Mitek Sells New Shares to Keep NASDAQ Spot

In a move to keep Mitek Systems from being delisted by the NASDAQ system of stock quotes, majority shareholder John Thornton has agreed to buy $400,000 worth of new stock, pushing the troubled company’s shareholder equity above the $375,000 minimum required by NASDAQ.

Mitek also announced a $233,000 loss for the third quarter, an improvement from the $516,000 loss over the same three-month period a year ago. Revenue for the period more than doubled, to $2.5 million, up from $1.2 million during the year-ago quarter.

The company, a manufacturer of printers and facsimile machines for mainly government customers, blamed the loss on a U.S. Defense Department moratorium on new purchases of computers and certain office equipment. The freeze was instituted in May and could remain in effect through Sept. 30, Mitek Vice President Maurice Roller said Wednesday.

Thornton’s investment, via the Thornton Family Trust, in unissued Mitek common stock will increase the total of loans and equity he has invested in the company over the past three years to $5.4 million. If made at Mitek’s current stock price of $1 per share, the stock purchase would increase his fully diluted stake in Mitek to 56% of total shares outstanding, from the previous 53%.

As of June 30, Mitek had shareholder equity of minus $306,000. Current assets of $4.3 million were outweighed by current liabilities of $4.9 million, giving the company negative working capital. Roller said that $2.8 million of the liabilities were notes due John Thornton later this year and that they probably will be converted to equity.

NASDAQ, which stands for National Assn. of Securities Dealers Automated Quotations, is an umbrella group for over-the-counter stock traders. Mitek’s capital fell below NASDAQ’s minimum required level in March, but the company was given a temporary exemption “subject to meeting certain conditions.”

Roller said Thornton’s stock buy will be voted on at Mitek’s board meeting in September.