Business context and reporting period
Filing identity: The supplied filing is SilverSun Technologies, Inc.’s Form 10-K for the fiscal year ended December 31, 2022—not a QXO, Inc. filing. It reports annual results, not standalone fourth-quarter results. SilverSun provided ERP software, technology consulting, and managed IT services to small and midsize businesses.
Financial performance and position
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $44.99 million | $41.70 million |
| Gross profit / margin | $17.96 million / 39.9% | $17.21 million / 41.3% |
| Operating loss | $385,379 | $230,986 |
| Net loss | $282,219; $0.05 per share | $134,434; $0.03 per share |
| Cash from operating activities | $2.04 million | $226,034 |
| Cash and cash equivalents at year-end | $8.01 million | $6.81 million |
Software revenue rose 49.8% to $11.78 million; service revenue fell 1.9% to $33.20 million. The 2022 gross margin declined amid employee compensation, recruitment, training, and inflation-related cost pressures. Operating cash flow benefited mainly from increases in accounts payable and deferred revenue; deferred charges also used cash.
At December 31, 2022, current assets were $13.70 million and current liabilities $10.75 million. Promissory-note debt totaled $1.45 million, including $783,479 due in 2023; finance lease obligations totaled $616,443. The company had no line of credit. Cash increased by $1.19 million during the year. Management said liquidity should fund operations for at least 12 months, while acknowledging economic and pandemic uncertainty.
Material changes versus 2021
- Revenue increased 7.9%, principally from cloud ERP and third-party software sales; service revenue excluding the divested X3 product line increased 8.3%.
- Gross profit grew 4.4%, slower than revenue, and overall gross margin declined 1.4 percentage points.
- Operating loss widened, and net loss more than doubled. 2021 included a $250,000 product-line sale gain and a $71,359 bargain-purchase gain, neither repeated in 2022.
- Operating cash flow improved to $2.04 million from $226,034; investing activities used $188,742 and financing activities used $655,134 in 2022.
- Cash rose, while total promissory-note debt increased to $1.45 million from $968,940. The company acquired DTS and NEO3 assets during 2022.
Outlook, significant transaction, and risks
Management’s strategy emphasized cloud-based offerings, recurring revenue, retention, cross-selling, and acquisitions. The filing gives no specific revenue or earnings guidance. Management expected no major capital expenditures and said inflation was increasing personnel costs and travel expenses.
SilverSun had agreed to combine with bitcoin-mining company Rhodium Enterprises, subject to shareholder, regulatory, listing, and other conditions. The proposed transaction contemplated SilverSun legacy holders retaining about 3.2% of the combined company, an approximately $8.5 million cash dividend, and a distribution of the SWK and Secure Cloud Services businesses to existing shareholders. The filing described an expected 2023 closing; the transaction was not completed as of the filing. Termination under specified circumstances could trigger a $5 million payment. The HoldCo Form 10 had been withdrawn in February 2023 because its financial statements were stale, with a refiling planned.
Key disclosed risks include acquisition integration and funding needs, competition and pricing pressure, dependence on skilled employees, cybersecurity and service disruptions, economic uncertainty, and the proposed merger’s execution and ownership changes. Rhodium-related risks include bitcoin-price volatility, electricity supply and pricing, site access, regulation, and financing. Management reported effective disclosure controls and internal control over financial reporting; the external auditor did not attest to internal-control effectiveness.
Important facts for investors to verify
- Confirm issuer and ticker: this filing identifies SilverSun Technologies (SSNT), not QXO, Inc.
- Review the audited financial statements and cash-flow detail, particularly the working-capital contributions to operating cash flow and the deferred-charge balance.
- Verify the merger’s eventual status, final consideration, dividend and distribution terms, and any termination-fee exposure using subsequent filings.
- Assess the 2023 debt maturities, lease commitments, and the company’s liquidity absent a credit facility.
- Evaluate whether recurring revenue and cloud sales offset service-margin pressure and higher labor costs.