What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-10 compared with 2020-11-09 · 208 added, 308 removed, 281 unchanged (65% of the section changed)

3 unchanged sentences

(Amounts in thousands)

September 30, 2020

December 31, 2019

March 31, 2021 December 31, 2020

Current assets:

Cash and cash equivalents $ 24,290 $ 28,577

Accounts receivable, net of allowance for doubtful accounts of $ 885 and $ 904 at September 30, 2020 and December 31, 2019, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 1,909 and $ 2,194 at March 31, 2021 and December 31, 2020, respectively

Inventory 349 449

Prepaid expenses and other current assets 3,372 3,284

3 unchanged sentences

Property and equipment, net 8,662 8,281

Goodwill 73,958 73,958

Intangible assets, net 61,646 64,552

1 unchanged sentence

Other assets, net 4,107 3,953

Total assets $ 441,103 $ 513,927

Liabilities and stockholders ’ equity

5 unchanged sentences

Other accrued liabilities 1,064 1,380

Contingent purchase obligation 3,880 3,880

Deferred revenue 1,605 4,343

6 unchanged sentences

Notes payable, net of current portion 10,683 12,225

Contingent purchase consideration

Operating lease liabilities, noncurrent 5,076 5,366

8 unchanged sentences

44,000 and 22,000 shares authorized;

16,225 and 16,098 shares issued, 15,900 and 15,714 shares outstanding at September 30, 2020 and December 31, 2019, respectively

Treasury stock at cost, 384 shares at September 30, 2020 and December 31, 2019

19,405 and 19,354 shares issued, 19,021 and 18,970 shares outstanding at March 31, 2021 and December 31, 2020, respectively

Treasury stock at cost, 384 shares at March 31, 2021 and December 31, 2020

( 5,017 ) ( 5,017 )

Additional paid-in capital 420,561 419,827

Accumulated deficit ( 271,552 ) ( 269,954 )

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income 465 604

Total stockholders’ equity 144,651 145,653

5 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Recurring $ 19,242 $ 18,436

Professional services, hardware and other 560 511

1 unchanged sentence

Cost of Sales 7,310 7,840

Gross profit 12,492 11,107

Operating expenses:

5 unchanged sentences

Loss from operations ( 1,269 ) ( 1,513 )

Interest (expense) income and other, net

Loss from continuing operations before income taxes

Income tax (benefit) expense

Loss from continuing operations

Discontinued operations

Income from operations of discontinued operations

Income tax benefit

Gain on discontinued operations, net of taxes

Interest expense and other, net ( 224 ) ( 235 )

Loss from operations before income taxes ( 1,493 ) ( 1,748 )

Income tax expense 105 19

Net loss ( 1,598 ) ( 1,767 )

Other comprehensive income:

Unrealized gain on marketable securities

Foreign currency translation loss

Unrealized (loss) gain on marketable securities ( 139 ) 65

Comprehensive loss $ ( 1,737 ) $ ( 1,702 )

Basic and diluted loss per share from continuing operations

Basic and diluted loss per share

Basic and diluted net loss per share

Basic $ ( 0.08 ) $ ( 0.11 )

Diluted $ ( 0.08 ) $ ( 0.11 )

Weighted average basic and diluted shares

Basic 19,007,000 15,727,000

Diluted 19,007,000 15,727,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Common Stock Outstanding

Common Stock Amount

Treasury Stock

Additional Paid-in Capital

Accumulated Deficit

Other Comprehensive Income (Loss)

Total Stockholders' Equity

Common Stock Outstanding Common Stock Amount Treasury Stock Additional Paid-in Capital Accumulated Deficit Other Comprehensive Income (Loss) Total Stockholders' Equity

Balance at December 31, 2020 18,970 $ 193 $ ( 5,017 ) $ 419,827 $ ( 269,954 ) $ 604 $ 145,653

1 unchanged sentence

Share based compensation — — — 626 — — 626

Other comprehensive income

Share issuance costs — — — ( 23 ) — — ( 23 )

Net loss — — — — ( 1,598 ) — ( 1,598 )

Other comprehensive loss — — — — — ( 139 ) ( 139 )

Balance at March 31, 2021 19,021 $ 194 $ ( 5,017 ) $ 420,561 $ ( 271,552 ) $ 465 $ 144,651

Stock issued upon option exercise and vesting of restricted stock units

Stock issued, ESPP

Share based compensation

Other comprehensive income

Balance at June 30, 2020

Stock issued upon option exercise and vesting of restricted stock units

Share based compensation

Other comprehensive income

Balance at September 30, 2020

The accompanying notes are an integral part of these condensed consolidated financial statements.

ASURE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Amounts in thousands)

Common Stock Outstanding

Common Stock Amount

Treasury Stock

Additional Paid-in Capital

Accumulated Deficit

Other Comprehensive Income (Loss)

Total Stockholders' Equity

Outstanding Common Stock Amount Treasury Stock Additional Paid-in

Capital Accumulated Deficit Other Comprehensive

Income (Loss) Total Stockholders'

Balance at December 31, 2019 15,714 $ 161 $ ( 5,017 ) $ 396,102 $ ( 253,642 ) $ ( 25 ) $ 137,579

Stock issued upon acquisition

Stock issued upon option exercise and vesting of restricted stock units 29 — — 106 — — 106

Share based compensation — — — 438 — — 438

Net loss — — — — ( 1,767 ) — ( 1,767 )

Other comprehensive income — — — — — 65 65

Balance at March 31, 2020 15,743 $ 161 $ ( 5,017 ) $ 396,646 $ ( 255,409 ) $ 40 $ 136,421

Stock issued, ESPP

Stock issued upon option exercise and vesting of restricted stock units

Share based compensation

Other comprehensive loss

Balance at June 30, 2019

Stock issued, ESPP

Stock issued upon option exercise and vesting of restricted stock units

Share based compensation

Other comprehensive loss

Balance at September 30, 2019

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net loss $ ( 1,598 ) $ ( 1,767 )

Adjustments to reconcile loss to net cash (used in) provided by operations:

Depreciation and amortization 3,862 3,516

Amortization of operating lease assets 421 386

Amortization of debt financing costs and discount 30 75

3 unchanged sentences

Share-based compensation 626 438

Loss on disposals of fixed assets

Changes in operating assets and liabilities:

Accounts receivable ( 210 ) 806

Inventory 44 84

Prepaid expenses and other assets ( 552 ) ( 900 )

3 unchanged sentences

Deferred revenue ( 2,762 ) ( 3,309 )

Net cash (used in) provided by operating activities

Net cash used in operating activities ( 1,235 ) ( 3,403 )

Cash flows from investing activities:

Acquisitions, net of cash acquired

Acquisition of intangible asset — ( 1,823 )

2 unchanged sentences

Net change in funds held for clients 66,439 27,714

Net cash (used in) provided by investing activities

Net cash provided by investing activities 65,158 24,806

Cash flows from financing activities:

Proceeds from notes payable

Payments of notes payable ( 1,981 ) ( 1,784 )

Proceeds from revolving line of credit

Payments of revolving line of credit

Debt financing fees — ( 20 )

Payments of finance leases

Net proceeds from issuance of common stock 108 106

Net change in client fund obligations ( 66,337 ) ( 27,751 )

Net cash provided by (used in) financing activities

Effect of foreign exchange rates

Net increase (decrease) in cash and cash equivalents

Net cash used in financing activities ( 68,210 ) ( 29,449 )

Net decrease in cash and cash equivalents ( 4,287 ) ( 8,046 )

Cash and cash equivalents at beginning of period 28,577 28,826

2 unchanged sentences

Cash paid for:

Non-cash Investing and Financing Activities:

Subordinated notes payable –acquisitions

Equity issued in connection with acquisitions

Interest $ 219 $ 99

Income taxes 183 —

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION

Asure Software, Inc., (“Asure”, the “Company”, “we” and “our”), a Delaware Corporation, is a leading provider of Human Capital Management (“HCM”).

Asure facilitates the growth of small and mid-sized companies 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, Human Resources ("HR"), and Time & Attendance software as well as HR Services ranging from HR projects to completely outsourcing payroll and HR staff.

We develop, market, sell and support our offerings across North America through our principal office in Austin, Texas and from our processing hubs in California, Tennessee, Nebraska, New York, Florida, Vermont, and Washington.

In December 2019, we completed the sale of the assets of our Workspace Management business for an aggregate purchase price of approximately $ 121,500 in cash.

We used the proceeds to pay down debt.

In July 2020 we finalized our working capital adjustment and received escrow funds of $ 1,687 .

For further information regarding the transaction, see Note 10 to the accompanying consolidated financial statements.

In July 2020, we acquired certain assets of a payroll tax business.

The initial Purchase price for the assets was $ 4.25 million, which we paid cash at closing.

The seller will be paid additional consideration for the assets based on the trailing twelve-month revenue at each of April 30, 2021 and October 31, 2021.

Contingent purchase consideration, if any, will generally be made by May 30, 2021 and December 30, 2021.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission and accordingly, they do not include all information and footnotes required under U.S.

Asure Software, Inc., (“Asure”, the “Company”, “we” and “our”), a Delaware corporation, is a leading provider of cloud-based Human Capital Management (“HCM”) software solutions.

We help small and mid-sized companies grow by assisting them in building better teams with skills that reach the next level, stay compliant with ever-changing federal, state, and local tax jurisdictions and labor laws, and better allocate cash so they can spend their financial capital on growing their business rather than back-office overhead expenses.

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

We also offer these products and services through our network of reseller partners.

Our platform vision is to help clients grow their business and become the most trusted HCM resource to entrepreneurs everywhere.

Our 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 Asure HCM suite includes four product lines:

Asure Payroll & Tax, Asure HR, Asure Time & Attendance, and Asure HRServices.

We develop, market, sell and support our offerings nationwide through our principal office in Austin, Texas and from our processing hubs in California, Tennessee, Nebraska, New York, Florida, Vermont, and Washington.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") and accordingly, they do not include all information and footnotes required under U.S.

generally accepted accounting principles ("U.S.

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Certain reclassifications were made to conform to the current period presentation in the condensed consolidated statements of comprehensive loss.

These reclassifications include a change in the presentation of revenues.

In the opinion of management, these interim financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation of our financial position as of September 30, 2020 and the results of operations, statements of changes in stockholders' equity for the three and nine months ended September 30, 2020 and September 30, 2019, and our statements of cash flows for the nine months ended September 30, 2020 and September 30, 2019.

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in our annual report on Form 10-K for the fiscal year ended December 31, 2019.

In the opinion of management, these interim financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation of our financial position as of March 31, 2021 and the results of operations, statements of changes in stockholders' equity for the three months ended March 31, 2021 and March 31, 2020, and our statements of cash flows for the three months ended March 31, 2021 and March 31, 2020.

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto filed with the SEC in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (our "2020 Annual Report on Form 10-K").

The results for the interim periods are not necessarily indicative of results for a full fiscal year.

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SIGNIFICANT RISKS AND UNCERTAINTIES

The COVID-19 pandemic has resulted in a global economic slowdown and disruptions that have and could continue to negatively impact our business.

The coronavirus ("COVID-19") pandemic has resulted in a global economic slowdown and disruptions that have and could continue to negatively impact our business.

The pandemic and numerous measures implemented to contain the virus such as business shutdowns, shelter-in-place orders and travel bans and restrictions have caused businesses, especially small and medium sized businesses some of whom are our customers, to reduce headcount or cease operations as customer demand decreased.

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In addition, the conditions caused by the COVID-19 pandemic could adversely affect our customers’ ability or willingness to purchase our offerings, delay prospective customers’ purchasing decisions, delay the provisioning of our offerings, lengthen payment terms, reduce the value or duration of customer subscription contracts, or affect attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance.

The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions and the impact of these and other factors on our employees, customers, partners and vendors.

The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, including the administration of vaccinations and the impact of these and other factors on our employees, customers, partners and vendors.

If we are not able to respond to and manage the impact of such events effectively, our business will be harmed.

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The effects of this standard on our financial position, results of operations and cash flows were not material.

Standards Yet to Be Adopted

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments – Credit Losses.

ASU 2016-13 requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

As we are a smaller reporting company, ASU 2016-13 is effective for us beginning January 1, 2023.

We are currently evaluating the impact, if any, the adoption will have on our financial position and results of operations.

In December 2019, the FASB issued ASU No.

2019-12, Simplifying the Accounting for Income Taxes .

ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other aspects of the accounting for income taxes.

ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

We are currently evaluating the impact, if any, the adoption will have on our financial position and results of operations.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

The standard became effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.

We adopted ASU 2019-12 during the quarter beginning January 1, 2021, using the prospective approach except for hybrid tax regimes, which we adopted using the modified retrospective approach.

The adoption of ASU 2019-12 resulted in no material impact to the Company's financial statements.

CONTINGENCIES

Although we have been, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of September 30, 2020, we were not a party to any pending legal proceedings that are material to our business.

Although we have been, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of March 31, 2021, we were not a party to any pending legal proceedings that are material to our business.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

As of March 31, 2021 and December 31, 2020, accumulated other comprehensive income consisted of net unrealized gains and losses on available-for-sale securities.

ASURE SOFTWARE, INC.

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NOTE 3 – INVESTMENTS AND FAIR VALUE MEASUREMENTS

As of September 30, 2020, and December 31, 2019, funds held for clients invested in available-for-sale securities consisting of government and commercial bonds, including mortgage-backed securities, amounted to $ 26,958 and $ 24,136 , respectively.

As of September 30, 2020, and December 31, 2019, funds held for clients invested in money market funds and other cash equivalents amounted to $ 37,265 and $ 48,500 , respectively.

Additionally, as of September 30, 2020, we had $ 8,248 of operating funds in money market funds, classified as cash equivalents.

Cash equivalents as of December 31, 2019 were not material.

As of March 31, 2021 and December 31, 2020, funds held for clients invested in available-for-sale securities consisting of government and commercial bonds, including mortgage-backed securities, amounted to $ 24,233 and $ 25,919 , respectively.

As of March 31, 2021, and December 31, 2020, funds held for clients invested in money market funds and other cash equivalents amounted to $ 1,082 and $ 63,999 , respectively.

Additionally, as of March 31, 2021 and December 31, 2020, we had $ 3,301 and $ 5,204 , respectively, of operating funds in money market funds, classified as cash equivalents.

Investments classified as available-for-sale consisted of the following:

September 30, 2020

March 31, 2021

Funds Held for Clients (2)

4 unchanged sentences

Asset-backed securities — — — —

Total $ 23,767 $ 477 $ ( 11 ) $ 24,233

December 31, 2020

5 unchanged sentences

Asset-backed securities 499 1 — 500

Total $ 25,315 $ 606 $ ( 2 ) $ 25,919

(1) Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss.

As of September 30, 2020 and December 31, 2019, there were 74 and 53 securities, respectively, in an unrealized gain position and there were 1 and 18 securities, respectively, in an unrealized loss position.

As of September 30, 2020, we had $ 7 in unrealized losses.

As of March 31, 2021 and December 31, 2020, there were 63 and 69 securities, respectively, in an unrealized gain position and there were 2 and 2 securities, respectively, in an unrealized loss position.

As of March 31, 2021, we had $( 11 ) in unrealized losses.

As of March 31, 2021, these unrealized losses were less than$( 7 ) individually and $( 11 ) in the aggregate.

As of December 31, 2020, these unrealized losses were less than $( 1 ) individually and $( 2 ) in the aggregate.

These securities have not been in a continuous unrealized gain or loss position for more than 12 months.

No securities have been in a continuous unrealized loss position for more than 12 months.

We do not intend to sell these investments and we do not expect to sell these investments before recovery of their amortized cost basis, which may be at maturity.

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Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

At September 30, 2020 and December 31, 2019, none of these securities were classified as cash and cash equivalents on the accompanying condensed consolidated balance sheets.

Expected maturities of available-for-sale securities as of September 30, 2020 are as follows:

Expected Maturities

(2) At March 31, 2021 and December 31, 2020, none of these securities were classified as cash and cash equivalents on the accompanying condensed consolidated balance sheets.

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

Expected maturities of available-for-sale securities as of March 31, 2021 are as follows:

Expected Maturities Amount

One year or less $ 4,228

2 unchanged sentences

After 10 years —

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

In July 2020, we acquired certain assets of a payroll tax business.

The initial Purchase price for the assets was $ 4.25 million, which we paid cash at closing.

The initial purchase price for the assets was $ 4,250 , which we paid cash at closing.

The seller will be paid additional consideration for the assets based on the trailing twelve-month revenue at each of April 30, 2021 and October 31, 2021.

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We utilized a Monte Carlo simulation to determine the fair value of the contingent consideration.

There was no adjustment to the fair value of the contingent consideration at September 30, 2020.

There was no adjustment to the fair value of the contingent consideration at March 31, 2021.

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in U.S.

generally accepted accounting principles and expands disclosures about fair value measurements.

GAAP and expands disclosures about fair value measurements.

ASC 820 establishes a three-tier fair value hierarchy, which is based on the reliability of the inputs used in measuring fair values.

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Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, respectively:

September 30, 2020

Total Carrying Value

Quoted Prices in Active Market

Significant Other Observable Inputs

Significant Unobservable Inputs

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

The following table presents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, respectively:

March 31, 2021

Total Carrying Value Quoted Prices in Active Market

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

Cash equivalents

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Available-for-sale securities 24,233 — 24,233 —

Total $ 28,616 $ 4,383 $ 24,233 $ —

Contingent purchase consideration $ 3,880 $ — $ — $ 3,880

Total $ 3,880 $ — $ — $ 3,880

December 31, 2020

Total Carrying Value

Quoted Prices in Active Market

Significant Other Observable Inputs

Significant Unobservable Inputs

Total Carrying Value Quoted Prices in Active Market

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

Cash equivalents

Money market funds $ 5,204 $ 5,204 $ — $ —

Funds held for clients

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Available-for-sale securities 25,919 — 25,919 —

Total $ 95,122 $ 69,203 $ 25,919 $ —

Contingent purchase consideration $ 3,880 $ — $ — $ 3,880

Total $ 3,880 $ — $ — $ 3,880

ASURE SOFTWARE, INC.

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NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS

As of September 30, 2020 and December 31, 2019, goodwill was $ 71,289 and $ 68,697 , respectively, which is net of the $ 35,060 impairment loss recognized in the fourth quarter of 2019.

As of March 31, 2021 and December 31, 2020, goodwill was $ 73,958 .

The Company evaluates the recoverability of goodwill annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

As of September 30, 2020, there has been no impairment of goodwill based on the quantitative assessments performed by the Company.

The following table summarizes the changes in our goodwill:

Balance at December 31, 2019

Balance at September 30, 2020

The gross carrying amount and accumulated amortization of our intangible assets as of September 30, 2020 and December 31, 2019 are as follows:

September 30, 2020

Intangible Assets

Weighted Average

Period (in Years)

As of March 31, 2021, there has been no impairment of goodwill based on the qualitative assessments performed by the Company.

The gross carrying amount and accumulated amortization of our intangible assets as of March 31, 2021 and December 31, 2020 are as follows:

March 31, 2021

Intangible Assets Weighted Average

(in Years) Gross Accumulated

Amortization Net

Customer relationships 8.9 $ 88,310 $ ( 31,350 ) $ 56,960

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Reseller relationships 7.0 853 ( 853 ) —

Trade names 3.0 880 ( 379 ) 501

Noncompete agreements 5.2 1,032 ( 861 ) 171

8.6 $ 103,076 $ ( 41,430 ) $ 61,646

December 31, 2020

Intangible Assets

Weighted Average

Period (in Years)

Intangible Assets Weighted Average

(in Years) Gross Accumulated

Amortization Net

Customer relationships 8.9 $ 88,310 $ ( 28,898 ) $ 59,412

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Reseller relationships 7.0 853 ( 853 ) —

Trade names 3.0 880 ( 312 ) 568

Noncompete agreements 5.2 1,032 ( 853 ) 179

8.5 $ 103,076 $ ( 38,524 ) $ 64,552

We record amortization expenses using the straight-line method over the estimated useful lives of the intangible assets, as noted above.

Amortization expenses recorded in Operating Expenses were $ 2,424 and $ 2,322 , for the three months ended September 30, 2020 and 2019, respectively.

Amortization expenses recorded in Cost of Sales were $ 397 and $ 417 for the three months ended September 30, 2020 and 2019, respectively.

Amortization expenses recorded in Operating Expenses were $ 7,123 and $ 7,143 , for the nine months ended September 30, 2020 and 2019, respectively.

Amortization expenses recorded in Cost of Sales were $ 1,225 and $ 1,137 for the nine months ended September 30, 2020 and 2019, respectively.

There is no impairment of intangibles during the nine months ended September 30, 2020 based on the qualitative assessment performed by the Company.

Amortization expenses recorded in Operating Expenses were $ 2,528 and $ 2,349 for the three months ended March 31, 2021 and 2020, respectively.

Amortization expenses recorded in Cost of Sales were $ 379 and $ 431 for the three months ended March 31, 2021 and 2020, respectively.

There is no impairment of intangibles during the three months ended March 31, 2021 based on the qualitative assessment performed by the Company.

ASURE SOFTWARE, INC.

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(Amounts in thousands, except share and per share data unless otherwise noted)

The following table summarizes the future estimated amortization expense relating to our intangible assets as of September 30, 2020:

Calendar Years

2020 (September to December)

The following table summarizes the future estimated amortization expense relating to our intangible assets as of March 31, 2021:

Calendar Years Amount

2021 (April to December) $ 8,695

Thereafter 13,363

NOTE 5 – NOTES PAYABLE

The following table summarizes our outstanding debt as of the dates indicated:

Stated Interest Rate

September 30, 2020

December 31, 2019

Maturity Stated Interest Rate March 31, 2021 December 31, 2020

Subordinated Notes Payable – acquisitions 7/1/2021 – 7/1/2022 2.00 % - 3.00 %

$ 4,263 $ 6,182

2.00 % - 3.00

PPP Loan – Pinnacle Bank 1

4/15/2022 1.00 % 8,856 8,856

Term Loan – Wells Fargo Syndicate Partner 12/31/2024 5.25 % 9,813 9,875

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Long-term Notes Payable $ 10,908 $ 12,525

Information presented in this table, the table that immediately follows and the last table in this footnote includes principal and interest due under the terms of a promissory note with Pinnacle Bank.

This loan was issued to us in connection with the Paycheck Protection Program pursuant to Title I of the Coronavirus Aid, Relief and Economic Security Act.

Under the terms of the Paycheck Protection Program, the principal balance and interest due under the promissory note will be forgiven if we meet certain conditions related to the use of the loan proceeds.

Under the terms of our promissory note with Pinnacle Bank, we would begin making payments on this promissory note in November 2020;

however, the Small Business Administration has issued guidance that defers all payments that would be owed on this loan until after the Small Business Administration makes a decision on our loan forgiveness application.

While we expect that the entire loan will be forgiven, we cannot be certain that the Small Business Administration will grant forgiveness of our entire loan.

(1) Information presented in each of the tables this Note 5 includes principal and interest due under the terms of a promissory note with Pinnacle Bank.

This loan was issued to us in connection with the Paycheck Protection Program pursuant to Title I of the Coronavirus Aid, Relief and Economic Security Act ("the PPP").

Under the terms of the PPP, the principal balance and interest due under the promissory note will be forgiven if we meet certain conditions related to the use of the loan proceeds.

Under the terms of our promissory note with Pinnacle Bank, we would have been required to make payments on this promissory note in November 2020;

however, the Small Business Administration ("the SBA") issued guidance, prior to that date, that deferred all payments that would be owed on this loan until after the SBA makes a decision on our loan forgiveness application.

While we expect that the entire loan will be forgiven, we cannot be certain that the SBA will grant forgiveness of our entire loan or a significant portion of the loan.

If we do not receive forgiveness of our entire loan, we will be obligated to start making payments on the portion of the principal and interest that is not forgiven so that it will be fully repaid no later than April 15, 2022, unless we are able to negotiate new payment terms with Pinnacle Bank.

We filed our initial application for forgiveness in December 2020, and completed our application in early February 2021.

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

The following table summarizes the debt issuance costs as of the dates indicated:

September 30, 2020

Gross Notes Payable

Debt Issuance Costs and Debt Discount

Net Notes Payable

March 31, 2021

Gross Notes Payable Debt Issuance Costs and Debt Discount Net Notes Payable

Notes payable, current portion 1

$ 12,024 $ ( 123 ) $ 11,901

Notes payable, net of current portion 2

10,908 ( 226 ) 10,682

Total $ 22,932 $ ( 349 ) $ 22,583

(1) Net Notes Payable includes $ 8,358 of Gross Notes Payables and $ 0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make any payments until the Small Business Administration has made a decision regarding our application for loan forgiveness.

Net Notes Payable, includes $ 3,477 of Gross Notes Payables and $ 0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make payments until the Small Business Administration has made a decision regarding our application for loan forgiveness.

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

(2) Net Notes Payable, includes $ 498 of Gross Notes Payables and $ 0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make payments until the SBA has made a decision regarding our application for loan forgiveness.

December 31, 2020

Gross Notes Payable

Debt Issuance Costs and Debt Discount

Net Notes Payable

Gross Notes Payable Debt Issuance Costs and Debt Discount Net Notes Payable

Notes payable, current portion 1

$ 12,388 $ ( 78 ) $ 12,310

Notes payable, net of current portion 2

The following table summarizes the future principal payments related to our outstanding debt as of September 30, 2020:

Includes $ 8,856 of principal payments related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make any payments until the Small Business Administration has made a decision regarding our application for loan forgiveness.

We expect to make our forgiveness application in the fourth quarter of 2020.

Given this, we expect that payments we may owe, if any, would not start until second quarter of 2021.

12,525 ( 300 ) 12,225

Total $ 24,913 $ ( 378 ) $ 24,535

(1) Net Notes Payable includes $ 6,866 of Gross Notes Payables and $ 0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make any payments until the SBA has made a decision regarding our application for loan forgiveness.

(2) Net Notes Payable, includes $ 1,989 of Gross Notes Payables and $ 0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make payments until the SBA has made a decision regarding our application for loan forgiveness.

The following table summarizes the future principal payments related to our outstanding debt as of March 31, 2021:

Year Ending Amount

2021 (remainder) $ 10,407

Total $ 22,932

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

Senior Credit Facility with Wells Fargo N.A.

5 unchanged sentences

The Credit Agreement has been amended and restated multiple times, with the most recent amendment and restatement effective December 31, 2019.

As described below, the Credit Agreement was also amended, but not restated, on August 10, 2020.

Following the amendment and restatement on December 31, 2019, the Credit Agreement provided for $ 20,000 in term loans and a $ 10,000 revolver and provided for new applicable margin rates for determining the interest payable on loans and amended certain of our financial covenants, including adding a covenant based on achieving EBITDA of at least $ 3,750 for the three months ended March 31, 2020, $ 4,850 for the six months ended June 30, 2020 and $ 5,950 for the nine months ended September 30, 2020, which covenant was in lieu of a leverage covenant calculated at March 31, 2020, June 30, 2020 and September 30, 2020.

On July 7, 2020, our senior lender identified certain events of default under our Credit Agreement and reserved their rights to pursue their remedies as a result of the events of default.

Then, on July 10, 2020, our senior lender issued a reservation of rights letter related to these events of default.

The primary event of default that triggered the reservation of rights letter was our failure to achieve Minimum EBITDA of $3,750 for the first quarter ending March 31, 2020, as required under Section 7 of the Credit Agreement, which failure was a result of impacts to our business driven primarily by COVID-19.

This covenant was set in December 31, 2019, before the Covid-19 pandemic and its possible effects on our business were known to our senior lender or us.

The other events of default our lender identified were technical defaults resulting from the fact that we were either unaware that our senior lender was considering the failure to achieve Minimum EBITDA an event of default as of May 11, 2020 or because we were unaware that the senior lender was still requiring that we provide certain requested documents in connection with our banking relationship.

Under the reservation of rights letter, the senior lender began accruing default interest from May 11, 2020.

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

On August 10, 2020, we entered into a waiver and amendment to our Credit Agreement and our Amended and Restated Guaranty and Security Agreement (the “Amendment”).

The Credit Agreement now provides for $ 10,000 in term loans and a $ 5,000 revolver and required that we make a principal payment of $ 9,750 on our outstanding term loans and reduce future availability on our revolver by $ 5,000 .

The outstanding principal balance and all accrued and unpaid interest on the term loans is due on December 31, 2024.

The Amendment provides for an accordion feature to our term loan that would allow us to borrow up to an additional $ 15,000 in term loans subject to certain conditions following the Covenant Conversion Date.

The Amendment also reset our financial covenants.

The Amendment does not require that we meet our fixed charge ratio or leverage ratio covenant until the Covenant Conversion Date.

The Coverage Conversion Date is the earlier of August 10, 2022 or the date in which we have satisfied the fixed charge coverage ratio and leverage ratio for two consecutive reporting periods.

Until such time, we are only obligated to comply with our minimum EBITDA and minimum recurring revenue covenants.

As described below, the Credit Agreement was amended during 2020, with the most recent amendment effective August 10, 2020.

Following the amendment, the Credit Agreement provided for $ 10,000 in term loans and a $ 5,000 revolver and provided for new applicable margin rates for determining the interest payable on loans and amended certain of our financial covenants as described in our Form 10-K filed with the SEC on March 9, 2021.

We expect to be in compliance with these amended financial covenants over the next twelve months.

As of September 30, 2020, and December 31, 2019, no amount was outstanding and $ 4,500 and $ 10,000 , respectively, was available for borrowing under the revolver.

In April 2020, Asure entered into a Promissory Note (the “PPP Note”) with Pinnacle Bank as the lender (the “Lender”), pursuant to which the Lender agreed to give us a loan under the Paycheck Protection Program (the "PPP Loan") offered by the U.S.

Small Business Administration (the “SBA”) in a principal amount of $ 8,856 pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).

The interest rate on the PPP Note is a fixed rate of 1 % per annum.

To the extent that the amounts owed under the PPP Loan, or a portion of them, are not forgiven, the Company will be required to make principal and interest payments in monthly installments beginning after the Small Business Administration makes a decision on our forgiveness application .

Based on current guidance from the Small Business Administration and assuming we file our forgiveness application in the fourth quarter of 2020, we would not expect to have a decision on our loan forgiveness application from the Small Business Administration until second quarter of 2021.

To the extent any portion of the PPP Loan is not forgiven, the PPP Note matures on April 15, 2022.

The PPP Note includes events of default.

Upon the occurrence of an event of default, the Lender will have the right to exercise remedies against the Company, including the right to require immediate payment of all amounts due under the PPP Note.

NOTE 6 – STOCKHOLDERS’ EQUITY

Authorized Shares

On May 28, 2020, the Company amended its Restated Certificate of Incorporation to increase the total number of authorized shares of capital stock from 23,500,000 to 45,500,000 and the number of authorized shares of common stock from 22,000,000 to 44,000,000 .

Share Repurchase Program

On March 10, 2020, our Board of Directors authorized a new stock repurchase program, under which we may repurchase up to $ 5,000 of our outstanding common stock.

This new stock repurchase program is in addition to the approximately 66,000 shares available under our existing stock repurchase plan.

Under this new stock repurchase program, we may repurchase shares in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

The extent to which we repurchase our shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by our management.

The repurchase program may be extended, suspended or discontinued at any time.

We expect to finance the program from existing cash resources.

While the program remains in place, there have been no repurchases in 2020 and 2019.

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

Employee Stock Purchase Plan

Our Employee Stock Purchase Plan (“Purchase Plan”) was approved by the shareholders in June 2017.

The Purchase Plan allows all eligible employees to purchase a limited number of shares of our common stock during pre-specified offering periods at a discount established by the Board of Directors, not to exceed 15 % of the fair market value of the common stock, at the beginning or end of the offering period (whichever is lower).

Under the ESPP, 225,000 shares were originally reserved for issuance.

On May 27, 2020, our shareholders increased the number of shares reserved for issuance under the Purchase Plan by an additional 250,000 shares.

Accumulated Other Comprehensive Income (Loss)

As of September 30, 2020, and December 31, 2019, accumulated other comprehensive income (loss) consisted of net unrealized gains and losses on available-for-sale securities.

As of March 31, 2021 and December 31, 2020, no amount was outstanding and $ 4,500 , respectively, was available for borrowing under the revolver.

Due to the effects of COVID-19 on our business and the related need to support our operations, we applied for and received a loan from Pinnacle Bank under the PPP during the second quarter of 2020.

Under the terms of our note with Pinnacle Bank, principal payments would have begun in November 2020.

However, the SBA, which administers loans issued under the PPP, has issued guidance, deferring all payments that would be owed on this loan until the SBA makes a decision on our loan forgiveness application.

While we expect that the entire loan will be forgiven, we cannot be certain that the SBA will forgive our entire loan.

If we do not receive forgiveness of our entire loan, we will be obligated to begin repaying the portion of the principal and interest that is not forgiven such that it is fully paid no later than April 15, 2022, unless we are able to negotiate new payment terms with Pinnacle Bank.

Further, if the portion of the PPP Loan that is not forgiven (the “Unforgiven Debt”) exceeds $ 3,250 or requires monthly payments of principal and interest in excess of $ 185 , it is likely we will be in default under our Credit Agreement unless we obtain a waiver from our senior lender or are otherwise able to negotiate acceptable terms with our senior lender and Pinnacle Bank.

We filed our initial application for forgiveness of this loan in December 2020, and completed our application in early February 2021.

Given this timing, we expect that payments we may owe, if any, would not start until second or third quarter of 2021.

GAAP, we are required to report this entire loan as outstanding debt in our financial statements and further identify the current portion of this debt (e.g.

amounts which would be payable in the next 12 months) with reference to the actual terms of our note with Pinnacle Bank.

Notwithstanding how this loan is reported in our financial statements, we do not expect to make any payments on this note until at least second quarter of 2021, and then only to the extent that any portion of this note is not forgiven in accordance with the terms of the PPP.

NOTE 6 – CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION

Receivables from contracts with customers, net of allowance for doubtful accounts of $ 885 were $ 5,220 at September 30, 2020.

Receivables from contracts with customers, net of allowance for doubtful accounts of $ 1,909 were $ 3,873 at March 31, 2021.

Receivables from contracts with customers, net of allowance for doubtful accounts of $ 2,194 were $ 3,354 at December 31, 2020.

As of September 30, 2020, one customer represented 3 % of our net accounts receivable balance.

As of March 31, 2021, one customer represented 5 % of our net accounts receivable balance.

No customers represented more than 10% of our net accounts receivable balance as of December 31, 2020.

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

Deferred Commissions

Deferred commission costs from contracts with customers were $ 3,530 and $ 2,697 at September 30, 2020 and December 31, 2019, respectively.

The amount of amortization recognized for the three and nine months ended September 30, 2020 was $ 220 and $ 660 , respectively and for the three and nine months ended September 30, 2019 was $ 428 and $ 1,018 , respectively.

Deferred commission costs from contracts with customers were $ 4,128 and $ 3,792 at March 31, 2021 and December 31, 2020, respectively.

The amount of amortization recognized for the three months ended March 31, 2021 and for the three months ended March 31, 2020 was $ 232 and $ 249 , respectively.

Deferred Revenue

During the three and nine months ended September 30, 2020, revenue of $ 259 and $ 3,652 , respectively, and the three and nine months ended September 30, 2019, revenue of $ 429 and $ 2,643 , respectively, was recognized from the deferred revenue balance at the beginning of each period.

During the three months ended March 31, 2021 and 2020, revenue of $ 3,406 and $ 2,704 was recognized from the deferred revenue balance at the beginning of each period.

Transaction Price Allocated to the Remaining Performance Obligations

As of September 30, 2020, approximately $ 24,537 of revenue is expected to be recognized from remaining performance obligations.

As of March 31, 2021, approximately $ 24,563 of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 65 % of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.

Revenue Concentration

During the three and nine months ended September 30, 2020 and 2019, there were no customers that individually represented 10% or more of consolidated revenue.

During the three months ended March 31, 2021 and 2020, there were no customers that individually represented 10% or more of consolidated revenue.

NOTE 7 – LEASES

We have entered into office space lease agreements, which qualify as operating leases under Topic 842.

We have entered into office space lease agreements, which qualify as operating leases under ASU No.

2016-02, “Leases (Topic 842)”.

Under such leases, the lessors receive annual minimum (base) rent.

1 unchanged sentence

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

We record base rent expense under the straight-line method over the term of the lease.

In the accompanying condensed consolidated statements of comprehensive loss, rent expense is included in operating expenses under selling, general and administrative expenses.

The components of the rent expense for the three and nine months ended September 30, 2020 and 2019 were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

The components of the rent expense for the three months ended March 31, 2021 and 2020 were as follows:

Three Months Ended March 31,

Operating lease cost $ 570 $ 552

2 unchanged sentences

For purposes of calculating the operating lease assets and lease liabilities, extension options are not included in the lease term unless it is reasonably certain we will exercise the option, or the lessor has the sole ability to exercise the option.

The weighted average discount rate of our operating leases is 10 % and 9 % as of September 30, 2020 and December 31, 2019, respectively.

The weighted average remaining lease term is five and six years as of September 30, 2020 and December 31, 2019, respectively.

Supplemental cash flow information related to operating leases for the nine months ended September 30, 2020 and 2019 follow:

Nine Months Ended September 30,

The weighted average discount rate of our operating leases is 8 % and 9 % as of March 31, 2021 and December 31, 2020, respectively.

The weighted average remaining lease term is five and six years as of March 31, 2021 and December 31, 2020, respectively.

Supplemental cash flow information related to operating leases for the three months ended March 31, 2021 and 2020 follow:

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

Three Months Ended March 31,

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Future minimum commitments over the life of all operating leases, which exclude variable rent payments, are as follows:

Year Ending December 31

Operating Leases

Year Ending December 31 Operating Leases

2021 (remainder) $ 1,854

Thereafter 1,803

Total minimum lease payments 8,727

1 unchanged sentence

Total lease liabilities $ 7,061

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

NOTE 8 – SHARE-BASED COMPENSATION

We have one active equity plan, the 2018 Incentive Award Plan (the “2018 Plan”).

The 2018 Plan, approved by our shareholders, replaced our 2009 Equity Incentive Plan, as amended (the “2009 Plan”), however, the terms and conditions of the 2009 Plan continues to govern any outstanding awards previously granted under the 2009 Plan.

The 2018 Plan, approved by our shareholders, replaced our 2009 Equity Incentive Plan, as amended (the “2009 Plan”), however, the terms and conditions of the 2009 Plan continue to govern any outstanding awards previously granted under the 2009 Plan.

The number of shares available for issuance under the 2018 Plan is equal to the sum of (i) 2,350,000 shares, and (ii) any shares subject to issued and outstanding awards under the 2009 Plan as of the effective date of the 2018 Plan that expire, are canceled or otherwise terminate following the effective date of the 2018 Plan.

We have outstanding options to purchase 1,465,985 shares at a weighted average exercise price of $ 7.89 .

During the three and nine months ending September 30, 2020 we issued 123,500 and 668,000 of employee stock options, respectively.

The weighted average exercise price of these awards was $ 6.86 and $ 6.46 for the three and nine months ended September 30, 2020, respectively, these awards will vest over a three-year period.

We also had 497,913 outstanding restricted stock units as of September 30, 2020.

In December 2019, we offered to exchange certain outstanding options to purchase shares of our common stock previously granted under the 2009 Plan and the 2018 Plan that have an exercise price per share higher than the greater of $ 8.50 or the closing trading price of our common stock on the offer expiration date (“eligible options”) for new RSUs to be granted under the 2018 Plan.

The offer exchange program was approved by our board of directors and by our shareholders earlier in 2019.

Under the offer exchange program, every 2.5 shares underlying an eligible option would be exchanged for one new RSU.

Upon expiration of the exchange offer in January 2020, we granted 187,000 RSUs in exchange for the cancellation of options to purchase 467,500 shares that were tendered by employees who participated in the offer exchange program.

As of September 30, 2020, we had 1,104,614 shares available for grant pursuant to the 2018 Plan.

Share based compensation for our stock option plans for the three months ended September 30, 2020 and September 30, 2019 was $ 707 and $ 577 , respectively and for the nine months ended September 30, 2020 and September 30, 2019 was $ 1,733 and $ 1,580 , respectively.

We issued 14,173 and 5,000 shares of common stock related to exercises of stock options for the three months ended September 30, 2020 and 2019, respectively.

We issued 43,901 and 30,000 shares of common stock related to the issuance of vested restricted stock units for the three months ended September 30, 2020 and 2019, respectively.

NOTE 10 – DISCONTINUED OPERATIONS

In December 2019, we sold our Workspace Management business to FM:Systems for approximately $ 121,500 in cash.

We used the proceeds to pay down debt.

In July 2020, in connection with finalizing the working capital adjustment, we received the escrow funds.

This transaction enabled us to focus on and continue to deliver our HCM solutions to small and mid-size businesses.

The table below reflects the operating results of the Workspace Management business reported as discontinued operations during the three and nine months ended September 30, 2019.

Three Months Ended

Nine Months Ended

September 30, 2019

Income from discontinued operations

Income tax benefit

Income from discontinued operations, net of taxes

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data unless otherwise noted)

The table below reflects the depreciation, amortization, capital expenditures, and significant operating and investing non-cash items of the Workspace Management business reported as discontinued operations during the three and nine months ended September 30, 2019:

Three Months Ended

Nine Months Ended

September 30, 2019

Depreciation and amortization

Provision for doubtful accounts

Share based compensation

Capital expenditures

Software capitalization

During the three months ending March 31, 2021 we issued 307,500 of employee stock options.

The weighted average exercise price of these awards was $ 7.53 for the three months ended March 31, 2021.

These awards will vest over a three-year period.

We also had 388,273 outstanding restricted stock units as of March 31, 2021.

As of March 31, 2021, we had 1,008,506 shares available for grant pursuant to the 2018 Plan.

Share based compensation for our stock option plans for the three months ended March 31, 2021 and March 31, 2020 were $ 626 and $ 438 , respectively.

We issued 19,709 and 19,317 shares of common stock related to exercises of stock options for the three months ended March 31, 2021 and 2020, respectively.

We issued 34,920 and 9,944 shares of common stock related to the issuance of vested restricted stock units for the three months ended March 31, 2021 and 2020, respectively.

NOTE 9 – NET LOSS PER SHARE

2 unchanged sentences

We compute the number of common share equivalents, which includes stock options, using the treasury stock method.

We have excluded stock options and restricted stock units of approximately 1,859,000 and 2,063,000 shares for the three and nine months ended September 30, 2020 and 2019, respectively, from the computation of the diluted shares because the effect of including the stock options and restricted stock units would have been anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per common share for the three and nine months ended September 30, 2020 and September 30, 2019:

Three Months Ended

Nine Months Ended

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

Loss from continuing operations

Income from discontinued operations

Net income (loss)

Weighted-average shares of common stock outstanding, basic and diluted

Basic and diluted income (loss) per share

Loss per share from continuing operations

Income per share from discontinued operations

Income (loss) per share

We have excluded stock options and restricted stock units of approximately 1,854,000

ASURE SOFTWARE, INC.

1 unchanged sentence

(Amounts in thousands, except share and per share data unless otherwise noted)

and 1,264,000 shares for the three months ended March 31, 2021 and 2020, respectively, from the computation of the diluted shares because the effect of including the stock options and restricted stock units would have been anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per common share for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended March 31,

Net loss $ ( 1,598 ) $ ( 1,767 )

Weighted-average shares of common stock outstanding, basic and diluted 19,007,000 15,727,000

Basic and diluted loss per share $ ( 0.08 ) $ ( 0.11 )

NOTE 10 – SUBSEQUENT EVENTS

We evaluated subsequent events through the date of the filing of this Quarterly Report on Form 10-Q with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the condensed consolidated financial statements as of September 30, 2020, and events which occurred subsequent to September 30, 2020 but were not recognized in the condensed consolidated financial statements.

We evaluated subsequent events through the date of the filing of this Quarterly Report on Form 10-Q with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the condensed consolidated financial statements as of March 31, 2021, and events which occurred subsequent to March 31, 2021 but were not recognized in the condensed consolidated financial statements.

Based on this evaluation, we have determined there were no subsequent events to report.

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 1. Financial Statements