Business Context and Reporting Period
This Form 8-K is a current report filed by SilverSun Technologies, Inc. (SSNT) on November 12, 2021, covering events occurring on November 9, 10, and 11, 2021. The filing details a strategic divestiture of a specific business unit and an executive employment agreement extension.
Key Financial Metrics and Transactions
- Asset Sale Proceeds: The company received $250,000 in cash from Net@Work, Inc. (NAW) for the sale of assets related to its Sage X3 software business.
- Future Revenue Stream: A Revenue Share Agreement (RSA) was established, entitling SilverSun to transitional compensation based on gross revenues or gross profits generated by NAW from the acquired business for periods ranging from 12 to 60 months.
- Financial Statements: This filing references a press release for Q3 2021 results but does not contain specific revenue, profit, cash flow, or debt figures within the text provided.
Material Changes
- Divestiture: SWK Technologies, Inc., a wholly-owned subsidiary, sold assets related to the Sage X3 software application business for small and middle-market companies in North America to NAW.
- Executive Tenure: CEO Mark Meller's employment term was extended through September 14, 2028, with no other changes to his compensation terms.
Outlook, Risks, and Management Commentary
- Transitional Services: SilverSun is obligated to provide transitional services to NAW, including customer introductions, file familiarization, and business acclimation, in exchange for the revenue share payments.
- Revenue Scope: The RSA covers annual maintenance renewals, software sales (cross-sell and migration), consulting, managed services, hosting, e-commerce projects, and new customer referrals.
- Q3 Results: The company announced third-quarter 2021 results on November 9, 2021, though specific performance metrics are not detailed in this filing text.
Investor Verification Checklist
- Verify the specific terms and calculation methodology of the Revenue Share Agreement (RSA) in Exhibit 10.1.
- Review the attached Q3 2021 press release (Exhibit 99.1) for actual financial performance metrics not included in this summary.
- Assess the impact of divesting the Sage X3 business unit on future recurring revenue streams.
- Confirm the extent of transitional service obligations and their potential impact on operational resources.