Concerned Stockholder Group Votes Against the Re-Election of Mitek Systems’ Board of Directors

Rhea-AI Summary

A group of concerned stockholders, including Hammana Partners LP, Bradley L. Radoff, and Joshua E. Schechter, has issued a letter urging fellow Mitek Systems (NASDAQ: MITK) stockholders to vote against the re-election of all six company directors at the upcoming Annual Meeting on September 10, 2024. The group cites significant destruction of stockholder value, poor M&A decisions, and mismanagement as reasons for their opposition.

The letter highlights Mitek's poor performance compared to major indices, with 1-year, 3-year, and 5-year total stockholder returns of -24.89%, -62.98%, and -14.15% respectively. The group expresses lack of confidence in the board and recently appointed interim CEO Scott Carter, urging directors to prepare their resignations in anticipation of a poor showing at the Annual Meeting.

Positive

• None.

Negative

• Significant destruction of stockholder value over 1, 3, and 5-year periods
• Poor M&A decisions and mismanagement by the board
• Lack of investor confidence in the current board and interim CEO
• Failure to address capital allocation, governance, and operational issues
• Director Donna Wells sold 16,839 shares on June 7, 2024

Encourages Fellow Stockholders to Vote Against the Re-Election of All Six Mitek Directors Based on Their Significant Destruction of Value and Mismanagement of the Company

HOUSTON--(BUSINESS WIRE)-- Hammana Partners LP, Bradley L. Radoff and Joshua E. Schechter (together with their affiliates, the “Concerned Stockholder Group” or “we”) are significant stockholders of Mitek Systems, Inc. (NASDAQ: MITK) (“Mitek” or the “Company”). Today, the Concerned Stockholder Group issued the below letter to stockholders ahead of the Company’s Annual Meeting of Stockholders on September 10, 2024:

September 5, 2024

Fellow Stockholders,

Over the past 12 months, we have engaged privately and publicly with Mitek’s management and Board of Directors (the “Board”) multiple times regarding the Company’s faulty strategy, poor corporate governance, substandard investor relations and lack of capital allocation discipline. During our conversations, we have tried to guide the Board in the direction of what normal and successful governance and management should look like. We have also provided qualified director candidates and are aware that other stockholders have done the same.

However, the Company has not acted to address the capital allocation, governance and operational issues we have repeatedly highlighted to the Board. In short, the entire Board has failed and needs to be replaced. We voted our shares AGAINST the incumbent directors ahead of the 2024 Annual Meeting. We encourage all stockholders to also vote AGAINST all six directors to hold them accountable for their mismanagement of the Company. In light of what we expect to be a very poor showing at the Annual Meeting, we urge all directors to begin preparing their resignations.

The Board should bear responsibility for the significant destruction of stockholder value, poor M&A and failed tenure of former CEO Max Carnecchia. We strongly doubt that recently appointed interim CEO Scott Carter is the right person to fix the Company given that he has no observable track record of value creation, especially considering his previous role as Executive Chair of the Board during 2023, and very little skin in the game. The remainder of the Board is equally uninvested – and director Donna Wells even sold 16,839 shares as recently as June 7^th – reinforcing our belief that the incumbent directors are not acting in stockholders’ best interests.

	1-Year TSR	3-Year TSR	5-Year TSR
Mitek Systems	-24.89%	-62.98%	-14.15%
Nasdaq Composite Index	22.71%	13.97%	123.50%
S&P 500 Index	24.00%	27.44%	103.57%
Russell 2000 Index	13.32%	-2.40%	54.39%
Russell 3000 Index	22.78%	21.95%	97.28%
Source: Bloomberg. Total stockholder returns (“TSR”) as of 9/4/2024.

We have no confidence in this Board and believe its members have done nothing to earn investors’ trust or patience. We strongly encourage all Mitek stockholders to strongly rebuke the Board’s behavior by voting AGAINST the re-election of all incumbent directors at next week’s Annual Meeting.

Sincerely,

Nicholas O’Sullivan	Bradley Radoff	Josh Schechter
Hammana Partners LP

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240905517269/en/

Greg Lempel

greg@fondrenlp.com

Source: On behalf of a Concerned Stockholder Group

FAQ

What is the Concerned Stockholder Group's recommendation for Mitek Systems' (MITK) upcoming Annual Meeting?

The Concerned Stockholder Group is recommending that stockholders vote AGAINST the re-election of all six Mitek Systems (MITK) directors at the Annual Meeting on September 10, 2024, due to their perceived mismanagement and destruction of stockholder value.

How has Mitek Systems' (MITK) stock performed compared to major indices over the past year?

According to the letter, Mitek Systems (MITK) has significantly underperformed major indices. The company's 1-year total stockholder return was -24.89%, compared to 22.71% for the Nasdaq Composite Index and 24.00% for the S&P 500 Index.

What are the main criticisms against Mitek Systems' (MITK) board of directors?

The main criticisms include significant destruction of stockholder value, poor M&A decisions, failed tenure of former CEO Max Carnecchia, lack of capital allocation discipline, poor corporate governance, and substandard investor relations.

When is Mitek Systems' (MITK) Annual Meeting of Stockholders scheduled for 2024?

Mitek Systems' (MITK) Annual Meeting of Stockholders is scheduled for September 10, 2024.