Business Context and Reporting Period
Company: Asure Software, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 10, 2025
Event: Entry into a Material Definitive Agreement (Credit, Security and Guaranty Agreement).
Key Financial Metrics and Debt Structure
This filing details a new credit facility rather than operational financial results (revenue, profit, or cash flow are not reported in this document).
- Total Facility Size: Up to $60 million.
- Initial Funding: $20 million funded on the Closing Date (April 10, 2025).
- Remaining Availability: $40 million available through March 31, 2027, in $2.0 million increments.
- Maturity Date: April 1, 2030.
- Interest Rate: Term SOFR + 5.00% (with a 2.00% SOFR floor).
- Amortization: Interest-only until April 1, 2029; followed by a 12-month straight-line amortization of principal.
- Upfront Fees: $300,000 due on Closing Date plus an advisory fee to Roth Capital Partners LLC.
- Prepayment Penalties: 3.00% (Year 1), 2.00% (Year 2), 1.00% (Year 3); none thereafter.
- Final Payment Fee: 1.00% of the amount advanced (waived if refinanced with MidCap).
Material Changes and Covenants
The Company has entered into a new debt obligation with MidCap Financial Trust and other lenders. Key covenants and conditions include:
- Leverage Covenant: Must maintain a Total Leverage Ratio of no greater than 5.50 to 1.00 (tested quarterly). Draws on the remaining $40 million require a ratio of less than 4.50 to 1.00.
- Liquidity Covenant: Must maintain a minimum liquidity threshold of 10.00% of the outstanding principal amount.
- Guarantors: Subsidiaries including Asure Operations LLC, Asure Customer & IP Holdco LLC, Asure Payroll Tax Management LLC, Asure Benefits Management LLC, and Asure Treasury Management, LLC.
- Default Interest: 2.0% per annum in excess of the standard rate upon an event of default.
Use of Proceeds and Outlook
Use of Proceeds:
- Closing Proceeds ($20M): Payment of transaction fees and working capital needs.
- Future Draws: Payment of consideration for Permitted Acquisitions.
Investor Verification Checklist
- Verify the Company's current Total Leverage Ratio to ensure compliance with the 5.50:1.00 covenant.
- Confirm the Company's current liquidity position meets the 10.00% of outstanding principal threshold.
- Review the specific definition of "Permitted Acquisitions" in the full agreement (Exhibit 10.1) to understand future capital deployment.
- Monitor the SOFR rate environment, as the interest rate is variable with a 2.00% floor.
- Check for any subsequent filings regarding the utilization of the remaining $40 million credit line.