AudioEye (AEYE) 10-Q 15 Aug 16 2016 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 05, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Entity Registrant Name	AUDIOEYE INC
Entity Central Index Key	1,362,190
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	AEYE
Entity Common Stock, Shares Outstanding		107,333,432

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash	$ 2,144,220	$ 1,687,257
Accounts receivable, net	26,288	22,741
Marketable securities, held in related party	2,700	3,600
Non-marketable securities, held in related party	50,000	50,000
Prepaid expenses and other current assets	41,388	41,388
Total current assets	2,264,596	1,804,986
Intangible assets, net	2,603,455	2,840,856
Goodwill	700,528	700,528
Total assets	5,568,579	5,346,370
Current liabilities:
Accounts payable and accrued expenses	187,258	213,620
Notes and loans payable, current	24,000	24,000
Related party payables	59,536	153,474
Derivative liabilities	3,999,298	439,361
Deferred revenue	416,449	60,790
Total current liabilities	4,686,541	891,245
Long term liabilities:
Convertible notes and loans payable, net	11,800	1,923,499
Total liabilities	4,698,341	2,814,744
Stockholders' equity:
Preferred stock, $0.00001 par value, 10,000,000 shares authorized, 160,000 and 175,000 issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	2	2
Common stock, $0.00001 par value, 250,000,000 shares authorized, 107,250,100 and 81,717,154 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	1,072	817
Treasury stock	(623,000)	(623,000)
Additional paid-in capital	33,754,111	27,393,238
Accumulated deficit	(32,261,947)	(24,239,431)
Total stockholders' equity	870,238	2,531,626
Total liabilities and stockholders' equity	$ 5,568,579	$ 5,346,370

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Preferred Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	160,000	175,000
Preferred Stock, Shares Outstanding	160,000	175,000
Common Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Shares, Issued	107,250,100	81,717,154
Common Stock, Shares, Outstanding	107,250,100	81,717,154

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues	$ 186,859	$ 104,423	$ 311,561	$ 205,461
Cost of revenue	297,764	394,502	592,572	856,633
Gross Loss	(110,905)	(290,079)	(281,011)	(651,172)
Operating expenses:
Selling and marketing	194,201	210,029	317,567	576,396
Research and development	84,996	58,738	170,613	201,020
General and administrative	821,898	2,167,320	1,292,923	4,188,547
Amortization and depreciation	139,835	133,944	278,373	267,888
Total operating expenses	1,240,930	2,570,031	2,059,476	5,233,851
Operating loss	(1,351,835)	(2,860,110)	(2,340,487)	(5,885,023)
Other income (expense):
Unrealized gain (loss) on derivative liabilities	70,908	0	(3,341,151)	0
Unrealized loss on marketable securities	(900)	0	(900)	0
Loss on settlement of debt	(1,664,281)	0	(1,664,281)	0
Other income	750	0	750	0
Interest income (expense)	(566,282)	157	(676,447)	3,264
Total other income (expense)	(2,159,805)	157	(5,682,029)	3,264
Net loss	(3,511,640)	(2,859,953)	(8,022,516)	(5,881,759)
Preferred stock dividend	(18,125)	(594,641)	(40,000)	(594,641)
Net loss available to common stockholders	$ (3,529,765)	$ (3,454,594)	$ (8,062,516)	$ (6,476,400)
Net loss per common share-basic and diluted (in dollars per share)	$ (0.04)	$ (0.04)	$ (0.09)	$ (0.08)
Weighted average common shares outstanding-basic and diluted (in shares)	98,295,458	79,531,225	90,006,306	79,139,308

CONSOLIDATED STATEMENT OF STOCK

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2016 - USD ($)	Total	Common Stock [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Noncontrolling Interest [Member]	Retained Earnings [Member]
Balance at Dec. 31, 2015	$ 2,531,626	$ 817	$ 2	$ 27,393,238	$ (623,000)	$ (24,239,431)
Balance (in shares) at Dec. 31, 2015		81,717,154	175,000
Common stock issued for services	14,292	$ 1	$ 0	14,291	0	0
Common stock issued for services (in shares)		83,336	0
Common stock issued in settlement of convertible notes and accrued interest	1,078,123	$ 128	$ 0	1,077,995	0	0
Common stock issued in settlement of convertible notes and accrued interest (in shares)		12,834,800	0
Common stock and warrants issued for cash, net of placement costs of $58,794	1,579,082	$ 117	$ 0	1,578,965	0	0
Common stock and warrants issued for cash, net of placement costs of $58,794 (in shares)		11,714,285	0
Common stock issued upon conversion of preferred stock	0	$ 9	$ 0	(9)	0	0
Common stock issued upon conversion of preferred stock (in shares)		900,525	(15,000)
Fair value of warrants issued in settlement of convertible debt and accrued interest	3,205,959	$ 0	$ 0	3,205,959	0	0
Reclassify fair value of liability warrants issued in connection with sale of common stock	(218,786)	0	0	(218,786)	0	0
Warrants and Options issued for services	688,292	0	0	688,292	0	0
Stock based compensation	14,166	0	0	14,166	0	0
Net loss	(8,022,516)	0	0	0	0	(8,022,516)
Balance at Jun. 30, 2016	$ 870,238	$ 1,072	$ 2	$ 33,754,111	$ (623,000)	$ (32,261,947)
Balance (in shares) at Jun. 30, 2016	107,250,100	107,250,100	160,000

CONSOLIDATED STATEMENT OF STOC6

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical)	6 Months Ended
	Jun. 30, 2016USD ($)
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs	$ 58,794

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$ (8,022,516)	$ (5,881,759)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	278,373	267,888
Amortization of debt discounts	600,301	0
Option, warrant and PSU expense	688,292	1,500,270
Stock issued or vissuable for services	28,458	664,497
Unrealized loss on marketable securities	900	0
Loss on change in derivative liabilities	3,341,151	0
Loss on settlement of debt	1,664,281	0
Changes in operating assets and liabilities:
Accounts receivable	(3,547)	246,094
Other current assets	0	(24,382)
Accounts payable and accruals	93,439	(227,928)
Billing in excess of costs	0	(91,408)
Deferred revenue	355,659	0
Related party payables	(93,938)	(228,983)
Net cash (used in) operating activities	(1,069,147)	(3,775,711)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash (paid for) intellectual property	(40,972)	(29,650)
Net cash (used in) investing activities	(40,972)	(29,650)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock and warrants for cash	1,579,082	325,000
Collection of stock subscription receivable	0	1,175,000
Issuance of preferred stock for cash	0	1,750,000
Proceeds from exercise of options and warrants	0	43,942
Repayments of notes payable	(12,000)	(16,000)
Net cash provided by financing activities	1,567,082	3,277,942
Net increase (decrease) in cash	456,963	(527,419)
Cash-beginning of period	1,687,257	1,672,901
Cash-end of period	2,144,220	1,145,482
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	0	307
Income taxes paid	0	0
Non-cash investing and financing activities:
Deemed Dividend beneficial conversion feature on convertible preferred stock	0	594,641
Common stock issued in settlement of convertible notes payable and accrued interest	1,078,123	0
Warrants issued in settlement of convertible notes payable and accrued interest	1,541,678	0
Reclass fair value of liability warrants from equity to liability upon issuance	218,786	0
Common stock issued on conversion of preferred stock	$ 9	$ 0

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION The accompanying unaudited interim financial statements of AudioEye, Inc. and its wholly-owned subsidiary (collectively, 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 on Form 10-K filed with the Securities and Exchange Commission on March 30, 2016. 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, 2015 as reported in the Company’s Annual Report on Form 10-K have been omitted. AudioEye, Inc. was formed as a Delaware corporation on May 20, 2005. The Company focuses on providing its customers with the most complete and inclusive web accessibility solution available. The Company’s suite of technologies allows its customers to provide their site visitors with an enhanced web experience. When implemented, the Company believes its solutions offer businesses the opportunity to reach more customers, improve brand image, and build additional brand loyalty. In addition, the Company’s solutions provide organizations with the ability to comply with internationally accepted web content accessibility guidelines (WCAG) as well as United States, Canadian and United Kingdom accessibility laws. Certain prior year amounts have been reclassified to conform to the current year presentation. Revenue is recognized when all applicable recognition criteria have been met, which generally include (a) persuasive evidence of an existing arrangement; (b) fixed or determinable price; (c) delivery has occurred or service has been rendered; and (d) collectability of the sales price is reasonably assured. For software and technology development contracts the Company recognizes revenues on a percentage of completion method based upon several factors including but not limited to (a) estimate of total hours and milestones to complete; (b) total hours completed; (c) delivery of services rendered; (d) change in estimates; and (e) collectability of the contract. The Company had three major customers including their affiliates which generated approximately 66 39 14 13 The Company had three major customers including their affiliates which generated approximately 64 32 19 14 At June 30, 2016, the Company had one customer representing 56 Certain Software as a Service (SaaS) and website hosting contracts are prepared and invoiced on an annual basis. Any funds received for hosting services not provided yet are held in deferred revenue, and are recorded as revenue when earned. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation, fair values relating to derivative liabilities, debt discounts and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the consolidated statements of operations, as if such amounts were paid in cash. The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At June 30, 2016 and December 31, 2015, the Company did not have any derivative instruments that were designated as hedges. On October 9, 2015, the Company issued convertible promissory notes representing $ 2,500,000 25,000,000 0.10 5 0.25 5 In accordance with ASC 815, these outstanding warrants are deemed to contain embedded derivatives. The value of the derivative instrument will fluctuate with the price of the Company’s common stock and is recorded as a current liability on the Company’s Consolidated Balance Sheets. The change in the value of the liability is recorded as “unrealized gain (loss) on derivative liability” on the Consolidated Statements of Operations. This is a non-cash income (expense) item and is adjusted in the “operating activities” of the Consolidated Statements of Cash Flow. At June 30, 2016 and December 31, 2015, the derivative liability was stated at $ 3,999,298 439,361 3,341,151 Fair value is an estimate of the exit price, representing the amount that would be received to, sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction cost. Fair value measurement under generally accepted accounting principles provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3: Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities. In October and November 2015, the Company issued warrants with an exercise price of $ 0.10 0.10 The Company estimated the fair value of these derivative warrants at initial issuance and again at each balance sheet date. The changes in fair value are recognized in earnings in the Consolidated Statements of Operations under the caption “unrealized gain/(loss) – derivative liability” until such time as the derivative warrants are exercised or expire. The Company used the Black-Scholes Option Pricing model to estimate the fair value of the dates of issuance, the price of the Company stock ranged $ 0.031 0.058 102 1.14 1.75 5 In April and May 2016, the Company issued warrants with an exercise price of $ 0.25 0.25 The Company estimated the fair value of these derivative warrants at initial issuance and again at each balance sheet date. The changes in fair value are recognized in earnings in the Consolidated Statements of Operations under the caption “unrealized gain/(loss) – derivative liability” until such time as the derivative warrants are exercised or expire. The Company used the Black-Scholes Option Pricing model to estimate the fair value of the dates of issuance, the price of the Company stock ranged $ 0.169 0.195 169 178 1.22 1.35 218,786 At June 30, 2016, the price of the Company stock was 0.161 172.95 1.01 4.28 4.81 3,999,298 70,908 (3,341,151) Fair Value Fair Value Hierarchy Assets Marketable securities, June 30, 2016 $ 2,700 Level 1 Marketable securities, December 31, 2015 $ 3,600 Level 1 Liabilities Derivative Liability , June 30, 2016 $ 3,999,298 Level 3 Derivative Liability , December 31, 2015 $ 439,361 Level 3 There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

MANAGEMENT LIQUIDITY PLANS

MANAGEMENT LIQUIDITY PLANS	6 Months Ended
	Jun. 30, 2016
Going Concern [Abstract]
Going Concern [Text Block]	NOTE 2: MANAGEMENT LIQUIDITY PLANS As of June 30, 2016, the Company had cash of $ 2,144,220 2,421,945 1,577,353 1,069,147 In May 2016, the Company sold shares of common stock and warrants for net proceeds, after commissions and other costs, of approximately $ 1,579,082 Management believes that the Company has sufficient funds to meet its operating funding requirements for at least the next twelve months. The Company expects that cash used in operations will decrease significantly over the next several years as the Company executes its business plan. In the event that the Company is not able to fully achieve its plan, the Company may need to raise additional funds through equity or debt financing. If the Company is unsuccessful in raising additional financing, it will need to reduce costs and operations in the future.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2016
Related Party Transactions [Abstract]
Related Party Transactions Disclosure [Text Block]	NOTE 3: RELATED PARTY TRANSACTIONS Dr. Carr Bettis, Executive Chairman and Chairman of Board of Directors As of June 30, 2016 and December 31, 2015, the Company owed Dr. Bettis $ 49,742 72,944 500 1,500 3,000 Sean Bradley, President, Chief Technology Officer, and Secretary As of June 30, 2016 and December 31, 2015 and 2014, the Company owed Sean Bradley $ 9,794 6,250 David Moradi, a Material Shareholder, on a fully diluted basis As of December 31, 2015 the Company owed David Moradi $ 70,000 4,280 In summary, as of June 30, 2016 and December 31, 2015 the total balances of related party payables were $ 59,536 153,474

INTANGIBLE ASSETS

INTANGIBLE ASSETS	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets Disclosure [Text Block]	NOTE 4: INTANGIBLE ASSETS For the six months ended June 30, 2016 and 2015, the Company invested in Patents in the amounts of $ 40,972 29,650 Prior to December 31, 2015, 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. Software development costs are amortized over their estimated useful life of three years. June 30, December 31, 2016 2015 Patents $ 3,696,041 $ 3,655,069 Capitalized software development 621,567 621,567 Accumulated amortization (1,714,153) (1,435,780) Intangible assets, net $ 2,603,455 $ 2,840,856 Amortization expense for patents totaled $ 94,076 186,855 90,736 181,555 45,759 91,518 43,125 86,250 Total amortization expense totaled $ 278,373 267,804

NOTES PAYABLE

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2016
Notes Payable [Abstract]
Debt Disclosure [Text Block]	NOTE 5: NOTES PAYABLE 24,000 11,800 24,000 1,923,499 Notes and loans payable June 30, December 31, Short Term Maryland TEDCO $ 24,000 $ 24,000 Total $ 24,000 $ 24,000 Long Term Convertible Secured Note (net of unamortized discounts of $600,301 in 2015) - 1,899,699 Maryland TEDCO $ 11,800 $ 23,800 Total $ 11,800 $ 1,923,499 As of December 31, 2012, the Company had an outstanding loan to a third party in the amount of $ 74,900 25 74,900 149,800 2,000 35,800 47,800 24,000 24,000 11,800 23,800 12,000 On October 9, 2015 (the “Initial Closing Date”), AudioEye, Inc. (the “Company”) entered into a Note and Warrant Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Investors”) for the issuance and sale of convertible promissory notes in an aggregate principal amount of up to $ 3,750,000 37,500,000 2,500,000 2,500,000 The Notes mature three years from the date of issuance (the “Maturity Date”) and, until the Notes are repaid or converted into shares of the Company’s equity securities (“Equity Securities”), accrue payable-in-kind interest at the rate of 10 1,000,000 60 The Notes contained customary events of default provisions. In connection with the issuance of the Notes, on October 9, 2015, the Company entered into a Security Agreement with the Investors (the “Security Agreement”) pursuant to which the Company granted a security interest in all of its assets to the Investors as collateral for the Company’s obligations under the Notes. As noted below, on April 18, 2016, the parties agreed to remove the security interest feature from the form of convertible promissory note that may be issued in the future under the Original Agreement. The Warrants are exercisable at $ 0.10 During 2015, the Company issued notes under this offering totaling $ 2,500,000 627,293 554,160 600,301 In connection with the transaction, the Company also entered into amendments to certain agreements. On April 18, 2016, the Company entered into a First Amendment to Note and Warrant Purchase Agreement (the “Purchase Agreement Amendment”) and an Omnibus Amendment to Secured Promissory Notes (the “Note Amendment”), which collectively amend that certain Note and Warrant Purchase Agreement dated as of October 9, 2015 (the “Original Agreement”) and the convertible promissory notes previously issued thereunder to, among other things (i) remove the right of Anthion Partners II, LLC (together with its affiliates, “Anthion”) to designate a member of the Board of Directors of the Company; (ii) amend the convertible promissory notes issued thereunder to provide that if a change of control of the Company occurs prior to the maturity date or an equity financing (as defined therein), the convertible promissory note shall be repaid in an amount equal to the product of (a) 1.4 and (b) the outstanding principal amount and all accrued and unpaid interest thereunder; (iii) reduce the conversion threshold in the definition of “qualified financing” under the convertible promissory notes from $ 2,000,000 1,000,000 On April 18, 2016, the Company issued an aggregate of 12,834,800 18,353,310 2,500,000 74,658 0.001 At the date of conversion, the Company determined that the conversion price of $ 0.84 1,025,000 18,353,310 3,205,959 1,541,678 1,664,281 0.175 178 1.24 5

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2016
Stockholders' Equity Attributable to Parent [Abstract]
Sale Leaseback Transaction Disclosure [Text Block]	NOTE 6: STOCKHOLDERS’ EQUITY As of June 30, 2016 and December 31, 2015, the Company had 107,250,100 81,717,154 160,000 175,000 10 5 0.1754 In April 2016, the Company issued an aggregate 83,336 14,292 In April 2016, the Company issued an aggregate of 12,834,800 1,025,000 In May 2016, the Company sold an aggregate of 11,714,285 1,312,000 1,579,082 0.25 In May 2016, the Company issued 900,525 15,000 Registration rights Under the purchase agreement, the Company has agreed to use its reasonable best efforts to prepare and file with the SEC registration statement within 60 days of the initial closing date, covering the resale by the investors of any common stock previously issued to the investors, and any common stock into which any convertible promissory notes previously issued to the investors are convertible and any common stock for which the warrants or any warrants previously issued to the investors are exercisable.

OPTIONS

OPTIONS	6 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	NOTE 7: OPTIONS 25,059,629 14,759,914 Intrinsic Wtd Avg. Value Number of Wtd Avg. Remaining of Exercisable Options Exercise Price Term Exercisable Options Outstanding at December 31, 2015 14,759,914 $ 0.30 3.61 8,374,294 $ — Granted 10,699,715 0.03 4.91 — Forfeited (400,000) 0.88 — Outstanding at June 30, 2016 25,059,629 $ 0.20 4.01 12,299,177 $ 425,513 On January 15, 2016, the Company granted performance options to acquire shares of the Company’s common stock in aggregate of 6,500,000 0.038 5,500,000 The estimated fair values of the options with performance and market conditions were determined using a Monte Carlo pricing model. Significant assumptions used in the valuation include expected term of 5 162 1.46 0 Nonperformance option grants during the six months ended June 30, 2016 were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 1.5 3.5 102.00 174.99 0.87 1.73 0 On April 15, 2016, the Company issued 49,715 0.179 April 15, 2019 6,250 On May 12, 2016, the Company issued 100,000 50 4.17 0.177 May 12, 2021 16,694 On May 12, 2016, the Company issued an aggregate of 3,400,000 50 50 0.177 May 12, 2021 559,603 For the three and six months ended June 30, 2016 and 2015, total stock compensation expense related to the options totaled $ 414,031 540,119 397,134 774,700

WARRANTS

WARRANTS	6 Months Ended
	Jun. 30, 2016
Warrants [Abstract]
Warrants [Text Block]	NOTE 8: WARRANTS Intrinsic Wtd Avg. Value Number of Wtd Avg. Remaining of Exercisable Warrants Exercise Price Term Exercisable Warrants Outstanding at December 31, 2015 42,526,609 $ 0.22 4.15 41,047,920 $ 1,167 Exercised - Granted 20,846,639 0.02 4.69 - Expired (99,166) 0.50 Outstanding at June 30, 2016 63,274,082 0.15 3.99 63,070,958 $ 4,603,155 The warrant grants during the six months ended June 30, 2016 were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 1.5 2.5 166.74 178.98 0.85 1.08 0 During the six months ended June 30, 2016, the Company issued an aggregate of 1,181,329 0.038 0.179 106,750 In April 2016, the Company issued an aggregate of 18,353,310 1,541,678 0.001 The Company determined that the estimated fair value of the 18,353,311 3,205,959 1,541,678 1,664,281 0.175 178 1.24 5 In May 2016, the Company issued 1,312,000 0.25 For the three and six months ended June 30, 2016 and 2015, the Company has incurred warrant-based expense of $ 58,483 415,445 470,187

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2016
Subsequent Events [Abstract]
Subsequent Events [Text Block]	NOTE 9: SUBSEQUENT EVENTS Employee options/warrants On July 15, 2016, the Company issued 394,625 0.156 On July 15, 2016, the Company granted 56,375 0.156 Common stock In July 2015, the Company issued an aggregate of 83,332 14,166 Litigation On July 25, 2016, the Company reached an agreement in principle to settle the consolidated securities class action lawsuit pending in the United States District Court for the District of Arizona, titled In re AudioEye, Inc. Sec. Litig. The settlement agreement is subject to definitive documentation, shareholder notice, and court approval. The terms of the agreement include a settlement payment to the class of $ 1,525,000 On July 26, 2016, a shareholder derivative complaint entitled Denese M. Hebert, derivatively on Behalf of Nominal Defendant AudioEye, Inc., v. Bradley, et al. Company Named Individuals

ORGANIZATION AND BASIS OF PRE17

ORGANIZATION AND BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Accounting, Policy [Policy Text Block]	Corporate Information and Background AudioEye, Inc. was formed as a Delaware corporation on May 20, 2005. The Company focuses on providing its customers with the most complete and inclusive web accessibility solution available. The Company’s suite of technologies allows its customers to provide their site visitors with an enhanced web experience. When implemented, the Company believes its solutions offer businesses the opportunity to reach more customers, improve brand image, and build additional brand loyalty. In addition, the Company’s solutions provide organizations with the ability to comply with internationally accepted web content accessibility guidelines (WCAG) as well as United States, Canadian and United Kingdom accessibility laws.
Reclassification, Policy [Policy Text Block]	Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation.
Revenue Recognition, Policy [Policy Text Block]	Revenue Recognition Revenue is recognized when all applicable recognition criteria have been met, which generally include (a) persuasive evidence of an existing arrangement; (b) fixed or determinable price; (c) delivery has occurred or service has been rendered; and (d) collectability of the sales price is reasonably assured. For software and technology development contracts the Company recognizes revenues on a percentage of completion method based upon several factors including but not limited to (a) estimate of total hours and milestones to complete; (b) total hours completed; (c) delivery of services rendered; (d) change in estimates; and (e) collectability of the contract. The Company had three major customers including their affiliates which generated approximately 66 39 14 13 The Company had three major customers including their affiliates which generated approximately 64 32 19 14 At June 30, 2016, the Company had one customer representing 56 Certain Software as a Service (SaaS) and website hosting contracts are prepared and invoiced on an annual basis. Any funds received for hosting services not provided yet are held in deferred revenue, and are recorded as revenue when earned.
Use of Estimates, Policy [Policy Text Block]	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation, fair values relating to derivative liabilities, debt discounts and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	Stock based compensation The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the consolidated statements of operations, as if such amounts were paid in cash.
Derivatives, Policy [Policy Text Block]	Derivative Instrument Liability The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At June 30, 2016 and December 31, 2015, the Company did not have any derivative instruments that were designated as hedges. On October 9, 2015, the Company issued convertible promissory notes representing $ 2,500,000 25,000,000 0.10 5 0.25 5 In accordance with ASC 815, these outstanding warrants are deemed to contain embedded derivatives. The value of the derivative instrument will fluctuate with the price of the Company’s common stock and is recorded as a current liability on the Company’s Consolidated Balance Sheets. The change in the value of the liability is recorded as “unrealized gain (loss) on derivative liability” on the Consolidated Statements of Operations. This is a non-cash income (expense) item and is adjusted in the “operating activities” of the Consolidated Statements of Cash Flow. At June 30, 2016 and December 31, 2015, the derivative liability was stated at $ 3,999,298 439,361 3,341,151
Fair Value Measurement, Policy [Policy Text Block]	Fair Value Measurements Fair value is an estimate of the exit price, representing the amount that would be received to, sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction cost. Fair value measurement under generally accepted accounting principles provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3: Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities. In October and November 2015, the Company issued warrants with an exercise price of $ 0.10 0.10 The Company estimated the fair value of these derivative warrants at initial issuance and again at each balance sheet date. The changes in fair value are recognized in earnings in the Consolidated Statements of Operations under the caption “unrealized gain/(loss) – derivative liability” until such time as the derivative warrants are exercised or expire. The Company used the Black-Scholes Option Pricing model to estimate the fair value of the dates of issuance, the price of the Company stock ranged $ 0.031 0.058 102 1.14 1.75 5 In April and May 2016, the Company issued warrants with an exercise price of $ 0.25 0.25 The Company estimated the fair value of these derivative warrants at initial issuance and again at each balance sheet date. The changes in fair value are recognized in earnings in the Consolidated Statements of Operations under the caption “unrealized gain/(loss) – derivative liability” until such time as the derivative warrants are exercised or expire. The Company used the Black-Scholes Option Pricing model to estimate the fair value of the dates of issuance, the price of the Company stock ranged $ 0.169 0.195 169 178 1.22 1.35 218,786 At June 30, 2016, the price of the Company stock was 0.161 172.95 1.01 4.28 4.81 3,999,298 70,908 (3,341,151) Fair Value Fair Value Hierarchy Assets Marketable securities, June 30, 2016 $ 2,700 Level 1 Marketable securities, December 31, 2015 $ 3,600 Level 1 Liabilities Derivative Liability , June 30, 2016 $ 3,999,298 Level 3 Derivative Liability , December 31, 2015 $ 439,361 Level 3
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Accounting Pronouncements There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

ORGANIZATION AND BASIS OF PRE18

ORGANIZATION AND BASIS OF PRESENTATION (Tables)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]	The following are the Company’s assets and liabilities, measured at fair value on a recurring basis, as of June 30, 2016 and December 31, 2015: Fair Value Fair Value Hierarchy Assets Marketable securities, June 30, 2016 $ 2,700 Level 1 Marketable securities, December 31, 2015 $ 3,600 Level 1 Liabilities Derivative Liability , June 30, 2016 $ 3,999,298 Level 3 Derivative Liability , December 31, 2015 $ 439,361 Level 3

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets [Table Text Block]	Prior to any impairment adjustment, intangible assets consisted of the following: June 30, December 31, 2016 2015 Patents $ 3,696,041 $ 3,655,069 Capitalized software development 621,567 621,567 Accumulated amortization (1,714,153) (1,435,780) Intangible assets, net $ 2,603,455 $ 2,840,856

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2016
Notes Payable [Abstract]
Schedule of Debt [Table Text Block]	As of June 30, 2016 and December 31, 2015, the Company has short term and long term notes payable of $ 24,000 11,800 24,000 1,923,499 Notes and loans payable June 30, December 31, Short Term Maryland TEDCO $ 24,000 $ 24,000 Total $ 24,000 $ 24,000 Long Term Convertible Secured Note (net of unamortized discounts of $600,301 in 2015) - 1,899,699 Maryland TEDCO $ 11,800 $ 23,800 Total $ 11,800 $ 1,923,499

OPTIONS (Tables)

OPTIONS (Tables)	6 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	As of June 30, 2016 and December 31, 2015, the Company has outstanding options to purchase 25,059,629 14,759,914 Intrinsic Wtd Avg. Value Number of Wtd Avg. Remaining of Exercisable Options Exercise Price Term Exercisable Options Outstanding at December 31, 2015 14,759,914 $ 0.30 3.61 8,374,294 $ — Granted 10,699,715 0.03 4.91 — Forfeited (400,000) 0.88 — Outstanding at June 30, 2016 25,059,629 $ 0.20 4.01 12,299,177 $ 425,513

WARRANTS (Tables)

WARRANTS (Tables)	6 Months Ended
	Jun. 30, 2016
Warrants [Abstract]
Schedule of Other Share-based Compensation, Activity [Table Text Block]	Below is a table summarizing the Company’s outstanding warrants as of June 30, 2016 and December 31, 2015: Intrinsic Wtd Avg. Value Number of Wtd Avg. Remaining of Exercisable Warrants Exercise Price Term Exercisable Warrants Outstanding at December 31, 2015 42,526,609 $ 0.22 4.15 41,047,920 $ 1,167 Exercised - Granted 20,846,639 0.02 4.69 - Expired (99,166) 0.50 Outstanding at June 30, 2016 63,274,082 0.15 3.99 63,070,958 $ 4,603,155

ORGANIZATION AND BASIS OF PRE23

ORGANIZATION AND BASIS OF PRESENTATION (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities held in related party	$ 2,700	$ 3,600
Derivative Liability, Fair Value, Gross Liability		627,293
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities held in related party	2,700	3,600
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability, Fair Value, Gross Liability	$ 3,999,298	$ 439,361

ORGANIZATION AND BASIS OF PRE24

ORGANIZATION AND BASIS OF PRESENTATION (Details Textual) - USD ($)	Oct. 09, 2015	May 31, 2016	May 31, 2016	Nov. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Apr. 30, 2016	Dec. 31, 2015	Nov. 09, 2015
Summary Of Significant Accounting Policies [Line Items]
Common Stock Issuance Price Per Share			$ 0.25	$ 0.10
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.10	$ 0.25	$ 0.25	$ 0.10					$ 0.001
Share Price					$ 0.161		$ 0.161
Fair Value Assumptions, Weighted Average Volatility Rate							172.95%
Fair Value Assumptions, Risk Free Interest Rate							1.01%
Fair Value Adjustment of Warrants			$ 218,786				$ 3,999,298
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Change in Unrealized Gain (Loss)							3,341,151
Derivative Liability, Current					$ 3,999,298		3,999,298			$ 439,361
Unrealized Gain (Loss) on Derivatives					$ 70,908	$ 0	$ (3,341,151)	$ 0
Class Of Warrant Or Right Exercisable Number	25,000,000
Debt Instrument, Face Amount	$ 2,500,000										$ 2,500,000
Black-scholes option pricing model [Member]
Summary Of Significant Accounting Policies [Line Items]
Share Price					$ 0.175		$ 0.175
Fair Value Assumptions, Weighted Average Volatility Rate				102.00%			178.00%
Fair Value Assumptions, Risk Free Interest Rate							1.24%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				5 years			5 years
Warrant [Member]
Summary Of Significant Accounting Policies [Line Items]
Fair Value Assumptions, Weighted Average Volatility Rate	0.25%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	5 years
Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights					0.038		$ 0.038
Share Price		$ 0.169	$ 0.169	$ 0.031
Fair Value Assumptions, Weighted Average Volatility Rate		169.00%
Fair Value Assumptions, Risk Free Interest Rate		1.22%		1.14%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		5 years					4 years 3 months 11 days
Minimum [Member] | Warrant [Member]
Summary Of Significant Accounting Policies [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term							1 year 6 months
Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 0.179		$ 0.179
Share Price		$ 0.195	$ 0.195	$ 0.058
Fair Value Assumptions, Weighted Average Volatility Rate					178.00%
Fair Value Assumptions, Risk Free Interest Rate		1.35%		1.75%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period							4 years 9 months 22 days
Maximum [Member] | Warrant [Member]
Summary Of Significant Accounting Policies [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term							5 years
Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage					66.00%		64.00%
Customer One [Member] | Sales Revenue, Net [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage					39.00%		32.00%
Customer Two [Member] | Sales Revenue, Net [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage					14.00%		19.00%
Customer Three [Member] | Sales Revenue, Net [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage					13.00%		14.00%
One Customer [Member] | Accounts Receivable [Member]
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage							56.00%

MANAGEMENT LIQUIDITY PLANS (Det

MANAGEMENT LIQUIDITY PLANS (Details Textual) - USD ($)	1 Months Ended	6 Months Ended
	May 31, 2016	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Going Concern And Management Liquidity Plans [Line Items]
Working Capital Amount		$ 2,421,945
Company used net cash in operations		(1,069,147)	$ (3,775,711)
Working Capital		1,577,353
Cash		$ 2,144,220		$ 1,687,257
Proceeds from Issuance or Sale of Equity	$ 1,579,082

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Textual) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Related party payables	$ 59,536	$ 59,536	$ 153,474
Operating Leases, Rent Expense, Net, Total	1,500	3,000
Executive Officer [Member]
Related Party Transaction [Line Items]
Due to Related Parties	49,742	49,742	72,944
Operating Leases, Rent Expense, Net, Total		500
Sean Bradley
Related Party Transaction [Line Items]
Due to Related Parties	$ 9,794	$ 9,794	6,250	$ 6,250
David Moradi
Related Party Transaction [Line Items]
Due to Related Parties			70,000
Interest Receivable			$ 4,280

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Intangible Assets
Accumulated amortization	$ (1,714,153)	$ (1,435,780)
Intangible assets, net	2,603,455	2,840,856
Patents
Intangible Assets
Finite-Lived Intangible Assets, Gross	3,696,041	3,655,069
Capitalized software development
Intangible Assets
Finite-Lived Intangible Assets, Gross	$ 621,567	$ 621,567

INTANGIBLE ASSETS (Details Text

INTANGIBLE ASSETS (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets			$ 278,373	$ 267,804
Software Development Costs
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 45,759	$ 43,125	91,518	86,250
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 94,076	$ 90,736	186,855	181,555
Finite-lived Intangible Assets Acquired			$ 40,972	$ 29,650

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Notes and loans payable
Short Term	$ 24,000	$ 24,000
Long Term	11,800	1,923,499
Convertible Secured Note (net of unamortized discounts of $600,301 in 2015)	0	1,899,699
Maryland TEDCO Note
Notes and loans payable
Short Term	24,000	24,000
Long Term	$ 11,800	$ 23,800

NOTES PAYABLE (Details Textual)

NOTES PAYABLE (Details Textual) - USD ($)	Oct. 09, 2015	Aug. 18, 2016	May 31, 2016	Apr. 30, 2016	Oct. 24, 2011	Nov. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Apr. 18, 2016	Nov. 09, 2015	Dec. 31, 2012
Debt Instrument [Line Items]
Interest Payable, Current			$ 1,312,000
Debt Instrument, Face Amount	$ 2,500,000												$ 2,500,000
Notes and Loans Payable, Current, Total							$ 24,000		$ 24,000		$ 24,000
Long-term Debt, Total							$ 11,800		$ 11,800		1,923,499
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.10		$ 0.25	$ 0.001		$ 0.10
Share Price							$ 0.161		$ 0.161
Fair Value Assumptions, Risk Free Interest Rate									1.01%
Proceeds from Notes Payable											2,500,000
Derivative Liability, Fair Value, Gross Liability											627,293
Amortization of Debt Discount (Premium)							$ 554,160		$ 600,301	$ 0
Stock Issued During Period, Shares, New Issues			11,714,285
Debt Conversion, Converted Instrument, Amount									$ 1,078,123	0
Debt Conversion, Description									In connection with the transaction, the Company also entered into amendments to certain agreements. On April 18, 2016, the Company entered into a First Amendment to Note and Warrant Purchase Agreement (the “Purchase Agreement Amendment”) and an Omnibus Amendment to Secured Promissory Notes (the “Note Amendment”), which collectively amend that certain Note and Warrant Purchase Agreement dated as of October 9, 2015 (the “Original Agreement”) and the convertible promissory notes previously issued thereunder to, among other things (i) remove the right of Anthion Partners II, LLC (together with its affiliates, “Anthion”) to designate a member of the Board of Directors of the Company; (ii) amend the convertible promissory notes issued thereunder to provide that if a change of control of the Company occurs prior to the maturity date or an equity financing (as defined therein), the convertible promissory note shall be repaid in an amount equal to the product of (a) 1.4 and (b) the outstanding principal amount and all accrued and unpaid interest thereunder; (iii) reduce the conversion threshold in the definition of “qualified financing” under the convertible promissory notes from $2,000,000 to $1,000,000; (iv) remove the security interest feature from the form of convertible promissory note that may be issued in the future under the Original Agreement, as amended, and (v) provide for optional conversion into warrants containing “blocker” provisions (“Special Warrants”) instead of shares upon an equity financing. The Company also made certain amendments to outstanding warrants to add similar “blocker” provisions.
Warrants and Rights Outstanding							3,205,959		$ 3,205,959
Gain (Loss) on Extinguishment of Debt							$ (1,664,281)	$ 0	$ (1,664,281)	$ 0
Fair Value Assumptions, Weighted Average Volatility Rate									172.95%
Maximum [Member]
Debt Instrument [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights							$ 0.179		$ 0.179
Share Price			$ 0.195			$ 0.058
Fair Value Assumptions, Risk Free Interest Rate			1.35%			1.75%
Fair Value Assumptions, Weighted Average Volatility Rate							178.00%
Minimum [Member]
Debt Instrument [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights							$ 0.038		0.038
Share Price			$ 0.169			$ 0.031
Fair Value Assumptions, Risk Free Interest Rate			1.22%			1.14%
Fair Value Assumptions, Weighted Average Volatility Rate			169.00%
Black-scholes option pricing model [Member]
Debt Instrument [Line Items]
Share Price							0.175		$ 0.175
Fair Value Assumptions, Expected Term									5 years
Fair Value Assumptions, Risk Free Interest Rate									1.24%
Fair Value Assumptions, Weighted Average Volatility Rate						102.00%			178.00%
Amendments to Existing Agreements [Member]
Debt Instrument [Line Items]
Interest Payable, Current												$ 74,658
Class of Warrant or Right, Exercise Price of Warrants or Rights												$ 0.001
Stock Issued During Period, Shares, New Issues		12,834,800
Warrants Issued During Period, Shares		18,353,310
Debt Conversion, Converted Instrument, Amount		$ 2,500,000
Note and Warrant Purchase Agreement [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount													$ 2,500,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	37,500,000
Note and Warrant Purchase Agreement [Member] | Share-based Compensation Award, Tranche One [Member]
Debt Instrument [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	10.00%
Convertible Notes Payable [Member]
Debt Instrument [Line Items]
Debt Conversion, Original Debt, Amount									$ 1,025,000
Debt Instrument, Convertible, Conversion Price							$ 0.84		$ 0.84
Debt Instrument, Convertible, If-converted Value in Excess of Principal				$ 1,541,678					$ 1,541,678
Loans Payable
Debt Instrument [Line Items]
Long-term Debt, Gross														$ 74,900
Debt Instrument, Interest Rate, Stated Percentage														25.00%
Interest Payable, Current														$ 74,900
Maryland TEDCO Note
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment, Total					$ 2,000
Long-term Debt, Gross							$ 35,800		35,800		47,800
Debt Instrument, Face Amount					$ 149,800
Notes and Loans Payable, Current, Total							24,000		24,000		24,000
Long-term Debt, Total							$ 11,800		11,800		$ 23,800
Repayments of Long-term Debt, Total									$ 12,000
Notes
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 3,750,000
Debt Conversion Total Issued And Outstanding Common Shares Percent	60.00%
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.10
Proceeds from Sale of Available-for-sale Securities, Equity	$ 1,000,000
Notes | Maximum [Member]
Debt Instrument [Line Items]
Proceeds from Sale of Available-for-sale Securities, Equity	2,000,000
Notes | Minimum [Member]
Debt Instrument [Line Items]
Proceeds from Sale of Available-for-sale Securities, Equity	$ 1,000,000

STOCKHOLDERS' EQUITY (Details T

STOCKHOLDERS' EQUITY (Details Textual) - USD ($)	1 Months Ended			6 Months Ended
	May 31, 2016	Apr. 30, 2016	Jul. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Nov. 30, 2015	Oct. 09, 2015
Class of Stock [Line Items]
Common Stock, Shares, Issued				107,250,100		81,717,154
Common Stock, Shares, Outstanding				107,250,100		81,717,154
Proceeds from Issuance of Warrants	$ 1,579,082			$ 0	$ 43,942
Stock Issued During Period, Shares, Issued for Services		83,336	83,332
Stock Issued During Period Value Warrants Exercised	1,312,000
Stock Issued During Period, Value, Issued for Services		$ 14,292	$ 14,166	$ 14,292
Stock Issued During Period, Shares, New Issues	11,714,285
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.25	$ 0.001					$ 0.10	$ 0.10
Class of Warrant or Right, Outstanding		18,353,310		18,353,310
Preferred Stock, Shares Issued				160,000		175,000
Preferred Stock, Shares Outstanding				160,000		175,000
Preferred Stock, Par or Stated Value Per Share				$ 0.00001		$ 0.00001
Stock Issued During Period, Shares, Conversion of Convertible Securities		12,834,800
Stock Issued During Period, Value, Conversion of Convertible Securities		$ 1,025,000		$ 1,078,123
Class of Warrant or Right, Expiration Term	5 years
Stock Issued During Period Shares, Conversion Of Preferred Stock	900,525
Conversion of Stock, Shares Converted	15,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Stock, Dividend Rate, Percentage				5.00%
Preferred Stock, Shares Issued				160,000		175,000
Preferred Stock, Shares Outstanding				160,000		175,000
Preferred Stock, Par or Stated Value Per Share				$ 10
Preferred Stock, Redemption Price Per Share				$ 0.1754

OPTIONS (Details)

OPTIONS (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures
Granted Weighted Average Remaining Term	4 years 8 months 8 days
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding
Outstanding at beginning of the period (in shares)	14,759,914
Granted (in shares)	10,699,715
Forfeited (in shares)	(400,000)
Outstanding at the end of the period (in shares)	25,059,629	14,759,914
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price
Outstanding at beginning of the period (in dollars per share)	$ 0.30
Granted (in dollars per share)	0.03
Forfeited (in dollars per share)	0.88
Outstanding at end of the period (in dollars per share)	$ 0.20	$ 0.30
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures
Outstanding, Weighted Average Remaining Term	4 years 4 days	3 years 7 months 10 days
Granted Weighted Average Remaining Term	4 years 9 months 7 days
Exercisable (in shares)	12,299,177	8,374,294
Share Based Compensation Arrangement by Share Based Payment Award Options, Intrinsic Value
Outstanding at beginning of the period, Intrinsic Value (in dollars)	$ 0
Granted, Intrinsic Value of Exercisable Options	$ 0
Forfeited, Intrinsic Value of Exercisable Options	$ 0
Outstanding at end of the period, Intrinsic Value (in dollars)	$ 425,513	$ 0

OPTIONS (Details Textual)

OPTIONS (Details Textual) - USD ($)

May 12, 2016

Jan. 15, 2016

Dec. 22, 2015

Apr. 15, 2016

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

May 31, 2016

May 30, 2016

Apr. 30, 2016

Dec. 31, 2015

Nov. 30, 2015

Oct. 09, 2015

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights

Vesting shall only occur if the closing share price of the Companys common stock on each of the 20 trading days before and including the end of any performance period is not less than $0.20 per share (market condition).

Class of Warrant or Right, Exercise Price of Warrants or Rights

$ 0.25

$ 0.001

$ 0.10

$ 0.10

Maximum

Class of Warrant or Right, Exercise Price of Warrants or Rights

$ 0.179

$ 0.179

Minimum

Class of Warrant or Right, Exercise Price of Warrants or Rights

$ 0.038

0.038

Options

Granted (in dollars per share)

$ 0.03

Share based compensation expense

$ 414,031

$ 397,134

$ 540,119

$ 774,700

Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance

25,059,629

25,059,629

14,759,914

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

10,699,715

Performance Options [Member]

Granted (in dollars per share)

$ 0.038

Expected term

5 years

Expected volatility (as a percent)

162.00%

Risk-free interest rate (as a percent)

1.46%

Expected dividend yield (as a percent)

0.00%

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

6,500,000

Performance Options [Member] | Performance and Market Conditions [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

5,500,000

Non Performance Options [Member]

Expected volatility (as a percent)

102.00%

Risk-free interest rate (as a percent)

1.73%

Expected dividend yield (as a percent)

0.00%

Non Performance Options [Member] | Maximum

Expected term

3 years 6 months

Non Performance Options [Member] | Minimum

Expected term

1 year 6 months

Options Granted On May 2016 One [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

100,000

Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date

May 12, 2021

Share Based Compensation Arrangement by Share Based Payment Award, Options, Grants in Period Grant Date Fair Value

$ 16,694

Class of Warrant or Right, Exercise Price of Warrants or Rights

$ 0.177

Options Granted On May 2016 One [Member] | Share-based Compensation Award, Tranche One [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

50.00%

Options Granted On May 2016 One [Member] | Share-based Compensation Award, Tranche Two [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

4.17%

Options Granted On April 2016 [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

49,715

Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price

$ 0.179

Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date

Apr. 15, 2019

Share Based Compensation Arrangement by Share Based Payment Award, Options, Grants in Period Grant Date Fair Value

$ 6,250

Options Granted On May 2016 Two [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross

3,400,000

Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price

$ 0.177

Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date

May 12, 2021

Share Based Compensation Arrangement by Share Based Payment Award, Options, Grants in Period Grant Date Fair Value

$ 559,603

Options Granted On May 2016 Two [Member] | Share-based Compensation Award, Tranche One [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

50.00%

Options Granted On May 2016 Two [Member] | Share-based Compensation Award, Tranche Two [Member]

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage

50.00%

WARRANTS (Details)

WARRANTS (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Number of warrants
Number of shares, beginning	42,526,609
Number of shares, exercised	0
Number of shares, granted	20,846,639
Number of shares,Expired	(99,166)
Number of shares, ending	63,274,082	42,526,609
Weighted average exercise price
Weighted average exercise price, beginning (in dollars per share)	$ 0.22
Weighted average exercise price, granted (in dollars per share) | $ / shares	0.02
Weighted average exercise price, Expired (in dollars per share)	0.50
Weighted average exercise price, ending (in dollars per share)	$ 0.15	$ 0.22
Weighted Average Remaining Term
Wtd Avg. Remaining Term	3 years 11 months 26 days	4 years 1 month 24 days
Wtd Avg. Remaining Term, granted	4 years 8 months 8 days
Exercisable
Exercisable (in shares)	63,070,958	41,047,920
Intrinsic Value
Outstanding at beginning of the period	$ 1,167
Intrinsic Value, granted		$ 0
Outstanding at ending of the period	$ 4,603,155	$ 1,167

WARRANTS (Details Textual)

WARRANTS (Details Textual) - USD ($)	Oct. 09, 2015	May 31, 2016	Apr. 30, 2016	Nov. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Number of warrants
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.10	$ 0.25	$ 0.001	$ 0.10
Class of Warrant or Right, Outstanding			18,353,310		18,353,310		18,353,310
Warrants and Rights Outstanding					$ 3,205,959		$ 3,205,959
Gain (Loss) on Extinguishment of Debt					$ (1,664,281)	$ 0	$ (1,664,281)	$ 0
Share Price					$ 0.161		$ 0.161
Fair Value Assumptions, Weighted Average Volatility Rate							172.95%
Fair Value Assumptions, Risk Free Interest Rate							1.01%
Share-based Compensation, Total							$ 688,292	1,500,270
Convertible Notes Payable [Member]
Number of warrants
Debt Instrument, Convertible, If-converted Value in Excess of Principal			$ 1,541,678				$ 1,541,678
Black-scholes option pricing model [Member]
Number of warrants
Share Price					0.175		$ 0.175
Fair Value Assumptions, Weighted Average Volatility Rate				102.00%			178.00%
Fair Value Assumptions, Risk Free Interest Rate							1.24%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				5 years			5 years
Minimum
Number of warrants
Class of Warrant or Right, Exercise Price of Warrants or Rights					0.038		$ 0.038
Share Price		$ 0.169		$ 0.031
Fair Value Assumptions, Weighted Average Volatility Rate		169.00%
Fair Value Assumptions, Risk Free Interest Rate		1.22%		1.14%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		5 years					4 years 3 months 11 days
Maximum
Number of warrants
Class of Warrant or Right, Exercise Price of Warrants or Rights					$ 0.179		$ 0.179
Share Price		$ 0.195		$ 0.058
Fair Value Assumptions, Weighted Average Volatility Rate					178.00%
Fair Value Assumptions, Risk Free Interest Rate		1.35%		1.75%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period							4 years 9 months 22 days
Warrants
Number of warrants
Expected term	5 years
Unamortized Share based compensation expense					$ 106,750		$ 106,750
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum							166.74%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum							178.98%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum							0.85%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum							1.08%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate							0.00%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights					1,181,329		1,181,329
Fair Value Assumptions, Weighted Average Volatility Rate	0.25%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	5 years
Share-based Compensation, Total					$ 58,483	$ 148,173	$ 415,445	$ 470,187
Warrants | Minimum
Number of warrants
Expected term							1 year 6 months
Warrants | Maximum
Number of warrants
Expected term							5 years

SUBSEQUENT EVENTS (Details Text

SUBSEQUENT EVENTS (Details Textual) - USD ($)	Jul. 15, 2016	Apr. 30, 2016	Jul. 31, 2015	Jun. 30, 2016	May 31, 2016
Subsequent Event [Line Items]
Stock Issued During Period, Value, Issued for Services		$ 14,292	$ 14,166	$ 14,292
Interest Payable, Current					$ 1,312,000
Stock Issued During Period, Shares, Issued for Services		83,336	83,332
Subsequent Event | Sean Bradley [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	56,375
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 0.156
Litigation Settlement, Amount	$ 1,525,000
Subsequent Event | Stock Compensation Plan [Member]
Subsequent Event [Line Items]
Warrants Issued During Period, Shares	394,625
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 0.156
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	3 years