asur-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2022


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __ to __


Commission File Number: 1-34522

ASURE SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

Delaware

74-2415696

(State or other jurisdiction of incorporation)

(I.R.S. Employer Identification No.)

3700 N. Capital of Texas Hwy. #350, Austin, Texas

78746

(Address of principal executive offices)

(Zip Code)


512-437-2700
(Registrant’s Telephone Number, including Area Code)
None
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

ASUR

The Nasdaq Capital Market

Series A Junior Participating Preferred Share Purchase Rights

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒

Yes

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐

Yes

☒

As of August 5, 2022, 20,141,850 shares of the registrant’s Common Stock, $0.01 par value, were outstanding.

Table of Contents

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	1
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and June 30, 2021	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and June 30, 2021	3
	Condensed Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2022 and June 30, 2021	4
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 4.	Controls and Procedures	22

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults upon Senior Securities	24
Item 4.	Other Information	24
Item 5.	Exhibits	24

	Signatures	26

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS

ASURE SOFTWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)


	June 30, 2022		December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	14,594	$	13,427
Accounts receivable, net of allowance for doubtful accounts of $2,819 and $2,210 at June 30, 2022 and December 31, 2021, respectively	5,736		5,308
Inventory	289		246
Prepaid expenses and other current assets	10,112		13,475
Total current assets before funds held for clients	30,731		32,456
Funds held for clients	184,661		217,376
Total current assets	215,392		249,832
Property and equipment, net	9,076		8,945
Goodwill	86,011		86,011
Intangible assets, net	73,657		78,573
Operating lease assets, net	5,877		5,748
Other assets, net	4,590		4,136
Total assets	$	394,603	$	433,245
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of notes payable	$	1,947	$	1,907
Accounts payable	862		565
Accrued compensation and benefits	3,453		3,568
Operating lease liabilities, current	1,382		1,551
Other accrued liabilities	4,532		2,436
Contingent purchase consideration	2,299		1,905
Deferred revenue	2,038		3,750
Total current liabilities before client fund obligations	16,513		15,682
Client fund obligations	184,428		217,144
Total current liabilities	200,941		232,826
Long-term liabilities:
Deferred revenue	2,369		36
Deferred tax liability	1,669		1,595
Notes payable, net of current portion	33,908		33,120
Operating lease liabilities, noncurrent	5,000		4,746
Contingent purchase consideration	1,074		2,424
Other liabilities	102		258
Total long-term liabilities	44,122		42,179
Total liabilities	245,063		275,005
Stockholders’ equity:
Preferred stock, $0.01 par value; 1,500 shares authorized; none issued or outstanding	—		—
Common stock, $0.01 par value; 44,000 shares authorized; 20,455 and 20,412 shares issued, 20,141 and 20,028 shares outstanding at June 30, 2022 and December 31, 2021, respectively	205		204
Treasury stock at cost, 384 shares at June 30, 2022 and December 31, 2021	(5,017)		(5,017)
Additional paid-in capital	431,647		429,912
Accumulated deficit	(275,637)		(266,760)
Accumulated other comprehensive loss	(1,658)		(99)
Total stockholders’ equity	149,540		158,240
Total liabilities and stockholders’ equity	$	394,603	$	433,245

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

Table of Contents

ASURE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(unaudited)				(unaudited)
Revenue:
Recurring	$	19,014	$	16,072	$	42,018	$	35,314
Professional services, hardware and other	1,286		1,096		2,615		1,656
Total revenue	20,300		17,168		44,633		36,970
Cost of Sales	8,039		7,223		16,908		14,533
Gross profit	12,261		9,945		27,725		22,437
Operating expenses:
Sales and marketing	4,589		3,622		9,486		7,233
General and administrative	8,696		6,821		16,181		13,319
Research and development	1,472		1,343		3,293		2,467
Amortization of intangible assets	3,352		2,528		6,784		5,056
Total operating expenses	18,109		14,314		35,744		28,075
Loss from operations	(5,848)		(4,369)		(8,019)		(5,638)
Interest expense, net	(1,085)		(223)		(1,901)		(447)
Other income, net	1,147		8,654		1,147		8,654
(Loss) Income from operations before income taxes	(5,786)		4,062		(8,773)		2,569
Income tax expense	74		298		104		403
Net (loss) income	(5,860)		3,764		(8,877)		2,166
Other comprehensive loss:
Unrealized loss on marketable securities	(1,754)		(69)		(1,063)		(208)
Comprehensive (loss) income	$	(7,614)	$	3,695	$	(9,940)	$	1,958

Basic and diluted (loss) earnings per share
Basic	$	(0.29)	$	0.20	$	(0.44)	$	0.11
Diluted	$	(0.29)	$	0.20	$	(0.44)	$	0.11

Weighted average basic and diluted shares
Basic	20,106		19,040		20,067		19,033
Diluted	20,106		19,203		20,067		19,198

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

Table of Contents

ASURE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock Outstanding	Common Stock Amount		Treasury Stock		Additional Paid-in Capital		Accumulated Deficit		Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance at December 31, 2021	20,028	$	204	$	(5,017)	$	429,912	$	(266,760)	$	(99)	$	158,240
Stock issued upon option exercise and vesting of restricted stock units	43	1		—		—		—		—		1
Share based compensation	—	—		—		729		—		—		729
Net loss	—	—		—		—		(3,017)		—		(3,017)
Other comprehensive loss	—	—		—		—		—		(1,063)		(1,063)
Balance at March 31, 2022	20,071	$	205	$	(5,017)

SEC Form 10-Q filed by Asure Software Inc