Aware, Inc. Reports Second Quarter 2002 Financial Results

BEDFORD, Mass. - July 31, 2002 - Aware, Inc. (NASDAQ: AWRE), a worldwide leader in DSL (digital subscriber line) technology for high-speed Internet access over telephone networks, today reported financial results for its second quarter ended June 30, 2002.

Revenues for the second quarter of 2002 were $4.0 million compared with $4.0 million for the same period last year. Sequentially, second quarter revenues increased 12% from $3.6 million in the first quarter of 2002. Net loss for the second quarter of 2002 was $2.1 million, or ($0.09) per diluted share. Net income for the second quarter of 2001 was $40,000, or $0.00 per diluted share.

Michael Tzannes, chief executive officer, said: "Deployments of new ADSL service around the world have continued to grow despite prolonged challenging telecommunications market conditions. We continue to believe in the long-term health and viability of the ADSL industry and have continued to improve and expand upon our intellectual property packages to best serve it. While we continue to experience a difficult industry environment, we are confident that Aware's strong customer base and technology will return us to better days."

Note: Aware's conference call will be broadcast live over the Internet today, July 31, 2002 at 5:00 p.m. Eastern Time. To listen to the call, please go to www.aware.com, and click on "Investor Relations."

About Aware
Aware, Inc. designs, develops, licenses and markets DSL technology that enables broadband communications over existing telephone networks. Its solutions, including splitterless G.lite, full-rate ADSL, VeDSL™, Dr. DSL®, XRDSL™, StratiPHY™, FastADSL™, BondedADSL™, and G.shdsl address central office as well as consumer electronics requirements. The company licenses its intellectual property and software to semiconductor manufacturers and equipment manufacturers who sell products incorporating Aware's technology. Aware also markets to systems companies to encourage them to design its technology into their products, and to service providers to encourage them to deploy new broadband services based on its technology. More information about Aware can be found at http://www.aware.com .

Safe Harbor Warning
Portions of this release contain forward-looking statements regarding future events and are subject to risks and uncertainties, such as estimates or projections of future revenue and earnings and the growth of the DSL market. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements. These factors include, but are not limited to: we have a unique business model, our quarterly results are difficult to predict, we depend on a limited number of licensees, we derive a significant amount of revenue from one customer, we depend on equipment companies to incorporate our technology into their products, we face intense competition from other DSL vendors, DSL technology competes with other technologies for broadband access, our business is subject to rapid technological change, and we may require additional engineering personnel. We refer you to the documents Aware files from time to time with the Securities and Exchange Commission, specifically the section titled Risk Factors in our quarterly report on Form 10-Q for the quarter ended March 31, 2002 and other reports and filings made with the Securities and Exchange Commission.