What changed in this filing

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Item 9A. Controls and Procedures

2025-03-06 compared with 2024-02-26 · 96 added, 38 removed, 99 unchanged (58% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Control and Procedures

Based on an evaluation under the supervision and with the participation of our management, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of December 31, 2023 to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of December 31, 2024.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the United States Securities and Exchange Commission’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level because of the existence of a material weakness as described below in Management’s Report on Internal Control over Financial Reporting.

Notwithstanding the material weakness in our internal control over financial reporting described below, management believes that the consolidated financial statements and related financial information included in this Annual Report fairly present in all material respects our financial condition, results of operations, and cash flows as of the dates presented, and for the periods ended on such dates, in conformity with accounting principles generally accepted in the United States of America.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on our assessment, management has concluded that our internal control over financial reporting was effective as of December 31, 2023 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S.

generally accepted accounting principles.

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management, including our chief executive officer and chief financial officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on such assessment, management has concluded that our internal control over financial reporting was ineffective as of December 31, 2024.

The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Marcum LLP, an independent registered public accounting firm, as stated in its report which is included in Item 8 of this Annual Report on Form 10-K.

Identified Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Our management identified that as of December 31, 2024, the Company had ineffective design and operation of controls over program change management due to a lack of complete program and data change logs for certain financially relevant applications.

Automated process-level and manual controls that are dependent upon the information derived from such financially relevant systems were determined to be ineffective as a result of such deficiency.

The material weakness did not result in a material misstatement to the Company’s consolidated financial statements, however, the control deficiency described above created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

The Company concluded that the deficiency represents a material weakness in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective as of December 31, 2024.

Management’s Plan to Remediate the Identified Material Weakness

The above-described material weakness has not been fully remediated as of the filing of this Annual Report on Form 10-K.

Since identifying the material weakness described above, management, with oversight from the Audit Committee, has began to implement enhanced policies, including changes to completely capture program and data change logs.

These controls and procedures are intended to address the identified material weakness and to enhance the Company’s overall internal control over financial reporting.

Specifically, the Company has configured its back-ups for its production environment to retain complete program and data change logs.

It also intends to implement automated tracking tools to ensure that all program and data changes are recorded and logged.

As management continues to evaluate and improve the Company’s internal control over financial reporting and disclosure controls and procedures, management may determine to take additional measures to improve controls and determine to modify the remediation plan described above.

The Company is working to remediate the material weakness as efficiently and effectively as possible, but the material weakness cannot be considered fully remediated until the updated policies and changes to the production environment have been in place and operated for a sufficient period of time to enable management to conclude, through testing, that these controls are designed and operating effectively.

Accordingly, management will continue to monitor and evaluate the effectiveness of our internal control over financial reporting in the activities affected by the material weakness described above.

Changes in Internal Control Over Financial Reporting

There have been no other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than the material weakness and remediation plan discussed above, there have been no other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of the year ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Stockholders and Board of Directors of

Asure Software, Inc.

Adverse Opinion on Internal Control over Financial Reporting

We have audited Asure Software, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, because of the effect of the material weakness described in the subsequent paragraphs on the achievement of the objectives of the control criteria, the Company has not maintained effective

internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in “Management’s Annual Report on Internal Control Over Financial Reporting”:

It was determined that as of December 31, 2024, the Company had ineffective design and operation of controls over program change management due to a lack of complete program and data change logs for certain financially relevant applications.

Automated process-level and manual controls that are dependent upon the information derived from such financially relevant systems were also determined to be ineffective as a result of such deficiency.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal December 31, 2024 consolidated financial statements, and this report does not affect our report dated March 6, 2025 on those financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2024 and 2023 and the related consolidated statements of comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024 and our report dated March 6, 2025 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual Report on Internal Control Over Financial Reporting”.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.

/s/ Marcum LLP

Los Angeles, California

March 6, 2025

OTHER INFORMATION

Performance Stock Unit Grants

Effective January 1, 2024, the Compensation Committee of the Board of Directors (the “Compensation Committee”) approved the grant of performance stock units (“PSU”) pursuant to a Performance Stock Unit Award Grant Notice and Performance Stock Unit Award Agreement (the “PSU Award Agreement”) under the 2018 Plan to Pat Goepel, John Pence and Eyal Goldstein payable in the form of RSUs.

Effective January 1, 2025, the Compensation Committee of the Board of Directors (the “Compensation Committee”) approved the grant of performance stock units (“PSU”) pursuant to a Performance Stock Unit Award Grant Notice and Performance Stock Unit Award Agreement (the “PSU Award Agreement”) under the 2018 Plan to Patrick Goepel, John Pence and Eyal Goldstein payable in the form of RSUs.

A form of the PSU Award Agreement is attached to this Annual Report as Exhibit 10.14.

The PSU Award Agreements set target and maximum levels of awards based on the achievement of Performance Metrics (as defined in the PSU Award Agreement) through the Performance Period (as defined in the PSU Award Agreement).

The RSUs granted pursuant to the PSU Award Agreement will vest over a three year period with one-third vesting on the Final Payment Date (as defined in the PSU Award Agreement) and each of the two years thereafter.

Third Amended and Restated By-Laws

Effective February 21, 2024, the board of directors (the “Board”) of the Company approved Amendment No.

2 (the “Amendment”) to the Third Amended and Restated By-Laws of the Company (as amended the “By-Laws”).

The Amendment, among other things:

• addresses the universal proxy rules adopted by the SEC, by providing that no person may solicit proxies in support of a director nominee other than the Board’s nominees unless such person has, or is part of a group that has, complied with Rule 14a-19 under the Securities Exchange Act of 1934, as amended (such rule, “Rule 14a-19”), including applicable notice and solicitation requirements;

• requires a shareholder that solicits proxies pursuant to Rule 14a-19 and the Bylaws to provide evidence that it has met the requirements of Rule 14a-19;

• requires director nominees to provide certain additional information, including but not limited to written representations that such nominee if elected will serve as a director and comply with Company policies;

• provides that if a shareholder does not comply with Rule 14a-19, the Company will disregard proxies and votes for such shareholder’s nominees.

The above summary does not purport to be complete and is qualified in its entirety by reference to the Amendment, effective February 21, 2024, a copy of which is filed as Exhibit 3.5 to this Annual Report on Form 10-K and is incorporated herein by reference.

The RSUs granted pursuant to the PSU Award Agreement will vest over a three-year as follows:

(a) 38.89% of the RSUs will vest on the Final Payment Date (as defined in the PSU Award Agreement) if the Final Payment Date is in February 2026 or 41.67% of the RSUs will vest on the Final Payment Date if the Final Payment Date is in March 2026;

and (b) the remaining RSUs will vest in equal monthly installments beginning on the first day of the calendar month after the Final Payment Date through and including January 1, 2028.

During the three months ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended), adopted , terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended ).

The Company has been in discussions with a number of lenders regarding the entry of a credit facility.

Based on these discussions, (i) the size of the facility is expected to allow the Company to borrow between $20.0 million to $60.0 million;

(ii) the facility is expected to have a term of 48-60 months;

(iii) the facility is expected to be secured by all of the assets of the Company and its subsidiaries, and (iv) interest is expected to accrue on the outstanding balance of the loan at a rate of Term SOFR plus a range of 4.0% to 7.0%.

For this purpose, “Term SOFR” will mean the per annum rate equal to the 30-day forwarding looking Term SOFR, as published by the CME Group Benchmark Administration Limited.

The Company has agreed to negotiate exclusively with one lender until April 13, 2025.

The Company is in the very early stages of negotiating a credit agreement with this lender and no definitive agreements have been reached as to size of the facility, the interest rate to be charged, the financial and other covenants that the Company will bound to or other material terms of the credit agreement.

Accordingly, there can be no assurance about the timing or terms of the definitive credit agreement, that a definitive credit agreement will be entered into by the Company with the lender or its affiliates on the above terms or otherwise, or that any financing transaction will be consummated.

The Company assumes no obligation to comment on or disclose further developments regarding the facility unless and until a definitive agreement has been entered.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

34 unchanged sentences

Amendment to No.

2 to Third Amended and Restated Bylaws.*

2 to Third Amended and Restated Bylaws (Previously filed as Exhibit 3.5 to the Company’s Annual Report on Form 10-K (File No.

1-34522) filed February 26, 2024).

Specimen Certificate for the Common Stock (Previously filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (File No.

3 unchanged sentences

1-34522), filed June 3, 2022).

Letter Agreement from Patrick Goepel relating to forfeiture of option rights (Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K (File No.

1-34522), filed March 30, 2012).+

Stock Option Agreement for Patrick Goepel (Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K (File No.

1-34522), filed March 30, 2012).+

Description of the Company’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.*

9 unchanged sentences

1-34522), filed December 21, 2017).

First Amendment to Executive Change in Control Severance Plan, dated January 1, 2024.+*

EXHIBIT NUMBER DESCRIPTION

First Amendment to Executive Change in Control Severance Plan, dated January 1, 2024 (Previously filed as Exhibit 10.6 to the Company’s Annual Report on Form 10-K (File No.

1-34522) filed February 26, 2024).

Asure Software, Inc.

2018 Incentive Award Plan, as amended on May 29, 2019, May 27, 2020 and May 31, 2022 (Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q (File No.

2018 Incentive Award Plan, as amended on May 29, 2019, May 27, 2020 and May 31, 2022 (Previously filed as Exhibit 99.1 to the Company’s Quarterly Report on Form 10-Q (File No.

1-34522), filed May 11, 2020).+

Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2018 Incentive Award Plan (Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K (File No.

1-34522), filed March 11, 2021).+

Form of Stock Option Grant Notice and Stock Option Agreement under the 2018 Incentive Award Plan (Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K (File No.

EXHIBIT NUMBER DESCRIPTION

Form of Stock Option Grant Notice and Stock Option Agreement under the 2018 Incentive Award Plan (Previously filed as Exhibit 10.32 to the Company’s Annual Report on Form 10-K (File No.

1-34522), filed March 11, 2021).+

Lease between 405 Colorado Holdings LP and Asure Software Inc., dated February 4, 2022.

(Previously filed as an Exhibit to the Company's Annual Report on Form 10-K (File No.

(Previously filed as Exhibit 10.35 to the Company's Annual Report on Form 10-K (File No.

1-34522), filed March 14, 2022)

1 unchanged sentence

1-34522) filed February 27, 2023) .

Form of 2024 Performance Stock Unit Award Grant Notice and Performance Stock Unit Award Agreement under the Company’s 2018 Incentive Award Plan (Previously filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K (File No.

1-34522) filed February 26, 2024).

Sales Agreement, dated October 31, 2024, by and between Asure Software, Inc.

and Roth Capital Partners, LLC (Previously filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K (File No.

1-34522) filed October 31, 2024).

Form of 2025 Performance Stock Unit Award Grant Notice and Performance Stock Unit Award Agreement under the Company’s 2018 Incentive Award Plan.*+

Insider Trading Policy*

Subsidiaries of the Company*

6 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished, not filed)**

Dodd-Frank Clawback Policy*

Dodd-Frank Clawback Policy (Previously filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K (File No.

1-34522) filed February 26, 2024).

101 The following materials from Asure Software, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL:

7 unchanged sentences

ASURE SOFTWARE, INC.

February 26, 2024 By:

March 6, 2025 By:

/s/ PATRICK GOEPEL

3 unchanged sentences

Signed Title Date

/s/ PATRICK GOEPEL Chief Executive Officer, Chairman of the Board of Directors February 26, 2024

/s/ PATRICK GOEPEL Chief Executive Officer, Chairman of the Board of Directors March 6, 2025

Patrick Goepel Principal Executive Officer

/s/ JOHN PENCE Chief Financial Officer February 26, 2024

/s/ JOHN PENCE Chief Financial Officer March 6, 2025

John Pence Principal Financial and Accounting Officer

/s/ DANIEL GILL Lead Independent Director February 26, 2024

/s/ BENJAMIN ALLEN Director February 26, 2024

/s/ DANIEL GILL Lead Independent Director March 6, 2025

/s/ BENJAMIN ALLEN Director March 6, 2025

Benjamin Allen

/s/ CARL DREW Director February 26, 2024

/s/ GRACE LEE Director February 26, 2024

/s/ BRADFORD OBERWAGER Director February 26, 2024

/s/ CARL DREW Director March 6, 2025

/s/ GRACE LEE Director March 6, 2025

/s/ BRADFORD OBERWAGER Director March 6, 2025

Bradford Oberwager

/s/ BJORN REYNOLDS Director February 26, 2024

/s/ BJORN REYNOLDS Director March 6, 2025

Bjorn Reynolds

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-K

Item 9A. Controls and Procedures