How does the assignment of these patents square with this statement? I am woefully ignorant of how all this works. As a shareholder, I wish I had the opportunity to address my questions to management. Please re-instate the quarterly webcast conference calls.
From the 10K for period ending 12/31/2012:
The majority of the remaining patents in our patent portfolio pertain to our biometrics and imaging and DSL service assurance software product lines. At the current time, we do not intend to pursue patent monetization alternatives for these patents. We believe that the wireless and DSL patent sales in 2012 will have no material impact on our biometrics and imaging and DSL service assurance software product lines.
Article on Business Insider today says Larry Fink of Blackstone the worlds biggest investor ($4.5 Trillion AUM) wrote a letter to all CEOs of S&P 500 companies urging them to "better articulate their plans for the future."
I wish the Staffords read his letter in full and direct the Co-CEO's to take his advice.
Here is another snip from the letter.
"We also believe that companies have an obligation to be open and transparent about their growth plans so that shareholders can evaluate them and companies’ progress in executing on those plans.
We are asking that every CEO lay out for shareholders each year a strategic framework for long-term value creation. Additionally, because boards have a critical role to play in strategic planning, we believe CEOs should explicitly affirm that their boards have reviewed those plans. BlackRock’s corporate governance team, in their engagement with companies, will be looking for this framework and board review."
Could it be due to a blackout period for insiders prior to earnings? After all, who is the only natural buyer of this stock? I'm thinking AWRE shows a loss this Q, the stock tanks to cash value, and then the sharks swoop in for the kill.
Open market stock repurchase program? No can do. No sellers. Stock price would jump.
Another tender offer? Same problem because it's too close in time to the last one. Same stockholders now have the learned the 'fool me once' lesson. Stock price would jump.
Either strategy would result in a jump in price. So the question is; why doesn't management want the SP to jump?
Was the earnings release 8K date last year. Since management doesn't believe in announcing earnings dates like a real public company in the 21'st century, I thought I'd volunteer that info.
The 10K came out on Feb 13, 2015...You're welcome
Rick Moberg, Aware’s co-chief executive officer and chief financial officer, said “This was an unusual financial quarter for us in that orders we expected to receive during the quarter slipped into the next quarter and we recorded a large income tax benefit. The income tax benefit was the result of a positive IRS audit outcome.
As we have discussed in previous earnings releases, our strategy is to broaden our biometrics business through opportunities in commercial markets. We are pleased to report progress towards that goal in the third quarter with the signing of a software license agreement with Certisign in Brazil. Certisign is the largest supplier of digital certificates in Brazil. We have been working with them since the summer of 2014 to develop and pilot test a new biometric identity proofing and authentication service they intend to offer their customers. The signing of the software license agreement signifies the beginning of the service rollout phase.
Certisign’s target customers include banks, retailers, telecoms, healthcare providers, and government agencies that want to reduce fraud by authenticating the identity of their customers and employees through a software-as-a-service model. Biometric enrollment and identity proofing can be conducted either at a customer's premises or at one of Certisign's 1,400+ retail locations. Biometric authentication is performed by a customer’s staff using workstations installed at the location of their choice.
Certisign’s platform and service offering was built on key Aware software products, including Biometric Services Platform (BioSP™), Nexa™, Inquire™, and Astra™. The enrollment and verification stations will be branded by Certisign and were built using Aware's NISTPack, SequenceCheck™, LiveScan API, PreFace™, and IrisCheck™ SDKs.
Aware will receive a per-transaction fee for Certisign's right to use our software in their system. We are excite
Aware will receive a per-transaction fee for Certisign's right to use our software in their system. We are excited by what this partnership may mean for Aware’s business.”
Prior to being 'excited', Mr Moberg was 'Optimistic'
Rick Moberg, Aware’s co-chief executive officer and chief financial officer, said “Quarterly revenue and earnings fluctuate based on project wins and the timing of delivery of licenses and services for those projects. Financial results this quarter are a reflection of these fluctuations. Moreover, we are moving through a transition in which we are working on lessening our dependence on government markets by moving into new commercial markets. Commercial biometrics markets represent a potential area of growth for us, but it is too early to predict whether we will be successful in these markets. We are optimistic they could develop into meaningful sources of revenue.”
Rick Moberg, Aware’s co-chief executive officer and chief financial officer, said “Over the past two quarters our financial results have been affected by lower revenue from a large government contract that has been winding down. We have been working on replacing revenue from that contract with new sources of revenue from government and commercial customers. For example, approximately 23% of first quarter revenue was derived from two biometrics projects with commercial customers. These projects in particular and commercial biometrics markets in general represent potential areas of growth for us. It is too early to predict the longer term trajectory of these opportunities, but we are optimistic they may develop into meaningful sources of revenue.
We would like to remind shareholders that our quarterly revenue fluctuates based on project wins and the timing of delivery of licenses and services for those projects.”
Rick Moberg, Aware’s co-chief executive officer and chief financial officer, said “This was an excellent quarter for us because of the medical imaging sale and the addition of two new biometrics customers who purchased software for commercial applications. Were it not for the $3.6 million revenue deferral on the medical imaging sale, Q4 revenue would have been more than $10.5 million. Our sales pipeline going into 2016 looks promising with a variety of opportunities. However, predicting when and if those opportunities might turn into revenue is difficult.
The trends we are seeing in the biometrics markets include a number of foreign government opportunities, emerging commercial opportunities, and uneven US government demand. All in all, we are optimistic about the opportunities in the market and our position, including our product portfolio and ability to deliver services.
Our project with Certisign in Brazil continued to move forward in the fourth quarter. Certisign has just began to roll out its service offering. We remain optimistic about this relationship and what it may mean for our business.”
I didn't find the specific Blackout policy on the Company website but i did find this in AWRE's code of ethics:
7. INSIDER TRADING, SECURITIES COMPLIANCE AND PUBLIC
Securities laws prohibit anyone who is in possession of material, non-public information
(“Inside Information”) about a company from purchasing or selling stock of that
company, or communicating the information to others. Associates who become aware of
such Inside Information about Aware must refrain from trading in the shares of Aware
until the Inside Information is publicly announced. Associates must also refrain from
disclosing that information to persons who do not have a need to know, whether they are
inside Aware or outside, such as spouses, relatives or friends. To use non-public
information for personal financial benefit to “tip” others who might make an investment
decision on the basis of this information is unethical and illegal.
Aware makes formal disclosures of its financial performance and results of operations to
the investment community. We also issue press releases to inform customers, investors
and the press about our product developments, relationships, and other events of note.
Other than those public statements, which go through official Aware channels, Associates
are restricted in their communications outside of Aware about Aware’s business. Aware
has adopted an Insider Trading Policy to comply with the various federal and state
securities laws which govern insider trading and has adopted a policy to comply with the
Securities and Exchange Commissions’ Regulation FD, which governs communications
with investors and other outside parties. Copies of these policies are available from
Aware’s General Counsel.
Keywords to search in the 2015 10K due out any day.
'USPTO' or 'PTAB' or 'appeal'....I fully expect we'll get a positive update on the patent assigned to Hybrid Audio.
8K..."Higher revenue and operating income in the fourth quarter of this year versus last year were primarily due to the following events that occurred during the quarter: i) two new biometrics software license sales for commercial applications; ii) a medical imaging software license sale; and iii) a $1.1 million hardware shipment that had been delayed from previous quarters. The medical imaging software license sale is discussed further below."
Imaginary conference call question...First, could you please give us some details about these two new commercial biometric licenses? Second, same question for the Medical Imaging license sale. Third, was the hardware related to the legacy Navy contract, the medical imaging deal, or something new?
In August 2015, the PTAB remanded the case back to the USPTO patent examiner of record for further review. In November 2015, the USPTO confirmed the validity of the claims in the patent.
Even though the USPTO has confirmed the validity of the claims in the patent, we do not know whether any patent monetization efforts by the third party will be successful.
The relevant part of the previous statement made on this issue last year was:
"● Notwithstanding the outcome at the PTAB, we do not know whether any patent monetization efforts by the third party will be successful. "
Replacing the word 'Notwithstanding' with it's synonym 'regardless of' makes this years statement consistent with last years.
So there we have it. All known expected near term catalysts to move this stock have passed. The stock has bumped up by 10% from before the 8K. Looking forward, longs have only the following reasons to hold on.
1, The hope that since the Staffords are the majority owners of the company they will act in their own best interests and take minority shareholders along for the ride.
2. The hope that Certibio will catch on and move the revenue needle in a significant and consistent way.
3. The hope that the patent monetization efforts mentioned above materialize into significant revenue.
4. The hope that some other company may buy AWRE at a premium to the current stock price.
5. The hope that AWRE's existing contracts with critical Govt agencies either escalates to the point of significant sales growth or at least gives them the credibility in the industry to make them preferred suppliers,
Hope is the at the bottom of the list in terms of being a legitimate investment premise. But here I find myself.