SilverSun Technologies, Inc. - FORM 8-K/A - EX-99.3 - August 30, 2012

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Exhibit 99.3




SILVERSUN TECHNOLOGIES, INC.
 
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS





 
 
 

SILVERSUN TECHNOLOGIES, INC.
Unaudited Pro Forma Condensed Balance Sheets
March 31, 2012

ASSETS
  
Historical
SilverSun
    
Historical
HighTower
    
Pro
Forma Adjustments
      
Pro
Forma
  
Current assets
                          
        Cash
  
$
99,952
    
$
11,609
      
(11,609
)
f
  
$
99,952
  
        Accounts receivable, net
    
1,164,352
      
14,904
      
(9,967
)
a
    
1,169,289
  
        Other current assets
    
39,700
      
2,290
      
-
        
41,990
  
                                   
             Total current assets
    
1,304,004
      
28,803
      
(21,576
)
      
1,311,231
  
                                   
Property and equipment, net
    
166,917
      
58,012
                
224,929
  
Deposits and other assets
    
48,011
      
-
                
48,011
  
Intangible assets
    
126,056
      
-
      
721,500
  
b, e
    
847,556
  
                                   
Total assets
  
$
1,644,988
    
$
86,815
    
$
699,924
      
$
2,431,727
  
                                   
LIABILITIES AND STOCKHOLDERS’  DEFICIT
                                  
                                   
Current liabilities
                                  
Accounts payable and accrued expenses
  
$
1,176,966
    
$
703,315
 a   
$
(656,653
) 
a, g, h
  
$
1,223,628
  
Accrued interest
    
10,818
      
-
                
10,818
  
Line of credit
    
-
      
-
      
441,964
  
c
    
441,964
  
Capital lease obligations
    
55,253
      
-
                
55,253
  
Notes payable to related parties
    
20,000
      
-
                
20,000
  
Convertible promissory note – related party, net of discount
    
7,054
      
-
                
7,054
  
Due to related party
    
5,111
      
102,402
      
(102,402
)
f
    
5,111
  
Deferred revenues
    
1,209,409
      
299,634
                
1,509,043
  
Customer deposits
    
-
      
613,414
      
(613,414
)
f
    
-
  
Promissory note
    
-
      
757,618
      
(757,618
)
f
    
-
  
                                   
             Total current liabilities
    
2,484,611
      
2,476,383
      
(1,688,123
)
      
3,272,871
  
                                   
Stockholders’ deficit
                                  
Preferred stock, $1.00 par value; authorized 1,000,000 shares;
         No shares issued and outstanding
    
-
      
-
                
-
  
Series A Convertible Preferred Stock, $1.00 par value; authorized 2
   shares;  no shares issued and  outstanding at March 31, 2012
    
-
      
-
                
-
  
Series B Preferred Stock, 1.00 par value; authorized 1 share;
   1 shares issued and outstanding
    
1
      
-
                
1
  
Common stock:
                                  
    Class A – par value $.0001; authorized 750,000,000 shares;
        116,800,933 and 4,456,912 shares issued and outstanding
    
11,680
      
-
                
11,680
  
    Common stock, par value $1.00 – 1,045 issued and outstanding
    
-
      
1,045
      
(1,045
)
f
    
-
  
    Class B – par value $.0001: authorized 50,000,000 shares;
        no shares issued and outstanding
    
-
      
-
                
-
  
Additional paid-in capital
    
10,153,643
      
-
      
134,909
  
 e, f, g, h
    
10,288,552
  
Accumulated deficit
    
(11,004,947
) 
    
(2,390,613
)
    
2,254,183
 
e, f, g, h
    
(11,141,377
)
                                   
             Total stockholders’ deficit
    
(839,623
) 
    
(2,389,568
)
    
2,388,047
        
(841,144
)
                                   
Total liabilities and stockholders’ deficit
  
$
1,644,988
    
$
86,815
    
$
699,924
      
$
2,431,727
  
 
 
2
 
 
SILVERSUN TECHNOLOGIES, INC.
Unaudited Pro Forma Condensed Statement of Operations
Three Months Ended March 31, 2012

   
Historical
SilverSun
    
Historical
HighTower
    
Pro
Forma Adjustments
      
Pro
Forma
  
                           
   Revenues, net
  
$
2,908,859
    
$
594,982
    
$
(2,427
)
d
  
$
3,501,414
  
                                   
   Cost of revenues
    
1,725,685
      
194,276
      
(2,427
)
d
    
1,917,534
  
                                   
   Gross profit      
    
1,183,174
      
400,706
      
-
        
1,583,880
  
                                   
Selling, general and administrative expenses :
                                  
   Selling, general and administrative expenses
    
1,130,296
      
447,801
      
50,000 
  
g
    
1,628,097
  
   Shares-based compensation expense
    
719,267
      
-
                
719,267
  
   Depreciation and amortization 
    
19,202
      
-
      
22,098
  
e
    
41,300
  
                                   
Total selling, general and administrative expenses
    
1,868,765
      
447,801
      
72,098
        
2,388,664
  
                                   
Loss from operations
    
(685,591
)
    
(47,095
)
    
(72,098
)
      
(804,784
)
                                   
Other income (expense)
                                  
   Amortization of debt discount
    
(4,250
)
    
-
                
(4,250
)
   Other income
    
-
      
2,103
                
2,103
  
   Interest, net
    
(18,350
)
    
(12,711
)
    
(6,629
)
      
(37,690
)
                                   
Total other income (expense)
    
(22,600
)
    
(10,608
)
    
(6,629
)
      
(39,837
)
                                   
Net loss
  
$
(708,191
)
  
$
(57,703
)
  
$
(78,727
)
    
$
(844,621
)
                                   
Net loss per common share – basic and diluted
  
$
(0.01
)
                    
$
(0.01
)
                                   
Weighted Average Shares – basic and diluted
    
110,846,863
                        
110,846,863
  
                                   

 
3
 

SILVERSUN TECHNOLOGIES, INC.
Unaudited Pro Forma Condensed Statement of Operations
Year Ended December 31, 2011

   
Historical
SilverSun
    
Historical
HighTower
  
Pro
Forma Adjustments
      
Pro
Forma
  
                         
   Revenues, net     
  
$
10,522,080
    
$
3,315,694
  
$
(36,034
)
d
  
$
13,801,740
  
                                 
   Cost of revenues
    
6,024,460
      
1,114,158
    
(36,034
)
d
    
7,102,584
  
                                 
   Gross profit      
    
4,497,620
      
2,201,536
    
-
        
6,699,156
  
                                 
Selling, general and administrative expenses :
                                
   Selling, general and administrative expenses
    
4,140,542
      
2,627,800
    
50,000
  
g
    
6,8188,342
  
   Depreciation and amortization 
    
97,011
      
-
    
88,392
  
e
    
185,403
  
                                 
Total selling, general and administrative expenses
    
4,237,553
      
2,627,800
    
138,392
        
7,003,745
  
                                 
Loss from operations
    
260,067
      
(426,264
)
  
(138,392
)
      
(304,589
)
                                 
Other income (expense)
                                
   Gain on revaluation of derivatives
    
362,035
      
-
              
362,035
  
   Gain on extinguishment of debt and derivative liability
    
2,228,939
      
-
              
2,228,939
  
   Gain on sale of marketable securities
    
-
      
33,551
              
33,551
  
   Other income
    
-
      
43,723
              
43,723
  
   Interest, net
    
(142,110
)
    
(50,079
)
  
(26,518
)
 h
    
(218,707
)
                                 
Total other income (expense)
    
2,448,864
      
27,195
    
(26,518
)
      
2,449,541
  
                                 
Net income (loss)
    
2,708,931
      
(399,069
)
  
(164,910
)
      
2,144,952
  
                                 
Net loss attributable to non-controlling interest in SWK Technologies, Inc.
    
92,383
      
-
    
-
        
92,383
  
                                 
Net income (loss) attributable to SilverSun Technologies, Inc.
  
$
2,616,548
    
$
(399,069
)
$
(164,910
)
    
$
2,052,569
  
                                 
Net income (loss) per common share – basic
  
$
0.58
                    
$
0.46
  
                                 
Net income (loss) per common share - diluted
  
$
0.02
                    
$
0.02
  
                                 
Weighted Average Shares – basic
    
4,481,000
                      
4,481,000
  
Weighted Average Shares – diluted
    
105,803,000
                      
105,803,000
  
 
 
4
 
 
 SILVERSUN TECHNOLOGIES, INC.

 Notes To Unaudited Pro Forma Condensed Financial Statements

1.                   Basis of Presentation

SilverSun Technologies, Inc. (the “Company”) is an information technology company, and a value added reseller and master developer for Sage Software’s MAS 90/200/500 and ERP X3 financial and accounting software as well as the publisher of its own proprietary Electronic Data Interchange (EDI) software, “MAPADOC.”  The Company focuses on the business software and information technology consulting market, and is looking for other opportunities to grow its business. The Company sells services and products to various end users, manufacturers, wholesalers and distributor industry clients located throughout the United States.

In June 2012, the Company’s wholly-owned subsidiary, SWK Technologies, Inc., acquired certain assets of HighTower Inc. for total consideration of $741,598, including $441,964 in cash and noncash portion assumption of deferred revenue obligation of $299,634. The preliminary purchase price was primarily allocated based on their estimated fair value to intangible assets. Upon completion of an independent valuation the purchase price allocated to the tangible and identifiable intangible assets acquired and liabilities assumed will be modified according to their respective estimated fair values, with the excess purchase consideration, if any, being allocated to goodwill at the closing of the transaction.

HighTower, Inc.,  is an information technology company that develops custom software for most of the ERP solutions it offers, and has a variety of established, off-the-shelf enhancements for Sage MAS 90 ERP and Sage MAS 200 ERP software systems. HighTower, Inc. is also a value added reseller for Sage Software’s MAS 90/200/500 financial and accounting software. HighTower, Inc. sells services and products to various end users, manufacturers, wholesalers and distributor industry clients located throughout the United States.

The unaudited pro forma balance sheet as of March 31, 2012 gives effect to the acquisition of HighTower, Inc. as if it had occurred as of March 31, 2012, based on a preliminary price allocation. The unaudited pro forma statements of operations for the three months ended March 31, 2012 and the year ended December 31, 2011 combines the historical operating results of the Company for the respective periods and the historical operating results for HightTower, Inc.,  prepared under the assumption that the acquisition of HighTower, Inc. had occurred as of January 1, 2011.

The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been reported if the combination had actually been completed as presented in the accompany unaudited pro forma combined condensed balance sheet and statements of operations. The unaudited pro forma combined condensed financial information presented is based on, and should be read in conjunction with, the historical financial statements and the related notes thereto for both the Company, as disclosed in its reports filed with the SEC, and HighTower, Inc.
 
 
5
 
 
SILVERSUN TECHNOLOGIES, INC.

 Notes To Unaudited Pro Forma Condensed Financial Statements


2.                   Explanation of Pro Forma Adjustments

The following pro forma adjustments are included in the unaudited pro forma combined condensed balance sheet and/or the unaudited pro forma combined condensed statements of operations.

 
a.
Elimination of intercompany accounts receivable and accounts payable.
 
b.
An increase to intangible assets to reflect the estimated value of the assets acquired from HighTower, Inc. on the closing date.
 
c.
An increase in the line of credit to acquire the assets of HighTower, Inc. on the closing date.
 
d.
Elimination of related transactions between the two companies.
 
e.
Amortization of acquired intangibles
 
f.
Elimination of items not assumed in the transaction.
 
g.
Legal and accounting fees associated with transaction
 
h.
Interest on line of credit
 
 
6
 

SilverSun Technologies, Inc. Reports