Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2014 | Jan. 30, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Dec-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MITK | |
Entity Registrant Name | MITEK SYSTEMS INC | |
Entity Central Index Key | 807863 | |
Current Fiscal Year End Date | -21 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 30,654,705 |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $12,784,071 | $7,766,590 |
Short-term investments | 14,160,303 | 16,269,170 |
Accounts receivable, net | 3,517,770 | 2,955,350 |
Other current assets | 543,815 | 704,409 |
Total current assets | 31,005,959 | 27,695,519 |
Long-term investments | 2,072,018 | |
Property and equipment, net | 1,198,963 | 1,293,270 |
Other non-current assets | 42,049 | 42,049 |
Total assets | 32,246,971 | 31,102,856 |
Current liabilities: | ||
Accounts payable | 1,436,305 | 1,792,267 |
Accrued payroll and related taxes | 1,060,161 | 1,434,913 |
Deferred revenue, current portion | 3,827,357 | 2,826,670 |
Other current liabilities | 153,037 | 157,649 |
Total current liabilities | 6,476,860 | 6,211,499 |
Deferred revenue, non-current portion | 261,250 | 311,225 |
Other non-current liabilities | 599,026 | 638,099 |
Total liabilities | 7,337,136 | 7,160,823 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 1,000,000 shares authorized, none issued and outstanding | ||
Common stock, $0.001 par value, 60,000,000 shares authorized, 30,654,705 and 30,521,080 issued and outstanding, respectively | 30,655 | 30,521 |
Additional paid-in capital | 60,769,963 | 59,946,288 |
Accumulated other comprehensive gain (loss) | -9,997 | -7,810 |
Accumulated deficit | -35,880,786 | -36,026,966 |
Total stockholders' equity | 24,909,835 | 23,942,033 |
Total liabilities and stockholders' equity | $32,246,971 | $31,102,856 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 30,654,705 | 30,521,080 |
Common stock, shares outstanding | 30,654,705 | 30,521,080 |
Statements_of_Operations_and_O
Statements of Operations and Other Comprehensive Loss (Unaudited) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | ||
Software | $3,746,517 | $3,169,864 |
Maintenance and professional services | 1,642,805 | 1,292,660 |
Total revenue | 5,389,322 | 4,462,524 |
Operating costs and expenses | ||
Cost of revenue-software | 213,910 | 321,099 |
Cost of revenue-maintenance and professional services | 283,491 | 249,598 |
Selling and marketing | 1,438,066 | 1,849,901 |
Research and development | 1,155,142 | 1,525,574 |
General and administrative | 2,164,839 | 1,997,200 |
Total operating costs and expenses | 5,255,448 | 5,943,372 |
Operating income (loss) | 133,874 | -1,480,848 |
Other income (expense), net | ||
Interest and other expense | -1,050 | -1,700 |
Interest and other income | 16,253 | 15,209 |
Total other income (expense), net | 15,203 | 13,509 |
Income (loss) before income taxes | 149,077 | -1,467,339 |
Provision for income taxes | -2,897 | -961 |
Net income (loss) | 146,180 | -1,468,300 |
Net income (loss) per share - basic and diluted | $0 | ($0.05) |
Shares used in calculating net income (loss) per share - basic | 30,618,097 | 30,402,397 |
Shares used in calculating net income (loss) per share - diluted | 31,173,815 | 30,402,397 |
Other comprehensive income (loss): | ||
Net income (loss) | 146,180 | -1,468,300 |
Unrealized gain (loss) on investments | -2,187 | -841 |
Other comprehensive income (loss) | $143,993 | ($1,469,141) |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities: | ||
Net income (loss) | $146,180 | ($1,468,300) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Stock-based compensation expense | 814,060 | 829,071 |
Depreciation and amortization | 107,700 | 116,175 |
Accretion and amortization on debt securities | 98,312 | 94,725 |
Provision for bad debt | 10,100 | 1,000 |
Changes in assets and liabilities: | ||
Accounts receivable | -572,520 | -1,363,435 |
Other assets | 136,760 | 92,643 |
Accounts payable | -355,962 | -335,668 |
Accrued payroll and related taxes | -374,752 | -93,092 |
Deferred revenue | 950,712 | 641,026 |
Other liabilities | -38,624 | -57,728 |
Net cash provided by (used in) operating activities | 921,966 | -1,543,583 |
Investing activities: | ||
Purchases of investments | -2,826,867 | -14,071,179 |
Sales and maturities of investments | 6,931,088 | 2,478,624 |
Purchases of property and equipment | -13,393 | -16,221 |
Net cash provided by (used in) investing activities | 4,090,828 | -11,608,776 |
Financing activities: | ||
Proceeds from exercise of stock options | 9,748 | 39,421 |
Principal payments on capital lease obligations | -5,061 | -4,533 |
Net cash provided by financing activities | 4,687 | 34,888 |
Net increase (decrease) in cash and cash equivalents | 5,017,481 | -13,117,471 |
Cash and cash equivalents at beginning of period | 7,766,590 | 23,294,456 |
Cash and cash equivalents at end of period | 12,784,071 | 10,176,985 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 1,191 | 1,719 |
Cash paid for income taxes | 2,897 | 961 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Unrealized holding loss on available-for-sale investments | -2,187 | -841 |
Cashless settlement of restricted stock units | 129 | 5 |
Cashless exercise of stock options | $4 | $3 |
Nature_of_Operations_and_Summa
Nature of Operations and Summary of Significant Accounting Policies | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Nature of Operations and Summary of Significant Accounting Policies | 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Nature of Operations | |||||||||
Mitek Systems, Inc. (the “Company”) is a mobile solutions provider engaged in the development, sale and service of its proprietary software solutions. | |||||||||
The Company applies its patented technology in image capture, correction and intelligent data extraction in the mobile financial and business services markets. The Company’s technology allows users to remotely deposit checks, pay bills, transfer credit card balances, open accounts and get insurance quotes by taking pictures of various documents with their camera-equipped smartphones and tablets instead of using the device keyboard. The Company’s products use advanced algorithms to correct image distortion, extract relevant data, route images to their desired location and process transactions through users’ financial institutions. As of December 31, 2014, the Company has been granted 20 patents and has an additional 23 patent applications pending. | |||||||||
The Company’s Mobile Deposit® product is software that allows users to remotely deposit a check using their camera-equipped smartphone or tablet. As of December 31, 2014, 3,304 financial institutions have signed agreements to deploy Mobile Deposit® and 2,744 of these financial institutions have deployed Mobile Deposit® to their customers, including all of the top ten, and nearly all of the top 50, U.S. retail banks, as ranked by SNL Financial for the third quarter of calendar year 2014. The Company’s Mobile Photo Account Opening™ product enables users to open a checking, savings or credit card account by capturing an image of the front and back of their driver’s license with their camera-equipped smartphone or tablet. Other mobile imaging software solutions the Company offers include Mobile Photo Payments™, a product that enables users to pay bills by taking a photo of their bill followed by a photo of the check or credit/debit card being used to pay the bill, Mobile Photo Bill Pay®, a mobile bill payment product that allows users to pay their bills using their camera-equipped smartphone or tablet and Mobile Balance Transfer™, a product that allows credit card issuers to provide balance transfer offers and enables users to transfer an existing credit card balance and establish a new credit card account by capturing an image of the user’s current credit card statement. The Company’s mobile imaging software solutions are available for iOS and Android operating systems. | |||||||||
The Company markets and sells its mobile imaging software solutions through channel partners or directly to enterprise customers that typically purchase licenses based on the number of transactions or subscribers that use our mobile software. The Company’s mobile imaging software solutions are often embedded in other mobile banking or enterprise applications developed by banks, insurance companies or their partners, and marketed under their own proprietary brands. In February 2014, the Company launched the Mitek Developers Network. The program will extend use of the Company’s Mobile Imaging Platform™ to developers interested in creating new mobile applications using camera-equipped smartphones and tablets. | |||||||||
Basis of Presentation | |||||||||
The accompanying unaudited financial statements of the Company as of December 31, 2014 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading. You should read these financial statements and the accompanying notes in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014, filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 5, 2014 (the “Form 10-K”). | |||||||||
Results for the three months ended December 31, 2014 are not necessarily indicative of results for any other interim period or for a full year. | |||||||||
Reclassifications | |||||||||
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications do not impact the reported net loss for such periods and do not have a material impact on the presentation of the overall financial statements. | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual future results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards and income taxes. | |||||||||
Net Income (Loss) Per Share | |||||||||
The Company calculates net income (loss) per share in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. Basic and diluted net income (loss) per share are based on the weighted-average number of common shares outstanding during the period, without giving effect to potentially dilutive securities. In a period with a net loss position, potentially dilutive securities, such as options, warrants and restricted stock units (“RSUs”), are not included in the calculation of diluted net loss because to do so would be antidilutive, and the number of shares used to calculate basic and diluted net loss is the same. | |||||||||
For the three months ended December 31, 2014 and 2013, the following potentially dilutive common shares were excluded from the calculation of net income (loss) per share, as they would have been antidilutive: | |||||||||
Three months ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Stock options | 2,412,625 | 2,754,030 | |||||||
Restricted stock units | 501,989 | 1,179,513 | |||||||
Warrants | — | 6,667 | |||||||
Total potentially dilutive common shares outstanding | 2,914,614 | 3,940,210 | |||||||
The calculation of basic and diluted net income (loss) per share is as follows: | |||||||||
Three months ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net income (loss) | $ | 146,180 | $ | (1,468,300 | ) | ||||
Weighted-average common shares outstanding: | |||||||||
Basic | 30,618,097 | 30,402,397 | |||||||
Diluted | 31,173,815 | 30,402,397 | |||||||
Net income (loss) per share: | |||||||||
Basic | $ | 0 | $ | (0.05 | ) | ||||
Diluted | $ | 0 | $ | (0.05 | ) | ||||
Revenue Recognition | |||||||||
Revenue from sales of software licenses sold through direct and indirect channels is recognized upon shipment of the related product, if the requirements of FASB ASC Topic 985-605, Software Revenue Recognition (“ASC 985-605”) are met, including evidence of an arrangement, delivery, fixed or determinable fee, collectability and vendor specific objective evidence (“VSOE”) of the fair value of the undelivered element. If the requirements of ASC 985-605 are not met at the date of shipment, revenue is not recognized until such elements are known or resolved. Revenue from customer support services, or maintenance revenue, includes post-contract support and the rights to unspecified upgrades and enhancements. VSOE of fair value for customer support services is determined by reference to the price the customer pays for such element when sold separately; that is, the renewal rate offered to customers. Revenue derived from professional services primarily includes consulting, implementation, and training. Revenue from fixed fee service engagements is recognized after the services are performed using the completed performance method. Revenue from time and materials service engagements is generally recognized as the services are performed. | |||||||||
In those instances when objective and reliable evidence of fair value exists for the undelivered items but not for the delivered items, the residual method is used to allocate the arrangement consideration. Under the residual method, the amount of arrangement consideration allocated to the delivered items equals the total arrangement consideration less the aggregate fair value of the undelivered items. Revenue from post-contract customer support is recognized ratably over the term of the contract. Certain customers have agreements that provide for usage fees above fixed minimums. Fixed minimum transaction fees are recognized as revenue | |||||||||
ratably over the term of the arrangement. Usage fees above fixed minimums are recognized as revenue when such amounts are reasonably estimable and billable. Revenue from professional services is recognized when such services are delivered. When a software sales arrangement requires professional services related to significant production, modification or customization of software, or when a customer considers professional services essential to the functionality of the software product, revenue is recognized based on predetermined milestone objectives required to complete the project, as those milestone objectives are deemed to be substantive in relation to the work performed. Any expected losses on contracts in progress are recorded in the period in which the losses become probable and reasonably estimable. | |||||||||
Accounts Receivable and Allowance for Doubtful Accounts | |||||||||
Accounts receivable, net, is as follows: | |||||||||
December 31, | September 30, | ||||||||
2014 | 2014 | ||||||||
Accounts receivable | $ | 3,533,970 | $ | 2,961,450 | |||||
Less: Allowance for doubtful accounts | (16,200 | ) | (6,100 | ) | |||||
Accounts receivable, net | $ | 3,517,770 | $ | 2,955,350 | |||||
Trade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the contractual payment terms. Allowances for doubtful accounts are established based on various factors, including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected. | |||||||||
Capitalized Software Development Costs | |||||||||
Costs incurred for the development of software that will be sold, leased or otherwise marketed are capitalized when technological feasibility has been established. Software development costs consist primarily of compensation of development personnel and related overhead incurred to develop new products and upgrade and enhance the Company’s current products, as well as fees paid to outside consultants. Capitalization of software development costs ceases and amortization of capitalized software development costs commences when the products are available for general release. For the three months ended December 31, 2014 and 2013, no software development costs were capitalized because the time period and costs incurred between technological feasibility and general release for all software product releases were not material. | |||||||||
Fair Value of Equity Instruments | |||||||||
The fair value of equity instruments involves significant estimates based on underlying assumptions made by management. The fair value for purchase rights under the Company’s equity plans is measured at the grant date using a Black-Scholes valuation model, which involves estimates of stock volatility, expected life of the instruments and other assumptions, and using the closing price of the Company’s common stock on the grant date for RSUs. The fair value of stock-based awards is recognized as an expense over the respective terms of the awards. | |||||||||
Deferred Income Taxes | |||||||||
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of such assets and liabilities. The Company maintains a valuation allowance against its deferred tax assets due to the uncertainty regarding the future realization of such assets, which is based on historical taxable income, projected future taxable income and the expected timing of the reversals of existing temporary differences. Until such time as the Company can demonstrate that it will no longer incur losses, or if the Company is unable to generate sufficient future taxable income, it could be required to maintain the valuation allowance against its deferred tax assets. | |||||||||
Comprehensive Loss | |||||||||
Comprehensive loss consists of net loss and unrealized gains and losses on available-for-sale securities. Included on the balance sheet at December 31, 2014 is an accumulated other comprehensive loss of $9,997, compared to an accumulated other comprehensive loss of $7,810 at September 30, 2014, related to the Company’s available-for-sale securities. | |||||||||
Recent Accounting Pronouncements | |||||||||
In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers (“ASC 606”) which amends the guidance in former ASC 605, Revenue Recognition. This accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2018. The Company is currently evaluating the impact of the provisions of ASC 606. |
Investments
Investments | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||
Investments | 2. INVESTMENTS | ||||||||||||||||
The following table summarizes investments by type of security as of December 31, 2014: | |||||||||||||||||
Cost | Gross | Gross | Fair Market | ||||||||||||||
Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | ||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Corporate debt securities, short-term | $ | 14,170,300 | $ | 455 | $ | (10,452 | ) | $ | 14,160,303 | ||||||||
Corporate debt securities, long-term | — | — | — | — | |||||||||||||
Total | $ | 14,170,300 | $ | 455 | $ | (10,452 | ) | $ | 14,160,303 | ||||||||
The following table summarizes investments by type of security as of September 30, 2014: | |||||||||||||||||
Cost | Gross | Gross | Fair Market | ||||||||||||||
Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | ||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Corporate debt securities, short-term | $ | 16,273,996 | $ | 1,472 | $ | (6,298 | ) | $ | 16,269,170 | ||||||||
Corporate debt securities, long-term | 2,075,002 | — | (2,984 | ) | 2,072,018 | ||||||||||||
Total | $ | 18,348,998 | $ | 1,472 | $ | (9,282 | ) | $ | 18,341,188 | ||||||||
The cost of securities sold is based on the specific identification method. Amortization of premiums, accretion of discounts, interest, dividend income and realized gains and losses are included in investment income. | |||||||||||||||||
The Company determines the appropriate designation of investments at the time of purchase and reevaluates such designation as of each balance sheet date. All of the Company’s investments are designated as available-for-sale debt securities. As of December 31, 2014 and September 30, 2014, the Company’s short-term investments have maturity dates of less than one year from the balance sheet date and the Company’s long-term investments have maturity dates of greater than one year from the balance sheet date. | |||||||||||||||||
Available-for-sale marketable securities are carried at fair value as determined by quoted market prices for identical or similar assets, with unrealized gains and losses, net of tax, and reported as a separate component of stockholders’ equity. Management reviews the fair value of the portfolio at least monthly, and evaluates individual securities with fair value below amortized cost at the balance sheet date. For debt securities, in order to determine whether impairment is other than temporary, management must conclude whether the Company intends to sell the impaired security and whether it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. If management intends to sell an impaired debt security or it is more likely than not that the Company will be required to sell the security prior to recovering its amortized cost basis, an other-than-temporary | |||||||||||||||||
impairment is deemed to have occurred. The amount of an other-than-temporary impairment on debt securities related to a credit loss, or securities that management intends to sell before recovery, is recognized in earnings. The amount of an other-than-temporary impairment on debt securities related to other factors is recorded consistent with changes in the fair value of all other available-for-sale securities as a component of stockholders’ equity in other comprehensive income. No other-than-temporary impairment charges were recognized in the three months ended December 31, 2014 and 2013. | |||||||||||||||||
Fair Value Measurements and Disclosures | |||||||||||||||||
FASB ASC Topic 820, Fair Value Measurements (“ASC 820”) defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable: | |||||||||||||||||
• | Level 1—Quoted prices in active markets for identical assets or liabilities; | ||||||||||||||||
• | Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | ||||||||||||||||
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||
Based on the fair value hierarchy, all of the Company’s investments are classified as Level 2, as represented in the following table: | |||||||||||||||||
December 31, 2014 | September 30, 2014 | ||||||||||||||||
Short-term investments: | |||||||||||||||||
Corporate debt securities | |||||||||||||||||
Financial | $ | 7,171,700 | $ | 9,334,140 | |||||||||||||
Industrial | 4,735,034 | 3,980,772 | |||||||||||||||
Utility | 855,672 | 756,215 | |||||||||||||||
Commercial paper | |||||||||||||||||
Financial | 1,397,897 | 2,198,043 | |||||||||||||||
Total short-term investments | $ | 14,160,303 | $ | 16,269,170 | |||||||||||||
Long-term investments: | |||||||||||||||||
Corporate debt securities | |||||||||||||||||
Financial | $ | — | $ | 1,564,505 | |||||||||||||
Utility | — | 507,513 | |||||||||||||||
Total long-term investments | $ | — | $ | 2,072,018 | |||||||||||||
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Stockholders' Equity | 3. STOCKHOLDERS’ EQUITY | ||||||||||||
Stock-Based Compensation Expense | |||||||||||||
The following table summarizes stock-based compensation expense related to stock options and RSUs, which was allocated as follows: | |||||||||||||
Three months ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Sales and marketing | $ | 175,118 | $ | 201,524 | |||||||||
Research and development | 137,406 | 184,888 | |||||||||||
General and administrative | 501,536 | 442,659 | |||||||||||
Stock-based compensation expense included in operating expenses | $ | 814,060 | $ | 829,071 | |||||||||
The fair value calculations for stock-based compensation awards to employees for the three months ended December 31, 2014 were based on the following assumptions: | |||||||||||||
Three Months | |||||||||||||
Ended | |||||||||||||
December 31, 2014 | |||||||||||||
Risk-free interest rate | 1.63% – 1.66% | ||||||||||||
Expected life (years) | 5.25 | ||||||||||||
Expected volatility | 98% | ||||||||||||
Expected dividends | None | ||||||||||||
The expected life of options granted is derived using assumed exercise rates based on historical exercise patterns and vesting terms, and represents the period of time that options granted are expected to be outstanding. Expected stock price volatility is based upon implied volatility and other factors, including historical volatility. After assessing all available information on either historical volatility, implied volatility, or both, the Company concluded that a combination of both historical and implied volatility provides the best estimate of expected volatility. | |||||||||||||
As of December 31, 2014, the Company had $6,849,905 of unrecognized compensation expense related to outstanding stock options and RSUs expected to be recognized over a weighted-average period of approximately 2.9 years. | |||||||||||||
2012 Incentive Plan | |||||||||||||
In January 2012, the Company’s board of directors adopted the Mitek Systems, Inc. 2012 Incentive Plan (the “2012 Plan”), upon the recommendation of the compensation committee of the Company’s board of directors. On February 19, 2014, the Company’s stockholders approved an amendment to the 2012 Plan that increased the total number of shares of the Company’s common stock reserved for issuance thereunder from 2,000,000 shares to 4,000,000 shares plus that number of shares of the Company’s common stock that would otherwise return to the available pool of unissued shares reserved for awards under its 1999 Stock Option Plan, 2000 Stock Option Plan, 2002 Stock Option Plan, 2006 Stock Option Plan and 2010 Stock Option Plan (collectively, the “Prior Plans”). As of December 31, 2014, (i) stock options to purchase 2,044,821 shares of the Company’s common stock and 561,508 RSUs were outstanding under the 2012 Plan, and 1,479,773 shares of the Company’s common stock were reserved for future grants under the 2012 Plan and (ii) stock options to purchase an aggregate of 1,478,244 shares of the Company’s common stock were outstanding under the Prior Plans. | |||||||||||||
Director Restricted Stock Unit Plan | |||||||||||||
In January 2011, the Company’s board of directors adopted the Mitek Systems, Inc. Director Restricted Stock Unit Plan, as amended and restated (the “Director Plan”), reserving up to 1,000,000 shares of the Company’s common stock for the issuance of RSUs may be granted to both employee and non-employee members of the Company’s board of directors. As of December 31, 2014, (i) 475,000 RSUs were outstanding under the Director Plan and (ii) 474,336 shares of the Company’s common stock were reserved for future grants under the Director Plan. | |||||||||||||
Stock Options | |||||||||||||
The following table summarizes stock option activity under the Company’s equity plans during the three months ended December 31, 2014: | |||||||||||||
Number of | Weighted- | Weighted- | |||||||||||
Shares | Average | Average | |||||||||||
Exercise Price | Remaining | ||||||||||||
Contractual Term | |||||||||||||
(in Years) | |||||||||||||
Outstanding, September 30, 2014 | 2,334,326 | $ | 4.11 | 5.46 | |||||||||
Granted | 1,355,500 | $ | 2.67 | ||||||||||
Exercised | (4,166 | ) | $ | 2.34 | |||||||||
Cancelled | (162,595 | ) | $ | 4.9 | |||||||||
Outstanding, December 31, 2014 | 3,523,065 | $ | 3.52 | 7.24 | |||||||||
The Company recognized $474,091 and $564,322 in stock-based compensation expense related to outstanding stock options in the three months ended December 31, 2014 and 2013, respectively. As of December 31, 2014, the Company had $3,891,848 of unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted-average period of approximately 2.9 years. As of December 31, 2013, the Company had $4,775,401of unrecognized compensation expense related to outstanding stock options expected to be recognized over a weighted-average period of approximately 2.5 years. | |||||||||||||
Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted-average exercise price, multiplied by the number of options outstanding and exercisable. The total intrinsic value of options exercised during the three months ended December 31, 2014 and 2013 was $4,083 and $336,340, respectively. As of December 31, 2014, there were 3,523,065 options outstanding with a weighted-average remaining contractual term, weighted-average exercise price and aggregate intrinsic value of 7.2 years, $3.52 and $3,138,317 respectively. As of December 31, 2013, there were 2,754,030 options outstanding with a weighted-average remaining contractual term, weighted-average exercise price and aggregate intrinsic value of 7.1 years, $4.16 and $7,313,083, respectively. | |||||||||||||
Restricted Stock Units | |||||||||||||
The following table summarizes RSU activity under the Company’s equity plans during the three months ended December 31, 2014: | |||||||||||||
Number of | Weighted- | ||||||||||||
Shares | Average | ||||||||||||
Fair Market Value | |||||||||||||
Per Share | |||||||||||||
Outstanding, September 30, 2014 | 1,101,303 | $ | 4.71 | ||||||||||
Granted | 104,000 | $ | 2.29 | ||||||||||
Settled | (129,459 | ) | $ | 2.65 | |||||||||
Cancelled | (39,336 | ) | $ | 4.07 | |||||||||
Outstanding, December 31, 2014 | 1,036,508 | $ | 4.45 | ||||||||||
The cost of RSUs is determined using the fair value of the Company’s common stock on the award date, and the compensation expense is recognized ratably over the vesting period. The Company recognized $339,970 and $264,749, respectively, in stock-based compensation expense related to outstanding RSUs in the three months ended December 31, 2014 and 2013, respectively. As of December 31, 2014, the Company had $2,958,057 of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 2.8 years. As of December 31, 2013, the Company had $4,605,913 of unrecognized compensation expense related to outstanding RSUs expected to be recognized over a weighted-average period of approximately 3.5 years. |
Income_Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 4. INCOME TAXES |
The Company’s deferred tax assets are primarily comprised of federal and state net operating loss carryforwards. Such federal and state net operating loss carryforwards begin to expire in the fiscal years ending September 30, 2018 and September 30, 2014, respectively. The Company carries a deferred tax valuation allowance equal to 100% of the net deferred tax assets. In recording this allowance, management has considered a number of factors, particularly the Company’s recent history of sustained operating losses. Management has concluded that a valuation allowance is required for 100% of the net deferred tax assets as it is more likely than not that the deferred tax assets will not be realized. | |
There can be no assurance that the Company will ever realize the benefit of any or all of the federal and state net operating loss carryforwards or the credit carryforwards, either due to ongoing operating losses or due to ownership changes, which may limit the usefulness of the net operating loss carryforwards. Due to the 100% valuation allowance on the net deferred tax assets, the Company does not anticipate that future changes in the Company’s unrecognized tax benefits will impact its effective tax rate. | |
The Company’s policy is to classify interest and penalties related to income tax matters as income tax expense. The Company had no accrual for interest or penalties as of December 31, 2014 or December 31, 2013, and has not recognized interest and/or penalties in the statements of operations for the three months ended December 31, 2014 or December 31, 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. COMMITMENTS AND CONTINGENCIES |
Legal Matters | |
Rothschild Mobile Imaging Innovations, Inc. | |
On May 16, 2014, Rothschild Mobile Imaging Innovations, Inc. (“RMII”) filed a complaint against the Company in the U.S. District Court for the District of Delaware alleging that certain of the Company’s mobile imaging products infringe four RMII-owned patents related to mobile imaging technology. On June 1, 2014, RMII amended its complaint to add JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. (together, “Chase”), one of the Company’s customers, as a defendant in the lawsuit (as amended, the “Initial Lawsuit”). On September 8, 2014, RMII filed three additional complaints (the “Subsequent Lawsuits” and together with the Initial Lawsuit, the “RMII Lawsuits”) against the Company in the U.S. District Court for the District of Delaware. The Subsequent Lawsuits contain allegations substantially similar to the Initial Lawsuit regarding infringement by the Company’s mobile imaging products of the four RMII-owned patents related to mobile imaging technology, but name as co-defendants Citibank, N.A., Citigroup Inc., Wells Fargo & Company, Wells Fargo Bank, N.A., Bank of America Corporation and Bank of America, N.A., respectively (together with Chase, the “Bank Defendants”), each of whom offers the Company’s mobile imaging technology as part of its mobile banking applications. The trial has been scheduled for April 3, 2017. | |
The Company has filed motions to dismiss RMII’s willful infringement claims against the Company in the Initial Lawsuit and motions to dismiss claims against the Company in the Subsequent Lawsuits. On November 10, 2014, the Company filed a motion to sever and stay the claims against Chase in the Initial Lawsuit pending resolution of RMII’s claims against the Company and to transfer the claims against the Company to the Southern District of California. On November 19, 2014, the Company filed joinders to the motion to stay with respect to the Subsequent Lawsuits. All motions are still pending before the Court. | |
Based on the Company’s current understanding of the claims, the Company has agreed to accept the demands for indemnity and defense tendered by three of the Bank Defendants in connection with their respective RMII Lawsuits. The Company is currently controlling the defense of such claims and has taken actions to defend the RMII Lawsuits, as more fully described above. The Company believes that RMII’s claims are without merit and intends to vigorously defend against those claims. The Company does not believe that the results of the RMII Lawsuits will have a material adverse effect on its financial condition or results of operations. | |
Other Legal Matters | |
In addition to the foregoing, the Company is subject to various claims and legal proceedings arising in the ordinary course of its business. While any legal proceeding has an element of uncertainty, the Company believes that the disposition of such matters, in the aggregate, will not have a material effect on the Company’s financial condition or results of operations. | |
Facility Lease | |
The Company’s principal executive offices, as well as its research and development facility, are located in approximately 22,523 square feet of office space in San Diego, California. The term of the lease for the Company’s offices continues through June 30, 2019. The annual base rent under the lease is approximately $471,000 per year and is subject to annual increases of approximately 3% per year. In connection with the lease, the Company received tenant improvement allowances totaling $675,690. These lease incentives are being amortized as a reduction of rent expense over the term of the lease. As of December 31, 2014, the unamortized balance of the lease incentives was $472,071, of which $104,905 has been included in other current liabilities and $367,166 has been included in other non-current liabilities. Under the terms of the lease, the Company issued a standby letter of credit to the landlord that allows for one or more draws of up to $210,000 over the term of the lease. The Company believes its existing properties are in good condition and are sufficient and suitable for the conduct of its business. |
Revenue_and_Vendor_Concentrati
Revenue and Vendor Concentrations | 3 Months Ended |
Dec. 31, 2014 | |
Risks and Uncertainties [Abstract] | |
Revenue and Vendor Concentrations | 6. REVENUE AND VENDOR CONCENTRATIONS |
Revenue Concentration | |
For the three months ended December 31, 2014, the Company derived revenue of $2,097,705 from two customers, with such customers accounting for 29% and 10%, respectively, of the Company’s total revenue. For the three months ended December 31, 2013 the Company derived revenue of $2,370,416 from two customers accounting for 33% and 21%, respectively, of the Company’s total revenue. The corresponding accounts receivable balances of customers from which revenues were in excess of 10% of total revenue were $1,915,160 and $1,113,300, respectively, at December 31, 2014 and 2013. | |
The Company’s revenue is derived primarily from the sale by the Company to channel partners, including systems integrators and resellers, and end-users of licenses to sell products covered by the Company’s patented technologies. These contractual arrangements do not obligate the Company’s channel partners to order, purchase or distribute any fixed or minimum quantities of the Company’s products. In most cases, the channel partners purchase the license from the Company after they receive an order from an end-user. The channel partners receive orders from various individual end-users; therefore, the sale of a license to a channel partner may represent sales to multiple end-users. End-users can purchase the Company’s products through more than one channel partner. | |
Revenues can fluctuate based on the timing of license renewals by channel partners. When a channel partner purchases or renews a license, the Company receives a license fee in consideration for the grant of a license to sell the Company’s products and there are no future payment obligations related to such agreement; therefore, the license fee the Company receives with respect to a particular license renewal in one period does not have a correlation with revenue in future periods. During the last several quarters, sales of licenses to one or more channel partners have comprised a significant part of the Company’s revenue. This is attributable to | |
the timing of renewals or purchases of licenses and does not represent a dependence on any single channel partner. The Company believes that it is not dependent upon any single channel partner, even those from which revenues were in excess of 10% of the Company’s total revenue in a specific reporting period, and that the loss or termination of the Company’s relationship with any such channel partner would not have a material adverse effect on the Company’s future operations because either we or another channel partner could sell our products to the end-user that had purchased from the channel partner we lost. | |
International sales accounted for approximately 2% and 8% of the Company’s total revenue for the three months ended December 31, 2014 and 2013, respectively. The Company sells its products in U.S. currency only. | |
Vendor Concentration | |
The Company purchases its integrated software components from multiple third-party software providers at competitive prices. For the three months ended December 31, 2014 and 2013, the Company did not make purchases from any one vendor comprising 10% or more of the Company’s total purchases. The Company has entered into contractual relationships with some of its vendors; however, the Company does not believe it is substantially dependent upon nor exposed to any significant concentration risk related to purchases from any of its vendors, given the availability of alternative sources for its necessary integrated software components. |
Nature_of_Operations_and_Summa1
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||
Dec. 31, 2014 | ||||
Accounting Policies [Abstract] | ||||
Nature of Operations | Nature of Operations | |||
Mitek Systems, Inc. (the “Company”) is a mobile solutions provider engaged in the development, sale and service of its proprietary software solutions. | ||||
The Company applies its patented technology in image capture, correction and intelligent data extraction in the mobile financial and business services markets. The Company’s technology allows users to remotely deposit checks, pay bills, transfer credit card balances, open accounts and get insurance quotes by taking pictures of various documents with their camera-equipped smartphones and tablets instead of using the device keyboard. The Company’s products use advanced algorithms to correct image distortion, extract relevant data, route images to their desired location and process transactions through users’ financial institutions. As of December 31, 2014, the Company has been granted 20 patents and has an additional 23 patent applications pending. | ||||
The Company’s Mobile Deposit® product is software that allows users to remotely deposit a check using their camera-equipped smartphone or tablet. As of December 31, 2014, 3,304 financial institutions have signed agreements to deploy Mobile Deposit® and 2,744 of these financial institutions have deployed Mobile Deposit® to their customers, including all of the top ten, and nearly all of the top 50, U.S. retail banks, as ranked by SNL Financial for the third quarter of calendar year 2014. The Company’s Mobile Photo Account Opening™ product enables users to open a checking, savings or credit card account by capturing an image of the front and back of their driver’s license with their camera-equipped smartphone or tablet. Other mobile imaging software solutions the Company offers include Mobile Photo Payments™, a product that enables users to pay bills by taking a photo of their bill followed by a photo of the check or credit/debit card being used to pay the bill, Mobile Photo Bill Pay®, a mobile bill payment product that allows users to pay their bills using their camera-equipped smartphone or tablet and Mobile Balance Transfer™, a product that allows credit card issuers to provide balance transfer offers and enables users to transfer an existing credit card balance and establish a new credit card account by capturing an image of the user’s current credit card statement. The Company’s mobile imaging software solutions are available for iOS and Android operating systems. | ||||
The Company markets and sells its mobile imaging software solutions through channel partners or directly to enterprise customers that typically purchase licenses based on the number of transactions or subscribers that use our mobile software. The Company’s mobile imaging software solutions are often embedded in other mobile banking or enterprise applications developed by banks, insurance companies or their partners, and marketed under their own proprietary brands. In February 2014, the Company launched the Mitek Developers Network. The program will extend use of the Company’s Mobile Imaging Platform™ to developers interested in creating new mobile applications using camera-equipped smartphones and tablets. | ||||
Basis of Presentation | Basis of Presentation | |||
The accompanying unaudited financial statements of the Company as of December 31, 2014 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in the U.S. (“GAAP”). The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation of the results of the interim periods presented. The financial statements include all adjustments (solely of a normal recurring nature) which are, in the opinion of management, necessary to make the information presented not misleading. You should read these financial statements and the accompanying notes in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2014, filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 5, 2014 (the “Form 10-K”). | ||||
Results for the three months ended December 31, 2014 are not necessarily indicative of results for any other interim period or for a full year. | ||||
Reclassifications | Reclassifications | |||
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications do not impact the reported net loss for such periods and do not have a material impact on the presentation of the overall financial statements. | ||||
Use of Estimates | Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. On an ongoing basis, management reviews its estimates based upon currently available information. Actual future results could differ materially from those estimates. These estimates include, but are not limited to, assessing the collectability of accounts receivable, estimation of the value of stock-based compensation awards and income taxes. | ||||
Net Income (Loss) Per Share | Net Income (Loss) Per Share | |||
The Company calculates net income (loss) per share in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. Basic and diluted net income (loss) per share are based on the weighted-average number of common shares outstanding during the period, without giving effect to potentially dilutive securities. In a period with a net loss position, potentially dilutive securities, such as options, warrants and restricted stock units (“RSUs”), are not included in the calculation of diluted net loss because to do so would be antidilutive, and the number of shares used to calculate basic and diluted net loss is the same. | ||||
Revenue Recognition | Revenue Recognition | |||
Revenue from sales of software licenses sold through direct and indirect channels is recognized upon shipment of the related product, if the requirements of FASB ASC Topic 985-605, Software Revenue Recognition (“ASC 985-605”) are met, including evidence of an arrangement, delivery, fixed or determinable fee, collectability and vendor specific objective evidence (“VSOE”) of the fair value of the undelivered element. If the requirements of ASC 985-605 are not met at the date of shipment, revenue is not recognized until such elements are known or resolved. Revenue from customer support services, or maintenance revenue, includes post-contract support and the rights to unspecified upgrades and enhancements. VSOE of fair value for customer support services is determined by reference to the price the customer pays for such element when sold separately; that is, the renewal rate offered to customers. Revenue derived from professional services primarily includes consulting, implementation, and training. Revenue from fixed fee service engagements is recognized after the services are performed using the completed performance method. Revenue from time and materials service engagements is generally recognized as the services are performed. | ||||
In those instances when objective and reliable evidence of fair value exists for the undelivered items but not for the delivered items, the residual method is used to allocate the arrangement consideration. Under the residual method, the amount of arrangement consideration allocated to the delivered items equals the total arrangement consideration less the aggregate fair value of the undelivered items. Revenue from post-contract customer support is recognized ratably over the term of the contract. Certain customers have agreements that provide for usage fees above fixed minimums. Fixed minimum transaction fees are recognized as revenue | ||||
ratably over the term of the arrangement. Usage fees above fixed minimums are recognized as revenue when such amounts are reasonably estimable and billable. Revenue from professional services is recognized when such services are delivered. When a software sales arrangement requires professional services related to significant production, modification or customization of software, or when a customer considers professional services essential to the functionality of the software product, revenue is recognized based on predetermined milestone objectives required to complete the project, as those milestone objectives are deemed to be substantive in relation to the work performed. Any expected losses on contracts in progress are recorded in the period in which the losses become probable and reasonably estimable. | ||||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts | |||
Trade accounts receivable are recorded at the net invoice value and are not interest bearing. The Company considers receivables past due based on the contractual payment terms. Allowances for doubtful accounts are established based on various factors, including credit profiles of the Company’s customers, contractual terms and conditions, historical payments, and current economic trends. The Company reviews its allowances by assessing individual accounts receivable over a specific aging and amount. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected. | ||||
Capitalized Software Development Costs | Capitalized Software Development Costs | |||
Costs incurred for the development of software that will be sold, leased or otherwise marketed are capitalized when technological feasibility has been established. Software development costs consist primarily of compensation of development personnel and related overhead incurred to develop new products and upgrade and enhance the Company’s current products, as well as fees paid to outside consultants. Capitalization of software development costs ceases and amortization of capitalized software development costs commences when the products are available for general release. For the three months ended December 31, 2014 and 2013, no software development costs were capitalized because the time period and costs incurred between technological feasibility and general release for all software product releases were not material. | ||||
Fair Value of Equity Instruments | Fair Value of Equity Instruments | |||
The fair value of equity instruments involves significant estimates based on underlying assumptions made by management. The fair value for purchase rights under the Company’s equity plans is measured at the grant date using a Black-Scholes valuation model, which involves estimates of stock volatility, expected life of the instruments and other assumptions, and using the closing price of the Company’s common stock on the grant date for RSUs. The fair value of stock-based awards is recognized as an expense over the respective terms of the awards. | ||||
Deferred Income Taxes | Deferred Income Taxes | |||
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of such assets and liabilities. The Company maintains a valuation allowance against its deferred tax assets due to the uncertainty regarding the future realization of such assets, which is based on historical taxable income, projected future taxable income and the expected timing of the reversals of existing temporary differences. Until such time as the Company can demonstrate that it will no longer incur losses, or if the Company is unable to generate sufficient future taxable income, it could be required to maintain the valuation allowance against its deferred tax assets. | ||||
Comprehensive Loss | Comprehensive Loss | |||
Comprehensive loss consists of net loss and unrealized gains and losses on available-for-sale securities. | ||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||
In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition – Revenue from Contracts with Customers (“ASC 606”) which amends the guidance in former ASC 605, Revenue Recognition. This accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2018. The Company is currently evaluating the impact of the provisions of ASC 606. | ||||
Fair Value Measurements and Disclosures | Fair Value Measurements and Disclosures | |||
FASB ASC Topic 820, Fair Value Measurements (“ASC 820”) defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable: | ||||
• | Level 1—Quoted prices in active markets for identical assets or liabilities; | |||
• | Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and | |||
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Nature_of_Operations_and_Summa2
Nature of Operations and Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Potentially Dilutive Common Shares | For the three months ended December 31, 2014 and 2013, the following potentially dilutive common shares were excluded from the calculation of net income (loss) per share, as they would have been antidilutive: | ||||||||
Three months ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Stock options | 2,412,625 | 2,754,030 | |||||||
Restricted stock units | 501,989 | 1,179,513 | |||||||
Warrants | — | 6,667 | |||||||
Total potentially dilutive common shares outstanding | 2,914,614 | 3,940,210 | |||||||
Calculation of Basic and Diluted Net Income (Loss) Per Share | The calculation of basic and diluted net income (loss) per share is as follows: | ||||||||
Three months ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Net income (loss) | $ | 146,180 | $ | (1,468,300 | ) | ||||
Weighted-average common shares outstanding: | |||||||||
Basic | 30,618,097 | 30,402,397 | |||||||
Diluted | 31,173,815 | 30,402,397 | |||||||
Net income (loss) per share: | |||||||||
Basic | $ | 0 | $ | (0.05 | ) | ||||
Diluted | $ | 0 | $ | (0.05 | ) | ||||
Summary of Accounts Receivable, Net | Accounts receivable, net, is as follows: | ||||||||
December 31, | September 30, | ||||||||
2014 | 2014 | ||||||||
Accounts receivable | $ | 3,533,970 | $ | 2,961,450 | |||||
Less: Allowance for doubtful accounts | (16,200 | ) | (6,100 | ) | |||||
Accounts receivable, net | $ | 3,517,770 | $ | 2,955,350 | |||||
Investments_Tables
Investments (Tables) | 3 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||
Summary of Investments by Type of Security | The following table summarizes investments by type of security as of December 31, 2014: | ||||||||||||||||
Cost | Gross | Gross | Fair Market | ||||||||||||||
Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | ||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Corporate debt securities, short-term | $ | 14,170,300 | $ | 455 | $ | (10,452 | ) | $ | 14,160,303 | ||||||||
Corporate debt securities, long-term | — | — | — | — | |||||||||||||
Total | $ | 14,170,300 | $ | 455 | $ | (10,452 | ) | $ | 14,160,303 | ||||||||
The following table summarizes investments by type of security as of September 30, 2014: | |||||||||||||||||
Cost | Gross | Gross | Fair Market | ||||||||||||||
Unrealized | Unrealized | Value | |||||||||||||||
Gains | Losses | ||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Corporate debt securities, short-term | $ | 16,273,996 | $ | 1,472 | $ | (6,298 | ) | $ | 16,269,170 | ||||||||
Corporate debt securities, long-term | 2,075,002 | — | (2,984 | ) | 2,072,018 | ||||||||||||
Total | $ | 18,348,998 | $ | 1,472 | $ | (9,282 | ) | $ | 18,341,188 | ||||||||
Summary of Fair Value of Investments Measured on Recurring Basis | Based on the fair value hierarchy, all of the Company’s investments are classified as Level 2, as represented in the following table: | ||||||||||||||||
December 31, 2014 | September 30, 2014 | ||||||||||||||||
Short-term investments: | |||||||||||||||||
Corporate debt securities | |||||||||||||||||
Financial | $ | 7,171,700 | $ | 9,334,140 | |||||||||||||
Industrial | 4,735,034 | 3,980,772 | |||||||||||||||
Utility | 855,672 | 756,215 | |||||||||||||||
Commercial paper | |||||||||||||||||
Financial | 1,397,897 | 2,198,043 | |||||||||||||||
Total short-term investments | $ | 14,160,303 | $ | 16,269,170 | |||||||||||||
Long-term investments: | |||||||||||||||||
Corporate debt securities | |||||||||||||||||
Financial | $ | — | $ | 1,564,505 | |||||||||||||
Utility | — | 507,513 | |||||||||||||||
Total long-term investments | $ | — | $ | 2,072,018 | |||||||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Stock-Based Compensation Expense Related to Stock Options and RSUs | The following table summarizes stock-based compensation expense related to stock options and RSUs, which was allocated as follows: | ||||||||||||
Three months ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Sales and marketing | $ | 175,118 | $ | 201,524 | |||||||||
Research and development | 137,406 | 184,888 | |||||||||||
General and administrative | 501,536 | 442,659 | |||||||||||
Stock-based compensation expense included in operating expenses | $ | 814,060 | $ | 829,071 | |||||||||
Fair Value Calculations for Stock-Based Compensation Awards | The fair value calculations for stock-based compensation awards to employees for the three months ended December 31, 2014 were based on the following assumptions: | ||||||||||||
Three Months | |||||||||||||
Ended | |||||||||||||
December 31, 2014 | |||||||||||||
Risk-free interest rate | 1.63% – 1.66% | ||||||||||||
Expected life (years) | 5.25 | ||||||||||||
Expected volatility | 98% | ||||||||||||
Expected dividends | None | ||||||||||||
Stock Option Activity | The following table summarizes stock option activity under the Company’s equity plans during the three months ended December 31, 2014: | ||||||||||||
Number of | Weighted- | Weighted- | |||||||||||
Shares | Average | Average | |||||||||||
Exercise Price | Remaining | ||||||||||||
Contractual Term | |||||||||||||
(in Years) | |||||||||||||
Outstanding, September 30, 2014 | 2,334,326 | $ | 4.11 | 5.46 | |||||||||
Granted | 1,355,500 | $ | 2.67 | ||||||||||
Exercised | (4,166 | ) | $ | 2.34 | |||||||||
Cancelled | (162,595 | ) | $ | 4.9 | |||||||||
Outstanding, December 31, 2014 | 3,523,065 | $ | 3.52 | 7.24 | |||||||||
RSU Activity | The following table summarizes RSU activity under the Company’s equity plans during the three months ended December 31, 2014: | ||||||||||||
Number of | Weighted- | ||||||||||||
Shares | Average | ||||||||||||
Fair Market Value | |||||||||||||
Per Share | |||||||||||||
Outstanding, September 30, 2014 | 1,101,303 | $ | 4.71 | ||||||||||
Granted | 104,000 | $ | 2.29 | ||||||||||
Settled | (129,459 | ) | $ | 2.65 | |||||||||
Cancelled | (39,336 | ) | $ | 4.07 | |||||||||
Outstanding, December 31, 2014 | 1,036,508 | $ | 4.45 | ||||||||||
Nature_of_Operations_and_Summa3
Nature of Operations and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 |
Institution | |||
Patents | |||
Accounting Policies [Abstract] | |||
Number of patents granted | 20 | ||
Number of patent applications pending | 23 | ||
Number of financial institutions signed agreements to deploy Mobile Deposit | 3,304 | ||
Number of companies deployed Mobile Deposit | 2,744 | ||
Number of U.S. retail banks and payment processing companies | 50 | ||
Software development costs capitalized | $0 | $0 | |
Accumulated other comprehensive gain (loss) | ($9,997) | ($7,810) |
Nature_of_Operations_and_Summa4
Nature of Operations and Summary of Significant Accounting Policies - Potentially Dilutive Common Shares (Detail) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding | 2,914,614 | 3,940,210 |
Restricted stock units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding | 501,989 | 1,179,513 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding | 6,667 | |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive common shares outstanding | 2,412,625 | 2,754,030 |
Nature_of_Operations_and_Summa5
Nature of Operations and Summary of Significant Accounting Policies - Calculation of Basic and Diluted Net Income (Loss) Per Share (Detail) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Net income (loss) | $146,180 | ($1,468,300) |
Weighted-average common shares outstanding - basic | 30,618,097 | 30,402,397 |
Weighted-average common shares outstanding - diluted | 31,173,815 | 30,402,397 |
Net income (loss) per share - Basic | $0 | ($0.05) |
Net income (loss) per share - Diluted | $0 | ($0.05) |
Nature_of_Operations_and_Summa6
Nature of Operations and Summary of Significant Accounting Policies - Summary of Accounts Receivable (Detail) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
Receivables [Abstract] | ||
Accounts receivable | $3,533,970 | $2,961,450 |
Less: Allowance for doubtful accounts | -16,200 | -6,100 |
Accounts receivable, net | $3,517,770 | $2,955,350 |
Investments_Summary_of_Investm
Investments - Summary of Investments by Type of Security (Detail) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $14,170,300 | $18,348,998 |
Gross Unrealized Gains | 455 | 1,472 |
Gross Unrealized Losses | -10,452 | -9,282 |
Fair Market Value | 14,160,303 | 18,341,188 |
Corporate debt securities [Member] | Short-term [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 14,170,300 | 16,273,996 |
Gross Unrealized Gains | 455 | 1,472 |
Gross Unrealized Losses | -10,452 | -6,298 |
Fair Market Value | 14,160,303 | 16,269,170 |
Corporate debt securities [Member] | Long-term [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 2,075,002 | |
Gross Unrealized Losses | -2,984 | |
Fair Market Value | $2,072,018 |
Investments_Additional_Informa
Investments - Additional Information (Detail) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Investments, Debt and Equity Securities [Abstract] | ||
Other-than-temporary impairment charges recognized | $0 | $0 |
Investments_Summary_of_Fair_Va
Investments - Summary of Fair Value of Investments Measured on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | $14,160,303 | $18,341,188 |
Short-term Investments [Member] | Recurring [Member] | Level-2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | 14,160,303 | 16,269,170 |
Short-term Investments [Member] | Recurring [Member] | Level-2 [Member] | Commercial paper [Member] | Financial [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | 1,397,897 | 2,198,043 |
Short-term Investments [Member] | Recurring [Member] | Level-2 [Member] | Corporate debt securities [Member] | Financial [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | 7,171,700 | 9,334,140 |
Short-term Investments [Member] | Recurring [Member] | Level-2 [Member] | Corporate debt securities [Member] | Industrial [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | 4,735,034 | 3,980,772 |
Short-term Investments [Member] | Recurring [Member] | Level-2 [Member] | Corporate debt securities [Member] | Utility [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | 855,672 | 756,215 |
Long-term Investments [Member] | Recurring [Member] | Level-2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | 2,072,018 | |
Long-term Investments [Member] | Recurring [Member] | Level-2 [Member] | Corporate debt securities [Member] | Financial [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | 1,564,505 | |
Long-term Investments [Member] | Recurring [Member] | Level-2 [Member] | Corporate debt securities [Member] | Utility [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of investments measured on recurring basis, total | $507,513 |
Stockholders_Equity_StockBased
Stockholders' Equity - Stock-Based Compensation Expense Related to Stock Options and RSUs (Detail) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in operating expenses | $814,060 | $829,071 |
Sales and marketing [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in operating expenses | 175,118 | 201,524 |
Research and development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in operating expenses | 137,406 | 184,888 |
General and administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense included in operating expenses | $501,536 | $442,659 |
Stockholders_Equity_Fair_Value
Stockholders' Equity - Fair Value Calculations for Stock-Based Compensation Awards (Detail) | 3 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Risk-free interest rate, Minimum | 1.63% |
Risk-free interest rate, Maximum | 1.66% |
Expected life (years) | 5 years 3 months |
Expected volatility | 98.00% |
Expected dividends | 0.00% |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Feb. 19, 2014 | Jan. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $6,849,905 | ||||
Weighted average period for unrecognized compensation expense expected to be recognized | 2 years 10 months 24 days | ||||
Options outstanding | 3,523,065 | 2,334,326 | 2,754,030 | ||
Recognized compensation expense | 814,060 | 829,071 | |||
Total intrinsic value of options exercised | 4,083 | 336,340 | |||
Weighted-average remaining contractual term | 7 years 2 months 27 days | 5 years 5 months 16 days | 7 years 1 month 6 days | ||
Weighted-average exercise price, outstanding shares | $3.52 | $4.11 | $4.16 | ||
Aggregate intrinsic value, outstanding shares | 3,138,317 | 7,313,083 | |||
Recognized stock-based compensation expense related to the outstanding RSUs | 339,970 | 264,749 | |||
2012 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Purchase of common stock | 2,044,821 | ||||
Number of common stock reserved for future grants | 1,479,773 | ||||
Director Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common stock reserved for future grants | 474,336 | ||||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance under stock holders incentive plan | 2,000,000 | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance under stock holders incentive plan | 4,000,000 | ||||
Maximum [Member] | Director Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares of common stock reserved for issuance | 1,000,000 | ||||
Restricted Stock Units (RSUs) [Member] | 2012 Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options outstanding | 561,508 | ||||
Restricted Stock Units (RSUs) [Member] | Director Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options outstanding | 475,000 | ||||
2010 Stock Option Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options outstanding | 1,478,244 | ||||
Stock options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | 3,891,848 | 4,775,401 | |||
Weighted average period for unrecognized compensation expense expected to be recognized | 2 years 10 months 24 days | 2 years 6 months | |||
Recognized compensation expense | 474,091 | 564,322 | |||
Restricted stock units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | 2,958,057 | ||||
Weighted average period for unrecognized compensation expense expected to be recognized | 2 years 9 months 18 days | ||||
Outstanding Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $4,605,913 | ||||
Weighted average period for unrecognized compensation expense expected to be recognized | 3 years 6 months |
Stockholders_Equity_Stock_Opti
Stockholders' Equity - Stock Option Activity (Detail) (USD $) | 3 Months Ended | ||
Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of Shares, Beginning balance | 2,334,326 | ||
Number of Shares, Granted | 1,355,500 | ||
Number of Shares, Exercised | -4,166 | ||
Number of Shares, Cancelled | -162,595 | ||
Number of Shares, Ending balance | 3,523,065 | 2,334,326 | 2,754,030 |
Weighted Average Exercise Price Per Share, Beginning balance | $4.11 | ||
Weighted Average Exercise Price Per Share, Granted | $2.67 | ||
Weighted Average Exercise Price Per Share, Exercised | $2.34 | ||
Weighted Average Exercise Price Per Share, Cancelled | $4.90 | ||
Weighted Average Exercise Price Per Share, Ending balance | $3.52 | $4.11 | $4.16 |
Weighted Average Remaining Contractual Term (in Years) | 7 years 2 months 27 days | 5 years 5 months 16 days | 7 years 1 month 6 days |
Stockholders_Equity_RSU_Activi
Stockholders' Equity - RSU Activity (Detail) (Restricted Stock Units (RSUs) [Member], USD $) | 3 Months Ended |
Dec. 31, 2014 | |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Beginning balance | 1,101,303 |
Number of Shares, Granted | 104,000 |
Number of Shares, Settled | -129,459 |
Number of Shares, Cancelled | -39,336 |
Number of Shares, Ending balance | 1,036,508 |
Weighted Average Exercise Price Per Share, Beginning balance | $4.71 |
Weighted Average Exercise Price Per Share, Granted | $2.29 |
Weighted Average Exercise Price Per Share, Settled | $2.65 |
Weighted Average Exercise Price Per Share, Cancelled | $4.07 |
Weighted Average Exercise Price Per Share, Ending balance | $4.45 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Federal net operating loss carryforwards will begin to expire | 30-Sep-18 | |
State net operating loss carryforwards will begin to expire | 30-Sep-14 | |
Deferred tax valuation allowance, percentage | 100.00% | |
Accrued interest | $0 | $0 |
Recognized income tax interest and/or penalties | $0 | $0 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended |
Dec. 31, 2014 | |
Loss Contingencies [Line Items] | |
Annual base rent | $471,000 |
Increased percentage of Company's annual base rent | 3.00% |
Tenant improvement allowances | 675,690 |
Unamortized lease incentives | 472,071 |
Building [Member] | |
Loss Contingencies [Line Items] | |
Amended office space subject to the lease | 22,523 |
Other current liabilities [Member] | |
Loss Contingencies [Line Items] | |
Unamortized lease incentives | 104,905 |
Other non-current liabilities [Member] | |
Loss Contingencies [Line Items] | |
Unamortized lease incentives | 367,166 |
Standby letter of credit [Member] | |
Loss Contingencies [Line Items] | |
Standby letter of credit to the landlord | $210,000 |
Revenue_and_Vendor_Concentrati1
Revenue and Vendor Concentrations - Additional Information (Detail) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue, Major Customer [Line Items] | ||
Total revenue earned | $5,389,322 | $4,462,524 |
Accounts receivable balances | 1,915,160 | 1,113,300 |
Customer Concentration Risk [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total revenue, percentage | 10.00% | 10.00% |
Customer Two [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total revenue earned | $2,097,705 | $2,370,416 |
Customer Two [Member] | Customer Concentration Risk [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total revenue, percentage | 10.00% | 21.00% |
Customer One [Member] | Customer Concentration Risk [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total revenue, percentage | 29.00% | 33.00% |
Sales Revenue Net [Member] | Geographic Concentration Risk [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total revenue, percentage | 2.00% | 8.00% |
Sales Revenue Net [Member] | Channel Partners [Member] | Customer Concentration Risk [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total revenue, percentage | 10.00% |