UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended
OR
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Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from _________ to _________
Commission file number
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of |
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Incorporation or Organization) |
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(Address of Principal Executive Offices)
(Zip Code)
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(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
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Trading Symbol |
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Name of Each Exchange on Which Registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer,” “accelerated filer," “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.:
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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 ___
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares outstanding of the registrant’s common stock as of October 24, 2023 was
AWARE, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2023
TABLE OF CONTENTS
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Page |
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PART I |
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3 |
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Item 1. |
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3 |
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Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 |
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4 |
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6 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 4. |
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PART II |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 6. |
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28 |
2
PART 1. FINANCIAL INFORMATION
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
AWARE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
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September 30, |
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December 31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Marketable securities |
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Accounts receivable, net |
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Unbilled receivables |
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Tax receivable |
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— |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Note receivable |
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Right of use asset |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Current portion of operating lease liabilities |
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Deferred revenue |
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Total current liabilities |
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Long-term deferred revenue |
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Long-term operating lease liabilities |
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Long-term portion of contingent acquisition payment |
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— |
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Total long-term liabilities |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of the consolidated financial statements.
3
AWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHNSIVE INCOME (LOSS)
(in thousands, except per share data)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenue: |
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Software licenses |
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$ |
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$ |
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$ |
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$ |
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Software maintenance |
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Services and other |
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Total revenue |
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Costs and expenses: |
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Cost of services and other revenue |
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Research and development |
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Selling and marketing |
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General and administrative |
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Fair value adjustment to contingent acquisition payment |
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— |
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Gain on sale of fixed assets |
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— |
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— |
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Total costs and expenses |
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Operating income (loss) |
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Interest income |
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Net income (loss) |
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$ |
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$ |
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$ |
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Net income (loss) per share – basic |
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$ |
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$ |
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$ |
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Net income (loss) per share – diluted |
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$ |
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$ |
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$ |
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Weighted-average shares – basic |
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Weighted-average shares – diluted |
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Other comprehensive income (loss): |
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Unrealized gain (loss) on available-for-sale securities |
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Comprehensive income (loss) |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of the consolidated financial statements.
4
AWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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Nine Months Ended |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net (loss) income |
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$ |
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$ |
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Adjustments to reconcile net income (loss) to net cash |
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Depreciation and amortization |
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Gain on sale of fixed assets |
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— |
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Stock-based compensation |
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Interest on note receivable |
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Bad debt provision |
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— |
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Non-cash lease expense |
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— |
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Change in fair value of contingent acquisition payment |
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Changes in assets and liabilities: |
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Accounts receivable |
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Unbilled receivables |
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Prepaid expenses and other current assets |
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( |
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Tax receivable |
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— |
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Accounts payable |
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Accrued expenses |
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Deferred revenue |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Purchases of property and equipment |
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Proceeds from sale of fixed assets |
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— |
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Purchase of marketable securities |
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Sale of marketable securities |
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— |
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Investment in note receivable |
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— |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Proceeds from issuance of common stock |
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Payments made for taxes of employees who surrendered |
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Repurchase of common stock |
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Net cash used in financing activities |
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Decrease in cash and cash equivalents |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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Supplemental disclosure: Cash paid for income taxes |
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$ |
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$ |
— |
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The accompanying notes are an integral part of the consolidated financial statements.
5
AWARE, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
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For the Three and Nine Months Ended |
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September 30, 2022 |
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Accumulated |
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Accumulated other |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Deficit |
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Comprehensive Loss |
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Equity |
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Balance at December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
- |
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$ |
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Issuance of unrestricted stock |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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Balance at March 31, 2022 |
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$ |
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$ |
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$ |
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- |
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$ |
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Issuance of common stock under employee stock purchase plan |
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Stock-based compensation expense |
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— |
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— |
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Repurchase of common stock |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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Balance at June 30, 2022 |
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$ |
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$ |
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$ |
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$ |
- |
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$ |
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Issuance of common stock under employee stock purchase plan |
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$ |
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$ |
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$ |
- |
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$ |
- |
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$ |
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Shares surrendered by employees to |
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— |
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( |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Repurchase of common stock |
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( |
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( |
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( |
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— |
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— |
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( |
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Other comprehensive loss |
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— |
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— |
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— |
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( |
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Net income |
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— |
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— |
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— |
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— |
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Balance at September 30, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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6
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For the Three and Nine Months Ended |
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September 30, 2023 |
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Additional |
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Total |
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Common Stock |
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Paid-In |
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Accumulated |
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Accumulated Other |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Deficit |
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Comprehensive Income (Loss) |
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Equity |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Issuance of unrestricted stock |
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( |
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— |
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— |
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— |
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Shares surrendered by employees to pay taxes related to unrestricted stock |
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( |
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— |
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( |
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— |
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— |
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( |
) |
Repurchase of common stock |
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( |
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( |
) |
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( |
) |
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— |
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— |
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( |
) |
Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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Balance at March 31, 2023 |
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$ |
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$ |
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