UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

___________

 

Date of Report (date of earliest event reported):            April 24, 2018           

 

AWARE, INC.

(Exact name of registrant as specified in its charter)

 

Massachusetts 000-21129 04-2911026
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)

 

40 Middlesex Turnpike, Bedford, MA, 01730

(Address of principal executive offices, including zip code)

 

Registrant's telephone number, including area code: (781) 276-4000

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

 

On April 24, 2018, Aware, Inc. issued the press release, attached to this Form 8-K as Exhibit 99.1, describing the results of operations and financial condition of the company as of and for the quarter ended March 31, 2018.

 

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

 

No financial statements are required to be filed as part of this Report. The following exhibits are filed as part of this report:

 

(d) EXHIBITS.

 

Number   Description
99.1   Press release issued by Aware, Inc. on April 24, 2018.

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  AWARE, INC.
     
Dated: April 24, 2018 By:   /s/ Kevin T. Russell
     Kevin T. Russell
    Chief Executive Officer and President
    General Counsel

 

 - 2 - 

 

 

EXHIBIT INDEX

 

Number   Description
99.1   Press release issued by Aware, Inc. on April 24, 2018.

 

 - 3 - 

 

  

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

Contact:

Kevin Russell

Aware, Inc.
781-276-4000

 

Aware, Inc. Reports First Quarter 2018

Financial Results



BEDFORD, MASS. – April 24, 2018 – Aware, Inc. (NASDAQ: AWRE), a leading global provider of biometrics software and solutions, today reported financial results for its first quarter ended March 31, 2018.

 

Revenue for the first quarter of 2018 was $2.9 million, a decrease of 30% compared to $4.2 million in the same quarter last year. Operating loss in the first quarter of 2018 was $0.7 million compared to operating income of $0.2 million in the first quarter of 2017. The decrease in revenue and resulting operating loss were primarily due to: (i) lower biometrics software license sales; (ii) lower service revenue, and (iii) no income from a patent arrangement that were partially offset by no cost of software licenses and lower cost of services.

 

Net loss in the first quarter of 2018 was $0.5 million, or $0.02 per diluted share, which compares to net income of $0.3 million, or $0.01 per diluted share, in the same period a year ago.

 

Kevin Russell, Aware’s chief executive officer and president, said “Our results for the first quarter were below our expectations. We have a number of opportunities that we are working on that we were not able to close in the first quarter. Our pipeline for 2018 looks promising, but we are unable to predict when opportunities will result in revenue. We continue to see interest in our product offerings in the government, commercial and mobile markets.”

 

Aware also announced today that its Board of Directors has approved a program authorizing the Company to purchase up to $10 million of its common stock. The shares may be purchased from time to time in the open market or through privately negotiated transactions at management's discretion, depending upon market conditions and other factors. The authorization to repurchase Company stock expires on December 31, 2019.

 

 

 

Aware, Inc. • 40 Middlesex Turnpike • Bedford, MA USA 01730-1432

Tel: (781) 276-4000 • Fax: (781) 276-4001 • E-mail: IR@aware.com

  

 

 

 

Aware, Inc. Reports First Quarter 2018 Financial Results Page 2

 

About Aware

 

Aware is a leading provider of biometrics software products and development services to governments, system integrators, and solution providers globally. Our products include SDKs, software components, workstation applications, and a modular, centralized, service-oriented platform. They fulfill a broad range of functions critical to biometric authentication and search, including face, fingerprint, iris, and voice capture, sample quality assurance, data compliance, capture hardware peripheral abstraction, centralized data processing and workflow, subsystem connectivity, and biometric matching algorithms. The products apply biometrics to enable identity-centric security solutions for applications including banking and payments, border management, credentialing and access control, intelligence and defense, and law enforcement. Aware is a publicly held company (Nasdaq: AWRE) based in Bedford, Massachusetts.

 

See Aware’s website for more information about our biometrics software products.

 

Safe Harbor Warning

 

Portions of this release contain forward-looking statements regarding future events and are subject to risks and uncertainties, such as estimates or projections of future revenue and earnings, and the growth of the biometrics markets. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements.

 

Risk factors related to our business include, but are not limited to: i) our operating results may fluctuate significantly and are difficult to predict; ii) we derive a significant portion of our revenue from government customers, and our business may be adversely affected by changes in the contracting or fiscal policies of those governmental entities; iii) a significant commercial market for biometrics technology may not develop, and if it does, we may not be successful in that market; iv) we derive a significant portion of our revenue from third party channel partners; v) hardware revenue is likely to decline in future periods; vi) we face intense competition from other biometrics solution providers; vii) our business is subject to rapid technological change; viii) our software products may have errors, defects or bugs which could harm our business; ix) our business may be adversely affected by our use of open source software; x) we rely on third party software to develop and provide our solutions and significant defects in third party software could harm our business xi) our intellectual property is subject to limited protection; xii) we may be sued by third parties for alleged infringement of their proprietary rights; xiii) we must attract and retain key personnel; xiv) we rely on single sources of supply for certain components used in our hardware products; xv) our business may be affected by government regulations and adverse economic conditions; xvi) we may make acquisitions that could adversely affect our results, and xvii) we may have additional tax liabilities.

 

We refer you to the documents Aware files from time to time with the Securities and Exchange Commission, specifically the section titled Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2017 and other reports and filings made with the Securities and Exchange Commission.

  

Aware is a registered trademark of Aware, Inc. Any other trademarks appearing herein are the property of their respective owners.

 

 

 

 

Aware, Inc. Reports First Quarter 2018 Financial Results Page 3

 

AWARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

(unaudited)

 

   Three Months Ended
March 31,
 
   2018   2017 
Revenue:          
    Software licenses   $1,473   $2,486 
    Software maintenance    1,294    1,253 
    Services    144    374 
    Royalties    -    43 
         Total revenue    2,911    4,156 
           
Costs and expenses:          
    Cost of software licenses    -    247 
    Cost of services    50    216 
    Research and development    1,875    1,857 
    Selling and marketing    924    915 
    General and administrative    785    790 
       Total costs and expenses    3,634    4,025 
 Patent related income    -    91 
           
Operating income (loss)    (723)   222 
Interest income    162    84 
Income (loss) before provision for (benefit from) income taxes    (561)   306 
Provision for (benefit from) income taxes    (66)   5 
Net income (loss)   $(495)  $301 
           
Net income (loss) per share – basic   $(0.02)  $0.01 
Net income (loss) per share – diluted   $(0.02)  $0.01 
           
Weighted-average shares – basic    21,547    22,255 
Weighted-average shares - diluted    21,573    22,321 

 

 

 

 

Aware, Inc. Reports First Quarter 2018 Financial Results Page 4

 

AWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

 

  

March 31,

2018

  

December 31,

2017

 
 ASSETS          
     Cash and cash equivalents   $50,648   $51,608 
     Accounts receivable, net    3,498    3,818 
     Property and equipment, net    4,295    4,304 
     Deferred tax assets    5,163    5,071 
     All other assets, net    324    234 
           
     Total assets   $63,928   $65,035 
           

LIABILITIES AND STOCKHOLDERS’ EQUITY

          
           
     Accounts payable and accrued expenses   $1,531   $1,569 
     Deferred revenue    2,396    2,932 
     Total stockholders’ equity    60,001    60,534 
           
     Total liabilities and stockholders’ equity   $63,928   $65,035 

 

 

 

###

 

 

Aware, Inc. • 40 Middlesex Turnpike • Bedford, MA USA 01730-1432

Tel: (781) 276-4000 • Fax: (781) 276-4001 • E-mail: IR@aware.com