asur-20220930

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 September 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.)

405 Colorado Street, Suite 1800, Austin, Texas

78701

(Address of principal executive offices)

(Zip Code)


512-437-2700
(Registrant’s Telephone Number, including Area Code)
3700 N. Capital of Texas Hwy #350 Austin, Texas 78746
(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 November 4, 2022, 20,160,622 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 September 30, 2022 and December 31, 2021	1
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and September 30, 2021	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and September 30, 2021	3
	Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended September 30, 2022 and September 30, 2021	4
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 4.	Controls and Procedures	26

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults upon Senior Securities	27
Item 4.	Other Information	27
Item 5.	Exhibits	28

	Signatures	28

Table of Contents

PART I

ITEM 1. FINANCIAL STATEMENTS

ASURE SOFTWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)


	September 30, 2022		December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	10,885	$	13,427
Accounts receivable, net of allowance for doubtful accounts of $2,751 and $2,210 at September 30, 2022 and December 31, 2021, respectively	6,821		5,308
Inventory	323		246
Prepaid expenses and other current assets	10,658		13,475
Total current assets before funds held for clients	28,687		32,456
Funds held for clients	181,969		217,273
Total current assets	210,656		249,729
Property and equipment, net	11,364		8,945
Goodwill	86,011		86,011
Intangible assets, net	70,238		78,573
Operating lease assets, net	7,969		5,748
Other assets, net	4,886		4,136
Total assets	$	391,124	$	433,142
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of notes payable	$	3,064	$	1,907
Accounts payable	1,322		565
Accrued compensation and benefits	4,179		3,568
Operating lease liabilities, current	1,686		1,551
Other accrued liabilities	4,137		2,333
Contingent purchase consideration	2,299		1,905
Deferred revenue	4,173		3,750
Total current liabilities before client fund obligations	20,860		15,579
Client fund obligations	184,617		217,144
Total current liabilities	205,477		232,723
Long-term liabilities:
Deferred revenue	252		36
Deferred tax liability	1,758		1,595
Notes payable, net of current portion	31,367		33,120
Operating lease liabilities, noncurrent	6,908		4,746
Contingent purchase consideration	670		2,424
Other liabilities	130		258
Total long-term liabilities	41,085		42,179
Total liabilities	246,562		274,902
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; 20,544 and 20,412 shares issued, 20,160 and 20,028 shares outstanding at September 30, 2022 and December 31, 2021, respectively	205		204
Treasury stock at cost, 384 shares at September 30, 2022 and December 31, 2021	(5,017)		(5,017)
Additional paid-in capital	432,445		429,912
Accumulated deficit	(280,170)		(266,760)
Accumulated other comprehensive loss	(2,901)		(99)
Total stockholders’ equity	144,562		158,240
Total liabilities and stockholders’ equity	$	391,124	$	433,142

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(unaudited)				(unaudited)
Revenue:
Recurring	$	19,959	$	16,374	$	61,977	$	51,688
Professional services, hardware and other	1,944		1,607		4,559		3,263
Total revenue	21,903		17,981		66,536		54,951
Cost of Sales	8,256

SEC Form 10-Q filed by Asure Software Inc