Asure Software (ASUR) risk factors, FY2024 10-K

RISKS RELATED TO OUR BUSINESS

1. 01We have a history of losses, and we cannot be certain that we will achieve or sustain profitability
2. 02Privacy concerns and laws and other regulations may limit the effectiveness of our applications and adversely affect our business
3. 03Our software and solutions may not function adequately, which could damage our reputation and give rise to claims against us, which could harm our business and operating results
4. 04We depend on data centers and computing infrastructure operated by third parties, and any disruption in these operations or changes of these providers could adversely affect our business
5. 05We may be required to incur debt to meet future capital requirements of our business. Should we be required to incur debt, the restrictions imposed by the terms of such debt could adversely affect our financial condition and our ability to respond to changes in our business
6. 06Volatility and weakness in bank and capital markets may adversely affect credit availability and related financing costs for us
7. 07We may require additional capital to support business growth, and this capital may not be available on acceptable terms, or at all
8. 08If we are unable to release timely updates to reflect changes in wage and hour laws, tax, privacy, benefit and other laws and regulations that our products help our clients address, the market acceptance of our products may be adversely affected and our revenues could decline
9. 09If we are not able to develop enhancements and new features to our products, keep pace with technological developments or respond to future technologies, our business, operating results and financial results will be adversely affected
10. 10In order for us to improve our operating results, it is important that our clients renew their agreements with us when the initial contract term expires and also purchase additional products or add additional users
11. 11Client funds that we hold in trust are subject to market, interest rate, credit and liquidity risk. The loss of these funds could have a material adverse effect on our business, financial condition and results of operations
12. 12The markets in which we participate are highly competitive, and if we do not compete effectively, our operating results could be adversely affected
13. 13Our clients could have insufficient funds to cover payments we have made on their behalf or credit that we have extended to them in connection with the services that we have provided, resulting in financial loss to us
14. 14Our balance sheet includes significant amounts of goodwill and intangible assets. The impairment of a significant portion of these assets would adversely affect our business, operating results and financial condition
15. 15If we fail to adequately protect our proprietary rights, our competitive advantage and brand could be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights
16. 16We may be sued by third parties for infringement of their proprietary rights
17. 17Even if demand for HCM products and services increases generally, there is no guarantee that demand for SaaS products generally or our products in particular will increase to a corresponding degree, or at all
18. 18We may be subject to claims, lawsuits, governmental investigations and other proceedings that could adversely affect our business, financial condition and results of operations
19. 19Issues in the use of artificial intelligence (“AI”) in our HCM products and services may result in reputational harm or liability to us
20. 20Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operating results
21. 21The use of open-source software in our applications may expose us to risks and harm our intellectual property rights
22. 22We may be adversely affected by failure of third parties in providing their services
23. 23Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
24. 24Inability to maintain the third-party licensed software we use in our applications at the current costs could result in increased costs or reduced service levels, which could adversely affect our business
25. 25Evolving regulation of the Internet, changes in the infrastructure underlying the Internet or interruptions in Internet access may adversely affect our business, operating results and financial condition by increasing our expenditures and causing client dissatisfaction
26. 26The adoption of new or interpretation of existing money service business statutes and money transmitter statutes at the federal and state level could subject us to additional regulation and related expense and necessitate changes to our business model
27. 27If we lose key personnel, including key management personnel, or are unable to attract and retain additional personnel as needed in the future, it could disrupt the operation of our business, delay our product development, harm our growth efforts and have a material adverse effect on our business
28. 28Some of our key components are procured from a single or limited number of suppliers. Thus, we are at risk of shortage, price increases, tariffs, changes, delay, or discontinuation of key components, which could disrupt and materially and adversely affect our business
29. 29Adverse tax laws or regulations could be enacted, or existing laws could be applied to us or our clients, which could increase the costs of our services and adversely impact our business
30. 30Political, economic and social factors may materially adversely affect our business and financial results

RISKS RELATED TO OUR SECURITIES

1. 31Sales, or the potential for sales, of a substantial number of shares of our common stock in the public market, including sales done by us in connection with financing activities or by our existing stockholders, could cause our stock price to fall
2. 32Our common stock has traded in low volumes. We cannot predict whether an active trading market for our common stock will ever develop
3. 33Our stock price has been, and likely will continue to be, volatile
4. 34We do not intend to pay dividends for the foreseeable future, and you must rely on increases in the market price of our common stock for returns on equity investment
5. 35Our stockholder rights plan, or “poison pill,” includes terms and conditions which could discourage a takeover or other transaction that stockholders may consider favorable
6. 36Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of our management and board of directors
7. 37Our business could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities