Series A Preferred Stock

Common Stock

*less than 1%

EXECUTIVE COMPENSATION

Summary Compensation Table

TheThe following Summary Compensation Table sets forth the total compensation paid or accrued for the fiscal years ended September 30, 20152017 and September 30, 20142016 for our principal executive officer and our other two most highly compensated executive officers who were serving as executive officers on September 30, 2015.2017. We refer to these officers as our named executive officers.

Employment Agreements

Thomas Massie

Mr. Massie resigned as President and Chief Executive Officer and Director on December 1, 2015. The terms of his original employment contract dated October 1, 2001 were superseded by a new Separation and Advisor Agreement (the “Agreement”). The Agreement provides that as of December 1, 2015, Mr. Massie will receive a gross payment of $31,250 per month for sixteen months. In addition, Mr. Massie will receive 100% coverage of the associated premiums for medical and dental coverage during such sixteen month period.

Roger KahnEmployment Agreements

We have entered into an employment agreement with Roger Kahn, our President and Chief OperatingExecutive Officer, to provide executive management services. The employment agreement hashad an initial term of thirteen months beginning August 24, 2015 and terminating on September 30, 2016. The employment agreement was amended on May 1, 2016 (“First Amendment”) to extend through September 30, 2017 and then extended again through September 30, 2018 (“Second amendment”). The First Amendment included a reimbursement for living expenses directly related to accommodations and utilities for an apartment near the Company’s corporate headquarters in an amount not to exceed $2,900 per month. The employment agreement renews for successive periods of one year if the Company provides written notice of renewal not less than 60 days prior to the end of the initial term or any applicable succeeding term. The employment agreement may be terminated by (i) us, in the event of Mr. Kahn's death, resignation, retirement or disability, or for or without cause, or (ii) Mr. Kahn for good reason. In the event that we terminate Mr. Kahn is terminated by us without cause or Mr. Kahn resigns for good reason, he is entitled to receive severance payments equal to twelve months of salary and one full quarterly bonus. In addition, any stock option awards that are not exercisable will be immediately vested and exercisable.

Michael Prinn

We have entered into an employment agreement with Michael Prinn, our Executive Vice President and Chief Financial Officer, to provide executive management services. Mr. Prinn’s current employment agreement is effective for the period of twelve months commencing October 1, 2015.2017 through September 30, 2018. The employment agreement may be terminated by (i) us, in the event of Mr. Prinn's death, resignation, retirement or disability, or for or without cause, or (ii) Mr. Prinn for good reason. In the event that we terminate Mr. Prinn is terminated by us without cause or Mr. Prinn resigns for good reason, he is entitled to receive severance payments equal to twelve months of salary and bonus. In addition, any stock option awards that are not exercisable will be immediately vested and exercisable.

Outstanding Equity Awards at Fiscal 2015 2017Year-End

The following table sets forth information concerning outstanding stock options for each named executive officer as of September 30, 2015.2017.

COMPENSATION OF DIRECTORS

Director Compensation

The following table sets forth information concerning the compensation of our Directors who are not named executive officers as of the fiscal year ended September 30, 2015.2017.

a). In consideration for a loan to the Company of $250,000, Michael Taglich received 3,000 options to purchase the Company’s Common Stock on November 20, 2015 at a price of $6.05. The fair value of the options at the time of grant was $4.15 per share. The shares vest in equal installments upon the anniversary date of the grant over three years. 

The non-employee members of the Company's Board of Directors are compensated as follows:

OTHER INFORMATION CONCERNING THE COMPANY AND THE BOARD OFDIRECTORS

Meetings of the Board of Directors

During the Company's fiscalfiscal year ended September 30, 2015,2017, the Board of Directors held four (4)five (5) meetings and acted foureight (8) times by unanimous written consent. During fiscal 2015,2017, each director attended each meeting. The Chairman was present at all meetings. The Company encourages Board members to attend the Annual Meeting.

Structure of the Board of Directors

Mr. Massie served as our President and Chief Executive Officer during fiscal 2015. Mr. Massie was also Chairman of the Board of the Directors until May 2015, when Ms. Joni Kahn, an independent director, was appointed as Chairperson of the Board.Board in May 2015. The Board of Directors determined that it would be beneficial to the Company to separate the offices of Chief Executive Officer and Chairperson of the Board in order to allow the Chief Executive Officer to focus on the Company’s operations and execution of its business plan while the Chairperson of the Board would focus on the Company’s strategic plan. The Board of Directors believes that Ms. Kahn’s service as Chairperson of the Board will further help extend the Company’s footprint into both the enterprise and multi-unit technology sectors.

The Board of Directors’Directors’ Role in Risk Oversight

The Board of Directors oversees our risk management process. This oversight is primarily accomplished through the Board of Directors’Directors’ committees and management’s reporting processes, including receiving regular reports from members of senior management on areas of material risk to the company, including operational, financial and strategic risks. The Audit Committee focuses on risks related to accounting, internal controls, and financial and tax reporting and related party transactions. The Audit Committee also assesses economic and business risks and monitors compliance with ethical standards. The Compensation Committee identifies and oversees risks associated with our executive compensation policies and practices.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.

Audit Committee

The Audit Committee assists the Board in the oversight of the audit of our consolidated financial statements and the quality and integrity of our accounting, auditing and financial reporting processes. The Audit Committee is responsible for making recommendationsrecommendations to the Board concerning the selection and engagement of independent registered public accountants and for reviewing the scope of the annual audit, audit fees, results of the audit and auditor independence. The Audit Committee also reviews and discusses with management and the Board such matters as accounting policies, internal accounting controls and procedures for preparation of financial statements. Our Audit Committee is comprised of Mr. Galaznik (Chair), Ms. Kahn and Mr. Landers. Our Board has determined that each of the members of the Audit Committee meet the criteria for independence under the standards provided by the Nasdaq Stock Market. The Board of Directors has adopted a written charter for the Audit Committee. A copy of such charter is available on the Company's website,www.bridgeline.com. During fiscal 2015,Fiscal 2017, the Audit Committee met four times. Each member of the Audit Committee attended each such meeting. The Chairman of the Audit Committee was present at all meetings.

Audit Committee Financial Expert. Our Board has also determined that each of Mr. Galaznik and Mr. Landers qualifies as an "audit committee financial expert" as defined under Item 407(d) (5) of Regulation S-K and as an independent director as defined by the Nasdaq listing standards.

Compensation Committee

The Compensation Committee evaluates the performance of our senior executives, considers the design and competitiveness of our compensation plans, including the review of independent research and data regarding compensationcompensation paid to executives of public companies of similar size and geographic location, reviews and approves senior executive compensation and administers our equity compensation plans. In addition, the Committee also conducts reviews of executive compensation to ensure compliance with Section 162(m) of the Internal Revenue Code of 1986, as amended. Our Compensation Committee is comprised of Ms. Kahn (Chair), Mr. Galaznik and Mr. Landers, all of whom are independent directors. The Board of Directors has adopted a written charter for the Compensation Committee. A copy of such charter is available on the Company's website,www.bridgeline.com. During fiscal 2015,Fiscal 2017, the Compensation Committee met fourfive times and acted seventwo times by unanimous written consent.

NominatNominatinging and Corporate Governance Committee

The Nominating and Governance Committee identifies candidates for future Board membership and proposes criteria for Board candidates and candidates to fill Board vacancies, as well as a slate of directors for electionelection by the shareholders at each annual meeting. The Nominating and Governance Committee also annually assesses and reports to the Board on Board and Board Committee performance and effectiveness and reviews and makes recommendations to the Board concerning the composition, size and structure of the Board and its committees. A copy of such charter is available on the Company's website,www.bridgeline.com. Our Nominating and Governance Committee is comprised of Mr. Landers (Chair) and Ms. Kahn, each of whom are independent directors. During fiscal 2015,Fiscal 2017, the Nominating and Governance Committee met fourfive times.

Communications with the Board of Directors

The Company encourages stockholder communications with the Board of Directors. Interested persons may directly contact any individual member of the Board of Directors by contacting Shareholder Relations, Bridgeline Digital, Inc., 80 Blanchard Road, Burlington, Massachusetts 01803.

Audit Committee Report

Audit Committee Report

The Audit Committee consists of three independent directors, all of whom are "independent directors" within the meaning of the applicable rules of the Securities and Exchange Commission and the Nasdaq Stock Market, Inc. The Audit Committee's responsibilities are as described in a written charter adopted by the Board, a copy of which is available on the Company's website atwww.bridgelinedigital.com.www.bridgeline.com.

The Audit Committee has reviewed and discussed the Company's audited financial statements for fiscal 20152017 with management and with the Company's independent registered public accounting firm, Marcum LLP. The Audit Committee has discussed with Marcum LLP the matters required to be discussed by Auditing Standard No. 16, as adopted by the Public Company Accounting Oversight Board relating to the conduct of the audit. The Audit Committee has received the written disclosures and the letter from Marcum LLP required by the Public Company Accounting Oversight Board in Ethics and Independence Rule 3526, Communications with Audit Committees Concerning Independence, and has discussed with Marcum LLP its independence.

Based on the Audit Committee's review of the audited financial statements and the review and discussions described in the foregoing paragraph, the Audit Committee recommended to the Board that the audited financialfinancial statements for fiscal 20152017 be included in the Company's Annual Report on Form 10-K for fiscal 20152017 for filing with the Securities and Exchange Commission.

Submitted by the members of the Audit Committee:

Kenneth Galaznik, Chairman

Scott Landers

Joni Kahn

OTHER MATTERS

Audit Fees

The firm of Marcum LLP acts as our principal independent registered public accounting firm. They have served as our independent auditors since April 26, 2010. A representative of Marcum LLP is expected to attend this year's Annual Meeting, and he will have an opportunity to make a statement if he desires to do so. It is also expected that such representative will be available to respond to appropriate questions.

The table below shows the aggregate fees that the CompanyCompany paid or accrued for the audit and other services provided by Marcum LLP for the fiscal years ended September 30, 20152017 and September 20, 2014.2016. The Company did not engage its independent registered public accounting firm during either of the fiscal years ended September 30, 20152017 or September 20, 201430, 2016 for any other non-audit services.

Audit Fees. This category includes fees for the audits of the Company's annual financial statements, review of financial statements included in the Company's Form 10-Q Quarterly Reports and services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for the relevant fiscal years.

Audit-Related Fees. This category consists of audits performed in connection with certain acquisitions.

Tax Fees. This category consists of professional services rendered for tax compliance, tax planning and tax advice. The services for the fees disclosed under this category include tax return preparation, research and technical tax advice.

There were no other fees paid or accrued to Marcum LLP in the fiscal years endedended September 30, 20152017 or September 30, 2014.2016.

Audit Committee Pre-Approval Policies and Procedures.

Before an independent public accounting firm is engaged by the Company to render audit or non-audit services, the engagement is approved by the Audit Committee. Our Audit Committee has the sole authority to approve the scope of the audit and any audit-relatedaudit-related services as well as all audit fees and terms. Our Audit Committee must pre-approve any audit and non-audit related services by our independent registered public accounting firm. During our fiscal year ended September 30, 2015,2017, no services were provided to us by our independent registered public accounting firm other than in accordance with the pre-approval procedures described herein.

Code of Conduct and Ethics

The Company's Board of Directors has adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-K of the Securities Act that applies to all of the Company's officers and employees, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Ethics codifies the business and ethical principles that govern the Company's business. A copy of the Code of Ethics is available on the Company's websitewww.bridgelinedigital.com.www.bridgeline.com. The Company intends to post amendments to or waivers from its Code of Ethics (to the extent applicable to its principal executive officer, principal financial officer or principal accounting officer) on its website. The Company's website is not part of this proxy statement.

PROPOSAL 2

RATIFICATION OF THE FILING AND EFFECTIVENESS

OF THE CERTIFICATE OF AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION FILED WITH THE DELAWARE DIVISION OF CORPORATIONS ON JULY 21, 2017 AND THE REVERSE STOCK SPLIT EFFECTED THEREBY

APPROVALOF THE BRIDGELINE DIGITAL, INC. 2016 STOCK INCENTIVE PLAN

TheOur Board of Directors believeshas determined that the future success of Bridgeline depends, in large part, upon the ability of the Company to attract, retain and motivate key employees and that the granting of stock options serves as an important factor in retaining key employees. In addition, the Board of Directors believes it is important to have a pool of options available for issuance as the Company considers potential acquisitions. On March 11, 2016, the Company’s Board of Directors approved, subject to stockholder approval, the Bridgeline Digital, Inc. 2016 Stock Incentive Plan (the “Plan”). Initially, a total of 2,500,000 shares of the Company’s Common Stock will be reserved for issuance under the Plan.

The Company’s existing stock incentive plan will expire in August 2016. The purpose of the Plan is to replace the expiring stock incentive plan and to reserve a sufficient number of shares of Common Stock for issuance under the Plan to existing employees and directors and to new employees. All of the options currently outstanding under the existing stock incentive plan are currently underwater. The Board of Directors intends to grant existing key employees and outside directors additional options under the Plan in order to continue to incentivize such existing employees through equity compensation. The Company also intends to use a portion of the shares reserved under the Plan to grant options in the future to newly-hired employees. Without the ability to provide equity compensation, the Company may be unable to attract and retain key employees and directors. If this proposal is approved, the Company expects to have sufficient shares available under the Plan for the next twelve to eighteen months.

The number of shares of Common Stock reserved under the Plan was determined by reviewing the status of the outstanding options that are currently underwater and by comparing the Company’s past option grants to key employees and new employees to its current hiring and retention plan. The adoption of the Plan would decrease the Company’s overhang from 21% to 17%. The Company’s burn rate, net of forfeited and expired shares, has averaged 6% over the past three fiscal years.

The Board of Directors believes that the approval of the Plan is in the best interests of the Company and recommends a vote for this proposal.

our stockholders to ratify, pursuant to Section 204 of the DGCL and common law, the filing and effectiveness of the Certificate of Amendment to our PurposeAmended and Restated Certificate ofPlan Incorporation filed with the Delaware Division of Corporations on July 21, 2017 (the “July 2017 Certificate of Amendment”) and the one-for-five reverse stock split that was effected thereby and that became effective on July 24, 2017 (the “2017 Reverse Stock Split”).  This ratification shall be retroactive to the effectiveness of the filing of the July 2017 Certificate of Amendment and of the 2017 Reverse Stock Split, as applicable.

The purpose

Background

At our 2017 Annual Meeting of Stockholders (“2017 Annual Meeting”) held on June 29, 2017, we sought stockholder approval of an amendment to our Amended and Restated Certificate of Incorporation, as amended (the “Charter”), to effectuate the 2017 Reverse Stock Split. Our request for approval of the Plan is to advance the interests of Bridgeline by encouraging equity participation in Bridgeline by directors, officers and employees of Bridgeline through the acquisition of shares of Common2017 Reverse Stock upon the exercise of options granted under the Plan or the issuance of restricted stock.

General Provisions

The following summary of the Plan is qualified in its entirety by reference to the Plan,Split included a copy of which is attached as Appendix B to this Proxy Statement.

The Plan was adopteddetermination by our Board of Directors on March 11, 2016. The Plan allows us to grant options, restricted stockthat it was in the Company’s best interest and other forms of stock-based compensation to our officers, directors, employees and outside consultants and advisors. We have developed this Plan to alignin the interests of (i) employees, (ii) non-employee Board members, and (iii) consultants and key advisors with thebest interests of our shareholders andstockholders to provide incentivesincrease the per share price of our stock to satisfy the per share minimum bid price requirement for these personscontinued listing on the NASDAQ Capital Market.  

At our 2017 Annual Meeting, our independent proxy tabulator reported votes cast by nominees/brokers without instruction from the beneficial owners of certain of our outstanding shares, also known as broker non-votes, in favor of the proposal in accordance with the rules of the NYSE that govern how brokers may cast such votes on proposals they determine to exert maximum efforts forbe routine matters. Consequently, our success andinspector of elections determined that the proposal to encourage them to contribute materiallyapprove an amendment to our growth. AsCharter to affect the 2017 Reverse Stock Split received the requisite stockholder approval and certified that the proposal passed. Certain statements made in our definitive proxy statement on Schedule 14A for the 2017 Annual Meeting of March 11, 2016 thereStockholders, which was filed with the SEC on May 16, 2017 (the “2017 Proxy Statement”) were approximately 90 persons eligibleinconsistent with this approach.  The 2017 Proxy Statement stated that such nominees/brokers would not have discretion to participatevote for the proposal to approve the amendment to our Charter to effectuate the 2017 Reverse Stock Split without instruction as we assessed the proposal to be a non-routine matter, and that broker non-votes would be counted “against” the proposal.

Based on the independent proxy tabulator’s report of votes cast, our inspector of elections for the 2017 Annual Meeting certified that the proposal passed, and we subsequently filed the July 2017 Certificate of Amendment with the Delaware Division of Corporations on July 21, 2017.  A question has been raised regarding the validity of the vote due to the disclosures in the Plan.2017 Proxy Statement regarding the authority of brokers/nominees to vote on the proposal without instruction from the beneficial owner of the securities held by such brokers/nominees. The Company had assessed the proposal to effectuate the 2017 Reverse Stock Split as a non-routine matter, which conflicts with the determination by the NYSE.

Our Board of Directors, in consultation with counsel, has determined that the description of the authority of brokers/nominees to vote on proposals without instruction in the 2017 Proxy Statement may create some uncertainty as to the effect of the vote obtained at the 2017 Annual Meeting of Stockholders.  As a result, our Board of Directors has determined that it is in the best interests of the Company and our stockholders to ratify the filing and effectiveness of the July 2017 Certificate of Amendment and the 2017 Reverse Stock Split pursuant to Section 204 of the DGCL and common law in order to eliminate any uncertainty related to the effectiveness of these corporate actions. If the ratification of the July 2017 Certificate of Amendment and the 2017 Reverse Stock Split (the “Amendment Ratification”) is approved by the stockholders and becomes effective, the ratification will be retroactive to (i) in the case of the filing of the July 2017 Certificate of Amendment, July 21, 2017, which was the date of the filing of the July 2017 Certificate of Amendment with the Delaware Division of Corporation, and (ii) in the case of the 2017 Reverse Stock Split, July 24, 2017, which was the date on which the 2017 Reverse Stock Split became effective.  

Board Approval of the Ratification of the July 2017 Certificate of Amendment and the 2017 Reverse Stock Split

Section 204 of the DGCL allows a Delaware corporation, by following specified procedures, to ratify a corporate act retroactive to the date the corporate act was originally taken.  The Company does not believe that it is clear that the filing and effectiveness of the July 2017 Certificate of Amendment and 2017 Reverse Stock Split are invalid and ineffective.  However, on January 12, 2018, our Board of Directors determined that it would be advisable and in the best interests of the Company and its stockholders to ratify the filing and effectiveness of the July 2017 Certificate of Amendment and the 2017 Reverse Stock Split pursuant to Section 204 of the DGCL and Delaware common law in order to eliminate any uncertainty related to their validity or effectiveness, and unanimously adopted the resolutions attached hereto as Appendix B (such resolutions are incorporated herein by reference) approving the Amendment Ratification. Our Board of Directors also recommended that our stockholders approve the Amendment Ratification for purposes of Section 204 and at common law, and directed that the Amendment Ratification be submitted to our stockholders for approval at the Annual Meeting.

The Plan is not subjecttext of sections 204 and 205 of the DGCL are attached hereto as Appendix C.

Filing of a Certificate of Validation

Upon the receipt of the required vote of the stockholders to approve the Amendment Ratification, we may file a certificate of validation with respect to the provisionsJuly 2017 Certificate of Amendment and the 2017 Reverse Stock Split with the Delaware Division of Corporation (the “Certificate of Validation”). The effectiveness of the Employment Retirement Income Security Act, as amended (“ERISA”), and is not a “qualified plan”filing of the Certificate of Validation will be the validation effective time of the Amendment Ratification within the meaning of Section 401204 of the Internal Revenue Code, as amended (the “Code”).

Shares Subject to thePlan. There are a total of 2,500,000 shares of Common Stock reserved for issuance under the Plan, subject to adjustment to prevent dilution from stock dividends, stock splits, recapitalization or similar transactions.

Administration of thePlan. The Plan is administered by the Compensation Committee. The Compensation Committee selects the individuals to whom options and awards are granted and determines the option exercise price and other terms of each award, subject to the provisions of the Plan. The Compensation Committee may delegate limited authority to grant a limited number of stock options to a committee comprised of the Company’s Chief Executive Officer and other officer(s) of the Company.DGCL.

Awards under thePlan. Under the Plan, the Compensation Committee may grant awards in the form of incentive stock options, as defined in Section 422Retroactive Ratification of the Code, options which do not so qualify, restricted stock awards,July 2017 Certificate of Amendment and certain other forms of equity award as determined by the Compensation Committee.Reverse Stock Split

Options. The durationWhen the Certificate of Validation becomes effective in accordance with the DGCL, it should eliminate any option shall be withinpossible uncertainty as to whether the sole discretionJuly 2017 Certificate of Amendment and the Compensation Committee; provided, however, that any incentive stock option granted to a 10%2017 Reverse Stock Split are void or less stockholder or any nonqualified stock option shall, by its terms, be exercised within ten years after the date the option is granted and any incentive stock option granted to a greater than 10% stockholder shall, by its terms, be exercised within five years after the date the option is granted. The exercise price of all options will be determined by the Compensation Committee; provided, however, that the exercise price of an option (including incentive stock options or nonqualified stock options) will be equal to, or greater than, the fair market value of a share of our stock on the date the option is granted and further provided that incentive stock options may not be granted to an employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of our stock or any parent or subsidiary, as defined in section 424 of the Code, unless the price per share is not less than 110% of the fair market value of our stock on the date of grant.

Restricted Stock.Restricted stock is Common Stock that is subject to a risk of forfeiture or other restrictions that will lapse upon satisfaction of specified conditions. Subject to any restrictions applicable to the award, a participant holding restricted stock, whether vested or unvested, will be entitled to enjoy all rights of a shareholder with respect to such restricted stock, including the right to receive dividends and vote the shares. Any dividends payable on the restricted stock awards will be subject to the same restrictions as the underlying award.

Termination of Employment. Unless the Compensation Committee provides otherwise in the terms of the award, if the employment or service of a participant is terminated, outstanding awards will cease to be exercisable (i) immediately if the participant’s employment or service is terminated for cause; (ii) up to three (3) months after the participant’s employment or service is terminated without cause; or (iii) up to one (1) year after the participant’s employment or service is terminated due to death or disability.

Termination or Amendment of thePlan. Our Board of Directors may at any time terminate the Plan or make such amendments thereto as it deems advisable, without action on the part of our shareholders unless their approval is required under the law. However, no termination or amendment will, without the consent of the individual to whom any option has been granted, affect or impair the rights of such individual. Under Section 422(b)(2) of the Code, no incentive stock option may be granted under the Plan more than ten years from the date the Plan was adopted by the Board of Directors.

New Plan Benefits

We are unable to determine the dollar value and number of stock awards that may be received by or allocated to (i) any of our named executive officers, (ii) our current executive officers, as a group, (iii) our employees who are not executive officers, as a group, and (iv) our non-executive directors, as a groupvoidable as a result of the approvalpotential failure of authorization described above, and the effect of the Plan because all stock awards grantedratification will be retroactive to such persons are granted by(i) in the Compensation Committeecase of the filing of the July 2017 Certificate of Amendment, July 21, 2017, which was the date of the original filing of the July 2017 Certificate of Amendment with the Secretary of State of the State of Delaware, and (ii) in the case of the 2017 Reverse Stock Split, July 24, 2017, which is the date on which the 2017 Reverse Stock Split became effective. The Board does not intend for this transaction to be the first step in a discretionary basis.series of plans or proposals of a “going private transaction” within the meaning of Rule 13e-3 of the Securities Exchange Act of 1934, as amended.

Time Limitations on Legal Challenges to the Ratification of the July 2017 Certificate of Amendment and the Reverse Stock Split

If the Amendment Ratification becomes effective, under the DGCL, any claim that (i) the July 2017 Certificate of Amendment or the 2017 Reverse Stock Split are void or voidable due to a failure of authorization, orFederal Income Tax Consequences  (ii) the Delaware Court of Chancery should declare in its discretion that the Amendment Ratification not be effective or be effective only on certain conditions, must be brought within 120 days from the time that the filing of the Certificate of Validation becomes effective in accordance with the DGCL.

The following summarizesConsequences if the U.S. federal income tax consequencesAmendment Ratification is Not Approved by the Stockholders

If the Amendment Ratification is not approved by the requisite vote of our stockholders, we will not be able to file the Certificate of Validation and the Amendment Ratification will not become effective in accordance with Section 204 of the DGCL. The failure to approve the Amendment Ratification may leave us exposed to potential claims that generally will arise with respect to awards granted under(i) the Plan. This summary is basedvote on the tax lawsJuly 2017 Certificate of Amendment did not receive requisite stockholder approval, (ii) the July 2017 Certificate of Amendment therefore was not validly adopted, and the 2017 Reverse Stock Split was not validly effected, and (iii) the Company could be delisted from the Nasdaq Capital Market because, but for the 2017 Reverse Stock Split, shares of our common stock may have continued to trade below the requisite $1.00 per share price needed to maintain our listing. If Nasdaq chooses to delist our common stock, our shares may then trade on the OTC Bulletin Board or other small trading markets, such as the pink sheets, causing our common stock to be considered a penny stock and potentially causing a decrease to nominal levels of trading that are avoided by retail and institutional investors, resulting in effectthe impaired liquidity of our shares.

Vote Required; Recommendation of the Board of Directors

Approval of the Amendment Ratification requires “For” votes from the holders of a majority of our outstanding voting securities as of the record date offor the 2018 Annual Meeting. The NYSE has informed us that a vote on this proxy statement. This summary assumes that all awards granted under the Plan are exempt from, or comply with, the rules under Section 409A of the Internal Revenue Code related to nonqualified deferred compensation. Changes to these laws could alter the tax consequences described below. This discussion is not intended toproposal will be a complete discussion of all of the federal income tax consequences of the Plan or of all of the requirements“routine” matter. Therefore, we do not expect any broker non-votes on this matter. Abstentions and any broker non-voters that must be met in order to qualify for the tax treatment described herein. In addition, because tax consequences may vary, and certain exceptions to the general rules discussed herein may be applicable, depending uponcast will have the personal circumstances of individual holders of securities, each participant should consider his personal situation and consult with his own tax advisorsame effect as a vote against this proposal.  

In addition, with respect to the specific tax consequences applicable to him. No information is provided as to state tax laws. The Plan is not qualified under Section 401approval of the Code, nor is it subjectAmendment Ratification, we are requiring “For” votes from the holders of a majority of shares of our voting securities outstanding as of the record date for the 2017 Annual Meeting that were issued and outstanding immediately prior to the provisionseffectiveness of the Employee Retirement Income Security Act2017 Reverse Stock Split.  Because we cannot specifically separate shares that were issued and outstanding immediately prior to the effectiveness of 1974,the 2017 Reverse Stock Split from shares that were not, we are requiring [_______] “For” votes on this proposal, which represents the sum of (i) one share more than fifty percent of our outstanding voting securities as amended.of the record date for the 2017 Annual Meeting plus (ii) the number of voting securities that have been issued since the effectiveness of the 2017 Reverse Stock Split.

The Board recommends that stockholders vote “FOR” Proposal 2.

Incentive Stock Options. A participant will not have income upon the grant of an incentive stock option. Also, except as described below, a participant will not have income upon exercise of an incentive stock option if the participant has been employed by the Company at all times beginning with the option grant date and ending three months before the date the participant exercises the option. If the participant has not been so employed during that time, then the participant will be taxed as described below under "Nonstatutory Stock Options." The exercise of an incentive stock option may subject the participant to the alternative minimum tax.PROPOSAL 3

A participant will have income upon the sale of the stock acquired under an incentive stock option at a profit (if sales proceeds exceed the exercise price). The type of income will depend on when the participant sells the stock. If a participant sells the stock more than two years after the option was granted and more than one year after the option was exercised, then, if sold at a profit, all of the profit will be long-term capital gain or, if sold at a loss, all of the loss will be long-term capital loss. If a participant sells the stock priorTHE ADJOURNMENT PROPOSAL

This proposal is presented to satisfying these waiting periods, then the participant will have engaged in a disqualifying disposition and the participant will have ordinary income equal to the difference between the exercise price and the fair market value of the underlying stockstockholders at the Meeting to approve an adjournment to another time the option was exercised. Depending on the circumstances of the disqualifying disposition, the participant may then be ableor place, if necessary or appropriate, to report any difference between the fair market value of the underlying stocksolicit additional proxies if there are not sufficient votes at the time of exercise and the disposition price as gain or loss, as the case may be.Meeting to approve Proposal 2.  

Nonstatutory Stock Options. A participant will not have income uponIf, at the grantMeeting, the number of a nonstatutory stock option. A participant will have compensation income upon the exercise of a nonstatutory stock option equal to the valueshares present or represented and voting in favor of the stock onapproval of Proposal 2 is not sufficient to approve that proposal, we currently intend to move to adjourn the dayMeeting in order to enable our Board of Directors to solicit additional proxies for the participant exercisedapproval of Proposal 2. In that event, we will ask our stockholders to vote only upon Proposals 1, 3, 4, and 5, and not upon Proposal 2. In the option lessevent this Proposal 3 is approved, the exercise price. Upon sale of the stock, the participant will have capital gain or loss equalMeeting may be adjourned from time to the difference between the sales proceeds and the value of the stock on the day the option was exercised. This capital gain or loss will be long-term if the participant has held the stock fortime to a date that is not more than one year and otherwise will be short-term.120 days after the original record date for the Meeting.

Restricted Stock. Generally, restricted stockIn this proposal, we are asking our stockholders to authorize the holder of any proxy solicited by our Board of Directors to vote in favor of granting discretionary authority to the proxy holders, and each of them individually, to adjourn the Meeting to another time and place for the purpose of soliciting additional proxies. If the stockholders approve the adjournment proposal, we could adjourn the Meeting and any adjourned session of the Meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from stockholders who have previously voted.

Vote Required and Recommendation

If the proposal to adjourn the Meeting for the purpose of soliciting additional proxies is not taxablesubmitted to the stockholders for approval, such proposal will be approved by the affirmative vote of a participantmajority of the votes cast at the time of grant, but instead is included in ordinary income (at its then fair market value) and subject to withholding when the restrictions lapse. A participant may elect to recognize income at the time of grant, in which case the fair market value of the common stock at the time of grant, less the amount paid, if any, for the stock, is included in ordinary income and subject to withholding and there is no further income recognition when the restrictions lapse.Meeting.

Other Stock-Based Awards. The tax consequences associated with other stock-based awards granted under the Plan will vary depending on the specific terms of such award. Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, the nature of the property to be received by the participant under the award and the participant's holding period and tax basis for the award or underlying common stock.

Tax Consequences to the Company. There will be no income tax consequences to the Company except that the Company will be entitled to a deduction when a participant has compensation income. Any such deduction will be subject to the limitations of Section 162(m) of the Code.

The Board of Directors unanimously recommends athat stockholders vote FOR“FOR” Proposal 3, as to the adjournment of the Meeting if necessary or appropriate to solicit additional proxies in favor of the approval of Proposal No.2.

The Board recommends that stockholders2, theapproval of theBridgeline Digital, Inc.2016 Stock Incentive Plan. vote “FOR” Proposal 3.

PROPOSAL 34

RARAFTIFICATIONTIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

Upon the recommendation of the Audit Committee, the Board of Directors has reappointed Marcum LLP to audit the consolidated financial statements of the Company for the fiscal year ending September 30, 2016.2018. Marcum LLP has served as the Company's independent registered public accounting firm since April 2010. A representative from Marcum LLP is expected to be present at the meeting with the opportunity to make a statement if he or she desires to do so and to be available to respond to appropriate questions.

Although stockholder ratification of the appointment is not required by law, the Company desires to solicit such ratification. If the appointment of Marcum LLP is not approved by a majority of the shares represented at the Meeting, the Company will considerconsider the appointment of other independent registered public accounting firms.

The Board recommends a vote FOR the approvalRequired Vote and Recommendation

Ratification of Proposal No. 3, the ratification of the appointment of Marcum LLP as the

Company's Company’s independent auditors for the fiscal year ending September 30, 2016.2018 requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting. Unless otherwise instructed on the proxy or unless authority to vote is withheld, shares represented by executed proxies will be voted “FOR” the ratification of Marcum LLP as the Company’s independent auditors for the fiscal year ending September 30, 2018.

The Board recommends that stockholders vote “FOR” the ratification of Marcum LLP as our independent auditors for the fiscal year ending September 30, 2018.

PROPOSAL 4

APPROVAL OF THE ISSUANCE OF UP TO4,700,000 SHARES OF THE COMPANY’S COMMON STOCK UPON

CONVERSION OF OUTSTANDING TERM NOTES, THE ISSUANCE OF WARRANTS TO PURCHASE UP TO AN

AGGREGATE OF 470,000 SHARES OF THE COMPANY’S COMMON STOCKAND THE ISSUANCE OF THE SHARES

OF COMMON STOCK ISSUABLE UPON EXERCISE OF SUCH WARRANTS

Since December 2014, the Company has issued a total of $3,000,000 in term notes to certain individual accredited investors (the “Outstanding Term Notes”). The Outstanding Term Notes contain interest rates ranging from 8.0% to 9.5% per annum and mature on March 1, 2017. Certain of the Outstanding Term Notes contain a prepayment penalty payable by the Company in the event such note is repaid prior to the maturity date. As of March 31, 2016, a total of $169,887 in interest has accrued under the Outstanding Term Notes and the Outstanding Term Notes had an aggregate prepayment penalty of $250,000. The Outstanding Term Notes are held as follows:

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, accrued but unpaid interest and prepayment penalties due under such Outstanding Term Notes into shares of Common Stock of the Company at a conversion price of $0.75 per share. Such conversion may occur at the election of the Company only if the stockholders approve at the Meeting the issuance of up to 4,700,000 shares of the Company’s Common Stock upon conversion of outstanding term notes, and the issuance of warrants to purchase up to an aggregate of 470,000 shares of the Company’s Common Stock and the issuance of the shares of Common Stock issuable upon exercise of such warrants. The conversion of the Outstanding Term Notes, including all principal and accrued interest and prepayment penalties, would result in the issuance of approximately 4,700,000 shares of the Company’s Common Stock.

In addition, the Company has agreed to issue the Company’s placement agent, Taglich Brothers, Inc., or its affiliates, warrants to purchase an aggregate of up to 470,000 shares of the Company’s Common Stock in return for services provided by Taglich Brothers, Inc. in connection with the conversion of the Outstanding Term Notes. The warrants will have a term of five years and an exercise price equal to the closing price of the Common Stock on the date of the warrants are issued. The warrants will only be issued if (i) the stockholders approve the issuance of the warrants and the issuance of the shares of Common Stock upon exercise of the warrants as described in this proposal at the Meeting and (ii) the Outstanding Term Notes convert into shares of Common Stock of the Company as described above.

The holders of the Outstanding Term Notes include officers, directors and consultants of the Company. Michael Taglich is a member of the Board of Directors of the Company, Roger Kahn is the Company’s Co-Interim Chief Executive Officer and President and Chief Executive Officer and Robert Taglich is a consultant to the Company. Michael Taglich and Robert Taglich are executives of Taglich Brothers, Inc.

Because the Company’s Common Stock is traded on the Nasdaq Stock Market, we are subject to the Nasdaq Listing Rules, including:

The issuance of the Common Stock upon conversion of the Outstanding Term Notes, the issuance of the warrants and the issuance of the Common Stock upon exercise of the warrants would result in the issuance of a number of shares of Common Stock equal to 20% or more of our outstanding Common Stock and 20% or more of the voting power outstanding at the time the Outstanding Term Notes were issued and would result in a change in control of the Company because such issuance will result in Michael Taglich becoming a holder of more than 20% of the Company’s outstanding Common Stock. In addition, because the issuance of Common Stock will be for a price less than the greater of book or market value of our Common Stock both at the time the Outstanding Term Notes were issued and at the time of conversion, the issuance of the shares may be considered to be equity compensation to the holders of the Outstanding Term Notes. Accordingly, we are soliciting stockholder approval of the issuance of up to 4,700,000 shares Common Stock upon conversion of the Outstanding Term Notes, the issuance of the warrants and the issuance of up to 470,000 shares of Common Stock upon exercise of the warrants. The conversion of the Outstanding Term Notes will occur and the warrants will be issued only if such approval is obtained.

We believe authorizing the Company to issue the shares of Common Stock upon conversion of the Outstanding Term Notes, to issue the warrants and to issue the shares of Common Stock upon exercise of the warrants is in the best interest of the Company and our stockholders. Converting the Outstanding Term Notes into shares of Common Stock rather than paying cash to the noteholders will provide the Company with more cash-flow flexibility and allow the Company to use such funds for working capital and general corporate purposes rather than repayment of debt. The issuance of Common Stock to the holders of the Outstanding Term Notes and upon exercise of the warrants will result in significant dilution to the stockholders, but we believe the resulting dilution is outweighed by the benefit to the Company and its stockholders of increased cash available for working capital and general corporate purposes.

TheBoard of Directors recommends a vote FOR the approval of Proposal No.4, theapproval of the issuance of up to

4,700,000 shares of the Company’s Common Stock upon conversion of outstanding term notes, the issuance of warrants

to purchase up to an aggregate of 470,000 shares of the Company’s Common Stock and the issuance of the Common Stock

upon exercise of the warrants.

PROPOSAL 5

APPROVAL OF THE ISSUANCE OF UP TO4,000,000 SHARES OF THE COMPANY’S COMMON STOCK UPON

CONVERSION OF OUTSTANDING CONVERTIBLE NOTES

In September and November of 2013, the Company issued a total of $3,000,000 in principal amount of convertible promissory notes to accredited investors (the “Convertible Notes”). Interest accrues under the Convertible Notes at a rate of 11.5% per annum and is paid quarterly in cash. The Convertible Notes mature on March 1, 2017 and are convertible prior to maturity at the election of the holder into Common Stock at a conversion price of $6.50 per share. On March 1, 2016, the closing price of the Common Stock was $0.88 per share. Because the conversion price of the Convertible Notes is significantly greater than the current trading price of the Common Stock, the Company does not expect any holders of the Convertible Notes to convert such notes. Rather, the Company expects to repay such Convertible Notes in cash on the Maturity Date.

The Company is proposing to amend the Convertible Notes to reduce the conversion price to $0.75 per share in order to provide an incentive to the holders of such Convertible Notes to convert the outstanding principal into shares of Common Stock. This decrease in the conversion price would result in an increase in the aggregate number of shares of Common Stock issuable upon conversion of the Convertible Notes from 461,539 shares to 4,000,000 shares. Because this amendment to the terms of the Convertible Notes would result in the issuance or potential issuance of a number of shares of Common Stock equal to 20% or more of our outstanding Common Stock and 20% or more of the voting power outstanding before the issuance, pursuant to Nasdaq Listing Rule 5635(d), the Company is soliciting stockholder approval of the issuance of up to a total of 4,000,000 shares Common Stock upon conversion of the Convertible Notes. The conversion price of the Convertible Notes will be amended only if such stockholder approval is obtained.

In addition, Michael Taglich, a member of the Board of Directors, and Robert Taglich, a consultant to the Company, each hold Convertible Notes. Michael Taglich holds a Convertible Note in principal amount of $100,000, and Robert Taglich holds a Convertible Note in principal amount of $200,000. The reduction in the conversion price of the Convertible Notes may result in the issuance of shares of Common Stock at a price that is below the greater of book or market value of our Common Stock and therefore may be considered to be equity compensation to each of Michael Taglich and Robert Taglich. Therefore, we are soliciting stockholder approval of the issuance of the shares of Common Stock upon conversion of the Convertible Notes held by Michael Taglich and Robert Taglich pursuant to Nasdaq Listing Rule 5635(c).

We believe authorizing the Company to reduce the conversion price of the Convertible Notes and thereby increasing the number of shares of Common Stock issuable upon conversion of the Convertible Notes is in the best interest of the Company and our stockholders. Providing an incentive for the holders of the Convertible Notes to convert such Notes into shares of Common Stock rather than requiring the Company to repay the Convertible Notes in cash will provide the Company with more cash-flow flexibility and allow the Company to use such funds for working capital and general corporate purposes rather than repayment of debt. The issuance of Common Stock to the holders of the Convertible Notes will result in significant dilution to the stockholders, but we believe the resulting dilution is outweighed by the benefit to the Company and its stockholders of increased cash available for working capital and general corporate purposes.

The Board of Directors recommends a vote FOR the approval of Proposal No.5, theapproval of the issuance of up to

4,000,000 shares of the Company’s Common Stock upon conversion of outstanding convertible notes.

PROPOSAL 6

APPROVAL OF THE ISSUANCE OF UP TO2,666,667 SHARES OF THE COMPANY’S COMMON STOCK UPON

CONVERSION OF TERM NOTES TO BE ISSUED IN A PRIVATE PLACEMENT

The Company is in the process of offering term notes to certain accredited investors in a private placement of term notes in an aggregate principal amount of up to $2,000,000 (the “Term Notes”). The Term Notes have an interest rate of 10%, with no interest accruing until July 1, 2016, and mature on March 31, 2017. Under the provisions of the Term Notes, all outstanding principal and any accrued and unpaid interest under the Term Notes will automatically convert into shares of Common Stock of the Company at a conversion price of $0.75 per share two trading days after receipt of stockholder approval of the issuance of up to 2,666,667 shares of Common Stock upon conversion of the Term Notes. The conversion of the Term Notes, including all principal and accrued interest, would result in the issuance of approximately 2,666,667 shares of the Company’s Common Stock. The Common Stock issued upon conversion of the Term Notes may be issued at a discount if the trading price of the Common Stock at the time of conversion is below $0.75 per share. The current book value of the Common Stock is $0.82 and the closing price on March 1, 2016 was $0.88 per share.

Because the Company’s Common Stock is traded on the Nasdaq Stock Market, we are subject to the Nasdaq Listing Rules, including Listing Rule 5635(d), which provides that stockholder approval is required prior to the issuance of securities in connection with a transaction (or a series of related transactions) other than a public offering involving the sale, issuance, or potential issuance of common stock (or securities exercisable or convertible into common stock) equal to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance for less than the greater of book or market value of the stock. Our issuance of the Common Stock upon conversion of the Term Notes combined with other issuances of Common Stock made or to be made by the Company may result in the issuance of a number of shares of Common Stock equal to 20% or more of our outstanding Common Stock and 20% or more of the voting power outstanding before the issuance. Accordingly, we are soliciting stockholder approval of the issuance of up to 2,666,667 shares Common Stock upon conversion of the Term Notes. The conversion will occur only if such approval is obtained.

We believe authorizing the Company to issue the shares of Common Stock upon conversion of the Term Notes is in the best interest of the Company and our stockholders. Converting the Term Notes into shares of Common Stock rather than paying cash to the noteholders will provide the Company with more cash-flow flexibility and allow the Company to use such funds for working capital and general corporate purposes rather than repayment of debt. The issuance of Common Stock to the holders of the Term Notes will result in significant dilution to the stockholders, but we believe the resulting dilution is outweighed by the benefit to the Company and its stockholders of increased cash available for working capital and general corporate purposes.

The Board of Directors recommends a vote FOR the approval of Proposal No.6, theapproval of the issuance of up to

2,666,667 shares of the Company’s Common Stock upon conversion of term notes to be issued in a private placement.

PROPOSAL 7

ADVISORY VOTE ON TO APPROVE THE COMPENSATION OF NAMED EXECUTIVE COMPENSATIONOFFICERS (“SAY-ON-PAY”)

Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, we provide our shareholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.

Our executiveexecutive compensation programs are designed to attract, motivate, and retain our named executive officers, who are critical to our success, and to reward our named executive officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total shareholder return. We seek to closely align the interests of our named executive officers with the interests of our shareholders, and our Compensation Committee regularly reviews named executive officer compensation to ensure such compensation is consistent with our goals.

Required Vote

This vote is advisory, which means that the vote on executive compensation is not binding on the company, our Board of Directors, or the Compensation Committee of the Board of Directors. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission. To the extent there is a significant vote against our named executive officer compensation as disclosed in this proxy statement, the Compensation Committee will evaluate whether any actions are necessary to address our shareholders’ concerns.

Accordingly, we ask our shareholders to vote on the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 20162018 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Summary Compensation Table, and the other related tables and disclosure.”

Vote Required and Recommendation

On this advisory, non-binding matter, the affirmative vote of at least a majority of the votes cast at the Annual Meeting is required to approve this Proposal 5.

The Board of Directors recommends athat stockholders vote “FOR” the approvaladvisory resolution above, approving of the compensation of our

named executive officers, as disclosed in this proxy statement.paid to the Company’s Named Executive Officers.

PROPOSAL 8

ADVISORY VOTE ON THE FREQUENCY OF FUTURE SAY-ON-PAY VOTES

Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, we provide our shareholders with the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently to hold future say-on-pay votes. Shareholders may indicate whether they would prefer that we conduct future say-on-pay votes once every one, two, or three years. Shareholders also may abstain from casting a vote on this proposal.

The Board of Directors has determined that an advisory vote on executive compensation every three years will permit our shareholders to provide direct input on the Company’s executive compensation philosophy, policies, and practices as disclosed in the Company’s proxy statement, on a regular basis. This approach is consistent with our efforts to engage in an ongoing dialogue with our shareholders on executive compensation and corporate governance matters.

Required Vote

This vote is advisory, which means that the vote on executive compensation is not binding on the company, our Board of Directors, or the Compensation Committee of the Board of Directors. The Company recognizes that the shareholders may have different views as to the best approach for the Company, and therefore we look forward to hearing from our shareholders as to their preferences on the frequency of an advisory vote on executive compensation. The Board of Directors and the Compensation Committee will take into account the outcome of the vote; however, when considering the frequency of future say-on-pay votes, the Board of Directors may decide that it is in the best interests of our shareholders and the Company to hold future say-on-pay votes more or less frequently than the frequency receiving the most votes cast by our shareholders.

The proxy card provides shareholders with the opportunity to choose among four options (holding the vote every one, two, or three years, or abstain from voting) and, therefore, shareholders will not be voting to approve or disapprove the recommendation of the Board of Directors.

The Board of Directors recommends a vote FOR the option of a vote every three years as the preferred frequency for future

say-on-pay votes.

Other Matters

The Board of Directors has no knowledge of any other matters which may come before the Meeting and does not intend to present any other matters. However, if any other matters shall properly come before the Meeting or any adjournment thereof, the persons named as proxies will have discretionary authority to vote the shares of Common Stock represented by the accompanying proxy in accordance with their best judgment.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of Securities Exchange Act of 1934 requires the Company's executive officers, directors, and persons who own more thanthan ten percent of a registered class of the Company's equity securities to file reports of ownership and changes in ownership with the Securities and Exchange Commission. BasedWith respect to 2017 and based solely on its review of the copies of such forms and amendments thereto received by it, the Company believes that during fiscal 2015 all of the executive officers, directors, and owners of ten percent of the outstanding shares of Common Stock complied with all applicable filing requirements with the exception of (i) one filinglate filings for shares purchased by Ms. Joni Kahn in May 2014,Robert Taglich for a Preferred Series A Stock dividend received on October 1, 2016 and a Series A Preferred Stock dividend received on January 1, 2017, for which a Form 4 was filed with the SEC on August 13, 2015, and (ii) one late filing forApril 3, 2017. Robert Taglich was a transaction by Mr. Michael Taglich in January 2015.Director until June 29, 2017.

Stockholder Proposals and Recommendations for Director

Any stockholder of the Company who wishes to present a proposal to be considered at the next annual meeting of stockholders of the Company and who wishes to have such proposal presented in the Company's Proxy Statement for such meeting must deliver such proposal in writing to the Company at 80 Blanchard Road, 2nd Floor, Burlington, Massachusetts 01803 on or before November 25, 2016.January 27, 2018. Such proposals may be made only by persons who are shareholders, beneficially or of record, on the date the proposals are submitted and who continue in such capacity through the date of the next annual meeting, of at least 1% or $2,000 in market value of securities entitled to be voted at the meeting, and have held such securities for at least one year.

For any stockholder proposal that is not submitted for inclusion in the Company’sCompany’s Proxy Statement, but is instead soughtseeks to be presentedpresent such proposal directly at the Annual Meeting, management will be able to vote proxies in its discretion if the Company does not receive notice of the proposal prior to the close of business on February 9, 2017.January 27, 2018.

Stockholders may recommend individuals to the Board of Directors for considerationconsideration as potential director candidates by following the requirements under Article I, Section 10 of the Bylaws. In order to be eligible to nominate a person for election to our Board of Directors a stockholder must (i) comply with the notice procedures set forth in the Bylaws and (ii) be a stockholder of record on the date of giving such notice of a nomination as well as on the record date for determining the stockholders entitled to vote at the meeting at which directors will be elected.

To be timely, a stockholder's notice must be in writing and received by our corporate secretary at our principal executive offices as follows: (A) in the case of an election of directors at an annual meeting of stockholders, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year's annual meeting, a stockholder's notice must be so received no earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (x) the 90th day prior to such annual meeting and (y) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs; or (B) in the case of an election of directors at a special meeting of stockholders, provided that the board of directors has determined that directors shall be elected at such meeting, not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of (1) the 90th day prior to such special meeting and (2) the tenth day following the day on which notice of the date of such special meeting was mailed or public disclosure of the date of such special meeting was made, whichever first occurs.

In addition, a stockholder's notice must contain the informationinformation specified in Article I, Section 10 of the Bylaws and must be accompanied by the written consent of the proposed nominee to serve as a director if elected. The stockholder making a nomination must personally appear at the annual or special meeting of stockholders to present the nomination, otherwise the nomination will be disregardeddisregarded.

Stockholders interested in making a nomination should refer to the complete requirements set forth in our BylawsBylaws filed as an exhibit to our Periodic Report on Form 10-Q filed with the Securities and Exchange Commission on February 17, 2015. Provided that the date of next year's annual meeting of stockholders is not advanced by more than 20 days or delayed by more than 60 days, from the first anniversary of the 2016 annual meeting,2018 Annual Meeting, any stockholder who wishes to make a nomination to be considered for the next annual meeting must deliver the notice specified by our Bylaws between December 31, 2016[________] and January 30, 2017.[_______], 2018. The By-Laws contain a number of substantive and procedural requirements, which should be reviewed by any interested stockholder. Any notice should be mailed to: Secretary, Bridgeline Digital, Inc., 80 Blanchard Road, 2nd Floor, Burlington, Massachusetts 01803.

Information Incorporated By Reference

Our Annual Report, containing financial statements and management’s discussion and analysis of our financial condition and results of operations for the year ended September 30, 2015 is being mailed contemporaneously with this proxy statement to all stockholders entitled to vote, and is incorporated herein by this reference.

	By Order of the Board of Directors
	Michael D. Prinn Assistant Secretary March 25, 2016February [__], 2018

Appendix A

Appendix B

BRIDGELINE DIGITAL, INC.Unanimous Written Consent of the Board of Directors

In Lieu of a Special Meeting

STOCK INCENTIVE PLAN

SECTION 1.     General Purpose of the Plan; Definitions.January 12, 2018

The nameundersigned, being all the Directors of Bridgeline Digital, Inc., a Delaware corporation (the “Company”), hereby consent, pursuant to Delaware General Corporation Law, Section 141(f), to the adoption of the plan isfollowing resolutions, effective as of the date set forth above:

Ratification of the Reverse Split And Amendment

WHEREAS , on July 21, 2017, Bridgeline Digital, Inc. Stock Incentive Plan, a Delaware corporation (the “Plan”“Company”). The purpose, filed a Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the PlanCompany setting forth an amendment (the “Amendment”) that effected a 1-for-5 reverse stock split (the “Reverse Split”) of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”);

WHEREAS , the Board of Directors (the “Board”) of the Company believes that such Amendment, and the Reverse Split effected thereby, were validly authorized by the Board and by the Company’s shareholders at the Company’s 2017 Annual Meeting of Shareholders, held on June 29, 2017 (the “2017 Annual Meeting”), pursuant to the Company’s shareholders’ approval of the proposal submitted to the Company’s shareholders at the 2017 Annual Meeting asking the Company’s shareholders to authorize the Board to effect, in its discretion, on or prior to July 31, 2017, a reverse stock split of the Company’s outstanding Common Stock at ratio of not less than 1-for-5, with the exact ratio to be determined by the Board, and to approve a corresponding amendment to the Company’s Amended and Restated Certificate of Incorporation to effect the reverse stock split and to reduce proportionately the total number of shares of Common Stock that the Company was authorized to issue, subject to the Board’s authority to determine not to effect any reverse stock split (the “Reverse Stock Split Proposal”);

WHEREAS , the Board has been advised that a question has been raised regarding whether such Reverse Stock Split Proposal and such Amendment, and the Reverse Split effected thereby, were properly approved; and

WHEREAS , in order to eliminate any uncertainty regarding the validity of such Amendment and the Reverse Split, the Board has determined that it is advisable to encourageadopt the following resolutions to ratify such actions.

NOW, THEREFORE, LET IT BE RESOLVED, that the potentially defective corporate acts to be ratified by this resolution are (i) the filing and enable officers and employeeseffectiveness of, and other persons providing services to, Bridgeline Digital, Inc.the amendment effected by, the Amendment filed with the Delaware Division of Corporations (the “Company”“State Office”) on July 21, 2017 and its Affiliates to acquire a proprietary interest(ii) the Reverse Split, which resulted in the Company. It is anticipatedcombination of all of the shares of Common Stock of the Company outstanding immediately prior to the effectiveness of the Reverse Split into 4,193,576 shares of Common Stock of the Company upon the effectiveness of the Reverse Split (which, together with the filing and effectiveness of, and the amendment affected by, the Amendment, are referred to herein as the “Potentially Defective Corporate Acts”);

FURTHER RESOLVED, that providingthe nature of the potential failures of authorization in respect of the Potentially Defective Corporate Acts identified in the paragraph immediately above are as follows: (i) the Reverse Stock Split Proposal was submitted to the Company’s shareholders for their approval at the 2017 Annual Meeting, and, at the 2017 Annual Meeting, the Company’s inspector of elections, relying on the report of the Company’s independent proxy tabulator, determined that the proposal to approve the Reverse Stock Split Proposal received the requisite shareholder approval, and based in part on that determination, the Company filed the Amendment with the State Office on July 21, 2017, thereby effecting the Reverse Split on July 24, 2017; (ii) as part of the determination that the Reverse Stock Split Proposal received the requisite shareholder approval, votes cast by brokers/nominees without instruction from the beneficial owners of certain shares of Common Stock (the “Broker Votes”) were counted as votes in favor of the approval of the Reverse Stock Split Proposal; however, the counting of the Broker Votes in favor of such personsapproval was inconsistent with a direct stakecertain statements made in the Company’s welfare will assureproxy materials for its 2017 Annual Meeting, which stated that a closer identificationbroker/nominee would not have discretion to vote on the Reverse Stock Split Proposal without instruction from the applicable beneficial owner and that the failure of their interestsa beneficial owner to provide his, her or its broker/nominee with thoseinstruction regarding how to vote on the Reverse Stock Split Proposal would have the same effect as casting a vote “against” the Reverse Stock Split Proposal; and (iii) if the Broker Votes were counted as votes “against” the proposal to approve the Reverse Stock Split Proposal, the Reverse Stock Split Proposal would not have been approved by the holders of a majority of the Company’s outstanding voting securities, as required by Section 242 of the Delaware General Corporation Law (the “DGCL”); and

FURTHER RESOLVED, that the Board hereby approves, adopts and authorizes, in all respects, the ratification of the Potentially Defective Corporate Acts pursuant to Section 204 of the DGCL and approves, adopts, authorizes and ratifies the Potentially Defective Corporate Acts.

Submission to Shareholders for Ratification

RESOLVED FURTHER, that the Board hereby directs that the Potentially Defective Corporate Acts shall be submitted to the shareholders of the Company for the shareholders to ratify such acts under Section 204 of the DGCL and itsunder common law, and the Board hereby recommends that the shareholders thereby stimulating their efforts onratify the Company’s behalf and strengthening their desire to remain with the Company.Potentially Defective Corporate Acts;

The following terms shall be defined as set forth below:

RESOLVED FURTHER“Affiliate” means a parent corporation, if any, and each subsidiary corporation, that the proper officers of the Company as those terms are defined in Section 424be, and each hereby is, authorized, empowered and directed, for and on behalf of the Code.Company, to submit the proposal to ratify the Potentially Defective Corporate Acts at the Company’s 2018 Annual Meeting of Stockholders (as the same may be adjourned and/or postponed, the “2018 Annual Meeting”), which meeting shall be held on March 23, 2018, at 9:00 a.m., Eastern Daylight Time, at the Company’s corporate headquarters located at 80 Blanchard Road, Burlington, Massachusetts 01803 (unless the Board fixes another date, time and place), and further directed to provide notice of the 2018 Annual Meeting in accordance with Section 204(d) of the DGCL to the shareholders entitled to vote thereon and to all other holders entitled to notice thereunder; and be it

RESOLVED FURTHER“Award” or “Awards”, except where referringthat the record date for determining the shareholders entitled to a particular categorynotice of grant underand to vote at the Plan, shall include Incentive Stock Options, Non-Statutory Stock Options, Restricted Stock Awards, Unrestricted Stock Awards, Performance Share Awards and Stock Appreciation Rights. Awards2018 Annual Meeting shall be evidenced by a written agreement (which may be in electronic form and may be electronically acknowledged and acceptedthe close of business on February 2, 2018, as previously set by the recipient) containingBoard (unless the Board subsequently fixes a different record date for such termspurposes); and conditions not inconsistent with the provisions of this Plan as the Committee shall determine.be it

RESOLVED FURTHER“Board” means, that the Board hereby recommends that the shareholders entitled to vote thereon approve the ratification of Directorsthe Potentially Defective Corporate Acts.

Abandonment

RESOLVED FURTHER, that at any time before the “validation effective time,” as such term in used in Section 204 of the DGCL, in respect of the Potentially Defective Corporate Acts identified in the foregoing resolutions, notwithstanding approval of the ratification of such Potentially Defective Corporate Acts by the shareholders of the Company, the Board may abandon the ratification of such Potentially Defective Corporate Acts without further action of the shareholders of the Company.