0001628280-21-009694 | 10-Q | XBRL Viewer

THE COMPANY AND BASIS OF PRESENTATION (Details)	3 Months Ended
THE COMPANY AND BASIS OF PRESENTATION (Details)	Mar. 31, 2021 challenge productLine
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of challenges driving product strategy \| challenge	3
Number of product lines \| productLine	4

LEASES (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Lease, Cost

The components of the rent expense for the three months ended March 31, 2021 and 2020 were as follows:


	Three Months Ended March 31,
	2021		2020
Operating lease cost	$	570	$	552
Sublease income	(11)		(48)
Net rent expense	$	559	$	504

Supplemental cash flow information related to operating leases for the three months ended March 31, 2021 and 2020 follow:


	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	609	$	573
Non-cash operating activities:
Operating lease assets obtained in exchange for new operating lease liabilities	$	325	$	—

Lessee, Operating Lease, Liability, Maturity

Future minimum commitments over the life of all operating leases, which exclude variable rent payments, are as follows:


Year Ending December 31	Operating Leases
2021 (remainder)	$	1,854
2022	1,949
2023	1,256
2024	1,037
2025	828
Thereafter	1,803
Total minimum lease payments	8,727
Less imputed interest	(1,666)
Total lease liabilities	$	7,061

LEASES - Rent Expense Components (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Leases [Abstract]
Operating lease cost	$ 570	$ 552
Sublease income	(11)	(48)
Net rent expense	$ 559	$ 504

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Mar. 31, 2021
Accounting Policies [Abstract]
Use of Estimates	USE OF ESTIMATES Preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are subjective in nature and involve judgments. The more significant estimates made by management include the valuation allowance for the gross deferred tax assets, useful lives of fixed assets, the determination of the fair value of its long-lived assets, and the fair value of assets acquired and liabilities assumed during acquisitions. We base our estimates on historical experience and on various other assumptions management believes reasonable under the given circumstances. These estimates could be materially different under different conditions and assumptions. Additionally, the actual amounts could differ from the estimates made. Management periodically evaluates estimates used in the preparation of the consolidated financial statements for continued reasonableness. We make appropriate adjustments, if any, to the estimates used prospectively based upon such periodic evaluation.
Significant Risks and Uncertainties	SIGNIFICANT RISKS AND UNCERTAINTIES The coronavirus ("COVID-19") pandemic has resulted in a global economic slowdown and disruptions that have and could continue to negatively impact our business. The pandemic and numerous measures implemented to contain the virus such as business shutdowns, shelter-in-place orders and travel bans and restrictions have caused businesses, especially small and medium sized businesses some of whom are our customers, to reduce headcount or cease operations as customer demand decreased. Given the economic slowdown and other risks and uncertainties associated with the pandemic, we expect that our business, financial condition, results of operations and growth prospects will be adversely affected in the future. Our business is impacted by employment levels as we have contracts that charge clients on a per-employee basis. In addition, the conditions caused by the COVID-19 pandemic could adversely affect our customers’ ability or willingness to purchase our offerings, delay prospective customers’ purchasing decisions, delay the provisioning of our offerings, lengthen payment terms, reduce the value or duration of customer subscription contracts, or affect attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance. The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, including the administration of vaccinations and the impact of these and other factors on our employees, customers, partners and vendors. If we are not able to respond to and manage the impact of such events effectively, our business will be harmed.
Recent Accounting Pronouncements	RECENT ACCOUNTING PRONOUNCEMENTS In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820). The new guidance modifies disclosure requirements related to fair value measurement. We adopted the standard on January 1, 2020. The adoption of this standard did not have an impact on our financial statements and disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). The new guidance reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). We adopted the standard on January 1, 2020 prospectively to all implementation costs incurred after the date of adoption. The effects of this standard on our financial position, results of operations and cash flows were not material. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The standard became effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We adopted ASU 2019-12 during the quarter beginning January 1, 2021, using the prospective approach except for hybrid tax regimes, which we adopted using the modified retrospective approach. The adoption of ASU 2019-12 resulted in no material impact to the Company's financial statements.
Contingencies	CONTINGENCIES Although we have been, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of March 31, 2021, we were not a party to any pending legal proceedings that are material to our business.
Accumulated Other Comprehensive Income (Loss)	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) As of March 31, 2021 and December 31, 2020, accumulated other comprehensive income consisted of net unrealized gains and losses on available-for-sale securities.
Fair Value Measurement	Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in U.S. GAAP 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.

CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) [Line Items]
Allowance for doubtful accounts	$ 1,909		$ 2,194
Receivables, net of allowances	3,873		3,354
Deferred commission costs from contract with customers	4,128		$ 3,792
Amortization of deferred sales commissions	232	$ 249
Deferred revenue	3,406	$ 2,704
Revenue expected from remaining performance obligations	$ 24,563
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) [Line Items]
Percentage of revenue expected from remaining performance obligation	65.00%
Expected timing for remaining performance obligation (in months)	12 months
Accounts Receivable
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) [Line Items]
Concentration risk percentage	5.00%		0.00%

SHARE-BASED COMPENSATION	3 Months Ended
SHARE-BASED COMPENSATION	Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
SHARE-BASED COMPENSATION	SHARE-BASED COMPENSATION We have one active equity plan, the 2018 Incentive Award Plan (the “2018 Plan”). The 2018 Plan, approved by our shareholders, replaced our 2009 Equity Incentive Plan, as amended (the “2009 Plan”), however, the terms and conditions of the 2009 Plan continue to govern any outstanding awards previously granted under the 2009 Plan. The number of shares available for issuance under the 2018 Plan is equal to the sum of (i) 2,350,000 shares, and (ii) any shares subject to issued and outstanding awards under the 2009 Plan as of the effective date of the 2018 Plan that expire, are canceled or otherwise terminate following the effective date of the 2018 Plan. We have outstanding options to purchase 1,465,985 shares at a weighted average exercise price of $7.89. During the three months ending March 31, 2021 we issued 307,500 of employee stock options. The weighted average exercise price of these awards was $7.53 for the three months ended March 31, 2021. These awards will vest over a three-year period. We also had 388,273 outstanding restricted stock units as of March 31, 2021. As of March 31, 2021, we had 1,008,506 shares available for grant pursuant to the 2018 Plan. Share based compensation for our stock option plans for the three months ended March 31, 2021 and March 31, 2020 were $626 and $438, respectively. We issued 19,709 and 19,317 shares of common stock related to exercises of stock options for the three months ended March 31, 2021 and 2020, respectively. We issued 34,920 and 9,944 shares of common stock related to the issuance of vested restricted stock units for the three months ended March 31, 2021 and 2020, respectively.

GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	8 years 7 months 6 days	8 years 6 months
Gross	$ 103,076	$ 103,076
Accumulated Amortization	(41,430)	(38,524)
Net	$ 61,646	$ 64,552
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	8 years 10 months 24 days	8 years 10 months 24 days
Gross	$ 88,310	$ 88,310
Accumulated Amortization	(31,350)	(28,898)
Net	$ 56,960	$ 59,412
Developed technology
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	6 years 7 months 6 days	6 years 7 months 6 days
Gross	$ 12,001	$ 12,001
Accumulated Amortization	(7,987)	(7,608)
Net	$ 4,014	$ 4,393
Reseller relationships
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	7 years	7 years
Gross	$ 853	$ 853
Accumulated Amortization	(853)	(853)
Net	$ 0	$ 0
Trade names
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	3 years	3 years
Gross	$ 880	$ 880
Accumulated Amortization	(379)	(312)
Net	$ 501	$ 568
Noncompete agreements
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in Years)	5 years 2 months 12 days	5 years 2 months 12 days
Gross	$ 1,032	$ 1,032
Accumulated Amortization	(861)	(853)
Net	$ 171	$ 179

NOTES PAYABLE

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

NOTES PAYABLE

The following table summarizes our outstanding debt as of the dates indicated:1


	Maturity	Stated Interest Rate		March 31, 2021		December 31, 2020
Subordinated Notes Payable – acquisitions	7/1/2021 – 7/1/2022	2.00% - 3.00%		$	4,263	$	6,182
PPP Loan – Pinnacle Bank1	4/15/2022	1.00	%	8,856		8,856
Term Loan – Wells Fargo Syndicate Partner	12/31/2024	5.25	%	9,813		9,875
Total Notes Payable				$	22,932	$	24,913
Short-term Notes Payable				12,024		12,388
Long-term Notes Payable				$	10,908	$	12,525

(1)Information presented in each of the tables this Note 5 includes principal and interest due under the terms of a promissory note with Pinnacle Bank. This loan was issued to us in connection with the Paycheck Protection Program pursuant to Title I of the Coronavirus Aid, Relief and Economic Security Act ("the PPP"). Under the terms of the PPP, the principal balance and interest due under the promissory note will be forgiven if we meet certain conditions related to the use of the loan proceeds. Under the terms of our promissory note with Pinnacle Bank, we would have been required to make payments on this promissory note in November 2020; however, the Small Business Administration ("the SBA") issued guidance, prior to that date, that deferred all payments that would be owed on this loan until after the SBA makes a decision on our loan forgiveness application. While we expect that the entire loan will be forgiven, we cannot be certain that the SBA will grant forgiveness of our entire loan or a significant portion of the loan. If we do not receive forgiveness of our entire loan, we will be obligated to start making payments on the portion of the principal and interest that is not forgiven so that it will be fully repaid no later than April 15, 2022, unless we are able to negotiate new payment terms with Pinnacle Bank. We filed our initial application for forgiveness in December 2020, and completed our application in early February 2021.

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


	March 31, 2021
	Gross Notes Payable		Debt Issuance Costs and Debt Discount		Net Notes Payable
Notes payable, current portion1	$	12,024	$	(123)	$	11,901
Notes payable, net of current portion2	10,908		(226)		10,682
Total	$	22,932	$	(349)	$	22,583

(1)Net Notes Payable includes $8,358 of Gross Notes Payables and $0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make any payments until the Small Business Administration has made a decision regarding our application for loan forgiveness.

(2)Net Notes Payable, includes $498 of Gross Notes Payables and $0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make payments until the SBA has made a decision regarding our application for loan forgiveness.


	December 31, 2020
	Gross Notes Payable		Debt Issuance Costs and Debt Discount		Net Notes Payable
Notes payable, current portion1	$	12,388	$	(78)	$	12,310
Notes payable, net of current portion2	12,525		(300)		12,225
Total	$	24,913	$	(378)	$	24,535

(1)Net Notes Payable includes $6,866 of Gross Notes Payables and $0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make any payments until the SBA has made a decision regarding our application for loan forgiveness.

(2)Net Notes Payable, includes $1,989 of Gross Notes Payables and $0 Debt Issuance Cost and Debt Discount related to our PPP loan with Pinnacle Bank, all or a portion of which we expect will be forgiven and for which we are not obligated to make payments until the SBA has made a decision regarding our application for loan forgiveness.

The following table summarizes the future principal payments related to our outstanding debt as of March 31, 2021:


Year Ending	Amount
2021 (remainder)	$	10,407
2022	3,400
2023	500
2024	8,625
2025	—
Total	$	22,932

Senior Credit Facility with Wells Fargo N.A.

In March 2014, we entered into a credit agreement (the “Credit Agreement”) with Wells Fargo, 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 has been amended and restated multiple times, with the most recent amendment and restatement effective December 31, 2019. As described below, the Credit Agreement was amended during 2020, with the most recent amendment effective August 10, 2020.

Following the amendment, the Credit Agreement provided for $10,000 in term loans and a $5,000 revolver and provided for new applicable margin rates for determining the interest payable on loans and amended certain of our financial covenants as described in our Form 10-K filed with the SEC on March 9, 2021. We expect to be in compliance with these amended financial covenants over the next twelve months.

As of March 31, 2021 and December 31, 2020, no amount was outstanding and $4,500, respectively, was available for borrowing under the revolver.

PPP Loan

Due to the effects of COVID-19 on our business and the related need to support our operations, we applied for and received a loan from Pinnacle Bank under the PPP during the second quarter of 2020. Under the terms of our note with Pinnacle Bank, principal payments would have begun in November 2020. However, the SBA, which administers loans issued under the PPP, has issued guidance, deferring all payments that would be owed on this loan until the SBA makes a decision on our loan forgiveness application. While we expect that the entire loan will be forgiven, we cannot be certain that the SBA will forgive our entire loan. If we do not receive forgiveness of our entire loan, we will be obligated to begin repaying the portion of the principal and interest that is not forgiven such that it is fully paid no later than April 15, 2022, unless we are able to negotiate new payment terms with Pinnacle Bank. Further, if the portion of the PPP Loan that is not forgiven (the “Unforgiven Debt”) exceeds $3,250 or requires monthly payments of principal and interest in excess of $185, it is likely we will be in default under our Credit Agreement unless we obtain a waiver from our senior lender or are otherwise able to negotiate acceptable terms with our senior lender and Pinnacle Bank. We filed our initial application for forgiveness of this loan in December 2020, and completed our application in early February 2021. Given this timing, we expect that payments we may owe, if any, would not start until second or third quarter of 2021. Under U.S. GAAP, we are required to report this entire loan as outstanding debt in our financial statements and further identify the current portion of this debt (e.g. amounts which would be payable in the next 12 months) with reference to the actual terms of our note with Pinnacle Bank. Notwithstanding how this loan is reported in our financial statements, we do not expect to make any payments on this note until at least second quarter of 2021, and then only to the extent that any portion of this note is not forgiven in accordance with the terms of the PPP.

NOTES PAYABLE - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Long-term Debt, Gross	$ 22,932	$ 24,913
Short-term Notes Payable	12,024	12,388
Long-term Notes Payable	10,908	12,525
Pinnacle Bank
NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Long-term Debt, Gross	$ 8,856	8,856
Stated Interest Rate	1.00%
Notes Payable, Other Payables
NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Long-term Debt, Gross	$ 4,263	6,182
Notes Payable, Other Payables \| Acquisitions \| Minimum
NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Stated Interest Rate	2.00%
Notes Payable, Other Payables \| Acquisitions \| Maximum
NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Stated Interest Rate	3.00%
Notes Payable, Other Payables \| Wells Fargo Syndicated Partner
NOTES PAYABLE (Details) - Schedule of Debt [Line Items]
Long-term Debt, Gross	$ 9,813	$ 9,875
Stated Interest Rate	5.25%

NOTES PAYABLE - Narrative (Details) - USD ($)	3 Months Ended
NOTES PAYABLE - Narrative (Details) - USD ($)	Mar. 31, 2021	Dec. 31, 2020
NOTES PAYABLE (Details) [Line Items]
Long-term line of credit	$ 0	$ 0
Remaining borrowing capacity	4,500,000	4,500,000
Medium-term Notes \| Credit Amendment
NOTES PAYABLE (Details) [Line Items]
Maximum borrowing capacity		10,000,000
PPP Loan \| Pinnacle Bank \| Maximum
NOTES PAYABLE (Details) [Line Items]
Unforgiven debt	3,250,000
Monthly periodic payment	$ 185,000
Revolving Credit Facility \| Credit Amendment
NOTES PAYABLE (Details) [Line Items]
Maximum borrowing capacity		$ 5,000,000

INVESTMENTS AND FAIR VALUE MEASUREMENTS - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Funds held for clients
Total	$ 28,616	$ 95,122
Liabilities:
Contingent purchase consideration	3,880	3,880
Total	3,880	3,880
Money market funds
Funds held for clients
Funds held for clients	1,082	63,999
Available-for-sale securities
Funds held for clients
Funds held for clients	24,233	25,919
Money market funds
Cash equivalents
Cash equivalents	3,301	5,204
Quoted Prices in Active Market (Level 1)
Funds held for clients
Total	4,383	69,203
Liabilities:
Contingent purchase consideration	0	0
Total	0	0
Quoted Prices in Active Market (Level 1) \| Money market funds
Funds held for clients
Funds held for clients	1,082	63,999
Quoted Prices in Active Market (Level 1) \| Available-for-sale securities
Funds held for clients
Funds held for clients	0	0
Quoted Prices in Active Market (Level 1) \| Money market funds
Cash equivalents
Cash equivalents	3,301	5,204
Significant Other Observable Inputs (Level 2)
Funds held for clients
Total	24,233	25,919
Liabilities:
Contingent purchase consideration	0	0
Total	0	0
Significant Other Observable Inputs (Level 2) \| Money market funds
Funds held for clients
Funds held for clients	0	0
Significant Other Observable Inputs (Level 2) \| Available-for-sale securities
Funds held for clients
Funds held for clients	24,233	25,919
Significant Other Observable Inputs (Level 2) \| Money market funds
Cash equivalents
Cash equivalents	0	0
Significant Unobservable Inputs (Level 3)
Funds held for clients
Total	0	0
Liabilities:
Contingent purchase consideration	3,880	3,880
Total	3,880	3,880
Significant Unobservable Inputs (Level 3) \| Money market funds
Funds held for clients
Funds held for clients	0	0
Significant Unobservable Inputs (Level 3) \| Available-for-sale securities
Funds held for clients
Funds held for clients	0	0
Significant Unobservable Inputs (Level 3) \| Money market funds
Cash equivalents
Cash equivalents	$ 0	$ 0

GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

As of March 31, 2021 and December 31, 2020, goodwill was $73,958. The Company evaluates the recoverability of goodwill annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. As of March 31, 2021, there has been no impairment of goodwill based on the qualitative assessments performed by the Company.

The gross carrying amount and accumulated amortization of our intangible assets as of March 31, 2021 and December 31, 2020 are as follows:


	March 31, 2021
Intangible Assets	Weighted Average Amortization Period (in Years)	Gross		Accumulated Amortization		Net
Customer relationships	8.9	$	88,310	$	(31,350)	$	56,960
Developed technology	6.6	12,001		(7,987)		4,014
Reseller relationships	7.0	853		(853)		—
Trade names	3.0	880		(379)		501
Noncompete agreements	5.2	1,032		(861)		171
	8.6	$	103,076	$	(41,430)	$	61,646


	December 31, 2020
Intangible Assets	Weighted Average Amortization Period (in Years)	Gross		Accumulated Amortization		Net
Customer relationships	8.9	$	88,310	$	(28,898)	$	59,412
Developed technology	6.6	12,001		(7,608)		4,393
Reseller relationships	7.0	853		(853)		—
Trade names	3.0	880		(312)		568
Noncompete agreements	5.2	1,032		(853)		179
	8.5	$	103,076	$	(38,524)	$	64,552

We record amortization expenses using the straight-line method over the estimated useful lives of the intangible assets, as noted above. Amortization expenses recorded in Operating Expenses were $2,528 and $2,349 for the three months ended March 31, 2021 and 2020, respectively. Amortization expenses recorded in Cost of Sales were $379 and $431 for the three months ended March 31, 2021 and 2020, respectively. There is no impairment of intangibles during the three months ended March 31, 2021 based on the qualitative assessment performed by the Company.

The following table summarizes the future estimated amortization expense relating to our intangible assets as of March 31, 2021:


Calendar Years	Amount
2021 (April to December)	$	8,695
2022	11,068
2023	9,942
2024	9,682
2025	8,896
Thereafter	13,363
	$	61,646

NET LOSS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted net loss per common share for the three months ended March 31, 2021 and March 31, 2020:


	Three Months Ended March 31,
	2021		2020
Net loss	$	(1,598)	$	(1,767)
Weighted-average shares of common stock outstanding, basic and diluted	19,007,000		15,727,000
Basic and diluted loss per share	$	(0.08)	$	(0.11)

LEASES - Lessee, Operating Lease, Disclosure (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$ 609	$ 573
Non-cash operating activities:
Operating lease assets obtained in exchange for new operating lease liabilities	$ 325	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 24,290	$ 28,577
Accounts receivable, net of allowance for doubtful accounts of $1,909 and $2,194 at March 31, 2021 and December 31, 2020, respectively	3,873	3,354
Inventory	349	449
Prepaid expenses and other current assets	3,372	3,284
Total current assets before funds held for clients	31,884	35,664
Funds held for clients	254,492	321,069
Total current assets	286,376	356,733
Property and equipment, net	8,662	8,281
Goodwill	73,958	73,958
Intangible assets, net	61,646	64,552
Operating lease assets, net	6,354	6,450
Other assets, net	4,107	3,953
Total assets	441,103	513,927
Current liabilities:
Current portion of notes payable	11,901	12,310
Accounts payable	750	1,288
Accrued compensation and benefits	3,610	2,916
Operating lease liabilities, current	1,985	1,833
Other accrued liabilities	1,064	1,380
Contingent purchase obligation	3,880	3,880
Deferred revenue	1,605	4,343
Total current liabilities before client fund obligations	24,795	27,950
Client fund obligations	254,241	320,577
Total current liabilities	279,036	348,527
Long-term liabilities:
Deferred revenue	86	111
Deferred tax liability	985	888
Notes payable, net of current portion	10,683	12,225
Operating lease liabilities, noncurrent	5,076	5,366
Other liabilities	586	1,157
Total long-term liabilities	17,416	19,747
Total liabilities	296,452	368,274
Stockholders’ equity:
Preferred stock, $0.01 par value; 1,500 shares authorized; none issued or outstanding	0	0
Common stock, $0.01 par value; 44,000 and 22,000 shares authorized; 19,405 and 19,354 shares issued, 19,021 and 18,970 shares outstanding at March 31, 2021 and December 31, 2020, respectively	194	193
Treasury stock at cost, 384 shares at March 31, 2021 and December 31, 2020	(5,017)	(5,017)
Additional paid-in capital	420,561	419,827
Accumulated deficit	(271,552)	(269,954)
Accumulated other comprehensive income	465	604
Total stockholders’ equity	144,651	145,653
Total liabilities and stockholders’ equity	$ 441,103	$ 513,927

LEASES - Lessee, Operating Lease, Liability, Maturity (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Leases [Abstract]
2021 (remainder)	$ 1,854
2022	1,949
2023	1,256
2024	1,037
2025	828
Thereafter	1,803
Total minimum lease payments	8,727
Less imputed interest	(1,666)
Total lease liabilities	$ 7,061

NOTES PAYABLE - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
2021 (remainder)	$ 10,407
2022	3,400
2023	500
2024	8,625
2025	0
Long-term Debt, Gross	$ 22,932	$ 24,913

NOTES PAYABLE (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes our outstanding debt as of the dates indicated:1


	Maturity	Stated Interest Rate		March 31, 2021		December 31, 2020
Subordinated Notes Payable – acquisitions	7/1/2021 – 7/1/2022	2.00% - 3.00%		$	4,263	$	6,182
PPP Loan – Pinnacle Bank1	4/15/2022	1.00	%	8,856		8,856
Term Loan – Wells Fargo Syndicate Partner	12/31/2024	5.25	%	9,813		9,875
Total Notes Payable				$	22,932	$	24,913
Short-term Notes Payable				12,024		12,388
Long-term Notes Payable				$	10,908	$	12,525

Schedule of Debt and Debt Issuance Costs

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


	March 31, 2021
	Gross Notes Payable		Debt Issuance Costs and Debt Discount		Net Notes Payable
Notes payable, current portion1	$	12,024	$	(123)	$	11,901
Notes payable, net of current portion2	10,908		(226)		10,682
Total	$	22,932	$	(349)	$	22,583


	December 31, 2020
	Gross Notes Payable		Debt Issuance Costs and Debt Discount		Net Notes Payable
Notes payable, current portion1	$	12,388	$	(78)	$	12,310
Notes payable, net of current portion2	12,525		(300)		12,225
Total	$	24,913	$	(378)	$	24,535

Schedule of Maturities of Long-term Debt

The following table summarizes the future principal payments related to our outstanding debt as of March 31, 2021:


Year Ending	Amount
2021 (remainder)	$	10,407
2022	3,400
2023	500
2024	8,625
2025	—
Total	$	22,932

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Other Comprehensive Income (Loss)
BALANCE (in shares) at Dec. 31, 2019		15,714,000
BALANCE at Dec. 31, 2019	$ 137,579	$ 161	$ (5,017)	$ 396,102	$ (253,642)	$ (25)
Stock issued upon option exercise and vesting of restricted stock units (in shares)	19,317	29,000
Stock issued upon option exercise and vesting of restricted stock units	$ 106			106
Share based compensation	438			438
Net loss	(1,767)				(1,767)
Other comprehensive income (loss)	65					65
BALANCE (in shares) at Mar. 31, 2020		15,743,000
BALANCE at Mar. 31, 2020	136,421	$ 161	(5,017)	396,646	(255,409)	40
BALANCE (in shares) at Dec. 31, 2020		18,970,000
BALANCE at Dec. 31, 2020	$ 145,653	$ 193	(5,017)	419,827	(269,954)	604
Stock issued upon option exercise and vesting of restricted stock units (in shares)	19,709	51,000
Stock issued upon option exercise and vesting of restricted stock units	$ 132	$ 1		131
Share based compensation	626			626
Share issuance costs	(23)			(23)
Net loss	(1,598)				(1,598)
Other comprehensive income (loss)	(139)					(139)
BALANCE (in shares) at Mar. 31, 2021		19,021,000
BALANCE at Mar. 31, 2021	$ 144,651	$ 194	$ (5,017)	$ 420,561	$ (271,552)	$ 465

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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NET LOSS PER SHARE - Components of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share [Abstract]
Net loss	$ (1,598)	$ (1,767)
Weighted-average shares of common stock outstanding, basic (in shares)	19,007,000	15,727,000
Weighted-average shares of common stock outstanding, diluted (in shares)	19,007,000	15,727,000
Basic loss per share (in USD per share)	$ (0.08)	$ (0.11)
Diluted loss per share (in USD per share)	$ (0.08)	$ (0.11)

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 1,909	$ 2,194
Preferred stock, par value (in USD per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,500	1,500
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in USD per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized	44,000	22,000
Common stock, shares issued (in shares)	19,405	19,354
Common stock, shares outstanding (in shares)	19,021	18,970
Treasury stock, shares (in shares)	384	384

Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Mar. 31, 2021	May 06, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	1-34522
Entity Registrant Name	ASURE SOFTWARE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	74-2415696
Entity Address, Address Line One	3700 N. Capital of Texas Hwy #350
Entity Address, City or Town	Austin
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	78746
City Area Code	512
Local Phone Number	437-2700
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		19,033,872
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Central Index Key	0000884144
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Common Stock, $0.01 par value
Document Information [Line Items]
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	ASUR
Security Exchange Name	NASDAQ
Series A Junior Participating Preferred Share Purchase Rights
Document Information [Line Items]
Title of 12(b) Security	Series A Junior Participating Preferred Share Purchase Rights
No Trading Symbol Flag	true

LEASES

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

LEASES

We have entered into office space lease agreements, which qualify as operating leases under ASU No. 2016-02, “Leases (Topic 842)”. Under such leases, the lessors receive annual minimum (base) rent. The leases have original terms (excluding extension options) ranging from one to ten years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We record base rent expense under the straight-line method over the term of the lease. In the accompanying condensed consolidated statements of comprehensive loss, rent expense is included in operating expenses under selling, general and administrative expenses. The components of the rent expense for the three months ended March 31, 2021 and 2020 were as follows:


	Three Months Ended March 31,
	2021		2020
Operating lease cost	$	570	$	552
Sublease income	(11)		(48)
Net rent expense	$	559	$	504

For purposes of calculating the operating lease assets and lease liabilities, extension options are not included in the lease term unless it is reasonably certain we will exercise the option, or the lessor has the sole ability to exercise the option. The weighted average discount rate of our operating leases is 8% and 9% as of March 31, 2021 and December 31, 2020, respectively. The weighted average remaining lease term is five and six years as of March 31, 2021 and December 31, 2020, respectively.

Supplemental cash flow information related to operating leases for the three months ended March 31, 2021 and 2020 follow:


	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	609	$	573
Non-cash operating activities:
Operating lease assets obtained in exchange for new operating lease liabilities	$	325	$	—

Future minimum commitments over the life of all operating leases, which exclude variable rent payments, are as follows:


Year Ending December 31	Operating Leases
2021 (remainder)	$	1,854
2022	1,949
2023	1,256
2024	1,037
2025	828
Thereafter	1,803
Total minimum lease payments	8,727
Less imputed interest	(1,666)
Total lease liabilities	$	7,061

GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
2021 (April to December)	$ 8,695
2022	11,068
2023	9,942
2024	9,682
2025	8,896
Thereafter	13,363
Net	$ 61,646	$ 64,552

SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Mar. 31, 2021
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTSWe evaluated subsequent events through the date of the filing of this Quarterly Report on Form 10-Q with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the condensed consolidated financial statements as of March 31, 2021, and events which occurred subsequent to March 31, 2021 but were not recognized in the condensed consolidated financial statements. Based on this evaluation, we have determined there were no subsequent events to report.

INVESTMENTS AND FAIR VALUE MEASUREMENTS - Investments Classified by Contractual Maturity Date (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Fair Value Disclosures [Abstract]
One year or less	$ 4,228
After one year through five years	20,005
After five years through 10 years	0
After 10 years	0
Available-for-sale debt securities total fair value	$ 24,233

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The gross carrying amount and accumulated amortization of our intangible assets as of March 31, 2021 and December 31, 2020 are as follows:


	March 31, 2021
Intangible Assets	Weighted Average Amortization Period (in Years)	Gross		Accumulated Amortization		Net
Customer relationships	8.9	$	88,310	$	(31,350)	$	56,960
Developed technology	6.6	12,001		(7,987)		4,014
Reseller relationships	7.0	853		(853)		—
Trade names	3.0	880		(379)		501
Noncompete agreements	5.2	1,032		(861)		171
	8.6	$	103,076	$	(41,430)	$	61,646


	December 31, 2020
Intangible Assets	Weighted Average Amortization Period (in Years)	Gross		Accumulated Amortization		Net
Customer relationships	8.9	$	88,310	$	(28,898)	$	59,412
Developed technology	6.6	12,001		(7,608)		4,393
Reseller relationships	7.0	853		(853)		—
Trade names	3.0	880		(312)		568
Noncompete agreements	5.2	1,032		(853)		179
	8.5	$	103,076	$	(38,524)	$	64,552

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table summarizes the future estimated amortization expense relating to our intangible assets as of March 31, 2021:


Calendar Years	Amount
2021 (April to December)	$	8,695
2022	11,068
2023	9,942
2024	9,682
2025	8,896
Thereafter	13,363
	$	61,646

INVESTMENTS AND FAIR VALUE MEASUREMENTS - Debt Securities, Available-for-sale (Details) $ in Thousands	Mar. 31, 2021 USD ($) security	Dec. 31, 2020 USD ($) security
Funds Held for Clients
Amortized Cost	$ 23,767	$ 25,315
Gross Unrealized Gains	477	606
Gross Unrealized Losses	(11)	(2)
Aggregate Estimated Fair Value	$ 24,233	$ 25,919
Number of securities in unrealized gain position \| security	63	69
Number of securities in unrealized loss position \| security	2	2
Certificates of deposit
Funds Held for Clients
Amortized Cost	$ 7,119	$ 7,370
Gross Unrealized Gains	165	204
Gross Unrealized Losses	0	0
Aggregate Estimated Fair Value	7,284	7,574
Corporate debt securities
Funds Held for Clients
Amortized Cost	8,894	9,415
Gross Unrealized Gains	213	297
Gross Unrealized Losses	(4)	(1)
Aggregate Estimated Fair Value	9,103	9,711
Municipal bonds
Funds Held for Clients
Amortized Cost	7,254	7,531
Gross Unrealized Gains	99	103
Gross Unrealized Losses	0	(1)
Aggregate Estimated Fair Value	7,353	7,633
US Government agency securities
Funds Held for Clients
Amortized Cost	500	500
Gross Unrealized Gains	0	1
Gross Unrealized Losses	(7)	0
Aggregate Estimated Fair Value	493	501
Asset-backed securities
Funds Held for Clients
Amortized Cost	0	499
Gross Unrealized Gains	0	1
Gross Unrealized Losses	0	0
Aggregate Estimated Fair Value	0	500
Individually
Funds Held for Clients
Gross Unrealized Losses	$ (7)	$ (1)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue:
Total revenue	$ 19,802	$ 18,947
Cost of Sales	7,310	7,840
Gross profit	12,492	11,107
Operating expenses:
Sales and marketing	3,611	3,575
General and administrative	6,498	5,522
Research and development	1,124	1,174
Amortization of intangible assets	2,528	2,349
Total operating expenses	13,761	12,620
Loss from operations	(1,269)	(1,513)
Interest expense and other, net	(224)	(235)
Loss from operations before income taxes	(1,493)	(1,748)
Income tax expense	105	19
Net loss	(1,598)	(1,767)
Other comprehensive income:
Unrealized (loss) gain on marketable securities	(139)	65
Comprehensive loss	$ (1,737)	$ (1,702)
Basic and diluted net loss per share
Basic (in USD per share)	$ (0.08)	$ (0.11)
Diluted (in USD per share)	$ (0.08)	$ (0.11)
Weighted average basic and diluted shares
Basic (in shares)	19,007,000	15,727,000
Diluted (in shares)	19,007,000	15,727,000
Recurring
Revenue:
Total revenue	$ 19,242	$ 18,436
Professional services, hardware and other
Revenue:
Total revenue	$ 560	$ 511

THE COMPANY AND BASIS OF PRESENTATION	3 Months Ended
THE COMPANY AND BASIS OF PRESENTATION	Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
THE COMPANY AND BASIS OF PRESENTATION	THE COMPANY AND BASIS OF PRESENTATION Asure Software, Inc., (“Asure”, the “Company”, “we” and “our”), a Delaware corporation, is a leading provider of cloud-based Human Capital Management (“HCM”) software solutions. We help small and mid-sized companies grow by assisting them in building better teams with skills that reach the next level, stay compliant with ever-changing federal, state, and local tax jurisdictions and labor laws, and better allocate cash so they can spend their financial capital on growing their business rather than back-office overhead expenses. Asure’s Human Capital Management suite, named Asure HCM, includes cloud-based Payroll, Tax Services, and Time & Attendance software as well as HR Services ranging from HR projects to completely outsourcing payroll and HR staff. We also offer these products and services through our network of reseller partners. Our platform vision is to help clients grow their business and become the most trusted HCM resource to entrepreneurs everywhere. Our product strategy is driven by three primary challenges that prevent businesses from growing: HR complexity, allocation of both human and financial capital, and the ability to build great teams. The Asure HCM suite includes four product lines: Asure Payroll & Tax, Asure HR, Asure Time & Attendance, and Asure HRServices. We develop, market, sell and support our offerings nationwide through our principal office in Austin, Texas and from our processing hubs in California, Tennessee, Nebraska, New York, Florida, Vermont, and Washington. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") and accordingly, they do not include all information and footnotes required under U.S. generally accepted accounting principles ("U.S. GAAP") for complete financial statements. Certain reclassifications were made to conform to the current period presentation in the condensed consolidated statements of comprehensive loss. In the opinion of management, these interim financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation of our financial position as of March 31, 2021 and the results of operations, statements of changes in stockholders' equity for the three months ended March 31, 2021 and March 31, 2020, and our statements of cash flows for the three months ended March 31, 2021 and March 31, 2020. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto filed with the SEC in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (our "2020 Annual Report on Form 10-K"). The results for the interim periods are not necessarily indicative of results for a full fiscal year.

NET LOSS PER SHARE - Narrative (Details) - shares	3 Months Ended
NET LOSS PER SHARE - Narrative (Details) - shares	Mar. 31, 2021	Mar. 31, 2020
Equity Option
NET LOSS PER SHARE (Details) [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,854,000	1,264,000

CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION	3 Months Ended
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION	Mar. 31, 2021
Revenue from Contract with Customer [Abstract]
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION	CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION Receivables Receivables from contracts with customers, net of allowance for doubtful accounts of $1,909 were $3,873 at March 31, 2021. Receivables from contracts with customers, net of allowance for doubtful accounts of $2,194 were $3,354 at December 31, 2020. As of March 31, 2021, one customer represented 5% of our net accounts receivable balance. No customers represented more than 10% of our net accounts receivable balance as of December 31, 2020. Deferred Commissions Deferred commission costs from contracts with customers were $4,128 and $3,792 at March 31, 2021 and December 31, 2020, respectively. The amount of amortization recognized for the three months ended March 31, 2021 and for the three months ended March 31, 2020 was $232 and $249, respectively. Deferred Revenue During the three months ended March 31, 2021 and 2020, revenue of $3,406 and $2,704 was recognized from the deferred revenue balance at the beginning of each period. Transaction Price Allocated to the Remaining Performance Obligations As of March 31, 2021, approximately $24,563 of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 65% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Revenue Concentration During the three months ended March 31, 2021 and 2020, there were no customers that individually represented 10% or more of consolidated revenue.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

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+ Details

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
SIGNIFICANT ACCOUNTING POLICIES	Mar. 31, 2021
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES Preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are subjective in nature and involve judgments. The more significant estimates made by management include the valuation allowance for the gross deferred tax assets, useful lives of fixed assets, the determination of the fair value of its long-lived assets, and the fair value of assets acquired and liabilities assumed during acquisitions. We base our estimates on historical experience and on various other assumptions management believes reasonable under the given circumstances. These estimates could be materially different under different conditions and assumptions. Additionally, the actual amounts could differ from the estimates made. Management periodically evaluates estimates used in the preparation of the consolidated financial statements for continued reasonableness. We make appropriate adjustments, if any, to the estimates used prospectively based upon such periodic evaluation. SIGNIFICANT RISKS AND UNCERTAINTIES The coronavirus ("COVID-19") pandemic has resulted in a global economic slowdown and disruptions that have and could continue to negatively impact our business. The pandemic and numerous measures implemented to contain the virus such as business shutdowns, shelter-in-place orders and travel bans and restrictions have caused businesses, especially small and medium sized businesses some of whom are our customers, to reduce headcount or cease operations as customer demand decreased. Given the economic slowdown and other risks and uncertainties associated with the pandemic, we expect that our business, financial condition, results of operations and growth prospects will be adversely affected in the future. Our business is impacted by employment levels as we have contracts that charge clients on a per-employee basis. In addition, the conditions caused by the COVID-19 pandemic could adversely affect our customers’ ability or willingness to purchase our offerings, delay prospective customers’ purchasing decisions, delay the provisioning of our offerings, lengthen payment terms, reduce the value or duration of customer subscription contracts, or affect attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance. The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, including the administration of vaccinations and the impact of these and other factors on our employees, customers, partners and vendors. If we are not able to respond to and manage the impact of such events effectively, our business will be harmed. RECENT ACCOUNTING PRONOUNCEMENTS In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820). The new guidance modifies disclosure requirements related to fair value measurement. We adopted the standard on January 1, 2020. The adoption of this standard did not have an impact on our financial statements and disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40). The new guidance reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). We adopted the standard on January 1, 2020 prospectively to all implementation costs incurred after the date of adoption. The effects of this standard on our financial position, results of operations and cash flows were not material. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The standard became effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We adopted ASU 2019-12 during the quarter beginning January 1, 2021, using the prospective approach except for hybrid tax regimes, which we adopted using the modified retrospective approach. The adoption of ASU 2019-12 resulted in no material impact to the Company's financial statements. CONTINGENCIES Although we have been, and in the future may be, the defendant or plaintiff in various actions arising in the normal course of business, as of March 31, 2021, we were not a party to any pending legal proceedings that are material to our business. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) As of March 31, 2021 and December 31, 2020, accumulated other comprehensive income consisted of net unrealized gains and losses on available-for-sale securities.

NET LOSS PER SHARE

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

NET LOSS PER SHARE

NET LOSS PER SHAREWe compute net loss per share based on the weighted average number of common shares outstanding for the period. Diluted net loss per share reflects the maximum dilution that would have resulted from incremental common shares issuable upon the exercise of stock options. We compute the number of common share equivalents, which includes stock options, using the treasury stock method. We have excluded stock options and restricted stock units of approximately 1,854,000

and 1,264,000 shares for the three months ended March 31, 2021 and 2020, respectively, from the computation of the diluted shares because the effect of including the stock options and restricted stock units would have been anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per common share for the three months ended March 31, 2021 and March 31, 2020:


	Three Months Ended March 31,
	2021		2020
Net loss	$	(1,598)	$	(1,767)
Weighted-average shares of common stock outstanding, basic and diluted	19,007,000		15,727,000
Basic and diluted loss per share	$	(0.08)	$	(0.11)

INVESTMENTS AND FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

INVESTMENTS AND FAIR VALUE MEASUREMENTS

As of March 31, 2021 and December 31, 2020, funds held for clients invested in available-for-sale securities consisting of government and commercial bonds, including mortgage-backed securities, amounted to $24,233 and $25,919, respectively. As of March 31, 2021, and December 31, 2020, funds held for clients invested in money market funds and other cash equivalents amounted to $1,082 and $63,999, respectively. Additionally, as of March 31, 2021 and December 31, 2020, we had $3,301 and $5,204, respectively, of operating funds in money market funds, classified as cash equivalents.

Investments classified as available-for-sale consisted of the following:


	March 31, 2021
	Amortized Cost		Gross Unrealized Gains (1)		Gross Unrealized Losses (1)		Aggregate Estimated Fair Value
Funds Held for Clients (2)
Certificates of deposit	$	7,119	$	165	$	—	$	7,284
Corporate debt securities	8,894		213		(4)		9,103
Municipal bonds	7,254		99		—		7,353
US Government agency securities	500		—		(7)		493
Asset-backed securities	—		—		—		—
Total	$	23,767	$	477	$	(11)	$	24,233


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains (1)		Gross Unrealized Losses (1)		Aggregate Estimated Fair Value
Funds Held for Clients (2)
Certificates of deposit	$	7,370	$	204	$	—	$	7,574
Corporate debt securities	9,415		297		(1)		9,711
Municipal bonds	7,531		103		(1)		7,633
US Government agency securities	500		1		—		501
Asset-backed securities	499		1		—		500
Total	$	25,315	$	606	$	(2)	$	25,919

(1)Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. As of March 31, 2021 and December 31, 2020, there were 63 and 69 securities, respectively, in an unrealized gain position and there were 2 and 2 securities, respectively, in an unrealized loss position. As of March 31, 2021, we had $(11) in unrealized losses. As of March 31, 2021, these unrealized losses were less than$(7) individually and $(11) in the aggregate. As of December 31, 2020, these unrealized losses were less than $(1) individually and $(2) in the aggregate. No securities have been in a continuous unrealized loss position for more than 12 months. We do not intend to sell these investments and we do not expect to sell these investments before recovery of their amortized cost basis, which may be at maturity. We review our investments to identify and evaluate investments that indicate possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

(2)At March 31, 2021 and December 31, 2020, none of these securities were classified as cash and cash equivalents on the accompanying condensed consolidated balance sheets.

Expected maturities of available-for-sale securities as of March 31, 2021 are as follows:


Expected Maturities	Amount

One year or less	$	4,228
After one year through five years	20,005
After five years through 10 years	—
After 10 years	—
	$	24,233

In July 2020, we acquired certain assets of a payroll tax business. The initial purchase price for the assets was $4,250, which we paid cash at closing. The seller will be paid additional consideration for the assets based on the trailing twelve-month revenue at each of April 30, 2021 and October 31, 2021. Contingent purchase consideration, if any, will generally be made by May 30, 2021 and December 30, 2021. The payment of the contingent consideration paid will be contingent on certain thresholds set forth in the asset purchase agreement. We utilized a Monte Carlo simulation to determine the fair value of the contingent consideration. There was no adjustment to the fair value of the contingent consideration at March 31, 2021.

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in U.S. GAAP 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 and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, respectively:


	March 31, 2021
	Total Carrying Value		Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents
Money market funds	$	3,301	$	3,301	$	—	$	—
Funds held for clients
Money market funds	1,082		1,082		—		—
Available-for-sale securities	24,233		—		24,233		—
Total	$	28,616	$	4,383	$	24,233	$	—

Liabilities:
Contingent purchase consideration	$	3,880	$	—	$	—	$	3,880
Total	$	3,880	$	—	$	—	$	3,880


	December 31, 2020
	Total Carrying Value		Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents
Money market funds	$	5,204	$	5,204	$	—	$	—
Funds held for clients
Money market funds	63,999		63,999		—		—
Available-for-sale securities	25,919		—		25,919		—
Total	$	95,122	$	69,203	$	25,919	$	—

Liabilities:
Contingent purchase consideration	$	3,880	$	—	$	—	$	3,880
Total	$	3,880	$	—	$	—	$	3,880

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

SHARE-BASED COMPENSATION (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) plan $ / shares shares	Mar. 31, 2020 USD ($) shares
Share-based Payment Arrangement [Abstract]
Number of active equity plans \| plan	1
Shares available for issuance (in shares)	2,350,000
Options outstanding (in shares)	1,465,985
Options outstanding weighted average exercise price (in Dollars per share) \| $ / shares	$ 7.89
Options granted (in shares)	307,500
Options granted exercise price (in USD per share) \| $ / shares	$ 7.53
Award vesting period (in years)	3 years
Restricted stock outstanding (in shares)	388,273
Shares available for grant (in shares)	1,008,506
Shares based compensation \| $	$ 626	$ 438
Stock issued upon option exercise and vesting of restricted stock units (in shares)	19,709	19,317
Restricted stock issued during period, net of forfeitures (in shares)	34,920	9,944

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net loss	$ (1,598)	$ (1,767)
Adjustments to reconcile loss to net cash (used in) provided by operations:
Depreciation and amortization	3,862	3,516
Amortization of operating lease assets	421	386
Amortization of debt financing costs and discount	30	75
Provision for (recovery of) doubtful accounts	1	75
Provision for deferred income taxes	98	8
Gain on modification of debt	0	(36)
Share-based compensation	626	438
Changes in operating assets and liabilities:
Accounts receivable	(210)	806
Inventory	44	84
Prepaid expenses and other assets	(552)	(900)
Accounts payable	(538)	(982)
Accrued expenses and other long-term obligations	(195)	(1,392)
Operating lease liabilities	(462)	(405)
Deferred revenue	(2,762)	(3,309)
Net cash used in operating activities	(1,235)	(3,403)
Cash flows from investing activities:
Acquisition of intangible asset	0	(1,823)
Purchases of property and equipment	(48)	(241)
Software capitalization costs	(1,233)	(844)
Net change in funds held for clients	66,439	27,714
Net cash provided by investing activities	65,158	24,806
Cash flows from financing activities:
Payments of notes payable	(1,981)	(1,784)
Debt financing fees	0	(20)
Net proceeds from issuance of common stock	108	106
Net change in client fund obligations	(66,337)	(27,751)
Net cash used in financing activities	(68,210)	(29,449)
Net decrease in cash and cash equivalents	(4,287)	(8,046)
Cash and cash equivalents at beginning of period	28,577	28,826
Cash and cash equivalents at end of period	24,290	20,780
Cash paid for:
Interest	219	99
Income taxes	$ 183	$ 0

GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 73,958,000		$ 73,958,000
Goodwill impairment	$ 0
Finite-lived intangible assets, amortization method	straight-line method
Amortization of intangible assets	$ 2,528,000	$ 2,349,000
Amortization in cost of sales	379,000	$ 431,000
Impairment of intangible assets, (excluding goodwill)	$ 0

INVESTMENTS AND FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jul. 31, 2020	Mar. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Adjustment to fair value of contingent consideration		$ 0
July 2020 Acquisition
Debt Securities, Available-for-sale [Line Items]
Initial purchase price	$ 4,250,000
Funds Held For Clients
Debt Securities, Available-for-sale [Line Items]
Available-for-sale securities		24,233,000	$ 25,919,000
Money market funds and other cash equivalents		1,082,000	63,999,000
Cash and Cash Equivalents
Debt Securities, Available-for-sale [Line Items]
Money market funds and other cash equivalents		$ 3,301,000	$ 5,204,000

INVESTMENTS AND FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Debt Securities, Available-for-sale

Investments classified as available-for-sale consisted of the following:


	March 31, 2021
	Amortized Cost		Gross Unrealized Gains (1)		Gross Unrealized Losses (1)		Aggregate Estimated Fair Value
Funds Held for Clients (2)
Certificates of deposit	$	7,119	$	165	$	—	$	7,284
Corporate debt securities	8,894		213		(4)		9,103
Municipal bonds	7,254		99		—		7,353
US Government agency securities	500		—		(7)		493
Asset-backed securities	—		—		—		—
Total	$	23,767	$	477	$	(11)	$	24,233


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains (1)		Gross Unrealized Losses (1)		Aggregate Estimated Fair Value
Funds Held for Clients (2)
Certificates of deposit	$	7,370	$	204	$	—	$	7,574
Corporate debt securities	9,415		297		(1)		9,711
Municipal bonds	7,531		103		(1)		7,633
US Government agency securities	500		1		—		501
Asset-backed securities	499		1		—		500
Total	$	25,315	$	606	$	(2)	$	25,919

(2)At March 31, 2021 and December 31, 2020, none of these securities were classified as cash and cash equivalents on the accompanying condensed consolidated balance sheets.

Investments Classified by Contractual Maturity Date

Expected maturities of available-for-sale securities as of March 31, 2021 are as follows:


Expected Maturities	Amount

One year or less	$	4,228
After one year through five years	20,005
After five years through 10 years	—
After 10 years	—
	$	24,233

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, respectively:


	March 31, 2021
	Total Carrying Value		Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents
Money market funds	$	3,301	$	3,301	$	—	$	—
Funds held for clients
Money market funds	1,082		1,082		—		—
Available-for-sale securities	24,233		—		24,233		—
Total	$	28,616	$	4,383	$	24,233	$	—

Liabilities:
Contingent purchase consideration	$	3,880	$	—	$	—	$	3,880
Total	$	3,880	$	—	$	—	$	3,880


	December 31, 2020
	Total Carrying Value		Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents
Money market funds	$	5,204	$	5,204	$	—	$	—
Funds held for clients
Money market funds	63,999		63,999		—		—
Available-for-sale securities	25,919		—		25,919		—
Total	$	95,122	$	69,203	$	25,919	$	—

Liabilities:
Contingent purchase consideration	$	3,880	$	—	$	—	$	3,880
Total	$	3,880	$	—	$	—	$	3,880

NOTES PAYABLE - Schedule of Debt and Debt Issuance Costs (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Gross notes payable, current portion	$ 12,024	$ 12,388
Gross notes payable, net of current portion	10,908	12,525
Long-term Debt, Gross	22,932	24,913
Debt issuance costs and debt discount, current portion	(123)	(78)
Debt issuance costs and debt discount, net of current portion	(226)	(300)
Debt Issuance Costs and Debt Discount	(349)	(378)
Net notes payable, current portion	11,901	12,310
Net notes payable, net of current portion	10,682	12,225
Net Notes Payable	22,583	24,535
Pinnacle Bank
Debt Instrument [Line Items]
Long-term Debt, Gross	8,856	8,856
Debt issuance costs and debt discount, current portion	0	0
Debt issuance costs and debt discount, net of current portion	0	0
Loans payable to bank, current	8,358	6,866
Notes payable to bank, noncurrent	$ 498	$ 1,989

LEASES - Narrative (Details)	Mar. 31, 2021	Dec. 31, 2020
LEASES (Details) [Line Items]
Operating lease, weighted average discount rate, percent	8.00%	9.00%
Minimum
LEASES (Details) [Line Items]
Operating lease, term of contract (in years)	1 year
Maximum
LEASES (Details) [Line Items]
Operating lease, term of contract (in years)	10 years
Building
LEASES (Details) [Line Items]
Operating lease, weighted average remaining lease term (in years)	5 years	6 years