Delaware
|
16-1633636
|
(State or other jurisdiction of incorporation)
|
(IRS Employer Identification No.)
|
Large accelerated filer r
|
|
Accelerated filer r
|
|
|
|
Non-accelerated filer r
|
|
Smaller Reporting Company ☒
|
|
|
|
Emerging growth company r
|
|
|
|
|
Page No.
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
Item 1.
|
3
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
8
|
|
|
|
|
Item 2.
|
19
|
|
Item 3.
|
23
|
|
Item 4.
|
23
|
|
|
|
|
PART II. OTHER INFORMATION
|
|
|
|
|
|
Item 1.
|
24
|
|
Item 1A.
|
24
|
|
Item 2.
|
24
|
|
Item 3.
|
24
|
|
Item 4.
|
24
|
|
Item 5.
|
24
|
|
Item 6.
|
24
|
|
March 31,
2018
|
December 31,
2017
|
||||||
ASSETS
|
||||||||
|
||||||||
Current assets:
|
||||||||
Cash
|
$
|
1,807,171
|
$
|
2,235,347
|
||||
Accounts receivable, net of allowance of $375,000
|
3,024,865
|
2,336,481
|
||||||
Unbilled services
|
706,963
|
428,208
|
||||||
Prepaid expenses and other current assets
|
344,146
|
403,911
|
||||||
|
||||||||
Total current assets
|
5,883,145
|
5,403,947
|
||||||
|
||||||||
Property and equipment, net
|
512,728
|
567,532
|
||||||
Intangible assets, net
|
2,743,360
|
2,640,457
|
||||||
Goodwill
|
401,000
|
401,000
|
||||||
Deferred tax assets
|
1,342,000
|
1,363,000
|
||||||
Deposits and other assets
|
36,312
|
36,312
|
||||||
|
||||||||
Total assets
|
$
|
10,918,545
|
$
|
10,412,248
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
||||||||
Current liabilities:
|
||||||||
Bank line of credit
|
$
|
-
|
$
|
-
|
||||
Accounts payable
|
2,289,691
|
2,094,297
|
||||||
Accrued expenses
|
912,510
|
1,071,515
|
||||||
Accrued interest
|
14,062
|
16,283
|
||||||
Income taxes payable
|
100,052
|
97,097
|
||||||
Contingent consideration – current portion
|
54,667
|
63,380
|
||||||
Long term debt - current portion
|
194,485
|
257,846
|
||||||
Capital lease obligations – current portion
|
77,559
|
94,443
|
||||||
Deferred revenue
|
2,673,295
|
2,150,771
|
||||||
|
||||||||
Total current liabilities
|
6,316,321
|
5,845,632
|
||||||
|
||||||||
Contingent consideration net of current portion
|
26,056
|
42,255
|
||||||
Long term debt net of current portion
|
179,583
|
228,626
|
||||||
Capital lease obligations net of current portion
|
57,338
|
68,614
|
||||||
|
||||||||
Total liabilities
|
6,579,298
|
6,185,127
|
||||||
|
||||||||
Commitments and contingencies
|
||||||||
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.001 par value; authorized 1,000,000 shares
No shares issued and outstanding
|
-
|
-
|
||||||
Series A Preferred Stock, $0.001 par value; authorized 2 shares
No shares issued and outstanding
|
-
|
-
|
||||||
Series B Preferred Stock, $0.001 par value; authorized 1 share
1 share issued and outstanding
|
1
|
1
|
||||||
Common stock, $0.00001 par value; authorized 75,000,000 shares
4,501,755 and 4,489,903 shares issued and outstanding
|
46
|
46
|
||||||
Additional paid-in capital
|
11,973,055
|
11,919,316
|
||||||
Accumulated deficit
|
(7,633,855
|
)
|
(7,692,242
|
)
|
||||
|
||||||||
Total stockholders’ equity
|
4,339,247
|
4,227,121
|
||||||
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
10,918,545
|
$
|
10,412,248
|
|
Three Months Ended March 31,
|
|||||||
|
2018
|
2017
|
||||||
Revenues:
|
||||||||
Software product, net
|
$
|
1,635,061
|
$
|
906,905
|
||||
Service, net
|
7,675,013
|
7,095,667
|
||||||
Total revenues, net
|
9,310,074
|
8,002,572
|
||||||
|
||||||||
Cost of revenues:
|
||||||||
Product
|
877,861
|
434,909
|
||||||
Service
|
4,491,475
|
4,180,614
|
||||||
Total cost of revenues
|
5,369,336
|
4,615,523
|
||||||
|
||||||||
Gross profit
|
3,940,738
|
3,387,049
|
||||||
|
||||||||
Selling, general and administrative expenses :
|
||||||||
Selling and marketing expenses
|
1,596,373
|
1,146,656
|
||||||
General and administrative expenses
|
2,059,669
|
1,704,976
|
||||||
Share based compensation expenses
|
53,740
|
76,389
|
||||||
Depreciation and amortization expenses
|
142,634
|
170,836
|
||||||
Total selling, general and administrative expenses
|
3,852,416
|
3,098,857
|
||||||
|
||||||||
Income from operations
|
88,322
|
288,192
|
||||||
|
||||||||
Other income (expense)
|
||||||||
Interest expense, net
|
(6,689
|
)
|
(8,461
|
)
|
||||
Total other income (expense)
|
(6,689
|
)
|
(8,461
|
)
|
||||
|
||||||||
Income before taxes
|
81,633
|
279,731
|
||||||
|
||||||||
Provision for income taxes
|
23,246
|
125,878
|
||||||
|
||||||||
Net income
|
$
|
58,387
|
$
|
153,853
|
||||
|
||||||||
Net income per common share – basic and fully diluted
|
$
|
0.01
|
$
|
0.03
|
||||
Weighted average shares
|
||||||||
Basic
|
4,493,617
|
4,486,153
|
||||||
Diluted
|
4,497,617
|
4,490,153
|
|
Series A
Preferred Stock
|
Series B
Preferred Stock
|
Common Stock
Class A
|
Additional
Paid in
|
Accumulated
|
Total
Stockholders’
|
||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
|||||||||||||||||||||||||||
Balance at January 1, 2017
|
-
|
$
|
-
|
1
|
$
|
1
|
4,477,403
|
$
|
46
|
$
|
12,176,642
|
$
|
(7,205,773
|
)
|
$
|
4,970,916
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Stock warrants in exchange for services
|
-
|
-
|
-
|
-
|
-
|
-
|
19,923
|
-
|
19,923
|
|||||||||||||||||||||||||||
Issuance of common stock for services
|
-
|
-
|
-
|
-
|
12,500
|
-
|
47,500
|
-
|
47,500
|
|||||||||||||||||||||||||||
Cash dividend
|
-
|
-
|
-
|
-
|
-
|
-
|
(359,014
|
)
|
-
|
(359,014
|
)
|
|||||||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
34,265
|
-
|
34,265
|
|||||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(486,469
|
)
|
(486,469
|
)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017
|
-
|
$
|
-
|
1
|
$
|
1
|
4,489,903
|
$
|
46
|
$
|
11,919,316
|
$
|
(7,692,242
|
)
|
$
|
4,227,121
|
||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Issuance of common stock for services
|
-
|
-
|
-
|
-
|
11,852
|
-
|
45,306
|
-
|
45,306
|
|||||||||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
8,433
|
-
|
8,433
|
|||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
58,387
|
58,387
|
|||||||||||||||||||||||||||
Balance at March 31, 2018
|
-
|
$
|
-
|
1
|
$
|
1
|
4,501,755
|
$
|
46
|
$
|
11,973,055
|
$
|
(7,633,855
|
)
|
$
|
4,339,247
|
|
Three Months Ended
March 31,
|
|||||||
|
2018
|
2017
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
58,387
|
$
|
153,853
|
||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
||||||||
Deferred income taxes
|
21,000
|
120,000
|
||||||
Depreciation and amortization
|
71,138
|
55,986
|
||||||
Amortization of intangibles
|
71,496
|
114,850
|
||||||
Bad debt expense
|
15,974
|
-
|
||||||
Share-based compensation
|
8,433
|
8,966
|
||||||
Common stock for services
|
45,306
|
47,500
|
||||||
Warrants in exchange for services
|
-
|
19,923
|
||||||
|
||||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
(704,358
|
)
|
235,015
|
|||||
Unbilled services
|
(278,755
|
)
|
(243,454
|
)
|
||||
Prepaid expenses and other current assets
|
12,722
|
(3,994
|
)
|
|||||
Deposits and other assets
|
-
|
(13,353
|
)
|
|||||
Accounts payable
|
195,394
|
(295,441
|
)
|
|||||
Accrued expenses
|
(159,005
|
)
|
(138,623
|
)
|
||||
Income tax payable
|
2,955
|
5,053
|
||||||
Accrued interest
|
184
|
185
|
||||||
Deferred revenues
|
522,524
|
67,051
|
||||||
Net cash (used in) provided by operating activities
|
(116,605
|
)
|
133,517
|
|||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(16,334
|
)
|
(64,928
|
)
|
||||
Software development costs
|
(174,399
|
)
|
(128,671
|
)
|
||||
Net cash used in investing activities
|
(190,733
|
)
|
(193,599
|
)
|
||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Payment of cash dividend
|
-
|
(89,566
|
)
|
|||||
Payment of contingent consideration
|
(24,912
|
)
|
(7,823
|
)
|
||||
Payment of long term debt
|
(67,766
|
)
|
(76,041
|
)
|
||||
Payment of capital lease obligations
|
(28,160
|
)
|
(26,608
|
)
|
||||
Net cash used in financing activities
|
(120,838
|
)
|
(200,038
|
)
|
||||
|
||||||||
Net decrease in cash
|
(428,176
|
)
|
(260,120
|
)
|
||||
|
||||||||
Cash, beginning of period
|
2,235,347
|
1,621,049
|
||||||
|
||||||||
Cash, end of period
|
$
|
1,807,171
|
$
|
1,360,929
|
||||
|
||||||||
Cash paid during period for:
|
||||||||
Interest
|
$
|
6,505
|
$
|
8,276
|
||||
Income taxes
|
$
|
-
|
$
|
825
|
|
Three Months
Ended
|
Three Months
Ended
|
||||||
|
March 31, 2018
|
March 31, 2017
|
||||||
Basic net income per share computation:
|
||||||||
Net income
|
$
|
58,387
|
$
|
153,853
|
||||
Weighted-average common shares outstanding
|
4,493,617
|
4,486,153
|
||||||
Basic net income per share
|
$
|
0.01
|
$
|
0.03
|
||||
Diluted net income per share computation:
|
||||||||
Net income
|
$
|
58,387
|
$
|
153,853
|
||||
Weighted-average common shares outstanding
|
4,493,617
|
4,486,153
|
||||||
Incremental shares for stock options
|
4,000
|
4,000
|
||||||
Total adjusted weighted-average shares
|
4,497,617
|
4,490,153
|
||||||
Diluted net income per share
|
$
|
0.01
|
$
|
0.03
|
|
|
Three Months
March 31, 2018
|
|
|
Three Months
March 31, 2017
|
|
||
Stock options
|
|
|
62,280
|
|
|
|
133,576
|
|
Warrants
|
|
|
208,241
|
|
|
|
208,240
|
|
|
|
|
|
|
|
|
|
|
Total potential dilutive securities not included in income per share
|
|
|
270,521
|
|
|
|
341,816
|
|
|
March 31, 2018
|
December 31, 2017
|
||||||
Leasehold improvements
|
$
|
94,031
|
$
|
88,511
|
||||
Equipment, furniture and fixtures
|
2,053,991
|
2,043,177
|
||||||
|
2,148,022
|
2,131,688
|
||||||
Less: Accumulated depreciation and amortization
|
(1,635,294
|
)
|
(1,564,156
|
)
|
||||
|
||||||||
Property and equipment, net
|
$
|
512,728
|
$
|
567,532
|
|
March 31, 2018
|
December 31, 2017
|
||||||
Equipment, furniture and fixtures
|
267,084
|
315,560
|
||||||
Less: Accumulated amortization
|
(121,308
|
)
|
(126,478
|
)
|
||||
|
||||||||
Property and equipment, net
|
$
|
145,776
|
$
|
189,082
|
|
March 31, 2018
|
December 31, 2017
|
Estimated Useful Lives
|
|||||||||
Proprietary developed software
|
$
|
1,366,508
|
$
|
1,192,109
|
5 - 7
|
|||||||
Intellectual property, customer list, and acquired contracts
|
3,129,551
|
3,129,551
|
5 – 15
|
|||||||||
Total intangible assets
|
$
|
4,496,059
|
$
|
4,321,660
|
||||||||
Less: accumulated amortization
|
(1,752,699
|
)
|
(1,681,203
|
)
|
||||||||
|
$
|
2,743,360
|
$
|
2,640,457
|
|
Amortization
|
|||
Balance of 2018
|
$
|
214,488
|
||
2019
|
411,916
|
|||
2020
|
393,924
|
|||
2021
|
357,374
|
|||
2022
|
290,672
|
|||
Thereafter
|
1,074,986
|
|||
|
||||
Total
|
$
|
2,743,360
|
Remainder of 2018
|
$
|
145,441
|
||
2019
|
154,727
|
|||
2020
|
73,900
|
|||
Total
|
$
|
374,068
|
Remainder of 2018
|
$
|
72,764
|
||
2019
|
45,249
|
|||
2020
|
28,489
|
|||
Total minimum lease payments
|
146,502
|
|||
Less amounts representing interest
|
(11,605
|
)
|
||
Present value of net minimum lease payments
|
134,897
|
|||
Less current portion
|
(77,559
|
)
|
||
Long-term capital lease obligation
|
$
|
57,338
|
|
Number
of Options
|
Average
Exercise Price
|
Average Remaining
Contractual Term
|
Aggregate
Intrinsic Value
|
||||||||||||
|
||||||||||||||||
Outstanding options at January 1, 2017
|
143,576
|
$
|
3.76
|
1.6 years
|
$
|
-0-
|
||||||||||
Options granted
|
-
|
-
|
-
|
|||||||||||||
Options canceled/forfeited
|
(81,296
|
)
|
$
|
4.80
|
||||||||||||
|
||||||||||||||||
Outstanding options at December 31, 2017
|
62,280
|
$
|
3.78
|
2.0 years
|
$
|
-0-
|
||||||||||
Options granted
|
-
|
|||||||||||||||
Options exercised
|
-
|
|||||||||||||||
Options canceled/forfeited
|
-
|
|||||||||||||||
|
||||||||||||||||
Outstanding options at March 31, 2018
|
62,280
|
$ |
3.78
|
1.8 years
|
$
|
-0-
|
||||||||||
|
||||||||||||||||
Vested Options:
|
||||||||||||||||
March 31, 2018:
|
36,640
|
$
|
3.61
|
1.4 years
|
$
|
-0-
|
||||||||||
December 31, 2017:
|
34,640
|
$
|
3.61
|
1.8 years
|
$
|
-0-
|
|
Warrants
Outstanding
|
Weighted Average
Exercise Price
|
||||||
|
||||||||
Balance, January 1, 2017
|
203,253
|
$
|
5.29
|
|||||
Granted
|
4,988
|
$
|
4.01
|
|||||
Exercised
|
-
|
$
|
-
|
|||||
Canceled
|
-
|
$
|
-
|
|||||
Outstanding and Exercisable December 31, 2017
|
208,241
|
$
|
5.26
|
|||||
|
||||||||
Granted
|
-
|
$
|
-
|
|||||
Exercised
|
-
|
$
|
-
|
|||||
Canceled
|
-
|
$
|
-
|
|||||
Outstanding and Exercisable March 31, 2018
|
208,241
|
$
|
5.26
|
|
Three Months Ended
|
|||||||
|
March 31,
|
March 31,
|
||||||
|
2018
|
2017
|
||||||
Current:
|
||||||||
Federal
|
$
|
-
|
$
|
5,290
|
||||
State and local
|
2,246
|
588
|
||||||
|
||||||||
Total current tax provision
|
2,246
|
5,878
|
||||||
|
||||||||
Deferred:
|
||||||||
Federal
|
20,000
|
108,000
|
||||||
State and local
|
1,000
|
12,000
|
||||||
|
||||||||
Total deferred tax provision
|
21,000
|
120,000
|
||||||
|
||||||||
Total provision
|
$
|
23,246
|
125,878
|
Remainder 2018
|
$
|
225,621
|
||
2019
|
228,671
|
|||
2020
|
177,763
|
|||
2021
|
176,258
|
|||
2022
|
127,447
|
|||
thereafter
|
159,854
|
|||
|
$
|
1,095,614
|
1) |
Revenues increased 16.3% from the same three month period in the prior year.
|
2) |
Income from operations decreased to $88,322 as compared to $288,192 for the same three month period in the prior year.
|
3) |
Net income was $58,387 as compared to $153,853 for the same three month period in the prior year.
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
SILVERSUN TECHNOLOGIES, INC.
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
Dated: May 14, 2018
|
|
By:
|
/s/ Mark Meller
|
|
|
|
|
|
Mark Meller
|
|
|
|
|
|
Principal Executive Officer
|
||
|
|
|
|
||
|
|
|
|
||
|
|
By:
|
/s/ Crandall Melvin III
|
|
|
|
|
|
Crandall Melvin III
|
||
|
|
|
Principal Accounting Officer
|
||
|
|
|
|
1.
|
I have reviewed this Form 10-Q of SilverSun Technologies, Inc.;
|
|
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
|
|
|
|
|
|
|
4.
|
Along with the Principal Accounting Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
|
|
5.
|
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Dated: May 14, 2018
|
By:
|
/s/ Mark Meller
|
|
|
|
Mark Meller
|
|
|
|
Principal Executive Officer
SilverSun Technologies, Inc.
|
|
1.
|
I have reviewed this Form 10-Q of SilverSun Technologies, Inc.;
|
|
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
|
|
|
|
|
|
|
4.
|
Along with the Principal Executive Officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
|
|
|
|
5.
|
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Dated: May 14, 2018
|
By:
|
/s/ Crandall Melvin III
|
|
|
|
Crandall Melvin III
|
|
|
|
Principal Financial Officer
SilverSun Technologies, Inc.
|
|
(1) |
Such Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in such Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
Dated: May 14, 2018
|
By:
|
/s/ Mark Meller
|
|
|
|
Mark Meller
|
|
|
|
Principal Executive Officer
SilverSun Technologies, Inc.
|
|
|
|
|
|
(1) |
Such Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in such Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
Dated: May 14, 2018
|
By:
|
/s/ Crandall Melvin III
|
|
|
|
Crandall Melvin III
|
|
|
|
Principal Financial Officer
SilverSun Technologies, Inc.
|
|
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
May 11, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SilverSun Technologies, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 4,501,755 | |
Amendment Flag | false | |
Entity Central Index Key | 0001236275 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounts receivable, allowance (in Dollars) | $ 375,000 | $ 375,000 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Authorized | 75,000,000 | 75,000,000 |
Issued | 4,489,903 | 4,489,903 |
Outstanding | 4,489,903 | 4,489,903 |
Series A Preferred Stock [Member] | ||
Preferred stock, authorized | 2 | 2 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, authorized | 1 | 1 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, issued | 1 | 1 |
Preferred stock, outstanding | 1 | 1 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) |
Preferred Stock [Member]
Series A Preferred Stock [Member]
|
Preferred Stock [Member]
Series B Preferred Stock [Member]
|
Common Stock [Member]
Common Class A [Member]
|
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
---|---|---|---|---|---|---|
Balance at Dec. 31, 2016 | $ 0 | $ 1 | $ 46 | $ 12,176,642 | $ (7,205,773) | $ 4,970,916 |
Balance (in Shares) at Dec. 31, 2016 | 0 | 1 | 4,477,403 | |||
Stock warrants in exchange for services | 19,923 | 19,923 | ||||
Issuance of common stock for services | 47,500 | 47,500 | ||||
Issuance of common stock for services (in Shares) | 12,500 | |||||
Cash dividend | (359,014) | (359,014) | ||||
Share-Based Compensation | 34,265 | 34,265 | ||||
Net income (loss) | (486,469) | (486,469) | ||||
Balance at Dec. 31, 2017 | $ 1 | $ 46 | 11,919,316 | (7,692,242) | 4,227,121 | |
Balance (in Shares) at Dec. 31, 2017 | 1 | 4,489,903 | ||||
Issuance of stock, net of fees | 45,306 | 45,306 | ||||
Issuance of stock, net of fees (in Shares) | 11,852 | |||||
Share-Based Compensation | 8,433 | 8,433 | ||||
Net income (loss) | 58,387 | 58,387 | ||||
Balance at Mar. 31, 2018 | $ 1 | $ 46 | $ 11,973,055 | $ (7,633,855) | $ 4,339,247 | |
Balance (in Shares) at Mar. 31, 2018 | 1 | 4,501,755 |
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures [Text Block] | SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES For the three months ended March 31, 2018: On March 31, 2018, the remaining principal and accrued interest on the note payable to Oates was offset against a related party receivable of $47,043. For the three months ended March 31, 2017: None |
NOTE 1 - DESCRIPTION OF BUSINESS |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 – DESCRIPTION OF BUSINESS SilverSun Technologies, Inc. (“SilverSun”) and wholly owned subsidiary SWK Technologies, Inc. (“SWK” together with SilverSun, the “Company”) is a value added reseller and master developer for Sage Software’s Sage100/500 and ERP X3 financial and accounting software as well as the publisher of proprietary software solutions, including its own Electronic Data Interchange (EDI) software, “MAPADOC.” The Company is also a managed network service provider, providing remote network monitoring services, business continuity, disaster recovery, data backup, and application hosting. The Company sells services and products to various industries including, but not limited to, manufacturers, wholesalers and distributors located throughout the United States. The Company is publicly traded and was quoted on the Over-the-Counter Market Place (“OTCQB”) under the symbol “SSNT” until April 18, 2017. Since April 19, 2017, the Company has been listed and is traded on the NASDAQ Capital Market under the symbol “SSNT”. |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of March 31, 2018, the results of operations and cash flows for the three months ended March 31, 2018 and 2017. These results are not necessarily indicative of the results to be expected for the full year. The financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and consequently have been condensed and do not include all of the disclosures normally made in an Annual Report on Form 10-K. The December 31, 2017 balance sheet included herein was derived from the audited consolidated financial statements included in the Company’s annual report on Form 10-K. Accordingly, the financial statements included herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on March 26, 2018. Principals of Consolidation The condensed consolidated financial statements include the accounts of SilverSun and its wholly owned subsidiary SWK. All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Goodwill Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. No impairment losses were identified or recorded for the three months ended March 31, 2018 and 2017. Capitalization of proprietary developed software Software development costs are accounted for in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased or Marketed. Costs associated with the planning and designing phase of software development are expensed as incurred. Once technological feasibility has been determined, a portion of the costs incurred in development, including coding, testing and quality assurance, are capitalized until available for general release to clients, and subsequently reported at the lower of unamortized cost or net realizable value. Amortization is calculated on a solution-by-solution basis and is over the estimated economic life of the software. Amortization commences when a solution is available for general release to clients. Definite Lived Intangible Assets and Long-lived Assets The purchased intangible assets are recorded at fair value using an independent valuation at the date of acquisition and are amortized over the useful lives of the asset using the straight-line amortization method. The Company assesses potential impairment of its intangible assets and other long-lived assets when there is evidence that recent events or changes in circumstances have made recovery of an asset’s carrying value unlikely. Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results. No impairment losses were identified or recorded for the three months ended March 31, 2018 and 2017. Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts. Topic 606 is effective as of January 1, 2018 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at January 1, 2018. Software product revenue is recognized when the product is delivered to the customer and our performance obligation is fulfilled. Service revenue is recognized when the professional consulting, maintenance or other ancillary services are provided to the customer. Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. Unbilled Services The Company recognizes revenue on its professional services as those services are performed or certain obligations are met. Unbilled services represent the revenue recognized but not yet invoiced. Deferred Revenues Deferred revenues consist of maintenance service, customer support services, including telephone support and deposits for future consulting services which will be earned as services are performed over the contractual or stated period, which generally ranges from three to twelve months. Commissions Sales commissions relating to service revenues are considered incremental and recoverable costs of obtaining a project with our customer. These commissions are calculated based on estimated revenue to be generated over the life of the project. These costs are deferred and expensed as the service revenue is earned. Commission expense is included in selling and marketing expenses in the accompanying condensed consolidated statements of income. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts. Concentrations The Company maintains its cash with various institutions, which exceed federally insured limits throughout the year. At March 31, 2018 and December 31, 2017, the Company had cash on deposit of approximately $1,457,879 and $1,933,772, respectively, in excess of the federally insured limits of $250,000. As of March 31, 2018, one customer represented approximately 17% of the total accounts receivable and unbilled services. For the three months ended March 31, 2018 and 2017, our top ten customers accounted for 25% ($2,296,492) and 22% ($1,781,773), respectively, of our total revenues. The Company does not rely on any one specific customer for any significant portion of our revenue. For the three months ended March 31, 2018 and 2017, purchases from one supplier through a “channel partner” agreement were approximately 25% and 23% of cost of revenues, respectively. This channel partner agreement is for a one year term and automatically renews for an additional one year term on the anniversary of the agreements effective date. As of March 31, 2018 and December 31, 2017, one supplier represented approximately 34% and 37% of total accounts payable respectively. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable and cash. As of March 31, 2018, the Company believes it has no significant risk related to its concentration of accounts receivable. Accounts Receivable Accounts receivable consist primarily of invoices for maintenance and professional services. Full payment for software ordered by customers is primarily due in advance of ordering from the software supplier. Payments for maintenance and support plan renewals are due before the beginning of the maintenance period. Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services. The Company maintains an allowance for bad debt estimated by considering a number of factors, including the length of time the amounts are past due, the Company’s previous loss history and the customer’s current ability to pay its obligations. Accounts are written off when deemed uncollectable. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets, generally three to seven years. Leasehold improvements are amortized using the straight-line method over the estimated useful lives or the term of the lease, whichever is shorter. Maintenance and repairs that do not materially add to the value of the equipment nor appreciably prolong its life are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the Unaudited Condensed Consolidated Statements of Income. Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss carryforwards. Based on ASU 2015-17, all deferred tax assets or liabilities are classified as long-term. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date. The Company has federal net operating loss (“NOL”) carryforwards which are subject to limitations under Section 382 of the Internal Revenue Code. The 2017 Tax Cuts and Jobs Act (“Tax Reform”) was enacted on December 22, 2017. The Tax Reform includes a number of changes in existing tax law impacting businesses including a permanent reduction in the U.S. federal statutory rate from 34% to 21%, effective on January 1, 2018. Under U.S. GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate. The rate reconciliation includes the Company’s assessment of the accounting under the Tax Reform which is preliminary and is based on information that was available to management at the time the unaudited condensed consolidated financial statements were prepared. The Company files income tax returns in the U.S. federal and state jurisdictions. Tax years 2014 to 2018 remain open to examination for both the U.S. federal and state jurisdictions. There were no liabilities for uncertain tax positions at March 31, 2018 or December 31, 2017. Fair Value Measurement The accounting standards define fair value and establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The Company’s current financial assets and liabilities approximate fair value due to their short term nature and include cash, accounts receivable, accounts payable, and accrued liabilities. The carrying value of longer term lease and debt obligations approximate fair value as their stated interest rates approximate the rates currently available. The Company’s goodwill and intangibles are measured on a non-recurring basis using Level 3 inputs, as discussed in Note 5. Stock-Based Compensation Compensation expense related to share-based transactions, including employee stock options, is measured and recognized in the financial statements based on a determination of the fair value. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For employee stock options, the Company recognizes expense over the requisite service period on a straight-line basis (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions may significantly impact stock-based compensation expense. Recently Adopted Authoritative Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The ASU defines a five-step process to achieve the core principal and, in doing so, it is possible more judgement and estimates may be required within the revenue recognition process than are currently in use. The ASU was effective for the Company in the first quarter of 2018 using either of two methods: (1) retrospective application to each prior reporting period presented with the option to elect certain practical expedients or (2) retrospective application with the cumulative effect of initially applying the ASU recognized at the date of the initial application and providing certain disclosures. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at January 1, 2018. Recent Authoritative Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to put most leases on their balance sheets by recognizing a lessee’s rights and obligations, while expenses will continue to be recognized in a similar manner to today’s legacy lease accounting guidance. This ASU could also significantly affect the financial ratios used for external reporting and other purposes, such as debt covenant compliance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on our consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350), which includes provisions, intended to simplify the test for goodwill impairment. The standard is effective for annual periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect the adoption of this standard to have a significant impact on our financial position and results of operations. No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements. |
NOTE 3 - NET INCOME PER COMMON SHARE |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | NOTE 3 – NET INCOME PER COMMON SHARE The Company’s basic income per common share is based on net income for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding option and warrants to the extent they are dilutive. The computation of diluted income per share for the three months ended March 31, 2018 and March 31, 2017 does not include all share equivalents as the exercise price of certain warrants and options exceeded the average market price of the common stock.
The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share.
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NOTE 4 - PROPERTY AND EQUIPMENT |
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Property, Plant and Equipment Disclosure [Text Block] | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment is summarized as follows:
Depreciation and amortization expense related to these assets for the three months ended March 31, 2018 and 2017 was $71,138 and $55,986, respectively. Property and equipment under capital leases are summarized as follows:
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NOTE 5 - INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Text Block] | NOTE 5 – INTANGIBLE ASSETS Intangible assets consist of proprietary developed software, intellectual property, customer lists and acquired contracts carried at cost less accumulated amortization and customer lists acquired at fair value less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives. The components of intangible assets are as follows:
Amortization expense included in depreciation and amortization expense was $71,496 for the three months ended March 31, 2018 as compared to $114,850 for the three months ended March 31, 2017. Included in proprietary developed software is $881,517 for the three months ended March 31, 2018 and $707,118 for the year ended December 31, 2017 not yet in service. The Company expects the proprietary developed software to be placed in service in 2018, and has included the amortization in the future amortization schedule accordingly. The Company expects future amortization expense to be the following:
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NOTE 6 - LINE OF CREDIT AND LONG-TERM DEBT |
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Line of Credit and Term Loan [Abstract] | |||||||||||||||||||||
Line of Credit and Term Loan [Text Block] | NOTE 6 – LINE OF CREDIT AND LONG-TERM DEBT On July 21, 2016, SWK entered into a Revolving Demand Note (the “Revolving Demand Note”) by and between SWK and M&T Bank (“Lender”), a commercial lender. The Lender has agreed to loan SWK up to a principal amount of one million dollars. The interest rate on the Revolving Demand Note is a variable rate, equal to the “Prime Rate”, plus ninety-five one-hundredths percent (0.95%) per annum. There is a minimum interest rate floor of four percent (4%). The Revolving Demand Note is secured by all SWK’s assets pursuant to a Security Agreement. Furthermore, on July 21, 2016, the Company and its Chief Executive Officer, Mr. Mark Meller, individually, entered into Unlimited Guaranty agreements (the “Guaranty Agreements”) with the Lender. The line is also collateralized by substantially all of the assets of the Company. Under the Guaranty Agreements, the Company and Mr. Meller personally, jointly and severally guaranteed the liabilities of SWK due and owing under the terms of the Revolving Demand Note. At March 31, 2018 and December 31, 2017 there were no borrowings under this note. On May 6, 2014, SWK acquired certain assets of ESC, Inc. pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $350,000 (the “ESC Note”). The ESC Note matures on April 1, 2019. Monthly payments are $6,135 including interest at 2% per year. At March 31, 2018 and December 31, 2017, the outstanding balance was $84,822 and $102,742, respectively. On March 11, 2015, SWK acquired certain assets of 2000 SOFT, Inc. d/b/a Accounting Technology Resource (ATR) pursuant to an Asset Purchase Agreement for cash of $80,000 and a promissory note for $175,000 (the “ATR Note”). The ATR Note matured on February 1, 2018. At December 31, 2017, the outstanding balance was $14,987. At March 31, 2018 there was no outstanding balance. On July 6, 2015, SWK acquired certain assets of ProductiveTech Inc. (PTI) pursuant to an Asset Purchase Agreement for cash of $500,000 and a promissory note for $600,000 (the “PTI Note”). The PTI Note is due in 60 months from the closing date and bears interest at a rate of two and one half (2.5%) percent. Monthly payments including interest are $10,645. At March 31, 2018 and December 31, 2017, the outstanding balance was $289,246 and $319,249, respectively. On October 19, 2015, SWK acquired certain assets of Oates & Company, LLC (Oates) pursuant to an Asset Purchase Agreement for cash of $125,000 and a promissory note for $175,000 (the “Oates Note”). The Oates Note is due three years from the closing date and bears interest at a rate of two (2%) percent. At December 31, 2017 the outstanding balance was $49,994. At March 31, 2018 there was no outstanding balance. At March 31, 2018, future payments of long term debt are as follows:
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NOTE 7 - CAPITAL LEASE OBLIGATIONS |
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Capital Leases in Financial Statements of Lessee Disclosure [Text Block] | NOTE 7 – CAPITAL LEASE OBLIGATIONS The Company has entered into lease commitments for equipment that meet the requirements for capitalization. The equipment has been capitalized and is included in the accompanying consolidated balance sheets. The related obligations are based upon the present value of the future minimum lease payments with interest rates ranging from 7.1% to 9.0%. At March 31, 2018, future payments under capital leases are as follows:
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NOTE 8 - EQUITY |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | NOTE 8 – EQUITY Equity On January 18, 2018, the Company issued 100 shares of stock each to 10 non-executive employees of SWK valued at $3,830 based on the current market price at issuance date. On February 8, 2018 and March 23, 2018, the Company issued 4,825 and 5,115 shares of stock, respectively, in exchange for financial advisory services. The shares are based on the current market price at issuance date with a value of $17,852 and $20,204, respectively. On March 30, 2018, the Company issued 912 shares of stock for legal services valued at $3,420 based on the current market price at issuance date. All shares issued during the period ended March 31, 2018 were unrestricted and fully vested. Options A summary of the status of the Company’s stock option plans for the fiscal years ended December 31, 2017 and the three months ending March 31, 2018 and changes during the years are presented below (in number of options):
As of March 31, 2018, the unamortized compensation expense for stock options was $62,102. Unamortized compensation expense is expected to be recognized over a weighted-average period of 2.3 years. Warrants The following table summarizes the warrants transactions:
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NOTE 9 - INCOME TAXES |
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Income Tax Disclosure [Text Block] | NOTE 9 – INCOME TAXES The recognized deferred tax asset is based upon the expected utilization of its benefit from future taxable income. The Company has federal net operating loss (“NOL”) carryforwards of approximately $6,849,000 as of March 31, 2018, which is subject to limitations under Section 382 of the Internal Revenue Code. These carryforward losses are available to offset future taxable income, and begin to expire in the year 2024 to 2034. The foregoing amounts are management’s estimates and the actual results could differ from those estimates. Future profitability in this competitive industry depends on continually obtaining and fulfilling new profitable sales agreements and modifying products. The inability to obtain new profitable contracts could reduce estimates of future profitability, which could affect the Company’s ability to realize the deferred tax assets. Income tax provision:
For the three months ended March 31, 2018, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate. The Federal effective rate is higher than the statutory rate primarily due to Incentive Stock Options (ISO) expense and 50% of general meals which is not deductible. The provision for the three months ended March 31, 2018 was $23,246. The effective tax rate consists primarily of the 21% federal statutory tax rate and a blended 5% state and local tax rate. |
NOTE 10 - RELATED PARTY TRANSACTIONS |
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Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 10 – RELATED PARTY TRANSACTIONS The Company leases its North Syracuse office space from its current CFO, Crandall Melvin III which expires on May 31, 2018. The monthly rent for this office space is $2,100. Total rent expense for the three months ended March 31, 2018 and 2017 was $6,300 and $6,300 respectively under this lease. The Company leases its Seattle office space from Mary Abdian, an employee of SWK, which expires September 30, 2018. The monthly rent for this office space is $3,090 and increases 3% each year. Total rent expense for the three months ended March 31, 2018 and 2017, pursuant to this lease, was $9,548 and $9,270 respectively. As of March 31, 2018, long term debt and contingent consideration are considered related party liabilities as holders are current employees of the Company, see Note 6 and Note 11. |
NOTE 11 - COMMITMENTS |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | NOTE 11 – COMMITMENTS Operating Leases Our main office was located at 5 Regent Street, Livingston, NJ 07039 where we had 6,986 square feet of office space at a monthly rent of $7,400. The lease expired on December 31, 2016 and was subsequently extended for two months ending February 28, 2017. On March 1, 2017, the Company entered into a new operating lease agreement for its main office located at 120 Eagle Rock Avenue, East Hanover, NJ 07936. The main office premises consists of 5,129 square feet of office space at a monthly rent starting at $8,762 and escalating to $10,044 per month by the end of the term April 30, 2024. On September 11, 2017, the Company entered into an operating lease agreement for an additional 1,870 square feet of office space at 120 Eagle Rock Ave, East Hanover, NJ commencing October 1, 2017 with a monthly rent of $3,506 for a period of one year. The Company has a lease, with a one-year extension, for office space at 6834 Buckley Road, North Syracuse, New York, at a monthly rent of $2,100. The lease expired on May 31, 2015 and was subsequently extended for a three-year term commencing June 1, 2015 and ending May 31, 2018. The Company leases 2,700 square feet of office space in Skokie, Illinois with a monthly rent of $3,000. This lease expires April 30, 2018. The lease is not being renewed. The Company leases 702 square feet of office space in Minneapolis, MN with a monthly rent of $1,560 a month. This lease expired March 31, 2018. This lease has converted to a month to month payment. The Company leases 2,105 square feet of office space in Phoenix, AZ starting at $1,271 and escalating to $2,894 per month by the end of the term September 30, 2019. The Company leases 1,500 square feet of office space in Seattle, WA with a monthly rent of $3,000 a month. The lease expires September 30, 2018. The Company leased 3,422 square feet of office space in Greensboro, NC with a monthly rent of $4,182 a month. The lease expired February 28, 2017 and was extended after reducing the rental space to 2,267 square feet at a monthly rent of $2,765 per month. The extension expires February 28, 2020. The Company leases 1,745 square feet of office space in Santa Ana, CA with a monthly rent of $3,225 per month escalating to $3,402 per month by the end of the lease term, April 30, 2018. This lease is not being renewed. On January 12, 2017, the Company entered into an operating lease agreement for its south New Jersey office commencing March 1, 2017. The company leases 6,115 square feet of office space in Thorofare, NJ starting at $4,591 and escalating to $5,168 per month by the end of the term February 28, 2022. Total rent expense under these operating leases for the three months ended March 31, 2018 and 2017 was $108,549 and $111,241, respectively. The following is a schedule of approximate future minimum rental payments for operating leases subsequent to the year ended December 31, 2017.
Contingent Consideration On October 1, 2015, SWK entered into an Asset Purchase Agreement (the “Macabe Purchase Agreement”) with The Macabe Associates, Inc., (“Macabe”), a Washington corporation and Mary Abdian and John Nicholson in their individual capacity as Shareholders. SWK acquired certain assets and liabilities of Macabe (as defined in the Macabe Purchase Agreement). In consideration for the acquired assets, the Company paid $21,423 in cash. Additionally, the Company will pay 35% of the net margin on software maintenance renewals for former Macabe customers for the first twelve months, and then 30%, 25% and 20% of the net margin on software maintenance renewals for the following three years. The Company will also pay 50% the first year, and 40%, 30% and 20% the three years after on the net margin on EASY Solution Maintenance, new software & license to existing Macabe customers and EASY Solutions software and maintenance sales to new customers. On any former Macabe customers migrating to Netsuite, X3 or Acumatica, the Company will pay 50% of the net margin of the sale after applicable costs and commissions for the three year period after the acquisition. The Company estimated this contingent consideration to be approximately $417,971 at acquisition. Certain payments were made in each of these contingent consideration components, resulting in a remaining balance of $80,723 as of March 31, 2018. The Company estimates that the contingent consideration will be fully paid by September 30, 2019. |
Accounting Policies, by Policy (Policies) |
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Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of March 31, 2018, the results of operations and cash flows for the three months ended March 31, 2018 and 2017. These results are not necessarily indicative of the results to be expected for the full year. The financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and consequently have been condensed and do not include all of the disclosures normally made in an Annual Report on Form 10-K. The December 31, 2017 balance sheet included herein was derived from the audited consolidated financial statements included in the Company’s annual report on Form 10-K. Accordingly, the financial statements included herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on March 26, 2018. |
Consolidation, Policy [Policy Text Block] | Principals of Consolidation The condensed consolidated financial statements include the accounts of SilverSun and its wholly owned subsidiary SWK. All significant intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired. Goodwill is not amortized, but tested for impairment annually or whenever indicators of impairment exist. These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. No impairment losses were identified or recorded for the three months ended March 31, 2018 and 2017. |
Software to be Sold, Leased, or Otherwise Marketed, Policy [Policy Text Block] | Capitalization of proprietary developed software Software development costs are accounted for in accordance with ASC 985-20, Software — Costs of Software to be Sold, Leased or Marketed. Costs associated with the planning and designing phase of software development are expensed as incurred. Once technological feasibility has been determined, a portion of the costs incurred in development, including coding, testing and quality assurance, are capitalized until available for general release to clients, and subsequently reported at the lower of unamortized cost or net realizable value. Amortization is calculated on a solution-by-solution basis and is over the estimated economic life of the software. Amortization commences when a solution is available for general release to clients. |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block] | Definite Lived Intangible Assets and Long-lived Assets The purchased intangible assets are recorded at fair value using an independent valuation at the date of acquisition and are amortized over the useful lives of the asset using the straight-line amortization method. The Company assesses potential impairment of its intangible assets and other long-lived assets when there is evidence that recent events or changes in circumstances have made recovery of an asset’s carrying value unlikely. Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results. No impairment losses were identified or recorded for the three months ended March 31, 2018 and 2017. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 also provides guidance on the recognition of costs related to obtaining customer contracts. Topic 606 is effective as of January 1, 2018 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at January 1, 2018. Software product revenue is recognized when the product is delivered to the customer and our performance obligation is fulfilled. Service revenue is recognized when the professional consulting, maintenance or other ancillary services are provided to the customer. Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of sales. |
Trade and Other Accounts Receivable, Unbilled Receivables, Policy [Policy Text Block] | Unbilled Services The Company recognizes revenue on its professional services as those services are performed or certain obligations are met. Unbilled services represent the revenue recognized but not yet invoiced. |
Revenue Recognition, Deferred Revenue [Policy Text Block] | Deferred Revenues Deferred revenues consist of maintenance service, customer support services, including telephone support and deposits for future consulting services which will be earned as services are performed over the contractual or stated period, which generally ranges from three to twelve months. |
Revenue Recognition, Services, Commissions [Policy Text Block] | Commissions Sales commissions relating to service revenues are considered incremental and recoverable costs of obtaining a project with our customer. These commissions are calculated based on estimated revenue to be generated over the life of the project. These costs are deferred and expensed as the service revenue is earned. Commission expense is included in selling and marketing expenses in the accompanying condensed consolidated statements of income |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations The Company maintains its cash with various institutions, which exceed federally insured limits throughout the year. At March 31, 2018 and December 31, 2017, the Company had cash on deposit of approximately $1,457,879 and $1,933,772, respectively, in excess of the federally insured limits of $250,000. As of March 31, 2018, one customer represented approximately 17% of the total accounts receivable and unbilled services. For the three months ended March 31, 2018 and 2017, our top ten customers accounted for 25% ($2,296,492) and 22% ($1,781,773), respectively, of our total revenues. The Company does not rely on any one specific customer for any significant portion of our revenue. For the three months ended March 31, 2018 and 2017, purchases from one supplier through a “channel partner” agreement were approximately 25% and 23% of cost of revenues, respectively. This channel partner agreement is for a one year term and automatically renews for an additional one year term on the anniversary of the agreements effective date. As of March 31, 2018 and December 31, 2017, one supplier represented approximately 34% and 37% of total accounts payable respectively. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable and cash. As of March 31, 2018, the Company believes it has no significant risk related to its concentration of accounts receivable. |
Receivables, Policy [Policy Text Block] | Accounts Receivable Accounts receivable consist primarily of invoices for maintenance and professional services. Full payment for software ordered by customers is primarily due in advance of ordering from the software supplier. Payments for maintenance and support plan renewals are due before the beginning of the maintenance period. Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services. The Company maintains an allowance for bad debt estimated by considering a number of factors, including the length of time the amounts are past due, the Company’s previous loss history and the customer’s current ability to pay its obligations. Accounts are written off when deemed uncollectable. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the estimated useful lives of the assets, generally three to seven years. Leasehold improvements are amortized using the straight-line method over the estimated useful lives or the term of the lease, whichever is shorter. Maintenance and repairs that do not materially add to the value of the equipment nor appreciably prolong its life are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the Unaudited Condensed Consolidated Statements of Income. |
Income Tax, Policy [Policy Text Block] | Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss carryforwards. Based on ASU 2015-17, all deferred tax assets or liabilities are classified as long-term. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date. The Company has federal net operating loss (“NOL”) carryforwards which are subject to limitations under Section 382 of the Internal Revenue Code. The 2017 Tax Cuts and Jobs Act (“Tax Reform”) was enacted on December 22, 2017. The Tax Reform includes a number of changes in existing tax law impacting businesses including a permanent reduction in the U.S. federal statutory rate from 34% to 21%, effective on January 1, 2018. Under U.S. GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate. The rate reconciliation includes the Company’s assessment of the accounting under the Tax Reform which is preliminary and is based on information that was available to management at the time the unaudited condensed consolidated financial statements were prepared. The Company files income tax returns in the U.S. federal and state jurisdictions. Tax years 2014 to 2018 remain open to examination for both the U.S. federal and state jurisdictions. There were no liabilities for uncertain tax positions at March 31, 2018 or December 31, 2017. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurement The accounting standards define fair value and establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The Company’s current financial assets and liabilities approximate fair value due to their short term nature and include cash, accounts receivable, accounts payable, and accrued liabilities. The carrying value of longer term lease and debt obligations approximate fair value as their stated interest rates approximate the rates currently available. The Company’s goodwill and intangibles are measured on a non-recurring basis using Level 3 inputs, as discussed in Note 5. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Compensation expense related to share-based transactions, including employee stock options, is measured and recognized in the financial statements based on a determination of the fair value. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For employee stock options, the Company recognizes expense over the requisite service period on a straight-line basis (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions may significantly impact stock-based compensation expense. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Authoritative Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The ASU defines a five-step process to achieve the core principal and, in doing so, it is possible more judgement and estimates may be required within the revenue recognition process than are currently in use. The ASU was effective for the Company in the first quarter of 2018 using either of two methods: (1) retrospective application to each prior reporting period presented with the option to elect certain practical expedients or (2) retrospective application with the cumulative effect of initially applying the ASU recognized at the date of the initial application and providing certain disclosures. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at January 1, 2018. Recent Authoritative Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to put most leases on their balance sheets by recognizing a lessee’s rights and obligations, while expenses will continue to be recognized in a similar manner to today’s legacy lease accounting guidance. This ASU could also significantly affect the financial ratios used for external reporting and other purposes, such as debt covenant compliance. This ASU will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently in the process of assessing the impact of this ASU on our consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350), which includes provisions, intended to simplify the test for goodwill impairment. The standard is effective for annual periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect the adoption of this standard to have a significant impact on our financial position and results of operations. No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s consolidated financial statements. |
NOTE 3 - NET INCOME PER COMMON SHARE (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
The Company’s basic income per common share is based on net income for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted income per common share is based on net income, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding option and warrants to the extent they are dilutive. The computation of diluted income per share for the three months ended March 31, 2018 and March 31, 2017 does not include all share equivalents as the exercise price of certain warrants and options exceeded the average market price of the common stock.
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] |
The following table summarizes securities that, if exercised, would have an anti-dilutive effect on earnings per share.
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NOTE 4 - PROPERTY AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] |
Property and equipment is summarized as follows:
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Schedule of Capital Leased Assets [Table Text Block] |
Property and equipment under capital leases are summarized as follows:
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NOTE 5 - INTANGIBLE ASSETS (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] |
The components of intangible assets are as follows:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] |
The Company expects future amortization expense to be the following:
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NOTE 6 - LINE OF CREDIT AND LONG-TERM DEBT (Tables) |
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Line of Credit and Term Loan [Abstract] | |||||||||||||||||||||
Schedule of Maturities of Long-term Debt [Table Text Block] |
At March 31, 2018, future payments of long term debt are as follows:
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NOTE 7 - CAPITAL LEASE OBLIGATIONS (Tables) |
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Leases, Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] |
At March 31, 2018, future payments under capital leases are as follows:
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NOTE 8 - EQUITY (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation, Stock Options, Activity [Table Text Block] |
A summary of the status of the Company’s stock option plans for the fiscal years ended December 31, 2017 and the three months ending March 31, 2018 and changes during the years are presented below (in number of options):
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Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] |
The following table summarizes the warrants transactions:
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NOTE 9 - INCOME TAXES (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
Income tax provision:
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NOTE 11 - COMMITMENTS (Tables) |
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] |
The following is a schedule of approximate future minimum rental payments for operating leases subsequent to the year ended December 31, 2017.
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SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: (Details) |
3 Months Ended |
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Mar. 31, 2018
USD ($)
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Supplemental Cash Flow Elements [Abstract] | |
Other Significant Noncash Transaction, Value of Consideration Given | $ 47,043 |
NOTE 3 - NET INCOME PER COMMON SHARE (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Basic net income per share computation: | ||
Net income (in Dollars) | $ 58,387 | $ 153,853 |
Weighted-average common shares outstanding | 4,493,617 | 4,486,153 |
Basic net income per share (in Dollars per share) | $ 0.01 | $ 0.03 |
Diluted net income per share computation: | ||
Net income (in Dollars) | $ 58,387 | $ 153,853 |
Weighted-average common shares outstanding | 4,493,617 | 4,486,153 |
Incremental shares for stock options | 4,000 | 4,000 |
Total adjusted weighted-average shares | 4,497,617 | 4,490,153 |
Diluted net income per share (in Dollars per share) | $ 0.01 | $ 0.03 |
NOTE 3 - NET INCOME PER COMMON SHARE (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share - shares |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities not included in loss per share | 270,521 | 341,816 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities not included in loss per share | 62,280 | 133,576 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive securities not included in loss per share | 208,241 | 208,240 |
NOTE 4 - PROPERTY AND EQUIPMENT (Details) - USD ($) |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Property, Plant and Equipment [Abstract] | ||
Depreciation, Depletion and Amortization | $ 71,138 | $ 55,986 |
NOTE 4 - PROPERTY AND EQUIPMENT (Details) - Schedule of Property and Equipment - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Property, Plant and Equipment [Line Items] | ||
Property and Equipment | $ 2,148,022 | $ 2,131,688 |
Less: Accumulated depreciation | (1,635,294) | (1,564,156) |
Property and equipment, net | 512,728 | 567,532 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment | 94,031 | 88,511 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment | $ 2,053,991 | $ 2,043,177 |
NOTE 4 - PROPERTY AND EQUIPMENT (Details) - Schedule of Capital Leased Assets - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Schedule of Capital Leased Assets [Abstract] | ||
Equipment, furniture and fixtures | $ 267,084 | $ 315,560 |
Less: Accumulated amortization | (121,308) | (126,478) |
Property and equipment, net | $ 145,776 | $ 189,082 |
NOTE 5 - INTANGIBLE ASSETS (Details) - USD ($) |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 71,496 | $ 114,850 |
Capitalized Computer Software, Additions | $ 881,517 | $ 707,118 |
NOTE 5 - INTANGIBLE ASSETS (Details) - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ||
Balance of 2018 | $ 214,488 | |
2019 | 411,916 | |
2020 | 393,924 | |
2021 | 357,374 | |
2022 | 290,672 | |
Thereafter | 1,074,986 | |
Total | $ 2,743,360 | $ 2,640,457 |
NOTE 6 - LINE OF CREDIT AND LONG-TERM DEBT (Details) - Schedule of Maturities of Long-term Debt |
Mar. 31, 2018
USD ($)
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Schedule of Maturities of Long-term Debt [Abstract] | |
Remainder of 2018 | $ 145,441 |
2019 | 154,727 |
2020 | 73,900 |
Total | $ 374,068 |
NOTE 7 - CAPITAL LEASE OBLIGATIONS (Details) |
Mar. 31, 2018 |
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Minimum [Member] | |
NOTE 7 - CAPITAL LEASE OBLIGATIONS (Details) [Line Items] | |
Capital Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate | 7.10% |
Maximum [Member] | |
NOTE 7 - CAPITAL LEASE OBLIGATIONS (Details) [Line Items] | |
Capital Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate | 9.00% |
NOTE 7 - CAPITAL LEASE OBLIGATIONS (Details) - Schedule of Future Minimum Lease Payments for Capital Leases - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Schedule of Future Minimum Lease Payments for Capital Leases [Abstract] | ||
Remainder of 2018 | $ 72,764 | |
2019 | 45,249 | |
2020 | 28,489 | |
Total minimum lease payments | 146,502 | |
Less amounts representing interest | (11,605) | |
Present value of net minimum lease payments | 134,897 | |
Less current portion | (77,559) | $ (94,443) |
Long-term capital lease obligation | $ 57,338 | $ 68,614 |
NOTE 8 - EQUITY (Details) - Schedule of Stockholders' Equity Note, Warrants or Rights - $ / shares |
3 Months Ended | 12 Months Ended |
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Mar. 31, 2018 |
Dec. 31, 2017 |
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Schedule of Stockholders' Equity Note, Warrants or Rights [Abstract] | ||
Warrants Outstanding and Exercisable | 208,241 | 203,253 |
Warrants Outstanding and Exercisable, Weighted Average Exercise Price | $ 5.26 | $ 5.29 |
Warrants Granted | 0 | 4,988 |
Warrants Granted, Weighted Average Exercise Price | $ 0 | $ 4.01 |
Warrants Exercised | 0 | 0 |
Warrants Exercised, Weighted Average Exercise Price | $ 0 | $ 0 |
Warrants Canceled | 0 | 0 |
Warrants Canceled, Weighted Average Exercise Price | $ 0 | $ 0 |
Warrants Outstanding and Exercisable | 208,241 | 208,241 |
Warrants Outstanding and Exercisable, Weighted Average Exercise Price | $ 5.26 | $ 5.26 |
NOTE 9 - INCOME TAXES (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||
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Jan. 01, 2018 |
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
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NOTE 9 - INCOME TAXES (Details) [Line Items] | ||||
Operating Loss Carryforwards | $ 6,849,000 | |||
Income Tax Expense (Benefit) | $ 23,246 | $ 125,878 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 34.00% | ||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 5.00% | |||
Minimum [Member] | ||||
NOTE 9 - INCOME TAXES (Details) [Line Items] | ||||
Operating Loss Carryforwards, Expiration Date | 2024 | |||
Maximum [Member] | ||||
NOTE 9 - INCOME TAXES (Details) [Line Items] | ||||
Operating Loss Carryforwards, Expiration Date | 2034 | |||
Domestic Tax Authority [Member] | ||||
NOTE 9 - INCOME TAXES (Details) [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
NOTE 9 - INCOME TAXES (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Schedule of Components of Income Tax Expense (Benefit) [Abstract] | ||
Federal | $ 5,290 | |
State and local | $ 2,246 | 588 |
Total current tax provision | 2,246 | 5,878 |
Federal | 20,000 | 108,000 |
State and local | 1,000 | 12,000 |
Total deferred tax provision | 21,000 | 120,000 |
Total provision | $ 23,246 | $ 125,878 |
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) - Building [Member] - USD ($) |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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North Syracuse, New York [Member] | ||
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||
Operating Leases, Rent Expense, Minimum Rentals | $ 2,100 | |
Operating Leases, Rent Expense | $ 6,300 | $ 6,300 |
North Syracuse, New York [Member] | Chief Financial Officer [Member] | ||
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||
Lease Expiration Date | May 31, 2018 | |
Operating Leases, Rent Expense, Minimum Rentals | $ 2,100 | |
Seattle, WA [Member] | ||
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||
Lease Expiration Date | Sep. 30, 2018 | |
Operating Leases, Rent Expense, Minimum Rentals | $ 3,000 | |
Operating Leases, Rent Expense | 9,548 | $ 9,270 |
Seattle, WA [Member] | Affiliated Entity [Member] | ||
NOTE 10 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||
Operating Leases, Rent Expense, Minimum Rentals | $ 3,090 | |
Operating Leases, Rent Expense, Yearly Increase in Minimum Rentals | 3.00% |
NOTE 11 - COMMITMENTS (Details) - Schedule of Future Minimum Rental Payments for Operating Leases |
Mar. 31, 2018
USD ($)
|
---|---|
Schedule of Future Minimum Rental Payments for Operating Leases [Abstract] | |
Remainder 2018 | $ 225,621 |
2019 | 228,671 |
2020 | 177,763 |
2021 | 176,258 |
2022 | 127,447 |
thereafter | 159,854 |
$ 1,095,614 |
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