SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 2 1 , 2018
BRIDGELINE DIGITAL, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-33567 | 52-2263942 |
| (State or other | (Commission | (IRS Employer |
| jurisdiction of | File Number) | Identification No.) |
| incorporation) |
80 Blanchard Road
Burlington, MA 01803
(Address of principal executive offices, including zip code)
( 781) 376-5555
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Exchange Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1. 0 1 . Entry into a Material Definitive Agreement
On September 21, 2018, Bridgeline Digital, Inc. (the “Company”) signed an amendment (the “Ninth Amendment”) to modify a certain Loan and Security Agreement (the “Agreement”) with Heritage Bank of Commerce (the “Bank”). Included in the Ninth Amendment are modifications to Sections 6.9(b) and (c) of the Loan and Security Agreement. The modification to Section 6.9(b) addresses the Performance to Plan – Adjusted EBITDA metrics for the fiscal quarters ended June 30, 2018, September 30, 2018 and December 31, 2018. The modification to Section 6.9(c) addresses the minimum unrestricted cash requirements for the Company’s accounts at the Bank upon repayment of Subordinated Debt incurred by the Company pursuant to certain Term Notes issued by the Company on September 7, 2018 in the principal amount of $941,176.
Item 9.01 Financial Statements and Exhibits.
Explanatory Note Regarding Exhibits
Investors should not rely on or assume the accuracy of representations and warranties in negotiated agreements that have been publicly filed because such representations and warranties may be subject to exceptions and qualifications contained in separate disclosure schedules, because such representations may represent the parties’ risk allocation in the particular transaction, because such representations may be qualified by materiality standards that differ from what may be viewed as material for securities laws purposes or because such representations may no longer continue to be true a of any given date.
(d) Exhibits.
| Exhibit No. | Exhibit Description |
| 10.1 | Ninth Amendment to the Loan and Security Agreement between Bridgeline Digital, Inc. and Heritage Bank of Commerce, dated September 21, 2018 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
BRIDGELINE DIGITAL , INC. |
|
|
| (Registrant) | |||
|
|
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Michael Prinn |
|
|
|
|
Michael Prinn |
|
|
|
|
Executive Vice President and |
|
| Chief Financial Officer | |||
Date: September 24, 2018
EXHIBIT INDEX
|
Exhibit No. |
Exhibit Description |
|
10.1 |
Ninth Amendment to the Loan and Security Agreement between Bridgeline Digital, Inc. and Heritage Bank of Commerce, dated September 21, 2018 |
Exhibit 10.1
NINTH
AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Ninth Amendment to Loan and Security Agreement is entered into as of September 21, 2018 (the “Amendment”), by and between HERITAGE BANK OF COMMERCE (“Bank”) and BRIDGELINE DIGITAL, INC. (“Borrower”).
RECITALS
Borrower and Bank are parties to that certain Loan and Security Agreement dated as of June 9, 2016 and as amended from time to time, including pursuant to that certain First Amendment to Loan and Security Agreement dated as of August 15, 2016, that certain Second Amendment to Loan and Security Agreement dated as of December 12, 2016, that certain Third Amendment to Loan and Security Agreement dated as of August 10, 2017, that certain Fourth Amendment to Loan and Security Agreement dated as of October 6, 2017, that certain Fifth Amendment to Loan and Security Agreement dated as of November 27, 2017, that certain Sixth Amendment to Loan and Security Agreement dated as of February 1, 2018, that certain Seventh Amendment to Loan and Security Agreement dated as of May 10, 2018, and that certain Eighth Amendment to Loan and Security Agreement dated as of August 10, 2018 (collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Section 6.9(b) of the Agreement is amended and restated in its entirety to read as follows:
(b) Performance to Plan – Adjusted EBITDA. Borrower’s minimum quarterly Adjusted EBITDA for the fiscal quarters ended on June 30, 2018 and September 30, 2018, and ending on December 31, 2018, shall be at least the amount set forth on Exhibit D. Borrower and Bank shall mutually agree upon minimum quarterly Adjusted EBITDA amounts for subsequent fiscal quarters no later than September 30, 2018.
2. Section 6.9(c) of the Agreement is amended and restated in its entirety to read as follows:
(c) Minimum Cash. Borrower shall maintain at all times at least $250,000 in unrestricted cash in its accounts at Bank. At all times on and after any repayment is made on the Subordinated Debt incurred by Borrower on or after September 7, 2018 pursuant to certain Term Notes issued by Borrower in the aggregate principal amount of $941,176, Borrower shall maintain at all times at least $500,000 in unrestricted cash in its accounts at Bank.
3. Exhibit D to the Agreement is replaced in its entirety with the Exhibit D separately provided by Bank to Borrower. The parties agree and acknowledge that the financial covenants for the quarters ended June 30, 2018 and September 30, 2018 have previously been established as set forth on Exhibit D and the covenant for the June 30, 2018 quarter was satisfied. This Amendment establishes the reporting and financial covenants for the quarter ending on December 31, 2018.
4. Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and no Event of Default has occurred and is continuing.
5. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.
6. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original hereof.
7. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:
(a) payment of an amendment fee in the amount of $2,500 plus all Bank Expenses incurred through the date of this Amendment; and
(b) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.
[remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
|
BRIDGELINE DIGITAL, INC.
By: /s/ Micahel D. Prinn
Name: Michael D. Prinn
|
|
|
HERITAGE BANK OF COMMERCE
By: /s/ Karla Schrader
Name: Karla Schrader
Title: Vice President |
Exhibit D
Compliance Certificate
|
TO: |
HERITAGE BANK OF COMMERCE |
|
FROM: |
BRIDGELINE DIGITAL, INC. |
The undersigned authorized officer of BRIDGELINE DIGITAL, INC. hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under “Complies” column.
|
Reporting Covenant |
Required |
Complies |
||||||
|
A/R & A/P Agings |
Monthly within 30 days |
Yes |
No |
|||||
|
Sales journal |
Monthly within 30 days |
Yes |
No |
|||||
|
Collections journal |
Monthly within 30 days |
Yes |
No |
|||||
|
Borrowing Base Certificate |
Monthly within 30 days |
Yes |
No |
|||||
|
Deferred Revenue Schedule |
Monthly within 30 days |
Yes |
No |
|||||
|
Balance Sheet and Income Statement |
Monthly within 30 days |
Yes |
No |
|||||
|
Compliance Certificate |
Monthly within 30 days |
Yes |
No |
|||||
|
Quarterly Financial statements/Form 10-Q |
Quarterly within 5 days of filing |
Yes |
No |
|||||
|
Annual Financial Statements/Form 10-K/ (CPA audited) |
Annually within 5 days of filing |
Yes |
No |
|||||
|
Borrower’s tax returns and schedule (CPA prepared) |
Annually within 5 days of filing but no later than October 31st of each year |
Yes |
No |
|||||
|
Personal Guarantor’s personal financial statements |
Annually no later than October 31st of each year (or more frequently as Bank may request) |
Yes |
No |
|||||
|
A/R and Collateral audit |
Semi-annually |
Yes |
No |
|||||
|
IP Notices |
As required under Section 6.10 |
Yes |
No |
|||||
|
Financial Covenant |
Required |
Actual |
Complies |
|||||
|
Asset Coverage Ratio |
1.40 : 1.00 |
_____: 1.00 |
Yes |
No |
||||
|
Maximum quarterly Adjusted EBITDA Loss for: |
||||||||
|
Quarter ending 6/30/18 and beyond |
($415,000) |
$__________ |
Yes |
No |
||||
|
Quarter ending 9/30/18 and beyond |
($424,000) |
$__________ |
Yes |
No |
||||
|
Quarter ending 12/31/18 and beyond |
($415,000) |
$__________ |
Yes |
No |
||||
|
Quarter ending 3/31/19 and beyond |
TBD |
$__________ |
Yes |
No |
||||
| Comments Regarding Exceptions: See Attached. | BANK USE ONLY | |
| Received by: __________________________________________________________ | ||
| Sincerely, | AUTHORIZED SIGNER | |
| Date: ________________________________________________________________ | ||
| _______________________________________________ | Verified: ______________________________________________________________ | |
| SIGNATURE | AUTHORIZED SIGNER | |
| _______________________________________________ | Date: _________________________________________________________________ | |
| TITLE | ||
| Compliance Status | Yes No | |
| _______________________________________________ | ||
| DATE | ||