As filed with the Securities and Exchange Commission on September
19, 2018
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BRIDGELINE DIGITAL, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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7372
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52-2263942
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(State or Other Jurisdiction of
Incorporation or Organization)
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(Primary
Standard Industrial
Classification
Code Number)
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(I.R.S. Employer
Identification Number)
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80 Blanchard Road
Burlington, MA 01803
(781) 376-5555
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant’s Principal Executive
Offices)
Roger
Kahn
President and Chief Executive Officer
Bridgeline Digital, Inc.
80 Blanchard Road
Burlington, MA 01803
(781) 376-5555
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to
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Daniel W. Rumsey, Esq.
Jessica R. Sudweeks, Esq.
Disclosure Law Group, a Professional Corporation
600 West Broadway, Suite 700
San Diego, CA 92101
Telephone: (619) 272-7050
Facsimile: (619) 330-2101
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Leslie Marlow, Esq.
Hank
Gracin, Esq.
Patrick J. Egan, Esq.
Gracin & Marlow, LLP
The Chrysler Building
405 Lexington Avenue, 26th Floor
New York, NY 10174
Telephone: (212) 907-6457
Facsimile: (212) 208-4657
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Approximate date of
commencement of proposed sale to the public: As soon as practicable after this registration
statement becomes effective.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, check the following
box. ☑
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the
Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration
statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange
Act:
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Large accelerated filer
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☐
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Accelerated
filer
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☐
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Non-accelerated
filer
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☐
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Smaller reporting company
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☑
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Emerging
growth company
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☐
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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. ☐
CALCULATION OF REGISTRATION
FEE
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Title
of each class of securities to be registered
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Proposed
maximum aggregate offering
price
(1)
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Amount
of registration fee
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Common
Stock, par value $0.001 per share(2)
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$6,250,000
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$778.13
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Representative’s
Warrants(3)
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—
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—
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Shares of Common
Stock underlying Representative’s Warrants(2)(4)
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$390,625
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$48.64
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Total
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$6,640,625
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$826.77
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(1)
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Estimated
solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(o) of the Securities Act of
1933, as amended (the “Securities Act”). Includes shares
that the underwriters have the option to purchase to cover
over-allotments, if any.
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(2)
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Pursuant
to Rule 416 under the Securities Act, the shares of common stock
being registered hereunder also include such indeterminate number
of additional shares of common stock as may be issued after the
date hereof as a result of stock splits, stock dividends or similar
transactions.
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(3)
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No
registration fee required pursuant to Rule 457(g) under the
Securities Act.
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(4)
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Estimated
solely for the purpose of calculating the registration fee pursuant
to Rule 457(g) under the Securities Act.
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The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933, as amended, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may
be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell
these securities nor does it seek an offer to buy these securities
in any jurisdiction where the offer or sale is not
permitted.
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PRELIMINARY PROSPECTUS
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SUBJECT TO COMPLETION
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DATED SEPTEMBER 19, 2018
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Shares
Common Stock
Bridgeline
Digital, Inc.
We are offering shares of our common
stock pursuant to this prospectus.
Our
common stock is currently listed on the Nasdaq Capital Market under
the symbol “BLIN.” The last reported sale price of our
common stock on September 18, 2018
was $1.02 per
share.
Investing in our securities involves risks. See
“Risk
Factors”
beginning on page 8
of this prospectus for a discussion of
the risks that you should consider in connection with an investment
in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
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Per
Share
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Total
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Public offering price
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$
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$
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Underwriting discounts and commissions (1)
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$
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$
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Proceeds, before expenses, to us
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$
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$
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(1)
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We have also agreed to issue to the representative of
the underwriters a five-year warrant to purchase up to
shares of our common stock, an amount
equal to 5% of the shares of common stock offered pursuant to this
prospectus, with an exercise price equal to the greater of (i) 125%
of the public offering price per share in this offering and (ii)
the closing price of our common stock on the closing date of this
offering, as reported by the Nasdaq Capital Market “the
Representative's
Warrants.”
In addition, we have also agreed to reimburse the underwriters for
certain expenses. See “Underwriting”
beginning on page 27 for
additional information regarding this warrant and underwriting
compensation generally.
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We have granted the underwriters an
option for a period of 45 days from the date of this prospectus to
purchase up to an additional
shares of our common stock, an
amount equal to 15% of the number of shares offered hereby, on the
same terms and conditions described herein, solely to cover
over-allotments, if any. See “Underwriting”
for more information.
The underwriters expect to deliver the shares of common stock
against payment on or about , 2018,
subject to customary closing conditions.
ThinkEquity
a division of Fordham Financial Management, Inc.
The date of this prospectus is
,
2018
BRIDGELINE DIGITAL, INC.
TABLE OF CONTENTS
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Page
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1
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2
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8
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15
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16
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17
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18
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19
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21
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22
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25
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27
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32
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32
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32
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33
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33
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ABOUT THIS PROSPECTUS
We have not, and the underwriters have not, authorized anyone to
provide you with information different than that which is contained
in or incorporated by reference in this prospectus or in any free
writing prospectus that we have authorized for use in connection
with this offering. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and
sales are permitted. The distribution of this prospectus and the
offering of the securities in certain jurisdictions may be
restricted by law. This prospectus does not constitute, and may not
be used in connection with, an offer to sell, or a solicitation of
an offer to buy, any securities offered by this prospectus by any
person in any jurisdiction in which it is unlawful for such person
to make such an offer or solicitation. You should assume that the
information appearing in this prospectus, the documents
incorporated by reference in this prospectus, and in any free
writing prospectus that we have authorized for use in connection
with this offering, is accurate only as of the date of those
respective documents. Our business, financial condition, results of
operations and prospects may have changed since those dates. You
should read this prospectus, the documents incorporated by
reference in this prospectus, and any free writing prospectus that
we have authorized for use in connection with this offering, in
their entirety before making an investment decision. You should
also read and consider the information in the documents to which we
have referred you in the sections of this prospectus entitled
“Where You Can Find More
Information” and
“Incorporation of Certain
Information by Reference.”
For investors outside of the United States: No action is being
taken in any jurisdiction outside of the United States that would
permit a public offering of the shares of our common stock or
possession or distribution of this prospectus in any such
jurisdiction. Persons outside of the United States who come into
possession of this prospectus must inform themselves about, and
observe any restrictions relating to, the offering of the shares of
common stock and the distribution of this prospectus outside of the
United States.
We further note that the representations, warranties and covenants
made by us in any agreement that is filed as an exhibit to any
document that is incorporated by reference in this prospectus were
made solely for the benefit of the parties to such agreement,
including, in some cases, for the purpose of allocating risk among
the parties to such agreements, and should not be deemed to be a
representation, warranty or covenant to you. Moreover, such
representations, warranties or covenants were accurate only as of
the date when made. Accordingly, such representations, warranties
and covenants should not be relied on as accurately representing
the current state of our affairs.
Unless the context requires otherwise, references in this
prospectus to “Bridgeline,” “Bridgeline
Digital,” the
“Company,” “we,” “us,” and “our” refer to Bridgeline Digital, Inc., a
Delaware corporation.
This
prospectus and the information incorporated herein by reference
include trademarks, servicemarks and tradenames owned by us or
other companies. All trademarks, servicemarks and tradenames
included or incorporated by reference in this prospectus are the
property of their respective owners.
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. This summary does not contain all of the information
you should consider before investing in our securities. Before
deciding to invest in our securities, you should read this entire
prospectus carefully, including the section of this prospectus
entitled “Risk Factors” beginning on page
8. All brand names or trademarks
appearing in this report are the property of their respective
holders. Unless the context requires otherwise, references in this
report to “Bridgeline,” the “Company,”
“we,” “us,” and “our” refer to
Bridgeline Digital, Inc., a Delaware
corporation.
Overview
Bridgeline Digital, The Digital Engagement
Company™, helps customers maximize the performance of
their full digital experience from websites and intranets to online
stores. Bridgeline’s Unbound platform integrates Web Content
Management, eCommerce, eMarketing, Social Media management, and Web
Analytics (Insights) with the goal of assisting marketers deliver
digital experiences that attract, engage and convert their
customers across all channels. Bridgeline’s Unbound platform
combined with its digital services assists customers in maximizing
on-line revenue, improving customer service and loyalty, enhancing
employee knowledge, and reducing operational costs. Our
Unbound franchise product is a platform that empowers large
franchise and multi-unit organizations with state-of-the-art web
engagement management while providing superior oversight of
corporate branding. Our Unbound franchise product also deeply
integrates content management, eCommerce, eMarketing and web
analytics on one unified platform.
The Unbound platform is delivered through a cloud-based software as
a service (“SaaS”) multi-tenant business model, whose
flexible architecture provides customers with state of the art
deployment providing maintenance, daily technical operation and
support; or via a traditional perpetual licensing business model,
in which the software resides on a dedicated server in either the
customer’s facility or hosted by Bridgeline via a cloud-based
hosted services model.
The
Bridgeline Unbound Platform is an award-winning application
recognized around the globe. Our teams of Microsoft Gold©
certified developers have won over 100 industry related
awards. In
2017, our Marketing Automation platform was named a 2017 SIIA CODiE
Award finalist in the Best Marketing Solution category. In 2016,
CIO Review selected
Bridgeline Unbound (formerly iAPPS) as one of the 20 Most Promising
Digital Marketing Solution Providers. This
followed accolades from the SIIA (Software and Information Industry
Association) which recognized Content Manager with the 2015 SIIA
CODiE Award for Best Web Content Management Platform. Also in 2015,
EContent magazine named
Bridgeline’s Unbound Digital Engagement Platform to its
Trendsetting Products list. The list of 75 products and platforms
was compiled by EContent’s editorial staff, and selections
were based on each offering’s uniqueness and importance to
digital publishing, media, and marketing. We were also recognized
in 2015 as a strong performer by Forrester Research, Inc in its
independence report, “The Forrester Wave ™:
Through-Channel Marketing Automation Platforms, Q3 2015.” In
recent years, our Content Manager and Commerce products were
selected as finalists for the 2014, 2013, and 2012 CODiE Awards for
Best Content Management Solution and Best Electronic Commerce
Solution, globally. In 2014 and 2013, Bridgeline Digital won
twenty-five Horizon Interactive Awards for outstanding development
of web applications and websites. Also in 2013, the Web Marketing
Association sponsored Internet Advertising Competition honored
Bridgeline Digital with three awards for customer websites and B2B
Magazine selected Bridgeline Digital as one of the Top Interactive
Technology companies in the United States. KMWorld Magazine Editors selected
Bridgeline Digital as one of the 100 Companies That Matter in
Knowledge Management and also selected Bridgeline’s Unbound
(formerly iAPPS) as a Trend Setting Product in 2013.
Corporate Information
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THE OFFERING
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The following summary contains general information about this
offering. The summary is not intended to be complete. You should
read the full text and more specific details contained elsewhere in
this prospectus.
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Issuer
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Bridgeline
Digital, Inc.
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Common Stock We are Offering
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shares of common
stock.
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Option to Purchase Additional Shares of Common Stock
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We have granted the underwriters an option for a period of 45 days
from the date of this prospectus to purchase up to
additional shares of our
common stock, an amount equal to 15% of the number of shares
offered hereby, on the same terms and conditions as set forth
herein, to cover over-allotments, if any.
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Common
Stock to be Outstanding Immediately After this
Offering
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shares (or shares if the underwriters
exercise their option to purchase additional shares in
full).
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Use of Proceeds
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We estimate that we will receive net proceeds from this offering of
approximately $ million, or approximately $
million if the underwriters exercise their option to
purchase additional shares in full, in each case, after deducting
underwriting discounts and our estimated offering
expenses.
We currently intend to use a portion of the net proceeds that we
receive from this offering to repay certain term notes, and to
utilize the remaining net proceeds for research and development,
working capital needs, capital expenditures and other general
corporate purposes. In addition, we may use a portion of the net
proceeds from this offering to pursue potential strategic
acquisitions, although we do not have any specific plans or
arrangements to do so at this time. See “Use of
Proceeds” on page
16 of this
prospectus.
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Risk Factors
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Investing in our securities involves significant risks. Before
making a decision whether to invest in our securities, please read
the information contained in or incorporated by reference under the
heading “Risk
Factors” in this
prospectus, the documents we have incorporated by reference herein,
and under similar headings in other documents filed after the date
hereof and incorporated by reference into this prospectus. See
“Incorporation of Certain
Information by Reference”
and “Where You Can Find More
Information.”
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Nasdaq Capital Market Symbol
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“BLIN.”
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The number of shares of our common stock that will
be outstanding immediately after the offering is based on 4,241,225
shares outstanding as of September 18, 2018. Unless we specifically state otherwise,
the share information in this prospectus excludes:
●
459,846
shares of our common stock issuable upon the exercise of stock
options outstanding at a weighted-average exercise price of $6.81
per share;
●
584,308
shares of common stock issuable upon the exercise of warrants at a
weighted-average exercise price of $6.58 per share;
●
260,534
shares of common stock reserved for future issuance under our 2016
Plan;
●
161,455 shares of common stock issuable upon
conversion of 262,364 outstanding shares of Series A Convertible
Preferred Stock
(“Series A
Preferred”);
and
●
shares of common stock issuable upon the
exercise of the Representative’s Warrants to be issued to the
representative of the underwriters upon closing of this
offering.
The above numbers reflect the 1-for-5 stock split effectuated by
the Company on July 24, 2017.
Unless otherwise indicated, all information in this prospectus
assumes:
●
no conversion of
outstanding shares of Series A Preferred;
●
no exercise of
outstanding warrants or the outstanding stock options issued under
the 2016 Plan, as described above; and
●
no exercise by the
underwriters of their option to purchase up to an
additional
shares of common stock from us in this offering to cover
over-allotments, if any.
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-4-
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SUMMARY FINANCIAL DATA
The following tables set forth a summary of our historical
financial data as of, and for the periods ended on, the dates
indicated. We have derived the statements of operations data for
the years ended September 30, 2017 and 2016 from our audited
financial statements and the related notes appearing in our Annual
Report on Form 10-K for the year ended September 30, 2017 (the
“2017
10-K”), which is
incorporated by reference into this prospectus. The statements of
operations data for the nine-months ended June 30, 2018 and 2017
and the balance sheet data as of June 30, 2018 have been derived
from our unaudited financial statements appearing in our Quarterly
Report on Form 10-Q for the period ended June 30, 2018 (the
“June
10-Q”), which is
incorporated by reference into this prospectus. In the opinion of
the management, the unaudited data reflects all adjustments,
consisting of normal and recurring adjustments, necessary for a
fair presentation of results as of and for these
periods.
The following summary financial data should be read together with
our consolidated financial statements and related notes appearing
in the 2017 10-K and in the June 10-Q, as well as in the sections
entitled “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” in each of the
2017 10-K and in our June 10-Q, each of which are incorporated by
reference into this prospectus. Our audited consolidated financial
statements have been prepared in U.S. dollars in accordance with
U.S. generally accepted accounting principles. Our historical results for any prior period are
not indicative of our future results, and our results for the
nine-months ended June 30, 2018 may not be indicative of our
results for the year ending September 30, 2018.
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Statement of Operations Data:
(dollars in thousands)
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Nine Months Ended
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Years Ended
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June 30,
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September 30,
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2018
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2017
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2017
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2016
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Revenue
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(unaudited)
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Digital
engagement services
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$5,559
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$6,298
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$8,498
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$8,520
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Subscription
and perpetual licenses
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4,367
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5,018
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6,788
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6,084
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Managed
service hosting
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839
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743
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1,007
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1,291
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Total revenue
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10,765
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12,059
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16,293
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15,895
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Cost of revenue
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Digital
engagement services
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3,666
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3,569
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4,911
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5,143
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Subscription
and perpetual licenses
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1,503
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1,468
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1,969
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1,835
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Managed
service hosting
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213
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209
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280
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304
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Total
cost of revenue
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5,382
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5,246
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7,160
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7,282
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Gross
profit
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5,383
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6,813
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9,133
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8,613
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Operating expenses
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Sales
and marketing
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3,045
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3,661
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4,807
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4,934
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General
and administrative
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2,156
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2,395
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3,256
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3,456
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Research
and development
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1,221
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1,175
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1,587
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1,578
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Depreciation
and amortization
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305
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468
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582
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1,309
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Goodwill
impairment
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4,615
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-
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-
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-
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Restructuring
expenses
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187
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249
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286
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879
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Total operating expenses
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11,529
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7,948
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10,518
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12,156
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Loss
from operations
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(6,146)
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(1,135)
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(1,385)
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(3,543)
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Interest
and other expense, net
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(115)
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(122)
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(201)
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(914)
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Loss
on inducement of debt (convertible notes)
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-
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-
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-
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(3,414)
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Loss
before income taxes
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(6,261)
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(1,257)
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(1,586)
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(7,871)
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(Benefit)/provision
for income taxes
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11
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13
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16
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(47)
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Net
loss
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$(6,272)
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$(1,270)
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$(1,602)
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$(7,824)
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Dividends
on convertible preferred stock
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(231)
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(207)
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(281)
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(131)
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Net
loss applicable to common shareholders
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(6,503)
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(1,477)
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(1,883)
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(7,955)
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Net
loss per share attributable to common shareholders:
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Basic
and diluted
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$(1.54)
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$(0.36)
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$(0.45)
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$(4.20)
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Number
of weighted average shares outstanding:
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Basic
and diluted
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4,222,848
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4,129,481
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4,147,140
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1,893,003
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Consolidated Balance Sheet Data:
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As of June 30, 2018
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Pro Forma
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(unaudited, dollars in thousands)
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Actual
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Pro Forma(1)
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As Adjusted(2)
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Cash
and cash equivalents
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$427
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$1,187
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$
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Total
assets
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11,422
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12,182
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Debt, current portion, less unamortized discount and issuance
costs
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198
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958
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Debt,
net of current portion
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2,810
|
2,810
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|
Total
liabilities
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6,090
|
6,850
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Total stockholders’ equity
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5,332
|
5,332
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(1)
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The pro forma figures give effect to the sale by
the Company of certain term promissory notes (the
“Term
Notes”) in the aggregate
principal amount of $941,176, which sales occurred
on September 7, 2018. After recording $141,176 of original
issue discount and debt issuance costs of $40,000, the Company
received net cash proceeds in the aggregate amount of $760,000 for
the Term Notes. The original issue discount and debt issuance costs
are recorded as a contra liability and will be amortized over the
life of the Term Notes. The Term Notes have an original issue
discount of fifteen percent (15%), bear interest at a rate of
twelve percent (12%) per annum, and mature on the earlier to occur
of (i) six months from September 7, 2018, or (ii) the consummation
of a debt or equity financing resulting in gross proceeds to the
Company of at least $3.0 million. In connection with the issuance of the Term Notes,
each purchaser also entered into a Subordination Agreement with the
Company’s lenders, Heritage Bank of Commerce and Montage
Capital II, L.P. (the “Lenders”), pursuant to which the purchasers agreed
to subordinate (i) all of the Company’s indebtedness and
obligations to the purchasers, whether presently existing or
arising in the future, to all of the Company’s indebtedness
the Lenders and (ii) all of the purchasers’ security
interests, if any, to all of the Lenders’ security interests
in property of the
Company.
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(2)
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Pro forma as adjusted balance sheet data reflects the items
described in footnote 1 and our sale
of shares
of common stock in this offering at an assumed public offering
price of
$ per
share, which was the last reported sale price of our common stock
on the Nasdaq Capital Market on September , 2018, after
deducting underwriting discounts and commissions and estimated
offering expenses payable by us as well as the repayment of the
Term Notes out of proceeds of the offering. Pro forma as adjusted
balance sheet data is illustrative only and will change based on
the actual public offering price and other terms of this offering
determined at pricing. Each $0.25 increase (decrease) in the
combined public offering price per share would increase (decrease)
the amount of cash and cash equivalents, working capital, total
assets, and total stockholders’ equity by approximately
$ million, assuming the number of
securities offered by us, as set forth on the cover page of this
prospectus, remains the same, and after deducting underwriting
discounts and commissions, estimated offering expenses payable by
us, and the amounts necessary to repay the Term Notes. We may also
increase or decrease the number of securities to be issued in this
offering. Each increase (decrease) of 1.0 million shares
offered by us would increase (decrease) the as adjusted amount of
cash and cash equivalents, working capital, total assets and total
stockholders’ deficit by approximately
$ million, assuming the assumed
public offering price remains the same, and after deducting
underwriting discounts and commissions, estimated offering expenses
payable by us, and the amounts necessary to repay the Term Notes.
The pro forma information discussed above is illustrative only and
will be adjusted based on the actual public offering price and
other terms of this offering determined between us and the
underwriters at pricing.
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RISK FACTORS
An
investment in our securities involves a high degree of risk. You
should consider the risks, uncertainties and assumptions discussed
below as well as all of the other information contained or
incorporated by reference in this prospectus, including our
Quarterly Reports on Form 10-Q for the quarters ended December 31,
2017, March 31, 2018 and June 30, 2018, and our Annual Report on
Form 10-K for the fiscal year ended September 30, 2017. See
“Incorporation of Certain Information by Reference” and
“Where You Can Find More Information.” It is not possible to predict or identify all such
risks. Consequently, we could also be affected by additional
factors that are not presently known to us or that we currently
consider to be immaterial to our
operations. The occurrence of any
of these known or unknown risks might cause you to lose all or part
of your investment in the offered securities.
Risks Related to Our Business
We have incurred significant net losses since inception and expect
continue to incur operating losses for the foreseeable future. We
may never achieve or sustain profitability, which would depress the
market price of our common stock and could cause you to lose all or
a part of your investment.
We have incurred net losses in each fiscal year since our inception
in 2000, including net losses of $7.8 million and $1.6 million
during the fiscal years ended September 30, 2017 and 2016,
respectively, and net losses of $6.3 million and $1.3 million
during the nine months ended June 30, 2018 and 2017, respectively.
As of September 30, 2017, we had an accumulated deficit of
approximately $54.3 million. We do not know whether or when we will
become profitable. Substantially all of our operating losses have
resulted from costs incurred in connection with our research and
development programs and from general and administrative costs
associated with our operations. Although we expect to incur
decreasing levels of operating losses over the next several years
due to the implementation of our restructuring plant, no assurances
can be given. Our prior losses, combined with expected future
losses, have had and will continue to have an adverse effect on our
stockholders’ equity (deficit) and working capital. Because
of the numerous risks and uncertainties associated with our
business, we are unable to predict the extent of any future losses
or when we will become profitable, if at all. Even if we do become
profitable, we may not be able to sustain or increase our
profitability on a quarterly or annual basis.
Our debt obligations and operating lease commitments may adversely
affect our financial condition and cash flows from
operations.
We maintain a $2.5 million line of credit with our bank,
Heritage Bank of Commerce, as well as a non-revolving term loan for
up to $1.0 million through Montage Capital II, L.P., both of which
are secured by all of our assets and intellectual property.
Additionally, on September 7, 2018, we sold and issued Term Notes
in the aggregate principal amount of $941,176, which will mature on
the earliest to occur of (i) six months from September 7,
2018, or (ii) the consummation of a debt or equity financing
resulting in gross proceeds to the Company of at least $3.0
million. Further, we have contractual
commitments in operating lease arrangements, which are not
reflected on our consolidated balance sheets. Our ability to meet
our expenses and debt obligations will depend on our future
performance, which will be affected by financial, business,
economic, regulatory and other factors. We will not be able to
control many of these factors, such as economic conditions and
governmental regulations. Further, our operations may not generate
sufficient cash to enable us to service our debt or contractual
obligations resulting from our leases. If we fail to make a payment
on our debt, we could be in default on such debt. If we are at any
time unable to generate sufficient cash flows from operations to
service our indebtedness when payment is due, we may be required to
attempt to renegotiate the terms of the instruments relating to the
indebtedness, seek to refinance all or a portion of the
indebtedness or obtain additional financing. There can be no
assurance that we would be able to successfully renegotiate such
terms, that any such refinancing would be possible or that any
additional financing could be obtained on terms that are favorable
or acceptable to us.
Although as of June 30, 2018, we were in compliance with all
financial covenants required pursuant to our borrowing facilities,
we have failed to satisfy such covenants in the past. A failure to
comply with the covenants and other provisions of our outstanding
debt could result in events of default under such instruments,
which could permit acceleration of all of our borrowings under our
revolving credit facility as well as our non-revolving term loan.
Any required repayment of our borrowing facilities as a result of a
fundamental change or other acceleration would lower our current
cash on hand such that we would not have those funds available for
use in our business. In addition, in the event we do not have
sufficient cash resources to repay our borrowings when due, we may
be required to forfeit all or some of our assets to the banks as a
result of their security interest in our assets, which would
negatively impact our business, financial condition and future
prospects, and we may not be able to continue as a going
concern.
If we are unable to manage our future growth efficiently, our
business, liquidity, revenues and profitability may
suffer.
We anticipate that continued expansion of our core business
will require us to address potential market opportunities. For
example, we may need to expand the size of our research and
development, sales, corporate finance or operations staff. There
can be no assurance that our infrastructure will be sufficiently
flexible and adaptable to manage our projected growth or that we
will have sufficient resources, human or otherwise, to sustain such
growth. If we are unable to adequately address these additional
demands on our resources, our profitability and growth might
suffer. Also, if we continue to expand our operations, management
might not be effective in expanding our physical facilities and our
systems, and our procedures or controls might not be adequate to
support such expansion. Our inability to manage our growth could
harm our business and decrease our revenues.
We may require additional financing to execute our business plan
and further expand our operations.
We may require additional funding to further expand our
operations. We currently have a borrowing facility with Heritage
Bank from which we can borrow, and this line is subject to
financial covenants that must be met. It is not certain that all or
part of this line will be available to us in the future. In
addition, we have received a term loan for up to $1.0 million with
Montage Capital II, L.P. We also depend on other sources of
financing and this may not be available to us in a timely basis if
at all, or on terms acceptable to us. Further, our ability to
obtain financing may be limited by rules of the Nasdaq Capital
Market. If we fail to obtain acceptable funding when needed, we may
not have sufficient resources to fund our operations, and this
would have a material adverse effect on our business.
Our revenue and quarterly results may fluctuate, which could
adversely affect our stock price.
We have experienced, and may in the future experience, significant
fluctuations in our quarterly operating results that may be caused
by many factors. These factors include, amongst
others:
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changes
in demand for our products;
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introduction,
enhancement or announcement of products by us or our
competitors;
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market
acceptance of our new products;
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the
growth rates of certain market segments in which we
compete;
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size
and timing of significant orders;
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budgeting
cycles of customers;
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mix of
products and services sold;
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changes
in the level of operating expenses;
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completion
or announcement of acquisitions; and
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general
economic conditions in regions in which we conduct
business.
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The length of our sales cycle can fluctuate significantly which
could result in significant fluctuations in license revenues being
recognized from quarter to quarter.
The decision by a customer to purchase our products often involves
the development of a complex implementation plan across a
customer’s business. This process often requires a
significant commitment of resources both by prospective customers
and us. Given the significant investment and commitment of
resources required in order to implement our software, it may take
several months, or even several quarters, for marketing
opportunities to materialize. If a customer’s decision to
purchase our products is delayed or if the installation of our
products takes longer than originally anticipated, the date on
which we may recognize revenue from these sales would be delayed.
Such delays and fluctuations could cause our revenue to be lower
than expected in a particular period and we may not be able to
adjust our costs quickly enough to offset such lower revenue,
potentially negatively impacting our results of
operations.
We are dependent upon a small number of major customers, and
a failure to renew our licenses with such customers could
reduce our revenue.
During fiscal year 2017, two of our customers in aggregate
accounted for 24% of total sales. Our customers have no
obligation to renew their subscription licenses, and some
customers have elected not to do so, including a number of our
large customers in the recent two fiscal years. Our license renewal
rates may decline or fluctuate as a result of a number of factors,
including customer dissatisfaction with our products and services,
our failure to update our products to maintain their attractiveness
in the market, or constraints or changes in budget priorities faced
by our customers. A decline in license renewal rates could cause
our revenue to decline which would have a material adverse effect
on our operations.
We face intense and growing competition, which could result in
price reductions, reduced operating margins and loss of market
share.
We operate in a highly competitive marketplace and generally
encounter intense competition to create and maintain demand for our
services and to obtain service contracts. If we are unable to
successfully compete for new business and license renewals, our
revenue growth and operating margins may decline. The market for
our Bridgeline Unbound platform (Content Manager, Insights,
eCommerce, Marketier, Social) and web development services are
competitive and rapidly changing. Barriers to entry in such markets
are relatively low. With the introduction of new technologies and
market entrants, we expect competition to intensify in the future.
Some of our principal competitors offer their products at a lower
price, which have in the past and may in the future result in
pricing pressures. Such pricing pressures and increased competition
generally could result in reduced sales, reduced margins or the
failure of our product and service offerings to achieve or maintain
more widespread market acceptance.
The web development/services market is highly fragmented with a
large number of competitors and potential competitors. Our
prominent public company competitors are Big Commerce, Salesforce
(Commerce Cloud), Episerver, Hubspot, Sitecore and Adobe
(Experience Manager). We face competition from customers and
potential customers who develop their own applications internally.
We also face competition from potential competitors that are
substantially larger than we are and who have significantly greater
financial, technical and marketing resources, and established
direct and indirect channels of distribution. As a result, they are
able to devote greater resources to the development, promotion and
sale of their products than we can.
There may be a limited market for our common stock, which may make
it more difficult for you to sell your stock and which may reduce
the market price of our common stock.
The average amount of shares traded per day for the eleven months
ended August 31, 2018 was approximately 417,000 shares, compared to
approximately 26,000 shares per day in fiscal 2017, 38,000 shares
per day for fiscal 2016 and 3,000 shares per day for fiscal 2015.
The average trading volume of our common stock can be sporadic and
may impair the ability of holders of our common stock to sell their
shares at the time they wish to sell them or at a price that they
consider reasonable. A low trading volume may also reduce the
fair market value of the shares of our common stock. Accordingly,
there can be no assurance that the price of our common stock will
reflect our actual value. There can be no assurance that the daily
trading volume of our common stock will increase or improve either
now or in the future.
The market price of our common stock is volatile, which could
adversely affect your investment in our common stock.
The market price of our common stock is volatile and could
fluctuate significantly for many reasons, including, without
limitation, as a result of the occurrence of those risks discussed
herein, actual or anticipated fluctuations in our operating results
and general economic and industry conditions. During fiscal 2017
and the nine-months ended June 30, 2018, the closing price of our
common stock as reported on the Nasdaq Capital Market fluctuated
between $2.12 and $4.55, and between $1.03 and $3.50, respectively.
We are required to meet certain financial criteria in order to
maintain our listing on the Nasdaq Capital Market. One such
requirement is that we maintain a minimum closing bid price of at
least $1.00 per share for our common stock. If we fail this
requirement, then the Nasdaq Capital Market will issue a notice
that we are not in compliance and we will need to take corrective
actions in order to not be delisted. Such corrective actions could
include a reverse stock split.
If our products fail to perform properly due to undetected errors
or similar problems, our business could suffer, and we could face
product liability exposure.
We develop and sell complex web engagement software, which may
contain undetected errors or bugs. Such errors can be detected at
any point in a product’s life cycle, but are frequently found
after introduction of new software or enhancements to existing
software. We continually introduce new products and new versions of
our products. Despite internal testing and testing by current and
potential customers, our current and future products may contain
serious defects. If we detect any errors before we ship a product,
we might have to delay product shipment for an extended period of
time while we address the problem. We might not discover software
errors that affect our new or current products or enhancements
until after they are deployed, and we may need to provide
enhancements to correct such errors. Therefore, it is possible
that, despite our testing, errors may occur in our software. These
errors could result in the following:
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harm to
our reputation;
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lost
sales;
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delays
in commercial release;
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product
liability claims;
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contractual
disputes;
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negative
publicity;
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delays
in or loss of market acceptance of our products;
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license
terminations or renegotiations; or
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unexpected
expenses and diversion of resources to remedy
errors.
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Furthermore, our customers may use our software together with
products from other companies. As a result, when problems occur, it
might be difficult to identify the source of the problem. Even when
our software does not cause these problems, the existence of
these errors might cause us to incur significant costs, divert the
attention of our technical personnel from our product development
efforts, impact our reputation, or cause significant customer
relations problems.
Technology and customer requirements evolve rapidly in our
industry, and if we do not continue to develop new products and
enhance our existing products in response to these changes, our
business could suffer.
We will need to continue to enhance our products in order to
maintain our competitive position. We may not be successful in
developing and marketing enhancements to our products on a timely
basis, and any enhancements we develop may not adequately address
the changing needs of the marketplace. Overlaying the risks
associated with our existing products and enhancements are ongoing
technological developments and rapid changes in customer
requirements. Our future success will depend upon our ability to
develop and introduce in a timely manner new products that take
advantage of technological advances and respond to new customer
requirements. The development of new products is increasingly
complex and uncertain, which increases the risk of delays. We may
not be successful in developing new products and incorporating new
technology on a timely basis, and any new products may not
adequately address the changing needs of the marketplace. Failure
to develop new products and product enhancements that meet market
needs in a timely manner could have a material adverse effect on
our business, financial condition and operating
results.
If we are unable to protect our proprietary technology and other
intellectual property rights, our ability to compete in the
marketplace may be substantially reduced.
If we are unable to protect our intellectual property, our
competitors could use our intellectual property to market products
similar to our products, which could decrease demand for such
products, thus decreasing our revenue. We rely on a combination of
copyright, trademark and trade secret laws, as well as licensing
agreements, third-party non-disclosure agreements and other
contractual measures to protect our intellectual property rights.
These protections may not be adequate to prevent our competitors
from copying or reverse-engineering our products. Our competitors
may independently develop technologies that are substantially
similar or superior to our technology. To protect our trade secrets
and other proprietary information, we require employees,
consultants, advisors and collaborators to enter into
confidentiality agreements. These agreements may not provide
meaningful protection for our trade secrets, know-how or other
proprietary information in the event of any unauthorized use,
misappropriation or disclosure of such trade secrets, know-how or
other proprietary information. The protective mechanisms we include
in our products may not be sufficient to prevent unauthorized
copying. Existing copyright laws afford only limited protection for
our intellectual property rights and may not protect such rights in
the event competitors independently develop similar products. In
addition, the laws of some countries in which our products are or
may be licensed do not protect our products and intellectual
property rights to the same extent as do the laws of the United
States.
Policing unauthorized use of our products is difficult and
litigation could become necessary in the future to enforce our
intellectual property rights. Any litigation could be time
consuming and expensive to prosecute or resolve, result in
substantial diversion of management attention and resources, and
materially harm our business or financial condition.
If a third party asserts that we infringe upon its proprietary
rights, we could be required to redesign our products, pay
significant royalties or enter into license
agreements.
Claims of infringement are becoming increasingly common as the
software industry develops and as related legal protections,
including but not limited to patents, are applied to software
products. Although we do not believe that our products infringe on
the rights of third parties, a third party may assert that our
technology or technologies of entities we acquire violates its
intellectual property rights. As the number of software products in
our markets increases and the functionality of these products
further overlap, we believe that infringement claims will become
more common. Any claims against us, regardless of their merit,
could:
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be
expensive and time consuming to defend;
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result
in negative publicity;
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force
us to stop licensing our products that incorporate the challenged
intellectual property;
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require
us to redesign our products;
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divert
management’s attention and our other resources;
and/or
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require
us to enter into royalty or licensing agreements in order to obtain
the right to use necessary technologies, which may not be available
on terms acceptable to us, if at all.
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We believe that any successful challenge to our use of a trademark
or domain name could substantially diminish our ability to
conduct business in a particular market or jurisdiction and thus
decrease our revenue and result in possible losses to our
business.
We depend on a third-party cloud platform provider to host
our Unbound SaaS environment and managed services business and
if we were to experience a disruption in service, our business and
reputation could suffer.
We host our SaaS and managed hosting customers via a third-party,
Amazon Web Services. If upon renewal date our third-party provider
does not provide commercially reasonable terms, we may be required
to transfer our services to a new provider, such as data center
facility, and we may incur significant equipment costs and possible
service interruption in connection with doing so. Interruptions in
our services might reduce our revenue, cause us to issue credits or
refunds to customers, subject us to potential liability, or harm
our renewal rates.
If our security measures or those of our third-party cloud
computing platform provider are breached and unauthorized
access is obtained to a customer’s data, our services may be
perceived as not being secure, and we may incur significant legal
and financial exposure and liabilities.
Security breaches could expose us to a risk of loss of our
customers’ information, litigation and possible liability.
While we have security measures in place, they may be breached as a
result of third-party action, including intentional misconduct by
computer hackers, employee error, malfeasance or otherwise and
result in someone obtaining unauthorized access to our IT systems,
our customers’ data or our data, including our intellectual
property and other confidential business information. Because the
techniques used to obtain unauthorized access, or to sabotage
systems, change frequently and generally are not recognized until
launched against a target, we may be unable to implement adequate
preventative measures. In addition, our customers may authorize
third-party technology providers to access their customer data, and
some of our customers may not have adequate security measures in
place to protect their data that is stored on our services. Because
we do not control our customers or third-party technology
providers, or the processing of such data by third-party technology
providers, we cannot ensure the integrity or security of such
transmissions or processing. Malicious third parties may also
conduct attacks designed to temporarily deny customers access to
our services. Any security breach could result in a loss of
confidence in the security of our services, damage our reputation,
negatively impact our future sales, disrupt our business and lead
to legal liability.
We rely on encryption and authentication technology from third
parties to provide the security and authentication to effectively
secure transmission of confidential information, including consumer
payment card numbers. Such technology may not be sufficient to
protect the transmission of such confidential information or these
technologies may have material defects that may compromise the
confidentiality or integrity of the transmitted data. Any
imposition of liability, particularly liability that is not covered
by insurance or is in excess of insurance coverage, could harm our
reputation, business and operating results. We might be required to
expend significant capital and other resources to protect further
against security breaches or to rectify problems caused by any
security breach, which, in turn could divert funds available for
corporate growth and expansion or future acquisitions.
We are dependent upon our management team and the loss of any of
these individuals could harm our business.
We are dependent on the efforts of our key management personnel.
The loss of any of our key management personnel, or our inability
to recruit and train additional key management and other personnel
in a timely manner, could materially and adversely affect our
business, operations and future prospects. We maintain a key man
insurance policy covering our Chief Executive Officer.
Because competition for highly qualified personnel is intense, we
might not be able to attract and retain the employees we need
to support our planned growth.
We will need to increase the size and maintain the quality of our
sales force, software development staff and professional services
organization to execute our growth plans. To meet our objectives,
we must attract and retain highly qualified personnel with
specialized skill sets. Competition for qualified personnel can be
intense, and we might not be successful in attracting and retaining
them. Our ability to maintain and expand our sales, product
development and professional services teams will depend on our
ability to recruit, train and retain top quality people with
advanced skills who understand sales to, and the specific needs of,
our target customers. For these reasons, we have experienced, and
we expect to again experience in the future, challenges in hiring
and retaining highly skilled employees with appropriate
qualifications for our business. In addition to hiring services
personnel to meet our needs, we may also engage additional
third-party consultants as contractors, which could have a negative
impact on our financial results. If we are unable to hire or retain
qualified personnel, or if newly hired personnel fail to develop
the necessary skills or reach productivity slower than anticipated,
it would be more difficult for us to sell our products and
services, and we could experience a shortfall in revenue and not
achieve our planned growth.
Future acquisitions may be difficult to integrate into our existing
operations, may disrupt our business, dilute stockholder
value, divert management’s attention, or negatively affect
our operating results.
We have acquired multiple businesses since our inception in
2000. Future acquisitions could involve substantial investment
of funds or financings by issuance of debt or equity securities and
could result in one-time charges and expenses and have the
potential to either dilute the interests of existing stockholders
or result in the issuance of or assumption of debt. Any such
acquisition may not be successful in generating revenues, income or
other returns to us, and the resources committed to such activities
will not be available to us for other purposes. Moreover, if we are
unable to access capital markets on acceptable terms or at all, we
may not be able to consummate acquisitions, or may have to do so
based upon less than optimal capital structure. Our inability to
take advantage of growth opportunities for our business or to
address risks associated with acquisitions or investments in
businesses may negatively affect our operating results.
Additionally, any impairment of goodwill or other intangible assets
acquired in an acquisition or in an investment, or charges to
earnings associated with any acquisition or investment activity,
may materially reduce our earnings which, in turn, may have an
adverse material effect on the price of our common
stock.
We are also subject to anti-takeover provisions under Delaware law,
which could delay or prevent a change of control. Together these
provisions may make the removal of management more difficult and
may discourage transactions that otherwise could involve payment of
a premium over prevailing market prices for our securities.
Provisions in our amended and restated bylaws and Delaware law may
have the effect of discouraging lawsuits against our directors and
officers.
Our amended and restated bylaws require that derivative actions
brought in our name, actions against our directors, officers, other
employees or stockholders for breach of fiduciary duty and other
similar actions may be brought only in the Court of Chancery in the
State of Delaware. Any person or entity purchasing or otherwise
acquiring any interest in shares of our capital stock shall be
deemed to have notice of and consented to the forum provisions in
our amended and restated bylaws.
This choice of forum provision may limit a stockholder’s
ability to bring a claim in a judicial forum that it finds
favorable for disputes with us or any of our directors, officers,
other employees or stockholders, which may discourage lawsuits with
respect to such claims. Alternatively, if a court were to find the
choice of forum provision contained in our amended and restated
bylaws to be inapplicable or unenforceable in an action, we may
incur additional costs associated with resolving such action in
other jurisdictions, which could harm our business, operating
results and financial condition.
Increasing government regulation could affect our business and may
adversely affect our financial condition.
We are subject not only to regulations applicable to businesses
generally, but also to laws and regulations directly applicable to
electronic commerce. In addition, an inability to satisfy the
standards of certain voluntary third-party certification bodies
that our customers may expect, such as an attestation of compliance
with the Payment Card Industry (“PCI”) Data Security Standards, may have an
adverse impact on our business and results. Further, there are
various statutes, regulations, and rulings relevant to the direct
email marketing and text-messaging industries, including the
Telephone Consumer Protection Act (“TCPA”), the CAN-SPAM Act and related Federal
Communication Commission (“FCC”) orders. The interpretation of many of
these statutes, regulations, and rulings is evolving in the courts
and administrative agencies and an inability to comply may have an
adverse impact on our business and results. If in the future we are
unable to achieve or maintain industry-specific certifications or
other requirements or standards relevant to our customers, it may
harm our business and adversely affect our
results.
We may also expand our business in countries that have more
stringent data protection laws than those in the United States, and
such laws may be inconsistent across jurisdictions and are subject
to evolving and differing interpretations. In
particular, the European Union has passed the General Data
Protection Regulation (“GDPR”),
which came into force on May 25, 2018. The GDPR includes more
stringent operational requirements for entities that receive or
process personal data (as compared to U.S. privacy laws and
previous EU laws), along with significant penalties
for non-compliance, more robust obligations on data
processors and data controllers, greater rights for data subjects,
and heavier documentation requirements for data protection
compliance programs. Additionally, both laws
regulating privacy and third-party products purporting to address
privacy concerns could negatively affect the functionality of, and
demand for, our products and services, thereby reducing our
revenue.
Federal, state, and foreign governments may adopt laws and
regulations applicable to our business. Any such legislation or
regulation could dampen the growth of the Internet and decrease its
acceptance. If such a decline occurs, companies may choose in the
future not to use our products and services. Any new laws or
regulations in the following areas could affect our
business:
|
|
●
|
user
privacy;
|
|
|
●
|
the
pricing and taxation of goods and services offered over the
Internet;
|
|
|
●
|
the
content of websites;
|
|
|
●
|
trademarks and
copyrights;
|
|
|
●
|
consumer
protection, including the potential application of “do not
call” registry requirements on customers and consumer
backlash in general to direct marketing efforts of
customers;
|
|
|
●
|
the
online distribution of specific material or content over
the Internet; or
|
|
|
●
|
the
characteristics and quality of products and services offered over
the Internet.
|
We have
issued preferred stock with rights senior to our common stock, and
may issue additional preferred stock in the future, in order to
consummate a merger or other transaction necessary to continue as a
going concern.
Our Certificate of Incorporation authorizes the issuance of up to
1.0 million shares of preferred stock, par value $0.001
per share, without shareholder approval and on terms established by
our board of directors, of which 264,000 shares have been
designated as Series A Preferred. We may issue additional
shares of preferred stock in order to consummate a financing or
other transaction, in lieu of the issuance of common
stock. The rights and preferences of any such class or series
of preferred stock would be established by our board of directors
in its sole discretion and may have dividend, voting, liquidation
and other rights and preferences that are senior to the rights of
our common stock.
We have never paid dividends on our common stock, and we do not
anticipate paying dividends on our common stock in the
future.
We have never paid cash dividends on our common stock, and do not
believe that we will pay any cash dividends on our common
stock in the future. Because we have no plan to pay cash dividends
on our common stock, an investor would only realize income from his
investment in our shares if there is a rise in the market price of
our common stock, which is uncertain and
unpredictable.
Risks Related to this Offering
Our management
team may invest or spend the proceeds of this offering in ways with
which you may not agree or in ways which may not yield a
significant return.
Our management will have broad discretion over the use of proceeds
from this offering. We currently intend to use the net proceeds
from the sale of securities offered by this prospectus for
general corporate purposes, including, but not limited to, research
and development, capital expenditures, repayment of indebtedness,
and additions to working capital. We may also use the net proceeds
from the sale of the securities under this prospectus to acquire or
invest in complementary businesses, technologies, products or
assets. However, our management will have broad discretion in the
application of the net proceeds from this offering and could spend
the proceeds in ways that do not improve our results of operations
or enhance the value of our common stock. The failure by management
to apply these funds effectively could result in financial losses
that could have a material adverse effect on our business, cause
the price of our common stock to decline and delay the development
of our product candidates.
Purchasers in this offering will experience immediate and
substantial dilution in the book value of their
investment.
Because the public offering price per
share is substantially higher than the book value per share of our
common stock, you will suffer substantial dilution in the net
tangible book value of the common stock you purchase in this
offering. After giving effect to the sale by us
of
shares of our common stock at a public offering price of $
per share, and after deducting the underwriting
discount and estimated offering expenses payable by us, you will
suffer immediate and substantial dilution of
$ per share in the net tangible book
value of the common stock you purchase in this offering. To
the extent outstanding options, warrants or other derivative
securities are ultimately exercised or converted, or if we issue
equity-based awards to our employees under our 2016 Plan, there
will be further dilution to investors who purchase shares in this
offering. In addition, if we issue additional equity securities or
derivative securities, investors purchasing shares in this offering
will experience additional dilution. For a further description of
the dilution that you will experience immediately after this
offering, see “Dilution” on page
21.
Sales of a
substantial number of shares of our common stock, or the perception
that such sales may occur, may adversely impact the price of our
common stock.
Sales of a substantial number of shares of our common stock in the
public market could occur at any time. These sales, or the
perception that such sales may occur, may adversely impact the
price of our common stock, even if there is no relationship between
such sales and the performance of our business. As of September
18, 2018, we had 4,241,225 shares of common stock
outstanding, as well as stock options to purchase an aggregate
of 459,846 shares of our common stock at a weighted average
exercise price of $6.81 per share, outstanding warrants to purchase
up to an aggregate of 584,308 shares of our common stock
at a weighted average exercise price of $6.58 per share and 161,455
shares of common stock issuable upon conversion of our outstanding
shares of Series A Preferred. The exercise and/or conversion of
such outstanding derivative securities may result in further
dilution of your investment.
CAUTIONARY NOTES REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus, and any documents we incorporate by reference,
contain forward-looking statements that involve substantial risks
and uncertainties. All statements contained in this prospectus and
any documents we incorporate by reference other than statements of
historical facts, including statements regarding our strategy,
future operations, future financial position, future revenue,
projected costs, prospects, plans, objectives of management and
expected market growth, are forward-looking statements. These
statements involve known and unknown risks, uncertainties and other
important factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements.
The words “anticipate,” “believe,”
“estimate,” “expect,” “intend,”
“may,” “plan,” “predict,”
“project,” “target,”
“potential,” “will,” “would,”
“could,” “should,” “continue,”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
our
ability to implement our business strategy;
●
anticipated
trends and challenges in our business and the markets in which we
operate;
●
our
expected future financial performance;
●
our
expectations regarding our operating expenses;
●
our
ability to anticipate market needs or develop new or enhanced
products to meet those needs;
●
our
expectations regarding market acceptance of our
products;
●
our
ability to compete in our industry and innovation by our
competitors;
●
our
ability to protect our confidential information and intellectual
property rights;
●
our
ability to successfully identify and manage any potential
acquisitions;
●
our
ability to manage expansion into international
markets;
●
our
ability to maintain or broaden our business relationships and
develop new relationships with strategic alliances, suppliers,
customers, distributors or otherwise;
●
our
ability to recruit and retain qualified sales, technical and other
key personnel;
●
our
ability to obtain additional financing;
●
our
ability to manage growth;
●
our
ability to maintain the listing of our common stock on the Nasdaq
Capital Market; and
●
other risks and uncertainties, including
those described in the
section entitled “Risk
Factors” in this
prospectus, as well as in our Annual Report on Form 10-K for the
fiscal year ended September 30, 2017, which risk factors are
incorporated herein by reference.
These
forward-looking statements are only predictions and we may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, so you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
We have based these forward-looking statements largely on our
current expectations and projections about future events and trends
that we believe may affect our business, financial condition and
operating results. We have included important factors in the
cautionary statements included in this prospectus, as well as
certain information incorporated by reference into this prospectus,
that could cause actual future results or events to differ
materially from the forward-looking statements that we make. Our
forward-looking statements do not reflect the potential impact of
any future acquisitions, mergers, dispositions, joint ventures or
investments we may make. Except as required by applicable law,
including the securities laws of the United States and the rules
and regulations of the SEC, we do not plan to publicly update or
revise any forward-looking statements contained herein after we
distribute this prospectus, whether as a result of any new
information, future events or otherwise.
You
should read this prospectus and any documents we incorporate by
reference with the understanding that our actual future results may
be materially different from what we expect. We do not assume any
obligation to update any forward-looking statements whether as a
result of new information, future events or otherwise, except as
required by applicable law.
USE OF PROCEEDS
We estimate that the net proceeds to
us from the sale of shares of our common stock by us in this
offering will be approximately $ million, or
approximately $ million if the underwriters
exercise in full their option to purchase additional shares
of common stock to cover over-allotments, if any, assuming the sale of shares of common
stock at an assumed public offering price of $ per
share (the last reported sale price of our common stock on the
Nasdaq Capital Market on September ,
2018), in each case, after deducting the estimated
underwriting discount, estimated offering expenses payable by us,
and the amounts necessary to repay the Term Notes (as set
forth below).
Each $0.25 increase (decrease) in the assumed public offering price
of $ per share would increase (decrease) the net
proceeds to us from this offering by approximately $
million, assuming the number of shares offered by us, as set forth
on the cover page of this prospectus, remains the same and after
deducting the estimated underwriting discount, estimated offering
expenses payable by us, and the amounts necessary to repay
the Term Notes. We may also increase
or decrease the number of shares of common stock we are offering.
Each increase (decrease) of 1,000,000 shares in the number of
shares of common stock we are offering would increase (decrease)
the net proceeds to us from this offering by approximately $
million, assuming that the assumed public offering price
remains the same, and after deducting the estimated underwriting
discount, estimated offering expenses payable by us, and the
amounts necessary to repay the Term Notes. This information is illustrative only, and
we will adjust this information based on the actual public offering
price and other terms of this offering determined at pricing. We do
not expect that a change in the public offering price or the number
of shares by these amounts would have a material effect on our
intended uses of the net proceeds from this offering, although it
may impact the amount of time prior to which we may need to seek
additional capital.
On September 7, 2018, we entered into
a Note Purchase Agreement (the “Purchase
Agreement”) with certain
accredited investors (each, a “Purchaser”), pursuant to which we sold and issued to
the Purchasers Term Notes in the aggregate principal amount of
$941,176, which Term Notes have an original issue discount of
fifteen percent (15%), bear interest at a rate of twelve percent
(12%) per annum, and have a maturity date of the earlier to occur
of (a) six months from the date of execution of the Purchase
Agreement, or (b) the consummation of a debt or equity financing
resulting in the gross proceeds to the Company of at least $3.0
million. We received net cash proceeds in the aggregate amount of
$760,000 through the sale of the Term Notes, after subtracting the
original issue discount and debt issuance costs, which proceeds it
has used as general working capital. Upon consummation of this
offering, assuming that we receive gross proceeds in an amount
exceeding $3.0 million, we intend to allocate approximately
$941,176, plus any accrued interest, to the repayment of the Term
Notes.
We expect to use the remaining net proceeds from this offering for
general corporate purposes including, but not limited to, research
and development, capital expenditures, repayment of indebtedness,
and additions to working capital. We may also use a portion of the
net proceeds from this offering to pursue potential strategic
acquisitions, although we do not have any specific plans or
arrangements to do so at this time. We cannot currently
allocate specific percentages of the net proceeds that we may use
for the purposes specified above.
Pending other uses, we intend to invest our proceeds from the
offering in short-term investments or hold them as cash. We cannot
predict whether the proceeds invested, if any, will yield a
favorable return. Our management will have broad discretion in the
use of the net proceeds from the offering, and investors will be
relying on the judgment of our management regarding the application
of the net proceeds.
Market Information
Our common stock is listed on the Nasdaq Capital Market under the
symbol “BLIN.”
On
September 18,
2018, the closing price for our common stock as reported on the
Nasdaq Capital Market was $1.02 per
share. Shown below is the range of high and low sales prices
for our common stock for the periods indicated as reported by the
Nasdaq Capital Market. Such quotations represent inter-dealer
prices without retail markup, markdown or commission and may not
necessarily represent actual transactions. In addition, the below
figures have been adjusted to reflect the 1-for-5 stock split
effectuated by the Company on July 24,
2017.
|
Year
Ending September 30, 2018
|
High
|
Low
|
|
|
|
|
|
Fourth Quarter
(through September 18, 2018)
|
$3.75
|
$0.79
|
|
Third
Quarter
|
$2.19
|
$1.14
|
|
Second
Quarter
|
$2.64
|
$1.84
|
|
First
Quarter
|
$3.03
|
$2.22
|
|
Year
Ending September 30, 2017
|
High
|
Low
|
|
|
|
|
|
Fourth
Quarter
|
$3.12
|
$2.12
|
|
Third
Quarter
|
$4.15
|
$2.65
|
|
Second
Quarter
|
$4.55
|
$3.11
|
|
First
Quarter
|
$3.95
|
$2.26
|
|
Year
Ending September 30, 2016
|
High
|
Low
|
|
|
|
|
|
Fourth
Quarter
|
$5.45
|
$3.80
|
|
Third
Quarter
|
$7.75
|
$3.65
|
|
Second
Quarter
|
$5.30
|
$3.10
|
|
First
Quarter
|
$6.65
|
$5.30
|
As of
September 18, 2018, our common stock was held of record by
approximately 1,700 stockholders. Because many of our shares are held by brokers and
other institutions on behalf of stockholders, we are unable to
estimate the total number of individual stockholders represented by
these record holders.
DIVIDEND
POLICY
We have never declared or paid cash dividends on our common stock,
and do not anticipate paying cash dividends to our holders of our
common stock in the near future. We currently intend to retain all
available funds and any future earnings for use in the operation of
our business. Therefore, we do not currently expect to pay any cash
dividends on our common stock for the foreseeable
future.
We currently have outstanding Series A Preferred and our Board of
Directors has the right to authorize the issuance of preferred
stock in the future, without further stockholder approval, the
holders of which may have preferences over the holders of our
common stock as to payment of dividends. Cash dividends are currently
payable to holders of our Series A Preferred at a rate of 12% per
year.
CAPITALIZATION
The
following table sets forth our cash and cash equivalents and
capitalization as of June 30, 2018:
|
|
●
|
on an
actual basis as of June 30, 2018;
|
|
|
●
|
on a pro forma basis, giving effect to the sale of the Term Notes
in the aggregate principal amount of $941,176, which sales occurred
on September 7, 2018, and for which we received cash proceeds in
the aggregate amount of $760,000 after subtracting the original
issue discount and debt issuance costs; and
|
|
|
●
|
on a pro forma as adjusted basis to reflect the issuance and sale
by us of
shares of our common stock in this offering at an assumed public
offering price of $ per share, which was
the last reported sale price for our common stock on the Nasdaq
Capital Market, after deducting the underwriting discounts and
commissions, estimated offering expenses payable by us, and the
amounts necessary to repay the Term Notes.
|
The pro forma and pro forma as adjusted information below is
illustrative only, and our capitalization following the
closing of this offering will be adjusted based on the actual
public offering price and other terms of this offering determined
at pricing as well as our actual expenses. You should read this
table together with our consolidated financial statements and the
related notes and the sections entitled “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in our
Quarterly
Reports on Form 10-Q for the quarters ended December 31, 2017,
March 31, 2018 and June 30, 2018, and our Annual Report on Form
10-K for the fiscal year ended September 30, 2017, which are
incorporated by reference herein.
|
|
As
of June 30, 2018
|
||
|
(unaudited,
dollars in thousands)
|
Actual
|
Pro
Forma(1)
|
Pro Forma
As Adjusted(2)
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$427
|
$1,187
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Debt, current
portion, less unamortized discount and issuance costs
|
198
|
958
|
|
|
Long term debt, net
of current portion
|
2,810
|
2,810
|
|
|
Other long term
liabilities
|
234
|
234
|
|
|
Stockholders’
equity:
|
|
|
|
|
Convertible
preferred stock - $0.001 par value; 1,000,000 shares authorized;
264,000 and 262,364 at June 30, 2018 and 245,172 and 243,536 at
September 30, 2017, issued and outstanding (liquidation preference
$2,624, as of June 30, 2018)
|
-
|
-
|
|
|
Common stock -
$0.001 par value; 50,000,000 shares authorized; 4,241,225 at June
30, 2018 and 4,200,219 at September 30, 2017, issued and
outstanding
|
5
|
5
|
|
|
Additional paid-in
capital
|
66,430
|
66,430
|
|
|
Accumulated
deficit
|
(60,752)
|
(60,752)
|
|
|
Accumulated other
comprehensive loss
|
(351)
|
(351)
|
|
|
Total
stockholders’ equity
|
5,332
|
5,332
|
|
|
Total
capitalization
|
$11,422
|
$12,182
|
$
|
|
|
(1)
|
The pro forma figures give effect to the sale by
the Company of certain term promissory notes (the
“Term
Notes”) in the aggregate
principal amount of $941,176, which sales occurred
on September 7, 2018. After recording $141,176 of original
issue discount and debt issuance costs of $40,000, the Company
received net cash proceeds in the aggregate amount of $760,000 for
the Term Notes. The original issue discount and debt issuance costs
are recorded as a contra liability and will be amortized over the
life of the Term Notes. The Term Notes have an original issue
discount of fifteen percent (15%), bear interest at a rate of
twelve percent (12%) per annum, and mature on the earlier to occur
of (i) six months from September 7, 2018, or (ii) the consummation
of a debt or equity financing resulting in gross proceeds to the
Company of at least $3.0 million. In connection with the issuance of the Term Notes,
each purchaser also entered into a Subordination Agreement with the
Company’s lenders, Heritage Bank of Commerce and Montage
Capital II, L.P. (the “Lenders”), pursuant to which the purchasers agreed
to subordinate (i) all of the Company’s indebtedness and
obligations to the purchasers, whether presently existing or
arising in the future, to all of the Company’s indebtedness
the Lenders and (ii) all of the purchasers’ security
interests, if any, to all of the Lenders’ security interests
in property of the
Company.
|
|
|
(2)
|
Each $0.25 increase (decrease) in the assumed public offering price
per share would increase (decrease) the amount of cash and cash
equivalents, working capital, total assets, and total
stockholders’ deficit by approximately $ million,
assuming the number of securities offered by us, as set forth on
the cover page of this prospectus, remains the same, and after
deducting underwriting discounts and commissions, estimated
offering expenses payable by us, and the amounts necessary to repay
the Term Notes. We may also increase or decrease the number of
securities to be issued in this offering. Each increase (decrease)
of 1.0 million shares offered by us would increase (decrease)
the as adjusted amount of cash and cash equivalents, working
capital, total assets and total stockholders’ deficit by
approximately $ million, assuming the assumed public
offering price remains the same, and after deducting underwriting
discounts and commissions, estimated offering expenses payable by
us, and the amounts necessary to repay the Term Notes. The pro
forma information discussed above is illustrative only and will be
adjusted based on the actual public offering price and other terms
of this offering determined between us and the underwriters at
pricing.
|
The number of shares of our common stock that will be outstanding
immediately after the offering is based on 4,241,225 shares
outstanding as of June 30, 2018. Unless we specifically state
otherwise, the share information in this prospectus
excludes:
●
459,846
shares of our common stock issuable upon the exercise of stock
options outstanding at a weighted-average exercise price of $6.81
per share;
●
584,308
shares of common stock issuable upon the exercise of warrants at a
weighted-average exercise price of $6.58 per share;
●
260,534
shares of common stock reserved for future issuance under our 2016
Plan; and
●
161,455
shares of common stock issuable upon conversion of 262,364
outstanding shares of Series A Preferred; and
●
shares of common stock issuable
upon the exercise of the Representative’s Warrants to be
issued to the representative of the underwriters.
The above numbers reflect the 1-for-5 stock split effectuated by
the Company on July 24, 2017.
DILUTION
If you
invest in our common stock in this offering, your interest will be
diluted immediately to the extent of the difference between the
public offering price per share and the adjusted net tangible book
value (deficit) per share of our common
stock after this offering. Net
tangible book value (deficit) per share of our common stock is
determined at any date by subtracting our total liabilities from
the amount of our total tangible assets (total assets less
intangible assets) and dividing the difference by the number of
shares of our common stock deemed to be outstanding at that
date. Dilution in net tangible book value (deficit) per
share represents the difference between the amount per share paid
by investors in this offering and the net tangible book value
(deficit) per share of our common stock immediately after this
offering.
Our
historical net tangible book value (deficit) as of June 30, 2018
was approximately $(2.7) million, or $(0.65) per share.
Our historical net tangible book value
(deficit) per share represents our
total tangible assets less our total liabilities, divided by the
number of shares of common stock outstanding as of June 30,
2018.
Our pro forma net tangible book value
(deficit) as of June 30, 2018 was
approximately $(2.7) million,
or $(0.65) per share of common
stock. Pro forma net tangible book value (deficit) per share represents our
total tangible assets less our total liabilities, divided by the
number of shares of common stock outstanding as of June 30, 2018,
after giving effect to giving effect to the sale by us of
the Term Notes in the aggregate principal amount of $941,176, which
sales occurred on September 7, 2018, and for which we received cash
proceeds in the aggregate amount of $760,000 after subtracting the
original issue discount and debt issuance costs. After further
giving effect to (i) the pro forma adjustment described above, (ii)
the repayment of the Term Notes upon consummation of the offering,
and (iii) the sale of shares of our common stock in this offering
at the assumed public offering price of
$ per share, which
was the last reported sale price of our common stock on the Nasdaq
Capital Market, and after deducting the underwriting discounts and
commissions and estimated offering expenses payable by us, our as
adjusted net tangible book value as of June 30, 2018 would have
been approximately
$ million, or
$ per share. This
represents an immediate increase in net tangible book value of
$ per share to
existing stockholders and immediate dilution in net tangible book
value of $ per
share to investors in this offering. The following table
illustrates this dilution on a per share
basis:
|
Assumed public
offering price per share
|
|
|
|
$
|
|
Historical net
tangible book value (deficit) per share as of June 30,
2018
|
|
$(0.65)
|
|
|
|
Pro forma increase
in net tangible book value per share attributable to the sale of
term notes described above
|
|
-
|
|
|
|
Pro forma net
tangible book value per share as of June 30, 2018
|
|
(0.65)
|
|
|
|
Increase in pro
forma net tangible book value (value) per share attributable to
investors purchasing shares from us in this offering
|
|
$-
|
|
|
|
|
|
|
|
|
|
Pro forma
as-adjusted net tangible book value per share after this
offering
|
|
|
|
$
|
|
|
|
|
|
|
|
Dilution in pro
forma as adjusted net tangible book value per share to new
investors in this offering
|
|
|
|
$
|
If the
underwriters exercise in full their option to purchase additional
shares of our common stock at the public offering price of
$ per share, our as adjusted net tangible
book value would be approximately $ per
share, an increase of approximately $ per share
to existing stockholders and an immediate dilution of approximately
$ per share to new investors purchasing
shares of our common stock in this offering, after deducting the
underwriting discount and estimated offering expenses payable by
us.
The
number of shares of common stock to be outstanding after this
offering is based on 4,241,225 shares outstanding as of June 30,
2018, and excludes:
●
459,846
shares of our common stock issuable upon the exercise of stock
options outstanding at a weighted-average exercise price of $6.81
per share;
●
584,308
shares of common stock issuable upon the exercise of warrants at a
weighted-average exercise price of $6.58 per share;
●
260,534
shares of Common Stock reserved for future issuance under our 2016
Plan;
●
161,455
shares of common stock issuable upon conversion of 262,364
outstanding shares of Series A Preferred; and
●
shares
of common stock issuable upon the exercise of the
Representative’s Warrants to be issued to the representative
of the underwriters.
If the underwriters exercise their option to purchase additional
shares in full, the percentage of shares of common stock held by
existing stockholders will decrease to
approximately % of the total
number of shares of our common stock outstanding after this
offering, and the number of shares held by new investors will
increase to , or
approximately % of the total
number of shares of common stock outstanding after the
offering.
To the
extent that outstanding options or warrants are exercised, or our
lines of credit or outstanding shares of Series A Preferred are
converted into shares of common stock, investors in this offering
will experience further dilution. In addition, we may choose to
raise additional capital due to market conditions or strategic
considerations even if we believe we have sufficient funds for our
current or future operating plans. To the extent that additional
capital is raised through the sale of equity or convertible debt
securities, the issuance of these securities could result in
further dilution to our stockholders.
DESCRIPTION
OF SECURITIES
The following summary of the rights of our capital stock is not
complete and is subject to and qualified in its entirety by
reference to our certificate of incorporation and bylaws, copies of
which are filed as exhibits to our Annual Report on Form 10-K for
the year ended September 30, 2017, filed with the SEC on December
21, 2017, which is incorporated by reference
herein.
General
Our authorized capital stock consists
of 50.0 million shares of our common stock, $0.001 par value per
share, and 1.0 million shares of preferred stock, $0.001 par value
per share. The following is a description of our common stock and
certain provisions of our amended and restated certificate of
incorporation (“Charter”), and our amended and restated bylaws
(“Bylaws”), and certain provisions of Delaware law.
This summary does not purport to be complete and is qualified in
its entirety by the provisions of our Charter and our Bylaws,
copies of which have been filed with the SEC as exhibits to our
periodic filings under the Securities and Exchange Act of 1934, as
amended (the
“Exchange
Act”), and are also
incorporated by reference as exhibits to the registration statement
of which this prospectus is a
part.
As of September 18, 2018, there were issued and outstanding, or
reserved for issuance:
●
4,241,255 shares of common stock held by
approximately 1,700 stockholders of record;
●
459,846
shares of our common stock issuable upon the exercise of stock
options outstanding at a weighted-average exercise price of $6.81
per share;
●
584,308
shares of common stock issuable upon the exercise of warrants at a
weighted-average exercise price of $6.58 per share;
●
260,534
shares of Common Stock reserved for future issuance under our 2016
Plan;
●
161,455 shares of common stock issuable upon
conversion of 262,364 outstanding shares of Series A
Preferred;
and
●
shares
of common stock issuable upon the exercise of the
Representative’s Warrants to be issued to the representative
of the underwriters.
The above numbers reflect the 1-for-5 stock split effectuated by
the Company on July 24, 2017.
Common Stock
Except as otherwise expressly provided in our Charter, or as
required by applicable law, all shares of our common stock have the
same rights and privileges and rank equally, share ratably and are
identical in all respects as to all matters, including, without
limitation, those described below. All outstanding shares of common
stock are fully paid and nonassessable.
Voting Rights. The holders
of common stock are entitled to one vote per share on all matters.
The common stock does not have cumulative voting rights, which
means that holders of the shares of common stock with a majority of
the votes to be cast for the election of directors can elect all
directors then being elected.
Dividends. Each share of common stock has an equal and
ratable right to receive dividends to be paid from our assets
legally available therefore when, as and if declared by our Board
of Directors. We have never declared or paid cash dividends on our
common stock, and we do not anticipate paying cash dividends on our
common stock in the foreseeable
future.
Liquidation. In the event
we dissolve, liquidate or wind up, the holders of common stock are
entitled to share equally and ratably in the assets available for
distribution after payments are made to our creditors and
to the holders of any outstanding preferred stock we may
designate and issue in the future with liquidation preferences
greater than those of the common stock.
Other. The holders of
shares of our common stock have no preemptive, subscription or
redemption rights and are not liable for further call or
assessment. All of the outstanding shares of common stock
are, and the shares of
common stock offered hereby will be, fully paid and
nonassessable.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is the
American Stock Transfer & Trust Company, LLC.
Preferred Stock
We are authorized, subject to limitations prescribed by Delaware
law and our Charter, to issue up to 1.0 million shares of preferred
stock in one or more series, to establish from time to time the
number of shares to be included in each series and to fix the
designation, powers, preferences and rights of the shares of each
series and any of its qualifications, limitations or restrictions.
Our Board of Directors can increase or decrease the number of
shares of any series, but not below the number of shares of that
series then outstanding, without any further vote or action by our
stockholders. Our Board of Directors may authorize the issuance of
preferred stock with voting or conversion rights that could
adversely affect the voting power or other rights of the holders of
the common stock. The issuance of preferred stock, while providing
flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, have the effect of
delaying, deferring or preventing a change in control of the
Company and may adversely affect the market price of our common
stock and the voting and other rights of the holders of our common
stock.
Series A Preferred
In October 2014, our Board of
Directors authorized the creation of a series of up to 264,000
shares of Series A Preferred. The Certificate of Designation of
Preferences, Rights and Limitations of the Series A Convertible
Preferred was filed with the
Delaware Secretary of State on October 28,
2014. As of
September 18, 2018, there were
264,000 shares of Series A Preferred issued and 262,364 shares of
Series Preferred outstanding.
As of September 18, 2018,
an aggregate total of 1,636 shares of Series A Preferred have been
converted into 1,007 shares of common stock. There will be no
further issuances of Series A Preferred.
Voting Rights.
Shares of Series A
Preferred vote on an as-converted basis along with shares of our
common stock.
Conversion. Shares of Series A
Preferred may be converted, at the option of the holder, at any
time into such number of shares of our common stock
(“Conversion
Shares”) equal (i) to the
number of shares of Series A Preferred to be converted, multiplied
by the stated value of $10.00 per share (the
“Stated
Value”) and (ii) divided
by the conversion price in effect at the time of conversion,
currently $16.25.
Any accrued but unpaid dividends on the shares of Series A
Preferred to be converted shall also be converted in shares of our
common stock at the Conversion Price. We also have the right to
require the holders to convert shares of Series A Preferred into
Conversion Shares if (i) the Company’s common stock has
closed at or above $32.50 per share for ten consecutive trading
days and (ii) the Conversion Shares are (A) registered for resale
on an effective registration statement or (B) may be resold
pursuant to Rule 144.
Dividends. Cumulative dividends
are currently payable in cash at a rate of 12% per year. The Series
A Preferred is senior to our common stock and any other stock with
respect to dividends rights.
Liquidation. In the event of
any liquidation, dissolution, or winding up of the Company, the
holders of shares of Series A Preferred will be entitled to receive
in preference to the holders of common stock and any other stock,
the amount equal to the Stated Value per share of Series A
Preferred plus declared and unpaid dividends, if any. After such
payment has been made, the remaining assets of the Company will be
distributed ratably to the holders of common
stock.
Anti-Takeover Effects of Certain Provisions of Delaware Law and of
the Company’s Certificate of Incorporation and
Bylaws
Delaware Law
We are subject to Section 203 of the
Delaware General Corporation Law (the “DGCL”) (“Section 203”). In general, Section 203 prohibits a
publicly held Delaware corporation from engaging in “business
combination” transactions with any “interested
stockholder” for a period of three years following the time
that the stockholder became an interested stockholder,
unless:
●
prior
to the time the stockholder became an interested stockholder,
either the applicable business combination or the transaction which
resulted in the stockholder becoming an interested stockholder is
approved by the corporation’s board of
directors;
●
upon
consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for
purposes of determining the voting stock outstanding (but not the
voting stock owned by the interested stockholder) shares owned by
directors who are also officers of the corporation and shares owned
by employee stock plans in which the employee participants do not
have the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer;
or
●
at
or subsequent to the time that the stockholder became an interested
stockholder, the business combination is approved by the
corporation’s board of directors and authorized at an annual
or special meeting of stockholders by the affirmative vote of at
least 66 2⁄3% of the outstanding voting stock which is not
owned by the interested stockholder.
A “business combination” is defined to include, in
general and subject to exceptions, a merger of the corporation with
the interested stockholder; a sale of 10% or more of the market
value of the corporation’s consolidated assets to the
interested stockholder; certain transactions that result in the
issuance of the corporation’s stock to the interested
stockholder; a transaction that has the effect of increasing the
proportionate share of the corporation’s stock owned by the
interested stockholder; and any receipt by the interested
stockholder of loans, guarantees or other financial benefits
provided by the corporation. An “interested
stockholder” is defined to include, in general and subject to
exceptions, a person that (1) owns 15% or more of the outstanding
voting stock of the corporation or (2) is an
“affiliate” or “associate” (as defined in
Section 203) of the corporation and was the owner of 15% or more of
the corporation’s outstanding voting stock at any time within
the prior three year period.
A Delaware corporation may opt out of Section 203 with an express
provision in its original certificate of incorporation or by an
amendment to its certificate of incorporation or bylaws expressly
electing not to be governed by Section 203 and approved by a
majority of its outstanding voting shares. We have not opted out of
Section 203. As a result, Section 203 could delay, deter or prevent
a merger, change of control or other takeover of our company that
our stockholders might consider to be in their best interests,
including transactions that might result in a premium being paid
over the market price of our common stock, and may also limit the
price that investors are willing to pay in the future for our
common stock.
Undesignated Preferred Stock
The ability to authorize undesignated preferred stock makes it
possible for our Board of Directors to issue one or more series of
preferred stock with voting or other rights or preferences. These
and other provisions may have the effect of deferring hostile
takeovers or delaying changes in control or management of our
company.
Requirements for Advance Notification of Stockholder Nominations
and Proposals
Our Bylaws establish advance notice procedures with respect to
stockholder proposals and the nomination of candidates for election
as directors, other than nominations made by or at the direction of
the Board of Directors or a committee of the Board of
Directors.
Stockholder Action by Written Consent; Special Meetings of
Stockholders
Our Bylaws prohibit our stockholders from taking action by written
consent in lieu of a meeting.
Amendment of Certificate of Incorporation and Bylaws
Our
Charter may be amended by the affirmative vote of a majority of the
aggregate number of shares of each class of our capital stock
issued and outstanding after a resolution of our Board of Directors
declaring the advisability of such amendment has been adopted in
accordance with Delaware law. Our Bylaws may be amended by the
affirmative vote of a majority of the aggregate number of shares of
each class of our capital stock issued and outstanding (and
entitled to vote on the subject matter) present in person or
represented by proxy at a meeting of stockholders provided that
notice thereof is stated in the written notice of the meeting. Our
Bylaws may also be amended by a majority of the Board of Directors
in accordance with Delaware law and our
Charter.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial
ownership is determined in accordance with Rule 13d-3 under the
Exchange Act. In computing the number of shares beneficially owned
by a person or a group and the percentage ownership of that person
or group, shares of our common stock subject to options or warrants
currently exercisable or exercisable within 60 days after September
18, 2018
are deemed outstanding, but are not deemed outstanding for the
purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, the address of each individual named
below is our address, 80 Blanchard Road, Burlington, Massachusetts
01803.
The following tables set forth, as of September 18, 2018, the
beneficial ownership of our Series A Preferred and common stock by
(i) each person or group of persons known to us to beneficially own
more than 5% of the outstanding shares of the outstanding
securities, (ii) each of our directors and named executive
officers, and (iii) all of our executive officers and directors as
a group. At the close of business on September 18, 2018 there were
262,354 shares of Series A Preferred and 4,241,255 shares of our
common stock issued and outstanding.
Except
as indicated in the footnotes to the tables below, each stockholder
named in the table has sole voting and investment power with
respect to the shares shown as beneficially owned by such
stockholder.
This
information is based upon information received from or on behalf of
the individuals named herein.
Series A Preferred
|
Name
and Address (1)
|
Number
of
Shares
Owned
(2)
|
Percent
of Shares
Outstanding
|
|
Robert
Taglich
790 New York
Avenue
Huntington,
NY 11743
|
65,993
|
25.15%
|
|
Alvin Fund,
LLC
215 West
98th
Street, Apt. 10A
New York, NY
10025
|
22,446
|
8.56%
|
|
Shadow
Capital, LLC
3601 SW
29th
Street
Topeka, KS
66614
|
21,128
|
8.05%
|
|
Sterling
Family Investment, LLC
12400 Dutch
Forest PL
Edmond, OK
73013
|
21,128
|
8.05%
|
|
|
(1)
|
Each of
our officers and directors are excluded from this table, as no
officer or director currently holds shares of Series A
Preferred.
|
|
|
|
|
|
|
(2)
|
Holders
of Series A Preferred
are entitled to vote on all matters presented to our stockholders
on an as-converted basis. Each share of Series A Preferred is
convertible, at the option of each respective holder, into
approximately 0.62 shares of our common
stock.
|
Common Stock
|
Name
and Address
|
Number
of
Shares
Owned
|
Percent
of Shares
Outstanding
|
|
Michael Taglich,
Director
|
985,146(1)
|
22.38%
|
|
Roger Kahn,
President, Chief Executive Officer and Director
|
345,283(2)
|
7.78%
|
|
Michael Prinn,
Executive Vice-President and Chief Financial
Officer
|
36,997(3)
|
*
|
|
Kenneth Galaznik,
Director
|
37,418(4)
|
*
|
|
Scott Landers,
Direcor
|
34,359(5)
|
*
|
|
Joni Kahn,
Director
|
33,223(6)
|
*
|
|
All current
executive officers and directors as a group (6
persons)
|
1,472,426
|
31.65%
|
*less
than 1%
|
|
(1)
|
Includes
153,297 shares issuable upon the exercise of warrants, and 7,200
shares of common stock subject to currently exercisable options
(includes options that will become exercisable within 60 days of
September 18, 2018).
Also includes 1,739 shares of common stock and 120 shares issuable
upon the exercise of warrants owned by Mr. Taglich’s
spouse.
|
|
|
(2)
|
Includes
8,600 shares issuable upon the exercise of warrants and 188,159
shares of common stock subject to currently exercisable options
(includes options that will become exercisable within 60 days of
September 18, 2018).
Includes 27,236 shares of common stock owned by Mr. Kahn’s
spouse.
|
|
|
(3)
|
Includes
35,067 shares of common stock subject to currently exercisable
options (includes options that will become exercisable within 60
days of September 18, 2018).
|
|
|
(4)
|
Includes
7,600 shares of common stock subject to currently exercisable
options (includes options that will become exercisable within 60
days of September 18, 2018).
|
|
|
(5)
|
Includes
6,400 shares of common stock subject to currently exercisable
options (includes options that will become exercisable within 60
days of September 18, 2018). Includes 400 shares of common stock
owned by Mr. Landers’ children.
|
|
|
(6)
|
Includes
5,000 shares of common stock subject to currently exercisable
options (includes options that will become exercisable within 60
days of September 18, 2018).
|
UNDERWRITING
ThinkEquity, a division of Fordham Financial Management, Inc., is
acting as the representative of the underwriters of this offering
(the “Representative”). We have entered
into an underwriting agreement
dated ,
2018 with the Representative. Subject to the terms and conditions
of the underwriting agreement, we have agreed to sell to each
underwriter named below and each underwriter named below has
severally and not jointly agreed to purchase from us, at the public
offering price per share less the underwriting discounts set forth
on the cover page of this prospectus, the number of shares of
common stock listed next to its name in the following
table:
|
Underwriters
|
|
Number
of Shares
|
|
|
|
ThinkEquity,
a division of Fordham Financial Management, Inc.
|
|
|
|
|
|
Total
|
|
|
|
|
All of
the shares to be purchased by the underwriters will be purchased
from us.
The underwriting agreement provides that the obligations of the
underwriters to pay for and accept delivery of the shares of common
stock offered by this prospectus are subject to various conditions
and representations and warranties, including the approval of
certain legal matters by their counsel and other conditions
specified in the underwriting agreement. The shares of common stock
are offered by the underwriters, subject to prior sale, when, as
and if issued to and accepted by them. The underwriters reserve the
right to withdraw, cancel or modify the offer to the public and to
reject orders in whole or in part. The underwriters are obligated
to take and pay for all of the shares of common stock offered by
this prospectus if any such shares of common stock are taken, other
than those shares of common stock covered by the over-allotment
option described below.
Over-Allotment Option
We have granted to the Representative of the underwriters an
option, exercisable no later than 45 calendar days after the date
of this prospectus, to purchase up to an
additional shares of common stock (an
amount equal to 15% of the shares of common stock sold in this
offering) from us to cover over-allotments, if any, at a price per
share of common stock equal to the public offering price, less the
underwriting discounts and commissions. The underwriters may
exercise this option only to cover over-allotments made in
connection with this offering. If the underwriters exercise this
option in whole or in part, then the underwriters will be severally
committed, subject to the conditions described in the underwriting
agreement, to purchase these additional shares of common stock. If
any additional shares of common stock are purchased, the
underwriters will offer the additional shares of common stock on
the same terms as those on which the shares of common stock are
being offered hereby.
Discounts and Commissions
The Representative has advised us that the underwriters propose to
offer the shares of common stock to the public at the public
offering price per share set forth on the cover page of this
prospectus. The underwriters may offer shares to securities dealers
at that price less a concession of not more than
$ per share, of
which up to
$ per
share may be re-allowed to other dealers.
The
following table summarizes the public offering price, underwriting
discounts and commissions and proceeds before expenses to us
assuming both no exercise and full exercise by the underwriters of
their over-allotment option:
|
|
Per
Share
|
Total
Without Over-allotment Option
|
Total
With Over-allotment Option
|
|
Public offering
price
|
$
|
$
|
$
|
|
Underwriting
discounts and commissions (7%)
|
$
|
$
|
$
|
|
Non-accountable
expense allowance (1%)(1)
|
$
|
$
|
$
|
|
Proceeds, before
expenses, to us
|
$
|
$
|
$
|
____________________
(1)
We have agreed to
pay a non-accountable expense allowance to the Representative equal
to 1% of the gross proceeds received in this offering
We have paid an expense deposit of $20,000 to the Representative,
which will be applied against the out-of-pocket accountable
expenses that will be paid by us to the underwriters in connection
with this offering, and will be reimbursed to us to the extent not
incurred.
In addition, we have also agreed to reimburse the Representative
for all reasonable out-of-pocket accountable fees and costs
incurred in connection with this offering; provided that in no
event shall we be obligated to reimburse the Representative more
than $90,000 in the aggregate for such fees, expenses and costs,
which may include: (a) fees and expenses of counsel to the
underwriters; (b) all filing fees and communication expenses
relating to the registration of the shares of common stock to be
sold in this offering with the SEC; (c) all filing fees and
expenses associated with the review of this offering by FINRA and
the Nasdaq Stock Market; and (d) any other reasonable out-of-pocket
accountable expenses incurred by the Representative in connection
with the performance of its services in this
offering.
We
estimate the expenses of this offering payable by us, not including
underwriting discounts and commissions, will be approximately $
.
Discretionary Accounts
The
underwriters do not intend to confirm sales of the securities
offered hereby to any accounts over which they have discretionary
authority.
Representatives’ Warrants
Upon closing of this offering, we have agreed to issue to the
Representative, as compensation, warrants to purchase a number of
shares of common stock equal to 5% of the aggregate number of
shares of common stock sold in this offering (the
“Representative’s
Warrants”). The Representative’s Warrants will
be exercisable at a per share exercise price equal to the greater
of (i) 125% of the public offering price per share in this offering
and (ii) the closing price of our common stock on the closing date
of this offering, as reported by the Nasdaq Capital Market. The
Representative’s Warrants are exercisable at any time and
from time to time, in whole or in part, commencing on the date that
is 180 days following the effective date of the registration
statement of which this prospectus is a part and expiring on the
date that is five (5) years following the effective date of the
registration statement.
The Representative’s Warrants have been deemed compensation
by FINRA and are therefore subject to a 180-day lock-up pursuant to
Rule 5110(g)(1) of FINRA. The Representative (or permitted
assignees under Rule 5110(g)(1)) will not sell, transfer, assign,
pledge, or hypothecate these warrants or the securities underlying
these warrants, nor will they engage in any hedging, short sale,
derivative, put, or call transaction that would result in the
effective economic disposition of the warrants or the underlying
securities for a period of 180 days from the effective date of this
registration statement. In addition, the warrants provide for
registration rights upon request, in certain cases. The demand
registration right provided will not be greater than five years
from the effective date of this registration statement in
compliance with FINRA Rule 5110(f)(2)(G)(iv). The piggyback
registration right provided will not be greater than seven years
from the effective date of this registration statement in
compliance with FINRA Rule 5110(f)(2)(G)(v). We will bear all fees
and expenses attendant to registering the securities issuable on
exercise of the warrants other than underwriting commissions
incurred and payable by the holders. The exercise price and number
of shares issuable upon exercise of the warrants may be adjusted in
certain circumstances including in the event of a stock dividend or
our recapitalization, reorganization, merger or consolidation.
However, the warrant exercise price or underlying shares will not
be adjusted for issuances of shares of common stock at a price
below the warrant exercise price.
Right of First Refusal
Until
six (6) months after the closing date of this offering, the
Representative will have, subject to certain exceptions, an
irrevocable right of first refusal to act as sole investment
banker, sole book-runner and/or sole placement agent, at the
Representative’s discretion, for each and every future public
equity offering for us, or any successor to or any subsidiary of
us, on terms customary for the Representative. The Representative
will have the sole right to determine whether or not any other
broker-dealer shall have the right to participate in any such
offering and the economic terms of any such participation. The
Representative will not have more than one opportunity to waive or
terminate the right of first refusal in consideration of any
payment or fee.
Other
The
underwriters and their affiliates may in the future provide various
investment banking and other financial services for us, for which
they may receive, in the future, customary fees.
Lock-Up Agreements
Pursuant to “lock-up” agreements, we and our executive
officers, directors and greater than 5% stockholders, have agreed,
subject to limited exceptions, without the prior written consent of
the Representative not to directly or indirectly, offer to sell,
sell, pledge or otherwise transfer or dispose of any of shares of
(or enter into any transaction or device that is designed to, or
could be expected to, result in the transfer or disposition by any
person at any time in the future of) our common stock, enter into
any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks
of ownership of shares of our common stock, make any demand for or
exercise any right or cause to be filed a registration statement,
including any amendments thereto, with respect to the registration
of any shares of common stock or securities convertible into or
exercisable or exchangeable for common stock or any of our other
securities or publicly disclose the intention to do any of the
foregoing, subject to customary exceptions, for a period of 90 days
from the date of this prospectus.
Listing
Our
common stock is listed on the Nasdaq Capital Market under the
symbol “BLIN.”
Stabilization
In
connection with this offering, the underwriters may engage in
stabilizing transactions, over-allotment transactions,
syndicate-covering transactions, penalty bids and purchases to
cover positions created by short sales.
Stabilizing
transactions permit bids to purchase shares so long as the
stabilizing bids do not exceed a specified maximum, and are engaged
in for the purpose of preventing or retarding a decline in the
market price of the shares while the offering is in
progress.
Over-allotment
transactions involve sales by the underwriters of shares in excess
of the number of shares the underwriters are obligated to purchase.
This creates a syndicate short position which may be either a
covered short position or a naked short position. In a covered
short position, the number of shares over-allotted by the
underwriters is not greater than the number of shares that they may
purchase in the over-allotment option. In a naked short position,
the number of shares involved is greater than the number of shares
in the over-allotment option. The underwriters may close out any
short position by exercising their over-allotment option and/or
purchasing shares in the open market.
Syndicate
covering transactions involve purchases of shares in the open
market after the distribution has been completed in order to cover
syndicate short positions. In determining the source of shares to
close out the short position, the underwriters will consider, among
other things, the price of shares available for purchase in the
open market as compared with the price at which they may purchase
shares through exercise of the over-allotment option. If the
underwriters sell more shares than could be covered by exercise of
the over-allotment option and, therefore, have a naked short
position, the position can be closed out only by buying shares in
the open market. A naked short position is more likely to be
created if the underwriters are concerned that after pricing there
could be downward pressure on the price of the shares in the open
market that could adversely affect investors who purchase in the
offering.
Penalty
bids permit the representative to reclaim a selling concession from
a syndicate member when the shares originally sold by that
syndicate member are purchased in stabilizing or syndicate covering
transactions to cover syndicate short positions.
These
stabilizing transactions, syndicate covering transactions and
penalty bids may have the effect of raising or maintaining the
market price of our shares of common stock or preventing or
retarding a decline in the market price of our shares of common
stock. As a result, the price of our common stock in the open
market may be higher than it would otherwise be in the absence of
these transactions. Neither we nor the underwriters make any
representation or prediction as to the effect that the transactions
described above may have on the price of our common stock. These
transactions may be effected in the over-the-counter market or
otherwise and, if commenced, may be discontinued at any
time.
Passive Market Making
In
connection with this offering, underwriters and selling group
members may engage in passive market making transactions in our
common stock on the Nasdaq Capital Market in accordance with Rule
103 of Regulation M under the Exchange Act, during a period before
the commencement of offers or sales of the shares and extending
through the completion of the distribution. A passive market maker
must display its bid at a price not in excess of the highest
independent bid of that security. However, if all independent bids
are lowered below the passive market maker’s bid, then that
bid must then be lowered when specified purchase limits are
exceeded.
Indemnification
We have
agreed to indemnify the underwriters against liabilities relating
to this offering arising under the Securities Act and the Exchange
Act, liabilities arising from breaches of some or all of the
representations and warranties contained in the underwriting
agreement, and to contribute to payments that the underwriters may
be required to make for these liabilities.
Electronic Distribution
This prospectus in electronic format may be made available on
websites or through other online services maintained by one or more
of the underwriters, or by their affiliates. Other than this
prospectus in electronic format, the information on any
underwriter’s website and any information contained in any
other website maintained by an underwriter is not part of this
prospectus or the registration statement of which this prospectus
forms a part, has not been approved and/or endorsed by us or any
underwriter in its capacity as underwriter, and should not be
relied upon by investors.
Selling Restrictions Outside the United States
No action has been taken in any jurisdiction (except in the United
States) that would permit a public offering of our common stock, or
the possession, circulation or distribution of this prospectus or
any other material relating to us or our common stock in any
jurisdiction where action for that purpose is required.
Accordingly, our common stock may not be offered or sold, directly
or indirectly, and none of this prospectus or any other offering
material or advertisements in connection with our common stock may
be distributed or published, in or from any country or
jurisdiction, except in compliance with any applicable rules and
regulations of any such country or
jurisdiction.
European Economic Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive, each a
“Relevant Member State,” with effect from and including
the date on which the Prospectus Directive is implemented in that
Relevant Member State, or the “Relevant Implementation
Date,” our securities will not be offered to the public in
that Relevant Member State prior to the publication of a prospectus
in relation to our securities that has been approved by the
competent authority in that Relevant Member State or, where
appropriate, approved in another Relevant Member State and notified
to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that, with effect
from and including the Relevant
Implementation
Date, an offer of our securities may be made to the public in that
Relevant Member State at any time:
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to any
legal entity that is a qualified investor as defined in the
Prospectus Directive;
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to
fewer than 100 or, if the Relevant Member State has implemented the
relevant provision of the 2010 PD Amending Directive, 150 natural
or legal persons (other than qualified investors as defined in the
Prospectus Directive), as permitted under the Prospectus Directive,
subject to obtaining the prior consent of the manager for any such
offer; or
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in any
other circumstances which do not require the publication by the
issuer of a prospectus pursuant to Article 3(2) of the Prospectus
Directive, provided that no such offer of the securities shall
require the issuer or any underwriter to publish a prospectus
pursuant to Article 3 of the Prospectus Directive.
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For the
purposes of this provision, the expression an “offer of
securities to the public” in relation to any securities in
any Relevant Member State means the communication in any form and
by any means of sufficient information on the terms of the offer
and securities to be offered so as to enable an investor to decide
to purchase or subscribe securities, as the same may be varied in
that Relevant Member State by any measure implementing the
Prospectus Directive in that Relevant Member State and the
expression “Prospectus Directive” means Directive
2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented in the Relevant Member State),
and includes any relevant implementing measure in each Relevant
Member State and the expression “2010 PD Amending
Directive” means Directive 2010/73/EU.
United Kingdom
In the
United Kingdom, this document is being distributed only to, and is
directed only at, and any offer subsequently made may only be
directed at persons who are “qualified investors” (as
defined in the Prospectus Directive) (i) who have professional
experience in matters relating to investments falling within
Article 19 (5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended (the Order), and/or
(ii) who are high net worth companies (or persons to whom it may
otherwise be lawfully communicated) falling within Article 49(2)(a)
to (d) of the Order (all such persons together, the relevant
persons). This document must not be acted on or relied on in the
United Kingdom by persons who are not relevant persons. In the
United Kingdom, any investment or investment activity to which this
document relates is only available to, and will be engaged in with,
relevant persons.
Canada
The
offering of our common stock in Canada is being made on a private
placement basis in reliance on exemptions from the prospectus
requirements under the securities laws of each applicable Canadian
province and territory where our common stock may be offered and
sold, and therein may only be made with investors that are
purchasing, or deemed to be purchasing, as principal and that
qualify as both an “accredited investor” as such term
is defined in National Instrument 45-106 Prospectus Exemptions or subsection
73.3(1) of the Securities
Act (Ontario) and as a “permitted client” as
such term is defined in National Instrument 31-103 Registration Requirements, Exemptions and
Ongoing Registrant Obligations. Any offer and sale of our
common stock in any province or territory of Canada may only be
made through a dealer that is properly registered under the
securities legislation of the applicable province or territory
wherein our common stock is offered and/or sold or, alternatively,
where such registration is not required.
Any
resale of our common stock by an investor resident in Canada must
be made in accordance with applicable Canadian securities laws,
which require resales to be made in accordance with an exemption
from, or in a transaction not subject to, prospectus requirements
under applicable Canadian securities laws. These resale
restrictions may under certain circumstances apply to resales of
the common stock outside of Canada.
Securities
legislation in certain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if this
prospectus (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or
damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s
province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult
with a legal advisor.
Pursuant to section 3A.3 (or, in the case of securities issued or
guaranteed by the government of a non-Canadian jurisdiction,
section 3A.4) of National Instrument 33-105 Underwriting Conflicts
(“NI 33-105”),
the underwriters are not required to comply with the disclosure
requirements of NI 33-105 regarding underwriter conflicts of
interest in connection with this
offering.
Upon
receipt of this prospectus, each Québec investor hereby
confirms that it has expressly requested that all documents
evidencing or relating in any way to the sale of the securities
described herein (including for greater certainty any purchase
confirmation or any notice) be drawn up in the English language
only. Par la réception de ce
document, chaque investisseur québecois confirme par les
présentes qu’il a expressément exigé que tous
les documents faisant foi ou se rapportant de quelque manière
que ce soit à la vente des valeurs mobilières
décrites aux présentes (incluant, pour plus de certitude,
toute confirmation d’achat ou tout avis) soient
rédigés en anglais seulement.
LEGAL
MATTERS
The validity of the securities offered by this prospectus will be
passed upon for us by Disclosure Law Group, a Professional
Corporation, San Diego, California. Gracin & Marlow, LLP, New York, New York, is
acting as counsel for the underwriters in connection with this
offering.
EXPERTS
Our consolidated financial statements appearing in our Annual
Report on Form 10-K for the year ended September 30, 2017,
which is incorporated by reference
into this prospectus, have been audited by
Marcum LLP, an independent registered public accounting firm, as
set forth in their reports thereon. Such consolidated financial
statements are incorporated herein by reference in reliance upon
such reports given on the authority of such firm as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE
INFORMATION
We are a public company and file annual, quarterly and special
reports, proxy statements and other information with the SEC. You
may read and copy any document we file at the SEC’s public
reference room at 100 F Street, NE, Washington, D.C. 20549. You can
request copies of these documents by writing to the SEC and paying
a fee for the copying cost. Please call the SEC at 1-800-SEC-0330
for more information about the operation of the public reference
room. Our SEC filings are also available, at no charge, to the
public at the SEC’s website at
http://www.sec.gov.
We
have filed with the SEC a Registration Statement on Form S-1 under
the Securities Act with respect to this offering of our securities.
This prospectus is part of that registration statement. This
prospectus does not contain all of the information set forth in the
registration statement or the exhibits to the registration
statement. For further information with respect to us and the
securities we are offering pursuant to this prospectus, you should
refer to the registration statement and its exhibits. Statements
contained in this prospectus as to the contents of any contract,
agreement or other document referred to are not necessarily
complete, and you should refer to the copy of that contract or
other documents filed as an exhibit to the registration statement.
You may read or obtain a copy of the registration statement at the
SEC’s public reference facilities and Internet site referred
to above.
INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE
The SEC
allows us to incorporate by reference the information we file with
it, which means that we can disclose important information to you
by referring you to another document that we have filed separately
with the SEC. You should read the information incorporated by
reference because it is an important part of this prospectus.
Information in this prospectus supersedes information incorporated
by reference that we filed with the SEC prior to the date of this
prospectus, while information that we file later with the SEC will
automatically update and supersede the information in this
prospectus. We incorporate by reference into this prospectus and
the registration statement of which this prospectus is a part the
information or documents listed below that we have filed with the
SEC:
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our
Annual Report on Form 10-K for the year ended September
30, 2017, filed with the SEC on December 21, 2017;
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Amendment
No. 1 to Annual Report on Form 10-K for the fiscal year ended
September 30, 2017, filed on January 26, 2018;
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the
information specifically incorporated by reference into our Annual
Report on Form 10-K for the year ended December 31,
2017 from our definitive proxy statement relating to our 2018
Annual Meeting of Stockholders, filed with the SEC on February 6,
2018;
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our
Quarterly Report on Form 10-Q for the three months ended
December 31, 2017, filed with the SEC on February 14,
2018;
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our
Quarterly Report on Form 10-Q for the three months ended
March 31, 2018, filed with the SEC on May 15,
2018;
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our
Quarterly Report on Form 10-Q for the three months ended
June 30, 2018, filed with the SEC on August 14, 2018;
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our
Current Reports on Form 8-K, filed with the SEC on
October 13, 2017, November 28, 2017, December 21, 2017, January 17,
2018, March 28, 2018, and September 11, 2018; and
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the
description of our common stock set forth in our registration
statement on Form 8-A, filed with the SEC on June 28,
2007, including any further amendments thereto or reports filed for
the purposes of updating this description.
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We also
incorporate by reference any future filings (other than current
reports furnished under Item 2.02 or Item 7.01 of
Form 8-K and exhibits filed on such form that are related
to such items unless such Form 8-K expressly provides to
the contrary) made with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, including those made after
(i) the date of the initial filing of the registration statement of
which this prospectus is a part and prior to effectiveness of such
registration statement, and (ii) the date of this prospectus and
before the completion of this offering of securities included in
this prospectus, or until we file a post-effective amendment that
indicates the termination of the offering of the common stock made
by this prospectus and will become a part of this prospectus from
the date that such documents are filed with the SEC. Information in
such future filings updates and supplements the information
provided in this prospectus. Any statements in any such future
filings will automatically be deemed to modify and supersede any
information in any document we previously filed with the SEC that
is incorporated or deemed to be incorporated herein by reference to
the extent that statements in the later filed document modify or
replace such earlier statements.
We will
furnish without charge to each person, including any beneficial
owner, to whom a prospectus is delivered, upon written or oral
request, a copy of any or all of the documents incorporated by
reference into this prospectus but not delivered with the
prospectus, including exhibits that are specifically incorporated
by reference into such documents. You should direct any requests
for documents to:
Bridgeline Digital, Inc.
Attn: Corporate Secretary
80 Blanchard Road
Burlington, MA 01803
(781) 376-5555
You
should rely only on information contained in, or incorporated by
reference into, this prospectus or in any free writing prospectus
that we have authorized for use in connection with this offering.
We have not, and the underwriters have
not, authorized anyone to provide you with information different
than that which is contained in or incorporated by reference in
this prospectus or in any free writing prospectus that we have
authorized for use in connection with this offering. We are
offering to sell, and seeking offers to buy, shares of common stock
only in jurisdictions where offers and sales are
permitted.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITY
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers, and
controlling persons, we have been advised that in the opinion of
the SEC this indemnification is against public policy as expressed
in the Securities Act and is therefore, unenforceable.
-33-
Shares
Common Stock
P R O S P E C T U S
ThinkEquity
a division of Fordham Financial Management, Inc.
Through
and including
,
2018 (25 days after commencement of this offering), all dealers
that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers’ obligation to
deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and
Distribution
The
following table indicates the expenses to be incurred in connection
with the offering described in this registration statement, other
than underwriting discounts and commissions, all of which will be
paid by us. All amounts are estimated except the Securities and
Exchange Commission registration fee and the Financial Industry
Regulatory Authority, Inc. (“FINRA”) filing fee.
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Amount
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SEC Registration
Fee
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$826.77
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FINRA Filing
Fee
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1,496.10
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Legal Fees and
Expenses
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*
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Accounting Fees and
Expenses
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*
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Transfer Agent and
Registrar fees and expenses
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*
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Printing
Expenses
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*
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Miscellaneous
Expenses
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*
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Total
expenses
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$*
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* To be provided by amendment.
Item 14. Indemnification of Officers and
Directors
Our amended and restated certificate of
incorporation (“Charter”) and amended and restated bylaws
(“Bylaws”) contain provisions relating to the
limitation of liability and indemnification of directors and
officers. Our Charter provides that a director will not be
personally liable to us or our stockholders for monetary damages
for breach of fiduciary duty as a director, except for
liability:
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for
any breach of the director’s duty of loyalty to us or our
stockholders;
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for
acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
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under Section 174 of the Delaware General
Corporation Law (the “DGCL”); or
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for
any transaction from which the director derived any improper
personal benefit.
Our
Charter also provides that we will indemnify our directors and
officers to the fullest extent not prohibited by the DGCL, as it
presently exists or may hereafter be
amended.
Our Bylaws provide that we will
indemnify our directors and officers to the fullest extent not
prohibited by the DGCL; provided, however,
that we may limit the extent of such
indemnification by individual contracts with our directors and
executive officers; and provided, further, that we are not required
to indemnify any director or executive officer in connection with
any proceeding (or part thereof) initiated by such person or any
proceeding by such person against us or our directors, officers,
employees or other agents unless:
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such
indemnification is expressly required to be made by
law;
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the
proceeding was authorized by the Board of Directors;
or
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such
indemnification is provided by us, in our sole discretion, pursuant
to the powers vested in us under the DGCL.
Our Bylaws provide that we shall advance, prior to the final
disposition of any proceeding, promptly following request therefor,
all expenses by any director or executive officer in connection
with any such proceeding upon receipt of any undertaking by or on
behalf of such person to repay said amounts if it should be
determined ultimately that such person is not entitled to be
indemnified under Article V of our Bylaws or otherwise.
Notwithstanding the foregoing, unless otherwise determined, no
advance shall be made by us if a determination is reasonably and
promptly made by the Board of Directors by a majority vote of a
quorum of directors who were not parties to the proceeding, or if
such a quorum is not obtainable, or even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in
a written opinion, that the facts known to the decision-making
party at the time such determination is made demonstrate clearly
and convincingly that such person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to our
best interests.
Our Bylaws also authorize us to purchase insurance on behalf of any
person required or permitted to be indemnified pursuant to Article
V of our Bylaws.
Section 145(a) of the DGCL authorizes a corporation to indemnify
any person who was or is a party, or is threatened to be made a
party, to a threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person
in connection with such action, suit or proceeding, if the person
acted in good faith and in a manner the person reasonably believed
to be in, or not opposed to, the best interests of the corporation
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the person’s conduct was
unlawful.
Section 145(b) of the DGCL provides in relevant part that a
corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
expenses (including attorneys’ fees) actually and reasonably
incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to
the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
The DGCL also provides that indemnification under Section 145(d)
can only be made upon a determination that indemnification of the
present or former director, officer or employee or agent is proper
in the circumstances because such person has met the applicable
standard of conduct set forth in Section 145(a) and
(b).
Section 145(g) of the DGCL also empowers a corporation to purchase
and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any
such capacity, or arising out of such person’s status as
such, whether or not the corporation would have the power to
indemnify such person against such liability under Section 145 of
the DGCL.
Section 102(b)(7) of the DGCL permits a corporation to provide for
eliminating or limiting the personal liability of one of its
directors for any monetary damages related to a breach of fiduciary
duty as a director, as long as the corporation does not eliminate
or limit the liability of a director for acts or omissions which
(1) which breached the director’s duty of loyalty to the
corporation or its stockholders, (2) which were not in good faith
or which involve intentional misconduct or knowing violation of
law, (3) under Section 174 of the DGCL; or (4) from which the
director derived an improper personal benefit.
We have obtained directors’ and officers’ insurance to
cover our directors and officers for certain
liabilities.
We plan to enter into an underwriting agreement, which provides
that the underwriters are obligated, under some circumstances, to
indemnify our directors, officers and controlling persons against
specified liabilities, including liabilities under the Securities
Act.
Item 15. Recent Sales of Unregistered Securities
The number of those securities sold and issued by the Company prior
to July 24, 2017 (the “Effective
Date”), as set forth
below, have been adjusted to reflect the 1-for-5 stock split
effectuated by the Company on the Effective Date. Accordingly,
those numbers included herein shall differ from the corresponding
numbers disclosed in our periodic reports filed with the SEC prior
to the Effective Date.
In October 2015, we sold 136,000 shares of our common stock at a
purchase price of $5.00 per share, for aggregate consideration of
$680,000, to accredited investors through a private placement
transaction.
In December 2015, we issued a warrant to purchase 6,000 shares of
common stock at a price of $20.00 per share to a director in
connection with a bank guaranty, which warrant was exercisable six-months after the
date of issuance and expires December 31, 2021.
In February 2016, we issued an aggregate of 21,539 shares of
restricted common stock at $4.55 per share to four members of our
Board of Directors in lieu of cash payments as consideration for
their services as board members.
In April 2016, our stockholders approved a proposal for
issuance of up to 800,000 shares of our common stock upon
conversion of certain outstanding convertible promissory notes.
From June 2016 through August 2016, all of the notes were converted
into shares of common stock.
In May
2016, we issued 361,336 shares of common stock, resulting in net
proceeds to the Company of $1.2 million for the first closing in
connection with the conversion of term notes issued to certain
accredited investors, as approved by the stockholders on April 29,
2016. We also issued to such investors
warrants to purchase an aggregate of 53,334 shares of our common
stock at a price of $3.75 per share, which warrants were exercisable six-months after
the date of issuance and expire five years from the date of
issuance. In June and July 2016, we issued an additional
172,000 shares of common stock, resulting in net proceeds to the
Company of $400,000 for the second and third closings in connection
with the conversion of these term notes.
In May
2016, certain officers and directors converted all outstanding
principal and accrued but unpaid interest due under outstanding
term notes held by such officers and directors into an aggregate of
867,765 shares of our common stock at a conversion price of $3.75
per share. In connection with the conversion, a total of 86,778
warrants to purchase common stock were issued at a price of $3.75
per share, which warrants were exercisable six months after the
date of issuance and expire five years from the date of
issuance.
In July 2016, we sold 440,000 shares of common stock at $3.75 per
share to certain accredited investors in a private placement
transaction, resulting in net proceeds of $1.5 million to the
Company. We also issued to such investors warrants to purchase an
aggregate of 44,000 shares of our common stock at a price of $4.60
per share, which warrants were exercisable six-months after the
date of issuance and expire five and one-half years from the date
of issuance.
During fiscal 2016, we issued 5,172 shares of common stock in
connection with a prior acquisition as payment of contingent
consideration.
In October 2016, we issued to one of our vendors 2,000 shares of
common stock at $3.95 per share for an aggregate fair market value
of $7,850 in exchange for services provided.
In November 2016, we sold 427,073 shares of our common stock at a
purchase price of $2.40 per share, for aggregate consideration of
approximately $1.1 million, to accredited investors through a
private placement transaction. We also issued to purchasers warrants to purchase
an aggregate of 213,538 shares of our common stock at a price of
$3.50 per share, which warrants were exercisable six-months after
the date of issuance and expire five and one-half years from the
date of issuance. In addition, we entered into a registration right
agreement with such purchasers to file a registration statement to
register the shares of common stock issued as well as those shares
of common stock underlying to the warrants that were issued to the
purchasers. Our President and CEO and two of our directors
purchased an aggregate of 78,740 shares of common stock in this
private offering; however, these officers and directors waived
their rights to participate in the registration
statement.
In December 2016, we issued warrants to purchase 6,000 shares of
common stock at a price of $20.00 per share to a director in
connection with a bank guaranty, which warrants were exercisable
six-months after the date of issuance and expire on December 31,
2021.
In February 2017, we issued an aggregate of 36,826 shares of
restricted common stock at $3.15 to five members of our Board of
Directors in lieu of cash payments as consideration for their
annual services as board members.
In June 2017, our CEO and President (Roger Kahn) elected to receive
shares of common stock in lieu of a $20,000 cash payment for a
bonus earned for his services to the Company in the first half of
the fiscal year. He received 7,273 fully vested restricted shares
with a fair value price of $2.75 per share.
During fiscal 2017, we issued 1,129 shares of common stock in
connection with a prior acquisition as payment of contingent
consideration.
In October 2017, we issued to one of our lenders an eight-year
warrant to purchase 66,315 shares of our common stock at a price of
$2.65 per share.
In December 2017, we issued a warrant to purchase 6,000 shares of
common stock at a price of $20.00 per share to a director in
connection with a bank guaranty, which warrants were exercisable
six-months after the date of issuance and expire December 31, 2021.
In February 2018, we issued an aggregate of 41,006 shares of
restricted common stock at $2.39 per share to four members of our
Board of Directors in lieu of cash payments as consideration for
their annual services as board members.
On September 7, 2018, we sold and issued Term Notes to certain
accredited investors in the aggregate principal amount of
$941,176, for which we
received cash proceeds in the aggregate amount of
$760,000 after subtracting the original issue discount and debt
issuance costs. The Term Notes have an original issue discount of
fifteen percent (15%), bear interest at a rate of twelve percent
(12%) per annum, and mature on the earlier to occur of (i) six
months from September 7, 2018, or (ii) the consummation of a debt
or equity financing resulting in gross proceeds to the Company of
at least $3.0 million.
We
believe that each of the offers, sales and issuances of securities
described in Item 15 were exempt from registration under the
Securities Act pursuant to Regulation D under the Securities Act or
pursuant to Section 4(a)(2) of the Securities Act regarding
transactions not involving a public offering. The recipients of
securities in each of these transactions represented their
intention to acquire the securities for investment only and not
with a view to or for sale in connection with any distribution
thereof and appropriate legends were affixed to the stock
certificates and instruments issued in such transactions. All
recipients had adequate access, through their relationships with
us, to information about us.
Item 16. Exhibits
|
Exhibit
|
|
Incorporated
by Reference
|
Filed
|
||
|
No.
|
Exhibit
|
Form
|
Filing
Date
|
Exhibit
No.
|
Herewith
|
|
1.1*
|
Form of
Underwriting Agreement
|
|
|
|
|
|
Asset Purchase Agreement, dated as of May 11,
2010, by and between Bridgeline Digital, Inc. and TMX
Interactive, Inc.
|
10-Q
|
May 17,
2010
|
2.1
|
|
|
|
Asset Purchase Agreement, dated as of July 9,
2010, by and between Bridgeline Digital, Inc. and e.magination
network, LLC
|
8-K
|
July 15,
2010
|
2.1
|
|
|
|
Agreement and Plan of Merger, dated as of
October 3, 2011, by and among Bridgeline Digital,
Inc., Magnetic
Corporation and Jennifer Bakunas
|
8-K
|
October 6,
2011
|
2.1
|
|
|
|
Agreement and Plan of Merger, dated as of May
31, 2012, by and among Bridgeline Digital,
Inc., MarketNet, Inc.
and Jill Bach
|
8-K
|
June 5,
2012
|
2.1
|
|
|
|
Amended and Restated Certificate of
Incorporation, as amended
|
10-Q
|
May 15,
2013
|
3.1
|
|
|
|
Certificate of Amendment to Amended and Restated
Certificate of Incorporation, dated May 4, 2015
|
8-K
|
May 5,
2015
|
3.1
|
|
|
|
Certificate of Designations of the Series A
Convertible Preferred Stock
|
8-K
|
November 4,
2014
|
3.1
|
|
|
|
Amended and Restated By Laws
|
10-Q
|
February
17, 2015
|
3.2
|
|
|
|
Specimen Common Stock Certificate (File No.
333-139298)
|
SB-2/A
|
June
20, 2007
|
4.1
|
|
|
|
4.2*
|
Form of
Representative’s Warrant
|
|
|
|
|
|
5.1*
|
Opinion
of Disclosure Law Group, a Professional Corporation.
|
|
|
|
|
|
Employment Agreement with Roger “Ari” Kahn, dated
August 24, 2015
|
10-K
|
December
24, 2015
|
10.1
|
|
|
|
First Amendment to Employment Agreement, Roger “Ari”
Kahn, dated May 10, 2016
|
8-K
|
May 13,
2016
|
10.1
|
|
|
|
Amended and Restated Stock Incentive Plan, as
amended
|
DEF 14
A
|
July
14, 2014
|
C
|
|
|
|
Securities Purchase Agreement between Bridgeline Digital, Inc. and
the investors named therein, dated October 29,
2010
|
8-K
|
November
4, 2010
|
10.1
|
|
|
|
Securities Purchase Agreement between Bridgeline Digital, Inc. and
the investors named therein, dated May 31,
2012
|
8-K
|
June 5,
2012
|
10.1
|
|
|
|
Form of Common Stock Purchase Warrant issued to Placement Agent,
dated November 6, 2013
|
8-K
|
November
12, 2013
|
10.3
|
|
|
|
Placement Agent Agreement between Bridgeline Digital, Inc. and
Taglich Brothers, Inc., dated October 30,
2013
|
8-K
|
November
12, 2013
|
10.5
|
|
|
|
Form of Restricted Stock Agreement by and between Bridgeline
Digital, Inc. and certain Board of Directors, dated February
24, 2014
|
10-Q
|
May 15,
2014
|
10.2
|
|
|
|
Securities Purchase Agreement between Bridgeline Digital, Inc. and
the Investors named therein dated March 28,
2014
|
10-Q
|
May 15,
2014
|
10.3
|
|
|
|
Form of Common Stock Purchase Warrant issued to Placement Agent,
dated March 28, 2014
|
10-Q
|
May 15,
2014
|
10.4
|
|
|
|
Securities Purchase Agreement between Bridgeline Digital, Inc and
the investors therein, dated October 28,
2014
|
8-K
|
November
4, 2014
|
10.1
|
|
|
|
Form of Common Stock Purchase Warrant Issued to Placement
Agent
|
8-K
|
November
4, 2014
|
10.2
|
|
|
Form of Common Stock Purchase Warrant Issued by Company to Michael
Taglich dated January 7, 2015
|
8-K
|
January
9, 2015
|
10.3
|
|
|
|
Side Letter between the Company and Michael Taglich, dated January
7, 2015
|
8-K
|
January
9, 2015
|
10.3
|
|
|
|
Form of Common Stock Purchase Warrant Issued by Company to Michael
Taglich dated February 17, 2015
|
10-Q
|
February
17, 2015
|
10.2
|
|
|
|
Form of Restricted Stock Agreement
|
10-Q
|
May 15,
2015
|
10.6
|
|
|
|
Form of Common Stock Purchase Warrant Issued by Company to Michael
Taglich dated May 12, 2015
|
10-Q
|
May 15,
2015
|
10.9
|
|
|
|
Form of Common Stock Purchase Warrant Issued by Company to Michael
Taglich dated July 21, 2015
|
8-K
|
July
24, 2015
|
10.2
|
|
|
|
Securities Purchase Agreement between Bridgeline Digital, Inc and
the investors therein, dated October 13,
2015
|
10-Q
|
February
12, 2016
|
10.3
|
|
|
|
Bridgeline Digital Inc. 2016 Stock Incentive
Plan
|
DEF 14
A
|
March
22, 2016
|
Appendix
B
|
|
|
|
Form of Common Stock Purchase Warrant issued to placement
agent
|
8-K
|
May 17,
2016
|
10.3
|
|
|
|
Loan and Security Agreement between Bridgeline Digital Inc. and
Heritage Bank of Commerce, dated June 9,
2016
|
8-K
|
June
15, 2016
|
10.1
|
|
|
|
Unconditional Guarantee entered into by Michael N. Taglich in favor
of Heritage Bank of Commerce, dated June 9,
2016
|
8-K
|
June
15, 2016
|
10.2
|
|
|
|
Placement Agreement between Bridgeline Digital, Inc and Taglich
Brothers, Inc dated March 31, 2016
|
8-K
|
June
15, 2016
|
10.3
|
|
|
|
First Amendment to the Loan and Security Agreement between
Bridgeline Digital Inc. and Heritage Bank of Commerce, dated
August 15, 2016
|
10-Q
|
August
15, 2016
|
10.12
|
|
|
|
Form of Securities Purchase Agreement dated November 3,
2016
|
8-K
|
November
4, 2016
|
10.1
|
|
|
|
Form of Purchaser Warrant
|
8-K
|
November
4, 2016
|
10.2
|
|
|
|
Form of Registration Rights Agreement dated November 3,
2016
|
8-K
|
November
4, 2016
|
10.3
|
|
|
|
Form of Insider Securities Purchase Agreement dated November 3,
2016
|
8-K
|
November
4, 2016
|
10.4
|
|
|
Second Amendment to the Loan and Security Agreement between
Bridgeline Digital Inc. and Heritage Bank of Commerce, dated
December 14, 2016
|
10-K
|
December
14, 2016
|
10.66
|
|
|
|
Employment Agreement with Michael D. Prinn dated November 11,
2016
|
10-Q
|
February
14, 2017
|
10.7
|
|
|
|
Third Amendment to the Loan and Security Agreement between
Bridgeline Digital, Inc and Heritage Bank of
Commerce
|
10-Q
|
August
14, 2017
|
10.1
|
|
|
|
First Amendment to Affirmation of Guaranty between Michael N.
Taglich and Heritage Bank of Commerce
|
10-Q
|
August
14, 2017
|
10.2
|
|
|
|
Seventh
Amendment to the Loan and Security Amendment between Bridgeline
Digital, Inc. and Heritage Bank of Commerce, dated May 10,
2018
|
10-Q
|
May 15,
2018
|
10.1
|
|
|
|
First
Amendment to the Loan and Security Amendment between Bridgeline
Digital, Inc. and Montage Capital II LP, dated May 10,
2018
|
10-Q
|
May 15,
2018
|
10.2
|
|
|
|
Eighth
Amendment to the Loan and Security Amendment between Bridgeline
Digital, Inc. and Heritage Bank of Commerce, dated August 10,
2018
|
10-Q
|
June
30, 2018
|
10.1
|
|
|
|
Form
of Note Purchase Agreement
|
8-K
|
September
11, 2018
|
10.1
|
|
|
|
Form
of Promissory Note
|
8-K
|
September
11, 2018
|
10.2
|
|
|
|
Form
of Subordination Agreement
|
8-K
|
September
11, 2018
|
10.3
|
|
|
|
Subsidiaries
of the Registrant
|
10-K
|
December 21,
2017
|
21.1
|
|
|
|
Consents
of Marcum LLP, Independent Registered Public Accounting
Firm
|
|
|
|
X
|
|
|
23.2*
|
Consent
of Disclosure Law Group, a Professional Corporation (included in
Exhibit 5.1)
|
|
|
|
|
|
24.1
|
Power
of Attorney (included on signature page to this Registration
Statement)
|
|
|
|
X
|
* To be filed by amendment.
Item
17. Undertakings
The
undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as
required by the underwriters to permit prompt delivery to each
purchaser.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Securities
Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes:
|
(1)
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the
Securities Act;
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than 20 percent change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee”
table in the effective registration statement;
|
|
|
(iii)
|
To
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
|
|
(4)
|
That,
for the purpose of determining liability of the registrant under
the Securities Act to any purchaser in the initial distribution of
the securities:
|
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used
to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities
to such purchaser:
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
|
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
|
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
|
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of
the registrant’s annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual
report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the
initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report, to
securityholders that is incorporated by reference in the prospectus
and furnished pursuant to and meeting the requirements of
Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide
such interim financial information.
The
registrant hereby further undertakes that:
(1) For
purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this registration statement as of the time
it was declared effective.
(2) For
the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of these securities at
that time shall be deemed to be the
initial bona
fide offering
thereof.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-1 and has duly caused
this registration statement or amendment thereto to be signed on
its behalf by the undersigned, thereunto duly authorized,
in the City of Burlington, Massachusetts on
September 19, 2018.
|
|
BRIDGELINE DIGITAL, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Roger
Kahn
|
|
|
|
Roger
Kahn
|
|
|
|
President and Chief Executive Officer (Principal Executive
Officer)
|
POWER OF ATTORNEY
We, the
undersigned officers and directors of Bridgeline Digital, Inc.,
hereby severally constitute and appoint Roger Kahn and Michael Prinn, and each of
them singly (with full power to each of them to act alone), our
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution in each of them for him or her and
in his or her name, place and stead, and in any and all capacities,
to sign any and all amendments (including post-effective
amendments) to this registration statement (or any other
registration statement for the same offering that is to be
effective upon filing pursuant to Rule 462(b) under the Securities
Act of 1933), and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite or necessary to be
done in and about the premises, as full to all intents and purposes
as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Roger
Kahn
|
|
President, Chief Executive Officer
|
|
September 19, 2018
|
|
Roger
Kahn
|
|
(Principal
Executive Officer) and Director
|
|
|
|
|
|
|
|
|
|
/s/ Michael
Prinn
|
|
Executive
Vice-President and
|
|
September 19, 2018
|
|
Michael
Prinn
|
|
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/Kenneth
Galaznik
|
|
Director
|
|
September 19, 2018
|
|
Kenneth
Galaznik
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Joni
Kahn
|
|
Director
|
|
September 19, 2018
|
|
Joni
Kahn
|
|
|
|
|
|
/s/ Scott
Landers
|
|
Director
|
|
September 19, 2018
|
|
Scott
Landers
|
|
|
|
|
|
/s/ Michael
Taglich
|
|
Director
|
|
September 19, 2018
|
|
Michael
Taglich
|
|
|
|
|
II-10