The following review of Asure's financial position as of March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012 and 2011 should be read in conjunction with the Company's 2011 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Asure's internet website address is http://www.asuresoftware.com. The Company's annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available through the investor relations page of the Company's internet website free of charge as soon as reasonably practicable after they are electronically filed, or furnished to, the Securities and Exchange Commission. Asure's internet website and the information contained therein or connected thereto are not intended to be incorporated into this Quarterly Report on Form 10-Q.

The Company currently offers two main product lines in its software and services business: NetSimplicity and iEmployee. Asure's NetSimplicity product line provides simple and affordable solutions to common office administration problems. NetSimplicity's flagship product, Meeting Room Manager ("MRM"), automates the entire facility scheduling process: reserving rooms, requesting equipment, ordering food, sending invitations, reporting on the meeting environment and more. Asure's iEmployee product line helps simplify the HR process and improves employee productivity by managing and communicating human resources, employee benefits and payroll information. iEmployee's web-based solutions include Time & Attendance, Timesheets, Human Resource Benefits, Expenses and others.

On March 27, 2012, the Board of Directors declared a 3-for-2 stock split, payable April 30, 2012 to the holders of record of the Company's common stock as of the close of business on April 23, 2012. The Company will make cash payments based upon the closing price of the Company's shares on the record date in lieu of the issuance of fractional shares. Share and per share information in these financial statements reflect the impact of the 3 for 2 stock split.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Report represent forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results of operations, levels of activity, economic performance, financial condition or achievements to be materially different from future results of operations, levels of activity, economic performance, financial condition or achievements as expressed or implied by such forward-looking statements.

Asure has attempted to identify these forward-looking statements with the words "believes," "estimates," "plans," "expects," "anticipates," "may," "could" and other similar expressions. Although these forward-looking statements reflect management's current plans and expectations, which are believed to be reasonable as of the filing date of this report, they inherently are subject to certain risks and uncertainties. Additionally, Asure is under no obligation to update any of the forward-looking statements after the date of this Form 10-Q to conform such statements to actual results.

RESULTS OF OPERATIONS

The following table sets forth the percentage of total revenues represented by
certain items in Asure's Consolidated Statements of Operations for the fiscal
periods indicated:

                                                       FOR THE THREE
                                                       MONTHS ENDED
                                                         March 31,
                                                     2012         2011
              Revenues                                  100 %       100 %
              Gross margin                             74.8        81.3
              Selling, general and administrative      51.4        59.4
              Research and development                 14.2        16.6
              Amortization of intangible assets         7.0         6.3
              Total operating expenses                 72.7        82.4
              Other (Expense), net                    (21.5 )      (1.1 )
              Net (loss)                              (20.4 )      (2.5 )

THREE MONTHS ENDED MARCH 31, 2012 AND 2011

Revenues

Consolidated revenues represent the combined revenues of the Company and its subsidiaries, including sales of the Company's scheduling software, human resource and time and attendance software, complementary hardware devices to enhance its software products, software maintenance and support services, installation and training services and other professional services.

Revenues for the three months ended March 31, 2012 were $4,153, an increase of $1,796, or 76.2%, from the $2,357 reported for the three months ended March 31, 2011. This was primarily due to $1,710 of revenues generated by ADI Time and Legiant acquired during the fourth quarter of 2011.

Asure will continue to target small and medium businesses and divisions of enterprises. In addition to continuing to develop its workforce management solutions and release new software updates and enhancements, the Company is actively exploring other opportunities to acquire additional products or technologies to complement its current software and services. In 2011, the Company acquired ADI Time and Legiant to enhance both its channel delivery capabilities and its time and labor management technology.

Asure also is implementing marketing initiatives, including tailoring its solutions to provide increased value and a simplified purchasing model to targeted customers. As the overall workforce management solutions market continues to experience significant growth related to software as a service ("SaaS") products, Asure will continue to focus on sales of its MRM, iEmployee and ADI SaaS products. .

Gross Margin

Gross margins for the three months ended March 31, 2012 were $3,107, an increase of $1,190, or 62.1%, from the $1,917 reported for the three months ended March 31, 2011. Gross margins as a percentage of revenues were 74.8% and 81.3% for the three months ended March 31, 2012 and 2011, respectively. Of the total increase in gross margins of $1,190, $ 1,095 was attributable to the acquisition of ADI Time and Legiant in the fourth quarter 2011.

Selling, General and Administrative

Selling, general and administrative ("SG&A") expenses for the three months ended March 31, 2012 were $2,135, an increase of $734 or 52.4%, from the $1,401 reported for the three months ended March 31, 2011. SG&A expenses as a percentage of revenues were 51.4% and 59.4% for the three months ended March 31, 2012 and 2011, respectively. The increase was primarily due to expenses associated with the acquisitions of ADI Time and Legiant and executive bonuses.

Throughout its operations, Asure continues to evaluate any unnecessary SG&A expenses and plans to further reduce expenses as appropriate.

Research and Development

Research and development ("R&D") expenses for the three months ended March 31, 2012 were $591, an increase of $200, or 51.2%, from the $391 reported for the three months ended March 31, 2011. R&D expenses as a percentage of revenues were 14.2% and 16.6% for the three months ended March 31, 2012 and 2011, respectively. Of the total increase in R&D expenses , $275 was driven by acquisition of ADI Time and Legiant in the fourth quarter of 2011

Asure continues to improve its products and technologies through organic improvements and through acquired intellectual property. The workforce product line continued to innovate by adding mobile solutions, world class SaaS hosting infrastructure and a proprietary time clock product set. The proprietary time clock product set includes multiple models which incorporate keypad and touch screen user interfaces, as well as proximity card, bar code card, and biometric data input. The workforce software product lines continued to evolve through quarterly feature releases and monthly maintenance releases. These product releases continued to serve client requests, and maintain a technological edge with competition.

Additionally, Asure continues to develop Meeting Room Manager and released a few minor versions in 2010 that enhanced the Microsoft Outlook Plug-in, Web and Interactive LCD interfaces, allowed assigned delegates the ability to schedule meetings on behalf of others, and provided more sophisticated conflict resolution options for scheduling recurring meetings via Microsoft Outlook.

Asure's development efforts for future releases and enhancements are driven by feedback received from its existing and potential customers and by gauging market trends. Management believes it has the appropriate development team to design and further improve its workforce management solutions.

Amortization of Intangible Assets in Operating Expenses

Amortization expenses for the three months ended March 31, 2012 were $292, an increase of $143 or 96% from the $149 reported for the three months ended March 31, 2011. Amortization expenses as a percentage of revenues were 7.0% and 6.3% for the three months ended March 31, 2012 and 2011, respectively The increase in amortization expense relate to the acquisition of ADI Time and Legiant in the fourth quarter of 2011.

Other Income and Expense

Other expense for the period ended March 31, 2012 was $891, an increase of $864 from the $27 reported for the three months ended March 31, 2011. Other expense as a percentage of revenues was 21.5% and 1.1% for the three months ended March 31, 2012 and 2011, respectively. The increase in other expense is due to loss on debt conversion $199, amortization of OID and derivative mark-to-market of $535 and quarterly Interest on Debt and others $120.

Net Loss

Asure generated a net loss of $847, or $0.18 per share, during the three months ended March 31, 2012, compared to a net loss of $60 or $0.01 per share reported for the three months ended March 31, 2011. Net loss as a percentage of total revenues were 20.4% for the three months ended March 31, 2012 compared to Net Loss of 2.5% for the three months ended March 31, 2011.

Asure will continue to implement its corporate strategy for growing its software and services business by modestly investing in areas that directly generate revenue and positive cash flows for the Company. However, uncertainties and challenges remain, especially during this macroeconomic environment downturn, and there can be no assurance that the Company can successfully grow its revenues or achieve profitability during the remainder of fiscal year 2012.

LIQUIDITY AND CAPITAL RESOURCES

                                                 FOR THE THREE MONTHS ENDED
                                                         MARCH 31,
                                                 2012                  2011
                                                       (in thousands)

     Working capital                         $      (4,254 )       $       (147 )
     Cash, cash equivalents and short-term
     investments                                     1,189                1,375
     Cash provided/(used) in operating
     activities                                        609                  312
     Cash provided/(used) in investing
     activities                                        (21 )                 (8 )
     Cash provided/(used) in financing
     activities                                       (494 )                (12 )

Working capital was ($4,254) on March 31, 2012, a decrease of $4,107 from ($147) on March 31, 2011. The decrease was primarily due to increase in Deferred Revenue of acquired companies $2,814, increase in account payable $769 and an increase of $500 in note payable.

Cash provided by operating activities was $609 for the three months ended March 31, 2012 primarily due to a loss of ($847) which was offset by the non-cash loss on debt conversion of $199, depreciation and amortization of $404, Interest expense on amortization of OID and derivative mark-to-market of $535, and due to decrease in accounts payable, accrued expenses and deferred revenue of $
246. Cash provided by operating activities was $312 for the three months ended March 31, 2011 primarily to reduction in accounts receivable of $206; $238 of depreciation and amortization expenses; a net loss of $60 and a decrease in accrued expenses of $71.

Cash used in investing activities was ($21) for the three months ended March 31, 2012 due to net purchases of property and equipment for $45 which was offset by collection of notes receivable of $24. Cash used in investing activities was ($8) for the three months ended March 31, 2011 due to net purchases of property and equipment. Asure's current operations are not capital intensive and management does not anticipate any significant capital expenditures during the remainder of calendar year 2012.

The Company leases office space and equipment under non-cancelable operating leases that expire at various dates through 2015. Certain leases obligate Asure to pay property taxes, maintenance and insurance and include escalation clauses. Approximately $1,351 or 77.3% of the Company's total operating lease obligations relate to its corporate office facility at Wild Basin in Austin, Texas.

Management continues to evaluate and reduce any unnecessary expenditure, while continuing to closely monitor all of its cash sources and uses as it manages its operations.

Cash used in financing activities was ($494) for the three months ended March 31, 2012 was primarily related to payments on notes payable conversion of $222 and on capital leases and notes payable of $286. Cash used in financing activities was ($12) for the three months ended March 31, 2011 related to payments on capital leases. Management believes it currently has sufficient cash and short-term investments on hand to fund its operations during the next twelve months and beyond without needing to obtain long-term financing. Therefore, the Company does not anticipate that it will be affected by any credit shortage in the current economic business environment.

Pursuant to Asure's stock repurchase plan, the Company is allowed to repurchase up to 300,000 shares (adjusted for the 10 to 1 reverse stock split) of the Company's common stock. In total, Asure has repurchased 256,107 shares for approximately $5.0 million over the life of the plan, including 43,364 shares of common stock for $110 purchased in 2010. Management will periodically assess repurchasing additional shares, depending on the Company's cash position, market conditions and other factors.

As of March 31, 2012, Asure's principal source of liquidity consisted of $1,189 of current cash and cash equivalents as well as future cash generated from operations. The Company is continuing to reduce expenses and thus may utilize its cash balances in the short-term to reduce long-term costs. The Company expects that it will be able to generate positive cash flows from operating activities for the remainder of 2012.

Management is focused on growing its existing software operations and looking to make strategic acquisitions in the near future. In the short-term, any acquisitions will be funded with equity, cash on the balance sheet, cash from operations, and cash or debt raised from outside sources.

There is no assurance that the Company will be able to grow its cash balances or limit its cash consumption and thus maintain sufficient cash balances, and it is possible that the Company's future business demands may lead to cash utilization at levels greater than recently experienced. Management believes that the Company has sufficient capital and liquidity to fund and cultivate the growth of its current and future operations for the next 12 months and thereafter. However, due to uncertainties related to the timing and costs of these efforts, Asure may need to raise additional capital in the future. Yet, there is no assurance that the Company will be able to raise additional capital if and when it is needed.

CRITICAL ACCOUNTING POLICIES

There were no material changes to our critical accounting policies and estimates since December 31, 2011. For additional information on critical accounting policies, refer to "Management's Discussion and Analysis" in our 2010 Annual Report on Form 10-K.