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INVESTMENTS AND FAIR VALUE MEASUREMENTS | 9 Months Ended
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Sep. 30, 2020
Fair Value Disclosures [Abstract] |
Fair Value Disclosures [Text Block] | NOTE 3 – INVESTMENTS AND FAIR VALUE MEASUREMENTS As of September 30, 2020, and December 31, 2019, funds held for clients invested in available-for-sale securities consisting of government and commercial bonds, including mortgage-backed securities, amounted to $26,958 and $24,136, respectively. As of September 30, 2020, and December 31, 2019, funds held for clients invested in money market funds and other cash equivalents amounted to $37,265 and $48,500, respectively. Additionally, as of September 30, 2020, we had $8,248 of operating funds in money market funds, classified as cash equivalents. Cash equivalents as of December 31, 2019 were not material. Investments classified as available-for-sale consisted of the following:
|  | September 30, 2020 |
|  | Amortized Cost |  |  | Gross Unrealized Gains (1) |  |  | Gross Unrealized Losses (1) |  |  | Aggregate Estimated Fair Value |
Funds Held for Clients (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  | $ | 8,844 |  |  | $ | 233 |  |  | $ | - |  |  | $ | 9,077 |
Corporate debt securities |  |  | 9,438 |  |  |  | 288 |  |  |  | - |  |  |  | 9,726 |
Municipal bonds |  |  | 7,561 |  |  |  | 101 |  |  |  | (7 | ) |  |  | 7,655 |
US Government agency securities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Asset-backed securities |  |  | 498 |  |  |  | 2 |  |  |  | - |  |  |  | 500 |
Total |  | $ | 26,341 |  |  | $ | 624 |  |  | $ | (7 | ) |  | $ | 26,958 |
|  | December 31, 2019 |
|  | Amortized Cost |  |  | Gross Unrealized Gains (1) |  |  | Gross Unrealized Losses (1) |  |  | Aggregate Estimated Fair Value |
Funds Held for Clients (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  | $ | 8,828 |  |  | $ | 11 |  |  | $ | - |  |  | $ | 8,839 |
Corporate debt securities |  |  | 6,883 |  |  |  | 6 |  |  |  | (9 | ) |  |  | 6,880 |
Municipal bonds |  |  | 6,383 |  |  |  | 6 |  |  |  | (7 | ) |  |  | 6,382 |
US Government agency securities |  |  | 1,000 |  |  |  | - |  |  |  | - |  |  |  | 1,000 |
Asset-backed securities |  |  | 1,067 |  |  |  | - |  |  |  | (32 | ) |  |  | 1,035 |
Total |  | $ | 24,161 |  |  | $ | 23 |  |  | $ | (48 | ) |  | $ | 24,136 |
| (1) | Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. As of September 30, 2020 and December 31, 2019, there were 74 and 53 securities, respectively, in an unrealized gain position and there were 1 and 18 securities, respectively, in an unrealized loss position. As of September 30, 2020, we had $7 in unrealized losses. As of December 31, 2019, these unrealized losses were less than $35 individually and $50 in the aggregate. These securities have not been in a continuous unrealized gain or loss position for more than 12 months. We do not intend to sell these investments and we do not expect to sell these investments before recovery of their amortized cost basis, which may be at maturity. We review our investments to identify and evaluate investments that indicate possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.
| (2) | At September 30, 2020 and December 31, 2019, none of these securities were classified as cash and cash equivalents on the accompanying condensed consolidated balance sheets.
Expected maturities of available-for-sale securities as of September 30, 2020 are as follows:
Expected Maturities |  | Amount |
One year or less |  | $ | 5,695 |
After one year through five years |  |  | 21,263 |
After five years through 10 years |  |  | - |
After 10 years |  |  | - |
|  | $ | 26,958 |
In July 2020, we acquired certain assets of a payroll tax business. The initial Purchase price for the assets was $4.25 million, which we paid cash at closing. The seller will be paid additional consideration for the assets based on the trailing twelve-month revenue at each of April 30, 2021 and October 31, 2021. Contingent purchase consideration, if any, will generally be made by May 30, 2021 and December 30, 2021. The payment of the contingent consideration paid will be contingent on certain thresholds set forth in the asset purchase agreement. We utilized a Monte Carlo simulation to determine the fair value of the contingent consideration. There was no adjustment to the fair value of the contingent consideration at September 30, 2020. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy, which is based on the reliability of the inputs used in measuring fair values. These tiers include:
| Level 1: | Quoted prices in active markets for identical assets or liabilities;
| Level 2: | Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and
| Level 3: | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table presents the fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, respectively:
|  | September 30, 2020 |
|  | Total Carrying Value |  |  | Quoted Prices in Active Market (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 8,248 |  |  | $ | 8,248 |  |  | $ | - |  |  | $ | - |
Funds held for clients |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  |  | 37,265 |  |  |  | 37,265 |  |  |  | - |  |  |  | - |
Available-for-sale securities |  |  | 26,958 |  |  |  | - |  |  |  | 26,958 |  |  |  | - |
Total |  | $ | 72,471 |  |  | $ | 45,513 |  |  | $ | 26,958 |  |  | $ | - |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent purchase consideration |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 2,745 |
Total |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 2,745 |
|  | December 31, 2019 |
|  | Total Carrying Value |  |  | Quoted Prices in Active Market (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Funds held for clients |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 48,500 |  |  | $ | 48,500 |  |  | $ | - |  |  | $ | - |
Available-for-sale securities |  |  | 24,136 |  |  |  | - |  |  |  | 24,136 |  |  |  | - |
Total |  | $ | 72,636 |  |  | $ | 48,500 |  |  | $ | 24,136 |  |  | $ | - |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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