MITEK SYSTEMS INC

Previous wording

Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our”) is a provider of mobile image capture and digital identity verification solutions. We are a software development company with expertise in artificial intelligence and machine learning. We currently serve more than 7,900 financial services organizations and financial technology (“fintech”) brands around the globe. Mitek markets and sells its products and services worldwide through internal, direct sales teams located in the United States (“U.S.”), Europe, and Latin America as well as through channel partners. Our partner sales strategy includes channel partners who are financial services technology providers and identity verification providers. These partners integrate our products into their solutions to meet the needs of their customers, typically provisioning Mitek services through their respective platforms.

Current wording

Mitek Systems, Inc. (“Mitek,” the “Company,” “we,” “us,” and “our”) is a provider of mobile image capture and digital identity verification solutions. We are a software development company with expertise in artificial intelligence and machine learning. We currently serve more than 7,900 financial services organizations and leading marketplace and financial technology (“fintech”) brands around the globe. Mitek markets and sells its products and services worldwide through internal, direct sales teams located in the United States (“U.S.”), Europe, and Latin America as well as through channel partners. Our partner sales strategy includes channel partners who are financial services technology and identity verification providers. These partners integrate our products into their solutions to meet the needs of their customers, typically provisioning Mitek services through their respective platforms.

Previous wording

•Revenue for the three months ended June 30, 2024 was $45.0 million, an increase of 4% compared to revenue of $43.1 million in the three months ended June 30, 2023.

Current wording

•Revenue for the three months ended December 31, 2024 was $37.3 million, an increase of 1% compared to revenue of $36.9 million in the three months ended December 31, 2023.

Previous wording

•Net income was $0.2 million, or $0.00 per diluted share, during the three months ended June 30, 2024, compared to net loss of $0.4 million, or negative $0.01 per diluted share, during the three months ended June 30, 2023.

Current wording

•Net loss was $4.6 million, or negative $0.10 per diluted share, during the three months ended December 31, 2024, compared to net loss of $5.8 million, or negative $0.13 per diluted share, during the three months ended December 31, 2023.

Previous wording

•Cash provided by operating activities was $10.6 million for the nine months ended June 30, 2024, compared to cash provided by operating activities of $28.1 million for the nine months ended June 30, 2023.

Current wording

•Cash provided by operating activities was $0.6 million for the three months ended December 31, 2024, compared to cash used in operating activities of $9.5 million for the three months ended December 31, 2023.

Previous wording

We believe that financial institutions, fintechs, and other companies see our patented solutions as a way to provide a superior digital customer experience to meet growing consumer demands of trust and convenience online and, at the same time, assist them in meeting regulatory requirements. The value of digital transformation to our customers is a possible increase in top line revenue and a reduction in the cost of sales and service. As the use of new technology increases, so does associated fraud and cyber-attacks. The negative outcomes of fraud and cyber-attacks encompass financial losses, brand damage, and loss of loyal customers. We predict growth in our deposits business as a result of the increased consumer adoption of digital financial services provided to them by their banks and identity verification products based on current trends in payments, online lending, more stringent regulations, growing usage of sharing apps and online marketplaces, and the ever-increasing demand for digital services.

Current wording

We believe that financial institutions, fintech platforms, and other companies see our patented solutions as a way to provide a superior digital customer experience to meet growing consumer demands of trust and convenience online and, at the same time, assist them in meeting regulatory requirements. The value of digital transformation to our customers is a possible increase in top line revenue and a reduction in the cost of sales and service. As the use of new technology increases, so does associated fraud and cyber-attacks. The negative outcomes of fraud and cyber-attacks encompass financial losses, brand damage, and loss of loyal customers, which we predict will lead to growth in demand for identity verification and sophisticated fraud detection, prevention and management products.

Previous wording

During each of the last few years, sales of licenses to one or more channel partners have comprised a significant part of our revenue each year. This is attributable to the timing of renewals or purchases of licenses and does not represent a dependence on any single channel partner. If we were to lose a channel partner relationship, we do not believe such a loss would adversely affect our operations because either we or another channel partner could sell our products to the end-users that had purchased products from the channel partner we lost. However, in that case, we or another channel partner must establish a relationship with the end-users, which could take time to develop, if it develops at all.

Current wording

During each of the last few years, sales of licenses to one or more channel partners have comprised a significant portion of our revenue each year. This is attributable to the timing of renewals or purchases of licenses and does not represent a dependence on any single channel partner. If we were to lose a channel partner relationship, we believe either we or another channel partner could sell our products to the end-users that had purchased products from the channel partner we lost. However, in that case, we or another channel partner must establish a relationship with the end-users, which could take time to develop.

Previous wording

We have a growing number of competitors in the mobile image capture and identity verification industry, many of which have greater financial, technical, marketing, and other resources. However, we believe our patented mobile image capture and identity verification technology, our growing portfolio of products and geographic coverage for the financial services industry, and our market expertise gives us a distinct competitive advantage. To remain competitive, we must continue to offer products that are attractive to the consumer as well as being secure, accurate, and convenient. To help us remain competitive, we intend to further strengthen performance of our portfolio of products through research and development as well as partnering with other technology providers.

Current wording

We have a growing number of competitors in the mobile image capture and identity verification industry, many of which have greater financial, technical, marketing, and other resources. However, we believe our patented mobile image capture and identity verification technology, our growing portfolio of products and coverage for the financial services industry, and our market expertise gives us a distinct competitive advantage. To remain competitive, we will continue to offer products that are attractive to the consumer as well as being compliant, accurate, and convenient. To help us remain competitive, we intend to further our investment in research and development as well as partnering with other technology providers.

Previous wording

Total revenue increased $1.9 million, or 4%, to $45.0 million in the three months ended June 30, 2024 compared to $43.1 million in the three months ended June 30, 2023. Software and hardware revenue increased $1.2 million, or 6%, to $22.7 million in the three months ended June 30, 2024 compared to $21.4 million in the three months ended June 30, 2023. This increase is primarily due to an increase in sales of our Mobile Deposit® software products, partially offset by a decrease in sales of our ID R&D biometrics software and legacy identify verification software and hardware products in the three months ended June 30, 2024 compared to the same period in 2023. Services and other revenue increased $0.7 million, or 3%, to $22.3 million in the three months ended June 30, 2024 compared to $21.6 million in the three months ended June 30, 2023. This increase is primarily due to higher revenue from our Check Fraud Defender software product in the three months ended June 30, 2024 compared to the same period in 2023.

Current wording

Total revenue increased by an immaterial amount to $37.3 million in the three months ended December 31, 2024 compared to $36.9 million in the three months ended December 31, 2023. Software and hardware revenue decreased $4.0 million, or 25%, to $12.0 million in the three months ended December 31, 2024 compared to $16.0 million in the three months ended December 31, 2023. This decrease is primarily due to a decrease in sales of our Mobile Deposit® software products in the three months ended December 31, 2024 compared to the same period in 2023. Services and other revenue increased $4.3 million, or 21%, to $25.3 million in the three months ended December 31, 2024 compared to $20.9 million in the three months ended December 31, 2023. This increase is primarily due to higher transactional SaaS revenue from our identity verification products and higher revenue from our Check Fraud Defender software product in the three months ended December 31, 2024 compared to the same period in 2023.

Previous wording

Cost of revenue includes personnel costs related to billable services and software support, direct costs associated with our hardware products, hosting costs, and the costs of royalties for third party products embedded in our products. Cost of revenue increased $0.8 million, or 13%, to $6.5 million in the three months ended June 30, 2024 compared to $5.7 million in the three months ended June 30, 2023. The increase in cost of revenue is primarily due to an increase in transactional SaaS revenue, partially offset by a decrease in revenue associated with our legacy identify verification software and hardware products during the three months ended June 30, 2024 compared to the same period in 2023.

Current wording

Cost of revenue includes personnel costs related to billable services and software support, direct costs associated with our hardware products, hosting costs, and the costs of royalties for third party products embedded in our products. Cost of revenue increased $0.4 million, or 7%, to $5.9 million in the three months ended December 31, 2024 compared to $5.5 million in the three months ended December 31, 2023. The increase in cost of revenue is primarily due to an increase in transactional SaaS revenue, partially offset by a decrease in revenue associated with our legacy identify verification software and hardware products during the three months ended December 31, 2024 compared to the same period in 2023.

Previous wording

Selling and marketing expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with sales and marketing personnel. Selling and marketing expenses also include non-billable costs of professional services personnel, advertising expenses, product promotion costs, trade shows, and other brand awareness programs. Selling and marketing expenses increased $0.1 million, or 1%, to $10.4 million in the three months ended June 30, 2024 compared to $10.3 million in the three months ended June 30, 2023. The increase in selling and marketing expense is primarily due to higher product promotion costs and other costs, partially offset by lower personnel-related costs in the three months ended June 30, 2024 compared to the same period in 2023.

Current wording

Selling and marketing expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with sales and marketing personnel. Selling and marketing expenses also include non-billable costs of professional services personnel, advertising expenses, product promotion costs, trade shows, and other brand awareness programs. Selling and marketing expenses decreased $0.2 million, or 2%, to $9.7 million in the three months ended December 31, 2024 compared to $9.9 million in the three months ended December 31, 2023. The decrease in selling and marketing expense is primarily due to lower personnel-related and other costs, partially offset by higher product promotion costs in the three months ended December 31, 2024 compared to the same period in 2023.

Previous wording

Research and development expenses include payroll, employee benefits, stock-based compensation, third party contractor expenses, and other headcount-related costs associated with software engineering and mobile capture science. Research and development expenses increased $6.1 million, or 27%, to $28.6 million in the nine months ended June 30, 2024 compared to $22.5 million in the nine months ended June 30, 2023. The increase in research and development expenses is primarily due to higher personnel-related costs and higher third-party contractor expenses, partially offset by lower other costs in the nine months ended June 30, 2024 compared to the same period in 2023.

Current wording

Research and development expenses include payroll, employee benefits, stock-based compensation, third party contractor expenses, and other headcount-related costs associated with software engineering and mobile capture science. Research and development expenses decreased $0.6 million, or 6%, to $8.3 million in the three months ended December 31, 2024 compared to $8.9 million in the three months ended December 31, 2023. The decrease in research and development expenses is primarily due to lower personnel-related costs, partially offset by higher third-party contractor expenses, in the three months ended December 31, 2024 compared to the same period in 2023.

Previous wording

General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with finance, legal, administration, and information technology functions, as well as third party legal, accounting, and other administrative costs. General and administrative expenses increased $1.0 million, or 9%, to $12.6 million in the three months ended June 30, 2024 compared to $11.6 million in the three months ended June 30, 2023. The increase in general and administrative expenses is primarily due to higher audit, accounting and tax fees and higher executive transition costs, partially offset by lower third-party and professional fees, lower legal fees, and a decrease in the allowance for uncollectible receivables, and other costs, during the three months ended June 30, 2024 compared to the same period in 2023.

Current wording

General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with finance, legal, administration, and information technology functions, as well as third party legal, accounting, and other administrative costs. General and administrative expenses decreased $3.6 million, or 23%, to $11.9 million in the three months ended December 31, 2024 compared to $15.5 million in the three months ended December 31, 2023. The decrease in general and administrative expenses is primarily due to lower legal fees, audit, accounting and tax fees and lower third-party and professional fees, partially offset by higher personnel-related costs, during the three months ended December 31, 2024 compared to the same period in 2023.

Previous wording

Amortization and acquisition-related costs include amortization of intangible assets, adjustments recorded due to changes in the fair value of contingent consideration, and other costs associated with acquisitions. Amortization and acquisition-related costs decreased $2.5 million, or 40%, to $3.8 million in the three months ended June 30, 2024 compared to $6.2 million in the three months ended June 30, 2023. The decrease in amortization and acquisition-related costs is primarily due to an increase in the fair value of acquisition-related contingent consideration associated with the ID R&D acquisition in the three months ended June 30, 2023 which was paid in the first fiscal quarter of 2024 and a decrease in amortization expense of intangible assets from previous acquisitions that had been fully amortized during the three months ended June 30, 2024 compared to the same period in 2023.

Current wording

Amortization and acquisition-related costs include amortization of intangible assets, adjustments recorded due to changes in the fair value of contingent consideration, and other costs associated with acquisitions. Amortization and acquisition-related costs decreased $0.3 million, or 8%, to $3.7 million in the three months ended December 31, 2024 compared to $4.0 million in the three months ended December 31, 2023. The decrease in amortization and acquisition-related costs is primarily due to a decrease in amortization expense of intangible assets from previous acquisitions that had been fully amortized during the three months ended December 31, 2024 compared to the same period in 2023.

Previous wording

Restructuring costs consist of employee severance obligations and other related costs. Restructuring costs were $1.1 million in the three months ended June 30, 2024 related to a restructuring that occurred in the third quarter of fiscal 2024. Restructuring costs were $14,000 in the three months ended June 30, 2023 related to a restructuring plan that was initially implemented in June and November 2022.

Current wording

Restructuring costs consist of employee severance obligations and other related costs. Restructuring costs were $0.8 million in the three months ended December 31, 2024 related to a restructuring that occurred in the first quarter of fiscal 2025. Restructuring costs were $48,000 in the three months ended December 31, 2023.

Previous wording

Interest expense includes the amortization of debt discount and issuance costs and coupon interest accrued on our 0.75% convertible senior notes due 2026 (the “2026 Notes”). Interest expense was $2.3 million for the three months ended June 30, 2024 and consisted of $2.0 million of amortization of debt discount and issuance costs and $0.3 million of interest incurred. Interest expense was $2.4 million for the three months ended June 30, 2023 and consisted of $1.9 million of amortization of debt discount and issuance costs and $0.5 million of interest incurred.

Current wording

Interest expense includes the amortization of debt discount and issuance costs and coupon interest accrued on our 0.75% convertible senior notes due 2026 (the “2026 Notes”). Interest expense was $2.4 million for the three months ended December 31, 2024 and consisted of $2.1 million of amortization of debt discount and issuance costs and $0.3 million of interest incurred. Interest expense was $2.3 million for the three months ended December 31, 2023 and consisted of $2.0 million of amortization of debt discount and issuance costs and $0.3 million of interest incurred.

Previous wording

Other income (expense), net includes interest income net of amortization and net realized gains or losses on our marketable securities portfolio, and foreign currency transactional gains or losses. Other income (expense), net increased $0.5 million, or 55%, to $1.4 million net income in the three months ended June 30, 2024 compared to $0.9 million net income in the three months ended June 30, 2023. The increase was primarily due to higher interest income net of amortization in the three months ended June 30, 2024 as compared to the same period in 2023.

Current wording

Other income (expense), net includes interest income net of amortization and net realized gains or losses on our marketable securities portfolio, and foreign currency transactional gains or losses. Other income (expense), net decreased $1.1 million, or 66%, to $0.6 million net income in the three months ended December 31, 2024 compared to $1.6 million net income in the three months ended December 31, 2023. The decrease was primarily due to higher foreign currency exchange transactional losses, partially offset by higher interest income net of amortization in the three months ended December 31, 2024 as compared to the same period in 2023.

Previous wording

For the nine months ended June 30, 2024, we recorded an income tax benefit of $2.8 million, which yielded an effective tax rate of 35%. For the nine months ended June 30, 2023, we recorded an income tax provision of $4.4 million, which yielded an effective tax rate of 32%. The difference between the U.S. federal statutory tax rate and our effective tax rate for the nine months ended June 30, 2024 and 2023 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation as well as the impact of state taxes, and federal, state and foreign research and development credits on its tax provision.

Current wording

For the three months ended December 31, 2024, we recorded an income tax benefit of $0.3 million which yielded an effective tax rate of 6%. For the three months ended December 31, 2023, we recorded an income tax benefit of $1.7 million, or an effective tax rate of 23%. The difference between the U.S. federal statutory tax rate and our effective tax rate for each of the three months ended December 31, 2024 and 2023 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation as well as the impact of share-based compensation, and federal, state and foreign research and development credits on its tax provision.

Previous wording

Cash generated from operations has historically been our primary source of liquidity to fund operations and investments to grow our business. Our additional sources of liquidity include available cash balances and proceeds from the issuance of the 2026 Notes (as defined below). On June 30, 2024, we had $133.2 million in cash and cash equivalents and investments compared to $134.9 million on September 30, 2023, a decrease of $2.9 million, or 2%. In summary, our cash flows from continuing operations were as follows (amounts in thousands):

Current wording

Cash generated from operations has historically been our primary source of liquidity to fund operations and investments to grow our business. Our additional sources of liquidity include available cash balances and proceeds from the issuance of the 2026 Notes (as defined below). On December 31, 2024, we had $137.9 million in cash and cash equivalents and investments compared to $141.8 million on September 30, 2024, a decrease of $3.9 million, or 3%. In summary, our cash flows from continuing operations were as follows (amounts in thousands):

Previous wording

Cash flows related to operating activities are dependent on net income, adjustments to net income and changes in working capital. Net cash provided by operating activities during the nine months ended June 30, 2024 was $10.6 million and resulted primarily from net non-cash charges of $28.3 million, partially offset by net loss of $5.3 million and unfavorable changes in operating assets and liabilities of $12.4 million. Net cash provided by operating activities during the nine months ended June 30, 2023 was $28.1 million and resulted primarily from net income of $9.5 million and net non-cash charges of $23.3 million, partially offset by unfavorable changes in operating assets and liabilities of $4.7 million. The decrease in cash provided by operating activities of $17.5 million during the nine months ended June 30, 2024 compared to nine months ended June 30, 2023 was primarily due to our net loss and an increase in accounts receivable.

Current wording

Cash flows related to operating activities are dependent on net income, adjustments to net income and changes in working capital. Net cash provided by operating activities during the three months ended December 31, 2024 was $0.6 million and resulted primarily from net non-cash charges of $10.5 million, partially offset by net loss of $4.6 million and unfavorable changes in operating assets and liabilities of $5.4 million. Net cash used in operating activities during the three months ended December 31, 2023 was $9.5 million and resulted primarily from a net loss of $5.8 million and by unfavorable changes in operating assets and liabilities of $11.2 million, partially offset by non-cash charges of $7.6 million. The increase in cash provided by operating activities of $10.0 million during the three months ended December 31, 2024 compared to three months ended December 31, 2023 was primarily due to the increase in non-cash charges and a decrease in income taxes paid of $7.1 million.

Previous wording

Net cash provided by investing activities was $27.8 million during the nine months ended June 30, 2024, which consisted primarily of net sales and maturities of investments of $29.0 million, partially offset by capital expenditures of $1.2 million. Net cash provided by investing activities was $25.6 million during the nine months ended June 30, 2023, which consisted primarily of net sales and maturities of investments of $50.0 million partially offset by capital expenditures of $0.7 million. The increase in cash provided by investing activities of $2.2 million during the nine months ended June 30, 2024 compared to nine months ended June 30, 2023 was primarily due to an increase in net sales and maturities of investments.

Current wording

Net cash provided by investing activities was $0.8 million during the three months ended December 31, 2024, which consisted primarily of net sales and maturities of investments of $1.2 million, partially offset by capital expenditures of $0.3 million. Net cash provided by investing activities was $17.9 million during the three months ended December 31, 2023, which consisted primarily of net sales and maturities of investments of $18.1 million partially offset by capital expenditures of $0.2 million. The decrease in cash provided by investing activities of $17.0 million during the three months ended December 31, 2024 compared to three months ended December 31, 2023 was primarily due to a decrease in net sales and maturities of investments.

Previous wording

Net cash used in financing activities was $12.9 million during the nine months ended June 30, 2024, primarily due to repurchases and retirements of Common Stock of $10.0 million, the payment of $4.6 million of acquisition-related contingent consideration, and payment of revolving credit line issuance costs of $0.3 million, partially offset by $1.0 million of net proceeds from the issuance of Common Stock under our equity plans and $1.1 million of net proceeds from other borrowings. Net cash provided by financing activities was $1.3 million during the nine months ended June 30, 2023, primarily due to proceeds from the issuance of equity plan Common Stock. The decrease in cash provided by financing activities of $14.2 million during the nine months ended June 30, 2024 compared to nine months ended June 30, 2023 was primarily due to repurchases and retirements of Common Stock and the payment of acquisition-related consideration in the nine months ended June 30, 2024.

Current wording

Net cash used in financing activities was $3.1 million during the three months ended December 31, 2024, primarily due to repurchases and retirements of Common Stock of $3.3 million, partially offset by $0.2 million of net proceeds from the issuance of Common Stock under our equity plans. Net cash used in financing activities was $3.1 million during the three months ended December 31, 2023, primarily due to the payment of $4.6 million of acquisition-related contingent consideration, partially offset by $0.9 million of net proceeds from the issuance of equity plan Common Stock and $0.7 million of proceeds from other borrowings. The decrease in cash used in financing activities was immaterial during the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

Previous wording

The Credit Agreement requires the Company to maintain a net leverage ratio of no more than 2.25 to 1.00 and if the Company engages in a share repurchase program, the net leverage ratio may not exceed 2.00 to 1.00. As disclosed in Note 6, on May 13, 2024, the Board authorized and approved a share repurchase program for up to $50.0 million of the currently outstanding shares of Common Stock. As of June 30, 2024 the Company’s net leverage ratio was 2.02 to 1.00 and as such the Company was not in compliance with the net leverage ratio covenant of the Credit Agreement. The Company obtained a waiver from the Bank which covers the compliance period ended June 30, 2024. Additionally, as there are no outstanding borrowings under the Credit Agreement, the Company’s waived non-compliance did not trigger any adverse impacts on the Credit Agreement or the 2026 Notes.

Current wording

The Credit Agreement requires the Company to maintain a net leverage ratio of no more than 2.25 to 1.00 and if the Company engages in a share repurchase program, the net leverage ratio may not exceed 2.00 to 1.00. As disclosed in Note 6, on May 13, 2024, the Board authorized and approved a share repurchase program for up to $50.0 million of the currently outstanding shares of Common Stock. As of December 31, 2024 the Company’s net leverage ratio was 1.79 to 1.00 and as such the Company was in compliance with the net leverage ratio covenant of the Credit Agreement. There are no outstanding borrowings under the Credit Agreement as of December 31, 2024.

Previous wording

The Company made purchases of $10.0 million, or 819,623 shares, during each of the three and nine months ended June 30, 2024 at an average price of $12.25 per share and subsequently retired the shares.

Current wording

The Company made purchases of $3.3 million, or 363,378 shares, during the three months ended December 31, 2024 at an average price of $8.99 per share and subsequently retired the shares.

Previous wording

At June 30, 2024, we had investments of $48.9 million, designated as available-for-sale debt securities, which consisted of commercial paper, corporate issuances, and asset-backed securities, 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. All securities for which maturity or sale is expected within one year are classified as “current” on the condensed consolidated balance sheets. All other securities are classified as “long-term” on the condensed consolidated balance sheets. At June 30, 2024, we had $38.7 million of our available-for-sale securities classified as current and $10.2 million of our available-for-sale securities classified as long-term. At September 30, 2023, we had $74.7 million of our available-for-sale securities classified as current and $1.3 million of our available-for-sale securities classified as long-term.

Current wording

At December 31, 2024, we had investments of $47.3 million, designated as available-for-sale debt securities, which consisted of commercial paper, corporate issuances, and asset-backed securities, 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. All securities for which maturity or sale is expected within one year are classified as “current” on the condensed consolidated balance sheets. All other securities are classified as “long-term” on the condensed consolidated balance sheets. At December 31, 2024, we had $30.6 million of our available-for-sale securities classified as current and $16.7 million of our available-for-sale securities classified as long-term. At September 30, 2024, we had $36.9 million of our available-for-sale securities classified as current and $11.4 million of our available-for-sale securities classified as long-term.

Previous wording

We had working capital of $151.8 million at June 30, 2024 compared to $138.5 million at September 30, 2023. We do not have any other material cash requirements other than those related to leases as described in Note 9. “Commitments and Contingencies” of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q. Based on our current operating plan, we believe the current cash and cash equivalents and cash expected to be generated from operations will be adequate to satisfy our working capital needs for at least the next twelve months from the date the financial statements are filed.

Current wording

We had working capital of $138.3 million at December 31, 2024 compared to $142.9 million at September 30, 2024. We do not have any other material cash requirements other than those related to leases as described in Note 10. “Leases” of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q. Based on our current operating plan, we believe the current cash and cash equivalents and cash expected to be generated from operations will be adequate to satisfy our working capital needs for at least the next twelve months from the date the financial statements are filed for the foreseeable future.