Unassociated Document
February
16, 2011
VIA
EDGAR
U.S.
Securities and Exchange Commission
Division
of Corporation Finance
100 F.
Street, N.E.
Washington,
D.C. 20549
Mail Stop
3720
Attention: Barbara
C. Jacobs, Assistant Director
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Re:
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Mitek
Systems, Inc.
Form
10-K for fiscal year ended September 30, 2010
Filed
November 16, 2010
File
No. 000-15235
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Dear Ms.
Jacobs:
Mitek
Systems, Inc., a Delaware corporation (the "Company"), respectfully
provides the following responses to the comments set forth in the comment letter
of the staff (the "Staff") of the Division of
Corporation Finance of the U.S. Securities and Exchange Commission (the "Commission") dated February 3,
2011 (the "Comment
Letter") relating to the above-referenced report of the
Company.
For
convenience, the numbered paragraphs of this letter correspond to the numbered
paragraphs of the Comment Letter and the text of the Staff's comments appear in
italics below.
Form 10-K for fiscal year
ended September 30, 2010
Part I
Item 1.
Business
General
1.
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We note that in fiscal year
2010, one customer comprised 14% of your total revenues. Please tell us
whether your business is substantially dependent upon any contract(s) with
this vendor. To the extent that you are substantially dependent upon any
agreement(s) with this vendor, please describe the material terms of the
agreement(s) and file such agreement(s) as an exhibit to your Form 10-K
pursuant to Item 601(b)(10)(ii)(B) of Regulation S-K or
advise.
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Response: In response to the
Staff’s comment, the Company supplementally advises the Staff that the
disclosure did not pertain to a customer, but rather to a
vendor. During fiscal 2010, the Company had purchases from one major
vendor that comprised approximately 14% of total purchases for the
year. The vendor is a third-party software provider, to which the
Company pays royalties. Management does not believe the Company is
substantially dependent upon nor exposed to any significant concentration risk
related to purchases from this vendor, given the availability of alternative
suppliers of such software products.
Ms.
Barbara C. Jacobs
U.S.
Securities and Exchange Commission
Division
of Corporation Finance
February
16, 2011
Page
2
Intellectual Property, page
5
2.
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You report that as of
September 30, 2010, you have been awarded a total of eight patents, three
of which were awarded in 2010. In your 2010 fourth quarter earnings
conference call, however, you state that you “have six patents and eight
more pending, and were recently awarded a patent for Mobile Deposit during
the fourth quarter.” Please
advise.
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Response: In response to the
Staff’s comment, the Company confirms that it has been awarded a total of eight
patents, three of which were awarded in 2010. During the 2010 fourth quarter
earnings conference call, the Company correctly state that it had been
“…recently awarded a patent for Mobile Deposit during the fourth quarter.” The
issue date of the Mobile Deposit patent was August 17, 2010. The Company
incorrectly stated that it had “six patents and eight more pending,” when, in
fact, the Company has eight patents and eight more pending.
Part II
Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations, page
15
General
3.
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Please tell us whether you
considered including an overview to your MD&A in order to provide
insight into material opportunities, challenges and risks, such as those
presented by known material trends and uncertainties, on which your
executives are most focused for both the short and long term, as well as
the actions they are taking to address these opportunities, challenges and
risks. For guidance, see Section III.A of SEC Release No. 33-8350,
available on our website at http://www.sec.gov/rules/interp/33-8350.htm.
In this regard, we note the discussion of your “three-phase product
strategy” in your 2010 fourth quarter earnings
call.
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Response: In response to the
Staff's comment, the Company confirms that it will include an "Overview" section
in the MD&A section in its future filings. The "Overview" will provide a
balanced, executive-level discussion that identifies the most important factors,
themes and other matters on which management is primarily focused in evaluating
the Company's financial condition and operating results. The "Overview" will
also provide a synopsis of relevant economic and industry-wide factors to better
inform the reader about how the Company earns revenues and generates
cash.
Ms.
Barbara C. Jacobs
U.S.
Securities and Exchange Commission
Division
of Corporation Finance
February
16, 2011
Page
3
4.
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Please describe any known
trends or uncertainties that have had or that the registrant reasonably
expects will have a material favorable or unfavorable impact on net sales
or revenues or income from continuing operations. To the extent known, you
should also disclose events that may cause a material change in the
relationship between costs and revenues. See Item 303(a)(3)(ii) of
Regulation S-K. In this regard, we refer to your 2010 fourth quarter
earnings call and note that your product mix is migrating more towards
mobile as the primary element of your sales revenue, which carries a lower
cost of sales than your core recognition
technology.
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Response: In response to the
Staff's comment, the Company confirms that it will describe known trends or
uncertainties that have had, or that it reasonably expects will have, a
materially favorable or unfavorable impact on net sales or revenues or income
from continuing operations in its future filings. To the extent known, the
Company also confirms that it will disclose events that may cause a material
change in the relationship between costs and revenues.
Part III
Item 10. Directors,
Executive Officers and Corporate Governance
Directors and Executive
Officers, page 40
5.
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For each of your directors,
briefly discuss the specific experience, qualifications, attributes or
skills that led to the conclusion that the person should serve as a
director for your company. See Item 401(e) of Regulation
S-K.
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Response: In response to the
Staff's comment, the Company advises the Staff that the disclosure required by
Item 401(e) of Regulation S-K was included in the Company’s proxy statement, as
amended, filed with the Commission on January 20, 2011 (the “2011 Proxy
Statement”) with respect to each director and nominee. Such disclosure was
included in the biography of each director and nominee. Further, the Company
confirms that it will include the disclosure required by Item 401(e) of
Regulation S-K in all future filings to the extent required.
Audit Committee and Audit
Committee Financial Expert, page 42
6.
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Please disclose whether or not
your audit committee has a charter. See Item 407(d)(1) of Regulation
S-K
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Response: In response to the
Staff's comment, the Company advises the Staff that the audit committee of the
board of directors of the Company has a charter. The Company further advises the
Staff that the foregoing is disclosed in the 2011 Proxy Statement under
“INFORMATION ABOUT OUR BOARD OF DIRECTORS—Board Committees.” Further, the
Company confirms that that it will include the disclosure required by Item
407(d)(1) of Regulation S-K in all future filings to the extent
required.
Ms.
Barbara C. Jacobs
U.S.
Securities and Exchange Commission
Division
of Corporation Finance
February
16, 2011
Page
4
Item 13. Certain
Relationships and Related Transactions, and Director
Independence
Related Transactions, page
46
7.
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Please provide your analysis
as to why are not required to file any agreements relating to your
transactions with John H. Harland Company and any of its subsidiaries
pursuant to Item 601(b)(10)(ii)(A) of Regulation
S-K.
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Response: In response to the
Staff's comment, the Company supplementally advises the Staff that it does not
believe that any agreements relating to its transactions with John H. Harland
Company ("JHH Co.") or any of its subsidiaries are required to be filed for the
reasons set forth below.
Item
601(b)(10)(ii)(A) of Regulation S-K describes one type of material contract that
is required to be filed with certain filings made with the Commission. Item
601(b)(10)(ii)(A) reads as follows:
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(ii)
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If
the contract is such as ordinarily accompanies the kind of business
conducted by the registrant and its subsidiaries, it will be deemed to
have been made in the ordinary course of business and need not be filed
unless it falls within one or more of the following categories, in which
case it shall be filed except where immaterial in amount or
significance:
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(A)
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Any
contract to which directors, officers, promoters, voting trustees,
security holders named in the registration statement or report, or
underwriters are parties other than contracts involving only the purchase
or sale of current assets having a determinable market price, at such
market price;
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The
license agreements and maintenance agreements that the Company has with JHH Co.
are agreements that ordinarily accompany the kind of business conducted by the
Company. The amount of revenue that the Company receives from such agreements is
immaterial in amount, and therefore, the Company believes that the filing of its
agreements with JHH co. is not required.
The
Company also entered into a securities purchase agreement dated February 22,
2005 with JHH Co. (the “SPA”), pursuant to which JHH Co. acquired a total of
2,142,856 shares of the Company’s common stock for an aggregate purchase price
of $1,500,000, and warrants to purchase an aggregate of 321,428 shares of the
Company’s common stock. The SPA and form of warrant representing the warrants
issued to JHH Co. pursuant to the SPA, were filed as exhibits to the Company’s
Current Report on Form 8-K filed with the Commission on February 23,
2005.
Ms.
Barbara C. Jacobs
U.S.
Securities and Exchange Commission
Division
of Corporation Finance
February
16, 2011
Page
5
No party
to the SPA continues to have any material rights or obligations thereunder, and
accordingly, the Company believes that while the SPA is a contract to which
security holders named in the report are a party, the SPA is immaterial in
significance.
The
warrants may be exercised for up to 321,428 shares of the Company’s common
stock. Such number of shares represented approximately 1.7% of the 18,316,249
shares of the Company’s common stock outstanding as of October 29, 2010. The
Company will incorporate by reference the form of warrant held by JHH Co. into
its next periodic report.
Signatures, page
49
8.
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In subsequent filings, please
identify the person who is signing in the capacity of controller or
principal accounting officer. See General Instruction D(2)(a) to Form
10-K.
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Response: In response to the
Staff's comment, the Company confirms that subsequent filings will identify the
person who is signing in the capacity of controller or principal accounting
officer.
* * *
The
Company acknowledges that: (i) the Company is responsible for the adequacy and
accuracy of the disclosure in the filing; (ii) Staff comments or changes to
disclosure in response to Staff comments do not foreclose the Commission from
taking any action with respect to the filing; and (iii) the Company may not
assert Staff comments as a defense in any proceeding initiated by the Commission
or any person under the federal securities laws of the United
States.
Please do
not hesitate to call me at (858) 503-7810 ext. 357, or the Company's Corporate
Controller, Fred Hutton, at (858) 503-7810 ext. 332, with any questions or
further comments you may have regarding the responses above.
Sincerely,
Mitek
Systems, Inc.
/s/
James B. DeBello
James
B. DeBello
President,
Chief Executive Officer and Chief Financial
Officer
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cc: Ryan
Houseal, Attorney-Advisor