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Item 8. Financial Statements and Supplementary Data

2025-09-12 compared with 2024-09-12 · 147 added, 125 removed, 858 unchanged (24% of the section changed)

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Sunnyvale, California

Opinion on the Financial Statements

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of eGain Corporation and subsidiaries (the “Company”) as of June 30, 2025 and 2024, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the two years in the period ended June 30, 2025 and the related notes and financial statement schedule listed in the index to this Annual Report on Form 10-K at Part IV Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

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The Company enters into contracts with its customers that may include promises to transfer cloud delivery arrangements, term software licenses, support and professional services.

Significant judgment may be required by the Company in determining revenue recognition for these customer agreements, including the determination of

whether products and services are considered distinct performance obligations that should be accounted for separately or combined as one unit of accounting and the determination of standalone selling prices (“SSP”) for each distinct performance, particularly for services that are not sold separately.

Significant judgment is required by the Company in determining revenue recognition for these customer agreements, including the determination of whether

products and services are considered distinct performance obligations that should be accounted for separately or combined as one unit of accounting and the determination of standalone selling prices (“SSP”) for each distinct obligations performance, particularly for services that are not sold separately.

The principal audit considerations for our determination that performing procedures related to the Company’s revenue recognition for customer agreements is a critical audit matter are the significant amount of judgment required by management in this process.

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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 testing the effectiveness of internal controls relating to the revenue recognition process, including internal controls related to the identification of distinct performance obligations and data used to establish SSP for products and services.

These procedures also included reviewing executed contracts for a sample of revenue transactions to assess management’s evaluation of significant terms, including the determination of distinct performance obligations, and testing the amounts recognized as revenue or recorded as deferred revenue.

These procedures included reviewing executed contracts for a sample of revenue transactions to assess management’s evaluation of significant terms, including the determination of distinct performance obligations, and testing the amounts recognized as revenue or recorded as deferred revenue.

In addition, we tested management’s determination of SSP by performing audit procedures that included, among others, assessing the appropriateness of the methodology applied, testing the mathematical accuracy of the underlying data and calculations, and testing selections to corroborate the data underlying the Company’s calculations.

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Total liabilities

Commitments and contingencies (Note 7 and 8)

Commitments and contingencies (Notes 7 and 8)

Stockholders’ equity:

Common stock, $ 0.001 par value – authorized:

Common stock, $ 0.001 par value per share – authorized:

60,000 shares;

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Cost of revenue:

Cost of subscription

Cost of professional services

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Income from operations

Interest income

Interest income, net

Other expense, net

Income before income tax provision

Provision for income taxes

Income before income tax benefit (provision)

Benefit from (provision for) income taxes

Per share information:

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Interest on stockholders’ notes

Repayment on stockholders’ notes

Issuance of common stock upon exercise of stock options

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BALANCES AS OF JUNE 30, 2024

Interest on stockholders’ notes

Repayment on stockholders’ notes

Write-off on stockholders’ notes

Issuance of common stock upon vesting of restricted stock units

Issuance of common stock upon exercise of stock options

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Gain on disposal of property and equipment

Write-off on stockholder's notes

Changes in operating assets and liabilities:

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Repurchases of common stock

Net cash provided by (used in) financing activities

Net cash used in financing activities

Effect of exchange rate differences on cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of year

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ROU assets and lease liabilities recognized from lease modification

Non-cash items:

Purchases of equipment through trade accounts payable

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

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Organization and Nature of Business

eGain Corporation (eGain, the Company, our, we or us) automates customer engagement with an innovative knowledge hub, powered by conversational artificial intelligence (AI) and analytics.

We sell mostly to large enterprises across financial services, telecommunications, retail, government, healthcare, and utilities seeking to better serve customers at scale while coping with content silos, process complexity, and regulatory compliance.

With our mantra of AX + BX + CX = DX™ , we guide clients to effortless digital experience (DX) by holistically optimizing agent experience (AX), business experience (BX) and customer experience (CX).

Leading brands use eGain’s cloud software to improve customer satisfaction, empower agents, reduce service cost, and boost sales.

We are headquartered in the United States.

eGain automates customer experience with an AI knowledge hub solution.

We sell our SaaS solution to enterprises who want to improve customer experience while reducing cost, by using AI to synthesize and deliver trusted, consumable answers from a knowledge hub.

We are headquartered in Sunnyvale, California, USA.

We also operate in the United Kingdom and India.

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The consolidated financial statements include the accounts of eGain and our wholly-owned subsidiaries, eGain Communications Ltd., Exony Limited (Exony), eGain Communications Pvt.

Ltd., eGain Communications (SA), and eGain Deutschland GmbH.

Ltd., eGain Communications (USA), and eGain Deutschland GmbH.

All significant intercompany balances and transactions have been eliminated.

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The resulting cumulative translation adjustments are recorded as a component of accumulated other comprehensive loss.

Foreign currency transaction gains and losses are included in “other expense, net” in the consolidated statements of operations, and resulted in a loss of $ 98,000 and $ 470,000 , in fiscal years ended June 30, 2024 and 2023, respectively.

Foreign currency transaction gains and losses are included in “other

expense, net” in the consolidated statements of operations, and resulted in a loss of $ 1.3 million and $ 98,000 , in fiscal years ended June 30, 2025 and 2024, respectively.

Cash and Cash Equivalents, Restricted Cash and Investments

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In addition, we established a provision for credit losses based upon factors surrounding the credit risk of customers, historical trends and other information.

Three customers accounted for a range of 18 % to 22 % of accounts receivable as of June 30, 2025.

Four partners and customers accounted for a range of 12 % to 22 % of accounts receivable as of June 30, 2024.

A set of different three partners and customers accounted for a range of 18 % to 22 % of accounts receivable as of June 30, 2023.

Accounts Receivable and Provision for Credit Losses

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Our accounts receivable are derived from revenue earned from customers and are not interest bearing.

We also maintain a provision for credit losses to reserve for potential

uncollectible trade receivables.

We also maintain a provision for credit losses to reserve for potential uncollectible trade receivables.

We review our trade receivables by aging category to identify specific customers with known disputes or collectability issues.

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and internationally, and changes in customer financial conditions.

If we made different judgments or utilized different estimates, material differences may result in additional reserves for trade receivables, which would be reflected by charges in general and administrative expenses for any period presented.

any period presented.

We write off a receivable after all collection efforts have been exhausted and the amount is deemed uncollectible.

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Our accounts receivable, net balance was $ 32.8 million and $ 31.7 million as of June 30, 2025 and 2024, respectively.

Our combined contract liabilities, which consist of both current and non-current deferred revenue for which we have an obligation to transfer services to customers and have received considerations in advance or the amount is due from customers, balance was $ 49.3 million and $ 49.9 million as of June 30, 2024 and 2023, respectively.

Property and Equipment, Net

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Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as noncurrent.

Our combined contract liabilities, which consist of both current and non-current deferred revenue for which we have an obligation to transfer services to customers and have received considerations in advance or the amount is due from customers, balance was $ 50.5 million and $ 49.3 million as of June 30, 2025 and 2024, respectively.

Cost Capitalized to Obtain Revenue Contracts, Net

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The capitalized amounts consist primarily of sales commissions paid to our direct sales force.

Capitalized amounts also include (i) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired and (ii) the associated payroll taxes and fringe benefit costs associated with the payments to our employees, including stock-based compensation.

Capitalized amounts also

include (i) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired and (ii) the associated payroll taxes and fringe benefit costs associated with the payments to our employees, including stock-based compensation.

Costs capitalized related to new revenue contracts are generally deferred and amortized on a straight-line basis over a period of benefit that we estimate to be five years .

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The Company assessed each of its revenue contracts in order to determine whether a significant financing component exists, and determined its contracts did not include a significant financing component for the years ended June 30, 2025 and 2024.

During the fiscal years ended June 30, 2024 and 2023, we capitalized $ 917,000 and $ 462,000 of costs to obtain revenue contracts, respectively, and amortized $ 1.5 million to sales and marketing expense each period.

During the fiscal years ended June 30, 2025 and 2024, we capitalized $ 865,000 and $ 917,000 of costs to obtain revenue contracts, respectively, and amortized $ 1.4 million and $ 1.5 million to sales and marketing expense, respectively.

Capitalized costs to obtain revenue contracts, net of accumulated amortization were $ 2.6 million and $ 3.1 million as of June 30, 2025 and 2024, respectively.

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Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised.

Lease expense is recognized

on a straight-line basis over the lease term.

The Company has elected not to recognize ROU assets and obligations for leases with an initial term of twelve months or less, and has applied a capitalization threshold to recognize a lease on the consolidated balance sheets.

Lease expense is recognized on a straight-line basis over the lease term.

The Company has elected not to recognize ROU assets and obligations for leases with an initial term of twelve months or less, and has applied a capitalization threshold to recognize a lease on the

consolidated balance sheets.

The expense associated with short-term leases and leases that do not meet the Company’s capitalization threshold are recorded to lease expense in the period it is incurred.

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We expense advertising costs as incurred.

Total advertising expenses for the fiscal years ended June 30, 2024 and 2023 were $ 180,000 and $ 686,000 , respectively.

Total advertising expenses for the fiscal years ended June 30, 2025 and 2024 were $ 2.2 million and $ 2.1 million, respectively.

Stock-Based Compensation

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Under this method, deferred tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

For the legacy eGain business in the United States, based upon the weight of available evidence, which includes our historical operating performance, our future investment plans, and the uncertainty in the current market and economic environment, we have determined that it is more likely than not that these assets will be realized and have released the valuation allowance against our net deferred tax assets of approximately $ 27.4 million except for California net operating losses and research and development credits.

For the legacy eGain business in the United Kingdom, based on the positive evidence, the Company has determined it would be able to utilize the deferred tax assets and does not have a valuation allowance against the deferred tax assets.

The remaining eGain foreign operations as well as Exony’s business have historically been profitable and we believe it is more likely than not that those assets will be realized.

Our tax provision primarily relates to foreign activities as well as state income taxes.

Our tax benefit (provision) primarily relates to foreign activities as well as federal and state income taxes.

Our income tax rate differs from the statutory tax rates primarily due to the change in valuation allowance, stock-based compensation, Section 267 inclusion, research and development tax credits, and our foreign operations.

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Operating segments are identified as components of an enterprise for which discrete financial information is available and regularly reviewed by our Chief Operating Decision-Maker in order to make decisions about resources to be allocated to the segment and assess its performance.

Our chief operating decision-makers under ASC 280, Segment Reporting , are our executive management team.

Our chief operating decision-makers review financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

Our chief operating decision-makers (CODMs) under ASC 280, Segment Reporting , are our executive management team.

Our CODMs review financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

The CODMs regularly evaluate non-GAAP operating income, which is defined as income from operations as presented on the consolidated statements of operations and adding back stock-based compensation, along with significant revenue and expense categories aligned with those presented on our consolidated statement of operations, and the accounting policies governing our segment are the same as those described in Note 1, “Summary of Business and Significant Accounting Policies.”

Information relating to our geographic areas for the fiscal years ended June 30, 2025 and 2024 is as follows (in thousands):

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Pronouncements Recently Adopted

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held at the reporting date based on internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts.

2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model, which will result in earlier recognition of credit losses.

We adopted this guidance as of our first quarter of fiscal year 2024 with no material impact on our condensed consolidated financial statements.

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires disclosures on expanded information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

The ASU is effective for fiscal years beginning after December 15, 2023 (our fiscal year 2025), with early adoption permitted.

The ASU is required to be applied retrospectively to all prior periods presented in the financial statements once adopted.

We adopted this guidance as of our fourth quarter of fiscal year 2025 with no material impact on our consolidated financial statements.

Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities.

The objective of this guidance is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in each relevant expense caption.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 (our fiscal year 2028), with early and retrospective adoption permitted.

We are currently evaluating the impact of this update on our consolidated financial statements and related disclosures.

Revenue Recognition

Revenue Recognition Policy

Our revenue is comprised of two categories including subscription and professional services.

Subscription includes SaaS revenue and legacy revenue.

SaaS includes revenue from cloud delivery arrangements, term licenses and embedded OEM royalties and associated support.

Legacy revenue is associated with license, maintenance, and support contracts on perpetual license arrangements that we no longer sell.

Professional services includes consulting, implementation, training, and managed services.

Our revenue is comprised of two categories including SaaS and professional services.

SaaS revenue includes cloud delivery arrangements, term licenses, embedded original equipment manufacturer (OEM) royalties, and associated support.

An immaterial amount of SaaS revenue is comprised of our legacy revenue which is associated with license, maintenance, and support contracts on perpetual license arrangements that we no longer sell.

Professional services include consulting, implementation, training, and managed services.

Significant Judgment Applied in the Determination of Revenue Recognition

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and (v) recognizing revenue when, or as, we satisfy each performance obligation in the contract typically through delivery or when control is transferred to the customer.

Subscription Revenue

The following customer arrangements are recognized ratably over the contract term as the performance obligations are delivered:

● Cloud delivery arrangements;

● Maintenance and support arrangements;

● Embedded OEM royalties and associated support arrangements;

● Term licenses which incorporate on-premise software licenses and a subscription to a substantial cloud functionalities.

For contracts involving distinct software licenses, the license performance obligation is satisfied at a point in time when control is transferred to the customer.

We typically invoice our customers in advance upon execution of the contract or subsequent renewals with payment terms between 30 and 45 days .

We typically invoice our customers in advance upon execution of the contract or subsequent renewals with payment terms generally between 30 and 45 days .

Invoiced amounts are recorded in accounts receivable, deferred revenue or revenue, depending if control transferred to our customers based on each arrangement.

The Company has a royalty revenue agreement with a customer related to the Company’s embedded intellectual property.

Under the terms of the agreement, the customer is to provide a combined fixed fee, per agent, for each software license sold containing the embedded software to the Company.

These embedded OEM royalties are included as subscription revenue.

Under Topic 606 revenue guidance, since these arrangements are for usage-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies, the Company estimate revenue recognized only as the performance obligation of the OEM royalties has been satisfied or partially satisfied.

We have a royalty revenue agreement with a customer related to our embedded intellectual property.

Under the terms of the agreement, the customer is to provide us a combination of fixed fee and per agent fee, for each software license sold containing the embedded software.

These embedded OEM royalties are included as SaaS revenue.

Under Topic 606 revenue guidance, since these arrangements are for usage-based licenses of intellectual property, for which the guidance in paragraph ASC 606-10-55-65 applies, we estimate revenue recognized only as the performance obligation of the

embedded OEM royalties has been satisfied or partially satisfied.

Differences between actual results and estimated amounts are adjusted in the following period as such sales are reported by the customer with a quarter in arrears.

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Our consulting and implementation service contracts are bid either on a time-and-material basis or on a fixed-fee basis.

Managed services contracts are bid on a time-

and-material basis.

Managed services contracts are bid on a time-and-material basis.

Fixed fees are generally paid upon milestone billing or customer acceptance at pre-determined points in the contract.

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VAT liability

Sales tax payable

Customer advances

Sales tax payable

Accrued other liabilities

Accrued liabilities

Other assets, net consists of the following:

As of June 30,

(in thousands)

Deferred tax assets

Prepaid others

Other receivable

Other assets, net

REVENUE RECOGNITION

Disaggregation of Revenue

The following table presents our subscription and professional services revenue during the fiscal years ended June 30, 2024 and 2023, respectively:

The following table presents our SaaS and professional services revenue during the fiscal years ended June 30, 2025 and 2024, respectively:

Fiscal Year Ended June 30,

(in thousands)

Legacy revenue

Total subscription

Professional services

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Revenue by geography is generally determined on the region of our contracting entity rather than the region of our customer.

The relative proportion of our total revenues between each geographic region as presented in the table below was materially consistent across each of our operating segments’ revenues for the periods presented.

The relative proportion of our total revenues between each

geographic region as presented in the table below was materially consistent across each of our operating segments’ revenues for the periods presented.

Fiscal Year Ended June 30,

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Unbilled receivables are included in accounts receivable, less provision for credit losses on our consolidated balance sheets.

Contract liabilities consist of deferred

revenue for which we have an obligation to transfer services to customers and have received consideration in advance or the amount is due from customers.

Contract liabilities consist of deferred revenue for which we have an obligation to transfer services to customers and have received consideration in advance or the amount is due from customers.

Once the obligations are fulfilled, then deferred revenue is recognized to revenue in the respective period.

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Deferred revenue, net of current portion

$ 36.2 million of deferred revenue as of June 30, 2023 was recognized as revenue during the fiscal year ended June 30, 2024.

$ 38.2 million of deferred revenue as of June 30, 2022 was recognized as revenue during the fiscal year ended June 30, 2023.

All deferred revenue as of June 30, 2024 was recognized as revenue during the fiscal year ended June 30, 2025.

Remaining Performance Obligations

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As of June 30, 2025, our remaining performance obligations were $ 91.6 million of which we expect to recognize $ 63.0 million and $ 28.6 million as revenue within one year and beyond one year, respectively.

Income before income tax provision consisted of the following (in thousands):

Income before income tax benefit (provision) consisted of the following (in thousands):

Fiscal Year Ended June 30,

United States

Income before income tax provision

Income before income tax benefit (provision)

The reconciliation of income tax expense at the statutory federal income tax rate and the Company’s effective tax rate is as follows (in thousands):

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Foreign income

Income tax provision

The components of the income tax provision are as follows (in thousands):

Benefit from (provision for) income taxes

The components of the income tax benefit (provision) are as follows (in thousands):

Fiscal Year Ended June 30,

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Total deferred:

Income tax provision

As of June 30, 2024, we had federal and state net operating loss carryforwards of approximately $ 12.0 million and $ 12.3 million, respectively.

Income tax benefit (provision)

As of June 30, 2025, we had zero federal and approximately $ 11.5 million state net operating loss carryforwards.

The net operating loss carryforwards will expire at various dates beginning in fiscal year ending June 30, 2036, if not utilized.

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The California research and development credit carryforwards are approximately $ 6.7 million as of June 30, 2025 and have an indefinite carryover period.

In 2024, California enacted legislation, with the first being S.B.167, which suspends the use of NOLs by businesses and individuals for tax years 2024 through 2026, limits the use of tax credits by businesses and individuals to $5 million for tax years 2024 through 2026, and clarifies that income not included in apportionable business income is excluded from the sales factor of the apportionment formula.

In 2025, California enacted legislation, with the first being S.B.167, which suspends the use of NOLs by businesses and individuals for tax years 2024 through 2026, limits the use of tax credits by businesses and individuals to $5 million for

tax years 2025 through 2026, and clarifies that income not included in apportionable business income is excluded from the sales factor of the apportionment formula.

The second, S.B.175, provides some relief from the $5 million credit limitation in S.B.

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ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not.

For the legacy eGain business in the United States, based upon the weight of available evidence, which includes our historical operating performance and the reported cumulative net losses in prior years, we have provided a full valuation allowance against our U.S.

For the legacy eGain business in the United States, based upon the weight of available evidence, which includes our historical operating performance and the reported cumulative net losses in prior years, we had historically provided a full valuation allowance against our U.S.

net deferred tax assets.

With respect to our foreign operations, we expect to utilize the deferred tax assets and have not placed a valuation allowance against them.

Our tax provision primarily relates to foreign activities as well as state income taxes.

Our income tax rate differs from the statutory tax rates primarily due to the change in

valuation allowance, stock-based compensation, Section 267, research and development credits, and our foreign operations.

The net valuation allowance increased by $ 1.5 million and increased by $ 1.7 million for the fiscal years ended June 30, 2024 and 2023, respectively.

However, based on analysis for the year ended June 30, 2025, we have determined that the positive evidence overcame any negative evidence, primarily due to the Company’s cumulative income position and concluded that it is more likely than not that the U.S.

federal deferred tax assets and other than certain California state deferred tax assets are realizable.

As a result, in the year ended June 30, 2025, we released the valuation allowance against all of the U.S.

federal and state deferred tax assets except for California net operating losses and research and development credits.

With respect to our foreign operations, we expect to fully utilize the deferred tax

assets and have not placed a valuation allowance against them.

Our tax benefit (provision) primarily relates to the release of the valuation allowance and foreign, federal, and state income taxes.

Our income tax rate differs from the statutory tax rates primarily due to the decrease in valuation allowance, stock-based compensation, Section 267, research and development credits, and our foreign operations.

The net valuation allowance decreased by $ 30.1 million and increased by $ 1.7 million for the fiscal years ended June 30, 2025 and 2024, respectively.

The significant decrease in the valuation allowance was the result of the Company’s release of the entire valuation allowance previously established on its federal and state deferred tax assets except for California net operating losses and research and development credit carryforwards.

We continue to maintain a full valuation allowance of $ 5.5 million on California net operating losses and research and development credit carryforwards, which we believe are not more likely than not to be realized in future periods.

We have not provided for taxes on $ 28.2 million of undistributed earnings of our foreign subsidiaries as of June 30, 2025.

It is our intention to reinvest such undistributed earnings indefinitely in our foreign subsidiaries.

If we distribute these earnings, in the form of dividends or otherwise, we would be subject to withholding taxes payable to the foreign jurisdiction and potential state taxes.

For the fiscal years ended June 30, 2024 and 2023, we have zero and $ 3.4 million of Global Intangible Low Tax Income inclusion and used our net operating losses to offset our taxable income, respectively.

If we distribute these earnings, in the form of dividends or otherwise, we would be subject to withholding taxes payable to the foreign jurisdiction.

For the fiscal years ended June 30, 2025 and 2024, we have $ 2.2 million and zero of Global Intangible Low Tax Income inclusion and used our net operating losses and the Section 250 deduction to offset our taxable income, respectively.

Uncertain Tax Positions

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2005 Stock Incentive Plan

2005 Management Stock Option Plan

2017 Employee Stock Purchase Plan

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In May 2005, our board of directors adopted the 2005 Management Stock Option Plan (2005 Management Plan) which provides for the grant of non-statutory stock options to directors, officers and key employees of eGain and its subsidiaries.

Our board extended the expiration date of the 2005 Management Plan to September 30, 2024.

The expiration date of the 2005 Management Plan was September 30, 2024.

Options under the 2005 Management Plan are granted at a price not less than 100 % of the fair market value of the common stock on the date of grant.

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Balance as of June 30, 2023

Options Exercised

Balance as of June 30, 2024

Options Exercised

Options Forfeited / Expired

Plan Shares Expired

Balance as of June 30, 2025

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Options Forfeited / Expired

RSUs Forfeited

Balance as of June 30, 2024

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Non-vested RSUs as of June 30, 2024

RSUs released

RSUs forfeited

Non-vested RSUs as of June 30, 2025

During the fiscal year ended June 30, 2024, we granted 3,901 RSUs to consultants.

We granted 2,659 and 3,901 RSUs to consultants during fiscal year ended June 30, 2025 and 2024, respectively.

The following table summarizes information about stock options outstanding and exercisable under all stock option plans as of June 30, 2025:

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$ 1.80 -$ 19.11

$ 1.8 -$ 19.11

The summary of options vested and exercisable as of June 30, 2025 comprised:

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In October 2017, our board of directors adopted the ESPP which provided eligible employees the option purchase the Company’s common stock through payroll deductions at a price equal to 85 % of the lower of the fair market value at the entry date of the applicable offering period or at the end of each applicable purchasing period.

The offering period, meaning a period with respect to which the right to purchase shares of our common stock may be granted under the ESPP, will not exceed twenty-seven months and consist of a series of six-month purchase periods.

The offering period, meaning

a period with respect to which the right to purchase shares of our common stock may be granted under the ESPP, will not exceed twenty-seven months and consist of a series of six-month purchase periods.

Eligible employees may join the ESPP at the beginning of any six-month purchase period.

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On December 17, 2021, our board of directors authorized an additional 600,000 shares of common stock to be available for issuance under ESPP.

As of June 30, 2025, 589,695 shares of common stock were reserved for future issuance under the ESPP.

Valuation of Stock-based Awards

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There is no income tax effect that has been recognized relating to the stock-based compensation expense in the US due to full valuation allowance.

Total stock-based compensation includes expense related to non-employee awards of $ 23,000 and $ 140,000 during the fiscal years ended June 30, 2024 and 2023, respectively.

Total stock-based compensation to non-employee awards were expense of $ 37,000 and $ 23,000 during the fiscal years ended June 30, 2025 and 2024, respectively.

A net reversal of stock-based compensation reflects the forfeiture of unvested stock awards due to termination of service.

We utilized the Black-Scholes valuation model for estimating the fair value of the stock-based compensation of options and ESPP stock purchase rights.

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Total stock-based compensation expense related to those purchase rights was $ 303,000 and $ 362,000 for the fiscal years ended June 30, 2025 and 2024, respectively.

As of June 30, 2024 unrecognized compensation expense related to purchase rights that will be recognized over a weighted average period of 0.42 years was $ 147,000 .

The dividend yield of zero is based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends.

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General and administrative

Total unamortized compensation cost, net of forfeitures, for all options granted but not yet vested as of June 30, 2024 was $ 2.0 million which is expected to be recognized over the weighted average period of 0.83 years.

The following table summarizes stock-based compensation expense relating to RSUs for the years ended June 30, 2024 (in thousands):

Fiscal Year Ended

June 30, 2024

Total unamortized compensation cost, net of forfeitures, for all options granted but not yet vested as of June 30, 2025 was $ 867,000 which is expected to be recognized over the weighted average period of 1.23 years.

The following table summarizes stock-based compensation expense relating to RSUs for the years ended June 30, 2025 and 2024, respectively (in thousands):

Fiscal Year Ended June 30,

Cost of revenue

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Total unamortized compensation cost, net of forfeitures, for all RSUs granted but not yet vested as of June 30, 2025 was $ 393,000 , which is expected to be recognized over the weighted average period of 0.38 years.

There were no RSUs granted during fiscal year ended June 30, 2023.

The following table summarizes stock-based compensation expense relating to the ESPP for the years ended June 30, 2025

and 2024, respectively (in thousands):

Fiscal Year Ended June 30,

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total unamortized compensation cost, net of forfeitures, for all purchase rights related to ESPP granted but not yet vested as of June 30, 2025 was $ 116,000 , which is expected to be recognized over a weighted average period of 0.42 years.

During our fiscal year ended June 30, 2025, we leased our office facilities under non-cancelable operating leases that expire on various dates through the fiscal year 2033.

We also modified three of our existing operating leases by extending the terms under such leases, which resulted in an increase in operating lease right-of-use assets and operating lease liabilities in the amount of approximately $ 2.1 million during our fiscal year ended June 30, 2024.

We also modified two of our existing operating leases by extending the terms under such leases, which resulted in an increase in operating lease right-of-use assets and operating lease liabilities in the amount of approximately $ 677,000 during our fiscal year ended June 30, 2025.

All of our office leases are classified as operating leases with lease expense recognized on a straight-line basis over the lease term.

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Employees may contribute up to 60 % of their salary, subject to certain limitations.

We, at the discretion of our board of directors, may contribute to

the 401(k) Plan.

We, at the discretion of our board of directors, may contribute to the 401(k) Plan.

In fiscal years 2025 and 2024, we contributed approximately $ 651,000 and $ 680,000 to the 401(k) Plan, respectively.

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The timing and number of shares repurchased will be determined based on an evaluation of market conditions and other factors, including stock price, trading volume, general business and market conditions, and the availability of capital.

The stock repurchase program has been extended until the earlier of (i) the date the aggregate amount of shares that can be repurchased under the stock repurchase program have been repurchased and (ii) the date the board of directors decides to terminate the stock repurchase program.

The original stock repurchase program became effective on November 14, 2022, and was amended on November 14, 2024 to extend the term until the earlier of (i) the date the aggregate amount of shares that can be repurchased under the stock repurchase program have been repurchased and (ii) November 14, 2025, unless further extended.

The stock repurchase program does not obligate us to acquire a specified number of shares and may be modified, suspended, or discontinued at any time at our discretion without notice.

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We intend to reissue repurchased shares at a later date and therefore carry the shares as treasury stock at cost.

QUARTERLY FINANCIAL DATA (Unaudited)

Following is a summary of quarterly operating results and share data for the years ended June 30, 2024 and 2023, respectively:

(in thousands, except per share data)

Fiscal Year 2024

Income from operations

Basic net income per share

Diluted net income per share

Fiscal Year 2023

Income (loss) from operations

Net income (loss)

Basic net income (loss) per share

Diluted net income (loss) per share

SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued.

The Company did not identify any other subsequent events, other than as described below, that would have required adjustment or disclosure in the consolidated financial statements that are not already previously disclosed.

On August 14, 2025, the Company issued a warrant (Warrant) to JPMC Strategic Investments I Corporation (JPMC) to acquire 500,000 shares of the Company’s common stock at an exercise price of $ 7.10 per share.

The offer and issuance of the Warrant is expected to be exempt from registration under the Securities Act, pursuant to Section 4(a)(2) of the Securities Act.

JPMC has represented to the Company that it is an “accredited investor” as defined in Regulation D and

that the Warrant is being acquired for investment purposes and not with a view to, or for sale in connection with, any distribution thereof.

In connection with the issuance of the Warrant, the Company and JPMC have entered into a board observer agreement under which a senior executive of JPMC was granted the right to attend meetings of the board of directors in a non-voting observer capacity.

Shares Repurchase

On September 3, 2025, the Company’s board of directors approved a $ 20 million increase in its stock repurchase program, bringing the aggregate amount eGain may purchase thereunder from $ 40 million to $ 60 million of its outstanding common stock.

As of September 3, 2025, eGain has repurchased approximately $ 39.8 million of shares of its common stock under its stock repurchase program, leaving approximately $ 0.2 million of shares of its common stock available for repurchase after such increase.

In addition, the board of directors approved to extend the stock repurchase program that was set to expire on November 14, 2025, until the earlier of (i) the date the aggregate amount of shares that can be repurchased under the stock repurchase program have been repurchased and (ii) the date the board of directors decides to terminate the stock repurchase program.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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OTHER INFORMATION

Adoption Date

Expiration Date

Aggregate # of Securities to be Purchased/Sold

Promod Narang (1)

Chief Technology Officer

(1) Promod Narang, Chief Technology Officer, adopted a Rule 10b5-1 trading plan on May 28, 2024.

Narang’s plan provides for the potential exercise of up to 100,000 vested stock options with the associated potential sale of up to 100,000 shares of the Company’s common stock.

This trading plan expires on September 11, 2024 (unless earlier terminated pursuant to the terms of the plan or upon the date all shares under the plan are sold).

This trading plan was entered into during an open window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended.

Other than as disclosed above, during the three months ended June 30, 2024, none of our directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION S

Not applicable.

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To the extent disclosure for delinquent reports is being made, it can be found under the caption “Delinquent Section 16(a) Reports” in the Proxy Statement and is incorporated herein by reference.

We have adopted an insider trading policy governing the purchase, sale, and/or other disposition of the Company’s securities by our directors, officers, employees, and other covered persons that we believe is reasonably designed to promote compliance with insider trading laws, rules, and regulations, and applicable Nasdaq listing standards.

A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10‑K.

EXECUTIVE COMPENSATION

The information contained under the headings “Executive Compensation” and “Compensation Committee Report” and under the captions “Election of Directors—2025 Director Compensation” and “Election of Directors—Compensation Committee Interlocks and Insider Participation” in the Proxy Statement is incorporated herein by reference.

Policies and Practices Related to the Grant of Certain Equity Awards.

We do not grant equity awards in anticipation of the release of material nonpublic information, and we do not time the release of material nonpublic information based on equity award grant dates or for the purpose of affecting the value of executive compensation .

While we do not have a formal policy with respect to the timing of awards of stock options, stock appreciation rights, or similar option-like instruments to our named executive officers, historically, including during fiscal year 2025, our compensation committee has not granted such awards.

In certain circumstances, including the hiring or promotion of an officer, the compensation committee may approve grants to be effective at other times.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.2 the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020).

Warrant to Purchase Common Stock dated as of August 14, 2025 between the Registrant and JPMC Strategic Investments I Corporation.

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Form S-1).

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Stephens Industrial Partners, LLC d/b/a Stephens & Stephens (Borregas I) (Successor in Interest to DeGuigne Ventures, LLC) (incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023).

Subsidiaries of eGain.

Insider Trading Policy of eGain.

Subsidiaries of eGain (incorporated by reference to Exhibit 21.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024) .

Consent of BPM LLP, Independent Registered Public Accounting Firm.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 of Chief Financial Officer.

eGain Corporation Incentive-Based Compensation Recoupment Policy.

eGain Corporation Incentive-Based Compensation Recoupment Policy (incorporated by reference to Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024).

Inline XBRL Instance Document

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and Accounting Officer)

/s/ C HRISTINE R USSELL

September 12, 2024

Christine Russell

/s/ G UNJAN S INHA

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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