Financial Analysis

14. Commitments and Contingencies The Company leases certain of its buildings under noncancelable lease agreements. Refer to the Leases footnote (Note 11 ) of the Notes to the Consolidated Financial Statements for additional information. The Company frequently warrants that the technology solutions it develops for its clients will operate in accordance with the project specifications without defects for a specified warranty period, subject to certain limitations that the Company believes are standard in the industry. In the event that defects are discovered during the warranty period, and none of the limitations apply, the Company is obligated to remedy the defects until the solution that the Company provided operates within the project specifications. The Company is not typically obligated by contract to provide its clients with any refunds of the fees they have paid, although a small number of its contracts provide for the payment of liquidated damages upon default. The Company has purchased insurance policies covering professional errors and omissions, property damage and general liability that reduce its monetary exposure for warranty-related claims and enable it to recover a portion of any future amounts paid. The Companys contracts typically provide for testing and client acceptance procedures that are designed to mitigate the likelihood of warranty-related claims, although there can be no assurance that such procedures will be effective for each project. The Company ha …

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Years Ended September 30, Revenues: 2025 2024 Subscription - SaaS $ 10,339 $ 10,699 Subscription - Maintenance 415 437 Subscription - Hosting 1,601 998 Services 3,028 3,224 $ 15,383 $ 15,358

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5. Fair Value Measurement and Fair Value of Financial Instruments The Companys financial instruments consist principally of accounts receivable, accounts payable, warrant liabilities, contingent consideration and long-term debt arrangements. The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, under U.S. GAAP, companies are required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows: Level 1Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. Level 3Valuations are based on prices or valuation techniques that require inputs that are bo …

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17. Income Taxes The components of the Companys tax provision (benefit) as of September 30, 2025 and 2024 , is as follows: Year Ended September 30, 2025 2024 Current: Federal $ - $ - State 18 22 Foreign - - Total current 18 22 Deferred: Federal - - State - - Foreign (57 ) (65 ) Total deferred (57 ) (65 ) Grand total $ (39 ) $ (43 ) The Companys income tax provision was computed using the federal statutory rate and state statutory rates, net of related federal benefit. The provision differs from the amount computed by applying the statutory federal income tax rate to pretax income, as follows: Year Ended September 30, 2025 % 2024 % Income tax (benefit)/provision $ (537 ) 21.0 % $ (421 ) 21.0 % Permanent differences, net 42 (1.6 )% 36 (1.8 )% State income tax provision/(benefit) 14 (0.5 )% 17 (0.8 )% Foreign income taxed at different rates (37 ) 1.4 % (118 ) 5.9 % Change in valuation allowance on deferred tax assets 362 (14.2 )% 534 (26.6 )% True up adjustments 117 (4.6 )% (91 ) 4.5 % Total $ (39 ) 1.5 % $ (43 ) 2.1 % As of September 30, 2025 , the Company has federal net operating loss (NOL) carryforwards of approximately $37.4 million of which $29.0 million is subject to the 20 -year carryforward and expire on various dates through 2038. The remaining federal NOL carryforward of $8.4 million is indefinite. Internal Revenue Code Section 382 places a limitation on the amount of taxable income which can be offset by NOL carryforwards after a change in control of a loss corporati …

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11. Leases The Company leases facilities in the United States for its corporate and regional field offices. During the years ended September 30, 2025 and 2024 , the Company was also a lessee/sublessor for certain office locations. Determination of Whether a Contract Contains a Lease We determine if an arrangement is a lease at inception, or upon modification of a contract and classify each lease as either an operating or finance lease at commencement. The Company reassesses lease classification subsequent to commencement upon a change to the expected lease term or a modification to the contract. Operating leases represent the Companys right to use an underlying asset as lessee for the lease term and lease obligations represent the Companys obligation to make lease payments arising from the lease. A contract contains a lease if the contract conveys the right to control the use of the identified property or equipment, explicitly or implicitly, for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of and obtain substantially all of the economic benefit from the use of the underlying asset. At commencement, contracts containing a lease are further evaluated for classification as an operating lease or finance lease based on their terms. ROU Model and Determination of Lease Term The Company uses the Right-of-Use (ROU) model to account for leases, which requires an entity to recognize a lease liabilit …

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10. Long-term Debt On March 1, 2021, the Company assumed the outstanding long-term debt obligations of an acquired business and issued a seller note to one of the selling stockholders. The assumed debt obligations and seller note are denominated in Euros. Long-term debt consists as follows: As of September 30, 2025 2024 Term loan payable, accruing interest at 3-Month EURIBOR plus 1.3% per annum, payable in quarterly installments starting in April 2023 and matures in July 2028. $ 256 $ 325 Sellers note payable, due to one of the selling stockholders, accruing interest at a fixed rate of 4.0% per annum. The Sellers note is payable over 5 installments and matures in October 2026. 70 201 Total debt 326 526 Less current portion: (156 ) (282 ) Long-term debt, net of current portion $ 170 $ 244 At September 30, 2025 , future maturities of long-term debt are as follows: Fiscal year: 2026 $ 156 2027 85 2028 85 Total debt $ 326 …

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"Recently Adopted Accounting Standards Segment Reporting In November 2023, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (ASU) No. 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures, which requires that an entity report segment information in accordance with Topic 280, Segment Reporting. The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU 2023 - 07 did not have a material impact to the Company's consolidated financial statements other than enhanced disclosures. See Note 16. Recently Issued Accounting Pronouncements Not Yet Effective Income Taxes In December 2023, the FASB issued ASU No. 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures, which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this Update are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of the new standard …

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18. Related Party Transactions Brandon Ross On February 14, 2025, the Board appointed Brandon Ross to serve as a Class III Director of the Board, to fill the vacancy created by the resignation of Mr. Taglich. Mr. Ross will serve until his term expires at the 2026 Annual Meeting of Stockholders. Mr. Ross currently serves as Head of Placements and Senior Managing Director at WestPark Capital, Inc. Of the 70,000 2025 Placement Agent Warrants issued to WestPark Capital, Inc., or its designees in March 2025, warrants to purchase 28,000 shares of Common Stock were designated to Mr. Ross. The warrants are exercisable immediately, expire on March 24, 2030 and have an exercise price of $1.875 per share. Michael Ketslakh On February 10, 2025, the Board appointed Michael Ketslakh to serve as a Class II Director of the Board, to fill the vacancy created by the resignation of Mr. Landers. Mr. Ketslakh will serve until his term expires at the 2028 Annual Meeting of Stockholders. Mr. Ketslakh participated in the Private Placement and purchased 394,736 unregistered shares. Michael Taglich On February 10, 2025, Michael Taglich announced his resignation from the Board of Directors. Refer to the Stockholder's Equity footnote regarding the Redemption Agreement (Note 12 ).

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9. Restructuring and Acquisition Related Expenses The Company incurred restructuring and acquisition related expenses of $0.2 million during each of the years ended September 30, 2025 and 2024 , respectively, which are included in Restructuring and acquisition related expenses in the consolidated statements of operations.

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15. Revenues and Other Related Items Disaggregated Revenues The Company disaggregates revenue from contracts with customers by geography and product grouping, as it believes this best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Companys revenue by geography (based on customer address) is as follows: Year Ended September 30, Revenues: 2025 2024 United States $ 13,109 $ 12,824 International 2,274 2,534 $ 15,383 $ 15,358 The largest concentration within the Companys international revenue geography is within Canada. Long-lived assets located in foreign jurisdictions aggregated approximately $0.6 million and $1.0 million as of September 30, 2025 and 2024 , respectively. The Companys revenue by type is as follows: Years Ended September 30, Revenues: 2025 2024 Subscription - SaaS $ 10,339 $ 10,699 Subscription - Maintenance 415 437 Subscription - Hosting 1,601 998 Services 3,028 3,224 $ 15,383 $ 15,358 Deferred Revenue Amounts that have been invoiced are recognized in accounts receivable, deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Deferred revenue represents amounts billed for which revenue has not yet been recognized. Deferred revenue that will be recognized during the succeeding 12 -month period is recognized as current deferred revenue and the remaining portion is recognized as noncurrent deferred revenue and is included in Other long-term liabilities. …

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16. Segment Reporting We operate as one operating segment: Software. The Software segment provides marketing technology to customers under software-as-a-service arrangements. The service term for the software arrangements is variable, with the median term being approximately five years. Bridgeline derives revenue primarily in North America and manages the business activities on a consolidated basis. Our Chief Executive Officer, our CODM, reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance. As such, we have one operating segment - Software - in the business of marketing technology. Our CODM reviews cost of sales expense, sales and marketing expense, general and administrative expense and research and development expense to assess our significant segment expenses, and reviews income (loss) from operations and net income (loss) to assess our operating performance. Our CODM also reviews total assets, as reported on our consolidated balance sheets. The accounting policies of the software segment are the same as those described in the summary of significant accounting policies. See our consolidated statement of operations for our significant segment expenses, loss from operations and net loss in the periods presented.

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"2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Companys fiscal year end is September 30th. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles (GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. The most significant estimates included in these consolidated financial statements are the valuation of accounts receivable, including the adequacy of the allowance for credit losses, valuation of long-lived assets, recognition and measurement of deferred revenues, fair value measurements related to the valuation of warrants and deferred tax valuation allowance. The complexity of the estimation process and factors relating to assumptions, risks and uncertainties inherent with the use of the estimates affect the amount of revenue and related expenses reported in the Companys consolidated financial statements. Internal and external factors can affect the Companys estimates. Actual results could dif …

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12. Stockholders Equity Under our Certificate of Incorporation, we are authorized, subject to limitations prescribed by Delaware law and our Charter, to issue up to 1,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions. Our Board of Directors can increase or decrease the number of shares of any series, but not below the number of shares of that series then outstanding, without any further vote or action by our stockholders. Our Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. Series A Convertible Preferred Stock The Company has designated 264,000 shares of its preferred stock as Series A Convertible Preferred Stock (Series A Preferred Stock). The shares of Series A Preferred Stock may be converted, at the option of the holder at any time, into such number of shares of common stock equal to (i) the number of shares of Series A Preferred Stock to be converted, multiplied by the stated value of $10 and (ii) divided by the conversion price in effect at the time of conversion. As of September 30, 2025 and September 30, 2024 , the Company had no shares of Series A Preferred Stock outstanding. Series B Convert …

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19. Subsequent Events The Company evaluated subsequent events through the date of this filing and concluded there were no material subsequent events requiring adjustment to or disclosure in these consolidated financial statements, other than disclosed in Note 11.

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