What changed in this filing

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Item 1. Financial Statements

2026-07-30 compared with 2026-04-30 · 139 added, 130 removed, 398 unchanged (40% of the section changed)

3 unchanged sentences

(in thousands, except per share amounts)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Current assets:

Cash and cash equivalents $ 19,679 $ 25,244

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

Accounts receivable, net of allowance for credit losses of $ 9,717 and $ 7,206 at June 30, 2026, and December 31, 2025, respectively

13,120 15,859

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44,000 shares authorized;

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

28,824 and 28,076 shares issued, 28,824 and 28,076 shares outstanding at June 30, 2026, and December 31, 2025, respectively

Treasury stock at cost, zero (1) shares at June 30, 2026, and December 31, 2025

Additional paid-in capital 522,060 517,432

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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 INCOME AND LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, except per share amounts)

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Recurring $ 33,958 $ 28,596 $ 71,715 $ 61,783

9 unchanged sentences

Total operating expenses 27,451 24,563 55,592 51,186

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

Loss from operations ( 2,396 ) ( 4,652 ) ( 67 ) ( 6,667 )

Interest income 168 277 354 448

Interest expense ( 1,753 ) ( 809 ) ( 3,499 ) ( 1,260 )

Other income, net — 188

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

Other income (expense), net — ( 96 ) — 92

Loss from operations before income taxes ( 3,981 ) ( 5,280 ) ( 3,212 ) ( 7,387 )

Income tax expense 462 843 606 1,134

Net income (loss) 625 ( 2,398 )

Other comprehensive income (loss):

Net loss ( 4,443 ) ( 6,123 ) ( 3,818 ) ( 8,521 )

Other comprehensive loss:

Unrealized gain (loss) on marketable securities ( 262 ) 228 ( 850 ) 670

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

Basic and diluted earnings (loss) per share

Comprehensive loss $ ( 4,705 ) $ ( 5,895 ) $ ( 4,668 ) $ ( 7,851 )

Basic and diluted loss per share

Basic $ ( 0.15 ) $ ( 0.22 ) $ ( 0.13 ) $ ( 0.31 )

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

Stock issued upon option exercise and vesting of restricted and performance stock units 138 1 — ( 112 ) — — ( 111 )

Stock issued, ESPP 49 1 — 324 — — 325

Share-based compensation — — — 2,131 — — 2,131

Net loss — — — — ( 4,443 ) — ( 4,443 )

Other comprehensive loss — — — — — ( 262 ) ( 262 )

Balance at June 30, 2026 28,824 $ 288 $ — $ 522,060 $ ( 324,170 ) $ ( 415 ) $ 197,763

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

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

Stock issued upon option exercise and vesting of restricted 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

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

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

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

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

Net loss $ ( 3,818 ) $ ( 8,521 )

Adjustments to reconcile loss to net cash provided by operations:

Depreciation and amortization 14,072 12,155

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Provision for deferred income taxes 606 1,134

Loss on extinguishment of debt — 103

Net realized gains on sales of available-for-sale securities ( 1,803 ) ( 1,310 )

Share-based compensation 4,281 3,754

Gain on disposals of long-term assets — ( 7 )

Changes in operating assets and liabilities:

2 unchanged sentences

Prepaid expenses and other assets ( 4,443 ) ( 1,462 )

Operating lease right-of-use assets — 21

Accounts payable ( 138 ) 232

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Cash flows from investing activities:

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

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

Purchases of property and equipment ( 472 ) ( 393 )

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Cash flows from financing activities:

Payments of finance lease principal ( 15 ) —

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

Payments of notes payable — ( 5,000 )

Debt extinguishment costs — ( 100 )

Payments made on amounts due for the acquisition of intangible assets ( 449 ) ( 1,280 )

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(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

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

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Notes payable issued for acquisitions $ 622 $ 1,150

Stock issued for acquisitions $ 445 $ —

Shares 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, HR management tools, Time & Attendance software, Recruiting, 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 Insurance 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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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 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.

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 June 30, 2026, comprehensive loss and changes in stockholders’ equity for the three and six months ended June 30, 2026, and 2025 , and cash flows for the six months ended June 30, 2026, and 2025 .

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.

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 months ended March 31, 2026 and 2025.

We did not recognize any provision for the three and six months ended June 30, 2026 and 2025.

RECENT ACCOUNTING PRONOUNCEMENTS

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

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

We adopted this standard prospectively for the annual period ending 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 March 31, 2026 and December 31, 2025, accumulated other comprehensive income (loss) consisted of net unrealized gains and losses on available-for-sale securities.

As of June 30, 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.

During the six months ended June 30, 2026, we completed one customer relationship asset acquisition.

The total purchase price of this acquisition was $ 6,175 , which consisted of $ 4,730 of cash paid during the six months ended June 30, 2026 , $ 121 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 dates.

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 1, 2025, we acquired 100 % of the membership interests of Lathem Time 2025 LLC (f/k/a Lathem Time Corporation, “Lathem”), whose technology will be used to expand the capabilities of our broader suite of HR solutions, specifically in timekeeping systems.

The aggregate purchase price that we paid for the membership interests was $ 39,497 , consisting of $ 37,500 paid in cash on hand and the remaining $ 2,221 in the form of a promissory note ($ 1,997 net of discount).

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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 total purchase price of these acquisitions was $ 20,523 , which consisted of $ 16,019 of cash paid during the year ended December 31, 2025, $ 56 of cash paid during the six months ended June 30, 2026 , 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 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 June 30, 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 .

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Total Carrying Value Level 1 Level 2 Level 3

March 31, 2026

June 30, 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):

March 31, 2026

June 30, 2026

Cash equivalents $ 5,505 $ 1 $ ( 1 ) $ 5,505

1 unchanged sentence

Corporate debt securities 95,967 95 ( 494 ) 95,568

Municipal bonds 842 — ( 7 ) 835

Government agency securities 3,551 2 ( 18 ) 3,535

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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 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 June 30, 2026, and December 31, 2025, there were 46 and 127 securities, respectively, in an unrealized gain position and there were 131 and 27 securities in an unrealized loss position, respectively.

As of June 30, 2026, these unrealized losses were less than $ 18 individually and $ 512 in the aggregate.

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

4 unchanged sentences

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 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.

(2) At June 30, 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):

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Restricted cash and cash equivalents held to satisfy client funds obligations $ 79,812 $ 139,459

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Total funds held for clients $ 178,915 $ 228,111

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

Expected maturities of available-for-sale securities are as of June 30, 2026, are as follows (in thousands):

One year or less $ 20,840

2 unchanged sentences

NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS

December 31, 2025 Acquisitions March 31, 2026

December 31, 2025 Acquisitions June 30, 2026

Goodwill $ 115,759 $ — $ 115,759

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

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

As of June 30, 2026, there has been no impairment of goodwill based on the qualitative assessments we have performed.

Gross Intangible Assets December 31, 2025 Acquisitions June 30, 2026

Customer relationships $ 182,024 $ 6,003 $ 188,027

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Amortization Net Intangible Assets

March 31, 2026

June 30, 2026

Customer relationships 8.4 $ 188,027 $ ( 110,998 ) $ 77,029

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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 $ 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.

Amortization expenses recorded in operating expenses were $ 9,661 and $ 8,481 for the six months ended June 30, 2026 and 2025, respectively.

Amortization expenses recorded in cost of sales were $ 728 and $ 420 for the six months ended June 30, 2026 and 2025, respectively.

There was no impairment of intangibles during the six months ended June 30, 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 for the period presented below (in thousands):

The following table summarizes the future estimated amortization expense relating to our intangible assets as of June 30, 2026 (in thousands):

2026 (Remaining) $ 8,951

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

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

Maturity Cash Interest Rate June 30, 2026 December 31, 2025

Notes Payable – Acquisitions (1)

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$ 11,395 $ 10,775

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

Notes Payable – Senior Credit Facility 04/30/30 8.99 % 60,000 60,000

Gross Notes Payable $ 71,395 $ 70,775

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

March 31, 2026

June 30, 2026

Current portion of notes payable $ 6,980 $ ( 315 ) $ 6,665

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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 March 31, 2026 (in thousands):

The following table summarizes the future principal payments related to our outstanding debt as of June 30, 2026 (in thousands):

2026 (Remaining) $ 5,760

1 unchanged sentence

Notes Payable - Acquisitions

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).

As of June 30, 2026, we have nine promissory notes related to acquisitions that occurred during the six months ended June 30, 2026, and prior years with a combined outstanding principal balance of $ 11,395 and maturity dates ranging from August 1, 2026, to July 1, 2029.

All of these promissory notes 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 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 .

On May 15, 2026, we came to an agreement with the seller of a prior asset acquisition to terminate the contingent consideration agreement associated with the transaction, determining the final purchase price of the acquisition as of that date.

As a result of the termination, we determined that we were owed $ 306 from the seller, and the principal amount of the promissory note associated with the acquisition was reduced in accordance with the terms of the acquisition agreement.

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.

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

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.

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 .

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 .

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 June 30, 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 9.04 % as of March 31, 2026 .

This rate was 8.74 % as of June 30, 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 2.0 % 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 March 31, 2026 , we are in compliance with all covenants under the Loan Agreement.

As of June 30, 2026, 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.

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NOTE 7 – CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION

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 $ 9,717 , were $ 13,120 at June 30, 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 $ 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.

We had a provision for expected losses of $ 14 , write-offs charged against the allowance for credit losses of $ 37 , and recoveries on previously written off receivables of $ 2,540 during the six months ended June 30, 2026.

We had a provision for expected losses of $ 20 , write-offs charges against the allowance for credit losses of $ 69 , and recoveries on previously written off receivables of $ 1,000 during the six months ended June 30, 2025.

As of June 30, 2026, we had one customer that accounted for $ 2,158 or 15 %, of our net accounts receivable balance.

The receivable balance is not collateralized, and thus the entire $ 2,158 is at risk of loss.

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Costs to Fulfill Contracts

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

Contract assets from contracts with customers were $ 6,487 and $ 3,747 at June 30, 2026 and December 31, 2025 , respectively .

Costs to Obtain Contracts

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 commission costs from contracts with customers w ere $ 15,590 and $ 14,721 at June 30, 2026 and December 31, 2025 , respectively.

The amount of amortization recognized for the three and six months ended June 30, 2026 was $ 1,006 and $ 1,814 , respectively, and for the three and six months ended June 30, 2025 was $ 878 and $ 1,615 , respectively.

Deferred Revenue

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.

During the three and six months ended June 30, 2026, revenue of $ 2,682 and $ 11,556 , respectively, and during the three and six months ended June 30, 2025, revenue of $ 2,567 and $ 8,557 , respectively, was recognized from the deferred revenue balance at the beginning of each period.

Transaction Price Allocated to the Remaining Performance Obligations

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.

As of June 30, 2026, approximately $ 80,032 of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 41 % of these remaining performance obligations over the next twelve months, with the balance recognized thereafter.

These amounts e xclude 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 June 30, 2026.

Revenue Concentration

During the six months ended June 30, 2026 and 2025, there were no customers 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 ASU No.

2016-02, “Leases (Topic 842)”.

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

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

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

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”).

Under this lease, the lessor receives fixed payments over a period of four years , after which we take ownership of the software and source code.

The resulting software asset is included in property and equipment, net, in the accompanying Condensed Consolidated Balance Sheets.

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 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 March 31,

Operating lease cost:

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

Rent expense was as follows for the periods presented below (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Rent expense $ 643 $ 520 $ 1,290 $ 1,054

Total operating lease cost $ 647 $ 534

Finance lease cost:

Amortization of assets $ 14 $ —

Interest on lease liabilities 7 —

Total finance lease cost $ 21 $ —

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 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,

The weighted average discount rate of our operating leases is 10 % as of June 30, 2026, and December 31, 2025.

The weighted average remaining lease term for our operating leases is three years as of June 30, 2026 and December 31, 2025.

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

Six Months Ended June 30,

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

Operating cash outflows from operating leases $ 1,304 $ 1,075

Non-cash operating activities:

Non-cash activities:

Operating lease assets obtained or removed in exchange for new, modified or terminated operating lease liabilities $ 36 $ 1,447

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

2026 (Remaining) $ 1,247

2027 2,387 87

2028 2,110 88

2029 1,035 58

Thereafter — —

Total minimum lease payments 7,003

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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 March 31, 2026, 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 June 30, 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 2,519 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.

We have an aggregate of 2,175 options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) granted and outstanding pursuant to the 2018 Plan as of June 30, 2026.

As of June 30, 2026, the number of shares available for future grant under the 2018 Plan is 2,067 .

Share-based compensation for our stock option plans for the three and six months ended June 30, 2026, was $ 2,131 and $ 4,281 , respectively, and for the three and six months ended June 30, 2025, was $ 1,891 and $ 3,754 , 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Common stock issued - options (1)

317 296 348 365

Common stock issued - RSU (1)(2)

(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.

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.

97 73 638 455

(1) Included in these amounts are 276 and 336 shares withheld for taxes or in connection with a cashless exercise of options during the three and six months ended June 30, 2026, respectively, and 180 shares withheld for taxes or in connection with a cashless exercise of options during the three and six months ended June 30, 2025.

(2) Included in these amounts are 21 and 318 restricted stock units during the three and six months ended June 30, 2026, respectively, and 159 restricted stock units during the six months ended June 30, 2025, that were converted from performance stock units which vested during those periods.

NOTE 10 - NET LOSS PER SHARE

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

Diluted net loss 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.

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 )

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

June 30, Six Months Ended

2026 2025 2026 2025

Net loss $ ( 4,443 ) $ ( 6,123 ) $ ( 3,818 ) $ ( 8,521 )

Weighted-average shares of common stock outstanding 28,749 27,237 28,586 27,100

Basic loss per share $ ( 0.15 ) $ ( 0.22 ) $ ( 0.13 ) $ ( 0.31 )

Net loss $ ( 4,443 ) $ ( 6,123 ) $ ( 3,818 ) $ ( 8,521 )

Weighted-average shares of common stock outstanding 28,749 27,237 28,586 27,100

Diluted loss per share $ ( 0.15 ) $ ( 0.22 ) $ ( 0.13 ) $ ( 0.31 )

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

The CODM uses consolidated net loss, as reported on our Consolidated Statements of Comprehensive 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 months ended March 31, 2026, and March 31, 2025, are as follows (in thousands):

The operating financial results of our single reportable segment for three and six months ended June 30, 2026 and 2025, are as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Total revenues $ 37,113 $ 30,124 $ 79,870 $ 64,978

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Deferred software and commission costs ( 3,789 ) ( 4,044 ) ( 7,544 ) ( 7,416 )

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

Other segment expenses (1)

Amortization, depreciation, and other noncash expenses 9,589 8,920 18,957 17,048

Other segment expenses (income) (1)

1,585 631 3,147 727

Total expenses 41,556 36,247 83,688 73,499

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

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

Net loss $ ( 4,443 ) $ ( 6,123 ) $ ( 3,818 ) $ ( 8,521 )

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

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