Market Overview

Elliott Management Sends Letter to Mitek Board of Directors


Urges Board to Engage with ASG Technologies

Believes Engagement Offers a Path to Certain, Premium Value for

Full letter available at

Elliott Management Corporation ("Elliott"), which manages funds that
collectively have made a substantial investment in the common stock and
economic equivalents of Mitek Systems, Inc. (together with its
subsidiaries, collectively the "Company" or "Mitek"), making Elliott one
of Mitek's largest investors, today wrote a letter to the Mitek Board of

The letter outlined Elliott's concerns with the Mitek Board's refusal to
engage with the serious acquisition interest expressed by ASG
Technologies Group, Inc. ("ASG"), one of Elliott's portfolio companies;
ASG's $10 per share offer represents a substantial premium (51%) to
Mitek's unaffected closing price on October 9, 2018.

In the letter, Elliott questioned if the Board's priorities are aligned
with those of shareholders, citing recent examples of entrenchment
through the adoption of a "poison pill," as well as misleading
statements surrounding the timeline of ASG's approaches to Mitek.
Elliott requested that the Mitek Board immediately engage in meaningful
dialogue with ASG to focus its attention on maximizing value rather than
entrenching itself.

The letter can be downloaded and read in full at

The full text of the letter can be read below:

November 20, 2018

The Board of Directors 
Mitek Systems, Inc.
600 B Street,
Suite 100
San Diego, CA 92101
Attn: Chairman Bruce Hansen

Dear Members of the Board:

We are writing to you on behalf of Elliott Associates, L.P. and Elliott
International, L.P. (collectively, "Elliott"
or "we"), which collectively have made a
substantial investment in the common stock and economic equivalents of
Mitek Systems, Inc. (together with its subsidiaries, collectively the "Company"
or "Mitek"), making us one of Mitek's
largest investors.

We are writing today to express our deep concern regarding your refusal
to engage with ASG Technologies Group, Inc. ("ASG"),
our portfolio company which has expressed serious interest in doing a
take-private transaction with Mitek. Contrary to Chairman Bruce Hansen's
assertions made in the Company's November 5 press release, ASG's $10 per
share offer represents a substantial premium (51%) to Mitek's unaffected
closing price on October 9, 2018. Even putting aside the attractiveness
of this premium, we are troubled by Mitek's refusal to engage with ASG
and allow it access to diligence materials with the aim of negotiating a
final, binding bid for the Company. Instead, Mr. Hansen stated in the
release that the Board has confidence in the Company's "current
strategy," despite the many flaws and risks inherent in that strategy
and despite the Company's lack at that time of a CEO or CFO.

We believe the Company's current, standalone path subjects shareholders
to unnecessary risk and is unlikely to deliver risk-adjusted upside to
shareholders in excess of $10 per share. Mitek's stock price has not
closed at or above $10 in the last year, and has only traded at or above
$10 for a brief period between July and September 2017. Also, as noted
in ASG's October 31 letter, Mitek's stock has meaningfully
underperformed all relevant benchmarks over the past 1, 2, and 5-year
periods. Profit margins have deteriorated significantly. Approximately
two-thirds of Mitek's revenue is tied to a secularly challenged market
(check deposits), and we believe its efforts to diversify into the
faster-growing market of identity verification are fraught with risk due
to intense competition and Mitek's lack of scale.

The Company's recent announcement that it has hired a new CEO does not
detract from the strangeness of the Board's prior endorsement of a
"strategy" with no management team in place to execute it. Instead, the
timing of this announcement just raises new questions, given that the
Board is supposed to set strategy in conjunction with management
– e.g., was the new CEO's willingness to rubber-stamp the Company's
existing, risky standalone strategy a condition of his hiring?

In contrast to this risky and questionable standalone path, we believe
engagement with ASG offers a path to certain, premium value for
shareholders today. Failure to pursue this opportunity is likely to
expose Mitek shareholders to additional downside risk due to the fact
that the market expects Mitek's Board to engage with ASG and is pricing
in the likelihood of a value-maximizing transaction. On October 10, the
day of the publication of news reports regarding ASG's acquisition
interest, Mitek's stock price increased by 17%. Similarly, on October
31, the day ASG released its proposal to acquire Mitek to the public,
the stock price increased by 14%. Meanwhile, on November 2, the day
after Mitek released its Q4 earnings and provided fiscal year 2019
guidance, the stock price only increased by 3%. We believe this pattern
shows that the recent increase in Mitek's stock price has been almost
exclusively driven by M&A speculation, and in the absence of a
transaction, we believe Mitek's shares would undoubtedly fall back to a
similar range where they were trading prior to these extraordinary

The fact that the Board is averting its eyes from these risks raises
questions about whether the Board's priorities are aligned with those of
shareholders – questions that take on greater urgency upon further
examination of the Board. For example, Board Chairman Bruce Hansen has
been selling his own stock in Mitek aggressively at levels far below $10
per share, leading us to question the sincerity of his claims that ASG's
proposal substantially undervalues Mitek. From the time Mr. Hansen
joined the Board through May 31, 2018, he sold no fewer than 66% of the
136,000 vested shares and options he received – 50,000 at $9.16
per share in November 2017, and another 40,000 at $8.66
and $8.74 per share in May 2018.
This selling activity appears to be limited to his stake in Mitek – Mr.
Hansen sits on the boards of two other publicly traded companies, yet he
has not sold any of the shares he has received in these companies.

This pattern raises obvious questions: If Mr. Hansen was a seller of his
own Mitek shares at $8.66 just last May, prior to the departures of the
Company's top two executives, then how can he be so dismissive of a $10
per share bid today when Mitek faces a deeply uncertain future in the
wake of those sudden departures? Why, if he and his Board have
confidence enough to "reaffirm" the Company's plan, has he sold so much
of his stock in Mitek since last November?

Other issues include the fact that three of the Company's six
independent directors serve on four or more corporate boards, making
them over-boarded according to many institutions' accepted corporate
governance best practices; and that the Board apparently had no
succession plan in place to deal with the departure of a CEO who had
been at the Company for 17 years. These facts, in conjunction with the
Board's refusal to engage with ASG, lead us to believe that significant
changes at the Board level may be required to ensure that the Board is
representing the best interests of Mitek shareholders.

Instead of change, however, the Board has pursued a path of
entrenchment, most notably through the recent adoption of a "poison
pill," which prompted an 8% decline in Mitek's stock price over the
three trading days following its adoption. Mitek's attempts to disguise
this poison pill as a tax-asset-protection plan are thoroughly
unconvincing. As of June 30, 2018, the Company's deferred tax assets
were less than $15 million. We would expect that the application of
Section 382 would not have a material (if any) impact on Mitek's ability
to utilize these deferred tax assets.

Mitek's true rationale for adopting this poison pill – old-fashioned
entrenchment – is demonstrated by the Company's use of an amorphous and
far-reaching definition of beneficial ownership that extends well beyond
the requirements of the Internal Revenue Code. Therefore, we are sending
a waiver request letter to the Board in the form of Exhibit A requesting
relief from the poison pill recently enacted so that we may acquire
"Beneficial Ownership" (as defined under the poison pill) of up to 14.9%.

Finally, we are deeply troubled by the fact that Mitek has made
misleading statements to shareholders regarding ASG's approaches to
Mitek and Mitek's engagement with ASG. For example, during the Company's
Q4 earnings call on November 1, Mr. Hansen made the erroneous statement
that "ASG reached out to us shortly after the announcement of our
executive changes…" (emphasis added). This statement implied an
opportunistic motive to ASG's approach, when in fact, as Mr. Hansen
knows, ASG first reached out to former Mitek CEO Jim DeBello about a
possible acquisition approximately one week before the
resignation announcements.

Mitek followed this erroneous statement with another the next day, when
it stated in its November 5 press release that it had only rejected
ASG's proposal after consultation with its financial advisors. This
statement gave the misleading impression that serious analysis had been
provided to the Board comparing ASG's premium offer of $10 per share to
the value-creation possible at Mitek on a standalone basis. In fact,
Mitek is working primarily with Evercore's activist defense team.
Additionally, we question the timing of Evercore's hiring, because Mitek
did not appear to us to have involved any financial advisors in the
evaluation and rejection of ASG's private proposals. We suspect Evercore
was only hired after ASG's public proposal forced the Board to
demonstrate at least an illusory level of diligence.

Even at our current ownership levels, Elliott is now a larger investor
in Mitek than all of Mitek's non-executive directors combined. In fact,
only one of Mitek's current external directors has ever invested his or
her own capital in the Company. On behalf of all shareholders, we
request that you immediately engage in meaningful dialogue with ASG. We
are aware that Mitek representatives met on November 16 with
representatives from ASG and Evergreen Coast Capital, our private-equity
affiliate, but that no substantive engagement took place. Instead, it is
our understanding that Mitek's representatives simply repeated the
assertions made in the November 5 release regarding the inadequacy of
ASG's proposal.

In fact, it is Mitek's lack of a serious response to ASG's proposal that
is inadequate. We consider it the responsibility of the Board to enter
into a non-disclosure agreement with ASG and permit ASG to conduct
customary due diligence with the aim of making a final, binding bid. If
it is truly the case that ASG's $10-per-share, 51%-premium bid
undervalues the Company, then allowing ASG to review Mitek's financial
records and plans so as to better understand the Company's prospects for
future growth can only benefit shareholders by potentially eliciting a
higher offer.

We believe Mitek will face considerable downside risks in the market
ahead. It is the responsibility of the Board to focus its attention on
maximizing value rather than entrenching itself. We believe that ASG's
offer is worthy of immediate engagement, and we know from feedback we
have received that our fellow shareholders share that view. We ask that
you engage with ASG immediately for the benefit of all Mitek

Best regards,

Jesse Cohn

Jason Genrich
Portfolio Manager

Exhibit A

November 20, 2018

The Board of Directors
Mitek Systems, Inc.
600 B Street, Suite
San Diego, CA 92101

RE: Section 382 Rights Agreement – Exemption

Dear Members of the Board:

Reference is made to the Section 382 Rights Agreement, dated as of
October 23, 2018, by and between Mitek Systems, Inc. (the "Company")
and Computershare Trust Company, N.A., (the "Rights
"), which generally imposes burdens on Persons that
Beneficially Own 4.9% (the "Ownership Limit")
or more of the Company's common stock, par value $0.001 per share (the "Common
"). Except as otherwise indicated, terms used herein
without definition shall have the meanings provided in the Rights

Elliott Associates, L.P. and Elliott International, L.P. (collectively, "Elliott")
request that the Board of Directors of the Company (the "Board")
grant an exemption under the Rights Agreement (the "Exemption")
from the Ownership Limit allowing for the acquisition or ownership of
outstanding Common Shares by Elliott of up to 14.9% the outstanding
Common Shares (the "Exemption").

This letter agreement shall remain in full force and effect until the
earlier of (i) the termination of this letter agreement and the
Exemption upon the written consent of all parties hereto or (ii) the
expiration, termination or repeal of the Rights Agreement.


Jesse Cohn

Jason Genrich
Portfolio Manager

Please indicate your confirmation that the Exemption has been granted by
the Board of Directors of the Company by executing this letter in the
space provided below.

Acknowledged and agreed, as of _________ ___, 2018.


By: ________________________

About Elliott

Elliott Management Corporation manages two multi-strategy hedge funds
which combined have approximately $35 billion of assets under
management. Its flagship fund, Elliott Associates, L.P., was founded in
1977, making it one of the oldest hedge funds under continuous
management. The Elliott funds' investors include pension plans,
sovereign wealth funds, endowments, foundations, funds-of-funds, high
net worth individuals and families, and employees of the firm.

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