XML 26 R15.htm IDEA: XBRL DOCUMENT
v3.4.0.3

Note 8 - Debt | 6 Months Ended
--- | ---
Mar. 31, 2016
Notes to Financial Statements |
Debt Disclosure [Text Block] | 8 . Debt Debt consists of the following:
|  | As of |  |  | As of |
|  | March 31, 2016 |  |  | September 30, 2015 |
Line of credit borrowings |  | $ | 2,315 |  |  | $ | 2,695 |
Bank term loan |  |  | - |  |  |  | 250 |
Subordinated convertible debt |  |  | 3,000 |  |  |  | 3,000 |
Term note from shareholder |  |  | 3,000 |  |  |  | 2,000 |
Subtotal debt |  | $ | 8,315 |  |  | $ | 7,945 |
Other (debt warrants) |  | $ | (69 | ) |  | $ | (158 | )
Total debt |  | $ | 8,246 |  |  | $ | 7,787 |
Less current portion |  | $ | 5,315 |  |  | $ | 92 |
Long term debt, net of current portion |  | $ | 2,931 |  |  | $ | 7,695 |
Line of Credit and Bank Term Loan In December 2013, the Company entered into a Loan and Security Agreement with BridgeBank (the “Loan Agreement”). The Loan Agreement had an original term of 27 months set to expire on March 31, 2016. In February 2016, BridgeBank agreed to extend the term to a maturity date of March 31, 2017. The Loan Agreement provides for up to $5 million of revolving credit advances which may be used for acquisitions and working capital purposes. Borrowings are limited to the lesser of (i) $5 million and (ii) 80% of eligible receivables as defined. The Company can borrow up to $1.0 million in out of formula borrowings for specified periods of time. Borrowings accrued interest at BridgeBank’s prime plus 1.00% (4.25%) through June 1, 2015 and then increased to prime plus 5.00% (8.25%) in accordance with an amendment to the Loan and Security Agreement (see below). The prime rate increased to 3.50% on December 17, 2015. The Company pays an annual commitment fee of 0.25%. Borrowings are secured by all of the Company’s assets and all of the Company’s intellectual property. The Company is also required to comply with certain financial and reporting covenants including an Asset Coverage Ratio. As of March 31, 2016, the Company had an outstanding balance under the Loan Agreement of $2.3 million. The Company was in compliance with all financial reporting covenants for the period ended March 31, 2016. In December 2014, the Company signed an Amendment to its Loan and Security Agreement with BridgeBank (the “Amendment”). As part of the Amendment Mr. Michael Taglich, a member of the Board of Directors, signed an unconditional guaranty (the “Guaranty”) and promise to pay the Company’s lender, BridgeBank, N.A all indebtedness in an amount not to exceed $1 million in connection with the out of formula borrowings. The Amendment also modified certain monthly financial reporting requirements and financial covenants on a prospective basis commencing as of the effective date of the Amendment. In July 2015, the Company further amended its Loan and Security Agreement with BridgeBank which further extended the Guaranty from Mr. Taglich to an amount not to exceed $2 million in connection with the out of formula borrowings. Under the terms of the Guaranty, the Guarantor authorizes Lender, without notice or demand and without affecting its liability hereunder, from time to time to: (a) renew, compromise, extend, accelerate, or otherwise change the time for payment, or otherwise change the terms, of the Indebtedness or any part thereof, including increase or decrease of the rate of interest thereon, or otherwise change the terms of the Indebtedness; (b) receive and hold security for the payment of this Guaranty or any Indebtedness and exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any such security; (c) apply such security and direct the order or manner of sale thereof as Lender in its discretion may determine; and (d) release or substitute any Guarantor or any one or more of any endorsers or other guarantors of any of the Indebtedness. To secure all of Guarantor's obligations hereunder, Guarantor assigns and grants to Lender a security interest in all moneys, securities, and other property of Guarantor now or hereafter in the possession of Lender, all deposit accounts of Guarantor maintained with Lender, and all proceeds thereof. Upon default or breach of any of Guarantor's obligations to Lender, Lender may apply any deposit account to reduce the Indebtedness, and may foreclose any collateral as provided in the Uniform Commercial Code and in any security agreements between Lender and Guarantor. At September 30, 2015, the Company had an outstanding short term bank term loan with BridgeBank of $250 which was repaid in October 2015. On March 18, 2016, the Company signed a Term Sheet with a new bank with the intent to replace the BridgeBank Loan Agreement. The Company expects to execute this new loan agreement by the end of May 2016. The new loan agreement will have a term of 24 months and will provide for up to $3 million of revolving credit advances which may be used for acquisitions and working capital purposes. Borrowings will be limited to the lesser of (i) $3 million and (ii) 75% of eligible receivables as defined. The Company will be able to borrow up to $1.0 million in out of formula borrowings for specified periods of time. Borrowings accrue interest at the Wall Street Journal published prime plus 1.75% (5.25%) and the annual commitment fees will be 0.4% in the first year and 0.2% in the second year. Borrowings will be secured by all of the Company’s assets and all of the Company’s intellectual property. The Company will also be required to comply with certain financial and reporting covenants including an Asset Coverage Ratio and an EBITDA metric. Term Notes from Shareholders The Company has issued term notes to Michael Taglich and Robert Taglich, both of whom are shareholders of the Company. Michael Taglich is also a Director of the Company. Five term notes totaling $2.25 million have been issued to Michael Taglich from the period of January 7, 2015 through December 3, 2015. Term notes totaling $250 were issued to Robert Taglich on December 3, 2015. On December 23, 2015, all of the Term Notes due to Michael and Robert Taglich were amended. The amendments consisted of an increase of 1.5% interest per annum effective January 1, 2016, an extension of the maturity date to March 1, 2017, and a prepayment penalty of 2%. Interest is due and payable for each of the notes mentioned above on the maturity date. In February 2016, Bridgeline issued additional Term Notes to both Michael Taglich and Robert Taglich to document a loan from each of them for $200. Also, in February 2016, Bridgeline issued a Term Note to Roger Kahn to document a loan for $100. Mr. Kahn was appointed the President and Chief Executive Officer of the Company on May 10, 2016. The terms of each of these three notes provide that Bridgeline will pay interest at a rate of 8% per annum, due and payable on the maturity date of March 1, 2017. As of March 31, 2016, total interest due on all Term Notes is $170, comprised of $159 due to Michael Taglich, $10 due to Robert Taglich, and $1 due to Roger Kahn. In consideration of the loans by Michael Taglich and a personal guaranty delivered by Michael Taglich to BridgeBank, N.A. for the benefit of Bridgeline on December 19, 2014 (the “Guaranty”), on January 7, 2015 the Company issued Michael Taglich a warrant to purchase 60,000 shares of Common Stock of the Company at a price equal to $4.00 per share. On January 7, 2015, Bridgeline also entered into a side letter with Michael Taglich pursuant to which Bridgeline agreed in the event the Guaranty remains outstanding for a period of more than 12 months, on each anniversary of the date of issuance of the Guaranty while the Guaranty remains outstanding Bridgeline will issue Michael Taglich a warrant to purchase 30,000 shares of common stock, which warrant shall contain the same terms as the warrant issued to Michael Taglich on January 7, 2015. Since the Guaranty did remain outstanding for a period of more than 12 months, a warrant to purchase 30,000 shares of common stock was issued to Michael Taglich in January 2016 at a price of $4.00. Mr. Taglich was also issued warrants in connection with the first four term notes. He was issued 120,000 at an exercise price of $4.00 in conjunction with the second and third Notes and 160,000 at an exercise price of $1.75 in connection with the fourth Note. The warrants have a term of five years and are exercisable six months after the date of issuance. Bridgeline agreed to provide piggyback registration rights with respect to the shares of common stock underlying the warrants. The fair value of the warrants issued to Mr. Taglich in connection with all of the Term Notes is $270 which was reflected as a debt discount in current liabilities with the offsetting amount recorded to additional paid in capital in the Consolidated Balance Sheet. The fair market value of the warrants is being amortized on a straight-line basis over their expected life, which was adjusted to coincide with the amendment to the maturity dates. Amortization of the debt discount is $201 through March 31, 2016 . On April 29, 2016, the shareholders of the Company approved the proposal for the issuance of up to issuance of up to 4,700,000 shares of the Company’s Common Stock upon conversion of the above outstanding term notes totaling $3 million. The Company and the holders of the outstanding term notes have agreed to amend the outstanding term notes to provide the Company with the option to convert all outstanding principal and accrued but unpaid interest due under such outstanding term notes into shares of Common Stock of the Company at a conversion price of $0.75 per share. Each of the shareholders have committed in writing to the conversion to equity, and as such, the Company has presented this debt as long-term in the Condensed Consolidated Balance Sheet. Subordinated Convertible Debt On September 30, 2013 and November 6, 2013, Bridgeline Digital entered into Note Purchase Agreements with accredited investors pursuant to which Bridgeline Digital sold an aggregate of $3.0 million of secured subordinated convertible notes (the "Convertible Notes"). The Convertible Notes are convertible at the election of the holder into shares of common stock of Bridgeline Digital at a conversion price equal to $6.50 per share at any time prior to the maturity date, provided that no holder may convert the Convertible Notes if such conversion would result in the holder beneficially owning more than 4.99% of the number of shares of Bridgeline Digital common stock outstanding at the time of conversion. The Convertible Notes mature on March 1, 2017 and interest accrues at 11.5%. On April 29, 2016, the shareholders of the Company approved a proposal for issuance of up to 4,000,000 shares of the Company’s Common Stock upon conversion of the outstanding Convertible Notes with a new conversion price of $0.75. The conversion price to $0.75 per share was provided as an incentive to the holders of such Convertible Notes to convert the outstanding principal into shares of Common Stock.

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration