Stock Performance and Ownership - The common stock price has been highly volatile, ranging from $41.74 to $205.40 since June 13, 2024, significantly higher than the initial sale price of $9.14 per share[36]. - Approximately 31.4% of the voting power of the capital stock is controlled by the Chairman and CEO, Brad Jacobs, allowing him significant influence over company decisions[49]. - JPE, controlled by Mr. Jacobs, holds 900,000 shares of Convertible Preferred Stock and 197,109,065 Warrants, potentially convertible into 394,218,132 shares of common stock, representing about 49.2% of voting power on a fully diluted basis[50]. - The company has registered 789,549,465 shares of common stock for potential sale by stockholders, which could adversely affect the market price of the common stock[39]. - The concentration of ownership and voting power may delay or prevent changes in control that could benefit stockholders, impacting the market price of the common stock[52]. Financial Performance - Total revenue for the year ended December 31, 2024, was $56.873 million, an increase from $54.517 million in 2023, representing a growth of approximately 4.4%[148]. - The net income for the year ended December 31, 2024, was $27.969 million, compared to a net loss of $1.070 million in 2023, indicating a significant turnaround in financial performance[148]. - The company's total current assets decreased to $5.089579 million in 2024 from $11.796 million in 2023, reflecting a decline of approximately 56.8%[145]. - Selling, general and administrative expenses rose sharply to $92.943 million in 2024 from $22.097 million in 2023, marking an increase of approximately 320%[148]. - The total liabilities increased to $45.363 million in 2024 from $13.024 million in 2023, representing an increase of approximately 248%[145]. - The company reported a loss from operations of $71 million for the year ended December 31, 2024, compared to a loss of $1.311 million in 2023[148]. - The company's accumulated deficit increased to $(6.229) million in 2024 from $(1.948) million in 2023[145]. - The total stockholders' equity decreased to $5.052899 million in 2024 from $7.471 million in 2023, a decline of approximately 32%[145]. Capital Structure and Financing - The company does not intend to pay dividends in the foreseeable future, relying on market price appreciation for investor returns[44]. - Future equity capital raises may lead to substantial dilution for existing shareholders, particularly if shares are issued at a significant discount[45]. - The company may face challenges in raising additional financing on acceptable terms, which could limit acquisition opportunities and working capital[46]. - Anti-takeover provisions in the company's Charter and bylaws could impair potential acquisition attempts, affecting stockholder opportunities for premium sales[53]. - The company completed a $1.0 billion cash investment from Jacobs Private Equity II, LLC, which facilitated a name change and a new ticker symbol on Nasdaq[159]. - The issuance of common stock and pre-funded warrants generated proceeds of $4,051,103,000, significantly bolstering the company's financial position[157]. - The company raised approximately $3.5 billion through a private placement of 340,932,212 shares at $9.14 per share, closing on July 19, 2024[206]. - An additional private placement generated approximately $620 million from the sale of 67,833,699 shares at $9.14 per share, closing on July 25, 2024[207]. Operational Challenges - The company is highly dependent on the leadership of Brad Jacobs as Chairman and CEO, and his loss could materially adversely affect the business and financial condition[57]. - The company faces risks related to acquisitions, including the failure to consummate acquisitions expeditiously, which could adversely impact business prospects and stock price[60]. - The building products distribution industry is highly fragmented and competitive, with low barriers to entry for local competitors, affecting net sales and operating results[64]. - The company may not be able to successfully integrate acquired businesses, which could lead to unexpected liabilities and adversely affect financial condition and results of operations[62]. - The industry is subject to cyclical market pressures, and prolonged periods of weak demand could reduce net sales and margins, potentially leading to losses[66]. - The company may face increased costs and reduced supply of building materials due to global trade tensions and tariffs, impacting competitiveness[67]. - The legacy business may fail to develop new products or technologies, which could hinder competitiveness and lead to unexpected expenses[69]. - The software and technology industry is highly competitive, and the legacy business may struggle to compete effectively against larger competitors[71]. - The rapid technological changes in the industry may cause the legacy business's products to become obsolete more quickly than expected[74]. Tax and Regulatory Matters - The effective income tax rate for 2024 was 45.0%, significantly higher than 22.0% in 2023, primarily due to permanent items and state income tax adjustments[236]. - The Company did not incur any interest or penalties related to income tax matters for the years ended December 31, 2024, and 2023[191]. - The Company’s total current tax provision for 2024 was $24.002 million, compared to $41,000 in 2023[236]. - The Company’s deferred tax assets increased to $3.975 million in 2024 from $1.912 million in 2023, while net deferred tax assets rose to $2.603 million[238]. Employee Compensation and Incentives - The Company recognized share-based compensation expense of $34.513 million in 2024, compared to only $41,000 in 2023[235]. - The Company granted 13,470 RSUs with a grant date fair value of $11.57, resulting in total unrecognized compensation expense of $143.1 million expected to be recognized over 4.93 years[230]. - The Company granted 8,420 pRSUs with a grant date fair value of $20.24, leading to total unrecognized compensation expense of $148.5 million expected to be recognized over 3.52 years[233]. - The Company’s total employee compensation and benefits for 2024 amounted to $46.984 million, up from $26.696 million in 2023[246]. Strategic Initiatives - QXO's strategy aims to capture a share of the $800 billion building products distribution industry, targeting tens of billions in annual revenue over the next decade through acquisitions and organic growth[161]. - The Company has announced a cash tender offer to acquire Beacon Roofing Supply, Inc. at a purchase price of $124.25 per share, with financing commitments fully covering the purchase price and associated costs[247][248]. - The Company completed an equity investment of $1.0 billion on June 6, 2024, through the issuance of 1,000,000 shares of Convertible Preferred Stock[197]. - The Company declared a special cash dividend of $17.4 million to stockholders of record as of the day before the closing of the Equity Investment, paid on June 12, 2024[204]. - An 8:1 reverse stock split was executed on June 6, 2024, reducing the issued and outstanding share count from 5,315,581 to 664,284 shares[205]. Asset Management - The allowance for expected credit losses increased to $547,000 at the end of 2024, up from $510,000 in 2023, indicating a cautious approach to credit risk management[168]. - The total intangible assets decreased from $4.919 million in 2023 to $4.024 million in 2024, with accumulated amortization increasing from $4.540 million to $5.415 million[215]. - The company extinguished all long-term debt obligations during the year ended December 31, 2024, with long-term debt of $1.7 million as of December 31, 2023[217]. - The company expects future amortization expenses for intangible assets to total $4.024 million over the next several years[216]. - As of December 31, 2024, total accrued expenses amounted to $35.692 million, a significant increase from $2.681 million as of December 31, 2023[177]. - The net property and equipment value decreased to $445,000 as of December 31, 2024, from $503,000 as of December 31, 2023, with depreciation expense of $246,900 for 2024 compared to $328,900 for 2023[180].
SilverSun Technologies(SSNT) - 2024 Q4 - Annual Report