What changed in this filing

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Item 1. Business

2026-03-06 compared with 2025-03-13 · 42 added, 44 removed, 388 unchanged (18% of the section changed)

7 unchanged sentences

• Authenticate:

Provide frictionless, multi-factor, password-less access to secured accounts and databases with biometric verification

Provide frictionless, multi-factor, passwordless access to secured accounts and databases with biometric verification

Manage the lifecycle of secure identities through optimized biometric interchanges

22 unchanged sentences

Integrated Framework and Platform Solutions and Services

Knomi® Mobile Framework

The Knomi mobile biometric authentication framework is built on our hardened biometric SDK components, which are optimized to operate on mobile devices, and a server that together enable strong, multi-factor, password-free authentication from a mobile device using biometrics.

Knomi offers multiple biometric modality options, including facial recognition, and voice authentication as means to enroll, onboard or authenticate.

Knomi software components can be used in different combinations and configurations to enable either a server-centric architecture, a web-based or a device-centric implementation.

Knomi has primarily been sold as a fixed term license that is priced on a subscription-based model and is also available as a perpetual license.

Going forward we plan to transition the Knomi offering to within the AwareID offering.

AwareSDK, formerly known as “Knomi Mobile Framework” is built on our hardened biometric SDK components, which are optimized to operate on mobile devices, and a server that together enable strong, multi-factor, password-free authentication from a mobile device using biometrics.

AwareSDK offers multiple biometric modality options, including facial recognition, and voice authentication as means to enroll, onboard or authenticate.

Our software components can be used in different combinations and configurations to enable either a server-centric architecture, a web-based or a device-centric implementation.

AwareSDK has primarily been sold as a fixed term license that is priced on a subscription-based model and is also available as a perpetual license.

We also sell AwareSDK as a Software-as-a-Service (SaaS) offering, formerly known as AwareID, that provides advanced identity verification and continuous authentication capabilities.

Its modular design ensures flexibility and extensibility across various industries.

This offering continues to provide biometric face and voice matching (1:1 and 1:N), liveness-verification (presentation attack detection), and document validation.

The platform uses proprietary Adaptive Authentication technology in cloud-based bundles which can be pre-configured and/or configured by the customer to provide comprehensive authentication functionality with situational awareness for onboarding, access control/management, and authentication of transactions.

These services can be used discretely to enhance investments already in place or combined to provide higher functionality.

The solution is built on open architecture and interfaces to maximize interoperability and connection to other biometric and/or digital identity applications and platforms.

Pricing for our AwareSDK SaaS offering is typically usage-based or transaction-based.

AwareABIS is an automated biometric identification system (“ABIS”) used for large-scale biometric identification and deduplication using fingerprint, face, and iris recognition.

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AFIX Suite of Products

Aware’s AFIX suite of products is used for small-scale law enforcement focused biometric identification.

The Aware AFIX suite of products is used for small-scale law enforcement focused biometric identification.

AFIX Tracker supports fingerprint, palmprint and latent print identification, designed to serve between 15,000 and 2 million identities.

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AFIX Tracker has primarily been sold as a perpetual license and is also available as a fixed term license that is priced on a subscription-based model or the size of the biometric system.

BioSP - Biometric Services Platform

BioSP is a biometric integration platform-as-a-service ("iPaaS") used to enable biometric data processing and management functionality in a web services architecture.

Awareness Platform (formerly known as BioSP - Biometric Services Platform)

The Awareness Platform is a biometric integration platform-as-a-service (“iPaaS”) used to enable biometric data processing and management functionality in a web services architecture.

It provides workflow, data management and formatting, and other important utilities for large-scale fingerprint recognition, face recognition, and iris recognition systems.

6 unchanged sentences

WebEnroll has primarily been sold as a perpetual license and is also available as a fixed term license that is priced on users, transactions, or enterprise wide.

AwareID is a Software-as-a-Service (SaaS) offering that provides advanced identity verification and continuous authentication capabilities.

Its modular design ensures flexibility and extensibility across various industries.

AwareID continues to leverage Knomi to provide biometric face and voice matching (1:1 and 1:N), liveness-verification (presentation attack detection), and document validation.

These services can be used discretely to enhance investments already in place or combined to provide higher functionality.

The AwareID solution is built on open architecture and interfaces to maximize interoperability and connection to other biometric and/or digital identity applications and platforms.

AwareID is typically provided as a SaaS offering with usage-based or transaction-based pricing, however it is also available on-premises when leveraging Knomi SDKs.

Software products

6 unchanged sentences

We also license our software unbundled as building blocks and have primarily sold these offerings as a perpetual license.

Historically, we sold our software products under perpetual or fixed-term licenses.

With the introduction of AwareID, we have incorporated SaaS offerings into our product line-up.

While we did not recognize material revenues from our SaaS offerings during 2024 and 2023, we continue to invest in and we expect SaaS to become a significant product offering moving forward.

Historically, we sold our software products exclusively under perpetual or fixed-term licenses.

With the introduction of AwareID, now the SaaS component of AwareSDK, we have incorporated SaaS offerings into our product line-up.

We recognized revenues from our SaaS offerings during 2025 and 2024 of $0.4 million and $0.1 million, respectively.

While perpetual and fixed-term licenses remain our primary source of software revenue, we continue to enhance and transition certain legacy software offerings to cloud-based delivery models and expect SaaS to become a significant product portfolio over time.

Building Blocks:

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Our principal imaging product is Aware JPEG 2000, which is based on the JPEG2000 standard.

The JPEG2000 standard is an image compression standard and coding system that was created by the Joint

Photographic Experts Group committee in 2000.

The JPEG2000 standard is an image compression standard and coding system that was created by the Joint Photographic Experts Group committee in 2000.

Our JPEG2000 product is used to compress, store, and display images.

36 unchanged sentences

All of our revenue in 2025 and 2024 was derived from unaffiliated customers.

No customer represented 10% or more of total revenue in 2024, and one customer represented 18% of total revenue in 2023.

As of December 31, 2024, two customers combined represented 34% of our net accounts receivable and unbilled receivables, and as of December 31, 2023, one customer represented 16%, of our net accounts receivable and unbilled receivables.

No customer represented 10% or more of total revenue in 2025 or 2024.

As of December 31, 2025, three customers combined represented 53% of our net accounts receivable and unbilled receivables, and as of December 31, 2024, two customers combined represented 34% of our net accounts receivable and unbilled receivables.

Competitive Business Conditions

A significant number of established companies have developed or are developing and marketing software and hardware for biometrics products and applications that currently compete with or will compete directly with our offerings.

We believe that additional competitors will enter the biometrics market and become significant long-term competitors, and that, as a result, competition will increase.

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The failure to close an order or the deferral or cancellation of an order can result in revenue and net income shortfalls for that quarter.

We base our current and future expense levels on our internal operating plans and sales forecasts, and our operating costs are to a large extent fixed.

We base our current and future expense levels on our internal operating plans and sales forecasts, and our operating costs, including personnel-related costs, may be difficult to reduce in the near term.

As a result, we may not be able to sufficiently reduce our costs in any quarter to adequately compensate for an unexpected near-term shortfall in revenues, and even a small shortfall could disproportionately and adversely affect our financial results for that quarter.

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Among the factors that could adversely affect our business are:

• the impact of actions, such as those recently announced by the U.S.

Department of Government Efficiency, intended to reduce the size of the federal government and federal spending,

• the impact of changes in government priorities, budgetary constraints, continuing resolutions, or other actions that reduce or delay government spending;

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

2 unchanged sentences

• 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 U.S.

or foreign trade policies, tariffs, export controls, sanctions, or retaliatory measures;

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

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Acceptance of biometrics as an alternative to such traditional methods depends upon a number of factors including:

i) the performance and reliability of biometric

i) the performance and reliability of biometric solutions;

ii) costs involved in adopting and integrating biometric solutions;

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• customers’ perceptions regarding the benefits of biometrics solutions;

• public perceptions regarding the intrusiveness of these solutions and the manner in which organizations use the biometric information collected;

• public perceptions regarding the confidentiality of private information;

• proposed or enacted legislation related to privacy of biometric information;

• public perceptions regarding the intrusiveness, fairness, accuracy, or potential bias of these solutions and the manner in which organizations use the biometric information collected;

• public perceptions regarding privacy and the use of biometric information;

• proposed or enacted legislation related to collection, use and storage of biometric information;

• customers’ satisfaction with biometrics solutions;

95 unchanged sentences

The potential costs of compliance with or imposed by new/existing regulations and policies that are applicable to us, or fines and penalties to which we may become subject if we fail to comply with those regulations and polices, may affect the use of our products and services and could have a material adverse impact on our results of operations.

We may also be subject to a growing array of laws aimed at regulating the use of artificial intelligence technologies, creating the potential for compliance and litigation risks.

For example, the European Union’s comprehensive Artificial Intelligence Act, which became effective in August 2024 with a staggered series of implementation deadlines stretching into 2027, provides for noncompliance fines up of to either 35 million euros or 7% of global turnover.

AI regulation also continues to increase in the United States.

For example, the California Transparency in Frontier Artificial Intelligence Act, which creates AI-related governance disclosure requirements for certain kinds of AI models, came into force in January 2026, and provides for noncompliance fines of up to $1 million and the Colorado AI Act, which takes effect in June 2026, imposes fines of up to $20,000 per violation.

In addition, our business may also be adversely affected by:

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We may not realize the anticipated benefits of our acquisitions or investments.

We may make acquisitions of or investments in companies that offer complementary products, services, and technologies, such as our acquisition of FortressID in December of 2021 and our investment in Omlis Limited.

We have made and may continue to make acquisitions of or investments in companies that offer complementary products, services, and technologies.

The ultimate success of our acquisitions depends, in part, on our ability to realize the anticipated synergies, cost savings and growth opportunities from integrating acquired businesses or assets into our existing businesses.

However, the acquisition and successful integration of independent businesses or assets is a complex, costly and time-consuming process, and the benefits we realize may not exceed the costs of the acquisition.

However, the acquisition and successful integration of independent businesses or assets is a complex, costly and time-consuming process, and the benefits we realized in some cases in the past have not and the benefits we realize in the future may not exceed the costs of the acquisition.

The risk and difficulties associated with acquiring and integrating companies and other assets include, among others, difficulties assimilating the operations and personnel of acquired companies, challenges in realizing the value of the acquired assets relative to the price paid, distraction of management from our ongoing businesses and potential product disruptions associated with the sale of the acquired company’s products.

These factors could have a material adverse effect on our business, financial condition, operating results and cash flows.

Additionally, our acquisitions have provided, in the case of Fortress ID, and may in the future provide for future contingent acquisition payments, based on the achievement of performance targets or milestones.

These arrangements can impact or restrict integration of acquired businesses and can result in disputes, including litigation.

In addition, there is uncertainty regarding the realizability of investments in private companies, such as our investment in Omlis Limited that was written down to $0 in 2023.

Additionally, regardless of the form of consideration we pay, acquisitions and investments could negatively impact our operations and earnings per share.

25 unchanged sentences

We must make judgments in the process of preparing our financial statements.

We prepare our financial statements in accordance with generally accepted accounting principles and certain critical accounting policies that are relevant to our business.

We prepare our financial statements in accordance with generally accepted accounting principles and certain critical accounting policies and estimates that are relevant to our business.

The application of these principles and policies requires us to make significant judgments and estimates.

The most significant estimates included in the financial statements pertain to revenue recognition, allowance for credit losses, valuation of acquired assets and assumed liabilities in business combinations, valuation of contingent acquisition payments, valuation of investment in note receivable, goodwill and long-lived asset impairment and valuation allowance for deferred income tax assets.

Actual results could differ from those estimates.

In the event that our judgments and estimates differ from actual results, we may have to change them, which could materially affect our financial position and results of operations.

The most significant estimates are discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates,” included elsewhere in this Annual Report on Form 10-K.

Moreover, accounting standards have been subject to rapid change and evolving interpretations by accounting standards setting organizations over the past few years.

7 unchanged sentences

Not applicable.

CYBERSECUrItY

Cybersecurity Risk Management and Strategy

3 unchanged sentences

The Company has implemented a Cybersecurity Policy (the “Policy”) that provides a framework for responding to cybersecurity incidents.

The Policy includes requirements for incident disclosure and reporting, protocols for incident

evaluation, including the use of third-party service providers and partners, and processes for notification and internal escalation of information to the Company’s senior management, incident response team, and Board of Directors (the "Board") and appropriate Board committees.

The Policy includes requirements for incident disclosure and reporting, protocols for incident evaluation, including the use of third-party service providers and partners, and processes for notification and internal escalation of information to the Company’s senior management, incident response team, and Board of Directors (the “Board”) and appropriate Board committees.

The Policy also addresses requirements for the Company’s external reporting obligations.

The Plan is reviewed and updated, as necessary but no less frequently than once a year, under the leadership of the Company’s Chief Security Officer (“CSO”).

The Policy is reviewed and updated, as necessary but no less frequently than once a year, under the leadership of the Company’s Chief Security Officer (“CSO”).

Although the Company did not experience a material cybersecurity incident during the year ended December 31, 2025, the scope and impact of any future incident cannot be predicted.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business