UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report: September 21, 2015
Date of earliest event reported: July 6, 2015
SILVERSUN TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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000-50302
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16-1633636
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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5 Regent Street, Suite 520
Livingston, New Jersey 07039
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(Address of Principal Executive Offices)
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(973) 758-9555
Registrant’s telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously disclosed in the Current Report on Form 8-K filed on July 10, 2015 (the “Initial 8-K”), SWK Technologies, Inc., a Delaware corporation (“SWK”) and wholly owned subsidiary of SilverSun Technologies, Inc. (the “Company”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) by and among SWK, ProductiveTech, Inc., a New Jersey corporation (“PTI”), and John McPoyle and Kevin Snyder, owners all of the issued and outstanding capital stock of PTI whereby SWK acquired substantially all of the operating assets of PTI (the “Acquisition”).
The Initial 8-K is amended by this Current Report on Form 8-K/A to present certain financial statements of PTI and to present certain unaudited pro forma financial information in connection with the Acquisition. PTI’s financial statements and the unaudited pro forma information of the Company and its subsidiaries are filed as exhibits hereto.
Item 9.01 Financial Statements and Exhibits.
Reference is made to the disclosure set forth under Item 1.01 of the Initial 8-K which disclosure is incorporated herein by reference.
(a) Audited Financial Statements of Businesses Acquired
The audited balance sheet of PTI as of December 31, 2014 and the related statement of income and changes in retained earnings and statement of cash flows for the year ended December 31, 2014, the notes to the financial statements and the independent auditor’s report are filed as Exhibit 99.1 to this Current Report on Form 8-K/A and are incorporated by reference herein.
(b) Reviewed Financial Statements of Business Acquired
Unaudited balance sheet of ProductiveTech, Inc. as of June 30, 2015 and the related statement of income and changes in retained earnings and statement of cash flows for the six months ended June 30, 2015 and 2014, and the notes to the financial statements are filed as Exhibit 99.2 to this Current Report on Form 8-K/A and are incorporated by reference herein
(c) Pro Forma Financial Information
The unaudited pro forma condensed consolidated balance sheet of the Company and its subsidiaries as of June 30, 2015 and the unaudited pro forma condensed consolidated statements of income of the Company and its subsidiaries for the year ended December 31, 2014 and six months ended June 30, 2015, giving effect to the acquisition of PTI are filed as Exhibit 99.3 to this Current Report on Form 8-K/A and are incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
Exhibit No.
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2.1
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Form of Asset Purchase Agreement, dated July 6, 2015, by and among SWK Technologies, Inc., ProductiveTech, Inc., John McPoyle and Kevin Snyder (incorporated herein by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on July 10, 2015)
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10.1
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Form of Promissory Note, dated July 6, 2015 issued in favor of ProductiveTech, Inc. (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on July 10, 2015)
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10.2
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Form of Employment Agreement, dated July 6, 2015 by and between SWK Technologies, Inc. and John McPoyle (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on July 10, 2015)
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10.3
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Form of Employment Agreement, dated July 6, 2015 by and between SWK Technologies, Inc. and Kevin Snyder (incorporated herein by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on July 10, 2015)
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99.1*
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99.2*
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99.3*
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SILVERSUN TECHNOLOGIES, INC.
Date: September 21, 2015
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By:
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/s/Mark Meller
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Mark Meller
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Chief Executive Officer
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Exhibit 99.1
PRODUCTIVETECH, INC.
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2014
AND
INDEPENDENT AUDITORS' REPORT
PRODUCTIVETECH, INC.
TABLE OF CONTENTS
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Page
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Independent Auditors' Report
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1
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Financial Statements
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Balance Sheet
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2
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Statement of Income and Changes in Retained Earnings
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3
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Statement of Cash Flows
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4
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Notes to Financial Statements
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5
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
of ProductiveTech, Inc.
We have audited the accompanying financial statements of ProductiveTech, Inc. (an S corporation) which comprise the balance sheet as of December 31, 2014 and the related statements of income and changes in retained earnings, and cash flows for the year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ProductiveTech, Inc. as of December 31, 2014 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
/s/ Friedman LLP
September 18, 2015
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BALANCE SHEET
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DECEMBER 31, 2014
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ASSETS
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Current assets
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Cash and cash equivalents
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$ |
13,297 |
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Accounts receivable
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169,007 |
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Inventory
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9,041 |
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Total current assets
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191,345 |
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Property and equipment, net
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85,232 |
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Other assets
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8,119 |
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Total assets
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$ |
284,696 |
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Line of credit
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$ |
50,000 |
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Accounts payable
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17,962 |
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Notes payable, related parties
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49,798 |
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Current portion of long-term debt
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12,006 |
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Deferred revenue
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25,711 |
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Other liabilities
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9,601 |
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Total current liabilities
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165,078 |
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Long-term debt
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20,881 |
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Total liabilities
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185,959 |
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Commitments
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Stockholders' equity
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Common stock, no par value, 100 shares authorized and issued
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5,000 |
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Retained earnings
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93,737 |
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Total stockholders' equity
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98,737 |
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Total liabilities and stockholders' equity
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$ |
284,696 |
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See notes to financial statements.
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STATEMENT OF INCOME AND CHANGES IN RETAINED EARNINGS
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YEAR ENDED DECEMBER 31, 2014
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Revenues
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Service
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$ |
1,271,599 |
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Product
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427,595 |
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Total Revenues
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1,699,194 |
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Cost of revenues
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Service
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576,723 |
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Product
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332,650 |
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Cost of revenues
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909,373 |
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Gross profit
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789,821 |
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Operating expenses
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General and administrative expenses
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616,591 |
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Income from operations
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173,230 |
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Other income (expense)
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Interest expense
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(3,275 |
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Income, other
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1,755 |
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(1,520 |
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Income before income taxes
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171,710 |
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Income tax expense
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1,773 |
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Net income
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169,937 |
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Retained earnings, beginning of year
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46,800 |
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Distributions
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(123,000 |
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Retained earnings, end of year
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$ |
93,737 |
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See notes to financial statements.
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STATEMENT OF CASH FLOWS
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YEAR ENDED DECEMBER 31, 2014
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Cash flows from operating activities
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Net income
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$ |
169,937 |
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Adjustments to reconcile net income to net cash
provided by operating activities
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Depreciation
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23,820 |
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Changes in assets and liabilities
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Accounts receivable
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34,112 |
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Inventory
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4,560 |
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Accounts payable
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(19,630 |
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Deferred revenue
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(32,480 |
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Other liabilities
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(889 |
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Net cash provided by operating activities
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179,430 |
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Cash flows from investing activities
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Acquisition of property, plant and equipment
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(21,684 |
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Proceeds from notes receivable, related party
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1,575 |
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Net cash used in investing activities
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(20,109 |
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Cash flows from financing activities
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Repayment of long-term debt
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(21,168 |
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Repayment of notes payable, related parties
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(14,286 |
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Distributions
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(123,000 |
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Net cash used in financing activities
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(158,454 |
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Net change in cash and equivalents
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867 |
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Cash and equivalents, beginning of year
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12,430 |
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Cash and equivalents, end of year
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$ |
13,297 |
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Supplemental cash flow disclosures
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Income taxes paid
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$ |
1,773 |
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Interest paid
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2,144 |
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Significant noncash investing and financing activities
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Equipment financed with lender
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29,654 |
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See notes to financial statements.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
ProductiveTech, Inc. (the “Company”), is incorporated in the state of New Jersey. The Company is engaged in the business of managed and hosted services, information technology consulting services and sales of computer hardware. Managed and hosted services include cloud services such as server backups and spam filtering.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.
Cash and cash equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Cash balances in banks are insured by the Federal Deposit Insurance Corporation subject to certain limitations.
Accounts Receivable
Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that no allowance is required at December 31, 2014.
Revenue Recognition
Managed and hosted services are recognized at the first of each month, as services are prepaid to cover the month in which revenue is recognized. Consulting and project services are billed and revenue is recognized as services are provided. Product revenue is recorded as products are sold and delivered to customers. If the product to be sold requires a down payment, the payment is recorded as a customer deposit and is recognized as revenue once the product is delivered to the customer.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided using the straight-line method over estimated useful lives of three to six years. Leasehold improvements are amortized over the shorter of the useful life of the related asset or the period of the lease.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventory
Inventory, which consist of purchased finished goods, are stated at the lower of cost (first-in, first-out) or market.
Deferred Revenue
Deferred revenue consists of prepaid blocks of time deposited for future consulting services which will be earned as services are performed.
Income Taxes
The Company has elected S Corporation status for federal income tax, New Jersey and Pennsylvania corporation business tax purposes. Under these elections, the Company is not a taxpaying entity for federal and state income tax purposes and, accordingly, no provision has been made for such income taxes, except for a minimum state corporate business tax. The stockholders’ allocable share of the Company’s income or loss is reportable on their income tax returns.
Fair Value of Financial Instruments
The carrying amounts of financial instruments, including cash, accounts receivable, accounts payable, accrued expenses, and other liabilities approximates fair value due to their short maturities. The Company believes that its indebtedness approximates fair value based on current yields for debt instruments with similar terms.
Subsequent Events
The Company has evaluated events and transactions for potential recognition or disclosure through September 18, 2015, which is the date the financial statements were available to be issued.
2 - RELATED PARTY TRANSACTIONS
The Company borrows funds from the stockholders to support the Company’s operations, as necessary. The loans are non-interest bearing with no set maturity date. As of December 31, 2014 the amount due is $49,798.
In January 2013 the Company entered into a $10,000 note receivable with a related party. The term of the loan is five years, maturing in January 2018, at an interest rate of 5.0%. As of December 31, 2014, the balance of the loan is $6,619. Interest income for 2014 was $537.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
3 - PROPERTY AND EQUIPMENT
Property and equipment, at cost, consist of the following:
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December 31,
2014
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Computers and equipment
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$ |
198,200 |
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Leasehold improvements and other fixed assets
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42,606 |
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240,806 |
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Less - Accumulated depreciation and amortization
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155,574 |
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$ |
85,232 |
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4 - LINE OF CREDIT
The Company maintains a $50,000 revolving line of credit with Fulton Bank of New Jersey, which is guaranteed by the stockholders of the Company and requires on an annual basis a minimum thirty day balance of zero. The collateral on the line includes accounts receivable, inventory, and property and equipment as pledged by the Company. Interest is at prime rate plus 1.0% not less than 4.5% (4.5% at December 31, 2014). The Company had $50,000 in borrowings against its revolving line of credit as of December 31, 2014.
5 - TERM LOAN AND NOTES PAYABLE
On August 28, 2009, the Company entered into a sixty month term loan with Fulton Bank of New Jersey in the amount of $100,000 due and paid off on September 5, 2014. The monthly payment amount was $1,973 with an annual interest rate of 6.75%. There was no outstanding balance at December 31, 2014.
On May 31, 2012, the Company entered into a thirty-six month financing agreement with Leaf Capital Funding, LLC in the amount of $16,204 due May 31, 2015, which is guaranteed by the stockholders of the Company and collateralized by the assets purchased with the funds. The monthly payment amount is $563 and has an imputed interest rate of 1.26% per month. At December 31, 2014 the outstanding balance was $3,232.
On December 23, 2014, the Company entered into a thirty-six month financing agreement with Leaf Capital Funding, LLC in the amount of $29,603 due December 23, 2017, which is guaranteed by the stockholders of the Company and collateralized by the assets purchased with the funds. The monthly payment amount is $992 and has an imputed interest rate of 1.04% per month. At December 31, 2014 the outstanding balance was $29,655.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
5 - TERM LOAN AND NOTES PAYABLE (Continued)
Future annual principal payments of long-term debt are as follows:
Year Ending December 31,
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2015
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$ |
12,006 |
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2016
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9,936 |
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2017
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10,945 |
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$ |
32,887 |
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6 - CONCENTRATIONS OF CREDIT RISK
For the year ended December 31, 2014, accounts receivable from one customer represents approximately 11% of the total receivable balance. No customers accounted for more than 10% of revenue for the year ended December 31, 2014.
7 - COMMITMENTS
On December 17, 2012, the Company signed a three year lease commencing on January 1, 2013 and terminating on December 31, 2015, with a base rent of $1,750 per month. On May 22, 2014, the lease agreement was amended for use of additional square footage increasing monthly base rent to $2,200, effective June 1, 2014. Future minimum payments under the lease are $13,200, representing payments through July 6, 2015 when the Company was acquired and the lease was taken over by the acquirer (see Note 8).
Total rent expense was approximately $24,875 for the year ended December 31, 2014.
8 - SUBSEQUENT EVENTS
On July 6, 2015, the Company entered into an Asset Purchase Agreement and sold substantially all of the Company’s assets for total consideration of $1,360,000 to SWK Technologies, Inc. (“SWK”), a subsidiary of SilverSun Technologies, Inc. (“SSNT”). The consideration is comprised of $500,000 in cash and a promissory note for $600,000. The note is due in 60 months from the closing date and bears interest at a rate of two and one half (2.5%) percent. Additionally in connection with the purchase agreement, SSNT issued 64,484 shares of common stock at a value of $260,000. Subsequent to the sale of the Company’s assets, the Company no longer has ongoing operations.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
8 - SUBSEQUENT EVENTS (Continued)
On April 10, 2015 the Company, increased their original line of credit with borrowings up to $150,000. The line is guaranteed by the stockholders with collateral including accounts receivable, inventory, property and equipment. The line now requires monthly principal payments equal to one thirty sixth of the balance outstanding.
Additionally, the Company opened a $50,000 revolving line of credit with the same bank that is guaranteed by the stockholders of the Company and requires on an annual basis a minimum thirty day balance of zero. The collateral on the line includes accounts receivable, inventory, property and equipment as pledged by the Company. Interest is at prime rate plus 1.0% not less than 4.5%.
Exhibit 99.2
PRODUCTIVETECH, INC.
FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2015 AND 2014
TABLE OF CONTENTS
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Page
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Financial Statements
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Balance Sheet
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1
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Statement of Income and Changes in Retained Earnings
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2
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Statement of Cash Flows
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3
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Notes to Financial Statements
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4
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BALANCE SHEETS
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June 30,
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December 31,
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2015
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2014
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(Unaudited)
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(Audited)
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ASSETS
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Current assets
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Cash and cash equivalents
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$ |
44,844 |
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$ |
13,297 |
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Accounts receivable
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162,687 |
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169,007 |
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Inventory
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13,042 |
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|
9,041 |
|
Total current assets
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220,573 |
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191,345 |
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Property and equipment, net
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93,300 |
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85,232 |
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Other assets
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20,913 |
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|
|
8,119 |
|
Total assets
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|
$ |
334,786 |
|
|
$ |
284,696 |
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
|
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Line of credit
|
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$ |
95,614 |
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|
50,000 |
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Accounts payable, trade
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|
95,712 |
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|
17,962 |
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Notes payable, related parties
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|
38,091 |
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|
49,798 |
|
Current portion of long-term debt
|
|
|
9,337 |
|
|
|
12,006 |
|
Deferred revenue
|
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|
16,815 |
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25,711 |
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Other liabilities
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17,010 |
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|
|
9,601 |
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Total current liabilities
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|
272,579 |
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|
|
165,078 |
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Long-term debt
|
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|
15,384 |
|
|
|
20,881 |
|
Total liabilities
|
|
|
287,963 |
|
|
|
185,959 |
|
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Commitments
|
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Stockholders' equity
|
|
|
|
|
|
|
|
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Common stock, no par value, 100 shares authorized and issued
|
|
|
5,000 |
|
|
|
5,000 |
|
Retained earnings
|
|
|
41,823 |
|
|
|
93,737 |
|
Total stockholders' equity
|
|
|
46,823 |
|
|
|
98,737 |
|
Total liabilities and stockholders' equity
|
|
$ |
334,786 |
|
|
$ |
284,696 |
|
See accompanying notes to the financial statements.
|
|
|
|
|
|
|
|
|
STATEMENTS OF INCOME AND CHANGES IN RETAINED EARNINGS
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
Service
|
|
$ |
696,326 |
|
|
$ |
627,038 |
|
Product
|
|
|
206,317 |
|
|
|
290,520 |
|
Total Revenues
|
|
|
902,643 |
|
|
|
917,558 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
Service
|
|
|
323,277 |
|
|
|
288,366 |
|
Product
|
|
|
169,027 |
|
|
|
219,189 |
|
Cost of revenues
|
|
|
492,304 |
|
|
|
507,555 |
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
410,339 |
|
|
|
410,003 |
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
366,325 |
|
|
|
283,499 |
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
44,014 |
|
|
|
126,504 |
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
(4,472 |
) |
|
|
(1,961 |
) |
Income, other
|
|
|
2,544 |
|
|
|
1,193 |
|
|
|
|
(1,928 |
) |
|
|
(768 |
) |
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
42,086 |
|
|
|
125,736 |
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
1,000 |
|
|
|
825 |
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
41,086 |
|
|
|
124,911 |
|
|
|
|
|
|
|
|
|
|
Retained earnings, beginning of period
|
|
|
93,737 |
|
|
|
46,800 |
|
|
|
|
|
|
|
|
|
|
Distributions
|
|
|
(93,000 |
) |
|
|
(69,000 |
) |
Retained earnings, end of period
|
|
$ |
41,823 |
|
|
$ |
102,711 |
|
See accompanying notes to the financial statements.
PRODUCTIVETECH, INC.
|
|
|
|
|
|
|
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2014
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
Net income
|
|
$ |
41,086 |
|
|
$ |
124,911 |
|
Adjustments to reconcile net income to net cash
provided by operating activities
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
15,457 |
|
|
|
11,681 |
|
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
6,320 |
|
|
|
10,156 |
|
Inventory
|
|
|
(4,001 |
) |
|
|
(9,974 |
) |
Accounts payable
|
|
|
77,750 |
|
|
|
23,481 |
|
Deferred revenue
|
|
|
(8,896 |
) |
|
|
(26,144 |
) |
Other liabilities
|
|
|
7,409 |
|
|
|
8,347 |
|
Net cash provided by operating activities
|
|
|
135,125 |
|
|
|
142,458 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment
|
|
|
(23,525 |
) |
|
|
(12,552 |
) |
Loan to stockholder
|
|
|
(20,000 |
) |
|
|
- |
|
Loan to employees
|
|
|
(587 |
) |
|
|
- |
|
Proceeds from notes receivable, related party
|
|
|
811 |
|
|
|
779 |
|
Net cash used in investing activities
|
|
|
(43,301 |
) |
|
|
(11,773 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Repayment of long-term debt
|
|
|
(8,166 |
) |
|
|
(14,255 |
) |
Repayment of notes payable - related parties
|
|
|
(4,725 |
) |
|
|
(6,578 |
) |
Proceeds from line of credit
|
|
|
50,000 |
|
|
|
- |
|
Repayment of line of credit
|
|
|
(4,386 |
) |
|
|
(25,000 |
) |
Distributions
|
|
|
(93,000 |
) |
|
|
(69,000 |
) |
Net cash used in financing activities
|
|
|
(60,277 |
) |
|
|
(114,833 |
) |
|
|
|
|
|
|
|
|
|
Net change in cash and equivalents
|
|
|
31,547 |
|
|
|
15,852 |
|
Cash and equivalents, beginning of period
|
|
|
13,297 |
|
|
|
12,430 |
|
Cash and equivalents, end of period
|
|
$ |
44,844 |
|
|
$ |
28,282 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow disclosures
|
|
|
|
|
|
|
|
|
Income taxes paid
|
|
$ |
1,000 |
|
|
$ |
825 |
|
Interest paid
|
|
|
3,732 |
|
|
|
1,264 |
|
See accompanying notes to the financial statements.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
ProductiveTech, Inc. (the “Company”), is incorporated in the state of New Jersey. The Company is engaged in the business of managed and hosted services, information technology consulting services and sales of computer hardware. Managed and hosted services include cloud services such as server backups and spam filtering.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.
Cash and cash equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Cash balances in banks are insured by the Federal Deposit Insurance Corporation subject to certain limitations.
Accounts Receivable
Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded based on a combination of historical experience, aging analysis and information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has determined that no allowance is required at June 30, 2015 and December 31, 2014.
Revenue Recognition
Managed and hosted services are recognized at the first of each month, as services are prepaid to cover the month in which revenue is recognized. Consulting and project services are billed and revenue is recognized as services are provided. Product revenue is recorded as products are sold and delivered to customers. If the product to be sold requires a down payment, the payment is recorded as a customer deposit and is recognized as revenue once the product is delivered to the customer.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided using the straight-line method over estimated useful lives of three to six years. Leasehold improvements are amortized over the shorter of the useful life of the related asset or the period of the lease.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventory
Inventory, which consist of purchased finished goods, are stated at the lower of cost (first-in, first-out) or market.
Deferred Revenue
Deferred revenue consists of prepaid blocks of time deposited for future consulting services which will be earned as services are performed.
Income Taxes
The Company has elected S Corporation status for federal income tax, New Jersey and Pennsylvania corporation business tax purposes. Under these elections, the Company is not a taxpaying entity for federal and state income tax purposes and, accordingly, no provision has been made for such income taxes, except for a minimum state corporate business tax. The stockholders’ allocable share of the Company’s income or loss is reportable on their income tax returns.
Fair Value of Financial Instruments
The carrying amounts of financial instruments, including cash, accounts receivable, accounts payable, accrued expenses, and other liabilities approximates fair value due to their short maturities. The Company believes that its indebtedness approximates fair value based on current yields for debt instruments with similar terms.
Subsequent Events
The Company has evaluated events and transactions for potential recognition or disclosure through September 18, 2015, which is the date the financial statements were available to be issued.
2 - RELATED PARTY TRANSACTIONS
The Company borrowed funds from the stockholders to support the Company’s operations, as necessary. As of June 30, 2015 and December 31, 2014 the amount due is $38,091 and $49,798, respectively. During the six months ended June 30, 2015 a stockholder borrowed $20,000 from the Company. The advance was applied against amounts due to stockholder. At June 30, 2015 the remaining balance due from the stockholder is $13,018 and is classified in other assets. All stockholder loans and advances are non-interest bearing with no set maturity date.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
2 - RELATED PARTY TRANSACTIONS (Continued)
In January 2013 the Company entered into a $10,000 note receivable with a related party. The term of the loan is five years, maturing in January 2018, at an interest rate of 5%. As of June 30, 2015 and December 31, 2014, the balance of the loan is $5,808 and $6,619, respectively.
3 - PROPERTY AND EQUIPMENT
Property and equipment, at cost, consist of the following:
|
|
June 30,
2015
|
|
|
December 31,
2014
|
|
Computers and equipment
|
|
$ |
221,725 |
|
|
$ |
198,200 |
|
Leasehold improvements and other fixed assets
|
|
|
42,606 |
|
|
|
42,606 |
|
|
|
|
264,331 |
|
|
|
240,806 |
|
Less - Accumulated depreciation and amortization
|
|
|
171,031 |
|
|
|
155,574 |
|
|
|
$ |
93,300 |
|
|
$ |
85,232 |
|
4 - LINES OF CREDIT
The Company had a $50,000 revolving line of credit with Fulton Bank of New Jersey, guaranteed by the stockholders of the Company and an annual basis minimum thirty day zero balance requirement. The collateral on the line included accounts receivable, inventory, property and equipment as pledged by the Company. Interest is at prime rate plus 1.0% not less than 4.5% (4.5% at June 30, 2015). On April 10, 2015 the Company, increased their borrowings up to $150,000 under this line. The annual minimum thirty day zero balance requirement was replaced with required monthly principal payments of one thirty sixth of the balance outstanding. The Company had $75,614 and $50,000 in borrowings against the line as of June 30, 2015 and December 31, 2014, respectively.
On April 10, 2015, the Company also opened a new $50,000 revolving line of credit with the same bank that is guaranteed by the stockholders of the Company and requires on an annual basis a minimum thirty day balance of zero. The collateral on the line includes accounts receivable, inventory, property and equipment as pledged by the Company. Interest is at prime rate plus 1.0% not less than 4.5% (4.5% at June 30, 2015). The Company had $20,000 in borrowings against this line of credit as of June 30, 2015.
PRODUCTIVE TECH, INC.
NOTES TO FINANCIAL STATEMENTS
5 - NOTES PAYABLE
On May 31, 2012, the Company entered into a thirty six-month financing agreement with Leaf Capital Funding, LLC in the amount of $16,204 due May 31, 2015, which is guaranteed by the stockholders of the Company and collateralized by the assets purchased with the funds. The monthly payment amount is $563 and has an imputed interest rate of 1.26% per month. As of December 31, 2014 the outstanding balance was $3,232 and the Company satisfied the outstanding balance as of June 30, 2015.
On December 23, 2014, the Company entered into a thirty-six month financing agreement with Leaf Capital Funding, LLC in the amount of $29,603 due December 23, 2017, which is guaranteed by the stockholders of the Company and collateralized by the assets purchased with the funds. The monthly payment amount is $991 and has an imputed interest rate of 1.04% per month. At June 30, 2015 and December 31, 2014 and the outstanding balance was $24,721 and $29,655, respectively.
Year Ending June 30,
|
|
|
|
2015
|
|
$ |
9,337 |
|
2016
|
|
|
10,574 |
|
2017
|
|
|
4,810 |
|
|
|
$ |
24,721 |
|
6 - CONCENTRATIONS OF CREDIT RISK
Accounts receivable from one customer represents approximately 18% and 11% of the total receivable balance as of June 30, 2015 and December 31, 2014, respectively. No customers accounted for more than 10% of revenue for the six months ended June 30, 2015 and 2014.
7 - COMMITMENTS
On December 17, 2012, the Company signed a three year lease commencing on January 1, 2013 and terminating on December 31, 2015, with a base rent of $1,750 per month. On May 22, 2014, the lease agreement was amended for use of additional square footage increasing monthly base rent to $2,200, effective June 1, 2014. As of June 30, 2015 there are no future minimum payments as the Company was acquired and the lease was taken over by the acquirer (see Note 8). Total rent expense was approximately $13,800 and $11,175 for six months ended June 30, 2015 and 2014, respectively.
8 - SUBSEQUENT EVENTS
On July 6, 2015, the Company entered into an Asset Purchase Agreement and sold substantially all of the Company’s assets for total consideration of $1,360,000 to SWK Technologies, Inc. (“SWK”), a subsidiary of SilverSun Technologies, Inc. (“SSNT”). The consideration is comprised of $500,000 in cash and a promissory note for $600,000. The note is due in 60 months from the closing date and bears interest at a rate of two and one half (2.5%) percent. Additionally in connection with the purchase agreement, SSNT issued 64,484 shares of common stock at a value of $260,000. Subsequent to the sale of the Company’s assets, the Company no longer has ongoing operations.
Exhibit 99.3
SILVERSUN TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SILVERSUN TECHNOLOGIES, INC.
Unaudited Pro Forma Condensed Consolidated Balance Sheets
June 30, 2015
|
|
|
|
|
Historical
|
|
|
Pro
|
|
|
|
|
|
|
|
|
|
|
Productive
Tech
|
|
|
Forma
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
2,062,756 |
|
|
$ |
44,844 |
|
|
|
(775,812 |
) |
a,c,g
|
|
$ |
1,331,788 |
|
Accounts receivable, net
|
|
|
1,995,753 |
|
|
|
162,687 |
|
|
|
- |
|
|
|
|
2,158,440 |
|
Inventory
|
|
|
- |
|
|
|
13,042 |
|
|
|
- |
|
|
|
|
13,042 |
|
Unbilled services
|
|
|
846,209 |
|
|
|
- |
|
|
|
- |
|
|
|
|
846,209 |
|
Prepaid expenses, other current assets
|
|
|
284,492 |
|
|
|
- |
|
|
|
- |
|
|
|
|
284,492 |
|
Deferred tax asset - current
|
|
|
38,000 |
|
|
|
- |
|
|
|
- |
|
|
|
|
38,000 |
|
Total current assets
|
|
|
5,227,210 |
|
|
|
220,573 |
|
|
|
(775,812 |
) |
|
|
|
4,671,971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
305,880 |
|
|
|
93,300 |
|
|
|
- |
|
|
|
|
399,180 |
|
Intangible assets, net
|
|
|
910,179 |
|
|
|
- |
|
|
|
952,000 |
|
b,f
|
|
|
1,862,179 |
|
Goodwill
|
|
|
56,000 |
|
|
|
- |
|
|
|
- |
|
|
|
|
56,000 |
|
Deferred tax asset
|
|
|
181,000 |
|
|
|
- |
|
|
|
- |
|
|
|
|
181,000 |
|
Deposits and other assets
|
|
|
26,260 |
|
|
|
20,913 |
|
|
|
(19,413 |
) |
a |
|
|
27,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ |
6,706,529 |
|
|
$ |
334,786 |
|
|
$ |
156,775 |
|
|
|
$ |
7,198,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$ |
1,135,952 |
|
|
$ |
95,712 |
|
|
$ |
- |
|
|
|
$ |
1,231,664 |
|
Accrued expenses
|
|
|
570,042 |
|
|
|
- |
|
|
|
- |
|
|
|
|
570,042 |
|
Accrued interest
|
|
|
14,196 |
|
|
|
- |
|
|
|
- |
|
|
|
|
14,196 |
|
Income taxes payable
|
|
|
307,778 |
|
|
|
- |
|
|
|
- |
|
|
|
|
307,778 |
|
Line of credit
|
|
|
- |
|
|
|
95,614 |
|
|
|
(95,614 |
) |
a |
|
|
- |
|
Note payable, related parties
|
|
|
- |
|
|
|
38,091 |
|
|
|
(38,091 |
) |
a |
|
|
- |
|
Long term debt – current portion
|
|
|
135,828 |
|
|
|
9,337 |
|
|
|
- |
|
|
|
|
145,165 |
|
Capital lease obligations – current portion
|
|
|
72,949 |
|
|
|
- |
|
|
|
- |
|
|
|
|
72,949 |
|
Deferred revenue
|
|
|
2,606,919 |
|
|
|
16,815 |
|
|
|
- |
|
|
|
|
2,623,734 |
|
Other liabilities
|
|
|
- |
|
|
|
17,010 |
|
|
|
(17,010 |
) |
a |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
4,843,664 |
|
|
|
272,579 |
|
|
|
(150,715 |
) |
|
|
|
4,965,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term debt, net of current portion
|
|
|
311,760 |
|
|
|
15,384 |
|
|
|
437,404 |
|
g,d |
|
|
764,548 |
|
Capital lease obligations, net of current portion
|
|
|
82,470 |
|
|
|
- |
|
|
|
- |
|
|
|
|
82,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
5,237,894 |
|
|
|
287,963 |
|
|
|
286,689 |
|
|
|
|
5,812,546 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; authorized 1,000,000 shares;
No shares issued and outstanding
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Series A Convertible Preferred Stock, $0.00 par value; authorized 2 shares;
No shares issued and outstanding
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
Common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Par value $0.00001; authorized 75,000,000 shares; 4,346,252 shares issued and outstanding
|
|
|
44 |
|
|
|
5,000 |
|
|
|
(5,000 |
) |
a |
|
|
44 |
|
Additional paid-in capital
|
|
|
11,919,300 |
|
|
|
- |
|
|
|
260,000 |
|
e |
|
|
12,179,300 |
|
Accumulated deficit
|
|
|
(10,450,709 |
) |
|
|
41,823 |
|
|
|
(384,914 |
) |
f,g,h |
|
|
(10,793,800 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
1,468,635 |
|
|
|
46,823 |
|
|
|
(129,914 |
) |
|
|
|
1,385,544 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
$ |
6,706,529 |
|
|
$ |
334,786 |
|
|
$ |
156,775 |
|
|
|
$ |
7,198,090 |
|
SILVERSUN TECHNOLOGIES, INC.
Unaudited Pro Forma Condensed Consolidated Balance Sheets
Six Months Ended June 30, 2015
|
|
Historical
SilverSun
|
|
|
Historical
ProductiveTech
|
|
|
Pro
Forma Adjustments
|
|
|
|
Pro
Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, net
|
|
$
|
12,414,533
|
|
|
$
|
902,643
|
|
|
$
|
-
|
|
|
|
$
|
13,317,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
7,203,527
|
|
|
|
492,304
|
|
|
|
-
|
|
|
|
|
7,695,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
5,211,006
|
|
|
|
410,339
|
|
|
|
-
|
|
|
|
|
5,621,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
4,295,717
|
|
|
|
350,868
|
|
|
|
-
|
|
|
|
|
4,646,585
|
|
Shares-based compensation expense
|
|
|
40,937
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
40,937
|
|
Depreciation and amortization
|
|
|
232,309
|
|
|
|
15,457
|
|
|
|
136,000
|
|
f
|
|
|
383,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative expenses
|
|
|
4,568,963
|
|
|
|
366,325
|
|
|
|
136,000
|
|
|
|
|
5,071,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
642,043
|
|
|
|
44,014
|
|
|
|
(136,000)
|
|
|
|
|
550,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, net
|
|
|
(25,497
|
)
|
|
|
(4,472
|
)
|
|
|
(5,891
|
) |
g
|
|
|
(35,860
|
)
|
Income, other
|
|
|
-
|
|
|
|
2,544
|
|
|
|
-
|
|
|
|
|
2,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(25,497
|
)
|
|
|
(1,928
|
)
|
|
|
(5,891
|
) |
|
|
|
(33,316
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
616,546
|
|
|
|
42,086
|
|
|
|
(141,891
|
) |
|
|
|
516,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
50,778
|
|
|
|
1,000
|
|
|
|
-
|
|
|
|
|
51,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
565,768
|
|
|
$ |
41,086
|
|
|
$ |
(141,891
|
) |
|
|
$ |
464,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share – basic and diluted
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares – basic and diluted
|
|
|
4,192,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SILVERSUN TECHNOLOGIES, INC.
Unaudited Pro Forma Condensed Consolidated Balance Sheets
Twelve Months Ended December 31, 2014
|
|
Historical
SilverSun
|
|
|
Historical
ProductiveTech
|
|
|
Pro
Forma Adjustments
|
|
|
|
Pro
Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, net
|
|
$
|
21,463,774
|
|
|
$
|
1,699,194
|
|
|
$
|
-
|
|
|
|
$
|
23,162,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
12,890,710
|
|
|
|
909,373
|
|
|
|
-
|
|
|
|
|
13,800,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
8,573,064
|
|
|
|
789,821
|
|
|
|
-
|
|
|
|
|
9,362,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
7,607,587
|
|
|
|
592,771
|
|
|
|
50,000
|
|
h
|
|
|
8,250,358
|
|
Shares-based compensation expense
|
|
|
130,253
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
130,253
|
|
Depreciation and amortization
|
|
|
364,573
|
|
|
|
23,820
|
|
|
|
272,000
|
|
f
|
|
|
660,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total selling, general and administrative expenses
|
|
|
8,102,413
|
|
|
|
616,591
|
|
|
|
322,000
|
|
|
|
|
9,041,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
470,651
|
|
|
|
173,230
|
|
|
|
(322,000)
|
|
|
|
|
321,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest, net
|
|
|
(59,750
|
)
|
|
|
(3,275
|
)
|
|
|
(12,481)
|
|
g
|
|
|
(75,506
|
)
|
Income, other
|
|
|
-
|
|
|
|
1,755
|
|
|
|
-
|
|
|
|
|
1,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(59,750
|
)
|
|
|
(1,520
|
)
|
|
|
(12,481)
|
|
|
|
|
(73,751
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
410,901
|
|
|
|
171,710
|
|
|
|
(334,481
|
)
|
|
|
|
248,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
218,000
|
|
|
|
1,773
|
|
|
|
-
|
|
|
|
|
219,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
192,901
|
|
|
$ |
169,937
|
|
|
$ |
(334,481)
|
|
|
|
$ |
28,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share – basic and diluted
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares – basic and diluted
|
|
|
3,942,836
|
|
|
|
|
|
|
|
|
|
|
|
|
4,007,320
|
|
SILVERSUN TECHNOLOGIES, INC.
Unaudited Pro Forma Condensed Consolidated Balance Sheets
1. Basis of Presentation
SilverSun Technologies, Inc. (the “Company”) is an information technology company, and a value added reseller and master developer for Sage Software’s MAS 90/200/500 and ERP X3 financial and accounting software as well as the publisher of its own proprietary Electronic Data Interchange (EDI) software, “MAPADOC.” The Company focuses on the business software and information technology consulting market, and is looking for other opportunities to grow its business. The Company sells services and products to various end users, manufacturers, wholesalers and distributor industry clients located throughout the United States.
On July 6, 2015 SWK Technologies, Inc (SWK), a wholly owned subsidiary of Silversun Technologies, Inc., entered into an Asset Purchase Agreement with ProductiveTech, Inc. (PTI) a New Jersey corporation, and John McPoyle and Kevin Snyder in their individual capacity as Shareholders. In consideration for the acquired assets, SWK paid $500,000 in cash and issued a promissory note for $600,000 (the “Note”). The note is due in 60 months from the closing date and bears interest at a rate of two and one half (2.5%) percent. The monthly payments including interest are $10,645. Additionally in connection with the purchase agreement, SilverSun Technologies, Inc. (“SSNT”) issued 64,484 shares of common stock at $4.032 per share for a value of $260,000.
ProductiveTech, Inc. (PTI) is incorporated in the state of New Jersey. PTI is engaged in the business of managed and hosted services, information technology consulting services and sales of computer hardware. Managed and hosted services include cloud services such as server backups and spam filtering.
The unaudited pro forma balance sheet as of June 30, 2015 gives effect to the acquisition of ProductiveTech, Inc. as if it had occurred as of June 30, 2015, based on a preliminary price allocation. The unaudited pro forma statements of operations for the six months ended June 30, 2015 and the year ended December 31, 2014 combines the historical operating results of the Company for the respective periods and the historical operating results for ProductiveTech, Inc., prepared under the assumption that the acquisition of ProductiveTech, Inc. had occurred as of January 1, 2014.
The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been reported if the combination had actually been completed as presented in the accompany unaudited pro forma combined condensed balance sheet and statements of operations. The unaudited pro forma combined condensed financial information presented is based on, and should be read in conjunction with, the historical financial statements and the related notes thereto for both the Company, as disclosed in its reports filed with the SEC, and ProductiveTech, Inc.
SILVERSUN TECHNOLOGIES, INC.
Unaudited Pro Forma Condensed Consolidated Balance Sheets
2. Explanation of Pro Forma Adjustments
The following pro forma adjustments are included in the unaudited pro forma combined condensed balance sheet and/or the unaudited pro forma combined condensed statements of income.
|
a.
|
Elimination of items not assumed in the transaction
|
|
b.
|
An increase to intangible assets to reflect the estimated value of the assets acquired from ProductiveTech, Inc. on the closing date.
|
|
c.
|
A decrease in cash to acquire the assets from ProductiveTech, Inc. on the closing date.
|
|
d.
|
An increase to notes payable to acquire the assets from ProductiveTech, Inc. on the closing date.
|
|
e.
|
An increase to paid in capital to represent the common stock issued to acquire the assets from ProductiveTech, Inc. on the closing date.
|
|
f.
|
Amortization of acquired intangibles
|
|
g.
|
Payments and interest on loan to acquire the assets from ProductiveTech, Inc.
|
|
h.
|
Legal and accounting fees associated with transaction
|
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