Asure Software (NASDAQ: ASUR), a leading provider of workforce
management software, today released the following facts in response
to many statements propagated by the dissident group led by
Pinnacle/Red Oak and David Sandberg in their communications to
stockholders.
BASE YOUR DECISION ON FACTS NOT FICTION!
Pinnacle Fund/Red Oak Partners and David Sandberg, in connection
with their ongoing campaign to gain support for their nominees for
Asure Software's Board of Directors, continue to make statements
about the Company and its management with which we disagree. We
feel our stockholders have the right to know the truth so they can
base their decisions on complete and accurate information.
To that end, we have addressed -- and corrected -- several of
Pinnacle/Red Oak's most recent statements. We leave it to you, our
stockholders, to decide whether Pinnacle/Red Oak's statements are
intentional and calculated misrepresentations, just careless and
irresponsible deviations from the truth, or simply a matter of
debate and disagreement.
PINNACLE/RED OAK FICTION #1: "ASUR's iEmployee division ... was
an independent, growing and thriving company (before ASUR acquired
it in 2007)."
FACT: iEmployee was not a growing and thriving business when
Asure acquired it in 2007.
At the time, iEmployee had little to no cash, did not follow
GAAP accounting standards, was bloated in headcount, lacked
effective sales and marketing programs, and suffered from high
customer attrition rates. All of this occurred during the watch of
two Pinnacle/Red Oak nominees for your Board -- Pat Goepel and Bob
Graham -- who were board members of iEmployee at the time. Asure
purchased iEmployee at a fair price, given the broken condition of
the business, and has worked ever since to fix it and position it
to reach its full potential.
PINNACLE/RED OAK FICTION #2: Characterizing the compensation
paid to the Chairman's son and amounts reimbursed for executives'
physicals at the Cooper Clinic in Dallas as "questionable" and
implying these expenditures constitute "wasteful spending."
FACT: Pinnacle/Red Oak characterized these payments and expenses
as "questionable" and "wasteful" without having any knowledge or
estimates of these payments and expenses.
It is difficult to understand how Pinnacle/Red Oak can
responsibly characterize these payments and expenses without the
benefit of any of the relevant facts.
FACT: Asure has spent an average of $749 per executive per year
for the cost of annual physicals at the Cooper Clinic.
As is standard practice at many companies, Asure offers a
nominal wellness benefit to its three executives in the form of
coverage for the cost of an annual physical. Over the past seven
years, the Company has reimbursed a total of $15,742 for
executives' visits to the Cooper Clinic for these physicals, which
comes to an average of $749 per year for each executive. This
expense is quite modest, and it provides a real benefit to the
Company by helping to protect the health of its executive team and
possibly avoiding additional health-related expenses.
FACT: Jeremy Snyder, son of Chairman Richard Snyder, is an
inside sales representative for Asure whose total compensation
averages $67,000 per year.
Jeremy Snyder's base pay is $40,500 per year, and the rest of
his compensation comes from performance-based commissions. He has
six years of experience and his pay is at the median point of the
scale for our inside sales team. The Company diligently sets
compensation levels for all employee positions commensurate with
the market for each position, using third-party data sources such
as ADP to determine market comparables. Pinnacle/Red Oak has not
publicly commented on the salary and benefits of any other
non-executive employee, but rather has focused solely on Jeremy
Snyder. We believe it is inappropriate for Pinnacle/Red Oak to
question the integrity of Company management by focusing on the
employment of the Chairman's son when Pinnacle/Red Oak has
absolutely no knowledge of the particulars of the arrangement and
otherwise no basis in fact for doing so.
PINNACLE/RED OAK FICTION #3: "We believe ASUR has paid more than
it should have already in audit fees."
FACT: The Company's $420,000 in audit fees for fiscal 2008 were
uncharacteristically high as a result of the iEmployee acquisition
and the Company's initial compliance with Section 404 of the
Sarbanes-Oxley Act.
To imply that the accounting fees Asure paid in fiscal 2008 are
representative of a typical year is misleading. Accounting costs
related to the iEmployee acquisition and Sarbanes-Oxley were
one-time costs that the Company does not expect to encounter again.
By contrast, in the three years prior to fiscal 2008, the Company
spent $240,000, $242,000 and $253,150 on accounting fees, which are
similar to fees typically paid by comparable-sized companies. The
Company expects its accounting fees for fiscal 2009 to be more
aligned with these historical figures. Audit fees are always
approved in advance by the Company's independent audit
committee.
PINNACLE/RED OAK FICTION #4: Citing performance results that are
irrelevant to the Company's current business model.
FACT: Pinnacle/Red Oak's references to total losses incurred by
the Company since 2003 cover a time period during which the
Company's operations were not comparable to its current business
model. Most of this period also is irrelevant to the dissident
group's relatively brief involvement as stockholders.
The Company has exited legacy businesses that were facing
eroding market demand and relevancy, eliminated 93% of expenses,
and integrated two strategic acquisitions -- NetSimplicity and
iEmployee -- in its planned, multi-year transformation to serve
high-growth, high-margin markets. As a still-young tech start-up,
Asure successfully achieved its stated strategic goal of becoming a
pure-play software company in the first quarter of fiscal 2008,
when it sunset its intellectual property licensing practice. During
the more relevant time period since then, the Company's losses have
totaled approximately $9.8 million. At the same time, the Company
has reduced its cash flow burn rate and has plans to break even by
the end of this calendar year, with the objective of reaching $30
million in revenues and 10% profit exiting fiscal 2013.
PINNACLE/RED OAK FICTION #5: "The incumbent Board and management
have ignored shareholder concerns and limited discussion with
holders."
FACT: Asure has an excellent and demonstrated history of
transparency and full disclosure to stockholders.
Pinnacle/Red Oak and Mr. Sandberg have falsely reported that
Asure refused to allow questions on our most recent quarterly
earnings conference call. On these calls, our long-time policy is
to take questions from analysts and registered brokers only.
Private investors are not and never have been eligible to ask
questions on our earnings calls. On our June 18, 2009, conference
call, the only qualified party in the queue to ask a question was
Red Oak, and even Mr. Sandberg has agreed that Red Oak's
participation on the call could be deemed inappropriate, given the
adversary relationship resulting from their instigation of the
proxy fight.
The Board's dedication to sound corporate governance,
transparency and full disclosure cannot be questioned. The Company
has submitted all necessary regulatory filings and disclosures and
has not had a financial restatement or audit adjustment in the past
10 years.
FACT: The Board of Directors of Asure Software and its
management team are committed to maintaining an open dialogue with
all its stockholders and potential investors.
The leadership team of Asure Software is -- and always will be
-- available for an open discussion with any stockholder (of any
sized holdings) or other parties who are interested in our
business. We are available for communication via phone, e-mail and
letter, and can make arrangements for face-to-face meetings when
appropriate. Our commitment to listen to any and all concerns, as
well as answer any and all questions to the best of our ability,
remains unchanged. That's why we find it particularly ironic that
Pinnacle/Red Oak has refused to accept our invitations to meet with
us and the entire Asure Board in Austin, Texas.
PINNACLE/RED OAK FICTION #6: "We believe it's in the
shareholder's best interest to be represented by Board members who
own significant amounts of stock and thus share more directly in
the results of their decisions."
FACT: The ownership stake of Asure's directors is appropriate
and aligns their interests with other stockholders.
Asure's current directors have significant "skin in the game" in
the form of stock ownership, and this has been the case far longer
than Pinnacle/Red Oak's relatively recent entry into the game. Our
directors have demonstrated their commitment to creating long-term
value, while Pinnacle/Red Oak has never articulated a plan for the
business. The current Board is experienced, but not entrenched.
Excluding President and CEO Nancy Harris who was just recently
named a director of the Company, our directors have an average
tenure of eight years on the Board. According to Directors and
Boards magazine, the current average tenure for directors at public
companies is approximately nine years.
While Pinnacle/Red Oak suggests that having more stock ownership
among the directors is better for a company, many experts disagree.
Such ownership can lead to short-term thinking (similar to that of
a hedge fund) which may not be in the best long-term interests of a
company and its shareholders. Fran Stoller, a corporate and
securities partner in the New York office of Loeb & Loeb LLP,
wrote recently that increasing director ownership is based on "the
largely unexplored yet persistent belief that this will improve
board (and, implicitly, corporate) performance." Unless empirical
support for this premise is presented, Stoller says, corporations
need to be mindful that stock ownership, in and of itself, does not
necessarily lead to exemplary behavior among directors and may
actually impair independent judgment, as well as provide a barrier
to board diversity.
PINNACLE/RED OAK FICTION #7: "(Asure directors) have re-priced
their own options not once but twice."
FACT: Asure has NEVER re-priced options for its directors. It
has re-priced stock options for employees to maintain an important
incentive program.
The Company re-priced these options to better reflect current
share price levels as a continued incentive for employees at a time
when no pay increases were being given and the cash bonus program
had been suspended. As other companies have done when faced with
similar declines in stock prices, we wanted to ensure that the
options were priced in such a way that they remained a true
incentive for employees. These options were re-priced according to
U.S. GAAP standards and all appropriate disclosures were made to
the Company's auditors, the SEC and to stockholders. We have never
re-priced options for directors.
PINNACLE/RED OAK FICTION #8: "The incumbent Board has allowed
the payment of consulting fees to a director without shareholder
approval and without detailed disclosure (other than the amounts
paid)."
FACT: Paying consulting fees to a director does not require
shareholder approval and Asure did disclose to the SEC the nominal
fees paid to one of its directors for a brief consulting engagement
related to the iEmployee acquisition in 2007.
PINNACLE/RED OAK FICTION #9: "Asure disclosed in their lawsuit
that they now have just over $8 million in cash and thus have
burned a whopping $3 million in shareholder money in just 2 months
since the April 30 quarter ended."
FACT: Asure reported $8.2 million in cash and cash equivalents
and $2.9 million in short-term investments for a total of $11.1
million at quarter-end on April 30, 2009. Pinnacle/Red Oak failed
to include the short-term equivalents in its calculations, instead
reporting the amount as "burned." This is a mistake that would not
be made by experienced accountants.
Even without SEC intervention or comment, Pinnacle/Red Oak has
now corrected this misrepresentation in its amended preliminary
proxy statement. However, the original misrepresentation is simply
another example of Pinnacle/Red Oak's carelessness and apparent
willingness to compromise accuracy in the interest of speed when it
comes to indicting the Company and its management.
CONCLUSION: The Pinnacle/Red Oak group is NOT interested in
casting the Company and its management team in a favorable light.
We disagree with many things they have said and implied, and will
continue to try to provide you, the stockholders, with accurate and
complete information and a balanced view.
We urge you to vote FOR your Board's nominees by signing, dating
and returning the Company's WHITE proxy card TODAY.
About Asure Software
Headquartered in Austin, Texas, Asure Software (ASUR), (a d/b/a
of Forgent Networks, Inc.), empowers small to mid-size
organizations and divisions of large enterprises to operate more
efficiently, increase worker productivity and reduce costs through
a comprehensive suite of on-demand workforce management software
and services. Asure's market-leading suite includes products that
optimize workforce time and attendance tracking, benefits
enrollment and tracking, pay stubs and W2 documentation, expense
management, and meeting and event management. With additional
offices in Warwick, Rhode Island, Vancouver, British Columbia, and
Mumbai, India, Asure serves 3,500 customers around the world. For
more information, please visit www.asuresoftware.com.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding
Asure's business which are not historical facts are
"forward-looking statements" that involve risks and uncertainties.
Such risks and uncertainties, which include those associated with
continued listing of the Company's securities on the NASDAQ Capital
Market, could cause actual results to differ from those contained
in the forward-looking statements.
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