Aware, Inc. Reports 2005 Third Quarter Financial Results

BEDFORD, Mass. - October 27, 2005 – Aware, Inc. (NASDAQ: AWRE), a worldwide leader and innovator of broadband intellectual property, today reported financial results for its third quarter ended September 30, 2005.

Revenues for the third quarter of 2005 were $5.1 million compared to $4.6 million for the same period last year. Net income for the third quarter of 2005 was $0.6 million, or $0.02 per share, compared to net income of $0.2 million, or $0.01 per share, for the year-ago period.

For the nine months ended September 30, 2005, revenues were $12.0 million compared to $11.9 million in the same period last year. Net loss for the nine months ended September 30, 2005 was $1.3 million or $0.06 per share, compared to a net loss of $1.8 million, or $0.08 per share, for the year-ago period.

Michael Tzannes, Aware’s chief executive officer commented, “Events in the industry and interactions with existing and prospective customers continue to build our confidence that our products and product developments are well positioned. The markets we are addressing are going through significant changes and we are optimistic that we can capitalize on these changes. Please join us on our conference call today where we will elaborate on the transitions that are underway in the DSL and biometrics industries and why they are positive for Aware.”

Tzannes added, “From the conclusion of today’s conference call until Friday, October 28 at 5:00 p.m., we invite interested parties to submit investor questions via email to investorquestions@aware.com. We will post questions and answers next week on our website.”

Note: Aware’s conference call will be broadcast live over the Internet today, October 27, 2005 at 5:00 p.m. Eastern Time. To listen to the call, please go to www.aware.com, and click on “Investor Relations.” The conference call may also be heard by calling (719) 457-2633 and referencing the confirmation number 1864272. A replay of the call will be archived on our website after the call.

Financial tables

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About Aware

Aware, Inc. designs, develops, licenses and markets DSL technologies that enable broadband communications over existing telephone networks. Its solutions, including splitterless G.lite, full-rate ADSL, ADSL2, ADSL2+, VDSL2, Bonded ADSL2+, Dr. DSL®, StratiPHY™, StratiPHY-Bonded™, StratiPHY2+™, StratiPHY3™ and G.SHDSL, address central office as well as customer premise requirements. Aware is also a leading provider of standards-based biometric transaction and image compression software toolkits. More information can be found at http://www.aware.com.