Business Context and Reporting Period
This Form 8-K Current Report was filed by SilverSun Technologies, Inc. (Ticker: SSNT) on April 23, 2020, covering events occurring on April 9, 2020. The report details a material definitive agreement entered into by SWK Technologies, Inc., a wholly-owned subsidiary of the Company.
Key Financial Metrics
The filing discloses the following specific financial obligation:
- Loan Amount: $3,150,832 (Paycheck Protection Program Loan).
- Lender: JPMorgan Chase Bank, N.A.
- Interest Rate: 0.98% per annum.
- Term: Two years.
- Repayment Schedule: Monthly principal and interest payments of $132,629.06 begin seven months after disbursement, totaling 24 payments.
- Deferral: Payments are deferred for six months post-disbursement.
The filing text does not provide clear values for revenue, profit, cash flow, margins, or existing debt levels outside of this new obligation.
Material Changes
The primary material change is the creation of a direct financial obligation via the PPP Loan. This represents a new liability on the balance sheet intended to support payroll costs and other eligible expenses under the CARES Act. No prior comparable period data is provided in this specific filing to assess year-over-year changes.
Outlook, Risks, and Contingencies
Loan Forgiveness Contingency: Under the CARES Act, the Company may apply for forgiveness of all or a portion of the loan. Forgiveness is contingent upon the use of proceeds for payroll costs, mortgage interest, rent, and utilities. The filing explicitly states that no assurance is provided that the loan will be forgiven in whole or in part.
Default Risks: The promissory note includes customary events of default, including payment defaults, making materially false representations to the SBA or Lender, or breaching loan terms. An event of default could result in the immediate repayment of all outstanding amounts and legal action.
Prepayment: The loan may be prepaid at any time prior to maturity without penalty.
Investor Verification Checklist
- Verify the actual utilization of loan proceeds to ensure eligibility for potential forgiveness.
- Monitor the Company's cash flow to ensure ability to service the $132,629.06 monthly payments starting seven months post-disbursement if forgiveness is not granted.
- Review the full text of the Note (Exhibit 10.1) for specific covenants and default triggers not summarized in the 8-K.
- Confirm the status of the SBA forgiveness application once the covered period concludes.