SilverSun Technologies(SSNT) - 2022 Q1 - Quarterly Report

Revenue and Profitability - For the three months ended March 31, 2022, revenues increased by $144,376 (1.3%) to $11,023,844 compared to $10,879,468 for the same period in 2021[148]. - Software sales rose by $606,951 (30.3%) to $2,610,962 for the three months ended March 31, 2022, primarily driven by increased revenues from the Acumatica solution[149]. - Service revenue decreased by $462,575 (5.2%) to $8,412,882 for the three months ended March 31, 2022, attributed to lower consulting and maintenance revenues[150]. - Gross profit for the three months ended March 31, 2022, decreased by $41,670 (0.9%) to $4,704,867, with a gross profit percentage of 42.7% compared to 43.6% in the prior year[151]. - The company reported a loss from operations of $19,716 for the three months ended March 31, 2022, compared to income from operations of $493,273 for the same period in 2021[158]. Operating Expenses - Operating expenses increased, with selling and marketing expenses rising by $56,503 (3.3%) and general and administrative expenses increasing by $306,059 (13.1%) for the three months ended March 31, 2022[154][155]. Business Strategy and Market Focus - The company plans to increase business and profitability through collaboration agreements, asset purchases, and acquisitions in the business software and IT consulting markets[162]. - The company is focused on expanding its customer base through cloud-based products and services, aiming to increase monthly recurring revenue (MRR) and reduce customer acquisition costs[139]. Financial Position and Liquidity - As of March 31, 2022, the company's working capital was $2,635,467 and cash on hand was $6,486,433[164]. - The company believes it has adequate liquidity to fund its operating plans for at least the next twelve months, although uncertainty related to the pandemic may affect this outlook[167]. Cash Flow Activities - For the three months ended March 31, 2022, cash used in operating activities was $8,246, a significant decrease from $500,461 in the same period in 2021[164]. - Cash used in investing activities for the three months ended March 31, 2022 was $180,548, which included $150,000 for the assets of NEO3 and $30,548 for property and equipment[165]. - Financing activities for the three months ended March 31, 2022 used cash of $138,890, compared to cash provided of $3,261,181 in the same period in 2021[166]. Economic Impact and Challenges - The company continues to monitor the economic impact of Covid-19 and is exploring cost-cutting measures and additional funding sources[159]. - Inflation has negatively impacted the company's profitability due to increased costs for recruiting and retaining personnel, as well as higher travel and meal costs[168]. Off-Balance Sheet Activities - The company did not engage in any material off-balance sheet activities during the three months ended March 31, 2022[169]. - The company does not hold any derivative instruments and does not engage in hedging activities[171]. Credit and Financing - The company has no line of credit or credit facility with any lender, which may impact its ability to compete effectively[160].