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Item 5. Other Information

2021-08-09 compared with 2021-05-10 · 41 added, 5 removed, 15 unchanged (75% of the section changed)

OTHER INFORMATION

On August 9, 2021, we entered into a commitment letter (the “Commitment Letter”) with Structural Capital Investments III, LP (“Structural”) pursuant to which Structural has agreed, subject to the conditions set forth in the Commitment Letter, to provide us up to $50 million in term loan financing to support our growth needs (the “New Credit Facility”).

The Loan and Security Agreement and Ancillary Terms attached to the Commitment Letter provide the material terms and conditions of the New Credit Facility.

Subject to the satisfaction of certain closing conditions, the parties are expected to close and fund up to $25 million of the New Credit Facility on or around September 15, 2021;

however the closing may be extended to September 30, 2021 upon our request, and at Structural’s reasonable discretion.

If the closing conditions are not satisfied by September 30, 2021 (if the extension is granted), the Commitment Letter will expire.

There is no assurance as to the timing or whether the closing conditions of the New Credit Facility will be satisfied.

The New Credit Facility, if consummated following the satisfaction of all closing conditions, would provide for up to $50.0 million of term loans, which we can draw upon until March 31, 2022;

however we may request an extension of our right to draw loans under the New Credit Facility until June 30, 2022 with Structural’s approval.

We would pay a non-utilization fee on any portions of the available commitment that we have not yet drawn in the amount of 0.25% of the unused commitment amount.

We would expect to draw a portion of the term loan at the closing of the New Credit Facility up to the amount of $25 million.

Interest will accrue on any outstanding balance at a rate equal to the greater of 9.0% or the Prime Rate, plus 5.75% (the “Basic Rate”).

In addition, interest will also be paid in kind (“PIK”) at a rate of 1.00% or 1.25% based on our ARR Ratio (discussed below) , measured on a quarterly basis.

The PIK interest would be added to our outstanding balance and would begin accruing interest at the Basic Rate.

Interest only payments would be due for the first twenty-four months of the New Credit Facility.

We could extend our interest only payments for another 12 months if we have achieved an annualized EBITDA of $8.0 million, or $90.0 million of annual recurring revenue before the end of the first twenty-four months of the New Credit Facility.

Principal payments would begin after the expiration of the interest only period (as extended, if applicable) and will be based on a five year amortization schedule, with a balloon payment due on the maturity date (which is expected to be four (4) years after the closing date).

Upon payment in full of the obligations under the New Credit Facility, we would pay to Structural a final payment fee equal to 1.0% of the change in our market capitalization during the term of the New Credit Facility.

We will also agree to provide Structural (together with other lender parties to the New Credit Facility) the right to participate in a future offering (whether public or private) on the same terms and conditions as other investors for an amount not to exceed $3.0 million.

There will be no financial covenants if our net cash position is equal to or greater than zero.

If our net cash position is less than zero, we would be subject to the following financial covenants:

• We must have unrestricted cash of no less than $5.0 million

• We must maintain an ARR ratio of no less than 0.70:1.00 for the first twenty-four months after the closing;

• We must maintain an ARR ratio of no less than 0.60:1.00 for the remainder of the term of the New Credit Facility.

The ARR ratio would be the ratio of our tested debt to our annual recurring revenue and would be measured on a quarterly basis.

Our Tested Debt consists of our outstanding obligations under the New Credit Facility (exclusive of PIK interest) and any indebtedness issued or earnouts owed to sellers in connection with acquisitions.

We expect to use the loans under the New Credit Facility for refinancing the Wells Fargo N.A.

debt, growth related initiatives and acquisitions.

In connection with the signing of the Commitment Letter, we paid a commitment signing fee equal to $375,000, which will be credited against the 1.0% facility fee payable to Structural at the closing of the New Credit Facility.

The New Credit Facility would replace our existing facility with Wells Fargo N.A.

and on August 9, 2021, we provided Wells Fargo N.A.

with notice of our intent to terminate the existing facility.

We expect to pay off all of our outstanding obligations to Wells Fargo N.A.

in connection with the closing of the New Credit Facility, which, at June 30, 2021, was a term loan with an outstanding principal balance of $9.75 million.

The foregoing description of the New Credit Facility and Structural’s commitment to us does not purport to be complete and is qualified in its entirety by reference to the full text of the Commitment Letter and its exhibits (including the negotiated form of Loan and Security Agreement), which is filed as Exhibit 10.1 to this Form 10-Q and is incorporated herein by reference.

EXHIBIT NUMBER DESCRIPTION

Commitment Letter, dated August 9, 2021, between Structural Capital Investments III, LP and Asure Software, Inc.*

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101 The following materials from Asure Software, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in iXBRL (Inline Extensible Business Reporting Language):

101 The following materials from Asure Software, Inc.’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2021, formatted in Inline XBRL:

(1) the Condensed Consolidated Balance Sheets, (2) the Condensed Consolidated Statements of Comprehensive Loss, (3) the Condensed Consolidated Statements of Changes in Stockholders’ Equity, (4) the Condensed Consolidated Statements of Cash Flows, and (5) Notes to Condensed Consolidated Financial Statements (filed herewith).

104 The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted as Inline XBRL and contained in Exhibit 101 (filed herewith).

104 The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted as Inline XBRL and contained in Exhibit 101 (filed herewith).

*Certain schedules and exhibits have been omitted pursuant to SK Rule 601(a)(5).

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ASURE SOFTWARE, INC.

May 10, 2021 By:

August 9, 2021 By:

/s/ PATRICK GOEPEL

1 unchanged sentence

Chief Executive Officer

May 10, 2021 By:

August 9, 2021 By:

/s/ JOHN PENCE

Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information