15 unchanged sentences
The Company’s management’s report on internal control over financial reporting was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits the Company to provide only the Company’s management’s report on internal control over financial reporting in this Annual Report on Form 10-K.
−Removed: (c) Changes to Internal Controls over Financial Reporting
+Added: (c) Changes to Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during our fourth quarter ended December 31, 2023, or in other factors that could significantly affect these controls, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
4 unchanged sentences
Directors and Executive Officers
−Removed: The following table and biographical summaries set forth information, including principal occupation and business experience, about our directors and executive officers at February 27, 2023:
+Added: The following table and biographical summaries set forth information, including principal occupation and business experience, about our directors and executive officers at March 13, 2024:
Officer and/or Director Since
8 unchanged sentences
Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).
−Removed: Board Diversity Matrix (As of February 27, 2023)
+Added: Board Diversity Matrix (As of March 13, 2024)
Total Number of Directors
111 unchanged sentences
Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).
−Removed: Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Company during the fiscal year ended December 31, 2022, including those reports that we have filed on behalf of our directors and Section 16 officers, no director, Section 16 officer, beneficial owner of more than 10% of the outstanding common stock, or any other person subject to Section 16 of the Exchange Act, failed to file with the SEC on a timely basis during the fiscal year ended December 31, 2022.
+Added: Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to the Company during the fiscal year ended December 31, 2023, including those reports that we have filed on behalf of our directors and Section 16 officers, no director, Section 16 officer, beneficial owner of more than 10% of the outstanding common stock, or any other person subject to Section 16 of the Exchange Act, failed to file with the SEC on a timely basis during the fiscal year ended December 31, 2023, except (i) as previously disclosed by the Company, (ii) Joseph Macaluso filed a Form 4 on December 13, 2023, which was delinquent, in connection with his cashless exercise of options, the earliest of which occurred on March 29, 2021, (iii) John Schachtel filed a Form 4 on December 13, 2023, which was delinquent, in connection with a stock option grant on October 14, 2021, (iv) Stanley Wunderlich filed a Form 4 on December 13, 2023, which was delinquent, in connection with a stock option grant on October 14, 2021, and (v) Stanley Wunderlich filed a Form 4 on December 29, 2023, which was delinquent, in connection with his cashless exercise of stock options on October 14, 2021.
Code of Ethics
15 unchanged sentences
Name and Position(s)
−Removed: Non-Equity Incentive Plan Compensation ($)
−Removed: Nonqualified Deferred Compensation Earnings ($)
+Added: Incentive Plan
Compensation ($)
Compensation ($)
+Added: Compensation ($)
President, Chief Executive Officer,
1 unchanged sentence
Chief Financial Officer
−Removed: On January 4, 2021, the Board of Directors of the Company (the “Board”) appointed Mr.
−Removed: Joseph Macaluso as Chief Financial Officer of the Company (the “CFO Appointment”).
−Removed: Concurrently, Mr.
−Removed: Macaluso submitted his resignation from his positions as a member of the Board and Chairman of the Audit Committee of the Company
Mark Meller, Chief Executive Officer
12 unchanged sentences
Meller’s employment agreement remain unchanged.
+Added: Concurrently with the execution of the Investment Agreement, SilverSun and Mark Meller entered into a letter agreement pursuant to which the Meller SilverSun Employment Agreement will be terminated and liquidated as of immediately prior to Closing, and Silver Sun will pay to Mr.
+Added: Meller a lump sum termination payment equal to the lessor of (i) $3.0 million and (ii) 300% of the average annual amount paid by the Company or any parent or subsidiary thereof to Mr.
+Added: Meller and included in his gross income for services rendered in each of the five calendar years immediately prior to closing, less $100, which is the amount that he is entitled to receive under the Meller SilverSun Agreement for certain terminations of his employment within three years following a change of control.
Potential Payments upon Termination or Change in Control
1 unchanged sentence
Meller of three hundred percent (300%), less $100,000 of his gross income for services rendered to the Company in each of the five prior calendar years should his employment be terminated following a change in control (as defined in the Meller Employment Agreement).
−Removed: Joseph Macaluso, Chief Financial Officer
−Removed: In connection with the CFO Appointment, Mr.
−Removed: Macaluso entered into an offer letter (the “Offer Letter”) with the Company.
−Removed: Pursuant to the Offer Letter, Mr.
−Removed: Macaluso is to receive a base salary at the annual rate of two hundred fifteen thousand dollars ($215,000) and a one-time cash sign on bonus in the amount of thirty thousand dollars ($30,000).
−Removed: Macaluso is eligible for a discretionary bonus of up to twenty percent (20%) of the Annual Rate.
−Removed: Pursuant to the Offer Letter, Mr.
−Removed: Macaluso’s employment with the Company is at-will and it may be terminated with or without cause.
Grants of Plan-based Awards Table for Fiscal Year 2023
1 unchanged sentence
Outstanding Plan-based Awards at December 31, 2023
−Removed: The following table sets forth the outstanding stock option grants held by named executive officers at the end of the 2022 fiscal year.
−Removed: The option exercise price set forth in the table is based on the closing market price on the date of grant.
−Removed: Number of Securities Underlying Unexercised Options(#) Exercisable
−Removed: Number of Securities Underlying Unexercised Options(#) Unexercisable
−Removed: Option Exercise
−Removed: Option Expiration
+Added: The Company had no outstanding equity awards to the executives named above at the end of the most recently completed fiscal year.
+Added: Options Exercised During Fiscal Year 2023
+Added: Value Realized
Joseph Macaluso
Joseph Macaluso
+Added: Clawback Policy
+Added: The Company has adopted a clawback policy that states that, in the event that the Company is required to prepare an accounting restatement, it will recover incentive-based compensation received by any current or former executive officer that was based upon the attainment of a financial reporting measure that was erroneously awarded during the three-year period preceding the date that the restatement was required.
Director Compensation
4 unchanged sentences
Stanley Wunderlich
+Added: Kenneth Edwards
John Schachtel
26 unchanged sentences
The Warrant shall be fully vested upon receipt thereof (the “Vesting Date”).
+Added: The warrants have expired and no warrants had been issued.
On January 4, 2021, we entered into a director agreement (“Edwards Director Agreement”) with Kenneth Edwards, pursuant to which Mr.
4 unchanged sentences
Edwards is to be paid a stipend of $1,667 per month (the “Stipend”).
+Added: Pay versus Performance Table
+Added: The following table shows the total compensation for the named executive officers as set forth in the Summary Compensation Table, the compensation “actually paid” (“CAP”) to the NEOs, the Company’s total shareholder return (“TSR”), and our net income (loss) for the years ended December 31, 2023 and 2022.
+Added: Performance Table
+Added: table total for
+Added: actually paid
+Added: to PEO (1)(3)
+Added: table total for
+Added: actually paid
+Added: initial fixed
+Added: return (3)(5)
+Added: In the table above, our PEO is Mark Meller.
+Added: In the table above, our only non-PEO NEO is Joseph Macaluso.
+Added: Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period.
+Added: The SEC rules require that certain adjustments be made to the Summary Compensation Table (“SCT”) totals to determine CAP, as reported in the Pay versus Performance table above.
+Added: The following table details the applicable adjustments that were made to determine CAP:
+Added: Cumulative TSR is calculated based on the value of an initial fixed investment of $100 in our common stock as of December 31, 2020.
+Added: option awards
+Added: fair value of
+Added: equity granted
+Added: change in fair
+Added: outstanding and
+Added: unvested equity
+Added: Add fair value
+Added: as of vesting
+Added: date of equity
+Added: awards granted
+Added: over-year change
+Added: in fair value
+Added: of equity awards
+Added: granted in prior
+Added: vested in the year
+Added: of equity awards
+Added: to meet vesting
+Added: Non-PEO NEOs (average)
+Added: Relationship Between Compensation Actually Paid and Performance Measures
+Added: CAP for the PEO and NEO’s is primarily wage-based, and changes in the value of the unvested and vested material are not significant.
+Added: The compensation is based upon contractual requirements as well as industry standards.
+Added: While the Company reviews performance measures in order to align executive compensation with Company performance, all of those Company measures are not presented in the Pay Versus Performance table above.
+Added: Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation actually paid (which, for all purposes hereof, shall be as computed in accordance with SEC rules) for a particular year.
+Added: The increase in the Company’s TSR reflects management’s efforts to increase shareholder value, however, the Company’s stock price is very volatile and may not be an indicator of future performance.
+Added: The increase in the Company’s TSR reflects management’s efforts to increase shareholder value, however, the higher stock price at December 31, 2023 is a result of the announcement on December 3, 2023, that the Company.
+Added: entered into the Investment Agreement with J PE and the other investors party thereto (collectively with JPE, the “Investors”), providing for an aggregate investment by the Investors of $1,000,000,000 in cash in the Company (collectively, the “Equity Investment”).
+Added: Following the closing of the Equity Investment, JPE will be the controlling stockholder of the Company and Mr.
+Added: Brad Jacobs, who controls JPE, will become Chairman and Chief Executive Officer of the Company (see Form 8-K filed with Securities and Exchange Commission on December 4, 2023.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
−Removed: The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of February 27, 2023 by (a) each stockholder who is known to us to own beneficially 5% or more of our outstanding Common Stock;
+Added: The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of March 13, 2024 by (a) each stockholder who is known to us to own beneficially 5% or more of our outstanding Common Stock;
(b) all directors;
1 unchanged sentence
Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of Common Stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of Common Stock.
−Removed: For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock that such person has the right to acquire within 60 days of February 27, 2023.
−Removed: For purposes of computing the percentage of outstanding shares of our Common Stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of February, 26 2023 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
+Added: For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock that such person has the right to acquire within 60 days of March 13, 2024.
+Added: For purposes of computing the percentage of outstanding shares of our Common Stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of March 13, 2024 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.
7 unchanged sentences
Chief Executive Officer, President and Chairman
−Removed: Joseph Macaluso
−Removed: Chief Financial Officer
−Removed: Kenneth Edwards
Stanley Wunderlich
−Removed: John Schachtel
Officers and Directors as a Group
−Removed: Beneficial Shareholders
−Removed: Bard Associates (8)
* denotes less than 1%
−Removed: Based on 5,256,177 shares of Common Stock outstanding as of February 26, 2023.
+Added: Based on 5,315,581 shares of Common Stock outstanding as of March 13, 2024.
Shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants but are not deemed outstanding for purposes of computing the percentage of any other person.
5 unchanged sentences
Meller beneficially owns 406,534 shares.
−Removed: Includes 15,815 shares subject to currently exercisable stock options owned by Mr.
−Removed: Includes 20,000 shares subject to currently exercisable stock options owned by Mr.
−Removed: Includes 20,000 shares subject to currently exercisable stock options owned by Mr.
−Removed: Includes 20,000 shares subject to currently exercisable stock options owned by Mr.
−Removed: Includes 75,815 shares subject to currently exercisable stock options held by all executives and directors of the Company (including those individually named above).
−Removed: All information about Bard Associates, Inc.
−Removed: is based on a Schedule 13G filed with the SEC on February 6, 2023.
Securities Authorized for Issuance Under Equity Compensation Plans
12 unchanged sentences
The Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1, 2020 and ending on (and including) January 1, 2029, in an amount equal to 180,030 shares (which is the equivalent of 4.0% of the 4,500,755 shares of common stock outstanding as of September 30, 2019).
−Removed: As of February 26, 2023, the Company has issued 158,420 options (see Note 9 to Notes to the Consolidated Financial Statements).
−Removed: Certain Relationships and Related Transactions
−Removed: At December 31, 2022 and December 31, 2021, certain long-term debt is considered a related party liability as holders, including Prairie Tech and PIT, are current employees of the Company.
+Added: As of March 13, 2024, the Company has issued 158,420 options.
+Added: In December 2023, the option holders received 59,404 shares of common stock and surrendered 158,420 shares of common stock underlying the option in a cashless exercise of the outstanding stock options in payment of the exercise price.
+Added: The cashless exercise was based on the market price of the average of the closing trading price of the Issuer's common stock on the 5 trading days ending prior to the date of exercise.
+Added: (see Note 10 to Notes to the Consolidated Financial Statements).
+Added: Certain Relationships and Related Transactions, and Director Independence
+Added: At December 31, 2023 and December 31, 2022, certain long-term debt is considered a related party liability as holders, including Prairie Tech, are current employees of the Company.
As of December 31, 2023 and December 31, 2022, the outstanding balances of this debt were $-0- and $103,333 respectively.
+Added: Please see “Board Composition and Director Independence” under “Item 10.
+Added: Directors, Executive Officers and Corporate Governance,” for information regarding director independence.
Principal Accountant Fees and Services
102 unchanged sentences
dated September 29, 2022 (incorporated herein by reference to Exhibit 10.3 on Form 8-K, filed with the SEC on October 3, 2022).
+Added: Asset Purchase Agreement, dated November 13, 2023 by and between SWK Technologies, Inc., and JCS Computer Resource Corporation (incorporated herein by reference to Exhibit 10.1 on Form 8-K, filed with the SEC on November 15, 2023).
+Added: Form of $1,025,000 Promissory Note, dated November 13, 2023, issued in favor of JCS Computer Resource Corporation, (incorporated herein by reference to Exhibit 10.2 on Form 8-K, filed with the SEC on November 15, 2023).
+Added: Investment Agreement (including all Exhibits thereto), dated December 3, 2023, by and among SilverSun Technologies, Inc.
+Added: Jacobs Private equity II, LLC and the other Investors party thereto (incorporated herein by reference to Exhibit 2.1 on Form 8-K, filed with the SEC on December 4, 2023 and the Definitive Proxy Statement filed with the SEC on February 13, 2024).
+Added: Voting and Support Agreement, dated December 3, 2023, by and between Jacobs Private Equity II, LLC, Mark Meller, Sharieve Meller family Trust and Mark Meller Family Trust (incorporated herein by reference to Exhibit 10.1 on Form 8-K, filed with the SEC on December 4, 2023).
+Added: Certificate of Elimination for Series A Preferred Stock filed with Delaware Secretary of State on December 1, 2023 (incorporated by reference to Exhibit 3.1 on Form 8-K, filed with the SEC on December 4, 2023).
+Added: Meller Letter Agreement, dated December 3, 2023, by and between SilverSun Technologies, Inc.
+Added: and Mark Meller (incorporated herein by reference to Exhibit 10.2 on Form 8-K, filed with the SEC on December 4, 2023).
Code of Ethics (incorporated by reference to Exhibit 14.1 filed with the Registrant’s Form 10-KSB for the fiscal year ended December 31, 2003).
1 unchanged sentence
Consent of Independent Registered Public Accounting Firm
−Removed: Consent of Independent Registered Public Accounting Firm
Certification of Principal Executive Officer pursuant to 18 U.S.C.
6 unchanged sentences
Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herein.
+Added: SilverSun Technologies, Inc.
+Added: Compensation Recovery Policy
Inline XBRL Instance Document
9 unchanged sentences
SILVERSUN TECHNOLOGIES, INC.
−Removed: February 28, 2023
+Added: March 14, 2024
/s/ Mark Meller
Principal Executive Officer
−Removed: February 28, 2023
+Added: March 14, 2024
/s/ Joseph Macaluso
4 unchanged sentences
Principal Executive Officer
−Removed: February 28, 2023
+Added: March 14, 2024
/s/ Stanley Wunderlich
−Removed: February 28, 2023
+Added: March 14, 2024
Stanley Wunderlich
/s/ Kenneth Edwards
−Removed: February 28, 2023
+Added: March 14, 2024
Kenneth Edwards
/s/ John Schachtel
−Removed: February 28, 2023
+Added: March 14, 2024
John Schachtel
1 unchanged sentence
Principal Financial Officer
−Removed: February 28, 2023
+Added: March 14, 2024
Joseph Macaluso
1 unchanged sentence
AUDITED FINANCIAL STATEMENTS
−Removed: REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS (PCAOB ID:
+Added: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID:
CONSOLIDATED FINANCIAL STATEMENTS:
8 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of SilverSun Technologies, Inc.
−Removed: (the “Company”) as of December 31, 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have audited the accompanying consolidated balance sheets of SilverSun Technologies, Inc.
+Added: (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on the Company's financial statements based on our audit.
+Added: Our responsibility is to express an opinion on the Company's financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: We conducted our audits in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
−Removed: As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
+Added: As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion.
−Removed: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
+Added: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
+Added: Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Revenue recognition
−Removed: Description of the Matter
−Removed: As described in Note 2 to the financial statements, the Company recognizes revenue mainly from the resale of software products, maintenance, and professional consulting services.
−Removed: The Company enters into contracts with customers that may include combinations of products and services, which are generally distinct and recorded as separate performance obligations.
−Removed: Revenue is recognized when control of the distinct performance obligation is transferred.
−Removed: For example, product revenue is recognized at a point in time while maintenance and professional consulting services revenue is recognized over time.
−Removed: Auditing the Company’s revenue recognition is a critical audit matter due to the effort required to analyze the high volume of transactions, significance of the total amounts recognized as revenue, and timing of when revenue is recognized.
−Removed: How We Addressed the Matter in Our Audit
−Removed: Our audit procedures related to the Company’s revenue recognition included, among others, selecting a sample of recorded revenue transactions and examining customer source documents for each selection, including the contract or agreement and invoices and payment support.
−Removed: In addition, we evaluated management’s application of the Company’s accounting policy, tested the mathematical accuracy of management’s calculation of revenue and associated timing of revenue recognized in the financial statements.
+Added: We determined that there are no critical audit matters.
/s/ Marcum LLP
1 unchanged sentence
Marlton, New Jersey
−Removed: February 28, 2023
−Removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the Stockholders and Board of Directors of
−Removed: SilverSun Technologies, Inc.
−Removed: Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of SilverSun Technologies, Inc.
−Removed: (the “Company”) as of December 31, 2021, the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
−Removed: Basis for Opinion
−Removed: These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on the Company's financial statements based on our audit.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
−Removed: As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
−Removed: Accordingly, we express no such opinion.
−Removed: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Revenue recognition
−Removed: Description of the Matter
−Removed: As described in Note 2 to the financial statements, the Company recognizes revenue mainly from the resale of software products, maintenance, and professional consulting services.
−Removed: The Company enters into contracts with customers that may include combinations of products and services, which are generally distinct and recorded as separate performance obligations.
−Removed: Revenue is recognized when control of the distinct performance obligation is transferred.
−Removed: For example, product revenue is recognized at a point in time while maintenance and professional consulting services revenue is recognized over time.
−Removed: Auditing the Company’s revenue recognition is a critical audit matter due to the effort required to analyze the high volume of transactions, significance of the total amounts recognized as revenue, and timing of when revenue is recognized.
−Removed: How We Addressed the Matter in Our Audit
−Removed: Our audit procedures related to the Company’s revenue recognition included, among others, selecting a sample of recorded revenue transactions and examining customer source documents for each selection, including the contract or agreement and invoices and payment support.
−Removed: In addition, we evaluated management’s application of the Company’s accounting policy, tested the mathematical accuracy of management’s calculation of revenue and associated timing of revenue recognized in the financial statements.
−Removed: /s/ Friedman LLP
−Removed: We have served as the Company’s auditor from 2004 to 2022.
−Removed: Marlton, New Jersey
March 14, 2024
19 unchanged sentences
Accrued interest
−Removed: Income taxes payable
Long term debt – current portion
5 unchanged sentences
Long term debt - net of current portion
−Removed: Long term debt - related party - net of current portion
Finance lease obligations - net of current portion
24 unchanged sentences
Software product, net
+Added: Service and other, net
Total revenues, net
Cost of revenues:
+Added: Service and other
Total cost of revenues
5 unchanged sentences
Total selling, general and administrative expenses
−Removed: Loss from operations
−Removed: Other income (expense)
+Added: Income (loss) from operations
+Added: Other expense:
Interest expense, net
−Removed: Gain on bargain purchase
−Removed: Gain on sale of product line
−Removed: Total other (expense) income, net
−Removed: (Loss) income before taxes
−Removed: Benefit (provision) for income taxes
+Added: Total other expense
+Added: Loss before taxes
+Added: Benefit for income taxes
Basic and diluted net loss per common share
7 unchanged sentences
Balance at January 1, 2022
−Removed: Cash dividend
−Removed: Proceeds from sale of common stock, net of legal expenses
−Removed: Shares issued in exchange for convertible debt
+Added: Stock compensation issued for outside services
Share-based compensation
Balance at December 31, 2022
−Removed: Stock compensation issued for outside services
+Added: Dividend payment
+Added: Shares issued for cashless exercise of stock options
Share-based compensation
Balance at December 31, 2023
+Added: * Less than $1
The accompanying notes are an integral part of these consolidated financial statements.
10 unchanged sentences
Amortization of right of use assets
−Removed: Bad debt provision (recovery)
+Added: Bad debt provision
Share-based compensation
−Removed: Gain on sale of product line
−Removed: Gain on bargain purchase
Changes in assets and liabilities:
13 unchanged sentences
Purchase of property and equipment
−Removed: Acquisition of business
Acquisition of assets
−Removed: Proceeds from sale of product line
Net cash used in investing activities
1 unchanged sentence
Payment of cash dividend
−Removed: Proceeds from issuance of stock, net of expenses
Payment of long-term debt
Payment of long-term debt – related party
−Removed: Payment of long-term convertible debt – related party
Payment of finance lease obligations
−Removed: Net cash (used in) provided by financing activities
−Removed: Net increase in cash
+Added: Net cash used in financing activities
+Added: Net (decrease) increase in cash
Cash, beginning of year
8 unchanged sentences
For the Year Ended December 31, 2023
−Removed: On January 1, 2022, the Company entered into an asset purchase agreement with Dynamic Tech Services, Inc (“DTS”) to acquire certain assets of DTS.
+Added: On September 29, 2022, the Company entered into an operating lease for equipment with Digital Fortress, Inc.
+Added: Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 109,840 .
+Added: On October 12, 2022, the Company entered into an operating lease for equipment and space with Cologix USA, Inc.
+Added: Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 106,471 .
+Added: On June 2, 2023, the Company entered into an operating lease to extend its lease for its Arizona office with Exeter 17319 DE, LLC.
+Added: Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 108,330 during the year ended December 31, 2023.
+Added: On January 3, 2024, the Company extended its lease for its main office in East Hanover, NJ for the two years ended April 30, 2026.
+Added: Monthly base rent will be $ 10,258 for the first year and $ 10,471 for the second year.
+Added: Accordingly, operating lease right of use assets and operating lease liabilities were recognized for the extension in the amount of $ 236,872 during the year ended December 31, 2023.
+Added: On November 13, 2023, the Company entered into an asset purchase agreement with JCS Computer Resource Corporation (“JCS”) to acquire certain assets of JCS for cash of $ 278,489 , prepaid time from clients in the amount of $ 21,511 and the issuance of a promissory note in the amount of $ 1,025,000 (the “JCS Note”) for a total of $ 1,325,000 .
+Added: The JCS Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 4.25 %) per annum.
+Added: For the Year Ended December 31, 2022:
+Added: On January 1, 2022, the Company entered into an asset purchase agreement with Dynamic Tech Services, Inc (“DTSI”) to acquire certain assets of DTSI.
The purchase price for the Acquired Assets was $ 1,335,000 , $ 500,000 of which was paid in cash in December 2021 and $ 835,000 of which was paid through the issuance of a four-year $ 835,000 promissory note dated January 1, 2022, paying interest at the rate of 3.25 % per annum (see Notes 7 and 11).
3 unchanged sentences
On April 15, 2022, the Company incurred approximately $ 494,383 in financial lease obligations for purchases of equipment.
−Removed: For the Year Ended December 31, 2021:
−Removed: On January 18, 2021, the Company incurred approximately $ 90,007 in financial lease obligations for purchases of equipment.
−Removed: In February 2021, ISM converted the outstanding balance of the ISM Note in the amount of $ 479,112 into 119,004 shares of the Company’s common stock.
−Removed: At December 31, 2021 and December 31, 2020, the outstanding balances on the ISM Note were $-0- and $ 512,487 respectively (see Note 6).
−Removed: In February 2021, Nellnube converted the outstanding balance of the Nellnube Note in the amount of $ 191,645 into 47,602 shares of the Company’s common stock.
−Removed: At December 31, 2021 and December 31, 2020, the outstanding balances on the Nellnube Note were $-0- and $ 204,995 respectively (see Note 6).
−Removed: On April 1, 2021, SWK acquired certain assets of CT-Solution, Inc.
−Removed: (“CTS”) pursuant to an asset purchase agreement for a promissory note in the aggregate principal amount of $ 130,000 (the “CTS Note”).
−Removed: The CTS Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 2.0 %) per annum.
−Removed: On May 1, 2021, SWK acquired certain assets of PeopleSense, Inc.
−Removed: (“PSI”) pursuant to an asset purchase agreement for cash of $ 145,703 , customer deposits related to prepaid time from clients in the amount of $ 99,938 , and the issuance of a promissory note in the aggregate principal amount of $ 450,000 (the “PSI Note”).
−Removed: The PSI Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 2.0 %) per annum.
−Removed: The Company entered into an operating lease for equipment with Atmosera, Inc.
−Removed: Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 90,245 .
−Removed: The Company entered into an operating lease for equipment with Cologix USA, Inc.
−Removed: Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 18,412 .
−Removed: On June 18, 2021, the Company incurred approximately $ 134,097 in financial lease obligations for purchases of equipment.
−Removed: On August 4, 2021, the Company incurred approximately $ 58,644 in financial lease obligations for purchases of equipment.
−Removed: On November 11, 2021, the Company incurred approximately $ 62,555 in financial lease obligations for purchases of equipment.
SILVERSUN TECHNOLOGIES, INC.
4 unchanged sentences
SilverSun Technologies, Inc.
−Removed: (“SilverSun”) through our wholly owned subsidiaries SWK Technologies, Inc.
−Removed: (“SWK”), Secure Cloud Services, Inc.
−Removed: (“SCS”) and Critical Cyber Defense Corp.
−Removed: (“CCD”) (together with SWK, SCS and SilverSun, the “Company”) is a business application, technology and consulting company providing strategies and solutions to meet our clients’ information, technology and business management needs.
+Added: (“SilverSun”) (together with SWK, SCS, CCDC and SilverSun Technology Holdings, the “Company”) is a business application, technology and consulting company providing strategies and solutions to meet our clients’ information, technology and business management needs.
Our services and technologies enable customers to manage, protect and monetize their enterprise assets whether on-premises or in the “Cloud”.
3 unchanged sentences
We have a dedicated network services practice that provides managed services, cybersecurity, application hosting, disaster recovery business continuity, cloud migration and other services.
−Removed: Our customers are nationwide, with concentrations in the New York/New Jersey metropolitan area, Arizona, Southern California, North Carolina, Washington, Oregon and Illinois.”
+Added: Our customers are nationwide, with concentrations in the New York/New Jersey metropolitan area, Arizona, Southern California, North Carolina, Georgia, Washington, and Illinois.
The Company is publicly traded on the NASDAQ Capital Market under the symbol “SSNT”.
−Removed: The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19), which in March 2020, was declared a pandemic by the World Health Organization.
−Removed: The ultimate disruption which may be caused by the outbreak is uncertain;
−Removed: however, it may result in a material adverse impact on the Company’s financial position, operations, and cash flows.
−Removed: Possible areas that may be affected include, but are not limited to, disruption to the Company’s customers and revenue, labor workforce, inability of customers to pay outstanding accounts receivable due and owing to the Company as they limit or shut down their businesses, customers seeking relief or extended payment plans relating to accounts receivable due and owing to the Company, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
11 unchanged sentences
The Company has not experienced any losses in such accounts.
−Removed: Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired.
−Removed: Goodwill is not amortized but tested for impairment annually or whenever indicators of impairment exist.
−Removed: These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors.
−Removed: The Company completed its impairment analysis as of December 31, 2022.
−Removed: No impairment losses were identified or recorded for the years ended December 31, 2022 and 2021.
+Added: Accounts Receivable and Allowance for Credit Losses
+Added: Accounts receivable consist primarily of invoices for maintenance and professional services.
+Added: Full payment for software ordered by customers is primarily due in advance of ordering from the software supplier.
+Added: Payments for maintenance and support plan renewals are due before the beginning of the maintenance period.
+Added: Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services.
+Added: The Company maintains an allowance for bad debt estimated by considering a number of factors, including the length of time the amounts are past due, the Company’s previous loss history and the customer’s current ability to pay its obligations.
+Added: Accounts are written off against the allowance when deemed uncollectable.
+Added: Recoveries of receivables previously written off are recorded as a reduction of bad debt expense when received.
+Added: Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 326-20-30-2, Financial Instruments – Credit Losses , requiring a reporting entity to use a pooled approach to estimate expected credit losses for financial assets with similar risk characteristics.
+Added: If a financial asset does not share similar risk characteristics with other financial assets held by the reporting entity, the allowance for credit losses should be determined on an individual basis.
+Added: Similar risk characteristics for trade receivables may include customer credit rating, trade receivable aging category (e.g., 30-90 days past due), industry, geographical location of the customer, product line, and other factors that may influence the likelihood of the customer not being able to pay for the goods or services.
+Added: The Company utilizes this individual approach for its trade receivables and unbilled services as each customer does not share similar risks.
SILVERSUN TECHNOLOGIES, INC.
3 unchanged sentences
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
+Added: Accounts Receivable and Allowance for Credit Losses (continued)
+Added: Trade receivables and unbilled services with customers are financial assets analyzed by the Company under the expected credit loss model.
+Added: To measure expected credit losses, trade receivables are grouped based on shared risk characteristics (i.e., the relevant industry sector and customer's geographical location) and days past due (i.e., delinquency status), while considering the following, if appropriate:
+Added: Customers in the same geographical location share similar risk characteristics associated with the macroeconomic environment of their region.
+Added: The expected credit loss rate is likely to increase as receivables move to older aging buckets.
+Added: The Company used the following aging categories to estimate the risk of delinquency status:
+Added: (i) 0 days past due;
+Added: (ii) 1-30 days past due;
+Added: (iii) 31-60 days past due;
+Added: (iv) 61-90 days past due;
+Added: and (v) over 90 days past due.
+Added: Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired.
+Added: Goodwill is not amortized but tested for impairment annually or whenever indicators of impairment exist.
+Added: These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors.
+Added: The Company completed its impairment analysis as of December 31, 2023.
+Added: No impairment losses were identified or recorded for the years ended December 31, 2023 and 2022.
Capitalization of proprietary developed software
14 unchanged sentences
No impairment losses were identified and recorded for the years ended December 31, 2023 and 2022, respectively .
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
+Added: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue Recognition
9 unchanged sentences
Service revenue is recognized when the professional consulting, maintenance or other ancillary services are provided to the customer.
+Added: Most of our service revenue is based on time arrangements which require the client to pay based on the number of hours worked at agreed-upon rates.
+Added: We recognize revenues for these arrangements based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date.
+Added: For all performance obligations related to contracts with a duration for less than one year, the Company has elected to apply the optional exemption provided in ASC Topic 606 and, therefore, is not required to disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period.
+Added: With respect to professional, maintenance, and ancillary services revenue that are included in deferred revenue, these revenues are earned and recognized over the contractual or stated period, which generally ranges three to 12 months.
+Added: Deferred revenue also includes deposits for future consulting, which are recognized when earned and billed to customer.
+Added: Maintenance and subscription revenue is recognized on a gross basis when the Company primarily acts as the principal in these transactions.
+Added: Maintenance and subscription revenue is recognized on a net basis when the Company primarily acts as an agent in a transaction.
Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of revenues.
−Removed: SILVERSUN TECHNOLOGIES, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2022 AND 2021
−Removed: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
−Removed: Revenue Recognition (Continued)
Components of revenue:
7 unchanged sentences
Unbilled services (contract assets) represent the revenue recognized but not yet invoiced.
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
+Added: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred Revenues
Deferred revenues consist of maintenance on proprietary products (contract liabilities), customer telephone support services (contract liabilities) and deposits for future consulting services which will be earned as services are performed over the contractual or stated period, which generally ranges from three to twelve months.
−Removed: As of December 31, 2022, there was $ 460,709 in deferred maintenance, $ 472,266 in deferred support services, and $ 2,824,115 in deposits for future consulting services.
−Removed: As of December 31, 2021, there was $ 291,468 in deferred maintenance, $ 398,382 in deferred support services, and $ 1,785,733 in deposits for future consulting services.
+Added: As of December 31, 2023, there was $ 943,011 in deferred maintenance and support services, and $ 2,218,071 in deposits for future consulting services.
+Added: As of December 31, 2022, there was $ 932,975 in deferred maintenance and support services, and $ 2,824,115 in deposits for future consulting services.
+Added: The following table represents the roll-forward of the deferred revenue for the year ended December 31, 2023 and 2022:
+Added: Deferred Maintenance
+Added: and Support Services
+Added: December 31, 2022
+Added: Future Consulting
+Added: December 31, 2022
+Added: Deferred Maintenance
+Added: and Support Services
+Added: December 31, 2023
+Added: Future Consulting
+Added: December 31, 2023
+Added: Balance at beginning of period
+Added: Cash received
+Added: Revenue recognized
+Added: Balance at end of period
+Added: Deposits for future consulting decreased as a result of our increase in consulting revenues as a result of our efforts to increase our consulting staff with additional resources, as well as system improvements, which has yielded a positive result in our financial performance.
+Added: We have also utilized some outside contractors to assist in projects because of our growth.
Sales commissions relating to service revenues are considered incremental and recoverable costs of obtaining a project with our customer.
17 unchanged sentences
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
+Added: On October 13, 2023, the Company terminated the Agreement and Plan of Merger with Rhodium dated as of September 29, 2022.
+Added: The Merger Agreement was terminated by the Company pursuant to Section 7.02(a) of the Merger Agreement which provides that the Merger Agreement may be terminated, and the transactions contemplated thereby abandoned by either the Company or Rhodium at any time before the effective time of the first merger contemplated by the Merger Agreement, by written notice from the terminating party to the other party if the closing under the Merger Agreement has not occurred on or before September 30, 2023.
+Added: As a result, the Company charged to expense all previously deferred deal related expenses in the amount of $ 2,986,107 .
+Added: These expenses are recorded as Deal Costs in the accompanying consolidated statement of operations in Other Expense.
The Company accounts for its leases in accordance with ASC 842, Leases .
33 unchanged sentences
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
−Removed: Accounts Receivable
−Removed: Accounts receivable consist primarily of invoices for maintenance and professional services.
−Removed: Full payment for software ordered by customers is primarily due in advance of ordering from the software supplier.
−Removed: Payments for maintenance and support plan renewals are due before the beginning of the maintenance period.
−Removed: Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services.
−Removed: The Company maintains an allowance for bad debt estimated by considering several factors, including the length of time the amounts are past due, the Company’s previous loss history and the customer’s current ability to pay its obligations.
−Removed: Accounts are written off against the allowance when deemed uncollectable.
Property and Equipment
45 unchanged sentences
The Company’s goodwill and intangibles are measured at fair-value on a non-recurring basis using Level 3 inputs, as discussed in Notes 6 and 11.
−Removed: Stock-Based Compensation
+Added: Share-Based Compensation
Compensation expense related to share-based transactions, including employee stock options, is measured and recognized in the financial statements based on a determination of the fair value.
4 unchanged sentences
Recently Adopted Authoritative Pronouncements
−Removed: In August 2020, the FASB issued ASU 2020-06 , Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity ’ s Own Equity (Subtopic 815-40) .
−Removed: The update simplifies the accounting for convertible debt instruments and convertible preferred stock by reducing the number of accounting models and limiting the number of embedded conversion features separately recognized from the primary contract.
−Removed: The guidance also includes targeted improvements to the disclosures for convertible instruments and earnings per share.
−Removed: This was adopted on January 1, 2022 and did not have a significant impact on our consolidated financial position and consolidated results of operations.
−Removed: In October 2021, the FASB issued ASU No.
−Removed: 2021-08, Business Combinations (Topic 805):
−Removed: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .
−Removed: This ASU requires contract assets and contract liabilities (e.g.
−Removed: deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, "Revenue from Contracts with Customers".
−Removed: Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree.
−Removed: Historically, such amounts were recognized by the acquirer at fair value in purchase accounting.
−Removed: The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
−Removed: Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued.
−Removed: This was adopted on January 1, 2022 and did not have a significant impact on our consolidated financial position and consolidated results of operations.
+Added: In September 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments , which changes the way companies evaluate credit losses for most financial assets and certain other instruments.
+Added: For receivables, and other short-term financial instruments, companies are required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses.
+Added: The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination.
+Added: This standard was adopted on January 1, 2023 and did not have a significant impact on our consolidated financial position and consolidated results of operations.
+Added: Recent Authoritative Pronouncements
+Added: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures , which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures.
+Added: This ASU will be effective for the annual period ending December 31, 2025.
+Added: The Company is currently evaluating the timing and impacts of adoption of this ASU.
+Added: No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.
SILVERSUN TECHNOLOGIES, INC.
2 unchanged sentences
DECEMBER 31, 2023 AND 2022
−Removed: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
−Removed: Recent Authoritative Pronouncements
−Removed: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments , which changes the way companies evaluate credit losses for most financial assets and certain other instruments.
−Removed: For receivables, and other short-term financial instruments, companies will be required to use a new forward-looking “expected loss” model to evaluate impairment, potentially resulting in earlier recognition of allowances for losses.
−Removed: The new standard also requires enhanced disclosures, including the requirement to disclose the information used to track credit quality by year of origination.
−Removed: 2016-13 will be effective for the Company in the first quarter 2023.
−Removed: Early adoption of the new standard is permitted;
−Removed: however, the Company has not elected to early adopt the standard.
−Removed: We are currently evaluating the effect that the new standard will have on our consolidated financial statements, if any.
−Removed: No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.
NOTE 3 – NET LOSS PER COMMON SHARE
19 unchanged sentences
Total potential dilutive securities not included in loss per share
+Added: NOTE 4 – ALLOWANCE FOR EXPECTED CREDIT LOSSES
+Added: Roll-forward of Allowance for Expected Credit Losses
+Added: The following table represents the roll-forward of the allowance for expected credit losses for the years ended December 31, 2023 and 2022:
+Added: December 31, 2023
+Added: December 31, 2022
+Added: Balance at beginning of period
+Added: Current period provision for expected losses
+Added: Balance at end of period
SILVERSUN TECHNOLOGIES, INC.
20 unchanged sentences
Amortization is computed using the straight-line method over the estimated useful lives.
−Removed: On January 1, 2022 (“Effective Date”), the Company entered into an asset purchase agreement with Dynamic Tech Services, Inc (“DTS”) to acquire certain assets of DTS.
+Added: On January 1, 2022, the Company entered into an asset purchase agreement with to acquire certain assets of DTS.
The purchase price for the Acquired Assets was $ 1,335,000 , $ 500,000 of which was paid in cash and $ 835,000 of which was paid through the issuance of a four-year $ 835,000 promissory note dated January 1, 2022, paying interest at the rate of 3.25 % per annum (see Note 11).
−Removed: On January 19, 2022, SWK acquired the customer list of NEO3, LLC (“NEO3”) pursuant to an Asset Purchase Agreement for the customer list for $ 150,000 cash and the issuance of a promissory note in the aggregate principal amount of $ 75,000 (the “NEO3 Note”).
+Added: On January 19, 2022, SWK acquired the customer list of pursuant to an Asset Purchase Agreement for the customer list for $ 150,000 cash and the issuance of a promissory note in the aggregate principal amount of $ 75,000 (the “NEO3 Note”).
The NEO3 Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 2.0 %) per annum.
1 unchanged sentence
The purchase price has been recorded as an intangible asset with an estimated life of seven years .
+Added: On November 13, 2023, the Company entered into an asset purchase agreement with to acquire certain assets of JCS for cash of $ 278,489 , prepaid time from clients in the amount of $ 21,511 and the issuance of a promissory note in the amount of $ 1,025,000 (the JCS Note”) for a total of $ 1,325,000 .
+Added: The JCS Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 4.25 %) per annum (see Note 7).
+Added: The purchase price has been allocated to customer list with an estimated life of seven years .
+Added: Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified with the excess purchase consideration being allocated to goodwill (see Note 11).
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
+Added: NOTE 6 – INTANGIBLE ASSETS (Continued)
The components of intangible assets are as follows:
6 unchanged sentences
accumulated amortization
−Removed: SILVERSUN TECHNOLOGIES, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2022 AND 2021
−Removed: NOTE 5 – INTANGIBLE ASSETS (Continued)
Amortization expense related to the above intangible assets was $ 671,504 and $ 732,552 , respectively, the years ended December 31, 2023 and 2022.
9 unchanged sentences
NOTE 7 – LONG-TERM AND RELATED PARTY DEBT
−Removed: On May 31, 2018, SWK acquired certain assets of Info Sys Management, Inc.
−Removed: (“ISM”) pursuant to an asset purchase agreement for cash of $ 300,000 and a promissory note issued in the aggregate principal amount of $ 1,000,000 (the “ISM Note”).
−Removed: The ISM Note is due five years from the closing date and bears interest at a rate of two percent (2%) per annum.
−Removed: Monthly payments including interest are $ 17,528 .
−Removed: The ISM Note has an optional conversion feature whereby the holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, until payment in full of the ISM Note, all of the outstanding principal amount of the ISM Note, plus accrued interest, into shares (the “Conversion Shares”) of the Company’s Common Stock, (“Common Stock”) at per share price equal to $ 4.03 , a price equal to the average closing price of its Common Stock for the five (5) trading days immediately preceding the issuance date of the ISM Note (the “Fixed Conversion Price”).
−Removed: In February 2021, ISM converted the outstanding balance of the ISM Note in the amount of $ 479,112 into 119,004 shares of the Company’s common stock.
−Removed: At December 31, 2022 and December 31, 2021, the outstanding balances on the ISM Note were $- 0 - and $-0-, respectively.
−Removed: On May 31, 2018, Secure Cloud Services acquired certain assets of Nellnube, Inc.
−Removed: (“Nellnube”) pursuant to an Asset Purchase Agreement for a promissory note issued in the aggregate principal amount of $ 400,000 (the “Nellnube Note”).
−Removed: The Nellnube Note is due five years from the closing date and bears interest at a rate of two percent (2%) per annum.
−Removed: Monthly payments including interest are $ 7,011 .
−Removed: The Nellnube Note has an optional conversion feature whereby the holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, all of the outstanding principal amount of the Nellnube Note, plus accrued interest, into shares (the “Conversion Shares”) of the Company’s Common Stock, (“Common Stock”) at per share price equal to $ 4.03 (the “Fixed Conversion Price”).
−Removed: In February 2021, Nellnube converted the outstanding balance of the Nellnube Note loan in the amount of $ 191,645 into 47,602 shares of the Company’s common stock.
−Removed: At December 31, 2022 and December 31, 2021, the outstanding balances on the Nellnube Note were $-0- and $-0-, respectively.
−Removed: On January 1, 2019, SWK acquired certain assets of Partners in Technology, Inc.
−Removed: (“PIT”) pursuant to an Asset Purchase Agreement for cash of $ 60,000 and the issuance of a promissory note in the aggregate principal amount of $ 174,000 (the “PIT Note”).
−Removed: The PIT Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 2.0 %) per annum.
−Removed: Monthly payments including interest are $ 4,984 .
−Removed: At December 31, 2022 and December 31, 2021, the outstanding balances of the loan were $- 0 - and $ 4,975 , respectively.
−Removed: SILVERSUN TECHNOLOGIES, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2022 AND 2021
−Removed: NOTE 6 – LONG-TERM AND RELATED PARTY DEBT (Continued)
On July 31, 2020, the Company acquired certain assets of Prairie Technology Solutions Group, LLC (“Prairie Tech”) pursuant to an Asset Purchase Agreement.
7 unchanged sentences
On August 4, 2022, the Company paid Note 2 and accrued interest in the amount of $ 111,924 .
+Added: On July 1, 2023, the Company paid Note 3 and accrued interest in the amount of $ 116,485 .
At December 31, 2023 and December 31, 2022, the outstanding balances on the PT Notes were $- 0 - and $ 103,333 , respectively.
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
+Added: NOTE 7 – LONG-TERM AND RELATED PARTY DEBT (Continued)
On October 1, 2020, SWK acquired certain assets of Computer Management Services, LLC, (“CMS”) pursuant to an Asset Purchase Agreement for cash of $ 410 , clients’ deposits related to technical support in the amount of $ 50,115 , prepaid time from clients in the amount of $ 67,073 , and the issuance of a promissory note in the aggregate principal amount of $ 170,000 (the “CMS Note”) for a total of $ 287,598 .
16 unchanged sentences
At December 31, 2023 and December 31, 2022, the outstanding balances on the PSI Note were $ 64,125 and $ 215,863 , respectively.
−Removed: On January 1, 2022, SWK acquired certain assets of Dynamic Tech Services, Inc.
−Removed: (“DTSI”) pursuant to an Asset Purchase Agreement for $ 500,000 cash and the issuance of a promissory note in the aggregate principal amount of $ 835,000 (the “DTSI Note”).
+Added: On January 1, 2022, SWK acquired certain assets of DTS pursuant to an Asset Purchase Agreement for $ 500,000 cash and the issuance of a promissory note in the aggregate principal amount of $ 835,000 (the “DTSI Note”).
The DTSI Note bears interest at a rate of three and one-quarter percent ( 3.25 %) per annum.
5 unchanged sentences
, to a principal amount below $685,000).
+Added: The Note will be amortized as follows:
+Added: The first payment of principal and interest due under the Note, which will be an annual payment, is due and payable on January 1, 2023, after the revised principal amount of the Buyer Note is determined and thereafter, payments will be made quarterly in twelve equal installments.
+Added: As of December 31, 2023 and December 31, 2022, the outstanding balances on the DTSI Note were $ 469,688 and $ 835,000 , respectively (see Note 11).
+Added: On January 19, 2022, SWK acquired the customer list of NEO3 pursuant to an Asset Purchase Agreement for the customer list for $ 150,000 cash and the issuance of a promissory note in the aggregate principal amount of $ 75,000 (the “NEO3 Note”).
+Added: The NEO3 Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 2.0 %) per annum.
+Added: Monthly payments including interest are $ 2,148 .
+Added: As of December 31, 2023 and December 31, 2022 the outstanding balances on the NEO3 Note were $ 27,604 and $ 52,559 , respectively.
SILVERSUN TECHNOLOGIES, INC.
3 unchanged sentences
NOTE 7 – LONG-TERM AND RELATED PARTY DEBT (Continued)
+Added: On November 13, 2023, SWK acquired certain assets of JCS pursuant to an Asset Purchase Agreement for cash of $ 278,489 , prepaid time from clients in the amount of $ 21,511 and the issuance of a promissory note in the amount of $ 1,025,000 (the JCS Note”) for a total of $ 1,325,000 .
+Added: The JCS Note bears interest at a rate of four and one-quarter percent ( 4.25 %) per annum.
+Added: The principal amount of the Note is subject to a downward adjustment in the event the Company loses any subscription renewal revenue during the one-year period immediately following the Effective Date from any persons that were customers of JCS immediately prior to the Effective Date (the “JCS Customers”).
+Added: Any such downward adjustment will be determined by calculating the percentage of loss of Acumatica subscription renewals during the one-year period immediately following the Effective Date from JCS Customers.
+Added: In the event that subscription renewal revenue received from JCS Customers during the one-year period immediately following the Effective Date is less than 95% of the subscription renewal revenue received by JCS from JCS Customers during the one-year period immediately preceding the Effective Date, the principal amount of the Note will be reduced.
+Added: The measuring period for any downward adjustment will be as of the one-year anniversary of the Effective Date.
+Added: Notwithstanding the foregoing, under no circumstances will the principal amount of the Note be reduced by reason of such downward adjustment by more than $150,000 (i.e., to a principal amount below $685,000).
The Note will be amortized as follows:
−Removed: The first payment of principal and interest due under the Note, which will be an annual payment, is due and payable on January 1, 2023, after the revised principal amount of the Buyer Note is determined and thereafter, payments will be made quarterly in twelve equal installments.
−Removed: At December 31, 2022, the outstanding balance on the DTSI Note was $ 835,000 (see Note 10).
−Removed: On January 19, 2022, SWK acquired the customer list of NEO3, LLC (“NEO3”) pursuant to an Asset Purchase Agreement for the customer list for $ 150,000 cash and the issuance of a promissory note in the aggregate principal amount of $ 75,000 (the “NEO3 Note”).
−Removed: The NEO3 Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 2.0 %) per annum.
−Removed: Monthly payments including interest are $ 2,148 .
−Removed: At December 31, 2022 the outstanding balance on the NEO3 Note was $ 52,559 .
+Added: The first payment of principal and interest due under the Note, which will be an annual payment, is due and payable on November 13, 2024, after the revised principal amount of the Buyer Note is determined and thereafter, payments will be made quarterly in eight equal installments.
+Added: At December 31, 2023 the outstanding balance on the JCS Note was $ 1,025,000 .
At December 31, 2023 and December 31, 2022, certain long-term debt is considered a related party liability as holders, including Prairie Tech and PIT, are current employees of the Company.
15 unchanged sentences
Less current portion
−Removed: Long-term capital lease obligation
+Added: Long-term finance lease obligation
SILVERSUN TECHNOLOGIES, INC.
3 unchanged sentences
NOTE 9 – OPERATING LEASE LIABILITIES
−Removed: The Company leases space in four different locations and also has an equipment lease rental with monthly payments ranging from $ 3,022 to $ 10,279 which expire at various dates through April 2024.
+Added: The Company leases space in four different locations and also has an equipment lease rental with monthly payments ranging from $ 3,022 to $ 10,279 which expire at various dates through September 2026.
+Added: On September 29, 2022, the Company entered into an operating lease for equipment with Digital Fortress, Inc.
+Added: Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 109,840 during the year ended December 31, 2023.
+Added: On October 12, 2022, the Company entered into an operating lease for equipment and space with Cologix USA, Inc.
+Added: Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $ 106,471 during the year ended December 31, 2023.
+Added: On June 2, 2023, the Company entered into an operating lease to extend its lease for its Arizona office with Exeter 17319 DE, LLC.
+Added: Accordingly, operating lease right of use assets and operating lease liabilities were recognized for the extension in the amount of $ 108,330 during the year ended December 31, 2023.
+Added: On January 3, 2024, the Company extended its lease for two years ended April 30, 2026.
+Added: Monthly base rent will be $ 10,258 for the first year and $ 10,471 for the second year.
+Added: Accordingly, operating lease right of use assets and operating lease liabilities were recognized for the extension in the amount of $ 236,872 during the year ended December 31, 2023.
The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities.
The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease.
+Added: The asset and liability were valued using an weighted average interest rate of 4.77 %.
The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2023 and 2022 are as follows:
11 unchanged sentences
Rent expense paid with cash was $ 435,491 for the year ended December 31, 2023, as compared to $ 494,429 for the year ended December 31, 2022.
−Removed: NOTE 9 – EQUITY
−Removed: Common Stock At-The-Market Sales Program
−Removed: On October 1, 2020, the Company entered into an At Market Issuance Sales Agreement (the “2020 At Market Agreement”) with a H.C.
−Removed: Wainwright &Co.
−Removed: (the “Sales Agent”) under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 3,489,499 from time to time through the Sales Agent.
−Removed: Sales of the Company’s common stock through the Sales Agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the U.S.
−Removed: Securities and Exchange Commission.
−Removed: The Company will pay to the Sales Agent a commission rate equal to 3.0 % of the gross proceeds from the sale of any shares of common stock sold through the Sales Agent under the 2020 At Market Agreement.
−Removed: Shares of common stock sold under the 2020 At Market Agreement were made pursuant to the Company’s Registration Statement on Form S-3 (File No.
−Removed: 333-249238), filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2020, as amended, and declared effective on October 23, 2020 (the “2020 Registration Statement”), and the prospectus included in the 2020 Registration Statement.
−Removed: In February 2021, 393,300 shares of Common Stock were issued and sold generating $ 3,382,352 , excluding legal expenses.
−Removed: No shares remain eligible for sale under the 2020 At Market Agreement.
SILVERSUN TECHNOLOGIES, INC.
2 unchanged sentences
DECEMBER 31, 2023 AND 2022
−Removed: NOTE 9 – EQUITY (Continued)
+Added: NOTE 10 – EQUITY
+Added: On August 4, 2023, the Board of Directors approved the payment of a $ 0.20 special cash dividend per share of Common Stock to shareholders of record August 18, 2023.
+Added: The dividend was paid on August 25, 2023 .
+Added: Common Stock At-The-Market Sales Program
In April 2021, the Company entered into an At Market Issuance Sales Agreement (the “2021 At Market Agreement”) with the Sales Agent under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 3,308,842 from time to time through the Sales Agent.
5 unchanged sentences
In July 2021, an additional 9,548 shares of Common Stock were issued and sold generating $ 76,436 , net of legal expenses.
−Removed: For the year ended December 31, 2022, the Company issued no shares under the 2021 At Market Agreement.
−Removed: For the year ended December 31, 2021, the company issued and sold a total of 468,300 shares generating $ 4,180,904 , net of legal expenses.
+Added: For the years ended December 31, 2023 and 2022, the Company issued no shares under the 2021 At Market Agreement
Stock Repurchase Program
9 unchanged sentences
The market value of these shares was $ 297,600 .
−Removed: On June 21, 2021, the Company announced the payment of a $ 0.60 special cash dividend per share of Common Stock to shareholders of record July 9, 2021.
−Removed: The dividend was paid on July 16, 2021 in the amount of $ 3,081,706 .
−Removed: Conversion of Convertible Debt
−Removed: In February 2021, ISM converted the outstanding balance of the loan in the amount of $ 479,112 into 119,004 shares of the Company’s common stock (see Note 6).
−Removed: In February 2021, Nellnube converted the outstanding balance of the loan in the amount of $ 191,645 into 47,602 shares of the Company’s common stock (see Note 6).
+Added: In December 2023, the Company issued 59,404 shares of common stock upon the exercise of stock options.
SILVERSUN TECHNOLOGIES, INC.
10 unchanged sentences
Treasury yield in effect at the time of grant.
−Removed: There were no stock options granted for the year ended December 31, 2022.
−Removed: On March 29, 2021, 99,990 stock options were granted with an exercise price of $ 6.53 per option and have a five-year term with a two -year vesting period at 50 % per annum.
−Removed: The fair value of stock options granted was $ 4.888 per option on the date of grant using the Black Scholes option-pricing model with the assumptions in the below table.
−Removed: On October 14, 2021, 71,630 shares were granted to directors and officers with an exercise price of $ 5.90 per option and have a five-year term and are vested at the date of grant.
−Removed: The fair value of stock options granted was $ 4.14 per option on the date of grant using the Black Scholes option-pricing model with the assumptions in the below table.
−Removed: Date of Grant
−Removed: Dividend Yield
−Removed: Risk-free Interest Rate
−Removed: March 21, 2021
−Removed: October 14, 2021
+Added: There were no stock options granted for the years ended December 31, 2023 and 2022.
A summary of the status of the Company’s stock option plans for the fiscal years ended December 31, 2023 and 2022 and changes during the years are presented below (in number of options):
8 unchanged sentences
Options granted
+Added: Options exercised (1)
Options canceled/forfeited
3 unchanged sentences
December 31, 2022:
+Added: Cashless exercise of outstanding stock options.
+Added: The option holders received 59,404 shares of common stock and surrendered 158,420 shares of common stock underlying the option in payment of the exercise price.
+Added: The cashless exercise was based on the market price of the average of the closing trading price of the Issuer's common stock on the 5 trading days ending prior to the date of exercise.
Total stock compensation recognized for the year ended December 31, 2023 and 2022 was $ 41,497 and $ 180,260 , respectively.
As of December 31, 2023 and 2022, the unamortized compensation expense for stock options was $- 0 - and $ 41,497 , respectively.
−Removed: The remaining amount will be recognized over the next 0.25 years.
As of December 31, 2023, there were 1,056,670 shares available for issuance under the Plan.
6 unchanged sentences
NOTE 11 – BUSINESS COMBINATIONS
−Removed: On April 1, 2021, SWK acquired certain assets of CT-Solution, Inc.
−Removed: (“CTS”) pursuant to an asset purchase agreement for a promissory note in the aggregate principal amount of $ 130,000 (the “CTS Note”).
−Removed: The CTS Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 2.0 %) per annum.
−Removed: Monthly payments including interest are $ 3,724 .
−Removed: The purchase price has been allocated to customer list with an estimated life of seven years .
−Removed: On May 1, 2021, SWK acquired certain assets of PeopleSense, Inc.
−Removed: (“PSI”) pursuant to an asset purchase agreement for cash of $ 145,703 , customer deposits related to prepaid time from clients in the amount of $ 99,938 , and the issuance of a promissory note in the aggregate principal amount of $ 450,000 (the “PSI Note”).
−Removed: The PSI Note is due in 36 months from the closing date and bears interest at a rate of two percent ( 2.0 %) per annum.
−Removed: The allocation of the purchase price to customer list with an estimated life of seven years which is deductible for tax purposes, has been based on an independent valuation.
−Removed: The valuation showed an increase of $ 71,359 above the purchase price, which was recorded as a gain on bargain purchase in the consolidated statement of operations as the independent valuation exceeded the purchase price.
−Removed: On January 1, 2022 (“Effective Date”), the Company entered into an asset purchase agreement with Dynamic Tech Services, Inc (DTS”) to acquire certain assets of DTS.
+Added: On January 1, 2022, the Company entered into an asset purchase agreement with to acquire certain assets of DTS.
The purchase price for the Acquired Assets was $ 1,335,000 , $ 500,000 of which was paid in cash and $ 835,000 of which was paid through the issuance of a four-year $835,000 promissory note dated January 1, 2022, paying interest at the rate of 3.25 % per annum.
−Removed: The principal amount of the Note is subject to a downward adjustment in the event the Company loses any subscription renewal revenue during the one-year period immediately following the Effective Date from any persons that were customers of DTS immediately prior to the Effective Date (the “DTS Customers”).
−Removed: Any such downward adjustment will be determined by calculating the percentage of loss of Acumatica subscription renewals during the one-year period immediately following the Effective Date from DTS Customers.
−Removed: In the event that subscription renewal revenue received from DTS Customers during the one-year period immediately following the Effective Date is less than 95% of the subscription renewal revenue received by DTS from DTS Customers during the one-year period immediately preceding the Effective Date, the principal amount of the Note will be reduced.
+Added: The principal amount of the Note was subject to a downward adjustment in the event the Company lost any subscription renewal revenue during the one-year period immediately following the Effective Date from any persons that were customers of DTS immediately prior to the Effective Date (the “DTS Customers”).
+Added: Any such downward adjustment would be determined by calculating the percentage of loss of Acumatica subscription renewals during the one-year period immediately following the Effective Date from DTS Customers.
+Added: In the event that subscription renewal revenue received from DTS Customers during the one-year period immediately following the Effective Date was less than 95% of the subscription renewal revenue received by DTS from DTS Customers during the one-year period immediately preceding the Effective Date, the principal amount of the Note would be reduced.
The measuring period for any downward adjustment will be as of the one-year anniversary of the Effective Date.
−Removed: Notwithstanding the foregoing, under no circumstances will the principal amount of the Note be reduced by reason of such downward adjustment by more than $150,000 ( i.e.
+Added: Notwithstanding the foregoing, under no circumstances would the principal amount of the Note be reduced by reason of such downward adjustment by more than $150,000 ( i.e.
, to a principal amount below $685,000).
+Added: There was no downward adjustment necessary as measured on the one-year anniversary of the note, January 1, 2023.
+Added: The Note was amortized as follows:
+Added: The first payment of principal and interest due under the Note, which will be an annual payment, was due and paid on January 1, 2023, and thereafter, payments will be made quarterly in twelve equal installments.
+Added: Upon completion of an independent valuation, the allocation of the purchase price was $ 1,207,000 to customer lists with the excess purchase consideration of $ 128,000 being allocated to goodwill.
+Added: On November 13, 2023, SWK acquired certain assets of JCS pursuant to an Asset Purchase Agreement for cash of $ 278,489 , prepaid time from clients in the amount of $ 21,511 and the issuance of a promissory note in the amount of $ 1,025,000 (the JCS Note”) for a total of $ 1,325,000 .
+Added: The Asset Purchase Agreement was recorded as a business combination under ASC 805, Business Combinations, as the assets purchased are capable of being conducted and managed for the purpose of providing a return.
+Added: The JCS Note bears interest at a rate of four and one-quarter percent (4.25%) per annum.
+Added: The principal amount of the Note is subject to a downward adjustment in the event the Company loses any subscription renewal revenue during the one-year period immediately following the Effective Date from any persons that were customers of JCS immediately prior to the Effective Date (the “JCS Customers”).
+Added: Any such downward adjustment will be determined by calculating the percentage of loss of Acumatica subscription renewals during the one-year period immediately following the Effective Date from JCS Customers.
+Added: In the event that subscription renewal revenue received from JCS Customers during the one-year period immediately following the Effective Date is less than 95% of the subscription renewal revenue received by JCS from JCS Customers during the one-year period immediately preceding the Effective Date, the principal amount of the Note will be reduced.
+Added: The measuring period for any downward adjustment will be as of the one-year anniversary of the Effective Date.
+Added: Notwithstanding the foregoing, under no circumstances will the principal amount of the Note be reduced by reason of such downward adjustment by more than $150,000 (i.e., to a principal amount below $685,000).
The Note will be amortized as follows:
−Removed: The first payment of principal and interest due under the Note, which will be an annual payment, is due and payable on January 1, 2023, after the revised principal amount of the Buyer Note is determined and thereafter, payments will be made quarterly in twelve equal installments.
+Added: The first payment of principal and interest due under the Note, which will be an annual payment, is due and payable on November 13, 2024, after the revised principal amount of the Buyer Note is determined and thereafter, payments will be made quarterly in eight equal installments.
+Added: At December 31, 2023 the outstanding balance on the JCS Note was $ 1,025,000 .
+Added: Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified with the excess purchase consideration being allocated to goodwill.
The Company expects these acquisitions to create synergies by combining operations and expanding geographic market share and product offerings.
−Removed: The following summarizes the purchase price allocation for all prior year and current year’s acquisitions:
+Added: The following summarizes the purchase price allocation for all prior year and current year acquisitions:
Cash consideration
9 unchanged sentences
NOTE 11 – BUSINESS COMBINATIONS (Continued)
−Removed: The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions of CT-Solution, Inc.
−Removed: (“CTS”), acquired April 1, 2021, PeopleSense, Inc.
−Removed: (“PSI), acquired May 1, 2021, and DTS, acquired January 1, 2022 occurred on January 1, 2021, nor is the financial information indicative of the results of future operations.
+Added: The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions of JCS Computer Resource Corporation (“JCS”) acquired November 13, 2023 occurred on January 1, 2022, nor is the financial information indicative of the results of future operations.
The following table represents the unaudited consolidated pro forma results of operations for the year ended December 31, 2022 as if the acquisitions occurred on January 1, 2022.
1 unchanged sentence
Cost of revenues
−Removed: Operating expenses, amortization and interest
−Removed: Income before taxes
−Removed: Basic and diluted income per common share
−Removed: The Company’s consolidated financial statements for the year ended December 31, 2022 include the actual results of CTS, PSI and DTS, and as such, pro forma results are not required.
−Removed: For the year ended December 31, 2021, there is $ 4,644 of estimated amortization expense and $ 606 of estimated interest expense included in the pro-forma results for CTS, $ 33,126 of estimated amortization expense and $ 2,797 of estimated interest expense included in the pro-forma results for PSI, and $ 190,714 of estimated amortization expense and $ 27,138 of estimated interest expense included in the pro-forma results for DTS.
−Removed: For the year ended December 31, 2022, the CTI, PSI and DTS operations had a net income before taxes of $ 420,370 which represented twelve months of operations for CTI, PSI and DTS that were included in the Company’s Consolidated Statement of Operations for the year ended December 31, 2022.
−Removed: This consisted of approximately $ 2,626,038 in revenues, $ 1,481,276 in cost of revenues and $ 724,392 in expenses.
+Added: Operating expenses
+Added: (Loss) income before taxes
+Added: Net (loss) income
+Added: Basic and diluted (loss) income per common share
+Added: For the year ended December 31, 2022, there is $ 189,276 of estimated amortization expense and $ 43,440 of estimated interest expense included in the pro-forma results for JCS.
+Added: For the year ended December 31, 2023, there is $ 165,617 of estimated amortization expense and $ 38,010 of estimated interest expense included in the pro-forma results for JCS.
NOTE 12 – INCOME TAXES
2 unchanged sentences
These carryforward losses are available to offset future taxable income and begin to expire in the year 2026 to 2034.
−Removed: SILVERSUN TECHNOLOGIES, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2022 AND 2021
−Removed: NOTE 11 – INCOME TAXES (Continued)
The foregoing amounts are management’s estimates, and the actual results could differ from those estimates.
15 unchanged sentences
Net deferred tax asset
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
+Added: NOTE 12 – INCOME TAXES (Continued)
For the year ended December 31, 2023, the Company recorded a tax benefit in the amount of $ 297,419 based on the estimated tax rate.
+Added: For the year ended December 31, 2022, the Company recorded a tax benefit in the amount of $ 192,184 based on the estimated tax rate.
The Federal effective rate is higher than the statutory rate primarily due to Incentive Stock Options (ISO), which are not tax deductible.
−Removed: For the year ended December 31, 2021, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate.
−Removed: The Federal effective rate is higher than the statutory rate primarily due to Incentive Stock Options (ISO), gain on bargain purchase, 50% of meals, and 100% entertainment expense which are not tax deductible.
−Removed: The total tax provision for the year ended December 31, 2021 was $ 178,005 .
A reconciliation of the statutory income tax rate to the effective rate is as follows for the period December 31, 2023 and 2022:
2 unchanged sentences
Permanent items
−Removed: Gain on bargain purchase
Return to provision for prior year
1 unchanged sentence
Effective income tax rate
−Removed: SILVERSUN TECHNOLOGIES, INC.
−Removed: AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: DECEMBER 31, 2022 AND 2021
−Removed: NOTE 11 – INCOME TAXES (Continued)
Income tax provision from continuing operations:
5 unchanged sentences
NOTE 13 – RELATED PARTY TRANSACTIONS
−Removed: At December 31, 2022 and December 31, 2021, certain long-term debt is considered a related party liability as holders, including Prairie Tech and PIT, are current employees of the Company.
+Added: At December 31, 2023 and December 31, 2022, certain long-term debt is considered a related party liability as holders, including Prairie Tech, are current employees of the Company.
As of December 31, 2023 and December 31, 2022, the outstanding balances of this debt were $- 0 - and $ 103,333 respectively.
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
NOTE 14 – COMMITMENTS AND CONTINGENCIES
13 unchanged sentences
On November 5, 2021, the Company’s Board of Directors approved a five-year extension through September of 2028 of the employment agreement with Mark Meller, the Company’s Chief Executive Officer and President under the same terms and conditions.
−Removed: NOTE 14 – SALE OF PRODUCT LINE
−Removed: On November 10, 2021, SWK entered into an Asset Purchase Agreement with Net@Work, Inc.
−Removed: (“NAW”) pursuant to which NAW acquired from SWK certain assets related to the component of SWK’s business devoted to selling and supporting the Sage X3 software application published by Sage Software, Inc.
−Removed: for small and middle market companies in North America.
+Added: Concurrently with the execution of the Investment Agreement, SilverSun and Mark Meller entered into a letter agreement pursuant to which the Meller SilverSun Employment Agreement will be terminated and liquidated as of immediately prior to Closing, and Silver Sun will pay to Mr.
+Added: Meller a lump sum termination payment equal to the lessor of (i) $3.0 million and (ii) 300% of the average annual amount paid by the Company or any parent or subsidiary thereof to Mr.
+Added: Meller and included in his gross income for services rendered in each of the five calendar years immediately prior to closing, less $100, which is the amount that he is entitled to receive under the Meller SilverSun Agreement for certain terminations of his employment within three years following a change of control.
+Added: NOTE 15 – RECENT EVENTS
+Added: 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.
+Added: On October 13, 2023, SilverSun terminated the Rhodium Merger Agreement
+Added: Jacobs Private Equity II, LLC ( “ JPE ” )
+Added: 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 ”).
+Added: The Investment Agreement has been unanimously approved by the SilverSun board of directors.
+Added: 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.
+Added: Following the Closing, SilverSun intends to pursue a business strategy of creating a tech-forward leader in the building products distribution industry.
+Added: 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.
SILVERSUN TECHNOLOGIES, INC.
2 unchanged sentences
DECEMBER 31, 2023 AND 2022
−Removed: NOTE 14 – SALE OF PRODUCT LINE (Continued)
−Removed: In consideration for the assets, NAW paid SWK $ 250,000 in cash and entered into a Revenue Share Agreement (“RSA”) with SWK.
−Removed: Pursuant to the RSA, NAW agreed to pay to SWK, for limited periods of time ranging from 12 to 60 months, transitional compensation measured by reference to gross revenues or gross profits (as applicable) generated by NAW from its sales of products or services after the Effective Date to customers of the Business.
−Removed: In consideration for such transitional compensation, SWK agreed to assist NAW for a period of time after the Effective Date with such transitional services as may be reasonably requested by NAW and reasonably acceptable to SWK or otherwise required for the operation of the Business, including (a) implementing a smooth and orderly transfer of the Business and the Acquired Assets from SWK to NAW, (b) making introductions to customers of the Business as and when requested by NAW, (c) familiarizing NAW with the files of each of the customers as may be reasonably required, and (d) acclimating NAW to the Business.
−Removed: The specific products and services giving rise to transitional compensation payments under the RSA include (i) annual maintenance renewals by customers, (ii) software, cross-sell software and migration software sales to customers, (iii) consulting services performed for customers, (iv) annual managed services contracts sold to customers, (v) hosting contracts sold to customers, (vi) e-commerce projects sold to customers, and (vii) new customer referrals.
−Removed: NOTE 15 – MERGER
−Removed: On September 29, 2022, the Company entered into a definitive agreement and plan of merger (the “Merger Agreement”) with Rhodium Enterprises, Inc.
−Removed: (“Rhodium”), an industrial-scale digital asset technology company utilizing proprietary technologies to mine bitcoin.
−Removed: Under the terms of the Merger Agreement, which has been unanimously approved by the Boards of Directors of both SilverSun and Rhodium, upon the consummation of the business combination, the Company will receive $ 10 million in cash and will retain 3.2 % equity in SilverSun upon consummation of the merger.
−Removed: Each holder of an outstanding share of SilverSun common stock will receive:
−Removed: A cash dividend of at least $1.50 per share, which equates to approximately $8.5 million in the aggregate;
−Removed: A stock dividend of one share of SilverSun Technologies Holdings, Inc.
−Removed: ("HoldCo"), a recently formed subsidiary of SilverSun.
−Removed: HoldCo's sole assets are its 100% ownership of SWK and SCS (together the "Subsidiaries"), which Subsidiaries accounted for the large majority of SilverSun's revenue in 2022.
−Removed: It is expected that the capital structure of HoldCo will roughly approximate the current capital structure of SilverSun;
−Removed: Following the consummation of the business combination, the business of the Subsidiaries will continue to be operated consistent with past practices.
−Removed: The current management and Board of Directors of SilverSun, including Mark Meller, the Chief Executive Officer of both SilverSun and SWK, will continue in their current roles at both HoldCo and the Subsidiaries.
−Removed: HoldCo will apply for public listing and the shares distributed in the stock dividend will be registered pursuant to a Form 10 that will be filed by HoldCo with the SEC (subject to regulatory and exchange regulations and approvals);
−Removed: The shares of SilverSun's common stock to be retained by the current SilverSun stockholders following the consummation of the business combination will collectively represent approximately 3.2% of SilverSun's pro forma common equity ownership.
−Removed: The proposed Mergers are expected to close in March or April of 2023, subject to the receipt of any applicable regulatory approvals, the approval of SilverSun's and Rhodium's respective stockholders, and other customary closing conditions.
−Removed: 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”).
−Removed: 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.
−Removed: These proposals include, but are not limited to, approval of (i) the Mergers;
−Removed: (ii) the Amended and Restated Certificate of Incorporation (and the matters covered thereby including the Reverse Stock Split);
−Removed: (iii) the Separation and Distribution Agreement;
−Removed: (iv) the SilverSun Technologies, Inc.
−Removed: 2023 Omnibus Incentive Plan;
−Removed: (v) the share issuances related to the Mergers requiring Nasdaq approval;
−Removed: and (vi) the post-Merger board nominees.
−Removed: These proposals are set forth in greater detail in the Form S-4.
−Removed: The Mergers are conditioned upon the approval of the Merger Proposal, subject to terms of the Merger Agreement.
−Removed: 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.
−Removed: Similarly, approval of the Merger proposal is subject to the approval of the Amended and Restated Certificate of Incorporation proposal, the Separation and Distribution
−Removed: 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.
+Added: NOTE 15 – RECENT EVENTS (Continued)
+Added: Jacobs Private Equity II, LLC ( “ JPE ” ) (Continued)
+Added: 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 ”).
+Added: Upon the Closing and giving effect to the Reverse Stock Split, SilverSun will issue to the Investors, in the aggregate:
+Added: (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;
+Added: 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.
+Added: Following the Closing, the Investors will own approximately 99.85 % of SilverSun common stock on an as-converted, as-exercised basis.
+Added: 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.
+Added: Accrued and unpaid dividends for any quarter will accrete to liquidation preference for all purposes.
+Added: 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.
+Added: The terms of the Convertible Preferred Stock are more fully set forth in Exhibit A to the Investment Agreement filed herewith.
+Added: 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.
+Added: The terms of the Warrants are more fully set forth in Exhibit B to the Investment Agreement filed herewith.
+Added: 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 Holdings on or prior to the Distribution Date (the “ Separation Agreement ”).
+Added: 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.
+Added: SilverSun Holdings common stock will be issued in book-entry form only, which means that no physical share certificates will be issued.
+Added: No fractional shares of SilverSun Holdings common stock will be issued.
+Added: 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 ”).
+Added: The Dividend will be paid on the Distribution Date from proceeds received by SilverSun from the Equity Investment.
+Added: 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.
+Added: 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.
+Added: As a result of the approval of the proposals set forth in such definitive proxy statement, eligible shareholders do not need to take any action to receive their shares of SilverSun Holdings common stock in connection with the Distribution.
+Added: 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.
+Added: Shortly after the Closing, SilverSun is expected to change its name to QXO, Inc.
+Added: 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.”
SILVERSUN TECHNOLOGIES, INC.
2 unchanged sentences
DECEMBER 31, 2023 AND 2022
−Removed: NOTE 15 – MERGER (Continued)
−Removed: 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;
−Removed: (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;
−Removed: 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.
−Removed: 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;
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: SilverSun Technologies Holdings, Inc.
−Removed: filed its Form 10 with the SEC on December 23, 2022.
−Removed: The Form 10 was withdrawn on February 21, 2023 because the financial statements contained therein were stale.
−Removed: SilverSun Technologies Holdings, Inc.
−Removed: 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.
−Removed: On February 14, 2023, the Company filed Amendment 2 to Form S-4 Registration Statement with the SEC.
−Removed: See business section of the Form 10-K for additional information.
+Added: NOTE 15 – RECENT EVENTS (Continued)
+Added: Jacobs Private Equity II, LLC ( “ JPE ” ) (Continued)
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Securities and Exchange Commission (the “ SEC ”).
+Added: One day prior to the date of the Distribution, SilverSun and SilverSun Holdings will enter into an Employee Matters Agreement (the “ Employee Matters Agreement ”).
+Added: 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.
+Added: 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 ”).
+Added: 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.
+Added: The Distribution will have tax consequences to SilverSun and the SilverSun stockholders that receive shares of SilverSun Holdings in the Distribution.
+Added: The Investment Agreement and the transactions contemplated by the Investment Agreement have been approved by SilverSun’s board of directors.
+Added: The approval of the Equity Investment, the Fifth Amended and Restated Certificate of Incorporation (including the 8:1 reverse stock split contemplated therein) and any equity incentive plan proposed by JPE were approved by the SilverSun stockholders at the Special Meeting.
+Added: The transactions are also subject to the receipt of necessary antitrust approvals and the satisfaction of other customary closing conditions.
+Added: 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.
+Added: 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.
+Added: 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 .
+Added: 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).
+Added: 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:
+Added: (a) month eight (8):
+Added: $40,000, (b) month nine (9):
+Added: $40,000, (c) month ten (10):
+Added: $50,000, (d) month eleven (11):
+Added: and (e) month twelve (12):
+Added: 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.
+Added: 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.
+Added: The Company and the Investors have made customary representations and warranties and covenants in the Investment Agreement.
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
+Added: NOTE 15 – RECENT EVENTS (Continued)
+Added: Jacobs Private Equity II, LLC ( “ JPE ” ) (Continued)
+Added: 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:
+Added: a “regular-way” market and an “ex-distribution” market.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: If a shareholder owns shares of SilverSun common stock as of the Record Date and sells 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 their ownership, as of the Record Date, of the shares of SilverSun common stock that they sold.
+Added: The consummation of the Distribution is subject to the satisfaction or waiver by SilverSun in its sole and absolute discretion of the following conditions:
+Added: 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;
+Added: and no proceedings for such purpose will be pending or threatened by the SEC;
+Added: the 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;
+Added: 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;
+Added: each of the other ancillary agreements contemplated by the Separation Agreement will have been duly executed and delivered by the applicable parties thereto;
+Added: 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;
+Added: at least two days prior to the Closing, SilverSun shall have file 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;
+Added: 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;
+Added: the Equity Investment will have been consummated.
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
+Added: NOTE 15 – RECENT EVENTS (Continued)
+Added: Jacobs Private Equity II, LLC ( “ JPE ” ) (Continued)
+Added: 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:
+Added: the SpinCo Assets, the SpinCo Liabilities or the SpinCo Business;
+Added: any breach by SilverSun Holdings or a subsidiary (after the Distribution) of the Separation Agreement;
+Added: 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;
+Added: 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;
+Added: 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.
+Added: 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:
+Added: the SilverSun Retained Liabilities;
+Added: any breach by SilverSun of the Separation Agreement;
+Added: 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;
+Added: 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 the information statement exhibit to the 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.
+Added: Indemnification with respect to taxes, and the procedures related thereto, will be governed by the Tax Matters Agreement.
+Added: SILVERSUN TECHNOLOGIES, INC.
+Added: AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: DECEMBER 31, 2023 AND 2022
+Added: NOTE 15 – RECENT EVENTS (Continued)
+Added: Jacobs Private Equity II, LLC ( “ JPE ” ) (Continued)
+Added: 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.
+Added: 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.
+Added: The termination payment in the maximum aggregate amount equal to $ 3,000,000 owed to Mark Meller as a result of the Closing under the Meller SilverSun Employment Agreement (as modified by the Meller Letter Agreement (as defined in the Investment Agreement)), will be a liability of SilverSun.
+Added: Any and all other liabilities under the Meller SilverSun Employment Agreement (as modified by the Meller Letter Agreement) will be a SpinCo Liability.
+Added: Except as otherwise set forth in the Separation Agreement or any ancillary agreement, each party will bear its own costs and expenses incurred after the Distribution Date.
+Added: Any amount or expense to be paid or reimbursed by any party to any other party shall be so paid or reimbursed promptly after the existence and amount of such obligation is determined and written demand therefor is made.
+Added: Subject to certain exceptions, under the Tax Matters Agreement:
+Added: 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;
+Added: 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.
+Added: 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 SEC on January 19, 2024.
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.