10-Q

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

☐ 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: 0-20008

ASURE SOFTWARE, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	74-2415696
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
110 Wild Basin Road, Suite 100
Austin, Texas	78746
(Address of Principal Executive Offices)	(Zip Code)

(512) 437-2700

(Registrant’s Telephone Number, including Area Code)

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  ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

      Large accelerated filer ☐      Accelerated filer ☐      Non-accelerated filer ☐      Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No ☒

As of August 11, 2016, the registrant had outstanding 6,516,596 shares of its Common Stock, $0.01 par value.

TABLE OF CONTENTS

		Page
		Number
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months ended June 30, 2016 and 2015	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
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 6.	Exhibits	24
Signatures		25

PART I – FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

ASURE SOFTWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	June 30, 2016 (Unaudited)			December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	283		$	1,158
Accounts and note receivable, net of allowance for doubtful accounts of $113 and $145 at June 30, 2016 and December 31, 2015, respectively		6,180			4,671
Inventory		516			784
Prepaid expenses and other current assets		1,422			1,072
Total current assets before funds held for clients		8,401			7,685
Funds held for clients		24,525			-
Total current assets		32,926			7,685
Property and equipment, net		2,003			2,212
Goodwill		26,265			17,436
Intangible assets, net		13,510			6,026
Other assets		100			458
Total assets	$	74,804		$	33,817
Liabilities and stockholders’ equity
Current liabilities:
Current portion of notes payable, net of debt issuance cost	$	4,901		$	909
Accounts payable		2,418			2,670
Accrued compensation and benefits		1,099			715
Other accrued liabilities		1,489			1,181
Deferred revenue		9,341			10,803
Total current liabilities before client fund obligations		19,248			16,278
Client fund obligations		24,525			-
Total current liabilities		43,773			16,278
Long-term liabilities:
Deferred revenue		1,545			947
Notes payable, net of debt issuance cost		26,074			12,384
Other liabilities		363			490
Total long-term liabilities		27,982			13,821
Total liabilities		71,755			30,099
Stockholders’ equity:
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding		-			-
Common stock, $.01 par value; 11,000 shares authorized; 6,901 and 6,674 shares issued, 6,517 and 6,290 shares outstanding at June 30, 2016 and December 31, 2015, respectively		69			67
Treasury stock at cost, 384 shares at June 30, 2016 and December 31, 2015		(5,017	)		(5,017	)
Additional paid-in capital		280,280			279,649
Accumulated deficit		(272,321	)		(270,903	)
Accumulated other comprehensive income (loss)		38			(78	)
Total stockholders’ equity		3,049			3,718
Total liabilities and stockholders’ equity	$	74,804		$	33,817

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

3

ASURE SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands, except share and per share data)

(Unaudited)

	FOR THE THREE MONTHS ENDED June 30,						FOR THE SIX MONTHS ENDED June 30,
	2016			2015			2016			2015
Revenues:
Cloud revenue	$	5,389		$	3,417		$	9,251		$	6,788
Hardware revenue		1,275			1,047			1,968			1,632
Maintenance and support revenue		1,192			1,541			2,431			3,107
On premise software license revenue		458			321			598			487
Professional services revenue		1,350			833			2,138			1,477
Total revenues		9,664			7,159			16,386			13,491
Cost of sales		2,176			1,879			3,906			3,531
Gross margin		7,488			5,280			12,480			9,960
Operating expenses
Selling, general and administrative		5,480			3,612			9,807			7,061
Research and development		645			743			1,456			1,481
Amortization of intangible assets		626			504			1,003			1,009
Total operating expenses		6,751			4,859			12,266			9,551
Income from operations		737			421			214			409
Other income (loss)
Interest income		-			-			10			-
Loss on lease termination		-			-			-			(110	)
Foreign currency gain (loss)		1			3			2			(8	)
Interest expense and other		(560	)		(279	)		(852	)		(561	)
Interest expense- amortization of original issue discount (OID)		-			(8	)		-			(16	)
Acquisition costs		-			-			(706	)		-
Total other loss, net		(559	)		(284	)		(1,546	)		(695	)
Income (loss) from operations before income taxes		178			137			(1,332	)		(286	)
Income tax provision		(42	)		(42	)		(86	)		(102	)
Net income (loss)	$	136		$	95		$	(1,418	)	$	(388	)
Other comprehensive income (loss)
Foreign currency gain (loss)		81			(41	)		116			(35	)
Other comprehensive income (loss)	$	217			54		$	(1,302	)	$	(423	)
Basic and diluted net income (loss) per share
Basic	$	0.02		$	0.02		$	(0.23	)	$	(0.06	)
Diluted	$	0.02		$	0.02		$	(0.23	)	$	(0.06	)
Weighted average basic and diluted shares
Basic		6,294,000			6,066,000			6,292,000			6,061,000
Diluted		6,429,000			6,231,000			6,292,000			6,061,000

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

4

 ASURE SOFTWARE, INC.

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	FOR THE SIX MONTHS ENDED JUNE 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,418	)	$	(388	)
Adjustments to reconcile net loss to net cash (used in) provided by operations:
Depreciation and amortization		1,706			1,553
Provision for doubtful accounts		10			40
Share-based compensation		106			98
Other		-			26
Changes in operating assets and liabilities:
Accounts receivable		(1,059	)		96
Inventory		268			(143	)
Prepaid expenses and other assets		86			(922	)
Accounts payable		(316	)		572
Accrued expenses and other long-term obligations		397			(196	)
Deferred revenue		(864	)		126
Net cash (used in) provided by operating activities		(1,084	)		862
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions net of cash acquired		(12,000	)		-
Purchases of property and equipment		(24	)		(989	)
Disposals of property and equipment		-			18
Collection of note receivable		64			-
Net change in funds held for clients		(8,106	)		-
Net cash used in investing activities		(20,066	)		(971	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		15,335			2,500
Payments on notes payable		(3,274	)		(2,875	)
Payments on amendment of senior notes payable		-			(75	)
Debt financing fees		(438	)		-
Payments on capital leases		(106	)		(97	)
Net proceeds from exercise of stock options		528			585
Net change in client fund obligations		8,106			-
Net cash provided by financing activities		20,151			38
Effect of foreign exchange rates		124			(36	)
Net decrease in cash and cash equivalents		(875	)		(107	)
Cash and cash equivalents at beginning of period		1,158			320
Cash and cash equivalents at end of period	$	283		$	213
SUPPLEMENTAL INFORMATION:
Cash paid for:
Interest	$	456		$	586
Non-cash Investing and Financing Activities:
Note receivable from customer		-			601
Subordinated notes payable – Mangrove acquisition		6,000			-

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

5

ASURE SOFTWARE, INC.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION

Asure Software, Inc., a Delaware corporation, is a provider of cloud-based software-as-a-service (“SaaS”) time and labor management and Agile Workplace management solutions that enable organizations to manage their office environments as well as their human resource and payroll processes effectively and efficiently. Asure develops, markets, sells and supports its offerings worldwide through its principal office in Austin, Texas and through additional offices in Dedham, Massachusetts; Traverse City, Michigan and London, United Kingdom.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission and accordingly, they do not include all information and footnotes required under U.S. generally accepted accounting principles 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 June 30, 2016 and December 31, 2015, the results of operations for the three and six months ended June 30, 2016 and 2015, and the cash flows for the six months ended June 30, 2016 and 2015.

You should read these condensed consolidated financial statements in conjunction with our audited consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in our annual report on Form 10-K for the fiscal year ended December 31, 2015.  The results for the interim periods are not necessarily indicative of results for a full fiscal year.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash deposits and highly liquid investments with an original maturity of three months or less when purchased.

LIQUIDITY

As of June 30, 2016, Asure’s principal sources of liquidity consisted of approximately $283 of cash and cash equivalents, future cash generated from operations and $3,000 available for borrowing under our Wells Fargo revolver discussed in Note 6 – Notes Payable. We believe that we have and/or will generate sufficient cash for our short- and long-term needs, including meeting the requirements of our term loan, and related debt covenant requirements. We continue to seek reductions in our expenses as a percentage of revenue on an annual basis and thus may utilize our cash balances in the short-term to reduce long-term costs. Based on current internal projections, we believe that we have and/or will generate sufficient cash for our operational needs, including any required debt payments, for at least the next twelve months.

Management is focused on growing our existing product offering, as well as our customer base, to increase our recurring revenues. We are also exploring additional strategic acquisitions in the near future, although we have no agreements to make any acquisition at this time. We expect to fund any future acquisitions with equity, available cash, future cash from operations, or debt from outside sources.  

We cannot assure that we can grow our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, management believes that we have sufficient capital and liquidity to fund and cultivate the growth of our current and future operations for at least the next 12 months and to maintain compliance with the terms of our debt agreements and related covenants or to obtain compliance through debt repayments made with the available cash on hand or anticipated for receipt in the ordinary course of operations.

6

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued FASB ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition”. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step process to achieve that core principle. ASU 2014-09 requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In August 2015, the FASB issued FASB ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”, which deferred the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, using one of two retrospective application methods. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued FASB ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing.” ASU 2016-10 clarifies the implementation guidance in Topic 606 for identifying performance obligations and determining when to recognize revenue on licensing agreements for intellectual property. In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting.” ASU 2016-11 rescinds certain SEC staff comments previously made in regard to these ASU’s. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” that provide guidance on assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. We are currently evaluating the effect that the adoption of ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016- 10, ASU 2016-11 and ASU 2016-12 will have on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern,” which requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern (meet its obligations as they become due) within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt about the entity’s ability to continue as a going concern, certain disclosures are required. This ASU is effective for annual reporting periods ending after December 15, 2016, and interim reporting periods thereafter. We adopted the provisions of ASU 2014-15 on January 1, 2016. This adoption did not have any impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03,” Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This ASU requires reporting entities to record costs paid to third parties that are directly related to issuing debt, and that otherwise would not be incurred, as a deduction to the corresponding debt for presentation purposes. In addition, in August 2015, FASB issued ASU 2015-15, “Interest — Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements-Amendments to SEC Paragraphs Pursuant to Staff Announcement at the June 18, 2015 Emerging Issues Task Force ("EITF") Meeting”. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The provisions of each ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity should apply each amendment retrospectively. We adopted ASU 2015-03 on January 1, 2016 for debt issuance costs on our term loan, on a retrospective basis. The impact of adopting ASU 2015-03 on our current period condensed consolidated financial statements was the classification of all deferred financing costs as a deduction to the corresponding debt in addition to the reclassification of deferred financing costs in other current and long term assets to short and long term notes payable as of December 31, 2015, within the condensed consolidated balance sheets to conform to the current period presentation. Other than these reclassifications and additional disclosures, the adoption of ASU 2015-03 did not have an impact on our consolidated financial statements.

7

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. Inventory within the scope of this update is required to be measured at the lower of its cost or net realizable value, with net realizable value being the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective prospectively for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the effect of adopting ASU 2015-11 on our consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments,” which requires acquirers to recognize adjustments to provisional amounts identified during the reporting period in which the adjustment amounts are determined. Acquirers should record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Application of the standard, which should be applied prospectively, is required for the annual and interim periods beginning after December 15, 2015. We adopted the provisions of ASU 2015-16 on January 1, 2016. The adoption did not have a material impact on our consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17,” Income Taxes: Balance Sheet Classification of Deferred Taxes”, to require that deferred tax liabilities and assets be classified entirely as non-current. This amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. Early adoption is permitted, and theamended guidance may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are currently evaluating the effects and timing of the adoption of ASU 2015-17, which must be adopted by the first quarter of 2017.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)".  The core principle of the standard is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. We will be required to adopt the new standard in the first quarter of 2019. We are currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements. 

CONTINGENCIES

Although Asure has been, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of June 30, 2016, we were not party to any pending legal proceedings.

NOTE 3 – FAIR VALUE MEASUREMENTS

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles and expands disclosures about fair value measurements. 

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

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

8

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

The following table presents the fair value hierarchy for our financial assets measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015, respectively:

			Fair Value Measure at June 30, 2016
	Total		Quoted		Significant
	Carrying		Prices		Other		Significant
	Value at		in Active		Observable		Unobservable
	June 30,		Market		Inputs		Inputs
Description	2016		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	283	$	283	$	-	$	-
Total	$	283	$	283	$	-	$	-
Liabilities:
Contingent consideration	$	173	$	-	$	-	$	173
Total	$	173	$	-	$	-	$	173

			Fair Value Measure at December 31, 2015
	Total		Quoted		Significant
	Carrying		Prices		Other		Significant
	Value at		in Active		Observable		Unobservable
	December 31,		Market		Inputs		Inputs
Description	2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	1,158	$	1,158	$	-	$	-
Total	$	1,158	$	1,158	$	-	$	-
Liabilities:
Contingent consideration	$	173	$	-	$	-	$	173
Total	$	173	$	-	$	-	$	173

The following summarizes quantitative information about Level 3 fair value measurements.

Contingent consideration

In connection with the acquisition of FotoPunch, Inc. (“FotoPunch”) in July 2014, we recorded contingent consideration based upon the expected achievement of certain milestone goals. We will record any changes to the fair value of contingent consideration due to changes in assumptions used in preparing the valuation model in selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss).

Contingent consideration is valued using a multi-scenario discounted cash flow method. The assumptions used in preparing the discounted cash flow method include estimates for outcomes if milestone goals are achieved and the probability of achieving each outcome. Management estimates probabilities and then applies them to management’s conservative case forecast, most likely case forecast and optimistic case forecast with the various scenarios. The Company has retained a third party expert to assist in determining the value of the contingent consideration.

The valuation of contingent consideration for the FotoPunch acquisition is based on a Monte Carlo simulation model for fiscal 2016 to 2018, with fiscal 2016 being a partial year from January 1, 2016 to June 30, 2016. Management provided revenue projections (an unobservable input) of $650, $2,203 and $3,925 for fiscal 2016 (partial year), fiscal 2017 and fiscal 2018, respectively. The fair value of this valuation is estimated on a quarterly basis through a collaborative effort by the Company's sales, marketing and finance departments. Significant changes in any of the unobservable inputs used in the fair value measurement of contingent consideration in isolation could result in a significantly lower or higher fair value. A change in projected revenue growth rates would be accompanied by a directionally similar change in fair value. Management evaluates the fair value on a quarterly basis based upon updated projections. 

9

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

The following table summarizes the changes in our contingent consideration:

Balance at December 31, 2015	$	173
Change in fair value of contingent consideration		-
Balance at June 30, 2016	$	173

Funds held for clients

Funds held for clients represent assets that, based upon the Company's intent, are restricted for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client fund obligations on our Condensed Consolidated Balance Sheets. Funds held for clients are held in demand deposit accounts at major financial institutions and are classified as a current asset on our Condensed Consolidated Balance Sheets since these funds are held solely for the purposes of satisfying the client fund obligations.

Client fund obligations represent the Company's contractual obligations to remit funds to satisfy clients' payroll and tax payment obligations and are recorded on the Condensed Consolidated Balance Sheets at the time that the Company impounds funds from clients.  The client fund obligations represent liabilities that will be repaid within one year of the balance sheet date.  The Company has reported client fund obligations as a current liability on the Condensed Consolidated Balance Sheets totaling $24,525 and $0 as of June 30, 2016 and December 31, 2015, respectively.  The Company has classified funds held for clients as a current asset since these funds are held solely for the purposes of satisfying client funds obligations.  The Company has reported cash flows related to purchases, sales and maturities of corporate and client funds marketable securities on a gross basis in the investing section of the Condensed Statements of Consolidated Cash Flows.  The Company has reported cash flows related to client fund investments with original maturities of ninety days or less on a net basis within the net increase in restricted cash and cash equivalents and other restricted assets held to satisfy client fund obligations in the investing section of the Statements of Consolidated Cash Flows.  The Company has reported cash flows related to cash received from and paid on behalf of clients on a net basis within the net increase in client fund obligations in the financing activities section of the Condensed Statements of Consolidated Cash Flows.

NOTE 4 – ACQUISITIONS

2016 Acquisition

Through the stock and asset purchases described below, we have entered into the human resource management, payroll processing and benefits administration services businesses, which we intend to integrate into our existing AsureForce® product line.

Stock Purchase Agreement

In March 2016, we acquired all of the issued and outstanding shares of common stock (the “Shares”) of Mangrove Employer Services, Inc. of Tampa, Florida (“Mangrove”). Pursuant to this stock purchase, we acquired the payroll division of Mangrove, which is engaged in the human resource management and payroll processing businesses. The aggregate consideration for the Shares consisted of (i) $11,348 in cash, a portion of which was used to pay certain obligations of Mangrove and (ii) a secured subordinated promissory note (the “Note”) in the principal amount of $6,000, subject to adjustment as provided in the Stock Purchase Agreement. We funded the cash payment with proceeds from our credit agreement with Wells Fargo. The Note bears interest at an annual rate of 3.50% and matures in March 2018, with the first installment of principal due in March 2017 and the second installment of principal due in March 2018. The Stock Purchase Agreement contains certain customary representations, warranties, indemnities and covenants. Details regarding the financing of the acquisition are described in the below Notes Payable table. Transaction costs for this acquisition were $706 and we expensed them as incurred. The acquisition costs are included in other income (loss) in the Condensed Consolidated Statement of Comprehensive Income (Loss) for six months ended June 30, 2016.

10

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Asset Purchase Agreement

In March 2016, we also acquired substantially all the assets of Mangrove COBRAsource Inc., a benefits administration services business which then was a wholly owned subsidiary of Mangrove. The aggregate consideration for the assets was $1,036, which Mangrove COBRAsource applied to pay off certain loan balances. The Asset Purchase Agreement contains certain customary representations, warranties, indemnities and covenants.

Following is the purchase price allocation for the acquisition of Mangrove. We based the preliminary fair value estimate for the assets acquired and liabilities assumed for this acquisition upon preliminary calculations and valuations.  Our estimates and assumptions for this acquisition are subject to change as we obtain additional information for our estimates during the respective measurement periods (up to one year from the acquisition date). The primary areas of those preliminary estimates that we have not yet finalized relate to certain tangible assets and liabilities acquired, certain legal matters and income and non-income based taxes.

We recorded the transaction using the acquisition method of accounting and recognized assets and liabilities assumed at their fair value as of the date of acquisition. The $8,700 of intangible assets subject to amortization consist of $1,200 allocated to Customer Relationships, $6,900 in Developed Technology and $600 for Trade Names.  We estimated the fair value of the Customer Relationships and Developed Technology using the excess earnings method, a form of the income approach. We discounted cash flow projections using a rate of 18.1%, which reflects the risk associated with the intangible asset related to the other assets and the overall business operations to us. We estimated the fair value of the Trade Names using the relief from royalty method based upon a 1.2% royalty rate for the payroll division and 0.5% for the benefits administration services business.  

The Company believes significant synergies are expected to arisefrom this strategic acquisition. This factor contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. A portion of acquired goodwill will be deductible for tax purposes.

We based the allocations on fair values at the date of acquisition:

	Amount
Assets acquired
Accounts receivable	$	523
Funds held for clients		16,419
Fixed assets		258
Other assets		28
Goodwill		8,837
Intangibles		8,700
Total assets acquired	$	34,765
Liabilities assumed
Accounts payable		64
Accrued other liabilities		282
Client fund obligations		16,419
Total liabilities assumed	$	16,765
Net assets acquired	$	18,000

11

ASURE SOFTWARE, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Unaudited Pro Forma Financial Information

The following unaudited summary of pro forma combined results of operation for the three and six months ended June 30, 2016 and 2015 gives effect to the acquisition of Mangrove and the acquisition of assets of COBRAsource as if we had completed them on January 1, 2015. This pro forma summary does not reflect any operating efficiencies, cost savings or revenue enhancements that we may achieve by combining operations. In addition, we have not reflected certain non-recurring expenses, such as legal expenses and other transactions expenses for the first 12 months after the acquisition, in the pro forma summary. We present this pro forma summary for informational purposes only and it is not necessarily indicative of what our actual results of operations would have been had the acquisitions taken place as of January 1, 2015, nor is it indicative of future consolidated results of operations.

	FOR THE THREE MONTHS ENDED		FOR THE THREE MONTHS ENDED
	JUNE 30,		JUNE 30,
	2016		2015
Revenues	$	9,664	$	8,959
Net income (loss)	$	136	$	(493	)
Net income (loss) per common share:
Basic and diluted	$	0.02		(0.08	)
Weighted average shares outstanding:
Basic		6,294		6,066
Diluted		6,429		6,231

	FOR THE SIX MONTHS ENDED JUNE 30,			FOR THE SIX MONTHS ENDED JUNE 30,
	2016			2015
Revenues	$	18,514		$	17,375
Net loss	$	(596	)	$	(1,200	)
Net loss per common share:
Basic and diluted	$	(0.09	)	$	(0.20	)
Weighted average shares outstanding:
Basic and diluted	$	6,292		$	6,061

NOTE 5 – GOODWILL AND OTHER INTANGIBLE ASSETS

Asure accounted for its historical acquisitions in accordance with ASC 805, Business Combinations.  We recorded the amount exceeding the fair value of net assets acquired at the date of acquisition as goodwill. We recorded intangible assets apart from goodwill if the assets had contractual or other legal rights or if the assets could be separated and sold, transferred, licensed, rented or exchanged. Asure’s goodwill relates to the acquisitions of ADI and Legiant in 2011, the acquisition of PeopleCube in 2012, and the acquisitions of FotoPunch and Roomtag in 2014 and Mangrove in 2016. 

12

ASURE SOFTWARE, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

In accordance with ASC 350, Intangibles-Goodwill and Other, we review and evaluate our long-lived assets, including intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that we may not recover their net book value. We test goodwill for impairment on an annual basis in the fourth fiscal quarter of each year, and between annual tests, if indicators of potential impairment exist, using a fair-value-based approach. There has been no impairment of goodwill for the periods presented. We amortize intangible assets not considered to have an indefinite useful life using the straight-line method over their estimated period of benefit, which generally ranges from one to nine years. Each reporting period, we evaluate the estimated remaining useful life of intangible assets and assess whether events or changes in circumstances warrant a revision to the remaining period of amortization or indicate that impairment exists. We have not identified any impairments of finite-lived intangible assets during any of the periods presented. 

The following table summarizes the changes in our goodwill:

Balance at December 31, 2015	$	17,436
Goodwill recognized upon acquisition of Mangrove		8,837
Foreign exchange adjustments to goodwill		(8	)
Balance at June 30, 2016	$	26,265

The gross carrying amount and accumulated amortization of our intangible assets as of June 30, 2016 and December 31, 2015 are as follows:

			June 30, 2016
Intangible Asset	Weighted Average Amortization Period (in Years)		Gross		Accumulated Amortization			Net
Developed Technology		12.7	$	10,915	$	(2,702	)	$	8,213
Customer Relationships		7.3		14,011		(9,599	)		4,412
Reseller Relationships		7		853		(579	)		274
Trade Names		14.5		1,294		(684	)		610
Covenant not-to-compete		2		229		(228	)		1
		14.6	$	27,302	$	(13,792	)	$	13,510

			December 31, 2015
Intangible Asset	Weighted Average Amortization Period (in Years)		Gross		Accumulated Amortization			Net
Developed Technology		7.6	$	4,015	$	(2,208	)	$	1,807
Customer Relationships		7.2		12,811		(8,959	)		3,852
Reseller Relationships		7		853		(518	)		335
Trade Names		5		694		(669	)		25
Covenant not-to-compete		2		229		(222	)		7
		7.3	$	18,602	$	(12,576	)	$	6,026

We record amortization expense using the straight-line method over the estimated useful lives of the intangible assets, as noted above.  Amortization expenses for the three months ended June 30, 2016 and 2015 were $626 and $504, respectively, included in Operating Expenses. Amortization expenses recorded in Cost of Sales were $106 and $106 for the three months ended June 30, 2016 and 2015, respectively. Amortization expenses for the six months ended June 30, 2016 and 2015 were $1,003 and $1,009 included in Operating Expenses, and $213 and $212, respectively, included in Cost of Sales.

13

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

The following table summarizes the future estimated amortization expense relating to our intangible assets as of June 30, 2016:

Calendar Years
2016	$	1,130
2017		2,245
2018		1,897
2019		1,264
2020		698
Thereafter		6,276
	$	13,510

NOTE 6 – NOTES PAYABLE

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

Notes Payable	Maturity	Stated Interest Rate			Balance as of June 30, 2016		Balance as of December 31, 2015
Subordinated Notes Payable- Mangrove acquisition	3/18/2018		3.50	%	$	6,060	$	-
Term Loan - Wells Fargo	3/31/2019		5.00	%		25,696		13,687
Total Notes Payable					$	31,756	$	13,687
Short-term notes payable, gross					$	5,187	$	1,031
Long-term notes payable, gross					$	26,569	$	12,656

On January 1, 2016, we adopted ASU 2015-03 for debt issuance costs on our term loan, on a retrospective basis. The impact of adopting ASU 2015-03 on our current period condensed consolidated financial statements was the classification of all deferred financing costs as a deduction to corresponding debt in addition to the reclassification of deferred financing costs in other current and long term assets to short and long term notes payable as of December 31, 2015, within the Condensed Consolidated Balance Sheets to conform to the current period presentation. The following table summarizes the debt issuance costs as of the dates indicated:

Notes Payable	Gross Notes Payable at June 30, 2016		Debt Issuance Costs			Net Notes Payable at June 30, 2016
Short-term notes payable	$	5,187	$	(286	)	$	4,901
Long-term notes payable		26,569		(495	)		26,074
Total Notes Payable	$	31,756	$	(781	)	$	30,975

Notes Payable	Gross Notes Payable at December 31, 2015		Debt Issuance Costs			Net Notes Payable at December 31, 2015
Short-term notes payable	$	1,031	$	(122	)	$	909
Long-term notes payable		12,656		(272	)		12,384
Total Notes Payable	$	13,687	$	(394	)	$	13,293

The following table summarizes the future principal payments related to our outstanding debt:

Year  Ended	Gross Amount
December 31, 2016	$	982
December 31, 2017		5,455
December 31, 2018		5,678
December 31, 2019		19,641
Gross Notes Payable	$	31,756

14

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Term Loan - Wells Fargo

In March 2014, we entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A., as administrative agent, and the lenders that are party thereto. The Credit Agreement contains customary events of default, including, among others, payment defaults, covenant defaults, judgment defaults, bankruptcy and insolvency events, cross defaults to certain indebtedness, incorrect representations or warranties, and change of control. In some cases, the defaults are subject to customary notice and grace period provisions. In March 2014 and in connection with the Credit Agreement, we and our wholly-owned active subsidiaries entered into a Guaranty and Security Agreement with Wells Fargo Bank. Under the Guaranty and Security Agreement, we and each of our wholly-owned active subsidiaries have guaranteed all obligations under the Credit Agreement and granted a security interest in substantially all of our and our subsidiaries’ assets.

The Credit Agreement provided for a term loan in the amount of $15,000 maturing in March 2019. We used the proceeds of the term loan to finance the repayment of all amounts outstanding under our loan agreement with Deerpath and the payment of certain fees, cost and expenses related to the Credit Agreement.

The Credit Agreement also provided for a revolving loan commitment in the aggregate amount of up to $3,000. The outstanding principal amount of the revolving loan is due and payable in March 2019. As of June 30, 2016, $0 was outstanding and $3,000 was available for borrowing under the revolver.

Additionally, the Credit Agreement provided for a $10,000 uncommitted incremental term loan facility to support permitted acquisitions.

Under the Credit Agreement, we were required to maintain a fixed charge coverage ratio of not less than 1.5 to 1.0 beginning with the quarter ended June 30, 2014 and each calendar quarter thereafter, and a leverage ratio of not greater than 3.5 to 1.0 beginning with the quarter ended June 30, 2014 with the levels stepping down thereafter. We amended the Credit Agreement in August 2014, March 2015 and November 2015. The August 2014 amendment revised the leverage ratio beginning with the quarter ended September 30, 2014 to a leverage ratio of not greater than 3.6 to 1.0 with the levels stepping down thereafter. The March 2015 amendment authorized us to optionally prepay, subject to specified conditions, the Subordinated Note Payable to Roomtag and revised the leverage ratio beginning with the quarter ended March 31, 2015 to a leverage ratio of not greater than 3.5 to 1.0 with the levels stepping down thereafter.  The November 2015 amendment increased the applicable margin relative to the LIBOR rate upon which we compute the interest payable.  We agreed that if our leverage ratio is (a) less than or equal to 2.25:1, (b) greater than 2.25:1 but less than or equal to 2.75:1, (c) greater than 2.75:1 but less than or equal to 3.25:1 or (d) greater than 3.25:1, the applicable margin relative to the LIBOR rate would be 3.00, 3.50, 4.00 or 4.50 percentage points, respectively. We further agreed that until the leverage ratio testing period ending September 30, 2016, we will pay interest based on the 4.50 percentage point margin level.

In March 2016, we amended the Credit Agreement. Under this amendment, we expanded the Credit Agreement by $12,500 to $29,188. The amendment changes the applicable margin rates for determining the interest rate payable on the loan as follows:

Total Leverage Ratio	Base Rate Margin			LIBOR Rate Margin
≤ 2.75:1		3.50	%		4.50	%
> 2.75:1 but ≤ 3.25:1		4.00	%		5.00	%
≥ 3.25:1		4.50	%		5.50	%

The March 2016 amendment also amends our leverage ratio requirements under the Credit Agreement.  We have now agreed to a leverage ratio not to exceed 5.00:1 at March 31, 2016, stepping down to 2.25:1 at December 31, 2018.

The Credit Agreement contains customary affirmative and negative covenants, including, among others, limitations with respect to debt, liens, fundamental changes, sale of assets, prepayment of debt, investments, dividends and transactions with affiliates.

The outstanding principal amount of the term loan is payable as follows:

·          $491 on June 30, 2016 and the last day of each fiscal quarter thereafter up to March 31, 2017; and

·          $655 on June 30, 2017 and the last day of each fiscal quarter thereafter, with a final payment of the remaining balance due on March 31, 2019

15

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

As of June 30, 2016, we were in compliance with all covenants and all payments remain current. We expect to be in compliance or be able to obtain compliance through debt repayments with available cash on hand or as we expect to generate from the ordinary course of operations over the next twelve months. 

 Subordinated Notes Payable: Mangrove Acquisition Note

In March 2016, we acquired all of the issued and outstanding shares of common stock (the “Shares”) of Mangrove. Pursuant to this stock purchase, we acquired the payroll division of Mangrove, which is engaged in the human resource management and payroll processing businesses. The aggregate consideration for the Shares consisted of (i) $11,348 in cash, a portion of which was used to pay certain obligations of Mangrove and (ii) a secured subordinated promissory note (the “Note”) in the principal amount of $6,000, subject to adjustment as provided in the Stock Purchase Agreement. We funded the cash payment with proceeds from the Credit Agreement with Wells Fargo. The Note bears interest at an annual rate of 3.50% and matures in March 2018, with the first installment of principal of $3,000 due in March 2017 and the second installment of principal of $3,000 due in March 2018.

NOTE 7 – SHARE BASED COMPENSATION

Share based compensation for our stock option plans for the three months ended June 30, 2016 and 2015 were $67 and $61, respectively, and $106 and $98 for the six months ended June 30, 2016 and 2015, respectively. We issued 235,000 shares of common stock related to exercises of stock options granted from our Stock Option Plan for the three months ended June 30, 2016 and 230,000 for the three months ended June 30, 2015, respectively.

Asure has one active equity plan, the 2009 Equity Plan (the “2009 Plan”). The 2009 Plan provides for the issuance of non-qualified and incentive stock options to our employees and consultants. We generally grant stock options with exercise prices greater than or equal to the fair market value at the time of grant.  The options generally vest over three to four years and are exercisable for a period of five to ten years beginning with date of grant.   Our shareholders approved an amendment to the 2009 Plan in June 2014 to increase the number of shares reserved under the plan from 1,200,000 to 1,400,000. We have a total of 549,000 options granted and outstanding pursuant to the 2009 Plan as of June 30, 2016.

NOTE 8 – OTHER COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) represents a measure of all changes in equity that result from recognized transactions and other economic events other than those resulting from investments by and distributions to shareholders. Our other comprehensive income (loss) includes foreign currency translation adjustments.

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax:

	Foreign Currency Items			Accumulated Other Comprehensive Income (Loss) Items
Beginning balance, December 31, 2015	$	(78	)	$	(78	)
Other comprehensive income before reclassifications		116			116
Amounts reclassified from accumulated other comprehensive income (loss)		—			—
Net current-period other comprehensive income		116			116
Ending balance, June 30, 2016	$	38		$	38

16

ASURE SOFTWARE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

NOTE 9 – NET INCOME (LOSS) PER SHARE

We compute net income (loss) per share based on the weighted average number of common shares outstanding for the period.  Diluted net income (loss) per share reflects the maximum dilution that would have resulted from incremental common shares issuable upon the exercise of stock options.  We compute the number of common share equivalents, which includes stock options, using the treasury stock method. We have excluded stock options to acquire 664,000 shares for the six months ended June 30, 2016 and 685,000 shares for the six months ended June 30, 2015, respectively, from the computation of the dilutive stock options because the effect of including the stock options would have been anti-dilutive.

The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and six months ended June 30, 2016 and 2015: 

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2016		2015		2016			2015
Net income (loss)	$	136	$	95	$	(1,418	)	$	(388	)
Weighted-average shares of common stock outstanding		6,294,000		6,066,000		6,292,000			6,061,000
Dilutive effect of employee stock options		135,000		165,000		-			-
Weighted average shares for diluted net income (loss) per share		6,429,000		6,231,000		6,292,000			6,061,000
Basic net income (loss) per share	$	0.02	$	0.02	$	(0.23	)	$	(0.06	)
Diluted net income (loss) per share	$	0.02	$	0.02	$	(0.23	)	$	(0.06	)

17

ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Report represent forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results of operations, levels of activity, economic performance, financial condition or achievements to be materially different from future results of operations, levels of activity, economic performance, financial condition or achievements as expressed or implied by such forward-looking statements. Asure has attempted to identify these forward-looking statements with the words “believes,” “estimates,” “plans,” “expects,” “anticipates,” “may,” “could” and other similar expressions. Although these forward-looking statements reflect management’s current plans and expectations, which we believe are reasonable as of the filing date of this report, they inherently are subject to certain risks and uncertainties. These risks and uncertainties include — but are not limited to —  adverse changes in the economy, financial markets, and credit markets; delays or reductions in information technology spending;  the development of the market for cloud based workplace applications; product development; market acceptance of new products and product improvements; our ability to retain or increase our customer base;  security breaches; errors, disruptions or delays in our services; privacy concerns and laws; changes in our sales cycle; competition, including pricing pressures, entry of new competitors, and new technologies; intellectual property enforcement and litigation; our ability to hire, retain and motivate employees;  our ability to manage our growth; our ability to realize benefits from acquisitions;  changes in sales may not be immediately reflected in our operating results due to our subscription model; changes in laws and regulations; changes in the Internet infrastructure; and changes in accounting standards. Asure is under no obligation to update any of the forward-looking statements after the date of this Form 10-Q to conform such statements to actual results.

OVERVIEW

The following review of Asure’s financial position as of June 30, 2016 and December 31, 2015 and the results of operations and cash flows for the three and six months ended June 30, 2016 and 2015 should be read in conjunction with our 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission.  Asure’s internet website address is http://www.asuresoftware.com.  Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available through the investor relations page of our internet website free of charge as soon as reasonably practicable after they are electronically filed, or furnished to, the Securities and Exchange Commission. Asure’s internet website and the information contained therein or connected thereto is not incorporated into this Quarterly Report on Form 10-Q.

Asure is a leading global provider of cloud-based software-as-a-service (“SaaS”) time and labor management and Agile Workplace management solutions that enable companies of all sizes and complexities to operate more efficiently and proactively manage costs associated with their most expensive assets: real estate, labor and technology.

We currently offer two main product lines, AsureSpace™ and AsureForce®.  Our AsureSpace™ Agile Workplace management solutions enable organizations to manage their office environments and optimize real estate utilization.  Our AsureForce® time and labor management solutions help organizations optimize labor and labor administration costs and activities. With our acquisitions of Mangrove Employer Services, Inc. and the assets of Mangrove COBRAsource Inc. in March 2016, we have entered into the human resource management, payroll processing and benefits administration services businesses, which we are integrating into our existing AsureForce® product line. For both product lines, support and professional services are other key elements of our software and services business. As an extension of our perpetual software product offerings, Asure offers our customers maintenance and support contracts that provide ready access to qualified support staff, software patches and upgrades to our software products.   We also provide installation of and training on our products, add-on software customization and other professional services on a global scale.

We target our sales and marketing efforts to a wide range of audiences, from small and medium-sized businesses to Fortune 500 companies and divisions of enterprise organizations throughout the United States, Europe and Asia/Pacific. We generate sales of our solutions through our direct sales teams and indirectly through our channel partners.  We are expanding our investment in our direct sales teams to continue to address our market opportunity. 

18

RESULTS OF OPERATIONS

The following table sets forth, for the fiscal periods indicated, the percentage of total revenues represented by certain items in Asure’s Condensed Consolidated Statements of Comprehensive Income (Loss):

	FOR THE THREE MONTHS ENDED JUNE 30,						FOR THE SIX MONTHS ENDED JUNE 30,
	2016			2015			2016			2015
Revenues		100	%		100	%		100	%		100	%
Gross margin		77.5			73.8			76.2			73.8
Selling, general and administrative		56.7			50.5			59.8			52.3
Research and development		6.7			10.4			8.9			11.0
Amortization of intangible assets		6.5			7.0			6.1			7.5
Total operating expenses		69.9			67.9			74.9			70.8
Other loss, net		(5.8	)		(4.0	)		(9.4	)		(5.2	)
Net income (loss)		1.4			1.3			(8.7	)		(2.9	)

THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015 (Amounts in thousands)

Revenue

Our revenue was derived from the following sources:

	FOR THE THREE MONTHS ENDED June 30,
Revenue	2016		2015		Increase (Decrease)			%
Cloud revenue	$	5,389	$	3,417	$	1,972			57.7
Hardware revenue		1,275		1,047		228			21.8
Maintenance and support revenue		1,192		1,541		(349	)		(22.6	)
On premise software license revenue		458		321		137			42.7
Professional services revenue		1,350		833		517			62.1
Total revenue	$	9,664	$	7,159	$	2,505			35.0

	FOR THE SIX MONTHS ENDED June 30,
Revenue	2016		2015		Increase (Decrease)			%
Cloud revenue	$	9,251	$	6,788	$	2,463			36.3
Hardware revenue		1,968		1,632		336			20.6
Maintenance and support revenue		2,431		3,107		(676	)		(21.8	)
On premise software license revenue		598		487		111			22.8
Professional services revenue		2,138		1,477		661			44.8
Total revenue	$	16,386	$	13,491	$	2,895			21.5

Revenue represents our consolidated revenues, including sales of our scheduling software, time and attendance and human resource software, complementary hardware devices to enhance our software products, software maintenance and support services, installation and training services and other professional services.

Our product offerings are categorized into AsureSpace™ and AsureForce®. AsureSpace™ offers workplace management solutions that enable organizations to manage their office environments and optimize real estate utilization, and AsureForce® offers time and labor management solutions which help organizations optimize labor and labor administration costs and activities. Both product groupings include cloud revenue, hardware revenue, maintenance and support revenue, on premise software license revenue and professional services revenue. AsureSpace™ revenues include PeopleCube, Meeting Room Manager and Roomtag revenues. AsureForce® revenues include ADI, Legiant, iEmployee, FotoPunch and Mangrove revenues.

19

Revenue for the three months ended June 30, 2016 was $9,664, an increase of $2,505, or 35.0%, from the $7,159 reported for the three months ended June 30, 2015. Cloud revenue increased from the second quarter of 2015 due to our continued emphasis on selling integrated cloud based solutions. AsureSpace™ revenue for the three months ended June 30, 2016 was $4,705, a slight increase of $458 or 10.8%, from the $4,247 recorded for the three months ended June 30, 2015. AsureSpace™ cloud and professional services revenues increased, offset by decreases in hardware, maintenance and support and on premise software license revenues. Cloud revenue increased $257, or 13.9%, and professional services revenue increased $379, or 62.4%, over the three months ended June 30, 2015. The largest decrease was in maintenance and support revenue of $196, or 19.1%, primarily caused by the movement of customers from on premise to on demand, cloud based solutions. AsureForce® revenue for the three months ended June 30, 2016 was $4,959, an increase of $2,047, or 70.3%, from the $2,912 recorded for the three months ended June 30, 2015. This increase was primarily due to the acquisition of Mangrove in March 2016, resulting in $1,984 of revenue in the second quarter of 2016. Cloud, hardware, on premise software license and professional services revenues increased, with the largest increases in cloud revenue of $1,716, or 109.5%, and hardware revenue of $193, or 61.2%, over the three months ended June 30, 2015. These increases were offset by a decrease in AsureForce® maintenance and support revenue of $153, or 29.8%, as compared to the three months ended June 30, 2015.

Revenue for the six months ended June 30, 2016 were $16,386, an increase of $2,895, or 21.5%, from the $13,491 reported for the six months ended June 30, 2015.  This increase was primarily due to an increase in cloud, hardware revenue, and professional services, offset by a decrease in maintenance and support revenue. AsureSpace™ revenue for the six months ended June 30, 2016 was $8,440, an increase of $410, or 5.1%, from the $8,030 recorded for the six months ended June 30, 2015. This increase was primarily due to an increase in cloud revenue, hardware revenue and professional services revenue, offset by decreases in maintenance and support, on premise software license revenue. AsureForce® revenue for the six months ended June 30, 2016 was $7,946, an increase of $2,485, or 45.5%, from the $5,461 recorded for the six months ended June 30, 2015. This increase was primarily due to an increase in cloud revenue, hardware revenue, on premise software license revenue and professional services revenue, offset by a decrease in maintenance and support revenue.

Although our total customer base is widely spread across industries, our sales are concentrated in certain industry sectors, including corporate, education, healthcare, government, legal and non-profit.  We continue to target small and medium sized businesses and divisions of larger enterprises in these same industries as prospective customers.  Geographically, we sell our products worldwide, but sales are largely concentrated in the United States, Canada and Europe.  Additionally, we have a distribution partner in Australia.   As the overall workforce management solutions market continues to experience significant growth related to SaaS products, we will continue to focus on sales of Meeting Room Manager, On Demand, PeopleCube and ADI SaaS products.

In addition to continuing to develop our workforce and Agile Workplace management solutions and release new software updates and enhancements, we continue to actively explore other opportunities to acquire additional products or technologies to complement our current software and services. Through acquisitions in 2011 of ADI and Legiant, we expanded our cloud computing time and attendance software and management services business.  The 2012 acquisition of PeopleCube gave us a product line that includes software to assist customers in driving integrated facility management of offices, conference rooms, video conferencing, events and training, alternative workspaces and lobby use. The 2014 acquisitions of FotoPunch and Roomtag support our vision to deliver innovative cloud-based Agile Workplace technologies. Our March 2016 acquisitions from Mangrove enable us to enter into the human resource management, payroll processing and benefits administration services businesses, which we are integrating into our existing AsureForce® product line.

Gross Margin

Consolidated gross margin for the three months ended June 30, 2016 was $7,488, an increase of $2,208, or 41.8%, from the $5,280 reported for the three months ended June 30, 2015.  Gross margin as a percentage of revenues was 77.5% and 73.8% for the three months ended June 30, 2016 and 2015, respectively. Consolidated gross margin for the six months ended June 30, 2016 was $12,480, an increase of $2,520, or 25.3%, from the $9,960 reported for the six months ended June 30, 2015.  Gross margins as a percentage of revenues were 76.2% and 73.8% for the six months ended June 30, 2016 and 2015, respectively. We attribute the increase in gross margin to a shift in the mix of our revenue between our higher margin and lower margin product lines as well as the addition of Mangrove in the first quarter of 2016.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses for the three months ended June 30, 2016 were $5,480, an increase of $1,868, or 51.7%, from the $3,612 reported for the three months ended June 30, 2015.  SG&A expenses as a percentage of revenues were 56.7% and 50.5% for the three months ended June 30, 2016 and 2015, respectively.

20

Selling, general and administrative (“SG&A”) expenses for the six months ended June 30, 2016 were $9,807, an increase of $2,746, or 38.9%, from the $7,061 reported for the six months ended June 30, 2015. SG&A expenses as a percentage of revenues were 59.8% and 52.3% for the six months ended June 30, 2016 and 2015, respectively.

SG&A expenses were higher in the three and six months ended June 30, 2016 as compared to the same periods in 2015 due to integration expenses related to the acquisition of Mangrove in the first quarter of 2016.

In 2015, we reorganized our sales team to increase our focus on larger deals in the enterprise and global markets, resulting in higher headcount and increased selling expenses. We continue to evaluate any unnecessary expenses and any increases in SG&A designed to enhance future revenue growth.

Research and Development Expenses

Research and development (“R&D”) expenses for the three months ended June 30, 2016 were $645, a decrease of $98, or 13.2%, from the $743 reported for the three months ended June 30, 2015. R&D expenses as a percentage of revenues were 6.7% and 10.4% for the three months ended June 30, 2016 and 2015, respectively.  

Research and development (“R&D”) expenses for the six months ended June 30, 2016 were $1,456, a decrease of $25, or 1.7%, from the $1,481 reported for the six months ended June 30, 2015. R&D expenses as a percentage of revenues were 8.9% and 11.0% for the six months ended June 30, 2016 and 2015, respectively.  

We continue to improve our products and technologies through organic improvements as well as through acquired intellectual property. We believe that our expanded investment in SaaS hosting, mobile and hardware technologies lays the ground work for broader market opportunities, and represents a key aspect of our competitive differentiation.  Native mobile applications, QR Code integration, expanded web service integration and other technologies are all part of our initiatives.

Our development efforts for future releases and enhancements are driven by feedback received from our existing and potential customers and by gauging market trends. We believe we have the appropriate development team to design and further improve our workforce management solutions.

Amortization of Intangible Assets

Amortization expenses for the three months ended June 30, 2016 were $626, an increase of $122, or 24.2%, from the $504 reported for the three months ended June 30, 2015. Amortization expenses as a percentage of revenues were 6.5% and 7.0% for the three months ended June 30, 2016 and 2015, respectively. Amortization expenses for the six months ended June 30, 2016 were $1,003, a decrease of $6, or 0.6% compared to $1,009, reported for the six months ended June 30, 2015. Amortization expenses as a percentage of revenues were 6.1% and 7.5% for the six months ended June 30, 2016 and 2015, respectively. 

Other Income and Loss

Other loss for the three months ended June 30, 2016 was $559, an increase of $275, or 96.8%, from the $284 reported for the three months ended June 30, 2015. Other loss as a percentage of revenues was 5.8% and 4.0% for the three months ended June 30, 2016 and 2015, respectively.  Other loss for the three months ended June 30, 2016 and June 30, 2015 are composed primarily of interest expense on notes payable.

Other loss for the six months ended June 30, 2016 was $1,546, an increase of $851, or 122.4%, from the $695 reported for the six months ended June 30, 2015. Other expense as a percentage of revenues was 9.4% and 5.2% for the six months ended June 30, 2016 and 2015, respectively. Other loss for the six months ended June 30, 2016 is composed primarily of $706 in one-time professional expenses related to the acquisition of Mangrove in March 2016 and interest expense on notes payable. Other loss for the six months ended June 30, 2015 is composed primarily of interest expense on notes payable of $561 and a loss on lease termination of $110.

Income Taxes

Provision for income tax expense was $42 for the three months ended June 30, 2016 and 2015. 

Provision for income tax expense for the six months ended June 30, 2016 was $86, a decrease of $16, or 15.7%, from the $102 reported for the six months ended June 30, 2015, respectively.

21

Net Income (Loss)

We recognized net income of $136, or $0.02 per share, during the three months ended June 30, 2016, compared to net income of $95, or $0.02 per share, during the three months ended June 30, 2015. Net income as a percentage of total revenues was 1.4% for the three months ended June 30, 2016 compared to net income of 1.3% of total revenues for the three months ended June 30, 2015.

We incurred a net loss of $1,418, or $(0.23) per share, during the six months ended June 30, 2016, compared to a net loss of $388, or $(0.06) per share reported for the six months ended June 30, 2015.  Net loss as a percentage of total revenues was 8.7% for the six months ended June 30, 2016 compared to net loss of 2.9% of total revenues for the six months ended June 30, 2015.

We intend to continue to implement our corporate strategy for growing the software and services business by modestly investing in areas that directly generate revenue and positive cash flows for the Company.  However, uncertainties and challenges remain and there can be no assurance that we can successfully grow our revenues or achieve profitability during the remainder of fiscal year 2016.

LIQUIDITY AND CAPITAL RESOURCES (Amounts in thousands)

	June 30,			December 31,
	2016			2015
Working capital deficit	$	(10,847	)	$	(8,593	)
Cash, cash equivalents and short-term investments		283			1,158

	For the Six Months Ended
	June 30,
	2016			2015
Cash (used in) provided by operating activities		(1,084	)	$	862
Cash used in investing activities		(20,066	)		(971	)
Cash provided by financing activities		20,151			38

Working Capital.  We had a working capital deficit of $10,847 at June 30, 2016, an increase in our deficit of $2,254 from the $8,593 deficit at December 31, 2015. The working capital deficit at June 30, 2016 and December 31, 2015 includes $9,341 and $10,803 of deferred revenue, respectively.  Deferred revenue is an obligation to perform future services.  We expect that deferred revenue will convert to future revenue as we perform our services, but this does not represent future payments. Deferred revenue can vary based on seasonality, expiration of initial multi-year contracts and deals that are billed after implementation rather than in advance of service delivery. We attribute the increase in our working capital deficit primarily to an increase in our current notes payable of $3,992, due to the acquisition of Mangrove in the first quarter of 2016.

Operating Activities.  Cash used in operating activities was $1,084 for the six months ended June 30, 2016. The $1,084 of cash used in operating activities during the first six months of 2016 was primarily driven by net income (after adjustment for non-cash items) of $404, an increase in inventory of $268 and an increase in other accrued liabilities of $397. This was offset by an increase in accounts receivable of $1,059, a decrease in deferred revenue of $864 and a decrease in accounts payable of $316. The $862 of cash provided by operating activities during the first six months of 2015 was primarily driven by net income (after adjustment for non-cash items) of $1,329, an increase in accounts payable of $572 and deferred revenue of $126, as well as a decrease in accounts receivable of $96. This was offset by an increase in inventory of $143, an increase in prepaid expenses and other assets of $922, and a decrease in accrued expenses of $196.

Investing Activities.  Cash used in investing activities was $20,066 and $971 for the six months ended June 30, 2016 and June 30, 2015, respectively, due primarily to the acquisition of Mangrove and the increase in funds held for clients in the first quarter of 2016 and due to net purchases of property and equipment in the six months ended June 30, 2015.

Financing Activities.  Cash provided by financing activities was $20,151 for the six months ended June 30, 2016. We incurred $15,335 of debt and $8,106 of client fund obligations, primarily due to the cash used in the acquisition of Mangrove and the increase in funds held for clients in the first quarter of 2016. This was offset by payments on notes payable of $3,274 and debt financing fees of $438. Cash provided by financing activities was $38 for the six months ended June 30, 2015. We incurred $2,500 of debt and collected $585 of proceeds from issuance of common stock. This was offset by note payments of $2,875, payments on capital leases of $97, and debt financing fees of $75. 

22

Sources of Liquidity.  As of June 30, 2016, Asure’s principal sources of liquidity consisted of approximately $283 of cash and future cash generated from operations. We believe that we have and/or will generate sufficient cash for our short- and long-term needs. Based on current internal projections, we believe that we have and/or will generate sufficient cash for our operational needs, including any required debt payments, for at least the next twelve months. We currently project that we can generate positive cash flows from our operating activities for at least the next twelve months.

Our management team is focused on growing our existing software operations and is also seeking additional strategic acquisitions for the near future. At present, we plan to fund any future acquisition with equity, existing cash and cash equivalents cash generated from future operations and/or cash or debt raised from outside sources.

We cannot assure that we can grow our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, management believes that we have sufficient capital and liquidity to fund and cultivate the growth of our current and future operations for at least the next twelve months and to maintain compliance with the terms of our debt agreements and related covenants or to obtain compliance through debt repayments made with our available cash on hand or anticipated for receipt in the ordinary course of operations.

Capital Resources. At June 30, 2016, we had $25,696 outstanding under our credit agreement with Wells Fargo. Available funds were approximately $0 under the term credit facility and approximately $3,000 under the revolving credit facility at June 30, 2016. For further discussion regarding debt and financing arrangements, see Note 6 to the accompanying condensed consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

There were no material changes to our critical accounting policies and estimates since December 31, 2015.  For additional information on critical accounting policies, refer to “Management’s Discussion and Analysis” in our 2015 Annual Report on Form 10-K.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 under the Exchange Act and are not required to provide the information required under this item.

ITEM 4.   CONTROLS AND PROCEDURES 

Evaluation of Disclosure Control and Procedures 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for us.  Based on an evaluation under the supervision and with the participation of our management, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of as of June 30, 2016 to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Change in Internal Controls over Financial Reporting

During the period ended June 30, 2016, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  

23

PART II – OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None

ITEM 6.    EXHIBITS

EXHIBIT NUMBER	DESCRIPTION
31.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following materials from Asure Software, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (1) the Condensed Consolidated Balance Sheets, (2) the Condensed Consolidated Statements of Comprehensive Loss, (3) the Condensed Consolidated Statements of Cash Flows, and (4) Notes to Condensed Consolidated Financial Statements.

* Filed herewith

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ASURE SOFTWARE, INC.
August 15, 2016	By:	/s/ PATRICK GOEPEL
		Patrick Goepel
		Chief Executive Officer
August 15, 2016	By:	/s/ BRAD WOLFE
		Brad Wolfe
		Chief Financial Officer

25

INDEX TO EXHIBITS

EXHIBIT NUMBER	DESCRIPTION
31.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following materials from Asure Software, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (1) the Condensed Consolidated Balance Sheets, (2) the Condensed Consolidated Statements of Comprehensive Loss, (3) the Condensed Consolidated Statements of Cash Flows, and (4) Notes to Condensed Consolidated Financial Statements.

* Filed herewith

26

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, the undersigned, Patrick Goepel, certify, that:

1. I have reviewed this quarterly report on Form 10-Q of the Company (the “Report”);

2. Based on my knowledge, the Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in the Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in the Report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within these entities, particularly during the period in which the Report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in the Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by the Report based on such evaluation; and

(d) Disclosed in the Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the quarter ended June 30, 2016) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and to the Audit Committee of the Board of Directors:

(a) All significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. 

Date: August 15, 2016	By:	/s/ PATRICK GOEPEL
		Patrick Goepel
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, the undersigned, Brad Wolfe, certify that:

1. I have reviewed this quarterly report on Form 10-Q of the Company (the “Report”);

2. Based on my knowledge, the Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in the Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in the Report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within these entities, particularly during the period in which the Report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in the Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by the Report based on such evaluation; and

(d) Disclosed in the Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the quarter ended June 30, 2016) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and to the Audit Committee of the Board of Directors:

(a) All significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. 

Date: August 15, 2016	By:	/s/ BRAD WOLFE
		Brad Wolfe
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, the undersigned, Patrick Goepel, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The quarterly report on Form 10-Q of the Company for the period ended June 30, 2016 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 15, 2016	By:	/s/ PATRICK GOEPEL
		Patrick Goepel
		Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Asure Software, Inc. and will be retained by Asure Software, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

 EXHIBIT 32.2

CERTIFICATION OF PERIODIC REPORT

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, the undersigned, Brad Wolfe, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The quarterly report on Form 10-Q of the Company for the period ended June 30, 2016 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended, and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 15, 2016	By:	/s/ BRAD WOLFE
		Brad Wolfe
		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Asure Software, Inc. and will be retained by Asure Software, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 11, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	ASURE SOFTWARE INC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		6,516,596
Amendment Flag	false
Entity Central Index Key	0000884144
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 283	$ 1,158
Accounts and note receivable, net of allowance for doubtful accounts of $113 and $145 at June 30, 2016 and December 31, 2015, respectively	6,180	4,671
Inventory	516	784
Prepaid expenses and other current assets	1,422	1,072
Total current assets before funds held for clients	8,401	7,685
Funds held for clients	24,525	0
Total current assets	32,926	7,685
Property and equipment, net	2,003	2,212
Goodwill	26,265	17,436
Intangible assets, net	13,510	6,026
Other assets	100	458
Total assets	74,804	33,817
Current liabilities:
Current portion of notes payable, net of debt issuance cost	4,901	909
Accounts payable	2,418	2,670
Accrued compensation and benefits	1,099	715
Other accrued liabilities	1,489	1,181
Deferred revenue	9,341	10,803
Total current liabilities before client fund obligations	19,248	16,278
Client fund obligations	24,525	0
Total current liabilities	43,773	16,278
Long-term liabilities:
Deferred revenue	1,545	947
Notes payable, net of debt issuance cost	26,074	12,384
Other liabilities	363	490
Total long-term liabilities	27,982	13,821
Total liabilities	71,755	30,099
Stockholders’ equity:
Preferred stock, $.01 par value; 1,500 shares authorized; none issued or outstanding	0	0
Common stock, $.01 par value; 11,000 shares authorized; 6,901 and 6,674 shares issued, 6,517 and 6,290 shares outstanding at June 30, 2016 and December 31, 2015, respectively	69	67
Treasury stock at cost, 384 shares at June 30, 2016 and December 31, 2015	(5,017)	(5,017)
Additional paid-in capital	280,280	279,649
Accumulated deficit	(272,321)	(270,903)
Accumulated other comprehensive income (loss)	38	(78)
Total stockholders’ equity	3,049	3,718
Total liabilities and stockholders’ equity	$ 74,804	$ 33,817

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Allowance for doubtful accounts (in Dollars)	$ 113	$ 145
Preferred stock par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,500	1,500
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	11,000	11,000
Common stock, shares issued	6,517	6,674
Common stock, shares outstanding	6,517	6,290
Treasury stock, shares	384	384

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Cloud revenue	$ 5,389	$ 3,417	$ 9,251	$ 6,788
Hardware revenue	1,275	1,047	1,968	1,632
Maintenance and support revenue	1,192	1,541	2,431	3,107
On premise software license revenue	458	321	598	487
Professional services revenue	1,350	833	2,138	1,477
Total revenues	9,664	7,159	16,386	13,491
Cost of sales	2,176	1,879	3,906	3,531
Gross margin	7,488	5,280	12,480	9,960
Operating expenses
Selling, general and administrative	5,480	3,612	9,807	7,061
Research and development	645	743	1,456	1,481
Amortization of intangible assets	626	504	1,003	1,009
Total operating expenses	6,751	4,859	12,266	9,551
Income from operations	737	421	214	409
Other income (loss)
Interest income	0	0	10	0
Loss on lease termination	0	0	0	(110)
Foreign currency gain (loss)	1	3	2	(8)
Interest expense and other	(560)	(279)	(852)	(561)
Interest expense- amortization of original issue discount (OID)	0	(8)	0	(16)
Acquisition costs	0	0	(706)	0
Total other loss, net	(559)	(284)	(1,546)	(695)
Income (loss) from operations before income taxes	178	137	(1,332)	(286)
Income tax provision	(42)	(42)	(86)	(102)
Net income (loss)	136	95	(1,418)	(388)
Other comprehensive income (loss)
Foreign currency gain (loss)	81	(41)	116	(35)
Other comprehensive income (loss)	$ 217	$ 54	$ (1,302)	$ (423)
Basic and diluted net income (loss) per share
Basic (in Dollars per share)	$ 0.02	$ 0.02	$ (0.23)	$ (0.06)
Diluted (in Dollars per share)	$ 0.02	$ 0.02	$ (0.23)	$ (0.06)
Weighted average basic and diluted shares
Basic (in Shares)	6,294,000	6,066,000	6,292,000	6,061,000
Diluted (in Shares)	6,429,000	6,231,000	6,292,000	6,061,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,418)	$ (388)
Adjustments to reconcile net loss to net cash (used in) provided by operations:
Depreciation and amortization	1,706	1,553
Provision for doubtful accounts	10	40
Share-based compensation	106	98
Other	0	26
Changes in operating assets and liabilities:
Accounts receivable	(1,059)	96
Inventory	268	(143)
Prepaid expenses and other assets	86	(922)
Accounts payable	(316)	572
Accrued expenses and other long-term obligations	397	(196)
Deferred revenue	(864)	126
Net cash (used in) provided by operating activities	(1,084)	862
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions net of cash acquired	(12,000)	0
Purchases of property and equipment	(24)	(989)
Disposals of property and equipment	0	18
Collection of note receivable	64	0
Net change in funds held for clients	(8,106)	0
Net cash used in investing activities	(20,066)	(971)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable	15,335	2,500
Payments on notes payable	(3,274)	(2,875)
Payments on amendment of senior notes payable	0	(75)
Debt financing fees	(438)	0
Payments on capital leases	(106)	(97)
Net proceeds from exercise of stock options	528	585
Net change in client fund obligations	8,106	0
Net cash provided by financing activities	20,151	38
Effect of foreign exchange rates	124	(36)
Net decrease in cash and cash equivalents	(875)	(107)
Cash and cash equivalents at beginning of period	1,158	320
Cash and cash equivalents at end of period	283	213
Cash paid for:
Interest	456	586
Non-cash Investing and Financing Activities:
Note receivable from customer	0	601
Subordinated notes payable – Mangrove acquisition	$ 6,000	$ 0

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NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2016

Disclosure Text Block [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION

Asure Software, Inc., a Delaware corporation, is a provider of cloud-based software-as-a-service (“SaaS”) time and labor management and Agile Workplace management solutions that enable organizations to manage their office environments as well as their human resource and payroll processes effectively and efficiently. Asure develops, markets, sells and supports its offerings worldwide through its principal office in Austin, Texas and through additional offices in Dedham, Massachusetts; Traverse City, Michigan and London, United Kingdom.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission and accordingly, they do not include all information and footnotes required under U.S. generally accepted accounting principles 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 June 30, 2016 and December 31, 2015, the results of operations for the three and six months ended June 30, 2016 and 2015, and the cash flows for the six months ended June 30, 2016 and 2015.

You should read these condensed consolidated financial statements in conjunction with our audited consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in our annual report on Form 10-K for the fiscal year ended December 31, 2015.  The results for the interim periods are not necessarily indicative of results for a full fiscal year.

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash deposits and highly liquid investments with an original maturity of three months or less when purchased.

LIQUIDITY

As of June 30, 2016, Asure’s principal sources of liquidity consisted of approximately $283 of cash and cash equivalents, future cash generated from operations and $3,000 available for borrowing under our Wells Fargo revolver discussed in Note 6 – Notes Payable. We believe that we have and/or will generate sufficient cash for our short- and long-term needs, including meeting the requirements of our term loan, and related debt covenant requirements. We continue to seek reductions in our expenses as a percentage of revenue on an annual basis and thus may utilize our cash balances in the short-term to reduce long-term costs. Based on current internal projections, we believe that we have and/or will generate sufficient cash for our operational needs, including any required debt payments, for at least the next twelve months.

Management is focused on growing our existing product offering, as well as our customer base, to increase our recurring revenues. We are also exploring additional strategic acquisitions in the near future, although we have no agreements to make any acquisition at this time. We expect to fund any future acquisitions with equity, available cash, future cash from operations, or debt from outside sources.  

We cannot assure that we can grow our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, management believes that we have sufficient capital and liquidity to fund and cultivate the growth of our current and future operations for at least the next 12 months and to maintain compliance with the terms of our debt agreements and related covenants or to obtain compliance through debt repayments made with the available cash on hand or anticipated for receipt in the ordinary course of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued FASB ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition”. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step process to achieve that core principle. ASU 2014-09 requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In August 2015, the FASB issued FASB ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”, which deferred the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, using one of two retrospective application methods. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued FASB ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing.” ASU 2016-10 clarifies the implementation guidance in Topic 606 for identifying performance obligations and determining when to recognize revenue on licensing agreements for intellectual property. In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting.” ASU 2016-11 rescinds certain SEC staff comments previously made in regard to these ASU’s. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” that provide guidance on assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. We are currently evaluating the effect that the adoption of ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016- 10, ASU 2016-11 and ASU 2016-12 will have on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern,” which requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern (meet its obligations as they become due) within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt about the entity’s ability to continue as a going concern, certain disclosures are required. This ASU is effective for annual reporting periods ending after December 15, 2016, and interim reporting periods thereafter. We adopted the provisions of ASU 2014-15 on January 1, 2016. This adoption did not have any impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03,” Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This ASU requires reporting entities to record costs paid to third parties that are directly related to issuing debt, and that otherwise would not be incurred, as a deduction to the corresponding debt for presentation purposes. In addition, in August 2015, FASB issued ASU 2015-15, “Interest — Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements-Amendments to SEC Paragraphs Pursuant to Staff Announcement at the June 18, 2015 Emerging Issues Task Force ("EITF") Meeting”. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The provisions of each ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity should apply each amendment retrospectively. We adopted ASU 2015-03 on January 1, 2016 for debt issuance costs on our term loan, on a retrospective basis. The impact of adopting ASU 2015-03 on our current period condensed consolidated financial statements was the classification of all deferred financing costs as a deduction to the corresponding debt in addition to the reclassification of deferred financing costs in other current and long term assets to short and long term notes payable as of December 31, 2015, within the condensed consolidated balance sheets to conform to the current period presentation. Other than these reclassifications and additional disclosures, the adoption of ASU 2015-03 did not have an impact on our consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. Inventory within the scope of this update is required to be measured at the lower of its cost or net realizable value, with net realizable value being the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective prospectively for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the effect of adopting ASU 2015-11 on our consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments,” which requires acquirers to recognize adjustments to provisional amounts identified during the reporting period in which the adjustment amounts are determined. Acquirers should record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Application of the standard, which should be applied prospectively, is required for the annual and interim periods beginning after December 15, 2015. We adopted the provisions of ASU 2015-16 on January 1, 2016. The adoption did not have a material impact on our consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17,” Income Taxes: Balance Sheet Classification of Deferred Taxes”, to require that deferred tax liabilities and assets be classified entirely as non-current. This amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. Early adoption is permitted, and theamended guidance may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are currently evaluating the effects and timing of the adoption of ASU 2015-17, which must be adopted by the first quarter of 2017.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)".  The core principle of the standard is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. We will be required to adopt the new standard in the first quarter of 2019. We are currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements. 

CONTINGENCIES

Although Asure has been, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of June 30, 2016, we were not party to any pending legal proceedings.

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NOTE 3 - FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 3 – FAIR VALUE MEASUREMENTS

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles and expands disclosures about fair value measurements. 

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

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table presents the fair value hierarchy for our financial assets measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015, respectively:

			Fair Value Measure at June 30, 2016
	Total		Quoted		Significant
	Carrying		Prices		Other		Significant
	Value at		in Active		Observable		Unobservable
	June 30,		Market		Inputs		Inputs
Description	2016		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	283	$	283	$	-	$	-
Total	$	283	$	283	$	-	$	-
Liabilities:
Contingent consideration	$	173	$	-	$	-	$	173
Total	$	173	$	-	$	-	$	173

			Fair Value Measure at December 31, 2015
	Total		Quoted		Significant
	Carrying		Prices		Other		Significant
	Value at		in Active		Observable		Unobservable
	December 31,		Market		Inputs		Inputs
Description	2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	1,158	$	1,158	$	-	$	-
Total	$	1,158	$	1,158	$	-	$	-
Liabilities:
Contingent consideration	$	173	$	-	$	-	$	173
Total	$	173	$	-	$	-	$	173

The following summarizes quantitative information about Level 3 fair value measurements.

Contingent consideration

In connection with the acquisition of FotoPunch, Inc. (“FotoPunch”) in July 2014, we recorded contingent consideration based upon the expected achievement of certain milestone goals. We will record any changes to the fair value of contingent consideration due to changes in assumptions used in preparing the valuation model in selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss).

Contingent consideration is valued using a multi-scenario discounted cash flow method. The assumptions used in preparing the discounted cash flow method include estimates for outcomes if milestone goals are achieved and the probability of achieving each outcome. Management estimates probabilities and then applies them to management’s conservative case forecast, most likely case forecast and optimistic case forecast with the various scenarios. The Company has retained a third party expert to assist in determining the value of the contingent consideration.

The valuation of contingent consideration for the FotoPunch acquisition is based on a Monte Carlo simulation model for fiscal 2016 to 2018, with fiscal 2016 being a partial year from January 1, 2016 to June 30, 2016. Management provided revenue projections (an unobservable input) of $650, $2,203 and $3,925 for fiscal 2016 (partial year), fiscal 2017 and fiscal 2018, respectively. The fair value of this valuation is estimated on a quarterly basis through a collaborative effort by the Company's sales, marketing and finance departments. Significant changes in any of the unobservable inputs used in the fair value measurement of contingent consideration in isolation could result in a significantly lower or higher fair value. A change in projected revenue growth rates would be accompanied by a directionally similar change in fair value. Management evaluates the fair value on a quarterly basis based upon updated projections. 

The following table summarizes the changes in our contingent consideration:

Balance at December 31, 2015	$	173
Change in fair value of contingent consideration		-
Balance at June 30, 2016	$	173

Funds held for clients

Funds held for clients represent assets that, based upon the Company's intent, are restricted for use solely for the purposes of satisfying the obligations to remit funds relating to the Company’s payroll and payroll tax filing services, which are classified as client fund obligations on our Condensed Consolidated Balance Sheets. Funds held for clients are held in demand deposit accounts at major financial institutions and are classified as a current asset on our Condensed Consolidated Balance Sheets since these funds are held solely for the purposes of satisfying the client fund obligations.

Client fund obligations represent the Company's contractual obligations to remit funds to satisfy clients' payroll and tax payment obligations and are recorded on the Condensed Consolidated Balance Sheets at the time that the Company impounds funds from clients.  The client fund obligations represent liabilities that will be repaid within one year of the balance sheet date.  The Company has reported client fund obligations as a current liability on the Condensed Consolidated Balance Sheets totaling $24,525 and $0 as of June 30, 2016 and December 31, 2015, respectively.  The Company has classified funds held for clients as a current asset since these funds are held solely for the purposes of satisfying client funds obligations.  The Company has reported cash flows related to purchases, sales and maturities of corporate and client funds marketable securities on a gross basis in the investing section of the Condensed Statements of Consolidated Cash Flows.  The Company has reported cash flows related to client fund investments with original maturities of ninety days or less on a net basis within the net increase in restricted cash and cash equivalents and other restricted assets held to satisfy client fund obligations in the investing section of the Statements of Consolidated Cash Flows.  The Company has reported cash flows related to cash received from and paid on behalf of clients on a net basis within the net increase in client fund obligations in the financing activities section of the Condensed Statements of Consolidated Cash Flows.

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NOTE 4 - ACQUISITIONS

6 Months Ended

Jun. 30, 2016

Disclosure Text Block Supplement [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

NOTE 4 – ACQUISITIONS

2016 Acquisition

Through the stock and asset purchases described below, we have entered into the human resource management, payroll processing and benefits administration services businesses, which we intend to integrate into our existing AsureForce® product line.

Stock Purchase Agreement

In March 2016, we acquired all of the issued and outstanding shares of common stock (the “Shares”) of Mangrove Employer Services, Inc. of Tampa, Florida (“Mangrove”). Pursuant to this stock purchase, we acquired the payroll division of Mangrove, which is engaged in the human resource management and payroll processing businesses. The aggregate consideration for the Shares consisted of (i) $11,348 in cash, a portion of which was used to pay certain obligations of Mangrove and (ii) a secured subordinated promissory note (the “Note”) in the principal amount of $6,000, subject to adjustment as provided in the Stock Purchase Agreement. We funded the cash payment with proceeds from our credit agreement with Wells Fargo. The Note bears interest at an annual rate of 3.50% and matures in March 2018, with the first installment of principal due in March 2017 and the second installment of principal due in March 2018. The Stock Purchase Agreement contains certain customary representations, warranties, indemnities and covenants. Details regarding the financing of the acquisition are described in the below Notes Payable table. Transaction costs for this acquisition were $706 and we expensed them as incurred. The acquisition costs are included in other income (loss) in the Condensed Consolidated Statement of Comprehensive Income (Loss) for six months ended June 30, 2016.

Asset Purchase Agreement

In March 2016, we also acquired substantially all the assets of Mangrove COBRAsource Inc., a benefits administration services business which then was a wholly owned subsidiary of Mangrove. The aggregate consideration for the assets was $1,036, which Mangrove COBRAsource applied to pay off certain loan balances. The Asset Purchase Agreement contains certain customary representations, warranties, indemnities and covenants.

Following is the purchase price allocation for the acquisition of Mangrove. We based the preliminary fair value estimate for the assets acquired and liabilities assumed for this acquisition upon preliminary calculations and valuations.  Our estimates and assumptions for this acquisition are subject to change as we obtain additional information for our estimates during the respective measurement periods (up to one year from the acquisition date). The primary areas of those preliminary estimates that we have not yet finalized relate to certain tangible assets and liabilities acquired, certain legal matters and income and non-income based taxes.

We recorded the transaction using the acquisition method of accounting and recognized assets and liabilities assumed at their fair value as of the date of acquisition. The $8,700 of intangible assets subject to amortization consist of $1,200 allocated to Customer Relationships, $6,900 in Developed Technology and $600 for Trade Names.  We estimated the fair value of the Customer Relationships and Developed Technology using the excess earnings method, a form of the income approach. We discounted cash flow projections using a rate of 18.1%, which reflects the risk associated with the intangible asset related to the other assets and the overall business operations to us. We estimated the fair value of the Trade Names using the relief from royalty method based upon a 1.2% royalty rate for the payroll division and 0.5% for the benefits administration services business.  

The Company believes significant synergies are expected to arisefrom this strategic acquisition. This factor contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. A portion of acquired goodwill will be deductible for tax purposes.

We based the allocations on fair values at the date of acquisition:

	Amount
Assets acquired
Accounts receivable	$	523
Funds held for clients		16,419
Fixed assets		258
Other assets		28
Goodwill		8,837
Intangibles		8,700
Total assets acquired	$	34,765
Liabilities assumed
Accounts payable		64
Accrued other liabilities		282
Client fund obligations		16,419
Total liabilities assumed	$	16,765
Net assets acquired	$	18,000

Unaudited Pro Forma Financial Information

The following unaudited summary of pro forma combined results of operation for the three and six months ended June 30, 2016 and 2015 gives effect to the acquisition of Mangrove and the acquisition of assets of COBRAsource as if we had completed them on January 1, 2015. This pro forma summary does not reflect any operating efficiencies, cost savings or revenue enhancements that we may achieve by combining operations. In addition, we have not reflected certain non-recurring expenses, such as legal expenses and other transactions expenses for the first 12 months after the acquisition, in the pro forma summary. We present this pro forma summary for informational purposes only and it is not necessarily indicative of what our actual results of operations would have been had the acquisitions taken place as of January 1, 2015, nor is it indicative of future consolidated results of operations.

	FOR THE THREE MONTHS ENDED		FOR THE THREE MONTHS ENDED
	JUNE 30,		JUNE 30,
	2016		2015
Revenues	$	9,664	$	8,959
Net income (loss)	$	136	$	(493	)
Net income (loss) per common share:
Basic and diluted	$	0.02		(0.08	)
Weighted average shares outstanding:
Basic		6,294		6,066
Diluted		6,429		6,231

	FOR THE SIX MONTHS ENDED JUNE 30,			FOR THE SIX MONTHS ENDED JUNE 30,
	2016			2015
Revenues	$	18,514		$	17,375
Net loss	$	(596	)	$	(1,200	)
Net loss per common share:
Basic and diluted	$	(0.09	)	$	(0.20	)
Weighted average shares outstanding:
Basic and diluted	$	6,292		$	6,061

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NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 5 – GOODWILL AND OTHER INTANGIBLE ASSETS

Asure accounted for its historical acquisitions in accordance with ASC 805, Business Combinations.  We recorded the amount exceeding the fair value of net assets acquired at the date of acquisition as goodwill. We recorded intangible assets apart from goodwill if the assets had contractual or other legal rights or if the assets could be separated and sold, transferred, licensed, rented or exchanged. Asure’s goodwill relates to the acquisitions of ADI and Legiant in 2011, the acquisition of PeopleCube in 2012, and the acquisitions of FotoPunch and Roomtag in 2014 and Mangrove in 2016. 

In accordance with ASC 350, Intangibles-Goodwill and Other, we review and evaluate our long-lived assets, including intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that we may not recover their net book value. We test goodwill for impairment on an annual basis in the fourth fiscal quarter of each year, and between annual tests, if indicators of potential impairment exist, using a fair-value-based approach. There has been no impairment of goodwill for the periods presented. We amortize intangible assets not considered to have an indefinite useful life using the straight-line method over their estimated period of benefit, which generally ranges from one to nine years. Each reporting period, we evaluate the estimated remaining useful life of intangible assets and assess whether events or changes in circumstances warrant a revision to the remaining period of amortization or indicate that impairment exists. We have not identified any impairments of finite-lived intangible assets during any of the periods presented. 

The following table summarizes the changes in our goodwill:

Balance at December 31, 2015	$	17,436
Goodwill recognized upon acquisition of Mangrove		8,837
Foreign exchange adjustments to goodwill		(8	)
Balance at June 30, 2016	$	26,265

The gross carrying amount and accumulated amortization of our intangible assets as of June 30, 2016 and December 31, 2015 are as follows:

			June 30, 2016
Intangible Asset	Weighted Average Amortization Period (in Years)		Gross		Accumulated Amortization			Net
Developed Technology		12.7	$	10,915	$	(2,702	)	$	8,213
Customer Relationships		7.3		14,011		(9,599	)		4,412
Reseller Relationships		7		853		(579	)		274
Trade Names		14.5		1,294		(684	)		610
Covenant not-to-compete		2		229		(228	)		1
		14.6	$	27,302	$	(13,792	)	$	13,510

			December 31, 2015
Intangible Asset	Weighted Average Amortization Period (in Years)		Gross		Accumulated Amortization			Net
Developed Technology		7.6	$	4,015	$	(2,208	)	$	1,807
Customer Relationships		7.2		12,811		(8,959	)		3,852
Reseller Relationships		7		853		(518	)		335
Trade Names		5		694		(669	)		25
Covenant not-to-compete		2		229		(222	)		7
		7.3	$	18,602	$	(12,576	)	$	6,026

We record amortization expense using the straight-line method over the estimated useful lives of the intangible assets, as noted above.  Amortization expenses for the three months ended June 30, 2016 and 2015 were $626 and $504, respectively, included in Operating Expenses. Amortization expenses recorded in Cost of Sales were $106 and $106 for the three months ended June 30, 2016 and 2015, respectively. Amortization expenses for the six months ended June 30, 2016 and 2015 were $1,003 and $1,009 included in Operating Expenses, and $213 and $212, respectively, included in Cost of Sales.

The following table summarizes the future estimated amortization expense relating to our intangible assets as of June 30, 2016:

Calendar Years
2016	$	1,130
2017		2,245
2018		1,897
2019		1,264
2020		698
Thereafter		6,276
	$	13,510

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NOTE 6 - NOTES PAYABLE

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE 6 – NOTES PAYABLE

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

Notes Payable	Maturity	Stated Interest Rate			Balance as of June 30, 2016		Balance as of December 31, 2015
Subordinated Notes Payable- Mangrove acquisition	3/18/2018		3.50	%	$	6,060	$	-
Term Loan - Wells Fargo	3/31/2019		5.00	%		25,696		13,687
Total Notes Payable					$	31,756	$	13,687
Short-term notes payable, gross					$	5,187	$	1,031
Long-term notes payable, gross					$	26,569	$	12,656

On January 1, 2016, we adopted ASU 2015-03 for debt issuance costs on our term loan, on a retrospective basis. The impact of adopting ASU 2015-03 on our current period condensed consolidated financial statements was the classification of all deferred financing costs as a deduction to corresponding debt in addition to the reclassification of deferred financing costs in other current and long term assets to short and long term notes payable as of December 31, 2015, within the Condensed Consolidated Balance Sheets to conform to the current period presentation. The following table summarizes the debt issuance costs as of the dates indicated:

Notes Payable	Gross Notes Payable at June 30, 2016		Debt Issuance Costs			Net Notes Payable at June 30, 2016
Short-term notes payable	$	5,187	$	(286	)	$	4,901
Long-term notes payable		26,569		(495	)		26,074
Total Notes Payable	$	31,756	$	(781	)	$	30,975

Notes Payable	Gross Notes Payable at December 31, 2015		Debt Issuance Costs			Net Notes Payable at December 31, 2015
Short-term notes payable	$	1,031	$	(122	)	$	909
Long-term notes payable		12,656		(272	)		12,384
Total Notes Payable	$	13,687	$	(394	)	$	13,293

The following table summarizes the future principal payments related to our outstanding debt:

Year  Ended	Gross Amount
December 31, 2016	$	982
December 31, 2017		5,455
December 31, 2018		5,678
December 31, 2019		19,641
Gross Notes Payable	$	31,756

Term Loan - Wells Fargo

In March 2014, we entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A., as administrative agent, and the lenders that are party thereto. The Credit Agreement contains customary events of default, including, among others, payment defaults, covenant defaults, judgment defaults, bankruptcy and insolvency events, cross defaults to certain indebtedness, incorrect representations or warranties, and change of control. In some cases, the defaults are subject to customary notice and grace period provisions. In March 2014 and in connection with the Credit Agreement, we and our wholly-owned active subsidiaries entered into a Guaranty and Security Agreement with Wells Fargo Bank. Under the Guaranty and Security Agreement, we and each of our wholly-owned active subsidiaries have guaranteed all obligations under the Credit Agreement and granted a security interest in substantially all of our and our subsidiaries’ assets.

The Credit Agreement provided for a term loan in the amount of $15,000 maturing in March 2019. We used the proceeds of the term loan to finance the repayment of all amounts outstanding under our loan agreement with Deerpath and the payment of certain fees, cost and expenses related to the Credit Agreement.

The Credit Agreement also provided for a revolving loan commitment in the aggregate amount of up to $3,000. The outstanding principal amount of the revolving loan is due and payable in March 2019. As of June 30, 2016, $0 was outstanding and $3,000 was available for borrowing under the revolver.

Additionally, the Credit Agreement provided for a $10,000 uncommitted incremental term loan facility to support permitted acquisitions.

Under the Credit Agreement, we were required to maintain a fixed charge coverage ratio of not less than 1.5 to 1.0 beginning with the quarter ended June 30, 2014 and each calendar quarter thereafter, and a leverage ratio of not greater than 3.5 to 1.0 beginning with the quarter ended June 30, 2014 with the levels stepping down thereafter. We amended the Credit Agreement in August 2014, March 2015 and November 2015. The August 2014 amendment revised the leverage ratio beginning with the quarter ended September 30, 2014 to a leverage ratio of not greater than 3.6 to 1.0 with the levels stepping down thereafter. The March 2015 amendment authorized us to optionally prepay, subject to specified conditions, the Subordinated Note Payable to Roomtag and revised the leverage ratio beginning with the quarter ended March 31, 2015 to a leverage ratio of not greater than 3.5 to 1.0 with the levels stepping down thereafter.  The November 2015 amendment increased the applicable margin relative to the LIBOR rate upon which we compute the interest payable.  We agreed that if our leverage ratio is (a) less than or equal to 2.25:1, (b) greater than 2.25:1 but less than or equal to 2.75:1, (c) greater than 2.75:1 but less than or equal to 3.25:1 or (d) greater than 3.25:1, the applicable margin relative to the LIBOR rate would be 3.00, 3.50, 4.00 or 4.50 percentage points, respectively. We further agreed that until the leverage ratio testing period ending September 30, 2016, we will pay interest based on the 4.50 percentage point margin level.

In March 2016, we amended the Credit Agreement. Under this amendment, we expanded the Credit Agreement by $12,500 to $29,188. The amendment changes the applicable margin rates for determining the interest rate payable on the loan as follows:

Total Leverage Ratio	Base Rate Margin			LIBOR Rate Margin
≤ 2.75:1		3.50	%		4.50	%
> 2.75:1 but ≤ 3.25:1		4.00	%		5.00	%
≥ 3.25:1		4.50	%		5.50	%

The March 2016 amendment also amends our leverage ratio requirements under the Credit Agreement.  We have now agreed to a leverage ratio not to exceed 5.00:1 at March 31, 2016, stepping down to 2.25:1 at December 31, 2018.

The Credit Agreement contains customary affirmative and negative covenants, including, among others, limitations with respect to debt, liens, fundamental changes, sale of assets, prepayment of debt, investments, dividends and transactions with affiliates.

The outstanding principal amount of the term loan is payable as follows:

·          $491 on June 30, 2016 and the last day of each fiscal quarter thereafter up to March 31, 2017; and

·          $655 on June 30, 2017 and the last day of each fiscal quarter thereafter, with a final payment of the remaining balance due on March 31, 2019

As of June 30, 2016, we were in compliance with all covenants and all payments remain current. We expect to be in compliance or be able to obtain compliance through debt repayments with available cash on hand or as we expect to generate from the ordinary course of operations over the next twelve months. 

 Subordinated Notes Payable: Mangrove Acquisition Note

In March 2016, we acquired all of the issued and outstanding shares of common stock (the “Shares”) of Mangrove. Pursuant to this stock purchase, we acquired the payroll division of Mangrove, which is engaged in the human resource management and payroll processing businesses. The aggregate consideration for the Shares consisted of (i) $11,348 in cash, a portion of which was used to pay certain obligations of Mangrove and (ii) a secured subordinated promissory note (the “Note”) in the principal amount of $6,000, subject to adjustment as provided in the Stock Purchase Agreement. We funded the cash payment with proceeds from the Credit Agreement with Wells Fargo. The Note bears interest at an annual rate of 3.50% and matures in March 2018, with the first installment of principal of $3,000 due in March 2017 and the second installment of principal of $3,000 due in March 2018.

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NOTE 7 - SHARE BASED COMPENSATION

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 7 – SHARE BASED COMPENSATION

Share based compensation for our stock option plans for the three months ended June 30, 2016 and 2015 were $67 and $61, respectively, and $106 and $98 for the six months ended June 30, 2016 and 2015, respectively. We issued 235,000 shares of common stock related to exercises of stock options granted from our Stock Option Plan for the three months ended June 30, 2016 and 230,000 for the three months ended June 30, 2015, respectively.

Asure has one active equity plan, the 2009 Equity Plan (the “2009 Plan”). The 2009 Plan provides for the issuance of non-qualified and incentive stock options to our employees and consultants. We generally grant stock options with exercise prices greater than or equal to the fair market value at the time of grant.  The options generally vest over three to four years and are exercisable for a period of five to ten years beginning with date of grant.   Our shareholders approved an amendment to the 2009 Plan in June 2014 to increase the number of shares reserved under the plan from 1,200,000 to 1,400,000. We have a total of 549,000 options granted and outstanding pursuant to the 2009 Plan as of June 30, 2016.

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NOTE 8 - OTHER COMPREHENSIVE LOSS

6 Months Ended

Jun. 30, 2016

Disclosure Text Block [Abstract]

Comprehensive Income (Loss) Note [Text Block]

NOTE 8 – OTHER COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) represents a measure of all changes in equity that result from recognized transactions and other economic events other than those resulting from investments by and distributions to shareholders. Our other comprehensive income (loss) includes foreign currency translation adjustments.

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax:

	Foreign Currency Items			Accumulated Other Comprehensive Income (Loss) Items
Beginning balance, December 31, 2015	$	(78	)	$	(78	)
Other comprehensive income before reclassifications		116			116
Amounts reclassified from accumulated other comprehensive income (loss)		—			—
Net current-period other comprehensive income		116			116
Ending balance, June 30, 2016	$	38		$	38

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NOTE 9 - NET LOSS PER SHARE

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE 9 – NET INCOME (LOSS) PER SHARE

We compute net income (loss) per share based on the weighted average number of common shares outstanding for the period.  Diluted net income (loss) per share reflects the maximum dilution that would have resulted from incremental common shares issuable upon the exercise of stock options.  We compute the number of common share equivalents, which includes stock options, using the treasury stock method. We have excluded stock options to acquire 664,000 shares for the six months ended June 30, 2016 and 685,000 shares for the six months ended June 30, 2015, respectively, from the computation of the dilutive stock options because the effect of including the stock options would have been anti-dilutive.

The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and six months ended June 30, 2016 and 2015: 

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2016		2015		2016			2015
Net income (loss)	$	136	$	95	$	(1,418	)	$	(388	)
Weighted-average shares of common stock outstanding		6,294,000		6,066,000		6,292,000			6,061,000
Dilutive effect of employee stock options		135,000		165,000		-			-
Weighted average shares for diluted net income (loss) per share		6,429,000		6,231,000		6,292,000			6,061,000
Basic net income (loss) per share	$	0.02	$	0.02	$	(0.23	)	$	(0.06	)
Diluted net income (loss) per share	$	0.02	$	0.02	$	(0.23	)	$	(0.06	)

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Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Cash and Cash Equivalents, Policy [Policy Text Block]

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash deposits and highly liquid investments with an original maturity of three months or less when purchased.

Liquidity Disclosure [Policy Text Block]

LIQUIDITY

As of June 30, 2016, Asure’s principal sources of liquidity consisted of approximately $283 of cash and cash equivalents, future cash generated from operations and $3,000 available for borrowing under our Wells Fargo revolver discussed in Note 6 – Notes Payable. We believe that we have and/or will generate sufficient cash for our short- and long-term needs, including meeting the requirements of our term loan, and related debt covenant requirements. We continue to seek reductions in our expenses as a percentage of revenue on an annual basis and thus may utilize our cash balances in the short-term to reduce long-term costs. Based on current internal projections, we believe that we have and/or will generate sufficient cash for our operational needs, including any required debt payments, for at least the next twelve months.

Management is focused on growing our existing product offering, as well as our customer base, to increase our recurring revenues. We are also exploring additional strategic acquisitions in the near future, although we have no agreements to make any acquisition at this time. We expect to fund any future acquisitions with equity, available cash, future cash from operations, or debt from outside sources.  

We cannot assure that we can grow our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future acquisitions. Future business demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot assure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, management believes that we have sufficient capital and liquidity to fund and cultivate the growth of our current and future operations for at least the next 12 months and to maintain compliance with the terms of our debt agreements and related covenants or to obtain compliance through debt repayments made with the available cash on hand or anticipated for receipt in the ordinary course of operations.

New Accounting Pronouncements, Policy [Policy Text Block]

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued FASB ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition”. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step process to achieve that core principle. ASU 2014-09 requires disclosures enabling users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In August 2015, the FASB issued FASB ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”, which deferred the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, using one of two retrospective application methods. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued FASB ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”. ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing.” ASU 2016-10 clarifies the implementation guidance in Topic 606 for identifying performance obligations and determining when to recognize revenue on licensing agreements for intellectual property. In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting.” ASU 2016-11 rescinds certain SEC staff comments previously made in regard to these ASU’s. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” that provide guidance on assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. We are currently evaluating the effect that the adoption of ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016- 10, ASU 2016-11 and ASU 2016-12 will have on our consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern,” which requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern (meet its obligations as they become due) within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt about the entity’s ability to continue as a going concern, certain disclosures are required. This ASU is effective for annual reporting periods ending after December 15, 2016, and interim reporting periods thereafter. We adopted the provisions of ASU 2014-15 on January 1, 2016. This adoption did not have any impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03,” Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”. This ASU requires reporting entities to record costs paid to third parties that are directly related to issuing debt, and that otherwise would not be incurred, as a deduction to the corresponding debt for presentation purposes. In addition, in August 2015, FASB issued ASU 2015-15, “Interest — Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements-Amendments to SEC Paragraphs Pursuant to Staff Announcement at the June 18, 2015 Emerging Issues Task Force ("EITF") Meeting”. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The provisions of each ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity should apply each amendment retrospectively. We adopted ASU 2015-03 on January 1, 2016 for debt issuance costs on our term loan, on a retrospective basis. The impact of adopting ASU 2015-03 on our current period condensed consolidated financial statements was the classification of all deferred financing costs as a deduction to the corresponding debt in addition to the reclassification of deferred financing costs in other current and long term assets to short and long term notes payable as of December 31, 2015, within the condensed consolidated balance sheets to conform to the current period presentation. Other than these reclassifications and additional disclosures, the adoption of ASU 2015-03 did not have an impact on our consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory”. Inventory within the scope of this update is required to be measured at the lower of its cost or net realizable value, with net realizable value being the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective prospectively for fiscal years and interim periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the effect of adopting ASU 2015-11 on our consolidated financial statements.

In September 2015, the FASB issued ASU 2015-16, “Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments,” which requires acquirers to recognize adjustments to provisional amounts identified during the reporting period in which the adjustment amounts are determined. Acquirers should record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Application of the standard, which should be applied prospectively, is required for the annual and interim periods beginning after December 15, 2015. We adopted the provisions of ASU 2015-16 on January 1, 2016. The adoption did not have a material impact on our consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17,” Income Taxes: Balance Sheet Classification of Deferred Taxes”, to require that deferred tax liabilities and assets be classified entirely as non-current. This amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. Early adoption is permitted, and theamended guidance may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. We are currently evaluating the effects and timing of the adoption of ASU 2015-17, which must be adopted by the first quarter of 2017.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)".  The core principle of the standard is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. We will be required to adopt the new standard in the first quarter of 2019. We are currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements.

Commitments and Contingencies, Policy [Policy Text Block]

CONTINGENCIES

Although Asure has been, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of June 30, 2016, we were not party to any pending legal proceedings.

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NOTE 3 - FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table presents the fair value hierarchy for our financial assets measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015, respectively:

			Fair Value Measure at June 30, 2016
	Total		Quoted		Significant
	Carrying		Prices		Other		Significant
	Value at		in Active		Observable		Unobservable
	June 30,		Market		Inputs		Inputs
Description	2016		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	283	$	283	$	-	$	-
Total	$	283	$	283	$	-	$	-
Liabilities:
Contingent consideration	$	173	$	-	$	-	$	173
Total	$	173	$	-	$	-	$	173

			Fair Value Measure at December 31, 2015
	Total		Quoted		Significant
	Carrying		Prices		Other		Significant
	Value at		in Active		Observable		Unobservable
	December 31,		Market		Inputs		Inputs
Description	2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	1,158	$	1,158	$	-	$	-
Total	$	1,158	$	1,158	$	-	$	-
Liabilities:
Contingent consideration	$	173	$	-	$	-	$	173
Total	$	173	$	-	$	-	$	173

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

The following table summarizes the changes in our contingent consideration:

Balance at December 31, 2015	$	173
Change in fair value of contingent consideration		-
Balance at June 30, 2016	$	173

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NOTE 4 - ACQUISITIONS (Tables) - Mangrove COBRASource, Inc. [Member]

6 Months Ended

Jun. 30, 2016

NOTE 4 - ACQUISITIONS (Tables) [Line Items]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

We based the allocations on fair values at the date of acquisition:

	Amount
Assets acquired
Accounts receivable	$	523
Funds held for clients		16,419
Fixed assets		258
Other assets		28
Goodwill		8,837
Intangibles		8,700
Total assets acquired	$	34,765
Liabilities assumed
Accounts payable		64
Accrued other liabilities		282
Client fund obligations		16,419
Total liabilities assumed	$	16,765
Net assets acquired	$	18,000

Business Acquisition, Pro Forma Information [Table Text Block]

The following unaudited summary of pro forma combined results of operation for the three and six months ended June 30, 2016 and 2015 gives effect to the acquisition of Mangrove and the acquisition of assets of COBRAsource as if we had completed them on January 1, 2015. This pro forma summary does not reflect any operating efficiencies, cost savings or revenue enhancements that we may achieve by combining operations. In addition, we have not reflected certain non-recurring expenses, such as legal expenses and other transactions expenses for the first 12 months after the acquisition, in the pro forma summary. We present this pro forma summary for informational purposes only and it is not necessarily indicative of what our actual results of operations would have been had the acquisitions taken place as of January 1, 2015, nor is it indicative of future consolidated results of operations.

	FOR THE THREE MONTHS ENDED		FOR THE THREE MONTHS ENDED
	JUNE 30,		JUNE 30,
	2016		2015
Revenues	$	9,664	$	8,959
Net income (loss)	$	136	$	(493	)
Net income (loss) per common share:
Basic and diluted	$	0.02		(0.08	)
Weighted average shares outstanding:
Basic		6,294		6,066
Diluted		6,429		6,231

	FOR THE SIX MONTHS ENDED JUNE 30,			FOR THE SIX MONTHS ENDED JUNE 30,
	2016			2015
Revenues	$	18,514		$	17,375
Net loss	$	(596	)	$	(1,200	)
Net loss per common share:
Basic and diluted	$	(0.09	)	$	(0.20	)
Weighted average shares outstanding:
Basic and diluted	$	6,292		$	6,061

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NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

The following table summarizes the changes in our goodwill:

Balance at December 31, 2015	$	17,436
Goodwill recognized upon acquisition of Mangrove		8,837
Foreign exchange adjustments to goodwill		(8	)
Balance at June 30, 2016	$	26,265

Schedule of Finite-Lived Intangible Assets [Table Text Block]

The gross carrying amount and accumulated amortization of our intangible assets as of June 30, 2016 and December 31, 2015 are as follows:

			June 30, 2016
Intangible Asset	Weighted Average Amortization Period (in Years)		Gross		Accumulated Amortization			Net
Developed Technology		12.7	$	10,915	$	(2,702	)	$	8,213
Customer Relationships		7.3		14,011		(9,599	)		4,412
Reseller Relationships		7		853		(579	)		274
Trade Names		14.5		1,294		(684	)		610
Covenant not-to-compete		2		229		(228	)		1
		14.6	$	27,302	$	(13,792	)	$	13,510

			December 31, 2015
Intangible Asset	Weighted Average Amortization Period (in Years)		Gross		Accumulated Amortization			Net
Developed Technology		7.6	$	4,015	$	(2,208	)	$	1,807
Customer Relationships		7.2		12,811		(8,959	)		3,852
Reseller Relationships		7		853		(518	)		335
Trade Names		5		694		(669	)		25
Covenant not-to-compete		2		229		(222	)		7
		7.3	$	18,602	$	(12,576	)	$	6,026

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The following table summarizes the future estimated amortization expense relating to our intangible assets as of June 30, 2016:

Calendar Years
2016	$	1,130
2017		2,245
2018		1,897
2019		1,264
2020		698
Thereafter		6,276
	$	13,510

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NOTE 6 - NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

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

Notes Payable	Maturity	Stated Interest Rate			Balance as of June 30, 2016		Balance as of December 31, 2015
Subordinated Notes Payable- Mangrove acquisition	3/18/2018		3.50	%	$	6,060	$	-
Term Loan - Wells Fargo	3/31/2019		5.00	%		25,696		13,687
Total Notes Payable					$	31,756	$	13,687
Short-term notes payable, gross					$	5,187	$	1,031
Long-term notes payable, gross					$	26,569	$	12,656

Schedule of Debt And Debt Issuance Costs [Table Text Block]

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

Notes Payable	Gross Notes Payable at June 30, 2016		Debt Issuance Costs			Net Notes Payable at June 30, 2016
Short-term notes payable	$	5,187	$	(286	)	$	4,901
Long-term notes payable		26,569		(495	)		26,074
Total Notes Payable	$	31,756	$	(781	)	$	30,975

Notes Payable	Gross Notes Payable at December 31, 2015		Debt Issuance Costs			Net Notes Payable at December 31, 2015
Short-term notes payable	$	1,031	$	(122	)	$	909
Long-term notes payable		12,656		(272	)		12,384
Total Notes Payable	$	13,687	$	(394	)	$	13,293

Schedule of Maturities of Long-term Debt [Table Text Block]

The following table summarizes the future principal payments related to our outstanding debt:

Year  Ended	Gross Amount
December 31, 2016	$	982
December 31, 2017		5,455
December 31, 2018		5,678
December 31, 2019		19,641
Gross Notes Payable	$	31,756

Schedule of Long-term Debt Instruments [Table Text Block]

In March 2016, we amended the Credit Agreement. Under this amendment, we expanded the Credit Agreement by $12,500 to $29,188. The amendment changes the applicable margin rates for determining the interest rate payable on the loan as follows:

Total Leverage Ratio	Base Rate Margin			LIBOR Rate Margin
≤ 2.75:1		3.50	%		4.50	%
> 2.75:1 but ≤ 3.25:1		4.00	%		5.00	%
≥ 3.25:1		4.50	%		5.50	%

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NOTE 8 - OTHER COMPREHENSIVE LOSS (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure Text Block [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax:

	Foreign Currency Items			Accumulated Other Comprehensive Income (Loss) Items
Beginning balance, December 31, 2015	$	(78	)	$	(78	)
Other comprehensive income before reclassifications		116			116
Amounts reclassified from accumulated other comprehensive income (loss)		—			—
Net current-period other comprehensive income		116			116
Ending balance, June 30, 2016	$	38		$	38

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NOTE 9 - NET LOSS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table sets forth the computation of basic and diluted net income (loss) per common share for the three and six months ended June 30, 2016 and 2015:

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2016		2015		2016			2015
Net income (loss)	$	136	$	95	$	(1,418	)	$	(388	)
Weighted-average shares of common stock outstanding		6,294,000		6,066,000		6,292,000			6,061,000
Dilutive effect of employee stock options		135,000		165,000		-			-
Weighted average shares for diluted net income (loss) per share		6,429,000		6,231,000		6,292,000			6,061,000
Basic net income (loss) per share	$	0.02	$	0.02	$	(0.23	)	$	(0.06	)
Diluted net income (loss) per share	$	0.02	$	0.02	$	(0.23	)	$	(0.06	)

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Cash and Cash Equivalents, at Carrying Value	$ 283	$ 1,158	$ 213	$ 320
Wells Fargo Bank, N.A. [Member] | Line of Credit [Member]
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity	$ 3,000

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NOTE 3 - FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jul. 01, 2016	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2015
NOTE 3 - FAIR VALUE MEASUREMENTS (Details) [Line Items]
Revenues	$ 9,664	$ 7,159		$ 16,386	$ 13,491
Client Fund Obligations, Current	$ 24,525			$ 24,525				$ 0
Scenario, Forecast [Member]
NOTE 3 - FAIR VALUE MEASUREMENTS (Details) [Line Items]
Revenues			$ 650			$ 3,925	$ 2,203

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NOTE 3 - FAIR VALUE MEASUREMENTS (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Assets:
Cash and Cash Equivalents	$ 283	$ 1,158
Total Assets	283	1,158
Liabilities:
Contingent consideration	173	173
Total Liabilities	173	173
Fair Value, Inputs, Level 1 [Member]
Assets:
Cash and Cash Equivalents	283	1,158
Total Assets	283	1,158
Liabilities:
Contingent consideration	0	0
Total Liabilities	0	0
Fair Value, Inputs, Level 2 [Member]
Assets:
Cash and Cash Equivalents	0	0
Total Assets	0	0
Liabilities:
Contingent consideration	0	0
Total Liabilities	0	0
Fair Value, Inputs, Level 3 [Member]
Assets:
Cash and Cash Equivalents	0	0
Total Assets	0	0
Liabilities:
Contingent consideration	173	173
Total Liabilities	$ 173	$ 173

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NOTE 3 - FAIR VALUE MEASUREMENTS (Details) - Schedule of Business Acquisitions by Acquisition, Contingent Consideration - Fair Value, Inputs, Level 3 [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Business Acquisition, Contingent Consideration [Line Items]
Contingent Consideration Balance	$ 173
Change in fair value of contingent consideration	0
Contingent Consideration Balance	$ 173

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NOTE 4 - ACQUISITIONS (Details) - USD ($) $ in Thousands	1 Months Ended
	Mar. 31, 2016	Jun. 30, 2016
Mangrove Employer Services, Inc. [Member]
NOTE 4 - ACQUISITIONS (Details) [Line Items]
Payments to Acquire Businesses, Gross	$ 11,348
Debt Instrument, Face Amount	$ 6,000
Debt Instrument, Interest Rate, Stated Percentage	3.50%
Debt Instrument, Payment Terms	first installment of principal due in March 2017 and the second installment of principal due in March 2018
Debt Instrument, Maturity Date, Description	March 2018
Business Acquisition, Transaction Costs	$ 706
Mangrove COBRASource, Inc. [Member]
NOTE 4 - ACQUISITIONS (Details) [Line Items]
Business Combination, Consideration Transferred	1,036
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	8,700	$ 8,700
Customer Relationships [Member] | Mangrove COBRASource, Inc. [Member]
NOTE 4 - ACQUISITIONS (Details) [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	$ 1,200
Fair Value Inputs, Discount Rate	18.10%
Developed Technology Rights [Member] | Mangrove COBRASource, Inc. [Member]
NOTE 4 - ACQUISITIONS (Details) [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	$ 6,900
Fair Value Inputs, Discount Rate	18.10%
Trade Names [Member] | Mangrove COBRASource, Inc. [Member]
NOTE 4 - ACQUISITIONS (Details) [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill	$ 600
Trade Names [Member] | Mangrove COBRASource, Inc. [Member] | Payroll Division [Member]
NOTE 4 - ACQUISITIONS (Details) [Line Items]
Fair Value Inputs, Discount Rate	1.20%
Trade Names [Member] | Mangrove COBRASource, Inc. [Member] | Benefits Administration Services [Member]
NOTE 4 - ACQUISITIONS (Details) [Line Items]
Fair Value Inputs, Discount Rate	0.50%

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NOTE 4 - ACQUISITIONS (Details) - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015
Assets acquired
Goodwill	$ 26,265		$ 17,436
Mangrove COBRASource, Inc. [Member]
Assets acquired
Accounts receivable	523
Funds held for clients	16,419
Fixed assets	258
Other assets	28
Goodwill	8,837
Intangibles	8,700	$ 8,700
Total assets acquired	34,765
Liabilities assumed
Accounts payable	64
Accrued other liabilities	282
Client fund obligations	16,419
Total liabilities assumed	16,765
Net assets acquired	$ 18,000

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NOTE 4 - ACQUISITIONS (Details) - Schedule of Business Acquisition, Pro Forma Information - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Schedule of Business Acquisition, Pro Forma Information [Abstract]
Revenues	$ 9,664	$ 8,959	$ 18,514	$ 17,375
Net	$ 136	$ (493)	$ (596)	$ (1,200)
Net income (loss) per common share:
Basic and diluted (in Dollars per share)	$ 0.02	$ (0.08)	$ (0.09)	$ (0.20)
Weighted average shares outstanding:
Basic and diluted (in Shares)			6,292	6,061
Weighted average shares outstanding:
Basic (in Shares)	6,294	6,066
Diluted (in Shares)	6,429	6,231

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NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS (Details) [Line Items]
Finite-Lived Intangible Assets, Amortization Method			straight-line method
Amortization of Intangible Assets	$ 626	$ 504	$ 1,003	$ 1,009
Cost of Goods Sold, Amortization	$ 106	$ 106	$ 213	$ 212
Minimum [Member]
NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			1 year
Maximum [Member]
NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			9 years

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NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - Schedule of Goodwill $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill [Line Items]
Goodwill, Balance	$ 17,436
Foreign exchange adjustments to goodwill	(8)
Goodwill, Balance	26,265
Mangrove COBRASource, Inc. [Member]
Goodwill [Line Items]
Goodwill recognized upon acquisition of Mangrove	8,837
Goodwill, Balance	$ 8,837

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NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - Schedule of Intangible Assets - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period	14 years 219 days	7 years 109 days
Intangible Asset, Gross	$ 27,302	$ 18,602
Accumulated Amortization	(13,792)	(12,576)
Intangible Asset, Net	$ 13,510	$ 6,026
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period	12 years 255 days	7 years 219 days
Intangible Asset, Gross	$ 10,915	$ 4,015
Accumulated Amortization	(2,702)	(2,208)
Intangible Asset, Net	$ 8,213	$ 1,807
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period	7 years 109 days	7 years 73 days
Intangible Asset, Gross	$ 14,011	$ 12,811
Accumulated Amortization	(9,599)	(8,959)
Intangible Asset, Net	$ 4,412	$ 3,852
Reseller Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period	7 years	7 years
Intangible Asset, Gross	$ 853	$ 853
Accumulated Amortization	(579)	(518)
Intangible Asset, Net	$ 274	$ 335
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period	14 years 6 months	5 years
Intangible Asset, Gross	$ 1,294	$ 694
Accumulated Amortization	(684)	(669)
Intangible Asset, Net	$ 610	$ 25
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period	2 years	2 years
Intangible Asset, Gross	$ 229	$ 229
Accumulated Amortization	(228)	(222)
Intangible Asset, Net	$ 1	$ 7

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NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - Schedule of Expected Amortization Expense - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Expected Amortization Expense [Abstract]
2016	$ 1,130
2017	2,245
2018	1,897
2019	1,264
2020	698
Thereafter	6,276
	$ 13,510	$ 6,026

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NOTE 6 - NOTES PAYABLE (Details) - USD ($) $ in Thousands	1 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2014	Jun. 30, 2016
Mangrove Employer Services, Inc. [Member]
NOTE 6 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount	$ 6,000
Debt Instrument, Maturity Date, Description	March 2018
Payments to Acquire Businesses, Gross	$ 11,348
Debt Instrument, Interest Rate, Stated Percentage	3.50%
Wells Fargo Bank, N.A. [Member] | Notes Payable to Banks [Member]
NOTE 6 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Face Amount		$ 15,000
Debt Instrument, Maturity Date, Description		March 2019
Line of Credit Facility, Covenant Terms	We have now agreed to a leverage ratio not to exceed 5.00:1 at March 31, 2016, stepping down to 2.25:1 at December 31, 2018.
Debt Instrument, Interest Rate, Stated Percentage			5.00%
Wells Fargo Bank, N.A. [Member] | Line of Credit [Member]
NOTE 6 - NOTES PAYABLE (Details) [Line Items]
Line of Credit Facility, Interest Rate Description		the term loan to finance the repayment of all amounts outstanding under our loan agreement with Deerpath and the payment of certain fees, cost and expenses related to the Credit Agreement.
Line of Credit Facility, Maximum Borrowing Capacity		$ 3,000
Line of Credit Facility, Remaining Borrowing Capacity			$ 3,000
Debt Instrument, Covenant Description		Under the Credit Agreement, we were required to maintain a fixed charge coverage ratio of not less than 1.5 to 1.0 beginning with the quarter ended June 30, 2014 and each calendar quarter thereafter, and a leverage ratio of not greater than 3.5 to 1.0 beginning with the quarter ended June 30, 2014 with the levels stepping down thereafter. We amended the Credit Agreement in August 2014, March 2015 and November 2015. The August 2014 amendment revised the leverage ratio beginning with the quarter ended September 30, 2014 to a leverage ratio of not greater than 3.6 to 1.0 with the levels stepping down thereafter. The March 2015 amendment authorized us to optionally prepay, subject to specified conditions, the Subordinated Note Payable to Roomtag and revised the leverage ratio beginning with the quarter ended March 31, 2015 to a leverage ratio of not greater than 3.5 to 1.0 with the levels stepping down thereafter. The November 2015 amendment increased the applicable margin relative to the LIBOR rate upon which we compute the interest payable. We agreed that if our leverage ratio is (a) less than or equal to 2.25:1, (b) greater than 2.25:1 but less than or equal to 2.75:1, (c) greater than 2.75:1 but less than or equal to 3.25:1 or (d) greater than 3.25:1, the applicable margin relative to the LIBOR rate would be 3.00, 3.50, 4.00 or 4.50 percentage points, respectively. We further agreed that until the leverage ratio testing period ending September 30, 2016, we will pay interest based on the 4.50 percentage point margin level.
Wells Fargo Bank, N.A. [Member] | Roomtag, LLC Acquisition [Member] | Notes Payable to Banks [Member]
NOTE 6 - NOTES PAYABLE (Details) [Line Items]
Long-term Line of Credit			0
Line of Credit Facility, Remaining Borrowing Capacity			$ 3,000
Wells Fargo Bank, N.A. [Member] | Line of Credit [Member]
NOTE 6 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Debt Default, Description of Violation or Event of Default		The Credit Agreement contains customary events of default, including, among others, payment defaults, covenant defaults, judgment defaults, bankruptcy and insolvency events, cross defaults to certain indebtedness, incorrect representations or warranties, and change of control.
Debt Instrument, Collateral		Under the Guaranty and Security Agreement, we and each of our wholly-owned active subsidiaries have guaranteed all obligations under the Credit Agreement and granted a security interest in substantially all of our and our subsidiaries’ assets.
Line of Credit Facility, Maximum Borrowing Capacity	$ 29,188
Line of Credit Facility, Increase (Decrease), Net	12,500
Debt Instrument, Covenant Compliance			The Credit Agreement contains customary affirmative and negative covenants, including, among others, limitations with respect to debt, liens, fundamental changes, sale of assets, prepayment of debt, investments, dividends and transactions with affiliates.The outstanding principal amount of the term loan is payable as follows:· $491 on June 30, 2016 and the last day of each fiscal quarter thereafter up to March 31, 2017; and· $655 on June 30, 2017 and the last day of each fiscal quarter thereafter, with a final payment of the remaining balance due on March 31, 2019As of June 30, 2016, we were in compliance with all covenants and all payments remain current. We expect to be in compliance or be able to obtain compliance through debt repayments with available cash on hand or as we expect to generate from the ordinary course of operations over the next twelve months.
First Installment of Principal [Member] | Mangrove Employer Services, Inc. [Member]
NOTE 6 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Periodic Payment	3,000
Second Installment of Principal [Member] | Mangrove Employer Services, Inc. [Member]
NOTE 6 - NOTES PAYABLE (Details) [Line Items]
Debt Instrument, Periodic Payment	$ 3,000

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NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Balance	$ 31,756	$ 13,687
Short-term notes payable, gross	5,187	1,031
Long-term notes payable, gross	$ 26,569	12,656
Mangrove COBRASource, Inc. [Member] | Notes Payable, Other Payables [Member]
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Maturity	Mar. 18, 2018
Stated Interest Rate	3.50%
Balance	$ 6,060	0
Wells Fargo Bank, N.A. [Member] | Notes Payable to Banks [Member]
NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Maturity	Mar. 31, 2019
Stated Interest Rate	5.00%
Balance	$ 25,696	$ 13,687

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NOTE 6 - NOTES PAYABLE (Details) - Schedule of Debt And Debt Issuance Costs - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Debt And Debt Issuance Costs [Abstract]
Short-term notes payable	$ 5,187	$ 1,031
Short-term notes payable	(286)	(122)
Short-term notes payable	4,901	909
Long-term notes payable	26,569	12,656
Long-term notes payable	(495)	(272)
Long-term notes payable	26,074	12,384
Total Notes Payable	31,756	13,687
Total Notes Payable	(781)	(394)
Total Notes Payable	$ 30,975	$ 13,293

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NOTE 6 - NOTES PAYABLE (Details) - Schedule of Maturities of Long-term Debt - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Schedule of Maturities of Long-term Debt [Abstract]
December 31, 2016	$ 982
December 31, 2017	5,455
December 31, 2018	5,678
December 31, 2019	19,641
Gross Notes Payable	$ 31,756	$ 13,687

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NOTE 6 - NOTES PAYABLE (Details) - Schedule of Appicable Margin Rates	6 Months Ended
	Jun. 30, 2016
Base Rate [Member] | Leverage Ratio Less Than or Equal To 2.75 To 1 [Member]
Debt Instrument [Line Items]
Base Rate Margin	3.50%
LIBOR Rate Margin	3.50%
Base Rate [Member] | Leverage Ratio Greater Than 2.75 To 1 But Less Than or Equal To 3.25 To 1 [Member]
Debt Instrument [Line Items]
Base Rate Margin	4.00%
LIBOR Rate Margin	4.00%
Base Rate [Member] | Leverage Ratio Greater Than or Equal To 3.25 To 1 [Member]
Debt Instrument [Line Items]
Base Rate Margin	4.50%
LIBOR Rate Margin	4.50%
London Interbank Offered Rate (LIBOR) [Member] | Leverage Ratio Less Than or Equal To 2.75 To 1 [Member]
Debt Instrument [Line Items]
Base Rate Margin	4.50%
LIBOR Rate Margin	4.50%
London Interbank Offered Rate (LIBOR) [Member] | Leverage Ratio Greater Than 2.75 To 1 But Less Than or Equal To 3.25 To 1 [Member]
Debt Instrument [Line Items]
Base Rate Margin	5.00%
LIBOR Rate Margin	5.00%
London Interbank Offered Rate (LIBOR) [Member] | Leverage Ratio Greater Than or Equal To 3.25 To 1 [Member]
Debt Instrument [Line Items]
Base Rate Margin	5.50%
LIBOR Rate Margin	5.50%

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NOTE 7 - SHARE BASED COMPENSATION (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) shares	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) shares	Jun. 30, 2015 USD ($) shares	Jun. 30, 2014 shares	May 31, 2014 shares
NOTE 7 - SHARE BASED COMPENSATION (Details) [Line Items]
Share-based Compensation (in Dollars) | $	$ 67	$ 61	$ 106	$ 98
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period			235,000	230,000
2009 Equity Plan [Member]
NOTE 7 - SHARE BASED COMPENSATION (Details) [Line Items]
Active Equity Plans			1
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant					1,400,000	1,200,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	549,000		549,000
Minimum [Member] | 2009 Equity Plan [Member]
NOTE 7 - SHARE BASED COMPENSATION (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			5 years
Maximum [Member] | 2009 Equity Plan [Member]
NOTE 7 - SHARE BASED COMPENSATION (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years

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NOTE 8 - OTHER COMPREHENSIVE LOSS (Details) - Schedule of Accumulated Other Comprehensive Income (Loss) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Schedule of Accumulated Other Comprehensive Income (Loss) [Abstract]
Beginning balance, December 31, 2015	$ (78)
Beginning balance, December 31, 2015	(78)
Other comprehensive income before reclassifications	116
Other comprehensive income before reclassifications	116
Amounts reclassified from accumulated other comprehensive income (loss)	0
Amounts reclassified from accumulated other comprehensive income (loss)	0
Net current-period other comprehensive income	116
Net current-period other comprehensive income	116
Ending balance, June 30, 2016	38
Ending balance, June 30, 2016	$ 38

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NOTE 9 - NET LOSS PER SHARE (Details) - shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Equity Option [Member]
NOTE 9 - NET LOSS PER SHARE (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	664,000	685,000

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NOTE 9 - NET LOSS PER SHARE (Details) - Components of Earnings Per Share, Basic and Diluted - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Components of Earnings Per Share, Basic and Diluted [Abstract]
Net income (loss) (in Dollars)	$ 136	$ 95	$ (1,418)	$ (388)
Weighted-average shares of common stock outstanding	6,294,000	6,066,000	6,292,000	6,061,000
Dilutive effect of employee stock options	135,000	165,000	0	0
Weighted average shares for diluted net income (loss) per share	6,429,000	6,231,000	6,292,000	6,061,000
Basic net income (loss) per share (in Dollars per share)	$ 0.02	$ 0.02	$ (0.23)	$ (0.06)
Diluted net income (loss) per share (in Dollars per share)	$ 0.02	$ 0.02	$ (0.23)	$ (0.06)