What changed in this filing

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Item 9A. Controls and Procedures

2022-12-21 compared with 2021-12-20 · 107 added, 92 removed, 444 unchanged (31% of the section changed)

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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.

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 recognized, 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, 2022, 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.

Based on the foregoing, we concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of the end of the period covered by this annual report.

Management ’

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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.

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 recognized 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, 2022.  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, 2021, 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.

Our management has concluded that as of September 30, 2022, our internal control over financial reporting (as defined in Rule 15d-15(e) under the Exchange Act) was 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.

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There have been no significant changes in our internal controls over financial reporting that occurred during the fiscal year ended September 30, 2022 that have materially, or are reasonably likely to materially affect, our internal controls over financial reporting.

OTHER INFORMATION

O THER I NFORMATION

Directors, Executive Officers and Corporate Governance.

The following table sets forth information regarding our directors and executive officers:

Director Class

Expiration of

Chairperson (1)(2)(3)(4)

2024 Annual Meeting

Kenneth Galaznik

Director (1)(2)(4)

2025 Annual Meeting

Scott Landers

Director (1)(2)(3)(4)

2025 Annual Meeting

Michael Taglich

2023 Annual Meeting

Director, President and Chief Executive Officer

2024 Annual Meeting

Windhausen 

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Independent director.

Windhausen was appointed as our Chief Financial Officer and Treasurer effective November 30, 2021, following the resignation of our former Chief Financial Officer, Mark G.

Windhausen was appointed as our Chief Financial Officer and Treasurer effective November 30, 2021, following the resignation of Mark G.

Downey, our former Chief Financial Officer.

Joni Kahn has been a member of our Board of Directors since April 2012.

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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.

Kahn brings extensive leadership experience to our Board and our Audit Committee as an experienced senior executive.

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.

In addition, Ms.

Kahn also brings extensive leadership experience to our Board and our Audit Committee as an experienced senior executive.

Kenneth Galaznik has been a member of our Board of Directors since 2006.

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Landers is the Chair of the Nominating and Corporate Governance Committee and serves as a member of the Audit and Compensation Committees.

Landers was President and Chief Executive Officer of Monotype Imaging Holdings, Inc.

from 2016 to July 2021.

He previously held the positions of Chief Operating Officer and Chief Financial Officer from 2008 to 2015. Monotype is a leading provider of fonts and font software, and the company was under both public and private ownership during his tenure.

Landers has been the Chief Executive Officer of Harver since January 2022.

Harver is a volume hiring solution enabling global enterprises to hire at scale.

From 2016 to July 2021, he was President and Chief Executive Officer of Monotype Imaging Holdings, Inc., and he also held the positions of Chief Operating Officer and Chief Financial Officer from 2008 to 2015.

Monotype is a leading provider of fonts and font software, and the company was under both public and private ownership during his tenure.

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.

Landers was the Vice President of Global Finance at Pitney Bowes Software, 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 held several senior finance positions 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.

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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”).

Section 16(a) of 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 to file certain reports regarding ownership of, and transactions in, the Company’s securities with the Securities and Exchange Commission.

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 2021 and 2020 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.

Based solely on a review of the copies of such forms and amendments thereto received by it, the Company believes that during the fiscal year ended September 30, 2022, all Section 16(a) filing requirements applicable to our officers, directors, and greater than 10% beneficial owners have been met.

Code of Conduct and Ethics

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The Company's website is not part of this proxy statement.

Meetings of the Board of Directors

During fiscal 2022, the Board of Directors met 5 times and acted 4 times by unanimous written consent.

Committees of the Board of Directors

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A copy of such charter is available on the Company's website, www.bridgeline.com .

During Fiscal 2021, the Audit Committee met five times.

During fiscal 2022, the Audit Committee met 4 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.

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A copy of such charter is available on the Company's website, www.bridgeline.com .

During Fiscal 2021, the Compensation Committee met four times and acted three times by unanimous written consent.

During fiscal 2022, the Compensation Committee met 3 times and acted 1 time by unanimous written consent.

Nominating and Corporate Governance Committee

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Kahn, each of whom are independent directors.

During Fiscal 2021, the Nominating and Governance Committee met four times.

During fiscal 2022, the Nominating and Governance Committee met 2 times.

Executive Compensation.

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Principal Position

President and Chief Executive Officer

Executive Vice President and Chief Financial Officer

and Treasurer

Roger Kahn - President and Chief Executive Officer

Windhausen - Chief Financial Officer and Treasurer

Downey - Former Executive Vice President and

Chief Financial Officer and Treasurer

Employment Agreements

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Kahn joined Bridgeline Digital, Inc.

(the “Company”) as the Company’s Chief Operating Officer.

as the Company’s Chief Operating Officer.

On December 1, 2015, Mr.

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Kahn to an annual salary of $330,000 starting on the date of the amendment and an annual bonus of $137,500.

On November 30, 2021, Mr.

Downey resigned from his position of Chief Financial Officer of Bridgeline Digital, Inc.

(“Bridgeline”

or the “Company”) to pursue new professional opportunities.

Downey will continue to provide transition services to the Company as a consultant until January 30, 2022.

On August 18, 2022, an amendment to the employment agreement between the Company and Mr.

Kahn was made, effective August 14, 2022 (the 

Second Amendment”).

The Second Amendment provides for the following:

(i) an increase in Mr.

Kahn’s annual salary to $400,000;

(ii) the opportunity for Mr.

Kahn to earn a periodic incentive bonus, subject to his satisfaction of certain performance metrics;

and (iii) the Company’s right, but not its obligation, to issue discretionary equity incentive awards to Mr.

Kahn, subject to applicable award agreements, equity incentive plans, and other such applicable terms, restrictions, and provisions.

In connection with the Second Amendment, Mr.

Kahn was given the opportunity to earn a $100,000 bonus with respect to the second half of fiscal 2022 and was awarded 200,000 shares of restricted stock (the “Restricted Stock Award”), pursuant to the Company’s 2016 Stock Incentive Plan.

Kahn’s Restricted Stock Award vests in quarterly installments over a three year period.

Kahn will also have the opportunity to earn one or more future incentive bonuses aggregating $200,000 for each year.

All other terms of Mr.

Kahn’s employment agreement, as amended are unchanged.

Effective November 30, 2021, Thomas R.

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Windhausen entered into an employment agreement (the “Employment Agreement”), effective November 30, 2021 through September 30, 2022, unless extended by mutual agreement of the Company and Mr.

Windhausen, whereby he will receive an two-hundred and forty thousand dollars base salary and the ability to earn a bi-annual incentive bonus of twenty-two thousand five hundred dollars, which incentive bonus may be awarded to Mr.

Windhausen, whereby he will receive $240,000 base salary and the ability to earn a bi-annual incentive bonus of $22,500, which incentive bonus may be awarded to Mr.

Windhausen at the discretion of the Company’s Compensation Committee.

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Windhausen’s employment is terminated by the Company without cause, 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.

Windhausen do not purport to be complete descriptions and are qualified in their entirety by reference to the Employment Agreement, which is filed as Exhibit 10.29 on to this Form 10-K.

There are no family relationships between Mr.

Windhausen and any director or executive officer of the Company.

On November 30, 2021, Mr.

Downey resigned from his position of Chief Financial Officer of Bridgeline Digital, Inc.

to pursue new professional opportunities.

Downey continued to provide transition services to the Company as a consultant until January 30, 2022.

Outstanding Equity Awards at Fiscal 2022 Year-End

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Shares vest in equal installments upon the anniversary date of the grant over three years.

Shares vest in equal installments on a monthly basis over three years.

Roger Kahn also holds 200,000 shares of restricted stock granted which were granted in August 2022 and which vest in quarterly installments over a three year period.

As of September 30, 2022, all shares remained restricted.

Director Compensation

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Michael and Claudia Taglich

790 New York Avenue

Huntington, NY 11743

 All current executive officers and directors as a group

790 New York Avenue Huntington, NY 11743

All current executive officers and directors as a group

Holder of Series C Preferred are entitled to vote on all matters presented to our stockholders on an as-converted basis.

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Percent of Shares

Michael Taglich

President, Chief Executive Officer, Director

Michael Taglich

Kenneth Galaznik

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All current executive officers and directors as a group

Includes 195,662 shares issuable upon the exercise of warrants, and 37,708 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2021).

Includes 335,043 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2022).

Includes 200,000 shares of restricted stock. Includes 545 shares of common stock owned by Mr.

Kahn’s spouse.

Includes 190,025 shares issuable upon the exercise of warrants, 38,889 shares issuable upon the exercise of Series C preferred stock, and 67,708 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2022).

Also includes 35 shares of Common Stock and 2 shares issuable upon the exercise of warrants owned by Mr.

Taglich’s spouse.

Includes 172 shares issuable upon the exercise of warrants and 171,481 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2021).

Includes 545 shares of common stock owned by Mr.

Kahn’s spouse.

Includes 37,660 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2021).

Includes 67,604 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2022).

Includes 67,644 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2022).

Includes 8 shares of Common Stock owned by Mr.

Lander’s children.

Includes 37,664 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2021).

Includes 26,667 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2021).

Includes 67,638 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2022).

Includes 10,000 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2022).

Includes 615,637 shares of Common Stock subject to currently exercisable options (includes options that will become exercisable within 60 days of September 30, 2022), and 229,394 other issuable shares including warrants and preferred stock.

We maintain a number of equity compensation plans for employees, officers, directors and other entities and individuals whose efforts contribute to our success.

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Equity Compensation Plan Information

to be issued upon

Weighted average

exercise price of

to be issued upon

remaining available

for future issuance

compensation plans

(excluding securities

in column (a))

Plan category

(excluding s ecurities reflected

in column a) (c)

Equity compensation plans approved by security holders

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At September 30, 2022, there were 1,757,629 total Warrants outstanding.

Stock warrants outstanding at September 30, 2021 are as follows:

Placement Agent

Director/Shareholder

Placement Agent

Director/Shareholder

Placement Agent

Certain Relationships and Related Transactions, and Director Independence.

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Fees for the services were $21,000.

In connection with the Company’s registered direct completed in February 2021, the Company issued Taglich Brothers 29,084 Investors warrants.

In connection with the Company’s registered direct offering completed in February 2021, the Company issued Taglich Brothers 29,084 Investors warrants.

Each warrant to purchase common stock expires five years from the date of issuance and is non-cash exercisable for $3.875 per share beginning six-months from the date of issuance, or February 4, 2021. 

The warrants expire February 4, 2026.

In connection with the Company’s Series D Preferred Stock registered direct and PIPE completed in May 2021, the Company issued Taglich Brothers 53,861 Investors warrants. 

In connection with the Company’s Series D Preferred Stock registered direct offering and PIPE completed in May 2021, the Company issued Taglich Brothers 53,861 Investors warrants. 

Each warrant to purchase common stock expires five years from the date of issuance and is non-cash exercisable for $2.850 per share beginning six-months from the date of issuance, or May 14, 2021. 

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Principal Accounting Fees and Services.

The firm of PKF O’Connor Davies LLP acts as our principal independent registered public accounting firm.

The firm of PKF O’Connor Davies LLP acts as our principal independent registered public accounting firm (PCAOB ID No.

They have served as our independent auditors since February 27, 2021.

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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 PKF O’Connor Davies LLP and Marcum LLP for the fiscal year ended September 30, 2021 and by Marcum LLP for the fiscal year ended September 30, 2020. 

 The Company did not engage its independent registered public accounting firms during either of the fiscal years ended September 30, 2021 or September 30, 2020 for any other non-audit services.

The table below shows the aggregate fees that the Company paid or accrued for the audit and other services provided by PKF O’Connor Davies LLP for the fiscal year ended September 30, 2022 and for both PKF O’Connor Davies LLP and Marcum LLP for the fiscal year ended September 30, 2021. The Company did not engage its independent registered public accounting firms during either of the fiscal years ended September 30, 2022 or September 30, 2021 for any other non-audit services.

Type of Service

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September 30, 2021

 $261,951

Audit-Related 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.

PKF O’Connor Davies LLP and Marcum LLP were $219,000 and $42,951, respectively, for fiscal year ended September 30, 2021.

PKF O’Connor Davies LLP and Marcum LLP were $243,050 and $15,437, respectively, for the fiscal year ended September 30, 2022.

PKF O’Connor Davies LLP and Marcum LLP were $219,000 and $42,951, respectively, for the fiscal year ended September 30, 2021.

Audit-Related Fees.

This category consists of audits performed in connection with certain acquisitions.

PKF O’Connor Davies LLP and Marcum LLP were $42,500 and $26,044, respectively, for fiscal year ended September 30, 2021.

This category consists of audits performed in connection with certain acquisitions. PKF O’Connor Davies LLP and Marcum LLP were $42,500 and $26,044, respectively, for the fiscal year ended September 30, 2021.

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 PKF O’Connor Davies, LLP or Marcum LLP in the fiscal years ended September 30, 2021 or September 30, 2020.

There were no other fees paid or accrued to PKF O’Connor Davies, LLP and Marcum LLP in the fiscal years ended September 30, 2022 or September 30, 2021.

Audit Committee Pre-Approval Policies and Procedures.

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Incorporated by Reference

Underwriting Agreement by and between Bridgeline Digital, Inc.

and ThinkEquity, dated October 16, 2018

October 19, 2018

Amended and Restated Certificate of Incorporation, as amended

Certificate of Designations of the Series A Convertible Preferred Stock 

November 4, 2014

Amended and Restated By-Laws

February 17, 2015

Certificate of Designations of the Series B Convertible Preferred Stock 

October 19, 2018

Amended and Restated By-Laws

December 14, 2018

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September 10, 2021

Certificate of Designation of the Series A Convertible Preferred Stock  

November 4, 2014

Certificate of Designation of the Series B Convertible Preferred Stock  

October 19, 2018

Registration Rights Agreement, dated November 3, 2016, by and between Bridgeline Digital, Inc.

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October 24, 2018

Share Purchase Agreement, by and between the Company and Woorank SRL., dated February 2, 2021 

First Amendment to the Bridgeline Digital Inc.

2016 Stock Incentive Plan

August 23, 2019

Appendix  B

Purchase Agreement, by and between the Company and WooRank SRL., dated February 2, 2021  

February 3, 2021

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Employment Agreement dated September 13, 2019 between Bridgeline Digital, Inc.

and Roger “Ari” Kahn

and Roger “

September 19, 2018

First Amendment to Roger “Ari” Kahn’s Employment Agreement dated February 25, 2021 

First Amendment to Roger “

Kahn ’

s Employment Agreement dated February 25, 2021  

March 2, 2021

Share Purchase Agreement, by and between the Company, Svanaco, Inc., an Illinois corporation, Svanawar, Inc., an Illinois corporation, and Hawk Search Inc., an Illinois corporation, dated May 11, 2021

Share Purchase Agreement, by and between the Company, Svanaco, Inc., an Illinois corporation, Svanawar, Inc., an Illinois corporation, and HawkSearch Inc., an Illinois corporation, dated May 11, 2021

Employment Agreement dated November 30, 2021 between Bridgeline Digital, Inc.

and Thomas R.

Exhibit  

 Incorporated by Reference

December 20, 2021 

Second Amendment to the Bridgeline Digital Inc.

2016 Stock Incentive Plan

February 14, 2022

Amendment to Stock Purchase Agreement, among Bridgeline Digital, Inc., Svanaco, Inc., Svanawar, Inc., and HawkSearch Inc., dated June 15, 2022.

June 22, 2022

Second Amendment to Roger “Ari” Kahn’s Employment Agreement, effective August 14, 2022 

August 24, 2022

Incorporated by Reference

Subsidiaries of the Registrant

Consent of PKF O’Connor Davies, LLP

Consent of Marcum LLP

Consent of PKF O ’

Connor Davies, LLP

CEO Certification, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Description of Document

Employment Agreement dated November 30, 2021 between Bridgeline Digital, Inc.

and Thomas R.

Subsidiaries of the Registrant

Consent of PKF O’Connor Davies, LLP

Consent of Marcum LLP

CEO Certification, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures