UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For
the quarterly period ended June 30, 2009
or
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For
the transition period from _________ to ___________.
Commission
File Number 0-15235
MITEK
SYSTEMS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
87-0418827
|
|
(State
of Incorporation)
|
(I.R.S.
Employer Identification No.)
|
|
8911
Balboa Ave., Suite B
|
|
|
San Diego,
California
|
92123
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant's
telephone number: (858)
503-7810
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ý No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes ¨ No ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act Check one):
|
Large
Accelerated Filer ¨
|
Accelerated
Filer ¨
|
Non-Accelerated
Filer ¨
(Do
not tech if a smaller
reporting
company)
|
Smaller
Reporting Company ý
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨ No ý
There
were 16,751,137 shares outstanding of the registrant's common stock as of August
12, 2009.
MITEK
SYSTEMS, INC.
FORM
10-Q
For
the quarterly period ended June 30, 2009
|
Special
Note About Forward–Looking Statements
|
(ii)
|
|
|
Part
I - Financial Information
|
||
|
ITEM
1.
|
Financial
Statements
|
1
|
|
ITEM
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
11
|
|
ITEM
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
16
|
|
ITEM
4.
|
Controls
and Procedures
|
16
|
|
Part
I I - Other Information
|
||
|
ITEM
1.
|
Legal
Proceedings
|
17
|
|
ITEM
1A.
|
Risk
Factors.
|
17
|
|
ITEM
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
18
|
|
ITEM
3.
|
Defaults
Upon Senior Securities.
|
18
|
|
ITEM
4.
|
Submission
of Matters to a Vote of Security Holders.
|
18
|
|
ITEM
5.
|
Other
Information.
|
18
|
|
ITEM
6.
|
Exhibits
|
18
|
|
Signatures
|
19
|
|
(i)
Special
Note About Forward-Looking Statements
We make
forward-looking statements in this report, particularly in Item 2. "Management's
Discussion and Analysis of Financial Condition and Results of Operations", and
in the documents that are incorporated by reference into this report, if
any. These forward-looking statements relate to Mitek's outlook or
expectations for earnings, revenues, expenses, asset quality or other future
financial or business performance, strategies or expectations, or the impact of
legal, regulatory or supervisory matters on Mitek's business, results of
operations or financial condition. Specifically, forward looking
statements used in this report may include statements relating to future
business prospects, revenue, income and financial condition of
Mitek.
Forward-looking
statements can be identified by the use of words such as "estimate," "may,"
"plan," "project," "forecast," "intend," "expect," "anticipate," "believe,"
"seek," "target" or similar expressions. These statements reflect
Mitek's judgment based on currently available information and involve a number
of risks and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements.
In
addition to those factors discussed under the heading "Risk Factors" in Part II,
Item 1A of this report, and in Mitek's other public filings with the Securities
and Exchange Commission or “SEC,” important factors could cause actual results
to differ materially from our expectations. These factors include,
but are not limited to:
|
|
·
|
adverse
economic conditions;
|
|
|
·
|
general
decreases in demand for Mitek products and
services;
|
|
|
·
|
competition
(including entry of new competitors) with competitors with substantially
greater resources than Mitek;
|
|
|
·
|
loss
of key customers or contracts;
|
|
|
·
|
increased
or adverse federal, state and local government
regulation;
|
|
|
·
|
inadequate
capital;
|
|
|
·
|
unexpected
costs;
|
|
|
·
|
lower
revenues or lower net income than
forecast;
|
|
|
·
|
inability
to raise prices;
|
|
|
·
|
the
risk of litigation and administrative
proceedings;
|
|
|
·
|
higher
than anticipated labor costs;
|
|
|
·
|
the
possible fluctuation and volatility of operating results and financial
condition;
|
|
|
·
|
adverse
publicity and news coverage;
|
|
|
·
|
inability
to carry out marketing and sales
plans;
|
|
|
·
|
loss
of key employees and executives;
|
|
|
·
|
changes
in interest rates; and
|
|
|
·
|
inflationary
factors.
|
You are
cautioned not to place undue reliance on any forward-looking statements, which
speak only as of the date hereof, or in the case of a document incorporated by
reference, as of the date of that document. Except as required by
law, we undertake no obligation to publicly update or release any revisions to
these forward-looking statements to reflect any events or circumstances after
the date of this report or to reflect the occurrence of unanticipated
events.
The above
list is not intended to be exhaustive and there may be other factors that would
preclude us from realizing the predictions made in the forward-looking
statement. We operate in a continually changing business environment
and new factors emerge from time to time. We cannot predict such
factors or assess the impact, if any, of such factors on their respective
financial positions or results of operations.
In this
report, unless the context indicates otherwise, the terms "Mitek," "Company,"
"we," "us," and "our" refer to Mitek Systems, Inc., a Delaware
corporation.
(ii)
PART I - FINANCIAL
INFORMATION
|
ITEM
1.
|
FINANCIAL
STATEMENTS
|
MITEK
SYSTEMS, INC
BALANCE
SHEETS
|
June
30,
|
September
30,
|
|||||||
|
2009
|
2008
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
CURRENT
ASSETS:
|
||||||||
|
Cash
and cash equivalents
|
$ | 537,216 | $ | 1,300,281 | ||||
|
Accounts
receivable including related party of $637 and $4,591, respectively, net
of allowance of $24,268 and $47,877, respectively
|
638,745 | 912,831 | ||||||
|
Inventory,
prepaid expenses and other current assets
|
114,454 | 100,000 | ||||||
|
Total
current assets
|
1,290,415 | 2,313,112 | ||||||
|
PROPERTY
AND EQUIPMENT-net
|
69,692 | 91,066 | ||||||
|
SOFTWARE
DEVELOPMENT COSTS-net
|
400,043 | 347,738 | ||||||
|
OTHER
ASSETS
|
29,465 | 29,465 | ||||||
|
TOTAL
ASSETS
|
$ | 1,789,615 | $ | 2,781,381 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
CURRENT
LIABILITIES:
|
||||||||
|
Accounts
payable
|
$ | 347,996 | $ | 403,925 | ||||
|
Accrued
payroll and related taxes
|
165,854 | 289,300 | ||||||
|
Deferred
revenue
|
681,147 | 676,085 | ||||||
|
Other
accrued liabilities
|
112,908 | 24,712 | ||||||
|
Total
current liabilities
|
1,307,905 | 1,394,022 | ||||||
|
Deferred
rent, long-term portion
|
51,763 | 55,745 | ||||||
|
TOTAL
LIABILITIES
|
1,359,668 | 1,449,767 | ||||||
|
STOCKHOLDERS'
EQUITY:
|
||||||||
|
Preferred
stock, $0.001 par value, 1,000,000 shares authorized, none issued and
outstanding
|
- | - | ||||||
|
Common
stock, $.001 par value; 40,000,000 shares authorized, 16,751,137 issued
and outstanding
|
16,751 | 16,751 | ||||||
|
Additional
paid-in capital
|
14,896,921 | 14,804,884 | ||||||
|
Accumulated
deficit
|
(14,483,725 | ) | (13,490,021 | ) | ||||
|
Total
stockholders' equity
|
429,947 | 1,331,614 | ||||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 1,789,615 | $ | 2,781,381 | ||||
The
accompanying notes form an integral part of these financial
statements.
-1-
MITEK
SYSTEMS, INC
STATEMENTS
OF OPERATIONS
(Unaudited)
|
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
SALES
|
||||||||||||||||
|
Software
including sales to a related party of $0 for the three months ended June
30, 2009 and 2008, and $0 and $227,712 for the nine months ended June 30,
2009 and 2008, respectively
|
$ | 418,778 | $ | 1,279,070 | $ | 1,346,869 | $ | 2,861,346 | ||||||||
|
Professional
services including sales to a related party of $15,010 and $15,998 for the
three months ended June 30, 2009 and 2008, respectively and $45,522 and
$40,961 for the nine months ended June 30, 2009 and 2008,
respectively
|
495,960 | 402,420 | 1,467,600 | 1,344,259 | ||||||||||||
| 914,738 | 1,681,490 | 2,814,469 | 4,205,605 | |||||||||||||
|
COSTS
AND EXPENSES:
|
||||||||||||||||
|
Cost
of sales-software
|
117,473 | 316,302 | 338,273 | 550,678 | ||||||||||||
|
Cost
of sales-professional services, education and other
|
70,268 | 41,750 | 180,104 | 124,887 | ||||||||||||
|
Operations
|
- | 23,377 | 29,840 | 71,906 | ||||||||||||
|
Selling
and marketing
|
133,340 | 413,239 | 684,397 | 1,093,246 | ||||||||||||
|
Research
and development
|
409,903 | 432,443 | 1,413,588 | 1,464,287 | ||||||||||||
|
General
and administrative
|
268,737 | 414,572 | 1,160,843 | 1,366,409 | ||||||||||||
|
Total
costs and expenses
|
999,721 | 1,641,683 | 3,807,045 | 4,671,413 | ||||||||||||
|
OPERATING
(LOSS) INCOME
|
(84,983 | ) | 39,807 | (992,576 | ) | (465,808 | ) | |||||||||
|
OTHER
(EXPENSE) INCOME:
|
||||||||||||||||
|
Interest
and other expense
|
(1,337 | ) | - | (3,770 | ) | - | ||||||||||
|
Interest
income
|
643 | 2,057 | 4,442 | 7,096 | ||||||||||||
|
Total
other (expense) income – net
|
(694 | ) | 2,057 | 672 | 7,096 | |||||||||||
|
(LOSS)
INCOME BEFORE INCOME TAXES
|
(85,677 | ) | 41,864 | (991,904 | ) | (458,712 | ) | |||||||||
|
PROVISION
FOR INCOME TAXES
|
- | - | (1,800 | ) | (2,800 | ) | ||||||||||
|
NET
(LOSS) INCOME
|
$ | (85,677 | ) | $ | 41,864 | $ | (993,704 | ) | $ | (461,512 | ) | |||||
|
NET
(LOSS) INCOME PER SHARE – BASIC
|
$ | (0.01 | ) | $ | 0.00 | $ | (0.06 | ) | $ | (0.03 | ) | |||||
|
WEIGHTED
AVERAGE NUMBER OF
|
||||||||||||||||
|
COMMON
SHARES OUTSTANDING – BASIC
|
16,751,137 | 16,751,137 | 16,751,137 | 16,751,137 | ||||||||||||
|
NET
(LOSS) INCOME PER SHARE – DILUTED
|
$ | (0.01 | ) | $ | 0.00 | $ | (0.06 | ) | $ | (0.03 | ) | |||||
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES AND COMMON SHARE EQUIVALENTS
OUTSTANDING – DILUTED
|
16,751,137 | 16,751,137 | 16,751,137 | 16,751,137 | ||||||||||||
The
accompanying notes form an integral part of these financial
statements.
-2-
MITEK
SYSTEMS, INC
STATEMENTS
OF CASH FLOWS
(Unaudited)
|
For
the nine months ended
|
||||||||
|
June
30,
|
||||||||
|
2009
|
2008
|
|||||||
|
OPERATING
ACTIVITIES
|
||||||||
|
Net
loss
|
$ | (993,704 | ) | $ | (461,512 | ) | ||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
|
Stock-based
compensation expense
|
92,037 | 181,881 | ||||||
|
Depreciation
and amortization
|
28,587 | 27,150 | ||||||
|
Amortization
of software development costs
|
11,430 | - | ||||||
|
Loss
on disposal of property and equipment
|
1,767 | - | ||||||
|
Provision
for bad debts
|
(23,609 | ) | 38,669 | |||||
|
Changes
in assets and liabilities:
|
||||||||
|
Accounts
receivable
|
297,695 | (948,526 | ) | |||||
|
Inventory,
prepaid expenses, and other current assets
|
(14,454 | ) | 19,813 | |||||
|
Accounts
payable
|
(55,929 | ) | 399,391 | |||||
|
Accrued
payroll and related taxes
|
(123,446 | ) | 74,068 | |||||
|
Deferred
revenue
|
5,062 | 99,019 | ||||||
|
Other
accrued liabilities
|
88,196 | (13,305 | ) | |||||
|
Deferred
rent
|
(3,982 | ) | 8,759 | |||||
|
Net
cash used in operating activities
|
(690,350 | ) | (574,593 | ) | ||||
|
INVESTING
ACTIVITIES
|
||||||||
|
Investment
in software development costs
|
(63,735 | ) | (124,160 | ) | ||||
|
Purchases
of property and equipment
|
(9,050 | ) | (27,958 | ) | ||||
|
Proceeds
from sale of property and equipment
|
70 | - | ||||||
|
Net
cash used in investing activities
|
(72,715 | ) | (152,118 | ) | ||||
|
FINANCING
ACTIVITIES
|
- | - | ||||||
|
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
(763,065 | ) | (726,711 | ) | ||||
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
1,300,281 | 2,096,282 | ||||||
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 537,216 | $ | 1,369,571 | ||||
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
|
Cash
paid for interest
|
$ | 2,003 | $ | - | ||||
|
Cash
paid for income taxes
|
$ | 1,800 | $ | 2,800 | ||||
The
accompanying notes form an integral part of these financial
statements.
-3-
MITEK
SYSTEMS, INC.
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis
of Presentation
The accompanying unaudited financial
statements as of June 30, 2009 of Mitek Systems, Inc. (the “Company”) have been
prepared in accordance with the instructions to Form 10-Q and Article 8 of
Regulation S-X and accordingly, they do not include all information and footnote
disclosures required by accounting principles generally accepted in the United
States of America. Refer to the Company’s financial statements on
Form 10-K for the year ended September 30, 2008 for additional
information. The financial statements do, however, reflect all
adjustments (solely of a normal recurring nature) which are, in the opinion of
management, necessary for a fair statement of the results of the interim periods
presented.
Results for the three and nine months
ended June 30, 2009 are not necessarily indicative of results which may be
reported for any other interim period or for the year as a whole.
Going
Concern
The
Company incurred a net loss of approximately $86,000 for the three months ended
June 30, 2009, compared to a net income of approximately $42,000 for three
months ended June 30, 2008. In the nine months ended June 30, 2009
and 2008, the Company had net losses of approximately $994,000 and $462,000,
respectively. As of June 30, 2009, the Company has incurred an
accumulated deficit of approximately $14.5 million. Cash used for
operations increased from approximately $575,000 in the first nine months of
fiscal 2008 to approximately $690,000 in the same period of fiscal
2009. Cash used in investing activities during the nine months ended
June 30, 2009 was approximately $73,000, compared to approximately $152,000 in
the nine months ended June 30, 2008. The Company’s cash balance was
approximately $537,000 as of June 30, 2009.
Based on
its current operating plan, the Company’s existing working capital may not be
sufficient to meet the cash requirements to fund its planned operating expenses,
capital expenditures, and working capital requirements for the next twelve
months without additional sources of cash and/or the deferral, reduction or
elimination of significant planned expenditures. The Company is
taking expense reduction measures to conserve cash and has retained an
investment banking firm to explore strategic alternatives. In
addition, the Company may need to raise significant additional funds to continue
its operations. In the absence of positive cash flows from
operations, the Company may be dependent on its ability to secure additional
funding through the issuance of debt or equity instruments. If
adequate funds are not available, the Company may be forced to significantly
curtail its operations or to obtain funds through entering into additional
collaborative agreements or other arrangements that may be on unfavorable terms,
if available at all.
These
factors raise substantial doubt about the Company’s ability to continue as a
going concern. The accompanying financial statements have been
prepared assuming that the Company will continue as a going
concern. This basis of accounting contemplates the recovery of the
Company’s assets and the satisfaction of liabilities in the normal course of
business. In addition, these financial statements do not include any
adjustments to the specific amounts and classifications of assets and
liabilities, which might be necessary should the Company be unable to continue
as a going concern.
On
January 9, 2009, the Company implemented a plan to decrease its operating
expenses by reducing its workforce in light of the economic contraction of the
financial services market into which the Company primarily sells its
products. The staff reduction included general and administrative,
sales and marketing and technical staff. The Company has diligently maintained
key resources to adequately pursue new sales opportunities and support its
operations. The Company's management does not believe that such reductions will
impair the Company’s ability to market its ImageNet Mobile Deposit application
and other mobile capture products, or to provide technical support to its
current and prospective customers.
-4-
2. Accounting
for Stock-Based Compensation
The
Company adopted the fair value recognition provisions of Statement of Financial
Accounting Standards ("SFAS") No. 123(R), Share-Based Payment ("SFAS
No. 123(R)").
SFAS
No. 123(R) requires forfeitures to be estimated at the time of grant and
revised, if necessary, in subsequent periods if actual forfeitures differ from
those estimates. The estimated average forfeiture rates at June 30,
2009 of approximately 17% for stock option grants were based on historical
forfeiture experience. The estimated expected remaining contractual
life of stock option grants at June 30, 2009 was approximately 1.7 years on
grants to directors and 6.9 years on grants to employees.
SFAS
No. 123(R) requires the cash flows resulting from the tax benefits ensuing
from tax deductions in excess of the compensation cost recognized for those
options to be classified as financing cash flows. Due to the
Company's valuation allowance from losses in the previous years, there was no
such tax benefits during the three and nine month periods ended June 30,
2009. Prior to the adoption of SFAS No. 123(R) those benefits
would have been reported as operating cash flows had the Company received any
tax benefits related to stock option exercises.
The fair
value of stock-based awards to employees and directors is calculated using the
Black-Scholes option pricing model. The Black-Scholes model requires
subjective assumptions, including future stock price volatility and expected
time to exercise, which greatly affect the calculated values. The
expected term of options granted is derived from historical data on employee
exercises and post-vesting employment termination behavior. The
risk-free rate selected to value any particular grant is based on the U.S
Treasury rate that corresponds to the expected life of the grant effective as of
the date of the grant. The expected volatility is based on the
historical volatility of the Company's stock price. These factors
could change in the future, affecting the determination of stock-based
compensation expense in future periods.
The value
of stock-based compensation is based on the single option valuation approach
under SFAS No. 123(R). It is assumed no dividends will be
declared. The estimated fair value of stock-based compensation awards
to employees is amortized using the straight-line method over the vesting period
of the options.
The fair
value calculations for stock-based compensation awards to employees for the nine
month periods ended June 30, 2009 and 2008 were based on the following
assumptions:
|
2009
|
2008
|
|||||||
|
Risk-free
interst rate
|
0.44% - 2.29 | % | 1.74% - 3.67 | % | ||||
|
Expected
life (years)
|
5.31 | 5.40 | ||||||
|
Expected
volatility
|
192 | % | 97 | % | ||||
|
Expected
dividends
|
None
|
None
|
||||||
The following table summarizes
stock-based compensation expense related to stock options under SFAS
No. 123(R) for the three and nine month periods ended June 30, 2009 and
2008 which was allocated as follows:
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Research
and development
|
$ | 7,807 | $ | 8,676 | $ | 25,376 | $ | 26,516 | ||||||||
|
Sales
and marketing
|
2,350 | 14,561 | 11,074 | 38,486 | ||||||||||||
|
General
and administrative
|
13,130 | 40,104 | 55,587 | 116,879 | ||||||||||||
|
Stock-based
compensation expense related to employee stock options included in
operating expenses
|
$ | 23,287 | $ | 63,341 | $ | 92,037 | $ | 181,881 | ||||||||
-5-
The following table summarizes vested
and unvested options, fair value per share weighted average remaining term and
aggregate intrinsic value at June 30, 2009:
|
Number
of
Shares
|
Weighted
Average
Grant
Date Fair
Value
Per Share
|
Weighted
Average
Remaining
Contractual
Life (in
Years)
|
Aggregate
Intrinsic Value
|
|||||||||||||
|
Vested
|
2,506,287 | 0.40 | 5.15 | $ | 50,186 | |||||||||||
|
Unvested
|
995,228 | 0.16 | 9.21 | 133,914 | ||||||||||||
|
Total
|
3,501,515 | 0.33 | 6.31 | $ | 184,100 | |||||||||||
As of June 30, 2009, the Company had
$149,250 of unrecognized compensation expense expected to be recognized over a
weighted average period of approximately 1.07 years.
A summary of option activity under the
Company’s stock equity plans during the nine months ended June 30, 2009 is as
follows:
|
Number
of Shares
|
Weighted
Average
Exercise
Price Per
Share
|
Weighted
Average
Remaining
Contractual
Term
(in
Years)
|
||||||||||
|
Outstanding,
September 30, 2008
|
3,740,158 | $ | 0.71 | 6.52 | ||||||||
|
Granted:
|
||||||||||||
|
Board
of Directors
|
150,000 | $ | 0.09 | 2.66 | ||||||||
|
Executive
Officers
|
249,000 | $ | 0.09 | 9.66 | ||||||||
|
Employees
|
505,000 | $ | 0.09 | 9.61 | ||||||||
|
Forfeited
|
(1,142,643 | ) | $ | 0.67 | 6.37 | |||||||
|
Outstanding,
June 30, 2009
|
3,501,515 | $ | 0.56 | 6.31 | ||||||||
The
following table summarizes significant ranges of outstanding and exercisable
options as of June 30, 2009:
|
Range
of
Exercise
Prices
|
Number
of
Options
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
(in
Years)
|
Weighted
Average
Exercise
Price
|
Number
of
Exercisable
Options
|
Weighted
Average
Exercise
Price
of
Exercisable
Options
|
Number
of
Unvested
Options
|
||||||||||||||||||
|
$
0.07 - $ 0.69
|
2,301,194 | 7.17 | $ | 0.29 | 1,311,534 | $ | 0.36 | 989,660 | ||||||||||||||||
|
$
0.70 - $ 0.92
|
426,000 | 4.64 | $ | 0.79 | 420,432 | $ | 0.79 | 5,568 | ||||||||||||||||
|
$
1.06 - $ 1.68
|
725,000 | 4.82 | $ | 1.11 | 725,000 | $ | 1.11 | - | ||||||||||||||||
|
$
2.13 - $ 2.68
|
38,500 | 2.65 | $ | 2.28 | 38,500 | $ | 2.28 | - | ||||||||||||||||
|
$
3.25 - $12.37
|
10,821 | 0.67 | $ | 6.18 | 10,821 | $ | 6.18 | - | ||||||||||||||||
| 3,501,515 | 6.31 | $ | 0.56 | 2,506,287 | $ | 0.71 | 995,228 | |||||||||||||||||
The
per-share weighted average fair value of options granted during the nine months
ended June 30, 2009 was $0.09.
On June
10, 2009, the Company’s 1999 Stock Option Plan (the “1999 Plan”) expired in
accordance with the terms the plan. Options granted under the plan
that were outstanding at such date remain in effect until such options are
exercised, forfeited or expire in accordance with the plan. As of
June 30, 2009, options to purchase 727,571 shares of the Company’s common stock
were outstanding under the 1999 Plan and no options were available for future
grants.
-6-
3. Income
Taxes
On
October 1, 2007, the Company adopted the provisions of the Financial Accounting
Standards Board ("FASB") Interpretation No. 48, Accounting for Uncertainty
in Income Taxes—an interpretation of FASB Statement No. 109
("FIN 48"). FIN 48 clarifies the accounting for uncertainty
in income taxes recognized in a company's financial statements and prescribes a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a
tax return. Further, FIN 48 gives guidance regarding the
recognition of a tax position based on a "more likely than not" recognition
threshold; that is, evaluating whether the position is more likely than not of
being sustained upon examination by the appropriate taxing authorities, based on
the technical merits of the position. The adoption of FIN 48 did not
impact the Company's financial condition, results or operations or cash
flows.
At
September 30, 2008, the Company had net deferred tax assets of approximately
$6.72 million. The deferred tax assets are primarily comprised of
federal and state net operating loss carryforwards (approximately 83% of the net
deferred tax assets at October 1, 2008). Such carryforwards expire
between 2008 and 2023. Under the Tax Reform Act of 1986, the amount
of and the benefit from net operating losses that can be carried forward may be
limited in certain circumstances. The Company carries a deferred tax
valuation allowance equal to 100% of total net deferred assets. In
recording this allowance, management has considered a number of factors, but
chiefly, the Company's recent history of sustained operating
losses. Management has concluded that a valuation allowance is
required for 100% of the total deferred tax assets as it is more likely than not
that the deferred tax assets will not be realized.
The
Company has not determined the amount of the annual limitation on operating loss
carryforwards that can be utilized in a taxable year. Any operating
loss carryforwards that will expire prior to utilization as a result of such
limitations will be removed from deferred tax assets with a corresponding
reduction of the valuation allowance. Based on the 100% valuation
allowance on the deferred tax assets, the Company does not anticipate that
future changes in the Company's unrecognized tax benefits will impact its
effective tax rate.
The
Company's policy is to classify interest and penalties related to income tax
matters as income tax expense. The Company had no accrual for
interest or penalties as of September 30, 2008 or June 30, 2009, and has not
recognized interest and/or penalties in the statement of operations for the
three and nine month periods ended June 30, 2009.
4. Commitments
and Contingencies
The
Company leases office space located at 8911 Balboa Avenue, San Diego, California
under a non-cancelable operating lease. The lease costs are expensed
on a straight-line basis over the lease term. The Company signed the
lease, which has an initial term of seven years in September
2005. The lease was effective and binding on the parties as of
September 19, 2005; however, the term of the lease began on
December 9, 2005, which was the date on which certain improvements were
substantially complete. On February 1, 2009, the lease was amended to
allow the Company to defer the payment of fifty percent (50%) of the basic rent
due for the months of February through September 2009. The Company
will repay the deferred rent with interest at an annual rate of six percent (6%)
in equal monthly installments payable on the first day of each calendar month
commencing October 1, 2009 and continuing through March 1, 2010. In
addition, in connection with the amendment, the Company waived its right to
exercise an early termination option.
5. Related
Party Transactions
John H.
Harland Company ("JHH Co.") made investments in the Company in February and
May 2005. JHH Co. acquired a total of 2,142,856 shares of
unregistered common stock for an aggregate purchase price of $1,500,000 or $0.70
per share. As part of the acquisition of shares, JHH Co. received
warrants to purchase 321,428 additional shares of common stock at $0.70 per
share. This transaction resulted in JHH Co. and its subsidiary,
Harland Financial Solutions (collectively "John Harland"), being considered
related parties of the Company due to the amount of the Company's common stock
beneficially owned by John Harland. John Harland is not involved in
the management decisions of the Company and does not participate in any board
meetings, unless invited.
-7-
Below is
a summary of revenues recognized from John Harland during the three and nine
months ended June 30, 2009 and 2008:
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Related
party revenue
|
||||||||||||||||
|
Software
|
- | - | - | 227,712 | ||||||||||||
|
Professional
services
|
15,010 | 15,998 | 45,422 | 40,961 | ||||||||||||
|
Total
related party revenue
|
15,010 | 15,998 | 45,422 | 268,673 | ||||||||||||
There was
an outstanding accounts receivable balance due from John Harland of
approximately $637 and $37 at June 30, 2009 and 2008, respectively.
6. Product
Revenues and Sales Concentrations
Product
Revenues
During
the three and nine months ended June 30, 2009 and 2008, the Company’s revenues
were derived primarily from its Character Recognition Product line.
Below is
a summary of the revenues by product lines:
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
|
Revenue
|
||||||||||||||||
|
Software
licenses
|
$ | 418,778 | $ | 1,279,070 | $ | 1,346,869 | $ | 2,861,346 | ||||||||
|
Professional
services, maintenance and other
|
495,960 | 402,420 | 1,467,600 | 1,344,259 | ||||||||||||
|
Total
revenue
|
$ | 914,738 | $ | 1,681,490 | $ | 2,814,469 | $ | 4,205,605 | ||||||||
Sales
Concentration
The
Company sells its products primarily to original equipment manufacturers, system
integrators and resellers who ultimately sell to depository
institutions. For the three and nine months ended June 30, 2009 and
2008, the Company had the following sales concentrations:
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Customers
to which sales were in excess of 10% of total sales:
|
||||||||||||||||
|
Number
of customers
|
2 | 1 | 1 | 1 | ||||||||||||
|
Aggregate
percentage of sales
|
30.5 | % | 57.6 | % | 14.8 | % | 23.9 | % | ||||||||
Below is a summary of sales to
customers to which sales were in excess of 10% of total sales and the
corresponding accounts receivable balances for the three and nine months ended
June 30, 2009 and 2008:
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
|
June
30,
|
June
30,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Sales
|
279,000 | 968,000 | 418,000 | 1,004,000 | ||||||||||||
|
Accounts
receivable balance
|
177,000 | 964,000 | 100 | 964,000 | ||||||||||||
-8-
7.
Capitalized
Software Development Costs
The
Company has developed Mobile Capture software, a software solution that captures
and reads data from mobile devices using proprietary technology. The
Company has completed all of the planning, designing, coding, and testing
activities necessary to establish technological feasibility of the product and
has determined that the product can be produced to meet its design
specifications including functions, features, and technical performance
requirements.
Costs of
internally developed software are expensed until the technological feasibility
of the software product has been established. Thereafter, software
development costs, to the extent that management expects such costs to be
recoverable against future revenues, are capitalized until the product's general
availability to customers in accordance with SFAS No. 86, Accounting for
the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed ("SFAS
No. 86").
The
Company evaluates its capitalized software development costs at each balance
sheet date to determine if the unamortized balance related to any given product
exceeds the estimated net realizable value of that product. Any such
excess is written off through accelerated amortization in the quarter it is
identified. Determining net realizable value, as defined by SFAS
No. 86, requires making estimates and judgments in quantifying the
appropriate amount to write off, if any. Actual amounts realized from
the software products could differ from those estimates. Also, any
future changes to the Company's product portfolio could result in significant
increases to its cost of license revenue as a result of the write-off of
capitalized software development costs. Software development costs of
approximately $0 and $64,000 were capitalized in the three and nine months ended
June 30, 2009, respectively. The Company completed its first
production general release of ImageNet Mobile DepositTM on
October 31, 2008, and entered into an agreement with a major financial
institution on November 4, 2008 to conduct a performance evaluation of the
product. In accordance with SFAS No. 86, the Company ceased
capitalizing software development costs related to this product on the date that
it completed its first production general release.
In
June 2009, the Company began to recognize revenue from the sale of ImageNet
Mobile DepositTM, at
which time it started amortizing the capitalized software development costs
associated with the product in accordance with SFAS No. 86. Under
SFAS No. 86, the annual amortization shall be the greater of the amount computed
using (a) the ratio that current gross revenues for a product bear to the total
of current and anticipated future gross revenues for that or (b) the
straight-line method over the remaining estimated economic life of the product
including the period being reported on. The Company determined it was
appropriate to amortize the related capitalized software development costs over
the remaining economic life of the product, estimated to be three
years. In the three and nine months ended June 30, 2009, the Company
recorded approximately $11,000 in amortization of software
development costs. No amortization of software development costs were
recorded in the three and nine months ended June 30, 2008.
8.
Recently
Issued Accounting Pronouncements
Effective October 1, 2008, the Company
adopted SFAS No. 157, Fair Value Measurements (“SFAS No. 157”). In
February 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-2, Effective
Date of FASB Statement No. 157, which provides a one year deferral of the
effective date of SFAS No. 157 for non-financial assets and non-financial
liabilities, except those that are recognized or disclosed in the financial
statements at fair value at least annually. As a result, the Company
only partially adopted SFAS No. 157 as it relates to its financial assets and
liabilities until the Company is required to apply this pronouncement to its
non-financial assets and liabilities beginning with fiscal year
2010. The adoption of SFAS No. 157 did not have a material impact on
the Company’s financial statements.
In February 2007, the FASB issued SFAS
No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities—Including an Amendment of FASB Statement No. 115 (“SFAS No.
159”). This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. Most of
the provisions in SFAS No. 159 are elective; however, the amendment to SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities (“SFAS No.
115”), applies to all entities with available-for-sale and trading
securities. The fair value option established by SFAS No. 159 permits
all entities to choose to measure eligible items at fair value at specified
election dates. Under SFAS No. 159, the Company would report
unrealized gains and losses on items for which the fair value option has been
elected in earnings at each subsequent reporting date. The fair value
option: (a) may be applied instrument by instrument, with a few exceptions, such
as investments otherwise accounted for by the equity method; (b) is irrevocable
(unless a new election date occurs); and (c) is applied only to entire
instruments and not to portions of instruments. This statement became
effective for the Company October 1, 2008; however, the Company did not elect
the fair value option for any of its financial assets or financial
liabilities.
-9-
On April 1, 2009, the FASB issued SFAS
No. 165, Subsequent Events (“SFAS No. 165”). SFAS No. 165 establishes
general standards for accounting for and disclosure of events that occur after
the balance sheet date but before financial statements are issued. SFAS No. 165
sets forth the period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may occur for
potential recognition in the financial statements, identifies the circumstances
under which an entity should recognize events or transactions occurring after
the balance sheet date in its financial statements, and the disclosures that
should be made about events or transactions that occur after the balance sheet
date. In preparing these financial statements, the Company evaluated
the events and transactions that occurred from June 30, 2009 through August 14,
2009, the date these financial statements were issued.
On April 1, 2009, the FASB issued FSP
FAS 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a
Business Combination That Arise from Contingencies.” The FSP amends
the guidance in FASB Statement No. 141 (Revised 2007) (“SFAS No. 141R”),
“Business Combinations,” to: (i) require that assets acquired and liabilities
assumed in a business combination that arise from contingencies be recognized at
fair value if fair value can be reasonably estimated. If fair value
of such an asset or liability cannot be reasonably estimated, the asset or
liability would generally be recognized in accordance with FASB Statement No. 5,
“Accounting for Contingencies,” and FASB Interpretation No. 14, “Reasonable
Estimation of the Amount of a Loss;” (ii) eliminate the requirement to disclose
an estimate of the range of outcomes of recognized contingencies at the
acquisition date. For unrecognized contingencies, the FASB decided to
require that entities include only the disclosures required by Statement No. 5
and that those disclosures be included in the business combination footnote; and
(iii) require that contingent consideration arrangements of an acquiree assumed
by the acquirer in a business combination be treated as contingent consideration
of the acquirer and should be initially and subsequently measured at fair value
in accordance with Statement No. 141R. This FSP is effective for
assets or liabilities arising from contingencies in business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. The Company
is currently evaluating the impact, if any, that the adoption of this FSP will
have on its financial statements.
On April 9, 2009, the FASB issued FSP
FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly,” providing guidelines for making fair value measurements
more consistent with the principles presented in SFAS No. 157. FSP
FAS 157-4 must be applied prospectively and retrospective application is not
permitted. FSP FAS 157-4 is effective for interim and annual periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009. An entity early adopting FSP FAS 157-4 must
also early adopt FSP FAS 115-2 and FAS 124-2. The adoption of FSP FAS
157-4 did not have a material impact on the Company’s financial
statements.
On April 9, 2009, the FASB issued FSP
FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary
Impairments,” providing additional guidance designed to create greater clarity
and consistency in accounting for and presenting impairment losses on debt
securities. FSP FAS 115-2 and FAS 124-2 is effective for interim and
annual periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. An entity may early adopt this
FSP only if it also elects to early adopt FSP FAS 157-4. The adoption
of FSP FAS 115-2 and FAS 124-2 did not have a material impact on the Company’s
financial statements.
On April 9, 2009, the FASB issued FSP
FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial
Instruments,” enhancing consistency in financial reporting by increasing the
frequency of fair value disclosures. FSP 107-1 and APB 28-1 is
effective for interim periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. However, an entity
may early adopt these interim fair value disclosure requirements only if it also
elects to early adopt FSP FAS 157-4 and FSP FAS 115-2 and FAS
124-2. The adoption of FSP FAS 107-1 and APB 28-1 did not have a
material impact on the Company’s financial statements.
On April 13, 2009, the SEC Office of
the Chief Accountant and Division of Corporation Finance issued SEC Staff
Accounting Bulletin 111 (“SAB 111”). SAB 111 amends and replaces SAB
Topic 5M, “Miscellaneous Accounting—Other Than Temporary Impairment of Certain
Investments in Equity Securities” to reflect FSP FAS 115-2 and FAS
124-2. SAB 111 provides guidance for assessing whether an impairment
of a debt security is other than temporary, as well as how such impairments are
presented and disclosed in the financial statements. The amended SAB
Topic 5M maintains the prior staff views related to equity securities but has
been amended to exclude debt securities from its scope. SAB 111 is
effective upon the adoption of FSP FAS 115-2 and FAS 124-2. The
adoption of SAB 111 did not have a material impact on the Company’s financial
statements.
-10-
In June 2009, the FASB issued SFAS No.
167, Amendments to FASB Interpretation No. 46(R) (“SFAS No. 167”), which amends
the consolidation guidance related to variable interest entities including
removing the scope exemption for qualifying special-purpose
entities. This statement is effective as of the first fiscal year
that begins after November 15, 2009 with early adoption
prohibited. The Company does not expect its adoption of SFAS No. 167
on October 1, 2010. The Company does not anticipate the adoption of
SFAS No. 167 to have a material effect on its financial statements.
In June 2009, the FASB issued SFAS No.
168, The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles (“SFAS No. 168”). SFAS No. 168
replaces SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles, and establishes the FASB Accounting Standards Codification as the
source of authoritative accounting principles recognized by the FASB to be
applied by nongovernmental entities in the preparation of financial statements
in conformity with Generally Accepted Accounting Principles. SFAS No.
168 is effective for interim and annual periods ending after September 15, 2009
and is not expected to have a material impact on the Company’s financial
statements.
|
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Special
Note Regarding Forward-Looking Statements
In
addition to historical information, this management’s discussion and analysis of
financial condition and results of operation contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. As contained herein, the words "expects," "anticipates,"
"believes," "intends," "will," and similar types of expressions identify
forward-looking statements, which are based on information that is currently
available to us, speak only as of the date hereof, and are subject to certain
risks and uncertainties. You should not place undue reliance on our
forward-looking statements because the matters they describe are subject to
known and unknown risks, uncertainties and other unpredictable factors, many of
which are beyond our control. Also, new risks and uncertainties arise
from time to time, and it is impossible for us to predict these matters or how
they may affect us. We do not undertake and specifically decline any
obligation to update any forward-looking statements or to publicly announce the
results of any revisions to any statements to reflect new information or future
events or developments.
To the
extent that this management’s discussion and analysis of financial condition and
results of operation contains forward-looking statements regarding the financial
condition, operating results, business prospects or any other aspect of the
Company, please be advised that our actual financial condition, operating
results and business performance may differ materially from those projected or
estimated by us in forward-looking statements. We have attempted to
identify certain of the factors that we currently believe may cause actual
future experiences and results to differ from our current
expectations. Please see "Note About Forward–Looking Statements" at
the beginning of this report. Please consider our forward-looking
statements in light of those risks as you read this report.
Outlook
Historically,
our business has been primarily focused on document image processing and image
analytics. Our business also focuses on intelligent character
recognition and forms processing technology, products and services used in the
financial services markets. We also develop fraud detection and
prevention products, which find signatures on any document and, using patented
algorithms, convert them into compact numeric codes, which are then compared
against one or more reference codes of trusted signatures for highly accurate
signature verification.
Our
primary strategy for fiscal 2009 has been and continues to be to expand our
business focus to include a software product that captures and reads data from
mobile devices using our proprietary technology. We refer to this
software product as Mobile Capture. Mobile Capture technology
converts a camera-equipped mobile phone into a mobile scanner that has the
ability to read and extract data from any digital photo or video
image. We have, however, continued to devote efforts to growing the
identified markets for our other products and enhance the functionality and
marketability of our image based recognition and forgery detection
technologies. In particular, we have been working on expanding the
installed base of our Recognition Toolkits and leveraging existing technology by
devising recognition-based applications to detect potential fraud and loss at
financial institutions. We also continue to seek to expand the
installed base of our Check Forgery detection solutions by pursuing
relationships with key resellers who we believe are better able to penetrate the
market and provide us entrée into a larger base of community
banks.
-11-
Application
of Critical Accounting Policies
Our
financial statements and accompanying notes are prepared in accordance with
accounting principles generally accepted in the United States of
America. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates by management are
affected by management’s application of accounting policies, are subjective and
may differ from actual results. Critical accounting policies for
Mitek include revenue recognition, allowance for doubtful accounts receivable,
fair value of equity instruments and accounting for income taxes.
Revenue
Recognition
We enter
into contractual arrangements with integrators, resellers and end users that may
include licensing of our software products, product support and maintenance
services, consulting services, resale of third-party hardware, or various
combinations thereof, including the sale of such products or services
separately. Our accounting policies regarding the recognition of
revenue for these contractual arrangements are fully described in the notes to
our financial statements filed with our annual report on Form 10-K for the year
ended September 30, 2008.
We
consider many factors when applying generally accepted accounting principles to
revenue recognition. These factors include, but are not limited to:
|
|
·
|
The
actual contractual terms, such as payment terms, delivery dates, and
pricing of the various product and service elements of a
contract;
|
|
|
·
|
Time
period over which services are to be
performed;
|
|
|
·
|
Creditworthiness
of the customer;
|
|
|
·
|
The
complexity of customizations to our software required by service
contracts;
|
|
|
·
|
The
sales channel through which the sale is made (direct, VAR, distributor,
etc.);
|
|
|
·
|
Discounts
given for each element of a contract;
and
|
|
|
·
|
Any
commitments made as to installation or implementation “go live”
dates.
|
Each of
the relevant factors is analyzed to determine its impact, individually and
collectively with other factors, on the revenue to be recognized for any
particular contract with a customer. Management is required to make
judgments regarding the significance of each factor in applying the revenue
recognition standards. Any misjudgment or error by management in its
evaluation of the factors and the application of the standards, especially with
respect to complex or new types of transactions, could have a material adverse
affect on our future revenues and operating results.
Accounts
Receivable
We
constantly monitor collections from our customers and maintain a provision for
estimated credit losses that is based on historical experience and on specific
customer collection issues. While such credit losses have
historically been within our expectations and the provisions established, we
cannot guarantee that we will continue to experience the same credit loss rates
that we have in the past. Since our revenue recognition policy
requires customers to be deemed creditworthy, our accounts receivable are based
on customers whose payment is reasonably assured. Our accounts
receivable are derived from sales to a wide variety of customers. We
do not believe a change in liquidity of any one customer or our inability to
collect from any one customer would have a material adverse impact on our
financial position.
Fair
Value of Equity Instruments
The
valuation of certain items, including valuation of warrants, beneficial
conversion feature related to convertible debt and compensation expense related
to stock options granted, involve significant estimates with underlying
assumptions judgmentally determined. The valuation of warrants and
stock options are based upon a Black Scholes valuation model, which involve
estimates of stock volatility, expected life of the instruments and other
assumptions.
-12-
Deferred
Income Taxes
Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. We maintain a valuation
allowance against the deferred tax asset due to uncertainty regarding the future
realization based on historical taxable income, projected future taxable income,
and the expected timing of the reversals of existing temporary
differences. Until such time as we can demonstrate that we will no
longer incur losses or if we are unable to generate sufficient future taxable
income we could be required to maintain the valuation allowance against our
deferred tax assets.
Capitalized
Software Development Costs
Research
and development costs are charged to expense as incurred. However,
the costs incurred for the development of computer software that will be sold,
leased, or otherwise marketed are capitalized when technological feasibility has
been established. These capitalized costs are subject to an ongoing
assessment of recoverability based on anticipated future revenues and changes in
hardware and software technologies. Costs that are capitalized
include direct labor and related overhead.
Amortization
of capitalized software development costs begins when product sales
commence. Amortization is provided on a product-by-product basis on
either the straight-line method over periods not exceeding three years or the
sales ratio method. Unamortized capitalized software development
costs determined to be in excess of net realizable value of the product are
expensed immediately.
Analysis
of Financial Condition and Results of Operations
Comparison
of the Three and Nine Months Ended June 30, 2009 and 2008
Net
Sales
Net sales
were approximately $915,000 and $1,681,000 for three months ended June 30, 2009
and 2008, respectively, a decrease of approximately $766,000, or
46%. In the nine months ended June 30, 2009, net sales were
approximately $2,814,000, compared to approximately $4,206,000 in the nine
months ended June 30, 2008, a decrease of approximately $1,392,000, or
33%. The decrease in revenue primarily relates to reduced sales of
our core products due to, among other factors, the recent downturn in the
banking and financial services industry.
We
recognized no revenue from Harland Financial Solutions, a subsidiary of John H.
Harland Company (collectively “John Harland”), for software licenses in the
three months ended June 30, 2009 and 2008. Revenue from John Harland
for maintenance support fees was approximately $15,000 and $16,000 in the three
months ended June 30, 2009 and 2008, respectively. In the nine months
ended June 30, 2009 and 2008, revenue recognized from software licenses sold to
John Harland was approximately $0 and $228,000, respectively. Revenue
from maintenance support fees was approximately $46,000 and $41,000 in the nine
months ended June 30, 2009 and 2008, respectively. John Harland is a
related party as discussed in greater detail in Note 5 to our financial
statements included in this report.
Cost
of Sales
Cost of
sales were approximately $188,000 and $358,000 for the three months ended June
30, 2009 and 2008, respectively, a decrease of approximately $170,000 or
47%. Stated as a percentage of net sales, cost of sales were
approximately 21% for the three months ended June 30, 2009 and
2008. Cost of sales were approximately $518,000 and $676,000 for the
nine months ended June 30, 2009 and 2008, respectively, a decrease of
approximately $158,000 or 23%. Cost of sales, as a percentage of net
sales, were 18% in the nine months ended June 30, 2009, compared to 16% in the
nine months ended June 30, 2008. The decrease in cost of sales in the
three and nine months ended June 30, 2009 is primarily due to decreased sales,
partially offset by an increase in third-party license fees.
Operations
Expenses
Operations
expenses include payroll, employee benefits, and other personnel-related costs
associated with purchasing, shipping and receiving. Due to the
workforce reduction implemented in January 2009, we eliminated our operations
department. Other costs previously included in this department have
been reallocated to the other departments. Operations expenses were
$0 and approximately $23,000 for the three months ended June 30, 2009 and 2008,
respectively.
-13-
Operations
expenses decreased by approximately $42,000 or 58% to approximately $30,000 in
the nine months ended June 30, 2009 from approximately $72,000 in the nine
months ended June 30, 2008. The decrease in the first nine months
of fiscal 2009 primarily relates to reduced personnel-related cost
and other direct operating expenses due to the workforce
reduction. Stated as a percentage of net sales, operations expenses
were 1% and 2% in the nine months ended June 30, 2009 and 2008,
respectively.
Selling
and Marketing Expenses
Selling
and marketing expenses include payroll, employee benefits, and other
headcount-related costs associated with sales and marketing personnel and
advertising, promotions, trade shows, seminars, and other
programs. In the three months ended June 30, 2009 and 2008, selling
and marketing expenses were approximately $133,000 and $413,000, respectively, a
decrease of approximately $280,000 or 68%. The decrease in the
current three-month period primarily relates to a decrease in personnel costs
due to the workforce reduction implemented in January 2009, reduced commissions
due to the lower sales volume, cost savings in public relations and other
promotion expenses and reduced travel and other direct operating
expenses. Stated as a percentage of net sales, selling and marketing
expenses for the three months ended June 30, 2009 and 2008 were 15% and 25%,
respectively.
Selling
and marketing expenses were approximately $684,000 in the nine months ended June
30, 2009, compared to approximately $1,093,000 in the nine months ended June 30,
2008, a decrease of approximately $409,000 or 37%. The decrease in
the first nine months of fiscal 2009 primarily relates to lower personnel costs
due to the workforce reduction, decreased commissions due to declining sales and
to cost savings in outside services, travel expenses, website development and
other promotional costs and stock-based compensation. Stated as a
percentage of net sales, selling and marketing expenses were 24% in the nine
months ended June 30, 2009, compared to 26% in the nine months ended June 30,
2008.
Research
and Development Expenses
Research
and development expenses include payroll, employee benefits, consultant expenses
and other headcount-related costs associated with product
development. These costs are incurred to maintain and enhance
existing products. We retain what we believe to be sufficient staff
to sustain our existing product lines, including development of new, more
feature-rich versions of our existing product, as we determine the marketplace
demands. We also employ research personnel, whose efforts are
instrumental in ensuring product paths from current technologies to anticipated
future generations of products within our area of business.
Research
and development expenses for the three months ended June 30, 2009 were
approximately $410,000, compared to approximately $432,000 for the three months
ended June 30, 2008, a decrease of approximately $22,000 or 5%. The
decrease in the current three month period primarily relates to the decrease in
personnel costs due to the workforce reduction implemented in January 2009,
partially offset by increased outside services. Stated as a
percentage of net sales, research and development expenses were 45% and 26% in
the three months ended June 30, 2009 and 2008, respectively.
In the
nine months ended June 30, 2009 and 2008, research and development expenses were
approximately $1,414,000 and $1,464,000, respectively, a decrease of
approximately $50,000 or 3%. The decrease in the current nine month
period is primarily due to decreases personnel costs and certain direct
operating expenses, such as software licenses, materials and supplies, repairs
and maintenance and recruitment costs, partially offset by increases in outside
services and telephone. Stated as a percentage of net sales, research
and development expenses were 50% and 35% in the nine months ended June 30, 2009
and 2008, respectively.
General
and Administrative Expenses
General
and administrative expenses include payroll, employee benefits, and other
personnel-related costs associated with the finance, facilities, and legal,
accounting and other administrative fees. General and administrative
expenses were approximately $269,000 in the three months ended June 30, 2009
compared to approximately $415,000 in the three months ended June 30, 2008, a
decrease of approximately $146,000 or 35%. The decrease in the
current three month period primarily relates to reduced personnel costs,
including salaries, taxes, vacation and other benefits due to the workforce
reduction implemented in January 2009 and decreases in other direct operating
expenses, including repairs and maintenance, travel expenses, bad debt expense
and stock-based compensation, partially offset by an increase in legal
expenses. Stated as a percentage of net sales, general and
administrative expenses were 29% and 25% for the three months ended June 30,
2009 and 2008, respectively.
-14-
In the
nine months ended June 30, 2009 and 2008, general and administrative expenses
were approximately $1,161,000 and $1,366,000, respectively, a
decrease of approximately $205,000 or 15%. The decrease in the nine
months ended June 30, 2009 was primarily due to decreased personnel costs due to
the workforce reduction, reduced bad debt expense and decreases in other direct
operating expenses, including stock-based compensation, travel and charitable
contributions, partially offset by increased accounting and legal fees and other
outside services. Stated as a percentage of net sales, general and
administrative expenses were 41% and 32% for the nine months ended June 30, 2009
and 2008, respectively.
Other
(Expense) Income
We
recorded interest expense of approximately $1,000 and $2,000 for the three and
nine months ended June 30, 2009. No interest expense was recorded in
the three and nine months ended June 30, 2008. In the three and nine
months ended June 30, 2009, we recorded a loss on the disposal of fixed assets
of approximately $2,000. There was no loss related to the disposal of
fixed assets in the three and nine months ended June 30,
2008. Interest income in the three months ended June 30, 2009 and
2008 was approximately $1,000 and $2,000, respectively. In the nine
months ended June 30, 2009 and 2008, interest income was approximately $4,000
and $7,000, respectively. The decrease in interest income in the
current periods was due to lower average cash balances.
Liquidity
and Capital Resources
On June
30, 2009, we had approximately $537,000 in cash and cash equivalents compared to
approximately $1,300,000 on September 30, 2008, a decrease of approximately
$763,000 or 59%. The balance of accounts receivable at June 30, 2009
was approximately $639,000, a decrease of approximately $274,000 or 30% from the
September 30, 2008 balance of approximately $913,000. The
decrease in accounts receivable was primarily due reduced sales, better
collection efforts and the timing of customer billings and the receipt of
payments.
Deferred
revenue, which consists of maintenance and support service fees that are
deferred and recognized as income over the contract period on a straight-line
basis, was approximately $681,000 and $676,000 at June 30, 2009 and
September 30, 2008, respectively. We believe that as the
installed base of our products grows and as customers purchase additional
complementary products, the maintenance and support service fees that are
deferred, as well those recognized as income over the contract term, will
increase.
We
financed our cash needs during the nine months ended June 30, 2009 and for the
same period in fiscal 2008 primarily from collections of accounts receivable and
existing cash and cash equivalents.
Net cash
used in operating activities during the nine months ended June 30, 2009 was
approximately $690,000, compared to approximately $575,000 during the nine
months ended June 30, 2008, an increase of approximately $115,000 or
20%. The primary uses of cash from operating activities during the
nine months ended June 30, 2009 included the net loss of approximately $994,000,
decreases in accounts receivable of approximately $274,000, accrued payroll and
related taxes of approximately $123,000 and accounts payable of approximately
$56,000, partially offset by an increase in other accrued liabilities of
approximately $88,000. Net cash used in operating activities in the
current nine-month period also included non-cash stock-based compensation of
approximately $92,000, depreciation and amortization of fixed assets of
approximately $29,000 and amortization of software development costs of
approximately $11,000.
Net cash
used in investing activities during the nine months ended June 30, 2009 was
approximately $73,000, compared to approximately $152,000 during the nine months
ended June 30, 2008, a decrease of approximately $79,000 or 52%. The
decrease in cash used in investing activities in the current period is primarily
due to a decrease of approximately $60,000 in software development
costs related to our Mobile Capture software application, which costs we ceased
capitalizing when we completed our first production general release in November
2008, and a reduction of approximately $19,000 in purchases of property and
equipment. We do not have any significant capital expenditures
planned for the foreseeable future.
-15-
We had
negative working capital of approximately $18,000 and current ratio 0.99 at June
30, 2009, compared to working capital of approximately $919,000 and a current
ratio 1.66 at September 30, 2008. On June 30, 2009, our total
liability to equity ratio was 3.17 to 1 compared to 1.09 to 1 on
September 30, 2008. We have experienced a significant decline in
working capital since September 30, 2008. We do not currently have
any credit facilities in place, or any arrangement that we can draw upon for
additional capital.
We
evaluate our cash requirements on a quarterly basis. Historically, we
have managed our cash requirements principally from cash generated from
operations and financing transactions, and we may need to raise additional
capital to fund continuing operations in the future. If our financing
efforts are not successful, we will need to explore alternatives to continue
operations, which may include a merger, asset sale, joint venture, loans or
further expense reductions. Based on our current operating plan, our
existing working capital may not be sufficient to fund our planned operating
expenses, capital expenditures, and working capital requirements for the next
twelve months without additional sources of cash and/or the deferral, reduction
or elimination of significant planned expenditures
On
January 9, 2009, we implemented a plan to decrease our operating expenses
by reducing our workforce in light of the economic contraction of the financial
services market into which we primarily sells our products. The staff
reduction included general and administrative, sales and marketing and technical
staff. We have diligently maintained key resources to adequately
pursue new sales opportunities and support our operations. Our management does
not believe that such reductions have impaired or will impair our ability to
market our ImageNet Mobile Deposit application and other mobile capture
products, or to provide technical support to our current and prospective
customers. While we believe our strategy to reduce our operating
expenses will allow us to support our operations in the short term, if our cost
cutting efforts are not successful or if we continue to experience a decrease in
sales of our products and services, we may not be able to continue as a going
concern.
ITEM
3. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Disclosure
not required as a result of the Company's status as a smaller reporting
company.
ITEM
4. CONTROLS
AND PROCEDURES
Disclosure
Controls and Procedures
As of the
end of the period covered by this report, under the supervision and with the
participation of our management, including the Chief Executive Officer and Chief
Financial Officer, we have evaluated the effectiveness of the design and
operation of our disclosure controls and procedures pursuant to Exchange Act
Rules 13a-15 as of the end of the period covered by this
report. Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer have concluded that as of June 30, 2009, our disclosure
controls and procedures were designed and functioning effectively to provide
reasonable assurance that the information required to be disclosed by us in
reports filed under the Exchange Act is (i) recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms and (ii)
accumulated and communicated to management including our Chief Executive Officer
and Chief Financial Officer, as appropriate to allow timely decisions regarding
disclosure.
Changes
in Internal Controls over Financial Reporting
There
have not been any changes in our internal controls over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d - 15(f) under the Exchange Act)
during the quarter ended June 30, 2009 that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting.
-16-
PART
II – OTHER INFORMATION
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
We are
not aware of any legal proceedings or claims that we believe may have,
individually or in the aggregate, a material adverse effect on our business,
financial condition, operating results, cash flow or liquidity.
|
ITEM
1A.
|
RISK
FACTORS.
|
In
addition to the other information set forth in this report, you should carefully
consider the factors discussed in “Part I. Item 1—Description of
Business—Risk Factors” in our Annual Report on Form 10-K for the fiscal
year ended September 30, 2008. These risks and uncertainties have the
potential to materially affect our business, financial condition, results of
operations, cash flows, projected results and future prospects. As of
the date of this report, other than the risk factors set forth below, we do not
believe that there have been any material changes to the risk factors previously
disclosed in our Annual Report on Form 10-K for the fiscal year ended
September 30, 2008.
We
have a history of losses and we may not achieve profitability in the
future.
Our
operations resulted in net losses of approximately $86,000 and $994,000 for the
three and nine months ended June 30, 2009, respectively. In addition,
as a public company, we incur significant legal, accounting, and other expenses
related to being a public company. As a result of these expenditures,
we will have to generate and sustain increased revenue to achieve and maintain
future profitability. We may not achieve sufficient revenue to
achieve or maintain profitability. We have incurred and may continue
to incur significant losses in the future for a number of reasons, including due
to the other risks described in this report, and we may encounter unforeseen
expenses, difficulties, complications, delays, and other unknown
factors. Accordingly, we may not be able to achieve or maintain
profitability and we may continue to incur significant losses for the
foreseeable future.
We
depend upon our key personnel.
Our
future success depends in large part on the continued service of our key
technical and management personnel. We do not have employment
contracts with or "key person" life insurance policies on, any of our employees,
including Mr. John M. Thornton, our Chairman and Mr. James B. DeBello,
our President, Chief Executive Officer and Chief Financial
Officer. Loss of services of key employees could have a material
adverse effect on our operations and financial condition. We are also
dependent on our ability to identify, hire, train, retain and motivate high
quality personnel, especially highly skilled engineers involved in the ongoing
developments required to refine our technologies and to introduce future
applications. The high technology industry is characterized by a high
level of employee mobility and aggressive recruiting of skilled
personnel.
We cannot
assure you that we will be successful in attracting, assimilating and retaining
additional qualified personnel in the future. If we were to lose the
services of one or more of our key personnel, or if we failed to attract and
retain additional qualified personnel, it could materially and adversely affect
our customer relationships, competitive position and revenues.
A few of our stockholders have
significant control over our voting stock which may make it difficult to
complete some corporate transactions without their support and may prevent a
change in control.
As of
June 30, 2009, John M. Thornton, who is our Chairman of the Board and his
spouse, Sally B. Thornton, who is also a member of our board of directors,
beneficially owned 2,869,959 shares of common stock or approximately 17% of our
outstanding common stock. Our directors and executive officers as a
whole, beneficially own 4,618,955 shares of common stock, or approximately 25%
of our common stock. John H. Harland Company beneficially owns
2,464,284 shares of common stock or approximately 14%, which includes 321,428
shares of common stock issuable upon exercise of warrants. Laurus
Funds may acquire up to 1,060,000 shares of our common stock upon exercise of
its warrant or approximately 6% of our common stock.
The
above-described significant stockholders may have considerable influence over
the outcome of all matters submitted to our stockholders for approval, including
the election of directors. In addition, this ownership could
discourage the acquisition of our common stock by potential investors and could
have an anti-takeover effect, possibly depressing the trading price of our
common stock.
-17-
Our
common stock price has been volatile. You may not be able to sell
your shares of our common stock for an amount equal to or greater than the price
at which you acquire your shares of common stock.
The
market price of our common stock has been, and is likely to continue to be,
highly volatile. Future announcements concerning us or our
competitors, quarterly variations in operating results, announcements of
technological innovations, the introduction of new products or changes in our
product pricing policies or those of our competitors, claims of infringement of
proprietary rights or other litigation, changes in earnings estimates by
analysts or other factors could cause the market price of our common stock to
fluctuate substantially. In addition, the stock market has from time
to time experienced significant price and volume fluctuations that have
particularly affected the market prices for the common stocks of technology
companies and that have often been unrelated to the operating performance of
particular companies. These broad market fluctuations may adversely
affect the market price of our common stock. During the fiscal year
ended September 30, 2008, the closing price of our common stock ranged from
$0.16 to $0.55. During the first nine months of fiscal 2009, the
closing price our common stock price ranged from $0.05 to $0.35.
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.
|
None.
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES.
|
None.
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
|
None.
|
ITEM
5.
|
OTHER
INFORMATION.
|
None.
|
ITEM
6.
|
EXHIBITS
|
See the
exhibit index immediately following signature page to this
report.
-18-
SIGNATURES
In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
August
14, 2009
|
MITEK
SYSTEMS, INC.
|
|
|
By:
|
/s/ James B. De Bello
|
|
|
James
B. DeBello
|
||
|
President,
Chief Executive Officer, and
|
||
|
Chief
Financial Officer
|
||
-19-
EXHIBIT
INDEX
|
Exhibit
No.
|
Exhibit
Title
|
|
|
31.1
|
Certification
of Periodic Report by the Chief Executive Officer Pursuant to Rules
13a-14(a) of the Securities Exchange Act of 1934
|
|
|
31.2
|
Certification
of Periodic Report by the Chief Financial Officer Pursuant to Rules
13a-14(a) of the Securities Exchange Act of 1934
|
|
|
32.1*
|
Certification
of Periodic Report by the Chief Executive Officer Pursuant to Section 906
of the Sarbanes Oxley Act of 2002
|
|
|
32.2*
|
Certification
of Periodic Report by the Chief Financial Officer Pursuant to Section 906
of the Sarbanes Oxley Act of 2002
|
* Furnished
herewith
-20-
Exhibit 31.1
CERTIFICATION
OF
CHIEF
EXECUTIVE OFFICER
I, James
B. DeBello, certify that:
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Mitek Systems,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
|
(b)
|
Designed
such internal control over financial reporting, or cause such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
|
5.
|
The
registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
|
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
|
Date:
August 14, 2009
|
/s/
James B. DeBello
|
|
James
B. DeBello, Chief Executive Officer
(Principal
Executive Officer)
|
Exhibit 31.2
CERTIFICATION
OF
CHIEF
FINANCIAL OFFICER
I, James
B. DeBello, certify that:
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Mitek Systems,
Inc.;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
|
(b)
|
Designed
such internal control over financial reporting, or cause such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
|
5.
|
The
registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
|
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
|
Date:
August 14, 2009
|
/s/
James B. DeBello
|
|
James
B. DeBello, Chief Financial Officer
(Principal
Financial Officer)
|
Exhibit 32.1
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER
I, James
B. DeBello, Chief Executive Officer of Mitek Systems, Inc. (the "Registrant"),
do hereby certify pursuant to Rule 13a of the Securities and Exchange Act of
1934, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 and
Section 1350 of Chapter 63 of Title 18 of the United States Code
that:
|
(1)
|
the
Registrant's Quarterly Report on Form 10-Q of the Registrant for the
period ended June 30, 2009 (the "Report"), to which this statement is
filed as an exhibit, fully complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934, as
amended; and
|
|
(2)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Registrant.
|
|
Date:
August 14, 2009
|
/s/
James B. DeBello
|
|
James
B. DeBello
Chief
Executive Officer
|
Exhibit 32.2
CERTIFICATION
OF CHIEF FINANCIAL OFFICER
I, James
B. DeBello, Chief Financial Officer of Mitek Systems, Inc. (the "Registrant"),
do hereby certify pursuant to Rule 13a of the Securities and Exchange Act of
1934, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 and
Section 1350 of Chapter 63 of Title 18 of the United States Code
that:
|
(1)
|
the
Registrant's Quarterly Report on Form 10-Q of the Registrant for the
period ended June 30, 2009 (the "Report"), to which this statement is
filed as an exhibit, fully complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934, as
amended; and
|
|
(2)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Registrant.
|
|
Date:
August 14, 2009
|
/s/
James B. DeBello
|
|
James
B. DeBello
Chief
Financial Officer
|