What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-14 compared with 2023-08-08 · 187 added, 220 removed, 700 unchanged (37% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current assets:

1 unchanged sentence

Accounts receivable, net of allowance of $ 435,212 and $ 490,311 as of

June 30, 2023 and December 31, 2022, respectively

September 30, 2023 and December 31, 2022, respectively

Unbilled services

31 unchanged sentences

authorized 75,000,000 shares,

5,256,177 and 5,256,177 shares issued and outstanding as of June 30, 2023

5,256,177 and 5,256,177 shares issued and outstanding as of September 30, 2023

and December 31, 2022, respectively

8 unchanged sentences

Three Months Ended

Six Months Ended

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Nine Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Software product, net

10 unchanged sentences

Other expense:

Interest expense

Interest expense, net

Total other expense

Income (loss) before taxes

Provision (benefit) for income taxes

Net income (loss)

Net income (loss) per common share:

Loss before taxes

Benefit for income taxes

Net loss per common share:

Weighted average shares:

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY

FOR THE THREE MONTHS ENDED JUNE 30, 2023

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

Preferred Stock

1 unchanged sentence

Stockholders’

Balance at April 1, 2023

Balance at June 30, 2023

FOR THE THREE MONTHS ENDED JUNE 30, 2022

Balance at July 1, 2023

Cash dividend

Balance at September 30, 2023

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022

Preferred Stock

1 unchanged sentence

Stockholders’

Balance at April 1, 2022

Balance at July 1, 2022

Share-based compensation

Balance at June 30, 2022

FOR THE SIX MONTHS ENDED JUNE 30, 2023

Stock compensation issued for services

Balance at September 30, 2022

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

Preferred Stock

2 unchanged sentences

Balance at January 1, 2023

Cash dividend

Share-based compensation

Balance at June 30, 2023

FOR THE SIX MONTHS ENDED JUNE 30, 2022

Balance at September 30, 2023

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

Preferred Stock

3 unchanged sentences

Share-based compensation

Balance at June 30, 2022

Stock compensation issued for services

Balance at September 30, 2022

See accompanying notes to the unaudited condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Deferred income taxes

12 unchanged sentences

Accrued expenses

Income tax payable

Accrued interest

1 unchanged sentence

Operating lease obligations

Net cash used in operating activities

Net cash provided by operating activities

Cash flows from investing activities:

3 unchanged sentences

Cash flows from financing activities:

Payment of cash dividend

Payment of long-term debt

1 unchanged sentence

Net cash used in financing activities

Net decrease in cash

Net (decrease) increase in cash

Cash, beginning of period

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

For the six months ended June 30, 2023:

For the nine months ended September 30, 2023:

On September 29, 2022, the Company entered into an operating lease for equipment with Digital Fortress, Inc.

3 unchanged sentences

On June 2, 2023, the Company entered into an operating lease to extend its lease for its Arizona office with Exeter 17319 DE, LLC.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 108,330 during the period ended June 30, 2023.

For the six months ended June 30, 2022:

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 108,330 during the period ended September 30, 2023.

For the nine months ended September 30, 2022:

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

4 unchanged sentences

On April 15, 2022, the Company incurred approximately $ 494,383 in financial lease obligations for purchases of equipment.

On September 29, 2022, the Company approved 120,000 shares of common stock in exchange for services.

These shares have not been issued and, as such, only the value of the shares have been recorded to additional paid-in capital.

The shares will be recorded when the shares have actually been issued.

See accompanying notes to the unaudited condensed consolidated financial statements.

29 unchanged sentences

Although the Company does not have significant operations in Russia, the sanctions could impact the Company’s business in other countries and could have a negative impact on the Company’s future revenue and that of its customers, either of which could adversely affect the Company’s business and financial results.

We currently also do not expect a significant impact on our results of operations in the future due to Israel-Hamas war, as we have minimal business in that region of the world, both directly and indirectly.

Although the Company does not have significant operations in this region, this war could impact the Company’s business in other countries and could have a negative impact on the Company’s future revenue and that of its customers, either of which could adversely affect the Company’s business and financial results.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2023, the results of operations for the three and six months ended June 30, 2023 and 2022 and cash flows for the six months ended June 30, 2023 and 2022.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 2023, the results of operations for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022.

These results are not necessarily indicative of the results to be expected for the full year.

32 unchanged sentences

These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors.

No impairment losses were identified or recorded for the three or six months ended June 30, 2023 and 2022.

No impairment losses were identified or recorded for the three or nine months ended September 30, 2023 and 2022.

Capitalization of Proprietary Developed Software

17 unchanged sentences

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.

No impairment losses were identified or recorded for the three and six months ended June 30, 2023 and 2022.

No impairment losses were identified or recorded for the three and nine months ended September 30, 2023 and 2022.

Revenue Recognition

12 unchanged sentences

For the Three Months Ending

September 30,

Software revenue

2 unchanged sentences

Ancillary service revenue

For the Six Months Ending

For the Nine Months Ending

September 30,

Software revenue

12 unchanged sentences

Deferred revenues consist of maintenance on proprietary products (contract liabilities), customer telephone support services (contract liabilities) and deposits for future consulting services that will be earned as such services are performed over the contractual or stated period, which generally ranges from three to twelve months.

As of June 30, 2023, there was $ 372,520 in deferred maintenance revenues, $ 512,475 in deferred support service revenues and $ 2,478,659 in deposits for future consulting services.

As of September 30, 2023, there was $ 354,558 in deferred maintenance revenues, $ 506,787 in deferred support service revenues and $ 2,490,893 in deposits for future consulting services.

As of December 31, 2022, there was $ 460,709 in deferred maintenance, $ 472,266 in deferred support services, and $ 2,824,115 in deposits for future consulting services.

4 unchanged sentences

Fair Value of Financial Instruments

The Company estimates that the fair value of all financial instruments at June 30, 2023 and December 31, 2022, as defined in ASC 852 “ 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 unaudited condensed consolidated balance sheets.

The Company estimates that the fair value of all financial instruments at September 30, 2023 and December 31, 2022, as defined in ASC 852 “ 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 unaudited condensed 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 unaudited condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022 for cash, accounts receivable, and accounts payable approximate the fair value because of the immediate or short-term maturity of these financial instruments.

The carrying amounts reported in the unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022 for cash, accounts receivable, and accounts payable approximate the fair value because of the immediate or short-term maturity of these financial instruments.

For 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.

2 unchanged sentences

The Company defers expenses until such time that the expense is consumed and charged to expense at that time.

Deferred charges represent expenses related to the merger (see Note 14) and will be charged against the proceeds when the merger is consummated.

Deferred charges represent expenses related to the merger (see Note 14).

On October 13, 2023, SilverSun Technologies, Inc.

(the “Company”) terminated the Agreement and Plan of Merger dated as of September 29, 2022.

The Merger Agreement was terminated by the Company pursuant to Section 7.02(a) of the Merger Agreement which provides that the Merger Agreement may be terminated, and the transactions contemplated thereby abandoned by either the Company or Rhodium at any time before the effective time of the first merger contemplated by the Merger Agreement, by written notice from the terminating party to the other party if the closing under the Merger Agreement has not occurred on or before September 30, 2023.

As a result, the Company charged to expense all previously deferred deal related expenses in the amount of $ 2,986,107 .

These expenses are recorded as Deal Costs in the accompanying condensed statement of operations in Other Expense.

SILVERSUN TECHNOLOGIES, INC.

22 unchanged sentences

The Company maintains its cash with various institutions, which exceed federally insured limits throughout the year.

At June 30, 2023 and December 31, 2022, the Company had cash on deposit of $ 6,030,908 and $ 7,050,862 , respectively, in excess of the federally insured limits of $ 250,000 .

As of June 30, 2023, no one customer represented more than 10% of the total accounts receivable and unbilled services.

At September 30, 2023 and December 31, 2022, the Company had cash on deposit of $ 5,709,344 and $ 7,050,862 , respectively, in excess of the federally insured limits of $ 250,000 .

As of September 30, 2023, no one customer represented more than 10% of the total accounts receivable and unbilled services.

As of December 31, 2022, no one customer represented more than 10% of the total accounts receivable and unbilled services.

For the six months ended June 30, 2023 and 2022, the Company’s top ten customers accounted for 10 % ($ 2,681,200 ) and 9 % ($ 1,856,981 ), respectively, of total revenues.

For the nine months ended September 30, 2023 and 2022, the Company’s top ten customers accounted for 9 % ($ 3,506,819 ) and 8 % ($ 2,449,875 ), respectively, of total revenues.

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

For the six months ended June 30, 2023 and 2022 purchases from one supplier through a “channel partner” agreement were approximately 14 % and 14 % of cost of revenues, respectively.

For the nine months ended September 30, 2023 and 2022 purchases from one supplier through a “channel partner” agreement were approximately 14 % and 14 % of cost of revenues, respectively.

The channel partner agreements are for a one-year term and automatically renew for an additional one-year term on the anniversary of the agreement’s effective date.

As of June 30, 2023, one supplier represented approximately 22 % of total accounts payable.

As of September 30, 2023, a legal firm represented approximately 54 % of total accounts payable and one supplier represented approximately 11 % of total accounts payable.

For the year ended December 31, 2022, one supplier represented approximately 28 % of total accounts payable.

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

As of June 30, 2023, the Company believes it has no significant risk related to its concentration of credit risk related to accounts receivable.

As of September 30, 2023, the Company believes it has no significant risk related to its concentration of credit risk related to accounts receivable.

SILVERSUN TECHNOLOGIES, INC.

28 unchanged sentences

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 June 30, 2023 and December 31, 2022.

There were no liabilities for uncertain tax positions at September 30, 2023 and December 31, 2022.

SILVERSUN TECHNOLOGIES, INC.

22 unchanged sentences

Recently Adopted Authoritative Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments , which changes the way companies evaluate credit losses for most financial assets and certain other instruments.

In September 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments , which changes the way companies evaluate credit losses for most financial assets and certain other instruments.

For receivables, and other short-term financial instruments, companies are required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses.

9 unchanged sentences

Diluted income (loss) 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.

For the three and six months ended June 30, 2023 and 2022, the average market prices for the periods ended are less than the exercise price of all the outstanding stock options, therefore, the inclusion of the stock options would be anti-dilutive.

In addition, for the three and six months ended June 30, 2022, 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.

June 30, 2023

June 30, 2022

Basic net income (loss) per share computation:

Net income (loss)

For the three and nine months ended September 30, 2023 and 2022, the average market prices for the periods ended are less than the exercise price of all the outstanding stock options, therefore, the inclusion of the stock options would be anti-dilutive.

In addition, for the three and nine months ended September 30, 2023 and 2022, since the Company had a net loss, the effect of common stock equivalents is anti-dilutive, and, as such, common stock equivalents have been excluded from the calculation.

September 30, 2023

September 30, 2022

Basic net loss per share computation:

Weighted-average common shares outstanding

Basic net income (loss) per share

Diluted net income (loss) per share computation:

Net income (loss) per above

Basic net loss per share

Diluted net loss per share computation:

Net loss per above

Weighted-average common shares outstanding

Total adjusted weighted-average shares

Diluted net income (loss) per share

June 30, 2023

June 30, 2022

Basic net income (loss) per share computation:

Net income (loss)

Diluted net loss per share

September 30, 2023

September 30, 2022

Basic net loss per share computation:

Weighted-average common shares outstanding

Basic net income (loss) per share

Diluted net income (loss):

Net income (loss)

Basic net loss per share

Diluted net loss:

Weighted-average common shares outstanding

Total adjusted weighted-average shares

Diluted net income (loss)per share

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

June 30, 2023

June 30, 2022

Diluted net loss per share

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

September 30, 2023

September 30, 2022

Stock options

Total potential dilutive securities not included in income (loss) income per share

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

June 30, 2023

June 30, 2022

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

September 30, 2023

September 30, 2022

Stock options

18 unchanged sentences

Roll-forward of Allowance for Doubtful Accounts

The following table represents the roll-forward of the allowance for doubtful accounts for the six months ended June 30, 2023 and the year ended December 31, 2022:

June 30, 2023

The following table represents the roll-forward of the allowance for doubtful accounts for the nine months ended September 30, 2023 and the year ended December 31, 2022:

September 30, 2023

December 31, 2022

4 unchanged sentences

Property and equipment is summarized as follows:

June 30, 2023

September 30, 2023

December 31, 2022

3 unchanged sentences

Property and equipment, net

Depreciation and amortization expense related to these assets for the three and six months ended June 30, 2023 were $ 85,529 and $ 178,070 , respectively, as compared to $ 96,582 and $ 195,007 for the three and six months ended June 30, 2022.

Depreciation and amortization expense related to these assets for the three and nine months ended September 30, 2023 were $ 75,310 and $ 253,380 , respectively, as compared to $ 96,713 and $ 291,720 for the three and nine months ended September 30, 2022.

Property and equipment under finance leases (included in Note 8) are summarized as follows:

June 30, 2023

September 30, 2023

December 31, 2022

15 unchanged sentences

The components of intangible assets are as follows:

June 30, 2023

September 30, 2023

December 31, 2022

3 unchanged sentences

accumulated amortization

Amortization expense related to the above intangible assets for the three and six months ended June 30, 2023 was $ 161,961 and $ 323,922 , respectively, as compared to $ 186,365 and $ 376,822 for the three and six months ended June 30, 2022.

Amortization expense related to the above intangible assets for the three and nine months ended September 30, 2023 was $ 161,961 and $ 485,883 , respectively, as compared to $ 193,042 and $ 569,864 for the three and nine months ended September 30, 2022.

The Company expects future amortization expense to be the following:

11 unchanged sentences

On August 4, 2022, the Company paid Note 2 and accrued interest in the amount of $ 111,924 .

At June 30, 2023 and December 31, 2022, the outstanding balances on the PT Notes were $ 103,333 and $ 103,333 , respectively.

On July 1, 2023, the Company repaid the outstanding balance of $ 103,333 and accrued interest.

At September 30, 2023 and December 31, 2022, the outstanding balances on the PT Notes were $- 0 - and $ 103,333 , respectively.

SILVERSUN TECHNOLOGIES, INC.

5 unchanged sentences

Monthly payments including interest are $ 4,869 .

At June 30, 2023 and December 31, 2022, the outstanding balances on the CMS Note were $ 19,396 and $ 48,249 , respectively.

At September 30, 2023 and December 31, 2022, the outstanding balances on the CMS Note were $ 4,861 and $ 48,249 , 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”).

1 unchanged sentence

Monthly payments including interest are $ 4,031 .

At June 30, 2023 and December 31, 2022, the outstanding balances on the BSS Note were $ 117,872 and $ 140,748 , respectively.

At September 30, 2023 and December 31, 2022, the outstanding balances on the BSS Note were $ 106,348 and $ 140,748 , respectively.

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

2 unchanged sentences

Monthly payments including interest are $ 3,724 .

At June 30, 2023 and December 31, 2022, the outstanding balances on the CTS Note were $ 36,896 and $ 58,741 , respectively.

At September 30, 2023 and December 31, 2022, the outstanding balances on the CTS Note were $ 25,892 and $ 58,741 , respectively.

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

2 unchanged sentences

Monthly payments including interest are $ 12,889 .

At June 30, 2023 and December 31, 2022, the outstanding balances on the PSI Note were $ 140,373 and $ 215,863 , respectively.

At September 30, 2023 and December 31, 2022, the outstanding balances on the PSI Note were $ 102,344 and $ 215,863 , respectively.

On January 1, 2022, SWK acquired certain assets of Dynamic Tech Services, Inc.

11 unchanged sentences

and thereafter, payments will be made quarterly in twelve equal installments.

At June 30, 2023 and December 31, 2022, the outstanding balances on the DTSI Note was $ 574,062 and $ 835,000 , respectively (see Note 11).

At September 30, 2023 and December 31, 2022, the outstanding balances on the DTSI Note was $ 521,875 and $ 835,000 , respectively (see Note 11).

On January 19, 2022, SWK acquired the customer list of NEO3, LLC (“NEO3”) pursuant to an Asset Purchase Agreement for the customer list for $ 150,000 cash and the issuance of a promissory note in the aggregate principal amount of $ 75,000 (the “NEO3 Note”).

1 unchanged sentence

Monthly payments including interest are $ 2,148 .

At June 30, 2023 and December 31, 2022, the outstanding balance on the NEO3 Note was $ 40,144 and $ 52,559 , respectively.

Total long-term and related party debt balances at June 30, 2023 and December 31, 2022 were $ 1,032,076 and $ 1,454,493 , respectively, of which $ 580,402 and $ 783,479 was classified as current portion at June 30, 2023 and December 31, 2022, respectively.

At June 30, 2023, future payments of long-term debt are as follows:

At September 30, 2023 and December 31, 2022, the outstanding balance on the NEO3 Note was $ 33,889 and $ 52,559 , respectively.

Total long-term and related party debt balances at September 30, 2023 and December 31, 2022 were $ 795,209 and $ 1,454,493 , respectively, of which $ 413,861 and $ 783,479 was classified as current portion at September 30, 2023 and December 31, 2022, respectively.

At September 30, 2023, future payments of long-term debt are as follows:

Remainder of 2023

5 unchanged sentences

The equipment has been capitalized and is included in property and equipment in the accompanying unaudited condensed consolidated balance sheets.

The weighted average interest rate as of June 30, 2023 was 7.24 % and the following weighted-average lease term:

June 30, 2023

The weighted average interest rate as of September 30, 2023 was 7.2 % and the following weighted-average lease term:

September 30, 2023

December 31, 2022

Weighted average remaining lease term

At June 30, 2023 future payments under finance leases are as follows:

June 30, 2023

At September 30, 2023 future payments under finance leases are as follows:

September 30, 2023

Remainder of 2023

7 unchanged sentences

On September 29, 2022, the Company entered into an operating lease for equipment with Digital Fortress, Inc.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 109,840 during the period ended June 30, 2023.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 109,840 during the period ended September 30, 2023.

On October 12, 2022, the Company entered into an operating lease for equipment and space with Cologix USA, Inc.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 106,471 during the period ended June 30, 2023.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 106,471 during the period ended September 30, 2023.

On June 2, 2023, the Company entered into an operating lease to extend its lease for its Arizona office with Exeter 17319 DE, LLC.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized for the extension in the amount of $ 108,330 during the period ended June 30, 2023.

Accordingly, operating lease right of use assets and operating lease liabilities were recognized for the extension in the amount of $ 108,330 during the period ended September 30, 2023.

The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities.

1 unchanged sentence

The asset and liability were valued using an weighted average interest rate of 4.77 %.

The Company's weighted average remaining lease term for operating leases as of June 30, 2023 and December 31, 2022 are as follows:

June 30, 2023

The Company's weighted average remaining lease term for operating leases as of September 30, 2023 and December 31, 2022 are as follows:

September 30, 2023

December 31, 2022

4 unchanged sentences

NOTE 9 – OPERATING LEASE LIABILITY (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 unaudited condensed consolidated balance sheet as of June 30, 2023:

Remainder 2023

4 unchanged sentences

Long-term operating lease liabilities

Total rent expense under operating leases for the three and six months ended June 30, 2023 was $ 103,213 and $ 213,080 , respectively, as compared to $ 123,086 and $ 258,217 for the three and six months ended June 30, 2022, respectively.

Total rent expense under operating leases for the three and nine months ended September 30, 2023 was $ 106,790 and $ 319,870 , respectively, as compared to $ 85,706 and $ 297,919 for the three and nine months ended September 30, 2022, respectively.

NOTE 10 – EQUITY

On August 4, 2023 , the Board of Directors approved the payment of a $ 0.20 special cash dividend per share of Common Stock to shareholders of record August 18, 2023 .

The dividend was paid on August 25, 2023.

Stock Repurchase Program

5 unchanged sentences

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 June 30, 2023, no repurchases have been made.

As of September 30, 2023, no repurchases have been made.

Stock Options

5 unchanged sentences

Treasury yield in effect at the time of grant.

There were no stock options granted for the six months ended June 30, 2023.

There were no stock options granted for the nine months ended September 30, 2023.

SILVERSUN TECHNOLOGIES, INC.

2 unchanged sentences

NOTE 10 – EQUITY (Continued)

A summary of the status of the Company’s stock option plans for the six months ended June 30, 2023 and the year ended December 31, 2022 and changes during the periods are presented below (in number of options):

A summary of the status of the Company’s stock option plans for the nine months ended September 30, 2023 and the year ended December 31, 2022 and changes during the periods are presented below (in number of options):

Exercise Price

5 unchanged sentences

Options canceled/forfeited

Outstanding options at June 30, 2023

For the three and six months ended June 30, 2023, the Company recorded share-based compensation expense of $-0- and $ 41,497 , respectively, as compared to $ 45,945 and $ 91,890 for the three and six months ended June 30, 2022.

As of June 30, 2023 and December 31, 2022, the unamortized compensation expense for stock options was $-0- and $ 41,497 , respectively.

Outstanding options at September 30, 2023

For the three and nine months ended September 30, 2023, the Company recorded share-based compensation expense of $- 0 - and $ 41,497 , respectively, as compared to $ 44,185 and $ 136,075 for the three and nine months ended September 30, 2022.

As of September 30, 2023 and December 31, 2022, the unamortized compensation expense for stock options was $- 0 - and $ 41,497 , respectively.

NOTE 11 – BUSINESS COMBINATIONS

23 unchanged sentences

Net assets acquired

The Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2023 and 2022 include the actual results of DTS, and as such, pro forma results are not required.

The Company’s unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023 and 2022 include the actual results of DTS, and as such, pro forma results are not required.

NOTE 12 – INCOME TAXES

3 unchanged sentences

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 $ 5,000,000 as of June 30, 2023, which is subject to limitations under Section 382 of the Internal Revenue Code.

The Company has federal net operating loss (“NOL”) carryforwards of approximately $ 5,700,000 as of September 30, 2023, which is subject to limitations under Section 382 of the Internal Revenue Code.

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

1 unchanged sentence

Deferred income taxes are recognized for the tax consequence of such temporary differences at the enacted tax rate expected to be in effect when the differences reverse.

The Company had approximately $ 886,000 and $ 1,106,000 in deferred tax assets at June 30, 2023 and December 31, 2022, respectively.

The decrease in the deferred tax asset is due to provision for income taxes, which will reduce our NOL carryforward and the receipt of state and federal refunds.

For the three and six months ended June 30, 2023, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate.

For the three and six months ended June 30, 2023, the Company recorded tax provisions of $ 95,481 and $ 170,272 , respectively, as compared to tax benefits of $ 15,280 and $ 13,192 for the three and six months ended June 30, 2022, respectively.

These increases in the tax provision are primarily the result of the increase in income before taxes for the three and six months ended June 30, 2023 as compared to the three and six months ended June 30, 2022.

The Company had approximately $ 1,342,000 and $ 1,106,000 in deferred tax assets at September 30, 2023 and December 31, 2022, respectively.

The increase in the deferred tax asset is due to tax benefit, which will increase our NOL carryforward.

For the three and nine months ended September 30, 2023, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate.

For the three and nine months ended September 30, 2023, the Company recorded tax benefits of $ 456,121 and $ 285,849 , respectively, as compared to tax benefits of $ 7,061 and $ 20,253 for the three and nine months ended September 30, 2022, respectively.

These increase in the tax benefits are primarily the result of the losses income before taxes for the three and nine months ended September 30, 2023 as compared to the three and nine months ended September 30, 2022, primarily as a result of the write-off of expenses associated with the termination of the Agreement and Plan of Merger dated as of September 29, 2022 (see Note 14).

NOTE 13 – RELATED PARTY TRANSACTIONS

At June 30, 2023 and December 31, 2022, certain long-term debt is considered a related party liability as a holder of Prairie Tech is current employee of the Company.

As of June 30, 2023 and December 31, 2022, the outstanding balances of this debt were $ 103,333 and $ 103,333 , respectively.

At September 30, 2023 and December 31, 2022, certain long-term debt is considered a related party liability as a holder of Prairie Tech is current employee of the Company.

As of September 30, 2023 and December 31, 2022, the outstanding balances of this debt were $- 0 - and $ 103,333 , respectively.

SILVERSUN TECHNOLOGIES, INC.

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(“Rhodium”), an industrial-scale digital asset technology company utilizing proprietary technologies to mine bitcoin.

Under the terms of the Merger Agreement, which has been unanimously approved by the Boards of Directors of both SilverSun and Rhodium, upon the consummation of the business combination, the Company will receive $ 10 million in cash and will retain 3.2 % equity in SilverSun upon consummation of the merger.

Each holder of an outstanding share of SilverSun common stock will receive:

A cash dividend of $1.50 per share, which equates to $7,884,266 in the aggregate;

A stock dividend of one share of SilverSun Technologies Holdings, Inc.

("HoldCo"), a recently formed subsidiary of SilverSun.

HoldCo's sole assets are its 100% ownership of SWK and SCS (together the "Subsidiaries"), which Subsidiaries accounted for the large majority of SilverSun's revenue in 2022.

It is expected that the capital structure of HoldCo will roughly approximate the current capital structure of SilverSun;

Following the consummation of the business combination, the business of the Subsidiaries will continue to be operated consistent with past practices.

The current management and Board of Directors of SilverSun, including Mark Meller, the Chief Executive Officer of both SilverSun and SWK, will continue in their current roles at both HoldCo and the Subsidiaries.

HoldCo will apply for public listing and the shares distributed in the stock dividend will be registered pursuant to a Form 10 that will be filed by HoldCo with the SEC (subject to regulatory and exchange regulations and approvals);

The shares of SilverSun's common stock to be retained by the current SilverSun stockholders following the consummation of the business combination will collectively represent approximately 3.2% of SilverSun's pro forma common equity ownership.

The proposed Mergers are subject to the receipt of any applicable regulatory approvals, the approval of SilverSun's and Rhodium's respective stockholders, and other customary closing conditions.

Prior to the Mergers, SilverSun will hold a special meeting of its shareholders as of a pre-Merger record date to be determined (the “Special Meeting”).

At the Special Meeting, the SilverSun stockholders will be asked to vote on the proposals set forth in the Form S-4 Registration Statement of SilverSun (the “Form S-4”) filed on October 19, 2022, as amended on January 9, 2023, February 14, 2023, April 4, 2023, April 28, 2023 and July 11, 2023 and as may be further amended in the future.

These proposals include, but are not limited to, approval of (i) the Mergers;

(ii) the Amended and Restated Certificate of Incorporation (and the matters covered thereby including the Reverse Stock Split);

(iii) the Separation and Distribution Agreement;

(iv) the SilverSun Technologies, Inc.

2023 Omnibus Incentive Plan;

(v) the share issuances related to the Mergers requiring Nasdaq approval;

and (vi) the post-Merger board nominees.

These proposals are set forth in greater detail in the Form S-4.

The Mergers are conditioned upon the approval of the Merger Proposal, subject to terms of the Merger Agreement.

If the Merger Proposal is not approved, the other proposals (except the adjournment proposal, as described in the S-4 ) will not be presented to the shareholders for a vote.

Similarly, approval of the Merger proposal is subject to the approval of the Amended and Restated Certificate of Incorporation proposal, the Separation and Distribution.

On March 13, 2023, SilverSun Technologies, Inc.

(the “Company”) entered into the Third Amendment to Merger Agreement (the “Amendment”) with Rhodium Enterprises Acquisition Corp., a Delaware corporation and direct wholly owned subsidiary of the Company, Rhodium Enterprises Acquisition LLC, a Delaware limited liability company and direct wholly owned subsidiary of the Company, and Rhodium Enterprises, Inc., a Delaware corporation (“Rhodium”), amending that certain Agreement and Plan of Merger, dated as of September 29, 2022 by and among the parties referenced above (as amended from time to time, the “Merger Agreement”).

The Amendment provides that the Merger Agreement may be terminated, and the transactions abandoned, by either the Company or Rhodium at any time before the First Effective Time (as defined in the Merger Agreement), by written notice from one to the other if the closing has not occurred on or before June 30, 2023.

No other provisions of the Merger Agreement were modified by the Amendment.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 – MERGER (Continued)

On July 11, 2023, SilverSun Technologies, Inc.

(the “Company”) entered into the Fifth Amendment to Merger Agreement (the “Amendment”) with Rhodium Enterprises Acquisition Corp., a Delaware corporation and direct wholly owned subsidiary of the Company, Rhodium Enterprises Acquisition LLC, a Delaware limited liability company and direct wholly owned subsidiary of the Company, and Rhodium Enterprises, Inc., a Delaware corporation (“Rhodium”), amending that certain Agreement and Plan of Merger, dated as of September 29, 2022 by and among the parties referenced above (as amended from time to time, the “Merger Agreement”).

The Amendment also removes Section 7.06 from the Agreement.

This section had provided for the payment of a $ 5,000,000 termination fee by the Company or Rhodium, as applicable, upon certain enumerated termination events.

Following such removal, the Company and Rhodium continue to retain all other legal remedies available to them upon such termination events.

The Merger Agreement may be terminated, whether before or after obtaining the requisite vote of SilverSun shareholders, by mutual written consent of SilverSun and Rhodium.

The Merger Agreement may be terminated, and the transactions abandoned, by either SilverSun or Rhodium at any time before the effective time of the merger , by written notice from one to the other if (i) the Closing has not occurred on or before June 30, 2023 or such later date mutually agreed to by SilverSun and Rhodium (the “Termination Date”), except that the right to terminate the Merger Agreement for this reason is not available to any party who is then in material breach of the Merger Agreement;

(ii) the requisite vote of SilverSun shareholders has not been obtained by reason of the failure to obtain the required vote at the SilverSun Shareholders’ Meeting (or any adjournment or postponement of such meeting) duly convened for such purpose, except that the right to terminate the Merger Agreement for this reason shall not be available to SilverSun where the failure to obtain the requisite vote has been caused by the action or failure to act of any of the SilverSun Entities or such action or failure to act constitutes a material breach by any of the SilverSun Entities of the Merger Agreement;

or (iii) any law or order is enacted, issued, promulgated or entered by a governmental authority of competent jurisdiction (including Nasdaq) that permanently enjoins, or otherwise prohibits the consummation of the transactions, and (in the case of any order) such order has become final and non-appealable.

The Merger Agreement may be terminated, and the transactions abandoned, by SilverSun at any time before the First Effective Time, if (i) Rhodium breaches any of its representations, warranties, covenants or agreements contained in the Merger Agreement, which breach (a) would give rise to the failure to satisfy the general closing conditions or the closing conditions to the obligations of SilverSun at the Closing and (b) such breach cannot be cured by the Termination Date, or, if curable, has not been cured by Rhodium within the earlier of (A) 30 days after Rhodium’s receipt of written notice of such breach from SilverSun and (B) three business days prior to the Termination Date, subject to certain conditions;

or (ii) all of the general closing conditions and the closing conditions to the obligations of Rhodium at the Closing have been satisfied (other than any condition the failure of which to be satisfied has been principally caused by the breach of the Merger Agreement by Rhodium or any of its affiliates and conditions that, by their nature, are to be satisfied at Closing and which are, at the time of termination, capable of being satisfied) and Rhodium has failed to fulfill its obligations and agreements contained in the Merger Agreement to consummate the Closing within three business days following written notice of such satisfaction from SilverSun and SilverSun is ready, willing and able to consummate the Closing.

If the Merger Agreement is validly terminated pursuant to the termination section of the Merger Agreement, except as provided below, it shall become void and of no further force and effect, with no liability (except as provided below) on the part of any party (or any stockholder, affiliate or representative of such party), except that, if such termination results from (a) fraud or (b) the willful and material (i) failure of any party to perform its covenants, obligations or agreements contained in the Merger Agreement or (ii) breach by any party of its representations or warranties contained in the Merger Agreement, then such party shall be liable for any damages incurred or suffered by the other parties as a result of such failure or breach.

SilverSun Technologies Holdings, Inc.

filed its Form 10 with the SEC on December 23, 2022.

The Form 10 was withdrawn on February 21, 2023 because the financial statements contained therein were stale.

SilverSun Technologies Holdings, Inc.

refiled the Form 10 on March 3, 2023.

On May 1, 2023, the Form 10 was withdrawn as the contemplated merger has not yet occurred.

SILVERSUN TECHNOLOGIES, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 – MERGER (Continued)

On April 4, 2023, the Company filed Amendment 3 to its Form S-4 Registration Statement with the SEC.

On April 28, 2023 the Company filed Amendment 4 to its Form S-4 Registration Statement with the SEC.

Set forth below is the description of each class of securities of SilverSun Technologies, Inc.

(the “Company”) outstanding as of December 31, 2022.

The following description summarizes the most important terms of these securities.

This summary does not purport to be complete and is qualified in its entirety by the provisions of our Certificate of Incorporation and our Bylaws, copies of which have been previously filed with the Securities and Exchange Commission and are incorporated by reference into the Annual Report on Form 10-K for the year ended December 31, 2022.

You should refer to our Articles of Incorporation, Bylaws and the applicable provisions of the Delaware General Corporation Law for a complete description.

Common stock, par value $ 0.00001 per share (the “Common Stock”) is the only class of our securities currently registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”).

Our Common Stock is listed on the Nasdaq Capital Market under the symbol “SSNT.”

On October 13, 2023, SilverSun Technologies, Inc.

(the “Company”) terminated the Agreement and Plan of Merger dated as of September 29, 2022 and amended on each of October 20, 2022;

December 21,2022;

March 13, 2023;

April 28, 2023;

July 11, 2023;

and September 6, 2023, by and among the Company, Rhodium Enterprises Acquisition Corp., a Delaware corporation and direct wholly owned subsidiary of the Company, Rhodium Enterprises Acquisition LLC, a Delaware limited liability company and direct wholly owned subsidiary of the Company, and Rhodium Enterprises, Inc., a Delaware corporation (“Rhodium”), (as amended, the “Merger Agreement”).

NOTE 15 – SUBSEQUENT EVENT

On August 4, 2023 , the Board of Directors approved the payment of a $ 0.20 special cash dividend per share of Common Stock to shareholders of record August 18, 2023 .

The dividend will be paid on August 25, 2023 .

On November 13, 2023, the Company entered into an asset purchase agreement to acquire certain assets of JCS Computer Resource Corporation (“JCS”).

The purchase price for the Acquired Assets was $ 1,325,000 , $ 278,489 of which was paid in cash, customer deposits related to prepaid time from clients in the amount of $ 21,511 and $ 1,025,000 of which was paid through the issuance of a three-year $ 1,025,000 promissory note dated November 9, 2023, paying interest at the rate of 4.25 % per annum.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

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and (v) the activities of competitors.

During the first six months of 2023, the Company continued to expand its customer base and growth trend which we believe will provide a basis for future growth.

Results of Operations for the Three and Six Months Ended June 30, 2023 and 2022.

During the first nine months of 2023, the Company continued to expand its customer base and growth trend which we believe will provide a basis for future growth.

Results of Operations for the Three and Nine Months Ended September 30, 2023 and 2022.

Our strategy is to grow our business through organic growth of our software applications, technology solutions and managed services, as well as expansion through acquisitions.

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To remain competitive and continue to grow, we continue to invest resources in our people, product development, marketing, and sales capabilities, and we expect to continue to do so in the future.

During the six months ended June 30, 2023 the Company continued to expand its customer base, which we believe provides a basis for future growth.

Revenues increased 21.8% to $26.4 million for the six months ended June 30, 2023 as compared to $21.7 million for the corresponding period in 2022.

During the nine months ended September 30, 2023 the Company continued to expand its customer base, which we believe provides a basis for future growth.

Revenues increased 22.2% to $39.8 million for the nine months ended September 30, 2023 as compared to $32.6 million for the corresponding period in 2022.

Our Acumatica and Sage product revenue continues to grow, and we are excited about the opportunity for growth with our Sage Intacct product.

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On September 29, 2022, the Company entered into a definitive agreement and plan of merger (the “Merger Agreement”) with Rhodium Enterprises, Inc.

(“Rhodium”), an industrial-scale digital asset technology company utilizing proprietary technologies to mine bitcoin (see Note 14 to Notes to Condensed Consolidated Financial Statements).

The proposed business combination is expected to close in 2023, subject to the receipt of any applicable regulatory approvals, the approval of SilverSun's and Rhodium's respective stockholders, and other customary closing conditions.

(“Rhodium”), an industrial-scale digital asset technology company utilizing proprietary technologies to mine bitcoin.

On October 13, 2023, SilverSun Technologies, Inc.

terminated the Agreement and Plan of Merger (see Note 14 to Notes to Condensed Consolidated Financial Statements).

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations (Continued).

For the three and six months ended June 30, 2023, revenues increased $2,619,198 (24.6%) and $4,723,092 (21.8%) to $13,257,271 and $26,385,009, respectively, as compared to $10,638,073 and $21,661,917, respectively, for the three and six months ended June 30, 2022.

For the three and nine months ended September 30, 2023, revenues increased $2,506,095 (23.0%) and $7,229,187 (22.2%) to $13,423,254 and $39,808,263, respectively, as compared to $10,917,159 and $32,579,076, respectively, for the three and nine months ended September 30, 2022.

This increase is mostly attributed to an increase in professional consulting revenues as well as an increase in software revenue.

Software revenues increased $515,939 (18.5%) and $1,227,306 (22.8%) to $3,298,020 and $6,620,349 for the three and six months ended June 30, 2023, respectively, as compared to $2,782,081 and $5,393,043 for the three and six months ended June 30, 2022, respectively, primarily because of an increase in our ERP software sales, especially for Acumatica and Sage Intacct.

Service revenue increased $2,103,259 (26.8%) and $3,495,786 (21.5%) to $9,959,251 and $19,764,660 for the three and six months ended June 30, 2023, respectively, as compared to $7,855,992 and $16,268,874 for the three and six months ended June 30, 2022.

Software revenues increased $367,974 (14.8%) and $1,595,280 (20.3%) to $2,850,462 and $9,470,811 for the three and nine months ended September 30, 2023, respectively, as compared to $2,482,488 and $7,875,531 for the three and nine months ended September 30, 2022, respectively, primarily because of an increase in our ERP software sales, especially for Acumatica and Sage Intacct.

Service revenue increased $2,138,121 (25.3%) and $5,633,907 (22.8%) to $10,572,792 and $30,337,452 for the three and nine months ended September 30, 2023, respectively, as compared to $8,434,671 and $24,703,545 for the three and nine months ended September 30, 2022.

This increase is mainly attributed to the increase in professional services, especially for our Acumatica, Sage 100, and Sage Intacct products, as well as an increase in revenue in our hosting services.

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We have also utilized some outside contractors to assist in projects because of our growth.

Gross profit for the three and six months ended June 30, 2023 increased $1,057,877 (25.6%) and $1,710,570 (19.4%) to $5,185,145 and $10,542,705, respectively, as compared to $4,127,268 and $8,832,135 for the three and six months ended June 30, 2022.

For the three months ended June 30, 2023, the overall gross profit percentage was 39.1% as compared to 38.8% for the three months ended June 30, 2022.

For the six months ended June 30, 2023, the overall gross profit percentage was 40.0% as compared to 40.8% for the six months ended June 30, 2022.

The gross profit attributed to software revenues increased $174,751 (15.9%) and $478,422 (21.9%) to $1,270,559 and $2,660,613, respectively, for the three and six months ended June 30, 2023 as compared to $1,095,808 and $2,182,191 for the three and six months ended June 30, 2022, due mostly to the increased volume of software sold.

For the three months ended June 30, 2023, the gross profit percentage on software revenue was 38.5% as compared to 39.4% for the three months ended June 30, 2022.

For the six months ended June 30, 2023, the gross profit percentage on software revenue was 40.2% as compared to 40.5% for the six months ended June 30, 2022.

The gross profit attributed to services increased $883,126 (29.1%) and $1,232,148 (18.5%) to $3,914,586 and $7,882,092 for the three and six months ended June 30, 2023 as compared to $3,031,460 and $6,649,944 for the three and six months ended June 30, 2022.

Gross profit for the three and nine months ended September 30, 2023 increased $921,664 (20.8%) and $2,632,234 (19.8%) to $5,350,233 and $15,892,938, respectively, as compared to $4,428,569 and $13,260,704 for the three and nine months ended September 30, 2022.

For the three months ended September 30, 2023, the overall gross profit percentage was 39.9% as compared to 40.6% for the three months ended September 30, 2022.

For the nine months ended September 30, 2023, the overall gross profit percentage was 39.9% as compared to 40.7% for the nine months ended September 30, 2022.

The gross profit attributed to software revenues increased $210,829 (23.8%) and $689,251 (22.5%) to $1,096,097 and $3,756,710, respectively, for the three and nine months ended September 30, 2023 as compared to $885,268 and $3,067,459 for the three and nine months ended September 30, 2022, due mostly to the increased volume of software sold.

For the three months ended September 30, 2023, the gross profit percentage on software revenue was 38.5% as compared to 35.7% for the three months ended September 30, 2022.

For the nine months ended September 30, 2023, the gross profit percentage on software revenue was 39.7% as compared to 38.9% for the nine months ended September 30, 2022.

The gross profit attributed to services increased $710,835 (20.1%) and $1,942,983 (19.1%) to $4,254,136 and $12,136,228 for the three and nine months ended September 30, 2023 as compared to $3,543,301 and $10,193,245 for the three and nine months ended September 30, 2022.

This increase is attributed to revenue increases in professional services and application hosting.

For the three months ended June 30, 2023, the gross profit percentage on service revenue was 39.3% as compared to 38.6% for the three months ended June 30, 2022.

For the six months ended June 30, 2023, the gross profit percentage on service revenue was 39.9% as compared to 40.9% for the six months ended June 30, 2022.

For the three months ended September 30, 2023, the gross profit percentage on service revenue was 40.7% as compared to 42.0% for the three months ended September 30, 2022.

For the nine months ended September 30, 2023, the gross profit percentage on service revenue was 40.2% as compared to 41.3% for the nine months ended September 30, 2022.

Operating expenses

Selling and marketing expenses increased $288,565 (15.6%) and $691,457 (19.1%) to $2,141,468 and $4,320,171, respectively, for the three and six months ended June 30, 2023 as compared to $1,852,903 and $3,628,714 for the three and six months ended June 30, 2022.

Selling and marketing expenses increased $211,676 (10.5%) and $903,133 (16.0%) to $2,228,526 and $6,548,697, respectively, for the three and nine months ended September 30, 2023 as compared to $2,016,850 and $5,645,564 for the three and nine months ended September 30, 2022.

This increase is primarily due to increased salary increases, new personnel, higher commissions to employees as a result of the increased revenues, as well as increased travel expenses associated with attendance at trade shows and conferences.

General and administrative expenses increased $312,639 (15.1%) and $231,690 (4.9%) to $2,383,784 and $4,943,812, respectively, for the three and six months ended June 30, 2023 as compared to $2,071,145 and $4,712,122 for the three and six months ended June 30, 2022.

This increase in expenses for the three months ended June 30, 2023 is a result of salary increases and an increase in accrued compensation, offset partially by a decrease in credit card fees.

For the six months ended June 30, 2023, general and administrative expenses increased primarily as a result of salary increases and increased accrued compensation, offset partially by a decrease in credit card fees, lower rent and recruitment expenses, as well as lower state excise taxes.

Share-based compensation decreased $45,945 (100%) and $50,393 (54.8%) for the three and six months ended June 30, 2023 to $-0- and $41,497, respectively, as compared to $45,945 and $91,890 for the three and six months ended June 30, 2022.

Depreciation and amortization expense decreased $32,892 (13.9%) and $86,947 (17.4%) to $203,629 and $411,424 for the three and six months ended June 30, 2023 as compared to $236,521 and $498,371 for the three and six months ended June 30, 2022.

This decrease is primarily due to the lower amortization of intangible assets as a result of certain intangible assets being fully amortized.

General and administrative expenses increased $253,269 (11.3%) and $484,959 (7.0%) to $2,497,891 and $7,441,703, respectively, for the three and nine months ended September 30, 2023 as compared to $2,244,622 and $6,956,744 for the three and nine months ended September 30, 2022.

This increase in expenses for the three months ended September 30, 2023 is a result of salary increases and increases in accrued compensation and state excise taxes offset partially by a decrease in credit card fees.

For the nine months ended September 30, 2023, general and administrative expenses increased primarily as a result of salary increases and increased accrued compensation, travel and entertainment, professional and license fees offset partially by a decrease in credit card fees, lower rent and recruitment expenses.

Share-based compensation decreased $44,185 (100%) and $94,578 (69.5%) for the three and nine months ended September 30, 2023 to $-0- and $41,497, respectively, as compared to $44,185 and $136,075 for the three and nine months ended September 30, 2022.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations (Continued).

Income (loss) income from operations

As a result of the above, for the three and six months ended June 30, 2023, the Company had net income from operations of $456,264 and $825,801, respectively, as compared to losses from operations of $79,246 and $98,962 for the three and six months ended June 30, 2022.

Depreciation and amortization expense decreased $44,161 (18.4%) and $131,108 (17.7%) to $196,361 and $607,785 for the three and nine months ended September 30, 2023 as compared to $240,522 and $738,893 for the three and nine months ended September 30, 2022.

This decrease is primarily due to the lower amortization of intangible assets as a result of certain intangible assets being fully amortized.

Income (loss) from operations

As a result of the above, for the three and nine months ended September 30, 2023, the Company had net income from operations of $427,455 and $1,253,256, respectively, as compared to losses from operations of $117,610 and $216,572 for the three and nine months ended September 30, 2022.

Other Expense

For the three and nine months ended September 30, 2023, the Company incurred other expense of $2,936,107 related to the terminated the Agreement and Plan of Merger dated as of September 29, 2022 (Notes 14 and Note 2 – Deferred Charges).

The Company charged to expense all previously deferred deal related expenses in the amount of $2,986,107.

These expenses are recorded as Deal Costs in the accompanying condensed statement of operations in Other Expense.

Loss Before Taxes

As a result of the above, for the three and nine months ended September 30, 2023, the Company had losses before taxes of $2,566,299 and $1,775,175, respectively, as compared to losses before of $141,298 and $282,912 for the three and nine months ended September 30, 2022.

Liquidity and Capital Resources

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As such, we need to rely on our own limited resources to weather any economic downturn.

Management will continue to monitor developments, explore various cost-cutting measures, and explore other sources of funding, but there is no guarantee we will be successful in doing so.

Management continues to monitor developments, explore various cost-cutting measures, and explore other sources of funding, but there is no guarantee we will be successful in doing so.

The Company currently has no line of credit or other credit facility with any lender.

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Management also explores opportunities to increase its business and profitability by entering into collaboration agreements, buying assets, and acquiring companies in the business software and information technology consulting and other markets with solid revenue streams and established customer bases that generate positive cash flow.

At June 30, 2023, future payments of long-term debt are as follows:

At September 30, 2023, future payments of long-term debt are as follows:

Remainder of 2023

The Company’s working capital was $3,957,224 at June 30, 2023 as compared to $2,946,349 at December 31, 2022 mostly due to lower accounts payable and deferred revenue.

During the six months ended June 30, 2023, the Company had a net decrease in cash of $878,851.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations (Continued).

Liquidity and Capital Resources (continued)

The Company’s working capital was $487,090 at September 30, 2023 as compared to $2,946,349 at December 31, 2022 mostly due to lower deferred charges, lower prepaid expenses and other current assets and cash offset partially by the decrease in deferred revenues.

During the nine months ended September 30, 2023, the Company had a net decrease in cash of $1,129,113.

The Company’s principal sources and uses of funds were as follows:

Cash used in operating activities:

Operating activities for the six months ended June 30, 2023 used $323,786 of cash as compared to using $485,308 of cash for the same period in 2022.

The decrease in cash used in operating activities is primarily due to the improvement in cash from operations, excluding the non-cash items, such as depreciation, amortization, and share-based compensation, decreases in accounts receivable and prepaid and other current assets offset partially by an increase in deferred charges for expenses related to the impending merger, accounts payable and deferred revenues.

Operating activities for the nine months ended September 30, 2023 provided $817,723 of cash as compared to $1,127,302 of cash for the same period in 2022.

The decrease in cash provided by operating activities is primarily due changes in accounts payable and deferred revenues offset partially by the improvement in cash from operations, excluding the non-cash items, such as depreciation, amortization, and share-based compensation as well as the change in deferred charges.

Cash used in investing activities:

Investing activities for the six months ended June 30, 2023 used cash of $23,860 as compared to using $180,549 cash for the same period in 2022, primarily as a result of lower acquisition costs for new businesses and purchases of property and equipment.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations (Continued).

Liquidity and Capital Resources (Continued)

Investing activities for the nine months ended September 30, 2023 used cash of $74,907 as compared to using $188,741 cash for the same period in 2022, primarily as a result of lower acquisition costs for new businesses.

Cash used in financing activities:

Financing activities for the six months ended June 30, 2023 used cash of $531,205 as compared to using cash in the amount of $274,586 for the same period in 2022.

The increase in cash used is because of the higher payments of long-term debt associated with prior acquisitions.

Financing activities for the nine months ended September 30, 2023 used cash of $1,871,929 as compared to using cash in the amount of $520,520 for the same period in 2022.

The increase in cash used is a result of the cash dividend paid to shareholders in August 2023.

The Company believes that as a result of the growth in business, and the funds on hand, it has adequate liquidity to fund its operating plans for at least the next twelve months, provided, however, that the Company cannot currently quantify the recent economic uncertainty and its effects on the business in the coming quarters.

For the six months ended June 30, 2023, inflation has impacted the Company’s profitability, as it has resulted in increased costs necessary to recruit and retain personnel.

For the nine months ended September 30, 2023, inflation has impacted the Company’s profitability, as it has resulted in increased costs necessary to recruit and retain personnel.

As the Company returns back to its pre-Covid marketing and trade show schedules, the higher costs of travel and meals will also have a negative impact on the Company’s profitability.

Off Balance Sheet Arrangements

During the six months ended June 30, 2023 or for fiscal 2022, we did not engage in any material off-balance sheet activities or have any relationships or arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

During the nine months ended September 30, 2023 and for fiscal 2022, we did not engage in any material off-balance sheet activities or have any relationships or arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitment or intent to provide additional funding to any such entities.

2 unchanged sentences

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-Q

Item 1. Financial Statements