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Item 1. Business

2021-03-11 compared with 2020-03-16 · 148 added, 165 removed, 41 unchanged (88% of the section changed)

Asure Software, Inc., a Delaware Corporation, headquartered in Austin, Texas, is a leading provider of cloud-based Human Capital Management (“HCM”) software and services and, until its divestiture in December 2019 (see RECENT DEVELOPMENTS), Workspace Management software solutions.

Asure facilitates the growth of small and mid-sized companies ("SMBs") by helping them (i) build better teams with skills that get them to the next level, (ii) stay compliant with ever changing federal, state, and local tax jurisdictions and labor laws, and (iii) allocate more resources to support growth rather than back-office overhead that suffocates growth.

Asure’s HCM suite, named AsureHCM, includes cloud-based Payroll & Tax, HR, and Time & Attendance software as well as HR Services ranging from HR projects to completely outsourcing payroll and HR staff.

Asure’s platform vision is to help clients grow their business and to become the most trusted HCM resource to entrepreneurs and managers.

The Asure product strategy is driven by three primary challenges that prevent businesses from growing:

HR complexity, allocation of both human and financial capital, and the ability to build great teams.

The AsureHCM suite includes four product lines:

AsurePayroll&Tax, AsureHR, AsureTime&Attendance, and AsureHR Services.

For all of the Asure product lines, we believe support and professional services are key elements of our value proposition and overall solution.

In addition to state-of-the-art hosting platforms and regular software upgrades and releases, Asure gives clients easy access to our skilled support team.

Our services and support representatives are knowledgeable not just in the Asure solution, but also best practices and change management strategies in the payroll and human resources management industries.

Many of our staff have professional certifications in payroll (CPP) and human resources (PHR and SPHR).

From installation to training and post-live support, our professional services team delivers a proficient customer experience on a global scale.

Our sales and marketing strategy includes both direct and indirect channels to target small and mid-sized businesses (SMBs) throughout the United States.

Our direct sales and marketing efforts include marketing directly to SMBs and their trusted advisors which include CPAs, banks, and benefits brokers who frequently refer their clients to HCM vendors.

Our indirect model licenses our HCM software to resellers that provide value-add HCM services to their clients.

These resellers include pure-play payroll providers focused on a geographic or industry niche as well as CPAs, banks, and benefits brokers that want to expand relationships with their clients directly without referring those clients outside their business.

Asure was incorporated in 1985 and our principal executive offices are located at 3700 N.

We are a leading provider of cloud-based Human Capital Management (HCM) solutions delivered primarily as Software-as-a-Service (SaaS).

We facilitate the growth of small and mid-sized businesses ("SMBs") by helping them (i) stay compliant with ever changing federal, state, and local tax jurisdictions and labor laws, (ii) allocate more resources to support growth rather than back-office overhead that suffocates growth, and (iii) build better teams with skills that get them to the next level.

Our vision is to become the most trusted HCM resource to entrepreneurs and managers by helping SMBs grow their businesses.

Our solution strategy is driven by three primary challenges that prevent businesses from growing:

human resources (HR) complexity, allocation of both human and financial capital, and the ability to build great teams.

Our HCM suite, named AsureHCM®, includes cloud-based Payroll & Tax, HR, a Time & Attendance software, and HR Services ranging from HR projects to completely outsourcing payroll to HR consulting services.

Support and professional services are key elements of our value proposition and overall solution.

In addition to state-of-the-art cloud solutions, hosted in Amazon AWS, and regular upgrades and releases, we provide clients easy access to our skilled support team.

Our services and support representatives are knowledgeable not just in Asure’s solutions, but also about best practices and change management strategies in the payroll and HCM industry.

Many of our staff have professional certifications in payroll (Certified Payroll Professionals, CPPs) and human resources (Professional in Human Resources, PHR, and Senior Professional in Human Resource, SPHR, certifications).

From installation to training and post-live support, our professional services team delivers a proficient client experience on a national scale.

Our sales and marketing strategy targets SMBs through both direct and indirect channels.

We are focused on less densely populated U.S.

metropolitan cities where fewer competitors have a presence.

We market directly to SMBs and their “trusted advisors,” including CPAs, regional banks, and benefits brokers.

Through an indirect model, Reseller Partners pay us recurring monthly license fees to white label our solutions while providing value-add HCM services to their clients (our indirect clients).

Reseller Partners are comprised of pure-play payroll providers focused on a geographic or industry niches and SMB’s trusted advisors (typically CPAs, regional banks, and benefits brokers).

We were incorporated in 1985 and our principal executive offices are located at 3700 N.

Capital of Texas Highway, Suite 350, Austin, Texas 78746.

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Information on our website is not part of this Annual Report on Form 10-K.

Asure makes available free of charge, on or through its website, our annual report on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file these materials or furnish them to the Securities and Exchange Commission.

RECENT DEVELOPMENTS

On December 2, 2019, we completed the sale of our Workspace Management business for $121.5 million.

Disclosure regarding the sale of the Workspace Management business is included in Note 12 - Discontinued Operations to our consolidated financial statements.

PRODUCTS AND SERVICES

Asure’s HCM solutions are designed to help companies grow.

Companies use Asure’s solutions to more effectively address the three primary challenges that prevent businesses from growing:

HR complexity - SMBs have a difficult time keeping up with, let alone maintaining compliance with, the constant changes in Federal, state & local tax and labor laws.

They also lack the technical staff and resources to maintain the software, hosting, and integrations of their HRIS tech-stack.

And most SMBs need their human capital focused on growth (Sales, Marketing, product development, customer service, etc.) rather than back-office staff that adds overhead and unnecessary complexity to running their business.

Asure helps companies stay compliant without the complexity because our software is delivered in the cloud with no IT footprint or administrative back-office needed.

Allocation of both human and financial capital - When it comes to growing a business, people and capital are scarce resources.

Asure enables SMBs to allocate their headcount toward growth rather than IT or administrative back-office staff.

And because we provide our services on a pay-as-you-go SaaS model, clients conserve cash by avoiding large up front implementation or capital purchase expenses.

Building great teams - SMBs struggle finding and attracting the talent needed to get to the next level because they lack the resources of large enterprises.

Asure’s HR software streamlines the process of finding and onboarding employees and our HR Services help companies with the best practices in recruiting, developing, and retaining key staff needed to get them to the next level.

We believe Asure’s suite of HCM software and services, named AsureHCM, is well-positioned to deliver innovative, scalable solutions.

With an emphasis on helping SMBs grow their businesses, the Asure product team aims to create and deliver easy-to-use solutions that help simplify their business, better allocate resources, and build great teams.

Within the AsureHCM suite, product lines include cloud revenue (software), hardware revenue (time clocks and data collection devices), and HR Services revenue.

We make available free of charge, on or through our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file these materials or furnish them to the Securities and Exchange Commission.

Our payroll and HCM solutions are designed to help companies grow.

Companies use our solutions to more effectively address three primary challenges that prevent businesses from growing:

HR complexity - SMBs have a difficult time complying with the continually changing Federal, state and local tax, and labor laws.

They also lack the technical staff and resources to maintain software, hosting, and integrations of proprietary payroll and HCM technology stacks.

Most SMBs also need their human capital focused on growth (sales, marketing, product development, client service, etc.) rather than back-office staff that adds overhead and unnecessary complexity to running their business.

Our solutions are primarily delivered in the cloud with no IT footprint or administrative back-office needed.

Allocation of human and financial capital - When it comes to growing a business, people and capital are scarce resources.

We enable SMBs to allocate their headcount toward growth rather than IT or administrative back-office staff.

Since Asure’s cloud solutions are primarily delivered as SaaS, clients are able to conserve cash by avoiding large upfront implementation and capital purchase expenses.

Building great teams - SMBs struggle to find and attract the talent needed to get to the next level because they lack the resources of large enterprises.

Our HR solutions streamline the process of finding and onboarding employees.

Furthermore, our HR Services help companies adopt the best practices in recruiting, developing, and retaining key staff.

With an emphasis on helping SMBs grow their businesses, our product team aims to create and deliver easy-to-use solutions that help simplify their business, better allocate resources, and build great teams.

Our solutions are primarily recurring cloud-based solutions delivered as SaaS and HR services as well as professional services and hardware (time clocks and data collection devices).

Payroll and Tax.

AsurePayroll&Tax is an integrated cloud-based solution that provides a foundation for our clients’ digital HR strategy.

Asure automates all the complex moving parts associated with payroll and taxes - from wages, benefits, overtime and garnishments, to tips, direct deposits, FLSA, and federal, state and local payroll taxes in all U.S.

jurisdictions.

Asure Payroll & Tax is an integrated cloud-based solution that provides a foundation for our clients’ digital HR strategy.

We automate all the complex and ever changing regulations associated with payroll and taxes in all U.S.

jurisdictions - from wages, benefits, overtime, and garnishments to tips, direct deposits, Fair Labor Standard Act and federal, state, and local payroll taxes.

Key capabilities include:

100% compliant payroll taxes - Maintain federal, state, and local tax rate tables and file taxes on client’s behalf.

General Ledger integration - No manual data entry with GL integration to client’s accounting system.

Managed garnishments - Clients save time, cut postage, reduce banking fees, and limit their liability.

Employee self-service - Eliminate paper & manual processes while improving employee engagement.

ACA compliance & reporting - Automated compliance with the Affordable Care Act requirements.

• Compliant payroll taxes;

• Maintain federal, state, and local tax rate tables;

• File taxes on client’s behalf timely and accurately according to agency regulations;

• File W-2 federal, states and local employer reporting timely and accurately in compliance with agency regulations;

• Affordable Care Act (ACA) compliance & reporting;

• General Ledger integration;

• Managed garnishments;

• Employee self-service.

Human Resources.

AsureHR has functionality to handle HR complexities that SMBs face including employee self-service so employees can access all their information, pay history, company documents, and more.

Asure HR’s cloud-based functionality handles HR complexities that SMBs face, including employee self-service so employees can access all their information (e.g., pay history and company documents).

With Asure HR’s dashboard, clients have convenient single-system access to every facet of the employee’s lifecycle.

The software improves benefits management by syncing to carriers and integrating with employee self-managed enrollment and life-event change adjustments.

This solution

improves benefits management by syncing to carriers and integrating with employee self-managed enrollment and life-event change adjustments.

Key capabilities include:

Applicant tracking - Find key talent that’s buried in a stack of resumes.

Employee on-boarding - No more manual data entry or paper for new hires.

Benefits enrollment - Automate the data entry while improving the employee experience.

Carrier feed connection - Save time and keep data in alignment with carriers.

Employee self-service - Happier employees and less paper for HR.

• Applicant tracking;

• Employee on-boarding;

• Benefits enrollment;

• Carrier feed connection;

• Employee self-service.

Time and Attendance.

AsureTime&Attendance provides cost savings and potential ROI gains come in the form of a more strategic use of labor dollars and the elimination of time theft.

Mobile time tracking helps executives to better understand where and when their employees are working, providing insight into labor schedules and labor costs.

With Asure’s mobile solution, employees can punch in and out from remote locations, and geo-positioning verifies the physical coordinates.

Biometric time clocks, including facial recognition, reduce time theft and help combat buddy punching.

Asure Time & Attendance is primarily cloud based and combines with our complementary hardware (time clocks and data collection devices) to provide cost savings and potential ROI gains in the form of a more strategic use of labor dollars and the elimination of time theft.

Mobile time tracking helps executives better understand where and when their employees are working, providing insight into labor schedules and labor costs.

With our mobile solution, employees can punch in and out from remote locations, as geo-positioning verifies the physical coordinates.

Biometric time clocks, including facial recognition, reduce time theft and assists in the verification of the identities of workers.

Automated system notifications, real-time dashboards, and flexible configuration options all work to streamline operations.

Finally, employees, supervisors and executives have real-time access to data and business intelligence to optimize labor costing, improve labor scheduling, and ultimately control labor costs.

Finally, employees, supervisors and executives have real-time access to data and business intelligence to optimize labor costing, improve labor scheduling, and control labor costs.

Key capabilities include:

FLSA and overtime compliance - Consistent enforcement of pay policies and application of pay rules.

Manage by exception - Stop reading every report and only deal with the exceptions.

Time-off management - Time off requests and approvals streamlined to keep managers working.

Error-Free Processing - Automated pay rule calculation for fast, accurate payroll processing.

Time collection flexibility - Time tracking that fits client needs:

Mobile, PC, badge-reader, and bio-metric.

• FLSA and overtime compliance;

• Manage by exception;

• Time-off management;

• Error-Free Processing;

• Time collection flexibility.

Human Resource Services.

AsureHR Services allows our SMB clients to run their businesses because we take responsibility for all the traditional Payroll and Human Resource functions.

We provide three core levels of HR services ranging from an online

compliance library, to on-demand call center for all HR questions, to a fully outsourced HR function.

Asure can also outsource discreet functions like payroll administration or the benefit enrollment process.

Asure provides three core levels of HR services, ranging from a cloud-based online compliance library, to on-demand call center for all HR questions, and to a fully outsourced HR function.

Asure also supports discreet functions like payroll administration and the benefit enrollment process.

Data Integration.

Asure’s solutions enable data integration with related third-party systems, such as 401(k), benefits, and insurance provider systems.

PRODUCT DEVELOPMENT

Asure strives to bring to market innovative, cloud-based solutions.

The HCM industry is characterized by continuing improvements in technology, resulting in the frequent introduction of new products, short product life cycles, changes in client needs, and continual improvement in product performance characteristics.

We strive to be cost-effective and timely in enhancing our innovative, cloud-based solutions, developing new innovative software that address the increasingly sophisticated and varied needs of growing businesses and anticipating technological advances while adhering to payroll and HCM industry standards.

First-to-market mobile applications are a testament to our success in innovation.

Our industry is characterized by continuing improvements in technology, resulting in the frequent introduction of new products, short product life cycles, changes in customer needs, and continual improvement in product performance characteristics.

Asure strives to be cost-effective and timely in enhancing our software applications, developing new innovative software solutions that address the increasingly sophisticated and varied needs of growing businesses, and anticipating technological advances while adhering to industry standards.

Asure development teams are staffed with software developers, quality assurance engineers and support specialists who work closely with our customers and sales and marketing teams to build products and services based on market requirements and customer feedback.

We develop our new product and service roadmaps based on inputs from customers, competitive comparisons and relevant technology innovations.

Our research and development strategy is rooted in continuous innovation and flexibility.

The development team enhances the functionality of our software and hardware products through improvement and new feature releases, with a particular focus on SaaS solutions for growing businesses that struggle with complexity and reseller partners who need powerful back-office tools and scalable infrastructure.

Asure will continue to evaluate opportunities for developing new software so that organizations can further streamline and automate the HR tasks associated with growing their businesses.

We seek to simultaneously allow organizations to improve their productivity while reducing the costs associated with those business tasks.

We also actively search for potential product, service or business acquisitions that we believe will complement our existing and planned product and service offerings.

More strategically, we typically target and nurture a pipeline of potential acquisitions from our reseller channel.

Those acquisitions are highly accretive because they easily tuck into our existing infrastructure and clients don’t need to change platforms.

We cannot guarantee that we will make future acquisitions or that we can successfully integrate acquired assets or businesses profitably into Asure.

Despite our efforts, we also cannot guarantee that we will complete our existing and future development efforts or that our new and enhanced software products will adequately meet the requirements of the marketplace and achieve market acceptance.

Additionally, Asure may experience difficulties that could delay or prevent the successful development or introduction of new or enhanced software products.

In the case of acquiring new or complementary software products or technologies, we may not be able to integrate the acquisitions into our current product lines.

Furthermore, despite extensive testing, errors may be found in new software products or releases after shipment, resulting in a diversion of development resources, increased service costs, loss of revenue and/or delay in market acceptance.

Our development teams work closely with clients and sales and marketing teams to build solutions based on market requirements and client feedback.

We also garner inputs from clients, competitive comparisons, and relevant technology innovations.

Development teams are staffed with software developers, quality assurance engineers and support specialists.

Specific roles include product owners, solutions architects, software engineers, software engineers in test, quality assurance analysts, technical writers, scrum masters, and usability designers.

Our research and development strategies are based on agile methodologies that foster continuous innovation and improvement with collaboration with stakeholders.

The development team enhances the functionality of our solutions through continual improvement and new feature releases, with a focus on cloud-based solutions delivered as SaaS for growing businesses that struggle with complexity and Reseller Partners that need powerful back-office tools and scalable infrastructure.

We continue to evaluate opportunities for developing new solutions that enable organizations to further streamline and

automate HR tasks associated with growing their businesses.

We seek to simultaneously allow organizations to improve their productivity while reducing the costs associated with those tasks.

SALES AND DISTRIBUTION

Asure sells its software products and services through both a direct and channel (partner) model, which enables us to sell our software solutions in an efficient, cost-effective manner.

Prospective customers learn about Asure through a variety of ways, including advertising, web site searches, sales calls, public relations, direct marketing and social media.

When prospective customers show an interest in Asure, we connect them with a sales representative via our web site, phone, or a face-to-face meeting to discuss their needs and the solutions they are interested in and make the sale.

We track our marketing and sales activities to provide immediate preview into activities, leads and pipeline opportunities.

Asure account management teams also work with existing customers to promote and sell additional solutions that are relevant for each customer.

In addition to this direct sales model, we supplement these efforts with our partner programs described below.

By working with our partners, we expand the reach of our direct sales force and gain access to key opportunities in major market segments worldwide.

Asure has two distinct levels of partners in our Partner Program:

Reseller Partners and Referral Partners.

Asure sells its software products and services through both a direct and reseller (partner) model, which extends our reach and enables us to sell our solutions in an efficient, cost-effective manner.

Prospective customers learn about Asure through a variety of ways, including advertising, web site searches, sales calls, public relations, direct marketing and social media.

We track our marketing and sales activities to provide immediate preview into activities, leads and pipeline opportunities.

Asure account management teams also work with existing customers to promote and sell additional software and services that are relevant for each customer.

In addition to this direct sales model, we supplement these efforts with our partner programs described below.

By working with our partners, we

expand the reach of our direct sales force and gain access to key opportunities in major market segments throughout the United States.

Asure has two distinct levels of partners in our Partner Program:

We sell our solutions through both direct and partner models.

Prospective clients learn about Asure in a variety of ways, including advertising, web site searches, sales calls, public relations, referral channels, direct marketing, and social media.

When prospective clients show an interest in Asure, they are connected with a sales representative, who works to close the sale, via Asure’s web site, phone, or a face-to-face meeting by discussing solutions that meet their needs.

We track our marketing and sales activities to provide immediate insights into activities, leads and pipeline opportunities.

Our account management teams also work with clients to promote and sell additional solutions that are relevant for each client.

We supplement our direct sales efforts with partner programs.

By working with partners, we gain access to opportunities in various geographic and industry niches.

Asure has two distinct levels of partners:

Reseller Partners and Referral Partners.

Reseller Partners.

Reseller Partners are companies that license Asure’s HCM software and services and then provide value-add services to their customers.

These resellers include pure-play payroll providers and ‘trusted advisors.’ Regional and industry-based payroll providers are a critical alternative to the one-size-fits-all national payroll companies that don’t speak the language or understand local needs of many businesses.

Entrepreneurs and executives at SMBs rely on their ‘trusted advisors’ like their CPA, bank, and benefit broker to advise them on payroll and HR decisions.

By white-labeling Asure’s HCM software these trusted-advisers can provide payroll and HR services directly to their clients which deepens relationship and grows revenue.

And because these Reseller Partners license the same products we sell to our direct customers, we gain the scale and operational efficiencies of supporting a single platform.

Reseller Partners pay us recurring license fees to white label our solutions and then they focus on providing value-add services to their clients (our indirect clients).

There are generally two types of Reseller Partners:

regional payroll providers and SMB trusted advisors (CPA, regional banks, and benefit brokers).

Regional payroll providers typically focus on a specific geographic area or industry.

They have proven to be attractive alternatives for SMBs’ payroll and HCM needs versus national payroll companies that do not necessarily understand local needs of many businesses.

Since trusted advisors are relied on by entrepreneurs and executives at SMBs to advise on payroll and HR decisions, white labeling our solutions allows them to provide additional solutions directly to their clients.

This deepens their client relationships and grows their revenue.

Asure’s Reseller Partners are also the primary source of Asure’s acquisitions.

Since they already white label Asure’s solutions, technology integration risk is lessened.

By acquiring Reseller Partners, we gain a presence in specific geographic (typically less densely populated U.S.

metropolitan cities) and industry niches.

These acquisitions help Asure gain scale by assuming all of the Reseller Partner's revenue instead of just a recurring licensing fee (which is typically a small percentage of their total revenue).

Reseller Partners can continue to license our solutions with the opportunity to expand their available solutions, or they can come under the Asure umbrella.

Referral Partners.

Referral Partners provide us with the name and particular information about a prospective customer and its needs as a sales lead.

If we accept the sales lead, we register it for the Referral Partner.

If we make a sale as a direct result of such a lead, we will pay the Referral Partner a sales lead referral fee.

Currently, we have a number of Referral Partners including regional banks, CPAs, and benefit brokers.

As the referral relationships develop and the referring partner becomes more comfortable in the HCM space, these referral partners become high probability prospects to become Reseller Partners by licensing our products directly.

We believe the AsureTime&Attendance line of workforce management software solutions has a competitive advantage in the marketplace in serving organizations seeking specific point-solutions as well as organizations desiring an integrated suite of solutions, particularly in the area of mobile time collection.

The AsureTime&Attendance mobile products are first-to-market technology solutions.

By competing tactically with point-solutions and strategically with an integrated suite of solutions, Asure can serve the needs of a broad spectrum of companies.

Primary competitors to AsureTime&Attendance include Kronos, Replicon, and Time Simplicity.

Our key competitive advantage in the AsureHCM suite is our system architecture.

Many HCM providers offer ‘integrated’ solutions meaning multiple databases and redundant data entry.

AsureHCM offers a single employee record keeping throughout the entire employee life cycle, starting with an online job application.

Other differentiating factors include our intuitive user interface with mobile accessibility, an integrated time and labor solution, and streamlined workflows with automated notifications and self-service options throughout.

With a complementary suite of HR products, AsureHCM offers a comprehensive platform to advance an organization’s HR strategy.

Another key differentiator is that we offer the same products to both direct customers and our Reseller Partners.

This improves our product development efficiency by supporting a single platform and creates a consistent user experience for both direct and indirect customers.

Within the Reseller Partner channel, additional differentiators include a robust back-end solution for payroll and tax management, access to a full suite of ancillary products, and the long-term advantage of our Partner-For-Life mentality.

Reseller Partners can continue as an Asure licensee with the opportunity to expand their available offerings, or they can come under the Asure umbrella and experience the full benefit of a forward-thinking technology company.

Competitors in the HCM market tend to fluctuate, however, our main competitors are ADP, Paychex, Kronos, Paylocity, Paycor, Paycom, Ceridian, Namely and Gusto.

While Asure has the advantage of a flexible, easy to use, cloud-based, SaaS-delivered software model, affordability and proven deployment methodology, we face several competitive challenges:

Referral Partners are typically the aforementioned trusted advisors (e.g., regional banks, CPAs, and benefit brokers) that provide us with SMB leads but do not resell our solutions.

Since SMBs rely on their trusted advisors to guide them in selecting payroll and HCM solutions, we have found this to be a fruitful source of leads.

Referral Partners provide qualified leads that convert to clients at a higher rate than non-referral leads.

We have been successful in nurturing some Referral Partners to become Reseller Partners over time as the referral relationships develop and they become more comfortable in the HCM space.

The market for HCM solutions is rapidly evolving, highly competitive and subject to evolving technology, shifting client needs, and frequent introduction of new products and services.

Our competitors range from regional payroll companies to large, well-established companies with multiple product offerings.

Competition in the HCM market is primarily based on product and service quality and reputation, scope of service, application offering and price.

Price tends to be the most important factor of competition for our small business clients with fewer employees, while the range of features, implementation, and scalability is more important to our larger businesses.

We compete with companies that provide HCM solutions by various means.

Many providers continue to deliver legacy enterprise software, but there is increased competition in the delivery of HCM cloud-based solutions by other Saas providers.

Competitors in the HCM market tend to fluctuate, however, Asure’s main competitors are ADP, Paychex, Kronos, Paylocity, Paycor, Paycom, Ceridian, Namely, and Gusto.

Primary competitors to Asure Time & Attendance include Kronos, Paychex, ADP, Replicon and Time Simplicity.

While Asure has the advantage of a flexible, easy to use, cloud-based, SaaS-delivered model, affordability and proven deployment methodology, Asure faces several competitive challenges:

• Vendors with face-to-face sales contact.

In this highly relationship-based sales process, vendors with large, dispersed field-based sales teams who meet and consult with prospects have an advantage.

vendors who approach the market in this manner include ADP, Paychex, Kronos, and Paylocity.

Asure has recently launched an inside sales development team focused on generating leads for our field-based sales team, which is focused on developing Referral Partner relationships and larger targeted direct sales opportunities.

Vendors that approach the market in this manner include ADP, Paychex, Kronos, and Paylocity.

• National payroll processors with loss-leader products.

Large brand and market share payroll processing vendors (such as ADP and Paychex) offer equivalent point solutions at little or no cost to prospects when they sign up for the first few months when in a competitive engagement because the short-term lost revenue is inconsequential compared to the long-term revenue they expect to receive over the next 8 to 10 years with that same client.

Some of our competitors, both current and future, may have greater financial, technical and marketing resources than us and therefore may be able to respond more quickly to new or emerging technologies and changes in customer requirements.

Large brand and market share payroll processing vendors (such as ADP and Paychex) offer equivalent point solutions at little or no cost to prospects when they sign up for the first few months when in a competitive engagement because the short-term lost revenue is inconsequential compared with the long-term revenue they expect to receive over the next 8 to 10 years with that same client.

As a result, they may compete more effectively on price and other terms.

Additionally, those competitors may devote greater resources in developing products or in promoting and selling their products to achieve greater market acceptance.

Asure is actively taking measures designed to address our competitive challenges, and clients tend to recognize the benefits of working with an established and publicly-traded partner versus a start-up or transitional vendor.

However, we cannot assure that we will be able to achieve or maintain a competitive advantage with respect to any of the competitive factors.

Asure’s marketing strategy relies on a comprehensive integrated plan rooted in our business objectives.

We are actively taking measures designed to address competitive challenges, and clients tend to recognize the benefits of working with an established and publicly-traded partner versus a start-up or transitional vendor.

However, we cannot ensure that we will be able to achieve or maintain a competitive advantage with respect to any of the competitive factors.

Our marketing strategy relies on a comprehensive integrated plan rooted in our business objectives.

Our marketing plan includes four primary objectives:

1) build brand awareness, 2) develop lead generation programs that drive revenue, 3) launch products in a meaningful way, and 4) develop an infrastructure that supports and measures marketing activities.

We deploy multi-faceted, multi-series direct marketing programs to drive awareness, interest and revenue.

Marketing vehicles include our web site, organic and paid search, advertising, public relations, direct marketing, events, social media, content marketing and eMarketing.

In 2019, we expanded our strategy to include Account Based Marketing and vertical-specific marketing.

Our marketing plan addresses growth and retention goals for our key target audiences throughout the United States.

We deploy multi-faceted, omni-channel direct marketing programs to drive awareness, interest and revenue.

Marketing vehicles include our web site, organic and paid search, advertising, public relations, direct marketing, events, social media, content marketing, reputation management, and other digital marketing tactics.

Our marketing plan addresses growth and retention goals for key target audiences throughout the United States.

SALES ENABLEMENT

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We have implemented and continue to optimize an end-to-end lead generation process that generates leads from marketing activities, captures and tracks all digital click behavior of the lead in our marketing automation software and CRM, follow-up and take all leads through a qualification and disposition process that ends in a closed loop of either won/lost opportunities or leads that get passed back to marketing for further nurturing.

Sales Enablement staff support sales with product training, customer and prospect demonstrations, and marketing webinars as well as best practices in modern selling that leverages email, social media, and online video.

Sales Enablement staff support sales with product training, client and prospect demonstrations, and marketing webinars as well as best practices in modern selling that leverages email, social media, and online video.

INDUSTRY REGULATION

Our business is subject to a wide range of complex U.S.

laws and regulations.

Our business and solutions are subject to a wide range of complex laws and regulations.

In addition, many of our solutions are designed to assist clients with their compliance with certain U.S.

laws and regulations that apply to them.

Failure to comply with, or changes in, laws and regulations applicable to our businesses could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

As a provider of HR outsourcing solutions, we process personal and sensitive data related to clients, employees of our clients, vendors and our employees.

laws and regulations that apply to them, particularly in their capacity as employers under state and federal laws.

Failure to comply with existing laws or regulations or anticipate and incorporate into our services new laws and regulations so that our services remain compliant could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

Data privacy and security of data is subject to strict regulatory oversight and the laws governing the collection, processing and storage of personal and sensitive data differs from jurisdiction to jurisdiction and even differs based on the type of data collected, such as biometric data.

We collect and process the personal and sensitive information of clients, clients of our Reseller Partners, employees of our clients and Reseller Partners, vendors and our own employees.

Data that we process and store includes personally identifying information such as names, addresses, social security numbers, bank account information, and in the case of our time and attendance products, biometric data.

We are therefore subject to compliance obligations under federal, state and foreign privacy and data security-related laws.

For instance, in the United States, the Health Insurance Portability and Accountability Act of 1996 applies to our COBRA, flexible spending account, and health savings account benefits administration services businesses.

We are also subject to federal, state and foreign security breach notification laws with respect to both our own employee data and client employee data.

Some of our solutions assist our clients in complying with certain U.S.

laws and regulations that apply to them.

For example, our HCM solutions help clients manage their compliance with certain requirements of the Patient Protection and Affordable Care Act.

Our COBRA administration services and flexible spending account services are designed to help our clients comply with relevant federal guidelines relating to, respectively, employers’ benefits continuation obligations and certain requirements of the Internal Revenue Code.

Although these laws and regulations apply to our clients and not to us, changes in such laws or regulations may affect our operations, products and services.

Additionally, the changing nature of privacy laws in the United States, Canada, the European Union and elsewhere may impact our processing of personal information of our employees and on behalf of our clients.

For example, the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020, affords consumers expanded privacy protections such as the right to know what personal information is collected and how it is used, California residents also have the right to request a business to delete their personal information unless it is necessary for the business to maintain for certain purposes.

They have the right to know if their personal information is being sold or shared and the right to opt-out of the sale or disclosure.

Failure to comply with the CCPA may result in attorney general enforcement action and damage to our reputation.

The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.

Complying with the enhanced obligations imposed by CCPA may result in significant costs to our business and require us to amend certain of our business practices and policies.

Further, enforcement actions and investigations by regulatory authorities related to data security incidents and privacy violations continue to increase.

The future enactment of more restrictive laws, rules or regulations

and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our businesses and noncompliance could result in regulatory penalties and significant legal liability.

For instance, in the United States, the Health Insurance Portability and Accountability Act of 1996, including the related security provisions, applies to our flexible spending account services.

We are also subject to federal and state security, privacy and security breach notification laws with respect to personal and sensitive data as defined under such laws.

Such state and federal laws include laws such as the California Consumer Privacy Act of 2018, as amended and the Illinois Biometric Information Privacy Act and rules and regulations promulgated under the Federal Trade Commission.

We have a small number of end user clients located in the European Union using our time and attendance software and accordingly, the EU’s General Data Protection Regulation applies to the collection, processing and storage of applicable sensitive and personal data.

In some instances, laws provide for civil penalties for violations as well as private rights of action for data breaches or other violations of the law.

Moreover, enforcement actions and

investigations by regulatory authorities related to data security incidents and privacy violations continue to increase.

The future enactment of more restrictive laws, rules or regulations and/or future enforcement actions or investigations could have a materially adverse impact on us through increased costs or restrictions on our businesses and noncompliance could result in regulatory penalties and significant legal liability.

Failure to comply with data privacy laws and regulations could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

The foregoing description does not include an exhaustive list of the laws and regulations governing and impacting our business.

As part of our payroll and payroll tax solutions, we move funds from clients’ accounts to employees, taxing authorities and other payees.

Certain state regulators have recently expanded their interpretation of state money transmission and money service business statutes to include these standard payroll processing activities necessitating our registering in certain jurisdictions as a money transmitter.

In addition, we are licensed as a payroll processor in jurisdictions requiring licensing of payroll processors.

Our activities under these money transmission statutes are subject to the anti-money laundering and reporting provisions of The Bank Secrecy Act of 1970, as amended by the USAPATRIOT Act of 2000, including the know-your-client due diligence requirements and related reporting of suspicious activities to applicable authorities.

Many of our solutions assist clients in complying with certain U.S.

laws and regulations that apply to them particularly in the human resources and employment law areas such as wage payment laws, state payroll tax filing and reporting, employee onboarding, and compliance with the IRS rules governing employers including tax withholdings, payroll tax filing and the preparation of Form W-2’s.

Additionally, our HCM solutions help clients manage their compliance other laws including, most recently, the new Families First Coronavirus Response Act of 2020 and rules and regulations promulgated pursuant to The Coronavirus Aid, Relief, and Economic Security Act (Cares Act) of 2020.

Additionally, our solutions help clients meet their obligations as a plan sponsor under COBRA, and sponsor and administer compliant Flexible Spending Account Plans and compliant Consumer Health Care Plans such as Health Savings Accounts and Health Reimbursement Accounts.

We have registered Asure Software® as a federal trademark with the U.S.

Patent and Trademark Office.

Our other core federally registered trademarks include AsureForce®, AsureSpace®, AsureHCM® and Evolution®.

Asure’s other core federally registered trademarks include AsureForce®, AsureHCM® and Evolution®.

As of December 31, 2020, we had a total of 482 employees (471 of which are full-time employees) in the following departments:

FUNCTION NUMBER OF

Research and development 70

2 unchanged sentences

Finance, human resources and administration 93

We continually evaluate and adjust the size and composition of our workforce.

We continually evaluate and adjusts the size and composition of our workforce.

We also periodically retain contractors to support our sales and marketing, information technology and administrative functions.

None of our employees are represented by a collective bargaining agreement.

Asure has not experienced any work stoppages and we consider our relations with our employees to be good.

Additionally, we augment our workforce capacity in research and development and customer service and technical support by contracting for services through third parties.

We have not experienced any work stoppages.

Additionally, we augment our workforce capacity in research and development and client service and technical support by contracting for services through third parties.

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What changed 10-K

Item 1. Business