Business Context and Reporting Period
This Form 8-K Current Report was filed by Silversun Technologies, Inc. (not QXO, Inc.) on September 23, 2011. The report details a material definitive agreement entered into on the same date involving the issuance of Series B Preferred Stock to the Company's Chief Executive Officer, Mr. Mark Meller.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, or operating margins. The primary financial data points disclosed are:
- Debt Obligations: Two promissory notes dated April 11, 2011, with a principal face amount of $275,000 each, totaling $550,000.
- Equity Issuance: One (1) share of Series B Preferred Stock issued with a par value of $0.001.
- Liquidity: No specific liquidity figures (e.g., cash on hand) are provided in this text.
Material Changes
The material change reported is the issuance of Series B Preferred Stock to Mr. Meller as partial consideration for his personal guarantee of the $550,000 in promissory notes. This transaction resulted in a material modification to the rights of security holders, specifically granting the Series B Preferred Stock significant voting power designed to ensure the holder controls approximately 51% of the voting power (calculated as total common stock divided by 0.49, minus total common stock).
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, revenue outlook, or management commentary regarding future operations. Key risks and contingencies identified include:
- Control Risk: The issuance of Series B Preferred Stock concentrates voting control in the hands of the CEO, potentially altering the balance of power among shareholders.
- Debt Contingency: The equity issuance is directly tied to the CEO's personal guarantee of the Company's debt; failure to repay the notes could trigger personal liability for the CEO.
- Regulatory Exemption: The sale of equity was conducted as a private placement under Section 4(2) of the Securities Act of 1933 and Regulation D, relying on the investors being accredited and the absence of a public offering.
Investor Verification Checklist
- Verify the current status and repayment terms of the two $275,000 promissory notes referenced in Exhibit 10.1.
- Review the full Certificate of Designation (Exhibit 4.1) to understand all rights, preferences, and restrictions of the Series B Preferred Stock beyond voting rights.
- Confirm the total number of outstanding Common Stock shares to calculate the precise voting weight of the Series B Preferred Stock.
- Check for any subsequent filings regarding the Series A Convertible Preferred Stock, as their consent was required for this amendment.