David Moradi
About David Moradi
David Moradi, age 49, is AudioEye’s CEO (since January 2022), previously Interim CEO and Chief Strategy Officer (August 2020–January 2022), and a director since November 2019; he will become Chairman of the Board effective at the May 23, 2025 Annual Meeting, with Jamil Tahir continuing as Lead Independent Director . He founded Sero Capital LLC (September 2018) and has prior investment roles at Anthion Management, Pequot Capital, and Soros Fund Management; he began as a special situations analyst at Imperial Capital and holds a B.A. in psychology from UCLA . During his tenure period, AudioEye’s TSR (fixed $100 investment from 12/31/2021) reached 216.67 by 2024; revenue grew 12% in 2024 to $35.2M, ARR rose 17% to $36.6M, customers increased to ~127k, and net loss improved to $(4.254)M from $(5.872)M in 2023 . Say‑on‑pay support was ~99% in 2024, and compensation is governed by anti‑hedging and Nasdaq‑compliant clawback policies .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sero Capital LLC | Founder & CEO | 2018–present | Principal shareholder of AudioEye; director designation rights history; growth investing in tech |
| Anthion Management | Founder & CEO | Not disclosed | Technology-focused investment fund leadership |
| Pequot Capital Management | Portfolio Manager | Not disclosed | Managed tech investments; institutional portfolio leadership |
| Soros Fund Management | Analyst & Portfolio Manager | Not disclosed | Research and portfolio management at leading fund |
| Imperial Capital LLC | Special Situations Analyst | Not disclosed | Early career analytical foundation |
| AudioEye | Interim CEO & Chief Strategy Officer | Aug 2020–Jan 2022 | Led transition prior to permanent CEO appointment |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| David Moradi Foundation | Founder & Chairman | Not disclosed | Philanthropy in education and veterans support |
| Sero Capital LLC | Founder & CEO | Sep 2018–present | Major AEYE holder; historic director designation rights |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $1 | $400,000 |
| Bonus Paid ($) | $0 | $0 |
| Stock Awards ($, SCT) | $0 | $0 |
| All Other Compensation ($) | $0 | $0 |
- Employment Agreement amended Dec 26, 2023 raised base salary to $400,000 beginning Jan 1, 2024; Second Amendment (Mar 31, 2025) reverts annual base salary to $1 beginning Q2 2025 and extends term to Jan 9, 2027; Third Amendment (Apr 4, 2025) adds health benefits value up to $10,000 annually .
Performance Compensation
CEO Long-Term Equity Awards (RSUs) – Vesting Schedule
| Grant | Grant Date | Quantity | Vesting Tranches | Acceleration Terms |
|---|---|---|---|---|
| Time-based RSUs | May 20, 2022 | 400,000 | 111,706 vested Jan 20, 2023; 111,706 vested Jan 20, 2024; 111,706 vested Jan 20, 2025; 64,882 scheduled Aug 20, 2025 | Full acceleration immediately prior to effective time of Change in Control involving a Corporate Transaction (2020 Plan) |
| Time-based RSUs | Mar 31, 2025 (Second Amendment) | 241,444 | 81,444 scheduled Jan 9, 2026; 160,000 scheduled Jan 9, 2027 | Any unvested RSUs fully vest if terminated without cause or upon death; also accelerates upon Change in Control involving a corporate transaction |
CEO Performance Share Awards (PSAs) – Performance Conditions and Status
| Metric | Target | Status/Actual | Payout | Performance Window / Notes |
|---|---|---|---|---|
| Monthly Recurring Revenue (MRR) | ≥ $3.0M for 2 consecutive months | Achieved; vested Dec 18, 2024 | 55,000 shares vested | Original Aug 20, 2025 expiration; achieved prior to expiry |
| MRR | ≥ $5.0M for 2 consecutive months | Not yet achieved | 50,000 shares potential | Performance period extended to Jan 9, 2027 (Second Amendment) |
| Stock VWAP | ≥ $25 for 20 consecutive trading days | Achieved; vested Jan 15, 2021 | 55,000 shares vested | Achieved early tranche under award |
| Stock VWAP | ≥ $50 for 20 consecutive trading days | Not yet achieved | 50,000 shares potential | Performance period extended to Jan 9, 2027 (Second Amendment) |
| Stock VWAP | ≥ $100 for 20 consecutive trading days | Not yet achieved | 50,000 shares potential | Original Aug 20, 2025 expiration still applies |
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As of Dec 31, 2024, 150,000 PSAs remained unearned; at $15.21/share these had a modeled payout value of $2,281,500 assuming maximum performance .
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Pay‑versus‑performance alignment: Compensation Actually Paid to the CEO moved in tandem with TSR and equity fair values; the Company reports TSR value of initial $100 investment at 216.67 in 2024 and details equity fair value adjustments underlying CAP calculations .
Near-term Vesting Dates (Potential Selling Pressure for Tax Withholding)
- Aug 20, 2025: 64,882 RSUs scheduled to vest .
- Jan 9, 2026: 81,444 RSUs scheduled to vest .
- Jan 9, 2027: 160,000 RSUs scheduled to vest .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 2,541,271 shares (676,981 directly; 1,864,290 via Sero Capital LLC), representing 20.5% of outstanding shares as of March 27, 2025 . Outstanding shares: 12,426,539 . |
| Vested but not settled RSUs excluded | 22,560 RSUs vested but not scheduled to settle within 60 days are excluded from beneficial count . |
| Unvested RSUs at 12/31/2024 | 176,588 RSUs unvested; market value $2,685,903 at $15.21/share . |
| Unearned PSAs at 12/31/2024 | 150,000 PSAs unearned; modeled payout value $2,281,500 at $15.21/share assuming max performance . |
| Hedging / Pledging | Company prohibits hedging transactions; no pledging disclosure found for Mr. Moradi . |
| Ownership Guidelines | Stock ownership guidelines not disclosed in proxy; no compliance status presented . |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement Timeline | Original Aug 20, 2020 agreement with $1 salary; Restated April 5, 2022 added 400,000 RSUs; Amendment Dec 26, 2023 raised salary to $400,000 for 2024; Second Amendment Mar 31, 2025 extended term to Jan 9, 2027 and reverted salary to $1 beginning Q2 2025; Third Amendment Apr 4, 2025 adds health benefits value up to $10,000 annually . |
| Severance / Acceleration | Any unvested RSUs become fully vested if terminated without cause or upon death; PSAs under 2020 award fully vest if terminated without cause before expiration; plan-level CIC accelerations as described . |
| Change-in-Control Economics | RSUs accelerate immediately prior to effective time of a CIC involving a corporate transaction (single-trigger for specified grants); PSUs accelerate based on actual performance at CIC per plan; excise tax gross‑up under IRC §4999/§280G is provided (shareholder‑unfriendly) . |
| Clawback | Nasdaq-compliant compensation recovery policy applies to incentive-based compensation upon accounting restatement; recovery over prior three fiscal years . |
| Non‑compete / Non‑solicit | Not disclosed in proxy; no terms presented . |
Board Governance
- Board service: Director since November 2019; to be appointed Chairman as of Annual Meeting (May 23, 2025); not independent under Nasdaq rules .
- Independence framework: Lead Independent Director (Jamil Tahir) presides executive sessions and provides oversight; independent directors (Fleming, Hawkins, Tahir) compose Audit, Compensation, and Nominating Committees .
- Committee roles: Audit (Tahir, Chair; Fleming; Hawkins); Compensation (Tahir, Chair; Fleming; Hawkins); Nominating & Corporate Governance (Fleming, Chair; Hawkins; Tahir) .
- Attendance and meetings: Board held six meetings in 2024; each director attended ≥75% of Board/committee meetings; three of five then-standing directors attended the 2024 Annual Meeting .
- Director compensation: Non-employee directors receive RSUs on annual/quarterly cycles with settlement deferrals; Moradi’s compensation as executive director is reported in the NEO table and excluded from the non-employee director table .
Performance & Track Record
| Metric | 2024 | 2023 | Notes |
|---|---|---|---|
| Revenue ($000s) | 35,201 | 31,316 | +12% YoY; Enterprise +13% YoY; Partner & Marketplace +12% YoY . |
| ARR ($MM) | 36.6 | 31.3 (implied base; ARR growth +17%) | +17% YoY; reflects growth across channels . |
| Customers (000s) | ~127 | ~110 | Expansion across channels . |
| Operating Loss ($000s) | (3,390) | (5,965) | Improved operating results . |
| Net Loss ($000s) | (4,254) | (5,872) | Loss narrowed 28% . |
| TSR (fixed $100, end of period) | 216.67 | 77.21 | CAP methodology aligns with equity fair value changes . |
- Strategic actions: Acquired ADA Site Compliance (Sept 27, 2024), adding enterprise revenue and intangible customer relationships; contingent consideration recorded; loan facility updated with covenants and liquidity minimums .
- Capital actions: 2024 ATM raised ~$6.6M net; 2023 $7.0M term loan; share repurchase program updated in Jan 2025 with up to $12.5M authorization .
Compensation Structure Analysis
- Shift toward equity-heavy, pay-for-performance: CEO received substantial time-based RSUs (2022 grant; 2025 grant) and performance shares tied to MRR and stock VWAP; no annual bonus paid for 2024 .
- Single-trigger CIC acceleration and 280G/4999 excise tax gross‑up: Red flags for shareholder-friendly alignment; potential for outsized payouts upon transactions .
- Strong shareholder support: ~99% Say‑on‑Pay in 2024 suggests investors view program alignment favorably despite gross‑up and CIC features .
Risk Indicators & Red Flags
- CEO to serve concurrently as Chairman (duality): mitigated by Lead Independent Director, but independence concerns persist; Moradi is not independent .
- Concentrated ownership: CEO beneficially controls ~20.5% of voting power; insiders collectively ~28.8%—potential influence over governance outcomes .
- CIC acceleration and tax gross‑up: Single-trigger vesting on RSUs and parachute excise tax gross‑up raise governance and pay practice concerns .
- Equity settlement cadence: Upcoming RSU vestings (Aug 20, 2025; Jan 9, 2026; Jan 9, 2027) may create periodic selling for tax withholdings, potentially impacting float/liquidity .
- Related party transactions: Audit Committee reports none requiring disclosure in 2025 proxy; Sero Capital historic designation rights noted .
Investment Implications
- Alignment: Large beneficial stake and reversion to $1 cash salary in 2025 emphasize equity alignment; performance shares directly tie incentives to recurring revenue scale and stock price levels .
- Governance watch items: CEO/Chair dual role and single‑trigger CIC vesting with gross‑up warrant monitoring, especially in strategic transaction scenarios .
- Trading signals: Track near‑term performance milestones (MRR ≥$5M for 2 months; VWAP ≥$50 for 20 days) that can unlock 100,000 PSAs, and monitor RSU vesting dates for potential insider tax-withholding sales .
- Execution: 2024 growth in revenue, ARR, and customer count alongside improving losses supports confidence in operating momentum under Moradi’s leadership; TSR outcomes and CAP adjustments reflect equity-driven pay dynamics .