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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 7th – 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 |
Posted In: MITK
