Mitek Systems Misstates Financials For Second Time In Eighteen Months
The image capture firm is down 35.4% since being added to the DuDil Shorts List.
October 28, 2022
While preparing its financials for the quarter ended June 30, 2022 Mitek Systems (MITK), a provider of mobile image capture and digital identity verification solutions, realized it had made material misstatements related to its HooYu acquisition in March 2022.
The accounting errors were so numerous, Mitek’s auditor appears to have forced the company to file an 8-K notifying investors its previous filings for the three and six months ended March 31, 2022 could no longer be relied on.
In its latest quarterly filing, Mitek detailed a litany of accounting mistakes— from income tax miscalculations to acquisition related expenses recognized in the wrong period— and revealed:
“We have decided to correct these errors during the quarter ended March 31, 2022, concluding that these expenses, accruals and balance sheet reclassifications are material to the unaudited interim consolidated balance sheet and statement of operations and comprehensive income (loss)...”
The restatement comes nine months after we warned Mitek had misstated 2021 financials due, in part, to acquisition accounting errors. Once again, Mitek’s auditor caught the error, which, among other adjustments, increased acquisition related costs by $400k.
The latest disclosure came after the market closed on a Friday.
Since being added to the DuDl Shorts list, Mitek shares have fallen 35.4%.
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