8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): October 16,
2018
BRIDGELINE DIGITAL, INC.
(Exact name of Registrant as specified in its Charter)
Delaware
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001-33567
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52-2263942
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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80 Blanchard Road
Burlington, MA
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01803
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s telephone number, including area code:
(781) 376-5555
(Name,
address, including zip code, and telephone number, including area
code, of agent for service of process)
NOT
APPLICABLE
(Former
Name or Former Address, if Changes Since Last Report)
Check
the appropriate box below if the Form 8-K is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions):
[
] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR
230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17
CFR 240.12b-2) ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act ☐
Item 1.01. Entry into a Material Definitive Agreement.
On
October 16, 2018, Bridgeline Digital, Inc., a Delaware corporation
(the “Company”), entered into an
underwriting agreement (the “Underwriting Agreement”) with
ThinkEquity, a division of Fordham Management, Inc. (the
“Underwriter”),
pursuant to which the Company agreed to issue and sell to the
Underwriter in a firm commitment underwritten public offering (the
“Offering”) an
aggregate of (i) 1,424,000 Class A Units (the “Class A Units”) at a public
offering price of $0.50 per Class A Unit, with each Class A Unit
consisting of one share of the Company’s common stock, par
value $0.001 per share (“Common Stock”), and one five-year
warrant to purchase one share of Common Stock at an exercise price
of $0.50 per share, an amount equal to the public offering price of
the Class A Units (each a “Warrant” and collectively, the
“Warrants”),
and (ii) 4,288 Class B Units (the “Class B Units,” and together with
the Class A Units, the “Units”) at a public offering
price of $1,000 per Class B Unit, with each Class B Unit consisting
of one share of the Company’s newly designated Series B
Convertible Preferred Stock, par value $0.001 per share
(“Series B
Preferred”), with a stated value of $1,000
(“Stated
Value”) and convertible into that number of shares of
Common Stock equal to the Stated Value divided by a conversion
price of $0.50 per share, with all shares of Series B Preferred
Stock convertible into an aggregate of 8,576,000 shares of Common
Stock together with Warrants to purchase 8,576,000 shares of Common
Stock.
In
addition, pursuant to the Underwriting Agreement, the Company
granted the Underwriter a 45-day option (the “Over-allotment Option”) to
purchase up to an additional 1,500,000 shares of Common Stock
and/or additional Warrants to purchase an additional 1,500,000
shares of Common Stock. The Underwriter partially exercised the
Over-allotment Option by electing to purchase from the Company
additional Warrants to purchase 400,000 shares of Common Stock. The
Offering, including the Warrants purchased in the partial exercise
of the over-allotment option, closed on October 19, 2018. The Units
were not certificated and the shares of Common Stock, Series B
Preferred Stock and Warrants comprising the Units are immediately
separable and were issued separately in the Offering.
The
Units were offered by the Company pursuant to a registration
statement on Form S-1 (File No. 333-227430), as amended,
filed with the Securities and Exchange Commission (the
“Commission”),
which was declared effective by the Commission on October 16, 2018
(the “Registration
Statement”).
The
conversion price of the Series B Preferred Stock and exercise
price of the Warrants is subject to appropriate adjustment in the
event of recapitalization events, stock dividends, stock splits,
stock combinations, reclassifications, reorganizations or similar
events affecting the Company’s Common Stock.
The
Warrants are immediately exercisable at a price of $0.50 per share
of Common Stock, a price equal to the public offering price of the
Class A Units, and will expire on October 19, 2023. If at the time
of exercise, there is no effective registration statement
registering, or no current prospectus available for, the issuance
of the shares of Common Stock to the holder, then the Warrants may
only be exercised through a cashless exercise. No fractional shares
of Common Stock will be issued in connection with the exercise of a
Warrant. In lieu of fractional shares, the holder will receive an
amount in cash equal to the fractional amount multiplied by the
fair market value of any such fractional shares. In addition,
so long as at least 25% of the
Warrants issued in the Offering remain outstanding, the Company
will be prohibited from issuing shares of Common Stock or common
stock equivalents (or combinations of units thereof) involving a
Variable Rate Transaction (as such term is defined in the
Warrants); provided,
however, that such prohibition
may be waived upon written consent of the holders of at least 80%
of the Warrants then outstanding.
The
Company may not effect, and holder will not be entitled to,
exercise any Warrant or conversion of the Series B Preferred Stock,
which, upon giving effect to such exercise, would cause (i) the
aggregate number of shares of Common Stock beneficially owned by
the holder (together with its affiliates) to exceed 4.99% (or, at
the election of the holder, 9.99%) of the number of shares of
Common Stock outstanding immediately after giving effect to the
exercise, or (ii) the combined voting power of the Company’s
securities beneficially owned by the holder (together with its
affiliates) to exceed 4.99% (or, at the election of the holder,
9.99%) of the combined voting power of all of the Company’s
securities then outstanding immediately after giving effect to the
exercise or conversion, as such percentage ownership is determined
in accordance with the terms of the Warrants or Series B Preferred
Stock. However, any holder may increase or decrease such percentage
to any other percentage not in excess of 9.99% upon at least 61
days’ prior notice from the holder to us.
The net
proceeds to the Company from the Offering, after deducting the
Underwriter’s fees and expenses, the Company’s
estimated Offering expenses and the repayment of certain term
notes, and excluding the proceeds, if any, from the exercise of the
Warrants issued in the Offering, were approximately $3.4
million. The Company intends to utilize the remaining net
proceeds for research and development, working capital needs,
capital expenditures and other general corporate purposes. In
addition, the Company may use a portion of the net proceeds to
pursue potential strategic acquisitions, although the Company does
not currently have any specific plans or arrangements to do
so.
The
Underwriting Agreement contains representations and warranties that
the parties made to, and solely for the benefit of, the other in
the context of all of the terms and conditions of that agreement
and in the context of the specific relationship between the
parties. The provisions of the Underwriting Agreement,
including the representations and warranties contained therein, are
not for the benefit of any party other than the parties to such
agreements and are not intended as documents for investors and the
public to obtain factual information about the current state of
affairs of the parties to those documents and agreements. Rather,
investors and the public should look to other disclosures contained
in the Company’s filings with the Securities and Exchange
Commission.
The
foregoing summaries of the terms of the Underwriting Agreement and
the Warrants are subject to, and qualified in their entirety by
reference to, the Underwriting Agreement and the form of Warrant,
which are attached to this Current Report on Form 8-K as Exhibits
1.1, and 4.1, respectively, and are incorporated herein by
reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
On
October 17, 2018, in connection with the Offering, the Company
filed the Certificate of Designation of Preferences, Rights and
Limitations of Series B Convertible Preferred Stock (the
“Certificate of
Designation”), with the Secretary of State of the
State of Delaware – Division of Corporations, designating
5,000 shares of the Company’s preferred stock as Series B
Preferred, each share of Series B Preferred with a Stated Value of
$1,000 per share. With certain exceptions, shares of Series B
Preferred rank on par with the Company’s Common Stock, in
each case, as to dividend rights and distributions of assets upon
liquidation, dissolution or winding up of the Company, and rank
junior to the Company’s Series A Convertible Preferred Stock
(the “Series A
Preferred”).
Each share of Series B Preferred is convertible
into that number of shares of the Company’s Common Stock
(“Conversion
Shares”) equal to the
Stated Value, divided by $0.50, the public offering price of the
Class A Units in the Offering, which conversion rate is subject to
adjustment in accordance with the terms of the Certificate of
Designation. Holders of Series B Preferred may elect to convert
shares of Series B Preferred into Conversion Shares at any time.
Subject to the Beneficial Ownership Limitation, as defined below,
holders of Series B Preferred will have the right to vote, on an
as-converted basis, with the holders of the Company’s Common
Stock on any matter presented to the Company’s stockholders
for their action or consideration. Holders of Series B
Preferred are prohibited from converting Series B Preferred into
shares of Common Stock if, as a result of such conversion, the
holder, together with its affiliates, would own more than 4.99% of
the total number of shares of Common Stock then issued and
outstanding (“Beneficial
Ownership Limitation”). However, any holder may
increase or decrease such percentage to any other percentage not in
excess of 9.99% upon at least 61 days’ prior notice from the
holder to the Company.
Shares
of the Series B Preferred Stock are not entitled to receive any
dividends, unless and until specifically declared by the
Company’s board of directors. Subject to any senior rights of
the Company’s Series A Preferred, the holders of the Series B
Preferred Stock will participate, on an as-if-converted-to-common
stock basis, in any dividends to the holders of Common Stock. The
Company is not obligated to redeem or repurchase any shares of
Series B Preferred Stock. Shares of Series B Preferred Stock are
not otherwise entitled to any redemption rights or mandatory
sinking fund or analogous fund provisions.
The
foregoing description of the Series B Preferred is qualified, in
its entirety, by the full text of the Certificate of Designation, a
copy of which is attached to this Current Report on Form 8-K as
Exhibit 3.1, and is incorporated by reference
herein.
Item 8.01. Other Events.
On
October 16, 2018, the Company issued a press release announcing the
pricing of the Offering. On October 19, 2018, the Company issued a
press release announcing the closing of the Offering. A copy of the
press releases are attached to this Current Report on Form 8-K as
Exhibits 99.1 and 99.2, respectively, and are incorporated herein
by reference.
Item 9.01 Financial Statements and Exhibits
See
Exhibit Index.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly
authorized.
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BRIDGELINE DIGITAL, INC.
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(Registrant)
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By:
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/s/ Roger
Kahn
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Roger
Kahn
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Chief
Executive Officer
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Date:
October 19, 2018
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Exhibit Index
Exhibit Number
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Description
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Underwriting
Agreement by and between Bridgeline Digital, Inc. and ThinkEquity,
a division of Fordham Financial Management, Inc., dated October 16,
2018
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Certificate
of Designation of Series B Convertible Preferred Stock
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Form of
Warrant
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Press
Release issued by Bridgeline Digital, Inc., dated October 16,
2018
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Press
Release issued by Bridgeline Digital, Inc., dated October 19,
2018
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