please see important note about forwardlooking statements at the beginning of this form 10-k. overview mitek systems , inc. is engaged in the development , sale and service of its proprietary software solutions related to mobile imaging solutions and intelligent character recognition software . we apply our patented technology in image capture , correction and intelligent data extraction in the mobile financial and business applications market . our technology for extracting data from any image taken using camera-equipped smartphones and tablets enables the development of consumer-friendly software products that use the camera as a simple mechanism to enter data and complete transactions . users take a picture of the document and our products correct image distortion , extract relevant data , route images to their desired location and process transactions through users ' financial institutions . our mobile deposit ® product is software that allows users to remotely deposit a check using their camera-equipped smartphone or tablet . as of september 30 , 2012 , 564 financial institutions , including 28 of the top 50 u.s. retail banks and payment processing companies , have signed agreements to deploy our mobile deposit ® product . of the 564 financial institutions , 205 have deployed our mobile deposit ® product with their customers . other mobile imaging software solutions we offer include mobile photo bill pay , a mobile bill payment product that allows users to pay their bills using their camera-equipped smartphone or tablet , mobile balance transfer , a product that allows credit card issuers to provide an offer to users and transfer an existing credit card balance by capturing an image of the user 's current credit card statement , mobile enrollment  , a product that enables users to enroll their checking account as a funding source for mobile payments by taking a photo of a blank check with their camera-equipped smartphone or tablet , and mobile photo quoting , a product that enables users to receive insurance quotes by using their camera-equipped smartphone or tablet to take a picture of their driver 's license and insurance card . our mobile imaging software solutions can be deployed on all major smartphone and tablet operating systems . we market and sell our mobile imaging software solutions through channel partners or directly to enterprise customers and end-users that typically purchase licenses based on the number of transactions or subscribers that use our mobile software . our 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 . market opportunities , challenges and risks the acceptance of mobile banking by financial institutions and their customers has helped drive demand for our mobile imaging software products . during fiscal year 2012 , a significant number of financial institutions deployed our mobile imaging software products , particularly mobile deposit ® , as part of their offering of mobile banking choices for their customers . we believe that financial institutions see our patented solutions as a way to provide an all-around better retail customer experience in mobile banking . to continue the growth in market acceptance , we must continue to offer mobile imaging software products that address the growing market for mobile banking and mobile imaging solutions sold into other vertical 19 markets . factors adversely affecting the pricing of or demand for our mobile applications , such as competition from other products or alternative technologies , any decline in the demand for mobile applications or negative publicity , or the obsolescence of the software environments in which our products operate , could result in lower revenues or gross margins . further , because most of our revenues are derived from a single type of technology , our product concentration may make us especially vulnerable to fluctuations in market demand and competition from alternative technologies , which could reduce our revenues . the implementation cycles for our software products and services by our channel partners and customers can be lengthy , often a minimum of three to six months and sometimes longer for larger customers , subject to delays and require significant investments . if implementation of our software products by our channel partners and customers are delayed or otherwise not completed , our business , financial condition , and results of operations may be adversely affected . we derive revenue predominately from the sale of software licenses to use the products covered by our patented technologies , such as mobile deposit ® , and to a lesser extent , by providing maintenance and professional services for the products we offer . the revenue we derive from these software licenses is primarily derived from product sales to our channel partners . revenues related to our licenses for mobile imaging software products are required to be recognized upon satisfaction of all applicable revenue recognition criteria . the recognition of future revenues from these licenses is dependent on a number of factors , including but not limited to the timing of implementation of our products by our channel partners and customers and the timing of additional software licenses and or license renewals by our channel partners and customers . during fiscal years 2012 and 2011 , sales of software licenses to channel partners have comprised a significant part of our revenue each quarter . this customer concentration is attributable to the timing of the purchase or renewal of licenses and does not represent a dependence on any channel partner . story_separator_special_tag as a percentage of net sales , general and administrative expenses increased to 62 % in 2012 compared to 33 % in 2011. other income ( expense ) , net interest and other expense , net was $ 239,984 in 2012 compared to $ 427,547 in 2011 , a decrease of $ 187,563 , or 44 % . during fiscal year 2011 , we incurred expenses associated with the accretion of the discount on our convertible debentures and accrued interest on the principal amount of those convertible debentures , including the remaining unamortized discount of approximately $ 320,000 related to the beneficial conversion feature at the time of the conversion of the debentures . these expenses did not recur in fiscal year 2012. this decrease was partially offset by an increase in amortization expense related to investment returns in fiscal year 2012. interest income was $ 277,144 in 2012 compared to $ 48,584 in 2011 , an increase of $ 228 , 560 due to higher cash balances and related investment returns during 2012 . ( benefit from ) provision for income taxes we recorded an income tax benefit of $ 4,008 in 2012. in 2011 , we recorded a provision for income taxes of $ 2,492 , primarily for state franchise taxes . story_separator_special_tag these contractual arrangements is fully described in note 1 to our financial statements included in this form 10-k. we consider many factors when applying gaap to revenue recognition . these factors include , but are not limited to , whether : persuasive evidence of an arrangement exists ; delivery of the product or performance of the service has occurred ; the fees are fixed or determinable ; collection of the contractual fee is probable ; and vendor-specific objective evidence of the fair value of undelivered elements or other appropriate method of revenue allocation exists . 24 each of the relevant factors is analyzed to determine its impact , individually and collectively with other factors , on the revenue to be recognized for any particular contract with a customer . management is required to make judgments regarding the significance of each factor in applying the revenue recognition standards , as well as whether or not each factor complies with such standards . any misjudgment or error by management in its evaluation of the factors and the application of the standards , especially with respect to complex or new types of transactions , could have a material adverse effect on our future revenues and operating results . accounts receivable we consistently monitor collections from our customers and maintain a provision for estimated credit losses that is based on historical experience and on specific customer collection issues . while such credit losses have historically been within our expectations and the provisions established , we can not guarantee that we will continue to experience the same credit loss rates that we have in the past . since our revenue recognition policy requires customers to be deemed creditworthy , our accounts receivable are based on customers whose payment is reasonably assured . our accounts receivable are derived from sales to a wide variety of customers . we do not believe a change in liquidity of any one customer or our inability to collect from any one customer would have a material adverse impact on our financial position . investments we determine the fair value of our assets and liabilities based on 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 maximize the use of observable inputs and minimize the use of unobservable inputs . we use a fair value hierarchy with three levels of inputs , of which the first two are considered observable and the last unobservable , to measure fair value : level 1quoted prices in active markets for identical assets or liabilities ; level 2inputs 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 3unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities . in using this fair value hierarchy , management may be required to make assumptions about pricing by market participants and assumptions about risk , specifically when using unobservable inputs to determine fair value . these assumptions are subjective in nature and may significantly affect our results of operations . fair value of equity instruments the valuation of certain items , including valuation of warrants , the beneficial conversion feature related to convertible debt and compensation expense related to stock options granted , involves significant estimates based on underlying assumptions made by management . the valuation of warrants and stock options are based upon a black-scholes valuation model , which involves estimates of stock volatility , expected life of the instruments and other assumptions . deferred income taxes deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes . we maintain 25 a valuation allowance against deferred tax assets due to uncertainty regarding the future realization based on historical taxable income , projected future taxable income , and the expected timing of the reversals of existing temporary differences . until such time as we can demonstrate that we will no longer incur losses or if we are unable to generate sufficient future taxable income , we could be required to maintain the valuation allowance against

liquidity and capital resources on september 30 , 2012 , we had $ 14,607,317 in cash and cash equivalents and short-term and long-term investments compared to $ 16,260,584 on september 30 , 2011 , a decrease of $ 1,653,267 , or 10 % . the decrease in cash and cash equivalents and short-term and long-term investments was primarily due to an increase in cash used in operating activities . 22 credit facility in january 2011 , we entered into a loan and security agreement with our primary operating bank . the loan agreement permits us to borrow , repay and re-borrow , from time to time until january 31 , 2013 , up to $ 400,000 subject to the terms and conditions of the agreement . our obligations under the loan agreement are secured by a security interest in our equipment and other personal property . interest on the credit facility accrues at an annual rate equal to one percentage point above the prime rate , fixed on the date of each advance . interest on the outstanding amount under the loan agreement is payable monthly . the loan agreement contains customary covenants for credit facilities of this type , including limitations on the disposition of assets , mergers and reorganizations . we are also obligated to meet certain financial covenants under the loan agreement , including minimum liquidity , for which we were in compliance as of september 30 , 2012. we had no amounts outstanding under this credit facility as of september 30 , 2012. net cash ( used in ) provided by operating activities net cash used in operating activities during the fiscal year ended september 30 , 2012 was $ 1,778,764 and resulted primarily from hiring additional personnel and other investments in the business .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources on september 30 , 2012 , we had $ 14,607,317 in cash and cash equivalents and short-term and long-term investments compared to $ 16,260,584 on september 30 , 2011 , a decrease of $ 1,653,267 , or 10 % . the decrease in cash and cash equivalents and short-term and long-term investments was primarily due to an increase in cash used in operating activities . 22 credit facility in january 2011 , we entered into a loan and security agreement with our primary operating bank . the loan agreement permits us to borrow , repay and re-borrow , from time to time until january 31 , 2013 , up to $ 400,000 subject to the terms and conditions of the agreement . our obligations under the loan agreement are secured by a security interest in our equipment and other personal property . interest on the credit facility accrues at an annual rate equal to one percentage point above the prime rate , fixed on the date of each advance . interest on the outstanding amount under the loan agreement is payable monthly . the loan agreement contains customary covenants for credit facilities of this type , including limitations on the disposition of assets , mergers and reorganizations . we are also obligated to meet certain financial covenants under the loan agreement , including minimum liquidity , for which we were in compliance as of september 30 , 2012. we had no amounts outstanding under this credit facility as of september 30 , 2012. net cash ( used in ) provided by operating activities net cash used in operating activities during the fiscal year ended september 30 , 2012 was $ 1,778,764 and resulted primarily from hiring additional personnel and other investments in the business .
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 Suspicious Activity Report : please see important note about forwardlooking statements at the beginning of this form 10-k. overview mitek systems , inc. is engaged in the development , sale and service of its proprietary software solutions related to mobile imaging solutions and intelligent character recognition software . we apply our patented technology in image capture , correction and intelligent data extraction in the mobile financial and business applications market . our technology for extracting data from any image taken using camera-equipped smartphones and tablets enables the development of consumer-friendly software products that use the camera as a simple mechanism to enter data and complete transactions . users take a picture of the document and our products correct image distortion , extract relevant data , route images to their desired location and process transactions through users ' financial institutions . our mobile deposit ® product is software that allows users to remotely deposit a check using their camera-equipped smartphone or tablet . as of september 30 , 2012 , 564 financial institutions , including 28 of the top 50 u.s. retail banks and payment processing companies , have signed agreements to deploy our mobile deposit ® product . of the 564 financial institutions , 205 have deployed our mobile deposit ® product with their customers . other mobile imaging software solutions we offer include mobile photo bill pay , a mobile bill payment product that allows users to pay their bills using their camera-equipped smartphone or tablet , mobile balance transfer , a product that allows credit card issuers to provide an offer to users and transfer an existing credit card balance by capturing an image of the user 's current credit card statement , mobile enrollment  , a product that enables users to enroll their checking account as a funding source for mobile payments by taking a photo of a blank check with their camera-equipped smartphone or tablet , and mobile photo quoting , a product that enables users to receive insurance quotes by using their camera-equipped smartphone or tablet to take a picture of their driver 's license and insurance card . our mobile imaging software solutions can be deployed on all major smartphone and tablet operating systems . we market and sell our mobile imaging software solutions through channel partners or directly to enterprise customers and end-users that typically purchase licenses based on the number of transactions or subscribers that use our mobile software . our 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 . market opportunities , challenges and risks the acceptance of mobile banking by financial institutions and their customers has helped drive demand for our mobile imaging software products . during fiscal year 2012 , a significant number of financial institutions deployed our mobile imaging software products , particularly mobile deposit ® , as part of their offering of mobile banking choices for their customers . we believe that financial institutions see our patented solutions as a way to provide an all-around better retail customer experience in mobile banking . to continue the growth in market acceptance , we must continue to offer mobile imaging software products that address the growing market for mobile banking and mobile imaging solutions sold into other vertical 19 markets . factors adversely affecting the pricing of or demand for our mobile applications , such as competition from other products or alternative technologies , any decline in the demand for mobile applications or negative publicity , or the obsolescence of the software environments in which our products operate , could result in lower revenues or gross margins . further , because most of our revenues are derived from a single type of technology , our product concentration may make us especially vulnerable to fluctuations in market demand and competition from alternative technologies , which could reduce our revenues . the implementation cycles for our software products and services by our channel partners and customers can be lengthy , often a minimum of three to six months and sometimes longer for larger customers , subject to delays and require significant investments . if implementation of our software products by our channel partners and customers are delayed or otherwise not completed , our business , financial condition , and results of operations may be adversely affected . we derive revenue predominately from the sale of software licenses to use the products covered by our patented technologies , such as mobile deposit ® , and to a lesser extent , by providing maintenance and professional services for the products we offer . the revenue we derive from these software licenses is primarily derived from product sales to our channel partners . revenues related to our licenses for mobile imaging software products are required to be recognized upon satisfaction of all applicable revenue recognition criteria . the recognition of future revenues from these licenses is dependent on a number of factors , including but not limited to the timing of implementation of our products by our channel partners and customers and the timing of additional software licenses and or license renewals by our channel partners and customers . during fiscal years 2012 and 2011 , sales of software licenses to channel partners have comprised a significant part of our revenue each quarter . this customer concentration is attributable to the timing of the purchase or renewal of licenses and does not represent a dependence on any channel partner . story_separator_special_tag as a percentage of net sales , general and administrative expenses increased to 62 % in 2012 compared to 33 % in 2011. other income ( expense ) , net interest and other expense , net was $ 239,984 in 2012 compared to $ 427,547 in 2011 , a decrease of $ 187,563 , or 44 % . during fiscal year 2011 , we incurred expenses associated with the accretion of the discount on our convertible debentures and accrued interest on the principal amount of those convertible debentures , including the remaining unamortized discount of approximately $ 320,000 related to the beneficial conversion feature at the time of the conversion of the debentures . these expenses did not recur in fiscal year 2012. this decrease was partially offset by an increase in amortization expense related to investment returns in fiscal year 2012. interest income was $ 277,144 in 2012 compared to $ 48,584 in 2011 , an increase of $ 228 , 560 due to higher cash balances and related investment returns during 2012 . ( benefit from ) provision for income taxes we recorded an income tax benefit of $ 4,008 in 2012. in 2011 , we recorded a provision for income taxes of $ 2,492 , primarily for state franchise taxes . story_separator_special_tag these contractual arrangements is fully described in note 1 to our financial statements included in this form 10-k. we consider many factors when applying gaap to revenue recognition . these factors include , but are not limited to , whether : persuasive evidence of an arrangement exists ; delivery of the product or performance of the service has occurred ; the fees are fixed or determinable ; collection of the contractual fee is probable ; and vendor-specific objective evidence of the fair value of undelivered elements or other appropriate method of revenue allocation exists . 24 each of the relevant factors is analyzed to determine its impact , individually and collectively with other factors , on the revenue to be recognized for any particular contract with a customer . management is required to make judgments regarding the significance of each factor in applying the revenue recognition standards , as well as whether or not each factor complies with such standards . any misjudgment or error by management in its evaluation of the factors and the application of the standards , especially with respect to complex or new types of transactions , could have a material adverse effect on our future revenues and operating results . accounts receivable we consistently monitor collections from our customers and maintain a provision for estimated credit losses that is based on historical experience and on specific customer collection issues . while such credit losses have historically been within our expectations and the provisions established , we can not guarantee that we will continue to experience the same credit loss rates that we have in the past . since our revenue recognition policy requires customers to be deemed creditworthy , our accounts receivable are based on customers whose payment is reasonably assured . our accounts receivable are derived from sales to a wide variety of customers . we do not believe a change in liquidity of any one customer or our inability to collect from any one customer would have a material adverse impact on our financial position . investments we determine the fair value of our assets and liabilities based on 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 maximize the use of observable inputs and minimize the use of unobservable inputs . we use a fair value hierarchy with three levels of inputs , of which the first two are considered observable and the last unobservable , to measure fair value : level 1quoted prices in active markets for identical assets or liabilities ; level 2inputs 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 3unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities . in using this fair value hierarchy , management may be required to make assumptions about pricing by market participants and assumptions about risk , specifically when using unobservable inputs to determine fair value . these assumptions are subjective in nature and may significantly affect our results of operations . fair value of equity instruments the valuation of certain items , including valuation of warrants , the beneficial conversion feature related to convertible debt and compensation expense related to stock options granted , involves significant estimates based on underlying assumptions made by management . the valuation of warrants and stock options are based upon a black-scholes valuation model , which involves estimates of stock volatility , expected life of the instruments and other assumptions . deferred income taxes deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes . we maintain 25 a valuation allowance against deferred tax assets due to uncertainty regarding the future realization based on historical taxable income , projected future taxable income , and the expected timing of the reversals of existing temporary differences . until such time as we can demonstrate that we will no longer incur losses or if we are unable to generate sufficient future taxable income , we could be required to maintain the valuation allowance against

