BRIDGELINE DIGITAL, INC. (NASDAQ:BLIN) Files An 8-K Entry into a Material Definitive Agreement

BRIDGELINE DIGITAL, INC. (NASDAQ:BLIN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement

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Loan Agreement with Montage Capital

On October 10, 2017, Bridgeline Digital, Inc. (the “Company”) entered into a Loan and Security Agreement (the “Loan Agreement”) with Montage Capital II, L.P. (“Montage”). The Loan Agreement has a thirty-six (36) month term which expires on October 10, 2020. The Loan Agreement provides for up to $1.5 million of borrowing in the form of a non-revolving term loan which may be used by the Company for working capital purposes (the “Loan”). $1 million of borrowing was advanced on the date of closing (the “First Tranche”). An additional $500 thousand of borrowing will be available at the Company’s option in the event that the Company achieves certain financial milestones and is otherwise in compliance with its loan covenants (the “Second Tranche”). Borrowings bear interest at the rate of 12.75% per annum. The Company paid a fee of $33,333.33 to Montage at closing. Interest only payments are due and payable during the first nine months of the Loan. Commencing on July 1, 2018, the Company shall be obligated to make principal payments of $26,000 per month if only the First Tranche has been received and $39,000 if the Company has received both the First Tranche and the Second Tranche. All remaining principal and interest shall be due and payable at maturity. Borrowings are secured by a second position lien on all of the Company’s assets including intellectual property and general intangibles. to the Loan Agreement, the Company is also required to comply with certain financial covenants. The Loan is subordinate to the Company’s senior debt facility with Heritage Bank of Commerce (“Heritage”). As additional consideration for the Loan, the Company issued to Montage an eight-year warrant to purchase 66,213 shares of the Company’s common stock at a price equal to $2.65 per share which may increase to an aggregate of 100,082 shares of the Company’s common stock in the event that Montage advances the Second Tranche (the “Warrant”). Further, in the event of a change in control prior to the exercise of the Warrant, Montage shall have the right to receive an equity buy-out of either $250 thousand if only the First Tranche has been advanced or $375 thousand if both the First Tranche and the Second Tranche have been advanced. If the equity buy-out is exercised, the Warrant will be surrendered to the Company for cancellation.

Heritage Bank Consent and Intercreditor Agreement

Heritage consented to the Company’s incurrence of additional indebtedness from Montage and the grant of a second position lien to Montage. In addition, Heritage and Montage entered into an Intercreditor Agreement dated October 10, 2017, and acknowledged by the Company.

The description of agreements and securities contained in this Form 8-K is qualified in its entirety by reference to the full text of the agreements and securities that the Company filed as exhibits to this Form 8-K.

Item 3.02. Unregistered Sales of Equity Securities

See the disclosure set forth in Item 1.01 above, which is incorporated herein by reference.

The securities offered, issued and sold to the Loan Agreement were issued without registration and are subject to restrictions under the Securities Act of 1933, as amended, and the securities laws of certain states, in reliance on the private offering exemptions contained in Section 4(2) of the Securities Act of 1933 and on Regulation D promulgated thereunder, and in reliance on similar exemptions under applicable state laws as a transaction not involving a public offering.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.

Exhibit Description

10.1

Loan and Security Agreement between Bridgeline Digital, Inc. and Montage Capital II, L.P., dated October 10, 2017

10.2

Form of Warrant to Purchase Stock issued to Montage Capital II, L.P.

10.3

Intercreditor Agreement between Heritage Bank of Commerce and Montage Capital II, L.P., dated October 10, 2017


Bridgeline Digital, Inc. Exhibit
EX-10.1 2 ex_96597.htm EXHIBIT 10.1 ex_96597.htm Exhibit 10.1   LOAN AND SECURITY AGREEMENT        This Loan and Security Agreement,…
To view the full exhibit click here

About BRIDGELINE DIGITAL, INC. (NASDAQ:BLIN)

Bridgeline Digital, Inc. is a digital engagement company. The Company’s iAPPS platform is a Web Engagement Management (WEM) platform that integrates Web Content Management, e-commerce, e-marketing, Social Media management and Web Analytics to help marketers deliver digital experiences that engage and convert their customers across all channels. The iAPPS platform is delivered through a cloud-based Software as a Service (SaaS) multi-tenant business model, which provides customers with deployment providing maintenance, daily technical operation and support, or through a perpetual licensing business model. The iAPPS suite of products includes iAPPS Experience Manager, iAPPS Content Manager, iAPPS Commerce, iAPPS Marketier, iAPPS Analyzer, iAPPSds and iAPPS Social. It offers various services, such as digital engagement services, digital strategy services, usability design and information architecture. It provides shared hosting, dedicated hosting and SaaS hosting for its customers.

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