Bridgeline Digital, Inc. 10-K

Item 9A. Controls and Procedures. Management’s Report on Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As of September 30, 2020, the end of our fiscal year covered by this report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Responsibility estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of September 30, 2020. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in the 2013 Internal Control-Integrated Framework . Our management has concluded that as of September 30, 2020, our internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our management reviewed the results of its assessment with our Board of Directors. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to a permanent exemption from the internal control audit requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. Inherent Limitations on Effectiveness of Controls Internal control over financial reporting has inherent limitations which include but are not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Provided its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis; however, these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Changes in Internal Control over Financial Reporting There have been no significant changes in our internal controls over financial reporting that occurred during the fiscal year ended September 30, 2020 that have materially, or are reasonably likely to materially affect, our internal controls over financial reporting. 60 ITEM 9B. OTHER INFORMATION None. PART III Item 10. Directors, Executive Officers and Corporate Governance. The following table sets forth information regarding our directors and executive officers: Name Age Position Joni Kahn 65 Chairperson (1)(2)(3)(4) Kenneth Galaznik 69 Director (1)(2)(4) Scott Landers 50 Director (1)(2)(3)(4) Michael Taglich 55 Director Roger Kahn 51 Director, President and Chief Executive Officer Mark G. Downey 55 Chief Financial Officer (5) (1) Member of the Audit Committee. (2) Member of the Compensation Committee. (3) Member of the Nominating and Governance Committee. (4) Independent director. (5) Mr. Downey was appointed as our Chief Financial Officer and Treasurer effective July 1, 2019, following the resignation of our former Chief Financial Officer, Carole Tyner. Biographies Joni Kahn has been a member of our Board of Directors since April 2012. In May 2015, Ms. Kahn was appointed Chairperson of the Board of Directors. She also serves as the Chair of the Compensation Committee and is a member of the Audit and Nominating and Governance Committees. Ms. Kahn has over thirty years of operating experience with high growth software and services companies with specific expertise in the SaaS (Software as a Service), ERP (Enterprise Resource Planning) Applications, Business Intelligence and Analytics and Cybersecurity segments. From 2013 to 2015, Ms. Kahn was the Senior Vice President of Global Services for Big Machines, Inc., which was acquired by Oracle in October 2013. From 2007 to 2012, Ms. Kahn was Vice President of Services for HP’s Enterprise Security Software group. From 2005 to 2007, Ms. Kahn was the Executive Vice President at BearingPoint where she managed a team of over 3,000 professionals and was responsible for North American delivery of enterprise applications, systems integration and managed services solutions. Ms. Kahn also oversaw global development centers in India, China and the U.S. From 2002 to 2005, Ms. Kahn was the Senior Group Vice President for worldwide professional services for Business Objects, a business intelligence and analytics software maker based in San Jose, where she led the applications and services division that supported that company's transformation from a products company to an enterprise solutions company. Business Objects was acquired by SAP in 2007. From 2000 to 2007, Ms. Kahn was a Member of the Board of Directors for MapInfo, a global location intelligence solutions company. She was a member of MapInfo’s Audit Committee and the Compensation Committee. MapInfo was acquired by Pitney Bowes in 2007. From 1993 to 2000, Ms. Kahn was an Executive Vice President and Partner of KPMG Consulting, where she helped grow the firm’s consulting business from $700 million to $2.5 billion. Ms. Kahn received her B.B.A in Accounting from the University of Wisconsin – Madison. Ms. Kahn brings extensive leadership experience to our Board and our Audit Committee as an experienced senior executive. Ms. Kahn has over thirty years of executive level managerial, operational, and strategic planning experience leading world-class sales, service and support technology organizations. Her service on prior boards also provides financial and governance experience. Ms. Kahn brings extensive leadership experience to our Board and our Audit Committee as an experienced senior executive. Ms. Kahn has over thirty years of executive level managerial, operational, and strategic planning experience leading world-class service and support technology organizations. Her service on prior boards also provides financial and governance experience. 61 The Board of Directors has determined that Ms. Kahn’s vast experience in the technology industry and finance, as well as her executive leadership, makes her qualified to continue as the Chairperson and member of our Board of Directors. Kenneth Galaznik has been a member of our Board of Directors since 2006. Mr. Galaznik is the Chairman of the Company’s Audit Committee and serves as a member of the Compensation Committee. From 2005 to 2016, Mr. Galaznik was the Senior Vice President, Chief Financial Officer and Treasurer of American Science and Engineering, Inc., a publicly held supplier of X-ray inspection and screening systems with a public market cap of over $200 million. Mr. Galaznik retired from his position at American Science and Engineering on March 31, 2016. From August 2002 to February 2005, Mr. Galaznik was Vice President of Finance of American Science and Engineering, Inc. From November 2001 to August 2002, Mr. Galaznik was self-employed as a consultant. From March 1999 to September 2001, he served as Vice President of Finance at Spectro Analytical Instruments, Inc. and has more than 35 years of experience in accounting and finance positions. Mr. Galaznik holds a B.B.A. degree in accounting from The University of Houston. Mr. Galaznik brings extensive experience to our Board and our Audit Committee as an experienced senior executive, a financial expert, and as chief financial officer of a publicly held company. The Board of Directors has determined that Mr. Galaznik’s deep experience in finance and his executive leadership make him qualified to continue as a member of our Board of Directors. Scott Landers has been a member of our Board of Directors since 2010. Mr. Landers is the Chair of the Nominating and Corporate Governance Committee and serves as a member of the Audit and Compensation Committees. Mr. Landers was named President and Chief Executive Officer of Monotype Imaging Holdings, Inc. on January 1, 2016 after serving as the company’s Chief Operating Officer since early 2015 and its Chief Financial Officer, Treasurer and Assistant Secretary since joining Monotype in July 2008. Effective October 11, 2019, Monotype was acquired by HGGC and is now a privately-owned company and is a leading provider of typefaces, technology and expertise that enable the best user experiences and sure brand integrity. Prior to joining Monotype, from September 2007 until July 2008, Mr. Landers was the Vice President of Global Finance at Pitney Bowes Software, a $450 million division of Pitney Bowes, a leading global provider of location intelligence solutions. From 1997 until September 2007, Mr. Landers held several senior finance positions, including Vice President of Finance and Administration, at MapInfo, a publicly held company which was acquired by Pitney Bowes in April 2007. Earlier in his career, Mr. Landers was a Business Assurance Manager with Coopers & Lybrand. Mr. Landers holds a bachelor's degree in accounting from Le Moyne College in Syracuse, N.Y. and a master’s degree in business administration from The College of Saint Rose in Albany, N.Y. Mr. Landers brings extensive experience to our Board and our Audit Committee as an experienced senior executive, a financial expert, and as chief executive officer and a chief financial officer of a publicly-held company. Our Board of Directors has determined that Mr. Lander’s financial skills, public-company experience, strategic business acumen and executive leadership make him a qualified to continue as a member of our Board of Directors. Michael Taglich has been a member of our Board of Directors since 2013. He is the Chairman and President of Taglich Brothers, Inc., a New York City based securities firm which he co-founded in 1992 with his brother Robert Taglich. Taglich Brothers, Inc. focuses on public and private micro-cap companies in a wide variety of industries. He is currently the Chairman of the Board of Air Industries Group Inc., a publicly traded aerospace and defense company (NYSE AIRI), and Mare Island Dry Dock Inc., a privately-held company. He also serves as a director of a number of other private companies. Michael Taglich brings extensive professional experience which spans various aspects of senior management, including finance, operations and strategic planning. Mr. Taglich has more than 30 years of financial industry experience and served on his first public company board over 20 years ago. Our Board of Directors has determined that Mr. Taglich’s executive strategic business skills in both private and public companies, as well as his experience leading and advising high-growth companies, make him a qualified to continue as a member of our Board of Directors. Roger Kahn has been a member of our Board of Directors since December 2017. Mr. Kahn joined the Company as the Chief Operating Officer in August 2015 and has been our President and Chief Executive Officer since May 2016. Prior to joining Bridgeline Digital, Mr. Kahn co-founded FatWire, a leading content management and digital engagement company. As the General Manager and Chief Technology Officer of FatWire, Mr. Kahn built the company into a global corporation with offices in thirteen countries. FatWire was acquired by Oracle in 2011. Mr. Kahn received his Ph.D. in Computer Science and Artificial Intelligence from the University of Chicago. Our Board of Directors has determined that Mr. Kahn’s vast experience as a successful entrepreneur in the technology space, as well as his technical and leadership acumen, make him qualified to continue as a member of our Board of Directors. 62 Mark G. Downey has been our Executive Vice President and Chief Financial Officer and Treasurer since July 2019. Mr. Downey comes to Bridgeline with more than 25 years of executive experience, including more than 15 years as a CFO and COO at several public and privately-held companies in the technology, private equity, financial services and professional services industries. Mr. Downey has extensive accounting, capital markets structuring, risk, treasury, M&A due diligence, technology enhancements, and overall operational and management experience. Prior to joining Bridgeline Digital, Inc., Mr. Downey served as a consultant and Director of Accounting & Transaction Services at MorganFranklin Consulting from 2015 to 2019. He was the global CFO and COO at Algodon Group, a private equity firm from 2014 to 2015 and CFO and COO and Treasurer at Dahlman Rose, Tullett Prebon and Commerzbank Securities from 2000 through 2014. He started his career at Coopers and Lybrand and holds a B.B.A. in Accounting from Iona College – Hagan School of Business and is a member of the American Institute of Certified Public Accountants and New York State Society of Certified Public Accountants. There are no family relationships between any of the directors and the Company’s executive officers, including between Ms. Joni Kahn and Mr. Roger Kahn, the Company’s President and Chief Executive Officer. Section 16(A) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) requires the Company’s executive officers, directors and persons who beneficially own more than 10% of a registered class of the Company’s equity securities (collectively, the “Reporting Persons”) to file certain reports regarding ownership of, and transactions in, the Company’s securities with the Securities and Exchange Commission (the “SEC”). These officers, directors and stockholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) reports that they file with the SEC. With respect to fiscal 2020 and 2019 and based solely on its review of the copies of such forms and amendments thereto received by it, the Company believes that all of the executive officers, directors, and owners of ten percent of the outstanding Common Stock complied with all applicable filing requirements. Code of Conduct and Ethics The Company's Board of Directors has adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K of the Securities Act that applies to all of the Company's officers and employees, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Ethics codifies the business and ethical principles that govern the Company's business. A copy of the Code of Ethics is available on the Company's website www.bridgeline.com. The Company intends to post amendments to or waivers from its Code of Ethics (to the extent applicable to its principal executive officer, principal financial officer or principal accounting officer) on its website. The Company's website is not part of this proxy statement. Committees of the Board of Directors The Company has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Audit Committee The Audit Committee assists the Board in the oversight of the audit of our consolidated financial statements and the quality and integrity of our accounting, auditing and financial reporting processes. The Audit Committee is responsible for making recommendations to the Board concerning the selection and engagement of independent registered public accountants and for reviewing the scope of the annual audit, audit fees, results of the audit and auditor independence. The Audit Committee also reviews and discusses with management and the Board such matters as accounting policies, internal accounting controls and procedures for preparation of financial statements. Our Audit Committee is comprised of Mr. Galaznik (Chair), Ms. Kahn and Mr. Landers. Our Board has determined that each of the members of the Audit Committee meet the criteria for independence under the standards provided by the Nasdaq Stock Market. The Board of Directors has adopted a written charter for the Audit Committee. A copy of such charter is available on the Company's website, www.bridgeline.com . During Fiscal 2020, the Audit Committee met four times. Each member of the Audit Committee attended each such meeting. The Chairman of the Audit Committee was present at all meetings. Audit Committee Financial Expert. Our Board has also determined that each of Mr. Galaznik and Mr. Landers qualifies as an "audit committee financial expert" as defined under Item 407(d) (5) of Regulation S-K and as an independent director as defined by the Nasdaq listing standards. Compensation Committee The Compensation Committee evaluates the performance of our senior executives, considers the design and competitiveness of our compensation plans, including the review of independent research and data regarding compensation paid to executives of public companies of similar size and geographic location, reviews and approves senior executive compensation and administers our equity compensation plans. In addition, the Committee also conducts reviews of executive compensation to ensure compliance with Section 162(m) of the Internal Revenue Code of 1986, as amended. Our Compensation Committee is comprised of Ms. Kahn (Chair), Mr. Galaznik and Mr. Landers, all of whom are independent directors. The Board of Directors has adopted a written charter for the Compensation Committee. A copy of such charter is available on the Company's website, www.bridgeline.com . During Fiscal 2020, the Compensation Committee met five times. 63 Nominating and Corporate Governance Committee The Nominating and Governance Committee identifies candidates for future Board membership and proposes criteria for Board candidates and candidates to fill Board vacancies, as well as a slate of directors for election by the shareholders at each annual meeting. The Nominating and Governance Committee also annually assesses and reports to the Board on Board and Board Committee performance and effectiveness and reviews and makes recommendations to the Board concerning the composition, size and structure of the Board and its committees. A copy of such charter is available on the Company's website, www.bridgeline.com . Our Nominating and Governance Committee is comprised of Mr. Landers (Chair) and Ms. Kahn, each of whom are independent directors. During Fiscal 2020, the Nominating and Governance Committee met four times. Item 11. Executive Compensation. Summary Compensation Table The following Summary Compensation Table sets forth the total compensation paid or accrued for the fiscal years ended September 30, 2020 and September 30, 2019 for our principal executive officer and our other two most highly compensated executive officers who were serving as executive officers as of September 30, 2020. We refer to these officers as our named executive officers. Name and Principal Position Fiscal Year End Salary Bonus All Other Compensation (2) Total Roger Kahn 2019 $ 300,000 $ 26,042 $ - $ 326,042 President and Chief Executive Officer 2020 $ 300,000 $ 15,624 $ - $ 315,624 Mark G. Downey 2019 $ 60,000 $ - $ - $ 60,000 Executive Vice President Chief Financial Officer and Treasurer 2020 $ 240,000 $ 5,000 $ - $ 245,000 Carole Tyner (1) 2019 $ 201,167 $ 7,500 $ 116,189 $ 324,856 Former Chief Financial Officer (1) Carole Tyner resigned as Chief Financial Officer on August 31, 2019. Effective July 1, 2019, Mark Downey was appointed as Executive Vice President, Chief Financial Officer and Treasurer. (2) Amounts paid to Carole Tyner in fiscal 2019 represented severance of $110,000, unused vacation of $5,077 and COBRA of $1,112. Employment Agreements Roger Kahn On August 24, 2015, Mr. Roger "Ari" Kahn joined Bridgeline Digital, Inc. (the "Company") as the Company's Chief Operating Officer. On December 1, 2015, Mr. Kahn and another were named Co-Interim Chief Executive Officers and Presidents and assumed the responsibilities of the Office of the Chief Executive Officer and President. On May 6, 2016, the Company appointed Mr. Kahn as President and Chief Executive Officer, effective May 10, 2016. Mr. Kahn's employment agreement was amended and reported on Form 8-K filed with the Securities and Exchange Commission on May 13, 2016. In furtherance of Mr. Kahn's employment with the Company, a new employment agreement was entered into on September 13, 2019 by and between the Company and Mr. Kahn. The principal change to Mr. Kahn's employment agreement is that it will automatically renew each fiscal year unless the Company provides written notice of its intent not to renew such employment agreement at least sixty (60) days in advance of the Company's fiscal year rather than the employment agreement only renewing upon notice from the Company. Carole Tyner On June 28, 2019, Ms. Carole Tyner resigned from her position of Chief Financial Officer of Bridgeline Digital, Inc. (the "Company") to pursue new professional opportunities. Upon Ms. Tyner's departure on August 31, 2019, she received a lump sum separation payment equivalent to six-months base salary, and further, she continued to receive COBRA health insurance continuation benefits with the Employer portion of the premiums paid by the Company through February 28, 2020. 64 Mark G. Downey Effective July 1, 2019, Mark G. Downey was appointed by the Company's Board of Directors as Executive Vice President, Chief Financial Officer and Treasurer of the Company. The Company and Mr. Downey entered into an employment agreement (the "Employment Agreement"), effective July 1, 2019 through September 30, 2020, whereby he will receive two-hundred and forty thousand dollars base salary and the ability to earn a bi-annual incentive bonus of thirty thousand dollars. Mr. Downey may also participate in such equity-based and cash-based incentive programs as the Company may from time to time make available to its executive officers, in accordance with the terms and conditions of such programs, as well as, the Company's other applicable employee benefits plans and programs. His Employment Agreement, which has been renewed through September 2021, also provides that in the event Mr. Downey's employment is terminated by the Company without cause or if the Company terminates his employment for good reason, he is entitled to receive severance benefits. The foregoing descriptions of the material terms of the Employment Agreement by and between the Company and Mr. Downey do not purport to be complete descriptions and are qualified in their entirety by reference to the Employment Agreement, which is filed as Exhibit 10.1 on Form 8-K. There are no family relationships between Mr. Downey and any director or executive officer of the Company. Outstanding Equity Awards at Fiscal 20 20 Year-End The following table sets forth information concerning outstanding stock options for each named executive officer as of September 30, 2020. Name Grant Date Number of Securities Underlying Unexercised Options Exercisable (1) Number of Securities Underlying Unexercised Options Unexercisable (1) Exercise price ($/sh) Option Expiration Date Roger Kahn (1) 08/24/2015 800 - $ 287.50 08/24/2025 08/19/2016 716 - $ 205.00 08/19/2026 1,516 - (1) Shares vest in equal installments upon the anniversary date of the grant over three years. Director Compensation The non-employee members of our Board of Directors are compensated as follows: ● Compensation . Each outside director receives an annual retainer of $12,000 and is compensated $1,500 for each meeting such director attends in person. Members of the Audit Committee receive additional annual compensation of $3,000. ● Committee Chair Bonus. The Chair of the Board of Directors receives an additional annual fee of $15,000. The Chair of the Audit Committee receives an additional annual fee of $10,000. The Chairs of the Compensation Committee and Nominating and Corporate Governance Committee each receive an additional annual fee of $5,000. These fees are payable in lump sums in advance. Other directors who serve on our standing committees, other than the Audit Committee, do not receive additional compensation for their committee services. 65 Director Compensation Table The following table sets forth information concerning the compensation paid to our non-employee directors during the fiscal year ended September 30, 2020. Annual Board Director Retainer Meetings Chairman Additional Total Ken Galaznik $ 12,000 $ 6,000 $ 10,000 $ 28,000 Joni Kahn 12,000 6,000 15,000 3,000 36,000 Scott Landers 12,000 6,000 5,000 3,000 26,000 Michael Taglich 12,000 6,000 18,000 $ 48,000 $ 24,000 $ 30,000 $ 6,000 $ 108,000 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 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 December 23, 2020 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, 100 Sylvan Road, Suite G-700, Woburn, Massachusetts 01801. The following tables set forth, as of December 23, 2020, the beneficial ownership of our Series C 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 each class 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 December 23, 2020 there were 350 shares of our Series C Preferred and 4,420,170 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 C Preferred Stock Name and Address Number of Shares Owned ( 1) Percent of Shares Outstanding Michael and Claudia Taglich 790 New York Avenue Huntington, NY 11743 350 100.00% All current executive officers and directors as a group 350 * (1) Holders of Series C Preferred are entitled to vote on all matters presented to our stockholders on an as-converted basis. Each share of Series C Preferred Stock is convertible, at the option of each respective holder, into approximately 111.11 shares of Common Stock. Common Stock Name and Address Number of Shares Owned Percent of Shares Outstanding Michael Taglich Director 304,387 (1) 6.47% Roger Kahn President, Chief Executive Officer, Director 8,392 (2) 0.19% Kenneth Galaznik Director 758 (3) 0.02% Scott Landers Director 721 (4) 0.02% Joni Kahn Director 719 (5) 0.02% Mark G. Downey Chief Financial Officer and Treasurer - - All current executive officers and directors as a group 314,977 (6) 6.72% (1) Includes 248,805 shares issuable upon the exercise of warrants, and 174 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of December 23, 2020). Also includes 35 shares of Common Stock and 2 shares issuable upon the exercise of warrants owned by Mr. Taglich’s spouse. 66 (2) Includes 172 shares issuable upon the exercise of warrants and 5,246 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of December 23, 2020). Includes 545 shares of common stock owned by Mr. Kahn’s spouse. (3) Includes 146 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of December 23, 2020). (4) Includes 138 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of December 23, 2020). Includes 8 shares of Common Stock owned by Mr. Lander’s children. (5) Includes 130 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of December 23, 2020). (6) Includes 5,824 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of December 23, 2020). We maintain a number of equity compensation plans for employees, officers, directors and other entities and individuals whose efforts contribute to our success. The table below sets forth certain information as of our fiscal year ended September 30, 2020 regarding the shares of our common stock available for grant or granted under our equity compensation plans. Equity Compensation Plan Information Number of securities Number of securities to be issued upon Weighted average remaining available exercise of exercise price of for future issuance outstanding options, outstanding options, under equity warrants and rights warrants and rights compensation plans Plan category (a) (b) (excluding securities reflected in column a) (c) Equity compensation plans approved by security holders 613,201 $ 4.76 190,045 Equity compensation plans not approved by security holders (1) 5,492,879 $ 4.37 - Total 6,106,080 $ - 190,045 (1) At September 30, 2020, there were 5,492,879 total Warrants outstanding. 67 Stock warrants outstanding at September 30, 2020 are as follows: Issue Extended Type Date Shares Price Expiration Placement Agent 06-Nov-13 - $ 1,625.00 06-Nov-18 Placement Agent 28-Mar-14 - $ 1,312.50 28-Mar-19 Placement Agent 28-Oct-14 - $ 812.50 28-Oct-19 Director/Shareholder 31-Dec-14 - $ 1,000.00 31-Dec-19 Director/Shareholder 12-Feb-15 - $ 1,000.00 12-Feb-20 Director/Shareholder 12-May-15 - $ 1,000.00 12-May-20 Director/Shareholder 31-Dec-15 120 $ 1,000.00 31-Dec-20 Placement Agent 17-May-16 1,736 $ 187.50 17-May-21 Placement Agent 11-May-16 1,067 $ 187.50 11-May-21 Placement Agent 15-Jul-16 880 $ 230.00 15-Jul-21 Investors 08-Nov-16 4,271 $ 175.00 09-May-22 Director/Shareholder 31-Dec-16 120 $ 1,000.00 31-Dec-21 Financing 10-Oct-17 1,327 $ 132.50 10-Oct-25 Director/Shareholder 31-Dec-17 120 $ 1,000.00 31-Dec-21 Investors 19-Oct-18 3,120 $ 25.00 19-Oct-23 Placement Agent 14-Apr-19 10,000 $ 31.25 16-Oct-23 Total 22,761 Item 13. Certain Relationships and Related Transactions, and Director Independence. Item 404(d) of Regulation S-K requires the Company to disclose any transaction or proposed transaction which occurred since the beginning of the two most recently completed fiscal years in which the amount involved exceeds the lesser of $120,000 or one percent (1%) of the average of the Company’s total assets as of the end of the last two completed fiscal years in which the Company is a participant and in which any related person has or will have a direct or indirect material interest. A related person is any executive officer, director, nominee for director, or holder of 5% or more of the Company's Common Stock, or an immediate family member of any of those persons. In accordance with our Audit Committee charter, our Audit Committee is responsible for reviewing and approving the terms of any related party transactions. Therefore, any material financial transaction between the Company and any related person would need to be approved by our Audit Committee prior to the Company entering into such transaction. In October 2013, Mr. Michael Taglich joined the Board of Directors. Michael Taglich is the Chairman and President of Taglich Brothers, Inc. a New York based securities firm. Taglich Brothers, Inc. acted as placement agents for many of the Company’s private offerings in 2012, 2013, 2014, and 2016. They were also the placement agent for the Company’s $3 million subordinated debt offering in 2013, the Series A Preferred stock sale in 2015, and Promissory Term Notes in 2018. As of August 16, 2019, Michael Taglich beneficially owns approximately 10% of Bridgeline stock. Michael Taglich has also guaranteed $1.5 million in connection with the Company’s out of formula borrowings on its credit facility with Heritage Bank. In consideration of previous loans made by Michael Taglich to the Company and the personal guaranty for Heritage Bank of Commerce, Mr. Taglich has been issued warrants to purchase common stock totaling 1,080 shares at an exercise price of $1,000.00 per share. In connection with the Company’s private placement completed in November 2016, the Company issued to the Investors warrants to purchase an aggregate total of 4,271 shares of common stock. Included were warrants to purchase 172 shares of common stock issued to Roger Kahn and warrants to purchase 308 shares of common stock issued to Michael Taglich. Each warrant to purchase common stock expires five and one-half years from the date of issuance and is exercisable for $175.00 per share beginning six months from the date of issuance, or May 9, 2017. The warrants expire May 9, 2022. In connection with previous private offerings and debt issuances, Taglich Brothers, Inc. were granted placement agent warrants to purchase 4,246 shares of common stock at a weighted average price of $321.00 per share. In September 2018, the Company sold and issued subordinate promissory notes (the “Promissory Term Notes”) to certain accredited investors (each, a “Purchaser”), pursuant to which it issued to the Purchasers (i) Promissory Term Notes, in the aggregate principal amount of approximately $941,000. The Promissory 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. Michael Taglich participated in the Note Purchase Agreement in September 2018. Michael Taglich purchased Promissory Term Notes in the amount of approximately $122,000 pursuant to the Note Purchase Agreement. Taglich Brothers, Inc. served as placement agent for the above transaction, for which services the Company paid to Taglich Brothers, Inc. $40,000 in cash compensation, or five percent (5%) of the net proceeds received by the Company. 68 Item 14. Principal Accounting Fees and Services. Audit Fees The firm of Marcum LLP acts as our principal independent registered public accounting firm. They have served as our independent auditors since April 26, 2010. A representative of Marcum LLP is expected to attend this year's Annual Meeting, and he will have an opportunity to make a statement if he desires to do so. It is also expected that such representative will be available to respond to appropriate questions. The table below shows the aggregate fees that the Company paid or accrued for the audit and other services provided by Marcum LLP for the fiscal years ended September 30, 2020 and September 30, 2019. The Company did not engage its independent registered public accounting firm during either of the fiscal years ended September 30, 2020 or September 30, 2019 for any other non-audit services. Type of Service Amount of Fee for Fiscal Year Ended September 30, 20 20 September 30, 201 9 Audit Fees $261,397 $268,271 Audit-Related Fees — — Tax Fees — — Total $26 1 , 397 $2 68 , 271 Audit Fees. This category includes fees for the audits of the Company's annual financial statements, review of financial statements included in the Company's Form 10-Q Quarterly Reports and services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for the relevant fiscal years. Audit-Related Fees. This category consists of audits performed in connection with certain acquisitions. Tax Fees. This category consists of professional services rendered for tax compliance, tax planning and tax advice. The services for the fees disclosed under this category include tax return preparation, research and technical tax advice. There were no other fees paid or accrued to Marcum LLP in the fiscal years ended September 30, 2020 or September 30, 2019. Audit Committee Pre-Approval Policies and Procedures. Before an independent public accounting firm is engaged by the Company to render audit or non-audit services, the engagement is approved by the Audit Committee. Our Audit Committee has the sole authority to approve the scope of the audit and any audit-related services as well as all audit fees and terms. Our Audit Committee must pre-approve any audit and non-audit related services by our independent registered public accounting firm. During our fiscal year ended September 30, 2020, no services were provided to us by our independent registered public accounting firm other than in accordance with the pre-approval procedures described herein. 69 PART IV Item 15. Exhibits and Financial Statement Schedules. (a) Documents Filed as Part of this Form 10-K 1. Financial Statements (included in Item 8 of this report on Form 10-K): – Reports of Independent Registered Public Accounting Firm – Consolidated Balance Sheets as of September 30, 2020 and 2019 – Consolidated Statements of Operations for the years ending September 30, 2020 and 2019 – Consolidated Statements of Comprehensive Income/(Loss) for the years ending September 30, 2020 and 2019 – Consolidated Statements of Shareholders’ Equity for the years ending September 30, 2020 and 2019 – Consolidated Statements of Cash Flows for the years ending September 30, 2020 and 2019 – Notes to Consolidated Financial Statements 2. Financial Statement Schedules – Not applicable 70 (b) Exhibits Documents listed below, except for documents followed by a parenthetical, are being filed as exhibits. Documents followed by a parenthetical are not being filed herewith and, pursuant to Rule 12b-32 of the General Rules and Regulations promulgated by the SEC under the Securities Exchange Act of 1934 (the Act), reference is made to such documents as previously filed as exhibits with the SEC. Exhibit Incorporated by Reference Filed No. Exhibit Form Filing Date Exhibit No. Herewith 1.1 Underwriting Agreement by and between Bridgeline Digital, Inc. and ThinkEquity, dated October 16, 2018 8-K October 19, 2018 1.1 3.1 Amended and Restated Certificate of Incorporation, as amended 10-Q May 15, 2013 3.1 3.2 Certificate of Designations of the Series A Convertible Preferred Stock 8-K November 4, 2014 3.1 3.3 Amended and Restated By-Laws 10-Q February 17, 2015 3.2 3.4 Certificate of Designations of the Series B Convertible Preferred Stock 8-K October 19, 2018 3.1 3.5 Amended and Restated By-Laws 8-K December 14, 2018 3.1 10.1 Amended and Restated Stock Incentive Plan, as amended DEF 14 A July 14, 2014 C Exhibit Incorporated by Reference Filed No. Exhibit Form Filing Date Exhibit No. Herewith 10.2 Form of Common Stock Purchase Warrant Issued to Placement Agent 8-K November 4, 2014 10.2 10.3 Form of Common Stock Purchase Warrant Issued by Company to Michael Taglich dated January 7, 2015 8-K January 9, 2015 10.2 10.4 Form of Common Stock Purchase Warrant Issued by Company to Michael Taglich dated February 17, 2015 10-Q February 17, 2015 10.2 10.5 Form of Restricted Stock Agreement 10-Q May 15, 2015 10.6 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 10.7 Form of Common Stock Purchase Warrant Issued by Company to Michael Taglich dated July 21, 2015 8-K July 24, 2015 10.2 10.8 Bridgeline Digital Inc. 2016 Stock Incentive Plan DEF 14 A March 22, 2016 Appendix B 10.9 Form of Common Stock Purchase Warrant issued to Placement Agent 8-K May 17, 2016 10.3 10.10 Placement Agreement between Bridgeline Digital, Inc and Taglich Brothers, Inc dated March 31, 2016 8-K June 15, 2016 10.3 10.11 Form of Securities Purchase Agreement dated November 3, 2016 8-K November 4, 2016 10.1 10.12 Form of Purchaser Warrant 8-K November 4, 2016 10.2 10.13 Form of Registration Rights Agreement dated November 3, 2016 8-K November 4, 2016 10.3 10.14 Form of Insider Securities Purchase Agreement dated November 3, 2016 8-K November 4, 2016 10.4 10.15 Loan and Security Agreement between Bridgeline Digital, Inc and Montage Capital II, L.P. dated October 10, 2017 8-K October 13, 2017 10.1 10.16 Form of Warrant to Purchase Stock issued to Montage Capital II, L.P 8-K October 13, 2017 10.2 10.17 Intercreditor Agreement between Heritage Bank of Comerce and Montage Capital II, L.P dated October 10, 2017 8-K October 13, 2017 10.3 10.18 First Amendment to the Loan and Security Agreement between Bridgeline Digital, Inc and Montage Capital II. LP, dated May 10, 2018 10-Q May 15, 2018 10.2 10.19 Form of Note Purchase Agreement 8-K September 11, 2018 10.1 10.20 Form of Promissory Note 8-K September 11, 2018 10.2 10.21 Form of Subordination Agreement 8-K September 11, 2018 10.3 10.22 Second Amendment to the Loan and Security Agreement between Bridgeline Digital, Inc and Montge Capital II, L.P., dated October 22, 2018 8-K October 24, 2018 10.1 Exhibit Incorporated by Reference Filed No. Exhibit Form Filing Date Exhibit No. Herewith 21.1 Subsidiaries of the Registrant X 23.1 Consent of Marcum LLP X 31.1 CEO Certification, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2 CFO Certification, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1 CEO Certification, Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 32.2 CFO Certification, Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 101.INS** XBRL Instance X 101.SCH** XBRL Taxonomy Extension Schema X 101.CAL** XBRL Taxonomy Extension Calculation X 101.DEF** XBRL Taxonomy Extension Definition X 101.LAB** XBRL Taxonomy Extension Labels X 101.PRE** XBRL Taxonomy Extension Presentation X (c) Financial Statement Schedules Not applicable 71 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BRIDGELINE DIGITAL, INC. a Delaware corporation By: /s/ Roger Kahn Name: Roger Kahn December 23, 2020 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Roger Kahn President and Chief Executive Officer, Director (Principal Executive Officer) December 23, 2020 /s/ Mark G. Downey Chief Financial Officer December 23, 2020 Mark G. Downey (Principal Financial Officer) /s/Kenneth Galaznik Director December 23, 2020 Kenneth Galaznik /s/ Joni Kahn Director December 23, 2020 Joni Kahn /s/ Scott Landers Director December 23, 2020 Scott Landers /s/ Michael Taglich Director December 23, 2020 Michael Taglich 72 Index of Exhibits Exhibit No. Description of Document 21.1 Subsidiaries of the Registrant 23.1 Consent of Marcum LLP 31.1 CEO Certification, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 CFO Certification, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 CEO Certification, Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 CFO Certification, Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS* XBRL Instance 101.SCH* XBRL Taxonomy Extension Schema 101.CAL* XBRL Taxonomy Extension Calculation 101.DEF* XBRL Taxonomy Extension Definition 101.LAB* XBRL Taxonomy Extension Labels 101.PRE* XBRL Taxonomy Extension Presentation *XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. 73