Bridgeline Digital, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K, dated May 28, 2021, reports the completion of an asset acquisition by Bridgeline Digital, Inc. (Nasdaq: BLIN). The filing details the closing of the acquisition of Hawk Search Inc., an Illinois corporation, which was previously announced on May 12, 2021.
Key Financial Metrics and Transaction Details
The total aggregate purchase price for the acquisition of Hawk Search is approximately $11.85 million. The payment structure is as follows:
- Initial Cash Payment: Approximately $4.8 million paid on the closing date (subject to working capital adjustments).
- Equity Payment: Issuance of 1,500 shares of newly created Series D Convertible Preferred Stock, valued at $1.5 million in the aggregate.
- Deferred Cash Payment: Approximately $2.0 million payable on or before December 31, 2021.
- Performance Earnout: Up to approximately $2.6 million payable within 30 days of the conclusion of the fiscal year 2022 annual audit and filing of the Form 10-K for the fiscal year ending September 30, 2022.
The filing does not provide specific revenue, profit, cash flow, margin, or debt metrics for the Company or the acquired entity. Pro forma financial information and financial statements of the acquired business are not included in this report and are intended to be filed in a subsequent amendment.
Material Changes
The primary material change is the consummation of the acquisition of Hawk Search Inc. on May 28, 2021. Additionally, the Company issued unregistered equity securities (Series D Convertible Preferred Stock) in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933.
Outlook, Risks, and Contingencies
Future cash outflows are contingent upon specific dates and performance metrics. The $2.6 million earnout is subject to adjustments pursuant to the Purchase Agreement and is contingent upon the conclusion of the fiscal year 2022 audit. The filing notes that the description of the Purchase Agreement is not complete and refers investors to the full text filed as Exhibit 10.1 to the May 12, 2021 Form 8-K.
Key Facts for Investor Verification
- Verify the final purchase price after working capital adjustments to the initial $4.8 million cash payment.
- Review the full Stock Purchase Agreement (Exhibit 10.1) for specific terms regarding the $2.6 million performance earnout.
- Monitor future filings for the required financial statements of Hawk Search and pro forma financial information.
- Confirm the terms and conversion rights of the newly issued Series D Convertible Preferred Stock.