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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1996
COMMISSION FILE NUMBER 000-21129
AWARE, INC.
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(Exact Name of Registrant as Specified in Its Charter)
MASSACHUSETTS 04-2911026
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
ONE OAK PARK, BEDFORD, MASSACHUSETTS, 01730
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(Address of Principal Executive Offices)
(Zip Code)
(617) 276-4000
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(Registrant's Telephone Number, Including Area Code)
Indicate by check 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.
YES NO X
--- ---
Indicate the number of shares outstanding of the issuer's common stock as of
August 14, 1996:
CLASS NUMBER OF SHARES OUTSTANDING
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Common Stock, par value $0.01 per share 18,392,397 shares
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AWARE, INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
Page
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PART I FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Balance Sheets as of June 30, 1996
and December 31, 1995 ..................................... 3
Condensed Statements of Operations for the
Three and Six Months Ended June 30, 1996
and June 30, 1995 ......................................... 4
Condensed Statements of Cash Flows for the
Six Months Ended June 30, 1996 and June 30, 1995 .......... 5
Notes to Condensed Financial Statements ................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ....................... 8
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders ....... 13
Item 6. Exhibits and Reports on Form 8-K .......................... 15
Signatures ................................................ 15
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PART I. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
AWARE, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents ...................................................... $ 2,694,112 $ 2,153,681
Accounts receivable (less allowance for doubtful
accounts of $15,300 in 1996 and $5,300 in 1995) ............................. 833,798 500,828
Unbilled accounts receivable ................................................... 109,648 116,261
Inventories .................................................................... 504,119 39,713
Deferred financing costs ....................................................... 371,240 -
Prepaid expenses ............................................................... 32,098 14,471
------------ ------------
Total current assets ..................................................... 4,545,015 2,824,954
Property and equipment, net of accumulated depreciation and
amortization of $1,594,669 in 1996 and $1,480,614 in 1995 ...................... 472,375 403,405
------------ ------------
Total assets ........................................................................ $ 5,017,390 $ 3,228,359
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................................... $ 777,215 $ 111,519
Accrued expenses ............................................................... 39,472 65,404
Accrued compensation ........................................................... 89,964 67,887
Accrued professional fees ...................................................... 18,926 14,000
Deferred revenue ............................................................... 50,000 50,000
------------ ------------
Total current liabilities .............................................. 975,577 308,810
Stockholders' equity:
Preferred stock, $1.00 par value; no shares authorized ......................... - -
Preferred stock, $1.00 par value:
Series B convertible preferred stock, 15,875 shares authorized,
15,875 issued and outstanding in 1995, none outstanding in 1996 ........ - 15,875
Series C convertible preferred stock, 13,525 shares authorized,
13,525 issued and outstanding in 1995, 5,410 outstanding in 1996 ....... 5,410 13,525
Series D convertible preferred stock, 74,800 shares authorized,
69,166 issued and outstanding in 1995, 13,012 outstanding in 1996 ...... 13,012 69,166
Series E convertible preferred stock, 45,000 shares authorized,
29,432 issued and outstanding in 1995 and 1996 ......................... 29,432 29,432
Common stock, $.01 par value; 30,000,000 shares authorized; issued
and outstanding, 1,166,960 in 1995 and 10,207,007 in 1996 .............. 102,070 11,670
Additional paid-in capital .................................................... 14,830,134 13,807,945
Accumulated deficit ........................................................... (10,485,283) (10,575,102)
Treasury stock ................................................................ (452,962) (452,962)
------------ ------------
Total stockholders' equity ............................................. 4,041,813 2,919,549
Total liabilities and stockholders' equity .......................................... $ 5,017,390 $ 3,228,359
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The accompanying notes are an integral part of the financial statements.
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AWARE, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
1996 1995 1996 1995
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Revenue:
Product ....................................... $ 144,894 $ 23,100 $ 150,019 $ 224,801
License and royalty ........................... 792,169 55,159 1,439,605 392,511
Research and development ...................... 191,412 283,316 500,854 694,639
----------- ---------- ----------- ----------
Total revenue ............................. 1,128,475 361,575 2,090,478 1,311,951
Costs and expenses:
Cost of product revenue ....................... 94,460 14,567 98,580 99,008
Cost of research and development revenue ...... 144,973 242,046 392,587 605,390
Research and development ...................... 437,872 361,344 789,497 707,916
Selling and marketing ......................... 188,857 112,338 330,548 202,598
General and administrative .................... 244,013 193,794 443,315 375,390
----------- ---------- ----------- ----------
Total costs and expenses ................. 1,110,175 924,089 2,054,527 1,990,302
Income (loss) from operations ..................... 18,300 (562,514) 35,951 (678,351)
Interest income ................................... 30,368 32,232 53,868 60,856
----------- ---------- ----------- ----------
Net income (loss) ................................. $ 48,668 $ (530,282) $ 89,819 $ (617,495)
=========== ========== =========== ==========
Net income (loss) per share ....................... $ 0.00 $ (0.26) $ 0.01 $ (0.30)
=========== ========== =========== ==========
Weighted average common and common
equivalent shares outstanding .................... 16,590,304 2,049,149 16,194,736 2,040,782
=========== ========== =========== ==========
The accompanying notes are an integral part of the financial statements.
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AWARE, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
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1996 1995
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Cash flows from operating activities:
Net income (loss) ............................................... $ 89,819 $ (617,495)
Depreciation and amortization ................................... 114,514 105,000
Increase (decrease) from changes in assets and liabilities:
Accounts receivable .......................................... (332,970) 281,492
Unbilled accounts receivable ................................. 6,613 257,448
Inventories .................................................. (464,406) 5,905
Prepaid expenses ............................................. (17,627) 26,092
Deferred offering costs ...................................... (371,240) -
Accounts payable ............................................. 665,696 (26,651)
Accrued expenses ............................................. 1,071 (396,267)
Deferred revenue ............................................. - (39,720)
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Net cash used in operating activities .............................. (308,530) (404,196)
Cash flows from investing activities:
Purchases of property and equipment ............................ (183,484) (121,985)
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Cash flows from financing activities:
Proceeds from issuance of common stock ........................ 1,032,445 15,928
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Increase (decrease) in cash and cash equivalents ................... 540,431 (510,253)
Cash and cash equivalents, beginning of period ..................... 2,153,681 2,566,128
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Cash and cash equivalents, end of period ........................... $2,694,112 $2,055,875
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest .......................................... $ 628 $ 578
SUPPLEMENTAL NONCASH DISCLOSURES:
Conversion of preferred stock to common stock ................... $ 80,144 -
Repurchase of Series D preferred shares for
cancellation of notes ...................................... - $ 457,062
The accompanying notes are an integral part of the financial statements.
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AWARE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
A) BASIS OF PRESENTATION
The accompanying unaudited condensed balance sheets, statements of
operations, and statements of cash flows reflect all adjustments
(consisting only of normal recurring items) which are, in the opinion
of management, necessary for a fair presentation of financial position
at June 30, 1996, and of operations and cash flows for the interim
periods ended June 30, 1996 and 1995.
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions for Form 10-Q and
therefore do not include all information and footnotes necessary for a
complete presentation of operations, the financial position, and cash
flows of the Company, in conformity with generally accepted accounting
principles. The Company filed audited financial statements which
included all information and footnotes necessary for such presentation
for the years ended December 31, 1995 and December 31, 1994 in
conjunction with a Registration Statement on Form S-1 (SEC File No.
333-6807), as declared effective on August 8, 1996.
The results of operations for the interim period ended June 30, 1996
are not necessarily indicative of the results to be expected for the
year.
B) INVENTORY
Inventory consists primarily of raw materials to manufacture modems.
There were nominal amounts of work-in-process and finished goods
inventory on hand at December 31, 1995 and June 30, 1996.
C) NET INCOME (LOSS) PER SHARE
Net income (loss) per share is based on the weighted average number of
common and dilutive common equivalent shares (common stock options and
convertible preferred stock) outstanding. Common equivalent shares are
not included in the per share calculations in fiscal 1995 periods
because the effect of their inclusion would be antidilutive, except in
accordance with Securities and Exchange Commission Staff Accounting
Bulletin No. 83. The Bulletin requires all common shares issued and
options to purchase shares of common stock granted by the Company
during the twelve-month period prior to the filing of a proposed
initial public offering to be included in the calculation as if they
were outstanding for all periods.
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D) SUBSEQUENT EVENT
On August 14, 1996, the Company completed an initial public offering
("IPO") whereupon 3,400,000 shares of Common Stock were sold at a price
of $10.00 per share. Net proceeds to the Company after underwriting
discounts and commissions and related expenses were approximately
$30,700,000. In addition, the Company granted to the underwriters of
the IPO a 30-day option to purchase up to an additional 510,000 shares
of Common Stock solely to cover over-allotments. Upon the closing of
the IPO, all outstanding shares of the Company's Preferred Stock were
automatically converted into shares of Common Stock.
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ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
The statements contained in the following Management's Discussion and
Analysis of Financial Condition and Results of Operations which are not
historical are "forward looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements represent the
Company's present expectations or beliefs concerning future events, however the
Company cautions that such statements are qualified by important factors. Such
factors, which are identified under the heading "Risk Factors" below, could
cause actual results to differ materially from those indicated in Management's
Discussion and Analysis of Financial Condition and Results of Operations.
RESULTS OF OPERATIONS
Product Revenue. Product revenue consists primarily of revenue from the
sale of tangible products, such as Asymmetric Digital Subscriber Line ("ADSL")
modems and video editing chipset products, which are manufactured by the Company
or third party suppliers. Product revenue increased by 527% from $23,100 in the
second quarter of 1995 to $144,894 in the current year quarter. Product revenue
as a percentage of total revenue was 13% in the second quarter of 1996 as
compared to 6% in the corresponding quarter of 1995. The dollar increase, as
well as the increase as a percentage of total revenue, is primarily due to the
following reasons. Revenue in the second quarter of 1995 period consisted
primarily of revenue from the sale of video editing chipset products, which the
Company discontinued in the fourth quarter of 1995. Revenue in the second
quarter of 1996 consisted primarily of revenue from the sale of ADSL modems,
which the Company began shipping in the first quarter of 1996. Accordingly, a
comparison of product revenue on a year over year basis is not particularly
meaningful due to differences in the composition of revenue.
For the six months ended June 30, product revenue decreased by 33% from
$224,801 in 1995 to $150,019 in 1996. Product revenue as a percentage of total
revenue was 7% for the first six months of 1996 as compared to 17% in the
corresponding period in 1995. The decrease in dollar revenue and as a percentage
of total revenue is primarily due to a large video editing chipset sale in the
first quarter of 1995 and a nominal amount of revenue from the sale of ADSL
modems in the first quarter of 1996.
License and Royalty Revenue. License and royalty revenue consists
primarily of revenue from the sale of intellectual property, such as hardware
and software technology licenses, compression software licenses, and royalties
from the sale of chipsets by customers who have licensed the Company's
technology. As such revenue has only a nominal cost of sale associated with it,
the Company does not report a separate cost of license and royalty revenue line
in its Statements of Operations.
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License and royalty revenue increased from $55,159 in the second quarter of 1995
to $792,169 in the current year quarter. License and royalty revenue as a
percentage of total revenue was 70% in the second quarter of 1996 as compared to
15% in the corresponding quarter of 1995. For the six months ended June 30,
license and royalty revenue increased from $392,511 in 1995 to $1,439,605 in
1996. License and royalty revenue as a percentage of total revenue was 69% for
the first six months of 1996 as compared to 30% in the corresponding period of
1995. The dollar increase as well as the increase as a percentage of total
revenue, in both the three and six month periods, is primarily due to an
increase in the sale of compression software licenses, and sales of ADSL and
other broadband technology licenses.
Research and Development Revenue. Research and development revenue
consists primarily of revenue from commercial contract engineering and
development, and government research contracts. Research and development revenue
decreased by 32% from $283,316 in the second quarter of 1995 to $191,412 in the
current year quarter. Research and development revenue as a percentage of total
revenue was 17% in the second quarter of 1996 as compared to 78% in the
corresponding quarter of 1995. For the six months ended June 30, research and
development revenue decreased from $694,639 in 1995 to $500,854 in 1996.
Research and development revenue as a percentage of total revenue was 24% for
the first six months of 1996 as compared to 53% in the corresponding period of
1995. The dollar decrease as well as the decrease as a percentage of total
revenue, in the three and six month periods, is primarily due to lower revenue
from commercial research and development contracts, which was partially offset
by a modest increase in revenue from U.S. government research contracts. The
decrease in research and development revenue as a percentage of total revenue
was also driven by the Company's decision to shift its business away from
contract research activities toward the sale of commercial technology licenses.
Cost of Product Revenue. Cost of product revenue consists primarily of
direct material, direct labor and overhead costs to produce the Company's
products, and cost of goods for purchases of finished goods inventory from third
party suppliers. Cost of product revenue as a percentage of product revenue was
65% in the second quarter of 1996 as compared to 63% in the prior year quarter.
Cost of product revenue as a percentage of product revenue was 66% for the first
six months of 1996 as compared to 44% in the corresponding 1995 period. In the
three and six month periods in 1996, the percentages primarily reflect the cost
of modem revenue. In the three and six month periods in 1995, the percentages
primarily reflect the cost of video editing chipset revenue. The lower cost of
product revenue in the first six months of 1995 reflects lower costs from the
Company's video editing chipset supplier due to a volume purchase.
Cost of Research and Development Revenue. Cost of research and
development revenue consists primarily of direct labor, direct material and
travel expenses associated with commercial contract engineering and development,
and government research contracts. As a percentage of research and development
revenue, related costs decreased from 85% in the second quarter of 1995 to 76%
in the current year quarter, and decreased from 87% in the first six months of
1995 to 78% in the corresponding 1996 period. The slight improvement in cost as
a percentage of research and development revenue is primarily attributable to
the mix of commercial and U.S. government research contracts.
Research and Development Expense. Research and development expense
consists primarily of employee and consultant costs, supplies and allocated
facilities costs related to the development and enhancement of the Company's
products and technology. Research and
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development expense increased by 21% from $361,344 in the second quarter of 1995
to $437,872 in the current year quarter. For the six month period ended June 30,
research and development expense increased 12% from $707,916 in 1995 to $789,497
in 1996. For the three and six month periods, the increase in research and
development expense is primarily attributable to higher spending on projects to
develop and enhance the Company's ADSL and Hybrid Fiber Coaxial technology.
Higher spending on these projects was partially offset by lower spending as a
result of the discontinuance of research involving audio compression technology
and lower facilities costs as a result of the relocation of the Company's
facilities in June 1995.
Selling and Marketing Expense. Selling and marketing expense consists
primarily of salaries for sales and marketing personnel, travel, product
advertising, and allocated facilities expense. Selling and marketing expense
increased 68% from $112,338 in the second quarter of 1995 to $188,857 in the
current year quarter. For the six month period ended June 30, sales and
marketing expense increased 63% from $202,598 in 1995 to $330,548 in 1996. For
the three and six month periods, the increase is primarily due to the addition
of sales personnel and increased product advertising related to the introduction
of the Company's ADSL modem.
General and Administrative Expense. General and administrative expense
consists primarily of salaries for administrative officers and support
personnel, allocated facilities costs, and professional services, such as legal
and audit expenses. General and administrative expense increased by 26% from
$193,794 in the second quarter of 1995 to $244,013 in the current year quarter.
For the six month period ended June 30, general and administrative expense
increased 18% from $375,390 in 1995 to $443,315 in 1996. For the three and six
month periods, the increase is primarily due to additions to the Company's
management team as well as legal expenses associated with patent filings and
other general matters.
Interest Income. Interest income decreased 6% from $32,232 in the
second quarter of 1995 to $30,368 in the current year quarter, primarily as a
result of lower average cash balances. For the six months ended June 30,
interest income decreased 11% from $60,856 in 1995 to $53,868 in 1996, also
primarily as a result of lower average cash balances.
Income Taxes. The Company has not provided for income taxes as it has a
history of net losses, which has resulted in tax loss carryforwards. As of
December 31, 1995, the Company had net operating loss carryforwards of
approximately $9,700,000 and approximately $576,000 of research and development
tax credit carryforwards to offset future federal taxable income. To the extent
not utilized, the net operating loss and tax credit carryforwards expire between
2003 and 2010.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased by $540,431 to $2,694,112 at June 30, 1996.
The primary source of cash flow in the first six months of 1996 was
approximately $1,000,000 of proceeds from the issuance of common stock under the
Company's stock option plans. Proceeds from the sale of common stock were offset
by $308,530 of cash used in operations, and $183,484 of cash invested in
property and equipment.
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Funds used in operations were principally attributable to an increase in
inventory. The Company purchased raw materials to manufacture ADSL modems in
anticipation of increased revenue from such products. The increase in property
and equipment was primarily related to purchases of computer and other equipment
used in research and development activities.
On August 14, 1996, the Company completed an initial public offering of its
common stock. The Company sold 3,400,000 shares and realized net proceeds of
approximately $30,700,000. The increase in deferred offering costs and accounts
payable at June 30, 1996 is primarily due to unpaid costs related to the public
offering. These financing costs will be paid and netted against the proceeds
from the public offering in the third quarter of 1996. While there can be no
assurance that the Company will not require additional financing, or that such
financing will be available to the Company, the Company believes that its
financial resources are adequate to meet its liquidity requirements over the
next twelve months.
RISK FACTORS
The Company believes that the occurrence of any one or some combination of the
following risk factors could have a material adverse effect on the Company's
business, financial condition and results of operations.
History of Operating Losses
The Company has incurred net losses in every fiscal year since
inception. Substantial additional research and development expenses to enhance
the performance and reduce the manufacturing costs of the Company's products
will be required before market acceptance can be determined. There can be no
assurance that the Company will achieve profitable operations in any future
period.
Dependence on Acceptance of ADSL Technology
The Company's future success is substantially dependent upon whether
ADSL technology gains widespread commercial acceptance by the telephone
companies ("telcos") and end users of telco services. The Company has invested
substantial resources in the development of ADSL technology implemented through
the Discrete Multi-Tone ("DMT") modulation technique. Telcos have only begun
evaluating DMT-based ADSL technology, and there can be no assurance that the
telcos will pursue the deployment of such ADSL technology.
Reliance on Telcos; Dependence on a Limited Number of Customers
Even if telcos adopt policies favoring full-scale implementation of
ADSL technology, there can be no assurance that sales of the Company's ADSL
products will become significant. The Company's customers, including Regional
Bell Operating Companies ("RBOCs"), OEMs and other telcos, are relatively few in
number and have significantly greater resources than that of the Company. The
Company has limited ability to influence or control decisions made by these
customers. There can be no assurance that these customers will not use their
size and bargaining power to demand unfavorable terms and conditions (including
price), seek alternative suppliers, or undertake internal development of
products comparable to those of the Company's.
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Substantial Dependence on Analog Devices, Inc.
The Company and Analog Devices, Inc. ("ADI") have entered into a series
of agreements to develop integrated chipsets based on the Company's technology.
The inability or refusal of ADI to manufacture, market and sell such chipsets in
substantial quantities would prevent telcos from adopting the Company's
technology and would have a material adverse effect on the Company's business.
There can be no assurance that ADI will succeed or, in the event that ADI is not
successful, that the Company would be able to find a substitute chipset
manufacturer without significant delays.
Proprietary Technology; Risk of Third Party Claims of Infringement
The Company's ability to compete effectively will depend to a
significant extent on its ability to protect it proprietary information and to
operate without infringing the intellectual property rights of others. Despite
the precautions the Company has taken to protect its intellectual property,
there can be no assurance that such steps will be adequate to prevent the
misappropriation of its technology. In addition, third parties may assert
exclusive patent, copyright and other intellectual property rights to
technologies that are important to the Company. There can be no assurance that
other third parties will not assert such claims against the Company in the
future.
Rapid Technological Change; Dependence on New Products
The markets for the Company's products are characterized by rapid
technological advances, evolving industry standards, changes in end-user
requirements, frequent new product introductions, and evolving telco offerings.
The Company's business will be materially adversely affected if technologies or
standards on which Company's products are based become obsolete, or if the
Company is unable to develop and introduce new products in a timely manner in
response to changing market conditions.
Competition
The markets for the Company's products are intensely competitive and
the Company expects competition to increase in the immediate future. Many of the
Company's competitors and potential competitors, including the RBOCs and AT&T
Paradyne Corporation, have significantly greater financial, technological,
manufacturing, marketing and personnel resources than the Company. There can be
no assurance that the Company will be able to compete successfully or that
competition will not adversely affect the Company's business.
Manufacturing
The Company has limited experience in manufacturing or in supervising
the manufacture of its products, including its ADSL Internet Access Modem. There
can be no assurance that the Company will not encounter significant difficulties
in manufacturing or controlling the quality of its products, or that its
products will be reliable in the field.
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PART II. OTHER INFORMATION
ITEM 4:
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On May 23, 1996, the Company held a special stockholders' meeting in lieu of
an annual meeting of stockholders.
Matters voted on and the results of those votes are set forth below:
(1) The votes cast to adopt Amended and Restated Articles of Organization were:
For: 13,476,117 Against: 0 Abstain: 0 Broker non-vote: 0
(2) The votes cast to adopt Amended and Restated By-Laws were:
For: 13,476,117 Against: 0 Abstain: 0 Broker non-vote: 0
(3) The votes cast to ratify the selection of Deloitte & Touche LLP as the
Company's independent auditors were:
For: 13,476,117 Against: 0 Abstain: 0 Broker non-vote: 0
(4) The votes cast to adopt the Directors' Non-Statutory Option Plan were:
For: 588,800 Against: 1,346,500 Abstain: 11,540,817 Broker non-vote: 0
(5) The votes cast to elect directors were:
Name For Against Abstain Broker non-vote
- -------------------------------------------------------------------------------------------
James C. Bender 13,476,117 0 0 0
John K. Kerr 13,175,317 0 300,800 0
William N. Sick, Jr. 13,175,317 0 300,800 0
John S. Stafford, Jr. 13,476,117 0 0 0
Charles K. Stewart 13,476,117 0 0 0
(6) The votes cast to ratify and confirm all acts and deeds of all of the
officers and directors of the Company from inception to present were:
For: 13,175,317 Against: 0 Abstain: 300,800 Broker non-vote: 0
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PART II. OTHER INFORMATION
ITEM 4:
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(CONTINUED)
(b) On June 6, 1996, the Company held a special stockholders' meeting.
Matters voted on and the results of those votes are set forth below:
(1) The votes cast to adopt Amended and Restated Articles of Organization were:
For: 12,547,025 Against: 0 Abstain: 100 Broker non-vote: 0
(2) The votes cast to adopt the 1996 Stock Option Plan were:
For: 12,475,312 Against: 100 Abstain: 71,713 Broker non-vote: 0
(3) The votes cast to adopt the 1996 Employee Stock Purchase Plan were:
For: 12,544,525 Against: 2,500 Abstain: 100 Broker non-vote: 0
(4) The votes cast to adopt Amended and Restated Articles of Organization to be
effective following the closing of the Company's initial public offering were:
For: 12,547,025 Against: 0 Abstain: 100 Broker non-vote: 0
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PART II. OTHER INFORMATION
ITEM 6:
EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 3.3* - Amended and Restated By-Laws
Exhibit 11.1* - Computation of Net Income (Loss) per Share
(b) REPORTS ON 8-K
None.
- --------------------
*filed herewith
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: August 29, 1996 AWARE, INC.
By: /s/ James C. Bender
----------------------------------------
James C. Bender, Chief Executive
Officer and President
Date: August 29, 1996 /s/ Richard P. Moberg
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Richard P. Moberg, Vice President and Chief
Financial Officer (Principal Financial and
Accounting Officer)
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