What changed in this filing

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Item 1. Business

2024-03-14 compared with 2023-02-28 · 353 added, 106 removed, 273 unchanged (63% of the section changed)

109 unchanged sentences

On January 22, 2022, the Company entered into an agreement to acquire certain assets of NEO3, LLC (“NEO3”), an Ohio-based company related to its Sage 100 and Acumatica operations.

On November 13, 2023, SWK entered into an Asset Purchase Agreement with JCS Computer Resource Corporation (“JCS”), an Illinois corporation pursuant to which SWK acquired from JCS certain assets (the “ Acquired Assets ”) related to the component of JCS’ business devoted to being a value added reseller of Sage 100, Sage 50, and Quickbooks software, together with ancillary consulting services related thereto.

Enterprise Resource Planning Software Strategy

90 unchanged sentences

Human Capital

As of February 6, 2022, we had approximately 172 full time employees with 45 of our employees engaged in sales and marketing activities, 97 employees are engaged in service fulfillment, and 30 employees performing administrative functions.

As of January 31, 2024, we had approximately 195 full time employees with 48 of our employees engaged in sales and marketing activities, 108 employees engaged in service fulfillment, and 39 employees performing administrative functions.

SilverSun’s future success depends in significant part upon the continued services of its key sales, technical, and senior management personnel and its ability to attract and retain highly qualified sales, technical, and managerial personnel.

None of SilverSun’s employees are represented by a collective bargaining agreement and SilverSun Holdings has never experienced a work stoppage.

Human capital management is critical to our ongoing business success, which requires investing in our people.

5 unchanged sentences

We emphasize our core values of innovation, encouragement, motivation, and curiosity with our employees to instill our culture and create an environment of growth and positivity.

Our future success depends in significant part upon the continued services of our key sales, technical, and senior management personnel and our ability to attract and retain highly qualified sales, technical, and managerial personnel.

None of our employees are represented by a collective bargaining agreement and we have never experienced a work stoppage.

Our Corporate History

23 unchanged sentences

In addition to the strategic geographic benefits of this acquisition, it has provided additional revenues from the approximately 250 additional customers.

On July 6, 2015 SWK entered into an Asset Purchase Agreement with ProductiveTech, Inc.

(“PTI”), a New Jersey managed IT service provider.corporation.

On July 6, 2015, SWK entered into an Asset Purchase Agreement with Productive Tech, Inc.

(“PTI”), a New Jersey managed IT service provider.

In addition to the strategic geographic benefits of this acquisition, it has provided additional revenues from the approximately 85 additional customers.

10 unchanged sentences

In May 2018, the Company formed a wholly owned subsidiary, Critical Cyber Defense Corp.

(“CCD”), a Nevada corporation, for the purpose of providing cyber defense products and services.

(“CCDC”), a Nevada corporation, for the purpose of providing cyber defense products and services.

On January 1, 2019, SWK entered into an Asset Purchase Agreement with Partners in Technology, Inc.(“PIT”), an Illinois based reseller of Sage Software.

19 unchanged sentences

for small and middle market companies in North America.

On January 1, 2022, the Company entered into an Asset Purchase Agreement with Dynamic Tech Services, Inc (DTS”), a Georgia corporation (“DTS”) pursuant to which SWK acquired from DTS certain assets related to the component of DTS’ operations devoted to selling and supporting Acumatica Cloud Enterprise Resource Planning solutions.

On January 1, 2022, SWK entered into an Asset Purchase Agreement with Dynamic Tech Services, Inc (DTS”), a Georgia corporation (“DTS”) pursuant to which SWK acquired from DTS certain assets related to the component of DTS’ operations devoted to selling and supporting Acumatica Cloud Enterprise Resource Planning solutions.

On January 22, 2022, entered into an agreement to acquire certain assets of NEO3, LLC (“NEO3”), an Ohio-based company related to its Sage 100 and Acumatica operations.

Recent Events – Rhodium Merger Agreement

On September 29, 2022, SilverSun Technologies, Inc., a Delaware corporation (“SilverSun” or the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Rhodium Enterprises Acquisition Corp., a Delaware corporation and direct wholly owned subsidiary of the Company (“Merger Sub I”), Rhodium Enterprises Acquisition LLC, a Delaware limited liability company and direct wholly owned subsidiary of the Company (“Merger Sub II”), and Rhodium Enterprises, Inc., a Delaware corporation (“Rhodium”).

Upon the terms and subject to the conditions set forth in the Merger Agreement, among other things, (i) Merger Sub I shall be merged with and into Rhodium (the “First Merger”) in accordance with Delaware General Corporation Law (the “DGCL”).

As a result of the First Merger, Merger Sub I shall cease to exist, and Rhodium shall continue as the surviving corporation of the First Merger (the “First Surviving Company”), and (ii) immediately following the First Merger, Rhodium shall be merged with and into Merger Sub II (the “Second Merger” and together with the First Merger, the “Mergers”) in accordance with the DGCL and the Delaware Limited Liability Company Act (“DLLCA”).

As a result of the Second Merger, Rhodium shall cease to exist, and Merger Sub II shall continue as the surviving company of the Second Merger (the “Surviving Company”) and as a direct, wholly owned subsidiary of SilverSun which will operate the pre-Merger business of Rhodium through its management of Rhodium Technologies LLC, a Delaware limited liability company (“Technologies”).

Upon consummation of the Mergers, SilverSun will be structured as an umbrella partnership C-corporation and will have two classes of common stock outstanding, the SilverSun Class A common stock and the SilverSun Class B common stock.

The holders of shares of SilverSun Class A common stock and Class B common stock will be entitled to one vote for each share of Class A common stock and Class B common stock, respectively, held of record on all matters on which stockholders are entitled to vote generally.

The SilverSun legacy stockholders and option holders (collectively, the “SilverSun Legacy Stockholders”) will retain approximately 6.22% of the outstanding SilverSun Class A common stock (on a fully diluted basis) which, following the Mergers will be approximately 3.2% of the outstanding SilverSun common stock.

The Rhodium legacy stockholders and equity holders (collectively, the “Rhodium Legacy Stockholders”) will receive approximately 93.78% of the SilverSun Class A common stock (on a fully diluted basis) which, following the Mergers, will be approximately 96.8% of the SilverSun common stock.

Imperium Investment Holdings LLC, a Wyoming limited liability company and the existing holder of 100% of Rhodium Class B common stock will hold 100% of the SilverSun Class B common stock following the consummation of the Mergers representing approximately 49% of the voting power of the combined company.

Upon consummation of the Mergers, SilverSun will become the managing member of Technologies.

The parties to the Merger Agreement have agreed that for all purposes of the Merger Agreement:

(i) the agreed pro forma net equity value of SilverSun after giving effect to the Mergers is $671,875,172 (the “Pro Forma Valuation”), (ii) based on such Pro Forma Valuation, the agreed value of the consideration to be received by the Rhodium Legacy Stockholders is $650,375,000 (the “Rhodium Valuation”) and the agreed value attributable to the SilverSun Legacy Stockholders is $21,500,172, and (iii) the holders of Rhodium’s simple agreements for future equity (“Rhodium SAFEs”) outstanding immediately prior to the First Effective Time shall receive SilverSun Class A common stock at the effective time of the First Merger based on the Rhodium Valuation.

Following the Mergers, SilverSun’s Class A common stock shall be listed on The Nasdaq Stock Market LLC (“Nasdaq”) and SilverSun shall be renamed Rhodium Enterprises, Inc.

In connection with the Mergers and pursuant to the terms of the Merger Agreement:

• subject to stockholder approval, SilverSun will, prior to the effective time of the First Merger, file an Amended and Restated Certificate of Incorporation to, among other things, change its name to “Rhodium Enterprises, Inc.” or such other name agreed to by Rhodium and SilverSun, set forth the number of authorized shares of SilverSun Class A common stock and SilverSun Class B common stock and set forth the rights and preferences of such shares of SilverSun Class A common stock and SilverSun Class B common stock, remove provisions that are no longer applicable following the completion of the Mergers, cancel the designation of the Series A Preferred Stock, par value $0.001 per share, and effect, at the discretion of the SilverSun Board, a reverse stock split at a ratio to be determined (the “Reverse Stock Split”);

• prior to the effective time of the Second Merger and immediately following the Reverse Stock Split, by virtue of filing the Amended and Restated Certificate of Incorporation and without any additional action on the part of any SilverSun entity, Rhodium or the holders of any securities of SilverSun or Rhodium, including holders of SilverSun common stock, each share of SilverSun common stock issued and outstanding immediately prior to the filing of the Amended and Restated Certificate of Incorporation will be automatically be converted into one validly issued, fully paid and nonassessable share of SilverSun Class A common stock;

• at the effective time of the First Merger, by virtue of the First Merger, each share of Rhodium Class A common stock issued and outstanding immediately prior to the effective time of the First Merger (other than any dissenting shares or the Excluded Rhodium Shares (as such term is defined below)) will automatically be converted into the right to receive a number of shares of SilverSun Class A common stock equal to the Rhodium Class A Exchange Ratio (as such term is defined in the Merger Agreement);

• each share of Rhodium Class B common stock issued and outstanding immediately prior to the effective time of the First Merger (other than any dissenting shares or the Excluded Rhodium Shares) will automatically be converted into the right to receive a number of shares of SilverSun Class B common stock equal to the Rhodium Class B Exchange Ratio (as such term is defined in the Merger Agreement);

• each Rhodium warrant that is outstanding and unexercised as of immediately prior to the First Effective Time will be converted into and become a warrant to purchase SilverSun Class A common stock and SilverSun will assume each such Rhodium warrant in accordance with its terms;

• each holder of a Rhodium Simple Agreement for Future Equity (“SAFE”) that is outstanding as of immediately prior to the effective time of the First Merger will, at the closing, receive a certain number of validly issued, fully paid and nonassessable shares of SilverSun Class A common stock equal to the Purchase Amount (as such term is defined in the Merger Agreement) divided by the per share price implied by the Rhodium Valuation (as such term is defined in the Merger Agreement);

• each share of Rhodium common stock held in the treasury of Rhodium, owned by Rhodium or any of its direct or indirect wholly owned subsidiaries or by SilverSun or any of its affiliates at the effective time of the First Merger (collectively, the “ Excluded Rhodium Shares ”) if any, will be cancelled automatically and will cease to exist, and no consideration will be paid for those Excluded Rhodium Shares;

• each Rhodium restricted stock unit (“RSU”) that is a vested will, as of the effective time of the First Merger , be automatically cancelled without any action on the part of any holder thereof in consideration for the right to receive a number of shares of SilverSun Class A common stock equal to the product obtained by multiplying (x) the total number of shares of Rhodium Class A common stock subject to such vested RSU immediately prior to the effective time of the First Merger by (y) the Rhodium Class A Exchange Ratio (as such term is defined in the Merger Agreement).

Each Rhodium RSU that is outstanding immediately prior to the effective time of the First Merger and that is not a vested RSU will, as of the effective time of the First Merger , automatically and without any action on the part of the holder thereof, be converted into a restricted stock unit award with respect to a number of shares of SilverSun Class A common stock equal to the product obtained by multiplying (x) the total number of shares of Rhodium Class A common stock subject to such unvested RSU immediately prior to the effective time of the First Merger by (y) the Rhodium Class A Exchange Ratio (each, a “ Rhodium Adjusted RSU Award ”).

Each such Rhodium Adjusted RSU Award will continue to have, and will be subject to, the same terms and conditions (including vesting and settlement terms) as applied to the corresponding unvested RSU immediately prior to the effective time of the First Merger;

• each SilverSun stock option that is outstanding immediately prior to the effective time of the Second Merger but following the Reverse Stock Split will (A) if the exercise price of such SilverSun stock option is equal to or greater than the Per Share SilverSun Value (as defined below), terminate and be cancelled as of immediately prior to the effective time of the Second Merger , without any consideration being payable in respect of each such SilverSun stock option, and have no further force or effect, and (B) if the exercise price of such SilverSun stock option is less than the Per Share SilverSun Value, (i) become fully vested as of immediately prior to the effective time of the Second Merger , (ii) be converted into an option award with respect to a number of shares of SilverSun Class A common stock equal to the total number of shares of SilverSun common stock subject to such SilverSun stock option immediately prior to the effective time of the Second Merger but following the Reverse Stock Split and (iii) shall automatically expire on the 90th th day following the date of the closing.

Following the effective time of the Second Merger , (i) no cancelled SilverSun stock option that was outstanding immediately prior to the Second Effective Time shall remain outstanding and each holder of a cancelled SilverSun stock option will cease to have any rights with respect to such cancelled SilverSun stock option and (ii) each adjusted SilverSun option award will continue to have, and will continue to be subject to, the same terms and conditions (other than as set forth in the previous sentence) as applied to the corresponding SilverSun stock option as of immediately prior to the effective time of the Second Merger .

For purposes of the foregoing, the “ Per Share SilverSun Value ” means the volume-weighted average price, rounded to the nearest one-hundredth of a cent, of a share of SilverSun Class A common stock on Nasdaq (as reported by Bloomberg L.P.

or, if not reported by Bloomberg L.P., in another authoritative source mutually selected by the parties to the Merger Agreement) in respect of the five consecutive trading day period beginning at 9:30 am (New York City time) on the first day of such trading day period and ending at 4:00 pm (New York City time) on the fifth full trading day prior to the effective time of the Second Merger ;

provided, that such measurement period shall not begin prior to the eighth day prior to the effective time of the Second Merger and will not end after the third day prior to the effective time of the Second Merger , in each case, with such adjustments as necessary to reflect the Reverse Stock Split;

• at the effective time of the Mergers, and by virtue of the Second Merger, without any additional action on the part of any SilverSun entity, Rhodium or the holders of any securities of SilverSun or Rhodium, including holders of SilverSun common stock, each share of capital stock of Rhodium as the surviving company of the First Merger will be cancelled and each limited liability company interest of Merger Sub II issued and outstanding immediately prior to the Effective Time will be converted into and become one validly issued, fully paid and (to the extent applicable) non-assessable limited liability company interest of Merger Sub II as the surviving company of the Second Merger, with the same rights, powers, and privileges as the limited liability company interests of Merger Sub II as the surviving company of the Second Merger;

• SilverSun will cause its shares of SilverSun Class A common stock to be listed on Nasdaq under the symbol “RHDM”, to the extent available, at or after the effective time of the Second Merger.

• Merger Sub II will be a wholly owned direct subsidiary of SilverSun and, as a result, Merger Sub II, as the surviving entity of the Second Merger, will operate Rhodium’s current business;

• promptly following the effective time of the Second Merger, SilverSun will distribute a cash dividend (the “Dividend”) in the aggregate amount of approximately $8,500,000 (at least $1.50 per pre-Merger/pre-Reverse Stock Split share) to the pre-Merger holders of SilverSun common stock as of a pre-Merger record date to be determined (the “Dividend and Distribution Record Date”).

The Dividend will be paid out of the $10,000,000 cash to be received by SilverSun from Rhodium in connection with the Mergers.

The balance of the $10,000,000 will be used by SilverSun to pay certain transaction expenses including tax payments.

In connection with the Mergers, Rhodium will also assume approximately $1,000,000 of SilverSun’s income tax liabilities related to the Distribution;

• prior to the effective time of the First Merger , the SilverSun Board and SilverSun shareholders of record as of the record date for the Special Meeting will (i) adopt the SilverSun Technologies, Inc.

2023 Omnibus Incentive Plan, reserving for issuance a number of shares of SilverSun Class A common stock equal to 10% of the fully diluted capitalization of SilverSun (including SilverSun Class B common stock on an as exchanged basis) immediately following the effective time of the First Merger, and (ii) assume the Rhodium 2022 Omnibus Incentive Plan in its then-current form;

• when the transactions contemplated by the Separation Agreement described below are consummated, all of the issued and outstanding common stock of SilverSun’s recently created, wholly owned subsidiary, SilverSun Technologies Holdings, Inc.will be distributed to the SilverSun stockholders of record on the Dividend and Distribution Record Date (the “Separation and Distribution”).

As a result of this Distribution, SilverSun’s indirect wholly owned subsidiaries, SWK and SCS, will be owned by the SilverSun stockholders indirectly through their shares of SilverSun Holdings.

The Merger Agreement contains a number of closing conditions, including the following conditions that apply to the obligations of each of SilverSun, Rhodium, Merger Sub I and Merger Sub II.

Conditions to Each Party ’ s Obligation to Consummate the Transactions

The Merger Agreement contains a number of closing conditions, including the following conditions that apply to the obligations of each of SilverSun, Rhodium, Merger Sub I and Merger Sub II:

• SilverSun shall have obtained the approval of its stockholders to adopt the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Mergers;

• Rhodium shall have obtained the approval of its Class B stockholders to adopt the Merger Agreement;

• the SilverSun registration statement on Form S-4 shall have become effective under the Securities Act, and no stop order suspending the effectiveness of the SilverSun registration statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened in writing by the SEC or its staff and not withdrawn;

• the registration statement on Form 10, as may be amended from time to time, filed by SilverSun with the SEC to effect the registration of the shares of common stock of SilverSun Holdings shall have become effective and no proceeding for that purpose shall have been initiated or threatened in writing by the SEC or its staff and not withdrawn;

• the shares of SilverSun Class A common stock to be issued to Rhodium stockholders pursuant to the Merger Agreement shall have been approved for listing on Nasdaq, subject only to official notice of issuance;

• the parties to the Merger Agreement shall have received all approvals with any governmental body necessary to consummate the transactions contemplated by the Merger Agreement, including, but not limited to, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), if applicable;

• there shall have not been enacted, promulgated or made effective following the date of the Merger Agreement any law or order by a governmental body of competent jurisdiction that enjoins or otherwise prohibits or makes illegal, and there has not been any legal action by any governmental body seeking to enjoin or prohibit or make illegal, the consummation of the transactions contemplated by the Merger Agreement, and there is not in effect any injunction (whether temporary, preliminary or permanent) by any governmental body of competent jurisdiction that enjoins or otherwise prohibits the consummation of the transactions contemplated by the Merger Agreement.

The proposed Mergers are expected to close as soon as possible following regulatory approval, 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 and February 14, 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 Agreement proposal and the share issuance proposal.

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 , by written notice from one to the other if (i) the Closing has not occurred on or before March 31, 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 shall pay, or cause to be paid, to Rhodium (or its designee(s)) by wire transfer of immediately available funds an amount equal to $5,000,000, if the Merger Agreement is terminated by Rhodium pursuant to the unilateral termination provisions in favor Rhodium described above.

Rhodium shall pay, or cause to be paid, to SilverSun (or its designee(s)) by wire transfer of immediately available funds an amount equal to $5,000,000, if the Merger Agreement is terminated by SilverSun pursuant to the unilateral termination provisions in favor of SilverSun described above.

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.

intends to refile a Form 10 containing updated financial statements on or about early March 2023 and expects to be able to request accelerated effectiveness of the Form 10 at its discretion.

If the Mergers are not completed for any reason, SilverSun will remain an independent public company, its common stock will continue to be listed and traded on Nasdaq under the symbol SSNT and will continue to be registered under the Exchange Act, the distribution and dividend will not take place and SilverSun will continue to file periodic reports with the SEC.

On February 14, 2023, the Company filed Amendment 2 to Form S-4 Registration Statement with the SEC.

The Separation and Distribution Agreement

In connection with the mergers, SilverSun Technologies Holdings, Inc., a recently formed Delaware corporation and direct wholly owned subsidiary of SilverSun (“SilverSun Holdings”), will enter into that certain Separation and Distribution Agreement (the “Separation Agreement”), whereby all of the issued and outstanding common stock of SilverSun Holdings, which owns all of the issued and outstanding common stock of (i) SWK Technologies, Inc., a Delaware corporation and indirect wholly owned subsidiary of SilverSun (“SWK”), and (ii) Secure Cloud Services, Inc., a Nevada corporation and indirect wholly owned subsidiary of SilverSun (“SCS”), will be distributed on a pro rata basis to the stockholders of SilverSun as of a record date to be determined by the SilverSun Board (the “Distribution”).

Following the Distribution, (a) the businesses of SWK and SCS will continue to be operated consistent with past practices and will be managed by the current management of SilverSun and the current members of the SilverSun Board, and (b) SilverSun Holdings will apply for public listing on the OTCQX of the shares distributed in the Distribution in reliance on a Form 10 registration statement.

In the Distribution, SilverSun stockholders of record on the Dividend and Distribution Record Date will receive shares of SilverSun Holdings common stock on a pro rata basis.

SilverSun Holdings will have 5,256,177 shares of common stock issued and outstanding at the time of the Distribution which is the amount of SilverSun common shares that will be issued and outstanding immediately prior to the Reverse Stock Split.

Accordingly, each holder of SilverSun common stock as of the Dividend and Distribution Record Date will receive one share of SilverSun Holdings common stock for every share of SilverSun common stock held by such holder immediately prior to the Reverse Stock Split.

Promptly following the Second Merger, SilverSun will issue a cash dividend pro rata in the aggregate amount of approximately $8,500,000 (the “Dividend”) to its pre-Merger SilverSun shareholders of record as of a record date, which shall be prior to the closing date of the Mergers, to be determined by the SilverSun Board, which record date shall be the same date as the record date for the Distribution (the “Dividend and Distribution Record Date”).

Following the Distribution, SilverSun will have no wholly-owned subsidiaries other than Critical Cyber Defense Corporation, a Nevada corporation (“CCDC”).

The Separation Agreement sets forth the terms and conditions regarding the separation of the cybersecurity and cloud services businesses from SilverSun.

Prior to the effectiveness of the Form 10, SilverSun will contribute all of the issued and outstanding common stock of its wholly owned subsidiaries, SWK and SCS, to SWK Holdings (the “Contribution”).

Following the Mergers, SilverSun will consummate the Distribution to the shareholders of SilverSun as of the Dividend and Distribution Record Date, pursuant to the Merger Agreement and Separation Agreement.

Consummation of the Distribution is subject to conditions that must be satisfied or waived by SilverSun prior to the completion of the separation.

In addition, SilverSun has the right in its sole and absolute discretion to determine the date and terms of the Distribution and will have the right, at any time until completion of the Distribution, to determine to abandon or modify the Distribution and to terminate the Separation Agreement.

On November 13, 2023, SWK entered into an Asset Purchase Agreement with JCS Computer Resource Corporation (“JCS”), an Illinois corporation pursuant to which SWK acquired from JCS certain assets (the “ Acquired Assets ”) related to the component of JCS’ business devoted to being a value-added reseller of Sage 100, Sage 50, and QuickBooks software, together with ancillary consulting services related thereto.

Recent Events – Rhodium

On September 29, 2022, SilverSun entered into a definitive agreement and plan of merger (the “ Rhodium Merger Agreement ”) by and among SilverSun, Rhodium Enterprises Acquisition Corp, Rhodium Enterprises Acquisition LLC and Rhodium Enterprises, Inc., an industrial-scale digital asset technology company utilizing proprietary technologies to mine bitcoin.

On October 13, 2023, SilverSun terminated the Rhodium Merger Agreement.

Recent Events – Jacobs Private Equity II, LLC ( “ JPE ” )

On December 3, 2023, SilverSun entered into an Investment Agreement (as it may be amended or supplemented, the “ Investment Agreement ”), with Jacobs Private Equity II, LLC, a Delaware limited liability company (“ JPE ”), and the other investors party thereto (the “ Other Investors ,” and together with JPE, the “ Investors ”), providing for an aggregate investment by the Investors of $1,000,000,000 in cash in SilverSun, including $900,000,000 from JPE (the “ Equity Investment ”).

The Investment Agreement has been unanimously approved by the SilverSun board of directors.

Following the closing (the “ Closing ”) of the Equity Investment (together with all of the other transactions contemplated by the Investment Agreement), JPE will become the controlling stockholder of SilverSun, and Brad Jacobs, the Managing Member of JPE, will become Chairman of the SilverSun board of directors and Chief Executive Officer of SilverSun.

Following the Closing, SilverSun intends to pursue a business strategy of creating a tech-forward leader in the building products distribution industry.

After spinning off the existing SilverSun business as described below, the remaining company, which will be renamed QXO, Inc., will be a standalone platform for acquisitions and operations in the building products distribution industry.

At least two days prior to the Closing, SilverSun will amend and restate its certificate of incorporation (the “ Charter Amendment ”) or the “Fifth Amended and Restated Certificate of Incorporation”) to, among other things, effect an 8:1 reverse stock split (the “ Reverse Stock Split ”) with respect to SilverSun’s common stock, par value $0.00001 per share (“ SilverSun common stock ”).

Upon the Closing and giving effect to the Reverse Stock Split, SilverSun will issue to the Investors, in the aggregate:

(a) 1,000,000 shares of Convertible Perpetual Preferred Stock of SilverSun (the “ Convertible Preferred Stock ”) that, in the aggregate, will be convertible into approximately 219 million shares of SilverSun common stock at an initial conversion price of $4.566 per share (equivalent to $0.571 per share pre-Reverse Stock Split), subject to customary anti-dilution adjustments;

and (b) warrants to purchase an additional approximately 219 million shares of SilverSun common stock (the “ Warrants ,” and together with the Convertible Preferred Stock, the “ Securities ”) at initial exercise prices of $4.566 per share (equivalent to $0.571 per share pre-Reverse Stock Split) with respect to 50% of the Warrants, $6.849 per share (equivalent to $0.856 per share pre-Reverse Stock Split) with respect to 25% of the Warrants, and $13.698 per share (equivalent to $1.712 per share pre-Reverse Stock Split) with respect to the remaining 25% of the Warrants, in each case subject to customary anti-dilution adjustments.

Following the Closing, the Investors will own approximately 99.85% of SilverSun common stock on an as-converted, as-exercised basis.

The Convertible Preferred Stock will pay quarterly cash dividends equal to the greater of (a) the as-converted dividends on the underlying Company common stock for the relevant quarter and (b) 9% of the then-applicable liquidation preference per annum.

Accrued and unpaid dividends for any quarter will accrete to liquidation preference for all purposes.

The Convertible Preferred Stock will not be redeemable and will vote together with the Company’s common stock on an as-converted basis on all matters, except as otherwise required by law, and separately as a class with respect to certain matters implicating the rights of holders of shares of Convertible Preferred Stock.

The terms of the Convertible Preferred Stock are more fully set forth in Exhibit A to the Investment Agreement filed herewith.

Each Warrant will initially be exercisable at any time and from time to time from the closing date until the tenth anniversary of the Closing date, at the option of the holder thereof, into one share of Company common stock at the exercise prices described above, subject to customary anti-dilution adjustments.

The terms of the Warrants are more fully set forth in Exhibit B to the Investment Agreement that was filed as Exhibit 2.1 to our Form 8-K filed with the SEC on December 4, 2023.

Under the terms of the Investment Agreement, SilverSun will, six days after the Closing (the “ Distribution Date ”), separate the existing SilverSun business (the “ Separation ”) into SilverSun Technologies Holdings, Inc., a Nevada corporation and currently a wholly owned subsidiary of the Company (“ SilverSun Holdings ” or “ SpinCo ”), and distribute all of the shares of SilverSun Holdings (the “ Distribution ”) to the stockholders of SilverSun as of the close of business on a record date that is expected to be one day prior to the date of closing (the “ Record Date ”) (collectively, the “ Spin-Off ”) in accordance with a separation and distribution agreement to be executed between SilverSun and SilverSun Technologies Holdings on or prior to the Distribution Date (the “ Separation Agreement ”).

Upon completion of the Distribution, each SilverSun stockholder as of the Record Date will receive eight shares of common stock, par value $0.00001 per share, of SilverSun Holdings (“ SilverSun Holdings common stock ”), for every share of SilverSun common stock held as of the close of business on the Record Date.

SilverSun Holdings common stock will be issued in book-entry form only, which means that no physical share certificates will be issued.

No fractional shares of SilverSun Holdings common stock will be issued.

Also pursuant to the Investment Agreement and the Separation Agreement, SilverSun will declare a $2.5 million aggregate cash dividend to its stockholders of record as of the Record Date (the “ Dividend ”).

The Dividend will be paid on the Distribution Date from proceeds received by SilverSun from the Equity Investment.

The Charter Amendment and the transactions contemplated by the Investment Agreement (including the issuance and sale to the Investors of the Securities), among other matters, were submitted for approval at the Special Meeting of the stockholders of SilverSun held at 9:00 A.M.EST on March 14, 2024 (the “ Special Meeting ”) as discussed in the definitive proxy statement of SilverSun dated February 13, 2024 and were approved at the Special Meeting.

As a result of the approval of the proposals set forth in such definitive proxy statement and subject to the closing under the Investment Agreement, eligible shareholders do not need to take any action to receive their shares of SilverSun Holdings common stock in connection with the Distribution.

It is expected that their shares of SilverSun Holdings common stock will trade on the OTCQX tier of OTC Markets and that their shares of SilverSun common stock will continue to trade on The Nasdaq Capital Market.

Shortly after the Closing, SilverSun is expected to change its name to QXO, Inc.

Once renamed, SilverSun is expected to change the ticker symbol of its common stock to “QXO.” Until such time, SilverSun will continue to trade on The Nasdaq Capital Market under the symbol “SSNT.”

Following the Distribution, SilverSun Holdings will operate through its direct subsidiaries SWK, SCS and CCDC and conduct the business conducted by SilverSun prior to the Distribution and the Closing under the Investment Agreement.

One day prior to the date of the Distribution, SilverSun and SilverSun Holdings will enter into an Employee Matters Agreement (the “ Employee Matters Agreement ”).

The Employee Matters Agreement sets forth the terms and conditions of certain employment, compensation and benefit matters related to the Distribution beyond those covered by the Separation Agreement.

One day prior to the date of the Distribution, SilverSun and SilverSun Holdings will also enter into a Tax Matters Agreement (the “ Tax Matters Agreement ”).

The Tax Matters Agreement will govern the respective rights, responsibilities and obligations of SilverSun and SilverSun Holdings after the Distribution with respect to tax liabilities and benefits, tax attributes, certain indemnification rights with respect to tax matters, the preparation and filing of tax returns, the control of audits and other tax proceedings, the intended federal income tax characterization of the Separation and the Distribution and the agreed-upon reporting thereof and certain other tax matters.

The Distribution will have tax consequences to SilverSun and the SilverSun stockholders that receive shares of SilverSun Holdings in the Distribution.

Following the Spin-Off, the Company’s current executive officers and directors, including Mark Meller, SilverSun’s chief executive officer, are expected to continue in their current roles at SilverSun Holdings and its subsidiaries.

SilverSun Holdings will apply for the public quotation of its shares on the OTCQX tier of OTC Markets, which shares will be registered pursuant to a Form 10 registration statement that has been filed with the U.S.

Securities and Exchange Commission (the “ SEC ”).

The Investment Agreement and the transactions contemplated by the Investment Agreement have been approved by SilverSun’s board of directors.

The approval of the Equity Investment, the Fifth Amended and Restated Certificate of Incorporation (including the 8:1 reverse stock split contemplated therein) and the equity incentive plan proposed by JPE were approved by the stockholders at the Special Meeting.

The transactions are also subject to the receipt of necessary antitrust approvals and the satisfaction of other customary closing conditions.

Following the Closing of the Equity Investment, the board of directors of SilverSun will be reconstituted such that (a) the number of seats on the board of directors will be as directed by JPE, (b) each of such directors (including Mr.

Jacobs) will be individuals designated by JPE, (c) each standing committee of the board of directors of the Company will be reconstituted in a manner designated by JPE and (d) Mr.

Jacobs will be appointed as the Chairman of the Board of Directors of SilverSun and Chief Executive Officer of SilverSun.

For information regarding the expected terms of Mr.

Jacobs engagement, see “ Jacobs Employment Agreement .”

In addition, the current executive officers of SilverSun will resign and new officers designated by JPE will be appointed, and SilverSun will change its name and trading symbol as determined by JPE.

Under the Investment Agreement, between signing and Closing, the Company will cooperate with JPE in JPE’s efforts for the Company to consummate an acquisition of one or more businesses selected by JPE, the consummation of which will not occur until the closing of the Spin-Off.

Such cooperation by the Company will include signing any definitive agreements with respect to such acquisition so long as the closing thereunder does not occur until the Closing.

JPE will pay for the expenses of this cooperation until the closing of the Spin-Off, at which point the Company will reimburse JPE for all such expenses (with the intention being that these expenses shall not reduce cash otherwise available to SilverSun Holdings).

If JPE consummates an acquisition of a business or businesses before the Closing, at the sole election of JPE, JPE may contribute such business or businesses to the Company and the Company will cooperate with JPE to effectuate any such contribution.

As part of such contribution, the Company will issue to JPE (and as directed by JPE) shares of Convertible Preferred Stock and Warrants with a value equal to the amount paid by JPE to purchase such business or businesses contributed by JPE, based on the same per share of Convertible Preferred Stock/per Warrant prices set forth above, and in such case the portion of the purchase price otherwise payable by JPE to the Company will be reduced by the amount JPE paid for the contributed business or businesses.

Under the Investment Agreement, the Company will be subject to restrictions on its ability to solicit alternative acquisition proposals from third parties and to provide non-public information to and enter into discussions or negotiations with third parties regarding alternative acquisition proposals, subject to the exceptions set forth in the Investment Agreement.

The Investment Agreement contains termination rights for both JPE and the Company, including, among others, for the Company if its board changes its recommendation to its stockholders of the Equity Investment in connection with a Superior Proposal (as defined in the Investment Agreement) to acquire the Company, and for JPE in the event of the Board changing its recommendation to its stockholders of the Equity Investment.

Upon termination of the Investment Agreement in connection with a Superior Proposal and certain other circumstances described in the Investment Agreement, the Company may be obligated to pay JPE a termination fee of $600,000.

Under the Investment Agreement, JPE will be permitted to delay the Closing of the Equity Investment, on one or more occasions, to a date that does not exceed 12 months following the December 3, 2023 signing (subject to the continued satisfaction of closing conditions at such time).

If JPE delays the Closing by more than 7 months following the signing, JPE will pay the Company the following fees on the first day of each additional month, starting with the first day of the eighth month:

(a) month eight (8):

$40,000, (b) month nine (9):

$40,000, (c) month ten (10):

$50,000, (d) month eleven (11):

and (e) month twelve (12):

Concurrently with the Closing of the Equity Investment, the Company and the Investors will enter into a Registration Rights Agreement with respect to the shares of Convertible Preferred Stock and Warrants and the shares of Company common stock issuable upon conversion or exercise thereof, which agreement will contain, among other customary provisions, the terms set forth on Exhibit C to the Investment Agreement filed herewith.

In addition, concurrently with the Closing of the Equity Investment, the Company and the Investors will enter into a stockholders’ agreement in the form attached as Exhibit G to the Investment Agreement filed herewith.

Upon the Closing of the Equity Investment, the SilverSun Technologies, Inc.

2019 Equity and Incentive Plan and all outstanding options issued thereunder, if any, will be terminated.

The Company and the Investors have made customary representations and warranties and covenants in the Investment Agreement.

Plan of Reorganization

Prior to Closing, SilverSun will contribute to SilverSun Holdings all of the issued and outstanding stock of SWK, SCS, and CCDC to SilverSun Holdings resulting in SWK, SCS and CCDC being direct wholly owned subsidiaries of SilverSun Holdings and SWK Technologies Canada, Inc., an Ontario corporation, which is currently owned by SWK and at the time of such Contribution will continue being owned by SWK, being an indirect wholly owned subsidiary of SilverSun Holdings.

In addition, at least one day prior to Closing the Equity Investment, SilverSun will contribute all of its assets, liabilities and employees to SilverSun Holdings.

Prior to the Distribution Date, SilverSun will declare the Dividend, and the Dividend will be paid to the SilverSun stockholders as of the Record Date on the Distribution Date from proceeds received by SilverSun from the Equity Investment.

In addition, at the Effective Time on the Distribution Date, each holder of SilverSun common stock as of the Record Date will receive eight shares of SilverSun Holdings common stock for every share of SilverSun common stock held as of the close of business on the Record Date by such holder of SilverSun common stock as of the Record Date.

No fractional shares of SilverSun Holdings common stock will be issued.

The Separation Agreement sets forth the terms and conditions regarding the Separation and the Distribution.

In addition, the Separation Agreement governs the treatment of indemnification, insurance, and litigation responsibility and management of SilverSun Holdings and SilverSun after the date of Distribution.

The Separation Agreement provides that SilverSun Holdings will indemnify SilverSun following the Distribution for any obligations and liabilities related to or arising from the SilverSun Holdings’ business, on the one hand, and SilverSun and its wholly owned subsidiary, CCDC, on the other hand, prior to the date of Distribution.

Following the Distribution, SilverSun and SilverSun Holdings will indemnify the other party for any obligations and liabilities related to or arising from its respective businesses on or after to the date of Distribution.

The Separation Agreement provides that SilverSun Holdings will indemnify SilverSun following the Distribution for any obligations and liabilities related to or arising from the SilverSun Holdings’ obligations and liabilities related to or arising from its respective businesses.

In addition to the Separation Agreement, SilverSun Holdings will enter several other agreements with us to effect the Separation and provide a framework for our relationship with SilverSun Holdings after the Separation including the Tax Matters Agreement and Employee Matters Agreement.

These agreements will provide for the allocation between SilverSun Holdings and its subsidiaries, on the one hand, and SilverSun and its subsidiaries, on the other hand, of the assets, liabilities, legal entities, and obligations associated with the business application, technology and consulting businesses, on the one hand, and the other SilverSun businesses (including the expected building products distribution business), on the other hand, and will govern the relationship between SilverSun Holdings and its subsidiaries, on the one hand, and SilverSun and its subsidiaries, on the other hand, subsequent to the Separation and the Distribution.

The Separation and the Distribution is subject to the satisfaction or waiver of certain conditions.

For a more detailed description of these conditions, see “ Conditions to the Distribution ” filed as Exhibit I to the Investment Agreement filed as Exhibit 2.1 on Form 8-K filed with the SEC on December 4, 2023.

We cannot provide any assurances that SilverSun will complete the Separation and the Distribution.

Reasons for the Separation

The SilverSun board of directors and its various committees have met regularly;

engaged in an extensive evaluation and analysis of the businesses conducted through its subsidiaries;

explored opportunities to drive enhanced performance and stockholder value;

consulted with financial, legal, tax, and accounting advisors;

and engaged in a strategic review of the growth prospects, enterprise value, end-markets, customers, financial market considerations, credit and insurance factors, and business operations in the current market for each business.

Following a strategic review, it was determined that separating the SpinCo Business (as such term is defined in the Separation Agreement) from the building products distribution businesses expected to be conducted by SilverSun following Closing would create two companies with attributes that best position each company for long-term success, including the following:

Distinct Focus .

Each company will benefit from a distinct strategic and management focus on its specific operational and growth priorities.

Differentiated Investment Theses .

Each company will offer differentiated and compelling investment opportunities based on its particular operating and financial model, allowing it to more closely align with its natural investor type.

Optimized Balance Sheet and Capital Allocation Priorities .

Each company will operate with a capital structure and capital deployment strategy tailored to its specific business model and growth strategies without having to compete with the other for investment capital.

Direct Access to Capital Markets .

Each company will have its own equity structure that will afford it direct access to the capital markets and allow it to capitalize on its unique growth opportunities appropriate to its business.

Incremental Stockholder Value .

Each company will benefit from the investment community’s ability to value its businesses independently within the context of its particular industry with the anticipation that, over time, the aggregate market value of the companies will be higher, on a fully distributed basis and assuming the same market conditions, than if SilverSun were to remain under its current configuration.

The SilverSun board of directors also considered a number of potentially negative factors in evaluating the Separation, including:

Risk of Failure to Achieve Anticipated Benefits of the Separation .

We may not achieve the anticipated benefits of the separation for a variety of reasons, including, among others:

the Separation will demand significant management resources and require significant amounts of management’s time and effort, which may divert management’s attention from operating our business;

following the Separation, we may be more susceptible to market fluctuations, and other events may be more disadvantageous for us than if we were still part of SilverSun, because our business would be less diversified than if the Separation and the Distribution were to not be consummated after the Closing.

Disruptions and Costs Related to the Separation .

The actions required to separate the SpinCo Business from SilverSun could disrupt our operations.

In addition, in connection with the Separation, we will incur costs that may, in the aggregate, be substantial.

These costs may include accounting, tax, legal and other professional services costs, recruiting and relocation costs associated with hiring key senior management personnel who are new to SilverSun and tax costs.

Uncertainty Regarding Stock Prices .

We cannot predict with certainty the effect of the Separation on the trading prices of SilverSun Holdings common stock or SilverSun common stock or know whether the combined market value of one share of our common stock and one share of SilverSun common stock will be less than, equal to or greater than the market value of one share of SilverSun common stock prior to the Distribution.

In determining whether to pursue the separation, the SilverSun board of directors concluded the potential benefits of the Separation outweighed the potential negative factors.

However, neither we nor SilverSun can assure you that, following the Separation, any of the benefits described above or otherwise will be realized to the extent anticipated or at all.

For more information see “ Risk Factors .”

Formation of SilverSun Technologies Holdings

SilverSun Technologies Holdings was formed as a Nevada corporation on November 30, 2023 for the purpose of holding the SpinCo Business.

As part of SilverSun’s plan to separate the SpinCo Business from the remainder of its business, in connection with the plan of reorganization pursuant to the Separation Agreement, SilverSun plans to transfer the equity interests of certain entities that are expected to operate the SpinCo Business and the assets and liabilities of the SpinCo Business to SilverSun Holdings prior to the Distribution.

For additional information, see “ Plan of Reorganization .”

Results of the Distribution

After the Distribution, SilverSun Holdings will be a publicly-traded company.

On the Distribution Date and effective as of the Effective Time, SilverSun will distribute all of the issued and outstanding shares of SilverSun Holdings common stock owned by it to the SilverSun stockholders as of the Record Date based on the distribution ratio of eight shares of SilverSun Holdings common stock for every one share of SilverSun common stock held by such holder of SilverSun common stock as of the Record Date.

The actual number of shares to be distributed will be determined on the Record Date.

Regulatory Approvals

We must complete the requirements for our common stock, including the shares underlying the Convertible Preferred Stock and the Warrants, to continue to be approved for listing on Nasdaq and for the common stock of SilverSun Holdings to be quoted on the OTCQX.

be approved for quotation on OTCQX.

We must also the file a notification and report under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and satisfy the applicable waiting period thereunder, Other than these requirements, we do not believe that any other material governmental or regulatory filings or approvals will be necessary to close the Investment Agreement and consummate the Distribution.

In addition under the Investment Agreement, SilverSun and the Investors have agreed to use their reasonable best efforts to obtain all required governmental approvals in connection with the completion of the transactions contemplated by the Investment Agreement (including the Separation, the Distribution and the Dividend).

SilverSun and JPE have determined that a filing under the HSR Act is required in connection with the Equity Investment.

We are unaware of any other material federal, state or foreign regulatory requirements or approvals required for completion of the Equity Investment.

Appraisal Rights

No SilverSun stockholder will have any appraisal rights in connection with the Separation or Distribution.

Trading of Our Common Stock

Beginning on the Record Date and continuing up to and including the Distribution Date, we expect that there will be two markets in SilverSun common stock:

a “regular-way” market and an “ex-distribution” market.

Shares of SilverSun common stock that trade on the “regular-way” market will trade with an entitlement to receive the Dividend and shares of SilverSun Holdings’ common stock in connection with the Distribution.

Shares of SilverSun common stock that trade on the “ex-distribution” market will trade without an entitlement to receive the Dividend and shares of SilverSun Holdings’ common stock in the Distribution.

Therefore, SilverSun shareholders that sell shares of SilverSun common stock on the “regular-way” market after the Record Date and up to and including through the Distribution Date, will be selling their right to receive the Dividend and shares of SilverSun Holdings’ common stock in connection with the Distribution.

If a shareholder owns shares of SilverSun common stock as of the Record Date and sell those shares on the “ex-distribution” market, up to and including through the Distribution Date, the shareholder will still receive the Dividend and the shares of SilverSun Holdings’ common stock that they would be entitled to receive in respect of your ownership, as of the Record Date, of the shares of SilverSun common stock that they sold.

Furthermore, beginning on the Record Date and continuing up to and including the Distribution Date, we expect there will be a “when-issued” market in SilverSun Holdings’ common stock.

“When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued.

The “when-issued” trading market will be a market for shares of SilverSun Holdings’ common stock that will be distributed to SilverSun stockholders on the Distribution Date.

If you own shares of SilverSun common stock as of the Record Date, you would be entitled to receive shares of SilverSun Holdings’ common stock in connection with the Distribution.

You may trade this entitlement to receive shares of SilverSun Holdings’ common stock, without trading the shares of SilverSun common stock you own, in the “when-issued” market.

On the first trading day following the Distribution Date, we expect “when-issued” trading with respect to SilverSun Holdings’ common stock will end and “regular-way” trading in SilverSun Holdings’ common stock will begin.

Conditions to the Distribution

The consummation of the Distribution is subject to the satisfaction or waiver by SilverSun in its sole and absolute discretion of the following conditions:

the SEC will have declared effective SilverSun Holdings’ registration statement on Form 10, under the Securities Exchange Act of 1934, as amended, no stop order suspending the effectiveness of such registration statement on Form 10 will be in effect;

and no proceedings for such purpose will be pending or threatened by the SEC;

this information statement exhibit to the Form 10 will have been mailed or otherwise made available to the holders of SilverSun common stock as of the Record Date;

the transfer of the SilverSun Holdings assets and the assumption of the SilverSun Holdings liabilities contemplated to be transferred from SilverSun (or the applicable subsidiary of SilverSun) to SilverSun Holdings (or the applicable subsidiary of SilverSun Holdings) on or prior to the Distribution will have occurred, and the transfer of SilverSun retained assets and assumption of the SilverSun retained liabilities contemplated to be transferred from SilverSun Holdings (or the applicable subsidiary of SilverSun Holdings) to SilverSun (or the applicable subsidiary of SilverSun) on or prior to the Distribution Date will have occurred, in each pursuant to the plan of reorganization included in the Separation Agreement and in accordance with and subject to the terms of the Separation Agreement;

each of the other ancillary agreements contemplated by the Separation Agreement will have been duly executed and delivered by the applicable parties thereto;

no order, injunction or decree issued by any governmental authority of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Separation, the Distribution or any of the transactions related thereto shall be pending or in effect;

at least two days prior to the Closing, SilverSun shall have filed with the Secretary of State of the State of Delaware, the Fifth Amended and Restated Certificate of Incorporation and had the Fifth Amended and Restated Certificate of Incorporation become effective in accordance with the laws of the State of Delaware as of 11:59 p.m., New York Time, on the date that is two (2) days prior to the Closing;

SilverSun’s common stock, including the shares underlying the Convertible Preferred Stock and the Warrants, will have been approved for continued listing on Nasdaq and SilverSun Holdings’ common stock to be distributed to the SilverSun stockholders as of the Record Date in connection with the Distribution will have been approved for quotation on the OTCQX, subject to official notice of distribution;

the Equity Investment will have been consummated.

Agreements with SilverSun

Prior to the Distribution, SilverSun Holdings and SilverSun (which will, shortly after the Closing, be renamed QXO, Inc.) will enter into certain agreements that will affect the separation of SilverSun’s legacy businesses from SilverSun, including by providing for the attribution between SilverSun Holdings and SilverSun of SilverSun’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities), and provide a framework for our relationship following the Distribution with SilverSun Holdings.

These agreements are the Separation Agreement, the Tax Matters Agreement and the Employee Matters Agreement.

Separation and Distribution Agreement

Transfer of Assets and Assumption of Liabilities

The Separation Agreement will identify the assets to be transferred, the liabilities to be assumed and the contracts to be transferred to each of SilverSun Holdings and SilverSun as part of the Separation and will provide for when and how these transfers and assumptions will occur.

In particular, the Separation Agreement will provide that, among other things, subject to the terms and conditions contained therein:

Certain assets related to the SpinCo Business, which we refer to as the “ SpinCo Assets, ” will be retained by or transferred to SilverSun Holdings or one of its subsidiaries.

The SpinCo Assets will consist of:

all issued and outstanding capital stock or other equity interests of the subsidiaries of SilverSun Holdings that hold the SpinCo Business;

all other assets owned by SilverSun and its subsidiaries immediately prior to 12:01 am, New York City time on the Distribution Date (the “Effective Time”), excluding the Parent Retained Assets (as such term is defined in the Separation Agreement).

In addition, the SpinCo Assets will not include any assets related or attributable to, or arising in connection with, taxes or tax returns, which will be exclusively governed by the Tax Matters Agreement.

Certain liabilities related to the SpinCo Business or the SpinCo Assets, which we refer to as the “ SpinCo Liabilities ,” will be retained by or transferred to SilverSun Holdings.

The SpinCo Liabilities will consist of:

any and all liabilities of SilverSun and/or its subsidiaries that were liabilities as of immediately prior to (or were incurred prior to or related to any period prior to) the Effective Time, including any and all liabilities of SilverSun and/or its subsidiaries related to the SpinCo Assets or the SpinCo Business, excluding only the Parent Retained Liabilities (as such term is defined in the Separation Agreement);

any and all liabilities arising out of claims made by any third party (including SilverSun’s or SilverSun Holdings’ respective directors, officers, stockholders, employees and agents) against SilverSun or any subsidiary or SilverSun Holdings or any subsidiary to the extent relating to, arising out of or resulting from the Separation Agreement or the Investment Agreement or the transactions contemplated thereby or the SpinCo Business or the SpinCo Assets.

In addition, the SpinCo Liabilities will not include any liabilities to the extent related or attributable to, or arising in connection with, taxes or tax returns, which shall be exclusively governed by the Tax Matters Agreement.

Certain assets will be retained by or transferred to SilverSun, which we refer to as the “ SilverSun Retained Assets.

” The SilverSun Retained Assets will consist of:

cash in an amount equal to the aggregate purchase price for the Securities (without limiting the obligation of SilverSun to pay the Dividend);

any contracts or other assets contributed by JPE to SilverSun at the Closing;

any contracts entered into, or any other assets acquired by, SilverSun on or after the Closing and before the Effective Time at the written direction of JPE or with the approval of the SilverSun board of directors after the Closing (the “ New Assets ”).

liabilities to the extent relating to the New Assets, which we refer to as the “ SilverSun Retained Liabilities ,” will be retained by or transferred to SilverSun.

Unless otherwise provided in the Separation Agreement or any of the related ancillary agreements, all assets will be transferred on an “as is, where is” basis.

Generally, if the transfer of any assets or any claim or right or benefit arising thereunder requires a consent that will not be obtained before the Distribution, or if the transfer or assignment of any such asset or such claim or right or benefit arising thereunder would be ineffective or would adversely affect the rights of the transferor thereunder so that the intended transferee would not in fact receive all such rights, the party retaining any asset that otherwise would have been transferred will use commercially reasonable efforts to promptly transfer, or cause the entity(ies) affiliated with it to promptly transfer, to the other party or the appropriate entity(ies).

Information provided herein with respect to the assets and liabilities of the parties following the Distribution is presented based on the allocation of such assets and liabilities pursuant to the Separation Agreement, unless the context otherwise requires.

The Separation Agreement will provide that in the event that the transfer of certain assets and assumption liabilities (or a portion thereof) to SilverSun Holdings or SilverSun, as applicable, does not occur prior to the Effective Time, then until such assets or liabilities (or a portion thereof) are able to be transferred, SilverSun Holdings or SilverSun, as applicable, will hold such assets on behalf and for the benefit of the transferee at the expense of the transferee and will use commercially reasonable efforts to effect such transfer of assets or assumption of liabilities as promptly following the Effective Time as will be practicable.

In addition, SilverSun and SilverSun Holdings will agree that on and prior to the eighteen (18)-month anniversary following the Effective Time, if any party owns any asset, that, although not transferred pursuant to the Separation Agreement, is mutually agreed by such party and the other party in their good faith judgment to be an asset that more properly (given the intention of the Separation Agreement) belongs to the other party or a subsidiary of the other party (other than (for the avoidance of doubt) any asset acquired from an unaffiliated third party by SilverSun or SilverSun Holdings or any of its subsidiaries following the Effective Time), then the party owning such asset shall, as applicable (i) transfer any such asset to the other party or the subsidiary of the other party identified as the appropriate transferee and following such transfer, such asset will be a Parent Retained Asset or SpinCo Asset, as the case may be, or (ii) grant such mutually agreeable rights with respect to such asset to permit such continued use, subject to, and consistent with the Separation Agreement, including with respect to assumption of associated liabilities.

The Distribution

The Separation Agreement will also govern the rights and obligations of the parties regarding the Distribution following the completion of the Separation.

On the Distribution Date, SilverSun will distribute to its stockholders that hold SilverSun common stock as of the Record Date of all of the issued and outstanding shares of SilverSun Holdings common stock on a pro rata basis.

SilverSun will not distribute any fractional shares of SilverSun Holdings common stock.

The Separation Agreement will provide that, except as expressly set forth in the Separation Agreement, SilverSun Holdings and its affiliates will release and discharge SilverSun and its affiliates from all liabilities assumed by SilverSun Holdings as part of the Separation, all liabilities arising from or in connection with the transactions contemplated by the Separation Agreement and all other activities to implement the Separation and the Distribution, and all liabilities arising from or in connection with actions, inactions, events, omissions, facts, or circumstances occurring or existing prior to the Effective Time, in each case to the extent relating to the SpinCo Business, the assets transferred to SilverSun Holdings as part of the Separation or the liabilities assumed by SilverSun Holdings as part of the Separation.

The Separation Agreement will further provide that, except as expressly set forth in the Separation Agreement, SilverSun and its affiliates will release and discharge SilverSun Holdings and its affiliates from all liabilities retained by SilverSun as part of the Separation and from all liabilities arising out of acts and events occurring or failing to occur, and all conditions existing, on or before the Effective Time of the Distribution, in each case to the extent relating to the businesses conducted by SilverSun, except the SpinCo Business, the assets retained by SilverSun as part of the Separation or the liabilities retained by SilverSun as part of the Separation.

Indemnification

In the Separation Agreement, SilverSun Holdings will agree to indemnify, defend and hold harmless SilverSun, each of SilverSun’s affiliates after giving effect to the Distribution and each of their respective representatives and all persons who at any time prior to the Effective Time are or have been stockholders, directors, officers, agents or employees of SilverSun Holdings or a subsidiary of SilverSun Holdings (after the Distribution) and who are not, as of immediately following the Effective Time, directors, officers or employees of SilverSun Holdings or its subsidiaries from and against all losses to the extent arising out of, relating to or resulting from, directly or indirectly:

the SpinCo Assets, the SpinCo Liabilities or the SpinCo Business;

any breach by SilverSun Holdings or a subsidiary (after the Distribution) of the Separation Agreement;

any failure of SilverSun Holdings, any subsidiary of SilverSun Holdings or any other person to pay, perform or otherwise promptly discharge any SpinCo Liabilities in accordance with their terms, whether prior to, on or after the Effective Time;

any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any subsidiary of SilverSun Holdings by SilverSun that survives following the Distribution;

all information contained in the Proxy Statement (as defined in the Investment Agreement), registration statement on Form 10 or the information statement exhibit to the Form 10 or the documents incorporated by reference therein (other than any information provided by JPE and as expressly set forth in the Separation Agreement), any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

SilverSun will agree to indemnify, defend and hold harmless SilverSun Holdings, each of SilverSun Holdings’ subsidiaries, each of the respective representatives of SilverSun Holdings and its subsidiaries from and against all losses to the extent arising out of, relating to or resulting from, directly or indirectly:

the SilverSun Retained Liabilities;

any breach by SilverSun of the Separation Agreement;

any failure of SilverSun or any other person to pay, perform or otherwise promptly discharge any SilverSun Retained Liabilities in accordance with their terms, whether prior to, on or after the Effective Time;

solely with respect to information regarding the Investors provided by or on behalf of JPE in writing to SilverSun or SilverSun Holdings expressly for inclusion in the registration statement on Form 10 or this information statement exhibit to Form 10, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

Indemnification with respect to taxes, and the procedures related thereto, will be governed by the Tax Matters Agreement.

SilverSun Holdings and SilverSun will acknowledge that the insurance policies of SilverSun prior to the Separation and the Distribution and insurance coverage maintained in favor of SilverSun Holdings and its subsidiaries, are part of the corporate insurance program maintained by the SilverSun Holdings and its subsidiaries and their respective affiliates (the “ Corporate Policies ”) and such coverage will not be available or transferred to any other subsidiary of SilverSun for any occurrence arising following the Distribution Date.

SilverSun Holdings and SilverSun will agree that in no event will SilverSun or any SilverSun Indemnitee have any liability or obligation

whatsoever to SilverSun Holdings or any of its subsidiaries in the event that any Corporate Policies or other Corporate Policy-related contract is terminated or otherwise ceases to be in effect for any reason, is unavailable or inadequate to cover any liability of any SilverSun Holdings or any of its subsidiaries for any reason whatsoever or will not be renewed or extended beyond the current expiration date.

Dispute Resolution

The Separation Agreement will contain provisions that govern, except as otherwise provided in any ancillary agreement, the resolution of disputes, controversies or claims that may arise between SilverSun and SilverSun Holdings related to the Separation or Distribution and that are unable to be resolved through good faith negotiations between SilverSun and SilverSun Holdings.

These provisions will contemplate that efforts will be made to resolve disputes, controversies and claims by escalation of the matter to executives of the parties in dispute.

If such efforts are not successful, one of the parties in dispute may submit the dispute, controversy or claim to binding alternative dispute resolution, subject to the provisions of the Separation Agreement.

The Separation Agreement will provide that all costs and expenses incurred prior to the Closing Date by any of SilverSun or its affiliates (other than those costs and expenses incurred by JPE) or SilverSun Holdings or any of its subsidiaries (whether or not paid on or prior to the Closing Date) relating to or in connection with the preparation, execution, delivery, printing and implementation of the Separation Agreement and any ancillary agreement, the registration statement on Form 10, the Contribution, the plan of reorganization, the Separation, the Distribution and the consummation of the transactions contemplated thereby, will be charged to and paid by SilverSun Holdings, and shall be a SpinCo Liability.

All costs and expenses incurred on or after the Closing Date by SilverSun or any of its subsidiaries (other than any costs or expenses relating to SilverSun Holdings, any of its subsidiaries, or any of its or their respective directors, officers, employees, advisors or other representatives, the SpinCo Business, the SpinCo Liabilities, the SpinCo Assets, the Separation, the Distribution, the Separation Agreement, the other ancillary agreements or any of the other transactions contemplated thereby or any actions taken by or at the request or direction of or on behalf of SilverSun Holdings, its subsidiaries or its and their respective directors, officers or employees) will be borne by SilverSun, and shall be a liability of SilverSun.

The Investment Agreement and the Meller Letter Agreement (as defined in the Investment Agreement)), provide that SilverSun will pay Mark Meller, as the result of the termination of the Meller SilverSun Employment Agreement, an amount not to exceed $3,000,000 (computed in accordance with the terms of the Meller SilverSun Employment Agreement and Meller Letter Agreement) and that, to the extent that the payment Mark Meller is owed as a result of the termination of the Meller SilverSun Employment Agreement is less than $3,000,000, the difference shall be treated as an additional expense reimbursement payable to SilverSun Holdings.

The payment to Mr.

Meller thereunder will be $2,854,534, which will be paid by SilverSun.

Therefore, SilverSun will reimburse SilverSun Holdings the difference between $3,000,000 and $2,854,534, or $145,466.

The forgoing payments will be made by SilverSun from the funds received in the Equity Investment.

Subject to certain exceptions, under the Tax Matters Agreement:

SilverSun Holdings generally will be responsible for (i) taxes of SilverSun, SilverSun Holdings and their respective subsidiaries for tax periods (or portions thereof) ending on or before the Distribution Date, (ii) taxes imposed on SilverSun, SilverSun Holdings, and their respective subsidiaries as a result of, in connection with or relating to the Distribution and certain related transactions, other than the first $1.5 million of such taxes, which will be borne by SilverSun and (iii) taxes of SilverSun Holdings and its subsidiaries for tax periods (or portions thereof) beginning after the Distribution Date;

SilverSun generally will be responsible for (i) the first $1.5 million of taxes imposed on SilverSun, SilverSun Holdings and their respective subsidiaries as a result of, in connection with or relating to the Distribution and certain related transactions, and (ii) taxes of SilverSun and its subsidiaries for tax periods (or portion thereof) beginning after the Distribution Date.

Amendment and Termination

The Separation Agreement will provide that the Separation Agreement and the Distribution can only be amended, terminated, modified or abandoned by mutual agreement of SilverSun and SilverSun Holdings.

In the event of such termination, neither party will have any liability of any kind to the other party or any other person.

Employee Matters Agreement

As of or prior to the Distribution, SilverSun and SilverSun Holdings will enter into the Employee Matters Agreement which will allocate liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and programs, and other related matters.

The Employee Matters Agreement will govern certain compensation and employee benefit obligations with respect to current and former employees and non-employee directors of each company.

The Employee Matters Agreement will provide that for purposes of compensation and benefit matters, unless otherwise specified, SilverSun Holdings will be responsible for liabilities for all current and former employees of SilverSun and its subsidiaries (including SilverSun Holdings and its subsidiaries) as of the Distribution.

Tax Matters Agreement

As of or prior to the Distribution, SilverSun and SilverSun Holdings will enter into the Tax Matters Agreement which will govern the respective rights, responsibilities and obligations of SilverSun and SilverSun Holdings after the Distribution with respect to tax liabilities and benefits, tax attributes, certain indemnification rights with respect to tax matters, the preparation and filing of tax returns, the control of audits and other tax proceedings, the intended federal income tax characterization of the Separation and the Distribution and the agreed-upon reporting thereof and certain other tax matters.

Subject to certain exceptions, under the Tax Matters Agreement:

SilverSun Holdings generally will be responsible for (i) taxes of SilverSun, SilverSun Holdings and their respective subsidiaries for tax periods (or portions thereof) ending on or before the Distribution Date, (ii) taxes imposed on SilverSun, SilverSun Holdings and their respective subsidiaries as a result of, in connection with or relating to the Distribution and certain related transactions, other than the first $1.5 million of such taxes, which will be borne by SilverSun, and (iii) taxes of SilverSun Holdings and its subsidiaries for tax periods (or portions thereof) beginning after the Distribution Date;

Investment Agreement

Under the Investment Agreement, until the Closing of the Equity Investment, SilverSun will cooperate with JPE in JPE’s efforts for SilverSun to consummate an acquisition of one or more businesses selected by JPE, the consummation of which will not occur until the consummation of the Separation and the Distribution.

Such cooperation by SilverSun will include signing any definitive agreements with respect to such acquisition so long as the closing thereunder does not occur until the Closing.

JPE will pay for the expenses of this cooperation until the closing of the Separation and the Distribution, at which point SilverSun will reimburse JPE from the Equity Investment for all such expenses (with the intention being that these expenses will not reduce cash otherwise available to SilverSun Technologies Holdings).

JPE may consummate an acquisition of a business or businesses prior to the Closing, and at, or substantially contemporaneously with, the Closing, at its sole election, JPE may contribute such business or businesses to SilverSun, in which case the Company will be required to cooperate to effectuate such contribution.

Such contributed business or businesses would be SilverSun Retained Assets and would remain with SilverSun following the consummation of the Separation and the Distribution.

In addition, the Investment Agreement provides that during the Post-Closing Spin-Off Period (as such term is defined in the Investment Agreement:

neither SilverSun, the SilverSun board of directors, JPE, nor its controlled affiliates, will take any action by or on behalf of us (or any of JPE or its controlled affiliates) that would be likely to delay, compromise or otherwise jeopardize our consummation of the Separation and the Distribution;

each member of JPE or its controlled affiliates will act in good faith in connection with the continued operation of the SpinCo Business, consistent with past practice in all material respects, and will use his, her, or its reasonable best efforts to cooperate with SilverSun in effecting the Separation and the Distribution;

no member of JPE or its controlled affiliates will make any material decisions relating to or impacting the SpinCo Business, including without limitation, modifying any of the organizational documents of SpinCo or any of its subsidiaries other than as contemplated by the Investment Agreement, or modifying any contracts to the extent relating to or impacting the legacy businesses, other than as contemplated by the Investment Agreement, without consulting with and obtaining the prior written consent of Mark Meller, the present CEO of SilverSun or in his absence, the then-current CEO of SilverSun Holdings (in each case which consent will not be unreasonably withheld, conditioned or delayed), or preventing or terminating the Separation and the Distribution.

In addition, SilverSun, JPE and the Other Investors agreed in the Investment Agreement that SilverSun, JPE, and the SilverSun board of directors will be permitted to operate SilverSun and its subsidiaries (other than SilverSun Holdings and SpinCo Business that has been contributed to SilverSun Holdings) during the Post-Closing Spin-Off Period in any manner SilverSun deems to be appropriate, including consummating an acquisition of one or more businesses or entities;

purchasing any assets of one or more businesses or entities, entering into financing transactions, or engaging in any similar transactions and actions in connection with the foregoing.

Without limiting the foregoing, during the Post-Closing Spin-Off Period, no member of JPE or its controlled affiliates will amend or modify (or agree to amend or modify) any terms of any of the agreements or other documents delivered pursuant to the Investment Agreement, in each case without the prior written consent of the CEO or in his absence the then-current CEO of SilverSun Holdings (which consent will not be unreasonably withheld, conditioned, or delayed).

If the Closing occurs, JPE will pay up to $900,000 of the out-of-pocket expenses incurred by SilverSun in connection with the Investment Agreement and the transactions and related agreements contemplated thereby, including all fees of its legal counsel, financial advisers, and accountants incurred in connection therewith.

Jacobs Employment Agreement

Effective as of the Closing, the Company will enter into an employment agreement with Brad Jacobs (the “ Jacobs Employment Agreement ”) in the form directed by JPE in writing prior to the Closing (but in no event earlier than 2 business days prior to the Closing).

The expected principal terms of the Jacobs Employment Agreement are described below.

The Jacobs Employment Agreement will provide for a five-year term, commencing on the Closing Date.

Position and Reporting

Jacobs will serve as Chief Executive Officer of the Company, reporting to the Company Board and, effective on the first day of the term, Mr.

Jacobs will also be appointed as a member and Chairman of the Company Board.

Salary and Target Annual Bonus

Jacobs’ annual base salary will have an initial annual rate of $750,000 and his target annual bonus will initially be 100% of his base salary.

Jacobs’ annual base salary and target annual bonus will increase (but not decrease) each calendar year of the term depending on the Company’s annualized revenue run rate as of the preceding December 31 as follows:

Potential Salary increases based on Annual Revenue Run Rate Band

Annualized Revenue Run Rate Band

1 Billion to $5 Billion

5 Billion to $10 Billion

10 Billion to $20 Billion

20 Billion to $30 Billion

Greater than $30 Billion

Potential Target Bonus Amounts based on Annual Revenue Run Rate Band

Annualized Revenue Run Rate Band

1 Billion to $5 Billion

135% of Base Salary

5 Billion to $10 Billion

150% of Base Salary

10 Billion to $20 Billion

165% of Base Salary

20 Billion to $30 Billion

200% of Base Salary

Greater than $30 Billion

200% of Base Salary

Termination Event

The Company may terminate Mr.

Jacobs’ employment during the term with or without cause and Mr.

Jacobs may resign his employment on 30 days’ prior written notice to the Company (or may resign for good reason in certain circumstances as described below).

The term will also end upon Mr.

Jacobs’ permanent disability or death.

The severance payments described below are subject to and conditioned upon Mr.

Jacobs (a) signing an irrevocable waiver and general release in favor of the Company and (b) complying with the restrictive covenants contained in the Jacobs Employment Agreement.

Non-CIC Termination.

In the event that either prior to a change in control of the Company or more than two years after a change in control of the Company occurs, the Company terminates Mr.

Jacobs’ employment without cause, Mr.

Jacobs will be entitled to receive:

• a cash payment equal to 12 months of base salary;

• medical and dental coverage for a period of six months from the date of termination;

• vesting of equity-based or other long-term incentive compensation awards solely to the extent set forth in the applicable award agreement.

CIC Termination.

In the event that upon or within the two-year period following a change in control of the Company, Mr.

Jacobs’ employment is terminated by the Company without cause or he resigns for good reason, Mr.

Jacobs will receive:

• 2.99 times the sum of Mr.

Jacobs’ annual base salary and target bonus;

• a pro rata target bonus for the year of termination;

• medical and dental coverage for a period of 24 months from the date of termination;

• vesting of equity-based or other long-term incentive compensation awards solely to the extent set forth in the applicable award agreement.

In the event that any benefits due or amounts payable to Mr.

Jacobs in connection with a change in control of the Company constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “ Code ”), then any such amounts will be reduced to avoid triggering the excise tax imposed by Section 4999 of the Code, provided that such reduction will be applied solely if it would result in Mr.

Jacobs retaining a greater portion of the payments on a net after-tax basis.

Jacobs will be subject to any compensation recovery policy maintained by the Company, as in effect from time to time.

Restrictive Covenants

Jacobs is generally subject to the following restrictive covenants:

employee and customer non-solicitation covenants during his employment and for a period of four years thereafter;

confidentiality and mutual non-disparagement covenants during his employment and thereafter;

and non-competition covenants during his employment and for a period of 12 months thereafter (during which period the Company will make monthly noncompete payments to Mr.

Jacobs equal to one-twelfth of his base salary), except that the Company will have the right (other than following a change in control of the Company) to extend the non-compete for up to three additional one-year periods so long as the Company pays Mr.

Jacobs an amount equal to the sum of one-twelfth of his base salary for each month during each applicable one-year extension period.

Initial Equity Awards

Grant of Initial Equity Awards.

In connection with the execution of the Jacobs Employment Agreement, following the Closing on a date selected by the Compensation Committee of the Company Board (which is anticipated to be no later than the 120 th day after the Closing), the Company will grant to Mr.

Jacobs an award of time-based restricted stock units relating to 3,832,676 shares of Common Stock (the “ RSUs ”) and an award of performance-based restricted stock units relating to 7,117,828 shares of Common Stock at target (the “ PRSUs ”).

Any RSUs and PRSUs that vest will be settled for Common Stock or, at the Company’s election, an equivalent amount of cash.

Except in the event of a change in control of the company, all shares delivered in settlement of RSUs and PRSUs (net of any shares withheld to cover taxes) will be subject to a transfer restriction that prohibits Mr.

Jacobs from disposing of such shares prior to December 31, 2029.

The Jacobs Employment Agreement does not contemplate that any additional equity awards will be granted to Mr.

Jacobs during the five-year term of the Jacobs Employment Agreement.

The RSUs will vest in five tranches on each of the first five anniversaries of the grant date, with the first tranche covering 15% of the RSUs, each of the next two tranches covering 17.5% of the RSUs, and each of the final two tranches covering 25% of the awards.

Vesting of RSUs will generally be subject to Mr.

Jacobs’s continued service with the Company through the applicable vesting date.

PRSU Vesting.

The PRSUs will be earned based on performance goals relating to the Company’s total stockholder return (“ TSR ”) compared to the TSR ranking of each company that is in the S&P 500 Index.

The PRSUs may be earned at a level ranging from zero to 225% of the target number, depending upon the degree of achievement of the applicable performance goal.

The degree of achievement of the Company TSR relative to the S&P 500 companies’ TSR will be measured against a specified payout matrix, pursuant to which Company TSR below the 55 th percentile of the S&P 500 companies will result in zero payout, while achievement at the 90 th percentile or above will result in a payout of 225% of target.

The performance goals for a portion of the PRSUs will be measured over a cumulative performance period beginning on the grant date and ending on December 31, 2028 and the performance goals for the remainder of the PRSUs will be measured based on designated performance periods that occur within such cumulative period.

Vesting of the PRSUs will generally be subject to Mr.

Jacobs’s continued service through the applicable performance period.

Termination of Employment.

The RSUs and PRSUs will be subject to special rules providing for either partial or full vesting on a qualifying termination of employment, including due to death, disability, termination without cause or, during the two years following a change in control, termination for good reason.

Treatment of Equity-Based Compensation

SilverSun, JPE and the Other Investors agreed in the Investment Agreement that effective as of the Closing, each Company stock option that is outstanding and unexercised as of immediately prior to the Closing, if any, will automatically be cancelled without payment or consideration to the holder thereof.

In addition, under the terms of the Employee Matters Agreement, the SilverSun Technologies, Inc.

2019 Equity and Incentive Plan will be terminated effective as of immediately prior to the Closing.

Transferability of Shares of SilverSun Holdings ’ Common Stock

The shares of SilverSun Holdings’ common stock that eligible SilverSun shareholders will receive in connection with the Distribution will be freely transferable, unless the recipient is considered an “affiliate” of SilverSun Holdings pursuant to Rule 144 under the Securities Act.

Persons that can be considered SilverSun Holdings’ affiliates after the Separation generally include individuals or entities that directly, or indirectly through one or more intermediaries, control, are controlled by, or are under common control with SilverSun Holdings, and will include the officers and directors of SilverSun Holdings.

Such affiliates may sell shares of our common stock received in connection with the Distribution only:

under a registration statement that the SEC has declared effective under the Securities Act;

under an exemption from registration under the Securities Act, such as the exemption afforded by Rule 144.

In general, under Rule 144 as currently in effect, an affiliate will be entitled to sell, within any three-month period, a number of shares of our common stock that does not exceed the greater of the following:

one percent of our common stock then outstanding;

the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 for the sale.

Rule 144 also includes notice requirements and restrictions governing the manner of sale for sales by our affiliates.

Sales may not be made under Rule 144 unless certain information about us is publicly available.

Where You Can Find More Information

1 unchanged sentence

We do not intend our website address to be an active link or to otherwise incorporate by reference the contents of the website into this Report.

The public may read and copy any materials the Company files with the U.S.

Securities and Exchange Commission (the “SEC”) at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.

The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0030.

The SEC maintains an Internet website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

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 1. Business