What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-03-29 compared with 2021-03-25 · 335 added, 313 removed, 1030 unchanged (39% of the section changed)

18 unchanged sentences

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not Applicable.

Directors, Executive Officers and Corporate Governance

132 unchanged sentences

Compensation ($)

President, Chief Executive Officer, and Director

President, Chief Executive Officer,

Joseph Macaluso,

Chief Financial Officer (1)

Christine Dye,

Chief Financial Officer (2)

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

On January 4, 2021, the Board of Directors of the Company (the “Board”) appointed Mr.

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

Concurrently, Mr.

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

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

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

1 unchanged sentence

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.

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

Dye received separation payments in an aggregate gross amount of $47,400.

During 2020, Ms.

Dye earned salary of $218,500 and a bonus of $80,400 for total compensation of $298,900.

Mark Meller, Chief Executive Officer

7 unchanged sentences

The Company will pay Mr.

Meller an annual salary of $565,000 per annum, with a ten percent (10%) increase on September 1 and every anniversary of such date for the duration of the Term.

Meller an annual salary of $565,000 per annum, with a ten percent (10%) increase on September 1 and every anniversary of such date for the duration of the Term beginning September 15, 2003.

On November 11, 2021, the Company and Mark Meller executed an amendment to Mr.

Meller’s employment agreement to extend his term of employment through September 14, 2028.

Other than the foregoing extension, the terms of Mr.

Meller’s employment agreement remain unchanged.

Potential Payments upon Termination or Change in Control

9 unchanged sentences

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

Grants of Plan-based Awards Table for Fiscal Year 2021

The following table sets forth information on stock options granted during or for the 2021 fiscal year to our named executive officers:

Number of Shares of Stock (#)

Exercise of Option Awards ($/Share)

Grant Date Value of Options

Joseph Macaluso

Outstanding Equity Awards at Fiscal Year-End 2021

The Company had no outstanding equity awards to the executives named above at the end of the most recent completed fiscal year.

The following table sets forth the outstanding stock option grants held by named executive officers at the end of the 2021 fiscal year.

The option exercise price set forth in the table is based on the closing market price on the date of grant.

Number of Securities Underlying Unexercised Options(#) Exercisable

Number of Securities Underlying Unexercised Options(#) Unexercisable

Option Exercise

Option Expiration

Joseph Macaluso

Director Compensation

4 unchanged sentences

Stanley Wunderlich

Joseph Macaluso

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”).

1) On January 4, 2021, the Board appointed Mr.

Joseph Macaluso as Chief Financial Officer of the Company.

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.

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

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.

5 unchanged sentences

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

Edwards was paid $1,667 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.

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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Under the Edwards Director Agreement, Mr.

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

Edwards is to be paid a stipend of $1,667 per month (the “Stipend”).

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

21 unchanged sentences

Beneficial Shareholders

Jeffrey Roth (2)

Ault Global Holdings, Inc.

Bard Associates (8)

BitNile Holdings (9)

* denotes less than 1%

1 unchanged sentence

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.

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.

Includes 800,000 shares owned by Mr.

Meller’s wife.

Meller disclaims beneficial ownership of the shares owned by his wife.

Includes 15,815 shares subject to currently exercisable stock options owned by Mr.

Includes 20,000 shares subject to currently exercisable stock options owned by Mr.

Includes 20,000 shares subject to currently exercisable stock options and 4,988 stock warrants owned by Mr.

Includes 80,803 shares subject to currently exercisable stock options and warrants held by all executives and directors of the Company (including those individually named above).

All information about Bard Associates, Inc.

is based on a Schedule 13G filed with the SEC on February 14, 2022.

All information about BitNile Holdings, is based on a Schedule 13-D filed with the SEC on January 31, 2022

Securities Authorized for Issuance Under Equity Compensation Plans

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

The following table sets forth information as of December 31, 2021 with respect to compensation plans (including individual compensation arrangements) under which our common shares are authorized for issuance, aggregated as follows:

7 unchanged sentences

Equity compensation plans not approved by security holders.

2004 Stock Incentive Plan

The Company adopted the 2004 Stock Incentive as the amended Plan (the “2004 Plan”) in order to attract and retain qualified employees, directors, independent contractors or agents of the Company.

The 2004 Plan terminated on September 29, 2014;

options granted before that date were not affected by plan termination.

At December 31, 2020 and 2019, -0- and 26,280 options remained outstanding under the 2004 Plan, respectively.

2019 Equity and Incentive Plan

2 unchanged sentences

The Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1, 2020 and ending on (and including) January 1, 2029, in an amount equal to 180,030 shares (which is the equivalent of 4.0% of the 4,500,755 shares of common stock outstanding as of September 30, 2019).

As of March 24, 2021, no securities were issued.

As of March 25, 2022, the Company has issued 165,620 options (see Note 9 to Notes to the Consolidated Financial Statements).

Certain Relationships and Related Transactions

As of December 31, 2020, long-term convertible debt issued in conjunction with various acquisitions are considered related party liabilities as holders are current employees of the Company, see Note 6.

In February 2021, the outstanding balances of the loans were converted into common stock of the Company.

As of December 31, 2021 and December 31, 2020, the outstanding balance for the long-term convertible debt was $-0- and $717,482, respectively.

At December 31, 2021 and December 31, 2020, certain long-term debt is considered related party liabilities holders, including Prairie, Tech and Partners in Technology, are current employees of the Company.

As of December 31, 2021 and December 31, 2020, the outstanding balances of this debt were $211,642 and $374,040, respectively.

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

1 unchanged sentence

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.

Total rent paid for 2020 was $10,195 under this lease.

Principal Accountant Fees and Services

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Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herein.

XBRL Instance Document

XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation Linkbase

XBRL Taxonomy Extension Definition Linkbase

XBRL Taxonomy Extension Label Linkbase

XBRL Taxonomy Extension Presentation Linkbase

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema

Inline XBRL Taxonomy Extension Calculation Linkbase

Inline XBRL Taxonomy Extension Definition Linkbase

Inline XBRL Taxonomy Extension Label Linkbase

Inline XBRL Taxonomy Extension Presentation Linkbase

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

Form 10-K Summary

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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AUDITED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID:

CONSOLIDATED FINANCIAL STATEMENTS:

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We have audited the accompanying consolidated balance sheets of SilverSun Technologies, Inc.

and Subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

(the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

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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.

(1) relate 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 on 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

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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.

Auditing the Company’s revenue recognition 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.

In addition, we evaluated management’s application of the Company’s accounting policy, tested the mathematical accuracy of management’s 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.

East Hanover, New Jersey

Marlton, New Jersey

March 29, 2022

3 unchanged sentences

Current assets:

Escrow accounts receivable

Accounts receivable, net of allowance of $375,000

Cash and cash equivalents

Accounts receivable, net of allowance of $ 330,311 and $ 375,000

Unbilled services

10 unchanged sentences

Accrued expenses

Accrued dividend

Accrued interest

1 unchanged sentence

Long term debt – current portion

Long term convertible debt – current portion

Long term debt – related party - current portion

Long term convertible debt - related party - current portion

Finance lease obligations – current portion

3 unchanged sentences

Long term debt net of current portion

Long term convertible debt net of current portion

Long term debt - related party - net of current portion

Long term convertible debt – related party - net of current portion

Finance lease obligations net of current portion

1 unchanged sentence

Total liabilities

Commitments and Contingencies

Commitments and Contingencies (see Note 13)

Stockholders’ equity:

6 unchanged sentences

authorized 75,000,000 shares

4,501,271 and 4,501,271 issued and outstanding as of December 31, 2020 and 2019, respectively

5,136,177 and 4,501,271 issued and outstanding as of December 31, 2021

and 2020, respectively

Additional paid-in capital

17 unchanged sentences

Share-based compensation expenses

Impairment of intangible assets

Depreciation and amortization expenses

Total selling, general and administrative expenses

Income (loss) from continuing operations

Other (expense) income:

(Loss) income from operations

Other income (expense)

Interest expense, net

Total other expense, net

Income (loss) from continuing operations before taxes

(Provision) Benefit for income taxes

Income (loss) from continuing operations

Discontinued operations

Income from discontinued operations

Gain on sale of discontinued operations

Gain on bargain purchase

Gain on sale of product line

Total other income (expense), net

Income before taxes

Provision for income taxes

Income from discontinued operations

Basic earnings (loss) per share applicable to common shareholders:

Continuing operations

Discontinued operations

Diluted earnings (loss) per share applicable to common shareholders:

Continuing operations

Discontinued operations

Net (loss) income

Basic and diluted net (loss) income per common share

Weighted average shares outstanding:

6 unchanged sentences

Balance at January 1, 2020

Cancellation of Series B stock

Cash dividend declared

Exercised stock warrants

Cash dividend

Share-based compensation

1 unchanged sentence

Cash dividend

Proceeds from sale of common stock, net of legal expenses

Shares issued in exchange for convertible debt

Share-based compensation

6 unchanged sentences

Cash flows from operating activities:

Net income from discontinued operations

Net income (loss) from continuing operations

Adjustments to reconcile net income (loss) to net cash

provided by (used in) operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash

provided by operating activities:

Deferred income taxes

2 unchanged sentences

Amortization of right of use assets

Bad debt expense

Bad debt recovery

Share-based compensation

Impairment of intangible asset

Gain on sale of product line

Gain on bargain purchase

Changes in assets and liabilities:

9 unchanged sentences

Operating lease obligations

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

Net cash provided by operating activities

Cash flows from investing activities:

1 unchanged sentence

Acquisition of business

Proceeds from sale of product line

Escrow accounts receivable

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

Software development costs

Net cash provided by investing activities of continuing operations

Net cash (used in) provided by investing activities

Cash flows from financing activities:

2 unchanged sentences

Payment of PPP loan

Payment of contingent consideration

Payment for repurchase of common stock

Proceeds from issuance of stock, net of expenses

Payment of long-term debt

Payment of long-term convertible debt

Payment of capital lease obligations

Net cash used in financing activities of continuing operations

Cash flows from discontinued operations

Operating activities of discontinued operations

Investing activities of discontinued operations

Net cash provided by discontinued operations

Net (decrease) increase in cash

Payment of long-term debt – related party

Payment of long-term convertible debt – related party

Payment of finance lease obligations

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Cash, beginning of year

8 unchanged sentences

For the Year Ended December 31, 2021:

On January 18, 2021, the Company incurred approximately $ 90,007 in financial lease obligations for purchases of equipment.

In February 2021, ISM converted the outstanding balance of the ISM Note in the amount of $ 479,112 into 119,004 shares of the Company’s common stock.

At December 31, 2021 and December 31, 2020, the outstanding balances on the ISM Note were $-0- and $ 512,487 respectively (see Note 6).

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

At December 31, 2021 and December 31, 2020, the outstanding balances on the Nellnube Note were $-0- and $ 204,995 respectively (see Note 6).

On April 1, 2021, SWK acquired certain assets of CT-Solution, Inc.

(“CTS”) pursuant to an asset purchase agreement for a promissory note in the aggregate principal amount of $ 130,000 (the “CTS Note”).

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

On May 1, 2021, SWK acquired certain assets of PeopleSense, Inc.

(“PSI”) pursuant to an asset purchase agreement for cash of $ 145,703 , customer deposits related to prepaid time from clients in the amount of $ 99,938 , and the issuance of a promissory note in the aggregate principal amount of $ 450,000 (the “PSI Note”).

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

The Company entered into an operating lease for equipment with Atmosera, Inc.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 90,245 .

The Company entered into an operating lease for equipment with Cologix USA, Inc.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 18,412 .

On June 18, 2021, the Company incurred approximately $ 134,097 in financial lease obligations for purchases of equipment.

On August 4, 2021, the Company incurred approximately $ 58,644 in financial lease obligations for purchases of equipment.

On November 11, 2021, the Company incurred approximately $ 62,555 in financial lease obligations for purchases of equipment.

For the Year Ended December 31, 2020:

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

7 unchanged sentences

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

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES (Continued):

For the Year Ended December 31, 2020 (continued):

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

4 unchanged sentences

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 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 .

6 unchanged sentences

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.

(“PIT”) for a $174,000 promissory note in addition to a cash payment of $60,000.

(see Note 10).

Operating lease right of use assets and operating lease liabilities were recognized in the amount of $911,000 at January 1, 2019.

On April 1, 2019 the Company entered into an operating lease in Lisle, IL.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $71,685.

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.

The Certificate of Withdrawal eliminated the Company’s Series B Preferred Stock, par value $.001 per share (the “Series B Preferred”), from the Company’s Certificate of Incorporation.

Prior to filing the Certificate of Elimination, Mark Meller, the Company’s Chief Executive Officer and Chairman and owner of the only share of Series B Preferred, cancelled the only share of Series B Preferred issued and outstanding.

On August 26, 2019 the Company sold the EDI practice and $1,150,000 of the proceeds were put in an escrow receivable account (see Note 14).

There was also an adjustment to the Working Capital and an additional $162,868 was added to the gain on the sale of Mapadoc.

On October 10, 2019, the Company’s Board of Directors authorized a new stock repurchase program, under which the Company may repurchase up to $2 million of its outstanding common stock.

Under this new stock repurchase program, the Company may repurchase shares in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by the Company’s management.

The repurchase program may be extended, suspended or discontinued at any time.

The Company expects to finance the program from existing cash resources.

As of December 31, 2019, no repurchases have been made.

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.

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

15 unchanged sentences

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

On August 26, 2019 SWK entered into and closed that certain Asset Purchase Agreement (the “MAPADOC Asset Purchase Agreement”) by and among the Company, SPS Commerce, Inc., as buyer (“SPS”), and SWK as seller, pursuant to which SPS agreed to acquire from SWK substantially all of the assets related to the MAPADOC business (See footnote 14).

The Company is publicly traded and was quoted on the Over-the-Counter Market Place (“OTCQB”) under the symbol “SSNT” until April 18, 2017.

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

On August 26, 2019 SWK entered into and closed that certain asset purchase agreement (the “MAPADOC Asset Purchase Agreement”) by and among the Company, SPS Commerce, Inc., as buyer (“SPS”), and SWK as seller, pursuant to which SPS agreed to acquire from SWK substantially all of the assets related to the MAPADOC business.

The Company is publicly 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.

29 unchanged sentences

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

1 unchanged sentence

The Company assesses potential impairment of its intangible assets and other long-lived assets when there is evidence that recent events or changes in circumstances have made recovery of an asset’s carrying value unlikely.

A triggering event occurred with the sale of Mapadoc EDI and an analysis was prepared by management.

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

No impairment losses were identified and recorded for the years ended December 31, 2021 and 2020 respectively.

Revenue Recognition

The Financial Accounting Standards Board “FASB” issued ASU 2014-09, Revenue from Contracts with Customers:

Topic 606 which superseded nearly all existing revenue recognition guidance under GAAP.

The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.

Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others.

Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts.

With the adoption of ASC 606, the Company has elected the significant financing component practical expedient.

The Company has elected the significant financing component practical expedient in accordance with ASC 606.

In determining the transaction price, the Company does not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

31 unchanged sentences

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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Leases (continued)

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

4 unchanged sentences

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

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Leases (continued)

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

8 unchanged sentences

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

The Company finances purchases of hardware and computer equipment through finance lease agreements.

Finance lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

Cash and Cash Equivalents

6 unchanged sentences

At December 31, 2021, the Company had cash on deposit of approximately $ 5,955,840 in excess of the federally insured limits of $ 250,000 .

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.

No one customer represented more than 10% of the total accounts receivable and unbilled services for the years ended December 31, 2021 and 2020.

For the years ended December 31, 2021 and 2020, the top ten customers accounted for 9 % ($ 3,644,319 ) and 10 % ($ 4,246,257 ), respectively, of total revenues.

2 unchanged sentences

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

For the year ended December 31, 2021, one supplier represented approximately 24 % of total accounts payable.

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

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

66 unchanged sentences

Recently Adopted Authoritative Pronouncements

In January 2017, the FASB issued ASU No.

2017-04, Intangibles-Goodwill and Other (Topic 350), which includes provisions, intended to simplify the test for goodwill impairment.

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.

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.

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.

This was adopted on January 1, 2021 and did not have a significant impact on our financial position and results of operations.

In December 2019, the FASB issued ASU No.

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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.

This was adopted on January 1, 2021 and did not have a significant impact on our financial position and results of operations.

SILVERSUN TECHNOLOGIES, INC.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Authoritative Pronouncements

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).

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

In October 2021, the FASB issued ASU No.

2021-08, "Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." This ASU requires contract assets and contract liabilities (e.g.

deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, "Revenue from Contracts with Customers".

Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree.

Historically, such amounts were recognized by the acquirer at fair value in purchase accounting.

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued.

The Company elected to early adopt ASU 2021-08 on January 1, 2022 and will apply to all business combinations consummated subsequent to this date.

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.

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 options, warrants and convertible securities to the extent they are dilutive.

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, 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.

NOTE 3 – NET (LOSS) INCOME PER COMMON SHARE

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

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

For the year ended December 31, 2021 since the Company has a net loss, the effect of common stock equivalents is anti-dilutive, and, as such, common stock equivalents have been excluded from the calculation.

For the year ended December 31, 2020, the average market prices for the year 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, the convertible promissory notes have also been excluded from the Company’s computation of income per common share for the year ended December 31, 2020.

December 31, 2021

December 31, 2020

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

Net income (loss) from continuing operations

Basic net (loss) income per share computation:

Net (loss) income

Weighted-average common shares outstanding

Basic net income (loss) per share

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

Net income (loss) per above

Interest on convertible note

Net income (loss)

Basic net (loss) income per share

Diluted net (loss) income per share computation:

Net (loss) income per above

Weighted-average common shares outstanding

Incremental shares for convertible promissory note, warrants And stock options

Incremental shares for convertible promissory note,

warrants and stock options

Total adjusted weighted-average shares

Diluted net loss per share

Diluted net (loss) income per share

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

NOTE 3 – NET (LOSS) INCOME PER COMMON SHARE (Continued)

The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share.

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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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Amortization is computed using the straight-line method over the estimated useful lives.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

NOTE 5 – INTANGIBLE ASSETS (Continued)

The components of intangible assets are as follows:

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Amortization expense related to the above intangible assets was $ 531,102 and $ 391,563 , respectively, the years ended December 31, 2021 and 2020.

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)

There was no impairment of intangible assets for the years ended December 31, 2021 and 2020, respectively.

The Company expects future amortization expense to be the following:

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.

The JPM Lender had agreed to loan SWK up to a principal amount of two million dollars.

The interest rate on the JPM Revolving Demand Note was to be a variable rate, equal to the “Adjusted LIBOR Rate”, plus two and one quarter percent (2.25%) per annum.

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 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.

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 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 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.

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.

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

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

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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 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”).

The ISM Note has an optional conversion feature whereby 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 $ 4.03 , 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”).

In February 2021, ISM converted the outstanding balance of the ISM Note in the amount of $ 479,112 into 119,004 shares of the Company’s common stock.

At December 31, 2021 and December 31, 2020, the outstanding balances on the ISM Note were $- 0 - and $ 512,487 , 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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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 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”).

The Nellnube Note has an optional conversion feature whereby the holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, 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 $ 4.03 (the “Fixed Conversion Price”) .

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

At December 31, 2021 and December 31, 2020, the outstanding balances on the Nellnube Note were $-0- and $ 204,995 , 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.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

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

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

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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.

In July 2021, the Company waived its rights to any downward adjustments on these notes, and agreed to pay the full face amount, plus interest, on those notes on the date of maturity.

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 July 31, 2021, the Company paid Note 1 and accrued interest in the amount of $ 107,543 .

At December 31, 2021 and December 31, 2020, the outstanding balances on the PT Notes were $ 206,667 and $ 310,000 , respectively.

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 .

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Monthly payments including interest are $ 4,869 .

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

At December 31, 2021 and December 31, 2020, the outstanding balances on the CMS Note were $ 105,097 and $ 160,821 , respectively.

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”).

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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, 2021 and December 31, 2020, the outstanding balances on the BSS Note were $ 185,820 and $ 230,000 , respectively.

On April 1, 2021, SWK acquired certain assets of CT-Solution, Inc.

(“CTS”) pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $ 130,000 (the “CTS Note”).

The CTS 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 $ 3,724 .

At December 31, 2021, the outstanding balance on the CTS Note was $ 101,781 .

On May 1, 2021, SWK acquired certain assets of PeopleSense, Inc.

(“PSI”) pursuant to an Asset Purchase Agreement for cash of $ 145,703 , customer deposits related to prepaid time from clients in the amount of $ 99,938 , and the issuance of a promissory note in the aggregate principal amount of $ 450,000 (the “PSI Note”).

The PSI 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 $ 12,889 .

At December 31, 2021, the outstanding balance on the PSI Note was $ 364,600 .

Total long-term debt balances at December 31, 2021 and 2020 were $ 968,940 and $ 1,482,343 , respectively, of which $ 402,005 and $ 545,000 was classified as current portion at December 31, 2021 and 2020, respectively.

At December 31, 2021, future payments of promissory notes are as follows over each of the next five fiscal years:

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DECEMBER 31, 2021 AND 2020

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.

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

As previously disclosed, SWK, a wholly-owned subsidiary of 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”).

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The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease.

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, 2021 and 2020 are as follows:

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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, 2021:

2025 and thereafter

Total undiscounted future minimum lease payments

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NOTE 9 – EQUITY

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.

The Certificate of Withdrawal eliminated the Company’s Series B Preferred Stock, par value $.001 per share (the “Series B Preferred”), from the Company’s Certificate of Incorporation.

Common Stock At-The-Market Sales Program

On October 1, 2020, the Company entered into an At Market Issuance Sales Agreement (the “2020 At Market Agreement”) with a H.C.

Wainwright &Co.

(the “Sales Agent”) under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 3,489,499 from time to time through the Sales Agent.

Sales of the Company’s common stock through the Sales Agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the U.S.

Securities and Exchange Commission.

The Company will pay to the Sales Agent a commission rate equal to 3.0 % of the gross proceeds from the sale of any shares of common stock sold through the Sales Agent under the 2020 At Market Agreement.

Shares of common stock sold under the 2020 At Market Agreement were made pursuant to the Company’s Registration Statement on Form S-3 (File No.

333-249238), filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2020, as amended, and declared effective on October 23, 2020 (the “2020 Registration Statement”), and the prospectus included in the 2020 Registration Statement.

In February 2021, 393,300 shares of Common Stock were issued and sold generating $ 3,382,352 , excluding legal expenses.

No shares remain eligible for sale under the 2020 At Market Agreement.

In April 2021, the Company entered into an At Market Issuance Sales Agreement (the “2021 At Market Agreement”) with the Sales Agent under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 3,308,842 from time to time through the Sales Agent.

Sales of the Company’s common stock through the Sales Agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the SEC.

The Company will pay to the Sales Agent a commission rate equal to 3.0 % of the gross proceeds from the sale of any shares of common stock sold through the Sales Agent under the 2021 At Market Agreement.

Shares of common stock sold under the 2021 At Market Agreement are made pursuant to the Company’s Registration Statement on Form S-3 (File No.

333-249238), filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2020, as amended, and declared effective on October 23, 2020 (the “2020 Registration Statement”), the prospectus included in the 2020 Registration Statement and the related prospectus supplement dated February 26, 2021.

In June 2021, 65,452 shares of Common Stock were issued and sold generating $ 722,116 , excluding legal expenses.

In July 2021, an additional 9,548 shares of Common Stock were issued and sold generating $ 76,436 , net of legal expenses.

For the year ended December 31, 2021, the company issued and sold a total of 468,300 shares generating $ 4,180,904 , net of legal expenses.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

NOTE 9 – EQUITY (continued)

Stock Repurchase Program

On October 10, 2019, the Company’s Board of Directors authorized a new stock repurchase program, under which the Company may repurchase up to $ 2 million of its outstanding common stock.

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The Company expects to finance the program from existing cash resources.

On November 5, 2021, the Board of Directors voted to increase the authorized amount of the buyback from $2 million to $ 5 million.

As of December 31, 2021, no repurchases have been made.

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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.

On June 21, 2021 , the Company announced the payment of a $ 0.60 special cash dividend per share of Common Stock to shareholders of record July 9, 2021.

The dividend was paid on July 16, 2021 in the amount of $ 3,081,706 .

Conversion of Convertible Debt

In February 2021, ISM converted the outstanding balance of the loan in the amount of $ 479,112 into 119,004 shares of the Company’s common stock (see Note 6).

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 (see Note 6).

Stock Options

The Company adopted the 2019 Equity and Incentive Plan (the “2019 Plan”) to order provide long-term incentives for employees and non-employees to contribute to the growth of the Company and attain specific performance goals.

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.

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Treasury yield in effect at the time of grant.

On March 29, 2021, 99,990 stock options were granted with an exercise price of $ 6.53 per option and have a five-year term with a two -year vesting period at 50 % per annum.

The fair value of stock options granted was $ 4.888 per option on the date of grant using the Black Scholes option-pricing model with the assumptions in the below table.

On October 14, 2021, 71,630 shares were granted to directors and officers with an exercise price of $ 5.90 per option and have a five-year term and are vested at the date 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.

The fair value of stock options granted was $ 4.14 per option on the date of grant using the Black Scholes option-pricing model with the assumptions in the below table.

Date of Grant

Dividend Yield

Risk-free Interest Rate

March 21, 2021

October 14, 2021

SILVERSUN TECHNOLOGIES, INC.

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Total stock compensation recognized for the year ended December 31, 2021 and 2020 was $ 441,310 and $ 10,194 , respectively

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

As of December 31, 2021 and 2020, the unamortized compensation expense for stock options was $ 228,726 and $ 0 , respectively.

The remaining amount will be recognized over the next 1.25 years.

The following table summarizes the warrants transactions:

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NOTE 10 – BUSINESS COMBINATIONS

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

(“PIT”) pursuant to an Asset Purchase Agreement in exchange for cash of $60,000 and a promissory note in the aggregate principal amount of $174,000 (“PIT Note”).

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

Monthly payments including interest are $4,984.

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.

On July 31, 2020, the Company acquired certain assets of Prairie Technology Solutions Group, LLC, (“PT”) pursuant to an asset purchase 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.

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

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”).

1 unchanged sentence

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

On April 1, 2021, SWK acquired certain assets of CT-Solution, Inc.

(“CTS”) pursuant to an asset purchase agreement for a promissory note in the aggregate principal amount of $ 130,000 (the “CTS Note”).

The CTS 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 $ 3,724 .

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

On May 1, 2021, SWK acquired certain assets of PeopleSense, Inc.

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

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

The valuation showed an increase of $ 71,359 above the purchase price, which was recorded as a gain on bargain purchase in the consolidated statement of operations as the independent valuation exceeded the purchase price.

On January 1, 2022 (“Effective Date”), the Company entered into an asset purchase agreement with Dynamic Tech Services, Inc (DTS”) to acquire certain assets of DTS.

The purchase price for the Acquired Assets was $ 1,335,000 , $ 500,000 of which was paid in cash and $ 835,000 of which was paid through the issuance of a four-year $835,000 promissory note dated January 1, 2022, paying interest at the rate of 3.25 % per annum.

The principal amount of the Note is subject to a downward adjustment in the event the Company loses any subscription renewal revenue during the one-year period immediately following the Effective Date from any persons that were customers of DTS immediately prior to the Effective Date (the “DTS Customers”).

Any such downward adjustment will be determined by calculating the percentage of loss of Acumatica subscription renewals during the one-year period immediately following the Effective Date from DTS Customers.

In the event that subscription renewal revenue received from DTS Customers during the one-year period immediately following the Effective Date is less than 95% of the subscription renewal revenue received by DTS from DTS Customers during the one-year period immediately preceding the Effective Date, the principal amount of the Note will be reduced.

The measuring period for any downward adjustment will be as of the one-year anniversary of the Effective Date.

Notwithstanding the foregoing, under no circumstances will the principal amount of the Note be reduced by reason of such downward adjustment by more than $150,000 ( i.e.

, to a principal amount below $685,000).

The Note will be amortized as follows:

The first payment of principal and interest due under the Note, which will be an annual payment, is due and payable on January 1, 2023, after the revised principal amount of the Buyer Note is determined and thereafter, payments will be made quarterly in twelve equal installments.

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

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

NOTE 10 – BUSINESS COMBINATIONS (Continued)

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

BSS (Preliminary)

2020 Purchase Prairie Tech

2020 Purchase CMS

2020 Purchase BSS

Cash consideration

1 unchanged sentence

Deposits and other assets

Accounts Receivable

Customer list

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Net assets acquired

(Preliminary)

Cash consideration

Total purchase price

Deposits and other assets

Customer list

Operating lease right-of-use assets

Total assets acquired

Deferred revenue

Contingent liability

Operating lease liability

Net assets acquired

SILVERSUN TECHNOLOGIES, INC.

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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, 2020, 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 years ended December 31, 2020 and 2019 as if the acquisitions occurred on January 1, 2019.

The following table represents the unaudited consolidated pro forma results of operations for the years ended December 31, 2021 and 2020 as if the acquisitions occurred on January 1, 2020 and 2021.

Operating expenses have been increased for the amortization expense associated with the estimated fair value adjustment as of December 31, 2020 of expected definite lived intangible assets and interest on the notes payable.

December 31, 2020

December 31, 2019

Cost of revenues

Operating expenses

Income (loss) before taxes

Net income (loss) from continuing operations

Basic and diluted income (loss) per common share

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.

Income before taxes

Basic and diluted income per common share

The Company’s consolidated financial statements for the years ending December 31, 2021, pro-forma results above include three months of results of CTS and four months of PSI.

For the year ended December 31, 2021, $ 4,644 of estimated amortization expense and $ 606 of estimated interest expense is included in the pro-forma results for CTS, $ 33,126 of estimated amortization, $ 2,797 of estimated interest expense included for PSI, and $ 190,714 of estimated amortization expense and $ 27,138 of estimated interest expense is included in the pro-forma results for DTS in the pro-forma results.

For the year ended December 31, 2021, the PSI and CTS operations had a net income before taxes of $ 176,536 which represented eight months of operations of PSI and nine months of operations of CTS that were included in the Company’s Consolidated Statement of Operations.

This consisted of approximately $ 365,117 in revenues, $ 172,150 in cost of revenues and $ 16,430 in operating expenses.

For the year ended December 31, 2020, there is $ 23,683 of estimated amortization expense and $ 7,231 of estimated interest expense included in the pro-forma results for PT, $ 20,598 of estimated amortization expense and $ 2,274 ,of estimated interest expense included in the pro-forma results for CMS, $ 30,118 of estimated amortization expense and $ 3,118 of estimated interest expense included in the pro-forma results for BSS, $ 18,576 of estimated amortization expense and $ 1,407 of estimated interest expense is included in the pro-forma results for CTS, $ 99,377 of estimated amortization expense and $ 7,657 of estimated interest expense is included in the pro-forma results for PSI, and $ 190,714 of estimated amortization expense and $ 27,138 of estimated interest expense is included in the pro-forma results for DTS in the 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

The recognized deferred tax asset is based upon the expected utilization of its benefit from future taxable income.

The Company has federal net operating loss (“NOL”) carryforwards of approximately $5,800,000 as of December 31, 2020, which is subject to limitations under Section 382 of the Internal Revenue Code.

These carryforward losses are available to offset future taxable income and begin to expire in the year 2024 to 2033.

SILVERSUN TECHNOLOGIES, INC.

2 unchanged sentences

DECEMBER 31, 2021 AND 2020

NOTE 11 – INCOME TAXES (Continued)

NOTE 11 – INCOME TAXES

The recognized deferred tax asset is based upon the expected utilization of its benefit from future taxable income.

The Company has federal net operating loss (“NOL”) carryforwards of approximately $ 5,400,000 as of December 31, 2021, which is subject to limitations under Section 382 of the Internal Revenue Code.

These carryforward losses are available to offset future taxable income and begin to expire in the year 2025 to 2033.

The foregoing amounts are management’s estimates, and the actual results could differ from those estimates.

6 unchanged sentences

Share based payments

Accrued expenses

Allowance for doubtful accounts

1 unchanged sentence

Deferred tax liabilities:

Installment sale

Long lived assets

4 unchanged sentences

For the year ended December 31, 2021, 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 50% of meals, 100% entertainment expense which are not tax deductible.

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

The total tax provision for the year ended December 31, 2021 was $ 178,005 .

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 change in federal statutory rate described above and 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 .

A reconciliation of the statutory income tax rate to the effective rate is as follows for the period December 31, 2021 and 2020:

2 unchanged sentences

Permanent items

Gain on bargain purchase

Return to provision for prior year

Change in valuation allowance

Effective income tax rate

4 unchanged sentences

NOTE 11 – INCOME TAXES (Continued)

Income tax provision (benefit) from continuing operations:

Income tax provision from continuing operations:

State and local

Total current tax provision (benefit)

Total current tax provision

State and local

Total deferred tax provision (benefit)

Total provision (benefit)

Total provision

NOTE 12 – RELATED PARTY TRANSACTIONS

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.

In February 2021, the outstanding balances of the loans were converted into common stock of the Company.

As of December 31, 2021 and December 31, 2020, the outstanding balance for the long-term convertible debt was $-0- and $ 717,482 , respectively.

At December 31, 2021 and December 31, 2020, certain long-term debt is considered a related party liability as holders, including Prairie Tech and PIT, are current employees of the Company.

As of December 31, 2021 and December 31, 2020, the outstanding balances of this debt were $ 211,642 and $ 374,040 , respectively.

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

1 unchanged sentence

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.

Total rent paid for 2020 was $ 10,195 under this lease.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Contingencies

On March 4, 2019, plaintiff John Solak (“Plaintiff”) commenced a direct and derivative action in the Delaware Court of Chancery (the “Action”):

both on his own behalf as a stockholder of Silversun and derivatively on behalf of SilverSun against the Company’s officers and directors relating to stockholder voting rights granted to the Company’s Chairman and Chief Executive Officer, Mark Meller in the form of Series B Preferred Stock.

On or about April 22, 2019, the Company determined to undertake certain actions relating to the Series B Preferred Stock challenged in Plaintiff’s complaint, as well as certain changes to the Company’s governance policies.

The Company’s officers and directors have at all relevant times denied, and continue to deny, any alleged violations of Delaware law.

Plaintiff’s counsel believe that the remedial measures by SilverSun in response to the Action render the Action moot, and give rise only to a claim for attorney’s fees.

The Company and the Plaintiff agreed that the Company shall pay $115,000 to Plaintiff’s counsel for fees and expenses.

The Court of Chancery of the State of Delaware has not been asked to review, and will pass no judgment on, this payment of fees and expenses or its reasonableness.

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

10 unchanged sentences

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) .

NOTE 14 – SALE OF EDI PRACTICE

On August 26, 2019 the Company entered into and closed that certain Asset Purchase Agreement (the “Asset Purchase Agreement”) by and among the Company, SPS Commerce, Inc., as buyer (“Buyer” or “SPS”), and SWK, as seller (the “Seller”), pursuant to which the Buyer has agreed to acquire from the Seller certain assets (all intellectual property and accounts receivable) related to the MAPADOC business, which was the EDI practice.

In consideration for the Acquired Assets (as defined in the Asset Purchase Agreement), at closing, SPS:

(i) paid Seller $10,350,000 in cash (the “Initial Cash Payment”);

and (ii) delivered $1,150,000 to an escrow account (the “Escrowed Property”) pursuant to the terms and conditions of that certain Escrow Agreement dated August 26, 2019 (the “Escrow Agreement”), for an aggregate consideration of $11,500,000 (the “Purchase Price”).

Pursuant to the terms and conditions of that certain Escrow Agreement entered into in connection with the Asset Purchase Agreement, portions of the Escrowed Property will be released at six months and at twelve months following the date of closing of the Asset Purchase Agreement, to the extent that no indemnity claims against the Escrowed Property have been filed by the Buyer.

On February 28, 2020, the company received the first half of the escrow agreement ($575,000), per the agreement.

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.

On November 5, 2021, the Company’s Board of Directors approved a five-year extension through September of 2028 of the employment agreement with Mark Meller, the Company’s Chief Executive Officer and President under the same terms and conditions.

SILVERSUN TECHNOLOGIES, INC.

2 unchanged sentences

DECEMBER 31, 2021 AND 2020

NOTE 15 – DISCONTINUED OPERATIONS

The financial results of our EDI Practice (“Mapadoc”) through December 31, 2019 are presented as discontinued operations.

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

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

December 31, 2019

Software product, net

Total revenues, net

Cost of revenues:

Cost of revenues

Selling, general and administrative expenses:

Selling and marketing expenses

General and administrative expenses

Depreciation and amortization expenses

Total selling, general and administrative expenses

Income from discontinued operations

Gain from sale of discontinued operations

Provision for income taxes

Income from discontinued operations

Calculation of gain on sale

Purchase Price*

Net Assets at August 26, 2019

Net Liabilities at August 26, 2019

Expenses associated with the sale

* Includes $162,868 of working capital adjustment

NOTE 14 – SALE OF PRODUCT LINE

On November 10, 2021, SWK entered into an Asset Purchase Agreement with Net@Work, Inc.

(“NAW”) pursuant to which NAW acquired from SWK certain assets related to the component of SWK’s business devoted to selling and supporting the Sage X3 software application published by Sage Software, Inc.

for small and middle market companies in North America.

In consideration for the assets, NAW paid SWK $ 250,000 in cash and entered into a Revenue Share Agreement (“RSA”) with SWK.

Pursuant to the RSA, NAW agreed to pay to SWK, for limited periods of time ranging from 12 to 60 months, transitional compensation measured by reference to gross revenues or gross profits (as applicable) generated by NAW from its sales of products or services after the Effective Date to customers of the Business.

In consideration for such transitional compensation, SWK agreed to assist NAW for a period of time after the Effective Date with such transitional services as may be reasonably requested by NAW and reasonably acceptable to SWK or otherwise required for the operation of the Business, including (a) implementing a smooth and orderly transfer of the Business and the Acquired Assets from SWK to NAW, (b) making introductions to customers of the Business as and when requested by NAW, (c) familiarizing NAW with the files of each of the customers as may be reasonably required, and (d) acclimating NAW to the Business.

The specific products and services giving rise to transitional compensation payments under the RSA include (i) annual maintenance renewals by customers, (ii) software, cross-sell software and migration software sales to customers, (iii) consulting services performed for customers, (iv) annual managed services contracts sold to customers, (v) hosting contracts sold to customers, (vi) e-commerce projects sold to customers, and (vii) new customer referrals.

NOTE 15 – SUBSEQUENT EVENTS

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.

On January 22, 2022, entered into an agreement to acquire certain assets of NEO3, LLC (“NEO3”).

The purchase price for the Acquired Assets was $ 225,000 , $ 150,000 of which was paid in cash and $ 75,000 of which was paid through the issuance of a three-year $75,000 promissory note dated January 22, 2022, paying interest at the rate of 2 % per annum.

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