SilverSun Technologies, Inc. - Quarter Report: 2015 September (Form 10-Q)

silversuntech10q093015.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2015

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-50302

SILVERSUN TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	16-1633636
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

5 Regent Street

Livingston, NJ 07039

(Address of principal executive offices)

(973) 396-1720

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 13, 2015, there were 4,410,736 shares outstanding of the registrant’s common stock.

Table of Contents

SILVERSUN TECHNOLOGIES, INC.

TABLE OF CONTENTS

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited):	3
	Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	3
	Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2015 and 2014	4
	Condensed Consolidated Statements of Stockholders Equity as of September 30, 2015 and December 31, 2014	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014	6
	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	30

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2015			December 31, 2014
ASSETS

Current assets:
Cash and cash equivalents	$	1,139,404		$	1,308,337
Accounts receivable, net of allowance of $125,000		2,345,593			2,097,454
Unbilled services		941,051			230,000
Prepaid expenses and other current assets		422,006			195,779
Deferred tax asset – current		38,000			38,000
Total current assets		4,886,054			3,869,570

Property and equipment, net		378,192			295,054
Intangible assets, net		2,008,773			809,481
Goodwill		56,000			56,000
Deferred tax asset		171,500			-
Deposits and other assets		27,759			26,725

Total assets	$	7,528,278		$	5,056,830

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	1,292,533		$	1,393,541
Accrued expenses		508,437			794,157
Accrued interest		14,514			14,716
Income taxes payable		272,791			76,000
Long term debt – current portion		241,315			174,578
Capital lease obligations – current portion		79,404			65,269
Deferred revenue		2,542,803			2,215,114
Total current liabilities		4,951,797			4,733,375

Long term debt, net of current portion		746,309			242,926
Capital lease obligations, net of current portion		77,832			66,922
Total liabilities		5,775,938			5,043,223

Commitments and contingencies		-			-

Stockholders’ equity:
Preferred stock, $0.001 par value; authorized 1,000,000 shares; No shares issued and outstanding		-			-
Series A Preferred Stock, $0.001 par value; authorized 2 shares No shares issued and outstanding		-			-
Series B Preferred Stock, $0.001 par value; authorized 1 share; 0 and 1 share issued and outstanding		-			1
Common stock:
Par value $.00001; authorized 75,000,000 shares; 4,410,736 and 3,959,064 shares issued and outstanding		45			40
Additional paid-in capital		12,186,540			11,030,043
Accumulated deficit		(10,434,245	)		(11,016,477	)
Total stockholders’ equity		1,752,340			13,607

Total liabilities and stockholders’ equity	$	7,528,278		$	5,056,830

See accompanying footnotes to the unaudited condensed consolidated financial statements.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014

Revenues:
Product, net	$	864,698		$	1,345,238		$	3,165,690		$	2,902,011
Service, net		6,335,085			4,741,227			16,448,626			13,364,021
Total revenues, net		7,199,783			6,086,465			19,614,316			16,266,032

Cost of revenues:
Product		409,451			699,750			1,479,688			1,481,915
Service		3,885,325			2,828,168			10,018,616			7,872,689
Cost of revenues		4,294,776			3,527,918			11,498,304			9,354,604

Gross profit		2,905,007			2,558,547			8,116,012			6,911,428

Selling, general and administrative expenses:
Selling expenses		1,254,202			853,818			3,096,001			2,476,720
General and administrative expenses		1,409,815			1,086,033			3,863,732			3,251,615
Share-based compensation		8,015			56,092			48,952			119,161
Depreciation and amortization		184,627			95,098			416,936			262,055
Total selling, general and administrative expenses		2,856,659			2,091,041			7,425,621			6,109,551

Income from operations		48,348			467,506			690,391			801,877

Other income (expense):
Interest expense, net		(14,347	)		(21,494	)		(39,844	)		(45,717	)
Total other income (expense)		(14,347	)		(21,494	)		(39,844	)		(45,717	)

Income before taxes		34,001			446,012			650,547			756,160

Provision for income taxes		17,537			197,847			68,315			327,364

Net income	$	16,464		$	248,165		$	582,232		$	428,796

Net income per common share:
Basic	$	0.00		$	0.06		$	0.14		$	0.11
Fully diluted		0.00			0.06			0.14			0.11

Weighted average shares:
Basic		4,407,231			3,945,925			4,265,065			3,938,618
Diluted		4,407,231			3,947,376			4,265,065			3,939,642

See accompanying footnotes to the unaudited condensed consolidated financial statements.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE YEAR ENDED DECEMBER 31, 2014 AND NINE MONTHS ENDED SEPTEMBER 30, 2015

	Series A Preferred Stock				Series B Preferred Stock						Common Stock Class A				Additional Paid in			Accumulated Equity			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			(Deficit)			(Deficit)
Balance at January 1, 2014		-	$	-		1		$	1			3,922,566	$	39	$	10,809,499		$	(11,209,378	)	$	(399,839	)

Common stock issued in a cashless exercise of warrants		-		-		-			-			4,167		-		(1	)		-			(1	)
Issuance of common stock for repayment of accrued liabilities		-		-		-			-			5,331		-		20,792			-			20,792
Share-Based Compensation		-		-		-			-			-		-		130,253			-			130,253

Issuance of common stock for services		-		-		-			-			27,000		1		69,500			-			69,501
Net income		-		-		-			-			-		-		-			192,901			192,901
Balance at December 31, 2014		-	$	-		1		$	1			3,959,064	$	40	$	11,030,043		$	(11,016,477	)	$	13,607

Cancellation of preferred share		-		-		(1	)		(1	)		-		-		1			-			-
Issuance of common stock, net of fees		-		-		-			-			363,490		4		812,019			-			812,023
Roundup of fractional shares		-		-		-			-			8,698		-		-			-			-
Issuance of common stock for services		-		-		-			-			15,000		-		36,300			-			36,300
Issuance of common stock for acquisition												64,484		1		259,225						259,226
Stock warrants in exchange for services																20,000						20,000
Share-Based Compensation		-		-		-			-			-		-		28,952			-			28,952
Net income		-		-		-			-			-		-		-			582,232			582,232

Balance at September 30, 2015		-	$	-		-		$	-			4,410,736	$	45	$	12,186,540		$	(10,434,245	)	$	1,752,340

The accompanying footnotes to the unaudited consolidated financial statements.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2015			2014
Cash flows from operating activities:
Net income	$	582,232		$	428,796
Adjustments to reconcile net income to net cash provided by operating activities
Deferred income taxes		(171,500	)		51,000
Depreciation and amortization		116,927			84,682
Amortization of intangibles		300,010			177,373
Share-based compensation		28,952			119,161
Stock warrants in exchange for services		20,000			-
Common stock issued in exchange for services		36,300			69,500

Changes in assets and liabilities:
Accounts receivable		(118,430	)		(349,432	)
Unbilled services		(700,682	)		(398,000	)
Prepaid expenses and other current assets		(212,188	)		(63,146	)
Deposits and other assets		(1,034	)		(3,739	)
Accounts payable		(208,779	)		(14,694	)
Accrued expenses		(285,720	)		430,625
Income tax payable		196,791			-
Accrued interest		(202	)		1,401
Deferred revenue		311,159			377,297
Net cash (used in) provided by operating activities		(106,164	)		910,824

Cash flows from investing activities:
Purchase of property and equipment		(42,801	)		(10,344	)
Acquisition of businesses		(563,471	)		-
Net cash used in investing activities		(606,272	)		(10,344	)

Cash flows from financing activities:
Repayment of long-term debt		(204,880	)		(170,653	)
Principal payments under capital leases obligations		(63,640	)		(42,946	)
Proceeds from issuance of common stock and warrants, net of fees		812,023			-
Net cash provided by (used in) financing activities		543,503			(213,599	)

Net (decrease) increase in cash and cash equivalents		(168,933	)		686,881

Cash and cash equivalents – beginning of period		1,308,337			762,892

Cash and cash equivalents – end of period	$	1,139,404		$	1,449,773

Cash paid during period for:
Interest	$	42,550		$	48,391
Income taxes	$	83,041		$	66,299

See accompanying footnotes to the unaudited condensed consolidated financial statements.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

For the nine months ended September 30, 2015:

The Company acquired certain assets and assumed certain liabilities of ProductiveTech, Inc. (“PTI”) for a $600,000 promissory note in addition to a cash payment of $483,471 and issuance of 64,484 shares of common stock at $4.032 per share for a value of $260,000.

The Company acquired certain assets of 2000 Soft d/b/a/ Accounting Technologies Resources (“ATR”) for a $175,000 promissory note in addition to a cash payment of $80,000.

On March 29, 2015, Mr. Meller returned his one share of Series B Preferred Stock (the “Series B Preferred”) to the Company and with the approval of the majority of the Company’s stockholders and the Board of Directors the Series B Preferred Stock was canceled in its entirety.

The Company incurred approximately $88,685 in capital lease obligations.

For the nine months ended September 30, 2014:

In connection with the acquisition of ESC Software, Inc. (“ESC”) the Company issued ESC a promissory note in the amount of $350,000 and the fair value of the assets was recorded at $350,000.

The Company issued 159,939 shares of common stock with fair value of $20,792 for repayment of accrued liabilities of $20,792.

See accompanying footnotes to the unaudited condensed consolidated financial statements.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

SilverSun Technologies, Inc. (the “Company” or “SilverSun”) and wholly owned subsidiary SWK Technologies, Inc. (“SWK”) is a value added reseller and master developer for Sage Software’s Sage 100/500 and ERP X3 financial and accounting software as well as the publisher of 20 proprietary software solutions, including its own proprietary Electronic Data Interchange (EDI) software, “MAPADOC”. The Company is also a managed network service provider, providing remote network monitoring services, business continuity, disaster recovery, data backup, and application hosting. The Company sells services and products to various industries including, but not limited to, manufacturers, wholesalers and distributors located throughout the United States. The Company is publicly traded and is currently quoted on the OTCQB marketplace (“OTCQB”) under the symbol “SSNT.”

In May 2014, the Company completed the purchase of selected assets of ESC Software, Inc. (“ESC”), a leading Arizona-based reseller of Sage Software and Acumatica applications. ESC’s customers and business products and services have been integrated into the infrastructure of SWK.

In March of 2015, the Company completed the purchase of selected assets of 2000 SOFT, d/b/a Accounting Technology Resources (“ATR”). ATR’s customers and business products and services have been integrated into the infrastructure of SWK.

In July 2015, the Company completed the purchase of selected assets of ProductiveTech, Inc. (“PTI”). PTI’s selected assets and liabilities, customers and business products and services have been integrated into the infrastructure of SWK.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of SilverSun Technologies, Inc. as of September 30, 2015, the results of operations and cash flows for the three and nine months ended September 30, 2015 and 2014. These results are not necessarily indicative of the results to be expected for the full year.

The financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC) and consequently have been condensed and do not include all of the disclosures normally made in an Annual Report on Form 10-K. The December 31, 2014 balance sheet included herein was derived from the audited financial statements included in the Company’s annual report on Form 10-K as of that date. Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC on March 31, 2015.

On February 4, 2015 the Company effected a 1-for-30 reverse stock split of the outstanding common stock (the “Reverse Stock Split”) whereby every thirty (30) shares of outstanding common stock decreased to one (1) share of common stock. Similarly, the number of shares of common stock, par value $0.00001 (“Common Stock”) into which each outstanding option and warrant to purchase common stock is to be exercisable decreased on a 1-for-30 basis and the exercise price of each outstanding option and warrant to purchase common stock increased proportionately. The impact of this reverse stock split has been retroactively applied to the financial statements and the related notes.

During the nine months ended September 30, 2015, there have been no material changes to the Company’s significant accounting policies than those previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Principle of Consolidation

The consolidated financial statements include the accounts of SilverSun and its subsidiary SWK, which is wholly owned. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Goodwill

Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. 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.

Definite Lived Intangible Assets and Long-lived Assets

Purchased intangible assets are recorded at fair value using an independent valuation at the date of acquisition and are amortized over the useful lives of the asset using the straight-line amortization method.

The Company assesses potential impairment of its intangible assets and other long-lived assets when there is evidence that recent events or changes in circumstances have made recovery of an asset’s carrying value unlikely. Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results. No impairment losses were identified or recorded for the nine months ended September 30, 2015 and 2014.

Revenue Recognition

Revenue is recognized when products are shipped, or services are rendered, evidence of a contract exists, the price is fixed or reasonably determinable, and collectability is reasonably assured.

Product Revenue

Software product revenue is recognized when the product is shipped to the customer. The Company treats the software component and the professional services consulting component as two separate arrangements that represent separate units of accounting. The arrangement consideration is allocated to each unit of accounting based upon that unit’s proportion of the fair value. In a situation where both components are present, software sales revenue is recognized when collectability is reasonably assured and the product is delivered and has stand-alone value based upon vendor specific objective evidence.

Service Revenue

Service revenue is comprised of primarily professional service consulting revenue, maintenance revenue and other ancillary services provided. Professional service revenue is recognized as service time is incurred.

With respect to maintenance services, upon the completion of one year from the date of sale, the Company offers customers an optional annual software maintenance and support agreement for subsequent periods not exceeding one year. Maintenance and support agreements are recorded as deferred revenue and recognized over the respective terms of the agreements, which typically range from three months to one year and are included in services revenue in the Consolidated Statements of Income.

Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales.

Unbilled Services

The Company recognizes revenue on its professional services as those services are performed or certain obligations are met. Unbilled services represents the revenue recognized but not yet invoiced.

Deferred Revenues

Deferred revenues consist of maintenance service, customer support services, including telephone support 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.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts.

Concentrations

The Company maintains its cash and cash equivalents with various institutions, which exceed federally insured limits throughout the year. At September 30, 2015 and December 31, 2014, the Company had cash on deposit of approximately $812,730 and $1,029,941 respectively in excess of the federally insured limits of $250,000.

For the nine months ended September 30, 2015 and 2014, the top ten customers accounted for 17% ($3,250,700) and 15% ($2,400,477), respectively, of total revenues. The Company does not rely on any one specific customer for any significant portion of its revenue.

For the nine months ended September 30, 2015 and 2014, purchases from one supplier through a “channel partner” agreement were approximately 24% and 26% of cost of revenues, respectively. This channel partner agreements is for a one year term and automatically renews for an additional one year term on the anniversary of the agreements effective date.

For the nine months ended September 30, 2015 and 2014, one supplier represented approximately 28% and 38% of total accounts payable, respectively.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable and cash and cash equivalents. As of September 30, 2015 the Company believes it has no significant risk related to its concentration of accounts receivable.

Accounts Receivable

Accounts receivable consist primarily of invoices for maintenance and professional services. Full payment for software ordered by customers is due in advance of ordering from the software supplier. Payments for maintenance and support plan renewals are due before the beginning of the maintenance period. Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services.

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.

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets, generally three to seven years. Maintenance and repairs that do not materially add to the value of the equipment nor appreciably prolong its life are charged to expense as incurred.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the Consolidated Statements of Income.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

Deferred income taxes reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss carryforwards. Deferred tax assets and liabilities are classified as current or non-current based on the classification of the related assets or liabilities for financial reporting, or according to the expected reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date.

The Company has federal net operating loss (“NOL”) carryforwards which are subject to limitations under Section 382 of the Internal Revenue Code.

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions if the weight of available evidence indicates that it is more likely than not that the position will not be sustained upon a tax examination with a tax examination being presumed to occur. The Company recognizes interest and penalties as incurred in finance income (expense), net in the Consolidated Statements of Income.

The Company files income tax returns in the U.S. federal and state jurisdictions. Tax years 2011 to 2014 remain open to examination for both the U.S. federal and state jurisdictions.

There were no liabilities for uncertain tax positions at September 30, 2015 and 2014.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. The reclassifications have had no effect on the financial position, operations or cash flows for the period ended September 30, 2014.

Fair Value Measurement

The accounting standards define fair value and establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The Company’s current financial assets and liabilities approximate fair value due to their short term nature and include cash, accounts receivable, accounts payable, and accrued liabilities. The carrying value of long term lease and debt obligations approximate fair value as their stated interest rates approximate the rates currently available.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock-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. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For employee stock options, the Company recognizes expense over the requisite service period on a straight-line basis (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU provides for a single comprehensive model for use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. The accounting standard is effective for interim and annual periods beginning after December 15, 2016 with no early adoption permitted. In July 2015, the FASB deferred the effective date of this accounting update to annual periods beginning after December 15, 2017, along with an option to permit early adoption as of the original effective date. The Company is required to adopt the amendments in the ASU using one of two acceptable methods. The Company is currently in the process of determining which adoption method it will apply and evaluating the impact of the guidance on its consolidated financial statements.

In August 2014, the FASB issued Accounting Standard Update 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Management of public and private companies will be required to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable) and, if so, disclose that fact. Management will be required to make this evaluation for both annual and interim reporting periods, if applicable. The standard is effective for annual periods ending after December 15, 2016 and interim periods ending after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. We do not expect the adoption of this ASU to impact the consolidated financial statements.

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – NET INCOME PER COMMON SHARE

The Company’s basic income per common share is based on net income for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding option and warrants to the extent they are dilutive. The computation of diluted income per share for the three and nine months ended September 30, 2015 does not include share equivalents as all warrants and options exceeded the average market price of the common stock.

	Three Months Ended		Three Months Ended
	September 30, 2015		September 30, 2014
Basic net income per share computation:
Net income	$	16,464	$	248,165
Weighted-average common shares outstanding		4,407,231		3,945,925
Basic net income per share	$	0.00	$	0.06
Diluted net income per share computation:
Net income	$	16,464	$	248,165
Weighted-average common shares outstanding		4,407,231		3,945,925
Incremental shares attributable to the common stock equivalents		-		1,451
Total adjusted weighted-average shares		4,407,231		3,947,376
Diluted net income per share	$	0.00	$	0.06

	Nine Months Ended		Nine Months Ended
	September 30, 2015		September 30, 2014
Basic net income per share computation:
Net income	$	582,232	$	428,796
Weighted-average common shares outstanding		4,265,065		3,938,618
Basic net income per share	$	0.14	$	0.11
Diluted net income per share
Net income	$	582,232	$	428,796
Weighted-average common shares outstanding		4,265,065		3,938,618
Incremental shares attributable to the common stock equivalents		-		1,024
Total adjusted weighted-average shares		4,265,065		3,939,642
Diluted net income per share	$	0.14	$	0.11

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

	Nine Months September 30, 2015		Nine Months September 30, 2014
Stock options		162,409		169,116
Warrants		203,253		16,667

Total potential dilutive securities not included in income per share		365,662		185,783

	Three Months September 30, 2015		Three Months September 30, 2014
Stock options		162,409		169,116
Warrants		203,253		16,667

Total potential dilutive securities not included in income per share		365,662		185,783

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment is summarized as follows:

	September 30, 2015			December 31, 2014
Leasehold improvements	$	30,557		$	30,557
Equipment, furniture and fixtures		1,375,443			1,175,378
		1,406,000			1,205,935
Less: Accumulated depreciation		(1,027,808	)		(910,881	)
Property and equipment, net	$	378,192		$	295,054

Depreciation and amortization expense related to these assets for the three and nine months ended September 30, 2015 was $38,920 and $116,927, respectively, as compared to $28,196 and $84,682 for the three and nine months ended September 30, 2014, respectively.

Property and equipment under capital leases are summarized as follows:

	September 30, 2015			December 31, 2014
Equipment, furniture and fixtures		385,771			297,080
Less: Accumulated depreciation		(208,131	)		(143,376	)

Property and equipment, net	$	177,640		$	153,704

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consist of developed intellectual property carried at cost less accumulated amortization and customer lists acquired at fair value less accumulated amortization. Amortization is computed using the straight-line method over the five year estimated useful lives.

The components of intangible assets are as follows:

	September 30, 2015			December 31, 2014
Proprietary developed software	$	365,911		$	365,911
Intellectual property, customer list, and acquired contracts		2,487,302			988,000

Total intangible assets	$	2,853,213		$	1,353,911
Less: accumulated amortization		(844,440	)		(544,430	)
	$	2,008,773		$	809,481

The estimated remaining useful lives for proprietary developed software is between 3 to 5 years. The estimated remaining useful lives for intellectual property and customer lists is between 4 to 5 years.

Amortization expense included in depreciation and amortization was $145,708 and $300,010 respectively for the three and nine months ended September 30, 2015 as compared to $66,902 and $177,373 for the three and nine months ended September 30, 2014.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5 – INTANGIBLE ASSETS (Continued)

The Company expects future amortization expense to be the following:

	Amortization
Balance of 2015	$	133,979
2016		570,797
2017		468,250
2018		373,190
2019		330,323
Thereafter		132,234

Total	$	2,008,773

NOTE 6 – LINE OF CREDIT, TERM LOAN AND PROMISSORY NOTES

On August 1, 2013, the Company obtained a line of credit and term loan from the bank. The line of credit expired on July 31, 2015 and was automatically renewed for an additional year. The agreement includes a borrowing base calculation tied to accounts receivable with a maximum availability of $750,000 at prime plus 1.75% interest (5% at September 30, 2015). The line is collateralized by substantially all of the assets of the Company and guaranteed by the Company’s Chief Executive Officer, Mr. Meller. The credit facility requires the Company to pay a monitoring fee of $1,000 monthly. The Company was in compliance with all loan covenants at September 30, 2015.

The two year term loan for $350,000 matured on July 31, 2015. Monthly payments were $15,776 including interest at 8%. The term loan was collateralized by substantially all of the assets of the Company and was guaranteed by the Company’s Chief Executive Officer, Mr. Meller. The term loan was paid off in full on July 3, 2015.

On May 6, 2014, SWK acquired certain assets of ESC, Inc. pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $350,000 (the “ESC Note”). The ESC Note matures on April 1, 2019. Monthly payments are $6,135 including interest at 2% per year. At September 30, 2015 the outstanding balance was $260,059.

On March 11, 2015, SWK acquired certain assets of 2000 SOFT, Inc. d/b/a Accounting Technology Resource (ATR) pursuant to an Asset Purchase Agreement for cash of $80,000 and a promissory note for $175,000 (the “ATR Note”). The note matures on February 1, 2018. Monthly payments are $5,012 including interest at 2% per year. At September 30, 2015 the outstanding balance was $146,557.

On July 6, 2015, SWK acquired certain assets of ProductiveTech Inc. (PTI) pursuant to an Asset Purchase Agreement cash of $500,000 and a promissory note for $600,000 (the “PTI 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. At September 30, 2015 the outstanding balance was $581,008.

At September 30, 2015, twelve (12) months of future payments of current and long term debt are as follows:

2016	$	241,315
2017		246,771
2018		222,151
2019		172,145
2020		105,242
Total	$	987,624

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 7 – CAPITAL LEASE OBLIGATIONS

The Company has entered into lease commitments for equipment that meet the requirements for capitalization. The equipment has been capitalized and is included property and equipment, net in the accompanying balance sheets. The related obligations are based upon the present value of the future minimum lease payments with interest rates ranging from 8.5% to 12.5%.

At September 30, 2015, twelve (12) months of future payments under capital leases are as follows:

2016	$	88,340
2017		63,545
2018		21,575
Total minimum lease payments		173,460
Less amounts representing interest		(16,224	)
Present value of net minimum lease payments		157,236
Less current portion		(79,404	)
Long-term capital lease obligation	$	77,832

NOTE 8 – EQUITY

Equity

On March 10, 2015, March 23, 2015 and March 24, 2015, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “Investors”) providing for the issuance and sale by the Company (the “Offering”) of an aggregate of 363,490 shares (the “Shares”) of Common Stock and warrants (the “Investor Warrants”) to purchase an aggregate of 181,745 shares of Common Stock (the “Warrant Shares”). Each Warrant to purchase one share of Common Stock was sold at a price of $0.01 and has an exercise price of $5.30 per share. The gross proceeds raised was $1,543,015 less expenses relating to the offering of $730,992, resulting in net proceeds to the Company of $812,023.

On April 29, 2015 the Board approved entering into a consulting agreement with Christopher IR for investor relation services. In addition to cash payments for services, the Company issued 15,000 shares of Common Stock at $2.42 per share or $36,300.

On July 6, 2015 the Company in relation to the acquisition of certain assets of PTI had issued 64,484 shares of Common Stock at $4.032 per share for a value of $260,000. The stock price was based on the average close price of SSNT stock for the five trading days immediately preceding the closing date.

Options

In February 2014, the Company granted 50,000 incentive stock options with an exercise price of $4.50 per option to certain non-executive employees under the 2004 Stock Incentive Plan. Approximately 25,000 of the options vest immediately with the remaining 50% vesting ratably over a three-year period. The Company estimated the fair value of each option using the Black Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0.0%, risk-free interest rate of 0.71%, volatility at 353.95% and an expected life of 5 years. The Company estimates the forfeiture rate based on historical data. Based on an analysis of historical information, the Company has applied a forfeiture rate of 15%. As a result, the Company estimated the value of these options at $115,488.

In May 2014, the Company granted 20,000 incentive stock options with an exercise price of $4.50 per option to a non – executive employee under the 2004 Stock Incentive Plan. The Company recognizes compensation cost on awards on a straight-line basis over the vesting period, approximately five years. The Company estimated the fair value of each option using the Black Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0.0%, risk-free interest rate of 1.68%, volatility at 328.76% and an expected life of 5 years. The Company estimates the forfeiture rate based on historical data. Based on an analysis of historical information, the Company has applied a forfeiture rate of 15%. As a result, the Company estimated the value of these options at $77,981.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 8 – EQUITY (Continued)

In July 2014, the Company granted 10,000 incentive stock options with an exercise price of $4.50 per option to a certain non-executive employee under the 2004 Stock Incentive Plan. Options vest immediately. The Company estimated the fair value of each option using the Black Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0.0%, risk-free interest rate of 1.0%, volatility at 323.81% and an expected life of 5 years. As a result, the Company estimated the value of these options at $44,987.

In March 2015, the Company granted 10,000 incentive stock options with an exercise price of $4.00 per option to a certain non-executive employee under the 2004 Stock Incentive Plan. The Company recognizes compensation cost on awards on a straight-line basis over the vesting period, approximately five years. The Company estimated the fair value of each option using the Black Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0.0%, risk-free interest rate of 1.6%, volatility at 263.18% and an expected life of 5 years. As a result, the Company estimated the value of these options at $39,875.

The Company uses judgment in estimating the amount of stock-based awards that are expected to be forfeited. If actual forfeitures differ significantly from the original estimate, stock-based compensation expense and the results of operations could be impacted.

A summary of the status of the Company’s stock option plans for the fiscal years ended December 31, 2014 and the nine months ending September 30, 2015 and changes during the years are presented below: (in number of options):

	Number of Options			Average Exercise Price		Average Remaining Contractual Term	Aggregate Intrinsic Value

Outstanding options at January 1, 2014		89,116		$	4.80	3.4 years	$	-0-
Options granted		80,000			4.50	4.3 years
Options canceled/forfeited		(5,270	)	$	4.80

Outstanding options at December 31, 2014		163,846		$	4.65	2.5 years	$	-0-
Options granted		10,000		$	4.00	4.7 years
Options canceled/forfeited		(11,437	)	$	4.41

Outstanding options at September 30, 2015		162,409		$	4.62	2.9 years	$	-0-

Vested Options:
September 30, 2015;		123,076		$	4.70	2.6 years	$	-0-
December 31, 2014:		115,653		$	4.65	1.8 years	$	-0-

For the nine months ended September 30, 2015 the unamortized compensation expense for stock options was $95,000. Unamortized compensation expense is expected to be recognized over a weighted-average period of three years.

Warrants

On January 29, 2015 the Company granted 3,333 warrants with a fair value of approximately $19,969, which immediately vested, to Joseph Macaluso as part of his compensation for agreeing to join the Board of Directors. The estimated fair value of the warrant has been calculated based on a Black-Scholes pricing model using the following assumptions: a) fair market value of stock of $6.00; b) exercise price of $6.00; c) Dividend yield of 0%; d) Risk free interest rate of 1.42%; e) expected volatility of 284.28%; f) Expected life of 5 years.

On March 9, 2015 the Company granted 18,175 warrants with a fair value of approximately $73,356, which immediately vested, to Alexander Capital, LP as partial compensation for acting as placement agent. The estimated fair value of the warrant has been calculated based on a Black-Scholes pricing model using the following assumptions: a) fair market value of stock of $4.05; b) exercise price of $5.088; c) Dividend yield of 0%; d) Risk free interest rate of 1.66%; e) expected volatility of 263.67%; f) Expected life of 5 years.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 8 – EQUITY (Continued)

On March 23, 2015 the Company granted 181,745 warrants with a fair value of approximately $638,630, which immediately vested, to those that purchased common stock as part of the offering. The estimated fair value of the warrant has been calculated based on a Black-Scholes pricing model using the following assumptions: a) fair market value of stock of $3.53; b) exercise price of $5.30; c) Dividend yield of 0%; d) Risk free interest rate of 1.41%; e) expected volatility of 258.39%; f) Expected life of 5 years.

The following table summarizes the warrants transactions:

	Warrants Outstanding		Weighted Average Exercise Price

Balance, January 1, 2014		25,001	$	5.20
Granted		-	$	-
Exercised		8,333	$	3.60
Canceled		16,668	$	4.20
Outstanding and Exercisable December 31, 2014		-	$	-

Granted		203,253	$	5.29
Exercised		-	$	-
Canceled		-	$	-
Outstanding and Exercisable September 30, 2015		203,253	$	5.29

NOTE 9 – BUSINESS COMBINATION

On May 6, 2014 SWK entered into an Asset Purchase Agreement with ESC, Inc. d/b/a ESC Software, an Arizona corporation, and Alan H. Hardy and Michael Dobberpuhl in their individual capacity as Shareholders. SWK acquired certain assets of ESC (as defined in the Purchase Agreement). In full consideration for the acquired assets, the Company issued a promissory note in the aggregate principal amount of $350,000. The purchase was initially allocated, based on the Company’s estimate of fair value, to intangible assets, which are expected to consist primarily of customers lists with an estimated life of five years. Upon completion of an independent valuation, the allocation of the purchase price to customer lists was modified from $350,000 to $294,000, with the excess purchase consideration being allocated to goodwill.

The following summarizes the purchase price allocation:

Customer List	$	294,000
Goodwill		56,000
Fair value of net assets acquired	$	350,000

Note to shareholders for acquisition	$	350,000
Total purchase price	$	350,000

Acquisition costs were approximately $7,500, which are included in general and administrative expenses.

On March 11, 2015 SWK entered into an Asset Purchase Agreement with 2000 SOFT, Inc. d/b/a ATR, a California corporation, and Karen Espinoza McGarrigle in her individual capacity as Shareholder. SWK acquired certain assets of ATR (as defined in the Purchase Agreement). In consideration for the acquired assets, the Company issued a promissory note in the aggregate principal amount of $175,000 and paid cash of $80,000. As additional consideration, the Company will pay 10% of the net margin on maintenance renewals for former ATR customers for the first twelve months and 5% of the net margin on maintenance renewals for the following twelve months. The purchase was initially allocated, based on the Company’s estimate of fair value, to intangible assets, which are expected to consist primarily of customers lists with an estimated life of five years. Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified accordingly and acquisition costs disclosed.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 9 – BUSINESS COMBINATION (Continued)

On July 6, 2015 SWK entered into an Asset Purchase Agreement with ProductiveTech (“PTI”), a south New Jersey corporation and John McPoyle and Kevin Snyder in their individual capacity as Shareholders. SWK acquired certain assets and liabilities of PTI (as defined in the Purchase Agreement). In consideration for the acquired assets, the Company paid $483,471 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. The purchase was initially allocated, based on the Company’s estimate of fair value, to accounts receivable, unbilled services, prepaid expenses and other assets, property and equipment, liabilities, capital lease obligations, and intangible assets, which are expected to consist primarily of customers list with an estimated life of five years. Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified accordingly and acquisition costs disclosed. As of September 30, 2015, the prior owners of PTI owed the Company $192,242 related to amounts collected by the prior owners subsequent to acquisition but owed to the Company. This amount is included in prepaid expenses and other current assets.

Cash consideration	$	483,471
Stock		259,226
Note payable		600,000
Total purchase price	$	1,342,697

Accounts receivable	$	129,709
Unbilled services		10,369
Prepaid expenses and other current assets		14,039
Property and equipment		93,300
Intangible assets		1,244,301
Total assets acquired		1,491,718

Current liabilities		(124,300	)
Capital lease obligations		(24,721	)
Liabilities acquired		(149,021	)
Total purchase price	$	1,342,697

The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions occurred on January 1, 2014, 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 nine months ended September 30, 2015 and 2014 as if the acquisitions had occurred on January 1, 2014. Operating expenses have been increased for the amortization expense associated with the estimated fair value adjustment as of September 30, 2015 of expected definite lived intangible assets.

Pro Forma	Nine Months Ended September 30, 2015		Nine Months Ended September, 2014
Net sales	$	20,740,563	$	19,399,533
Operating expenses	$	7,903,884	$	7,079,009
Income before taxes	$	708,219	$	1,080,435
Net income	$	620,296	$	633,089
Basic and diluted income per common share	$	0.15	$	0.16

The Company’s condensed consolidated financial statements for the nine months ending September 30, 2015 include the actual results of ESC since the date of acquisition, May 6, 2014, the actual results of ATR since the date of acquisition, March 11, 2015, and the actual results of PTI since the date of acquisition, July 6, 2015. The nine months ended September 30, 2015 pro-forma results above include two months of results of ATR and six months of pro-forma results for PTI. For the period ended September 30, 2014 pro-forma results above include nine months of pro-forma results for ATR, four months of pro-forma results for ESC, and nine months pro-forma results for PTI. For the nine months ended September 30, 2015 the ESC operations had a net income before taxes of $118,670 that was included in the Company’s Condensed Consolidated Statement of Income, which consisted of approximately $1,008,285 in revenues and $889,615 in expenses. For the nine months ended September 30, 2015 the ATR operations had a net income before taxes of $44,566 that was included in the Company’s Condensed Consolidated Statement of Income, which consisted of approximately $639,319 in revenues and $594,753 in expenses. For the nine months ended

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 9 – BUSINESS COMBINATION (Continued)

September 30, 2015 the PTI operations had a net income before taxes of $23,768 that was included in the Company’s Condensed Consolidated Statement of Income, which consisted of approximately $509,776 in revenues and $486,008 in expenses.

NOTE 10 – INCOME TAXES

The recognized deferred tax asset is based upon the expected utilization of its benefit from future taxable income. The Company has federal net operating loss (“NOL”) carryforwards of approximately $7,416,000 as of September 30, 2015, which is subject to limitations under Section 382 of the Internal Revenue Code. These carryforward losses are available to offset future taxable income, and begin to expire in the year 2025 to 2030.

The foregoing amounts are management’s estimates and the actual results could differ from those estimates. Future profitability in this competitive industry depends on continually obtaining and fulfilling new profitable sales agreements and modifying products. The inability to obtain new profitable contracts could reduce estimates of future profitability, which could affect the Company’s ability to realize the deferred tax assets.

	Nine Months Ended
	September 30,			September 30,
	2015			2014
Current:
Federal	$	215,833		$	268,528
State and local		23,982			29,836

Total current tax provision		239,815			298,364

Deferred:
Federal		25,650			26,100
State and local		2,850			2,900
Release of valuation allowance		(200,000	)		-

Total deferred tax provision (benefit)		(171,500	)		29,000

Total provision	$	68,315		$	327,364

For the year nine months ended September 30, 2015, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate. The Federal effective rate is higher than the statutory rate primarily due to Incentive Stock Options (ISO) expense which is generally never tax deductible for the Company. The provision for the nine months ended September 30, 2015 was $239,815. The effective tax rate consists primarily of the 34% federal statutory tax rate and a blended 3% state and local tax rate.

For the nine months ended September 30, 2015, the Company’s Federal and State provision requirements were offset by the reversal of a portion of the valuation allowance, totaling $560,000, no longer deemed necessary, and recorded a net tax benefit of $200,000, which represents a reduction in its valuation allowance on tax attributes that are expected to be utilized based on management’s assessment and evaluation of historical and projected income.

NOTE 11 – SUBSEQUENT EVENTS

On October 1, 2015 SWK entered into an Asset Purchase Agreement with The Macabe Associates, Inc. (Macabe) a Washington corporation, and Mary Abdian and John Nicholson in their individual capacity as Shareholders. In consideration for the acquired assets, the Company paid $50,000 in cash and has entered into a four-year revenue sharing agreement. Additionally in connection with the purchase agreement, SilverSun Technologies, Inc. (“SSNT”) issued to the shareholders of Macabe 25,000 incentive stock options with an exercise price of $3.66. Options will vest over five years at the rate of 20% per annum. The Company estimated the fair value of each option using the Black Scholes option-pricing model with the following weighted-average assumptions: expected dividend yield of 0.0%, risk-free interest rate of 1.37%, volatility at 332.76% and an expected life of 5 years. As a result, the Company estimated the value of these options at $91,482.

On October 7, 2015 SWK sold its interest in the product “Beerrun” to PAID RUN, LLC (“PAID RUN”), a Massachusetts corporation. In consideration of the sold assets, PAID RUN paid SWK $134,000 in cash.

Table of Contents

SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 11 – SUBSEQUENT EVENTS (Continued):

On October 19, 2015 SWK entered into an Asset Purchase Agreement with Oates & Company, LLC (Oates) a North Carolina corporation, and Christopher Scott Oates in his individual capacity as a Shareholder. In consideration for the acquired assets, the Company paid $125,000 in cash and issued a promissory note for $175,000 (the “Note”). The note is due in three years from the closing date and bears interest at a rate of two (2%) percent. The monthly payments including interest are $5,012. Additionally in connection with the purchase agreement, the Company issued a Convertible Note for $200,000. The Convertible Note is due January 1, 2017 and bears interest at a rate of one (1%) percent. The quarterly interest payments are computed on the basis of 365-day year from the date of this note until paid.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,

This quarterly report on Form 10-Q and other reports filed by SilverSun Technologies, Inc. and SWK Technologies, Inc. (“SWK”), its wholly owned subsidiary (together the “Company”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

Overview

We are 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-premise or in the “Cloud”. As a value added reseller of business application software, we offer solutions for accounting and business management, financial reporting, Enterprise Resource Planning (“ERP”), Warehouse Management Systems (“WMS”), Customer Relationship Management (“CRM”), and Business Intelligence (“BI”). We are also a managed network service provider, providing remote network monitoring services, business continuity, disaster recovery, data backup, and application hosting. Additionally, we have our own development staff building software solutions for Electronic Data Interchange (“EDI”), time and billing, and various ERP enhancements. Our value-added services focus on consulting and professional services, specialized programming, training, and technical support. We have a dedicated network services practice that provides managed services, hosting, business continuity, cloud, email and web services. Our customers are nationwide, with concentrations in the New York/New Jersey metropolitan area, Chicago, Dallas, Arizona and Southern California.

Our core business is divided into the following practice areas:

ERP (Enterprise Resource Management) and Accounting Software

We are a value-added reseller for a number of industry-leading ERP applications. We are a Sage Software Authorized Business Partner and Sage Certified Gold Development Partner. Forty-five percent of our customer base consists of Sage ERP X3, Sage 100 ERP, Sage 500 ERP, and Sage BusinessWorks customers. We believe we are among the largest Sage ERP X3 partners in North America, with a sales and implementation presence complemented by a scalable software development practice for customizations and enhancements. Due to the growing demand for true cloud-based ERP solutions, we have added two (2) industry leading applications to our ERP portfolio: (1) NetSuite ERP, among the world’s leading cloud ERP solutions; and (2) Acumatica, a browser-based ERP solution that can be offered on premise, in the public cloud, or in a private cloud. We develop and resell a variety of add-on solutions to all our ERP and accounting packages that help customize the installation to our customers’ needs and streamline their operations.

Table of Contents

Value-Added Services for ERP

We go beyond simply reselling software packages; we have a consulting and professional services organization that manages the process as we move from the sales stage into implementation, go live, and production. We work inside our customers’ organizations to ensure all software and Information Technology (“IT”) solutions are enhancing their business needs. A significant portion of our services revenue comes from continuing to work with existing customers as their business needs change, upgrading from one version of software to another, or providing additional software solutions to help them grow their revenue. We have a dedicated help desk team that fields hundreds of calls every week. Our custom programming department builds specialized software packages as well as “off the shelf” enhancements, time and billing software, and a cloud solution dedicated to the craft brewing industry.

EDI (Electronic Data Interchange) Software and Services

EDI is the computer to computer exchange of standard business documents, such as purchase orders and invoices, in electronic format. A standard file format is established for each kind of document in order to facilitate the exchange of data across a variety of platforms and programs. We have a proprietary software solution, MAPADOC, which is fully integrated with the Sage ERPs. MAPADOC allows businesses to dramatically cut data entry time by eliminating duplicate entries and reduces costly errors with trading partners. MAPADOC is the only EDI solution that is built within the framework of the Sage ERPs, allowing customers to stay within one application to get their job done.

Network and Managed Services

We provide comprehensive network and managed services designed to eliminate the IT concerns of our customers. Businesses can focus on their core strengths rather than technology issues. We adapt our solutions for virtually any type of business, from large national and international product and service providers, to small businesses with local customers. Our business continuity services provide automatic on and off site backups, complete encryption, and automatic failure testing. We also provide email and web security, IT consulting, managed network, and emergency IT services. Our focus in the network and managed services practice is to focus on industry verticals in order to demonstrate our ability to better understand our customers’ needs.

Results of Operations for the Three and Nine Months Ended September 30, 2015 and 2014.

During the nine months ended September 30, 2015 the Company continued to expand its customer base and growth trend which we believe will provide a basis for future growth.

1) Revenues increased 21% from the same nine month period in the prior year.

2) Income from operations was $690,391 as compared to $801,877 for the same nine month period in the prior year.

3) Net income was $582,232 as compared to $428,796 for the same nine month period in the prior year.

4) As a result of an increase in sales and marketing expense, we continue to lay the foundation for continued growth.

Revenues

Revenues for the three and nine months ended September 30, 2015 increased $1,113,318 to $7,199,783 (18%) and $3,348,284 (21%) to $19,614,316 respectively as compared to $6,086,465 and $16,266,032 for the three and nine months ended September 30, 2014 respectively. Software sales decreased by $480,540 for the three months ended September 30, 2015 while there was an overall increase of $263,679 to $3,165,690 for the nine months ended September 30, 2015. Software sales for the three and nine months ended September 30, 2014 was $1,345,238 and $2,902,011 for an overall increase of 9% over the nine months ended September 30, 2015. This increase was primarily due to an increase in sales of our accounting software products, such as Sage ERP X3, Acumatica, and Accellos Warehouse Management. Service revenue increased by $1,593,858 to $6,335,085 for the three months ended September 30, 2015 from $4,741,227 for the three months ended September 30, 2014. Service revenue increased $3,084,605 to $16,448,626 for the nine months ended September 30, 2015 from $13,364,021 for the nine months ended September 30, 2014. The overall increases are primarily due to the continued successful sales and marketing efforts and very competitive pricing, and the Company’s strategy to increase its business by seeking additional opportunities through potential acquisitions, partnerships or investments.

Table of Contents

Gross Profit

Gross profit for the three months ended September 30, 2015 increased $346,460 (14%) to $2,905,007 from $2,558,547 for the three months ended September 30, 2014. For the nine months ended September 30, 2015 gross profit increased $1,204,584 (17%) to $8,116,012 as compared to $6,911,428 for the nine months ended September 30, 2014. The increase in overall gross profit for this period is attributed to the increase in revenues from existing business, including the revenues from the ESC, ATR and PTI acquisitions. For the nine months ended September 30, 2015, the overall gross profit percentage was 41.4% as compared to 42.5% for the nine months ended September 30, 2014. The gross profit attributed to software sales decreased $190,242 to $455,246 for the three months ended September 30, 2015 from $645,488 for the three months ended September 30, 2014. The gross profit attributed to software sales increased $265,906 to $1,686,002 for the nine months ended September 30, 2015 from $1,420,096 for the nine months ended September 30, 2014 which resulted in an increase in the gross profit percentage from 48.9% to 53.3%. The mix of products being sold by the Company changes from time to time and sometimes causes the overall gross margin percentage to vary. The gross profit attributed to services increased $536,701 to $2,449,760 for the three months ended September 30, 2015 from $1,913,059 for the three months ended September 30, 2014. The gross profit attributed to services increased $938,678 from the nine months ended September 30, 2014 to the nine months ended September 30, 2015 primarily due to the implementations of larger scale accounting systems. The gross profit percentage attributed to services decreased to 39.1% for the nine months ended September 30, 2015 from 41.1% for the nine months ended September 30, 2014. In addition, the Company will often enter into agreements with former resellers to take over their customers in exchange for being paid a commission for a period of time. The Company currently has 12 of these arrangements in place, which had the result of reducing the Company’s reported gross profit percentage by 1.00% and 0.55% for the three and nine months ended September 30, 2015, and 1.50% and 1.02% for three and nine months ended September 30, 2014.

Operating Expenses

Selling and marketing expenses increased $400,384 (47%) to $1,254,202 for the three months ended September 30, 2015 from $853,818 for the three months ended September 30, 2014. For the nine months ended September 30, 2015 sales and marketing expenses increased $619,281 (25%) to $3,096,001 as compared to $2,476,720 the nine months ended September 30, 2014 due to increased sales personnel, travel expenses as a result of an increase in sales activity as we continue to lay the foundation for future growth.

General and administrative expenses increased $323,782 (30%) to $1,409,815 for the three months ended September 30, 2015 from $1,086,033 for the three months ended September 30, 2014. For the nine months ended September 30, 2015 general and administrative expenses increased $612,117 (19%) to $3,863,732 for the nine months ended September 30, 2015 as compared to $3,251,615 for the nine months ended September 30, 2014 primarily as a result of increases in payroll and related expenses associated with the addition of management personnel and incremental costs associated with the acquisition of ESC, ATR and PTI.

During the three and nine months ended September 30, 2015, the Company recognized $8,015 and $48,952 of share-based compensation expense respectively as a result of the granting of stock options to some of its non-executive employees as compared to $56,092 and $119,161 for the three and nine months ended September 30, 2014 respectively.

Depreciation and amortization expense increased $89,529 for the three months ended September 30, 2015 to $184,627 as compared to $95,098 for the three months ended September 30, 2014. Depreciation and amortization expense increased $154,881 for the nine months ended September 30, 2015 to $416,936 as compared to $262,055 or the period ended September 30, 2014. This increase is primarily attributed to the increase in amortization associated with the intangible assets acquired from the ESC acquisition in 2014 and the ATR and PTI acquisitions in 2015.

Income from Operations

For the three and nine months ended September 30, 2015 the Company had income from operations of $48,348 and $690,391 respectively as compared to income from operations of $467,506 and $801,877 for the three and nine months ended September 30, 2014 respectively.

Income Taxes

For the nine months ended September 30, 2015, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate. The Federal effective rate is higher than the statutory rate primarily due to Incentive Stock Options (ISO) expense which is generally never tax deductible for the Company. The provision for the nine months ended September 30, 2015 was $68,315. The effective tax rate consists primarily of the 34% federal statutory tax rate and a blended 3% state and local tax rate.

Table of Contents

For the nine months ended September 30, 2015, the Company’s Federal and State provision requirements were offset by the reversal of a portion of the valuation allowance no longer deemed necessary, and recorded a net tax benefit of $200,000, which represents a reduction in its valuation allowance on tax attributes that are expected to be utilized based on management’s assessment and evaluation of historical and projected income.

Net Income

For three and nine months September 30, 2015, the Company had net income of $16,464 and $582,232 respectively as compared to a net income of $248,165 and $428,796 for the nine months ended September 30, 2014 for the reasons mentioned above.

Liquidity and Capital Resources

We are currently seeking additional operating income opportunities through potential acquisitions or investments. Such acquisitions or investments may consume cash reserves or require additional cash or equity. Our working capital and additional funding requirements will depend upon numerous factors, including: (i) strategic acquisitions or investments; (ii) an increase to current company personnel; (iii) the level of resources that we devote to sales and marketing capabilities; (iv) technological advances; and (v) the activities of competitors.

In addition to developing new products, obtaining new customers and increasing sales to existing customers, management plans to increase its business and profitability by entering into collaboration agreements, buying assets, and acquiring companies in the business software and information technology consulting market with solid revenue streams and established customer bases that generate positive cash flow.

In October 2011, the Company obtained a line of credit from a bank. The agreement included a borrowing base calculation tied to accounts receivable with a maximum availability of $750,000. On August 1, 2013, the Company negotiated a new line of credit and term loan from the bank. The term of the line of credit expired on July 31, 2015 and was renewed for one more year. The agreement includes a borrowing base calculation tied to accounts receivable with a maximum availability of $750,000 at prime plus 1.75% interest (currently 5%). The line is collateralized by substantially all of the assets of the Company and is guaranteed by the Company’s Chief Executive Officer, Mr. Meller. The credit facility requires the Company to pay a monitoring fee of $1,000 monthly. The Company was in compliance with its loan covenants at September 30, 2015.

Under the term loan, the Company borrowed $350,000 in July 2013 from a bank. Monthly payments were at $15,776 including interest at 8%. The term loan was collateralized by substantially all of the assets of the Company and was guaranteed by the Company’s Chief Executive Officer, Mr. Meller. The term loan was paid in full on July 3, 2015.

On May 6, 2014, SWK acquired certain assets of ESC, Inc. pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $350,000 (the “ESC Note”) the note matures on April 1, 2019. Monthly payments are $6,135 including interest at 2% per year.

On March 11, 2015, SWK acquired certain assets of 2000 SOFT, Inc. d/b/a Accounting Technology Resource (ATR) pursuant to an Asset Purchase Agreement for cash of $80,000 and a promissory note in the aggregate amount of $175,000 (the “ATR Note”) and matures on February 1, 2018. Monthly payments are $5,012 including interest at 2% per year.

In March 2015, 363,490 shares of common stock were sold at a price of $4.24 per share and 181,745 warrants were sold at a price of $.01. The gross proceeds raised was $1,543,015 and underwriting expenses of $730,992, resulting in net proceeds to the Company of $812,023.

On July 6, 2015 SWK 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, the Company 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. The stock price was based on the average close price of SSNT stock for the five trading days immediately preceding the closing date.

Table of Contents

During the nine months ended September 30, 2015, the Company had a net decrease in cash of $168,933. The Company’s principal sources and uses of funds were as follows:

Cash provided by operating activities

The Company used cash of $106,164 in operating activities for the nine months ended September 30, 2015 as compared to generating $910,824 of cash for operating activities for the same period in 2014. This decrease in cash used in operating activities is primarily attributed to an increase in deferred income taxes, unbilled services, prepaid expenses and accrued expenses.

Cash used in investing activities

Investing activities for the nine months ended September 30, 2015 used cash of $606,272 as compared to a use of cash of $10,344 for the same period in 2014. This use of cash is attributed to higher purchases of property and equipment and the acquisition of ATR and PTI.

Cash provided by financing activities

Financing activities for the nine months ended September 30, 2015 provided cash of $543,503 as compared to a use of cash of $213,599 for the same period in 2014. The increase was due primarily to the proceeds from issuance of common stock and warrants, net of fees, offset by regular payments on long term debt and capital lease obligations.

The Company believes that as a result of the growth in business, and the availability of its credit line, it has adequate liquidity to fund its operating plans for at least the next twelve months.

There was no significant impact on the Company’s operations as a result of inflation for the nine months ended September 30, 2015.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate these estimates, including those related to bad debts, inventory obsolescence, intangible assets, and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

For the nine months ended September 30, 2015, there have been no new significant accounting policies or accounting pronouncements from those disclosed in our annual 10-K for the year ended December 31, 2014.

We have identified below the accounting policies, revenue recognition and software costs, related to what we believe are most critical to our business operations and are discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policies affect our reported and expected financial results.

Use of Estimates

Goodwill

Table of Contents

Revenue Recognition

Revenue is recognized when products are shipped, or services are rendered, evidence of a contract exists, the price is fixed or reasonably determinable, and collectability is reasonably assured.

Product Revenue

Service Revenue

Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales.

Accounts Receivable

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, the customer’s current ability to pay its obligations.

Deferred Revenues

Income Taxes

The Company has federal net operating loss (“NOL”) carryforwards which are subject to limitations under Section 382 of the Internal Revenue Code.

Table of Contents

There were no liabilities for uncertain tax positions at September 30, 2015 and 2014.

Definite Lived Intangible Assets and Long-lived Assets

The purchased intangible assets are recorded at fair value using an independent valuation at the date of acquisition and are amortized over the useful lives of the asset using the straight-line amortization method.

Stock-Based Compensation

Recent Accounting Pronouncements

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements.

Off Balance Sheet Arrangements

During the nine months ended September 30, 2015 or for fiscal 2014, we did not engage in any material off-balance sheet activities or have any relationships or arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitment or intent to provide additional funding to any such entities.

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) and 15d-15 under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective due to our limited finance staff, and the ineffective management review of complex transactions to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure.

Notwithstanding the material weakness, management believes that the condensed consolidated financial statements which are included in this Quarterly Report on Form 10-Q fairly present, in all material respects, the financial position of the Company at September 30, 2015 in conformity with U.S. generally accepted accounting principles.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the quarter ended September 30, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect on our financial condition.

Item 1A. Risk Factors

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on March 31, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Other than disclosed above, there were no unregistered sales of equity securities that were not otherwise disclosed in a current report on Form 8-K.

Item 3. Defaults upon Senior Securities

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

There is no other information required to be disclosed under this item which has not been previously reported.

Item 6. Exhibits

31.1		Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
31.2		Certification by the Principal Financial Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
32.1		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2		Certification by the Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	SILVERSUN TECHNOLOGIES, INC.


Dated: November 16, 2015	By:	/s/ Mark Meller
		Mark Meller
		Principal Executive Officer


	By:	/s/ Crandall Melvin III
		Crandall Melvin III
		Principal Accounting Officer