SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

Aware, Inc.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

05453N100

(CUSIP Number)

Privet Fund Management LLC

Attn: Ryan Levenson

3280 Peachtree Road NE

Suite 2670

Atlanta, GA 30305

With a copy to:

Rick Miller

Bryan Cave LLP

1201 W. Peachtree St., 16th Floor

Atlanta, Georgia 30309

Tel: (404) 572-6600

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

November 13, 2012

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), (f) or (g), check the following box.  [  ]

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

*           The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

CUSIP No.  05453N100  Page 2 of 8 Pages

1	NAME OF REPORTING PERSONS.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Privet Fund Management LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP  (a)[√]   (b)[  ]
3	SEC USE ONLY
4	SOURCE OF FUNDS                                                                WC, AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [     ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY  EACH REPORTING  PERSON WITH:		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 778,056
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 778,056
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 778,056
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [√]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.5
14	TYPE OF REPORTING PERSON OO

SCHEDULE 13D

CUSIP No.  05453N100  Page 3 of 8 Pages

1	NAME OF REPORTING PERSONS.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Privet Fund LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP      (a)[√]  (b)[  ]
3	SEC USE ONLY
4	SOURCE OF FUNDS                                                                WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [     ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY  EACH REPORTING  PERSON WITH:		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 719,407
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 719,407
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 719,407
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [√]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.2
14	TYPE OF REPORTING PERSON PN

SCHEDULE 13D

CUSIP No.  05453N100  Page 4 of 8 Pages

1	NAME OF REPORTING PERSONS.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Ryan Levenson
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[√]       (b)[  ]
3	SEC USE ONLY
4	SOURCE OF FUNDS                                                                PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [     ]
6	CITIZENSHIP OR PLACE OF ORGANIZATION   United States
NUMBER OF SHARES BENEFICIALLY OWNED BY  EACH REPORTING  PERSON WITH:		7	SOLE VOTING POWER 42,603
		8	SHARED VOTING POWER 778,056
		9	SOLE DISPOSITIVE POWER 42,603
		10	SHARED DISPOSITIVE POWER 778,056
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 820,659
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.7
14	TYPE OF REPORTING PERSON IN

SCHEDULE 13D

CUSIP No.  05453N100  Page 5 of 8 Pages

Reference is hereby made to the statement on Schedule 13D filed with the Securities and Exchange Commission on behalf of the Reporting Persons on February 1, 2012, as amended (the “Schedule 13D”), with respect to the Common Stock, par value $0.01 per share of Aware, Inc., a Massachusetts corporation (the “Corporation”). Capitalized terms not otherwise defined herein are used as defined in the Schedule 13D. The Reporting Persons hereby amend and supplement the Schedule 13D as follows.

The undersigned hereby amends and supplements the Schedule 13D as follows.

Item 3.                                Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and restated in its entirety to read as follows:

The purchase price of the 58,649 shares of Common Stock held by Privet Fund Management LLC is approximately $237,026, which was funded with assets under separately managed accounts with Privet Fund Management LLC. The purchase price of the 719,407 shares of Common Stock held by Privet Fund LP is approximately $2,459,128, which was funded with partnership funds of Privet Fund LP. The purchase price of the 42,603 shares of Common Stock held by Mr. Levenson is approximately $167,418, which was funded with Mr. Levenson’s personal assets.  All purchase prices include brokerage commissions. Privet Fund LP effects purchases of securities primarily through margin accounts maintained for it with prime brokers, which may extend margin credit to it as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules, and the prime brokers’ credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.

Item 4.                                Purpose of Transaction.

Item 4 is hereby amended to add the following:

           On November 13, 2012, the Reporting Persons delivered a letter to the Corporation’s Board of Directors highlighting the inadequacy of the Corporation’s disclosure and encouraging the Corporation to pursue a strategy geared toward maximizing shareholder value.  A copy of the board letter is attached as Exhibit 99.1 hereto.

Item 5.                      Interest in Securities of the Issuer.

Item 5(a) is hereby amended and restated in its entirety to read as follows:

(a)  As of the date of this filing, the Reporting Persons beneficially own an aggregate 820,659 shares of Common Stock, or approximately 3.7% of the outstanding Common Stock of the Corporation. For further information, see the cover pages hereto which are hereby incorporated by reference. All percentages of outstanding Common Stock are calculated based on information included in the Form 10-Q filed by the Corporation for the quarterly period ended September 30, 2012, which reported that 22,356,815 shares of Common Stock were outstanding as of October 22, 2012.

CUSIP No.  05453N100  Page 6 of 8 Pages

Item 7.                      Materials to be Filed as Exhibits.

Item 7 is hereby amended to add the following:

Exhibit 99.1 Board Letter dated November 13, 2012.

Signature

After reasonable inquiry and to the best of my knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

 Date:  November 13, 2012  PRIVET FUND LP

By: Privet Fund Management LLC,

Its Managing Partner

By:  /s/ Ryan Levenson

Name: Ryan Levenson

Its: Sole Manager

 PRIVET FUND MANAGEMENT LLC

By: /s/ Ryan Levenson

Name: Ryan Levenson

Its: Sole Manager

/s/ Ryan Levenson

Ryan Levenson

SCHEDULE 1

Shares Acquired or Sold by the Reporting Persons in the Last 60 Days or Since Their Most Recent Schedule 13D Filing:

Unless otherwise indicated, all transactions were effected on the open market.

1.             Privet Fund LP

Trade Date	Nature of Transaction (Purchase/Sale)	Number of Shares	Price Per Share1
9/11/2012	Purchase	2,500	$6.50
9/11/2012	Purchase	2,500	$6.54
9/11/2012	Purchase	5,000	$6.10

1 Not including any brokerage fees.

2.             Ryan Levenson

Trade Date	Nature of Transaction (Purchase/Sale)	Number of Shares	Price Per Share1
9/11/2012	Purchase	1,000	$6.53

1 Not including any brokerage fees. 

EX-99.1

 Exhibit 99.1

November 13, 2012

Aware, Inc.

Aware, Inc. Board of Directors

40 Middlesex Turnpike

Bedford, MA 01730

To the Aware, Inc. Board of Directors,

Privet Fund Management writes as one of Aware, Inc.’s (“Aware” or the “Company”) largest outside shareholders.  We have followed Aware for more than two years, and have been an owner of the business for over 18 months.  During this time, we have conducted extensive due diligence of the Company and its operating and non-operating assets.

On the heels of completing announced patent monetization efforts and shuttering the unprofitable DSL hardware operations, having now winnowed the business to a few elements, the question arises, “where to from here?”  In our opinion, the path is clear.

First, biometrics software is essentially the remaining operation of the Company.  With roughly $15 million of revenue, this business does not have the scale to justify being a public company.  Furthermore, the business has not demonstrated the ability to – nor do we believe it can – grow sufficiently to substantiate its long-term viability as an independent enterprise.  The biometrics industry is fragmented with too many small-scale competitors.

Fortunately for Aware, there is a consolidation trend within the biometrics industry with a particular emphasis on hardware firms acquiring software firms.  Given Aware biometrics’ strong software niche and relatively smaller scale, we believe selling the business into this consolidation trend makes obvious sense for Aware.  Sell now and capture value from a logical buyer; alternatively, as hardware firms acquire other software firms and develop their own internal software, Aware biometrics runs the risk of having its customer base designed away via internal development.  In light of the foregoing, we strongly believe Aware biometrics should be sold to a larger enterprise.

Second, the Company’s $115 million cash balance requires immediate attention.  Balance sheet cash amounts to over five times Aware’s enterprise value.  This situation is, in our opinion, untenable.  The Company should return this capital to shareholders by paying an immediate and significant dividend.  We believe that Aware lacks the management capacity and competitive positioning to execute a biometrics acquisition strategy.  Further, we also note the junk bond portfolio Aware has developed over the past year.  We have no desire to see Aware converted to a holding company or investment platform for future money management endeavors.  If certain members of the Board would like to pursue such a strategy, we recommend they do so with their pro rata portion of the distributed cash.  In sum, there should be no thought of investing the cash balance.

Thirdly, we believe that Aware is hiding behind GAAP technicalities as an excuse for not providing shareholders a full (or any) explanation of its Hybrid Audio litigation interest.  Hybrid Audio may in fact represent Aware’s most valuable non-cash asset.  The Board has a clear fiduciary duty to shareholders to manage the

 1  

Company for all shareholders’ benefit and provide sufficient information such thatshareholders can make informed decisions concerning ownership.  The current vacuum of public disclosure surrounding Hybrid Audio is, in our opinion, inexcusable.  If not for Privet and other shareholders hounding the Company over Hybrid Audio disclosure, the public would have no idea the litigation interest even exists.  Having  now reluctantly disclosed the litigation interest in generic, uninformative terms, Aware audaciously amends the terms of its litigation joint venture in a manner that obviates the disclosure requirement altogether.  We also find it interesting that the timing of this disclosure policy change coincided with the timing of Aware’s replacement of PWC as its auditor, which raises the question of whether PWC forced disclosure of the VIE and was ultimately dismissed for its efforts?  Regardless, Aware’s willful lack of disclosure is truly remarkable behavior that thumbs its nose at the core tenets of corporate governance.  Meanwhile, members of the Board are making open market purchases of Aware stock.  The optics in this situation are horrific and the substance could be even worse if directors possess material, non-public information.

Having attended two preliminary Hybrid Audio hearings, most recently the Markman hearing, Privet is well aware of the substantive nature and potential value of the lawsuit.  However, we believe that other shareholders lack this information and all shareholders lack management’s assessment.  With Motorola Mobility, Research in Motion and Nokia having settled the claims against them, Hybrid Audio appears to have valid legal claims and has potentially received settlement cash.  Apparently, Aware originally created a legal structure that prevented the Company from having to disclose developments within Hybrid Audio, and now has re-crafted that joint venture such that the Company need not disclose this important asset at all.  While this may technically pass GAAP muster, Privet believes that it fails the essential purpose of public reporting and proper disclosure.  Tellingly, throughout the Markman hearing, defense counsel repeatedly referred to “Aware” rather than Hybrid Audio. The Board should remedy this situation immediately, offering shareholders more useful and complete information concerning the Company’s litigation assets.  Giving public shareholders fulsome and timely information with which to properly assess their investment is the core principle upon which public markets function.  Given Aware’s roughly $10mm operating enterprise value (net of headquarters real estate value), it defies logic that Hybrid Audio would not qualify as a material asset.

Moreover, there is no strategic need for the total dearth of Hybrid Audio disclosure and, more generally, disclosure surrounding IP strategy.  Other public companies with both IP licensing efforts and separate operating businesses provide detailed disclosure of litigation strategy and developments within specific cases – e.g., Unwired Planet, Inc. blog and commentary surrounding litigation outcomes and strategy. Likewise, other public companies that sell patents provide detail surrounding the specific patents sold – e.g., Section 3.4 of April 5, 2012 AOL-Microsoft patent purchase agreement, specifically listing patents being sold.  In contrast, Aware unnecessarily files its lists of patents sold confidentially with the Securities and Exchange Commission.  Since this information can be obtained through the United States Patent Office website, the confidential filing appears to serve no purpose other than to make your shareholders work harder to determine what the Company is doing with their assets.

For all these reasons, we believe Aware’s disclosure surrounding IP is atrocious.  How are your shareholders to gauge the wisdom of your actions when you provide no context, information or strategic insight surrounding them?  For instance, Aware sold over 60 patents to Techquity Capital Management, a private equity firm focused on extracting value from IP assets.  In announcing the sale, Aware offered no information concerning the number of patents transferred or the specific identity or nature of the underlying buyer.  Determining both of these most basic, relevant facts required independent research on the part of your shareholders.  Further, there was no explanation offered as to why Aware felt this transaction offered shareholders the most value.  Does not Aware have an IP licensing business?  Why would another IP licensing business see more future value in the patents than Aware?  These are the types of questions any diligent

 2  

shareholder should ask.  Unfortunately, given Aware’s lack of disclosure in filings and refusal to hold management calls or otherwise effectively communicate with shareholders, we are left only able to hypothesize.

In sum, the proper course of action here seems clear.  Privet believes that Aware should no longer remain an independent, public company.  The Company does not possess the scale or strategy to remain autonomous.  In our view, the Company should distribute the vast majority of its cash balance to shareholders, leaving only enough cash to bridge a sale of the business.  Aware’s Hybrid Audio interest should be distributed to shareholders via a contingent litigation stub.  Aware biometrics should then be sold in a robust process to maximize value for shareholders.  We believe this outcome can be structured in a relatively tax efficient manner.

We also believe that it is imperative the Company begins to more effectively communicate with shareholders while executing a path to value maximization along the lines detailed above.  As a significant shareholder, Privet expects no less from the Board and stands ready to ensure and enforce the rights of all shareholders.

Sincerely,

Ryan Levenson	Cliff Orr
Privet Fund Management LLC	Privet Fund Management LLC

 3