Under the terms of the letter of intent, it is contemplated that Mitek will issue a three-year $3.0 million secured fixed price convertible term note with a variable rate coupon based on the WSJ Prime Rate.

The letter of intent anticipates that the Term Note will be convertible into Mitek common stock at a fixed conversion price no higher than 102% of the average closing price of Mitek's common stock for the ten trading days prior to this announcement. It is also anticipated that Laurus Funds will be issued warrants with a term of seven years to purchase shares of Mitek's common stock.

"We look forward to closing this transaction with Laurus Funds," stated Mitek's President and CEO, James DeBello. "We believe this arrangement will provide Mitek additional capital to assist in expanding our sales and marketing initiatives to deploy check fraud diagnostics and imaging solutions to financial institutions. We view this transaction as extremely positive for Mitek and our shareholders."

The letter of intent is not a binding agreement by Laurus Funds to provide the financing, such agreement will arise only upon the execution and delivery by Mitek of definitive agreements and the fulfillment, to the satisfaction of Laurus Funds, of the conditions precedent set forth therein. In the event Laurus funds elects not to consummate the transactions contemplated hereby or Mitek is unable for any reason to close the transaction in accordance with the terms and conditions of this letter on or before June 30, 2004, the terms of the letter of intent shall automatically.