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Delaware	16-1633636
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	¨		Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No x

		Page No.
PART I.    FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited):	3
	Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012	3
	Condensed Consolidated Statements of Operations for the Three Months March 31, 2013 and 2012	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4.	Controls and Procedures	14
PART II.   OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	15

ASSETS		March 31,   2013				December 31, 2012
Current assets:
Cash and cash equivalents		$	261			$	4
Accounts receivable, net of allowance of $80			1,191				1,510
Prepaid expenses and other current assets			156				132
Total current assets			1,608				1,646
Property and equipment, net of accumulated depreciation of $711 and $685			263				250
Intangible assets, net of accumulated amortization of $152 and $104			836				884
Deposits and other assets			22				22
Total assets		$	2,729			$	2,802
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Bank line of credit		$	-			$	179
Accounts payable and accrued expenses			1,735				1,959
Accrued interest			13				12
Capital lease obligations			93				89
Deferred revenue			1,534				1,358
Notes payable to related party			20				20
Total current liabilities			3,395				3,617
Commitments and contingencies			-				-
Stockholders’ deficit:
Preferred stock, $1.00 par value; authorized 1,000,000 shares;          No shares issued and outstanding			-				-
Series A Convertible Preferred Stock, $1.00 par value;            no shares issued and outstanding			-				-
Series B Preferred Stock, .001 par value; authorized 1 share;          1 share issued and outstanding			-				-
Common stock:
Class A – par value $.00001; authorized 750,000,000 shares;               116,951,000 thousand shares issued and outstanding			1				1
Class B – par value $.00001: authorized 50,000,000 shares; no shares issued and outstanding			-				-
Additional paid-in capital			10,749				10,716
Accumulated deficit			(11,416	)			(11,532	)
Total stockholders’ deficit			(666	)			(815	)
Total liabilities and stockholders’ deficit		$	2,729			$	2,802

 

		Three Months Ended March 31,
		2013				2012
Revenues:
Software product, net		$	716			$	359
Service, net			3,328				2,550
Total revenues, net			4,044				2,909
Cost of revenues:
Product			342				169
Service			2,067				1,557
Total cost of revenues			2,409				1,726
Gross profit			1,635				1,183
Selling, general and administrative expenses :
Selling and marketing expenses			730				515
General and administrative expenses			693				616
Share-based compensation expense			4				719
Depreciation and amortization			76				19
Total selling, general and administrative expenses			1,503				1,869
Income (loss) from operations			132				(686	)
Other income (expense)
Amortization of debt discount			-				(4	)
Interest expense, net			(16	)			(18	)
Total other income (expense)			(16	)			(22	)
Net income (loss)		$	116			$	(708	)
Net income (loss) per common share – basic and fully diluted		$	0.00			$	(0.01	)
Weighted Average Shares
Basic			116,951				110,847
Diluted			117,150				110,847

 

		Three Months Ended March 31,
		2013				2012
Cash flows from operating activities:
Net income (loss)		$	116			$	(708	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization			76				19
Amortization of debt discount			-				4
Share-based compensation			4				719
Common stock issued for services			-				5
Stock warrants issued in exchange for services			28				-
Changes in assets and liabilities:
Accounts receivable			319				(283	)
Prepaid expenses and other current assets			(24	)			75
Deposits and other assets			-				10
Accounts payable and accrued expenses			(225	)			(84	)
Accrued interest			1				3
Deferred revenue			176				194
Net cash provided by (used in) operating activities			471				(46	)
Cash flows from investing activities:
Acquisition of intangible assets			-				(31
Purchase of property and equipment			(22	)			(48	)
Net cash used in investing activities			(22	)			(79	)
Cash flows from financing activities:
Repayment of bank line of credit			(179	)			-
Principal payments under capital leases obligations			(13	)			(9	)
Net cash used in financing activities			(192	)			(9	)
Net increase (decrease) in cash and cash equivalents			257				(134	)
Cash and cash equivalents – beginning of period			4				234
Cash and cash equivalents – end of period		$	261			$	100
Cash paid during period for:
Interest expense		$	16			$	-
Income taxes		$	-			$	-

 
 

 
 

a)  The Company incurred approximately $17 in capital lease obligations.

 

 

 

 
 

 
 

 

 

		(in thousands, except per share data)
		Three Months Ended				Three Months Ended
		March 31, 2013				March 31, 2012
Basic net income (loss)  per share attributable to common shareholders computation:
Net income (loss) attributable to common stockholders		$	116			$	(708	)
Weighted-average common shares outstanding			116,951				110,847
Basic net income (loss) per share attributable to common Stockholders		$	0.00			$	(0.01	)
Diluted net income (loss) per share attributable to common shareholders computation
Net income (loss) attributable to common stockholders		$	116			$	(708	)
Weighted-average common shares outstanding			116,951				110,847
Incremental shares attributable to the common stock  equivalents			199				-
Total adjusted weighted-average shares			117,150				110,847
Diluted net income (loss) per share attributable to common Stockholders		$	0.00			$	(0.01	)

In January 2013, Mr. Meller extended the due date of his Note Payable to January 1, 2014.

		(in thousands, except per share data)
		March 31, 2013				December 31, 2012
Proprietary developed software		$	294			$	294
Intellectual property, customer list, and acquired contracts			694				694
Total intangible assets		$	988			$	988
Less: accumulated amortization			152				104
		$	836			$	884

 

 

Pro Forma (in thousands)
		Three Months Ended March 31, 2012
Net sales		$	3,504
Operating expenses			2,563
Income (loss) before taxes			(807	)
Net income (loss)		$	(807	)
Basic income (loss) per common share		$	(0.01	)
Diluted income (loss) per common share		$	(0.01	)

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

31.1		Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
31.2		Certification by the Principal Accounting Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
32.1		Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2		Certification by the Principal Accounting Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
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
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101.PRE		XBRL Taxonomy Extension Presentation Linkbase

		SILVERSUN TECHNOLOGIES, INC.
Dated: May 14, 2013		By:	/s/ Mark Meller
			Mark Meller
			Chief Executive Officer (Principal Executive Officer)
			Chief Financial Officer (Principal Accounting Officer)