Lisa Flynn – IR Pat Goepel – CEO Dave Scoglio – VP and CFO

Bryan Batista [ph] – Sterne Agee Mike Chadwick [ph]

Good day, ladies and gentlemen and welcome to the second quarter 2010 Asure Software earnings conference call. My name is Melalia and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Later, we will conducting a question-and-answer session towards the end of this conference. (Operator Instructions) I would now like to turn the presentation over to your host for today’s conference Ms. Lisa Flynn. Please proceed.

Thank you, Melalia. Welcome everyone to Asure Software’s conference call. Before we start, I’d like to mention that some of the statements made by management during this call might include projections, estimates and other forward-looking information. This will include any discussion of the company’s business outlook. These particular forward-looking statements and all of the statements that may be made on this call that are not historical are subject to a number of risks and uncertainties that could affect their outcomes. You are urged to consider the risk factors relating to the company’s business contained in our latest periodic reports on file with the Securities and Exchange Commission. These risk factors are important and they could cause actual results to differ materially. This call is also being recorded on behalf of Asure Software and is copyrighted material. It cannot be recorded or rebroadcast without the company’s express permission and your participation implies consent to the call’s recording. After we have completed our review of the quarter, we’ll open up the call for questions from the financial community. I would now like to turn the call over to Mr. Pat Goepel, Chief Executive Officer of Asure Software. Pat.

Thank you, Lisa. My name is Pat Goepel. I am a CEO and Board Member of Asure. I am also a minority shareholder. And we are pleased to be with you today where we are announcing our second quarter fiscal results. The second quarter had a short period of November and December. In 2010, we will formally go to a calendar year. We are very proud of our results and to remind investors, we took over as a board and a management team in 2009. Our first priorities were to stabilize the business, the ownership structure, the NASDAQ listing and to make sure we looked and put into place a plan that would turn around Asure. We are making very, very strong progress against that plan. We are proud of our second quarter fiscal results. We had revenue growth, we had sales growth, we had EBITDA positive and net income positive for the quarter. The net income positive was for the first time in two and half years. So it is evidence of our turnaround that's in track. From a goals -- and we have talked about this in previous conference calls but our goals are to simplify the business, really level the cost structure and rightsize the cost structure to the size of Asure to grow the business and to grow the business around a SaaS or a software as a service technology company, to improve our products and grow the revenue from our products and our client relationships, to improve our client relationships and to unite the employees whether they are in Mumbai, Vancouver, Austin or Warwick around one common goal. I’m pleased to report that we are starting to do that as a company and the outward signs are getting very healthy. In the quarter, we had key client wins on the NetSimplicity side of the business in Computer Associates, GE Asset Management, The Florida School of Law, Foley -- Foley & Lardner, a law firm at Milwaukee, Wisconsin. Pens State University, salesforce.com, were two key wins that we had in iEmployee business. We also have some very strong assets that we feel our undervalued at Asure, where we have a real estate deal that I’m personally committing to resolving in a better way for Asure. Net operating losses that have up to 20 years of our tax effects or a net tax effects of up to 35% of federal taxes, plus some state tax savings and in that turnaround, from time to time, you are going to have some bumpiness. But in the second quarter results, we were very, very positive and we are hitting in all cylinders. With the actual details of the financial results reporting, I’m going to turn the call now to Dave Scoglio. And let me tell you, Dave has been with the company as a consultant and formally we announced the CFO role. We are very pleased to have Dave. He has a tremendous background and he has jumped in with both feet. Also, we have a good finance staff that’s been in place for a while under Paul Tesluk and I’m very pleased with both -- with both of them being in the positions for this past quarter. So with that, David?

Thank you, Pat. I’m going to take just a few minutes view over the financial results of our fiscal Q2, 2010 period, which was a short period consisting of November and December 2009, due to our recent decision to switch to a calendar year. I will also be comparing these results relative to the same two-month period in 2008. Revenue for the current period grew 14% over the prior period in 2008 from $1.47 million to $1.68 million. Excluding the divested Visual Asset Manager product revenue that we did have in 2008, this measure would have been close to the 20%. The growth was driven by significant increases in hardware sales in both product lines, iEmployee and NetSimplicity and also continued growth in our SaaS offering, particularly on the NetSimplicity side. Gross margin contribution increase 6% over the same period in 2008. However, margin percent was slightly down due to product mix, specifically the aforementioned hardware sales. Operating expenses decreased 49% over the prior period, reduced from 2.3 million to 1.16 million, largely due to compensation and other cost reductions. Compensation reductions were driven by lower head count and rate per head efficiencies including a reduced overhead and executive structure. Other cost reductions were driven by one-time items in 2009 including negotiated reductions in certain outstanding tables deemed excessive by current management. Net income for the period was $49,000 or $0.02 per share which is a turnaround of 936,000 over the prior period. This concludes our discussions of the financial results for Q2 2010. Please do note that our next reporting period will be for calendar year quarter ending March 31, 2010. At this time, I would like to turn the discussion back to Pat Goepel for closing comments and questions.

Thank you, Dave. So shareholders were pleased to report that we had a great quarter. More importantly, we are focused on simplifying the business, improving our cost structure, improving our products and adding value in our products for our customers. Our client satisfaction has been strong and we are winning new business. As we look forward to 2010, the evidence of our 2009 quarter will bode very, very well for 2010. As we look at our 2010 in simplifying the business, we are also going to work through our real estate lease, which is problematic from a cost structure and our Austin headquarters building We also are committed to growing top line at a rate of 20%. We also feel that we have our 20-20 plan in place, where we can grow at 20% in the EBITDA margin, can start to look at 20% especially as we work through the real estate issue in Austin. The core business, as we look to our 2010 plan and look to the first quarter in 2010, January was on track in almost every area. We look at our non-core assets. We will continue to focus on unlocking value. We feel Asure has a lot of momentum going forward. We thank you for your interest. We thank you for your support and as a shareholder, we treat this business very seriously and we feel that we have a great opportunity going forward. With that, I will turn the conference call open to any questions that you may have on the quarter of the business for either myself or David Scoglio, our CFO. With that operator, could we take the first question?

Thank you. (Operator Instructions) Your first question comes from the line of Bryan Batista [ph] with Sterne Agee. Bryan Batista – Sterne Agee: Hi. Good afternoon. I recognized what you guys have done as far as implementing the new CEO or CFO, cutting down your costs. I was wondering if there are any projections for increasing revenue?

Thanks, Bryan. This is Pat Goepel. What we look into the components of increasing revenue, first of all we are very pleased that 14% revenue growth this quarter and 20% if you included the divested Visual Asset Manager. What we have is we have a -- on NetSimplicity, we’re committed to growing the business and growing the current business organically with our SaaS products or software or service products. We feel like the future of the business and particularly in that product, there should be no reason why we couldn't get a lot of revenue growth. In addition to our traditional business in NetSimplicity, we have also started a smaller market product in NetSimplicity. And it is early in the sense that we are marketing over the web, a small business can swipe a credit card at either $49 a month or $99 and they could buy the product online. That is the first for us and in the first quarter, we have already had a handful of sales. What we believe is this is another revenue stream that will happen in the future organically where we don’t have the cost of a traditional sale but it's more a marketing sale and a Software as a Service. So we feel like we will have another line extension from that. It’s a brand new products, so too new to tell thus far but we are very pleased that we've had a handful of sales thus far in 2010. In addition to that, we have a base around meeting room management. We will look to expand and be opportunistic in both channel arrangements, international arrangements and potentially widening of the product in looking at channel arrangements or potentially acquisitions in the future. Around iemployee, we are very pleased with our growth in iEmployee. It's already a Software as a Service business. We are going to look at penetrating customers’ different products around it whether it's time clock sales or whether it's increased modules or reporting or professional services around our core business. That will be organically. We’re also going to be opportunistic in looking at new channel development. We have been very pleased with our channel partners thus far and simply put some of our channels have many more feet on the street that can give us leads and we feel that there is an opportunity to grow through those channels. So our company is focused on a top line. As I mentioned before, we anticipate growing at 20%. This quarter was good evidence of growth. And in the future, not only will we grow but we will have a repetitive base to grow from. Approximately 72% or so of our revenue is repetitive today. We anticipate that going up over time and then we will be opportunistic in acquisitions or other channel partners that will drive growth in addition to what we spoke about. Bryan Batista – Sterne Agee: :

Thank you.

(Operator Instructions) Your next question comes from line of Mike Chadwick [ph], private investor.

Yeah. Hi gentlemen. Congratulations on the positive results. I just have a few questions for you today. First, with regard to margins, can you break out the core software and SaaS margin versus the hardware sales margins?

Hey. Mike, this is Pat. We haven’t broke that out exactly. Suffice to say that core Software as a Service margins typically are a little bit higher than the hardware sales. And when you look in the business from hardware sales, we have different types of hardware, whether it's time clock or TVs or monitoring of conference rooms. So we haven't published that number but suffice to say Software as a Service margins are a little bit more than the hardware margins today.

Okay. So in terms of the hardware sales, do you -- do you think or anticipate that they will continue to significantly increase as a percentage of sales similar to this quarter?

I think we achieved a well-rounded mix. I think we will have hardware sales that will continue as -- in overall picture. So we are not selling hardware for hardware sake. We are selling hardware as a complete package in over -- in the overall SaaS business and to have some stickiness to our customers on an ongoing basis. We are committed to having profitable business lines and the hardware we anticipate will be profitable. But the pure software probably has more margin at this point in time in the hardware.

Right. Understood. Thanks. On the idea that you introduce last Q call, Pat, which was the 20-20 plan and then reiterated a guidance basically today. I’m assuming your estimates are based on certain factors such as projected IT spending reports, some level of GDP increase or maybe even something specific like analyst firms forecasted growth on the human resources SaaS vector. Can you provide some insight on what assumptions or factors you are using to target those goals?

Sure. First of all, as you know, Mike, in both product lines, we feel like we have big market. The iEmployee plays in the space of human resources and workplace productivity and depending on study you read from Gartner or IDC or what have you. They are billion, billion dollar marketplaces. So and typically, they are growing at 6% to 10% depending on study you read. We feel like we have an opportunity with the relationships we have and what the products we have that we can not only grow at market but we have an opportunity as a smaller company to grow ahead of market. We also spend a significant time nuturing our relationships and talking to people and believe that we’ve had some headway in ultimately growing the business and have that opportunity to do that. NetSimplicity, again, we’re in a big market compared to depending on who defines it, whether it is Gartner or IDC or some of the other analysts. And we feel like we have an opportunity to grow out the capability of NetSimplicity and we also feel like we have the capability to go with a touchless product that makes NetSimplicity more affordable to small businesses. But in addition to some of the key wins that we had with Computer Associates and GE Asset Management, they are available to either divisions or to larger companies as well. So when we look at that and then we break it down to our core business, where we feel like we have good marketing programs, some good relationships to draw traffic to the web and then we have salespeople following up on inside sales and the leads, we think there is no reason why that business model in both organizations would support to the 20-20 plan. As far as the expenses and profitability of the 20-20 plan, what we've tried to do is invest in the sales and the client relationships and then where we felt like we needed to be leaner, we tried to cut away from the customer. Some of that was in what we felt were excess management, more of a leaner organization and we feel that we've been successful in doing that. Also, we are investing in client relationships where we are closer to the customer and we feel that happy customers make more profitable relationships and they buy more stuff. So that is a key component as relative to our plan as well. As far as drivers of it, from an economy perspective, we have basically maintained a same-store sales number that would -- I think by the end of the year would grow at about 1% or so. So there is a number of different factors, price increases, same-store sales, installations, client relationships and then obviously, the market. We've taken all that in account in trying to build a plan that is a winner for our employees, clients, shareholders as well.

Got it. Thanks. And then lastly, can you provide us some level of projection in relation to cash balances and short-term investments at the end of calendar year 2010? This would be excluding any acquisitions or those types of expenses.

Yeah. Dave, I will let you provide that range of cash.

Sure. Hi, Mike. How are you?

Good. Thank you.

Good. So, as we stated from a cash perspective, right now we are at 2.262. My current projection for year-end is just north of $3 million.

And Mike, as you know, there are a lot of factors into that. We are going to actively look at our lease relationship in Austin. We are going to actively look at different channel partnerships, et cetera. But that is the current plan without any one-time items.

All right. Super. Thank you.

Thanks Mike.

And at this time, there are no more any questions in the queue. I would now like to hand the call over to Mr. Pat Goepel for closing remarks.

Great. Well. As we iterated, I think Asure had a great quarter. We are in the middle of the turnaround. We feel like the turn around is on track. We thank you for your interest and your support. We are having a lot of fun but in the turnaround, there is always challenges and problems to work through. We are tackling them head on. We are open and honest for the communication about those problems and we'll share our successes. We are happy you are a shareholder and our next call will be after the first quarter of the calendar year, sometime after the March 31 period and we will share with you at that time those results and we look forward to your participation on that call as well as we thank you for your interest in the Asure. Bye now.

Thank you for your participation on today’s conference. This concludes the presentation and you may now disconnect. Have a great day.