See accompanying notes to the unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~STOCKHOLDERS’ EQUITY

See accompanying notes to the unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~STOCKHOLDERS’ EQUITY

See accompanying notes to the unaudited condensed consolidated financial statements.

~~See accompanying notes to the unaudited condensed consolidated financial statements.~~

FOR THE ~~SIX~~THREE MONTHS ENDED JUNE 30,, 2021 AND 2020 ~~AND 2019~~

On January 18, 2021, the Company incurred approximately $90,007 in financial lease obligations for purchases of equipment.

In February 2021, ISM converted the outstanding balance of the ISM Note in the amount of $479,110 into 119,004 shares of the Company’s common stock. At June 30, 2021 and December 31, 2020, the outstanding balances on the ISM Note were $-0- and $512,487 respectively (see Note 6).

In February 2021, Nellnube converted the outstanding balance of the Nellnube Note in the amount of $191,645 into 47,602 shares of the Company’s common stock. At June 30, 2021 and December 31, 2020, the outstanding balances on the Nellnube Note were $-0- and $204,995 respectively (see Note 6).

On May 1, 2021, SWK acquired certain assets of PeopleSense, Inc. (“PSI”) pursuant to an Asset Purchase Agreement for cash of $145,703, customer deposits related to prepaid time from clients in the amount of $99,938, and the issuance of a promissory note in the aggregate principal amount of $450,000 (the “PSI Note”). The PSI Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum.

The Company entered into an operating lease for equipment with Atmosera, Inc. Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $90,245.

The Company entered into an operating lease for equipment with Cologix USA, Inc. Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $18,412.

On June 18, 2021, the Company incurred approximately $134,097 in financial lease obligations for purchases of equipment.

On January 23, 2020 the Company entered into an operating lease for equipment with VAR Technology Finance. Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $453,379.

On January 29, 2020 the Company entered into an operating lease in Greensboro, NC. Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $104,296.

On February 1, 2020 the Company entered into an operating lease in East Hanover, NJ. Accordingly, operating lease right of use assets and operating lease liabilities were recognized in the amount of $349,987.

~~The Company acquired certain assets of Partners in Technology, Inc. (“PIT”) for a $174,000 promissory note in addition to a cash payment of $60,000. (see Note 10).~~

~~Operating lease right of use assets and operating lease liabilities were recognized in the amount of $911,000 at January 1, 2019.~~

~~On April 1, 2019 the company entered into an operating lease in Lisle, IL and operating lease right of use assets and operating lease liabilities were recognized in the amount of $71,685.~~

~~The Company incurred approximately $291,936 in finance lease obligations for purchases of equipment.~~

See accompanying notes to the unaudited condensed consolidated financial statements.

“SilverSun Technologies, Inc. (“SilverSun”) through our wholly owned subsidiaries SWK Technologies, Inc. (“SWK”), Secure Cloud Services, Inc. (“SCS”) and Critical Cyber Defense Corp. (“CCD”) ~~together with SWK, SCS and SilverSun (the~~(collectively the “Company”) is a business application, technology and consulting company providing strategies and solutions to meet our clients’ information, technology and business management needs. Our services and technologies enable customers to manage, protect and monetize their enterprise assets whether on-premise or in the “Cloud”. As a value-added reseller of business application software, we offer solutions for accounting and business management, financial reporting, Enterprise Resource Planning (“ERP”), Human Capital Management (“HCM”), Warehouse Management Systems (“WMS”), Customer Relationship Management (“CRM”), and Business Intelligence (“BI”). Additionally, we have our own development staff building software solutions for time and billing, and various ERP enhancements. Our value-added services focus on consulting and professional services, specialized programming, training, and technical support. We have a dedicated network services practice that provides managed services, cybersecurity, application hosting, disaster recovery, business continuity, cloud and other services. Our customers are nationwide, with concentrations in the New York/New Jersey metropolitan area, Arizona, Southern California, North Carolina, Washington, Oregon and Illinois.

On August 26, 2019 SWK entered into and closed that certain Asset Purchase Agreement (the “MAPADOC Asset Purchase Agreement”) by and among the Company, SPS Commerce, Inc., as buyer (“SPS”), and SWK as seller, pursuant to which SPS agreed to acquire from SWK substantially all of the assets related to the MAPADOC business (See footnote 13).

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~~is listed and is traded on the NASDAQ Capital Market under the symbol “SSNT”.

The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Company’s financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s customers and revenue, labor workforce, inability of customers to pay outstanding accounts receivable due and owing to the Company as they limit or shut down their businesses, customers seeking relief or extended payment plans relating to accounts receivable due and owing to the Company, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment.

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 June 30, ~~2020,~~2021, the results of operations for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 and cash flows for the six months ended June 30, ~~2020~~2021 and ~~2019.~~2020. 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, ~~2019~~2020 balance sheet included herein was derived from the audited consolidated financial statements included in the Company’s ~~annual report~~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, ~~2019,~~2020, filed with the SEC on March ~~26, 2020.~~25, 2021.

~~All financial results of the EDI practice are classified as discontinued operations for the purpose of this quarterly report (see Note 13).~~

The accompanying unaudited condensed consolidated financial statements include the accounts of ~~the “Company”~~SilverSun and its wholly-owned subsidiaries. These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. All significant inter-company transactions and accounts have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) 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 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 and six months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

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.

We account for business combinations under the acquisition method of accounting. This method requires the recording of acquired assets and assumed liabilities at their acquisition date fair values. The excess of the purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Results of operations related to business combinations are included prospectively beginning with the date of acquisition and transaction costs related to business combinations are recorded within SG&A.

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 and six months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

The Financial Accounting Standards Board “FASB” issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606 which superseded 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.

With the adoption of ASC 606, the Company has elected the significant financing component practical expedient. In determining the transaction price, the Company does not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

Software product revenue is recognized when the product is delivered to the customer and the Company’s 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.~~revenues.

The Company recognizes revenue on its professional services as those services are performed. Unbilled services (contract assets) represent the revenue recognized but not yet invoiced.

Deferred revenues consist of maintenance on proprietary products (contract liabilities), customer telephone support services (contract liabilities) and deposits for future consulting services which will be earned as such services are performed over the contractual or stated period, which generally ranges from three to twelve months. As of June 30, ~~2020,~~2021, there was ~~$129,605~~$184,970 in deferred maintenance, ~~$257,516~~$395,251 in deferred support services, and ~~$1,930,750,~~$1,889,590, in deposits for future consulting services. As of December 31, ~~2019,~~2020, there was ~~$145,977~~$167,267 in deferred maintenance, ~~$159,165~~$308,343 in deferred support services, and ~~$1,701,841~~$1,563,631 in deposits for future consulting services.

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 unaudited condensed consolidated statements of operations.

The Company estimates that the fair value of all financial instruments at June 30, 2021 and December 31, 2020, as defined in Financial Accounting Standards Board (“FASB”) ASC 825 “Financial Instruments”, does not differ materially, except for the items discussed below, from the aggregate carrying values of its financial instruments recorded in the accompanying unaudited condensed consolidated balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value.

The carrying amounts reported in the unaudited condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020 for cash, accounts receivable, and accounts payable approximate the fair value because of the immediate or short-term maturity of these financial instruments. Each reporting period we evaluate market conditions including available interest rates, credit spreads relative to our credit rating and liquidity in estimating the fair value of our debt. After considering such market conditions, we estimate that the fair value of debt approximates its carrying value.

The Company accounts for its leases in accordance with ASC 842 Leases. The Company leases office space and equipment. The Company concludes on whether an arrangement is a lease at inception. This determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property, plant or equipment for period of time in exchange for consideration. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes these lease expenses on a straight-line basis over the lease term.

The Company has assessed its contracts and concluded that its leases consist of finance and operating leases. Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s unaudited condensed consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate represents a significant judgment that is based on an analysis of the Company’s credit rating, country risk, treasury and corporate bond yields, as well as comparison to the Company’s borrowing rate on its most recent loan. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately.

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.

The Company maintains its cash with various institutions, which exceed federally insured limits throughout the year. At June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had cash on deposit of ~~$6,087,520~~$8,524,717 and ~~$8,016,900,~~$5,900,593, respectively, in excess of the federally insured limits of $250,000.

As of June 30, ~~2020,~~2021, no one customer represented more than 10% of the total accounts receivable and unbilled services. As of December 31, ~~2019,~~2020, no one customer represented ~~14%~~more than 10% of the total accounts receivable and unbilled services.

For the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, the Company’s top ten customers accounted for ~~12%~~11% ($~~2,433,153)~~2,283,248) and 12% ($~~2,267,328)~~2,433,153), respectively, of total revenues. The Company does not rely on any one specific customer for any significant portion of its revenue.

For the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, purchases from one supplier through a “channel partner” agreement were approximately 14% and ~~20%~~14% 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 June 30, ~~2020 and December 31, 2019,~~2021, one supplier represented approximately ~~23% and 15%~~13% of total accounts ~~payable respectively.~~payable. For the year ended December 31, 2020 two suppliers represented approximately 39% of accounts payable.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable ~~cash~~ and ~~escrow accounts receivable.~~cash. As of June 30, ~~2020,~~2021, the Company believes it has no significant risk related to its concentration of 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~~several 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 against the allowance when deemed uncollectable.

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. 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 operations.

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 Company files income tax returns in the U.S. federal and state jurisdictions. Tax years ~~2016~~2017 to ~~2019~~2020 remain open to examination for both the U.S. federal and state jurisdictions.

There were no liabilities for uncertain tax positions at June 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

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, intangibles and ~~intangibles~~lease obligations are measured at fair-value on a non-recurring basis using Level 3 inputs, as discussed in ~~Note~~Notes 5 and 10.

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 significantly impact stock-based compensation expense.

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. This was adopted on January 1, 2020 and did not have a significant impact on our financial position and results of operations.

In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments -Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. The amendment in this update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This ~~update is intended to provide financial statement users with more decision-useful information about the expected credit losses. We do~~was adopted on January 1, 2021 and did not ~~expect the adoption of this standard to~~ have a significant impact on our financial position and results of operations.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes - simplifying the accounting for income taxes (Topic 740), which is meant to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendment also improves consistent application and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ~~We do~~This was adopted on January 1, 2021 and did not ~~expect the adoption of this standard to~~ have a significant impact on our financial position and results of operations.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). The update simplifies the accounting for convertible debt instruments and convertible preferred stock by reducing the number of accounting models and limiting the number of embedded conversion features separately recognized from the primary contract. The guidance also includes targeted improvements to the disclosures for convertible instruments and earnings per share. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is evaluating the impact of the adoption on its consolidated financial statements.

No other recently issued accounting pronouncements had or are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements.

The Company’s basic income (loss) per common share is based on net income (loss) 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.

For the ~~three and~~ six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, the average market prices for the periods ended are less than the exercise price of all the outstanding stock options, ~~and warrants,~~ therefore, the inclusion of the stock options ~~and warrants~~ would be anti-dilutive. ~~In addition,~~For the three months ended June 30, 2021, the average market prices for the periods ended are less than the exercise price of all the outstanding stock options, therefore, the inclusion of the stock options would be anti-dilutive. For the six months ended June 30, 2020, since the effect of common stock equivalents is anti-dilutive with respect to ~~losses,~~the loss, the convertible promissory notes have also been excluded from the Company’s computation of net loss per common share for continuing operations for the six months ended June 30, 2020 and three and six months ended June 30, 2019. Therefore, basic and diluted income (loss) per common share for continuing operations for the six months ended June 30, 2020 and three and six months ended June 30, 2019 are the same.share. For the three months ended June 30, 2020 convertible promissory notes have been included in the Company’s computation of income per common ~~share for continuing operations.~~share. For the three and six months ended June 30, 2021 since the convertible promissory notes have been converted into common stock, they have been excluded in the Company’s computation of net income (loss) per common share.

The following table summarizes securities that, if exercised, would have an anti-dilutive effect on ~~earnings~~income (loss) per share.

The following table summarizes securities that, if exercised, would have an anti-dilutive effect on income (loss) per share.

Depreciation and amortization expense related to these assets was ~~$81,070~~$79,317 and ~~$165,633,~~$157,619, respectively, for the three and six months ended June 30, ~~2020~~2021 as compared to ~~$86,726~~$81,070 and ~~$161,112~~$165,633 for the three and six months ended June 30, ~~2019.~~2020.

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.

Amortization expense related to the above intangible assets for the three and six months ended June 30, ~~2020~~2021 was ~~$91,974~~$131,502 and ~~$183,946,~~$251,739, respectively, as compared to ~~$99,844~~$91,974 and ~~$199,687~~$183,946 for the three and six months ended June 30, ~~2020 and 2019.~~2020.

NOTE 6 – CONVERTIBLE DEBT AND LONG-TERM DEBT, RELATED PARTY AND PPP LOAN

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 per annum. Monthly payments including interest are $10,645. At June 30, 2020 and December 31, 2019, the outstanding balance on the PTI Note was $10,623 and $73,899, respectively.

On May 31, 2018, SWK acquired certain assets of Info Sys Management, Inc. (“ISM”) pursuant to an Asset Purchase Agreement for cash of $300,000 and a promissory note issued in the aggregate principal amount of $1,000,000 (the “ISM Note”). The ISM Note is due five years from the closing date and bears interest at a rate of two percent (2%) per annum. Monthly payments including interest are $17,528. The ISM Note has an optional conversion feature whereby the holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, until payment in full of the ISM Note, all of the outstanding principal amount of the ISM Note, plus accrued interest, into shares (the “Conversion Shares”) of the Company’s Common Stock, (“Common Stock”) at per share price equal to $4.03, a price equal to the average closing price of its Common Stock for the five (5) trading days immediately preceding the issuance date of the ISM Note (the “Fixed Conversion Price”). In February 2021, ISM converted the outstanding balance of the ISM Note in the amount of $479,111 into 119,004 shares of the Company’s common stock. At June 30, ~~2020~~2021 and December 31, ~~2019~~2020, the outstanding ~~balance~~balances on the ISM Note ~~was $611,948~~were $-0- and ~~$710,420~~$512,487 respectively.

~~NOTE 6 – CONVERTIBLE DEBT AND LONG-TERM DEBT, RELATED PARTY AND PPP LOAN (Continued)~~

On May 31, 2018, Secure Cloud Services acquired certain assets of Nellnube, Inc. (“Nellnube”) pursuant to an Asset Purchase Agreement for a promissory note issued in the aggregate principal amount of $400,000 (the “Nellnube Note”). The Nellnube Note is due five years from the closing date and bears interest at a rate of two percent (2%) per annum. Monthly payments including interest are $7,011. The Nellnube Note has an optional conversion feature whereby the holder may, at its sole and exclusive option, elect to convert, at any time and from time to time, all of the outstanding principal amount of the Nellnube Note, plus accrued interest, into shares (the “Conversion Shares”) of the Company’s Common Stock, (“Common Stock”) at per share price equal to $4.03 (the “Fixed Conversion Price”). In February 2021, Nellnube converted the outstanding balance of the Nellnube Note loan in the amount of $191,645 into 47,602 shares of the Company’s common stock. At June 30, ~~2020~~2021 and December 31, ~~2019~~2020, the outstanding ~~balance~~balances on the Nellnube Note ~~was $244,779~~were $-0- and ~~$284,168~~$204,995 respectively.

On January 1, 2019, SWK acquired certain assets of Partners in Technology, Inc. (“PIT”) pursuant to an Asset Purchase Agreement for cash of $60,000 and the issuance of a promissory note in the aggregate principal amount of $174,000 (the “PIT Note”). The PIT Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $4,984. At June 30, ~~2020~~2021 and December 31, ~~2019~~2020, the outstanding balances on the PIT Note were $34,655 and $64,040 respectively.

On July 31, 2020, the Company acquired certain assets of Prairie Technology Solutions Group, LLC (“Prairie Tech”) pursuant to an Asset Purchase Agreement. In consideration for the acquired assets, the Company paid $185,000 in cash and issued 3 promissory notes to Prairie Tech (“Prairie Tech Note 1”, “Prairie Tech Note 2” and “Prairie Tech Note 3”), each in the principal aggregate amount of $103,333 (collectively the “Prairie Tech Notes”). The Prairie Tech Notes bear interest at a rate of 4% per annum. Prairie Tech Note 1 has a term of one (1) year and is subject to downward adjustment based on whether certain revenue milestones are achieved. Prairie Tech Note 2 has a term of two (2) years and is also subject to downward adjustment based on whether certain revenue milestones are achieved. Prairie Tech Note 3 has a term of three (3) years and is not subject to a downward adjustment. At June 30, 2021 and December 31, 2020, the outstanding balances on the PT Notes were $310,000 and $310,000 respectively. On July 31, 2021, the Company paid Note 1 and accrued interest in the amount of $107,543.

On October 1, 2020, SWK acquired certain assets of Computer Management Services, LLC, (“CMS”) pursuant to an Asset Purchase Agreement for cash of $410, clients deposits related to technical support in the amount of $50,115, prepaid time from clients in the amount of $67,073, and the issuance of a promissory note in the aggregate principal amount of $170,000 (the “CMS Note”) for a total of $287,598. The CMS Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $4,869. At June 30, 2021 and December 31, 2020, the outstanding balances on the CMS Note were $133,098 and $160,821 respectively.

On December 1, 2020, SWK acquired certain assets of Business Software Solutions (“BSS”) pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $230,000 (the “BSS Note”). The BSS Note is due in 60 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $4,031. At June 30, 2021 and December 31, 2020, the outstanding balances on the BSS Note were $208,020 and $230,000 respectively.

On April 1, 2021, SWK acquired certain assets of CT-Solution, Inc. (“CTS”) pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $130,000 (the “CTS Note”). The CTS Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $3,724. At June 30, 2021, the outstanding balance on the ~~PIT~~CTS Note was ~~$93,133~~$122,980.

NOTE 6 – CONVERTIBLE DEBT AND LONG-TERM DEBT, RELATED PARTY AND PPP LOAN (continued)

On May 1, 2021, SWK acquired certain assets of PeopleSense, Inc. (“PSI”) pursuant to an Asset Purchase Agreement for cash of $145,703, customer deposits related to prepaid time from clients in the amount of $99,938, and ~~$121,968~~the issuance of a promissory note in the aggregate principal amount of $450,000 (the “PSI Note”). The PSI Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $12,889. At June 30, 2021, the outstanding balance on the CTS Note was $437,861.

Total convertible debt and long-term debt balances at June 30, 2021 and December 31, 2020 were $1,246,614 and $1,482,343, respectively, of which $428,765 and $545,000 was classified as current portion at June 30, 2021 and December 31, 2020, respectively.

At June 30, ~~2020,~~2021, future payments of ~~long term~~long-term debt are as follows:

~~On April 9, 2020,~~ SWK ~~Technologies, Inc. (“SWK”), a wholly-owned subsidiary of SilverSun Technologies, Inc. (the “Company”), issued~~entered into a promissory note (the “Note”) towith JPMorgan Chase Bank, N.A. (the “Lender”), which provided for a loan in the ~~principal aggregate~~ amount of $3,150,832 (the “PPP Loan”) pursuant to the Paycheck Protection Program ~~(“PPP”)~~ under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan had a two-year term and an interest at a rate of 0.98% per annum. Monthly principal and interest payments were deferred for six months after the date of disbursement. The PPP Loan could be prepaid at any time prior to maturity with no prepayment penalties.

~~Beginning seven months from the date of the PPP Loan SWK was required to make 24 monthly payments of principal and interest in the amount of $132,629.06.~~

Under the terms of the CARES Act, PPP loan recipients could apply for and be granted forgiveness for all or a portion of loan granted under the program. Such forgiveness would be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. No assurance was provided that SWK would obtain forgiveness of the PPP Loan in whole or in part.

At the time ~~the Company~~SWK applied for the PPP Loan, ~~the Company~~we believed that it qualified to receive ~~the~~ funds pursuant to the ~~PPP. However, on~~then published PPP qualification and certification requirements. On April 23, 2020, ~~subsequent to the Company’s receipt of the PPP Loan,~~ the SBA, in consultation with the Department of Treasury, issued new guidance that creates uncertainty regarding the qualification requirements for a PPP ~~loan for public companies,~~Loan (the “New Guidance”). Out of an abundance of caution and ~~provided a safe harbor whereby a public company could repay its PPP loan without consequence by May 7, 2020. On May 5, 2020,~~in light of the ~~SBA issued additional guidance, whereby they extended~~New Guidance, SWK determined to pay off the safe harbor date until May 14, 2020, and furthermore committed to provide additional guidance relative to a public’s company ability to retain its PPP loan. The Company reviewed the new guidance and subsequently returned the fullentire amount of the ~~loan~~PPP Loan. Accordingly, the PPP Loan was paid in full to the Lender on May 18, ~~2020.~~ 2020, resulting in the full satisfaction of the Note. Under the terms of the PPP Loan, SWK had the right to repay the Note without penalty.

The Company has entered into lease commitments for equipment that meet the requirements for capitalization. The equipment has been capitalized and is included in property and equipment in the accompanying unaudited condensed consolidated balance sheets. The related obligations are based upon the present value of the future minimum lease payments with the following:

The Company leases office space in ~~ten~~10 different locations with monthly payments ranging from ~~$720~~$655 to ~~$10,044~~$9,617 which expire at various dates through March 2025. The Company also leases equipment with a monthly payment of $10,279 which expires February 2024.

The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.

The Company's weighted average remaining lease term and weighted average discount rate for operating leases as of June 30, ~~2020~~2021 are as follows:

The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total lease liabilities recognized on the unaudited condensed consolidated balance sheet as of June 30, ~~2020:~~2021:

Total rent expense under ~~operating leases~~for the three and six months ended June 30, 2021 was $157,509 and $319,323, respectively, as compared to $134,485 and $263,270 for the three and six months ended June 30, 2020, ~~was $134,485 and $263,270 as compared to $103,438 and $260,823 for the three and six months ended June 30, 2019.~~respectively.

On October 1, 2020, the Company entered into an At Market Issuance Sales Agreement (the “2020 At Market Agreement”) with a H.C. Wainwright &Co. (the “Sales Agent”) under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $3,489,499 from time to time through the Sales Agent. Sales of the Company’s common stock through the Sales Agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the U.S. Securities and Exchange Commission. The Company will pay to the Sales Agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the Sales Agent under the 2020 At Market Agreement.

Shares of common stock sold under the 2020 At Market Agreement were made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-249238), filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2020, as amended, and declared effective on October 23, 2020 (the “2020 Registration Statement”), and the prospectus included in the 2020 Registration Statement. In February 2021, 393,300 shares of Common Stock were issued and sold generating $3,382,352, excluding legal expenses. No shares remain eligible for sale under the 2020 At Market Agreement.

In April 2021, the Company entered into an At Market Issuance Sales Agreement (the “2021 At Market Agreement”) with H.C Wainwright & Co. (the “Sales Agent”) under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $3,308,842 from time to time through the Sales Agent. Sales of the Company’s common stock through the Sales Agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the SEC. The Company will pay to the Sales Agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the Sales Agent under the 2021 At Market Agreement.

~~Equity~~Shares of common stock sold under the 2021 At Market Agreement are made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-249238), filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2020, as amended, and declared effective on October 23, 2020 (the “2020 Registration Statement”), the prospectus included in the 2020 Registration Statement and the related prospectus supplement dated February 26, 2021. In June 2021, 65,452 shares of Common Stock were issued and sold generating $722,116, excluding legal expenses. In July 2021, an additional 9,548 shares of Common Stock were issued and sold generating $106,108, excluding legal expenses.

In February 2021, ISM converted the ~~Company announced~~outstanding balance of the ~~payment of a $0.05 special cash dividend per share of Common Stock. The dividend payments announced~~loan in ~~December were paid out on January 14, 2019 for an aggregate~~the amount of ~~approximately $225,038, which was applied against additional paid in capital and included in accrued expenses at December 31, 2018.~~ $479,110 into 119,004 shares of the Company’s common stock (see Note 6).

In February 2021, Nellnube converted the outstanding balance of the loan in the amount of $191,645 into 47,602 shares of the Company’s common stock (see Note 6).

On October 10, 2019, the Company’s Board of Directors authorized a new stock repurchase program, under which the Company may repurchase up to $2 million of its outstanding common stock. Under this new stock repurchase program, the Company may repurchase shares in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements, and other corporate considerations, as determined by the Company’s management. The repurchase program may be extended, suspended, or discontinued at any time. The Company expects to finance the program from existing cash resources. As of June 30, ~~2020 and December 31, 2019,~~2021, no repurchases have been made.

The Company adopted the 2019 Equity and Incentive Plan (the “2019 Plan”) to order provide long-term incentives for employees and non-employees to contribute to the growth of the Company ~~announced~~and attain specific performance goals.

The fair value of each option awarded is estimated on the ~~payment~~date of ~~a $0.50 special cash dividend per share~~grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Expected volatilities are based on historical volatility of Common ~~Stock payable~~Stock. The expected life of the options granted represents the period of time from date of grant to expiration. The risk-free interest rate is based on ~~January 14, 2020 for~~the U.S. Treasury yield in effect at the time of grant. On March 29, 2021, 99,990 stock options were granted with an ~~aggregate amount~~exercise price of ~~$2,250,636, which~~$6.53 per option and have a five-year term with a two-year vesting period at 50% per annum. The fair value of stock options granted was ~~applied against paid in capital.~~$4.888 per option on the date of grant using the Black Scholes option-pricing model with the following assumptions:

~~(Unaudited)~~$48,940 and $49,932, respectively, as compared to $3,399 and $6,798 for the three and six months ended June 30, 2020.

A summary of the status of the Company’s stock option plans for the fiscal years ended December 31, 2019 and the six months ending June 30, 2020 and changes during the years are presented below (in number of options):

As of June 30, 2021 and December 31, 2020, the unamortized compensation expense for stock options was ~~$3,396.~~$341,073 and $-0-, respectively. Unamortized compensation expense is expected to be recognized over a weighted-average period of ~~0.3~~1.5 years.

On ~~January~~December 1, ~~2019,~~2020, SWK acquired certain assets of ~~Partners in Technology, Inc.~~Business Software Solutions (“~~PIT”~~BSS”) pursuant to an Asset Purchase Agreement ~~in exchange~~ for ~~cash of $60,000 and~~ a promissory note in the aggregate principal amount of ~~$174,000 (“PIT~~$230,000 (the “BSS Note”). The ~~PIT~~BSS Note is due in 60 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $4,031. The purchase price has been allocated to customer list with an estimated life of fifteen years.

On April 1, 2021, SWK acquired certain assets of CT-Solution, Inc. (“CTS”) pursuant to an Asset Purchase Agreement for a promissory note in the aggregate principal amount of $130,000 (the “CTS Note”). The CTS Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%). per annum. Monthly payments including interest are ~~$4,984.~~$3,724. The ~~allocation of the~~ purchase price has been allocated to customer list with an estimated life of fifteen ~~years and goodwill, which is deductible for tax purposes, has been based on an independent valuation.~~years.

The Company expects ~~this acquisition~~these acquisitions to create synergies by combining operations and expanding geographic market share and product offerings.

The following summarizes the purchase price allocation for the current and prior ~~year’s acquisition:~~year acquisitions:

The purchase of PSI was initially allocated, based on the Company’s estimate of fair value, to intangible assets, which are expected to consist primarily of customers lists with an estimated life of seven years. Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified with the excess purchase consideration being allocated to goodwill.

The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions of Prairie Technology Solutions Group, LLS (“PT”), acquired July 31, 2020, Computer Management Services, LLC (CMS”), acquired October 1, 2020, Business Software Solutions (“BSS”), acquired December 1, 2020, CT-Solution, Inc. (“CTS”), acquired April 1, 2021, and PeopleSense, Inc. (“PSI), acquired May 1, 2021, occurred on January 1, 2020, nor is the financial information indicative of the results of future operations. The following table represents the unaudited condensed consolidated pro forma results of operations for the three and six months ended June 30, 2020 as if the acquisitions occurred on January 1, 2020. For the three and six months ended June 30, 2020, operating expenses have been increased for the amortization expense of expected definite lived intangible assets and interest on the notes payable.

The Company’s unaudited condensed consolidated financial statements for the three and six ~~months ending~~ended June 30, ~~2020 and 2019~~2021 include the actual results of ~~PIT since the date of acquisition, January 1, 2019.~~ PT, CMS and BSS.

The Company’s unaudited condensed consolidated financial statements for the three months ended June 30, 2021 included the actual results for CTS and actual results for two months for PSI. For three months ended June 30, 2021 pro-forma results above include two months of results for PSI. For the six months ended June 30, 2021 pro-forma results above include three months of results of CTS and four months of PSI. For the three months ended June 30, 2021, there is $8,282 of estimated amortization expense and $699 of estimated interest expense included for PSI in the pro-forma results. For the six months ended June 30, 2021, $4,644 of estimated amortization expense and $606 of estimated interest expense is included in the pro-forma results for CTS and $24,844 of estimated amortization and $2,098 of estimated interest expense included for PSI in the pro-forma results.

For the three months ended June 30, 2020, there is $10,149 of estimated amortization expense and $3,126 of estimated interest expense included in the pro-forma results for PT, $6,864 of estimated amortization expense and $5,560,of estimated interest expense included in the pro-forma results for CMS, $8,214 of estimated amortization expense and $1,104,of estimated interest expense included in the pro-forma results for BSS, $4,644 of estimated amortization expense and $606 of estimated interest expense is included in the pro-forma results for CTS, and $24,845 of estimated amortization expense and $2,098 of estimated interest expense is included in the pro-forma results for PSI.

For the six months ended June 30, 2020, there is $20,298 of estimated amortization expense and $6,252 of estimated interest expense included in the pro-forma results for PT, $13,728 of estimated amortization expense and $11,120,of estimated interest expense included in the pro-forma results for CMS, $16,428 of estimated amortization expense and $2,209 of estimated interest expense included in the pro-forma results for BSS, $9,288 of estimated amortization expense and $1,212 of estimated interest expense is included in the pro-forma results for CTS, and $49,689 of estimated amortization expense and $4,196 of estimated interest expense is included in the pro-forma results for PSI.

FASB ASC 740-10, “Accounting for Uncertainty in Income Taxes” (“ASC 740-10”) prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company does not have any unrecognized tax benefits.

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 ~~$6,177,000~~$5,100,000 as of June 30, ~~2020,~~2021, which is subject to limitations under Section 382 of the Internal Revenue Code. These carryforward losses are available to offset future taxable income and a portion begin to expire in the year 2024 to ~~2033.~~

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.2033.

~~(Unaudited)~~temporary differences, primarily net operating loss carryforwards, asset reserves and depreciation, gave rise to the Company’s deferred tax asset. Deferred income taxes are recognized for the tax consequence of such temporary differences at the enacted tax rate expected to be in effect when the differences reverse. The Company had approximately $828,000 and $1.04 million in deferred tax assets at June 30, 2021 and December 31, 2020, respectively.

For the six months ended June 30, ~~2020,~~2021, the Company’s Federal and State provision requirements were calculated based on the estimated tax rate. ~~The Federal effective rate is higher than~~For the ~~statutory rate primarily due~~six months ended June 30, 2021, the Company recorded a tax provision of $195,017 as compared to ~~Incentive Stock Options (ISO) and 50% of meals, 100% entertainment expense which are not~~a tax ~~deductible. The~~ benefit from ~~continuing operations~~the net loss before taxes for the six months ended June 30, 2020 ~~was~~in the amount of $78,382. ~~The effective tax rate consists primarily of the 21% federal statutory tax rate and a blended 5% state and local tax rate.~~

As of ~~June 30, 2020 and~~ December 31, ~~2019, long term debt and long term~~2020, long-term convertible debt issued in conjunction with various acquisitions are considered related party liabilities as holders are current employees of the Company, see Note 6.

~~On August 26, 2019~~ In February 2021, the ~~Company entered~~outstanding balances of the loans were converted into ~~that certain Asset Purchase Agreement (the “Asset Purchase Agreement”) by~~common stock of the Company. As of June 30, 2021 and ~~among~~December 31, 2020, the Company, SPS Commerce, Inc., as buyer (“Buyer” or “SPS”), and SWK, as seller (the “Seller”), pursuant to which the Buyer has agreed to acquire from the Seller certain assets (all intellectual property and accounts receivable) related to the MAPADOC business, which was the EDI practice. In considerationoutstanding balance for the ~~Acquired Assets (as defined in the Asset Purchase Agreement), at closing, SPS: (i) paid Seller $10,350,000 in cash (the “Initial Cash Payment”);~~long-term convertible debt was $-0- and (ii) delivered $1,150,000 to an escrow account (the “Escrowed Property”) pursuant to the terms and conditions of that certain Escrow Agreement dated August 26, 2019 (the “Escrow Agreement”), for an aggregate consideration of $11,500,000 (the “Purchase Price”). Pursuant to the terms and conditions of that certain Escrow Agreement entered into in connection with the Asset Purchase Agreement, portions of the Escrowed Property will be released at six months and at twelve months following the date of closing of the Asset Purchase Agreement, to the extent that no indemnity claims against the Escrowed Property have been filed by the Buyer. On February 28, 2020, the Company received the first half of the escrow agreement ($575,000), per the agreement. There was also an adjustment to the Working Capital and an additional $162,868 was added to the gain on the sale of Mapadoc which was recognized in 2019 and paid in February 2020.$717,482, respectively.

~~The financial results of our EDI Practice (“Mapadoc”) through June 30, 2019 are presented as discontinued operations. The following table presents the financial results of “Mapadoc.”~~

On July 31, 2020, the Company acquired certain assets of Prairie Technology Solutions Group, LLC (“Prairie Tech”) pursuant to an Asset Purchase Agreement. In consideration for the acquired assets, the Company paid $185,000 in cash and issued three promissory notes to Prairie Tech (“Prairie Tech Note 1”, “Prairie Tech Note 2” and “Prairie Tech Note 3”), each in the principal aggregate amount of $103,333 (collectively the “Prairie Tech Notes”). The Prairie Tech Notes bear interest at a rate of 4% per annum. Prairie Tech Note 1 has a term of one (1) year and is subject to downward adjustment based on whether certain revenue milestones are achieved. Prairie Tech Note 2 has a term of two (2) years and is also subject to downward adjustment based on whether certain revenue milestones are achieved. Prairie Tech Note 3 has a term of three (3) years and is not be subject to a downward adjustment.

Shares of common stock sold under the 2021 At Market Agreement are made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-249238), filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2020, as amended, and declared effective on October 23, 2020 (the “2020 Registration Statement”), the prospectus included in the 2020 Registration Statement and the related prospectus supplement dated February 26, 2021. In July 2021, an additional 9,548 shares of Common Stock were issued and sold generating $106,108, excluding legal expenses.

On June 21, 2021, the Company announced the payment of a $0.60 special cash dividend per share of Common Stock to shareholders of record July 9, 2021. The dividend was paid on July 16, 2021 in the amount of $3,081,706.

On August 4, 2021, the Company incurred approximately $58,644 in financial lease obligations for purchases of equipment.

Item 2. ~~Management’s~~Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations,~~Operations.

This quarterly report on Form 10-Q and other reports filed by SilverSun Technologies, Inc. and its wholly owned subsidiaries, SWK Technologies, Inc., Secure Cloud Services, Inc., and Critical Cyber Defense Corp. (collectively the “Company”, “we”, “our”, and “us”) from time to time with the U.S. Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019,~~2020, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

The Company is engaged in providing transformational business management applications and technologies and professional consulting services to small and medium size companies, primarily in the manufacturing, distribution and service industries.

We are executing a multi-pronged business strategy centered on cloud-based products, services, recurring revenue, customer retention and on rapidly increasing the size of our installed customer base. The growth of our customer base is accomplished via both our traditional marketing programs and acquisitions. After a customer is secured, our strategy is to up-sell and cross-sell, providing the customer with advanced technologies and third-party add-ons that help them digitally transform their business. These add-on products could include application hosting, cybersecurity, warehouse management, human capital management, payment automation, sales tax compliance or any number of other products or services that we represent. Many of these incremental products and services are billed on a subscription basis, often paying monthly for the service, which increases our monthly recurring revenue (“MRR”). This strategy increases the average revenue per customer, which facilitates our continued growth, and reduces our cost of customer acquisition, which enhances our profitability profile.

We are a business application, technology and consulting company providing strategies and solutions to meet our clients’ information, technology and business management needs. Our services and technologies enable customers to manage, protect and monetize their enterprise assets whether on-premise or in the ~~“Cloud”.~~cloud. As a value-added reseller of business application software, we offer solutions for accounting and business management, financial reporting, Enterprise Resource Planning (“ERP”), Human Capital Management (“HCM”), Warehouse Management Systems (“WMS”), Customer Relationship Management (“CRM”), and Business Intelligence (“BI”). Additionally, we have our own development staff building software solutions for various ERP enhancements. Our value-added services focus on consulting and professional services, specialized programming, training, and technical support. We have a dedicated Information Technology (“IT”) network services practice that provides managed services, Infrastructure-as-a-Service, cybersecurity, application hosting, disaster recovery, business continuity, cloud and other services. Our customers are nationwide, with concentrations in the New York/New Jersey metropolitan area, Arizona, Southern California, North Carolina, Washington, Oregon and Illinois.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued).

We are a value-added reseller for a number of industry-leading ERP applications. We are a Sage Software Authorized Business Partner and Sage Certified Gold Development Partner. We believe we are among the largest Sage partners in North America, with a sales and implementation presence complemented by a scalable software development practice for customizations and enhancements. Due to the growing demand for cloud-based ERP solutions, we also have in our ERP portfolio Acumatica, a browser-based ERP solution that can be offered on premise, in the public cloud, or in a private cloud. We develop and resell a variety of add-on solutions to all our ERP and accounting packages that help customize the installation to our customers’ needs and streamline their operations.

We go beyond simply reselling software packages; we have a consulting and professional services organization that manages the process as we move from the sales stage into implementation, go live, and production. We work inside our customers’ organizations to ensure all software and IT solutions are enhancing their business needs. A significant portion of our services revenue comes from continuing to work with existing customers as their business needs change, upgrading from one version of software to another, or providing additional software solutions to help them manage their business and grow their revenue. We have a dedicated help desk team that fields hundreds of calls every week. Our custom programming department builds specialized software packages as well as “off the shelf” enhancements and time and billing software.

We provide ~~comprehensive~~ IT managed services, Infrastructure-as-a-Service, cybersecurity, business continuity, disaster recovery, data back-up, network maintenance and service upgrades for our business clients. We are a Microsoft Solutions Provider. Our staff includes engineers who maintain certifications from Microsoft and Sage Software. They are Microsoft Certified Systems Engineers and Microsoft Certified Professionals, and they provide a host of services for our clients, including remote network monitoring, server implementation, support and assistance, operation and maintenance of large central systems, technical design of network infrastructure, technical troubleshooting for large scale problems, network and ~~managed~~server security, and backup, archiving, and storage of data from servers. There are numerous competitors, both larger and smaller, nationally and locally, with whom we compete in this market.

We provide enterprise level security services ~~designed~~ to ~~eliminate~~ the ~~IT concerns of our customers. Businesses can focus on their core strengths rather than technology issues. We adapt our solutions~~mid-market. Our cybersecurity-as-a-service offering includes a security operations center, incident response, cybersecurity assessments, and hacking simulations. The service is particularly well-suited for ~~virtually any~~customers in compliance-driven and regulated industries, including financial services, pension administration, insurance, and the land and title sector.

Application hosting is a type of ~~business,~~SaaS (Software-as-a-Service) hosting solution that allows applications to be available from ~~large national~~a remote cloud infrastructure and ~~international product~~to be accessed by users through the internet.

Item 2.Management’s Discussion and ~~service providers, to small businesses with local customers. Our business continuity services provide automatic on-site~~Analysis of Financial Condition and off-site backups, complete encryption, and automatic failure testing. We also provide cybersecurity, application hosting, IT consulting and managed network services. Our focus in the network and managed services practice is to focus on industry verticals in order to demonstrate our ability to better understand our customers’ needs. Results of Operations (continued).

Results of Operations for the Three and Six Months Ended June 30,~~, 2020~~ 2021 and ~~2019.~~2020.

During the six months ended June 30, ~~2020~~2021 the Company continued to expand its customer base, which prior to Covid-19 we believed would provide a basis for future growth, as revenues increased ~~7% from~~6.9% as compared to the same ~~six month~~six-month period in the prior year. The Company ~~will continue~~continues to monitor the ~~Covid 19~~Covid-19 situation as it pertains to the disruption of our business and growth in future quarters and will take steps, if necessary, to establish mitigation strategies ~~in order~~ to try and minimize risk of any potential downturn for shareholders as well the health, safety and wellbeing of its employees and customers.

~~Revenues for~~For the three months ended June 30, ~~2020~~2021, revenues increased ~~$553,527 (6.07%)~~$556,264 (5.8)% to ~~$9,672,945~~$10,229,209 as compared to ~~$9,119,418~~$9,672,945 for the three ended June 30, 2020. This increase is mostly attributed to an increase in recurring and service revenues partially offset by a decline in software sales.

For the six months ended June 30, ~~2019. Revenues~~2021, revenues increased $1,356,209 (6.9%) to $21,108,677 as compared to $19,752,468 for the six months ended June 30, 2020, ~~increased $1,325,736 (7.19%~~respectively. The increase is mostly attributed to the increase in recurring and service revenues.

Software sales decreased $165,212 (8.6%) to ~~$19,752,468 as compared to $18,426,732~~$1,761,485 for the ~~six~~three months ended June 30, ~~2019.The increase can be attributed to both the increase in software sales and consulting revenue,~~2021 as ~~well as an increase in subscription revenue.~~

~~Software sales increased $502,058 (35.24%)~~compared to $1,926,697 for the three months ended June 30, 2020 ~~as compared~~due to ~~$1,424,639 for~~ the ~~three months ended June 30, 2019.~~timing of orders. For the six months ended June 30, ~~2019~~2021, software sales increased ~~$664,952 (21.94%~~$69,629 (1.9%) to ~~$3,695,867 from $3,030,915 for the same period in 2019. The increase is attributable to increased sales of third party solutions which add functionality to customer’s existing systems.~~

Service revenue increased by $51,469 to $7,746,248 for the three months ended June 30, 2020 from $7,694,779 for the same period in 2019, which represents an overall increase of 0.67%. Service revenue increased by $660,784 to $16,056,601 for the six months ended June 30, 2020 from $15,395,817 for the same period in 2019, representing an overall increase of 4.29%. This increase is attributed to the increase in both consulting and subscription revenue.

~~Gross profit for the three months ended June 30, 2020 increased $461,707 (13.28%) to $3,938,605~~$3,765,496 as compared to $3,476,898 for the three months ended June 30, 2019. For the three month period ended June 30, 2020, the overall gross profit percentage was 40.72% as compared to 38.13% for the period ended June 30, 2019.

Gross profit for the six months ended June 30, 2020 increased $551,293 (7.62%) to $7,790,814 as compared to $7,239,521 for the six months ended June 30, 2019. For the six month period ended June 30, 2020, the overall gross profit percentage was 39.44% as compared to 39.29% for the period ended June 30, 2019.

The gross profit attributed to software sales increased $179,832, or 35%, to $693,532 for the three months ending June 30, 2020 versus $513,700 in the three months ending June 30, 2019, Gross profit attributed to software sales increased $109,784, or 8.97%, to $1,333,310 for the six months ending June 30, 2020 versus $1,223,526 in the six months ending June 30, 2019. This increase is attributed to the increase in software sales for the period.

The gross profit attributed to services increased $281,875, or 9.51%, to $3,245,073 for the three months ending June 30, 2020 versus $2,963,198 for the three months ending June 30, 2019, while gross profit attributed to services increased $441,509, or 7.33%, to $6,457,504 for the six months ending June 30, 2020 versus $ 6,015,995 for the six months ending June 30, 2019. This increase is attributed to the increase in subscription revenue for the period.

Selling and marketing expenses increased $167,506 (10.70%) to $1,733,472 for the three months ending June 30, 2020 from $1,565,966 in the three months ending June 30, 2019. Selling and marketing expenses increased $366,379 (11.07%) to $3,674,795 for the six months ended June 30, 2020 compared to $3,308,416 for the six months ended June 30, 2019. This is due to increased variable compensation as a result of increased sales.

General and administrative expenses decreased $96,347 (4.64%) to $1,981,248 for the three months ending June 30, 2020 from $2,077,595 in the three months ending June 30, 2019. General and administrative expenses decreased $24,982 (0.60%) to $4,107,389$3,695,867 for the six months ended June 30, 2020 as a result of an increase in our ERP software sales offset partially by a decrease in third party software revenues.

Service revenue increased by $721,476 (9.3%) and $1,286,580 (8.0%) to $8,467,724 and $17,3343,181 for the three and six months ended June 30, 2021, respectively, as compared to ~~$4,132,371~~$7,746,248 and $16,056,601 for the three and six months ended June 30, 2020, respectively. These increases are mainly attributed to increases managed services and application hosting as we continue to focus in this area due to the needs of our customers’ digital transformation and the further requirement of customers to have the ability of their organizations to work remotely, particularly during the Covid pandemic.

Gross profit for the three and six months ended June 30, 2021 increased $332,075 (8.4%) and $1,226,403 (15.7%) to $4,270,680 and $9,017,217, respectively, as compared to $3,981,605 and $7,790,814 for the three and six months ended June 30, 2020, respectively. For the three months ended June 30, 2021, the overall gross profit percentage was 41.7% as compared to 40.7% for the three months ended June 30, 2020. For the six months ended June 30, 2021, the overall gross profit percentage was 42.7% as compared to 39.4% for the six months ended June 30, ~~2019.~~2020.

The gross profit attributed to software sales increased $82,435 (11.9%) and $296,614 (22.2%) to $775,967 and $1,629,924 for the three and six months ended June 30, 2021, respectively, as compared to $693,532 and $1,333,310 for the three and six months ended June 30, 2020. This increase is due to sales of software with higher gross profits.

The gross profit attributed to services increased $249,640 (7.7%) and $929,789 (14.4%) to $3,494,713 and $7,387,293 for the three and six months ended June 30, 2021, respectively, as compared to $3,245,073 and $6,457,504 for the three and six months ended June 30, 2020, respectively. This increase is attributed to revenue increases in managed services and application hosting, which provide for higher profit margins, and increases in commission and maintenance revenue for the period.

Selling and marketing expenses decreased $119,366 (6.9%) and $341,381 (9.3%) to $1,614,106 and $3,333,414 for the three and six months ended June 30, 2021, respectively, as compared to $1,733,472 and $3,674,795 for the three and six months ended June 30, 2020, respectively. This decrease is primarily due to lower travel and entertainment expense and reduced attendance at conferences and trade shows, as we were still doing some travel in the early part of 2020, lower marketing expenses, in addition to a slight reduction in payroll related expenses as a result departmental changes for various employees, thereby reducing salary and benefit expense.

General and administrative expenses increased $212,029 (10.7%) and $420,806 (10.2%) to $2,193,277 and $4,528,195 for the three and six months ended June 30, 2021, respectively, as compared to $1,981,248 and $4,107,389 for the three and six-months ended June 30, 2020, respectively. This is primarily as a result of ~~decreases~~increases in payroll related expenses related to both additional personnel and departmental changes for various employees, which increased salary and benefit expense. These increases were partially offset by lower travel ~~expenses as a result of less employees traveling during the pandemic.~~ and entertainment expenses.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued).

Results of Operations for the Three and Six Months Ended June 30, 2021 and 2020 (continued).

Share-based compensation increased $45,541 and $43,134 for the three and six months to $48,940 and $49,932 for the three and six months ended June 30, 2021 as compared to $3,399 and $6,798 for the three and six months ended June 30, 2020, respectively. The increase is due to the issuance of stock options at the end of March 2021.

Depreciation and amortization expense ~~decreased $13,526~~increased $37,409 and $58,920 to $210,453 and $408,499 for the three and six months ended June 30, 2021, respectively, as compared to $173,044 and $349,579 for the three and six months ended June 30, 2020. This increase is primarily due to the additional amortization of intangible assets related to the new acquisitions.

As a result of the above, for the three months ended June 30, ~~2020 to $173,044~~2021, the Company had income from operations of $203,904 as compared to ~~$186,570~~income from operations of $47,442 for the three months ended June 30, ~~2019. Depreciation and amortization expense decreased $11,219~~2020. For the six months ended June 30, 2021, the Company had net income from operations of $697,177 as compared to a loss from operations of $347,747 for the six months ended June 30, ~~2020 to $349,579 as compared to $360,798 for the six months ended June 30, 2019. This decrease is due to some equipment being fully depreciated in~~ 2020.

For the three months ended June 30, 2020, the Company had income from continuing operations of $33,514 as compared to loss from continuing operations of $300,802 for the three months ended June 30, 2019. The increase is primarily due to increased revenue as well as less general and administrative expenses.

For the six months ended June 30, 2020, the Company had a loss from continuing operations of $258,601 as compared to loss from continuing operations of $484,101 for the six months ended June 30, 2019. The decrease in loss is primarily due to increased revenue as well as less general and administrative expenses.

The negative impact of Covid-19 on the economy creates tremendous uncertainty for the Company in the coming months and quarters. ~~Recent government reports indicate that there are currently about 17 million people unemployed in~~While our Company has not been significantly impacted as a result of this uncertainty, the ~~U.S., many of whom work at our customer’s businesses or businesses similar to our customers. The~~potential negative impact on our business, in the future, is impossible to determine at this point, although it is likely that we ~~will~~could suffer negative consequences as many ~~of these~~ companies go out of business or decrease their technology spending.

The ~~current confusion in SBA guidance as to whether the~~ Company ~~as a publicly-traded entity, was eligible to retain its PPP Loan, as well as the unavailability~~currently has no line of credit or other ~~alternative sources of funding, means that~~credit facility with any lender.

As such, we ~~may~~ need to rely on our own limited resources to weather ~~the anticipated~~any economic downturn., Our competitors, almost all of whom are ~~privately-held, and~~privately held, were able to avail themselves of the PPP program, ~~will~~which may make it more difficult for the Company to compete in the marketplace. Management will continue to monitor developments, explore various cost-cutting measures, and explore other sources of funding, but there is no guarantee we will be successful in doing so.

We are currently seeking additional operating income opportunities through potential acquisitions or investments. Such acquisitions or investments may consume cash reserves or require additional cash or equity. Our working capital and additional funding requirements will depend upon numerous factors, including: (i) strategic acquisitions or investments; (ii) an increase to current company personnel; (iii) the level of resources that we devote to sales and marketing capabilities; (iv) technological advances; and (v) the activities of competitors.

In February 2021, ISM converted the outstanding balance of the loan in the amount of $479,110 into 119,004 shares of the Company’s common stock.

In February 2021, Nellnube converted the outstanding balance of the loan in the amount of $191,645 into 47,602 shares of the Company’s common stock.

In February 2021, the Company received net proceeds of $3,382,352, excluding legal expenses, from the sale of 393,300 of common stock under its Registration Statement on Form S-3 and the previously disclosed At Market Issuance Sales Agreement.

In April 2021, the Company entered into the “2021 At Market Agreement with H.C wainwright & Co. (the “Sales Agent”) under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $3,308,842 from time to time through the Sales Agent. Sales of the Company’s common stock through the Sales Agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the SEC. The Company will pay to the Sales Agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the Sales Agent under the 2021 At Market Agreement.

In June 2021, 65,452 shares of Common Stock were issued and sold generating $722,116 under The At Market Agreement, excluding legal expenses. In July 2021, an additional 9,548 shares of Common Stock were issued and sold generating $106,108, excluding legal expenses.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued).

In addition to developing new products, obtaining new customers and increasing sales to existing customers, management plans to increase its business and profitability by entering into collaboration agreements, buying assets, and acquiring companies in the business software and information technology consulting and other markets with solid revenue streams and established customer bases that generate positive cash flow.

On ~~July 31, 2020,~~April 1, 2021, the Company acquired certain assets of ~~Prairie Technology Solutions Group, LLC~~CT-Solution, Inc. (“~~PT”~~CTS”) pursuant to an Asset Purchase Agreement. In consideration for the acquired assets, the Company ~~paid $185,000 in cash and three~~issued a promissory ~~notes, each~~note to CTS in the principal aggregate amount of ~~$103,333 (“PT Notes”~~$130,000 (the CTS Note”) ~~with an~~. The CTS Note is due in 36 months from the closing date and bears interest at a rate of 4%two (2%) percent per annum. ~~The notes mature July 2021, July 2022 and July 2023 respectively.~~Monthly payments including interest are $3,724.

~~The Company currently has no line of credit or other credit facility with any lender.~~

~~Table~~

On May 1, 2021, SWK acquired certain assets of ~~Contents~~

PeopleSense, Inc. (“PSI”) pursuant to an Asset Purchase Agreement for cash of $145,703, customer deposits related to prepaid time from clients in the amount of $99,938, and the issuance of a promissory note in the aggregate principal amount of $450,000 (the “PSI Note”). The PSI Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $12,889.

~~As of~~At June 30, ~~2020, the Company has $960,483 notes outstanding from acquisitions occurring between 2014 and 2019. Future~~2021, future payments ~~on these notes~~of long-term debt are as follows:

Remainder of 2020

$
178,962

2021

341,763

2022

293,380

2023

146,378

Total

$
960,483

Remainder of 2021	$	277,675
2022		402,005
2023		393,211
2024		125,875
2025		47,848
Total	$	1,246,614

During the six months ended June 30, ~~2020,~~2021, the Company had a net ~~decrease~~increase in cash of ~~$1,799,371.~~$2,831,944. The Company’s principal sources and uses of funds were as follows:

Cash (used in) provided by ~~(used in)~~ operating activities ~~of continuing operations~~

Operating activities for the six months ended June 30, ~~2020 provided~~2021 used cash of ~~$270,375~~$838,824 as compared to ~~using~~providing cash of ~~$1,364,291~~$270,375 for the same period in ~~2019.~~2020. This increase in cash used is primarily due anto increase in ~~collections~~prepaid expenses and other current assets, mostly as a result of an amount due from a vendor of approximately $871,000 (paid in July 2021), lower accounts receivable ~~as well as a decrease~~and the change in ~~accounts payable.~~income taxes payable offset partially by the increase in operating income for the period.

Cash (used in) provided by (~~used in~~)investing activities ~~of continuing operations~~

Investing activities for the six months ended June 30, ~~2020 provided~~2021 used cash of ~~$496,142~~$217,824 as compared to ~~using~~providing cash of ~~$164,227~~$496,142 for the same period in ~~2019. This increase~~2020. For the six months ended June 30, 2021, the Company acquired PSI and paid $145,703 in cash ~~is due to a decrease in software development costs~~ as ~~well as a decrease in acquisition of business costs as well as partial payment~~part of the ~~Escrow~~transaction (see Note 10). For the six months ended June 30, 2020, escrowed proceeds of $575,000 were received from the sale of the EDI ~~sale~~practice in August 2019.

Cash ~~used in~~provided by (used in) financing activities ~~of continuing operations~~

Financing activities for the six months ended June 30, ~~2020 used~~2021 provided cash of ~~$2,565,888~~$3,888,592 as compared to ~~$557,042~~using cash in the amount of $2,565,888 for the same period in ~~2019.~~2020. The ~~use was due primarily~~increase in cash is attributed to the ~~payment~~received net proceeds of $4,104,468 from the ~~cash dividend in January 2020.~~

~~Cash flows from discontinued operations~~

~~Operating activities for discontinued operations for~~sale of common stock under its Registration Statement on Form S-3 and the previously disclosed At Market Issuance Sales Agreement with a sales agent. During the six months ended June 30, 2020, ~~provided cash of $0 as compared~~the Company paid a dividend to ~~$806,189 for the same period in 2019. This is due to the fact that the EDI practice was sold in August 2019, providing six months of operating activities in 2019.~~

~~Investing activities of discontinued operations for~~its shareholders which did not occur during the six months ended June 30, ~~2020 used cash of $0 as compared to $93,826 for the same period in 2019. This was due to having no software being put into production in 2020 as a result of the EDI practice being sold in 2019.~~2021.

The Company believes that as a result of the growth in business, and the funds available from the proceeds from the sale of ~~its Mapadoc division,~~common stock, it has adequate liquidity to fund its operating plans for at least the next twelve months, provided, however, that the Company cannot currently quantify the uncertainty related to the recent pandemic and its effects on the business in the coming quarters. The belief that the Company has sufficient liquidity may be incorrect as the impact of Covid-19 becomes clearer over the coming months and quarters.

There was no significant impact on the Company’s operations as a result of inflation for the six months ended June 30, ~~2020.~~2021.

Table of Contents

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued).

Off Balance Sheet Arrangements

During the six months ended June 30, ~~2020~~2021 or for fiscal ~~2019,~~2020, we did not engage in any material off-balance sheet activities or have any relationships or arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitment or intent to provide additional funding to any such entities.

~~Table of Contents~~

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We do not hold any derivative instruments and do not engage in any hedging activities.

Item 4.Controls and Procedures

(a)Evaluation of Disclosure and Control Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act. Based on the controls evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the date of their evaluation, our disclosure controls and procedures were effective to provide reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (b) such information is accumulated and communicated to our management, including our Chief Executive Officer and President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. To our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company our subsidiaries, threatened against or affecting our Company, our common stock, our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

~~We face risks related to Novel Coronavirus~~There is a risk associated with COVID-19

The Company’s operations may be affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which ~~could significantly disrupt our, operations, sales, consulting services, and financial results.~~

~~Our business will be adversely impacted~~in March 2020, was declared a pandemic by the ~~effects of~~World Health Organization. The ultimate disruption which may be caused by the ~~Novel Coronavirus (COVID-19). In addition to global macroeconomic effects,~~outbreak is uncertain; however, it may result in a material adverse impact on the ~~Novel Coronavirus (COVID-19) outbreak~~Company’s financial position, operations, and ~~any other related adverse public health developments will cause disruption to our operations, including~~cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Company’s customers and revenue, labor workforce, inability of customers to pay outstanding accounts receivable due and owing to the Company as they limit or shut down their businesses, customers seeking relief or extended payment plans relating to accounts receivable due and owing to the Company, unavailability of products and supplies used in operations, and the ~~potential~~ decline in value of assets held by the Company, including property and equipment. Our customers have been and will be disrupted by worker absenteeism, quarantines and restrictions on employees’ ability to work, including but not limited to office closures and disruptions to travel or health-related restrictions. Depending on the magnitude of such effects on our activities or the operations of our customers, our on-site consulting will be delayed, which could adversely affect our business, operations and customer relationships. There can be no assurance that any decrease in sales resulting from the Novel Coronavirus (COVID-19) will be offset by increased sales in subsequent periods. Although the magnitude of the impact of the Novel Coronavirus (COVID-19) outbreak on our business and operations remains uncertain, the continued spread of the Novel Coronavirus (COVID-19) or the occurrence of other epidemics and the imposition of related public health measures and travel and business restrictions will adversely impact our business, financial condition, operating results and cash flows. In addition, we have experienced and will experience disruptions to our business operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of our employees to perform their jobs that may impact our ability to perform on-site consulting services and maintenance of our products in a timely manner or meet required milestones or customer commitments.

~~Other than the foregoing, we~~We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, filed with the SEC on March ~~26, 2020.~~25, 2021.

~~Other than disclosed above in the financial statements and footnotes, there~~There were no unregistered sales of the Company’s equity securities ~~that were not otherwise disclosed in a current report on Form 8-K.~~during the quarter ended June 30, 2021.

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

~~There is no other information required to be disclosed under this item which has not been previously reported.~~

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	SSNT	The NASDAQ Capital Market

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☒		Smaller Reporting Company ☒

Emerging Growth Company ☐

		Page No.
PART I.FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited):	3
	Condensed Consolidated Balance Sheets as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020	3
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, ~~2020~~2021 and ~~2019~~2020	4
	~~Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2020 and 2019~~	5
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, ~~2020~~2021 and ~~2019~~2020	65
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, ~~2020~~2021 and ~~2019~~2020	7
	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2425
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2830
Item 4.	Controls and Procedures	2830

PART II.OTHER INFORMATION

Item 1.	Legal Proceedings	2931
Item 1A.	Risk Factors	2931
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2931
Item 3.	Defaults Upon Senior Securities	2931
Item 4.	Mine Safety Disclosures	2931
Item 5.	Other Information	2932
Item 6.	Exhibits	3033

	June 30, 2020				December 31, 2019
ASSETS

Current assets:
Cash	$	6,859,030			$	8,658,401
Escrow accounts receivable		575,000				1,150,000
Accounts receivable, net of allowance of $375,000		1,966,582				2,529,545
Unbilled services		660,962				183,484
Prepaid expenses and other current assets		295,489				455,434

Total current assets		10,357,063				12,976,864

Property and equipment, net		625,852				712,627
Operating lease right-of-use assets		1,375,542				698,840
Intangible assets, net		2,423,355				2,607,301
Goodwill		891,000				891,000
Deferred tax assets		1,126,262				874,482
Deposits and other assets		191,804				192,158

Total assets	$	16,990,878			$	18,953,272

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	1,612,286			$	2,210,618
Accrued expenses		1,482,412				1,189,746
Accrued dividend		-				2,250,636
Accrued interest		15,751		��		15,378
Income taxes payable		325,355				152,355
Long term debt – current portion		69,100				131,795
Long term convertible debt – current portion		279,888				277,106
Finance lease obligations – current portion		136,861				162,625
Operating lease liabilities – current portion		434,523				262,020
Deferred revenue		2,317,871				2,006,983

Total current liabilities		6,674,047				8,659,262

Long term debt net of current portion		34,656				64,072
Long term convertible debt net of current portion		576,839				717,482
Finance lease obligations net of current portion		121,460				180,976
Operating lease liabilities net of current portion		941,019				436,820
Total liabilities		8,348,021				10,058,612

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.001 par value; authorized 1,000,000 shares
Series A Preferred Stock, $0.001 par value; authorized 2 shares; No shares issued and outstanding		-				-
Common stock, $0.00001 par value; authorized 75,000,000 shares; 4,501,271 shares issued and outstanding		46				46
Additional paid-in capital		9,536,996				9,530,198
Accumulated deficit		(894,185	)			(635,584	)

Total stockholders’ equity		8,642,857				8,894,660

Total liabilities and stockholders’ equity	$	16,990,878			$	18,953,272

	June 30, 2021		December 31, 2020
ASSETS

Current assets:
Cash	$	9,427,360	$	6,595,416
Accounts receivable, net of allowance of $325,000 and $375,000, respectively		1,470,391		1,580,242
Unbilled services		138,748		52,072
Prepaid expenses and other current assets		1,519,417		400,820

Total current assets		12,555,916		8,628,550

Property and equipment, net		661,647		523,040
Operating lease right-of-use assets		1,235,332		1,373,720
Intangible assets, net		3,700,238		3,126,336
Goodwill		1,011,952		1,011,952
Deferred tax assets		827,917		1,039,084
Deposits and other assets		193,819		198,726

Total assets	$	20,186,821	$	15,901,408

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	1,142,737	$	1,875,115
Accrued expenses		1,062,375		1,330,786
Accrued interest		22,629		21,206
Income taxes payable		83,031		318,031
Long-term debt – current portion		428,765		262,301
Long-term convertible debt – current portion		0		282,699
Finance lease obligations – current portion		176,054		118,658
Operating lease liabilities – current portion		515,550		481,250
Deferred revenue		2,469,811		2,039,241

Total current liabilities		5,900,952		6,729,287

Long-term debt net of current portion		817,849		502,560
Long-term convertible debt net of current portion		0		434,783
Finance lease obligations net of current portion		158,121		62,316
Operating lease liabilities net of current portion		719,782		892,470

Total liabilities		7,596,704		8,621,416

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.001 par value; authorized 1,000,000 shares
Series A Preferred Stock, $0.001 par value; authorized 2 shares, no shares issued and outstanding		0		0
Common stock, $0.00001 par value; authorized 75,000,000 shares, 5,126,629 and 4,501,271 shares issued and outstanding, respectively		52		46
Additional paid-in capital		12,565,034		7,739,883
Retained earnings (accumulated deficit)		25,031		(459,937	)

Total stockholders’ equity		12,590,117		7,279,992

Total liabilities and stockholders’ equity	$	20,186,821	$	15,901,408

	Three Months Ended						Six Months Ended
	30-Jun-20			30-Jun-19			30-Jun-20			30-Jun-19
Revenues:
Software product, net	$	1,926,697		$	1,424,639		$	3,695,867		$	3,030,915
Service, net		7,746,248			7,694,779			16,056,601			15,395,817
Total revenues, net		9,672,945			9,119,418			19,752,468			18,426,732

Cost of revenues:
Product		1,233,165			910,939			2,362,557			1,807,389
Service		4,501,175			4,731,581			9,599,097			9,379,822
Total cost of revenues		5,734,340			5,642,520			11,961,654			11,187,211

Gross profit		3,938,605			3,476,898			7,790,814			7,239,521

Selling, general and administrative expenses:
Selling and marketing expenses		1,733,472			1,565,966			3,674,795			3,308,416
General and administrative expenses		1,981,248			2,077,595			4,107,389			4,132,371
Share-based compensation expenses		3,399			3,398			6,798			10,111
Depreciation and amortization expenses		173,044			186,570			349,579			360,798
Total selling, general and administrative expenses		3,891,163			3,833,529			8,138,561			7,811,696

Income (loss) from continuing operations		47,442			(356,631	)		(347,747	)		(572,175	)

Other income (expense):
Other income		5,686			-			11,411			-
Interest income (expense)		(8,246	)		(24,131	)		(647	)		(40,611	)
Total other income (expense)		(2,560	)		(24,131	)		10,764			(40,611	)

Income (loss) from continuing operations before taxes		44,882			(380,762	)		(336,983	)		(612,786	)

Provision (benefit) for income taxes		11,368			(79,960	)		(78,382	)		(128,685	)
Income (loss) from continuing operations		33,514			(300,802	)		(258,601	)		(484,101	)


Discontinued operations
Income from discontinued operations		-			378,648			-			734,021
Provision for income taxes		-			80,736			-			156,774
Income from discontinued operations		-			297,912			-			577,247

Net (loss) income	$	33,514		$	(2,890	)	$	(258,601	)	$	93,146

Basic earnings (loss) per share applicable to common shareholders:
Continuing operations	$	0.01		$	(0.07	)	$	(0.06	)	$	(0.11	)
Discontinued operations	$	-		$	0.07		$	-		$	0.13
Net (loss) income	$	0.01		$	(0.00	)	$	(0.06	)	$	0.02

Diluted earnings (loss) per share applicable to common shareholders:
Continuing operations	$	0.01		$	(0.07	)	$	(0.06	)	$	(0.11	)
Discontinued operations	$	-		$	0.07		$	-		$	0.13
Net (loss) income	$	0.01		$	(0.00	)	$	(0.06	)	$	0.02

Weighted average shares outstanding:
Basic		4,501,271			4,500,755			4,501,271			4,500,755
Diluted		4,714,070			4,500,755			4,501,271			4,500,755

	Three Months Ended						Six Months Ended
	June 30, 2021			June 30, 2020			June 30, 2021			June 30, 3020
Revenues:
Software product, net	$	1,761,485		$	1,926,697		$	3,765,496		$	3,695,867
Service, net		8,467,724			7,746,248			17,343,181			16,056,601
Total revenues, net		10,229,209			9,672,945			21,108,677			19,752,468

Cost of revenues:
Product		985,518			1,233,165			2,135,572			2,362,557
Service		4,973,011			4,501,175			9,955,888			9,599,097
Total cost of revenues		5,958,529			5,734,340			12,091,460			11,961,654

Gross profit		4,270,680			3,938,605			9,017,217			7,790,814

Selling, general and administrative expenses:
Selling and marketing expenses		1,614,106			1,733,472			3,333,414			3,674,795
General and administrative expenses		2,193,277			1,981,248			4,528,195			4,107,389
Share-based compensation expenses		48,940			3,399			49,932			6,798
Depreciation and amortization expenses		210,453			173,044			408,499			349,579
Total selling, general and administrative expenses		4,066,776			3,891,163			8,320,040			8,138,561

Income (loss) from operations		203,904			47,442			697,177			(347,747	)

Other income (expense):
Other income		0			5,686			0			11,411
Interest expense		(7,167	)		(8,246	)		(17,192	)		(647	)
Total other income (expense)		(7,167	)		(2,560	)		(17,192	)		10,764

Income (loss) before taxes		196,737			44,882			679,985			(336,983	)

Provision (benefit) for income taxes		66,448			11,368			195,017			(78,382	)

Net income (loss)	$	130,289		$	33,514		$	484,968		$	(258,601	)


Net income (loss) per common share:
Basic	$	0.03	$	0.01	$	0.10	$	(0.06	)
Fully diluted	$	0.03	$	0.01	$	0.10	$	(0.06	)


Weighted average shares:
Basic	5,062,752	4,501,271	4,914,844	4,501,271
Diluted	5,065,093	4,714,070	4,916,797	4,501,271

	Series A Preferred Stock				Series B Preferred Stock				Common Stock Class A				Additional Paid in		(Accumulated Deficit) Retained			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Earnings			Equity
Balance at April 1, 2021		-	$	-		-	$	-		5,061,177	$	52	$	11,793,978	$	(105,258	)	$	11,688,772

Share-based compensation		-		-		-		-		-		-		48,940		-			48,940
Issuance of common stock from a public offering, net of expenses		-		-		-		-		65,452		-		722,116		-			722,116
Net income		-		-		-		-		-		-		-		130,289			130,289

Balance at June 30, 2021		-	$	-		-	$	-		5,126,629	$	52	$	12,565,034	$	25,031		$	12,590,117

	Six Months Ended June 30,
	2020			2019
Cash flows from operating activities:
Net (loss) income	$	(258,601	)	$	93,146
Net income from discontinued operations		-			577,247
Net loss from continuing operations		(258,601	)		(484,101	)
Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities:
Deferred income taxes		(251,780	)		(132,774	)
Depreciation and amortization		165,633			161,112
Amortization of intangibles		183,946			199,687
Amortization of right of use assets		230,960			139,742
Bad debt expense		9,175			-
Share-based compensation		6,798			10,111

Changes in assets and liabilities:
Accounts receivable		553,788			(835,652	)
Unbilled services		(477,478	)		(469,940	)
Prepaid expenses and other current assets		159,945			27,361
Deposits and other assets		354			(2,642	)
Accounts payable		(598,332	)		(325,692	)
Accrued expenses		292,666			(439,639	)
Income tax payable		173,000			3,313
Accrued interest		373			371
Deferred revenues		310,888			924,194
Operating lease obligations		(230,960	)		(139,742	)
Net cash provided by (used in) operating activities of continuing operations		270,375			(1,364,291	)

Cash flows from investing activities:
Purchase of property and equipment		(78,858	)		(23,693	)
Acquisition of business		-			(60,000	)
Software development costs		-			(80,534	)
Escrow accounts receivable		575,000			-
Net cash provided by (used in) investing activities of continuing operations		496,142			(164,227	)

Cash flows from financing activities:
Payment of cash dividend		(2,250,636	)		(225,038	)
Proceeds from PPP loan		3,150,832			-
Payment of PPP loan		(3,150,832	)		-
Payment of contingent consideration		-			(22,548	)
Payment of long term debt		(92,112	)		(115,784	)
Payment of long term convertible debt		(137,860	)		(135,133	)
Payment of finance lease obligations		(85,280	)		(58,539	)
Net cash used in financing activities of continuing operations		(2,565,888	)		(557,042	)

Cash flows from discontinued operations:
Operating activities of discontinued operations		-			806,189
Investing activities of discontinued operations		-			(93,826	)
Net cash provided by discontinued operations		-			712,363

Net decrease in cash		(1,799,371	)		(1,373,197	)

Cash, beginning of period		8,658,401			1,900,857

Cash, end of period	$	6,859,030		$	527,660

Cash paid during period for:
Interest	$	21,796		$	40,611
Income taxes	$	25,648		$	901

	Six Months Ended June 30,
	2021			2020
Cash flows from operating activities:
Net income (loss)	$	484,968		$	(258,601	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Deferred income taxes		211,167			(251,780	)
Depreciation and amortization		157,619			165,633
Amortization of intangibles		251,739			183,946
Amortization of right of use assets		247,045			230,960
Bad debt expense		(50,000	)		9,175
Share-based compensation		49,932			6,798

Changes in assets and liabilities:
Accounts receivable		159,851			553,788
Unbilled services		(86,676	)		(477,478	)
Prepaid expenses and other current assets		(1,118,597	)		159,945
Deposits and other assets		4,907			354
Accounts payable		(732,378	)		(598,332	)
Accrued expenses		(268,411	)		292,666
Income tax payable		(235,000	)		173,000
Accrued interest		1,423			373
Deferred revenues		330,632			310,888
Operating lease obligations		(247,045	)		(230,960	)
Net cash (used in) provided by operating activities		(838,824	)		270,375

Cash flows from investing activities:
Purchase of property and equipment		(72,121	)		(78,858	)
Acquisition of business		(145,703	)		0
Escrow accounts receivable		0			575,000
Net cash (used in) provided by investing activities		(217,824	)		496,142

Cash flows from financing activities:
Payment of cash dividend		0			(2,250,636	)
Proceeds from PPP loan		0			3,150,832
Payment of PPP loan		0			(3,150,832	)
Proceeds from issuance of stock, net of expenses		4,104,468			0
Payment of long-term debt		(98,247	)		(92,112	)
Payment of long-term convertible debt		(46,725	)		(137,860	)
Payment of finance lease obligations		(70,904	)		(85,280	)
Net cash provided by (used in) financing activities		3,888,592			(2,565,888	)


Net increase (decrease) in cash		2,831,944			(1,799,371	)

Cash, beginning of period		6,595,416			8,658,401

Cash, end of period	$	9,427,360		$	6,859,030

Cash paid during period for:
Interest	$	15,769		$	21,796
Income taxes	$	312,800		$	25,648

	For the Three Months Ending June 30,				For the Six Months Ending June 30,
	2020		2019		2020		2019
Professional Consulting	$	3,357,915	$	3,016,724	$	6,905,493	$	6,017,285
Maintenance Revenue	$	1,592,449	$	1,606,869	$	3,290,925	$	3,434,369
Ancillary Service Revenue	$	2,795,884	$	3,071,186	$	5,860,183	$	5,944,163

	For the Three Months Ending June 30,
	2021		2020
Software revenue	$	1,761,485	$	1,926,696
Professional consulting		3,297,888		3,383,813
Maintenance revenue		1,666,780		1,592,449
Ancillary service revenue		3,503,056		2,769,987
	$	10,229,209	$	9,672,945

	Amortization
Remainder of 2021	$	276,142
2022		492,427
2023		429,314
2024		429,314
2025		422,457
2026		407,875
Thereafter		1,242,709

Total	$	3,700,238

	For the Six Months Ending June 30,
	2021		2020
Software revenue	$	3,765,496	$	3,695,867
Professional consulting		6,810,201		6,905,493
Maintenance revenue		3,519,453		3,290,925
Ancillary service revenue		7,013.527		5,860,183
	$	21,108,677	$	19,752,468

	Three Months Ended		Three Months Ended
	June 30, 2020		June 30, 2019
Basic net income (loss) from continuing operations per share computation:
Net income (loss) from continuing operations	$	33,514	$	(300,802	)
Weighted-average common shares outstanding		4,501,271		4,500,755
Basic net income (loss) per share	$	0.01	$	(0.07	)
Diluted net income (loss) from continuing operations per share computation:
Net income (loss) per above	$	33,514	$	(300,802	)
Interest on Convertible debt		4,514		-
Net income (loss)		38,028		(300,802	)
Weighted-average common shares outstanding		4,501,271		4,500,755
Incremental shares for convertible promissory notes		212,799		-
Total adjusted weighted-average shares		4,714,070		4,500,755
Diluted net income (loss) per share	$	0.01	$	(0.07	)

	Six Months Ended			Six Months Ended
	June 30, 2020			June 30, 2019
Basic net income (loss) from continuing operations per share computation:
Net loss from continuing operations	$	(258,601	)	$	(484,101	)
Weighted-average common shares outstanding		4,501,271			4,500,755
Basic net loss per share	$	(0.06	)	$	(0.11	)
Diluted net income (loss) from continuing operations per share computation:
Net income (loss) per above	$	(258,601	)	$	(484,101	)
Net income (loss)		(258,601	)		(484,101	)
Weighted-average common shares outstanding		4,501,271			4,500,755
Incremental shares for convertible promissory notes		-			-
Total adjusted weighted-average shares		4,501,271			4,500,755
Diluted net income (loss) per share	$	(0.06	)	$	(0.11	)

	Three Months Ended		Three Months Ended
	June 30, 2021		June 30, 2020
Basic net income per share computation:
Net income	$	130,289	$	33,514
Weighted-average common shares outstanding		5,062,752		4,501,271
Basic net income per share	$	0.03	$	0.01
Diluted net income per share computation:
Net income per above	$	130,289	$	33,514
Interest on convertible debt		0		4,514
Net income		130,289		38,028
Weighted-average common shares outstanding		5,062,752		4,501,271
Incremental shares for warrants and convertible promissory notes		2,341		212,799
Total adjusted weighted-average shares		5,065,093		4,714,070
Diluted net income per share	$	0.03	$	0.01

	Six Months Ended		Six Months Ended
	June 30, 2021		June 30, 2020
Basic net income (loss):
Net income (loss)	$	484,968	$	(258,601	)
Weighted-average common shares outstanding		4,914,844		4,501,271
Basic net income (loss) per share	$	0.10	$	(0.06	)
Diluted net income (loss):
Net income (loss) per above	$	484,968	$	(258,601	)
Net income (loss)		484,968		(258,601	)
Weighted-average common shares outstanding		4,914,844		4,501,271
Incremental shares for warrants		1,953		0
Total adjusted weighted-average shares		4,916,797		4,501,271
Diluted net income (loss) per share	$	0.10	$	(0.06	)

	Three Months June 30, 2020		Three Months June 30, 2019
Stock options		22,280		46,947
Warrants		4,988		208,241
Convertible promissory notes		-		280,943

Total potential dilutive securities not included in loss per share		27,268		536,131

	Three Months June 30, 2021		Three Months June 30, 2020
Stock options		99,990		22,280
Warrants		0		4,988

Total potential dilutive securities not included in income (loss) per share		99,990		27,268

	Six Months June 30, 2020		Six Months June 30, 2019
Stock options		22,280		41,613
Warrants		4,988		208,241
Convertible promissory notes		212,799		280,943

Total potential dilutive securities not included in loss per share		240,067		530,797

	Six Months June 30, 2021		Six Months June 30, 2020
Stock options		99,990		22,280
Warrants		0		4,988
Convertible promissory notes		0		212,799

Total potential dilutive securities not included in income (loss) per share		99,990		240,067

	June 30, 2020			December 31, 2019
Leasehold improvements	$	98,831		$	98,831
Equipment, furniture and fixtures		2,921,198			2,842,340
		3,020,029			2,941,171
Less: Accumulated depreciation and amortization		(2,394,177	)		(2,228,544	)

Property and equipment, net	$	625,852		$	712,627

	June 30, 2020			December 31, 2019			Estimated Useful Lives
Proprietary developed software	$	390,082		$	390,082			5 – 7
Intellectual property, customer list, and acquired contracts		4,430,014			4,430,014			5 – 15
Total intangible assets	$	4,820,096		$	4,820,096
Less: accumulated amortization		(2,396,741	)		(2,212,795	)
	$	2,423,355		$	2,607,301

	June 30, 2021			December 31, 2020			Estimated Useful Lives
Proprietary developed software	$	390,082		$	390,082		5 –7
Intellectual property, customer list, and acquired contracts		6,166,253			5,340,612		5 –15
Total intangible assets	$	6,556,335		$	5,730,694
Less: accumulated amortization		(2,856,097	)		(2,604,358	)
	$	3,700,238		$	3,126,336

	Amortization
Remainder of 2020	$	181,097
2021		328,495
2022		261,792
2023		198,680
2024		198,680
Thereafter		1,254,611

Total	$	2,423,355

Remainder of 2020	$	178,962
2021		341,763
2022		293,380
2023		146,378
Total	$	960,483

	~~June 30,~~ ~~2020~~
~~Weighted average remaining lease term~~		~~1.95~~
~~Weighted average interest rate~~		~~5.36~~	%

	June 30, 2021			December 31, 2020
Weighted average remaining lease term		2.16			1.31
Weighted average interest rate		7.30	%		5.6	%

Remainder of 2020	$	83,138
2021		125,591
2022		57,584
2023		6,640
Total minimum lease payments		272,953
Less amounts representing interest		(14,632	)
Present value of net minimum lease payments		258,321
Less current portion		(136,861	)
Long-term finance lease obligation	$	121,460

	June 30, 2021
Remainder of 2021	$	103,270
2022		140,346
2023		89,401
2024		27,466
Total minimum lease payments		360,483
Less amounts representing interest		(26,308	)
Present value of net minimum lease payments		334,175
Less current portion		(176,054	)
Long-term finance lease obligation	$	158,121

	~~June 30~~~~, 2020~~
~~Weighted average remaining lease term~~		~~3.40~~
~~Weighted average discount rate~~		~~3.90~~	%

Remainder 2020	$	255,759
2021		456,075
2022		364,083
2023		328,032
2024		141,457
Thereafter		20,510
Total undiscounted future minimum lease payments		1,565,916
Less: Difference between undiscounted lease payments and discounted lease liabilities		(190,374	)
Total operating lease liabilities	$	1,375,542
Less current portion		(434,523	)
Long-term operating lease liabilities	$	941,019