What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-03-25 compared with 2020-03-26 · 406 added, 297 removed, 937 unchanged (43% of the section changed)

23 unchanged sentences

Chairman, President, Chief Executive Officer and Director

Christine Dye

Joseph Macaluso

Chief Financial Officer

Stanley Wunderlich

Joseph Macaluso

Kenneth Edwards

John Schachtel

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Meller’s specific experience, qualifications, attributes and skills in connection with his appointment to our board, we took into account his experience in the industry and his knowledge of running and managing the Company.

Christine Dye, Chief Financial Officer

Dye has over 20 years of financial management experience within technology solution organizations, including serving as Chief Financial Officer at three previous companies.

As CFO of Send Word Now, Inc., and later as CFO at On-Net Surveillance Systems, both private-equity sponsored companies, she assisted in the sale of both businesses.

In addition, she was previously Finance Director at Citrix Systems, Inc., where she also served as part of the leadership team for GoToAssist™ and the Audio Conferencing division.

Dye earned her B.S.

in Accounting from the University of North Carolina at Charlotte, and is a Certified Public Accountant in New Jersey.

Joseph Macaluso, Chief Financial Officer

Joseph Macaluso has over 30 years of experience in financial management.

Macaluso has served as Chairman of the Audit Committee and a Director of the Company since 2015 before becoming its Chief Financial Officer on January 4, 2021.

Macaluso has been the Principal Accounting Officer of Tel-Instrument Electronics Corp., a developer and manufacturer of avionics test equipment for both the commercial and military markets since 2002.

Previously, he had been involved in companies in the medical device and technology industries holding positions including Chief Financial Officer, Treasurer and Controller.

Macaluso has a Bachelor of Science degree in Accounting from Fairfield University.

Stanley Wunderlich, Director

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Wunderlich’s experience, qualifications, attributes and skills in connection with his appointment to our Board, we took into account his experience in finance and investor relations.

Joseph Macaluso, Director

Joseph Macaluso has over 30 years of experience in financial management.

Previously, he had been involved in companies in the medical device and technology industries holding positions including Chief Financial Officer, Treasurer and Controller.

Macaluso has a Bachelor of Science degree in Accounting from Fairfield University.

In evaluating Mr.

Macaluso’s specific experience, qualifications, attributes and skills in connection with his appointment to Board, we took into account his expertise in general management, finance, corporate governance and strategic planning, as well as his experience in operations and mergers and acquisitions.

Kenneth Edwards, Director

Edwards combines over 40 years of experience in the accounting and finance industry.

Previously, he has been involved with a few certified public accounting firms as well as companies in various other industries holding positions including Partner, Managing Director, Chief Financial Officer and Senior Vice-President of Finance.

Ken currently serves as Chief Financial Officer of Edison Learning, Inc., an Education Management Company.

Ken joined Edison Learning, Inc.

in September 2017.

From July 2016 to September 2017, he was Managing Director for CFO Strategies, LLC, a company involved in outsourced CFO and Controller services.

From July 1981 to July 1993 and from October 2000 to June 2016, he was with several public accounting firms (Coopers & Lybrand, BDO Seidman, Edwards & Company and Cohn Reznick) in various roles until his retirement from Cohn Reznick as an Audit Partner in June 2016.

During the period from July 1993 to July 1997, he served as Senior Vice President of Finance for Home State Holdings, Inc., an insurance holding company that focused on property and casualty insurance, and from July 1997 to September 2000 as Chief Financial Officer for Menu Direct, Inc.

a specialty food manufacturer.

Ken is currently a member of the Advisory Board of Robert Wood Johnson University Hospital, located at Somerset New Jersey.

He previously served as a Director and Treasurer for the Urban League of Morris Country and as a Director and Chairperson for the Hope Chest Scholarship Foundation.

He has an undergraduate accounting degree from Goshen College.

The Board believes that Mr.

Edwards’ extensive experience as a CPA makes him well-qualified to help guide the Audit Committee of the Board.

The Board has determined that Mr.

Edwards meets the current independence and experience requirements contained in the listing standards of The Nasdaq Capital Markets and is an audit committee financial expert as defined in Securities and Exchange Commission regulations.

John Schachtel, Director

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Stanley Wunderlich, Mr.

Joseph Macaluso, and Mr.

Kenneth Edwards, and Mr.

John Schachtel.

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Wunderlich, Mr.

Macaluso, and Mr.

Edwards, and Mr.

Schachtel have qualified as independent and that they have no material relationship with us that might interfere with his or her exercise of independent judgment.

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Currently, the Audit Committee consists of Mr.

Joseph Macaluso, Mr.

Kenneth Edwards, Mr.

Stanley Wunderlich and Mr.

John Schachtel.

Macaluso, Chairman of the Audit Committee, may be deemed a financial expert as defined in Item 407(d)(5) of Regulation S-K.

Edwards, Chairman of the Audit Committee, may be deemed a financial expert as defined in Item 407(d)(5) of Regulation S-K.

The Audit Committee operates pursuant to a written charter (the “ Audit Committee Charter ”), a current copy of which is publicly available on the investor relations portion of the Company’s website at www.silversuntech.com.

Currently, the Compensation Committee consists of Mr.

Joseph Macaluso, Mr.

Stanley Wunderlich and Mr.

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Currently, the Nominating and Corporate Governance Committee consists of Mr.

Joseph Macaluso, Mr.

Kenneth Edwards, Mr.

Stanley Wunderlich and Mr.

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Code of Ethics

The Company has adopted a Code of Ethics for adherence by its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Controller to ensure honest and ethical conduct;

The Company has adopted a Code of Ethics for adherence by its Chief Executive Officer, Chief Financial Officer, and Controller to ensure honest and ethical conduct;

full, fair and proper disclosure of financial information in the Company’s periodic reports filed pursuant to the Securities Exchange Act of 1934;

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Nonqualified Deferred Compensation Earnings ($)

C ompensation ($)

Compensation ($)

President, Chief Executive Officer,

Compensation ($)

President, Chief Executive Officer, and Director

Christine Dye,

Chief Financial Officer (1) (2)

Effective November 13, 2020, resigned from her position as Chief Financial Officer of the Company.

To facilitate a transition of her duties, the Company and Ms.

Dye entered into a Separation Agreement, effective as of October 13, 2020 (the “Separation Agreement”).

Pursuant to the Separation Agreement, Ms.

Dye’s employment with the Company will end on November 13, 2020 and Ms.

Dye will receive separation payments in an aggregate gross amount of $47,400.00.

On January 4, 2021, the Board of Directors of SilverSun Technologies, Inc.

(the “Company”) appointed Mr.

Joseph Macaluso as Chief Financial Officer of the Company (the “CFO Appointment”).

Concurrently, Mr.

Joseph Macaluso submitted his resignation from his positions as a member of the Board and Chairman of the Audit Committee of the Company.

Mark Meller, Chief Executive Officer

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Meller of three hundred percent (300%), less $100,000 of his gross income for services rendered to the Company in each of the five prior calendar years should his employment be terminated following a change in control (as defined in the Meller Employment Agreement).

Joseph Macaluso, Chief Financial Officer

In connection with the CFO Appointment, Mr.

Macaluso entered into an offer letter (the “Offer Letter”) with the Company.

Pursuant to the Offer Letter, Mr.

Macaluso is to receive a base salary at the annual rate of Two Hundred Fifteen Thousand Dollars ($215,000) and a one-time cash sign on bonus in the amount of Thirty Thousand Dollars ($30,000).

Macaluso is eligible for a discretionary bonus of up to Twenty percent (20%) of the Annual Rate.

Pursuant to the Offer Letter, Mr.

Macaluso’s employment with the Company is at-will and it may be terminated with or without cause.

Outstanding Equity Awards at Fiscal Year-End 2020

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The following Director Compensation Table sets forth the compensation of our directors for the fiscal year ending on December 31, 2020.

Director Compensation for Fiscal 2019

or Paid in Cash

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John Schachtel

On January 4, 2021, the Board of Directors (the “Board”) of SilverSun Technologies, Inc.

(the “Company”) appointed Mr.

Joseph Macaluso as Chief Financial Officer of the Company (the “CFO Appointment”).

Concurrently, Mr.

Joseph Macaluso submitted his resignation from his positions as a member of the Board and Chairman of the Audit Committee of the Company, Mr.

Macaluso did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

On January 4, 2021, in connection with the Resignation of Mr.

Macaluso, the Board appointed Mr.

as a member of the Board and Chairman of the Audit Committee.

Edwards will be paid $1,667 per month, payable quarterly for his service as a member of the board and as Chairman of the Audit Committee.

We pay only our independent directors for their service on our board of directors.

Wunderlich is paid $1,000 per month, payable quarterly for his service as a member of the board and as Chairman of the Nominating and Governance Committee.

Macaluso is paid $1,500 per month, payable quarterly for his service as a member of the board and as Chairman of the Audit Committee.

Macaluso was paid $1,500 per month, payable quarterly for his service as a member of the board and as Chairman of the Audit Committee.

Schachtel is paid $1,500 per month, payable quarterly for his service as a member of the board and as Chairman of the Compensation Committee.

In 2019, the directors were each paid a bonus of $20,000 as a result of the Mapadoc sale.

Edwards will be paid $1,667 per month, payable quarterly for his service as a member of the board and as Chairman of the Audit Committee.

Director Agreements

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To date no warrants have been issued pursuant to this agreement.

On January 29, 2015, we entered into a director agreement (“Macaluso Director Agreement”) with Joseph Macaluso, pursuant to which Mr.

Macaluso was appointed to the Board effective January 29, 2015 (the “Effective Date”).

The Macaluso Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr.

Macaluso is re-elected to the Board.

Under the Macaluso Director Agreement, Mr.

Macaluso is to be paid a stipend of one thousand five hundred dollars ($1,500) (the “Stipend”) per month, payable quarterly.

Additionally, Mr.

Macaluso shall receive warrants (the “Warrants”) to purchase such number of shares of the Company’s Common Stock, as shall equal (the “Formula”) (A) $20,000 divided by (B) the closing price of the Common Stock on the date of grant of the Warrant.

The exercise price of the Warrant shall be the closing price on the date of the grant of such Warrant (the “Grant Date”) plus $0.01.

The Warrant shall be fully vested upon receipt thereof (the “Vesting Date”).

On March 27, 2017, we entered into a director agreement (“Schachtel Director Agreement”) with John Schachtel, pursuant to which Mr.

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The Warrant shall be fully vested upon receipt thereof (the “Vesting Date”).

On January 4, 2021, we entered into a director agreement (“Edwards Director Agreement”) with Kenneth Edwards, pursuant to which Mr.

Edwards was appointed to the Board effective January 4, 2021 (the “Effective Date”).

The Edwards Director Agreement may, at the option of the Board, be automatically renewed on such date that Mr.

Edwards is re-elected to the Board.

Under the Edwards Director Agreement, Mr.

Edwards is to be paid a stipend of $5,000 (the “Stipend”) payable quarterly.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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Chief Executive Officer, President and Chairman

Christine Dye (3)

Chief Financial Officer

Joseph Macaluso

Chief Financial Officer

Kenneth Edwards

Stanley Wunderlich

3 unchanged sentences

Jeffrey Roth (2)

Poplar Point Capital Management LLC (4)

Ault Global Holdings, Inc.

Bard Associates (4)

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Shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any other person.

All information about Mr.

Roth is based on a Form 4 filed with the SEC on February 16, 2021.

Roth is a former employee of SWK Technologies, Inc, a wholly-owned subsidiary of SilverSun Technologies, Inc.

Dye became Chief Financial Officer effective February 11, 2019.

All information about Poplar Point Capital Management, LLC, and related parties, is based on a Schedule 13G filed with the SEC on January 14, 2020.

All information about Ault Global Holdings, Inc., and related parties, is based on a Schedule 13-D filed with the SEC on March 18, 2021.

All information about Bard Associates, Inc.

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Securities Authorized for Issuance Under Equity Compensation Plans

There are 26,280 outstanding options to purchase our securities.

There are no outstanding options to purchase our securities as of December 31, 2020.

The following table sets forth information as of December 31, 2020 with respect to compensation plans (including individual compensation arrangements) under which our common shares are authorized for issuance, aggregated as follows:

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Certain Relationships and Related Transactions

The Company leased its Seattle office space from Mary Abdian, an employee of SWK, which expired September 30, 2018, however, this lease was terminated on May 31, 2018 by mutual consent.

The monthly rent for this office space was $3,090 and increased 3% each year.

The Company leased its Seattle, WA office space from Mary Abdian, an employee of SWK.

The lease which expires on September 30, 2018, was terminated by mutual consent on May 31, 2019, and the lease continued on a month-to-month basis with a monthly rent of approximately $2,066.

The Company ended the lease on May 31, 2020.

Total rent paid for 2020 and 2019 was $10,195 and $24,117 respectively under this lease.

Director Independence

On an annual basis, each director and executive officer will be obligated to disclose any transactions with the Company in which a director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest in accordance with Item 407(a) of Regulation S-K.

Following completion of these disclosures, the Board will make an annual determination as to the independence of each director using the current standards for “independence” that satisfy the criteria for the Nasdaq Capital Markets.

As of December 31, 2019, the Board determined that Mr.

Wunderlich, Mr.

Macaluso, and Mr.

Schachtel were independent.

Principal Accountant Fees and Services

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Audit - Related Fees

All Other Fees (a)

(a) All other fees include fees primarily for review and other services related to securities registration documents, assistance with other document reviews and assistance with revenue agent examination.

All Other Fees

Prior to engaging our accountants to perform a particular service, our Audit Committee obtains an estimate for the service to be performed.

All of the services described above were approved by the Audit Committee in accordance with its procedures.

All the services described above were approved by the Audit Committee in accordance with its procedures.

Asset Purchase Agreement, dated March 11, 2015, by and among SWK Technologies, Inc., 2000Soft, Inc.

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List of Subsidiaries

Consent of Independent Registered Public Accounting Firm

Certification of Principal Executive Officer pursuant to 18 U.S.C.

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March 25, 2021

/s/ Christine Dye

Christine Dye

/s/ Joseph Macaluso

Joseph Macaluso

Principal Financial Officer

6 unchanged sentences

Stanley Wunderlich

/s/ Joseph Macaluso

/s/ Kenneth Edwards

March 25, 2021

Joseph Macaluso

Kenneth Edwards

/s/ John Schachtel

1 unchanged sentence

John Schachtel

/s/ Christine Dye

/s/ Joseph Macaluso

Principal Financial Officer

March 25, 2021

Christine Dye

Joseph Macaluso

INDEX TO FINANCIAL STATEMENTS

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) related to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion or the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue recognition

Description of the Matter

As described in Note 2 to the financial statements, the Company recognizes revenue mainly from the resale of software products, maintenance and professional consulting services.

The Company enters into contracts with customers that may include combinations of products and services, which are generally distinct and recorded as separate performance obligations.

Revenue is recognized when control of the distinct performance obligation is transferred.

For example, product revenue is recognized at a point in time while maintenance and professional consulting services revenue is recognized over time.

Auditing the Company’s revenue is a critical audit matter due to the effort required to analyze the high volume of transactions, significance of the total amounts recognized as revenue, and timing of when revenue is recognized.

How We Addressed the Matter in Our Audit

Our audit procedures related to the Company’s revenue recognition included, among others, selecting a sample of recorded revenue transactions and examining customer source documents for each selection, including the contract or agreement and invoices and payment support.

In addition, we evaluated management’s application of the Company’s accounting policy, tested the mathematical calculation of revenue and associated timing of revenue recognized in the financial statements.

/s/ Friedman LLP

We have served as the Company’s auditor since 2004.

Marlton, New Jersey

East Hanover, New Jersey

March 25, 2021

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Prepaid expenses and other current assets

Current assets held for sale

Total current assets

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Deposits and other assets

Other assets held for sale

LIABILITIES & STOCKHOLDERS’ EQUITY

5 unchanged sentences

Income taxes payable

Contingent consideration – current portion

Long term debt – current portion

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Deferred revenue

Current liabilities held for sale

Total current liabilities

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No shares issued and outstanding

Series B Preferred Stock, $0.001 par value;

none and 1 share issued and outstanding as of December 31, 2019 and 2018 respectively

Common stock, $0.00001 par value;

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Total selling, general and administrative expenses

Loss from continuing operations

Income (loss) from continuing operations

Other (expense) income:

Interest expense, net

Total other (expense) income

Loss from continuing operations before taxes

Benefit (Provision) for income tax

Loss from continuing operations

Total other expense, net

Income (loss) from continuing operations before taxes

(Provision) Benefit for income taxes

Income (loss) from continuing operations

Discontinued operations

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Balance at January 1, 2019

Issuance of common stock for services

Cash dividend

Cancelled Stock

Share-based compensation

Balance at December 31, 2018

Cancellation of Series B stock

Exercised stock warrants

Cash dividend declared

Exercised stock warrants

Share-based compensation

Balance at December 31, 2019

Cash dividend

Share-based compensation

Balance at December 31, 2020

The accompanying notes are an integral part of these consolidated financial statements.

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Net income from discontinued operations

Net loss from continuing operations

Adjustments to reconcile net (loss) income to net cash

used in operating activities:

Net income (loss) from continuing operations

Adjustments to reconcile net income (loss) to net cash

provided by (used in) operating activities:

Deferred income taxes

5 unchanged sentences

Impairment of intangible asset

Common stock for services

Changes in assets and liabilities:

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Operating lease obligations

Net cash used in operating activities of continuing operations

Net cash provided by (used in) operating activities of continuing operations

Cash flows from investing activities:

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Acquisition of business

Escrow accounts receivable

Proceeds from sale of EDI practice, net of fees and taxes

Software development costs

Net cash provided by (used in) investing activities of continuing operations

Net cash provided by investing activities of continuing operations

Cash flows from financing activities:

Payment of cash dividend

Proceeds from PPP loan

Payment of PPP loan

Payment of contingent consideration

8 unchanged sentences

Net cash provided by discontinued operations

Net increase (decrease) in cash

Net (decrease) increase in cash

Cash, beginning of year

5 unchanged sentences

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS (Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

For the Year Ended December 31, 2020:

On January 23, 2020 the Company entered into an operating lease for equipment with VAR Technology Finance.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $453,379.

On January 29, 2020 the Company entered into an operating lease in Greensboro, NC.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $104,296.

On February 1, 2020 the Company entered into an operating lease in East Hanover, NJ.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $349,987.

The Company leases office space in Chicago, IL with a monthly rent of $582.

The lease expired May 31, 2020.

This has been renewed for two years expiring May 31, 2022 at rate of $655 per month.

On July 1, 2020 the Company entered into an operating lease in Phoenix, Arizona.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $103,451.

On July 31, 2020, the Company acquired certain assets of Prairie Technology Solutions Group, LLC (“Prairie Tech”) pursuant to an Asset Purchase Agreement.

In consideration for the acquired assets, the Company paid $185,000 in cash and issued three promissory notes to Prairie Tech (“Prairie Tech Note 1”, “Prairie Tech Note 2” and “Prairie Tech Note 3”), each in the principal aggregate amount of $103,333 (collectively the “Prairie Tech Notes”).

The Prairie Tech Notes bear interest at a rate of 4% per annum.

The Company also received deferred revenue in the amount of $51,748 and deposits of $32,896.

The Company assumed office lease in Burr.

Ridge, IL starting at $2,849 per month and escalating to $2,929 per month by the end of the term which ends July 30, 2022.

The Company also recognized right-of-use assets and related liabilities in the amount of $64,863.

On October 1, 2020, SWK acquired certain assets of Computer Management Services, LLC, (“CMS”) pursuant to an Asset Purchase Agreement for cash of $410, liabilities in the form of clients deposits related to technical support in the amount of $50,115 and prepaid time from clients in the amount of $67,073, and the issuance of a promissory note in the aggregate principal amount of $170,000 (the “CMS Note”) for a total of $287,598.

The CMS Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum.

Monthly payments including interest are $4,869.

On December 1, 2020, SWK acquired certain assets of Business Software Solutions (“BSS”) pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $230,000 (the “BSS Note”).

The BSS Note is due in 60 months from the closing date and bears interest at a rate of two percent (2.0%) per annum.

Monthly payments including interest are $4,031.

On December 9, 2020, the Company declared a $0.40 special cash dividend per share of Common Stock payable on December 28, 2020 for shareholders of record on December 28, 2020 for an aggregate amount of $1,800,509.

For the Year Ended December 31, 2019:

The Company acquired certain assets of Partners in Technology, Inc.

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The Company incurred approximately $291,936 in finance lease obligations for the purchase of equipment.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

For the Year Ended December 31, 2019 (continued):

On September 6, 2019, the Company filed a Certificate of Elimination of Certificate of Designations (the “Certificate of Elimination”) with the Secretary of State of the State of Delaware.

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On December 24, 2019, the Company announced the payment of a $0.50 special cash dividend per share of Common Stock payable on January 14, 2020 for an aggregate amount of $2,250,636, which was applied against paid in capital.

For the Year Ended December 31, 2018:

On March 31, 2018, the remaining principal and accrued interest on the note payable to Oates & Company, LLC.

was offset against a related party receivable of $47,043.

The Company acquired certain assets of Info Management Systems, Inc.

(“ISM”) for a $1,000,000 promissory note in addition to a cash payment of $300,000 and the assumption of certain capital lease obligations of approximately $25,734 (see Note 10).

The Company acquired certain assets of Nellnube, Inc (“NNB”) for a $400,000 promissory note and the assumption of certain capital lease obligations of approximately $57,964 (see Note 10).

On December 24, 2018, the Company announced the payment of a $0.05 special cash dividend per share of Common Stock payable on January 14, 2019 for an aggregate amount of $225,038, which was applied against paid in capital.

The Company incurred approximately $80,875 in capital lease obligations for purchases of equipment.

The accompanying notes are an integral part of these consolidated financial statements.

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Our value-added services focus on consulting and professional services, specialized programming, training, and technical support.

We have a dedicated network services practice that provides managed services, cybersecurity, application hosting, disaster recovery business continuity, cloud and other services.

We have a dedicated network services practice that provides managed services, cybersecurity, application hosting, disaster recovery business continuity, cloud migration and other services.

Our customers are nationwide, with concentrations in the New York/New Jersey metropolitan area, Arizona, Southern California, North Carolina, Washington, Oregon and Illinois.”

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Since April 19, 2017, the Company has been listed and is traded on the NASDAQ Capital Market under the symbol “SSNT”.

The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19), which in March 2020, was declared a pandemic by the World Health Organization.

The ultimate disruption which may be caused by the outbreak is uncertain;

however, it may result in a material adverse impact on the Company’s financial position, operations, and cash flows.

Possible areas that may be affected include, but are not limited to, disruption to the Company’s customers and revenue, labor workforce, inability of customers to pay outstanding accounts receivable due and owing to the Company as they limit or shut down their businesses, customers seeking relief or extended payment plans relating to accounts receivable due and owing to the Company, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 unchanged sentences

All significant inter-company transactions and accounts have been eliminated in consolidation.

Use of Estimates and Classifications

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

Actual results could differ from those estimates.

Certain amounts previously reported may have been reclassified to conform to the current year financial statement presentation.

Such reclassifications did not affect net income or stockholders’ equity.

Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired.

2 unchanged sentences

No impairment losses were identified or recorded for the years ended December 31, 2020 and 2019.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Capitalization of proprietary developed software

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Amortization commences when a solution is available for general release to clients.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Business Combinations

We account for business combinations under the acquisition method of accounting.

This method requires the recording of acquired assets and assumed liabilities at their acquisition date fair values.

The excess of the purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.

Results of operations related to business combinations are included prospectively beginning with the date of acquisition and transaction costs related to business combinations are recorded within SG&A.

Definite Lived Intangible Assets and Long-lived Assets

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Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results.

Impairment losses of $ 236,860 and $0, were identified and recorded for the year ended December 31, 2019 and 2018 respectively.

Impairment losses of $ -0- and $236,860, were identified and recorded for the years ended December 31, 2020 and 2019 respectively.

Revenue Recognition

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Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Components of revenue:

For the Year Ended December 31

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Maintenance Revenue

Software revenue

Ancillary Service Revenue

6 unchanged sentences

As of December 31, 2019, there was $145,977 in deferred maintenance, $159,165 in deferred support services, and $1,701,841 in deposits for future consulting services.

Sales commissions relating to service revenues are considered incremental and recoverable costs of obtaining a project with our customer.

These commissions are calculated based on estimated revenue to be generated over the life of the project.

These costs are deferred and expensed as the service revenue is earned.

Commission expense is included in selling and marketing expenses in the accompanying consolidated statements of operations.

Fair Value of Financial Instruments

The Company estimates that the fair value of all financial instruments at December 31, 2020 and December 31, 2019, as defined in Financial Accounting Standards Board (“FASB”) ASC 825 “Financial Instruments”, does not differ materially, except for the items discussed below, from the aggregate carrying values of its financial instruments recorded in the accompanying consolidated balance sheets.

The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies.

Considerable judgment is required in interpreting market data to develop the estimates of fair value.

The carrying amounts reported in the consolidated balance sheets as of December 31, 2020 and December 31, 2019 for cash, accounts receivable, and accounts payable approximate the fair value because of the immediate or short-term maturity of these financial instruments.

Each reporting period we evaluate market conditions including available interest rates, credit spreads relative to our credit rating and liquidity in estimating the fair value of our debt.

After considering such market conditions, we estimate that the fair value of debt approximates its carrying value.

On January 1, 2019, the Company adopted the new lease accounting standard using the modified retrospective transition method applied at the effective date of the standard.

Results for reporting periods beginning after January 1, 2019 are presented under the new leasing standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting.

The Company has elected to utilize the package of practical expedients at the time of adoption, which allows the Company to (1) not reassess whether any expired or existing contracts are or contain leases, (2) not reassess the lease classification of any expired or existing leases, and (3) not reassess initial direct costs for any existing leases.

The Company also has elected to utilize the short-term lease recognition exemption and, for those leases that qualified, the Company did not recognize right-of-use (“ROU”) assets or lease liabilities.

SILVERSUN TECHNOLOGIES, INC.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Sales commissions relating to service revenues are considered incremental and recoverable costs of obtaining a project with our customer.

These commissions are calculated based on estimated revenue to be generated over the life of the project.

These costs are deferred and expensed as the service revenue is earned.

Commission expense is included in selling and marketing expenses in the accompanying consolidated statements of operations.

Leases (continued)

The Company accounts for its leases in accordance with ASC 842 Leases.

The Company leases office space and equipment.

The Company concludes on whether an arrangement is a lease at inception.

This determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property, plant or equipment for period of time in exchange for consideration.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

The Company recognizes these lease expenses on a straight-line basis over the lease term.

The Company has assessed its contracts and concluded that its leases consist of finance and operating leases.

Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As most of the Company’s leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The incremental borrowing rate represents a significant judgment that is based on an analysis of the Company’s credit rating, country risk, treasury and corporate bond yields, as well as comparison to the Company’s borrowing rate on its most recent loan.

The Company uses the implicit rate when readily determinable.

The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately.

Cash and Cash Equivalents

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At December 31, 2020, the Company had cash on deposit of approximately $5,900,593 in excess of the federally insured limits of $250,000.

As of December 31, 2019, one customer represented 14% of the total accounts receivable and unbilled services.

As of December 31, 2020, no one customer represented more than 10% of the total accounts receivable and unbilled services.

As of December 31, 2019, one customer represented 14% of the total accounts receivable and unbilled services.

For the years ended December 31, 2020 and 2019, the top ten customers accounted for 10% ($4,246,257) and 10% ($3,903,702), respectively, of total revenues.

The Company does not rely on any one specific customer for any significant portion of its revenue base .

For both the years ended December 31, 2019 and 2018, purchases from one supplier through a “channel partner” agreement were approximately 19% and 24% respectively.

For the years ended December 31, 2020 and 2019, purchases from one supplier through a “channel partner” agreement were approximately 15% and 19% respectively.

This channel partner agreement is for a one-year term and automatically renews for an additional one-year term on the anniversary of the agreements effective date.

For the years ended December 31, 2019 and 2018, one supplier represented approximately 15% and 40% of total accounts payable, respectively.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash and cash equivalents.

For the year ended December 31, 2020 two suppliers represented approximately 39% of accounts payable.

For the year ended December 31, 2019, one supplier represented approximately 15% of total accounts payable.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash.

As of December 31, 2020, the Company believes it has no significant risk related to its concentration of accounts receivable.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounts Receivable

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Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services.

The Company maintains an allowance for bad debt estimated by considering a number of factors, including the length of time the amounts are past due, the Company’s previous loss history and the customer’s current ability to pay its obligations.

The Company maintains an allowance for bad debt estimated by considering several factors, including the length of time the amounts are past due, the Company’s previous loss history and the customer’s current ability to pay its obligations.

Accounts are written off against the allowance when deemed uncollectable.

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When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the consolidated statements of operations.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company accounts for income taxes using the asset and liability method described in FASB ASC 740, “Income Taxes”.

Deferred tax assets arise from a variety of sources, the most significant being:

a) tax losses that can be carried forward to be utilized against profits in future years;

b) expenses recognized for financial reporting purposes but disallowed in the tax return until the associated cash flow occurs;

and c) valuation changes of assets which need to be tax effected for book purposes but are deductible only when the valuation change is realized.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss carryforwards.

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The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date.

The Company accounts for uncertainties in income taxes under ASC 740-10-50 which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

ASC 740-10 requires that the Company determine whether the benefits of its tax positions are more-likely-than-not of being sustained upon audit based on the technical merits of the tax position.

The Company recognizes the impact of an uncertain income tax position taken on its income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority.

The Company has federal net operating loss (“NOL”) carryforwards which are subject to limitations under Section 382 of the Internal Revenue Code.

The 2017 Tax Cuts and Jobs Act (“Tax Reform”) was enacted on December 22, 2017.

The Tax Reform includes a number of changes in existing tax law impacting businesses including a permanent reduction in the U.S.

federal statutory rate from 34% to 21%, effective on January 1, 2018.

GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate.

The rate reconciliation includes the Company’s assessment of the accounting under the Tax Reform and is based on information that was available to management at the time the consolidated financial statements were prepared.

The Company files income tax returns in the U.S.

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federal and state jurisdictions.

Despite the Company’s belief that its tax return positions are consistent with applicable tax laws, one or more positions may be challenged by taxing authorities.

Settlement of any challenge can result in no change, a complete disallowance, or some partial adjustment reached through negotiations or litigation.

Interest and penalties related to income tax matters, if applicable, will be recognized as income tax expense.

There were no liabilities for uncertain tax positions at December 31, 2020 and 2019.

During the years ended December 31, 2020 and 2019 the Company did not incur any expense related to interest or penalties for income tax matters, and no such amounts were accrued as of December 31, 2020 and 2019.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value Measurement

FASB ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and prescribes disclosures about fair value measurements.

The accounting standards define fair value and establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available.

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The Company’s current financial assets and liabilities approximate fair value due to their short-term nature and include cash, accounts receivable, accounts payable, and accrued liabilities.

The carrying value of longer term lease, contingent consideration and debt obligations approximate fair value as their stated interest rates approximate the rates currently available.

The carrying value of longer-term leases and debt obligations approximate fair value as their stated interest rates approximate the rates currently available.

The Company’s goodwill and intangibles are measured at fair-value on a non-recurring basis using Level 3 inputs, as discussed in Note 5 and 9.

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Any changes in these highly subjective assumptions significantly impact stock-based compensation expense.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently Adopted Authoritative Pronouncements

In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No.

2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements.

Topic 842 was subsequently amended by ASU No.

2018-01, Land Easement Practical Expedient for Transition to Topic 842;

2018-10, Codification Improvements to Topic 842, Leases;

2018-11, Targeted Improvements.

The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The new standard is effective on January 1, 2019.

A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application.

An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application.

If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date.

The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods.

The Company adopted the new standard on January 1, 2019 and use the effective date as the date of initial application.

Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

The new standard provides a number of optional practical expedients in transition.

The Company elects the ‘package of practical expedients’, which permits the Company not to reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs.

On adoption, the Company recognized additional operating lease liabilities of approximately $911,000 with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases.

In June 2018, the FASB, issued ASU No.

2018-07 to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions.

The new guidance expands the scope of Accounting Standards Codification, or ASC, 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in an entity’s own operations and supersedes the guidance in ASC 505-50.

The guidance is effective for public business entities in annual periods beginning after December 15, 2018, and interim periods within those annual periods.

Early adoption is permitted, including in an interim period for which financial statements have not been issued, but not before an entity adopts ASC 606.

This was adopted on January 1, 2019 and did not have a material impact on the financial position and results of operations.

Recent Authoritative Pronouncements

In January 2017, the FASB issued ASU No.

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The standard is effective for annual periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

We do not expect the adoption of this standard to have a significant impact on our financial position and results of operations.

This was adopted on January 1, 2020 and did not have a significant impact on our financial position and results of operations.

Recent Authoritative Pronouncements

In June 2016, the FASB issued ASU No.

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The amendment in this update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables.

This update is intended to provide financial statement users with more decision-useful information about the expected credit losses.

We have evaluated the requirements of this standard on our financial assets and have concluded that the adoption of this ASU, beginning January 1, 2021, will not have a material impact on our consolidated financial statements.

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The amendment also improves consistent application and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

This standard is effective for annual periods beginning after December 15, 2020, including interim reporting periods within these annual periods.

We do not expect the adoption of this standard to have a significant impact on our financial position and results of operations.

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.

SILVERSUN TECHNOLOGIES, INC.

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DECEMBER 31, 2020 AND 2019

NOTE 3 – NET (LOSS) INCOME PER COMMON SHARE

The Company’s basic loss per common share is based on net loss for the relevant period, divided by the weighted average number of common shares outstanding during the period.

Diluted income per common share is based on net income (loss), divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding option and warrants to the extent they are dilutive.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40).

The update simplifies the accounting for convertible debt instruments and convertible preferred stock by reducing the number of accounting models and limiting the number of embedded conversion features separately recognized from the primary contract.

The guidance also includes targeted improvements to the disclosures for convertible instruments and earnings per share.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

The Company is evaluating the impact of the adoption on its consolidated financial statements.

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.

NOTE 3 – NET INCOME (LOSS) PER COMMON SHARE

The Company’s basic income (loss) per common share is based on net income (loss) for the relevant period, divided by the weighted average number of common shares outstanding during the period.

As of December 31, 2020, and 2019, the average market prices for the years ended are less than the exercise price of all the outstanding stock options and warrants, therefore, the inclusion of the stock options and warrants would be anti-dilutive .

In addition, since the effect of common stock equivalents is anti-dilutive with respect to losses, the convertible promissory notes have also been excluded from the Company’s computation of loss per common share for continuing operations for the years periods ended December 31, 2019 and 2018.

Therefore, basic and diluted loss per common share for continuing operations for the year ended December 31, 2019 and 2018 are the same.

In addition, since the effect of common stock equivalents is anti-dilutive, the convertible promissory notes have also been excluded from the Company’s computation of income (loss) per common share from continuing operations for the years ended December 31, 2020 and 2019.

Therefore, basic and diluted income (loss) per common share for continuing operations for the years ended December 31, 2020 and 2019 are the same.

December 31, 2020

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Diluted net income (loss) from continuing operations per share computation:

Net loss per above

Net income (loss) per above

Interest on convertible note

Net income (loss)

Weighted-average common shares outstanding

Incremental shares for convertible promissory note, warrants And stock options

Total adjusted weighted-average shares

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Total potential dilutive securities not included in loss per share

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 4 – PROPERTY AND EQUIPMENT

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Depreciation and amortization expense related to these assets for the years ended December 31, 2020 and 2019 was $314,369 and $338,103.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 4 – PROPERTY AND EQUIPMENT (Continued)

Property and equipment under finance leases are summarized as follows:

Property and equipment under finance leases (included in Note 7) are summarized as follows:

December 31, 2020

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Amortization expense related to the above intangible assets was $391,563 and $381,933, respectively, the years ended December 31, 2020 and 2019.

Impairment on intangible assets was $236,860 and $0 for the year ended December 31, 2019 and 2018, respectively.

Impairment on intangible assets was $-0- and $236,860 for the years ended December 31, 2020 and 2019, respectively.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 5 – INTANGIBLE ASSETS (Continued)

The Company expects future amortization expense to be the following:

NOTE 6 – LINE OF CREDIT, CONVERTIBLE DEBT AND LONG TERM DEBT, RELATED PARTY

NOTE 6 – LINE OF CREDIT, CONVERTIBLE DEBT, LONG TERM DEBT, RELATED PARTY AND PPP LOAN

On September 11, 2018, SWK entered into a Revolving Demand Note (the “JPM Revolving Demand Note”) by and between SWK and JPMorgan Chase Bank (“JPM Lender”), a commercial lender.

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The JPM Revolving Demand Note was secured by all of SWK’s assets pursuant to a Security Agreement.

The line was also collateralized by substantially all of the assets of the Company.

The line was also collateralized by substantially all the assets of the Company.

On August 26, 2019, all amounts owed to JPM Lender under the JPM Revolving Demand Note were paid and the JPM Revolving Demand Note terminated and is of no further force or effect.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 6 – LINE OF CREDIT , CONVERTIBLE DEBT AND LONG TERM DEBT, RELATED PARTY (Continued)

On May 6, 2014, SWK acquired certain assets of ESC, Inc.

pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $350,000 (the “ESC Note”).

The ESC Note matures on April 1, 2019.

Monthly payments are $6,135 including interest at 2% per year.

At December 31, 2019 and December 31, 2018, the outstanding balance was $0 and $30,521, respectively.

On July 6, 2015, SWK acquired certain assets of ProductiveTech Inc.

The ESC Note matured on April 1, 2019.

Monthly payments were $6,135 including interest at 2% per year.

At December 31, 2020 and December 31, 2019, the outstanding balances were $-0- and $-0-, respectively.

On July 6, 2015, SWK acquired certain assets of Productive Tech Inc.

(PTI) pursuant to an Asset Purchase Agreement for cash of $500,000 and a promissory note for $600,000 (the “PTI Note”).

The PTI Note is due in 60 months from the closing date and bears interest at a rate of two and one half (2.5%) percent.

The PTI Note was due in 60 months from the closing date and with an interest rate of two and one half (2.5%) percent.

Monthly payments including interest are $10,645.

At December 31, 2019 and December 31, 2018, the outstanding balance on the PTI Note was $73,899 and $198,106, respectively.

THE PTI Note matured and last payment made on July 1, 2020.

At December 31, 2020 and December 31, 2019, the outstanding balances on the PTI Note were $-0- and $73,899, respectively.

On May 31, 2018, SWK acquired certain assets of Info Sys Management, Inc.

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The ISM Note has an optional conversion feature where the holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, until payment in full of the ISM Note, all of the outstanding principal amount of the ISM Note, plus accrued interest, into shares (the “Conversion Shares”) of the Company’s Common Stock, (“Common Stock”) at per share price equal to $4.026, a price equal to the average closing price of its Common Stock for the five (5) trading days immediately preceding the issuance date of the ISM Note (the “Fixed Conversion Price”).

At December 31, 2019 and December 31, 2018 the outstanding balance on the ISM Note was $710,420 and $904,436 respectively.

At December 31, 2020 and December 31, 2019, the outstanding balances on the ISM Note were $512,487 and $710,420, respectively.

In February 2021, ISM converted the outstanding balance of the loan in the amount of $479,111 into 119,004 shares of the Company’s common stock.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 6 – LINE OF CREDIT, CONVERTIBLE DEBT, LONG TERM DEBT, RELATED PARTY AND PPP LOAN (Continued)

On May 31, 2018, Secure Cloud Services acquired certain assets of Nellnube, Inc.

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The Nellnube Note has an optional conversion feature where the holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, until payment in full of the Nellnube Note, all of the outstanding principal amount of the Nellnube Note, plus accrued interest, into shares (the “Conversion Shares”) of the Company’s Common Stock, (“Common Stock”) at per share price equal to $4.026, a price equal to the average closing price of its Common Stock for the five (5) trading days immediately preceding the issuance date of the Nellnube Note (the “Fixed Conversion Price”).

At December 31, 2019 and December 31, 2018 the outstanding balance on the Nellnube Note was $284,168 and $361,774 respectively.

At December 31, 2020 and December 31, 2019, the outstanding balances on the Nellnube Note were $204,995 and $284,168 respectively.

In February 2021, Nellnube converted the outstanding balance of the loan in the amount of $191,645 into 47,602 shares of the Company’s common stock.

On January 1, 2019, SWK acquired certain assets of Partners in Technology, Inc.

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Monthly payments including interest are $4,984.

At December 31, 2019 the outstanding balance was $121,968.

At December 31, 2020 and December 31, 2019, the outstanding balances of the loan were $64,040 and $121,968, respectively.

On July 31, 2020, the Company acquired certain assets of Prairie Technology Solutions Group, LLC (“Prairie Tech”) pursuant to an Asset Purchase Agreement.

The Prairie Tech Notes bear interest at a rate of 4% per annum.

Prairie Tech Note 1 has a term of one (1) year and is subject to downward adjustment based on whether certain revenue milestones are achieved.

Prairie Tech Note 2 has a term of two (2) years and is also subject to downward adjustment based on whether certain revenue milestones are achieved.

Prairie Tech Note 3 has a term of three (3) years and is not subject to a downward adjustment.

At December 31, 2020 the outstanding balance on the PT notes were $310,000.

On October 1, 2020, SWK acquired certain assets of Computer Management Services, LLC, (“CMS”) pursuant to an Asset Purchase Agreement for cash of $410, clients deposits related to technical support in the amount of $50,115, prepaid time from clients in the amount of $67,073, and the issuance of a promissory note in the aggregate principal amount of $170,000 (the “CMS Note”) for a total of $287,598.

The CMS Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum.

Monthly payments including interest are $4,869.

At December 31, 2020 the outstanding balance on the note was $160,821.

The BSS Note is due in 60 months from the closing date and bears interest at a rate of two percent (2.0%) per annum.

Monthly payments including interest are $4,031.

At December 31, 2020, the outstanding balance of the loan was $230,000.

Total convertible debt and long-term debt balances at December 31, 2020 and 2019 were $1,482,343 and $1,190,455, respectively, of which $545,000 and $408,901 was classified as current portion at December 31, 2020 and 2019, respectively.

At December 31, 2020, future payments of promissory notes are as follows over each of the next five fiscal years:

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DECEMBER 31, 2020 AND 2019

NOTE 7 – FINANCE AND CAPITAL LEASE OBLIGATIONS

NOTE 6 – LINE OF CREDIT, CONVERTIBLE DEBT, LONG TERM DEBT, RELATED PARTY AND PPP LOAN (Continued)

As previously disclosed, SWK Technologies, Inc.

(“SWK”), a wholly-owned subsidiary of SilverSun Technologies, Inc.

(the “Company”), entered into a promissory note (the “Note”) with JPMorgan Chase Bank, N.A.

(the “Lender”), which provided for a loan in the amount of $3,150,832 (the “PPP Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

At the time SWK applied for the PPP Loan, we believed that it qualified to receive funds pursuant to the then published PPP qualification and certification requirements.

On April 23, 2020, the SBA, in consultation with the Department of Treasury, issued new guidance that creates uncertainty regarding the qualification requirements for a PPP Loan (the “New Guidance”).

Out of an abundance of caution and in light of the New Guidance, SWK determined to pay off the entire amount of the PPP Loan.

Accordingly, the PPP Loan was paid in full to the Lender on May 18, 2020, resulting in the full satisfaction of the Note.

Under the terms of the PPP Loan, SWK had the right to repay the Note without penalty.

NOTE 7 – FINANCE LEASE OBLIGATIONS

The Company has entered into lease commitments for equipment that meet the requirements for capitalization.

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December 31, 2020

Weighted average remaining lease term

Weighted average interest rate

December 31, 2019

Weighted average remaining lease terms

Weighted average interest rates

At December 31, 2020, future payments under finance leases are as follows:

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Long-term capital lease obligation

The Company included capital lease obligations as of December 31, 2018 under the finance lease obligations caption in the consolidated balance sheet.

Disclosures related to periods prior to adoption of ASU 2016-02

The Company adopted ASU 2016-02 using a modified retrospective adoption method at January 1, 2019 as noted in Note 2 “Recently Adopted Authoritative Standards”.

As required, the following disclosure is provided for periods prior to adoption.

Minimum capital lease commitments as of December 31, 2018 that have initial or remaining lease terms in excess of one year are as follows:

Total minimum lease payments

Less amounts representing interest

Present value of net minimum lease payments

Less current portion

Long-term capital lease obligation

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 8 – OPERATING LEASE LIABILITY

NOTE 8 – OPERATING LEASE LIABILITIES

The Company leases office space in eleven different locations with monthly payments ranging from $744 to $10,279 which expire at various dates through April 2025.

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The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.

The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2019 are as follows:

The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2020 and 2019 are as follows:

December 31, 2020

December 31, 2019

Weighted average remaining lease term

Weighted average discount rate

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 8 – OPERATING LEASE LIABILITIES (Continued)

The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total lease liabilities recognized on the consolidated balance sheet as of December 31, 2020:

2025 and thereafter

Total undiscounted future minimum lease payments

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Total rent expense under operating leases for the year ended December 31, 2020 was $548,336 as compared to $417,467 for the year ended December 31, 2019.

Disclosures related to periods prior to adoption of ASU 2016-02

The Company adopted ASU 2016-02 using a modified retrospective adoption method at January 1, 2019 as noted in Note 2 “Recently Adopted Authoritative Standards”.

As required, the following disclosure is provided for periods prior to adoption.

Minimum operating lease commitments as of December 31, 2018 that have initial or remaining lease terms in excess of one year are as follows:

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

Rent expense paid with cash was $552,613 for the year ended December 31, 2020 as compared to $423,469 for the year ended December 31, 2019.

NOTE 9 – EQUITY

On January 18, 2018, the Company issued 100 shares of stock each to 10 non-executive employees of SWK valued at $3,830 based on the current market price at issuance date.

On February 8, 2018 and March 23, 2018, the Company issued 4,825 and 5,115 shares of stock, respectively, in exchange for financial advisory services.

The shares are based on the current market price at issuance date with a value of $17,852 and $20,204, respectively.

On March 30, 2018, the Company issued 912 shares of stock for legal services valued at $3,420 based on the current market price at issuance date.

All shares issued were fully vested.

On October 24, 2018, the Company cancelled an aggregate of 1,000 shares of stock previously issued on January 18, 2018 to ten (10) non-executive employees of SWK.

This was in response to the Company’s non-compliance with Nasdaq Listing Rule 5365(c).

Upon cancellation of such shares, the company regained compliance.

On December 24, 2018, the Company announced the payment of a $0.05 special cash dividend per share of Common Stock.

The dividend payments announced in December were paid out on January 14, 2019 for an aggregate amount of approximately $225,038, which was applied against additional paid in capital and included in accrued expenses at December 31, 2018.

On September 6, 2019, the Company filed a Certificate of Elimination of Certificate of Designations (the “Certificate of Elimination”) with the Secretary of State of the State of Delaware.

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Total stock compensation recognized for the year ended December 31, 2019 and 2018 was $16,910 and $28,000, respectively.

On December 10, 2020, the Company announced the payment of a $0.40 special cash dividend per share of Common Stock payable on December 28, 2020 for an aggregate amount of $1,800,509 which was applied against paid in capital.

Stock Options

The fair value of each option awarded is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table.

Expected volatilities are based on historical volatility of Common Stock.

The expected life of the options granted represents the period from date of grant to expiration (5 years).

The risk-free interest rate is based on the U.S.

Treasury yield in effect at the time of grant.

There were no stock options granted for the year ended December 31, 2020.

As of December 31, 2020, the Company has no outstanding stock options.

SILVERSUN TECHNOLOGIES, INC.

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December 31, 2019:

Total stock compensation recognized for the year ended December 31, 2020 and 2019 was $10,194 and $16,910, respectively

As of December 31, 2020, the unamortized compensation expense for stock options was $0.

Unamortized compensation expense is expected to be recognized over a weighted-average period of 0.8 year.

The following table summarizes the warrants transactions:

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Exercise Price

Average Remaining Contractual Term

Average Remaining

Contractual Term

Balance, January 1, 2019

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DECEMBER 31, 2020 AND 2019

NOTE 10 – BUSINESS COMBINATION

On May 31, 2018 SWK acquired certain assets of Info Sys Management, Inc.

(“ISM”), a reseller of Sage and Acumatica software, pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $1,000,000 (“ISM Note”) and a cash payment of $300,000.

The ISM Note is due May 31, 2023 and bears an interest rate of 2% per year.

The monthly payments including interest are $17,528.

The ISM Note has an optional conversion feature where the Holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, until payment in full of the ISM Note, all of the principal amount of the ISM Note, plus accrued interest, into shares of the Company’s common stock at a price equal to $4.03.

The allocation of the purchase price to customer lists with an estimated life of fifteen years, deposits and other assets, fixed assets and goodwill, which is deductible for tax purposes, has been based on an independent valuation summarized in the following table.

On May 31, 2018 SCS acquired certain assets of Nellnube, Inc.

(“Nellnube”), a business application hosting company, pursuant to an Asset Purchase Agreement for a promissory note (“Nellnube Note”) in the aggregate principal amount of $400,000.

The Nellnube Note is due on May 31, 2023 and bears an interest rate of 2% per year.

The monthly payments including interest are $7,011.

The Nellnube Note has an optional conversion feature where the Holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, until payment in full of the Nellnube Note, all of the principal amount of the Nellnube Note, plus accrued interest, into shares of the Company’s common stock at a price equal to $4.03.

The allocation of the purchase price to customer lists with an estimated life of fifteen years, fixed assets and goodwill, which is deductible for tax purposes, has been based on an independent valuation summarized in the following table.

NOTE 10 – BUSINESS COMBINATIONS

On January 1, 2019, SWK acquired certain assets of Partners in Technology, Inc.

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The allocation of the purchase price to customer list with an estimated life of fifteen years and goodwill, which is deductible for tax purposes, has been based on an independent valuation.

On July 31, 2020, the Company acquired certain assets of Prairie Technology Solutions Group, LLC, (“PT”) pursuant to an Asset Agreement for cash of $185,000 and the issuance of three promissory notes each in the amount of $103,333.

Note 1 is due on the one- year anniversary of the closing date.

Note 2 is due on the two-year anniversary of the closing date and Note 3 is due on the three-year anniversary of the closing date.

Each note bears an interest rate of four percent (4%) per annum.

Payments are due annually including interest.

The allocation of the purchase price to customer list with an estimated life of ten years and goodwill, which is deductible for tax purposes, has been based on an independent valuation.

On October 1, 2020, the Company acquired certain assets of Computer Management Services, LLC (“CMS”) pursuant to an Asset Purchase Agreement.

In consideration for the acquired assets, the Company paid $410 in cash and issued a promissory note to CMS in the principal aggregate amount of $170,000.

The CMS Note is due in 36 months from the closing date and bears interest at a rate of two (2%) percent per annum.

Monthly payments including interest are $4,869.

The allocation of the purchase price to customer list with an estimated life of ten years and goodwill, which is deductible for tax purposes, has been based on an independent valuation.

The BSS Note is due in 60 months from the closing date and bears interest at a rate of two percent (2.0%) per annum.

Monthly payments including interest are $4,031.

The purchase price has been allocated to customer list with an estimated life of fifteen years.

Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified with the excess purchase consideration being allocated to goodwill.

The Company expects these acquisitions to create synergies by combining operations and expanding geographic market share and product offerings.

The following summarizes the purchase price allocation for all prior year and current year’s acquisitions:

BSS (Preliminary)

Cash consideration

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Deposits and other assets

Property and equipment

Accounts Receivable

Customer List

Operating Lease Right-of-Use Assets

Total assets acquired

Capital lease obligations

Liabilities acquired

Deferred revenue

Contingent liability

Operating lease liability

Net assets acquired

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DECEMBER 31, 2020 AND 2019

NOTE 10 – BUSINESS COMBINATION (Continued)

NOTE 10 – BUSINESS COMBINATIONS (Continued)

The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions occurred on January 1, 2019, nor is the financial information indicative of the results of future operations.

The following table represents the unaudited consolidated pro forma results of operations for the year ended December 31, 2018 as if the acquisition occurred on January 1, 2018.

The following table represents the unaudited consolidated pro forma results of operations for the years ended December 31, 2020 and 2019 as if the acquisitions occurred on January 1, 2019.

Operating expenses have been increased for the amortization expense associated with the estimated fair value adjustment as of December 31, 2019 of expected definite lived intangible assets and interest on the notes payable.

December 31, 2020

December 31, 2019

Cost of revenues

Operating expenses

Loss before taxes

Net loss from continuing operations

Income (loss) before taxes

Net income (loss) from continuing operations

Basic and diluted income (loss) per common share

The year ended December 31, 2018 pro-forma results above include five months of results of ISM and Nellnube and twelve months of PIT.

For the year ending December 31, 2018, there is $44,991 of estimated amortization expense included in the ISM/Nellnube/PIT pro-forma results.

The Company’s consolidated financial statements for the twelve months ending December 31, 2019 include the actual results of PIT since the date of acquisition, January 1, 2019.

For the year ended December 31, 2018, the ISM/Nellnube operations had a net income before taxes of $174,264 which represented seven months of operations that were included in the Company’s Consolidated Statement of Operations.

This consisted of approximately $1,859,424 in revenues, $701,600 in cost of revenues, and $983,559 in operating expenses.

For the year ended December 31, 2019, the ISM/Nellnube/PIT operations had a net income before taxes of $336,844 which represented twelve months of operations that were included in the Company’s Consolidated Statement of Operations.

The Company’s consolidated financial statements for the years ending December 31, 2020 and 2019 include the actual results of PIT since the date of acquisition, January 1, 2019.

The year ended December 31, 2020 pro-forma results above include seven months of results of PT, nine months of CMS and eleven months of BSS.

For the year ending December 31, 2020, there is $23,683 of estimated amortization expense and $7,231 of estimated interest expense included in the PT pro-forma results, $20,598 of estimated amortization expense and $2,274 of estimated interest expense included in the CMS pro-forma results, and $30,118 of estimated amortization expense and $3,881 of estimated interest expense included in the BSS pro-forma results.

For the year ended December 31, 2020, PT had a net loss of $5,739, CMS had net income of $116, 074 and BSS had a net loss $7,463.

For the year ended December 31, 2020, the PT, CMS & BSS operations had a net income before taxes of $157,515 which represented 6 months of operations of PT, three months of operations of CMS and one months of operations of BSS that were included in the Company’s Consolidated Statement of Operations.

This consisted of approximately $867,991 in revenues, $467,654 in cost of revenues and $242,822 in operating expenses.

The year ended December 31, 2019 pro-forma results above include total year results for PT, CMS and BSS.

For the year ending December 31, 2019, there is $40,596 of estimated amortization expense and $12,630 of estimated interest expense included in the PT pro-forma results, $27,456 of estimated amortization expense and $2,893 of estimated interest expense included in the CMS pro-forma results, and $32,856 of estimated amortization expense and $4,196 of estimated interest expense included in the BSS pro-forma results.

For the years ended December 31, 2019, there was no income included in the Company’s Statement of Operations for PT, CMS and BSS.

NOTE 11 – INCOME TAXES

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Net deferred tax asset

The 2017 Tax Cuts and Jobs Act (“Tax Reform”) was enacted on December 22, 2017.

The Tax Reform includes a number of changes in existing tax law impacting businesses including a permanent reduction in the U.S.

federal statutory rate from 34% to 21%, effective on January 1, 2018.

GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate.

For the year ended December 31, 2020, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate.

The Federal effective rate is higher than the statutory rate primarily due to Incentive Stock Options (ISO) and 50% of meals, 100% entertainment expense which are not tax deductible.

The total tax benefit for the year ended December 31, 2019 was $455,006.

The Federal effective rate is higher than the statutory rate primarily due to 50% of meals, 100% entertainment expense which are not tax deductible.

The total tax provision for the year ended December 31, 2020 was $47,391.

For the year ended December 31, 2019, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate.

1 unchanged sentence

The total tax benefit for the year ended December 31, 2019 was $455,006.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 1 1 – INCOME TAXES (Conti nued)

A reconciliation of the statutory income tax rate to the effective rate is as follows for the period December 31, 2020 and 2019:

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State income tax, net of federal benefit

Permanent items

Return to provision for prior year

Effective income tax rate

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 11 – INCOME TAXES (Continued)

Income tax provision (benefit) from continuing operations:

5 unchanged sentences

NOTE 12 – RELATED PARTY TRANSACTIONS

The Company leased its Seattle office space from Mary Abdian, an employee of SWK, which expired September 30, 2018, however, this lease was terminated on May 31, 2018 by mutual consent.

The monthly rent for this office space was $3,090 and increased 3% each year.

As of December 31, 2020 and 2019, long term debt and convertible debt are considered related party liabilities as holders are current employees of the Company, see Note 6.

The Company leased its Seattle, WA office space from Mary Abdian, an employee of SWK.

The lease which expires on September 30, 2018, was terminated by mutual consent on May 31, 2019 and the lease continued on a month-to-month basis with a monthly rent of approximately $2,066.

The Company ended the lease on May 31, 2020.

Total rent paid for 2020 and 2019 was $10,195 and $24,117 respectively under this lease.

As of December 31, 2019 and 2018, long term debt, convertible debt and contingent consideration are considered related party liabilities as holders are current employees of the Company, see Note 6.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 13 – COMMITMENTS AND CONTINGENCIES

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The Stipulation and Order Regarding Notice to Stockholders was entered into by Plaintiff, the Company and the Company’s officers and directors on August 2, 2019 and this matter is now resolved.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 13 – COMMITMENTS AND CONTINGENCIES (Continued)

Employment agreements

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There was also an adjustment to the Working Capital and an additional $162,868 was added to the gain on the sale of Mapadoc which was recognized in 2019 and paid in February 2020.

On August 31, 2020, the Company received the second half of the escrow amount of $575,000 as per the agreement.

SILVERSUN TECHNOLOGIES, INC.

5 unchanged sentences

The following table presents the financial results of “Mapadoc.”

Mapadoc Balance Sheet

Current assets:

Accounts receivable

Unbilled services

Prepaid expenses and other current assets

Total current assets

Long term assets:

Intangible assets, net

Current liabilities:

Accrued expenses

Deferred revenue

Total current liabilities

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

NOTE 1 5 – DISCONTINUED OPERATIONS (Continued)

Mapadoc Results of operations

Twelve Months Ended

December 31, 2019

Mapadoc Results of Operations for the year ended December 31, 2019:

December 31, 2019

19 unchanged sentences

NOTE 16 – SUBSEQUENT EVENTS

In February 2020, the company entered into a new capital lease agreement with VAR Technology Finance for a finance lease in the amount of $485,965 for equipment.

The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was been declared a pandemic by the World Health Organization.

The ultimate disruption which may be caused by the outbreak is uncertain;

however it may result in a material adverse impact on the Company’s financial position, operations and cash flows.

Possible areas that may be affected include, but are not limited to, disruption to the Company’s customers and revenue, labor workforce, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment.

In January 2021, the Company entered into a new capital lease agreement with Dimension Funding for a finance lease in the amount of $90,007 for equipment.

In February 2021, ISM converted the outstanding balance of the loan into 119,004 shares of the Company’s common stock (see Note 6).

In February 2021, Nellnube converted the outstanding balance of the loan into 47,602 shares of the Company’s common stock (see Note 6).

In February 2021, the Company signed a letter of intent to acquire CT-Solution, Inc.

("CT"), a leading Indianapolis-based reseller of Sage Software solutions.

Over the last 20 years, CT-Solution has implemented technology applications at prominent manufacturers, distributors, and professional service organizations throughout the Midwest.

In February 2021, the Company received net proceeds of $3,382,352, excluding legal expenses, from the sale of 393,300 of common stock under its Registration Statement on Form S-3 and the previously disclosed At Market Issuance Sales Agreement with a sales agent.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures