BEDFORD, Mass., June 26, 2014 /PRNewswire/ -- Aware, Inc. (NASDAQ: AWRE), a leading supplier of biometrics software and services, today announced that its Board of Directors has declared a special cash dividend of $1.75 per share, or approximately $40 million in total. The special cash dividend will be paid on July 24, 2014 to shareholders of record as of July 10, 2014.
The Board of Directors has determined that the company's current cash balances exceed our capital requirements and has decided to return cash to shareholders.
The federal income tax treatment of the special cash dividend will depend on the amount of the company's current and accumulated earnings and profits as of December 31, 2014, as determined by the Internal Revenue Code. We currently estimate that for federal income tax purposes approximately 10% of the special cash dividend will be treated as a dividend and that approximately 90% will be treated as a return of capital and/or capital gain. We will notify shareholders in early 2015 as to the actual amounts of each.
With respect to a share of company stock, (i) the amount treated as a dividend for federal income tax purposes may be treated as qualified dividend income if the shareholder satisfies certain requirements, and (ii) the amount of the special cash dividend that is not treated as a dividend for federal income tax purposes will be treated first as a return of capital to the extent of a shareholder's adjusted tax basis in such share, and then as capital gain. We encourage shareholders to consult their tax advisors to understand how this special cash dividend may affect their tax obligations.We also encourage shareholders to contact their brokers in order to understand the Nasdaq Rules and Regulations regarding the effect of selling shares of our common stock following the record date on their eligibility to receive the dividend.