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What changed in AUDIOEYE INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AUDIOEYE INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+121 added−121 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-12)

Top changes in AUDIOEYE INC's 2025 10-K

121 paragraphs added · 121 removed · 94 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThis focus on website accessibility is growing internationally as well, with over 100 countries having ratified the U.N. Convention on the Rights of Persons with Disabilities. The European Accessibility Act (EAA) will take effect in June 2025, requiring digital products and services — including websites, e-commerce, and mobile apps — to meet accessibility standards across the European Union (“EU”).
Biggest changeThis focus on website accessibility is growing internationally as well, with over 100 countries having ratified the U.N. Convention on the Rights of Persons with Disabilities. The European Accessibility Act (EAA) became effective in June 2025, requiring digital products and services, including websites, e-commerce, and mobile apps, to meet accessibility standards across the European Union (“EU”).
Our solution is trusted by some of the largest and most influential companies in the world, including Samsung, Landry’s, Calvin Klein and others. Government agencies, such as the Federal Communications Commission, use our software with their digital platforms. We also work with government agencies at the state and local level.
Our solution is currently trusted by some of the largest and most influential companies in the world, including Samsung, Landry’s, Calvin Klein and others. Government agencies, such as the Federal Communications Commission, use our software with their digital platforms. We also work with government agencies at the state and local level.
AudioEye provides employees with the technology and resources required to have a high-quality remote work experience while remaining connected to teams in other locations. We expect to continue a hybrid of virtual and in-person work in the future. 5 Table of Contents As of December 31, 2024, we had 117 full-time employees.
AudioEye provides employees with the technology and resources required to have a high-quality remote work experience while remaining connected to teams in other locations. We expect to continue a hybrid of virtual and in-person work in the future. 5 Table of Contents As of December 31, 2025, we had 116 full-time employees.
We have a patent portfolio comprised of twenty-four (24) issued patents in the United States and three (3) pending US patent applications. The commercial value of these patents is unknown. We plan to continue to invest in research and development and expand our portfolio of proprietary intellectual property.
We have a patent portfolio comprised of twenty-six (26) issued patents in the United States and three (3) pending US patent applications. The commercial value of these patents is unknown. We plan to continue to invest in research and development and expand our portfolio of proprietary intellectual property.
We had one major customer (including the customer’s affiliates reflecting multiple contracts and a partnership with the Company) which accounted for approximately 15% and 17% of our revenue in the years ended December 31, 2024 and 2023, respectively.
We had one major customer (including the customer’s affiliates reflecting multiple contracts and a partnership with the Company) which accounted for approximately 13% and 15% of our revenue in the years ended December 31, 2025 and 2024, respectively.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe cannot assure you that infringement or invalidity claims (or claims for indemnification resulting from infringement claims) will not be asserted or prosecuted against us or that any such assertions or prosecutions will not materially adversely affect our business. 9 Table of Contents Regardless of whether any future claims are valid or can be successfully asserted, defending against such claims could cause us to incur significant costs, could jeopardize or substantially delay a successful outcome in any future litigation, and could divert resources away from our other activities.
Biggest changeRegardless of whether any future claims are valid or can be successfully asserted, defending against such claims could cause us to incur significant costs, could jeopardize or substantially delay a successful outcome in any future litigation, and could divert resources away from our other activities.
Should we be unable to identify or conclude important strategic transactions, our business prospects and operations could be adversely affected as a result of the devotion of 7 Table of Contents significant managerial effort required, and the challenges of achieving our objectives in the absence of strategic opportunities.
Should we be unable to identify or conclude 7 Table of Contents important strategic transactions, our business prospects and operations could be adversely affected as a result of the devotion of significant managerial effort required, and the challenges of achieving our objectives in the absence of strategic opportunities.
The market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as: ● the outcomes of potential future patent litigation; ● our ability to monetize our future patents; ● changes in our industry; 15 Table of Contents ● announcements of technological innovations, new products or product enhancements by us or others; ● announcements by us or others of significant strategic partnerships, out-licensing, in-licensing, joint ventures, acquisitions or capital commitments; ● changes in laws or regulations or judicial interpretation of the application of accessibility-related laws and regulations to the internet; ● our failure to meet any financial covenants, to have sufficient liquidity to repay any of our indebtedness, or to refinance our indebtedness on favorable terms, or at all; ● changes in earnings estimates or recommendations by security analysts, if our common stock is covered by analysts; ● investors’ general perception of us; ● future issuances of common stock; ● investors’ future resales of our securities; ● the addition or departure of key personnel; ● general market conditions, including the volatility of market prices for shares of technology companies, generally, and other factors, including factors unrelated to our operating performance; and ● the other factors described in this “Risk Factors” section.
The market price of our common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as: ● the outcomes of potential future patent litigation; ● our ability to monetize our future patents; ● changes in our industry; ● announcements of technological innovations, new products or product enhancements by us or others; ● announcements by us or others of significant strategic partnerships, out-licensing, in-licensing, joint ventures, acquisitions or capital commitments; ● changes in laws or regulations or judicial interpretation of the application of accessibility-related laws and regulations to the internet; ● our failure to meet any financial covenants, to have sufficient liquidity to repay any of our indebtedness, or to refinance our indebtedness on favorable terms, or at all; ● changes in earnings estimates or recommendations by security analysts, if our common stock is covered by analysts; ● investors’ general perception of us; ● future issuances of common stock; ● investors’ future resales of our securities; ● the addition or departure of key personnel; ● general market conditions, including the volatility of market prices for shares of technology companies, generally, and other factors, including factors unrelated to our operating performance; and ● the other factors described in this “Risk Factors” section.
In addition, profitability, if any, in our newer activities may be lower than in our older activities, and we may not be successful enough in these newer activities to recoup our investments in them. If any of this were to occur, it could damage our reputation, limit our growth, and negatively affect our operating results.
In addition, profitability, if any, in our newer activities may be lower than in our older activities, and we may not be successful enough in these newer activities to recoup our investments in them. If any of these were to occur, it could damage our reputation, limit our growth, and negatively affect our operating results.
We cannot guarantee we will meet these covenants, obtain sufficient capital to repay the loan on a timely basis or obtain refinancing of the loan on satisfactory terms, or at all, all of which could have a material adverse effect on our business.
We cannot guarantee we will meet these covenants, obtain sufficient capital to repay the debt on a timely basis or obtain refinancing of the debt on satisfactory terms, or at all, all of which could have a material adverse effect on our business.
Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. We will need to recruit and retain additional qualified personnel to successfully grow our business.
Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. 14 Table of Contents We will need to recruit and retain additional qualified personnel to successfully grow our business.
Such circumstances, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise 16 Table of Contents additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.
Such circumstances, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.
Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures and our internal control over financial reporting were effective as of December 31, 2024.
Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures and our internal control over financial reporting were effective as of December 31, 2025.
We have sought in the past, and are continuing to seek, strategic opportunities, which may include acquisitions, to help us pursue our business objectives. Although we may devote significant time and resources in pursuit of such transactions, we may struggle to successfully identify such opportunities, or to successfully conclude transactions.
We have entered into in the past, and are continuing to seek, strategic opportunities, which may include acquisitions, to help us pursue our business objectives. Although we may devote significant time and resources in pursuit of such transactions, we may struggle to successfully identify such opportunities, or to successfully conclude transactions.
Our future development will require additional capital, and we may be unable to obtain needed capital or financing on satisfactory terms, or at all, which would prevent us from fully developing our business and generating revenues. As of December 31, 2024, we had $5.7 million in cash.
Our future development will require additional capital, and we may be unable to obtain needed capital or financing on satisfactory terms, or at all, which would prevent us from fully developing our business and generating revenues. As of December 31, 2025, we had $5.3 million in cash.
To protect our intellectual property rights, we rely on a combination of patent, trademark, copyright, and trade secret laws, confidentiality agreements with our employees and third parties, and protective contractual provisions.
To protect our intellectual property rights, we rely on a combination of patent, trademark, copyright, and trade secret laws, confidentiality 9 Table of Contents agreements with our employees and third parties, and protective contractual provisions.
Our Certificate of Incorporation authorizes the issuance of up to 50,000,000 shares of common stock with a $0.00001 par value per share and 10,000,000 shares of preferred stock with a $0.00001 par value per share, of which, as of December 31, 2024, approximately 12,285,000 shares of common stock were issued and outstanding.
Our Certificate of Incorporation authorizes the issuance of up to 50,000,000 shares of common stock with a $0.00001 par value per share and 10,000,000 shares of preferred stock with a $0.00001 par value per share, of which, as of December 31, 2025, approximately 12,383,000 shares of common stock were issued and outstanding.
Risks Relating to Our Business and Industry We have a history of generating significant losses and may not be able to achieve and sustain profitability. To date, we have not been profitable, and we may never achieve profitability on a full-year or consistent basis. We incurred net losses of $4,254,000 for the year ended December 31, 2024.
Risks Relating to Our Business and Industry We have a history of generating significant losses and may not be able to achieve and sustain profitability. To date, we have not been profitable, and we may never achieve profitability on a full-year or consistent basis. We incurred net losses of $3,077,000 for the year ended December 31, 2025.
We may not be able to successfully integrate newly acquired businesses or other strategic relationships, such matters involve various risks, and we may not be able to fully realize the potential benefit of such opportunities.
We may not be able to successfully integrate newly acquired businesses or other strategic relationships, such matters involve various risks, and we may not be able to fully realize the potential benefit of such opportunities. We may not be able to integrate acquisitions or strategic relationships that we complete, or successfully realize their full benefit.
As of December 31, 2024, we had an accumulated deficit of $95,746,000. If we continue to experience losses, we may not be able to continue our operations, and investors may lose their entire investment. We continue to pursue business through a variety of channels.
As of December 31, 2025, we had an accumulated deficit of $103,398,000. If we continue to experience losses, we may not be able to continue our operations, and investors may lose their entire investment. We continue to pursue business through a variety of channels.
As of January 31, 2025, our Chief Executive Officer beneficially owned over 20% of the voting power of our outstanding shares of common stock.
As of January 31, 2026, our Chief Executive Officer beneficially owned over 21% of the voting power of our outstanding shares of common stock.
As of December 31, 2024, we also had outstanding options to purchase an aggregate of approximately 36,000 shares of our common stock, and unvested, or vested but not yet settled, restricted stock units covering an aggregate of approximately 1,315,000 shares of common stock.
As of December 31, 2025, we also had outstanding options to purchase an aggregate of approximately 7,000 shares of our common stock, and unvested, or vested but not yet settled, restricted stock units covering an aggregate of approximately 989,000 shares of common stock.
If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. We may also face claims by our investors, which could harm our business and financial condition.
If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.
No assurance can be given that we can successfully raise additional equity or debt capital, or that such financing will be available to us on favorable terms, if at all. 6 Table of Contents We have a $7.0 million loan due in November 2026 that includes certain financial and liquidity covenants.
No assurance can be given that we can successfully raise additional equity or debt capital, or that such financing will be available to us on favorable terms, if at all. 6 Table of Contents We have a credit facility that includes certain financial and liquidity covenants.
If it does not, our results of operations and financial condition could be adversely affected. If we are not able to adequately protect our patented rights, our operations may be negatively impacted. Our ability to compete largely depends on the superiority, uniqueness and value of our technology and intellectual property.
If we are not able to adequately protect our patented rights, our operations may be negatively impacted. Our ability to compete largely depends on the superiority, uniqueness and value of our technology and intellectual property.
We cannot assure you that we will be able to attract or retain such personnel. 14 Table of Contents If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, we may not be able to report financial results accurately or on a timely basis, or to detect fraud, which could have a material adverse effect on our business and stock price.
If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, we may not be able to report financial results accurately or on a timely basis, or to detect fraud, which could have a material adverse effect on our business and stock price.
We have been party to litigation and may in the future be party to additional litigation, which could have a material adverse effect on our financial position or results of operations. We are subject to disputes and allegations related to our business operations.
We are, have been, and may in the future be, party to litigation, which could have a material adverse effect on our financial position or results of operations. We are subject to disputes and allegations related to our business operations. Because we are in a technology industry, these disputes may involve claims of intellectual property infringement or misappropriation.
In addition, this concentration of ownership may delay or prevent future transactions or a change in control of our company. 17 Table of Contents Provisions of our Certificate of Incorporation and bylaws could discourage potential acquisition proposals and could deter or prevent a change in control.
The interests of our controlling stockholders may not coincide with our interests or the interests of other stockholders. In addition, this concentration of ownership may delay or prevent future transactions or a change in control of our company. Provisions of our Certificate of Incorporation and bylaws could discourage potential acquisition proposals and could deter or prevent a change in control.
Sales or the availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline and adversely affect our ability to raise capital.
We cannot predict the prices at which our common stock will trade in the future. Sales or the availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline and adversely affect our ability to raise capital.
If this were to occur, our stockholders could face significant material adverse consequences, including limited availability of market quotations for our common stock and reduced liquidity for the trading of our securities. In addition, we could experience a decreased ability to issue additional securities and obtain additional financing in the future.
If this were to occur, our stockholders could face significant material adverse consequences, including limited availability of market quotations for our common stock and reduced liquidity for the trading of our securities.
These types of occurrences could cause users to perceive that our products and services do not function properly and could therefore adversely affect our ability to attract and retain strategic partners and customers.
These types of occurrences could cause users to perceive that our products and services do not function properly and could therefore adversely affect our ability to attract and retain strategic partners and customers. Fraud, impersonation, and social engineering schemes could result in financial loss or reputational harm.
In addition, without a large float, our common stock is less liquid than the stock of companies with broader public ownership and, as a result, the trading price of our common stock may be more volatile. In the absence of an active public trading market, an investor may be unable to liquidate its investment in our common stock.
In addition, without a large float, our common stock is less liquid than the stock 16 Table of Contents of companies with broader public ownership and, as a result, the trading price of our common stock may be more volatile.
Because we are in a technology industry, these disputes may involve claims of intellectual property infringement or misappropriation. We have also been involved in securities law litigation in the past. These and other types of litigation can be very expensive, and we cannot assure you that our insurance policies will cover the costs.
We also are, and previously have been, involved in securities law litigation. These and other types of litigation can be very expensive, and we cannot assure you that our insurance policies will cover the costs.
We cannot guarantee that we will always meet these covenants or that we can obtain sufficient capital to repay the loan on a timely basis, or obtain refinancing of the loan on satisfactory terms, or at all. Weakened global economic conditions including current and ongoing microeconomic uncertainty may adversely affect our industry, business and results of operations.
We cannot guarantee that we will always meet these covenants or that we can obtain sufficient capital to repay the loan on a timely basis, or obtain refinancing of the loan on satisfactory terms, or at all.
Trading of a relatively small volume of our common stock may have a greater impact on the trading price of our stock than would be the case if our public float were larger. We cannot predict the prices at which our common stock will trade in the future.
In the absence of an active public trading market, an investor may be unable to liquidate its investment in our common stock. Trading of a relatively small volume of our common stock may have a greater impact on the trading price of our stock than would be the case if our public float were larger.
Our $7.0 million term loan has an interest rate equal to 6.25% in excess of the base rate, which is defined as the greater of the prime rate and 7.00% per annum, payable in cash on a monthly basis. Consequently, our interest payment obligations are subject to fluctuations in market interest rates.
Our $13.4 million term loan outstanding as of December 31, 2025 bears interest payable in cash on a monthly basis of 3.25% in excess of the term SOFR rate, which is defined as the greater of (i) 2.30% and (ii) the 1-month Term SOFR Reference Rate. Consequently, our interest payment obligations are subject to fluctuations in market interest rates.
The market price for our common stock may fluctuate significantly, which could result in substantial losses by our investors.
In addition, we could experience a decreased ability to issue additional securities and obtain additional financing in the future. 15 Table of Contents The market price for our common stock may fluctuate significantly, which could result in substantial losses by our investors.
Risks Relating to Our Charter Documents and Capital Structure A small number of “insider” stockholders have significant influence over stockholder actions. As of January 31, 2025, our directors and executive officers beneficially owned an aggregate of 3,538,888 of our outstanding shares of common stock, which represents approximately 29% of the aggregate voting power of our outstanding shares of common stock.
As of January 31, 2026, our directors and executive officers beneficially owned an aggregate of 3,134,426 of our outstanding shares of common stock, which represents approximately 25% of the aggregate voting power of our outstanding shares of common stock.
Removed
On November 30, 2023, we entered into a Loan and Security Agreement (the “Loan Agreement”) with SG Credit Partners, Inc. (the “Lender”) pursuant to which we acquired a $7.0 million loan due in November 2026. Under the Loan Agreement, we provided the Lender a first priority security interest in all existing and future acquired assets owned by us.
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On March 31, 2025, we entered into a Loan and Security Agreement (the “Credit Facility Agreement”) with Western Alliance Bank (the “Lender”).
Removed
The Loan Agreement contains certain customary covenants that limit our ability to engage in certain transactions.
Added
The Credit Facility Agreement provides for borrowings of up to $20.0 million, including (i) a term loan facility, comprising of a $12.0 million term loan advance funded on March 31, 2025, and subsequent term loan advances available upon request through March 31, 2026 in an aggregate principal amount not to exceed $5.0 million; and (ii) a revolving line of credit in an aggregate outstanding amount not to exceed $3.0 million.
Removed
In addition, we must maintain (i) minimum liquidity of $2.0 million, subject to a higher minimum liquidity requirement in order to make certain payments; and (ii) minimum monthly recurring revenue levels measured on a trailing three month average basis as of the last day of each calendar month.
Added
Borrowings under the Credit Facility Agreement mature on March 31, 2030.
Removed
The minimum monthly recurring revenue levels commence at $2.3 million and increase for each month after the month ending November 30, 2024 to the greater of $2.3 million and 105% of Borrowers’ monthly recurring revenue for the applicable month in the prior year.
Added
The Credit Facility Agreement is secured by substantially all of our assets and contains certain customary financial covenants, including the requirements that we maintain (a) a minimum cash balance held in accounts with the Lender; (b) a certain ratio of total committed debt to Annual Recurring Revenue; (c) a certain ratio of aggregate funded indebtedness to adjusted EBITDA; and (d) a minimum Fixed Charge Coverage Ratio.
Removed
Our overall performance depends in part on worldwide economic and geopolitical conditions.
Added
Further, these covenants may restrict or limit our ability to enter into certain arrangements or make certain expenditures. ​ Weakened global economic conditions including current and ongoing microeconomic uncertainty may adversely affect our industry, business and results of operations. Our overall performance depends in part on worldwide economic and geopolitical conditions.
Removed
If we do locate and consummate important acquisitions or strategic relationships, we may not be able to integrate those opportunities or successfully realize their full benefit.
Added
If we fail to address competitive developments quickly and effectively, we may not be able to remain a viable business. Advances in artificial intelligence may intensify competition and reduce demand for our solutions. The web accessibility market is evolving, and artificial intelligence is an important driver of that evolution.
Removed
If we fail to address competitive developments quickly and effectively, we may not be able to remain a viable business. We acquired ADA Site Compliance, LLC (“ADA Site Compliance”) on September 27, 2024, and we cannot assure you that will successfully integrate the business or that the acquisition will bring us the expected benefits.
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We incorporate artificial intelligence (“AI”) into our automated accessibility services, and competition in this area may increase over time. Established technology companies and new market entrants may develop AI capabilities that are more accurate, faster, more comprehensive, or less expensive than our own.
Removed
On September 27, 2024, we acquired ADA Site Compliance. We cannot assure you that we will be able to successfully integrate the business or that we will receive the expected benefits from the acquisition.
Added
Additionally, platform providers, content management system vendors, and browser or device manufacturers may integrate AI-driven accessibility features directly into their core products, which could reduce demand for third-party solutions like ours. The pace of AI development makes it difficult to predict which technologies or competitors will emerge as most prominent in our market.
Removed
All of the risks from the risk factor entitled “ We may not be able to successfully integrate newly acquired businesses or other strategic relationships, such matters involve various risks, and we may not be able to fully realize the potential benefit of such opportunities” apply to ADA Site Compliance, including the risk that we could fail to integrate the customers to new products and services over time.
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Our investments in AI research and development may not keep pace with those of better-resourced competitors, and improvements to our AI capabilities may not always result in products that customers prefer over alternatives. If we are unable to differentiate our solutions or compete effectively, our revenue, customer retention, and growth prospects could be adversely affected.
Removed
Further, while a significant portion of the aggregate consideration for ADA Site Compliance is based on ADA Site Compliance’s annual recurring and non-recurring revenue targets measured as of December 31, 2025, ADA Site Compliance may ultimately not perform as we hope both during and subsequent to the earn-out period.
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We cannot assure you that infringement or invalidity claims (or claims for indemnification resulting from infringement claims) will not be asserted or prosecuted against us or that any such assertions or prosecutions will not materially adversely affect our business.
Removed
The interests of our controlling stockholders may not coincide with our interests or the interests of other stockholders.
Added
We are subject to the risk of fraudulent schemes in which third parties pose as Company executives, board members, or trusted counterparties to induce unauthorized payments, wire transfers, or the disclosure of sensitive business information. These schemes typically exploit human judgment rather than technical vulnerabilities and may not be preventable through cybersecurity measures alone.
Added
Fraudulent parties may use publicly available information, including our SEC filings and press releases, to make such communications appear credible. Although we maintain internal controls designed to detect and prevent unauthorized transactions, there can be no assurance that these controls will be effective in all circumstances.
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A successful scheme could result in material financial loss, legal liability, and reputational harm, and any such losses may not be fully covered by our insurance policies.
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We cannot assure you that we will be able to attract or retain such personnel.
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We may also face claims by our investors, which could harm our business and financial condition. 17 Table of Contents Risks Relating to Our Charter Documents and Capital Structure A small number of “insider” stockholders have significant influence over stockholder actions.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have implemented incident response processes in the event of a cybersecurity threat. Such incident responses are overseen by functional leaders and internal experts. In the event of a cybersecurity threat, security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation.
Biggest changeSuch incident responses are overseen by functional leaders and internal experts. In the event of a cybersecurity threat, security events and data incidents are evaluated, ranked by severity and prioritized for response and remediation. Incidents are evaluated to determine materiality as well as operational and business impact and reviewed for potential privacy impact.
Members of management that comprise our incident response team include the following officers (or those with similar responsibility): Senior Director of Information Technology, Chief Operating Officer, Chief Financial Officer, Customer Success (if customers are affected), and Vice President of Human Resources (if employee data is affected).
Members of management that comprise our incident response team include the following officers (or those with similar responsibility): Senior Director of Information Technology, Chief Operating Officer, Chief Financial Officer, Customer Success (if customers are affected), and Senior Vice President of Human Resources (if employee data is affected).
We describe whether and how risks from identified cybersecurity threats are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “Security and privacy breaches, computer viruses, and cyber-attacks could harm our business, financial condition, results of operations, or reputation.” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K. 18 Table of Contents Cybersecurity Governance Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management.
We describe whether and how risks from identified cybersecurity threats are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “Security and privacy breaches, computer viruses, and cyber-attacks could harm our business, financial condition, results of operations, or reputation.” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
Our Audit Committee is responsible for the oversight of risks from cyber and data security threats. Members of the Board or Audit Committee receive periodic updates from senior management regarding our cybersecurity processes and risks.
Cybersecurity Governance Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management. Our Audit Committee is responsible for the oversight of risks from cyber and data security threats. Members of the Board or Audit Committee receive periodic updates from senior management regarding our cybersecurity processes and risks.
To defend, detect and respond to cybersecurity incidents, we, among other things: conduct proactive privacy and cybersecurity reviews of systems and applications, audit applicable data policies, perform penetration testing using external third-party tools and techniques to test security controls, conduct employee training, monitor emerging laws and regulations related to data protection and information security (including our products) and implement appropriate changes.
To defend, detect and respond to cybersecurity incidents, we, among other things: conduct proactive privacy and cybersecurity reviews of systems and applications, audit applicable data policies, perform penetration testing using external third-party tools and techniques to test security controls, conduct employee training, monitor emerging laws and regulations related to data protection and information security (including our products) and implement appropriate changes. 18 Table of Contents We have implemented incident response processes in the event of a cybersecurity threat.
Incidents are evaluated to determine materiality as well as operational and business impact and reviewed for potential privacy impact. As part of the above processes, we have engaged external auditors and consultants to assess our internal cybersecurity programs and compliance with applicable practices and standards and obtained a SOC 2 Type II report.
As part of the above processes, we have engaged external auditors and consultants to assess our internal cybersecurity programs and compliance with applicable practices and standards and obtained a SOC 2 Type II report.
A communication plan will be developed by Marketing, Legal, and Human Resources to inform internal employees, the public, those directly affected, and regulatory authorities, as necessary to help ensure all notifications comply with relevant laws and regulations.
A communication plan will be developed by Marketing, Legal, and Human Resources to inform internal employees, the public, those directly affected, and regulatory authorities, as necessary to help ensure all notifications comply with relevant laws and regulations. We did not experience any material cybersecurity incidents during the fiscal year ended December 31, 2025.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Company’s principal offices are located at 5210 E. Williams Circle, Suite 750, Tucson, Arizona 85711, consisting of approximately 627 square feet under a lease agreement that expires in October 2025.
Biggest changeItem 2. Properties The Company’s principal offices are located at 5210 E. Williams Circle, Suite 750, Tucson, Arizona 85711, consisting of approximately 627 square feet under a lease agreement that expires in October 2026. The Company also occupies shared office space in several locations under membership agreements which provide for membership fees based on the number of contracted seats.
Removed
The Company also leases office space in New York City, New York, and occupies shared office space in several locations under membership agreements which provide for membership fees based on the number of contracted seats.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 4. Mine Safety Disclosures Not applicable. PART II
Biggest changeItem 4. Mine Safety Disclosures Not applicable. 19 Table of Contents PART II
While these matters could materially affect operating results when resolved in future periods, management believes that, after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided for in the consolidated balance sheet as of December 31, 2024, would not be material to our financial position or annual results of operations.
While these matters could materially affect operating results when resolved in future periods, management believes that, after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided for in the consolidated balance sheet as of December 31, 2025, would not be material to our financial position or annual results of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth information with respect to our repurchases of common stock during the three months ended December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum Number ​ ​ ​ ​ ​ ​ ​ ​ ​ of Shares (or ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate Dollar ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ Value) that May ​ ​ ​ ​ ​ ​ ​ as Part of Publicly ​ Yet Be Purchased ​ ​ Total Number of ​ Average Price ​ Announced Plans or ​ under the Plans or ​ Shares Purchased Paid per Share Programs Programs (2) October 1 - October 31: ​ ​ ​ ​ ​ ​ ​ Employee transactions (1) 4,025 ​ $ 25.23 — ​ $ — November 1 - November 30: ​ ​ ​ ​ ​ ​ Employee transactions (1) 8,285 ​ ​ 27.55 — ​ — December 1 - December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee transactions (1) ​ 34,274 ​ ​ 19.39 ​ — ​ ​ — Total: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee transactions (1) ​ 46,584 ​ $ 21.35 ​ — ​ $ — Share repurchase program (2) ​ — ​ $ — ​ — ​ $ 1,860,000 (1) Includes shares surrendered by employees to satisfy tax withholding obligations in connection with the settlement restricted stock units or the issuance of unrestricted shares of common stock.
Biggest changeThe following table sets forth information with respect to our repurchases of common stock during the three months ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum Number ​ ​ ​ ​ ​ ​ ​ ​ ​ of Shares (or ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate Dollar ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ Value) that May ​ ​ ​ ​ ​ ​ ​ as Part of Publicly ​ Yet Be Purchased ​ ​ Total Number of ​ Average Price ​ Announced Plans or ​ under the Plans or ​ ​ ​ ​ Shares Purchased ​ ​ ​ Paid per Share ​ ​ ​ Programs ​ ​ ​ Programs (2) October 1 - October 31, 2025: ​ ​ ​ ​ ​ ​ ​ Employee transactions (1) 1,645 ​ $ 13.85 — ​ $ — November 1 - November 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee transactions (1) 2,891 ​ ​ 12.37 — ​ — Share repurchase program (2) ​ 53,733 ​ ​ 12.17 ​ 53,733 ​ ​ 8,261,000 December 1 - December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee transactions (1) ​ 9,599 ​ ​ 11.68 ​ — ​ ​ — Share repurchase program (2) ​ 27,398 ​ ​ 12.24 ​ 27,398 ​ ​ 7,925,000 Total: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee transactions (1) ​ 14,135 ​ $ 12.07 ​ — ​ $ — Share repurchase program (2) ​ 81,131 ​ $ 12.19 ​ 81,131 ​ $ 7,925,000 (1) Includes shares surrendered by employees to satisfy tax withholding obligations in connection with the settlement restricted stock units or the issuance of unrestricted shares of common stock.
We have not declared or paid any dividends on our preferred or common stock since our inception, and we presently anticipate that earnings, if any, will be retained for development of our business. There are no restrictions in our Certificate of Incorporation or By-laws that prevent us from declaring dividends.
We have not declared or paid any dividends on our preferred or common stock since our inception, and we presently anticipate that earnings, if any, will be retained for development of our business. There are no restrictions in our Certificate of Incorporation or 20 Table of Contents By-laws that prevent us from declaring dividends.
On January 31, 2025, there were 144 holders of record of our common stock, and a greater number of beneficial holders of our common stock for whom shares were held in a “nominee” or “street” name.
On January 31, 2026, there were 126 holders of record of our common stock, and a greater number of beneficial holders of our common stock for whom shares were held in a “nominee” or “street” name.
The transfer agent of our common stock is Equiniti Trust Company. Its address is 1100 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120-4100, and its telephone number is 1-800-468-9716. Dividend Policy Dividends to preferred stockholders take precedence over any dividends to common stockholders.
Its address is 1100 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120-4100, and its telephone number is 1-800-468-9716. Dividend Policy Dividends to preferred stockholders take precedence over any dividends to common stockholders.
In November 2023, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $5 million of our common stock through December 31, 2025. The stock repurchase program may be suspended or discontinued at any time and does not commit the Company to repurchase any dollar amount or particular number of shares of stock.
In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027. The program may be amended, suspended, or discontinued at any time and does not commit the Company to repurchase any shares of its common stock.
Shares repurchased under the program are subsequently retired and restored to the status of authorized but unissued shares of common stock. As of December 31, 19 Table of Contents 2024, we had $1.86 million remaining for the repurchase of shares. In March 2025, this share repurchase program was terminated.
Shares repurchased under the program are subsequently retired and restored to the status of authorized but unissued shares of common stock. As of December 31, 2025, we had $7.93 million remaining for the repurchase of shares.
(2) In November 2023, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $5 million of our common stock through December 31, 2025. Shares repurchased under the program are subsequently retired. The average price paid per share includes any broker commissions. In March 2025, this share repurchase program was terminated.
(2) In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027. Shares repurchased under the program will be subsequently retired. The average price paid per share includes any broker fees . The transfer agent of our common stock is Equiniti Trust Company.
Removed
No shares were repurchased under this program between December 31, 2024 and the date it was terminated. In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027.
Removed
The program may be amended, suspended, or discontinued at any time and does not commit the Company to repurchase any shares of its common stock. No repurchases have been made under this program to date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDue to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change (in thousands) 2024 2023 $ % ​ Revenue ​ $ 35,201 ​ $ 31,316 ​ $ 3,885 ​ 12 % Cost of revenue ​ 7,261 ​ 6,974 ​ 287 ​ 4 % Gross profit ​ 27,940 ​ 24,342 ​ 3,598 ​ 15 % Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and marketing ​ 12,668 ​ 11,781 ​ 887 ​ 8 % Research and development ​ 5,077 ​ 6,989 ​ (1,912) ​ (27) % General and administrative ​ 13,585 ​ 11,537 ​ 2,048 ​ 18 % Total operating expenses ​ 31,330 ​ 30,307 ​ 1,023 ​ 3 % Operating loss ​ (3,390) ​ (5,965) ​ 2,575 ​ (43) % Interest income (expense), net ​ ​ (864) ​ ​ 93 ​ ​ (957) ​ (1,029) % Net loss ​ $ (4,254) ​ $ (5,872) ​ $ 1,618 ​ (28) % ​ Revenue The following table presents our revenues disaggregated by sales channel: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, Change (in thousands) 2024 ​ 2023 ​ $ ​ % Partner and Marketplace $ 20,249 ​ $ 18,027 ​ $ 2,222 ​ 12 % Enterprise 14,952 ​ 13,289 ​ 1,663 ​ 13 % Total revenue $ 35,201 ​ $ 31,316 ​ $ 3,885 ​ 12 % ​ The Partner and Marketplace channel consists of our CMS partners, platform & agency partners, authorized resellers and the Marketplace.
Biggest changeDue to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change (in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % ​ Revenue ​ $ 40,311 ​ $ 35,201 ​ $ 5,110 ​ 15 % Cost of revenue ​ 8,755 ​ 7,261 ​ 1,494 ​ 21 % Gross profit ​ 31,556 ​ 27,940 ​ 3,616 ​ 13 % Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and marketing ​ 14,897 ​ 12,668 ​ 2,229 ​ 18 % Research and development ​ 4,590 ​ 5,077 ​ (487) ​ (10) % General and administrative ​ 15,249 ​ 13,445 ​ 1,804 ​ 13 % Change in fair value of contingent consideration ​ (1,350) ​ 140 ​ (1,490) ​ (1,064) % Total operating expenses ​ 33,386 ​ 31,330 ​ 2,056 ​ 7 % Operating loss ​ (1,830) ​ (3,390) ​ 1,560 ​ (46) % Other expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense, net ​ ​ (947) ​ ​ (864) ​ ​ (83) ​ 10 % Loss on extinguishment of debt ​ ​ (300) ​ ​ — ​ ​ (300) ​ 100 % Total other expense ​ ​ (1,247) ​ ​ (864) ​ ​ (383) ​ 44 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ (3,077) ​ $ (4,254) ​ $ 1,177 ​ (28) % ​ Revenue The following table presents our revenues disaggregated by sales channel: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ Change (in thousands) 2025 ​ 2024 ​ $ ​ % Partner and Marketplace $ 22,233 ​ $ 20,249 ​ $ 1,984 ​ 10 % Enterprise 18,078 ​ 14,952 ​ 3,126 ​ 21 % Total revenue $ 40,311 ​ $ 35,201 ​ $ 5,110 ​ 15 % ​ The Partner and Marketplace channel consists of our CMS partners, platform & agency partners, authorized resellers and the Marketplace.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes for the years ended December 31, 2024 and 2023 that appear elsewhere in this annual report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes for the years ended December 31, 2025 and 2024 that appear elsewhere in this annual report on Form 10-K.
The discussion of the results of our operations compares the year ended December 31, 2024 with the year ended December 31, 2023. Our results of operations in these periods are not necessarily indicative of the results which may be expected for any subsequent period.
The discussion of the results of our operations compares the year ended December 31, 2025 with the year ended December 31, 2024. Our results of operations in these periods are not necessarily indicative of the results which may be expected for any subsequent period.
Factors that could cause or contribute to such differences include but are not 20 Table of Contents limited to those discussed below and elsewhere in this annual report on Form 10-K, particularly in “Risk Factors.” The forward-looking statements included in this annual report on Form 10-K are made only as of the date hereof.
Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this annual report on Form 10-K, particularly in “Risk Factors.” The forward-looking statements included in this annual report on Form 10-K are made only as of the date hereof.
ARR excludes non-recurring fees, which are defined as revenue expected to be generated from services typically not offered as a subscription service or annual service offering such as our PDF remediation services business, one-time mobile application reports, and other miscellaneous services that are offered as non-subscription services or are expected to be one-time in nature.
ARR excludes non-recurring fees, which are defined as revenue expected to be generated from services typically not offered as a subscription service or annual 24 Table of Contents service offering such as our PDF remediation services business, one-time mobile application reports, and other miscellaneous services that are offered as non-subscription services or are expected to be one-time in nature.
We have two sales channels to deliver our product, the Partner and Marketplace channel and the Enterprise channel. AudioEye continues to focus on recurring revenue growth in both channels, while still offering our website and mobile application reporting services and PDF remediation services that provide non-recurring revenue.
In 2025, we continued to focus on product innovation and expanding revenue. We have two sales channels to deliver our product, the Partner and Marketplace channel and the Enterprise channel. AudioEye continues to focus on recurring revenue growth in both channels, while still offering our website and mobile application reporting services and PDF remediation services that provide non-recurring revenue.
We had one major customer (including the customer’s affiliates reflecting multiple contracts and a partnership with the Company) which accounted for approximately 15% and 17% of our revenue in the years ended December 31, 2024 and 2023, respectively. The Company continued to invest in research and development in 2024.
We had one major customer (including the customer’s affiliates reflecting multiple contracts and a partnership with the Company) which accounted for approximately 13% and 15% of our revenue in the years ended December 31, 2025 and 2024, respectively. The Company continued to invest in research and development in 2025.
Total research and development cost includes the amount of research and development expense reported within operating expenses as well as development cost that was capitalized during the fiscal period. For the year ended December 31, 2024, R&D expenses decreased by 27% from the prior year.
Total research and development cost includes the amount of research and development expense reported within operating expenses as well as development cost that was capitalized during the fiscal period. For the year ended December 31, 2025, R&D expenses decreased by 10% from the prior year.
Quantitative and Qualitative Disclosures About Market Risk Not applicable. Item 8. Financial Statements and Supplementary Data Our Financial Statements begin on page F-1 of this Annual Report on Form 10-K and are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.
Financial Statements and Supplementary Data Our Financial Statements begin on page F-1 of this Annual Report on Form 10-K and are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.
For the year ended December 31, 2024, total revenue increased by 12% over the prior year. As of December 31, 2024, Annual Recurring Revenue (“ARR”) was approximately $36.6 million, which represented an increase of 17% from December 31, 2023. Refer to “Other Key Operating Metrics” below for details on how we calculate ARR.
For the year ended December 31, 2025, total revenue increased by 15% over the prior year. As of December 31, 2025, Annual Recurring Revenue (“ARR”) was approximately $40.0 million, which represented an increase of 9% from December 31, 2024. Refer to “Other Key Operating Metrics” below for details on how we calculate ARR.
Total research and development cost, as defined under the “Research and Development” section in the “Results of Operations” below, was 19% of total revenue in 2024. Total research and development cost decreased from the prior year due to the completion of significant initiatives in research and development.
Total research and development cost, as defined under the “Research and Development” section in the “Results of Operations” below, was 16% of total revenue in 2025. Total research and development cost decreased from the prior year due to lower personnel cost.
Selling and Marketing Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ (in thousands) ​ 2024 2023 $ % Selling and marketing ​ $ 12,668 ​ $ 11,781 ​ $ 887 ​ 8 % ​ Selling and marketing expenses consist primarily of compensation and benefits related to our sales and marketing staff, as well as third-party advertising and marketing expenses.
Selling and Marketing Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ (in thousands) ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Selling and marketing ​ $ 14,897 ​ $ 12,668 ​ $ 2,229 ​ 18 % ​ Selling and marketing expenses consist primarily of compensation and benefits related to our sales and marketing staff, as well as third-party advertising and marketing expenses.
Changes in estimated revenue and outcomes different from estimates could cause a significant adjustment to earnings in a reporting period as the fair value of the liability is highly dependent on management’s estimate. ​ Goodwill is recorded based on the excess of purchase price over the estimated fair value of net assets acquired and is not amortized.
Changes in estimated revenue and outcomes different from estimates could cause a significant adjustment to the cost of acquired assets in a reporting period as the fair value of the liability is highly dependent on management’s estimate.
We also use ARR as one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations.
Other Key Operating Metrics We consider annual recurring revenue (“ARR”) as a key operating metric and a key indicator of our overall business. We also use ARR as one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations.
As of December 31, 2024, AudioEye had approximately 127,000 customers, an increase from 110,000 customers at December 31, 2023. The increase in customer count is attributed to both our Partner and Marketplace and Enterprise channels. In the twelve months ended December 31, 2024, revenue from our Partner and Marketplace grew 12% over the prior year.
As of December 31, 2025, AudioEye had approximately 131,000 customers, an increase from 127,000 customers at December 31, 2024. The increase in customer count was attributable to an increase in customers in our Partner and Marketplace channel. In the twelve months ended December 31, 2025, revenue from our Partner and Marketplace channel grew 10% over the prior year.
Executive Overview AudioEye is an industry-leading digital accessibility platform delivering Americans with Disabilities Act (“ADA”) and WCAG compliance at scale. Our solutions advance accessibility with patented technology that reduces barriers, expands access for individuals with disabilities, and enhances the user experience for a broader audience. In 2024, we continued to focus on product innovation, expanding revenue and managing expenses.
Executive Overview AudioEye is an industry-leading digital accessibility platform delivering Americans with Disabilities Act (“ADA”) and Web Content Accessibility Guidelines (“WCAG”) compliance at scale. Our solutions advance accessibility with patented technology that reduces barriers, expands access for individuals with disabilities, and enhances the user experience for a broader audience.
This channel represented about 58% of ARR at the end of December 2024. In the twelve months ended December 31, 2024, total Enterprise revenue, inclusive of revenue from ADA Site Compliance acquired in September 2024, increased by 13% over the prior year. The Enterprise channel represented about 42% of ARR at the end of December 2024.
This channel represented about 58% of ARR at December 31, 2025. In the twelve months ended December 31, 2025, total Enterprise channel revenue increased by 21% over the prior year. The Enterprise channel represented about 42% of ARR at December 31, 2025.
General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ (in thousands) ​ 2024 2023 ​ $ % General and administrative ​ $ 13,585 ​ $ 11,537 ​ $ 2,048 ​ 18 % ​ General and administrative expenses consist primarily of compensation and benefits related to our executives, directors and corporate support functions, general corporate expenses including legal fees, occupancy and transaction costs.
General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ (in thousands) ​ 2025 ​ ​ ​ 2024 ​ $ ​ ​ ​ % General and administrative ​ $ 15,249 ​ $ 13,445 ​ $ 1,804 ​ 13 % ​ 23 Table of Contents General and administrative expenses consist primarily of compensation and benefits related to our executives, directors and corporate support functions, general corporate expenses including legal fees, occupancy and transaction costs.
Both intangible assets and goodwill are evaluated periodically for impairment. ​ Refer to Note 2 - Significant Accounting Policies to our consolidated financial statements for a complete discussion of the significant accounting policies and methods used in the preparation of our consolidated financial statements, including our accounting policies related to intangible assets. ​ Item 7A.
Refer to Note 2 - Significant Accounting Policies to our consolidated financial statements for a complete discussion of the significant accounting policies and methods used in the preparation of our consolidated financial statements, including our accounting policies related to intangible assets. ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. Item 8.
Research and Development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ (in thousands) ​ 2024 2023 $ % Research and development expense ​ $ 5,077 ​ $ 6,989 ​ $ (1,912) ​ (27) % Plus: Capitalized research and development cost ​ 1,771 ​ 1,946 ​ (175) ​ (9) % Total research and development cost ​ $ 6,848 ​ 8,935 ​ $ (2,087) ​ (23) % ​ Research and development (“R&D”) expenses consist primarily of compensation and related benefits related to our employees involved in research and development activities.
Research and Development Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ (in thousands) ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Research and development expense ​ $ 4,590 ​ $ 5,077 ​ $ (487) ​ (10) % Plus: Capitalized research and development cost ​ 1,876 ​ 1,771 ​ 105 ​ 6 % Total research and development cost ​ $ 6,466 ​ 6,848 ​ $ (382) ​ (6) % ​ Research and development (“R&D”) expenses consist primarily of compensation and related benefits related to our employees involved in research and development activities.
Additionally, if the Company’s plans are not achieved and/or if significant unanticipated events occur, the Company may have to further modify its business plan, which may require us to raise additional capital or reduce expenses. ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ December 31, 2024 December 31, 2023 ​ Current assets ​ $ 12,120 ​ $ 14,776 ​ Current liabilities ​ (11,571) ​ (11,529) ​ Working capital ​ $ 549 ​ $ 3,247 ​ ​ Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ (in thousands) 2024 2023 ​ Net cash provided by operating activities $ 2,731 ​ $ 318 ​ Net cash used in investing activities ​ (7,214) ​ (2,156) ​ Net cash provided by financing activities ​ 898 ​ 4,170 ​ Net increase (decrease) in cash and cash equivalents ​ $ (3,585) ​ $ 2,332 ​ ​ For the year ended December 31, 2024, in relation to the prior year, cash provided by operating activities increased primarily due to increased revenue and cost efficiencies associated with lower personnel expense following a realignment in our product and development teams .
Additionally, if the Company’s plans are not achieved and/or if significant unanticipated events occur, the Company may have to further modify its business plan, which may require us to raise additional capital or reduce expenses. ​ Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ (in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ Net cash provided by operating activities ​ ​ ​ $ 4,753 ​ $ 2,731 ​ Net cash used in investing activities ​ (4,196) ​ (7,214) ​ Net cash provided by (used in) financing activities ​ (920) ​ 898 ​ Net decrease in cash and cash equivalents ​ $ (363) ​ $ (3,585) ​ ​ For the year ended December 31, 2025, in relation to the prior year, cash provided by operating activities increased primarily as a result of the increase in revenue.
The increase in cost of revenue was primarily due to higher service delivery costs associated with increased revenue, amortization of our capitalized software development costs and additional costs attributable to ADA Site Compliance, which was acquired in September 2024. For the year ended December 31, 2024, gross profit increased by 15% over the prior year.
For the year ended December 31, 2025, cost of revenue increased by 21% over the prior year. The increase in cost of revenue was primarily due to increased costs incurred for service delivery, which were in line with the increase in revenue, and higher amortization expense related to our capitalized software development costs.
Cost of Revenue and Gross Profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ (in thousands) ​ 2024 2023 $ % Revenue ​ $ 35,201 ​ $ 31,316 ​ $ 3,885 ​ 12 % ​ Cost of Revenue ​ 7,261 ​ 6,974 ​ 287 ​ 4 % ​ Gross profit ​ $ 27,940 ​ $ 24,342 ​ $ 3,598 ​ 15 % ​ ​ Cost of revenue consists primarily of compensation and related benefits costs for our customer experience team, as well as a portion of our technology operations team that supports the delivery of our services, fees paid to our managed hosting and other third-party service providers, amortization of capitalized software development costs and patent costs, and allocated overhead costs. 22 Table of Contents For the year ended December 31, 2024, cost of revenue increased by 4% over the prior year.
The 21% increase in Enterprise channel revenue was driven primarily by new customer relationships, including from our expansion into the European Union. 22 Table of Contents Cost of Revenue and Gross Profit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change (in thousands) ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Revenue ​ $ 40,311 ​ $ 35,201 ​ $ 5,110 ​ 15 % Cost of revenue ​ 8,755 ​ 7,261 ​ 1,494 ​ 21 % Gross profit ​ $ 31,556 ​ $ 27,940 ​ $ 3,616 ​ 13 % ​ Cost of revenue consists primarily of compensation and related benefits costs for our customer experience team, as well as a portion of our technology operations team that supports the delivery of our services, fees paid to our managed hosting and other third-party service providers, amortization of capitalized software development costs and patent costs, and allocated overhead costs.
The critical accounting estimates discussed below are estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations. ​ 25 Table of Contents Goodwill, Intangible Assets and Contingent Consideration recognized in connection with a Business Combination We recognize intangible assets acquired in connection with business combinations based on their fair value at acquisition, which is determined by management with the assistance a third-party valuation specialist.
The critical accounting estimates discussed below are estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations. ​ Contingent Consideration Recognized in Connection with Business Combinations and Asset Acquisitions We recognize the contingent consideration liability resulting from a business combination based on its fair value, which is determined both initially and at the end of each reporting period preceding the end of the measurement period using the Monte-Carlo simulation model.
For the year ended December 31, 2024, in relation to the prior year, cash used in investing activities increased primarily due to the acquisition of ADA Site Compliance in 2024, for which we paid $5.3 million, net of cash acquired. Cash used for investing activities in 2023 related primarily to cash outlays for software development costs.
For the year ended December 31, 2025, in relation to the prior year, cash used in investing activities decreased primarily due to a reduction in payments towards business and asset acquisitions. In 2024, we paid $5.3 million in connection with the acquisition of ADA Site Compliance, net of cash acquired, whereas payments towards asset acquisitions in 2025 totaled $2.2 million.
As of March 12, 2025, we have no off-balance sheet arrangements, and we believe that the Company has sufficient liquidity to continue as a going concern through the next twelve months. We expect to continue to invest in our product and in sales and marketing to capture market demand.
Refer to Note 6 – Debt to our consolidated financial statements for additional information regarding our credit facility. As of March 12, 2026, we have no off-balance sheet arrangements, and we believe that the Company has sufficient liquidity to continue as a going concern through the next twelve months.
As of December 31, 2024, ARR was $36.6 million, which represents an increase of 17% year-over-year, driven by growth in both our Partner and Marketplace channel and Enterprise channel . Liquidity and Capital Resources Working Capital As of December 31, 2024, we had $5.7 million in cash and cash equivalents, and working capital of $549,000.
As of December 31, 2025, ARR was $40.0 million, which represents an increase of 9% year-over-year, driven by growth in both our Partner and Marketplace channel and Enterprise channel .
The increase in gross profit was a result of increased revenue.
For the year ended December 31, 2025, gross profit increased by 13% over the prior year. The increase in gross profit was a result of increased revenue.
In November 2023, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $5 million of our common stock through December 31, 2025. Shares repurchased under the program are subsequently retired and restored to the status of authorized but unissued shares of common stock.
Shares repurchased under the program are subsequently retired and restored to the status of authorized but unissued shares of common stock. In the year ended December 31, 2025, we used $4.57 million of the program to repurchase shares. As of December 31, 2025, we had $7.93 million remaining for the repurchase of shares.
No shares were repurchased under this program between December 31, 2024 and the date it was terminated. In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027.
In January 2025, the Board of Directors adopted a share repurchase program authorizing the repurchase of up to $12.5 million of our common stock through January 24, 2027. The program may be amended, suspended, or discontinued at any time and does not commit the Company to repurchase any shares of its common stock.
The increase in Partner and Marketplace channel revenue was the result of continued expansion with existing partners and the execution of new partnerships agreements in the year. The increase in Enterprise channel revenue was driven primarily by an increase in Enterprise customers .
This channel also includes federal, state and local government agencies. For the year ended December 31, 2025, total revenue increased by 15% over the prior year. The 10% increase in Partner and Marketplace channel revenue was the result of continued expansion with existing partners and the execution of new partnerships agreements in the year.
For the year ended December 31, 2024, selling and marketing expenses increased by 8% over the prior year. The increase in selling and marketing expenses resulted primarily from additional cost associated with ADA Site Compliance, which was acquired in September 2024, as well as higher third-party marketing and stock compensation expense .
For the year ended December 31, 2025, selling and marketing expenses increased by 18% over the prior year. The increase in selling and marketing expenses resulted primarily from higher investment in third-party marketing services and higher personnel costs.
This decrease was driven by l ower personnel cost associated with a realignment in our product and development teams following the completion of significant initiatives in R&D . For the year ended December 31, 2024, capitalized R&D cost decreased by 9% from the prior year.
This decrease was driven by l ower personnel cost resulting from a reduction in headcount . For the year ended December 31, 2025, capitalized R&D cost increased by 6% from the prior year. The increase in capitalized R&D cost was the result of engineering personnel spending more time on product development than in previous year.
In 2024, cash provided by operating activities totaled $2.7 million, and we were able to raise $6.6 million through an ATM offering, net of transaction costs. We expect cash provided by operating activities to continue to improve in 2025, driven mainly by the anticipated revenue growth.
We expect to continue to invest in our product and in sales and marketing to capture market demand. In 2025, cash provided by operating activities totaled $4.8 million. We expect cash provided by operating activities to continue to improve in 2026, driven mainly by the anticipated revenue growth.
In the twelve months ended December 31, 2024, both selling and marketing expense and general and administrative expense increased over the prior year. This increase in selling and marketing expense was due to additional costs associated with ADA Site Compliance, which was acquired in September 2024, as well as higher third-party marketing and stock compensation expenses .
The increase in general and administrative expense for the year ended December 31, 2025 was due primarily to higher amortization expense associated with our intangible assets, as well as increases in personnel costs, including stock compensation expense, and litigation expenses.
For the year ended December 31, 2024, general and administrative expenses increased by 18% over the prior year.
For the year ended December 31, 2025, both selling and marketing expense and general and administrative expense increased over the prior year. The increase in selling and marketing expense was mainly driven by higher investment in third-party marketing services .
For the year ended December 31, 2024, in relation to the prior year, cash provided by financing activities decreased due to an increase in payments related to settlement of employee stock-based awards and common stock repurchases, as well as higher payouts towards the contingent consideration in connection with the acquisition of BOIA.
For the year ended December 31, 2025, in relation to the prior year, the change to cash used in financing activities from cash provided by financing activities was primarily due to an increase in common stock repurchases from $2.0 million in 2024 to $4.6 million in 2025 .
The decrease in capitalized R&D cost was the result of engineering personnel spending less time on product development than in previous comparable periods. Total R&D cost, which includes both R&D expenses and capitalized R&D costs, decreased 23% from 2023 to 2024.
Total R&D cost, which includes both R&D expenses and capitalized R&D costs, decreased 6% from 2024 to 2025.
The increase in general and administrative expenses was due primarily to an increase in litigation expenses of $2.1 million, as well as increased stock compensation expense and transaction costs incurred in connection with the acquisition of ADA Site Compliance . 23 Table of Contents Interest Income (Expense) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, Change (in thousands) ​ 2024 2023 ​ $ % Interest income (expense), net ​ $ (864) ​ $ 93 ​ $ (957) ​ (1,029) % ​ For the year ended December 31, 2024 , interest expense, net consisted primarily of interest on our term loan borrowed in the fourth quarter of 2023, which was partially offset by interest income from investment in money market funds.
Interest Expense, Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ Change (in thousands) ​ 2025 ​ ​ ​ 2024 ​ $ ​ ​ ​ % Interest expense, net ​ $ (947) ​ $ (864) ​ $ (83) ​ 10 % ​ Interest expense, net consists primarily of interest on our term loan, offset by interest income from investment in money market funds.
Removed
The increase in general and administrative expense was mainly driven by increases in litigation and stock compensation expenses, as well as transaction costs incurred in connection with the acquisition of ADA Site Compliance .
Added
For the year ended December 31, 2025, general and administrative expenses increased by 13% over the prior year. The increase in general and administrative expenses was due primarily to higher amortization expense associated with our intangible assets, as well as higher personnel cost, including stock compensation expense, and an increase in litigation expense by $715,000.
Removed
This channel also includes federal, state and local government agencies and revenue attributable to ADA Site Compliance, which was acquired in September 2024. For the year ended December 31, 2024, total revenue increased by 12% over the prior year.
Added
Change in Fair Value of Contingent Consideration ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ Change ​ (in thousands) ​ 2025 ​ ​ ​ 2024 ​ $ ​ ​ ​ % Change in fair value of contingent consideration ​ $ (1,350) ​ $ 140 ​ $ (1,490) ​ (1,064) % ​ Change in fair value of contingent consideration consists of non-cash valuation adjustments to contingent consideration liabilities recognized in connection with a business combination or an asset acquisition.
Removed
For the year ended December 31, 2023 , interest income, net consisted primarily of income from investment in money market funds. Other Key Operating Metrics We consider annual recurring revenue (“ARR”) as a key operating metric and a key indicator of our overall business.
Added
For the year ended December 31, 2025, the change in fair value of contingent consideration was due to a reduction in the estimated earnout payable in connection with the acquisition of ADA Site Compliance. We do not expect further changes in fair value of contingent consideration associated with ADA Site Compliance in future periods.
Removed
The $2.7 million decrease in working capital in 2024 was primarily due to the acquisition of ADA Site Compliance, for which we made payments totaling $5.3 million in 2024, net of cash received.
Added
For the year ended December 31, 2025, interest expense, net increased by 10% over the prior year. The increase in interest expense, net was primarily attributable to a reduction in interest income from investment in money market funds.
Removed
In the twelve months ended December 31, 2024 , we paid $2.02 million in cash to repurchase 299,371 shares of our common stock. As of December 31, 2024 , we had $1.86 million remaining for the repurchase of shares. In March 2025, this share repurchase program was terminated.
Added
Loss on Extinguishment of Debt ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ Change (in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ ​ ​ ​ % Loss on extinguishment of debt ​ $ (300) ​ $ — ​ $ (300) ​ 100 % ​ On March 31, 2025, upon entering into a new credit facility with Western Alliance Bank, the Company paid the full $7.0 million in outstanding principal on its previous term loan with SG Credit Partners.
Removed
The program may be amended, suspended, or discontinued at any time and does not commit the Company to repurchase any shares of its common stock. No repurchases have been made under this program to date.
Added
For the year ended December 31, 2025, in connection with the termination of this term loan, we recognized a $300,000 loss on extinguishment of debt, which included $144,000 in prepayment and other fees and the unamortized portion of related debt discount and debt issuance costs.
Removed
In the second quarter of 2024, the Company initiated an At The Market offering (“ATM offering”), under which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $7.0 million from time to time.
Added
Liquidity and Capital Resources ​ Working Capital ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ Current assets ​ $ 12,622 ​ $ 12,120 ​ Current liabilities ​ (14,416) ​ (11,571) ​ Working capital ​ $ (1,794) ​ $ 549 ​ ​ As of December 31, 2025, we had $5.3 million in cash and cash equivalents, and working capital of ($1,794,000).
Removed
As of December 31, 2024, we had issued 292,746 shares of our common stock and raised $6,634,000, net of transaction expenses, utilizing the ATM offering in full. In the second quarter of 2024, we made a $2.4 million cash payment to settle the contingent consideration associated with the Bureau of Internet Accessibility Inc.
Added
The $2.3 million decrease in working capital in 2025 was primarily due to an increase in deferred revenue associated with new customers, accrued liabilities related to asset acquisitions, and a portion of our term loan being classified as a current liability.
Removed
(“BOIA”) acquisition in full. 24 Table of Contents ​ As of December 31, 2024, we had $1.4 million in noncurrent contingent consideration liability recognized in connection with the acquisition of ADA Site Compliance, and $7.0 million in noncurrent term loan which matures on November 30, 2026.
Added
As of December 31, 2025, we had $13.4 million outstanding under the term loan, $12.9 million of which is classified as a noncurrent liability. The term loan matures on March 31, 2030, and requires quarterly principal payments due beginning on April 10, 2026.
Removed
For the years ended December 31, 2024 and 2023, we raised $6.6 million and $6.9 million, respectively, through an ATM offering and a term loan, respectively, net of transaction costs.
Added
This impact was partially offset by a net improvement in other financing activities, as 2025 net proceeds from debt refinancing 25 Table of Contents of $5.7 million exceeded the net 2024 impact of $4.9 million, which was comprised of net common stock offering proceeds of $6.6 million reduced by $1.7 million in cash outlays for settlement of contingent consideration.
Removed
Acquired intangible assets are amortized on a straight-line basis over their estimated useful life. ​ We also recognize the contingent consideration liability resulting from a business combination based on its fair value, which is determined both initially and in each reporting period preceding the end of the measurement period using the Monte-Carlo simulation model.
Added
The model incorporates key assumptions, including non-recurring and recurring revenue metrics. Changes in estimated revenue and outcomes different from estimates could cause a significant adjustment to earnings in a reporting period as the fair value of the liability is highly dependent on management’s estimate.
Removed
The model incorporates key assumptions, including non-recurring and recurring revenue metrics.
Added
The fair value of the contingent consideration liability resulting from an asset acquisition is determined by management based on estimated recurring revenue from acquired customer relationships. Subsequent changes in the estimated amount of consideration are recognized as an adjustment to the cost of the acquired asset.
Removed
The value of goodwill is highly dependent on the assessed fair value of intangible assets and contingent consideration liability at acquisition.

Other AEYE 10-K year-over-year comparisons