Company: AWRE
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038714
Chunk: 117

Company: AWARE INC /MA/
Filing Date: 2025-03-13
Form: 10-K
Item: Item 8
Chunk 117
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 differences are expected to reverse.  We establish a valuation allowance to offset temporary deductible differences, net operating loss carryforwards and tax credits when it is more likely than not that the deferred tax assets will not be realized.We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the tax position. The evaluation of an uncertain tax position is based on factors that include, but are not limited to, changes in the tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit and changes in facts or circumstances related to a tax position.  Any changes to these estimates, based on the actual results obtained and/or a change in assumptions, could impact our tax provision in future periods.  Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as a provision for income tax in the consolidated statements of operations and comprehensive loss.Capitalization of Software Costs – We capitalize certain costs to develop software products to be sold, leased, or marketed to external users after technological feasibility of the product has been established.  No software costs were capitalized during the years ended December 31, 2024 and 2023, because such costs incurred between the period after technological feasibility to the product release were immaterial.   The Company capitalizes and amortizes certain direct costs associated with computer software developed or purchased for internal use incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company amortizes capitalized software costs generally over three to five years, commencing on the date the software is placed into service.  No software costs were capitalized during the years ended December 31, 2024 and 2023, because such costs were immaterial.Research and Development Costs – Costs incurred in the research and development of our products are expensed as incurred.Concentration of Credit Risk – At December 31, 2024 and 2023, we had cash and cash equivalents in excess of federally insured deposit limits of approximately $12.7 million and $9.7 million, respectively.

41

Concentration of credit risk with respect to net accounts receivable and unbilled receivables consisted of amounts owed by the following customers that comprised more than 10% of net accounts receivable and unbilled receivables at December 31: 

          December 31,