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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
Shares		      Weighted-
Average
Exercise Price		      Weighted-
Average
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 )     $ 4.90      
  

 

 

        

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
Shares		      Weighted-
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.