Company: AWRE
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038714
Chunk: 19

Company: AWARE INC /MA/
Filing Date: 2025-03-13
Form: 10-K
Item: Item 1A
Chunk 19
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 as those recently announced by the U.S. Department of Government Efficiency, intended to reduce the size of the federal government and federal spending,

•other changes in fiscal policies or decreases in available government funding, 

•changes in government funding priorities; 

•changes in government programs or applicable requirements; 

•the adoption of new laws or regulations or changes to existing laws or regulations relating to the provision of biometrics services or the use of biometric data; 

•changes in political or social attitudes with respect to security and defense issues; 

•changes in audit policies and procedures of government entities; 

•potential delays or changes in the government appropriations process; and 

•delays in the payment of our invoices by government payment offices. 

These and other factors could cause government customers or our channel partners to reduce purchases of products and services from us, which would have a material adverse effect on our business, financial condition and operating results.

We derive a significant portion of our revenue from third party channel partners.

Our future results depend upon the continued successful distribution of our products through a channel of systems integrators and OEM partners. Systems integrators, including VARs, use our software products as a component of the biometrics systems they deliver to their customers. OEMs embed our software products in their technology devices or software products. These channel partners typically sell their products and services to government customers. 

Our failure to effectively manage our relationships with these third parties could impair the success of our sales, marketing and support activities. Moreover, the activities of these third parties are not within our direct control. The occurrence of any of the following events could have a material adverse effect on our business, financial condition and operating results:

•a reduction in sales efforts by our partners;

•the failure of our partners to win awards in which our products are used;

•a reduction in technical capabilities or financial viability of our partners;

•a misalignment of interest between us and any of our partners;

•the termination of our relationship with a major systems integrator or OEM; or

•any adverse effect on a partner’s business related to competition, pricing or other factors.

A significant commercial market for biometrics technology may not develop, and, even if it does, there can be no assurance our biometrics technology will be successful. 

A component of our strategy to grow our revenue includes expansion into commercial markets. To date, biometrics technology has received only limited acceptance and slow adoption in these markets.   Although the recent appearance of biometric readers on popular consumer products, such as smartphones,