets	3,551,814
	Goodwill	700,528
	Total Assets	4,256,935

	Liabilities
	Accounts payable and accrued expenses	117,162

	Net Assets	4,139,773

INTANGIBLE_ASSETS

INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2013
INTANGIBLE ASSETS	'
INTANGIBLE ASSETS	'


	NOTE 12: INTANGIBLE ASSETS

	Prior to September 30, 2013, patents, technology and other intangibles with contractual terms were generally amortized over their estimated useful lives of ten years. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.

	Prior to any impairment adjustment, intangible assets consisted of the following:

		September 30,			December 31,
		2013			2012

	Patents	$	3,563,541		$	3,553,651
	Accumulated Amortization	(401,768		)	(135,030		)
	Intangible Assets, Net	$	3,161,773		$	3,418,621

	Amortization expense totaled $266,738 and $55,288 for the nine months ended September 30, 2013 and 2012, respectively.

OPTIONS_Tables

OPTIONS (Tables)	9 Months Ended
OPTIONS (Tables)	Sep. 30, 2013
OPTIONS	'
Summary of the Company's outstanding options	'


		Number of shares	Wtd. Avg.	Wtd. Avg.	Intrinsic
		Shares	Exercise Price	Remaining Term	Value
	Outstanding at December 31, 2012	2,820,000	0.25	5	211,500

	Granted	1,750,000	0.58	—	—

	Exercised	142,500	0.25	—	—

	Outstanding at September 30, 2013	4,427,500	0.38	4.23	177,323

WARRANTS_Tables

WARRANTS (Tables)	9 Months Ended
WARRANTS (Tables)	Sep. 30, 2013
WARRANTS	'
Summary of the Company's outstanding warrants	'


		Number of	Wtd Avg.	Wtd Avg.	Intrinsic
		Shares	Exercise Price	Remaining Term	Value
	Outstanding at December 31, 2012	—	—	—	—

	Granted	4,357,625	0.29	—	—

	Outstanding at September 30, 2013	4,357,625	0.29	4.36	—

ACQUISITION_OF_AUDIOEYE_INC_BY1

ACQUISITION OF AUDIOEYE, INC. BY AUDIOEYE ACQUISITION CORPORATION (Tables)	9 Months Ended
	Sep. 30, 2013
ACQUISITION OF AUDIOEYE, INC. BY AUDIOEYE ACQUISITION CORPORATION	'
Schedule of purchase price allocation	'


	Purchase Price Allocation

	Purchase Price:	Cash		$	1,125,000
		1,500,000 shares of AEAC stock		375,000		$	1,500,000

	Add: Net Assets (deficit)					2,752,342		*
	Less: Identifiable Intangibles - Patents					(3,551,814		)
	Goodwill					$	700,528

Schedule of net asset (deficit) acquired in acquisition	'

	Net Assets (deficit)

			Book Value
			at 08/17/12
	Current Assets		$	109,521
	Property, Plant & Equipment, net		7,688
	Patents		—
	Current Liabilities		(1,517,724		)
	L/T Liabilities		(1,351,827		)
	Contingent Liabilities (Note 2)		—
	Net Assets (deficit)		$	(2,752,342	)*

MERGER_OF_AUDIOEYE_INC_AND_AUD1

MERGER OF AUDIOEYE, INC. AND AUDIOEYE ACQUISITION CORPORATION (Tables)	9 Months Ended
	Sep. 30, 2013
MERGER OF AUDIOEYE, INC. AND AUDIOEYE ACQUISITION CORPORATION	'
Schedule of net assets recorded in business combination	'


	Assets
	Cash	4,593
	Intangible Assets	3,551,814
	Goodwill	700,528
	Total Assets	4,256,935

	Liabilities
	Accounts payable and accrued expenses	117,162

	Net Assets	4,139,773

INTANGIBLE_ASSETS_Tables

INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2013
INTANGIBLE ASSETS	'
Schedule of intangible assets	'


		September 30,			December 31,
		2013			2012

	Patents	$	3,563,541		$	3,553,651
	Accumulated Amortization	(401,768		)	(135,030		)
	Intangible Assets, Net	$	3,161,773		$	3,418,621

ORGANIZATION_AND_BASIS_OF_PRES1

ORGANIZATION AND BASIS OF PRESENTATION (Details) (USD $)	6 Months Ended	9 Months Ended	12 Months Ended		0 Months Ended
	Jun. 30, 2011	Sep. 30, 2013	Dec. 31, 2012	Mar. 22, 2013	Aug. 15, 2012	Sep. 30, 2013	Jun. 22, 2011	Mar. 31, 2010
	AudioEye Acquisition Corporation	AudioEye Acquisition Corporation	AudioEye Acquisition Corporation	AudioEye Acquisition Corporation	CMG Holdings Group, Inc.	CMG Holdings Group, Inc.	CMG Holdings Group, Inc.	CMG Holdings Group, Inc.
Organization and Basis of Presentation	'	'	'	'	'	'	'	'
Former stockholders right to receive cash from income earned (as a percent)	'	'	'	'	'	'	'	50.00%
Percentage of outstanding shares acquired	80.00%	'	'	'	'	'	'	'
Aggregate principal amount of senior notes, to be released	'	'	'	'	'	'	$1,025,000	'
Cash payment of senior notes, released	'	'	700,000	'	'	'	'	'
Issuance of secured promissory note	'	'	425,000	'	'	'	'	'
Issuance of shares for debt	'	'	1,500,000	'	'	'	'	'
Issuance of shares in spin-off	'	1,500,259	'	'	'	'	'	'
Stockholders dividend to be distributed as the Spin-Off (as a percent)	'	'	'	'	'	'	5.00%	'
Royalty Agreement period	'	'	'	'	'5 years	'	'	'
Royalty agreement, percent	'	'	'	'	'	10.00%	'	'
Commission agreement, percent	'	'	'	'	'	7.50%	'	'
Merger with AEAC conversion rate of stock (in dollars per share)	'	$0.94	'	'	'	'	'	'
Merger with AEAC, debentures assumed	'	'	'	1,400,200	'	'	'	'
Shares issued to AEAC share holders	'	24,004,143	'	'	'	'	'	'
Shares issued to AEAC debenture holders	'	'	'	$5,871,752	'	'	'	'

GOING_CONCERN_Details

GOING CONCERN (Details) (USD $)	3 Months Ended		9 Months Ended
GOING CONCERN (Details) (USD $)	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
GOING CONCERN	'	'	'	'	'
Net Losses	$870,810	$315,143	$1,796,796	$742,364	'
Accumulated deficit	6,193,643	'	6,193,643	'	4,396,847
Working Capital Deficit	$394,242	'	$394,242	'	$2,775,216

RELATED_PARTY_TRANSACTIONS_Det

RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended		9 Months Ended
RELATED PARTY TRANSACTIONS (Details) (USD $)	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
RELATED PARTY TRANSACTIONS	'	'	'	'	'
Related party payable, short term	$91,250	'	$91,250	'	$829,418
Related party loans, long term	0	'	0	'	10,000
Related party receivables	88,125	'	88,125	'	16,125
Revenue from related party	$37,125	$750	$57,375	$2,250	'

NOTES_PAYABLE_Details

NOTES PAYABLE (Details) (USD $)

9 Months Ended

3 Months Ended

0 Months Ended

12 Months Ended

9 Months Ended

3 Months Ended

9 Months Ended

0 Months Ended

9 Months Ended

0 Months Ended

Sep. 30, 2013

Sep. 30, 2012

10-May-13

Dec. 31, 2012

Mar. 31, 2013

Mar. 25, 2013

Mar. 22, 2013

Dec. 31, 2012

Sep. 30, 2013

Jul. 29, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2013

Dec. 31, 2012

Feb. 06, 2013

Aug. 15, 2012

Sep. 30, 2013

Aug. 03, 2013

Sep. 30, 2013

AEAC Debentures

AudioEye Acquisition Corporation

Maximum Number of Shares

Loans Payable

Promissory Note to Third Party

Secured Promissory Note

Note

AEAC Debentures

Maximum Number of Shares

Notes Payable

Carrying amount of debt

$74,900

$103,800

$121,800

$143,070

Interest rate (as a percent)

8.00%

25.00%

8.00%

10.00%

Due date from the date of issuance

'1 year

'4 years

Accrued interest

74,900

2,384

Face amount of debt

382,500

149,800

425,000

150,000

Monthly payments

2,000

Current portion of debt

24,000

Long-term portion of debt

79,800

97,800

79,800

97,800

Total payments

218,000

718,000

18,000

Debt conversion - percent of total issued and outstanding common shares as of conversion date

10.00%

Debt conversion - number of shares

6,000,000

Total payments on debt

200,000

Payment of accrued interest

16,339

Repayment of debt

700,000

183,661

Principal amount of debt converted to common shares

1,400,200

241,359

Number of common shares issued for conversion of debt

5,871,752

1,998,402

Common shares issued for conversion of debt, percentage of total common shares outstanding

5.68%

Accounts payable converted to debt

30,000

Conversion option of principal and interest (in dollars per share)

$0.25

Accrued interest of debt converted to common shares

67,732

Term of debt

'1 year

Warrants to purchase shares

1,092,000

20,000

Strike price (in dollars per share)

$0.39

$1.22

$0.60

$0.50

Value of warrant reflected as a discount to the note

$6,930

Share price (in dollars per share)

$0.47

Term

'5 years

Volatility (as a percent)

100.00%

Dividends (as a percent)

0.00%

Discount rate (as a percent)

1.36%

COMMITMENTS_AND_CONTINGENCIES_

COMMITMENTS AND CONTINGENCIES (Details) (USD $)	0 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) (USD $)	Aug. 07, 2013
Nathaniel Bradley	'
Commitments and Contingencies	'
Executive Employment Agreement period	'3 years
Base salary	$200,000
Sean Bradley	'
Commitments and Contingencies	'
Executive Employment Agreement period	'3 years
Base salary	195,000
James Crawford	'
Commitments and Contingencies	'
Executive Employment Agreement period	'3 years
Base salary	185,000
Edward O'Donnell	'
Commitments and Contingencies	'
Executive Employment Agreement period	'2 years
Base salary	165,000
Constantine Potamianos	'
Commitments and Contingencies	'
Executive Employment Agreement period	'2 years
Base salary	$150,000

STOCKHOLDERS_EQUITY_Details

STOCKHOLDERS' EQUITY (Details) (USD $)	0 Months Ended		3 Months Ended	9 Months Ended		0 Months Ended			12 Months Ended
	Sep. 10, 2013	Apr. 05, 2013	Jun. 30, 2013	Sep. 30, 2013	Dec. 31, 2012	Feb. 06, 2013	Mar. 25, 2013	Mar. 22, 2013	Dec. 31, 2012
	Sep. 10, 2013	Apr. 05, 2013	Jun. 30, 2013	Sep. 30, 2013	Dec. 31, 2012	Secured Promissory Note	AudioEye Acquisition Corporation	AudioEye Acquisition Corporation	AudioEye Acquisition Corporation
Stockholders' Equity	'	'	'	'	'	'	'	'	'
Common stock issued (in shares)	'	'	'	44,496,699	35,192,045	'	'	'	'
Common stock outstanding (in shares)	'	'	'	44,496,699	35,192,045	'	'	'	'
Total payments on debt	'	'	'	'	'	$200,000	'	'	'
Payment of accrued interest	'	'	'	'	'	16,339	'	'	'
Repayment of debt	'	'	'	'	'	183,661	'	'	700,000
Principal amount of debt converted to common shares	'	'	'	'	'	241,359	1,400,200	1,400,200	'
Number of common shares issued for conversion of debt	'	'	'	'	'	1,998,402	5,871,752	5,871,752	'
Common shares issued for conversion of debt, percentage of total common shares outstanding	'	'	'	'	'	5.68%	'	'	'
Shares issued for services	'	200,000	'	'	'	'	'	'	'
Value of shares issued for services	'	50,000	'	'	'	'	'	'	'
Units sold to accredited investors (in shares)	'	'	'	1,092,000	'	'	'	'	'
Number of common shares consisted in each units sold to accredited investor	'	'	'	1	'	'	'	'	'
Term of warrants issued to accredited investor	'	'	'	'3 years	'	'	'	'	'
Number of common shares that can be purchased against each warrant issued to accredited investor	'	'	'	1	'	'	'	'	'
Exercise price of units (in dollars per share)	'	'	'	$0.50	'	'	'	'	'
Purchase price of units (in dollars per share)	'	'	'	$0.50	'	'	'	'	'
Accrued interest of debt converted to common shares	'	'	'	'	'	'	67,732	67,732	'
Warrants to purchase shares	'	'	'	1,092,000	'	'	'	'	'
Proceeds from sale of units to accredited investors	'	'	426,346	'	'	'	'	'	'
Accounts payable forgiven from the sale of units to accredited investors	'	'	50,000	'	'	'	'	'	'
Common shares issued for the exercise of options	142,500	'	'	'	'	'	'	'	'
Proceeds from exercise of options	$37,188	'	'	$37,188	'	'	'	'	'

OPTIONS_Details

OPTIONS (Details) (USD $)

9 Months Ended

0 Months Ended

9 Months Ended

Sep. 30, 2013

Jul. 29, 2013

Aug. 20, 2013

Sep. 30, 2013

10-May-13

Sep. 30, 2013

Dec. 31, 2012

Sep. 30, 2013

Options granted on July 29, 2013

Options granted one, on August 20, 2013

Options granted two, on August 20, 2013

Options granted three, on August 20, 2013

2013 Incentive Compensation Plan

2012 Incentive Compensation Plan

Options vested on July 29, 2014

Options vested on July 29, 2015

Minimum

Maximum

Options vested in February 2014

Options vested in August 2014

Immediate vesting

Vesting every 90 days

Immediate vesting

Vesting every 90 days

Minimum

Maximum

Options

Options issued and outstanding

4,427,500

2,820,000

Authorized shares in plan

5,000,000

Balance of shares remaining in plan for disbursement

4,400,000

30,000

Options Granted

350,000

300,000

600,000

100,000

400,000

1,750,000

Vesting percentage

50.00%

12.50%

50.00%

12.50%

50.00%

Vesting period of options, anniversary date of grant date

'90 days

Granted (in dollars per share)

$0.35

$0.40

$0.50

$0.58

Expected term

'1 year 5 months 1 day

'3 years 3 months

Expected volatility (as a percent)

100.00%

Risk-free interest rate (as a percent)

0.82%

1.57%

Expected dividend yield (as a percent)

0.00%

Grant date fair value of options

$439,748

Options based expense

$59,254

$458,765

OPTIONS_Details_2

OPTIONS (Details 2) (USD $)	0 Months Ended		9 Months Ended	12 Months Ended
	Sep. 10, 2013	10-May-13	Sep. 30, 2013	Dec. 31, 2012
	Sep. 10, 2013	2012 Incentive Compensation Plan	2012 Incentive Compensation Plan	2012 Incentive Compensation Plan
Number of options:	'	'	'	'
Options issued and outstanding, beginning	'	'	2,820,000	'
Options Granted	'	400,000	1,750,000	'
Exercised	142,500	'	142,500	'
Options issued and outstanding, ending	'	'	4,427,500	2,820,000
Weighted Average Exercise Price:	'	'	'	'
Weighted Average Exercise Price of Options outstanding, beginning (in dollars per share)	'	'	$0.25	'
Granted (in dollars per share)	'	$1	$0.58	'
Exercised (in dollars per share)	'	'	$0.25	'
Weighted Average Exercise Price of Options outstanding, ending (in dollars per share)	'	'	$0.38	$0.25
Outstanding and exercisable options:	'	'	'	'
Weighted average remaining contractual life, beginning	'	'	'4 years 2 months 23 days	'5 years
Weighted average remaining contractual life, ending	'	'	'4 years 2 months 23 days	'5 years
Intrinsic value, beginning	'	'	$211,500	'
Intrinsic value, ending	'	'	$177,323	$211,500

WARRANTS_Details

WARRANTS (Details) (USD $)

9 Months Ended

0 Months Ended

9 Months Ended

0 Months Ended

6 Months Ended

0 Months Ended

6 Months Ended

0 Months Ended

6 Months Ended

0 Months Ended

9 Months Ended

0 Months Ended

6 Months Ended

9 Months Ended

Sep. 30, 2013

Jul. 29, 2013

Jun. 30, 2013

10-May-13

Mar. 19, 2013

Aug. 03, 2013

Jul. 29, 2013

Sep. 30, 2013

Jul. 29, 2013

Sep. 30, 2013

Mar. 19, 2013

Jun. 30, 2013

Sep. 30, 2013

Mar. 19, 2013

Jun. 30, 2013

Sep. 30, 2013

Mar. 19, 2013

Jun. 30, 2013

Sep. 30, 2013

Jul. 29, 2013

10-May-13

Mar. 19, 2013

Jun. 30, 2013

Sep. 30, 2013

item

Note

Minimum

Maximum

James Crawford

Nathaniel Bradley

Sean Bradley

Ted O'Donnell

Warrants

Minimum

Maximum

Warrants

Issuance of warrants (in shares)

20,000

293,915

95,394

464,593

38,333

103,128

1,696,155

32,500

67,033

1,491,924

28,333

28,360

250,000

41,872

3,652,672

99,166

Release of aggregate due to related party

$38,333

$913,168

Strike price (in dollars per share)

$0.39

$1.22

$0.50

$0.60

$0.25

$0.50

$0.25

$0.50

$0.25

$0.50

Annual vesting percentage

33.00%

Value of warrants

71,250

59,254

38,333

51,000

913,168

Stock compensation expense related to the options and warrants

59,254

Units sold to accredited investors (in shares)

1,092,000

Number of common shares consisted in each unit sold to accredited investor

Term of warrants issued to accredited investor

'3 years

Number of common shares that can be purchased against each warrant issued to accredited investor

Expected term

'3 years 6 months

'5 years

Expected volatility (as a percent)

100.00%

250.00%

Risk-free interest rate (as a percent)

0.82%

1.40%

Expected dividend yield (as a percent)

0.00%

Exercise price of units (in dollars per share)

$0.50

Purchase price of units (in dollars per share)

$0.50

Warrants to purchase shares

1,092,000

20,000

Number of entities to which warrants to be issued as part of service contracts

Number of service contracts

Face amount of debt

150,000

Debt discount from warrants issued with debt

$6,930

WARRANTS_Details_2

WARRANTS (Details 2) (USD $)	9 Months Ended
WARRANTS (Details 2) (USD $)	Sep. 30, 2013
Number of shares	'
Number of shares, granted	4,357,625
Number of shares, ending	4,357,625
Weighted average exercise price	'
Weighted average exercise price, granted (in dollars per share)	$0.29
Weighted average exercise price (in dollars per share)	$0.29
Weighted average remaining term	'4 years 4 months 10 days

PERFORMANCE_SHARE_UNITS_Detail

PERFORMANCE SHARE UNITS (Details) (USD $)	9 Months Ended
PERFORMANCE SHARE UNITS (Details) (USD $)	Sep. 30, 2013	Aug. 07, 2013
PERFORMANCE SHARE UNITS	'	'
Number of incentive shares estimated to be issued	1,000,000	'
Expenses incurred	$59,254	'
PSUs	'	'
PERFORMANCE SHARE UNITS	'	'
Percentage of units estimated to be issued	100.00%	'
Closing stock price (in dollars per share)	'	$0.45
Expenses to be amortized over performance period	450,000	'
Expenses incurred	$75,000	'
Nathaniel Bradley \| PSUs	'	'
PERFORMANCE SHARE UNITS	'	'
Performance share unit agreement granted (in shares)	200,000	'
Performance share unit subject to increase of total units (in shares)	400,000	'
Performance share unit agreement period	'3 years	'
Number of shares issued for each performance share unit (in shares)	1	'
Sean Bradley \| PSUs	'	'
PERFORMANCE SHARE UNITS	'	'
Performance share unit agreement granted (in shares)	200,000	'
Performance share unit subject to increase of total units (in shares)	300,000	'
Performance share unit agreement period	'3 years	'
Number of shares issued for each performance share unit (in shares)	1	'
James Crawford \| PSUs	'	'
PERFORMANCE SHARE UNITS	'	'
Performance share unit agreement granted (in shares)	200,000	'
Performance share unit subject to increase of total units (in shares)	300,000	'
Performance share unit agreement period	'3 years	'
Number of shares issued for each performance share unit (in shares)	1	'

ACQUISITION_OF_AUDIOEYE_INC_BY2

ACQUISITION OF AUDIOEYE, INC. BY AUDIOEYE ACQUISITION CORPORATION (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Aug. 17, 2012	Dec. 31, 2012
	Sep. 30, 2013	Dec. 31, 2012	AudioEye Inc.	AudioEye Inc.
Acquisition	'	'	'	'
Current Assets	'	'	$109,521	'
Property, Plant & Equipment, net	'	'	7,688	'
Current Liabilities	'	'	-1,517,724	'
L/T Liabilities	'	'	-1,351,827	'
Net assets	'	'	2,752,342	'
Percentage of outstanding shares acquired	'	'	'	80.00%
Cash paid for entity	'	'	1,125,000	'
Stock issued for acquisition	'	'	375,000	'
Stock issued for acquisition (in shares)	'	'	'	1,500,000
Purchase price	'	'	1,500,000	'
Identifiable Intangibles - Patents	'	'	-3,551,814	-3,551,814
Goodwill	$700,528	$700,528	$700,528	$700,528

MERGER_OF_AUDIOEYE_INC_AND_AUD2

MERGER OF AUDIOEYE, INC. AND AUDIOEYE ACQUISITION CORPORATION (Details) (USD $)	0 Months Ended	9 Months Ended
	Mar. 22, 2013	Sep. 30, 2013	Dec. 31, 2012	Aug. 17, 2012
Assets	'	'	'	'
Goodwill	'	$700,528	$700,528	'
AudioEye Inc. Acquisition Corporation	'	'	'	'
Merger	'	'	'	'
Shares of AEAC common stock converted to company stock (in dollars per share)	'	$0.94	'	'
Aggregate principal amount of debentures assumed	1,400,200	'	'	'
Accrued interest on debentures assumed	67,732	'	'	'
Shares issued to AEAC debenture holders	5,871,752	'	'	'
Assets	'	'	'	'
Cash	'	'	4,593	'
Intangible Assets	'	'	3,551,814	3,551,814
Goodwill	'	'	700,528	700,528
Total Assets	'	'	4,256,935	'
Liabilities	'	'	'	'
Accounts payable and accrued expenses	'	'	117,162	'
Net Assets	'	'	$4,139,773	'

INTANGIBLE_ASSETS_Details

INTANGIBLE ASSETS (Details) (USD $)	9 Months Ended
INTANGIBLE ASSETS (Details) (USD $)	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Patents	'	'	'
Intangible Assets	'	'	'
Intangible assets, gross	$3,563,541	'	$3,553,651
Accumulated Amortization	-401,768	'	-135,030
Patents	3,161,773	'	3,418,621
Amortization expense	$266,738	$55,288	'
Patents, Technology and Other Intangibles	'	'	'
Intangible Assets	'	'	'
Estimated useful lives	'10 years	'	'