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Mitek stands on the edge of delisting from Nasdaq yet again

Mitek stands on the edge of delisting from Nasdaq yet again
 

Digital ID vendor Mitek Systems has yet file required quarterly reports with Nasdaq, the exchange on which it is traded, and exchange officials have “initiated a process to delist” the company’s securities.

Mitek executives this week announced the move, saying they intend to request a hearing before Nasdaq to explain themselves. The request automatically gives the company more time to comply – an active and current process, the announcement states.

Exchange officials could offer yet another extension, according to the company, but they are not required to do that.

The company has not filed a 10-K financials statement with the U.S. Securities and Exchange Commission for the fiscal year ended September 2022. Nor has it filed quarter reports – 10-Qs – since December 2022.

In each case, Mitek has said staff could not comply on time without unreasonable effort or expense.

Executives have said they are switching independent registered public accounting firms. Its previous contractor resigned a year ago. The switch has been disruptive.

But government filings also hint at larger problems.

The company “is also in the process of evaluating deficiencies identified in connection with its assessment of the effectiveness of its internal control over financial reporting,” according to its SEC form 12b-25.

Companies traded on any exchange must meet many and sometimes stringent requirements. The regulation in this instance is designed to make sure investors have information on which to base buy and sell decisions.

The equities world right now is essentially blind to Mitek’s performance.

The uncertainty around Mitek could also effect ID R&D and Hooyu, as both biometrics firms were acquired by Mitek in the last two years.

It is not the first time that Mitek has faced being delisted. It has faced the threat multiple times, notably in 1988 and 2004. In both of those incidents, Mitek could not meet Nasdaq capital requirements. Its shares were delisted temporarily in 2004, according to business trade publication Finextra.

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