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Item 8. Financial Statements and Supplementary Data

2024-09-12 compared with 2023-09-14 · 126 added, 107 removed, 857 unchanged (21% of the section changed)

8 unchanged sentences

Consolidated Statements of Operations for the years ended June 30, 2024 and 2023

Consolidated Statements of Comprehensive Income (Loss) for the years ended June 30, 2023 and 2022

Consolidated Statements of Comprehensive Income for the years ended June 30, 2024 and 2023

Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2024 and 2023

6 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of eGain Corporation and subsidiaries (the “Company”) as of June 30, 2023 and 2022, 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 June 30, 2023 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”).

We have audited the accompanying consolidated balance sheets of eGain Corporation and subsidiaries (the “Company”) as of June 30, 2024 and 2023, 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, 2024 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”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2024 and 2023, and the consolidated results of its operations and its cash flows for each of the two years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

37 unchanged sentences

Restricted cash

Accounts receivable, less allowance for doubtful accounts of $ 237 and $ 123 as of June 30, 2023 and 2022, respectively

Accounts receivable, less provision for credit losses of $ 59 and $ 237 as of June 30, 2024 and 2023, respectively

Costs capitalized to obtain revenue contracts, net

48 unchanged sentences

Total operating expenses

Income (loss) from operations

Income from operations

Interest income

Other (expense) income, net

Income (loss) before income tax provision

Other expense, net

Income before income tax provision

Provision for income taxes

Net income (loss)

Per share information:

Earnings (loss) per share:

Earnings per share:

Weighted-average shares used in computation:

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EGAIN CORPORATION

C ONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

C ONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

Years Ended June 30,

Net income (loss)

Other comprehensive income (loss), net of taxes:

Other comprehensive income, net of taxes:

Foreign currency translation adjustments

Total comprehensive income (loss)

Total comprehensive income

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

9 unchanged sentences

Issuance of common stock in connection with employee stock purchase plan

Repurchase of common stock

Stock-based compensation

2 unchanged sentences

Interest on stockholders’ notes

Repayment on stockholders’ notes

Issuance of common stock upon exercise of stock options

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Cash flows from operating activities:

Net income (loss)

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

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of costs capitalized to obtain revenue contracts

1 unchanged sentence

Depreciation and amortization

Provision for doubtful accounts

Provision for credit losses

Deferred income taxes

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Cash flows from financing activities:

Interest on stockholder notes

Repayment of stockholder notes

Proceeds from exercise of stock options

3 unchanged sentences

Effect of exchange rate differences on cash and cash equivalents

Net increase in cash, cash equivalents and restricted cash

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

Cash, cash equivalents and restricted cash at beginning of year

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Actual results could differ from those estimates.

We evaluate our significant estimates, including those related to revenue recognition, provision for doubtful accounts, valuation of stock-based compensation, valuation of long-lived assets, valuation of deferred tax assets, and litigation, among others.

We evaluate our significant estimates, including those related to revenue recognition, provision for credit losses, valuation of stock-based compensation, valuation of long-lived assets, valuation of deferred tax assets, and litigation, among others.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

4 unchanged sentences

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) income, net” in the consolidated statements of operations, and resulted in a loss of $ 470,000 and a gain of $ 824,000 , in fiscal years ended June 30, 2023 and 2022, 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 $ 98,000 and $ 470,000 , in fiscal years ended June 30, 2024 and 2023, respectively.

Cash and Cash Equivalents, Restricted Cash and Investments

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We perform ongoing credit evaluations of our customers with outstanding receivables and generally do not require collateral.

In addition, we established an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information.

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

A set of different partners and customers accounted for a range of 13 % to 26 % of accounts receivable as of June 30, 2022.

Accounts Receivable and Allowance for Doubtful Accounts

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

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

We extend unsecured credit to our customers on a regular basis.

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

We also maintain an allowance for doubtful accounts to reserve for potential

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

uncollectible trade receivables.

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In certain revenue contracts, contractual billings do not coincide with revenue recognized on the contract.

Unbilled accounts receivables are recorded when revenue recognized on the contract exceeds billings, pursuant to contract provisions, and become billable upon certain criteria being met.

Unbilled accounts receivables, for which the Company has the unconditional right to consideration, totaled $ 1.7 million and $ 770,000 as of June 30, 2023 and 2022, respectively, and are included in the accounts receivable, less allowance for doubtful accounts, balance on the accompanying consolidated balance sheets.

Our accounts receivable, net balance was $ 31.6 million and $ 27.0 million for the year ended June 30, 2023 and 2022, 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 $ 49.9 million and $ 49.4 million for the year ended June 30, 2023 and 2022, respectively.

There were no contract assets for the years ended June 30, 2023 and 2022.

Unbilled accounts receivables (contract assets) are recorded when revenue recognized on the contract exceeds billings, pursuant to contract provisions, and become billable upon certain criteria being met.

Unbilled accounts receivables, for which the Company has the unconditional right to consideration, totaled $ 3.6 million and $ 1.7 million as of June 30, 2024 and 2023, respectively, and are included in the accounts receivable, less provision for credit losses, balance on the accompanying consolidated balance sheets.

Our accounts receivable, net balance was $ 31.7 million and $ 31.6 million as of June 30, 2024 and 2023, 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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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, 2024 and 2023.

During the fiscal years ended June 30, 2023 and 2022, we capitalized $ 462,000 and $ 2.4 million of costs to obtain revenue contracts, respectively, and amortized $ 1.5 million to sales and marketing expense each period.

Capitalized costs to obtain revenue contracts, net were $ 3.6 million and $ 4.6 million as of June 30, 2023 and 2022, respectively.

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.

Capitalized costs to obtain revenue contracts, net of accumulated amortization were $ 3.1 million and $ 3.6 million as of June 30, 2024 and 2023, respectively.

Lease agreements are evaluated to determine whether an arrangement is or contains a lease in accordance with ASC 842, Leases .

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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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Stock-based compensation expense for employee and non-employee awards is recognized as expense over the requisite service period, which is generally in line with the vesting period, net of expected forfeitures.

Stock-based compensation expense consists of expenses for stock options granted under our Amended and Restated 2005 Management Stock Option Plan, our Amended and Restated 2005 Stock Incentive Plan, and our 2017 Employee Stock Purchase Plan (ESPP).

Stock-based compensation expense consists of expenses for stock options and restricted stock units (RSUs) granted under our Amended and Restated 2005 Management Stock Option Plan, our Amended and Restated 2005 Stock Incentive Plan, and our 2017 Employee Stock Purchase Plan (ESPP).

Income taxes are accounted for using the asset and liability method in accordance with ASC 740, Income Taxes.

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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, GILTI inclusion, research and development tax credits, and our foreign operations.

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.

We account for uncertain tax positions according to the provisions of ASC 740.

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We consider many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

As of June 30, 2023, utilization of the net operating loss (NOL) or tax credit carryforwards to offset future taxable income and taxes, respectively, are subject to an annual limitation under the Internal Revenue Code of 1986 and similar state provisions, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments such as built in gain or

built in loss, as required.

As of June 30, 2024, utilization of the NOL or tax credit carryforwards to offset future taxable income and taxes, respectively, are subject to an annual limitation under the Internal Revenue Code of 1986 and similar state provisions, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the

applicable long-term, tax-exempt rate, and then could be subject to additional adjustments such as built in gain or built in loss, as required.

Any limitation may result in expiration of all or a portion of its NOL and or tax credit carryforwards before utilization.

The Company has not identified a change in ownership as of June 30, 2024 that would significantly limit the net operating loss carryovers.

Comprehensive Income (Loss)

Comprehensive Income

We report comprehensive income and its components in accordance with ASC 220, Comprehensive Income .

Under the accounting standards, comprehensive income (loss) includes all changes in equity during a period except those resulting from investments by or distributions to owners.

Total comprehensive income for each of the two years in the year ended June 30, 2023 is shown in the accompanying consolidated statements of comprehensive income (loss).

Under the accounting standards, comprehensive income includes all changes in equity during a period except those resulting from investments by or distributions to owners.

Total comprehensive income for each of the two years in the year ended June 30, 2024 is shown in the accompanying consolidated statements of comprehensive income.

Accumulated other comprehensive loss presented in the accompanying consolidated balance sheets as of June 30, 2024 and 2023 consists of accumulated foreign currency translation adjustments.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding.

In periods where net income is reported, the weighted average number of shares is increased by stock options in-the-money to calculate diluted net income per share.

The following table represents the calculation of basic and diluted net income (loss) per common share (in thousands, except per share data):

Earnings Per Share

Basic earnings per share is computed using the weighted-average number of shares of common stock outstanding.

In periods where net income is reported, the weighted average number of shares is increased by stock options in-the-money and shares issuable for RSUs subject to service-based vesting requirements to calculate diluted earnings per share.

The following table represents the calculation of basic and diluted earnings per common share (in thousands, except per share data):

Years Ended June 30,

Net income (loss)

Per share information:

Earnings (loss) per share:

Earnings per share:

Weighted-average shares used in computation:

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Recent Accounting Pronouncements

Pronouncements Not Yet Adopted

Pronouncements Recently Adopted

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

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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.

Subsequent to the issuance of ASU No.

2016-13, the FASB issued ASU No.

2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, ASU No.

2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instrument, ASU No.

2019-05, Financial Instruments - Credit Losses (Topic 326) Targeted Transition Relief, ASU No.

2016-13, ASU No.

2019-10 Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and ASU No.

2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses.

The subsequent ASUs do not change the core principle of the guidance in ASU No.

Instead, these amendments are intended to clarify and improve operability of certain topics included within ASU No.

Additionally, ASU No.

2019-10 defers the effective date for the adoption of the new standard on credit losses for public filers that are considered small reporting companies (SRC) as defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which will be fiscal year 2024 for the Company if it continues to be classified as an SRC.

In February 2020, the FASB issued ASU 2020-02, which provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses.

The subsequent amendments will have the same effective date and transition requirements as ASU No.

Early adoption is permitted.

Topic 326 requires a modified retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption.

While the Company is currently evaluating the impact of Topic 326, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements or the related disclosure.

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

Revenue Recognition

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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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Depreciation and amortization expense was $ 387,000 and $ 490,000 for the fiscal years ended June 30, 2024 and 2023, respectively.

Disposed fixed assets, which were substantially fully-depreciated, were $ 516,000 and $ 71,000 for the fiscal years ended June 30, 2023, and June 30, 2022, respectively.

Disposed property and equipment, which were substantially fully-depreciated, were $ 625,000 and $ 516,000 for the fiscal years ended June 30, 2024 and June 30, 2023, respectively.

Accrued compensation consists of the following:

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(in thousands)

Customer advances

Sales tax payable

VAT liability

Sales tax payable

Customer advances

Accrued other liabilities

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Contract assets, if any, consist of unbilled receivables for completed performance obligations which have not been invoiced, and for which we do not have an unconditional right to consideration.

Unbilled receivables are included in accounts receivable, less allowance for doubtful accounts 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.

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.

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

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As of June 30, 2024, our remaining performance obligations were $ 78.4 million of which we expect to recognize $ 60.4 million and $ 18 million as revenue within one year and beyond one year, respectively.

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

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

Fiscal Year Ended June 30,

United States

Income (Loss) before income tax provision

Income before income tax 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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Deferred return to provision

Section 267 payables

Net change in valuation allowance

Foreign income

Expiration of tax attributes

Income tax provision

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The California research and development credit carryforwards are approximately $ 6.8 million as of June 30, 2024 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.

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

167 by allowing taxpayers subject to the limit to elect to later receive a refund of credits they would have otherwise used to reduce tax liabilities during the limitation period.

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Research credits

Other credits

Deferred revenue

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Lease liability

Section 267 payables

Capitalized research and development

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

The net valuation allowance increased by $ 1.7 million and decreased by $ 3.1 million for the fiscal years ended June 30, 2023 and 2022, respectively.

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.

We have not provided for taxes on $ 26.2 million of undistributed earnings of our foreign subsidiaries as of June 30, 2024.

1 unchanged sentence

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, 2023 and 2022, we have $ 3.4 million and none of Global Intangible Low Tax Income (GILTI) inclusion and used our net operating losses to offset our taxable income, respectively.

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.

Uncertain Tax Positions

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Ending balance

There is no amount of unrecognized tax benefit, if recognized currently, that would impact the Company’s effective tax rate as of June 30, 2023 and 2022, respectively.

There is $ 45,000 and $ 0 of unrecognized tax benefit, if recognized currently, that would impact the Company’s effective tax rate as of June 30, 2024 and 2023, respectively.

No accrued interest and penalties have been recognized in the tax provision related to unrecognized tax benefits.

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Stock options outstanding

Restricted stock units outstanding

Stock available for future grants or issuance:

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Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period, net of expected forfeitures.

Stock-based compensation expense consists of expenses for stock options and our 2017 Employee Stock Purchase Plan (ESPP).

Stock-based compensation expense consists of expenses for stock options, RSUs, and discounted employee common stock granted under our 2017 Employee Stock Purchase Plan (ESPP).

2005 Management Stock Option Plan

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Balance as of June 30, 2022

Options Granted

Options Exercised

Options Forfeited / Expired

Balance as of June 30, 2023

Options Granted

Options Exercised

Options Forfeited / Expired

Balance as of June 30, 2024

2005 Stock Incentive Plan

In March 2005, our board of directors adopted the 2005 Stock Incentive Plan which provides for the grant of stock options to eGain’s employees, officers, directors and consultants.

Our board extended the expiration date of the 2005 Stock Incentive Plan to September 30, 2024 and made certain other changes.

In March 2005, our board of directors adopted the 2005 Stock Incentive Plan which provides for the grant of stock options and RSUs to eGain’s employees, officers, directors and consultants.

Our board extended the expiration date of the 2005 Stock Incentive Plan to October 11, 2033 and made certain other changes.

Options granted under the 2005 Stock Incentive Plan are non-qualified stock options.

1 unchanged sentence

The options generally vest ratably over a period of four years and expire no later than ten years from the date of grant.

RSUs granted under the 2005 Stock Incentive Plan contain service-based condition and is valued at the grant date fair value;

our closing stock price on the date of grant.

The RSUs generally vest ratably over a period of one year.

The following table represents the activity under the 2005 Stock Incentive Plan:

3 unchanged sentences

Options Granted

( 3,607,661 )

Options Exercised

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Options Forfeited / Expired

RSUs Forfeited

Balance as of June 30, 2024

During the fiscal year ended June 30, 2023, we granted 8,800 stock options to consultants.

During the fiscal year ended June 30, 2024, we granted zero stock options to consultants.

A summary of RSU activity during the year ended June 30, 2024 is as follows:

Weighted Average

Fair Value per Share

Non-vested RSUs as of June 30, 2023

RSUs forfeited

Non-vested RSUs as of June 30, 2024

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

The following table summarizes information about stock options outstanding and exercisable under all stock option plans as of June 30, 2024:

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The aggregate intrinsic value in the preceding table represents the total intrinsic value based on stock options with a weighted average exercise price less than our closing stock price of $ 6.31 as of June 30, 2024 that would have been received by the option holders, had they exercised their options on June 30, 2024.

The total intrinsic value of stock options exercised was $ 866,000 and $ 4.3 million during fiscal years 2023 and 2022, respectively.

The total intrinsic value of stock options exercised was $ 806,000 and $ 866,000 during fiscal years 2024 and 2023, respectively.

2017 Employee Stock Purchase Plan

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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.

Determining the fair value of the stock-based awards at the grant date requires significant judgment and the use of estimates, particularly surrounding Black-Scholes valuation assumptions such as stock price volatility and expected option term.

Valuation of Stock-based Awards

Determining the fair value of the stock options and ESPP awards at the grant date requires significant judgment and the use of estimates, particularly surrounding Black-Scholes valuation assumptions such as stock price volatility and expected option term.

The table below summarizes the effect of stock-based compensation (in thousands):

Fiscal Year Ended June 30,

Non-cash stock-based compensation expense

Stock-based compensation expense

Income tax expense

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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.

We utilized the Black-Scholes valuation model for estimating the fair value of the stock-based compensation of options granted.

All shares of our common stock issued pursuant to our stock option plans are only issued out of an authorized reserve of shares of common stock, which were previously registered with the Securities and Exchange Commission on a registration statement on Form S-8.

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

All shares of our common stock issued pursuant to our stock plans are only issued out of an authorized reserve of shares of common stock, which were previously registered with the Securities and Exchange Commission on a registration statement on Form S-8.

During the fiscal years ended June 30, 2024 and 2023, there were 120,300 and 228,817 options granted, respectively, with a weighted average grant date fair value of $ 3.16 and $ 4.56 , per share, respectively.

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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

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total unamortized compensation cost, net of forfeitures, for all RSUs granted but not yet vested as of June 30, 2024 was $ 528,000 , 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.

During our fiscal year ended June 30, 2024, 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.

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

12 unchanged sentences

Operating cash outflows from operating leases

Right-of-use assets obtained in exchange for new operating lease liabilities

As of June 30, 2024 , remaining maturities of lease liabilities are as follows (in thousands):

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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 2024 and 2023, we contributed approximately $ 680,000 and $ 841,000 to the 401(k) Plan, respectively.

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On November 14, 2022, the Company’s board of directors authorized a stock repurchase program under which we may purchase up to $ 20 million of our outstanding common stock.

On May 31, 2024, our board of directors authorized a $ 20 million increase in its stock repurchase program, bringing the aggregate amount eGain may purchase thereunder from $ 20 million to $ 40 million of its outstanding common stock.

As of June 30, 2024, approximately $ 17 million remained available for stock repurchases pursuant to our stock repurchase program.

2 unchanged sentences

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 is effective immediately on November 14, 2022, has a term of one year from adoption unless extended, 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.

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 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.

The stock repurchase program will be funded using existing cash or future cash flows.

5 unchanged sentences

Fiscal Year 2024

Income (loss) from operations

Net income (loss)

Basic net income (loss) per share

Diluted net income (loss) per share

Income from operations

Basic net income per share

Diluted net income per share

Fiscal Year 2023

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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

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference from the information under the headings “Election of Directors” and “Executive Compensation—Compensation Discussion and Analysis” contained in eGain’s definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for eGain’s 2023 Annual Meeting of Stockholders (Proxy Statement).

The information required by this item is incorporated by reference from the information under the headings “Election of Directors” and “Executive Compensation—Compensation Overview” contained in eGain’s definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for eGain’s 2024 Annual Meeting of Stockholders (Proxy Statement).

Certain information required by this item concerning executive officers is set forth in Part I, Item 1 of this report under the caption “Information About Our Executive Officers” and is incorporated herein by reference.

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End of Period

Allowance for Doubtful Accounts:

Provision for Credit Losses:

Year ended June 30, 2024

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Description of Exhibits

Second Amended and Restated Certificate of Incorporation, as amended through N ovember 9, 2012 .

(incorporated by reference to Exhibit 3(i) to the Registrant’s Current Report on Form 8-K filed on December 10, 2021).

Second Amended and Restated Certificate of Incorporation, as amended through November 9, 2012 (incorporated by reference to Exhibit 3(i) to the Registrant’s Current Report on Form 8-K filed on December 10, 2021).

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Registrant’s Registration Statement on Form S-1, File No.

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

eGain Corporation Amended and Restated 2005 Stock Incentive Plan (as amended through October 11, 2021) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 10, 2021) .

eGain Corporation Amended and Restated 2005 Management Stock Option Plan, as amended through August 25, 2021.

(incorporated by reference to Exhibit 10.2# to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021).

eGain Corporation Amended and Restated 2005 Stock Incentive Plan (as amended through October 12, 2023) (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2023).

eGain Corporation Amended and Restated 2005 Management Stock Option Plan, as amended through August 25, 2021 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021).

F orm of Executive Change in Control Severance Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015) .

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Second Amendment to Standard Industrial/Commercial Multi-Tenant Lease Modified Net dated as of August 1, 2021 between the Registrant and D.R.

Stephens Industrial Partners, LLC d/b/a Stephens & Stephens (Borregas I) (Successor in Interest to DeGuigne Ventures, LLC).

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.

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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.

Inline XBRL Instance Document

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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