AudioEye (AEYE) 10-Q 14 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 12, 2019
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Registrant Name	AUDIOEYE INC
Entity Central Index Key	0001362190
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Trading Symbol	AEYE
Entity Shell Company	true
Entity Common Stock, Shares Outstanding		7,664,419
Entity Emerging Growth Company	false
Entity Small Business	true

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash	$ 2,804,456	$ 5,741,549
Accounts receivable, net	632,706	172,384
Marketable securities, held in related party	306	510
Deferred costs, short term	182,042	176,006
Prepaid expenses and other current assets	152,837	49,901
Total current assets	3,772,347	6,140,350
Property and equipment, net	166,591	108,007
Right of use assets	942,588	0
Deferred costs, long term	116,417	93,790
Intangible assets, net	1,837,452	2,061,404
Goodwill	700,528	700,528
Total assets	7,535,923	9,104,079
Current liabilities:
Accounts payable and accrued expenses	698,498	93,544
Related party payables	24,467	14,467
Finance lease liabilities	44,556	30,172
Operating lease liabilities	190,559	0
Deferred rent		4,472
Deferred revenue	2,944,630	2,626,712
Total current liabilities	3,902,710	2,769,367
Long term liabilities:
Finance lease liabilities	59,542	51,150
Operating lease liabilities	762,305	0
Deferred rent		6,585
Deferred revenue	232,021	402,075
Total liabilities	4,956,578	3,229,177
Stockholders' equity:
Preferred stock, value
Common stock, $0.00001 par value, 50,000,000 shares authorized, 7,623,227 and 7,579,995 shares issued and outstanding as of March 31, 2019 and December 31, 2018	77	76
Additional paid-in capital	48,883,802	48,017,926
Accumulated deficit	(46,304,535)	(42,143,101)
Total stockholders' equity	2,579,345	5,874,902
Total liabilities and stockholders' equity	7,535,923	9,104,079
Series A Preferred Stock [Member]
Stockholders' equity:
Preferred stock, value	$ 1	$ 1

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Preferred Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Common Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	7,656,046	7,579,995
Common Stock, Shares, Outstanding	7,656,046	7,579,995
Series A Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Preferred Stock, Shares Authorized	200,000	200,000
Preferred Stock, Shares Issued	105,000	105,000
Preferred Stock, Shares Outstanding	105,000	105,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Revenue	$ 2,435,622	$ 1,234,897	$ 4,421,300	$ 2,384,239
Cost of revenue	1,147,424	622,645	2,050,408	1,210,109
Gross profit	1,288,198	612,252	2,370,892	1,174,130
Operating expenses:
Selling and marketing	1,093,827	576,894	1,965,702	1,187,556
Research and development	146,577	49,362	361,830	99,029
General and administrative	2,066,687	1,081,840	4,203,013	2,146,465
Total operating expenses	3,307,091	1,708,096	6,530,545	3,433,050
Operating loss	(2,018,893)	(1,095,844)	(4,159,653)	(2,258,920)
Other income (expense):
Unrealized loss on marketable securities	(186)	1,422	(204)	1,650
Interest income (expense), net	(929)	(105)	(1,577)	132
Total other (loss) income	(1,115)	1,317	(1,781)	1,782
Net loss	(2,020,008)	(1,094,527)	(4,161,434)	(2,257,138)
Dividends on Series A convertible preferred stock	(13,089)	(13,524)	(26,034)	(27,274)
Net loss available to common stockholders	$ (2,033,097)	$ (1,108,051)	$ (4,187,468)	$ (2,284,412)
Net loss per common share-basic and diluted	$ (0.27)	$ (0.17)	$ (0.55)	$ (0.35)
Weighted average common shares outstanding-basic and diluted	7,645,872	6,471,832	7,628,679	6,469,212

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2017	$ 65	$ 1	$ 40,121,845	$ (39,425,900)	$ 696,011
Balance (in shares) at Dec. 31, 2017	6,467,066	110,000
Restricted stock units, warrants and options issued for services			367,303		367,303
Net loss				(1,162,611)	(1,162,611)
Balance at Mar. 31, 2018	$ 65	$ 1	41,250,638	(38,285,838)	2,964,866
Balance (in shares) at Mar. 31, 2018	6,467,066	110,000
Balance at Dec. 31, 2017	$ 65	$ 1	40,121,845	(39,425,900)	696,011
Balance (in shares) at Dec. 31, 2017	6,467,066	110,000
Net loss					(2,257,138)
Balance at Jun. 30, 2018	$ 65	$ 1	41,521,360	(39,380,365)	2,141,061
Balance (in shares) at Jun. 30, 2018	6,488,281	105,000
Adoption of ASU | Accounting Standards Update 2014-09 [Member]				80,153	80,153
Adoption of ASU | Accounting Standards Update 2017-11 [Member]			761,490	2,222,520	2,984,010
Balance at Mar. 31, 2018	$ 65	$ 1	41,250,638	(38,285,838)	2,964,866
Balance (in shares) at Mar. 31, 2018	6,467,066	110,000
Common stock issued upon conversion of preferred stock (in Shares)	13,204	(5,000)
Restricted stock units, warrants and options issued for services			270,722		270,722
Common stock issued in exchange for exercise of options and warrants (in shares)	8,011
Net loss				(1,094,527)	(1,094,527)
Balance at Jun. 30, 2018	$ 65	$ 1	41,521,360	(39,380,365)	2,141,061
Balance (in shares) at Jun. 30, 2018	6,488,281	105,000
Adoption of ASU | Accounting Standards Update 2014-09 [Member]					80,153
Balance at Dec. 31, 2018	$ 76	$ 1	48,017,926	(42,143,101)	5,874,902
Balance (in shares) at Dec. 31, 2018	7,579,995	105,000
Common stock issued in exchange for exercise of options and warrants			42,450		42,450
Common stock issued in exchange for exercise of options and warrants (in Shares)	43,232
Restricted stock units, warrants and options issued for services			448,900		448,900
Net loss				(2,141,426)	(2,141,426)
Balance at Mar. 31, 2019	$ 76	$ 1	48,509,276	(44,284,527)	4,224,826
Balance (in shares) at Mar. 31, 2019	7,623,227	105,000
Balance at Dec. 31, 2018	$ 76	$ 1	48,017,926	(42,143,101)	5,874,902
Balance (in shares) at Dec. 31, 2018	7,579,995	105,000
Net loss					(4,161,434)
Balance at Jun. 30, 2019	$ 77	$ 1	48,883,802	(46,304,535)	2,579,345
Balance (in shares) at Jun. 30, 2019	7,656,046	105,000
Balance at Mar. 31, 2019	$ 76	$ 1	48,509,276	(44,284,527)	4,224,826
Balance (in shares) at Mar. 31, 2019	7,623,227	105,000
Common stock issued in exchange for exercise of options and warrants	$ 1		99,273		99,274
Common stock issued in exchange for exercise of options and warrants (in Shares)	32,819
Restricted stock units, warrants and options issued for services			275,253		275,253
Net loss				(2,020,008)	(2,020,008)
Balance at Jun. 30, 2019	$ 77	$ 1	$ 48,883,802	$ (46,304,535)	$ 2,579,345
Balance (in shares) at Jun. 30, 2019	7,656,046	105,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS	6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2018USD ($)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (4,161,434)	$ (2,257,138)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	349,108	265,077
Option, warrant, RSU and PSU expense	724,153	638,025
Unrealized loss (gain) on marketable securities	204	(1,650)
Amortization of deferred commission	108,075	25,491
Noncash operating lease expense	116,738	0
Changes in operating assets and liabilities:
Accounts receivable	(460,322)	(151,916)
Deferred costs	(136,738)	(66,324)
Other current assets	(102,936)	(1,168)
Accounts payable and accruals	604,954	2,128
Operating lease liabilities	(116,738)	(1,865)
Deferred revenue	147,864	463,512
Related party payables	10,000	(9,068)
Net cash (used in) operating activities	(2,917,072)	(1,094,896)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	(45,804)	(10,893)
Software development costs	(97,279)	(173,597)
Net cash (used in) investing activities	(143,083)	(184,490)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options and warrants	141,724	0
Repayments of finance leases	(18,662)	(1,454)
Net cash provided by (used in) financing activities	123,062	(1,454)
Net decrease in cash	(2,937,093)	(1,280,840)
Cash-beginning of period	5,741,549	1,960,430
Cash-end of period	2,804,456	679,590
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	2,798	255
Income taxes paid		0
Non cash investing and financing activities:
Right-of-use assets and operating lease obligations recognized during the year	483,565	0
Equipment acquired under finance leases	40,657	60,668
Reclassify fair value of warrant liabilities to equity upon adoption of ASU 2017-11		2,984,010
Accounting Standards Update 2014-09 [Member]
Changes in operating assets and liabilities:
Deferred costs	(136,738)	(66,324)
Non cash investing and financing activities:
Adoption of ASU		80,153
Accounting Standards Update 2016-02 [Member]
Non cash investing and financing activities:
ROU assets and operating lease obligations recognized upon adoption of ASU 2016-02	$ 568,268	$ 0

ORGANIZATION AND BASIS OF PRESE

ORGANIZATION AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2019
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 (the “SEC”), 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 for the fiscal year ended December 31, 2018, as filed with the SEC on March 27, 2019. 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. Certain prior period amounts have been reclassified to conform to current period classification. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended December 31, 2018 as reported in the Company’s Annual Report on Form 10‑K have been omitted. Corporate Information and Background AudioEye, Inc. (“we”, “our” or the “Company”) was incorporated on May 20, 2005 in the state of Delaware. The Company has developed patented, Internet content publication and distribution software that enables conversion of any media into accessible formats and allows for real time distribution to end users on any Internet connected device. The Company’s focus is to create more comprehensive access to Internet and other media to all people regardless of their network connection, device, location, or disabilities. The Company is focused on developing innovations in the field of networked and device embedded audio technology. The Company owns a unique patent portfolio comprised of six issued patents in the United States, a notice of allowance from the U.S. Patent and Trademark Office for a seventh patent, and two U.S. patents pending with additional patents being drafted for filing with the U.S. Patent and Trademark Office and internationally. Our common stock has been listed on the NASDAQ Capital Market under the symbol “AEYE” since September 4, 2018. Prior to September 4, 2018, our common stock was quoted on the OTCQB and the OTC Bulletin Board beginning on April 15, 2013 under the same symbol. In August 2018, the Company sold 1,000,000 shares (the “Shares”) of its common stock at $6.25 per share for net proceeds of $5,609,215, after costs and expenses of $640,785 (the “Private Placement”). At the closing of the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the investors pursuant to which the Company agreed to register the Shares for resale. On September 4, 2018, the Company filed a registration statement on Form S‑1 covering the resale of the securities subject to the Registration Rights Agreement. On July 5, 2019, the Company filed a post-effective amendment to the registration statement on Form S-1 covering the resale of the securities subject to the Registration Rights Agreement, in order to, among other things, incorporate into the filing the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2019. On August 1, 2018, the Company amended its Certificate of Incorporation to implement a reverse stock split in the ratio of 1 share for every 25 shares of common stock and to reduce the number of authorized shares of common stock from 250,000,000 to 50,000,000. As a result, 186,994,384 shares of the Company’s common stock were exchanged for 7,479,775 shares of the Company’s common stock. These financial statements have been retroactively restated to reflect the reverse stock split. Revenue Recognition Revenue is recognized when delivery of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. We determine revenue recognition through the following five steps: · Identify the contract with the customer; · Identify the performance obligations in the contract; · Determine the transaction price; · Allocate the transaction price to the performance obligations in the contract; and · Recognize revenue when, or as, the performance obligations are satisfied. Certain Software as a Service (“SaaS”) invoices are prepared on an annual basis. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when earned. Subscription revenue is recognized on a ratable basis, using a mid-month convention, over the contractual subscription term of the arrangement beginning on the date that our service is made available to the customer. Payments received in advance of services being rendered are recorded as deferred revenue. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when earned. We generate most of our revenue from subscription services, which are primarily comprised of subscription fees from customers on the Ally Platform. The following table presents our revenue disaggregated by type of good or service and sales channel: Six months ended June 30, 2019 2018 Revenue – Direct $ 3,287,570 $ 1,928,447 Revenue – Indirect (Strategic partners) 1,133,730 455,792 Total revenue $ 4,421,300 $ 2,384,239 There were significant changes in contract liabilities balances during the six months ended June 30, 2019. The table below summarizes the activity within the deferred revenue accounts during the six months ended June 30, 2019: December 31, Cash Revenue June 30, 2018 received recognized 2019 Deferred revenue $ 3,028,787 $ 3,414,210 $ 3,266,346 $ 3,176,651 As of June 30, 2019, $2,944,630 was classified as short term deferred revenue and is expected to be recognized over the next twelve months following June 30, 2019. The remaining $232,021 is long-term deferred revenue to be recognized thereafter. At June 30, 2019, the Company had one customer representing 25% of the outstanding accounts receivable. At December 31, 2018, the Company had a different customer representing 22% of the outstanding accounts receivable. The Company had one major customer (including such customer’s affiliates) which generated approximately 10% and 11% of the Company’s revenue in the three and six months ended June 30, 2019, respectively and 9% and 11% of the Company’s revenue in the three and six months ended June 30, 2018, respectively. Use of Estimates 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 revenue and expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates. 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. The fair value of the award is measured on the grant date. 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. Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of the Company’s common stock outstanding during the period. “Diluted earnings per share” reflects the potential dilution that could occur if our share-based awards and convertible securities were exercised or converted into common stock. The dilutive effect of our share-based awards is computed using the treasury stock method, which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (i.e., the difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. The dilutive effect of our convertible preferred stock is computed using the if-converted method, which assumes conversion at the beginning of the year. However, when a net loss exists, no potential common stock equivalents are included in the computation of the diluted per-share amount because the computation would result in an anti-dilutive per-share amount. Potentially dilutive securities excluded from the computation of basic and diluted net earnings (loss) per share for the six months ended June 30, 2019 and 2018 are as follows: 2019 2018 Preferred stock 289,344 277,371 Options to purchase common stock 954,602 1,062,609 Warrants to purchase common stock 1,648,159 1,766,122 Restricted stock units 222,514 194,672 Totals 3,114,619 3,300,774 Fair Value Measurements Fair value is an estimate of the exit price, representing the amount that would be received upon the sale of 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. The Company has no liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018. The following are the Fair Value Fair Value Hierarchy Assets Marketable securities, June 30, 2019 $ 306 Level 1 Marketable securities, December 31, 2018 $ 510 Level 1 Leases In February 2016, the Financial Accounting Standards Board (“FASB”) established ASC Topic 842, Leases (Topic 842), by issuing ASU No. 2016‑02, which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018‑01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018‑10, Codification Improvements to Topic 842, Leases; and ASU No. 2018‑11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize an ROU asset and lease liability on the balance sheet. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019 using the modified-retrospective method, with an effective date or application date of January 1, 2019 and thus did not adjust comparative periods. The new standard provides a number of optional practical expedients in transition. The Company has elected the “package of practical expedients”, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight practical expedient. The new standard had a material effect on the Company’s financial statements. The most significant effects of adoption relate to (1) the recognition of new ROU assets and lease liabilities on the Company’s balance sheet for real estate operating leases; and (2) providing significant new disclosures about the Company’s leasing activities. As of January 1, 2019, the Company recognized additional operating lease liabilities of $568,268 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company recognized corresponding ROU assets of $557,212. In February 2019, the Company entered into a new lease in Marietta, Georgia, which resulted in ROU assets of an incremental $483,565 being recognized on the balance sheet upon lease commencement in June 2019. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, that the Company does not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company expects changes to its disclosed lease recognition policies and practices, as well as to other related financial statement disclosures due to the adoption of this standard. See Note 6 for these revised disclosures for fiscal year 2019. Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018‑07, regarding ASC Topic 718 Compensation - Stock Compensation , which largely aligns the accounting for share-based compensation for non-employees with the accounting for share-based compensation for employees. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. The adoption of this standard did not have a material effect on our consolidated financial statements. There are various other 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'S LIQUIDITY PLANS

MANAGEMENT'S LIQUIDITY PLANS	6 Months Ended
	Jun. 30, 2019
MANAGEMENT'S LIQUIDITY PLANS
MANAGEMENT'S LIQUIDITY PLANS	NOTE 2 — MANAGEMENT’S LIQUIDITY PLANS As of June 30, 2019, the Company had cash of $2,804,456 and a working capital deficit of $130,363. In addition, the Company used actual net cash in operations of $1,291,581 and $2,917,072 during the three- and six-months ended June 30, 2019. In August 2018, the Company sold 1,000,000 shares of its common stock at $6.25 per share for net proceeds of $5,609,215, after costs and expenses of $640,785. In connection with the October 9, 2015 Note and Warrant Purchase Agreement, the Company received proceeds from the issuance of convertible notes payable of $100,000 in September 2018 and $124,975 in October 2018. In July and August 2019, the Company held discussions and negotiations with holders of certain warrants to purchase the Company's common stock with respect to a transaction in which the Company and the holders agreed to amend certain warrant agreements to provide that from the date of amendment through August 16, 2019, the exercise price was reduced from $2.50 to $1.63 per share for warrants to purchase an aggregate of 1,194,990 shares and from $6.25 to $4.07 per share for warrants to purchase an aggregate of 85,719 shares, provided that any exercise during such period was in full and the exercise price was paid in cash. Potential proceeds if all 1,280,709 amended warrants are exercised would be approximately $2.2 million. In August 2019, the Company negotiated an agreement for a $2.0 million Line of Credit (the "LOC") with a private lender. The Company’s primary source of operating funds has been from revenue generated from sales and cash proceeds from the sale of common stock and the issuance of convertible and other debt. With the early warrant exercises and the LOC, it is anticipated that the Company will have cash sufficient to fund operations for the next twelve months.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	6 Months Ended
	Jun. 30, 2019
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT	NOTE 3 — PROPERTY AND EQUIPMENT Property and equipment as of June 30, 2019 and December 31, 2018 is summarized as follows: June 30, December 31, 2019 2018 Computer equipment $ 64,195 $ 62,170 Equipment under finance lease 136,162 95,506 Furniture and fixtures 48,748 4,968 Total 249,105 162,644 Less accumulated depreciation (82,514) (54,637) Property and equipment, net $ 166,591 $ 108,007 Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful life of 3 years. When property or equipment is retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference, less any amount realized from disposition, is reflected in earnings. Included in net property and equipment are assets under finance leases (formerly known as capital leases) of $136,162, less accumulated depreciation of $35,359 as of June 30, 2019 and $95,506, less accumulated depreciation of $16,117, as of December 31, 2018. The Company spent $45,804 and $10,893 in the purchase of furniture and equipment during the six months ended June 30, 2019 and 2018, respectively. The Company also leased $40,657 and $60,668 in equipment during the six months ended June 30, 2019 and 2018, respectively. Depreciation expense was $14,503 and $27,877 for the three and six months ended June 30, 2019, respectively. Depreciation expense was $7,432 and $11,749 for the three and six months ended June 30, 2018, respectively.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	6 Months Ended
	Jun. 30, 2019
INTANGIBLE ASSETS
INTANGIBLE ASSETS	NOTE 4 — INTANGIBLE ASSETS For the six months ended June 30, 2019 and 2018, the Company invested in software development costs in the amounts of $97,279 and $173,597, respectively. Patents, technology and other intangibles with contractual terms are 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. Intangible assets consisted of the following: June 30, December 31, 2019 2018 Patents $ 3,697,709 $ 3,697,709 Capitalized software development 1,507,538 1,410,259 Domain name 10,000 10,000 Accumulated amortization (3,377,795) (3,056,564) Intangible assets, net $ 1,837,452 $ 2,061,404 Amortization expense for patents totaled $93,658 and $187,316 for the three and six months ended June 30, 2019, respectively; and $93,658 and $180,684 for the three and six months ended June 30, 2018, respectively. Amortization expense for software development totaled $67,672 and $133,915 for the three and six months ended June 30, 2019, respectively; and $36,322 and $72,644 for the three and six months ended June 30, 2018, respectively. Total amortization expense was $321,231 and $253,328 for the six months ended June 30, 2019 and 2018, respectively.

DEFERRED COSTS

DEFERRED COSTS	6 Months Ended
	Jun. 30, 2019
DEFERRED COSTS
DEFERRED COSTS	NOTE 5 — DEFERRED COSTS Effective January 1, 2018, the Company capitalizes initial and renewal sales commission payments in the period a customer contract is obtained and payment is received; and the commissions are amortized consistent with the transfer of the goods or services to the customer over the expected period of benefit, which we have deemed to be the contract term. Such commissions are amortized over the greater of contract term or technological obsolescence period when the underlying contracted products are technology-based, such as for the SaaS-based platforms, or the expected customer relationship period when the underlying contracted products are not technology-based, such as for patient experience survey products. The table below summarizes the activity within the deferred commission costs account, during the six months ended June 30, 2019: December 31, Commission Commission June 30, 2018 Costs Deferred Amortized 2019 Deferred costs, short term $ 176,006 $ 114,111 $ (108,075) $ 182,042 Deferred costs, long term 93,790 22,627 — 116,417 Deferred commission costs $ 269,796 $ 136,738 $ (108,075) $ 298,459 During the three and six months ended June 30, 2019, the Company deferred an aggregate of $71,269 and $136,738 for commissions paid. Amortization of deferred costs for the three and six months ended June 30, 2019 was $56,676 and $108,075, respectively. During the six months ended June 30, 2018, the Company deferred an aggregate of $66,324 for commissions paid and reclassified from equity $80,153 previously paid amounts that were originally expensed as commissions. Amortization of deferred costs for the three and six months ended June 30, 2018 was $15,517 and $25,491, respectively.

LEASE LIABILITIES AND RIGHT OF

LEASE LIABILITIES AND RIGHT OF USE ASSETS	6 Months Ended
	Jun. 30, 2019
LEASE LIABILITIES AND RIGHT OF USE ASSETS
LEASE LIABILITIES AND RIGHT OF USE ASSETS	NOTE 6 — LEASE LIABILITIES AND RIGHT OF USE ASSETS Finance Leases June 30, December 31, 2019 2018 Finance equipment lease dated April 5, 2018 $ 10,410 $ 13,056 Finance equipment lease dated May 8, 2018 11,581 14,525 Finance equipment lease dated June 27, 2018 17,616 21,701 Finance equipment lease dated September 18, 2018 12,670 15,368 Finance equipment lease dated September 28, 2018 13,932 16,672 Finance equipment lease dated February 20, 2019 17,518 — Finance equipment lease dated June 4, 2019 20,371 — Total finance lease liabilities 104,098 81,322 Less current portion (44,556) (30,172) Long term portion $ 59,542 $ 51,150 During the six months ended June 30, 2019, the Company entered into two finance leases for computer equipment, each for a three-year term. The Company recognized these arrangements as finance leases based on the determination that the leases exceeded 75% of the economic life of the underlying assets. The Company initially recorded the equipment and the finance leases liability at the estimated present value of the minimum lease payments of $19,754 and $20,903, respectively. During the year ended December 31, 2018, the Company entered into five finance leases (formerly known as capital leases) for computer equipment for a three-year term. The Company recognized these arrangements as finance leases based on the determination that the leases exceeded 75% of the economic life of the underlying assets. The Company initially recorded the equipment and the finance lease liability at the estimated present value of the minimum lease payments of $95,506. The leases include base monthly payments in the aggregate of $4,131, due on the monthly anniversary of each contract. At the expiration of the lease, the Company is required to return all leased equipment to the lessor with right of repurchase at fair value. The Company has made payments under these leases in the total amount of $18,662 during the six months ended June 30, 2019. The effective interest rate of the finance leases is estimated at 6% based on the implicit rate in the lease agreements. The following summarizes the right to use assets under finance leases included in property and equipment: June 30, December 31, 2019 2018 Classes of property Computer equipment $ 136,162 $ 95,506 Less: accumulated depreciation (35,359) (16,117) $ 100,803 $ 79,389 The following summarizes total future minimum finance lease payments at June 30, 2019: Period ending December 31, 2019 $ 23,649 2020 49,571 2021 33,827 2022 4,416 Total minimum lease payments 111,463 Amount representing interest (7,365) Present value of minimum lease payments 104,098 Current portion of finance lease obligations 44,556 Finance lease obligations, less current portion $ 59,542 Operating Leases The Company’s principal executive offices are located at 5210 E. Williams Circle, Suite 750, Tucson, Arizona 85711, consisting of approximately 5,151 square feet as of June 30, 2019. The Company’s principal office originally consisted of approximately 2,362 square feet. On December 21, 2017, effective February 1, 2018, the Company amended its existing lease to expand its Arizona office to approximately 4,248 square feet and to extend the expiration date to September 30, 2021. Beginning February 1, 2018, the basic rent increased to $9,598 per month. On October 2, 2018, effective December 1, 2018, the Company further amended its existing lease to expand its Arizona office to approximately 5,151 square feet. In accordance with the amended lease, rent increased to $11,810 on January 1, 2019, escalating over time to $12,977 at the end of the lease, which was further extended to October 31, 2022. The Company also has offices in Atlanta, located at 3901 Roswell Road, Suite 134, leased for an aggregate of $3,937 per month as of December 31, 2017 under a lease expiring on September 30, 2019. On December 29, 2017, effective February 1, 2018, the Company amended its existing lease to expand its Georgia office from approximately 2,739 square feet to approximately 3,831 square feet. Beginning February 1, 2018, the basic rent increased by $1,500 through the remainder of the lease term. In February 2019, the Company entered into a lease for new offices in Marietta, Georgia located at 450 Franklin Gateway, Marietta, Georgia consisting of approximately 9,662 square feet. The new lease commenced on June 1, 2019, with move-in on June 15, 2019. Beginning in 2017, we leased office space in New York for $300 per month, which was increased to $850 per month in October 2018 through May 31, 2019. Beginning in June 2019, we moved to larger office space in New York, leased for $4,482 per month, for a term of 12 months ending May 31, 2020. Beginning November 1, 2015, we subleased an office in Scottsdale, Arizona from a company controlled by our Executive Chairman for $3,578 per month, which continues on a month to month basis as of June 30, 2019. These New York and Scottsdale properties were considered short-term leases and therefore were not measured under Topic 842. The Company has made operating lease payments in the amount of $191,843 during the six months ended June 30, 2019. Rent expense charged to operations, which differs from rent paid due to rent credits and to increasing amounts of base rent, is calculated by allocating total rental payments on a straight-line basis over the term of the lease. Operating lease liabilities at June 30, 2019 and January 1, 2019 consist of: June 30, January 1, 2019 2019 Tucson Arizona office lease $ 461,170 $ 518,309 Marietta Georgia office lease 474,708 — Atlanta Georgia office lease 16,986 49,959 Total operating lease liabilities 952,864 568,268 Less current portion (190,559) (166,252) Long term portion $ 762,305 $ 402,016 As of January 1, 2019, the Company adopted the provisions of ASC Topic 842 using the modified retrospective method. In adopting ASC Topic 842, Leases (Topic 842), the Company elected the ‘package of practical expedients’, which permitted it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. Effective January 1, 2019, the Company initially recognized operating lease liabilities of $568,268 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The discount rate utilized in such present value calculation was 6% based on an estimate of the Company’s incremental borrowing rate. At such time, the Company also recognized corresponding right-of-use (ROU) assets of $557,212 and eliminated the prior period deferred rent of $11,056. During the six months ended June 30, 2019, the Company entered into an operating lease for new office space in Marietta, Georgia, for a five-year term. The Company measured and recorded a right of use asset and corresponding operating lease liability of $483,565 at the lease commencement date in June 2019. The following summarizes total future minimum operating lease payments at June 30, 2019: Period ending December 31, 2019 $ 124,838 2020 267,500 2021 262,219 2022 244,245 2023 118,166 2024 80,638 Total minimum lease payments 1,097,606 Less: present value discount (144,742) Present value of minimum lease payments 952,864 Current portion of operating lease obligations 190,559 Operating lease obligations, less current portion $ 762,305 The following summarizes lease expenses for the six months ended June 30, 2019: Finance lease expenses: Depreciation/amortization expense $ 27,877 Interest on lease liabilities 2,693 Finance lease expense 30,570 Operating lease expense 114,120 Short-term lease expense 38,698 Total lease expenses $ 183,388

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2019
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	NOTE 7 — RELATED PARTY TRANSACTIONS As of June 30, 2019, and December 31, 2018, the total balances of related party payable were $24,467 and $14,467, respectively, related to rent payable for the Scottsdale office and to reimbursement for employee paid travel on behalf of the Company.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2019
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE 8 — STOCKHOLDERS’ EQUITY Preferred Stock As of June 30, 2019 and December 31, 2018, the Company had 105,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”), issued at $10 per share, paying a 5% cumulative annual dividend and convertible for common stock at a price of $4.385 per share. For the six months ended June 30, 2019, preferred stockholders earned, but were not paid, $26,034 in annual dividends, or equivalent to 5,937 shares of common stock based on a conversion price of $4.385 per share. As of June 30, 2019 and December 31, 2018, cumulative and unpaid dividends were $218,774 and $192,740, respectively, or equivalent to 49,891 and 43,954 shares of common stock, respectively, based on a conversion price of $4.385 per share. On any matter presented to the stockholders of the Company, holders of Preferred Stock are entitled to cast the number of votes equal to the number of shares of common stock into which the shares of Preferred Stock are convertible as of the record date to vote on such matter. As long as any shares of Preferred Stock are outstanding, the Company has certain restrictions on share repurchases or amendments to the Certificate of Incorporation in a manner that adversely affects any rights of the preferred stockholders. In addition, the preferred stockholders have a liquidation preference for purposes of which the Preferred Stock would be valued at $10 per share plus accrued cumulative annual dividend. At June 30, 2019 and December 31, 2018, the total liquidation preference was valued at $1,268,774 and $1,242,740, respectively. In the event of any liquidity event, holders of each share of Preferred Stock shall be entitled to be paid the liquidation preference out of the assets of the Company legally available before any sums shall be paid to holders of common stock. Common Stock As of June 30, 2019 and December 31, 2018, the Company had 7,656,046 and 7,579,995 shares, respectively, of common stock issued and outstanding. In the six months ended June 30, 2019, the Company issued 21,932 shares of its common stock upon the exercise of options, for aggregate proceeds of $24,897. In the six months ended June 30, 2019, the Company issued 40,183 shares of its common stock, upon the exercise of outstanding warrants to purchase an aggregate of 40,183 shares of common stock, for aggregate proceeds of $116,827. In the six months ended June 30, 2019, the Company issued an aggregate of 9,999 shares of its common stock upon the net exercise of 13,341 outstanding options and issued an aggregate of 3,937 shares of its common stock upon the net exercise of outstanding warrants to purchase 11,446 shares of common stock. Options The following table summarizes the Company’s outstanding options activity during the six months ended June 30, 2019: Weighted Intrinsic Weighted Average Value Number of Average Remaining of Options Exercise Price Term Exercisable Options Outstanding at December 31, 2018 997,989 $ 4.67 2.14 925,545 $ 4,705,220 Granted 121,639 7.48 8.83 — — Exercised (35,273) 1.61 — — — Forfeited/Expired (129,753) 10.08 — — — Outstanding at June 30, 2019 954,602 $ 4.41 804,103 $ 3,870,943 On February 7, 2019, the Company granted an aggregate of 28,700 incentive stock options to employees newly hired since June 4, 2018. The options to purchase shares of common stock are exercisable at $10.55 per share, have a term of five years, and vest as to 50% of the options at the vesting commencement date, which is generally one year from the date of hire (vesting commencement dates range from June 4, 2019 through January 25, 2020), and vest as to the remaining 50% of the options in eight equal quarterly installments commencing on the first day of each calendar quarter following the vesting commencement date and installments continuing on the first day of each of the seven calendar quarters thereafter. All vesting is subject to the employee’s continued service through the vesting date. The exercise price was determined using the closing price of the Company’s common stock on February 7, 2019. The Black-Scholes value on the grant date of the options was $258,392. On June 3, 2019, the Company granted an aggregate of 92,939 nonqualified stock options to employees newly hired since February 7, 2019, and longer-tenured employees for performance in 2018. The options to purchase shares of common stock are exercisable at $6.53 per share, have a term of ten years, and vest in three approximately equal annual installments on the first three anniversaries of the grant date. All vesting is subject to the employee’s continued service through the vesting date. The exercise price was determined using the closing price of the Company’s common stock on June 3, 2019. The Black-Scholes value on the grant date of the options was $571,471. Option grants during the six months ended June 30, 2019 were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 3.25 to 6.00 years, expected volatility of 152.58% to 156.23%, risk free interest rate of 1.83% to 2.48%, and expected dividend yield of 0%. For the three and six months ended June 30, 2019, total stock compensation expense related to options totaled $93,495 and $165,769, respectively. For the three and six months ended June 30, 2018, total stock compensation expense related to options totaled $78,152 and $223,198, respectively. As of June 30, 2019, the outstanding unamortized stock compensation expense related to options was $760,202 (which will be recognized through June 2022). Warrants The following table summarizes the Company’s outstanding warrants activity for the six months ended June 30, 2019: Weighted Intrinsic Weighted Average Value Number of Average Remaining of Warrants Exercise Price Term Warrants Outstanding at December 31, 2018 1,781,715 $ 4.20 2.23 $ 8,930,058 Granted — — — — Exercised (51,629) 3.67 — — Forfeited/Expired (81,927) 8.03 — — Outstanding at June 30, 2019 1,648,159 $ 4.19 $ 7,303,284 For the three and six months ended June 30, 2019, warrant-based compensation expense was $0. For the three and six months ended June 30, 2018, the Company incurred warrant-based compensation expense of $109,207 and $110,600, respectively. There was no outstanding unamortized stock-based compensation expense related to warrants as of June 30, 2019. Restricted stock units (“RSUs”) The following table summarizes the restricted stock unit activity for the six months ended June 30, 2019: Restricted stock units issued as of December 31, 2018 222,514 Granted 134,740 Total Restricted stock units issued at June 30, 2019 357,254 Vested at June 30, 2019 222,514 Unvested restricted stock units as of June 30, 2019 134,740 On June 3, 2019, the Company granted 11,280 RSUs to each of Alexandre Zyngier, Ernest Purcell and Anthony Coelho for their continued service on the Board of Directors. Such RSUs will vest on June 30, 2020, subject to the director’s continuous service through the vesting date. The settlement date for such RSUs is the earlier of (i) June 3, 2026 or (ii) the date on which the Company undergoes a change of control. The fair value of the RSUs at grant date was $220,975. On June 3, 2019, the Company granted 20,000 RSUs to David Kovacs, an employee who is also a shareholder. Such RSUs will vest on September 3, 2019, subject to Mr. Kovac’s continuous service through the vesting date. The settlement date for such RSUs is the earlier of (i) promptly after the vesting date or (ii) in any event no later than March 15, 2020. The fair value of the RSUs at grant date was $130,600. On June 3, 2019, the Company granted 80,900 RSUs to Sachin Barot, its Chief Financial Officer, in accordance with his employment agreement. Such RSUs will vest annually over a three-year period, in installments of (i) 26,967 RSUs on June 3, 2020, (ii) 26,967 RSUs on June 3, 2021 and (iii) 26,966 on June 3, 2022, subject to Mr. Barot’s continuous service through the vesting date. The settlement date for such RSUs is the earlier of (a) promptly after each vesting date or (b) in any event no later than March 15 of the calendar year following the calendar year in which such vesting occurs. The fair value of the RSUs at grant date was $528,277. For the three and six months ended June 30, 2019, the Company incurred RSU-based compensation expense of $181,757 and $558,384, respectively. For the three and six months ended June 30, 2018, the Company incurred RSU-based compensation expense of $83,363 and $304,227, respectively. The outstanding unamortized stock-based compensation expense related to RSUs was $809,691 (which will be recognized through May 2022) as of June 30, 2019.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2019
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE 9 — COMMITMENTS AND CONTINGENCIES Litigation We may become involved in various routine disputes and allegations incidental to our business operations. While it is not possible to determine the ultimate disposition of these matters, our management believes that the resolution of any such matters, should they arise, is not likely to have a material adverse effect on our financial position or results of operations.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2019
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 10 — SUBSEQUENT EVENTS In July 2019, the Company issued an aggregate of 8,373 shares of common stock upon the net exercise of outstanding options and warrants to purchase an aggregate of 18,040 shares of common stock. In July and August 2019, the Company held discussions and negotiations with holders of certain warrants to purchase the Company’s common stock with respect to a transaction in which the Company and the holders agreed to amend certain warrant agreements to provide that from the date of amendment through August 16, 2019, the exercise price was reduced from $2.50 to $1.63 per share for warrants to purchase an aggregate of 1,194,990 shares and from $6.25 to $4.07 per share for warrants to purchase an aggregate of 85,719 shares, provided that any exercise during such period was in full and the exercise price was paid in cash. Potential proceeds if all 1,280,709 amended warrants are exercised would be approximately $2.2 million. In August 2019, the Company negotiated and signed an agreement for a $2.0 million LOC with a private lender.

ORGANIZATION AND BASIS OF PRE_2

ORGANIZATION AND BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2019
ORGANIZATION AND BASIS OF PRESENTATION
Corporate Information and Background	Corporate Information and Background AudioEye, Inc. (“we”, “our” or the “Company”) was incorporated on May 20, 2005 in the state of Delaware. The Company has developed patented, Internet content publication and distribution software that enables conversion of any media into accessible formats and allows for real time distribution to end users on any Internet connected device. The Company’s focus is to create more comprehensive access to Internet and other media to all people regardless of their network connection, device, location, or disabilities. The Company is focused on developing innovations in the field of networked and device embedded audio technology. The Company owns a unique patent portfolio comprised of six issued patents in the United States, a notice of allowance from the U.S. Patent and Trademark Office for a seventh patent, and two U.S. patents pending with additional patents being drafted for filing with the U.S. Patent and Trademark Office and internationally. Our common stock has been listed on the NASDAQ Capital Market under the symbol “AEYE” since September 4, 2018. Prior to September 4, 2018, our common stock was quoted on the OTCQB and the OTC Bulletin Board beginning on April 15, 2013 under the same symbol. In August 2018, the Company sold 1,000,000 shares (the “Shares”) of its common stock at $6.25 per share for net proceeds of $5,609,215, after costs and expenses of $640,785 (the “Private Placement”). At the closing of the Private Placement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the investors pursuant to which the Company agreed to register the Shares for resale. On September 4, 2018, the Company filed a registration statement on Form S‑1 covering the resale of the securities subject to the Registration Rights Agreement. On July 5, 2019, the Company filed a post-effective amendment to the registration statement on Form S-1 covering the resale of the securities subject to the Registration Rights Agreement, in order to, among other things, incorporate into the filing the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2019. On August 1, 2018, the Company amended its Certificate of Incorporation to implement a reverse stock split in the ratio of 1 share for every 25 shares of common stock and to reduce the number of authorized shares of common stock from 250,000,000 to 50,000,000. As a result, 186,994,384 shares of the Company’s common stock were exchanged for 7,479,775 shares of the Company’s common stock. These financial statements have been retroactively restated to reflect the reverse stock split.
Revenue Recognition	Revenue Recognition Revenue is recognized when delivery of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. We determine revenue recognition through the following five steps: · Identify the contract with the customer; · Identify the performance obligations in the contract; · Determine the transaction price; · Allocate the transaction price to the performance obligations in the contract; and · Recognize revenue when, or as, the performance obligations are satisfied. Certain Software as a Service (“SaaS”) invoices are prepared on an annual basis. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when earned. Subscription revenue is recognized on a ratable basis, using a mid-month convention, over the contractual subscription term of the arrangement beginning on the date that our service is made available to the customer. Payments received in advance of services being rendered are recorded as deferred revenue. Any funds received for services not provided yet are held in deferred revenue and are recorded as revenue when earned. We generate most of our revenue from subscription services, which are primarily comprised of subscription fees from customers on the Ally Platform. The following table presents our revenue disaggregated by type of good or service and sales channel: Six months ended June 30, 2019 2018 Revenue – Direct $ 3,287,570 $ 1,928,447 Revenue – Indirect (Strategic partners) 1,133,730 455,792 Total revenue $ 4,421,300 $ 2,384,239 There were significant changes in contract liabilities balances during the six months ended June 30, 2019. The table below summarizes the activity within the deferred revenue accounts during the six months ended June 30, 2019: December 31, Cash Revenue June 30, 2018 received recognized 2019 Deferred revenue $ 3,028,787 $ 3,414,210 $ 3,266,346 $ 3,176,651 As of June 30, 2019, $2,944,630 was classified as short term deferred revenue and is expected to be recognized over the next twelve months following June 30, 2019. The remaining $232,021 is long-term deferred revenue to be recognized thereafter. At June 30, 2019, the Company had one customer representing 25% of the outstanding accounts receivable. At December 31, 2018, the Company had a different customer representing 22% of the outstanding accounts receivable. The Company had one major customer (including such customer’s affiliates) which generated approximately 10% and 11% of the Company’s revenue in the three and six months ended June 30, 2019, respectively and 9% and 11% of the Company’s revenue in the three and six months ended June 30, 2018, respectively.
Use of Estimates	Use of Estimates 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 revenue and expenses during the reporting period. Significant estimates include the fair value of the Company’s stock, stock-based compensation and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.
Stock-Based Compensation	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. The fair value of the award is measured on the grant date. 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.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of the Company’s common stock outstanding during the period. “Diluted earnings per share” reflects the potential dilution that could occur if our share-based awards and convertible securities were exercised or converted into common stock. The dilutive effect of our share-based awards is computed using the treasury stock method, which assumes all share-based awards are exercised and the hypothetical proceeds from exercise are used to purchase common stock at the average market price during the period. The incremental shares (i.e., the difference between shares assumed to be issued versus purchased), to the extent they would have been dilutive, are included in the denominator of the diluted EPS calculation. The dilutive effect of our convertible preferred stock is computed using the if-converted method, which assumes conversion at the beginning of the year. However, when a net loss exists, no potential common stock equivalents are included in the computation of the diluted per-share amount because the computation would result in an anti-dilutive per-share amount. Potentially dilutive securities excluded from the computation of basic and diluted net earnings (loss) per share for the six months ended June 30, 2019 and 2018 are as follows: 2019 2018 Preferred stock 289,344 277,371 Options to purchase common stock 954,602 1,062,609 Warrants to purchase common stock 1,648,159 1,766,122 Restricted stock units 222,514 194,672 Totals 3,114,619 3,300,774
Fair Value Measurements	Fair Value Measurements Fair value is an estimate of the exit price, representing the amount that would be received upon the sale of 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. The Company has no liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018. The following are the Fair Value Fair Value Hierarchy Assets Marketable securities, June 30, 2019 $ 306 Level 1 Marketable securities, December 31, 2018 $ 510 Level 1
Leases	Leases In February 2016, the Financial Accounting Standards Board (“FASB”) established ASC Topic 842, Leases (Topic 842), by issuing ASU No. 2016‑02, which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018‑01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018‑10, Codification Improvements to Topic 842, Leases; and ASU No. 2018‑11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize an ROU asset and lease liability on the balance sheet. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019 using the modified-retrospective method, with an effective date or application date of January 1, 2019 and thus did not adjust comparative periods. The new standard provides a number of optional practical expedients in transition. The Company has elected the “package of practical expedients”, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight practical expedient. The new standard had a material effect on the Company’s financial statements. The most significant effects of adoption relate to (1) the recognition of new ROU assets and lease liabilities on the Company’s balance sheet for real estate operating leases; and (2) providing significant new disclosures about the Company’s leasing activities. As of January 1, 2019, the Company recognized additional operating lease liabilities of $568,268 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company recognized corresponding ROU assets of $557,212. In February 2019, the Company entered into a new lease in Marietta, Georgia, which resulted in ROU assets of an incremental $483,565 being recognized on the balance sheet upon lease commencement in June 2019. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, that the Company does not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company expects changes to its disclosed lease recognition policies and practices, as well as to other related financial statement disclosures due to the adoption of this standard. See Note 6 for these revised disclosures for fiscal year 2019.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018‑07, regarding ASC Topic 718 Compensation - Stock Compensation , which largely aligns the accounting for share-based compensation for non-employees with the accounting for share-based compensation for employees. The guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. The adoption of this standard did not have a material effect on our consolidated financial statements. There are various other 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 PRE_3

ORGANIZATION AND BASIS OF PRESENTATION (Tables)	6 Months Ended
	Jun. 30, 2019
ORGANIZATION AND BASIS OF PRESENTATION
Schedule of disaggregation of revenue	The following table presents our revenue disaggregated by type of good or service and sales channel: Six months ended June 30, 2019 2018 Revenue – Direct $ 3,287,570 $ 1,928,447 Revenue – Indirect (Strategic partners) 1,133,730 455,792 Total revenue $ 4,421,300 $ 2,384,239
Schedule of deferred revenue, by arrangement	There were significant changes in contract liabilities balances during the six months ended June 30, 2019. The table below summarizes the activity within the deferred revenue accounts during the six months ended June 30, 2019: December 31, Cash Revenue June 30, 2018 received recognized 2019 Deferred revenue $ 3,028,787 $ 3,414,210 $ 3,266,346 $ 3,176,651
Schedule of antidilutive securities excluded from computation of earnings Per share	Potentially dilutive securities excluded from the computation of basic and diluted net earnings (loss) per share for the six months ended June 30, 2019 and 2018 are as follows: 2019 2018 Preferred stock 289,344 277,371 Options to purchase common stock 954,602 1,062,609 Warrants to purchase common stock 1,648,159 1,766,122 Restricted stock units 222,514 194,672 Totals 3,114,619 3,300,774
Schedule of fair value, assets and liabilities measured on recurring basis	The following are the Fair Value Fair Value Hierarchy Assets Marketable securities, June 30, 2019 $ 306 Level 1 Marketable securities, December 31, 2018 $ 510 Level 1

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Jun. 30, 2019
PROPERTY AND EQUIPMENT
Schedule of property, plant and equipment	Property and equipment as of June 30, 2019 and December 31, 2018 is summarized as follows: June 30, December 31, 2019 2018 Computer equipment $ 64,195 $ 62,170 Equipment under finance lease 136,162 95,506 Furniture and fixtures 48,748 4,968 Total 249,105 162,644 Less accumulated depreciation (82,514) (54,637) Property and equipment, net $ 166,591 $ 108,007

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2019
INTANGIBLE ASSETS
Schedule of Finite-Lived Intangible Assets	Intangible assets consisted of the following: June 30, December 31, 2019 2018 Patents $ 3,697,709 $ 3,697,709 Capitalized software development 1,507,538 1,410,259 Domain name 10,000 10,000 Accumulated amortization (3,377,795) (3,056,564) Intangible assets, net $ 1,837,452 $ 2,061,404

DEFERRED COSTS (Tables)

DEFERRED COSTS (Tables)	6 Months Ended
	Jun. 30, 2019
DEFERRED COSTS
Schedule of deferred policy acquisition costs	The table below summarizes the activity within the deferred commission costs account, during the six months ended June 30, 2019: December 31, Commission Commission June 30, 2018 Costs Deferred Amortized 2019 Deferred costs, short term $ 176,006 $ 114,111 $ (108,075) $ 182,042 Deferred costs, long term 93,790 22,627 — 116,417 Deferred commission costs $ 269,796 $ 136,738 $ (108,075) $ 298,459

LEASE LIABILITIES AND RIGHT O_2

LEASE LIABILITIES AND RIGHT OF USE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2019
LEASE LIABILITIES AND RIGHT OF USE ASSETS
Schedule of Capital Lease Obligations	June 30, December 31, 2019 2018 Finance equipment lease dated April 5, 2018 $ 10,410 $ 13,056 Finance equipment lease dated May 8, 2018 11,581 14,525 Finance equipment lease dated June 27, 2018 17,616 21,701 Finance equipment lease dated September 18, 2018 12,670 15,368 Finance equipment lease dated September 28, 2018 13,932 16,672 Finance equipment lease dated February 20, 2019 17,518 — Finance equipment lease dated June 4, 2019 20,371 — Total finance lease liabilities 104,098 81,322 Less current portion (44,556) (30,172) Long term portion $ 59,542 $ 51,150
Schedule of Capital Leased Assets	The following summarizes the right to use assets under finance leases included in property and equipment: June 30, December 31, 2019 2018 Classes of property Computer equipment $ 136,162 $ 95,506 Less: accumulated depreciation (35,359) (16,117) $ 100,803 $ 79,389
Schedule of Future Minimum Lease Payments for Capital Leases	The following summarizes total future minimum finance lease payments at June 30, 2019: Period ending December 31, 2019 $ 23,649 2020 49,571 2021 33,827 2022 4,416 Total minimum lease payments 111,463 Amount representing interest (7,365) Present value of minimum lease payments 104,098 Current portion of finance lease obligations 44,556 Finance lease obligations, less current portion $ 59,542
Schedule Of Allocation Of Total Rental Payments	Operating lease liabilities at June 30, 2019 and January 1, 2019 consist of: June 30, January 1, 2019 2019 Tucson Arizona office lease $ 461,170 $ 518,309 Marietta Georgia office lease 474,708 — Atlanta Georgia office lease 16,986 49,959 Total operating lease liabilities 952,864 568,268 Less current portion (190,559) (166,252) Long term portion $ 762,305 $ 402,016
Schedule Of Future Minimum Lease Payments For Operating Leases	The following summarizes total future minimum operating lease payments at June 30, 2019: Period ending December 31, 2019 $ 124,838 2020 267,500 2021 262,219 2022 244,245 2023 118,166 2024 80,638 Total minimum lease payments 1,097,606 Less: present value discount (144,742) Present value of minimum lease payments 952,864 Current portion of operating lease obligations 190,559 Operating lease obligations, less current portion $ 762,305
Schedule Of Lease Expense	The following summarizes lease expenses for the six months ended June 30, 2019: Finance lease expenses: Depreciation/amortization expense $ 27,877 Interest on lease liabilities 2,693 Finance lease expense 30,570 Operating lease expense 114,120 Short-term lease expense 38,698 Total lease expenses $ 183,388

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	6 Months Ended
	Jun. 30, 2019
STOCKHOLDERS' EQUITY
Schedule of Share-based Compensation, Stock Options, Activity	The following table summarizes the Company’s outstanding options activity during the six months ended June 30, 2019: Weighted Intrinsic Weighted Average Value Number of Average Remaining of Options Exercise Price Term Exercisable Options Outstanding at December 31, 2018 997,989 $ 4.67 2.14 925,545 $ 4,705,220 Granted 121,639 7.48 8.83 — — Exercised (35,273) 1.61 — — — Forfeited/Expired (129,753) 10.08 — — — Outstanding at June 30, 2019 954,602 $ 4.41 804,103 $ 3,870,943
Schedule of Other Share-based Compensation, Activity	The following table summarizes the Company’s outstanding warrants activity for the six months ended June 30, 2019: Weighted Intrinsic Weighted Average Value Number of Average Remaining of Warrants Exercise Price Term Warrants Outstanding at December 31, 2018 1,781,715 $ 4.20 2.23 $ 8,930,058 Granted — — — — Exercised (51,629) 3.67 — — Forfeited/Expired (81,927) 8.03 — — Outstanding at June 30, 2019 1,648,159 $ 4.19 $ 7,303,284
Schedule of Nonvested Restricted Stock Shares Activity	The following table summarizes the restricted stock unit activity for the six months ended June 30, 2019: Restricted stock units issued as of December 31, 2018 222,514 Granted 134,740 Total Restricted stock units issued at June 30, 2019 357,254 Vested at June 30, 2019 222,514 Unvested restricted stock units as of June 30, 2019 134,740

ORGANIZATION AND BASIS OF PRE_4

ORGANIZATION AND BASIS OF PRESENTATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
ORGANIZATION AND BASIS OF PRESENTATION
Revenue - Direct			$ 3,287,570	$ 1,928,447
Revenue - Indirect (Strategic partners)			1,133,730	455,792
Total revenue	$ 2,435,622	$ 1,234,897	$ 4,421,300	$ 2,384,239

ORGANIZATION AND BASIS OF PRE_5

ORGANIZATION AND BASIS OF PRESENTATION - Deferred Revenue, by Arrangement (Details)	6 Months Ended
	Jun. 30, 2019USD ($)
ORGANIZATION AND BASIS OF PRESENTATION
Deferred revenue	$ 3,028,787
Cash received	3,414,210
Revenue recognized	3,266,346
Deferred revenue	$ 3,176,651

ORGANIZATION AND BASIS OF PRE_6

ORGANIZATION AND BASIS OF PRESENTATION - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,114,619	3,300,774
Antidilutive Securities preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	289,344	277,371
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	954,602	1,062,609
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,648,159	1,766,122
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	222,514	194,672

ORGANIZATION AND BASIS OF PRE_7

ORGANIZATION AND BASIS OF PRESENTATION - Summary fair value on a recurring basis (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities held in related party	$ 306	$ 510
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities held in related party	$ 306
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities held in related party		$ 510

ORGANIZATION AND BASIS OF PRE_8

ORGANIZATION AND BASIS OF PRESENTATION - Additional Information (Details) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 31, 2018	Aug. 01, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Feb. 01, 2019	Jan. 01, 2019
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Stock Issued During Period, Shares, New Issues	1,000,000
Shares Issued, Price Per Share	$ 6.25
Proceeds from Issuance of Common Stock	$ 5,609,215
Payments of Stock Issuance Costs	$ 640,785
Stockholders' Equity Note, Stock Split		1 share for every 25 shares
Common Stock, Shares Authorized		50,000,000	50,000,000		50,000,000		50,000,000
Conversion of Stock, Shares Converted		186,994,384
Conversion of Stock, Shares Issued		7,479,775
Deferred Revenue, Current			$ 2,944,630		$ 2,944,630		$ 2,626,712
Deferred Revenue, Noncurrent			232,021		232,021		402,075
Operating Lease Liability			952,864		952,864				$ 568,268
Operating Lease, Right-of-Use Asset			$ 942,588		$ 942,588		$ 0		$ 557,212
GA
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Operating Lease, Right-of-Use Asset								$ 483,565
Sales Revenue, Net [Member] | Customer Concentration Risk [Member]
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Concentration Risk, Percentage			10.00%	9.00%	11.00%	11.00%
Accounts Receivable [Member] | Major Customer Number Two [Member]
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Concentration Risk, Percentage							22.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Concentration Risk, Percentage					25.00%
Previously Reported [Member]
Organization Consolidation And Presentation Of Financial Statements Line Items [Line Items]
Common Stock, Shares Authorized		250,000,000

MANAGEMENT'S LIQUIDITY PLANS -

MANAGEMENT'S LIQUIDITY PLANS - Additional Information (Details) - USD ($)	1 Months Ended					3 Months Ended	6 Months Ended
	Aug. 31, 2019	Jul. 31, 2019	Oct. 31, 2018	Sep. 30, 2018	Aug. 31, 2018	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Going Concern And Management Liquidity Plans [Line Items]
Working Capital Deficit						$ 130,363	$ 130,363
Cash						$ 2,804,456	2,804,456		$ 5,741,549
Net Cash Provided by (Used in) Operating Activities							$ (2,917,072)	$ (1,094,896)
Stock Issued During Period, Shares, New Issues					1,000,000
Payments of Stock Issuance Costs					$ 640,785
Shares Issued, Price Per Share					$ 6.25
Proceeds from Issuance of Common Stock					$ 5,609,215
Payments of Costs Related to Common Stock Subscriptions			$ 124,975
Stock Issued During Period Shares Stock Warrants Exercised							40,183
Warrants to purchase shares of common stock						11,446	11,446
Proceeds from Warrant Exercises							$ 116,827
Convertible Notes Payable [Member]
Going Concern And Management Liquidity Plans [Line Items]
Net Cash Provided by (Used in) Operating Activities						$ 1,291,581	$ 2,917,072
Proceeds from Common Stock Subscriptions				$ 100,000
Subsequent event
Going Concern And Management Liquidity Plans [Line Items]
Warrants to purchase shares of common stock	1,280,709	1,280,709
Proceeds from Warrant Exercises	$ 2,200,000	$ 2,200,000
Maximum borrowing capacity, Line of credit (LOC)	$ 2,000,000
Subsequent event | Warrant one
Going Concern And Management Liquidity Plans [Line Items]
Warrants to purchase shares of common stock	1,194,990	1,194,990
Subsequent event | Warrant two
Going Concern And Management Liquidity Plans [Line Items]
Warrants to purchase shares of common stock	85,719	85,719
Subsequent event | Minimum [Member] | Warrant one
Going Concern And Management Liquidity Plans [Line Items]
Warrants exercise price	$ 1.63	$ 1.63
Subsequent event | Minimum [Member] | Warrant two
Going Concern And Management Liquidity Plans [Line Items]
Warrants exercise price	4.07	4.07
Subsequent event | Maximum [Member] | Warrant one
Going Concern And Management Liquidity Plans [Line Items]
Warrants exercise price	2.50	2.50
Subsequent event | Maximum [Member] | Warrant two
Going Concern And Management Liquidity Plans [Line Items]
Warrants exercise price	$ 6.25	$ 6.25

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 249,105	$ 162,644
Less accumulated depreciation	(82,514)	(54,637)
Property and equipment, net	166,591	108,007
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	64,195	62,170
Equipment under capital lease [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	136,162	95,506
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 48,748	$ 4,968

PROPERTY AND EQUIPMENT - Additi

PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Depreciation	$ 14,503	$ 7,432	$ 27,877	$ 11,749
Payments to Acquire Property, Plant, and Equipment			$ 45,804	10,893
Property, Plant and Equipment, Estimated Useful Lives			P3Y
Property, Plant and Equipment, Gross	249,105		$ 249,105		$ 162,644
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	82,514		82,514		54,637
Noncash or Part Noncash Acquisition, Fixed Assets Acquired			40,657	$ 60,668
Assets Held under Capital Leases [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	136,162		136,162		95,506
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 35,359		$ 35,359		$ 16,117

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Intangible Assets
Accumulated amortization	$ (3,377,795)	$ (3,056,564)
Intangible assets, net	1,837,452	2,061,404
Patents [Member]
Intangible Assets
Finite-Lived Intangible Assets, Gross	3,697,709	3,697,709
Capitalized software development [Member]
Intangible Assets
Finite-Lived Intangible Assets, Gross	1,507,538	1,410,259
Domain Name [Member]
Intangible Assets
Finite-Lived Intangible Assets, Gross	$ 10,000	$ 10,000

INTANGIBLE ASSETS - Additional

INTANGIBLE ASSETS - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Software Development [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 321,231	$ 253,328	$ 321,231	$ 253,328
Amortization of Intangible Assets	67,672	36,322	133,915	72,644
Finite-lived Intangible Assets Acquired			97,279	173,597
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	3,697,709		3,697,709		$ 3,697,709
Amortization of Intangible Assets	$ 93,658	$ 93,658	$ 187,316	$ 180,684

DEFERRED COSTS (Details)

DEFERRED COSTS (Details)	6 Months Ended
	Jun. 30, 2019USD ($)
Deferred costs, short term - Beginning balance	$ 176,006
Deferred costs, long term - Beginning balance	93,790
Deferred costs, short term - End balance	182,042
Deferred costs, long term - End balance	116,417
Accounting Standards Update 2014-09 [Member]
Deferred costs, long term - Beginning balance	93,790
Deferred commission costs - Beginning balance	269,796
Commission Costs Deferred, short term	114,111
Commission Costs Deferred, long term	22,627
Commission Costs Deferred	136,738
Commission Amortized, Short term	(108,075)
Commission Amortized, Long term	0
Commission Amortized	(108,075)
Deferred costs, short term - End balance	182,042
Deferred costs, long term - End balance	116,417
Deferred commission costs - End balance	$ 298,459

DEFERRED COSTS - Additional Inf

DEFERRED COSTS - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Mar. 31, 2018
Increase (Decrease) in Deferred Charges			$ 136,738	$ 66,324
Amortization of Deferred Charges	$ 56,676	$ 15,517	108,075	25,491
Accounting Standards Update 2014-09 [Member]
Increase (Decrease) in Deferred Charges	$ 71,269		$ 136,738	66,324
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets		$ 80,153		$ 80,153	$ 80,153

LEASE LIABILITIES AND RIGHT O_3

LEASE LIABILITIES AND RIGHT OF USE ASSETS (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Total finance lease liabilities	$ 104,098	$ 81,322
Less current portion	(44,556)	(30,172)
Long term portion	59,542	51,150
Finance equipment lease dated April 5, 2018 [Member]
Total finance lease liabilities	10,410	13,056
Finance equipment lease dated May 8, 2018 [Member]
Total finance lease liabilities	11,581	14,525
Finance equipment lease dated June 27, 2018 [Member]
Total finance lease liabilities	17,616	21,701
Finance equipment lease dated September 18, 2018 [Member]
Total finance lease liabilities	12,670	15,368
Finance equipment lease dated September 28, 2018 [Member]
Total finance lease liabilities	13,932	16,672
Finance equipment lease dated February 20, 2019 [Member]
Total finance lease liabilities	17,518	0
Finance equipment lease dated June 4, 2019 [Member]
Total finance lease liabilities	$ 20,371	$ 0

LEASE LIABILITIES AND RIGHT O_4

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Summary of the right to use assets under finance leases (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Classes of property
Computer equipment	$ 20,903	$ 95,506	$ 19,754
Computer Equipment [Member]
Classes of property
Computer equipment	136,162	95,506
Less: accumulated depreciation	(35,359)	(16,117)
Capital Leases, Balance Sheet, Assets by Major Class, Net	$ 100,803	$ 79,389

LEASE LIABILITIES AND RIGHT O_5

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Summary of the total future minimum finance lease payments (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
LEASE LIABILITIES AND RIGHT OF USE ASSETS
2019	$ 23,649
2020	49,571
2021	33,827
2022	4,416
Total minimum lease payments	111,463
Amount representing interest	(7,365)
Present value of minimum lease payments	104,098
Current portion of capital lease obligations	44,556	$ 30,172
Finance lease obligations, less current portion	$ 59,542	$ 51,150

LEASE LIABILITIES AND RIGHT O_6

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Summary of operating lease liabilities (Details) - USD ($)	Jan. 01, 2019	Jun. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Operating Leases, Rent Expense	$ 1,500	$ 4,482		$ 300
Total operating lease liabilities	568,268	952,864	$ 952,864
Less current portion	(166,252)	(190,559)	(190,559)		$ 0
Long term portion	402,016	$ 762,305	762,305		$ 0
Tucson Arizona office lease [Member]
Operating Leases, Rent Expense	518,309		461,170
Marietta Georgia Office Lease [Member]
Operating Leases, Rent Expense	0		474,708
Atlanta Georgia [Member]
Operating Leases, Rent Expense	$ 49,959		$ 16,986

LEASE LIABILITIES AND RIGHT O_7

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Summary of total future minimum operating lease payments (Details) - USD ($)	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
LEASE LIABILITIES AND RIGHT OF USE ASSETS
2019	$ 124,838
2020	267,500
2021	262,219
2022	244,245
2023	118,166
2024	80,638
Total minimum lease payments	1,097,606
Less: present value discount	(144,742)
Present value of minimum lease payments	952,864	$ 568,268
Current portion of operating lease obligations	190,559	166,252	$ 0
Operating lease obligations, less current portion	$ 762,305	$ 402,016	$ 0

LEASE LIABILITIES AND RIGHT O_8

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Summary of lease expenses (Details)	6 Months Ended
	Jun. 30, 2019USD ($)
Finance lease expenses:
Depreciation/amortization expense	$ 27,877
Interest on lease liabilities	2,693
Finance lease expense	30,570
Operating lease expense	114,120
Short-term lease expense	38,698
Total lease expenses	$ 183,388

LEASE LIABILITIES AND RIGHT O_9

LEASE LIABILITIES AND RIGHT OF USE ASSETS - Additional Information (Details)	Oct. 31, 2022USD ($)	Jan. 01, 2019USD ($)	Feb. 01, 2018USD ($)ft²	Dec. 31, 2017USD ($)	Jun. 30, 2019USD ($)ft²	Jun. 30, 2019USD ($)ft²	Dec. 31, 2018USD ($)	Sep. 30, 2018USD ($)	Feb. 01, 2019ft²	Dec. 01, 2018ft²	Jun. 30, 2018USD ($)
Lessee Capital Lease Term of Contract						3 years	3 years
Capital Leased Assets, Gross					$ 20,903	$ 20,903	$ 95,506				$ 19,754
Interest Expense, Lessee, Assets under Capital Lease						$ 4,131
Debt Instrument, Interest Rate, Effective Percentage					6.00%	6.00%
Finance Lease, Principal Payments						$ 18,662
Operating Lease, Payments		$ 568,268				191,843
Operating Lease, Right-of-Use Asset		557,212			$ 942,588	$ 942,588	0
Deferred Rent Credit, Noncurrent		11,056					$ 6,585
Percentage of finance lease exceeding						75.00%	75.00%
Area of Land | ft²			4,248		5,151	5,151				5,151
Operating Leases Rent Expense Net				$ 3,937		$ 3,578
Increase Lease And Rental Expense	$ 12,977	11,810	$ 9,598			850
Operating Leases, Rent Expense		$ 1,500			$ 4,482			$ 300
Lessee, Operating Lease, Discount Rate		6.00%
Marietta Georgia [Member]
Operating Lease, Right-of-Use Asset					$ 483,565	$ 483,565
Area of Land | ft²									9,662
Arizona [Member]
Area of Land | ft²					2,362	2,362
Georgia [Member] | Minimum [Member]
Area of Land | ft²			2,739
Georgia [Member] | Maximum [Member]
Area of Land | ft²			3,831

RELATED PARTY TRANSACTIONS - Ad

RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
RELATED PARTY TRANSACTIONS
Due to Related Parties	$ 24,467	$ 14,467

STOCKHOLDERS' EQUITY - Outstand

STOCKHOLDERS' EQUITY - Outstanding Options (Details) - USD ($)	Jun. 03, 2019	Feb. 07, 2019	Feb. 07, 2019	Jun. 30, 2019	Dec. 31, 2018
Number of Options
Outstanding at beginning of the period (in shares)
Number of options granted	92,939	28,700		13,341
Outstanding at the end of the period (in shares)				9,999
Wtd Avg. Exercise Price
Granted (in dollars per share)	$ 6.53
Exercised (in dollars per share)			$ 10.55
Wtd Avg. Remaining Term
Exercised Weighted Average Remaining Term			5 years
Employee Stock Option
Number of Options
Outstanding at beginning of the period (in shares)				997,989
Number of options granted				121,639
Exercised (shares)				(35,273)
Forfeited/Expired				(129,753)
Outstanding at the end of the period (in shares)				954,602	997,989
Exercisable (in shares)				804,103	925,545
Wtd Avg. Exercise Price
Outstanding at beginning of the period (in dollars per share)				$ 4.67
Granted (in dollars per share)				7.48
Exercised (in dollars per share)				1.61
Forfeited/Expired				10.08
Outstanding at end of the period (in dollars per share)				$ 4.41	$ 4.67
Wtd Avg. Remaining Term
Granted Weighted Average Remaining Term				8 years 9 months 29 days
Outstanding, Wtd Average Remaining Term				2 years 9 months 26 days	2 years 1 month 21 days
Intrinsic Value of Options
Granted, Intrinsic Value of Exercisable Options				$ 0
Outstanding, Intrinsic Value (in dollars)				$ 3,870,943	$ 4,705,220

STOCKHOLDERS' EQUITY - Outsta_2

STOCKHOLDERS' EQUITY - Outstanding Warrants (Details) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2018	Jun. 30, 2019	Dec. 31, 2016	Dec. 31, 2017
Wtd Avg. Exercise Price
Outstanding (in dollars per share)	$ 4.19
Wtd Avg. Remaining Term
Outstanding	1 year 10 months 10 days		2 years 2 months 23 days
Warrant [Member]
Number of warrants
Number of shares, Beginning	1,781,715
Number of shares, granted		0
Number of shares, exercised	(51,629)
Number of shares, Forfeited		(81,927)
Number of shares, Ending	1,648,159
Wtd Avg. Exercise Price
Outstanding (in dollars per share)	$ 4.20
Exercised (in dollars per share)	$ 3.67
Forfeited (in dollars per share)		$ 8.03
Intrinsic Value of Warrants
Outstanding			$ 8,930,058	$ 7,303,284

STOCKHOLDERS' EQUITY - Restrict

STOCKHOLDERS' EQUITY - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) [Member] - shares	3 Months Ended	6 Months Ended
	Mar. 31, 2018	Jun. 30, 2019
Restricted stock units issued as of December 31, 2018	222,514
Granted	134,740
Total Restricted stock units issued at March 31, 2019	357,254
Vested at March 31, 2019		222,514
Unvested restricted stock units as of March 31, 2019		134,740

STOCKHOLDERS' EQUITY - Restri_2

STOCKHOLDERS' EQUITY - Restricted stock units, Additional Information (Details) - USD ($)	Jun. 03, 2019	Mar. 15, 2019	Mar. 31, 2018
Class of Stock [Line Items]
Vesting term	3 years
Restricted Stock Units (RSUs) [Member]
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			134,740
Fair value of the RSUs at grant date	$ 130,600	$ 528,277
Restricted Stock Units (RSUs) [Member] | Vest on June 3, 2020
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	26,967
Restricted Stock Units (RSUs) [Member] | Vest on June 3, 2021
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	26,967
Restricted Stock Units (RSUs) [Member] | Vest on June 3, 2022
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	26,966
Restricted Stock Units (RSUs) [Member] | Director [Member]
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	11,280
Fair value of the RSUs at grant date	$ 220,975
Restricted Stock Units (RSUs) [Member] | David Kovacs
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	20,000
Restricted Stock Units (RSUs) [Member] | Sachin Barot
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	80,900
Vesting term	3 years

STOCKHOLDERS' EQUITY - Addition

STOCKHOLDERS' EQUITY - Additional Information (Details) - USD ($)	Jun. 03, 2019	Feb. 07, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Class of Stock [Line Items]
Common Stock, Shares, Issued			7,656,046		7,656,046		7,579,995
Common Stock, Shares, Outstanding			7,656,046		7,656,046		7,579,995
Number of options granted	92,939	28,700			13,341
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights					21,932
Stock or Unit Option Plan Expense			$ 760,202
Restricted Stock or Unit Expense			181,757	$ 83,363	$ 558,384	$ 304,227
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options			$ 809,691		$ 809,691
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			11,446		11,446
Weighted average exercise price	$ 6.53
Term of option	10 years
Vesting term	3 years
Black-Scholes value on the grant date of the options	$ 571,471				$ 258,392
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number			9,999		9,999
Stock Issued During Period Shares Stock Warrants Exercised					40,183
Proceeds from Warrant Exercises					$ 116,827
Preferred Stock, Liquidation Preference, Value			$ 1,268,774		$ 1,268,774		$ 1,242,740
Preferred Stock, Liquidation Preference Per Share			$ 10		$ 10
Proceeds from Stock Options Exercised					$ 24,897
Employee Stock Option
Class of Stock [Line Items]
Expected dividend yield (as a percent)					0.00%
Allocated Share-based Compensation Expense			$ 93,495	$ 78,152	$ 165,769	223,198
Warrant [Member]
Class of Stock [Line Items]
Allocated Share-based Compensation Expense					$ 109,207	$ 110,600
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			0		0
Stock Issued During Period Shares Stock Warrants Exercised					3,937
Maximum [Member] | Employee Stock Option
Class of Stock [Line Items]
Expected term					6 years
Expected volatility (as a percent)					156.23%
Risk-free interest rate (as a percent)					2.48%
Minimum [Member] | Employee Stock Option
Class of Stock [Line Items]
Expected term					3 years 3 months
Expected volatility (as a percent)					152.58%
Risk-free interest rate (as a percent)					1.83%
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Redemption Price (in dollars per share)			$ 4.385		$ 4.385		$ 4.385
Preferred Stock, Dividend Rate, Percentage					5.00%
Dividends, Preferred Stock, Stock					$ 26,034
Common Stock Dividends, Shares					5,937
Preferred stock unpaid dividend equivalent common stock, Shares					49,891		43,954
Dividends Payable			$ 218,774		$ 218,774		$ 192,740
Preferred Stock, Shares Issued			105,000		105,000		105,000
Preferred Stock Issue Per Share			$ 10		$ 10

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - USD ($)	1 Months Ended		6 Months Ended
	Aug. 31, 2019	Jul. 31, 2019	Jun. 30, 2019
Subsequent Event [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			11,446
Proceeds from Stock Options Exercised			$ 24,897
Potential proceeds from warrants exercises			$ 116,827
Subsequent event
Subsequent Event [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,280,709	1,280,709
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		8,373
Proceeds from Stock Options Exercised		$ 18,040
Potential proceeds from warrants exercises	$ 2,200,000	$ 2,200,000
Maximum borrowing capacity, Line of credit (LOC)	$ 2,000,000
Subsequent event | Warrant one
Subsequent Event [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,194,990	1,194,990
Subsequent event | Warrant two
Subsequent Event [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	85,719	85,719
Subsequent event | Minimum [Member] | Warrant one
Subsequent Event [Line Items]
Warrants exercise price	$ 1.63	$ 1.63
Subsequent event | Minimum [Member] | Warrant two
Subsequent Event [Line Items]
Warrants exercise price	4.07	4.07
Subsequent event | Maximum [Member] | Warrant one
Subsequent Event [Line Items]
Warrants exercise price	2.50	2.50
Subsequent event | Maximum [Member] | Warrant two
Subsequent Event [Line Items]
Warrants exercise price	$ 6.25	$ 6.25