Nasdaq Hearings Panel Grants Mitek’s Request for Continued Listing Pending Compliance with Filing Requirement
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Mitek Systems, Inc.'s recent encounter with potential delisting from the Nasdaq Capital Market underscores the importance of adherence to regulatory requirements for listed companies. The firm's ability to maintain its listing, contingent on meeting the Nasdaq's conditions, primarily the timely filing of its overdue financial reports, is critical for investor confidence. The market often reacts negatively to delisting news, as it can affect a stock's liquidity and visibility, potentially leading to a decrease in share price. However, Mitek's proactive measures to address the filing issues and the Panel's decision to allow continued listing may mitigate some of the negative market sentiment. Investors should monitor the company's adherence to the new deadline closely, as it will be indicative of Mitek's commitment to regulatory compliance and operational efficiency.
The Nasdaq Listing Rule 5250(c)(1) is a regulatory framework designed to ensure transparency and accountability by requiring the timely filing of financial reports. Mitek Systems, Inc.'s delay in filing its Form 10-K and subsequent Q1 Form 10-Q has put the company at risk of non-compliance. For stakeholders, the ability of a company to file reports promptly is not just a matter of regulatory compliance, but also a reflection of the company's internal financial controls and management's efficacy. The Panel's conditional approval for continued listing provides a short-term relief for the company, but it also places significant pressure on Mitek to enhance its financial reporting processes. Failure to meet the new deadline could result in severe consequences, including potential delisting, which would likely have a detrimental effect on the company's market value and shareholder trust.
Compliance with the Nasdaq Listing Rule 5250(c)(1) is essential for maintaining the integrity of the capital markets. Mitek Systems, Inc.'s situation highlights the repercussions of non-compliance, which can extend beyond immediate financial implications to include reputational damage. The Panel's decision to allow Mitek a grace period to rectify its filing deficiencies is an opportunity for the company to demonstrate its commitment to compliance and governance standards. From a compliance perspective, it is imperative that Mitek not only meets the imposed deadline but also takes corrective actions to prevent future occurrences. This may involve reviewing and strengthening internal controls and governance practices to reassure stakeholders that the company prioritizes compliance and is taking steps to uphold the standards expected by the Nasdaq and its investors.
As previously disclosed, the Company received a delisting determination (the “Notice”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the Staff initiated a process to delist the Company’s securities from Nasdaq as a result of the Company not being in compliance with the Listing Rule, which requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission (the “SEC”), due to the Company’s failure to timely file its Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (the “Form 10-K”). The Company subsequently did not timely file the Q1 Form 10-Q because the Q1 Form 10-Q could not be prepared until the Form 10-K was filed.
The Company attended the previously announced and scheduled March 19, 2024 hearing before the Panel and requested the continued listing of its securities on the Nasdaq Capital Market pending its return to compliance with the Listing Rule.
The Company filed its Form 10-K on March 19, 2024, and intends to file the Q1 Form 10-Q as promptly as possible in order to regain compliance with the Listing Rule.
Notwithstanding the foregoing, there can be no assurance that the Company will be able to meet this deadline or ultimately regain compliance with all applicable requirements for continued listing.
About Mitek Systems, Inc.
Mitek (NASDAQ: MITK) is a global leader in digital access, founded to bridge the physical and digital worlds. Mitek’s advanced identity verification technologies and global platform make digital access faster and more secure than ever, providing companies new levels of control, deployment ease and operation, while protecting the entire customer journey. Trusted by
Follow Mitek on LinkedIn, Twitter and YouTube, and read Mitek’s latest blog posts here.
Notice Regarding Forward-Looking Statements
Statements contained in this news release relating to the Company or its management’s intentions, hopes, beliefs, expectations or predictions of the future, including, but not limited to, statements relating to the Company's listing status and the Company’s filing of the Q1 Form 10-Q constitute forward looking statements. Such forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, risks related to the Company’s ability to withstand negative conditions in the global economy, a lack of demand for or market acceptance of the Company’s products, the impact of the Company’s acquisition of HooYu Ltd. including any operational or cultural difficulties associated with the integration of the businesses of Mitek and HooYu Ltd., the Company’s ability to continue to develop, produce and introduce innovative new products in a timely manner, the Company’s ability to capitalize on a growing market, quarterly variations in revenue, the profitability of certain sectors of the Company, the performance of the Company’s growth initiatives, the outcome of any pending or threatened litigation, and the timing of the implementation and launch of the Company’s products by the Company’s signed customers.
Additional risks and uncertainties faced by the Company are contained from time to time in the Company’s filings with the SEC, including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023, as filed with the SEC on March 19, 2024 and its quarterly reports on Form 10-Q and current reports on Form 8-K, which you may obtain for free on the SEC’s website at www.sec.gov. Collectively, these risks and uncertainties could cause the Company’s actual results to differ materially from those projected in its forward-looking statements and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company disclaims any intention or obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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Investor Contact:
Todd Kehrli or Jim Byers
MKR Investor Relations, Inc.
mitk@mkr-group.com
Source: Mitek Systems, Inc.
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