What changed in this filing

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Item 1. Financial Statements

2026-04-30 compared with 2025-10-30 · 134 added, 221 removed, 394 unchanged (47% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current assets:

Cash and cash equivalents $ 19,221 $ 25,244

Accounts receivable, net of allowance for credit losses of $ 7,625 and $ 6,328 at September 30, 2025, and December 31, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 7,610 a nd $ 7,206 at March 31, 2026 and December 31, 2025, respectively

13,467 15,859

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44,000 shares authorized;

27,727 and 26,671 shares issued, 27,727 and 26,671 shares outstanding at September 30, 2025, and December 31, 2024, respectively

Treasury stock at cost, zero (1) shares at September 30, 2025, and December 31, 2024

28,637 and 28,076 shares issued, 28,637 and 28,076 shares outstanding at March 31, 2026 and December 31, 2025, respectively

Treasury stock at cost, zero (1) shares at March 31, 2026 and December 31, 2025

Additional paid-in capital 519,717 517,432

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(1) The aggregate Treasury stock of prior repurchases of our own common stock was retired and subsequently issued effective January 1, 2024.

See the Condensed

Consolidated Statement of Changes in Stockholders' Equity for the impact of this transaction.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

ASURE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS

(in thousands, except per share amounts)

Three Months Ended September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Three Months Ended

Recurring $ 37,757 $ 33,187

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Total operating expenses 28,141 26,623

Loss from operations ( 3,499 ) ( 3,622 ) ( 10,166 ) ( 8,245 )

Income (loss) from operations 2,329 ( 2,015 )

Interest income 188 171

1 unchanged sentence

Other income, net — 188

Loss from operations before income taxes ( 4,995 ) ( 3,731 ) ( 12,382 ) ( 8,135 )

Income (loss) from operations before income taxes 769 ( 2,107 )

Income tax expense 144 291

Net loss ( 5,362 ) ( 3,901 ) ( 13,883 ) ( 8,569 )

Other comprehensive income:

Unrealized gain on marketable securities 237 1,340 907 1,105

Comprehensive loss $ ( 5,125 ) $ ( 2,561 ) $ ( 12,976 ) $ ( 7,464 )

Basic and diluted loss per share

Net income (loss) 625 ( 2,398 )

Other comprehensive income (loss):

Unrealized gain (loss) on marketable securities ( 588 ) 442

Comprehensive income (loss) $ 37 $ ( 1,956 )

Basic and diluted earnings (loss) per share

Basic $ 0.02 $ ( 0.09 )

10 unchanged sentences

Stock issued upon option exercise and vesting of restricted and performance stock units 512 5 — ( 310 ) — — ( 305 )

Share-based compensation — — — 1,863 — — 1,863

Net loss — — — — ( 2,398 ) — ( 2,398 )

Other comprehensive income — — — — — 442 442

Balance at March 31, 2025 27,122 $ 271 $ — $ 507,149 $ ( 309,624 ) $ ( 133 ) $ 197,663

Stock issued upon option exercise and vesting of restricted and performance stock units 189 2 — 239 — — 241

Stock issued, ESPP 54 1 — 351 — — 352

Share-based compensation — — — 1,891 — — 1,891

Net loss — — — — ( 6,123 ) — ( 6,123 )

Other comprehensive income — — — — — 228 228

Balance at June 30, 2025 27,365 $ 274 $ — $ 509,630 $ ( 315,747 ) $ 95 $ 194,252

Stock issued upon option exercise and vesting of restricted stock units 100 1 — ( 24 ) — — ( 23 )

Stock issued for acquisitions 49 — — 445 — — 445

Stock issued for debt payment 138 1 1,058 — — 1,059

Share-based compensation — — — 2,150 — — 2,150

Net loss — — — — ( 5,362 ) — ( 5,362 )

Other comprehensive income — — — — — 237 237

Balance at September 30, 2025 27,727 $ 277 $ — $ 513,587 $ ( 321,109 ) $ 332 $ 193,087

Net income — — — — 625 — 625

Other comprehensive loss — — — — — ( 588 ) ( 588 )

Balance at March 31, 2026 28,637 $ 286 $ — $ 519,717 $ ( 319,727 ) $ ( 153 ) $ 200,123

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5 unchanged sentences

Stock issued upon option exercise and vesting of restricted stock units 451 4 — 437 — — 441

Stock issued for acquisitions 450 5 — 4,489 — — 4,494

Share-based compensation — — — 1,863 — — 1,863

Retirement and reissuance of treasury shares — ( 4 ) 5,017 — ( 5,013 ) — —

Net income — — — — ( 308 ) — ( 308 )

Other comprehensive loss — — — — — ( 244 ) ( 244 )

Balance at March 31, 2024 25,749 $ 258 $ — $ 494,537 $ ( 295,761 ) $ ( 1,359 ) $ 197,675

Stock issued upon option exercise and vesting of restricted stock units 58 — — 63 — — 63

Stock issued, ESPP 61 1 — 332 — — 333

Stock issued for acquisitions 50 — — 323 — — 323

Share-based compensation — — — 1,488 — — 1,488

Net loss — — — — ( 2,398 ) — ( 2,398 )

Other comprehensive income — — — — — 442 442

Balance at June 30, 2024 25,918 $ 259 $ — $ 496,743 $ ( 300,121 ) $ ( 1,350 ) $ 195,531

Stock issued upon option exercise and vesting of restricted stock units 97 1 — 329 — — 330

Stock issued for acquisitions 525 5 — 4,257 — — 4,262

Share-based compensation — — — 1,591 — — 1,591

Net loss — — — — ( 3,901 ) — ( 3,901 )

Other comprehensive income — — $ — — — 1,340 1,340

Balance at September 30, 2024 26,540 $ 265 $ — $ 502,920 $ ( 304,022 ) $ ( 10 ) $ 199,153

Balance at March 31, 2025 27,122 $ 271 $ — $ 507,149 $ ( 309,624 ) $ ( 133 ) $ 197,663

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net loss $ ( 13,883 ) $ ( 8,569 )

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

Net income (loss) $ 625 $ ( 2,398 )

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

Depreciation and amortization 7,073 5,972

5 unchanged sentences

Provision for deferred income taxes 143 291

Gain on extinguishment of debt ( 119 ) —

Net realized gains on sales of available-for-sale securities ( 902 ) ( 656 )

4 unchanged sentences

Prepaid expenses and other assets ( 4,189 ) ( 1,049 )

Operating lease right-of-use assets 14 —

Accounts payable ( 172 ) 903

2 unchanged sentences

Deferred revenue ( 4,913 ) ( 3,810 )

Net cash provided by (used in) operating activities 10,924 ( 394 )

Net cash provided by operating activities 2,709 1,996

Cash flows from investing activities:

Business combination consideration, net of cash acquired ( 37,500 ) ( 7,900 )

Acquisition of intangible assets ( 14,967 ) ( 4,497 )

Acquisition of intangible asset ( 4,721 ) ( 6,346 )

Purchases of property and equipment ( 218 ) ( 192 )

5 unchanged sentences

Payments of finance lease principal ( 15 ) —

Proceeds from notes payable, net of issuance costs 57,982 —

Payments of notes payable ( 5,000 ) ( 420 )

Debt extinguishment costs ( 100 ) —

Payments made on amounts due for the acquisition of intangible assets ( 31 ) ( 723 )

Net proceeds from issuance of common stock 1,011 902

Capital raise fees — ( 47 )

Net proceeds from (settlements for) common stock transactions ( 305 ) 441

Net change in client fund obligations ( 11,177 ) 64,207

Net cash provided by (used in) financing activities ( 11,528 ) 63,925

Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents ( 60,245 ) ( 44,894 )

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents ( 14,198 ) 53,291

Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period 164,703 145,712

4 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Reconciliation of cash, cash equivalents, and restricted cash, and restricted cash equivalents to the Condensed Consolidated Balance Sheets

Three Months Ended March 31,

Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents to the Condensed Consolidated Balance Sheets

Cash and cash equivalents $ 19,221 $ 14,076

3 unchanged sentences

Cash paid for interest $ 1,350 $ 125

Cash paid for income taxes $ — $ 15

Non-cash investing and financing activities:

1 unchanged sentence

Notes payable issued for acquisitions $ 879 $ 1,150

Shares issued for acquisitions $ 956 $ 9,125

Shares issued for debt payments $ 1,059 $ —

Stock issued for acquisitions $ 445 $ —

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Our solutions also provide new ways for employers to connect with their employees and strengthen relationships with their talent.

At the core of our offering is the Asure HCM platform—a SaaS-based system that includes Payroll & Tax filing, Recruiting, Time & Attendance software, HR management tools, and Benefits Administration.

At the core of our offering is the Asure HCM platform—a SaaS-based system that includes Payroll & Tax filing, HR management tools, Time & Attendance software, Recruiting, and Benefits Administration.

This platform serves as the foundation for delivering both our core software and a range of complementary, technology-enabled services.

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Asure has two types of partners:

Reseller Partners that white label our product s while providing value-added services to their clients (our indirect clients) and Referral Partners that provide us with client leads but do not resell our solutions.

Reseller Partners that white label our products while providing value-added services to their clients (our indirect clients) and Referral Partners that provide us with client leads but do not resell our solutions.

We have and will continue to invest in research and development to expand our solutions.

1 unchanged sentence

The Asure HCM suite includes eight product lines:

Asure Payroll & Tax, Asure Tax Management Solutions, AsureRecruiting™, Asure Time & Attendance, Asure HR Compliance, Asure Insurance and Benefits Administration, AsureMarketplace™, and AsurePay™.

We develop, market, sell and support our offerings nationwide through our principal office in Austin, Texas, and from our other office locations in Alabama, California, Florida, Georgia, New Jersey, New York, North Carolina, Ohio, South Dakota, Tennessee, Texas, Virginia, and Vermont.

Asure Payroll & Tax, Asure HR Compliance, Asure Time & Attendance, AsureRecruiting™, Asure Insurance and Benefits Administration, AsurePay™, Asure Tax Management Solutions, and AsureMarketplace™ .

We develop, market, sell and support our offerings nationwide through our principal office in Austin, Texas, and from our processing hubs in Alabama, California, Florida, Georgia, New Jersey, New York, North Carolina, Ohio, South Dakota, Tennessee, Texas, Virginia, and Vermont .

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.

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GAAP”) for complete financial statements.

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, 2025, comprehensive loss and changes in stockholders’ equity for the three and nine months ended September 30, 2025, and 2024 , and cash flows for the nine months ended September 30, 2025, and 2024 .

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements.

These reclassifications had no effect on the consolidated financial position or consolidated results of operations of the Company.

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, 2026, comprehensive income and loss and changes in stockholders’ equity for the three months ended March 31, 2026 and March 31, 2025, and cash flows for the three months ended March 31, 2026 and March 31, 2025.

These unaudited 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, 2025 (our “2025 Annual Report on Form 10-K”).

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Provisions are made if the cost of inventories exceeds their net realizable value and is charged to cost of sales.

We did not recognize any provision for the three and nine months ended September 30, 2025 and 2024.

We did not recognize any provision for the three months ended March 31, 2026 and 2025.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures (Topic 740), which requires companies to disaggregate information about their effective tax rate reconciliation as well as information on income taxes paid.

The standard applies to all entities subject to income taxes.

The standard becomes effective for public entities for annual periods beginning after December 15, 2024.

We are currently evaluating this standard and the potential effects of these changes to our consolidated financial statements.

In July 2025, the FASB issued ASU No.

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The standard becomes effective for all entities for annual periods beginning after December 15, 2025.

We are currently evaluating this standard and the potential effects of these changes to our consolidated financial statements.

We adopted this standard prospectively for the annual period ended December 31, 2026.

This guidance did not have an impact on our financial position, results of operations, or cash flows.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

As of September 30, 2025, and December 31, 2024, accumulated other comprehensive income (loss) consisted of net unrealized gains and losses on available-for-sale securities.

As of March 31, 2026 and December 31, 2025, accumulated other comprehensive income (loss) consisted of net unrealized gains and losses on available-for-sale securities.

NOTE 3 - BUSINESS COMBINATIONS AND ASSET ACQUISITIONS

Asset Acquisitions

During the three months ended March 31, 2026, we completed one customer relationship asset acquisition.

The total purchase price of this acquisition was $ 6,172 , which consisted of $ 4,721 of cash paid during the three months ended March 31, 2026 , $ 127 of cash to be paid over the next 12 months, the delivery of promissory notes in the amount of $ 879 , net of discounts, and the delivery of 49 shares of Asure common stock, which had an aggregate fair value of $ 445 at the acquisition date.

The acquired customer relationships are recorded as intangible assets and are being amortized on a straight-line basis over eight years.

Business Combinations

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The goodwill of $ 21,035 arising from the acquisition consists largely of the synergies and economies of scale expected from combining our operations with Lathem and is expected to be deductible for tax purposes.

Lathem contributed net revenues of $ 4,631 , of which $ 2,710 are recurring revenues, and net income of $ 708 to our consolidated total operating activity from the acquisition date of July 1, 2025, through September 30, 2025.

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented as if the transaction had occurred as of January 1, 2024, prepared in accordance with ASC 805:

Pro Forma (Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

Total revenue

$ 36,252 $ 33,936 $ 110,608 $ 102,797

$ ( 5,174 ) $ ( 4,923 ) $ ( 13,682 ) $ ( 12,622 )

Pro forma earnings for the nine months ended September 30, 2025, were adjusted to exclude $ 733 of legal costs associated with the acquisition that were recognized in general and administrative expense.

Pro forma earnings for the nine months ended September 30, 2024, were adjusted to include these charges.

Asset Acquisitions

During the nine months ended September 30, 2025, we completed six customer relationship asset acquisitions.

The total purchase price of these acquisitions was $ 19,363 , which consisted of $ 14,990 of cash paid during the nine months ended September 30, 2025 , $ 371 of cash to be paid over the next 12 months, the delivery of promissory notes in the amount of $ 3,046 , net of discounts, and the delivery of 124 shares of Asure common stock, which had an aggregate fair value of $ 956 at the acquisition dates.

The purchase prices for certain of these acquisitions are subject to adjustments for contingent events which are generally expected to occur over the next one to two years following September 30, 2025, including revenue generated from the acquired assets.

The acquired customer relationships are recorded as intangible assets and are being amortized on a straight-line basis over eight years .

Business Combinations

Effective July 11, 2024, we purchased substantially all the assets of an applicant tracking technology company based out of South Dakota for an innovative hiring solution designed to streamline the recruitment process for small and mid-sized businesses.

This strategic acquisition reinforces Asure’s commitment to delivering comprehensive, user-friendly tools that simplify people management.

The aggregate purchase price paid for the business was $ 15,162 , consisting of $ 7,900 paid in cash on hand, $ 3,000 in the form of a promissory note ($ 1,716 net of discount), and 525 shares of Asure common stock, which had a fair value of $ 4,262 on the day of acquisition.

The purchase consideration was allocated among the acquired assets, which consist of a customer relationships intangible asset with fair value of $ 2,700 , and a developed technology intangible asset with a fair value of $ 3,200 .

Additionally, we assumed $ 237 of deferred revenue and $ 498 of other accrued liabilities as part of the transaction.

The intangible assets are being amortized on a straight-line basis over eight and seven years , respectively.

The remaining $ 8,713 of excess purchase consideration was allocated to goodwill, which is generally expected to be deductible for tax purposes.

This represents the knowledge and experience of the employees retained as part of the transaction as well as the synergies and economies of scale expected from expanding the Midwest operating region to a national scale.

Asset Acquisitions

During the year ended December 31, 2024, we completed eleven customer relationship asset acquisitions.

The total purchase price of these acquisitions was $ 15,206 , which consisted of $ 5,842 of cash paid during the year ended December 31, 2024, $ 1,381 of cash paid during the nine months ended September 30, 2025 , $ 1,462 of cash to be paid over the next 12 months, $ 235 of cash to be paid thereafter, the delivery of promissory notes in the amount of $ 1,423 , net of discounts, and the delivery of 500 shares of Asure common stock, which had an aggregate fair value of $ 4,863 at the acquisition dates.

The purchase prices for certain of these acquisitions are subject to adjustments for contingent events which are generally expected to occur over the next one to three years following September 30, 2025, including revenue generated from the acquired assets.

During the year ended December 31, 2025, we completed seven customer relationship asset acquisitions.

The total purchase price of these acquisitions was $ 20,523 , which consisted of $ 16,019 of cash paid during the year ended December 31, 2025 , $ 31 of cash paid during the three months ended March 31, 2026, $ 25 of cash to be paid over the next 12 months, the delivery of promissory notes in the amount of $ 3,492 , net of discounts, and the delivery of 124 shares of Asure common stock, which had an aggregate fair value of $ 956 at the respective acquisition dates.

The purchase prices for certain of these acquisitions are subject to adjustments for contingent events which are generally expected to occur over the next twelve months following March 31, 2026, including revenue generated from the acquired assets.

The acquired customer relationships are recorded as intangible assets and are being amortized on a straight-line basis over eight years.

See Note 6 — Notes Payable for information related to outstanding debt in connection with our business combinations and asset acquisitions.

NOTE 4 - INVESTMENTS AND FAIR VALUE MEASUREMENTS

11 unchanged sentences

Total Carrying Value Level 1 Level 2 Level 3

September 30, 2025

March 31, 2026

Funds held for clients

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Cash equivalents and investments classified as available-for-sale within funds held for clients consisted of the following for the periods presented below (in thousands):

September 30, 2025

March 31, 2026

Cash equivalents $ 4,652 $ 3 $ ( 4 ) $ 4,651

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

As of September 30, 2025, and December 31, 2024, there were 122 and 45 securities, respectively, in an unrealized gain position and there were 30 and 89 securities in an unrealized loss position, respectively.

As of September 30, 2025, these unrealized losses were less than $ 18 individually and $ 151 in the aggregate.

As of March 31, 2026 and December 31, 2025, there were 56 and 127 securities, respectively, in an unrealized gain position and there were 92 and 27 securities in an unrealized loss position, respectively.

As of March 31, 2026, these unrealized losses were less than $ 14 individually and $ 320 in the aggregate.

As of December 31, 2025, these unrealized losses were less than $ 13 individually and $ 94 in the aggregate.

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Factors considered in determining whether a loss is a credit loss 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.

(2) At September 30, 2025 and December 31, 2024, none of these securities were classified as cash and cash equivalents on the accompanying Condensed Consolidated Balance Sheets.

(2) At March 31, 2026 and December 31, 2025, none of these securities were classified as cash and cash equivalents on the accompanying Condensed Consolidated Balance Sheets.

Funds held for clients represent assets that we have classified for use solely for the purposes of satisfying the obligations to remit funds relating to our payroll and payroll tax filing services, which are classified as client funds obligations on our Condensed Consolidated Balance Sheets.

Funds held for clients have been invested in the following categories for the periods presented below (in thousands):

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Restricted cash and cash equivalents held to satisfy client funds obligations $ 131,284 $ 139,459

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Total funds held for clients $ 216,514 $ 228,111

Expected maturities of available-for-sale securities are as of September 30, 2025, are as follows (in thousands):

Expected maturities of available-for-sale securities are as of March 31, 2026, are as follows (in thousands):

One year or less $ 20,385

2 unchanged sentences

NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS

December 31, 2024 Acquisitions September 30, 2025

December 31, 2025 Acquisitions March 31, 2026

Goodwill $ 115,759 $ — $ 115,759

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A portion of acquired goodwill will be amortizable for tax purposes.

As of September 30, 2025, there has been no impairment of goodwill based on the qualitative assessments we have performed.

Gross Intangible Assets December 31, 2024 Acquisitions September 30, 2025

As of March 31, 2026, there has been no impairment of goodwill based on the qualitative assessments we have performed.

Gross Intangible Assets December 31, 2025 Acquisitions March 31, 2026

Customer relationships $ 182,024 $ 6,212 $ 188,236

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Weighted Average

(in Years) Gross Accumulated

Amortization Net

September 30, 2025

(in Years) Gross Intangible Assets Accumulated

Amortization Net Intangible Assets

March 31, 2026

Customer relationships 8.4 $ 188,236 $ ( 106,311 ) $ 81,925

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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 $ 13,250 and $ 11,790 for the nine months ended September 30, 2025 and 2024, respectively.

Amortization expenses recorded in cost of sales were $ 783 and $ 150 for the nine months ended September 30, 2025 and 2024, respectively.

There was no impairment of intangibles during the nine months ended September 30, 2025, based on the qualitative assessment we performed.

Amortization expenses recorded in Operating Expenses were $ 4,972 and $ 4,308 for the three months ended March 31, 2026 and 2025, respectively.

Amortization expenses recorded in Cost of Sales were $ 364 and $ 50 for the three months ended March 31, 2026 and 2025, respectively.

There was no impairment of intangibles during the three months ended March 31, 2026 based on the qualitative assessment we performed.

However, if market, political and other conditions over which we have no control continue to affect the capital markets and our stock price declines, we may experience an impairment of our intangibles in future quarters.

The following table summarizes the future estimated amortization expense relating to our intangible assets as of September 30, 2025 (in thousands):

The following table summarizes the future estimated amortization expense relating to our intangible assets for the period presented below (in thousands):

2026 (Remaining) $ 14,031

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The following table summarizes our outstanding debt as of the dates indicated (in thousands):

Maturity Cash Interest Rate September 30, 2025 December 31, 2024

Maturity Cash Interest Rate March 31, 2026 December 31, 2025

Notes Payable – Acquisitions (1)

1 unchanged sentence

$ 11,701 $ 10,775

Notes Payable – Other 11/01/25 10.00 % — 5,000

Notes Payable – MidCap 04/30/2030 9.04 % 60,000 60,000

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

September 30, 2025

March 31, 2026

Current portion of notes payable $ 6,980 $ ( 493 ) $ 6,487

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Total $ 70,775 $ ( 3,149 ) $ 67,626

The following table summarizes the future principal payments related to our outstanding debt as of September 30, 2025 (in thousands):

The following table summarizes the future principal payments related to our outstanding debt as of March 31, 2026 (in thousands):

2026 (Remaining) $ 5,760

1 unchanged sentence

Notes Payable - Acquisitions

As of September 30, 2025, we have nine promissory notes related to acquisitions that occurred during the nine months ended September 30, 2025, and prior years with a combined outstanding principal balance of $ 14,475 and maturity dates ranging from October 1, 2025, to July 1, 2029.

All of these promissory notes are subordinated to our Loan Agreement with MidCap (defined below).

As of March 31, 2026, we have nine promissory notes related to acquisitions that occurred during the three months ended March 31, 2026 and prior years with a combined outstanding principal balance of $ 11,701 and maturity dates ranging from August 1, 2026 to July 1, 2029.

All of our promissory notes related to acquisitions are subordinated to our Loan Agreement with MidCap (defined below).

See Note 3 — Business Combinations and Asset Acquisitions for further discussion regarding the issuance of notes payable related to acquisitions.

On August 13, 2025, we prepaid the outstanding balance on one of our acquisition-related promissory notes through the issuance of shares of our common stock.

Prior to extinguishment, the promissory note had an outstanding principal balance of $ 1,000 and would mature on February 22, 2026.

Prior to extinguishment, the promissory note had an outstanding principal balance of $ 1,000 and a maturity date of February 22, 2026.

In connection with the extinguishment, the principal balance of the note was reduced by $ 118 for indemnifiable claims related to the acquisition.

The remaining $ 956 of principal and accrued interest was repaid with 91 shares of common stock, having a fair value of $ 701 .

See Note 12 — Subsequent Events for the details of an extinguishment of an acquisition-related promissory note through the issuance of shares of our common stock after the reporting period.

Notes Payable - Other

In November 2024, we delivered a promissory note to an unrelated third party in exchange for cash.

As of December 31, 2024, the promissory note had an outstanding principal balance of $ 5,000 and would mature on November 1, 2025.

On April 10, 2025, we agreed to repay the outstanding balance on our unrelated third-party promissory note prior to its maturity using the proceeds of the Loan Agreement (described below).

In connection with the extinguishment, we paid the lender an aggregate amount of $ 5,197 (the “Payoff Amount”) in full payment of our outstanding obligations under the Note.

The Payoff Amount represented $ 5,097 of outstanding principal and interest on the unpaid principal balance and a $ 100 prepayment fee.

Notes Payable - MidCap

On April 10, 2025, we entered into a Loan Agreement with MidCap and the lenders from time to time party thereto (such lenders collectively with MidCap, the “Lenders”).

Under the Loan Agreement, we may borrow up to $ 60,000 from the Lenders, all of which has been funded as of September 30, 2025.

On October 30, 2025, we partially repaid the outstanding balance on one of our acquisition-related promissory notes through the issuance of shares of our common stock and cash payment of accrued interest.

Prior to the transaction, the promissory note had an outstanding principal balance of $ 3,000 and would mature on July 1, 2029.

In connection with the partial extinguishment, the holders of the promissory note agreed to reduce the principal balance of the portion of the note by $ 300 in consideration of the early repayment.

The remaining $ 1,700 of principal was repaid with 201 shares of common stock, having an estimated fair value of $ 1,511 , and $ 20 of accrued interest was paid with cash.

After the partial extinguishment, the outstanding principal balance of the note is $ 1,000 .

Senior Credit Facility

On April 10, 2025, we entered into a Loan Agreement with MidCap Financial Trust (“MidCap”) and the lenders from time to time party thereto (such lenders collectively with MidCap, the “Lenders”).

Under the Loan Agreement, we may borrow up to $ 60,000 from the Lenders, all of which has been funded as of March 31, 2026 .

The maturity date of the loan as provided under the Loan Agreement is April 1, 2030 (the “Maturity Date”).

Interest on the outstanding loan balance is payable monthly in arrears at an annual rate of Term Secured Overnight Financing Rate (“SOFR”) plus 5.00 %, subject to a SOFR floor of 2.00 %.

This rate was 9.66 % as of September 30, 2025.

This rate was 9.04 % as of March 31, 2026 .

Prior to April 1, 2029 (the “Amortization Start Date”), we must make interest-only payments on the outstanding loan balance.

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In such event, and for so long as it continues, the outstanding loan balance will bear interest at 2.00 % per annum in excess of the rate otherwise payable.

The Loan Agreement is collateralized by substantially all of our assets except for all funds held for clients and an amount of cash intended solely to cover employee wages, benefits, and taxes for a limited period.

Under the Loan Agreement, we covenant to maintain a (1) Total Leverage Ratio (as defined in the Loan Agreement), as tested quarterly, no greater than 5.50 to 1.00, and (2) minimum liquidity threshold of $ 10,000 .

As of September 30, 2025, we are in compliance with all covenants under the Loan Agreement.

In connection with the Loan Agreement and subsequent draw, we incurred $ 2,025 of origination, legal, and other fees that represent debt financing costs to be deferred and amortized over the duration of the Loan Agreement, of which $ 7 was unpaid as of September 30, 2025.

As of March 31, 2026 , we are in compliance with all covenants under the Loan Agreement.

As a result, net proceeds of all borrowings under the Loan Agreement were $ 57,975 .

NOTE 7 – CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION

Receivables from contracts with customers, net of allowance for credit losses of $ 7,625 , w ere $ 14,563 at September 30, 2025.

Receivables from contracts with customers, net of allowance for credit losses of $ 7,610 , were $ 13,467 at March 31, 2026.

Receivables from contracts with customers, net of allowance for credit losses of $ 7,206 , were $ 15,859 at December 31, 2025.

We had a provision for expected losses of $ 1,121 , write-offs charged against the allowance for credit losses of $ 562 , and recoveries on previously written off receivables of $ 737 during the nine months ended September 30, 2025.

We had a provision for expected losses of $ 111 , write-offs charges against the allowance for credit losses of $ 16 , and recoveries on previously written off receivables of $ 1,267 during the nine months ended September 30, 2024.

The increase in provision for expected losses is primarily due to regulatory and legislative changes impacting our expectation on current and future credit losses related to professional service receivables associated with Employee Retention Tax Credits.

No customer represented more than 10% of our net accounts receivable balance as of September 30, 2025, and December 31, 2024.

We had a provision for expected losses of $ 9 , write-offs charged against the allowance for credit losses of $ 37 , and recoveries on previously written off receivables of $ 432 during the three months ended March 31, 2026.

We had a provision for expected losses of $ 93 , write-offs charged against the allowance for credit losses of $ 22 , and recoveries on previously written off receivables of $ 145 during the three months ended March 31, 2025.

As of March 31, 2026 , we had two customers that accounted for $ 1,383 and $ 1,354 , or 10 % and 10 % respectively, of our net accounts receivable balance.

The receivable balance is not collateralized, and thus the entire $ 2,737 is at risk of loss.

As of December 31, 2025, we had one customer that accounted for $ 1,879 or 13 % of our net accounts receivable balance.

Contract Assets

Costs to Fulfill Contracts

Contract assets from contracts with customers were $ 2,726 and $ 1,712 at September 30, 2025 and December 31, 2024 , respectively .

Contract assets from contracts with customers were $ 4,713 and $ 3,747 at March 31, 2026 and December 31, 2025, respectively .

Costs to Obtain Contracts

Deferred commission costs from contracts with customers w ere $ 14,467 and $ 12,351 at September 30, 2025 and December 31, 2024 , respectively.

The amount of amortization recognized for the three and nine months ended September 30, 2025 was $ 839 and $ 2,453 , respectively, and for the three and nine months ended September 30, 2024 was $ 689 and $ 1,548 , respectively.

Deferred commission costs from contracts with customers were $ 15,290 and $ 14,721 at March 31, 2026, and December 31, 2025 , respectively.

The amount of amortization recognized for the three months ended March 31, 2026, and March 31, 2025, was $ 809 and $ 737 , respectively.

Deferred Revenue

During the three and nine months ended September 30, 2025, revenue of $ 1,834 and $ 10,391 , respectively, and during the three and nine months ended September 30, 2024, revenue of $ 286 and $ 6,409 , respectively, was recognized from the deferred revenue balance at the beginning of each period.

During the three months ended March 31, 2026 and 2025 , revenue of $ 8,874 and $ 5,990 , respectively, 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, 2025, approximately $ 84,701 of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 39 % of these remaining performance obligations over the next twelve months, with the balance recognized thereafter.

These amounts exclude remaining performance obligations related to contracts for professional services for tax and payroll offerings whose remaining contractual term is less than one year as of September 30, 2025.

Revenue Concentration

During the nine months ended September 30, 2025 and 2024, there were no customers that individually represented 10% or more of consolidated revenue.

As of March 31, 2026, approximately $ 85,567 of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 38 % of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.

These amounts exc lude remaining performance obligations related to contracts for professional services for tax and payroll offerings whose remaining contractual term is less than one year as of March 31, 2026.

Revenue Co ncentration

During the three months ended March 31, 2026 and 2025, there w ere no c ustomers that individually represented 10% or more of consolidated revenue.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Lease Commitments

We have entered into office space lease agreements, which qualify as operating leases under ASC 842 (“Leases”).

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

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

2016-02, “Leases (Topic 842)”.

Under such leases, we have commitments to pay annual minimum (base) rent.

The leases have original terms (excluding extension options) ranging from one to ten years .

1 unchanged sentence

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 general and administrative expenses.

In the accompanying Condensed Consolidated Statements of Comprehensive Income and Loss, rent expense is included in operating expenses under general and administrative expenses.

We have entered into a software license agreement, which qualifies as a finance lease under ASC 842 (“Leases”).

2 unchanged sentences

We record amortization for the related asset over its useful life on a straight-line basis and recognize interest expense under the effective interest method over the term of the lease.

In the accompanying Condensed Consolidated Statements of Comprehensive Loss, these expenses are included in general and administrative expenses and interest expense, respectively.

In the accompanying Condensed Consolidated Statements of Comprehensive Income and Loss, these expenses are included in general and administrative expenses and interest expense, respectively.

The components of the lease-related expenses are as follows for the periods presented below (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Operating lease cost:

Rent expense $ 647 $ 534

Sublease income — — — ( 4 )

Total operating lease cost $ 647 $ 534

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For purposes of calculating the 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 % as of September 30, 2025, and December 31, 2024.

The weighted average remaining lease term for our operating leases is three years and four years as of September 30, 2025 and December 31, 2024, respectively.

The discount rate of our finance lease is 11 % as of September 30, 2025.

The remaining lease term for our finance lease is four years as of September 30, 2025.

Supplemental cash flow information related to leases are as follows for the periods presented below (in thousands):

Nine Months Ended September 30,

The weighted average discount rate of our operating leases is 10 % as of March 31, 2026 and December 31, 2025.

The weighted average remaining lease term for our operating leases is three years as of March 31, 2026 and December 31, 2025.

The discount rate of our finance lease is 11 % as of March 31, 2026 and December 31, 2025.

The remaining lease term for our finance lease is three and four years as of March 31, 2026 and December 31, 2025, respectively.

Supplemental cash flow information related to operating leases are as follows for the periods presented below (in thousands):

Three Months Ended March 31,

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

Operating cash outflows from operating leases $ 651 $ 564

Non-cash activities:

Non-cash operating activities:

Operating lease assets obtained or removed in exchange for new, modified or terminated operating lease liabilities $ 70 $ 736

Finance lease assets obtained or removed in exchange for new, modified, or terminated finance lease liabilities $ 284 $ —

Future minimum commitments over the life of all operating and financing leases, which exclude variable rent payments, are as follows for the period presented below (in thousands):

Future minimum commitments over the life of all operating leases, which exclude variable rent payments, are as follows for the period presented below (in thousands):

Operating Leases Finance Leases

3 unchanged sentences

2029 1,035 58

Thereafter — —

3 unchanged sentences

Contingencies

Although we have been, are, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of September 30, 2025 , we were not currently a party to any material legal proceedings.

Although we have been, are, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of March 31, 2026, we were not currently a party to any material legal proceedings.

NOTE 9 - SHARE-BASED COMPENSATION

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The number of shares reserved for issuance under the 2018 Plan is 6,998 shares.

We have an aggregate of 2,341 options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) granted and outstanding pursuant to the 2018 Plan as of September 30, 2025.

As of September 30, 2025, the number of shares available for future grant under the 2018 Plan is 2,589 .

Share-based compensation for our stock option plans for the three and nine months ended September 30, 2025, was $ 1,967 and $ 5,721 , respectively, and for the three and nine months ended September 30, 2024, was $ 1,591 and $ 4,981 , respectively .

We have an aggregate of 2,519 options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) granted and outstanding pursuant to the 2018 Plan as of March 31, 2026.

As of March 31, 2026, the number of shares available for future grant under the 2018 Plan is 1,811 .

Share-based compensation for our stock option plans for the three months ended March 31, 2026, and March 31, 2025, was $ 2,150 and $ 1,863 , respectively.

Issuance of common stock related to the exercise of stock options and the vesting of restricted stock units (including restricted stock units that converted from performance stock units) are as follows for the period presented below (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Common stock issued - options 31 69

Common stock issued - RSU (1)

100 46 555 370

(1) Included in these amounts are 4 and 184 shares withheld for taxes or in connection with a cashless exercise of options during the three and nine months ended September 30, 2025, respectively.

(2) Included in these amounts are 159 restricted stock units during the nine months ended September 30, 2025, and 109 restricted stock units during the nine months ended September 30, 2024, that were converted from performance stock units which vested during those periods.

There were no stock units converted from performance stock units during the three months ended September 30, 2025 and 2024.

(1) Included in these amounts are 297 and 159 of restricted stock units that were converted from performance stock units which vested during the three months ended March 31, 2026 and 2025, respectively.

Effective January 1, 2026, the Compensation Committee approved the grant of PSUs pursuant to a PSU Award Grant Notice and PSU Award Agreement (the “2026 PSU Award Agreement”) under the 2018 Plan to our executive officers payable in the form of RSUs.

The number of RSUs into which the PSUs convert for each executive officer is a sliding scale between 0 % to 200 % of the target amount based on our achievement of certain performance metrics tied to our recurring revenue and gross profit for 2026.

NOTE 10 - NET LOSS PER SHARE

We compute net income or loss per share based on the weighted average number of common shares outstanding for the period.

Diluted net income per share reflects the maximum dilution that would have resulted from incremental common shares issuable upon the exercise of stock options or vesting of RSUs and in some cases PSUs.

Effective January 1, 2025, the Compensation Committee approved the grant of PSUs pursuant to a PSU Award Grant Notice and PSU Award Agreement (the “2025 PSU Award Agreement”) under the 2018 Plan to our executive officers payable in the form of RSUs.

On February 26, 2026, the PSUs converted to RSUs at 100 % of target based on the achievement of set performance metrics, and we paid out a total of 348 RSUs to our executive officers.

NOTE 10 - NET EARNINGS (LOSS) PER SHARE

We compute net earnings or loss per share based on the weighted average number of common shares outstanding for the period.

Diluted net earnings per share reflects the maximum dilution that would have resulted from incremental common shares issuable upon the exercise of stock options or vesting of RSUs and in some cases PSUs.

In periods of net income, we compute the adjustment to the denominator of our dilutive net earnings per share calculation to include these stock options, RSUs, and PSUs, as applicable, using the treasury stock method.

Regardless of the period resulting in net income or net loss, we exclude the adjustment to the denominator of our dilutive net loss per share calculation to the extent that they are anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per common share for the periods presented below (in thousands, except per share amounts):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net loss $ ( 5,362 ) $ ( 3,901 ) $ ( 13,883 ) $ ( 8,569 )

Weighted-average shares of common stock outstanding 27,566 26,429 27,257 25,870

Basic loss per share $ ( 0.19 ) $ ( 0.15 ) $ ( 0.51 ) $ ( 0.33 )

Net loss $ ( 5,362 ) $ ( 3,901 ) $ ( 13,883 ) $ ( 8,569 )

Weighted-average shares of common stock outstanding 27,566 26,429 27,257 25,870

Diluted loss per share $ ( 0.19 ) $ ( 0.15 ) $ ( 0.51 ) $ ( 0.33 )

For the three months ended March 31, 2026, 450 share awards were excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods presented below (in thousands, except per share amounts):

Three Months Ended March 31,

Net income (loss) $ 625 $ ( 2,398 )

Weighted-average basic shares outstanding 28,420 26,961

Effect of dilutive share-based awards 451 —

Weighted-average diluted shares 28,871 26,961

Basic earnings (loss) per share $ 0.02 $ ( 0.09 )

Diluted earnings (loss) per share $ 0.02 $ ( 0.09 )

NOTE 11 - SEGMENT INFORMATION

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Our chief operating decision maker (“CODM”) is the Chairman and Chief Executive Officer, who reviews financial information presented on a consolidated basis.

The CODM uses consolidated net loss, as reported on our Consolidated Statements of Comprehensive Loss, to assess financial performance and allocate resources.

The CODM uses consolidated net income (loss), as reported on our Consolidated Statements of Comprehensive Income and Loss, to assess financial performance and allocate resources.

These financial metrics are used by the CODM to make key operating decisions, such as the allocation of budget between cost of sales, sales and marketing, general and administrative, and research and development expenses.

The CODM does not review assets in evaluating the results of the segment, and therefore, such information is not presented.

The operating financial results of our single reportable segment for three and nine months ended September 30, 2025 and 2024, are as follows (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

The operating financial results of our single reportable segment for three months ended March 31, 2026, and March 31, 2025, are as follows (in thousands):

Total revenues $ 42,757 $ 34,854

3 unchanged sentences

Deferred software and commission costs ( 3,755 ) ( 3,372 )

Amortization, depreciation, and other noncash expenses 9,518 7,604 26,566 21,619

Other segment expenses (income) (1)

1,501 109 2,221 ( 110 )

Amortization, depreciation, and other non-cash expenses 9,368 8,128

Other segment expenses (1)

Total expenses 42,132 37,252

Net loss $ ( 5,362 ) $ ( 3,901 ) $ ( 13,883 ) $ ( 8,569 )

(1) Other segment expenses include interest expense (income) and other business expense (income)

NOTE 12 - SUBSEQUENT EVENTS

Subsequent to September 30, 2025, but before the filing of the financial statements, we completed a customer relationship asset acquisition.

The total purchase price of this acquisition was $ 1,146 , which consisted of $ 700 of cash paid at close and the delivery of a promissory note in the amount of $ 446 , net of discount.

Prior to the transaction, the promissory note had an outstanding principal balance of $ 3,000 and would mature on July 1, 2029.

In connection with the partial extinguishment, the holders of the promissory note agreed to reduce the principal balance of the portion of the note by $ 300 in consideration of the early repayment.

The remaining $ 1,700 of principal was repaid with 201 shares of common stock, having an estimated fair value of $ 1,511 , and $ 20 of accrued interest was paid with cash.

After the partial extinguishment, the outstanding principal balance of the note is $ 1,000 .

Net income (loss) $ 625 $ ( 2,398 )

(1) Other segment expenses include interest expense, net of interest income, and other business expense

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