Item 1.01 Entry into a Material Definitive Agreement.
On January 1, 2022 (the "Effective Date"), SWK Technologies, Inc. ("SWK"), a
wholly-owned subsidiary of SilverSun Technologies, Inc., entered into an Asset
Purchase Agreement (the "Asset Purchase Agreement") with Dynamic Tech Services,
Inc., a Georgia corporation ("DTS") pursuant to which SWK acquired from DTS
certain assets (the "Acquired Assets") related to the component of DTS' business
devoted to selling and supporting Acumatica Cloud Enterprise Resource Planning
solutions.
The purchase price for the Acquired Assets was $1,335,000, $500,000 of which was
paid in cash and $835,000 of which was paid through the issuance by SWK to DTS
of a four-year $835,000 promissory note dated January 1, 2022 paying interest at
the rate of 3.25% per annum ("the "Note"). The principal amount of the Note is
subject to a downward adjustment in the event SWK loses any subscription renewal
revenue during the one-year period immediately following the Effective Date from
any persons that were customers of DTS immediately prior to the Effective Date
(the "DTS Customers"). Any such downward adjustment will be determined by
calculating the percentage of loss of Acumatica subscription renewals during the
one-year period immediately following the Effective Date from DTS Customers. In
the event that subscription renewal revenue received by SWK from DTS Customers
during the one-year period immediately following the Effective Date is less than
95% of the subscription renewal revenue received by DTS from DTS Customers
during the one-year period immediately preceding the Effective Date, the
principal amount of the Note will be reduced. By way of example, if the annual
subscription renewals of DTS Customers received by DTS during the one-year
period preceding the Effective Date was $1,000,000 and the annual subscription
renewals of DTS Customers received by SWK during the one-year period following
the Effective Date was $900,000, this will represent a 10% loss of the renewal
revenue conveyed to SWK. The reciprocal of this percentage loss, which would be
90%, would then be multiplied by the outstanding principal amount of the Note of
$835,000, and the new outstanding principal amount of the Buyer Note would be
$751,500, which is the amount which will be due and owing and paid in accordance
with the terms of the Note. The measuring period for any downward adjustment
will be as of the one-year anniversary of the Effective Date. Notwithstanding
the foregoing, under no circumstances will the principal amount of the Note be
reduced by reason of such downward adjustment by more than $150,000 (i.e., to a
principal amount below $685,000). The Note will be amortized as follows: The
first payment of principal and interest due under the Note, which will be an
annual payment, is due and payable on January 1, 2023, after the revised
principal amount of the Buyer Note is determined and thereafter, payments will
be made quarterly in twelve equal installments.
The Asset Purchase Agreement contains customary confidentiality and
indemnification provisions and customary representations, warranties and
covenants by the parties for transactions of this type. It also contains a
four-year non-compete provision applicable to North America and the Caribbean
and a five -year non-solicitation provision in favor of SWK.
In connection with the Asset Purchase Agreement, effective January 1, 2022, SWK
entered into a one-year Consulting Agreement with DTS (the "Consultant"),
whereby the Consultant, through its sole employee, Joseph Gress, will provide
consulting services to SWK (the "Consulting Agreement"). The Consultant's duties
will focus on the subscription renewals of Acumatica customers and the sale of
Acumatica products and services offered by SWK and such other duties as SWK may
reasonably request involving SWK's Acumatica related business. Pursuant to the
Consulting Agreement, Mr. Gress will devote all of his working time to the
business and affairs of the Company. In consideration of the services to be
rendered by the Consultant thereunder, the Company will pay the Consultant a
base salary ("Base Salary") in the amount of One Hundred Fifty Thousand Dollars
($150,000) per annum, payable monthly in twelve equal installments commencing on
January 31, 2022. The Consultant may also earn up to an additional $51,000 based
upon the amount of net new and add-on sales of Acumatica during the term of the
Consulting Agreement. The Consulting Agreement can be terminated by SWK with or
without cause and by the Consultant for good reason. If terminated by SWK
without cause or by the Consultant for good reason, SWK is obligated to pay the
Base Salary to the Consultant for the remainder of the term. The Consulting
Agreement includes a Non-Disclosure/Non-Solicitation And Arbitration Agreement
which includes confidentiality, non-compete and non-solicitation provisions.
Item 8.01 Other Events.
On January 5, 2022, the Company issued a press release announcing the Asset
Purchase Agreement and related matters. A copy of the press release is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1* Asset
Purchase
Agreement,
dated January
1, 2022 by and
between SWK
Technologies,
Inc., and
Dynamic Tech
Services,
Inc.
10.2* $835,000
January 1,
2022
Promissory
Note of SWK
Technologies,
Inc. issued to
Dynamic Tech
Services,
Inc.
10.3* Consulting
Agreement
dated January
1, 2022 by and
between SWK
Technologies,
Inc., and
Dynamic Tech
Services,
Inc.
99.1* Press
release dated
January 5,
2022
104 Cover Page
Interactive
Data File
(formatted as
Inline
XBRL)
*Filed herewith
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SILVERSUN TECHNOLOGIES A 
