Aware, Inc. Reports Fourth Quarter and 2007 Financi...(.04 Net income per share - diluted $...)

Net income per share - diluted $0.01 $0.04 $0.01 $0.04

Weighted average shares -

basic 23,818,467 23,596,832 23,737,715 23,474,048

Weighted average shares -

diluted 24,917,360 24,998,093 25,083,700 24,964,958

(1) Effective January 1, 2006 the Company adopted Statement of Financial

Accounting Standard No. 123 (Revised), "Share-Based Payment"

(FAS 123(R)). The amounts in the tables above include stock-based

compensation as follows (in thousands):

Three Months Ended Year Ended

December 31, December 31,

2007 2006 2007 2006

Cost of product sales $5 $3 $13 $15

Cost of contract revenue 43 51 176 149

Research and development 172 118 483 904

Sales and marketing 41 23 119 289

General and administrative 85 48 347 580

Total stock-based compensation

costs $346 $243 $1,138 $1,937

AWARE, INC.

Non-GAAP Financial Measures and Reconciliation

(In thousands, except per share data)

(unaudited)

Three Months Ended Year Ended

December 31, December 31,

2007 2006 2007 2006

GAAP net income $193 $882 $160 $1,034

Stock-based compensation 346 243 1,138 1,937

Non-GAAP net income $539 $1,
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