Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
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 | 20,141,850 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0000884144 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity File Number | 1-34522 | |
Document Annual Report | true | |
Common Stock, $0.01 par value | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | ASUR | |
Security Exchange Name | NASDAQ | |
Series A Junior Participating Preferred Share Purchase Rights | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Series A Junior Participating Preferred Share Purchase Rights | |
No Trading Symbol Flag | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash, cash equivalents, and restricted cash | $ 14,594 | $ 13,427 |
Accounts receivable, net of allowance for doubtful accounts of $2,819 and $2,210 at June 30, 2022 and December 31, 2021, respectively | 5,736 | 5,308 |
Inventory | 289 | 246 |
Prepaid expenses and other current assets | 10,112 | 13,475 |
Total current assets before funds held for clients | 30,731 | 32,456 |
Funds held for clients | 184,661 | 217,376 |
Total current assets | 215,392 | 249,832 |
Property and equipment, net | 9,076 | 8,945 |
Goodwill | 86,011 | 86,011 |
Intangible assets, net | 73,657 | 78,573 |
Operating lease assets, net | 5,877 | 5,748 |
Other assets, net | 4,590 | 4,136 |
Total assets | 394,603 | 433,245 |
Current liabilities: | ||
Current portion of notes payable | 1,947 | 1,907 |
Accounts payable | 862 | 565 |
Accrued compensation and benefits | 3,453 | 3,568 |
Operating lease liabilities, current | 1,382 | 1,551 |
Other accrued liabilities | 4,532 | 2,436 |
Contingent purchase consideration | 2,299 | 1,905 |
Deferred revenue | 2,038 | 3,750 |
Total current liabilities before client fund obligations | 16,513 | 15,682 |
Client fund obligations | 184,428 | 217,144 |
Total current liabilities | 200,941 | 232,826 |
Long-term liabilities: | ||
Deferred revenue | 2,369 | 36 |
Deferred tax liability | 1,669 | 1,595 |
Notes payable, net of current portion | 33,908 | 33,120 |
Operating lease liabilities, noncurrent | 5,000 | 4,746 |
Contingent purchase consideration | 1,074 | 2,424 |
Other liabilities | 102 | 258 |
Total long-term liabilities | 44,122 | 42,179 |
Total liabilities | 245,063 | 275,005 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value; 1,500 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value; 44,000 shares authorized; 20,455 and 20,412 shares issued, 20,141 and 20,028 shares outstanding at June 30, 2022 and December 31, 2021, respectively | 205 | 204 |
Treasury stock at cost, 384 shares at June 30, 2022 and December 31, 2021 | (5,017) | (5,017) |
Additional paid-in capital | 431,647 | 429,912 |
Accumulated deficit | (275,637) | (266,760) |
Accumulated other comprehensive loss | (1,658) | (99) |
Total stockholders’ equity | 149,540 | 158,240 |
Total liabilities and stockholders’ equity | $ 394,603 | $ 433,245 |
Common stock, shares authorized | 44,000 | 44,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 2,819 | $ 2,210 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,500 | 1,500 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 44,000 | 44,000 |
Common stock, shares issued | 20,455 | 20,412 |
Common stock, shares outstanding | 20,141 | 20,028 |
Treasury stock, shares | 384 | 384 |
Contingent purchase consideration | $ 1,074 | $ 2,424 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 20,300 | $ 17,168 | $ 44,633 | $ 36,970 |
Cost of Sales | 8,039 | 7,223 | 16,908 | 14,533 |
Gross profit | 12,261 | 9,945 | 27,725 | 22,437 |
Operating expenses: | ||||
Sales and marketing | 4,589 | 3,622 | 9,486 | 7,233 |
General and administrative | 8,696 | 6,821 | 16,181 | 13,319 |
Research and development | 1,472 | 1,343 | 3,293 | 2,467 |
Amortization of intangible assets | 3,352 | 2,528 | 6,784 | 5,056 |
Operating Expenses | 18,109 | 14,314 | 35,744 | 28,075 |
Loss from operations | (5,848) | (4,369) | (8,019) | (5,638) |
Interest expense, net | (1,085) | (223) | (1,901) | (447) |
Other Nonoperating Income (Expense) | 1,147 | 8,654 | 1,147 | 8,654 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (5,786) | 4,062 | (8,773) | 2,569 |
Income tax expense | 74 | 298 | 104 | 403 |
Net (loss) income | (5,860) | 3,764 | (8,877) | 2,166 |
Other comprehensive loss: | ||||
Unrealized loss on marketable securities | (1,754) | (69) | (1,063) | (208) |
Comprehensive (loss) income | $ (7,614) | $ 3,695 | $ (9,940) | $ 1,958 |
Basic and diluted (loss) earnings per share | ||||
Basic (in Dollars per share) | $ (0.29) | $ 0.20 | $ (0.44) | $ 0.11 |
Diluted (in Dollars per share) | $ (0.29) | $ 0.20 | $ (0.44) | $ 0.11 |
Weighted average basic and diluted shares | ||||
Basic (in shares) | 20,106 | 19,040 | 20,067 | 19,033 |
Diluted (in shares) | 20,106 | 19,203 | 20,067 | 19,198 |
Recurring | ||||
Revenue: | ||||
Total revenue | $ 19,014 | $ 16,072 | $ 42,018 | $ 35,314 |
Professional services, hardware and other | ||||
Revenue: | ||||
Total revenue | $ 1,286 | $ 1,096 | $ 2,615 | $ 1,656 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Shares, Outstanding | 18,970 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 145,653 | $ 193 | $ (5,017) | $ 419,827 | $ (269,954) | $ 604 |
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 | 18,970 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2020 | 145,653 | $ 193 | (5,017) | 419,827 | (269,954) | 604 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2021 | 144,651 | $ 194 | (5,017) | 420,561 | (271,552) | 465 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 51 | |||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 626 | 626 | ||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | (23) | (23) | ||||
Net Income (Loss) Attributable to Parent | (1,598) | (1,598) | ||||
Other Comprehensive Income (Loss), Net of Tax | (139) | (139) | ||||
Shares, Outstanding, Ending Balance at Mar. 31, 2021 | 19,021 | |||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | 23 | 23 | ||||
Stock Issued During Period, Value, Stock Options Exercised | 132 | $ 1 | 131 | |||
Shares, Outstanding, Beginning Balance at Dec. 31, 2020 | 18,970 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2020 | 145,653 | $ 193 | (5,017) | 419,827 | (269,954) | 604 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2021 | 149,419 | $ 195 | (5,017) | 421,633 | (267,788) | 396 |
Net Income (Loss) Attributable to Parent | 2,166 | |||||
Shares, Outstanding, Ending Balance at Jun. 30, 2021 | 19,099 | |||||
Shares, Outstanding | 19,021 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 144,651 | $ 194 | (5,017) | 420,561 | (271,552) | 465 |
Shares, Outstanding, Beginning Balance at Mar. 31, 2021 | 19,021 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2021 | 144,651 | $ 194 | (5,017) | 420,561 | (271,552) | 465 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2021 | $ 149,419 | $ 195 | (5,017) | 421,633 | (267,788) | 396 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 85 | 49 | ||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | $ 714 | 714 | ||||
Net Income (Loss) Attributable to Parent | 3,764 | 3,764 | ||||
Other Comprehensive Income (Loss), Net of Tax | (69) | (69) | ||||
Shares, Outstanding, Ending Balance at Jun. 30, 2021 | 19,099 | |||||
Stock Issued During Period, Value, Stock Options Exercised | $ 189 | $ 1 | 188 | |||
Stock Issued During Period, Value, Employee Stock Purchase Plan | 170 | |||||
Stock issued, ESPP (in shares) | 29 | |||||
Shares, Outstanding | 19,099 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 149,419 | $ 195 | (5,017) | 421,633 | (267,788) | 396 |
Shares, Outstanding | 20,028 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 158,240 | $ 204 | (5,017) | 429,912 | (266,760) | (99) |
Shares, Outstanding, Beginning Balance at Dec. 31, 2021 | 20,028 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2021 | 158,240 | $ 204 | (5,017) | 429,912 | (266,760) | (99) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2022 | 154,890 | $ 205 | (5,017) | 430,641 | (269,777) | (1,162) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 43 | |||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 729 | 729 | ||||
Net Income (Loss) Attributable to Parent | (3,017) | (3,017) | ||||
Other Comprehensive Income (Loss), Net of Tax | (1,063) | (1,063) | ||||
Shares, Outstanding, Ending Balance at Mar. 31, 2022 | 20,071 | |||||
Stock Issued During Period, Value, Stock Options Exercised | 1 | $ 1 | ||||
Shares, Outstanding, Beginning Balance at Dec. 31, 2021 | 20,028 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2021 | 158,240 | $ 204 | (5,017) | 429,912 | (266,760) | (99) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2022 | 149,540 | $ 205 | (5,017) | 431,647 | (275,637) | (1,658) |
Net Income (Loss) Attributable to Parent | (8,877) | |||||
Shares, Outstanding, Ending Balance at Jun. 30, 2022 | 20,142 | |||||
Shares, Outstanding | 20,071 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 154,890 | $ 205 | (5,017) | 430,641 | (269,777) | (1,162) |
Shares, Outstanding, Beginning Balance at Mar. 31, 2022 | 20,071 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Mar. 31, 2022 | 154,890 | $ 205 | (5,017) | 430,641 | (269,777) | (1,162) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2022 | 149,540 | $ 205 | (5,017) | 431,647 | (275,637) | (1,658) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 33 | |||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 814 | 814 | ||||
Net Income (Loss) Attributable to Parent | (5,860) | (5,860) | ||||
Other Comprehensive Income (Loss), Net of Tax | $ (496) | (496) | ||||
Shares, Outstanding, Ending Balance at Jun. 30, 2022 | 20,142 | |||||
Stock Issued During Period, Value, Employee Stock Purchase Plan | 192 | |||||
Stock issued, ESPP (in shares) | 38 | |||||
Shares, Outstanding | 20,142 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 149,540 | $ 205 | $ (5,017) | $ 431,647 | $ (275,637) | $ (1,658) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net Income (Loss) Attributable to Parent | $ (8,877) | $ 2,166 |
Adjustments to reconcile (loss) income to net cash provided by (used in) operations: | ||
Depreciation and amortization | 9,363 | 7,905 |
Amortization of operating lease assets | 868 | 830 |
Amortization of debt financing costs and discount | 345 | 60 |
Net amortization of premiums and accretion of discounts on available-for-sale securities | 205 | 31 |
Provision for doubtful accounts | 198 | 1 |
Provision for deferred income taxes | 75 | 358 |
Gain (Loss) on Extinguishment of Debt | (180) | (8,654) |
Debt Securities, Available-for-sale, Realized Gain (Loss) | (406) | (269) |
Share-based compensation | 1,544 | 1,340 |
Loss (gain) on disposals of long-term assets | 1 | (21) |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | (955) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (627) | (129) |
Inventory | (51) | 107 |
Prepaid expenses and other assets | 3,890 | (190) |
Increase (Decrease) in Other Operating Assets | (997) | (277) |
Accounts payable | 280 | (16) |
Accrued expenses and other long-term obligations | 2,099 | (1,440) |
Operating lease liabilities | 85 | (591) |
Deferred revenue | 621 | (3,109) |
Net Cash Provided by (Used in) Operating Activities, Total | 7,481 | (1,898) |
Cash flows from investing activities: | ||
Acquisition of intangible asset | (2,039) | 0 |
Purchases of property and equipment | (306) | (86) |
Software capitalization costs | (1,805) | (2,311) |
Payments to Acquire Debt Securities, Available-for-sale | (19,870) | (236) |
Proceeds from sales and maturities of available-for-sale securities | 2,450 | 7,813 |
Net Cash Provided by (Used in) Investing Activities, Total | (21,570) | 5,180 |
Cash flows from financing activities: | ||
Payments of notes payable | 0 | (3,090) |
Payment for Contingent Consideration Liability, Financing Activities | 0 | 1,784 |
Net proceeds from issuance of common stock | 192 | 468 |
Net change in client fund obligations | (32,716) | (113,251) |
Net Cash Provided by (Used in) Financing Activities, Total | (32,524) | (117,657) |
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents | (46,613) | (114,375) |
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period | 198,743 | 324,985 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | 152,130 | 210,610 |
Cash, cash equivalents, and restricted cash | 14,594 | 20,292 |
Restricted Cash and Cash Equivalents | 137,536 | 190,318 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | 152,130 | 210,610 |
Supplemental Cash Flow Information [Abstract] | ||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 1,435 | 449 |
Proceeds from Income Tax Refunds | 175 | |
Income Taxes Paid | 378 | |
Subordinated notes payable –acquisitions | $ 411 | $ 0 |
THE COMPANY AND BASIS OF PRESEN
THE COMPANY AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies | NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION Asure Software, Inc., (“Asure”, the “Company”, “we” and “our”), a Delaware corporation, is a provider of Human Capital Management (“HCM”) software solutions. We help small and medium-sized companies grow by helping them build more productive teams, providing the tools and resources that help them 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 human resources (“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 become the most trusted HCM resource to entrepreneurs everywhere by helping our clients grow their businesses. 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 HR Services. We develop, market, sell and support our offerings nationwide through our principal office in Austin, Texas and from our processing hubs in California, Florida, Nebraska, New Jersey, New York, Tennessee, and Vermont. 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. 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, 2022 and the results of operations, statements of changes in stockholders’ equity for the three and six months ended June 30, 2022 and June 30, 2021, and our statements of cash flows for the six months ended June 30, 2022 and June 30, 2021. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes thereto filed with the SEC in our annual report on Form 10-K for the fiscal year ended December 31, 2021 (our “2021 Annual Report on Form 10-K”). The results for the interim periods are not necessarily indicative of results for a full fiscal year. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies | NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION Asure Software, Inc., (“Asure”, the “Company”, “we” and “our”), a Delaware corporation, is a provider of Human Capital Management (“HCM”) software solutions. We help small and medium-sized companies grow by helping them build more productive teams, providing the tools and resources that help them 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 human resources (“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 become the most trusted HCM resource to entrepreneurs everywhere by helping our clients grow their businesses. 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 HR Services. We develop, market, sell and support our offerings nationwide through our principal office in Austin, Texas and from our processing hubs in California, Florida, Nebraska, New Jersey, New York, Tennessee, and Vermont. 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. 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, 2022 and the results of operations, statements of changes in stockholders’ equity for the three and six months ended June 30, 2022 and June 30, 2021, and our statements of cash flows for the six months ended June 30, 2022 and June 30, 2021. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and notes thereto filed with the SEC in our annual report on Form 10-K for the fiscal year ended December 31, 2021 (our “2021 Annual Report on Form 10-K”). The results for the interim periods are not necessarily indicative of results for a full fiscal year. |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES Preparation of the Condensed 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 Condensed 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, 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. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents include investments in an institutional money market fund, which invests in U.S. Treasury bills, notes and bonds, and/or repurchase agreements, backed by such obligations. Carrying value approximates fair value. Restricted cash consists of cash balances which are restricted as to withdrawal or usage. As of June 30, 2022, the Company has $500 of restricted cash related to our agreement with South State Bank. RECENT ACCOUNTING PRONOUNCEMENTS 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. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): This update establishes a new approach to estimate credit losses on certain financial instruments. The update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The amended guidance will also update the impairment model for available-for-sale debt securities, requiring entities to determine whether all or a portion of the unrealized loss on such securities is a credit loss. The Company is currently evaluating this standard and the potential effects of these changes to its consolidated financial statements and will adopt this new standard in the fiscal year beginning January 1, 2023. ACCUMULATED OTHER COMPREHENSIVE LOSS As of June 30, 2022 and December 31, 2021, accumulated other comprehensive loss consisted of net unrealized gains and losses on available-for-sale securities. |
Business Combinations and Asset
Business Combinations and Asset Acquisitions | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination Disclosure | NOTE 3 - BUSINESS COMBINATIONS AND ASSET ACQUISITIONS 2021 In September 2021, the Company acquired certain assets (the “Asset Purchase Agreement”) of a payroll business, which was used to provide payroll processing services. The aggregate purchase price that the Company paid for these assets was $14,750, paid as follows: (i) $10,325 in cash at closing, (ii) the delivery of 244 shares of the Company’s common stock, which the parties agreed had an aggregate value of $2,213 as of September 30, 2021, and (iii) the delivery of a promissory note in the amount of $2,213. The promissory note was adjusted to $2,223 to account for post close and working capital adjustments. The Asset Purchase Agreement is subject to working capital adjustments to the purchase price. Also in September 2021, we acquired certain assets of a payroll business (the “Second Asset Purchase Agreement”), which were used to provide payroll processing services. The aggregated purchase price for these assets was $24,150, paid as follows: (i) $15,000 was paid in cash at closing, (ii) the delivery of 523 shares of the Company’s common stock which both parties agreed had an aggregate value of $4,800 at closing, and (iii) the delivery of a promissory note of $4,350. The promissory note also includes a contingent consideration, which is contingent on certain thresholds and will be based on the trailing twelve-month revenue at September 30, 2022, which we expect will be paid in the fourth quarter of 2022. Additionally, we utilized a Monte Carlo simulation to determine the fair value of the contingent consideration. For the year ended December 31, 2021, there was a measurement period adjustment to the fair value of the contingent consideration of $465. For the quarter ended June 30, 2022, there was a measurement period adjustment to the fair value of the contingent consideration of $1,350. The promissory note was adjusted to $4,533 to account for post close and working capital adjustments. 2022 |
INVESTMENTS AND FAIR VALUE MEAS
INVESTMENTS AND FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
INVESTMENTS AND FAIR VALUE MEASUREMENT | Accounting Standards Codification (ASC) 820 “Fair Value Measurement” (ASC 820) defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable: 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 June 30, 2022 and December 31, 2021, respectively (in thousands): Total Carrying Value Level 1 Level 2 Level 3 June 30, 2022 Assets: Funds held for clients Money market funds $ 2,583 $ 2,583 $ — $ — Available-for-sale securities 47,125 — 47,125 — Total $ 49,708 $ 2,583 $ 47,125 $ — Liabilities: Contingent purchase consideration (1) $ 3,373 $ — $ — $ 3,373 Total $ 3,373 $ — $ — $ 3,373 December 31, 2021 Assets: Funds held for clients Money market funds $ 1,116 $ 1,116 $ — $ — Available-for-sale securities 32,060 — 32,060 — Total $ 33,176 $ 1,116 $ 32,060 $ — Liabilities: Contingent purchase consideration (1) $ 4,329 $ — $ — $ 4,329 Total $ 4,329 $ — $ — $ 4,329 (1) See Note 3 — Business Combinations and Asset Acquisitions for further discussion regarding the contingent purchase consideration. Restricted cash equivalents and investments classified as available-for-sale within funds held for clients consisted of the following (in thousands): Amortized Gross Unrealized Gains (1) Gross Unrealized Losses (1) Aggregate June 30, 2022 Restricted cash equivalents $ 2,600 $ — $ — $ 2,600 Available-for-sale securities: Certificates of deposit 1,234 5 (3) 1,236 Corporate debt securities 39,712 94 (1,369) 38,437 Municipal bonds 7,327 — (336) 6,991 U.S. Government agency securities 500 — (39) 461 Total available-for-sale securities 48,773 99 (1,747) 47,125 Total (2) $ 51,373 $ 99 $ (1,747) $ 49,725 December 31, 2021 Restricted cash equivalents $ 1,116 $ — $ — $ 1,116 Available-for-sale securities: Certificates of deposit 1,240 7 (4) 1,243 Corporate debt securities 22,597 2 (76) 22,523 Municipal bonds 7,825 3 (24) 7,804 U.S. Government agency securities 500 — (10) 490 Total available-for-sale securities 32,162 12 (114) 32,060 Total (2) $ 33,278 $ 12 $ (114) $ 33,176 (1) Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. As of June 30, 2022 and December 31, 2021, there were 22 and 10 securities, respectively, in an unrealized gain position and there were 85 and 57 securities in an unrealized loss position, respectively. As of June 30, 2022, these unrealized losses were less than $68 individually and $1,761 in the aggregate. As of December 31, 2021, these unrealized losses were less than $11 individually and $114 in the aggregate. These securities have not been in a continuous unrealized gain or 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 June 30, 2022 and December 31, 2021, none of these securities were classified as cash and cash equivalents on the accompanying Condensed Consolidated Balance Sheets. Funds held for clients represent assets that the Company has classified as 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 funds obligations on our Condensed Consolidated Balance Sheets. Funds held for clients have been invested in the following categories (in thousands): June 30, 2022 December 31, 2021 Restricted cash and cash equivalents held to satisfy client funds obligations $ 137,536 $ 185,316 Restricted short-term marketable securities held to satisfy client funds obligations 7,161 5,559 Restricted long-term marketable securities held to satisfy client funds obligations 39,964 26,501 Total funds held for clients $ 184,661 $ 217,376 Expected maturities of available-for-sale securities as of June 30, 2022 are as follows (in thousands): One year or less $ 7,161 After one year through five years 39,964 Total $ 47,125 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS 2021 Acquisitions 2022 Goodwill $ 86,011 $ — $ 86,011 We believe significant synergies are expected to arise from our strategic acquisitions and their assembled workforces. This factor contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, we recorded goodwill for each acquisition. A portion of acquired goodwill will be amortizable for tax purposes. As of June 30, 2022, there has been no impairment of goodwill based on the qualitative assessments performed by the Company. Gross Intangible Assets 2021 Acquisitions 2022 Customer relationships $ 114,611 $ 2,360 $ 116,971 Developed technology 12,001 — 12,001 Reseller relationships 1,012 100 1,112 Trade names 880 — 880 Non-compete agreements 1,032 — 1,032 $ 129,536 $ 2,460 $ 131,996 The gross carrying amount and accumulated amortization of our intangible assets as of June 30, 2022 are as follows (in thousands, except weighted average periods): Weighted Average Gross Accumulated Net June 30, 2022 Customer relationships 8.7 $ 116,971 $ (46,158) $ 70,813 Developed technology 6.6 12,001 (9,691) 2,310 Reseller relationships 7.2 1,112 (874) 238 Trade names 3.0 880 (713) 167 Non-compete agreements 5.2 1,032 (903) 129 8.4 $ 131,996 $ (58,339) $ 73,657 December 31, 2021 Customer relationships 8.7 $ 114,611 $ (39,535) $ 75,076 Developed technology 6.6 12,001 (9,098) 2,903 Reseller relationships 7.2 1,012 (864) 148 Trade names 3.0 880 (579) 301 Non-compete agreements 5.2 1,032 (887) 145 8.4 $ 129,536 $ (50,963) $ 78,573 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 $6,784 and $5,056 for the six months ended June 30, 2022 and 2021, respectively. Amortization expenses recorded in Cost of Sales were $593 and $757 for the six months ended June 30, 2022 and 2021, respectively. There was no impairment of intangibles during the six months ended June 30, 2022 based on the qualitative assessment performed by the Company. However, if market, political and other conditions over which we have no control continue to affect the capital markets and our stock price declines, we may experience an impairment of our intangibles in future quarters. The following table summarizes the future estimated amortization expense relating to our intangible assets as of June 30, 2022 (in thousands): 2022 $ 7,302 2023 13,558 2024 13,297 2025 12,511 2026 9,400 2027 7,225 Thereafter 10,364 $ 73,657 |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 6 - NOTES PAYABLE The following table summarizes our outstanding debt as of the dates indicated (in thousands): Maturity Cash Interest Rate June 30, 2022 December 31, 2021 Subordinated Notes Payable – Acquisitions (1) 7/1/2021 – 9/30/2026 2.00% - 3.00% $ 8,634 $ 8,178 Senior Credit Facility 10/1/2025 10.50% 30,246 30,224 Gross Notes Payable $ 38,880 $ 38,402 (1) See Note 3 — Business Combinations and Asset Acquisitions for further discussion regarding the notes payable related to acquisitions. The following table summarizes the debt issuance costs as of the dates indicated (in thousands): Gross Notes Payable Debt Issuance Costs and Debt Discount Net Notes Payable June 30, 2022 Current portion of notes payable $ 2,309 $ (362) $ 1,947 Notes payable, net of current portion 36,571 (2,663) 33,908 Total $ 38,880 $ (3,025) $ 35,855 December 31, 2021 Current portion of notes payable $ 2,079 $ (172) $ 1,907 Notes payable, net of current portion 36,323 (3,203) 33,120 Total $ 38,402 $ (3,375) $ 35,027 The following table summarizes the future principal payments related to our outstanding debt as of June 30, 2022 (in thousands): 2022 $ 1,898 2023 4,827 2024 6,623 2025 23,307 2026 2,225 Total $ 38,880 Senior Credit Facility with Structural Capital Investments III, LP On September 10, 2021, the Company entered into a Loan and Security Agreement with Structural Capital Investments III, LP (“Structural” and together with the other lenders that are or become parties thereto, the “Lenders”), and Ocean II PLO LLC, as administrative and collateral agent for Structural and the Lenders (“Agent”), under the terms of which the Lenders have committed to lend us up to $50,000 in term loan financing to support our growth needs (the “Facility”) until June 30, 2022. Of the amount committed by the Lenders, the company drew $30,000 in September 2021, at the closing and the remaining $20,000 has lapsed. The Company also entered into a secured promissory note with the Agent evidencing our obligations under the Facility. The Company’s obligations are further guaranteed by each of our subsidiaries and secured by our assets and the assets of our subsidiaries. At the onset of the agreement, we paid to the Lenders an origination fee of $500. Interest accrues on any outstanding balance at a rate equal to the greater of 9.0% or the Prime Rate, plus 5.75% (the “Basic Rate”) and is payable in advance. In addition, interest is paid in kind (“PIK”) at a rate of 1.00% or 1.25% based on our APR Ratio, measured on a quarterly basis. The PIK interest is added to our outstanding balance and accrues interest at the Basic Rate. Interest only payments are due until October 2023, with an option to extend until October 2024, dependent on certain financial or revenue metrics before the end of the first twenty-four months of the Facility. Principal payments begin after the expiration of the interest only period, and are based on a five year amortization schedule, with a balloon payment due in October 2025. The table above in this Note 6 — Notes Payable summarizing future principal payments assumes the Company will not extend the period of interest only payments to October 2024. Upon payment in full of the obligations under the Facility, we are to pay Lenders a final payment fee equal to 1.0% of the increase in our market capitalization since the onset of the agreement, at that time valued at $182,400. The Company has agreed to provide the Lenders the right to participate in a future offering—whether public or private—on the same terms and conditions as other investors for an amount not to exceed $3,000. There are no financial covenants if our net cash position is equal to or greater than zero. If our net cash position is less than zero, the Company would be subject to the following financial covenants: (i) unrestricted cash of no less than $5,000, (ii) maintain an APR ratio of no less than 0.70:1.00 through September 10, 2023, and (iii) maintain an APR ratio of no less than 0.60:1.00 from September 10, 2023 through the remainder of the term of the Facility. The APR ratio would be the ratio of our tested debt to our annual recurring revenue and would be measured on a quarterly basis. Our Tested Debt consists of our outstanding obligations under the Facility (exclusive of PIK interest) and any indebtedness issued or earnouts owed to sellers in connection with acquisitions. |
CONTRACTS WITH CUSTOMERS AND RE
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | NOTE 7 – CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION Receivables Receivables from contracts with customers, net of allowance for doubtful accounts of $2,819, were $5,736 at June 30, 2022. Receivables from contracts with customers, net of allowance for doubtful accounts of $2,210, were $5,308 at December 31, 2021. No customers represented more than 10% of our net accounts receivable balance as of June 30, 2022 and December 31, 2021, respectively. Deferred Commissions Deferred commission costs from contracts with customers were $5,467 and $4,684 at June 30, 2022 and December 31, 2021, respectively. The amount of amortization recognized for the three and six months ended June 30, 2022 $435 and $780, respectively, and for the three and six months ended June 30, 2021 was $307 and $539, respectively. Deferred Revenue During the three and six months ended June 30, 2022, revenue of $293 and $3,205, and the three and six months ended June 30, 2021, revenue of $442 and $3,848, respectively, was recognized from the deferred revenue balance at the beginning of each period. Transaction Price Allocated to the Remaining Performance Obligations As of June 30, 2022, approximately $26,340 of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 73% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Revenue Concentration During the three and six months ended June 30, 2022 and 2021, there were no customers that individually represented 10% or more of consolidated revenue. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block [Abstract] | |
Lessor, Operating Leases [Text Block] | NOTE 8 - 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 year 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 general and administrative expenses. The components of the rent expense for the six months ended June 30, 2022 and 2021 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Operating lease cost $ 576 $ 544 $ 1,142 $ 1,114 Sublease income (11) (11) (21) (21) Net rent expense $ 565 $ 533 $ 1,121 $ 1,093 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% as of June 30, 2022 and December 31, 2021, respectively. The weighted average remaining lease term is five years and six years as of June 30, 2022 and December 31, 2021, respectively. Supplemental cash flow information related to operating leases for the six months ended June 30 are as follows (in thousands): Six Months Ended June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 1,133 $ 1,198 Non-cash operating activities: Operating lease assets obtained in exchange for new operating lease liabilities $ 1,512 $ 325 Future minimum commitments over the life of all operating leases, which exclude variable rent payments, are as follows (in thousands): 2022 $ 974 2023 1,824 2024 1,684 2025 1,296 2026 831 2027 626 Thereafter 566 Total minimum lease payments 7,801 Less: imputed interest (1,419) Total lease liabilities $ 6,382 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement [Text Block] | NOTE 9 - 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 will continue to govern any outstanding awards granted thereunder. The number of shares available for issuance under the 2018 Plan is equal to the sum of (i) 4,350 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 2,312 options and RSUs granted and outstanding pursuant to the 2018 Plan as of June 30, 2022. As of June 30, 2022, the number of shares available for issuance under the 2018 Plan is 1,535. Share based compensation for our stock option plans for the three months ended June 30, 2022 and June 30, 2021 was $814 and $714, respectively and for the six months ended June 30, 2022 and June 30, 2021 $1,542 and $1,340. We issued no common stock related to exercises of stock options for the three months ended June 30, 2022 and issued 85 shares of common stock related to exercises for the three months ended June 30, 2021. We issued 30 and 28 shares of common stock upon the vesting of restricted stock units, net for the three months ended June 30, 2022 and 2021, respectively. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2022 | |
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 2,312 and 2,172 for the three and six months ended June 30, 2022 and 2021, 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 and six months ended June 30 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic: Net income (loss) $ (5,860) $ 3,764 $ (8,877) $ 2,166 Weighted-average shares of common stock outstanding 20,106 19,040 20,067 19,033 Basic loss per share $ (0.29) $ 0.20 $ (0.44) $ 0.11 Diluted: Net income (loss) $ (5,860) $ 3,764 $ (8,877) $ 2,166 Weighted-average shares of common stock outstanding 20,106 19,203 20,067 19,198 Diluted loss per share $ (0.29) $ 0.20 $ (0.44) $ 0.11 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 - SUBSEQUENT EVENTS In July 2022, the Company reached an agreement with the holders of the subordinated note payable, issued in connection with the purchase of a business the Company acquired in 2018 to settle outstanding indemnification claims for $190, which reduced the outstanding balance of the subordinated note payable (including interest) to $600. This note was adjusted to $600 as of June 30, 2022. Also in July 2022, the Company agreed to the amount of the contingent consideration earned in connection with the acquisition of its payroll tax processing business in July 2020, and adjusted the amount of this contingent consideration as of June 30, 2022, to $2,229. There remains an outstanding principal balance on the subordinated note payable issued in connection with the purchase of a business we acquired in 2020, which note matured on July 1, 2022. $634 of the principal balance was paid on July 1, 2022. A $232 payment on the principal balance was withheld as security for outstanding claims for which we are entitled to indemnification under the purchase agreement. The Company will make payment, subject to its rights of set-off under the purchase agreement, when the claims are resolved. Due to its rights under the purchase agreement and the terms of this note, the Company is not in default under the note. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policy) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS 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. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): This update establishes a new approach to estimate credit losses on certain financial instruments. The update requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The amended guidance will also update the impairment model for available-for-sale debt securities, requiring entities to determine whether all or a portion of the unrealized loss on such securities is a credit loss. The Company is currently evaluating this standard and the potential effects of these changes to its consolidated financial statements and will adopt this new standard in the fiscal year beginning January 1, 2023. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy | CASH, CASH EQUIVALENTS, AND RESTRICTED CASHThe Company considers all highly liquid investments with an original maturity of 90 days or less at the time of purchase to be cash equivalents. Cash equivalents include investments in an institutional money market fund, which invests in U.S. Treasury bills, notes and bonds, and/or repurchase agreements, backed by such obligations. Carrying value approximates fair value. Restricted cash consists of cash balances which are restricted as to withdrawal or usage. As of June 30, 2022, the Company has $500 of restricted cash related to our agreement with South State Bank. |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE LOSS As of June 30, 2022 and December 31, 2021, accumulated other comprehensive loss consisted of net unrealized gains and losses on available-for-sale securities. |
Use of Estimates | USE OF ESTIMATES Preparation of the Condensed 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 Condensed 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, 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. |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments, Policy | Accounting Standards Codification (ASC) 820 “Fair Value Measurement” (ASC 820) defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 describes a fair value hierarchy based on the following three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable: 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. |
INVESTMENTS AND FAIR VALUE ME_2
INVESTMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
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 June 30, 2022 and December 31, 2021, respectively (in thousands): Total Carrying Value Level 1 Level 2 Level 3 June 30, 2022 Assets: Funds held for clients Money market funds $ 2,583 $ 2,583 $ — $ — Available-for-sale securities 47,125 — 47,125 — Total $ 49,708 $ 2,583 $ 47,125 $ — Liabilities: Contingent purchase consideration (1) $ 3,373 $ — $ — $ 3,373 Total $ 3,373 $ — $ — $ 3,373 December 31, 2021 Assets: Funds held for clients Money market funds $ 1,116 $ 1,116 $ — $ — Available-for-sale securities 32,060 — 32,060 — Total $ 33,176 $ 1,116 $ 32,060 $ — Liabilities: Contingent purchase consideration (1) $ 4,329 $ — $ — $ 4,329 Total $ 4,329 $ — $ — $ 4,329 |
Debt Securities, Available-for-sale | Restricted cash equivalents and investments classified as available-for-sale within funds held for clients consisted of the following (in thousands): Amortized Gross Unrealized Gains (1) Gross Unrealized Losses (1) Aggregate June 30, 2022 Restricted cash equivalents $ 2,600 $ — $ — $ 2,600 Available-for-sale securities: Certificates of deposit 1,234 5 (3) 1,236 Corporate debt securities 39,712 94 (1,369) 38,437 Municipal bonds 7,327 — (336) 6,991 U.S. Government agency securities 500 — (39) 461 Total available-for-sale securities 48,773 99 (1,747) 47,125 Total (2) $ 51,373 $ 99 $ (1,747) $ 49,725 December 31, 2021 Restricted cash equivalents $ 1,116 $ — $ — $ 1,116 Available-for-sale securities: Certificates of deposit 1,240 7 (4) 1,243 Corporate debt securities 22,597 2 (76) 22,523 Municipal bonds 7,825 3 (24) 7,804 U.S. Government agency securities 500 — (10) 490 Total available-for-sale securities 32,162 12 (114) 32,060 Total (2) $ 33,278 $ 12 $ (114) $ 33,176 (1) Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. As of June 30, 2022 and December 31, 2021, there were 22 and 10 securities, respectively, in an unrealized gain position and there were 85 and 57 securities in an unrealized loss position, respectively. As of June 30, 2022, these unrealized losses were less than $68 individually and $1,761 in the aggregate. As of December 31, 2021, these unrealized losses were less than $11 individually and $114 in the aggregate. These securities have not been in a continuous unrealized gain or 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 June 30, 2022 and December 31, 2021, none of these securities were classified as cash and cash equivalents on the accompanying Condensed Consolidated Balance Sheets. Funds held for clients represent assets that the Company has classified as 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 funds obligations on our Condensed Consolidated Balance Sheets. Funds held for clients have been invested in the following categories (in thousands): June 30, 2022 December 31, 2021 Restricted cash and cash equivalents held to satisfy client funds obligations $ 137,536 $ 185,316 Restricted short-term marketable securities held to satisfy client funds obligations 7,161 5,559 Restricted long-term marketable securities held to satisfy client funds obligations 39,964 26,501 Total funds held for clients $ 184,661 $ 217,376 |
Investments Classified by Contractual Maturity Date | Expected maturities of available-for-sale securities as of June 30, 2022 are as follows (in thousands): One year or less $ 7,161 After one year through five years 39,964 Total $ 47,125 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The gross carrying amount and accumulated amortization of our intangible assets as of June 30, 2022 are as follows (in thousands, except weighted average periods): Weighted Average Gross Accumulated Net June 30, 2022 Customer relationships 8.7 $ 116,971 $ (46,158) $ 70,813 Developed technology 6.6 12,001 (9,691) 2,310 Reseller relationships 7.2 1,112 (874) 238 Trade names 3.0 880 (713) 167 Non-compete agreements 5.2 1,032 (903) 129 8.4 $ 131,996 $ (58,339) $ 73,657 December 31, 2021 Customer relationships 8.7 $ 114,611 $ (39,535) $ 75,076 Developed technology 6.6 12,001 (9,098) 2,903 Reseller relationships 7.2 1,012 (864) 148 Trade names 3.0 880 (579) 301 Non-compete agreements 5.2 1,032 (887) 145 8.4 $ 129,536 $ (50,963) $ 78,573 |
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, 2022 (in thousands): 2022 $ 7,302 2023 13,558 2024 13,297 2025 12,511 2026 9,400 2027 7,225 Thereafter 10,364 $ 73,657 |
Schedule of Goodwill [Table Text Block] | 2021 Acquisitions 2022 Goodwill $ 86,011 $ — $ 86,011 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | The following table summarizes our outstanding debt as of the dates indicated (in thousands): Maturity Cash Interest Rate June 30, 2022 December 31, 2021 Subordinated Notes Payable – Acquisitions (1) 7/1/2021 – 9/30/2026 2.00% - 3.00% $ 8,634 $ 8,178 Senior Credit Facility 10/1/2025 10.50% 30,246 30,224 Gross Notes Payable $ 38,880 $ 38,402 (1) See Note 3 — Business Combinations and Asset Acquisitions for further discussion regarding the notes payable related to acquisitions. The following table summarizes the debt issuance costs as of the dates indicated (in thousands): Gross Notes Payable Debt Issuance Costs and Debt Discount Net Notes Payable June 30, 2022 Current portion of notes payable $ 2,309 $ (362) $ 1,947 Notes payable, net of current portion 36,571 (2,663) 33,908 Total $ 38,880 $ (3,025) $ 35,855 December 31, 2021 Current portion of notes payable $ 2,079 $ (172) $ 1,907 Notes payable, net of current portion 36,323 (3,203) 33,120 Total $ 38,402 $ (3,375) $ 35,027 |
Schedule of Maturities of Long-term Debt [Table Text Block] | The following table summarizes the future principal payments related to our outstanding debt as of June 30, 2022 (in thousands): 2022 $ 1,898 2023 4,827 2024 6,623 2025 23,307 2026 2,225 Total $ 38,880 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block [Abstract] | |
Lease, Cost [Table Text Block] | The components of the rent expense for the six months ended June 30, 2022 and 2021 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Operating lease cost $ 576 $ 544 $ 1,142 $ 1,114 Sublease income (11) (11) (21) (21) Net rent expense $ 565 $ 533 $ 1,121 $ 1,093 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Future minimum commitments over the life of all operating leases, which exclude variable rent payments, are as follows (in thousands): 2022 $ 974 2023 1,824 2024 1,684 2025 1,296 2026 831 2027 626 Thereafter 566 Total minimum lease payments 7,801 Less: imputed interest (1,419) Total lease liabilities $ 6,382 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
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 and six months ended June 30 (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic: Net income (loss) $ (5,860) $ 3,764 $ (8,877) $ 2,166 Weighted-average shares of common stock outstanding 20,106 19,040 20,067 19,033 Basic loss per share $ (0.29) $ 0.20 $ (0.44) $ 0.11 Diluted: Net income (loss) $ (5,860) $ 3,764 $ (8,877) $ 2,166 Weighted-average shares of common stock outstanding 20,106 19,203 20,067 19,198 Diluted loss per share $ (0.29) $ 0.20 $ (0.44) $ 0.11 |
THE COMPANY AND BASIS OF PRES_2
THE COMPANY AND BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Funds held for clients | $ 184,661 | $ 217,376 |
Business Combinations and Ass_2
Business Combinations and Asset Acquisitions (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||||
Business Combination Disclosure | NOTE 3 - BUSINESS COMBINATIONS AND ASSET ACQUISITIONS 2021 In September 2021, the Company acquired certain assets (the “Asset Purchase Agreement”) of a payroll business, which was used to provide payroll processing services. The aggregate purchase price that the Company paid for these assets was $14,750, paid as follows: (i) $10,325 in cash at closing, (ii) the delivery of 244 shares of the Company’s common stock, which the parties agreed had an aggregate value of $2,213 as of September 30, 2021, and (iii) the delivery of a promissory note in the amount of $2,213. The promissory note was adjusted to $2,223 to account for post close and working capital adjustments. The Asset Purchase Agreement is subject to working capital adjustments to the purchase price. Also in September 2021, we acquired certain assets of a payroll business (the “Second Asset Purchase Agreement”), which were used to provide payroll processing services. The aggregated purchase price for these assets was $24,150, paid as follows: (i) $15,000 was paid in cash at closing, (ii) the delivery of 523 shares of the Company’s common stock which both parties agreed had an aggregate value of $4,800 at closing, and (iii) the delivery of a promissory note of $4,350. The promissory note also includes a contingent consideration, which is contingent on certain thresholds and will be based on the trailing twelve-month revenue at September 30, 2022, which we expect will be paid in the fourth quarter of 2022. Additionally, we utilized a Monte Carlo simulation to determine the fair value of the contingent consideration. For the year ended December 31, 2021, there was a measurement period adjustment to the fair value of the contingent consideration of $465. For the quarter ended June 30, 2022, there was a measurement period adjustment to the fair value of the contingent consideration of $1,350. The promissory note was adjusted to $4,533 to account for post close and working capital adjustments. 2022 | |||
Business Combination Segment Allocation [Line Items] | ||||
Debt Instrument, Fair Value Disclosure | $ 411 | $ 411 | ||
Initial purchase price | 1,970 | |||
Business Acquisition, Transaction Costs | $ 31 | $ 31 | ||
The Asset Purchase Agreement [Member] | ||||
Business Combination Segment Allocation [Line Items] | ||||
Debt Instrument, Fair Value Disclosure | $ 2,213 | |||
Stock issued upon acquisition (in Shares) | 244 | |||
Asset Acquisition, Consideration Transferred | $ 14,750 | |||
Stock issued upon acquisition | 2,213 | |||
Initial purchase price | $ 10,325 | |||
Second Asset Purchase Agreement [Member] | ||||
Business Combination Segment Allocation [Line Items] | ||||
Debt Instrument, Fair Value Disclosure | $ 4,350 | |||
Stock issued upon acquisition (in Shares) | 523 | |||
Asset Acquisition, Consideration Transferred | $ 24,150 | |||
Stock issued upon acquisition | 4,800 | |||
Initial purchase price | 15,000 | |||
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities | $ 465 |
INVESTMENTS AND FAIR VALUE ME_3
INVESTMENTS AND FAIR VALUE MEASUREMENTS - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) $ in Thousands | Jun. 30, 2022 USD ($) security | Dec. 31, 2021 USD ($) security |
Liabilities: | ||
Number of securities in unrealized gain position | security | 22 | 10 |
Funds Held For Clients, Restricted Cash and Debt Securities, Gross Unrealized Losses | $ (1,747) | $ (114) |
Recurring | ||
Funds held for clients | ||
Total | 49,708 | 33,176 |
Liabilities: | ||
Contingent purchase consideration(1) | 3,373 | 4,329 |
Total | 3,373 | 4,329 |
Recurring | Money Market Funds [Member] | ||
Funds held for clients | ||
Funds held for clients | 2,583 | 1,116 |
Recurring | Available-for-sale securities | ||
Funds held for clients | ||
Funds held for clients | 47,125 | 32,060 |
Recurring | Level 1 | ||
Funds held for clients | ||
Total | 2,583 | 1,116 |
Liabilities: | ||
Contingent purchase consideration(1) | 0 | 0 |
Total | 0 | 0 |
Recurring | Level 1 | Money Market Funds [Member] | ||
Funds held for clients | ||
Funds held for clients | 2,583 | 1,116 |
Recurring | Level 1 | Available-for-sale securities | ||
Funds held for clients | ||
Funds held for clients | 0 | 0 |
Recurring | Level 2 | ||
Funds held for clients | ||
Total | 47,125 | 32,060 |
Liabilities: | ||
Contingent purchase consideration(1) | 0 | 0 |
Total | 0 | 0 |
Recurring | Level 2 | Money Market Funds [Member] | ||
Funds held for clients | ||
Funds held for clients | 0 | 0 |
Recurring | Level 2 | Available-for-sale securities | ||
Funds held for clients | ||
Funds held for clients | 47,125 | 32,060 |
Recurring | Level 3 | ||
Funds held for clients | ||
Total | 0 | 0 |
Liabilities: | ||
Contingent purchase consideration(1) | 3,373 | 4,329 |
Total | 3,373 | 4,329 |
Recurring | Level 3 | Money Market Funds [Member] | ||
Funds held for clients | ||
Funds held for clients | 0 | 0 |
Recurring | Level 3 | Available-for-sale securities | ||
Funds held for clients | ||
Funds held for clients | $ 0 | $ 0 |
INVESTMENTS AND FAIR VALUE ME_4
INVESTMENTS AND FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
INVESTMENTS AND FAIR VALUE MEASUREMENTS (Details) [Line Items] | ||
Initial purchase price | $ 1,970 | |
Long-term Debt, Gross | $ 38,880 | $ 38,402 |
INVESTMENTS AND FAIR VALUE ME_5
INVESTMENTS AND FAIR VALUE MEASUREMENTS - Debt Securities, Available-for-sale (Details) $ in Thousands | Jun. 30, 2022 USD ($) security | Dec. 31, 2021 USD ($) security |
Funds Held for Clients | ||
Amortized Cost | $ 48,773 | $ 32,162 |
Gross Unrealized Gains | 99 | 12 |
Gross Unrealized Losses | (1,761) | (114) |
Aggregate Estimated Fair Value | 47,125 | 32,060 |
Funds Held For Clients, Restricted Cash and Debt Securities | 49,725 | 33,176 |
Funds Held For Clients, Restricted Cash and Debt Securities, Gross Unrealized Losses | (1,747) | (114) |
Funds Held For Clients, Restricted Cash and Debt Securities, Gross Unrealized Gains | 99 | 12 |
Funds Held For Clients, Restricted Cash and Debt Securities, Amortized Cost | $ 51,373 | $ 33,278 |
Number of securities in unrealized gain position | security | 22 | 10 |
Number of securities in unrealized loss position | security | 85 | 57 |
Funds Held For Clients, Restricted Cash, Amortized Cost | $ 2,600 | $ 1,116 |
Funds Held For Clients, Restricted Cash, Gross Unrealized Losses | 0 | 0 |
Funds Held For Clients, Restricted Cash | 2,600 | 1,116 |
Funds Held For Clients, Restricted Cash, Gross Unrealized Gains | 0 | 0 |
IndividuallyMember | ||
Funds Held for Clients | ||
Gross Unrealized Losses | (68) | (11) |
AggregateMember [Member] | ||
Funds Held for Clients | ||
Gross Unrealized Losses | (114) | |
Certificates of deposit | ||
Funds Held for Clients | ||
Amortized Cost | 1,234 | 1,240 |
Gross Unrealized Gains | 5 | 7 |
Gross Unrealized Losses | (3) | (4) |
Aggregate Estimated Fair Value | 1,236 | 1,243 |
Corporate debt securities | ||
Funds Held for Clients | ||
Amortized Cost | 39,712 | 22,597 |
Gross Unrealized Gains | 94 | 2 |
Gross Unrealized Losses | (1,369) | (76) |
Aggregate Estimated Fair Value | 38,437 | 22,523 |
Municipal bonds | ||
Funds Held for Clients | ||
Amortized Cost | 7,327 | 7,825 |
Gross Unrealized Gains | 0 | 3 |
Gross Unrealized Losses | (336) | (24) |
Aggregate Estimated Fair Value | 6,991 | 7,804 |
U.S. Government agency securities | ||
Funds Held for Clients | ||
Amortized Cost | 500 | 500 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (39) | (10) |
Aggregate Estimated Fair Value | $ 461 | $ 490 |
INVESTMENTS AND FAIR VALUE ME_6
INVESTMENTS AND FAIR VALUE MEASUREMENTS - Funds Held For Clients (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 |
Debt Securities, Available-for-sale [Line Items] | |||
Restricted Cash and Cash Equivalents | $ 137,536 | $ 185,316 | $ 190,318 |
Debt Securities, Available-for-sale, Current | 7,161 | 5,559 | |
Debt Securities, Available-for-sale, Noncurrent | 39,964 | 26,501 | |
Total funds held for clients | $ 184,661 | $ 217,376 |
INVESTMENTS AND FAIR VALUE ME_7
INVESTMENTS AND FAIR VALUE MEASUREMENTS - Investments Classified by Contractual Maturity Date (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Fair Value Disclosures [Abstract] | |
One year or less | $ 7,161 |
After one year through five years | 39,964 |
Available-for-sale debt securities total fair value | $ 47,125 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 86,011 | $ 86,011 | $ 86,011 | ||
Acquisition | 0 | ||||
Amortization of intangible assets | 3,352 | $ 2,528 | 6,784 | $ 5,056 | |
Cost, Amortization | 593 | $ 757 | |||
Goodwill and Intangible Asset Impairment | $ 0 | ||||
Finite-Lived Intangible Assets, Amortization Method | straight-line method | straight-line method | |||
Finite-lived Intangible Assets Acquired | $ 2,460 | ||||
Initial purchase price | $ 1,970 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - Schedule of Goodwill $ in Thousands | Jun. 30, 2022 USD ($) |
Schedule of Goodwill [Abstract] | |
Balance | $ 86,011 |
Balance | $ 86,011 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - Schedule of Intangible Assets - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Asset, Weighted Average Amortization Period | 8 years 4 months 24 days | 8 years 4 months 24 days | |
Intangible Asset, Gross | $ 131,996 | $ 129,536 | |
Intangible Asset, Accumulated Amortization | (58,339) | (50,963) | |
Intangible Asset, Net | 73,657 | 78,573 | |
Finite-lived Intangible Assets Acquired | $ 2,460 | ||
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Asset, Weighted Average Amortization Period | 8 years 8 months 12 days | 8 years 8 months 12 days | |
Intangible Asset, Gross | $ 116,971 | 114,611 | |
Intangible Asset, Accumulated Amortization | (46,158) | (39,535) | |
Intangible Asset, Net | 70,813 | 75,076 | |
Finite-lived Intangible Assets Acquired | $ 2,360 | ||
Developed Technology Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Asset, Weighted Average Amortization Period | 6 years 7 months 6 days | 6 years 7 months 6 days | |
Intangible Asset, Gross | $ 12,001 | 12,001 | |
Intangible Asset, Accumulated Amortization | (9,691) | (9,098) | |
Intangible Asset, Net | 2,310 | 2,903 | |
Finite-lived Intangible Assets Acquired | $ 0 | ||
Customer Lists | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Asset, Weighted Average Amortization Period | 7 years 2 months 12 days | 7 years 2 months 12 days | |
Intangible Asset, Gross | $ 1,112 | 1,012 | |
Intangible Asset, Accumulated Amortization | (874) | (864) | |
Intangible Asset, Net | 238 | 148 | |
Finite-lived Intangible Assets Acquired | $ 100 | ||
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Asset, Weighted Average Amortization Period | 3 years | 3 years | |
Intangible Asset, Gross | $ 880 | 880 | |
Intangible Asset, Accumulated Amortization | (713) | (579) | |
Intangible Asset, Net | 167 | 301 | |
Finite-lived Intangible Assets Acquired | $ 0 | ||
Noncompete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Asset, Weighted Average Amortization Period | 5 years 2 months 12 days | 5 years 2 months 12 days | |
Intangible Asset, Gross | $ 1,032 | 1,032 | |
Intangible Asset, Accumulated Amortization | (903) | (887) | |
Intangible Asset, Net | 129 | $ 145 | |
Finite-lived Intangible Assets Acquired | $ 0 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - Schedule of Expected Amortization Expense - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of Expected Amortization Expense [Abstract] | ||
Finite-Lived Intangible Asset, Expected Amortization, Year One | $ 13,558 | |
Finite-Lived Intangible Asset, Expected Amortization, Year Two | 13,297 | |
Finite-Lived Intangible Asset, Expected Amortization, Year Three | 12,511 | |
Finite-Lived Intangible Asset, Expected Amortization, Year Four | 9,400 | |
Finite-Lived Intangible Asset, Expected Amortization, Year Five | 7,225 | |
Finite-Lived Intangible Asset, Expected Amortization, after Year Five | 10,364 | |
Intangible Asset, Net | 73,657 | $ 78,573 |
Lessee, Operating Lease, Liability, to be Paid, after Year Five | 566 | |
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year | $ 7,302 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
NOTES PAYABLE (Details) [Line Items] | ||
Debt Issuance Costs, Gross, Current | $ 362 | $ 172 |
Long-term Debt, Gross | 38,880 | 38,402 |
Notes Payable, Other Payables [Member] | ||
NOTES PAYABLE (Details) [Line Items] | ||
Long-term Debt, Gross | 8,634 | 8,178 |
StructuralCapital | ||
NOTES PAYABLE (Details) [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 50,000 | |
Loan Processing Fee | 500 | |
StructuralCapital | Notes Payable, Other Payables [Member] | ||
NOTES PAYABLE (Details) [Line Items] | ||
Long-term Debt, Gross | $ 30,246 | $ 30,224 |
Debt Instrument, Interest Rate, Stated Percentage | 10.50% |
NOTES PAYABLE (Details) - Sched
NOTES PAYABLE (Details) - Schedule of Debt - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ||
Long-term Debt, Gross | $ 38,880 | $ 38,402 |
Current portion of notes payable | 1,947 | 1,907 |
Notes payable, net of current portion | 33,908 | 33,120 |
Short-term Debt | ||
NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ||
Notes Payable | $ 2,309 | 2,079 |
Notes Payable, Other Payables [Member] | ||
NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ||
Debt Instrument, Maturity Date, Description | 7/1/2021 – 9/30/2026 | |
Long-term Debt, Gross | $ 8,634 | 8,178 |
Long-term Debt | ||
NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ||
Notes Payable | $ 36,571 | 36,323 |
Consolidated Entities [Domain] | Minimum [Member] | ||
NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2% | |
Consolidated Entities [Domain] | Maximum [Member] | ||
NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3% | |
StructuralCapital | Notes Payable, Other Payables [Member] | ||
NOTES PAYABLE (Details) - Schedule of Debt [Line Items] | ||
Debt Instrument, Maturity Date, Description | 10/1/2025 | |
Debt Instrument, Interest Rate, Stated Percentage | 10.50% | |
Long-term Debt, Gross | $ 30,246 | $ 30,224 |
NOTES PAYABLE (Details) - Sch_2
NOTES PAYABLE (Details) - Schedule of Debt and Debt Issuance Costs - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of Debt and Debt Issuance Costs [Abstract] | ||
Debt Issuance Costs and Debt Discount, current portion | $ (362) | $ (172) |
Notes payable, net of current portion | 1,947 | 1,907 |
Notes payable, net of current portion | (2,663) | (3,203) |
Notes payable, net of current portion | 33,908 | 33,120 |
Long-term Debt, Gross | 38,880 | 38,402 |
Total Debt Issuance Costs and Debt Discount | (3,025) | (3,375) |
Total notes payable | 35,855 | 35,027 |
NOTES PAYABLE (Details) [Line Items] | ||
Debt Issuance Costs, Gross, Current | $ 362 | $ 172 |
NOTES PAYABLE (Details) - Sch_3
NOTES PAYABLE (Details) - Schedule of Maturities of Long-term Debt - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of Maturities of Long-term Debt [Abstract] | ||
Long-Term Debt, Maturity, Year One | $ 4,827 | |
Long-Term Debt, Maturity, Year Two | 6,623 | |
Long-Term Debt, Maturity, Year Three | 23,307 | |
Long-Term Debt, Maturity, Year Four | 2,225 | |
Long-term Debt, Gross | 38,880 | $ 38,402 |
Long-Term Debt, Maturity, Remainder of Fiscal Year | $ 1,898 |
CONTRACTS WITH CUSTOMERS AND _2
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) [Line Items] | |||||
Contract with Customer, Asset, Allowance for Credit Loss | $ 2,819 | $ 2,819 | $ 2,210 | ||
Amortization of Deferred Sales Commissions | 435 | $ 307 | 780 | $ 539 | |
Deferred Revenue, Revenue Recognized | 293 | $ 442 | 3,205 | $ 3,848 | |
Revenue, Remaining Performance Obligation, Amount | $ 26,340 | $ 26,340 | |||
Revenue, Remaining Performance Obligation, Percentage | 73% | 73% | |||
Accrued Sales Commission | $ 5,467 | $ 5,467 | $ 4,684 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-21 | |||||
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) [Line Items] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months | 12 months | |||
Customer Concentration Risk [Member] | |||||
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) [Line Items] | |||||
Concentration Risk, Benchmark Description | No customers represented more than 10% of our net accounts receivable balance as of June 30, 2022 and December 31, 2021, respectively. | ||||
Revenue Benchmark [Member] | |||||
CONTRACTS WITH CUSTOMERS AND REVENUE CONCENTRATION (Details) [Line Items] | |||||
Concentration Risk, Benchmark Description | During the three and six months ended June 30, 2022 and 2021, there were no customers that individually represented 10% or more of consolidated revenue. |
LEASES (Details)
LEASES (Details) | Jun. 30, 2022 | Dec. 31, 2021 |
LEASES (Details) [Line Items] | ||
Operating Lease, Weighted Average Discount Rate, Percent | 8% | |
Operating Lease, Weighted Average Remaining Lease Term | 5 years | 6 years |
Minimum [Member] | ||
LEASES (Details) [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 1 year | |
Maximum [Member] | ||
LEASES (Details) [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 10 years |
LEASES (Details) - Rent Expense
LEASES (Details) - Rent Expense Components - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Rent Expense Components [Abstract] | ||||
Operating lease cost | $ 576 | $ 544 | $ 1,142 | $ 1,114 |
Sublease income | (11) | (11) | (21) | (21) |
Net rent expense | $ 565 | $ 533 | $ 1,121 | $ 1,093 |
LEASES (Details) - Lessee, Oper
LEASES (Details) - Lessee, Operating Lease, Disclosure - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows from operating leases | $ 1,133 | $ 1,198 |
Non-cash operating activities: | ||
Operating lease assets obtained in exchange for new operating lease liabilities | $ 1,512 | $ 325 |
Minimum [Member] | ||
LEASES (Details) [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 1 year | |
Maximum [Member] | ||
LEASES (Details) [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 10 years |
LEASES (Details) - Lessee, Op_2
LEASES (Details) - Lessee, Operating Lease, Liability, Maturity $ in Thousands | Jun. 30, 2022 USD ($) |
Lessee, Operating Lease, Liability, Maturity [Abstract] | |
Lessee, Operating Lease, Liability, to be Paid, Year One | $ 1,824 |
Lessee, Operating Lease, Liability, to be Paid, Year Two | 1,684 |
Lessee, Operating Lease, Liability, to be Paid, Year Three | 1,296 |
Lessee, Operating Lease, Liability, to be Paid, Year Four | 831 |
Lessee, Operating Lease, Liability, to be Paid, Year Five | 626 |
Lessee, Operating Lease, Liability, to be Paid, after Year Five | 566 |
Lessee, Operating Lease, Liability, to be Paid, Total | 7,801 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (1,419) |
Operating Lease, Liability | 6,382 |
Lessee, Operating Lease, Liability, to be Paid, Remainder of Fiscal Year | $ 974 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | (85) | |||
Share-based compensation | $ 814 | $ 714 | $ 1,544 | $ 1,340 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 30 | 28 | ||
Share-based Payment Arrangement, Expense (in Dollars) | $ 1,542 | |||
2018 Plan | ||||
Share-based Payment Arrangement [Abstract] | ||||
Shares available for issuance | 4,350 | 4,350 | ||
Options Outstanding | 2,312 | 2,312 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,535 | 1,535 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,535 | 1,535 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 4,350 | 4,350 | ||
Options Outstanding | 2,312 | 2,312 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Equity Option | ||
NET LOSS PER SHARE (Details) [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,312,000 | 2,172,000 |
NET LOSS PER SHARE (Details) -
NET LOSS PER SHARE (Details) - Components of Earnings Per Share, Basic and Diluted - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||||
Net income (loss) | $ (5,860) | $ (3,017) | $ 3,764 | $ (1,598) | $ (8,877) | $ 2,166 |
Weighted average shares of common stock outstanding, basic (in shares) | 20,106 | 19,040 | 20,067 | 19,033 | ||
Weighted average shares of common stock outstanding, diluted (in shares) | 20,106 | 19,203 | 20,067 | 19,198 | ||
Basic loss per share (in Dollars per share) | $ (0.29) | $ 0.20 | $ (0.44) | $ 0.11 | ||
Diluted loss per share (in Dollars per share) | $ (0.29) | $ 0.20 | $ (0.44) | $ 0.11 |