What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-12-19 compared with 2024-12-26 · 199 added, 194 removed, 831 unchanged (32% of the section changed)

12 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Bridgeline Digital, Inc.

We have audited the accompanying consolidated balance sheets of Bridgeline Digital, Inc.

and Subsidiaries (the “Company”) as of September 30, 2025 and 2024, and the related consolidated statements of operations, comprehensive income/(loss), stockholders’ equity, and cash flows for each of the two years in the period ended September 30, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

15 unchanged sentences

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Going Concern Assessment

As described in Note 1 to the consolidated financial statements, the Company has incurred net losses from operations for each of the two years in the period ended September 30, 2024, and net cash used in operating activities was $765,000 for the year ended September 30, 2024.

The Company determined these, and other factors which include (1) current assets exceed current liabilities at September 30, 2024, when adjusted for deferred revenue and (2) the Company may offer and sell, from time to time, in one or more offerings, up to $50 million of their debt or equity securities, or any combination thereof, did not raise substantial doubt as to the Company's ability to continue as a going concern one year from the issuance date of the consolidated financial statements.

In making this determination, management prepared a cash flow projection through December 2025.

Management used significant assumptions in preparing the cash flow projection, which included expected revenue and cash receipts, operating costs and other obligations.

The principal considerations for our determination that the evaluation of management's going concern assessment was a critical audit matter are the significant judgment and subjectivity inherent in the Company's future cash flow estimate and a high degree of auditor judgment in evaluating management's forecasts for at least the next twelve months.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included:

assessed the overall reasonableness of the Company's future cash flow projections, including significant assumptions utilized by the Company and comparison to historical trends and other information obtained during the audit.

compared October 2024 and November 2024 actual operating results to forecasted amounts, as well as the Company’s fiscal year 2024 operating budget to actual results, to determine overall accuracy of future operating cash flow projections.

evaluated the adequacy of the Company's financial statement disclosures.

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there were no critical audit matters.

We have served as the Company’s auditor since 2021.

/s/ PKF O'Connor Davies, LLP

1 unchanged sentence

December 18, 2025

We have served as the Company’s auditor since 2021.

BRIDGELINE DIGITAL, INC.

32 unchanged sentences

11,000 shares authorized;

350 shares issued and outstanding at September 30, 2024 and 2023

Series D Convertible Preferred stock:

4,200 shares authorized;

no shares issued and outstanding at September 30, 2024 and 2023

0 shares issued and outstanding at September 30, 2025 and 350 shares issued and outstanding at September 30, 2024

Common stock - $ 0.001 par value;

50,000,000 shares authorized;

10,417,609 shares issued and outstanding at September 30, 2024 and September 30, 2023

12,224,399 shares issued and outstanding at September 30, 2025 and 10,417,609 shares issued and outstanding at September 30, 2024

Additional paid-in capital

5 unchanged sentences

Total stockholders’ equity

10,006 11,460

Total liabilities and stockholders’ equity

5 unchanged sentences

Years Ended September 30,

Subscription and perpetual licenses

$ 12,355 $ 12,134

Digital engagement services

Total net revenue

1 unchanged sentence

Cost of revenue:

Subscription and perpetual licenses

Digital engagement services

Total cost of revenue

5 unchanged sentences

Depreciation and amortization

Goodwill impairment

Restructuring and acquisition related expenses

11 unchanged sentences

$ ( 2,518 ) $ ( 1,961 )

Redemption of Series C Convertible Preferred Stock

Net loss attributable to common shareholders

$ ( 2,849 ) $ ( 1,961 )

Net loss per share attributable to common stockholders:

15 unchanged sentences

( 2,531 ) ( 2,012 )

Redemption of Series C Convertible Preferred Stock

Comprehensive loss attributable to common shareholders

$ ( 2,862 ) $ ( 2,012 )

The accompanying notes are an integral part of these consolidated financial statements.

16 unchanged sentences

- - - - 582 - - 582

Redemption of Series C Convertible Preferred Stock (Note 12)

( 350 ) - - - ( 331 ) - - ( 331 )

Issuance of common stock, net of offering costs

- - 1,473,979 2 1,981 - - 1,983

Issuance of common stock - stock options exercised

- - 67,173 - 20 - - 20

Withholding tax on share-based compensation (Note 12)

- - - - ( 161 ) - - ( 161 )

Issuance of restricted common stock

- - 265,638 - - - - -

- - - - - ( 2,518 ) - ( 2,518 )

Foreign currency translation

9 unchanged sentences

$ ( 2,518 ) $ ( 1,961 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of intangible assets

1 unchanged sentence

Change in fair value of warrant liabilities

( 76 ) ( 575 )

Stock-based compensation

1 unchanged sentence

( 57 ) ( 65 )

Goodwill impairment

Changes in operating assets and liabilities

Accounts receivable

( 261 ) ( 280 )

Prepaid expenses and other current assets

3 unchanged sentences

Total adjustments

Net cash (used in) provided by operating activities

Net cash used in operating activities

( 1,104 ) ( 765 )

Cash flows used in investing activities:

2 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common stock, net of offering costs

Proceeds from stock option exercised

Redemption of Series C Convertible Preferred Stock and warrants

Withholding tax on share-based compensation

Payments of long-term debt

( 226 ) ( 209 )

Payments of contingent consideration and deferred cash payable

Net cash used in financing activities

Net cash provided by (used in) financing activities

1,360 ( 209 )

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

( 987 ) ( 479 )

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

3 unchanged sentences

Cash paid for:

Non-cash financing activities:

Withholding tax included in accounts payable

The accompanying notes are an integral part of these consolidated financial statements.

5 unchanged sentences

Bridgeline’s software is available through a cloud-based Software as a Service (“SaaS”) model.

Additionally, Bridgeline’s software is available via a perpetual licensing business model, in which the software can reside on premise at the customer’s facility, or manage-hosted by Bridgeline.

Additionally, Bridgeline’s software is available via a perpetual licensing business model, in which the software can reside on premises at the customer’s facility, or manage-hosted by Bridgeline.

Bridgeline’s product offerings include:

16 unchanged sentences

The Company maintains regional field offices serving the following geographical locations:

Woodbury, New York;

Rosemont, Illinois;

Atascadero, California;

Garden City, NY;

Rosemont, IL;

Atascadero, CA;

Ontario, Canada;

6 unchanged sentences

Such securities offerings may be made pursuant to the Company’s currently effective registration statement on Form S- 3 (File No.

333 - 262764 ), which was initially filed with the Securities and Exchange Commission on February 16, 2022 and declared effective on March 4, 2022 ( the “Shelf Registration Statement”).

333 - 285176 ), which was initially filed with the Securities and Exchange Commission on February 24, 2025 and declared effective on February 27, 2025 ( the “Shelf Registration Statement”).

A complete description of the types of securities that the Company may sell is described in the Preliminary Prospectus contained in the Shelf Registration Statement.

2 unchanged sentences

Further, our ability to offer or sell such securities may be limited by rules of the NASDAQ Capital Market.

We are currently evaluating our future financing options, including the filing of a new shelf registration statement to replace our existing Shelf Registration Statement, which is set to expire on March 4, 2025.

A new registration statement would provide us with continued flexibility to access capital and support our business objectives.

The decision to file a new registration statement and the timing of any such filing will depend on several factors, including market conditions, our capital requirements, and our eligibility to utilize Form S- 3 at the time of filing.

There can be no assurance that we will proceed with filing a new registration statement or that, if filed, it will be declared effective by the SEC.

On March 24, 2025, the Company entered into a Securities Purchase Agreement with purchasers, pursuant to which the Company agreed to issue and sell, in a registered direct offering, an aggregate of 1,000,000 shares of the Company’s common stock, par value $ 0.001 per share, at an offering price of $ 1.50 per share, for aggregate gross proceeds from the offering of approximately $ 1.5 million before deducting the placement agent fee and related offering expenses (see Note 12 ).

Proceeds after deducting offering expenses was $ 1.3 million.

On March 25, 2025, the Company separately entered into a form of subscription agreement with certain accredited investors relating to a private placement transaction and sale (the “Private Placement”) of 473,979 unregistered shares of the Company’s common stock at an offering price of $ 1.52 per share, for aggregate gross proceeds from the Private Placement of approximately $ 720 thousand before deducting related offering expenses.

Proceeds after deducting offering expenses was $ 700 thousand.

Summary of Significant Accounting Policies

5 unchanged sentences

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods.

The most significant estimates included in these consolidated financial statements are the valuation of accounts receivable, including the adequacy of the allowance for credit losses, valuation of long-lived assets, recognition and measurement of deferred revenues, fair value of contingent consideration, fair value measurements related to the valuation of warrants and deferred tax valuation allowance.

The most significant estimates included in these consolidated financial statements are the valuation of accounts receivable, including the adequacy of the allowance for credit losses, valuation of long-lived assets, recognition and measurement of deferred revenues, fair value measurements related to the valuation of warrants and deferred tax valuation allowance.

The complexity of the estimation process and factors relating to assumptions, risks and uncertainties inherent with the use of the estimates affect the amount of revenue and related expenses reported in the Company’s consolidated financial statements.

24 unchanged sentences

The Company derives its revenue from two sources:

(i) Subscription and Perpetual Licenses, which are comprised of software subscription fees (“SaaS”), perpetual software licenses, and maintenance for post-customer support (“PCS”) on perpetual licenses, and (ii) Digital Engagement Services, which are professional services to implement our products such as web development, digital strategy, information architecture and usability engineering search.

(i) Subscription, which are comprised of software subscription fees (“SaaS”), hosting and related services, maintenance for post-customer support (“PCS”) on perpetual licenses, and perpetual software licenses, and (ii) Services, which are professional services to implement our products such as web development, digital strategy, information architecture and usability engineering search.

Customers who license the software on a subscription basis, which can be described as “Software as a Service” or “SaaS,” do not take possession of the software.

1 unchanged sentence

If the consideration promised in a contract includes a variable amount, for example, overage fees, contingent fees or service level penalties, the Company includes an estimate of the amount it expects to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur.

The Company’s subscription service arrangements are non-cancelable and do not contain refund-type provisions.

The Company’s subscription arrangements are non-cancelable and do not contain refund-type provisions.

Revenue is reported net of applicable sales and use tax.

22 unchanged sentences

Payment terms may vary by customer but generally do not exceed 45 days from invoice date.

Invoicing for digital engagement services is either monthly or upon achievement of milestones and payment terms for such billings are within the standard terms described above.

Invoicing for services is either monthly or upon achievement of milestones and payment terms for such billings are within the standard terms described above.

Invoices for subscriptions and hosting are typically issued monthly and are generally due in the month of service.

39 unchanged sentences

If after assessing these qualitative factors, the Company determines it is “more-likely-than- not” that the fair value of the reporting unit is less than the carrying value, then performing the Step 1 quantitative test is necessary.

Step 1 of the quantitative test requires comparison of the fair value of the reporting unit to the respective carrying value.

If the carrying value of the reporting unit is less than the fair value, no impairment exists.

Otherwise, the Company would recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value up to the amount of goodwill.

BRIDGELINE DIGITAL, INC.

1 unchanged sentence

(in thousands, except share and per share data)

Step 1 of the quantitative test requires comparison of the fair value of the reporting unit to the respective carrying value.

If the carrying value of the reporting unit is less than the fair value, no impairment exists.

Otherwise, the Company would recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value up to the amount of goodwill.

The Company generally estimates the fair value using a weighting of the income and market approaches.

11 unchanged sentences

If such fair value is less than the current carrying value, the asset is written down to the estimated fair value.

There were no impairments of long-lived assets, other than impairment of goodwill, in fiscal 2024 or 2023 .

There were no impairments of long-lived assets in fiscal 2025 or 2024 .

Business Combinations

5 unchanged sentences

In those circumstances where an acquisition involves a contingent consideration arrangement, the Company recognizes a liability equal to the fair value of the contingent payments expected to be made as of the acquisition date.

The Company re-measures this liability each reporting period and recognizes changes in the fair value through income (loss) before income taxes within the consolidated statements of operations.

The Company re-measures this liability for each reporting period and recognizes changes in the fair value through income (loss) before income taxes within the consolidated statements of operations.

Foreign Currency

7 unchanged sentences

The adjustments are recognized as a separate component of stockholders’ equity and are included in accumulated other comprehensive income (loss).

The Company’s foreign currency translation net losses for fiscal 2024 and 2023 were ($ 51 ) and ($ 28 ), respectively.

The Company’s foreign currency translation net gains (losses) for fiscal 2025 and 2024 were $( 13 ) and $( 51 ), respectively.

Transaction gains and losses related to monetary assets and liabilities denominated in a currency different from a subsidiary’s functional currency are included in the consolidated statements of operations.

Segment Information

The Company has one reportable segment.

The Company operates as one operating segment, Software, in the business of marketing technology.

Our chief executive officer is our chief operating decision makers ("CODM"), and reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

Stock-Based Compensation

9 unchanged sentences

Such costs were $ 534 thousand and $ 74 thousand for fiscal 2025 and 2024 , respectively.

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Employee Benefits

2 unchanged sentences

The Company made no contributions in either fiscal 2025 or fiscal 2024 .

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted in response to the COVID- 19 pandemic.

The CARES Act, among other things, contains modifications on the limitation of business interest for tax years beginning in 2019 and 2020, and permits net operating loss carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021.

In addition, the CARES Act allows net operating losses incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes.

These provisions of the CARES Act did not have a material effect on the Company’s estimated effective tax rate.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

Key provisions of the OBBBA including making permanent certain aspects of the Tax Cuts and Jobs Act, which was enacted into U.S.

law on December 22, 2017.

This includes modifying certain international tax rules and restoring provisions that accelerate deductions for certain business investments and expenditures.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in subsequent years.

The OBBBA did not have a material impact on the Company’s consolidated financial statements for the fiscal year ended September 30, 2025, and the Company does not expect the changes to have a material impact on the provision of income taxes or net income in the future periods.

Effective in the current fiscal year ended September 30, 2025, foreign jurisdictions in which the Company operates have enacted legislation to adopt a minimum tax rate described in the Global Anti-Base Erosion tax model rules (referred to as GloBE or Pillar II) issued by the Organization for Economic Co-operation and Development (“OECD”).

A minimum ETR of 15% would apply to multinational companies with consolidated revenue over €750 million.

Under the GloBE rules, a company would be required to determine a combined ETR for all entities located in a jurisdiction.

If the jurisdictional tax rate is less than 15%, an additional tax generally will be due to bring the jurisdictional effective tax rate up to 15%.

As of September 30, 2025,the Pillar II minimum tax does not apply on the Company’s full year results of operations or financial position.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns.

13 unchanged sentences

Recently Adopted Accounting Standards

Financial Instruments – Credit Losses

Effective October 1, 2023, the Company adopted the requirements of ASU 2016 - 13, Financial Instruments - Credit Losses (Topic 326 ), Measurement of Credit Losses on Financial Instruments (“ASU 2016 - 13” ), along with the subsequently issued guidance amending and clarifying various aspects of ASU 2016 - 13, using the modified retrospective method of adoption.

In accordance with that method, the comparative periods’ information continues to be reported under the relevant accounting guidance in effect for that period.

For the current period, the standard replaces the existing incurred credit loss model with the current expected credit losses model for financial instruments, including accounts receivable, through a cumulative-effect adjustment to accumulated deficit as of the beginning of the first reporting period in which the guidance is effective.

Although the adoption of ASU 2016 - 13 did not have a material impact on the condensed consolidated financial statements it represented a change in the accounting policy with respect to the estimation of allowance for uncollectible accounts.

Business Combinations

In October 2021, the FASB issued ASU No.

2021 - 08, Business Combinations (Topic 606 ):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contracts.

Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements, if the acquiree prepared financial statements in accordance with U.S.

The amendment in this update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim period.

The guidance should be applied prospectively to business combinations occurring on or after the effective date of the amendment in this update.

The adoption of ASU 2021 - 08 during the Company's fiscal 2024 first quarter did not have a material impact on its consolidated financial statements and related disclosures.

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Recently Issued Accounting Pronouncements Not Yet Effective

Segment Reporting

In November 2023, the FASB issued ASU No.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No.

2023 - 07, Segment Reporting (Topic 280 ):

2 unchanged sentences

The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impact of the new standard on its consolidated financial statements which is expected to result in enhanced disclosures.

The adoption of ASU 2023 - 07 did not have a material impact to the Company's consolidated financial statements other than enhanced disclosures.

Recently Issued Accounting Pronouncements Not Yet Effective

In December 2023, the FASB issued ASU No.

4 unchanged sentences

The Company is currently evaluating the impact of the new standard on its consolidated financial statements which is expected to result in enhanced disclosures.

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

5 unchanged sentences

The Company is currently evaluating the impact of the new standard on its consolidated financial statements which is expected to result in enhanced disclosures.

Intangibles—Goodwill and Other—Internal-Use Software

In September 2025, the FASB issued ASU No.

2025 - 06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350 - 40 ):

Targeted Improvements to the Accounting for Internal-Use Software .

The ASU eliminates the concept of development stages and introduces a “probable-to-complete” threshold for capitalization of internal-use software costs.

The amendments in this Update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of the new standard on its consolidated financial statements which is not expected to have a material impact.

Interim Reporting

In December 2025, the FASB issued ASU No.

2025 - 11, Interim Reporting (Topic 270 ) .

The ASU improves the navigability of the required interim disclosures and clarifies when the guidance is applicable, as well as provides additional guidance on what disclosures should be provided in interim reporting periods.

The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods beginning after December 15, 2028.

The Company is currently evaluating the impact of the new standard on its consolidated financial statements which is not expected to have a material impact.

All other Accounting Standards Updates issued but not yet effective are not expected to have a material effect on the Company’s future consolidated financial statements or related disclosures.

7 unchanged sentences

$ 1,542 $ 1,288

As of and for the years ended September 30, 2024 and 2023 no customers exceeded 10% of accounts receivable and no customers exceeded 10% of the Company’s total revenues.

As of and for the year ended September 30, 2025 one customer exceeded 10 % of accounts receivable.

As of and for the year ended September 30, 2024, no customers exceeded 10% of accounts receivable.

As of and for the years ended September 30, 2025 and 2024, no customers exceeded 10% of the Company’s total revenues.

Allowance for Credit Losses

1 unchanged sentence

Balance as of October 1, 2024

Credit loss expense

Provision for credit losses

Write-off/adjustments

Balance as of September 30, 2025

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Property and equipment

9 unchanged sentences

Depreciation and amortization on the above assets were $ 47 and $ 102 in fiscal 2025 and 2024 , respectively.

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Fair Value Measurement and Fair Value of Financial Instruments

27 unchanged sentences

Montage Capital

Series C Preferred

Series D Preferred

3 unchanged sentences

$ 1.32 $ 1.32 $ 1.15 $ 1.15

The Company recognized a gain $ 0.1 million and $ 0.6 million for the years ended September 30, 2024 and 2023 , respectively, related to the change in fair value of warrant liabilities.

The Company recognized a loss of $ 4 thousand and a gain of $ 0.1 million for the years ended September 30, 2025 and 2024 , respectively, related to the change in fair value of warrant liabilities.

The changes in fair value of warrant liabilities were due to changes in inputs, primarily a change in the stock price and the risk-free rate, to the Monte Carlo option-pricing model.

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

The Company’s goodwill (see Note 6 ) and contingent consideration obligations were from arrangements resulting from acquisitions, completed in prior periods not presented.

The contingent consideration was a result of former potential future payments of consideration that were contingent upon the achievement of revenue targets and operational goals.

Contingent consideration is recognized at its estimated fair value at the date of acquisition based on the Company’s expected probability of future payment, discounted using a weighted average cost of capital in accordance with accepted valuation methodologies.

The Company reviews and re-assesses the estimated fair value of contingent consideration liabilities at each reporting period and the updated fair value could differ materially from the initial estimates.

The Company measures contingent consideration recognized in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified as Level 3 inputs.

The Company uses a simulation-based model to estimate the fair value of contingent consideration on the acquisition date and at each reporting period.

The simulation model uses certain inputs and assumptions, including revenue projections, an estimate of revenue discount and volatility rate based on comparable public companies’ data, and risk-free rate.

Significant increases or decreases to either of these inputs in isolation could result in a significantly higher or lower liability with a higher liability limited to the contractual maximum of the contingent consideration liabilities.

Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate on the acquisition date and each reporting period and the amount paid will be recognized in earnings.

The fair value of contingent consideration was $ 250 thousand on September 30, 2022, all of which was paid in October 2022.

There were no contingent consideration amounts remaining thereafter.

The Company’s goodwill (see Note 6 ) was from arrangements resulting from acquisitions, completed in prior periods not presented.

Assets and liabilities of the Company measured at fair value as of September 30, 2025 and 2024 , are as follows.

Goodwill, net, is a non-recurring fair value measurement.

As of September 30, 2025

Warrant liabilities:

Series A and C

$ - $ - $ 2 $ 2

Total warrant liabilities

1 unchanged sentence

As of September 30, 2024

Goodwill, net

$ - $ - $ 8,468 $ 8,468

Warrant liabilities:

Series A and C

$ - $ - $ 10 $ 10

Total warrant liabilities

$ - $ - $ 98 $ 98

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

The following table provides a roll forward of the fair value, as determined by Level 3 inputs, as follows:

Contingent Consideration Obligations

Warrant Liabilities

5 unchanged sentences

Balance at end of period, September 30, 2025

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

The carrying value of goodwill is not amortized, but is tested for impairment annually as of September 30th, as well as whenever events or changes in circumstances indicate that the carrying amount of a reporting unit may not be recoverable.

4 unchanged sentences

Annual tests were performed at September 30, 2025 and 2024 .

Due to the current inflationary macro-economic conditions and a sustained decline in the Company’s market capitalization, for the 2023 test, the Company elected to forgo the qualitative test and performed a quantitative goodwill impairment test by comparing the fair value of its reporting unit to its respective carrying value.

The Company estimated the fair value of the reporting unit using a 75% and 25% weighting to the market approach and income approach, respectively, and a discount rate of 22.9%.

The Company used industry accepted valuation models.

Under the income approach (level 3 inputs), the Company used a discounted cash flow methodology which required management to make significant estimates and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, perpetual growth rates, and long-term discount rates, among others.

For the market approach, the Company used the guideline public company method.

Under this method, the Company utilized information from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit, to create valuation multiples that were applied to the operating performance of the reporting unit being tested, in order to obtain their respective fair values.

The Company also reconciled the aggregate fair value of its reporting unit to its current market capitalization, allowing for a reasonable control premium.

For fiscal 2024, management performed a qualitative assessment that did not result in any impairment indicators at September 30, 2024 .

Based on the impairment assessment performed , the Company recognized a goodwill impairment charge of $ 7.5 million, all of which was attributable to goodwill, during fiscal 2023.

The Company concluded that the definite-lived and other long-lived assets were not impaired.

Management performed a qualitative assessment that did not result in any impairment indicators at September 30, 2025 and 2024 .

Changes in the carrying value of goodwill are as follows:

23 unchanged sentences

Restructuring and Acquisition Related Expenses

The Company incurred restructuring and acquisition related expenses of $ 0.2 million and $ 0.1 million during the years ended September 30, 2024 and 2023 , respectively, which are included in Restructuring and acquisition related expenses in the consolidated statements of operations.

The Company incurred restructuring and acquisition related expenses of $ 0.2 million during each of the years ended September 30, 2025 and 2024 , respectively, which are included in Restructuring and acquisition related expenses in the consolidated statements of operations.

Long-term Debt

4 unchanged sentences

Term loan payable, accruing interest at 3-Month EURIBOR plus 1.3% per annum, payable in quarterly installments starting in April 2023 and matures in July 2028.

Seller’s note payable (“Seller’s note”), due to one of the selling stockholders, accruing interest at a fixed rate of 4.0% per annum.

The Seller’s note is payable over 5 installments and matures in September 2025.

Seller’s note payable, due to one of the selling stockholders, accruing interest at a fixed rate of 4.0% per annum.

The Seller’s note is payable over 5 installments and matures in October 2026.

Less current portion:

44 unchanged sentences

Operating lease liabilities, net of current portion

As of September 30, 2024 , the Company had no lease commitments that extend past fiscal 2028, assuming the Company does not exercise its termination option in 2025.

The Rosemont, Illinois lease contains an early termination clause, which the Company expects to execute, under which the lease can be terminated on August 31, 2025 upon payment of a $ 93 thousand termination fee.

Starting October 1, 2023, the Company has subleased its office space in Rosemont, Illinois.

The sublease is for $ 6 thousand per month, through August 31, 2025.

As of September 30, 2025 , the Company had lease commitments that extended to fiscal 2028.

Starting December 1, 2025, the Company will lease office space in Garden City, New York.

The lease is for $ 7 thousand per month, through March 31, 2031.

At September 30, 2024 , future minimum rental commitments under non-cancelable leases with initial or remaining terms in excess of one year were as follows:

17 unchanged sentences

The shares of Series A Preferred Stock may be converted, at the option of the holder at any time, into such number of shares of common stock equal to (i) the number of shares of Series A Preferred Stock to be converted, multiplied by the stated value of $ 10 and (ii) divided by the conversion price in effect at the time of conversion.

As of September 30, 2024 and 2023 , the Company had no shares of Series A Preferred Stock outstanding.

As of September 30, 2025 and September 30, 2024 , the Company had no shares of Series A Preferred Stock outstanding.

Series B Convertible Preferred Stock

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The shares of Series B Preferred Stock may be converted, at the option of the holder at any time, into such number of shares of common stock equal to (i) the number of shares of Series B Preferred Stock to be converted, multiplied by the stated value of $ 1,000 and (ii) divided by the conversion price in effect at the time of conversion.

As of September 30, 2024 and 2023 , the Company had no shares of Series B Preferred Stock outstanding.

As of September 30, 2025 and September 30, 2024, the Company had no shares of Series B Preferred Stock outstanding.

Series C Convertible Preferred Stock

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The Company may not effect, and a holder will not be entitled to, convert the Series C Preferred Stock or exercise any Series C Preferred Warrants, which, upon giving effect to such conversion or exercise, would cause the aggregate number of shares of common stock beneficially owned by the Purchaser (together with its affiliates) to exceed 4.99 % (or, at the election of the holder, 9.99 %) of the number of shares of common stock outstanding immediately after giving effect to the exercise.

As of September 30, 2024 and 2023 , the Company had 350 shares of Series C Preferred Stock outstanding, which were convertible into an aggregate of 38,889 shares of the Company’s common stock.

On March 5, 2025, the Company entered into a Securities Redemption Agreement (the “Redemption Agreement”) with Michael Taglich and Claudia Taglich (the “Sellers”), pursuant to which the Company agreed to purchase and redeem from the Sellers:

(i) all 350 shares of the Company’s Series C Preferred Stock, par value $ 0.001 per share;

(ii) placement agent warrants to purchase an aggregate of 13,000 shares of the Company’s common stock, par value $ 0.001 per share;

and (iii) stock options issued on or before December 31, 2017 , to purchase 108 shares of common stock (collectively, the “Securities”).

The aggregate purchase price for the Securities was $ 332.5 thousand which was allocated first amongst the liability classified placement agent warrants based on the purchase date fair value, then no value was allocated to the options as the fair value was deemed to be insignificant and then, the remainder of the purchase price was allocated to the equity classified Series C Preferred Shares.

The Company accounted for the redemption of the Series C Preferred Stock as a return to the preferred stockholder measured as the difference between the (i) purchase price allocated to the Series C Preferred Stock of $ 331 thousand and (ii) the carrying value of the Series C Preferred Stock, which was $ 0 .

The difference of $ 331 thousand was recognized as a reduction in additional paid-in capital, in the absence of retained earnings, and is included as a component of net loss attributable to common shareholders.

As of September 30, 2025 and September 30, 2024, the Company had no shares of Series C Preferred Stock outstanding and 350 shares of Series C Preferred Stock outstanding, respectively.

Series D Convertible Preferred Stock

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The Company may not effect, and a holder will not be entitled to convert, the Series D Preferred Stock or exercise any Series D Preferred Warrants, which, upon giving effect to such conversion or exercise, would cause (i) the aggregate number of shares of common stock beneficially owned by the Purchaser (together with its affiliates) to exceed 4.99 % (or, at the election of the holder, 9.99 %) of the number of shares of common stock outstanding immediately after giving effect to the exercise.

As of September 30, 2024 and 2023 , the Company had no shares of Series D Preferred Stock outstanding.

Amended and Restated Stock Incentive Plan

The Company has granted common stock, common stock warrants, and common stock option awards (the “Equity Awards”) to employees, consultants, advisors and former debt holders of the Company and to former owners and employees of acquired companies that have become employees of the Company.

The Company’s Amended and Restated Stock Incentive Plan (the “Plan”) provided for the issuance of up to 5,000 shares of common stock.

This Plan expired in August 2016.

On April 29, 2016, the stockholders approved a new stock incentive plan, the 2016 Stock Incentive Plan (the “2016 Plan”).

The 2016 Plan authorizes the award of incentive stock options, non-statutory stock options, restricted stock, unrestricted stock, performance shares, stock appreciation rights and any combination thereof to employees, officers, directors, consultants, independent contractors and advisors of the Company.

The 2016 Plan provides for the issuance in the aggregate of up to 2,400,000 shares of common stock associated with awards granted under the Stock Incentive Plan.

As of September 30, 2024 , there were 2,107,895 options outstanding and 38,940 shares available for future issuance under the 2016 Plan.

As of September 30, 2025 and September 30, 2024, the Company had no shares of Series D Preferred Stock outstanding.

BRIDGELINE DIGITAL, INC.

1 unchanged sentence

(in thousands, except share and per share data)

Stock Incentive Plans

The Company has historically granted common stock, common stock warrants, and common stock option awards (the “Equity Awards”) to employees, consultants, advisors and former debt holders of the Company and to former owners and employees of acquired companies that have become employees of the Company.

On September 16, 2025, the stockholders approved a new stock incentive plan, the 2025 Stock Incentive Plan (the “2025 Plan”).

The 2025 Plan authorizes the award of incentive stock options, non-statutory stock options, restricted stock, unrestricted stock, performance shares, stock appreciation rights and any combination thereof to employees, officers, directors, consultants, independent contractors and advisors of the Company.

The 2025 Plan provides for the issuance in the aggregate of up to 1,500,000 shares of common stock associated with awards granted under the Stock Incentive Plan.

As of September 30, 2025 , there were 200,000 options and 112,331 restricted stock outstanding and 1,130,571 shares available for future issuance under the 2025 Plan.

Historically, the Company’s Amended and Restated Stock Incentive Plan (the “Plan”) provided for the issuance of up to 5,000 shares of common stock.

This Plan expired in August 2016.

On April 29, 2016, the stockholders approved a new stock incentive plan, the 2016 Stock Incentive Plan (the “2016 Plan”).

The 2016 Plan, as amended, provided for the issuance in the aggregate of up to 2,400,000 shares of common stock associated with awards granted under the Stock Incentive Plan.

As of September 30, 2025 , there were 1,788,677 options and 78,879 restricted stock outstanding and no shares available for future issuance under the 2016 Plan.

Compensation Expense

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Year Ended September 30,

Cost of revenue

Operating expenses

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The warrants are typically exercisable six months after the issue date, expire in five years, and contain a cashless exercise provision and piggyback registration rights.

March 2025 Placement Agent Warrants - In March 2025, in connection with the Registered Direct offering, the Company issued 70,000 warrants to purchase shares of the Company’s common stock to WestPark Capital, Inc.

who acted as the exclusive placement agent for the offering, (the “March 2025 Placement Agent Warrants”).

As compensation for their services, the Company paid to WestPark a fee equal to 7 % of the aggregate purchase price paid for shares placed by WestPark at closing and reimbursed WestPark for certain expenses incurred in connection with the offering.

The March 2025 Placement Agent Warrants were issued March 26, 2025 with an exercise price of $ 1.875 per share and expire March 24, 2030.

The March 2025 Placement Agent Warrants were determined to be equity-classified awards.

Montage Warrant - As additional consideration for a prior loan arrangement which was paid in full in a prior period not presented, the Company issued to Montage Capital an eight -year warrant (the “Montage Warrant”) to purchase the Company’s common stock at a price equal to $ 132.50 per share.

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As of September 30, 2024 , no Series D Warrants have been exercised and the aggregate number of shares issuable upon exercise was 592,106 and 179,536 shares for investors and placement agents, respectively.

The Montage Warrants, Series A and C Preferred Warrants, the Placement Agent Warrants issued in connection with the Series C Preferred Stock, and the Series D Warrants were all determined to be derivative liabilities and are subject to remeasurement each reporting period (see Note 5 ).

During years ended September 30, 2024 and 2023 , there were no warrants exercised.

BRIDGELINE DIGITAL, INC.

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(in thousands, except share and per share data)

During the years ended September 30, 2025 and 2024 , there were no warrants exercised.

During the year ended September 30, 2025 , 13,000 Placement Agent Warrants have been redeemed in connection with the Redemption Agreement.

Total warrants outstanding as September 30, 2025 , were as follows:

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166,536 $ 2.85 5/12/2026

Placement Agent

70,000 $ 1.88 3/24/2030

Warrant Issuances

The Company did not issue warrants to purchase common stock during the years ended September 30, 2024 and 2023 .

The Company issued 70,000 warrants to purchase common stock during the year ended September 30, 2025, and did not issue warrants to purchase common stock during the year ended September 30, 2024 .

Summary of Option and Warrant Activity and Outstanding Shares

During the year ended September 30, 2025 the Company issued:

(i) 153,307 shares of restricted stock, net of shares withheld to settle tax withholding, of which (a) 86,049 shares were issued to its Chief Executive Officer at a grant-date fair value of $ 1.51 , based upon the closing price of the Company's common stock on the grant date, which vest ratably on a quarterly basis over a three -year period, and (b) 67,258 shares were granted to its directors, at a grant-date fair value of $ 1.51 , based upon the closing price of the Company's common stock on the grant date which vested immediately upon the grant date of June 26, 2025 and;

(ii) 112,331 shares of restricted stock, net of shares withheld to settle tax withholding, issued to its Chief Executive Officer at a grant-date fair value of $ 1.32 , based upon the closing price of the Company's common stock on the grant date, which vest ratably on a quarterly basis over a three -year period;

and (iii) 200,000 options to purchase shares to members of management at an exercise price of $ 1.32 , which vest ratably on a quarterly basis over a three -year period.

During the year ended September 30, 2024 the Company granted (i) options to purchase 250,000 shares to members of management at an exercise price of $ 0.81 , which vest ratably on a quarterly basis over a three -year period and (ii) options to purchase 80,000 shares to board members at an exercise price of $ 0.90 , which vested immediately.

During the year ended September 30, 2023 the Company, (i) issued 300,000 total options to its Chief Executive Officer at an exercise price of $ 1.18 , which vest in 36 equal monthly installments over a three -year period, (ii) issued 50,000 total options to employees at an exercise price of $ 1.34 , which vest ratably over a three -year period in equal quarterly installments, (iii) issued 152,000 total options to employees at an exercise price of $1.18, which vest ratably over a three -year period in equal quarterly installments, and (iv) issued 200,000 total options to the Board of Directors at an exercise price of $1.18, which vested immediately.

The weighted-average option fair values, as determined using the Black-Scholes option valuation model, and the assumptions used to estimate these values for stock options granted during the year ended September 30, 2025 and 2024 are as follows:

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89.8 % 108.5 % 96.1 %

108.5 % 96.1 % 88.5 % 90.7 %

Risk-free interest rate

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(in thousands, except share and per share data)

A summary of combined restricted stock, stock option and warrant activity is as follows:

Restricted Stock

A summary of combined stock option and warrant activity is as follows:

Stock Options

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330,000 0.83 - -

Exercised or redeemed

Cancelled/Forfeited

( 53,518 ) 1.50 - -

3 unchanged sentences

200,000 1.32 70,000 1.88

Exercised or redeemed

( 137,500 ) 1.24 ( 13,000 ) 2.85

Cancelled/Forfeited

( 180,667 ) 2.85 - -

( 1,051 ) 335.04 - -

Outstanding, September 30, 2025

1 unchanged sentence

There were 1,552,010 and 1,543,890 options vested and exercisable as of September 30, 2025 and 2024 , respectively.

The options outstanding at September 30, 2024 and 2023 had an aggregate intrinsic value of $ 105,000 and $ 0 , respectively.

A summary of the status of unvested options is as follows:

The options outstanding at September 30, 2025 and 2024 had an aggregate intrinsic value of $ 0.2 and $ 0.1 million, respectively.

A summary of the status of restricted stock is as follows:

Weighted Average

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( 141,100 ) 1.32

Forfeited/Cancelled

( 13,000 ) 1.07

Cancelled/Forfeited

Unvested at September 30, 2025

191,210 $ 1.40

The aggregate fair value of restricted stock that vested during fiscal 2025 was $ 0.2 million.

The following table summarizes information about outstanding stock options at September 30, 2025 :

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$ ( 2,518 ) $ ( 1,961 )

Effect of dilutive securities:

Change in fair value of in-the-money warrant derivative liabilities

Redemption of Series C Convertible Preferred Stock

Net loss applicable to common stockholders - diluted earnings per share

3 unchanged sentences

Effect of dilutive securities:

Preferred stock

Weighted-average shares outstanding for diluted earnings per share

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861,533 804,533

Convertible preferred stock

Series C Convertible preferred stock

Unvested restricted stock

191,210 66,672

31 unchanged sentences

Years Ended September 30,

Digital Engagement Services

$ 3,224 $ 3,146

Subscription - SaaS

$ 10,339 $ 10,699

Subscription - Maintenance

Subscription - Hosting

$ 15,383 $ 15,358

12 unchanged sentences

$ 2,262 $ 284

Segment Reporting

We operate as one operating segment:

The Software segment provides marketing technology to customers under software-as-a-service arrangements.

The service term for the software arrangements is variable, with the median term being approximately five years.

Bridgeline derives revenue primarily in North America and manages the business activities on a consolidated basis.

Our Chief Executive Officer, our CODM, reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance.

As such, we have one operating segment - Software - in the business of marketing technology.

Our CODM reviews cost of sales expense, sales and marketing expense, general and administrative expense and research and development expense to assess our significant segment expenses, and reviews income (loss) from operations and net income (loss) to assess our operating performance.

Our CODM also reviews total assets, as reported on our consolidated balance sheets.

The accounting policies of the software segment are the same as those described in the summary of significant accounting policies.

See our consolidated statement of operations for our significant segment expenses, loss from operations and net loss in the periods presented.

BRIDGELINE DIGITAL, INC.

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$ ( 39 ) $ ( 43 )

The Company’s income tax provision was computed using the federal statutory rate and average state statutory rates, net of related federal benefit.

The Company’s income tax provision was computed using the federal statutory rate and state statutory rates, net of related federal benefit.

The provision differs from the amount computed by applying the statutory federal income tax rate to pretax income, as follows:

Year Ended September 30,

Income tax provision/(benefit) at the federal statutory rate of 21%

Income tax (benefit)/provision

$ ( 537 ) 21.0 % $ ( 421 ) 21.0 %

Permanent differences, net

42 ( 1.6 )% 36 ( 1.8 )%

State income tax provision/(benefit)

14 ( 0.5 )% 17 ( 0.8 )%

Foreign income taxed at different rates

( 37 ) 1.4 % ( 118 ) 5.9 %

Change in valuation allowance on deferred tax assets

362 ( 14.2 )% 534 ( 26.6 )%

True up adjustments

117 ( 4.6 )% ( 91 ) 4.5 %

$ ( 39 ) 1.5 % $ ( 43 ) 2.1 %

As of September 30, 2025 , the Company has federal net operating loss (“NOL”) carryforwards of approximately $ 37.4 million of which $ 29.0 million is subject to the 20 -year carryforward and expire on various dates through 2038.

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Accordingly, the Company has established a valuation allowance against a portion of its deferred tax assets at September 30, 2025 and 2024 .

For the years ended September 30, 2024 and 2023 , the valuation allowance for deferred tax assets increased by $ 0.5 million and $ 0.3 million, respectively.

The acquisition of HawkSearch during the third quarter of fiscal 2021 resulted in the recognition of deferred tax liabilities of approximately $ 1.2 million related to intangible assets.

Prior to the business combination, the Company had a full valuation allowance on its net deferred tax assets.

The deferred tax liabilities generated from the business combination netted against the Company’s pre-existing deferred tax assets.

Consequently, the impact of such resulted in the release of $1.2 million of the pre-existing valuation allowance against the deferred tax assets and corresponding deferred tax benefit recognized during fiscal 2021.

For each of the years ended September 30, 2025 and 2024 , the valuation allowance for deferred tax assets increased by $ 0.4 million and $ 0.5 million, respectively

We recognize deferred tax assets for stock-based awards that result in deductions on our income tax returns, based on the amount of stock-based compensation recognized and the statutory tax rate in the jurisdiction in which we will receive a tax deduction.

We also recognize interest accrued related to unrecognized tax benefits in interest expense.

Penalties, if incurred, are recognized as a component of tax expense.

The Company’s policy as it relates to interest and penalties related to unrecognized tax benefits is to recognize interest accrued in interest expense and penalties, if incurred, as a component of tax expense.

The Company is subject to U.S.

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There were no undistributed earnings of the Company’s foreign subsidiaries at September 30, 2025 and 2024 .

The 2017 Tax Act subjects a U.S.

The Tax Cuts and Jobs Act ( “2017 Tax Act”), enacted on December 22, 2017, subjects a U.S.

stockholder to tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries.

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taxpayers that sell goods or services to foreign customers under the new Foreign Derived Intangible Income Deduction (“FDII”) rules.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) included reforms to the US international income tax regime.

For tax years beginning after December 31, 2025, there is a permanent 40% deduction for net CFC tested income (“NCTI”), which replaces GILTI, and makes several changes to the determination of tested income and the amount of the foreign tax credit.

In addition, there is a permanent 33.34% foreign-derived deduction eligible income (“FDDEI”), which replaces FDII and makes several changes to the determination of deduction eligible income (“DEI”).

As of September 30, 2025 and September 30, 2024 , the Company did not have GILTI to be reported.

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The Company does not expect any change to this determination in the next twelve months.

BRIDGELINE DIGITAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Related Party Transactions

In October 2013, Mr.

Michael Taglich joined the Board of Directors.

Michael Taglich is the Chairman and President of Taglich Brothers, Inc.

(“Taglich Brothers”), a New York based securities firm.

Taglich Brothers acted as placement agents for many of the Company’s private offerings and debt issuances.

In connection with previous private offerings and debt issuances which occurred prior to the fiscal years presented in these consolidated financial statements, Taglich Brothers were granted Placement Agent Warrants to purchase 4,246 shares of common stock at a weighted average price of $ 321.00 per share and were granted Placement Agent Warrants to purchase 10,926 shares of common stock at a weighted average price of $ 761.61 per share.

In consideration of previous loans made by Michael Taglich to the Company and the personal guaranty on a former third -party credit facility no longer maintained by the Company, Mr.

Taglich has been issued warrants to purchase common stock totaling 1,080 shares at an exercise price of $ 1,000 per share.

In November 2018, the Company engaged Taglich Brothers Inc, on a non-exclusive basis, to perform advisory and investment banking services to identify possible acquisition target possibilities.

Fees for the services were $ 8 thousand per month for three months and $ 5 thousand per month thereafter, cancellable at any time.

Taglich Brothers Inc.

could also earn a success fee ranging from $ 200 thousand for a revenue target acquisition of under $5 million up to $ 1 million for an acquisition target over $200 million.

In connection with the asset purchase of Stantive, Taglich Brothers earned a success fee of $ 200,000 .

Michael Taglich purchased 350 units in the amount of $ 350 of Series C Preferred Stock and associated warrants in the private transaction consummated on March 13, 2019.

Taglich’s purchase was subject to stockholder approval pursuant to the Nasdaq Stock Market Rule 5635 (c), for which approval by the stockholders of the Company was obtained on April 26, 2019.

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 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.

The warrants expire May 12, 2026.

On February 14, 2025, the Board appointed Brandon Ross to serve as a Class III Director of the Board, to fill the vacancy created by the resignation of Mr.

Ross will serve until his term expires at the 2026 Annual Meeting of Stockholders.

Ross currently serves as Head of Placements and Senior Managing Director at WestPark Capital, Inc.

Of the 70,000 2025 Placement Agent Warrants issued to WestPark Capital, Inc., or its designees in March 2025, warrants to purchase 28,000 shares of Common Stock were designated to Mr.

The warrants are exercisable immediately, expire on March 24, 2030 and have an exercise price of $ 1.875 per share.

Michael Ketslakh

On February 10, 2025, the Board appointed Michael Ketslakh to serve as a Class II Director of the Board, to fill the vacancy created by the resignation of Mr.

Ketslakh will serve until his term expires at the 2028 Annual Meeting of Stockholders.

Ketslakh participated in the Private Placement and purchased 394,736 unregistered shares.

Michael Taglich

On February 10, 2025, Michael Taglich announced his resignation from the Board of Directors.

Refer to the Stockholder's Equity footnote regarding the Redemption Agreement (Note 12 ).

Subsequent Events

The Company evaluated subsequent events through the date of this filing and concluded there were no material subsequent events requiring adjustment to or disclosure in these consolidated financial statements.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data