EGAIN Corp 10-K for FY2023

About this 10-K

Headline figures

EGAIN Corp (EGAN)

10-K 2023-09-14 For: 2023-06-30

Added on April 11, 2026

EGAIN Corp filed this 10-K on September 14, 2023, covering the fiscal year ended June 30, 2023 (FY2023).

Balance as of
June 30, 2023
($)

Balance as of
June 30, 2022
($)

Contract liabilities:

Deferred revenue

Deferred revenue, net of current portion

Fiscal year ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $98.01M; up 6.6% from $91.95M a year earlier
Net income: $2.11M; compared with a net loss of $2.44M a year earlier
Diluted EPS: $0.06; compared with -$0.08 a year earlier

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Delaware		77-0466366
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	EGAN	The Nasdaq Stock Market LLC

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐


Item No.		Page

	Forward-Looking Statements	3

	Summary Risk Factors	4

	PART I

1.	Business	6

1A.	Risk Factors	14

1B.	Unresolved Staff Comments	30

2.	Properties	30

3.	Legal Proceedings	30

4.	Mine Safety Disclosures	30

	PART II

5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	31

6.	Reserved	33

7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

7A.	Quantitative and Qualitative Disclosures About Market Risk	47

8.	Financial Statements and Supplementary Data	48

9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	80

9A.	Controls and Procedures	80

9B.	Other Information	80

9C.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	81

	PART III

10.	Directors, Executive Officers and Corporate Governance	81

11.	Executive Compensation	81

12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	81

13.	Certain Relationships and Related Transactions and Director Independence	82

14.	Principal Accounting Fees and Services	82

	PART IV

15.	Exhibits and Financial Statement Schedules	83

16.	Form 10-K Summary	85

	Signatures	86


Name	Age	Position
Ashutosh Roy	57	Chief Executive Officer and Chairman
Eric N. Smit	61	Chief Financial Officer
Promod Narang	65	Chief Technology Officer


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in thousands)
April 1, 2023 to April 30, 2023	152,648	$	7.41	152,648	$	17,767
May 1, 2023 to May 31, 2023	261,865	$	7.16	261,865	$	15,893
June 1, 2023 to June 30, 2023	225,947	$	7.33	225,947	$	14,237
Total	640,460			640,460


	6/30/2018	6/30/2019	6/30/2020	6/30/2021	6/30/2022	6/30/2023
eGain Corporation	$ 100.00	$ 53.91	$ 73.58	$ 76.03	$ 64.57	$ 49.60
Nasdaq Composite	$ 100.00	$ 107.78	$ 136.51	$ 198.71	$ 152.16	$ 191.93
S&P Software & Services Select Industry Index	$ 100.00	$ 119.54	$ 139.58	$ 215.60	$ 140.14	$ 168.74


	Fiscal Year Ended June 30
	2023		2022		Change

Revenue	(in thousands, except percentages)
SaaS revenue	$	89,619	$	80,904	$	8,715	11	%
Legacy revenue		705		3,653		(2,948)	(81)	%
Total subscription revenue	$	90,324	$	84,557	$	5,767


	2023		2022
Revenue:
Subscription	92	%	92	%
Professional services	8		8
Total revenue	100		100
Cost of revenue:
Cost of subscription	19		16
Cost of professional services	9		11
Total cost of revenue	28		27
Gross profit	72		73
Operating Expenses:
Research and development	28		27
Sales and marketing	32		37
General and administrative	11		12
Total operating expenses	71		76
Income (Loss) from operations	1	%	(3)	%


	Fiscal Year Ended June 30,
	2023		2022		Change

Revenue	(in thousands, except percentages)
Subscription	$	90,324	$	84,557	$	5,767	7	%
Professional services		7,687		7,394		293	4	%
Total revenue	$	98,011	$	91,951	$	6,060


	Payments Due by Period

	Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years
Operating leases		2,819		935		1,356		528		—
Total	$	2,819	$	935	$	1,356	$	528	$	—


		Page Number
Report of BPM LLP, Independent Registered Public Accounting Firm (PCAOB ID 207)		49
Consolidated Financial Statements:
Consolidated Balance Sheets as of June 30, 2023 and 2022		51
Consolidated Statements of Operations for the years ended June 30, 2023 and 2022		52
Consolidated Statements of Comprehensive Income (Loss) for the years ended June 30, 2023 and 2022		53
Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2023 and 2022		54
Consolidated Statements of Cash Flows for the years ended June 30, 2023 and 2022		55
Notes to Consolidated Financial Statements		56


	June 30,
	2023		2022
ASSETS
Current assets:
Cash and cash equivalents	$	73,201	$	72,173
Restricted cash		7		7
Accounts receivable, less allowance for doubtful accounts of $237 and $123 as of June 30, 2023 and 2022, respectively		31,569		26,961
Costs capitalized to obtain revenue contracts, net		1,317		1,487
Prepaid expenses		2,466		2,612
Other current assets		1,268		895
Total current assets		109,828		104,135
Property and equipment, net		633		831
Operating lease right-of-use assets		2,797		3,850
Costs capitalized to obtain revenue contracts, net of current portion		2,318		3,136
Goodwill		13,186		13,186
Other assets, net		1,355		871
Total assets	$	130,117	$	126,009
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,044	$	1,706
Accrued compensation		7,697		8,708
Accrued liabilities		5,387		4,926
Operating lease liabilities		832		1,044
Deferred revenue		47,762		45,638
Total current liabilities		63,722		62,022
Deferred revenue, net of current portion		2,101		3,785
Operating lease liabilities, net of current portion		1,762		2,537
Other long-term liabilities		836		808
Total liabilities		68,421		69,152
Commitments and contingencies (Note 7 and 8)
Stockholders’ equity:
Common stock, $0.001 par value – authorized: 60,000 shares; issued: 32,268 and 31,930 shares; outstanding: 31,482 and 31,930 shares as of June 30, 2023 and 2022, respectively		32		32
Additional paid-in capital		401,087		393,157
Treasury stock, at cost: 786 and 0 common shares as of June 30, 2023 and 2022, respectively.		(5,763)		—
Notes receivable from stockholders		(97)		(95)
Accumulated other comprehensive loss		(2,122)		(2,687)
Accumulated deficit		(331,441)		(333,550)
Total stockholders’ equity		61,696		56,857
Total liabilities and stockholders’ equity	$	130,117	$	126,009


	Years Ended June 30,
	2023		2022
Revenue:
Subscription	$	90,324	$	84,557
Professional services		7,687		7,394
Total revenue		98,011		91,951
Cost of revenue:
Cost of subscription		18,677		14,780
Cost of professional services		8,638		9,757
Total cost of revenue		27,315		24,537
Gross profit		70,696		67,414
Operating expenses:
Research and development		27,300		24,387
Sales and marketing		31,707		33,746
General and administrative		10,300		11,419
Total operating expenses		69,307		69,552
Income (loss) from operations		1,389		(2,138)
Interest income		2,401		94
Other (expense) income, net		(434)		838
Income (loss) before income tax provision		3,356		(1,206)
Provision for income taxes		(1,247)		(1,235)
Net income (loss)	$	2,109	$	(2,441)
Per share information:
Earnings (loss) per share:
Basic	$	0.07	$	(0.08)
Diluted	$	0.06	$	(0.08)
Weighted-average shares used in computation:
Basic		31,959		31,553
Diluted		32,799		31,553
Summary of stock-based compensation included in the costs and expenses above:
Cost of revenue	$	1,469	$	3,056
Research and development		1,970		2,935
Sales and marketing		997		2,367
General and administrative		1,810		3,022
Total stock-based compensation	$	6,246	$	11,380


									Notes		Accumulated
				Additional					Receivable		Other				Total
	Common Stock			Paid-in		Treasury Stock			From		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Shares	Amount		Stockholders		Loss		Deficit		Equity
BALANCES AS OF JULY 1, 2021	31,231	$	31	$	378,451	—	$	—	$	(92)	$	(1,220)	$	(331,109)	$	46,061
Interest on stockholders’ notes	—		—		—	—		—		(3)		—		—		(3)
Issuance of common stock upon exercise of stock options	553		1		2,139	—		—		—		—		—		2,140
Issuance of common stock in connection with employee stock purchase plan	146		—		1,187	—		—		—		—		—		1,187
Stock-based compensation	—		—		11,380	—		—		—		—		—		11,380
Foreign currency translation adjustments	—		—		—	—		—		—		(1,467)		—		(1,467)
Net loss	—		—		—	—		—		—		—		(2,441)		(2,441)
BALANCES AS OF JUNE 30, 2022	31,930		32		393,157	—		—		(95)		(2,687)		(333,550)		56,857
Interest on stockholders’ notes	—		—		—	—		—		(2)		—		—		(2)
Issuance of common stock upon exercise of stock options	180		—		610	—		—		—		—		—		610
Issuance of common stock in connection with employee stock purchase plan	158		—		1,074	—		—		—		—		—		1,074
Repurchase of common stock	(786)		—		—	786		(5,763)								(5,763)
Stock-based compensation	—		—		6,246	—		—		—		—		—		6,246
Foreign currency translation adjustments	—		—		—	—		—		—		565		—		565
Net income	—		—		—	—		—		—		—		2,109		2,109
BALANCES AS OF JUNE 30, 2023	31,482	$	32	$	401,087	786	$	(5,763)	$	(97)	$	(2,122)	$	(331,441)	$	61,696


			Income
	Total		(Loss)		Long-Lived
	Revenue		from Operations		Assets
Year ended June 30, 2023:
North America	$	76,375	$	1,976	$	358
Europe, Middle East, & Africa		21,636		5,830		131
Asia Pacific		—		(6,417)		144
	$	98,011	$	1,389	$	633
Year ended June 30, 2022:
North America	$	66,793	$	(4,128)	$	488
Europe, Middle East, & Africa		25,158		8,997		119
Asia Pacific		—		(7,007)		224
	$	91,951	$	(2,138)	$	831


	As of June 30,
	2023		2022

	(in thousands)
Computers and equipment	$	3,886	$	4,174
Furniture and fixtures		963		933
Leasehold improvements		655		600
Total		5,504		5,707
Accumulated depreciation and amortization		(4,871)		(4,876)
Property and equipment, net	$	633	$	831


		Reserved
		Stock
		Options
Stock options outstanding		4,885,999
Stock available for future grants or issuance:
2005 Stock Incentive Plan		1,057,983
2005 Management Stock Option Plan		71,983
2017 Employee Stock Purchase Plan		938,403
Total reserved shares of common stock for issuance		6,954,368


	Shares		Weighted
	Available for	Options	Average
	Grant	Outstanding	Exercise Price
Balance as of June 30, 2021	68,649	1,172,517	$	3.51
Options Granted	—	—	$	—
Options Exercised	—	(342,466)	$	4.08
Options Forfeited / Expired	3,334	(3,334)	$	1.75
Balance as of June 30, 2022	71,983	826,717	$	3.29
Options Granted	—	—	$	—
Options Exercised	—	—	$	—
Options Forfeited / Expired	—	—	$	—
Balance as of June 30, 2023	71,983	826,717	$	3.29


	Options Outstanding				Options Exercisable
		Weighted
Range of		Average	Weighted			Weighted
Exercise	Number of	Remaining	Average		Number of	Average
Prices	Shares	Contractual Life	Exercise Price		Shares	Exercise Price
$1.8-$2.13	13,005	3.65	$	1.81	13,005	$	1.81
$2.50	902,375	3.37	$	2.50	902,375	$	2.50
$3.4-$7.77	496,803	3.91	$	5.76	421,833	$	5.50
$7.8-$9.86	492,483	7.10	$	8.82	315,140	$	8.65
$9.87-$11.26	238,843	7.29	$	10.59	108,497	$	10.62
$11.36	2,476,541	8.02	$	11.36	1,104,884	$	11.36
$11.47-$13.75	247,399	6.18	$	12.47	172,587	$	12.70
$14.28	5,000	7.21	$	14.28	3,437	$	14.28
$14.40	3,550	5.12	$	14.40	3,550	$	14.40
$19.11	10,000	7.29	$	19.11	6,666	$	19.11
$1.8-$19.11	4,885,999	6.51	$	8.91	3,051,974	$	7.68


	As of June 30, 2023			As of June 30, 2022
Weighted average remaining lease term (in years)		3.40			4.05
Weighted average discount rate		4.97	%		4.92	%


Fiscal Period:
Fiscal 2024	$	935
Fiscal 2025		668
Fiscal 2026		688
Fiscal 2027		528
Total minimum lease payments		2,819
Less: Imputed interest		(225)
Total operating lease liabilities		2,594
Less: Current operating lease liabilities		(832)
Total operating lease liabilities, net of current portion	$	1,762


	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Fiscal Year

	(in thousands, except per share data)
Fiscal Year 2023
Revenue	$	24,763	$	25,600	$	23,013	$	24,635	$	98,011
Gross profit	$	18,481	$	18,848	$	15,418	$	17,949	$	70,696
Income (loss) from operations	$	(670)	$	213	$	(512)	$	2,358	$	1,389
Net income (loss)	$	(16)	$	(104)	$	(372)	$	2,601	$	2,109
Basic net income (loss) per share	$	(0.00)	$	(0.00)	$	(0.01)	$	0.08	$	0.07
Diluted net income (loss) per share	$	(0.00)	$	(0.00)	$	(0.01)	$	0.08	$	0.06

Fiscal Year 2022
Revenue	$	21,451	$	23,093	$	23,904	$	23,503	$	91,951
Gross profit	$	16,153	$	16,992	$	17,367	$	16,902	$	67,414
Income (loss) from operations	$	691	$	(630)	$	(476)	$	(1,723)	$	(2,138)
Net income (loss)	$	551	$	(826)	$	(615)	$	(1,551)	$	(2,441)
Basic net income (loss) per share	$	0.02	$	(0.03)	$	(0.02)	$	(0.05)	$	(0.08)
Diluted net income (loss) per share	$	0.02	$	(0.03)	$	(0.02)	$	(0.05)	$	(0.08)


				Number of securities
	Number of			remaining available for
	securities to be	Weighted-average		future issuance under
	issued upon exercise	exercise price of		equity compensation
	of outstanding	outstanding options		plans (excluding securities
	options and rights	and rights		reflected in column (a))
Plan Category	(a)	(b)		(c)
Equity compensation plans approved by security holders
2005 Stock Incentive Plan	4,059,282	$	10.06	1,057,983
Equity compensation plans not approved by security holders
2005 Management Stock Option Plan	826,717	$	3.29	71,983
Total	4,885,999	$	8.91	1,129,966


					Amounts
	Balance at		Additions		Written Off,
	Beginning of		Charged to		Net of		Balance at
	Period		Expense		Recoveries		End of Period
Allowance for Doubtful Accounts:
Year ended June 30, 2023	$	123	$	260	$	(146)	$	237
Year ended June 30, 2022	$	434	$	68	$	(379)	$	123


Exhibit No.		Description of Exhibits

3(i).1		Second Amended and Restated Certificate of Incorporation, as amended through November 9, 2012. (incorporated by reference to Exhibit 3(i) to the Registrant’s Current Report on Form 8-K filed on December 10, 2021).

3(ii)		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Registrant’s Registration Statement on Form S-1, File No. 333-83439, originally filed with the Commission on July 22, 1999, as subsequently amended (Form S-1)).

4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8, File No. 333-261722 filed on December 17, 2021).

4.2		Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.2 the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020).

10.1#		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Form S-1).


10.2#		eGain Corporation Amended and Restated 2005 Stock Incentive Plan (as amended through October 11, 2021) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 10, 2021).

10.3#		eGain Corporation Amended and Restated 2005 Management Stock Option Plan, as amended through August 25, 2021. (incorporated by reference to Exhibit 10.2# to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021).

10.4#		Form of Executive Change in Control Severance Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015).

10.5#		eGain Corporation 2017 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2020).

10.6 10.7		Standard Industrial/Commercial Multi-Tenant Lease Modified Net dated as of May 9, 2011 between the Registrant and DeGuigne Ventures, LLC (incorporated by reference to Exhibit 10.14 to Amendment No. 1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2014). First Amendment to Standard Industrial/Commercial Multi-Tenant Lease Modified Net dated as of May 14, 2014 between the Registrant and D.R. Stephens Industrial Partners, LLC (Successor in Interest to DeGuigne Ventures, LLC) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 19, 2014).

10.8		Second Amendment to Standard Industrial/Commercial Multi-Tenant Lease Modified Net dated as of August 1, 2021 between the Registrant and D.R. Stephens Industrial Partners, LLC d/b/a Stephens & Stephens (Borregas I) (Successor in Interest to DeGuigne Ventures, LLC).

21.1		Subsidiaries of eGain.

23.1		Consent of BPM LLP, Independent Registered Public Accounting Firm.

24.1		Power of Attorney (included on the signature page hereof).

31.1		Rule 13a-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a) Certification of Chief Financial Officer.

32.1*		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 of Chief Executive Officer.

32.2*		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 of Chief Financial Officer.

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE 104		Inline XBRL Taxonomy Extension Presentation Linkbase Document Cover Page Interactive Data File (embedded within the Inline XBRL document)


	eGain Corporation

Date: September 14, 2023	By:	/s/ ASHUTOSH ROY
		Ashutosh Roy Chief Executive Officer

Name	Title	Date

/s/ ASHUTOSH ROY	Chief Executive Officer and Director (Principal Executive Officer)	September 14, 2023
Ashutosh Roy		September 14, 2023

/s/ ERIC N. SMIT	Chief Financial Officer	September 14, 2023
Eric N. Smit	(Principal Financial and Accounting Officer)

/s/ CHRISTINE RUSSELL	Director	September 14, 2023
Christine Russell	Director	September 14, 2023

/s/ GUNJAN SINHA	Director	September 14, 2023
Gunjan Sinha	Director	September 14, 2023

/s/ PHIROZ P. DARUKHANAVALA	Director	September 14, 2023
Phiroz P. Darukhanavala	Director	September 14, 2023

/s/ BRETT SHOCKLEY	Director	September 14, 2023
Brett Shockley	Director	September 14, 2023


LESSOR		LESSEE

D.R. STEPHENS		eGAIN Corporation
INDUSTRIAL PARTNERS, LLC
dba Stephens & Stephens (Borregas I), LLC
		by	/s/ Eric Smit

by	/s/ Lane Stephens
	Lane B. Stephens, Manager	Eric Smit
		(please print name)

		CFO
		Title


By:	/s/ Ashutosh Roy
	Ashutosh Roy
	Chief Executive Officer

	September 14, 2023