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: March 31, 2016

or

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     No  
  
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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No
 
As of May 13, 2016, there were 4,410,736 shares outstanding of the registrant’s common stock.  

 
SILVERSUN TECHNOLOGIES, INC.
 
TABLE OF CONTENTS
 
 
 
Page No.
PART I.    FINANCIAL INFORMATION
 
 
 
 
Item 1.
3
 
3
 
4
 
5
 
6
 
8
 
 
 
Item 2.
20
Item 3.
26
Item 4.
26
 
 
 
PART II.   OTHER INFORMATION
 
 
 
 
Item 1.
27
Item 1A.
27
Item 2.
27
Item 3.
27
Item 4.
27
Item 5.
27
Item 6.
27
 
 

Table of Contents
 
PART I – FINANCIAL INFORMATION 
Item 1.  Financial Statements
 
SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 
 
 
March 31,
2016
   
December 31,
2015
 
ASSETS
           
 
           
Current assets:
           
Cash and cash equivalents
 
$
673,536
   
$
1,193,313
 
Accounts receivable, net of allowance of $375,000
   
2,576,863
     
2,477,301
 
Unbilled services
   
678,683
     
741,543
 
Prepaid expenses and other current assets
   
306,329
     
443,619
 
Deferred tax asset – current
   
38,000
     
38,000
 
 
               
Total current assets
   
4,273,411
     
4,893,776
 
 
               
Property and equipment, net
   
516,771
     
425,347
 
Intangible assets, net
   
2,500,954
     
2,571,537
 
Goodwill
   
401,000
     
401,000
 
Deferred tax assets
   
152,500
     
162,000
 
Deposits and other assets
   
29,889
     
29,889
 
 
               
Total assets
 
$
7,874,525
   
$
8,483,549
 
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current liabilities:
               
Accounts payable
 
$
1,644,252
   
$
1,594,100
 
Accrued expenses
   
702,776
     
821,586
 
Accrued interest
   
16,661
     
14,817
 
Income taxes payable
   
301,632
     
250,284
 
Bank line of credit
   
-
     
-
 
Contingent consideration – current portion
   
125,650
     
128,434
 
Long term debt - current portion
   
301,681
     
300,033
 
Capital lease obligations – current portion
   
86,337
     
90,167
 
Deferred revenue
   
2,087,063
     
2,369,999
 
 
               
Total current liabilities
   
5,266,052
     
5,569,420
 
 
               
Contingent consideration net of current portion
   
241,740
     
272,213
 
Long term debt net of current portion
   
717,109
     
793,150
 
Capital lease obligations net of current portion
   
71,773
     
92,445
 
Convertible note payable
   
200,000
     
200,000
 
Total liabilities
   
6,496,674
     
6,927,228
 
 
               
Commitments and contingencies
   
-
     
-
 
 
               
Stockholders’ equity:
               
Preferred stock, $0.001 par value; authorized 1,000,000 shares
   
-
     
-
 
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
No shares issued and outstanding
   
-
     
-
 
Common stock:
               
Par value $0.00001; authorized 75,000,000 shares
4,410,736  shares issued and outstanding
   
45
     
45
 
Additional paid-in capital
   
11, 945,701
     
12,198,448
 
Accumulated deficit
   
(10,567,895
)
   
(10,642,172
)
Total stockholders’ equity
   
1,377,851
     
1,556,321
 
 
               
Total liabilities and stockholders’ equity
 
$
7,874,525
   
$
8,483,549
 
 
 See accompanying notes to condensed consolidated financial statements.
3

Table of Contents
 
SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
 
Three Months Ended March 31,
 
 
 
2016
   
2015
 
Revenues:
           
Software product, net
 
$
860,442
   
$
1,382,742
 
Service, net
   
6,923,859
     
5,100,372
 
Total revenues, net
   
7,784,301
     
6,483,114
 
 
               
Cost of revenues:
               
Product
   
444,894
     
637,509
 
Service
   
4,408,378
     
3,045,333
 
Total cost of revenues
   
4,853,272
     
3,682,842
 
 
               
Gross profit
   
2,931,029
     
2,800,272
 
 
               
Selling, general and administrative expenses :
               
Selling and marketing expenses
   
1,084,879
     
912,130
 
General and administrative expenses
   
1,518,933
     
1,187,814
 
Share based compensation
   
11,952
     
30,405
 
Depreciation and amortization
   
170,894
     
111,956
 
Total selling, general and administrative expenses
   
2,786,658
     
2,242,305
 
 
               
     Income from operations
   
144,371
     
557,967
 
 
               
Other income (expense)
               
    Interest expense, net
   
(19,246
)
   
(12,217
)
Other income
   
10,000
     
-
 
Total other income (expense)
   
(9,246
)
   
(12,217
)
 
               
Income before taxes
   
135,125
     
545,750
 
 
               
Provision for income taxes
   
60,848
     
24,583
 
 
               
Net income
 
$
74,277
   
$
521,167
 
 
               
Net income per common share – basic and fully diluted
 
$
0.02
   
$
0.13
 
Weighted average shares
               
     Basic
   
4,410,736
     
4,042,317
 
     Diluted
   
4,477,403
     
4,051,338
 
 
See accompanying footnotes to the condensed consolidated financial statements

4

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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2015 AND THREE MONTHS ENDED MARCH 31, 2016
 
   
 
Series A
Preferred Stock   
   
 
Series B
Preferred Stock   
   
 
Common Stock
Class A  
   
 
Additional
Paid in
   
 
Accumulated
Equity
   
 
Total
Stockholders’
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
(Deficit)
   
Equity
 
Balance at January 1, 2015
   
-
   
$
-
     
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 stock for acquisition
   
-
     
-
     
-
     
-
     
64,484
     
1
     
259,225
     
-
     
259,226
 
Stock warrants in exchange for services
   
-
     
-
     
-
     
-
     
-
     
-
     
20,000
     
-
     
20,000
 
Share-Based Compensation
   
-
     
-
     
-
     
-
     
-
     
-
     
40,860
     
-
     
40,860
 
Net income
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
374,305
     
374,305
 
                                                                         
Balance at December 31, 2015
   
-
   
$
-
     
-
   
$
-
     
4,410,736
   
$
45
   
$
12,198,448
   
$
(10,642,172
)
 
$
1,556,321
 
                                                                         
Cash dividend
   
-
     
-
     
-
     
-
     
-
     
-
     
(264,699
)
   
-
     
(264,699
)
Share-Based Compensation
   
-
     
-
     
-
     
-
     
-
     
-
     
11,952
     
-
     
11,952
 
Net income
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
74,277
     
74,277
 
Balance at March 31, 2016
   
-
   
$
-
     
-
   
$
-
     
4,410,736
   
$
45
   
$
11,945,701
   
$
(10,567,895
)
 
$
1,377,851
 
 

The accompanying notes are an integral part of these consolidated financial statements. 
 
5

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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 
 
 
Three Months Ended
March 31,
 
 
 
2016
   
2015
 
Cash flows from operating activities:
           
Net income
 
$
74,277
   
$
521,167
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Deferred income taxes
   
9,500
     
(190,500
)
Depreciation and amortization
   
57,807
     
38,207
 
Amortization of intangibles
   
113,086
     
73,749
 
Share-based compensation
   
11,952
     
30,405
 
 
               
Changes in certain assets and liabilities:
               
Accounts receivable
   
(99,562
)
   
(207,182
)
Unbilled services
   
62,860
     
(288,055
)
Prepaid expenses and other current assets
   
137,290
     
(11,278
)
Deposits and other assets
   
-
     
(2,263
)
Accounts payable
   
50,152
     
119,279
 
Accrued expenses
   
(118,811
)
   
(103,612
)
Income tax payable
   
51,348
     
215,083
 
Accrued interest
   
1,844
     
(232
)
Deferred revenues
   
(282,936
)
   
255,990
 
 Net cash provided by operating activities
   
68,807
     
450,758
 
 
               
Cash flows from investing activities:
               
Purchase of property and equipment
   
(149,231
)    
(24,869
)
Software development costs
   
(42,503
)
   
-
 
Acquisition of new business
   
-
     
(80,000
)
 
               
Net cash used in investing activities
   
(191,734
)
   
(104,869
)
 
               
Cash flows from financing activities:
               
Proceeds from issuance of common stock and warrants, net of fees
   
-
     
812,023
 
Payment of cash dividend
   
(264,699
)
   
-
 
Repayment of contingent consideration
   
(33,257
)
   
-
 
Repayment of long term debt
   
(74,393
)
   
(62,360
)
Principal payments under capital leases obligations
   
(24,501
)
   
(19,508
)
Net cash (used in) provided by financing activities
   
(396,850
)
   
730,155
 
 
               
Net (decrease) increase in cash and cash equivalents
   
(519,777
)
   
1,076,044
 
 
               
Cash and cash equivalents – beginning of period
   
1,193,313
     
1,308,337
 
 
               
Cash and cash equivalents – end of period
 
$
673,536
   
$
2,384,381
 
 
               
Cash paid during period for:
               
Interest
 
$
17,402
   
$
13,143
 
Income taxes
 
$
40,849
   
$
22,136
 
 
See accompanying footnotes to the condensed consolidated financial statements.
6

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 SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

For the three months ended March 31, 2016:

None

For the three months ended March 31, 2015:

The Company acquired certain assets of 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 to the Company and the Company cancelled the certificate. On March 29, 2015, subject to shareholder approval, the Board approved the cancellation of the Series B Preferred Certificate of Designation.
 

 

 
 
See accompanying footnotes to the condensed consolidated financial statements.
 
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS

SilverSun Technologies, Inc. (the “Company”) and wholly owned subsidiary SWK Technologies, Inc. (“SWK”) is a value added reseller and master developer for Sage Software’s Sage100/500 and ERP X3 financial and accounting software as well as the publisher of proprietary software solutions, including its own 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 Over-the-Counter Market Place (“OTCQB”) under the symbol “SSNT.”
 
In May of 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. In 2015, the Company completed four additional acquisitions, 2000 SOFT, d/b/a Accounting Technology Resources (“ATR”), a Southern California based reseller of Sage Software applications, ProductiveTech, Inc. (“PTI”) located in Southern New Jersey, The Macabe Associates, Inc., (“Macabe”) a Washington based reseller of Sage Software and Acumatica applications, and Oates & Company, (“Oates”) a North Carolina reseller of Sage Software applications.

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 March 31, 2016, the results of operations and cash flows for the three months ended March 31, 2016 and 2015.  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, 2015 balance sheet included herein was derived from the audited financial statements included in the Company’s annual report on Form 10-K. 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, 2015 filed with the SEC on March 30, 2016.

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 three months ended March 31, 2016, there have been no material changes to the Company’s significant accounting policies than those previously disclosed in the Company’s Form 10-K for the year ended December 31, 2015.
 
Principals 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.
 
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
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.

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

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. 
 
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 three months ended March 31, 2016 and 2015.
 
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.
 
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
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.

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 March 31, 2016 and December 31, 2015, the Company had cash on deposit of approximately $376,721 and $895,727 respectively in excess of the federally insured limits of $250,000.
 
For the three months ended March 31, 2016 and 2015, our top ten customers accounted for 22% ($1,748,878) and 33% ($2,124,079), respectively, of our total revenues.  The Company does not rely on any one specific customer for any significant portion of our revenue.
 
For the three months ended March 31, 2016 and 2015, purchases from one supplier through a “channel partner” agreement were approximately 22% and 42% of cost of revenues, respectively.  This channel partner agreement 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 three months ended March 31, 2016 and 2015, one supplier represented approximately 36% and 27% 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 March 31, 2016 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.
 
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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 Company files income tax returns in the U.S. federal and state jurisdictions. Tax years 2013 to 2016 remain open to examination for both the U.S. federal and state jurisdictions.

There were no liabilities for uncertain tax positions at March 31, 2016 and March 31, 2015.

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 longer term lease and debt obligations approximate fair value as their stated interest rates approximate the rates currently available.
 
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 may significantly impact stock-based compensation expense.
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements
 
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to put most leases on their balance sheets by recognizing a lessee’s rights and obligations, while expenses will continue to be recognized in a similar manner to today’s legacy lease accounting guidance. This ASU could also significantly affect the financial ratios used for external reporting and other purposes, such as debt covenant compliance.  This ASU will be effective for us on January 1, 2019, with early adoption permitted. We are currently in the process of assessing the impact of this ASU on our consolidated financial statements.
 
In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, including treatment of excess tax benefits and forfeitures, as well as consideration of minimum statutory tax withholding requirements. The ASU will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early application permitted in any interim or annual period. The Company is evaluating the future impact of this ASU on 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.

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 months ended March 31, 2016 and March 31, 2015 does not include share equivalents as all warrants and options exceeded the average market price of the common stock. Convertible debt is included below, based on if-converted method.                              
 
 
 
Three Months
Ended
   
Three Months
Ended
 
 
 
March 31, 2016
   
March 31, 2015
 
Basic net income per share computation:
           
Net income
 
$
74,277
   
$
521,167
 
Weighted-average common shares outstanding
   
4,410,736
     
4,042,317
 
Basic net income per share
 
$
0.02
   
$
0.13
 
Diluted net income per share computation:
               
Net income
 
$
74,277
   
$
521,167
 
Weighted-average common shares outstanding
   
4,477,403
     
4,051,338
 
Total adjusted weighted-average shares
   
4,477,403
     
4,051,338
 
Diluted net income per share
 
$
0.02
   
$
0.13
 
 
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 
NOTE 3 – NET INCOME PER COMMON SHARE (Continued)
 
The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share.
 
 
 
Three Months
March 31, 2016
 
 
Three Months
March 31, 2015
 
Stock options
 
 
183,576
 
 
 
30,000
 
Warrants
 
 
203,253
 
 
 
185,078
 
 
 
 
 
 
 
 
 
 
Total potential dilutive securities not included in income per share
 
 
368,829
 
 
 
215,078
 
 
NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment is summarized as follows:
 
 
 
March 31, 2016
   
December 31, 2015
 
Leasehold improvements
 
$
30,557
   
$
30,557
 
Equipment, furniture and fixtures
   
1,620,499
     
1,471,268
 
 
   
1,651,056
     
1,501,825
 
Less: Accumulated depreciation
   
(1,134,285
)
   
(1,076,478
)
 
               
 Property and equipment, net
 
$
516,771
   
$
425,347
 
 
Depreciation and amortization expense related to these assets for the three months ended March 31, 2016 and 2015 was $57,807 and $38,207, respectively. 

Property and equipment under capital leases are summarized as follows:

 
 
March 31, 2016
   
December 31, 2015
 
Equipment, furniture and fixtures
   
433,536
     
433,536
 
Less: Accumulated depreciation
   
(257,029
)
   
(232,228
)
 
               
 Property and equipment, net
 
$
176,507
   
$
201,308
 

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consist of proprietary developed software, intellectual property, customer lists and acquired contracts 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 estimated useful lives.
 
The components of intangible assets are as follows:
 
 
 
March 31, 2016
   
December 31, 2015
   
Estimated Useful Lives
 
Proprietary developed software
 
$
408,414
   
$
365,911
     
5
 
Intellectual property, customer list, and acquired contracts
   
3,069,551
     
3,069,551
     
5 - 15
 
Total intangible assets
 
$
3,477,965
   
$
3,435,462
         
Less: accumulated amortization
   
(977,011
)
   
(863,925
)
       
 
 
$
2,500,954
   
$
2,571,537
         
 
Amortization expense included in depreciation and amortization was $113,086 for the three months ended March 31, 2016 as compared to $73,749 for the three months ended March 31, 2015. Included in proprietary developed software is $42,503 not yet in service.
 
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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 2016
 
$
339,258
 
2017
   
355,796
 
2018
   
260,737
 
2019
   
260,738
 
2020
   
243,512
 
thereafter
   
1,040,913
 
 
       
Total
 
$
2,500,954
 
 
NOTE 6 – LINE OF CREDIT, TERM LOAN AND PROMISSORY NOTES

On August 1, 2013, the Company obtained a line of credit (the “Credit Line”) and a two year term loan from the bank (the “Term Loan”). The Credit Line expired on July 31, 2015 and was automatically renewed for an additional year. The Credit Line includes a borrowing base calculation tied to accounts receivable with a maximum availability of $750,000 at prime plus 1.75% interest (5.25% at March 31, 2016).  The Credit 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 Line requires the Company to pay a monitoring fee of $1,000 monthly. The Company was in compliance with all covenants related to the Credit Line at March 31, 2016.
 
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 March 31, 2016 the outstanding balance was $225,708. 
 
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 March 31, 2016 the outstanding balance was $117,828.
 
On July 6, 2015, SWK acquired certain assets of ProductiveTech Inc. (PTI) pursuant to an Asset Purchase Agreement for 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.  Monthly payments including interest are $10,645. At March 31, 2016 the outstanding balance was $524,105.
 
On October 19, 2015, SWK acquired certain assets of Oates & Company, LLC (Oates) pursuant to an Asset Purchase Agreement for cash of $125,000 and a promissory note for $175,000 (the “Oates Note”).  The note is due in three years from the closing date and bears interest at a rate of two (2%) percent.  Monthly payments including interest are $5,012. At March 31, 2016 the outstanding balance was $151,149. 
 
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. The Company’s may, at its sole and exclusive option, convert, at any time until payment in full of this Note, all or any part of the principal amount of the Note plus accrued interest, into shares of the Company’s Common Stock, at the price per share equal to $3.00 per share.
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

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

At March 31, 2015, future payments of long term debt are as follows:
 
Remainder of 2016
 
$
225,640
 
2017
   
506,677
 
2018
   
257,846
 
2019
   
154,727
 
2020
   
73,900
 
Total
 
$
1,218,790
 

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 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 11.0%.
 
At March 31, 2016, future payments under capital leases are as follows:
 
Remainder of 2016
 
$
74,070
 
2017
   
74,200
 
2018
   
23,695
 
Total minimum lease payments
   
171,965
 
Less amounts representing interest
   
(13,855
)
Present value of net minimum lease payments
   
158,110
 
Less current portion
   
(86,337
)
Long-term capital lease obligation
 
$
71,773
 

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 Investor 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 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.
 
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. 
 
On January 11, 2016, the Company announced the payment of a $0.06 special cash dividend per share of Common Stock. The dividend payments were paid out on January 20, 2016 for an aggregate amount of $264,699, which reduced additional paid in capital.
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

NOTE 8 – EQUITY (Continued)

Options
 
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.

In October 2015, the Company 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.

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, 2015 and the three months ending March 31, 2016 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, 2015
   
163,846
   
$
4.65
 
2.5 years
 
$
-0-
 
Options granted
   
35,000
     
3.76
 
4.2 years
       
Options canceled/forfeited
   
(15,270
)
 
$
4.61
 
 
       
 
               
 
       
Outstanding options at December 31, 2015
   
183,576
   
$
4.49
 
2.7 years
 
$
-0-
 
Options granted
   
-
                   
Options exercised
   
-
                   
Options canceled/forfeited
   
-
         
 
       
 
               
 
       
Outstanding options at March 31, 2016
   
183,576
     
4.49
 
2.7 years
 
$
-0-
 
 
               
 
       
Vested Options:
               
 
       
   March 31, 2016;
   
127,907
   
$
4.68
 
1.9 years
 
$
-0-
 
   December 31, 2015:
   
119,243
   
$
4.70
 
2.0 years
 
$
-0-
 
 
For the three months ended March 31, 2016 the unamortized compensation expense for stock options was $80,504.  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%; and (f) Expected life of 5 years.
 
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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, 2015
    -    
$
-  
Granted
   
203,253
   
$
5.29
 
Exercised
   
-
   
$
-
 
Canceled
   
-
   
$
-
 
Outstanding and Exercisable December 31, 2015
   
203,253
   
$
5.29
 
 
               
Granted
   
-
   
$
-
 
Exercised
   
-
   
$
-
 
Canceled
   
-
   
$
-
 
Outstanding and Exercisable March 31, 2016
   
203,253
   
$
5.29
 
 
NOTE 9 – BUSINESS COMBINATION
 
During 2015 SWK completed four acquisitions. On March 11, 2015 SWK entered into an Asset Purchase Agreement with 2000 SOFT, Inc. d/b/a ATR, a California corporation. On July 6, 2015 SWK entered into an Asset Purchase Agreement with ProductiveTech (“PTI”), a south New Jersey corporation. As of March 31, 2016, the prior owners of PTI owed the Company $32,199 related to amounts collected by the prior owners subsequent to acquisition but owed to the Company and this amount is included in prepaid expenses and other current assets. On October 1, 2015 SWK entered into an Asset Purchase Agreement with The Macabe Associates, Inc., a Washington corporation. On October 19, 2015 SWK entered into an Asset Purchase Agreement with Oates & Company, a North Carolina reseller. As of March 31, 2016, the prior owners of Oates owed the Company $63,170 related to amounts collected by the prior owner subsequent to acquisition but owed to the Company and this amount is included in prepaid expenses and other current assets.
 
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, 2015, 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 three months ended March 31, 2015 as if the acquisition occurred on January 1, 2015. Operating expenses have been increased for the amortization expense associated with the estimated fair value adjustment of definite lived intangible assets.
 
Pro Forma
 
Three Months Ended
March 31, 2015
 
Net sales
 
$
8,123,066
 
Operating expenses
   
2,937,009
 
Income  before taxes
   
612,745
 
Net income
 
$
565,384
 
Basic and diluted income per common share
 
$
0.13
 
 
For the three months ended March 31, 2015 the pro-forma results above include two months of pro-forma results of ATR, three months of pro-forma results for PTI, three months of pro-forma results for Macabe, and three months of pro-forma results for Oates.  
 
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 SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 
NOTE 9 – BUSINESS COMBINATION (Continued)
 
For the three months ended March 31, 2016 the ATR operations had a net income before taxes of $17,334 that was included in the Company’s Consolidated Statement of Income, which consisted of approximately $248,668 in revenues and $231,334 in expenses.
 
For the three months ended March 31, 2016 the PTI operations had a net income before taxes of $20,783 that was included in the Company’s Consolidated Statement of Income, which consisted of approximately $445,753 in revenues and $424,970 in expenses.
 
For the three months ended March 31, 2016 the Macabe operations had a net income before taxes of $24,636 that was included in the Company’s Consolidated Statement of Income, which consisted of approximately $314,956 in revenues and $290,320 in expenses.
 
For the three months ended March 31, 2016 the Oates operations had a net income before taxes of $10,978 that was included in the Company’s Consolidated Statement of Income, which consisted of approximately $651,923 in revenues and $640,945 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 $7,385,000, of which approximately $6,835,000 is reserved, as of March 31, 2016, 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 2026 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.
 
Income tax provision (benefit):
 
 
 
Three Months Ended
 
 
 
March 31,
   
March 31,
 
 
 
2016
   
2015
 
Current:
           
               Federal
 
$
45,943
   
$
191,831
 
               State and local
   
5,405
     
23,252
 
 
               
               Total current tax provision
   
51,348
     
215,083
 
 
               
Deferred:
               
               Federal
   
8,550
     
8,473
 
               State and local
   
950
     
1,027
 
               Release of valuation allowance
   
-
     
(200,000
)
 
               
               Total deferred tax provision (benefit)
   
9,500
     
(190,500
)
 
               
Total provision
 
$
60,848
     
24,583
 

For the year three months ended March 31, 2016, 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 three months ended March 31, 2016 was $60,848. The effective tax rate consists primarily of the 40% federal statutory tax rate and a blended 5% state and local tax rate.
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SILVERSUN TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 
NOTE 11 – RELATED PARTY TRANSACTIONS
 
The Company leases its North Syracuse office space from its current CFO, Crandall Melvin III which expires on May 31, 2018. The monthly rent for this office space is $2,100. Total rent expense for the three months ended March 31, 2016 and 2015 was $6,300 and $6,300 respectively under this lease.
 
The Company leases its Seattle office space from Mary Abdian, an employee of SWK, which expires September 30, 2018. The monthly rent for this office space is $3,000 and increases 3% each year. Total rent expense for the three months ended March 31, 2016 under this lease was $9,000.00.
 
As of March 31, 2016, long term debt, convertible note payable and contingent consideration are considered related party liabilities as holders are current employees of the company, see Note 6 and Note 9.
 
NOTE 12 – COMMITMENTS

Operating Leases
 
Our main offices are located at 5 Regent Street, Livingston, NJ 07039 where we have 6,986 square feet of office space at a monthly rent of $7,400. The lease expires December 31, 2016. The Company has a lease, with a one-year extension, for office space at 6834 Buckley Road, North Syracuse, New York, at a monthly rent of $2,100.  The lease expired on May 31, 2015 and was subsequently extended for a three year term commencing June 1, 2015 and ending May 31, 2018.  The Company also leases 2,700 square feet of office space for sales and support in Skokie, Illinois with a monthly rent of $3,000. This lease expires April 30, 2018. The Company also leases 702 square feet for sales and support in Minneapolis, Minnesota with a monthly rent of $1,515 a month. This lease expires March 31, 2017. The Company leases 2,105 square feet of office space in Phoenix, AZ starting at $1,271 and escalating to $2,894 per month by the end of the term September 30, 2019. The Company leases 1,500 square feet of office space in Seattle, WA with a monthly rent of $3,000 a month.  The lease expires September 30, 2018. The Company leases 383 square feet of office space in Spartanburg, SC with a monthly rent of $450 a month.  The lease expires June 30, 2016. The Company leases 3,422 square feet of office space in Greensboro, NC with a monthly rent of $4,182 a month. The lease expires February 28, 2017. The Company leases 1,745 square feet of office space in Santa Ana, CA with a monthly rent of $3,225 per month escalating to $3,402 per month by the end of the lease term, April 30, 2018.
 
Total rent expense under these operating leases for the three months ended March 31, 2016 and 2015 was $87,379 and $46,702, respectively.

The following is a schedule of approximate future minimum rental payments for operating leases subsequent to the year ended December 31, 2015.
 
Remainder 2016
 
$
237,869
 
2017
   
178,916
 
2018
   
98,704
 
2019
   
26,046
 
   
$
541,535
 
 
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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 Subsidiary (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, 2015, 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”). 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, Southern California, North Carolina and Washington.

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. 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.

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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 and time and billing software.
 
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 Months Ended March 31, 2016 and 2015.
 
During the three months ended March 31, 2016 the Company continued to expand its customer base and growth trend which we believe will provide a basis for future growth.
 
1)
Revenues increased 20.1% from the same three month period in the prior year.
2)
Income from operations decreased to $144,371 as compared to $557,967 for the same three month period in the prior year.
3)
Net income was $74,277 as compared to $521,167 for the same three month period in the prior year.
 
Revenues
 
Revenues for the three months ended March 31, 2016 increased $1,301,187 (20.1%) to $7,784,301 as compared to $6,483,114 for the three months ended March 31, 2015. Software sales decreased by $522,300 to $860,442 for the three months ended March 31, 2016 from $1,382,742 for the same period in 2015 for an overall decrease of 37.8%.  This decrease was primarily due to sales orders that were expected to close in the current quarter being delayed to future quarters. Service revenue increased by $1,823,487 to $6,923,859 for the three months ended March 21, 2016 from $5,100,372 for the same period in 2015 for an overall increase of 35.8%. The overall increases are primarily due to increased business activity associated with the acquisitions the Company completed in 2015, and the Company’s continued successful sales and marketing efforts.
 
Gross Profit
 
Gross profit for the three months ended March 31, 2016 increased $130,757 (4.7%) to $2,931,029 as compared to $2,800,272 for the three months ended March 31, 2015. For the period ended March 31, 2016, the overall gross profit percentage was 37.7% as compared to 43.2% for the period ended March 31, 2015.   The gross profit attributed to software sales decreased $329,685 to $415,548 for the three months ending March 31, 2016 from $745,233 in the three months ending March 31, 2015.  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 $460,442 for the three months ending March 31, 2016 from the three months ending March 31, 2015 primarily due to the implementations of larger scale accounting systems. The gross profit percentage attributed to services decreased to 36.3% in 2016 from 40.3% in 2015.
 
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Operating Expenses
 
Selling and marketing expenses increased $172,749 (18.9%) to $1,084,879 for the three months ended March 31, 2016 compared to $912,130 for the three months ended March 31, 2015 due to increased sales personnel and travel expenses as a result of an increase in sales activity generated by the 2015 acquisitions.
 
General and administrative expenses increased $331,119 (27.9%) to $1,518,933 for the three months ended March 31, 2016 as compared to $1,187,814 for the three months ended March 31, 2015 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 ATR, PTI, Macabe and Oates.
 
During the three months ended March 31, 2016, the Company recognized $11,952 of share-based compensation expense as a result of the granting of stock options to some of its non-executive employees as compared to $30,405 for the same three month period in 2015.

Depreciation and amortization expense increased $58,938 for the three months ended March 31, 2016 to $170,894 as compared to $111,956 for the period ended March 31, 2015. This increase is primarily attributed to the increase in amortization associated with the intangible assets acquired from the ATR, PTI, Macabe, and Oates acquisitions in 2015.

Income from Operations

For the year three months ended March 31, 2016, the Company had income from operations of $144,371 as compared to income from operations of $557,967 for the same period in 2015.

Income Taxes
 
For the year three months ended March 31, 2016, 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 three months ended March 31, 2016 was $60,848. The effective tax rate consists primarily of the 40% federal statutory tax rate and a blended 5% state and local tax rate.
 
Net Income
 
For year three months March 31, 2016, the Company had net income of $74,277 as compared to a net income of $521,167 for the three months ended March 31, 2015 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 and managed services 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. This line 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 (the “Credit Line”) and a two year term loan from the bank (the “Term Loan”). The term of the Credit Line was for two years and expired on July 31, 2015 and was automatically renewed . The agreement included a borrowing base calculation tied to accounts receivable with a maximum availability of $750,000 at prime plus 1.75% interest (currently 5.25%).  The Credit 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 Line requires the Company to pay a monitoring fee of $1,000 monthly. At March 31, 2016, the Company was in compliance with the required financial covenants, the fixed charge ratio and debt to net worth. As of March 31, 2016, the availability under this Credit Line was $750,000. 
 
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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. At March 31, 2016 the outstanding balance was $225,708. 

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”). The note matures on February 1, 2018.  Monthly payments are $5,012 including interest at 2% per year. At March 31, 2016 the outstanding balance was $117,828. 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. Certain payments were made resulting in a remaining balance of $6,680 as of March 31, 2016.
 
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 acquired certain assets of ProductiveTech Inc. (PTI) pursuant to an Asset Purchase Agreement (the “PTI Purchase Agreement”) for cash of $500,000 and a promissory note for $600,000 (the “PTI Note”).  The PTI 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 March 31, 2016 the outstanding balance was $524,104. 
 
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 (the “Macabe Purchase Agreement”). SWK acquired certain assets and liabilities of Macabe (as defined in the Macabe Purchase Agreement). In consideration for the acquired assets, the Company paid $21,423 in cash. As additional consideration, the Company will pay $5,500 cash twelve months from closing and $5,500 cash twenty four months from closing on the net-to-SWK revenues for Software and Maintenance sales if certain estimates are met for a total of $11,000 and was recorded as part of the contingent consideration included in the purchase price. Additionally, the Company will pay 35% of the net margin on software maintenance renewals for former Macabe customers for the first twelve months, and then 30%, 25% and 20% of the net margin on software maintenance renewals for the following three years. The Company will also pay 50% the first year, and 40%, 30% and 20% the three years after on the net margin on EASY Solution Maintenance, new software & license to existing Macabe customers and EASY Solutions software and maintenance sales to new customers. On any former Macabe customers migrating to Netsuite, X3 or Acumatica, the Company will pay 50% of the net margin of the sale after applicable costs and commissions for the three years period after the acquisition. The Company estimated this contingent consideration to be approximately $417,971 at acquisition and which is included in the purchase price. Certain payments were made in each of these contingent consideration components, resulting in a remaining balance of $360,710 as of March 31, 2016.

On October 19, 2015, SWK acquired certain assets of Oates & Company, LLC (Oates) pursuant to an Asset Purchase Agreement (the “Oates Purchase Agreement”) for cash of $125,000 and a promissory note for $175,000 (the “Oates Note”).  The Oates 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. At March 31, 2016 the outstanding balance was $151,149.  Additionally in connection with the Oates 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. The Company’s may, at its sole and exclusive option, convert, at any time until payment in full of this Note, all or any part of the principal amount of the Note plus accrued interest, into shares of the Company’s Common Stock, at the price per share equal to $3.00 per share.
 
During the three months ended March 31, 2016, the Company had a net decrease in cash of $519,777.  The Company’s principal sources and uses of funds were as follows:
 
Cash provided by operating activities

The Company generated $68,807 in cash from operating activities for the three months ended March 31, 2016 as compared to generating $450,758 of cash for operating activities for the same period in 2015. This increase in cash provided by operating activities is primarily attributed to a decrease in accounts receivable offset partially by an increase in accounts payable.
 
Cash used in investing activities

Investing activities for the three months ended March 31, 2016 used cash of $191,734. This use of cash is attributed to purchases of property and equipment and costs related to the internal development of software.
 
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Cash used in financing activities
 
Financing activities for the three months ended March 31, 2016 used cash of $396,850 as compared to generating cash of $730,155 for the same period in 2015. The decrease was due primarily to the payment of a cash dividend and $812,000 provided by equity raise in prior year.
 
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 three months ended March 31, 2016.  
 
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 consolidated 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 three months ended March 31, 2016, 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, 2015.
 
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.

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 as described below. Professional service revenue is recognized as service 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 one-year periods. 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 service revenue in the Consolidated Statement 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.
 
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Accounts Receivable
 
The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current credit worthiness, as determined by review of their current credit information.  The Company continuously monitors credits and payments from its customers and maintains provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified.  While such credit losses have historically been within our expectation and the provision established, the Company cannot guarantee that it will continue to receive positive results.
 
Unbilled Services
 
The Company recognizes revenue on its professional services as those services are performed or certain obligations are met.
 
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.

Intangible Assets

The values assigned to intangible assets were based on an independent valuation. Purchased intangible assets are amortized over the useful lives based on the estimate of the use of economic benefit of the asset using the straight-line amortization method. 

The Company assesses potential impairment of its intangible 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. 

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 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.

Off Balance Sheet Arrangements
 
During the three months ended March 31, 2016 or for fiscal 2015, 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.
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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 March 31, 2016 in conformity with U.S. generally accepted accounting principles.

Remediation

We are currently in the process of executing a plan of action to remediate the material weaknesses identified above. However, we cannot be assured that these weaknesses will be remediated or that other material weaknesses will not be discovered.

(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 March 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
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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, 2015, filed with the SEC on March 30, 2016.
 
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
 
31.2
 
32.1
 
32.2
 
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
 
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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: May 16, 2016
 
By:
/s/ Mark Meller
 
 
 
 
 
Mark Meller
 
 
 
 
 
Principal Executive Officer
 
 
 
 
 
 
 
 
 
 
By:
/s/ Crandall Melvin III
 
 
 
 
Crandall Melvin III
 
 
 
Principal Accounting Officer
 
 
 
 
 
 
 
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