AUDIOEYE INC

To the Shareholders and Board of Directors of

AudioEye, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of AudioEye, Inc. and its subsidiary (collectively, the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Estimate for Valuation of Acquired Customer Relationships Intangible Asset

Description of the Matter

As discussed in Note 3 to the consolidated financial statements, on September 27, 2024, the Company consummated the business acquisition of ADA Site Compliance (ADA SC) for total consideration of approximately $7 million. The acquisition-date fair value of ADA SC’s customer relationships intangible asset was $5.1 million. The fair value of the intangible asset was estimated using a multi-period excess earnings method.

We identified the evaluation of the fair value of customer relationships intangible asset acquired through the ADA SC business combination as a critical audit matter due to the significant judgment required in determining its estimated fair value. The significant assumptions used to estimate the fair value of the intangible asset included certain assumptions that form the basis of the forecasted results, such as revenue growth rates, attrition rates, expense forecasts and discount rates. There was a high degree of auditor judgment and subjectivity in applying audit procedures and evaluating the significant assumptions relating to the estimate, including involvement of our fair value specialist.

How We Addressed the Matter in Our Audit

To test the estimated fair value of the customer relationships intangible asset, we performed audit procedures that included, among others, evaluating the prospective financial information, evaluating the Company’s selection of the valuation methodology, evaluating the methods and significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates used. For example, we assessed the completeness and accuracy of the historical financial information of ADA SC that were used to develop the assumptions related to forecasted revenue and expenses and involved our valuation specialist to assist with our evaluation of the methodology used by the Company and the reasonableness of significant assumptions, and performed independent comparative calculations to estimate the discount rate.

/s/MaloneBailey, LLP

www.malonebailey.com

We have served as the Company’s auditor since 2011.

Houston, Texas

March 12, 2025