SilverSun Technologies And Rhodium Enterprises, Inc Announce Planned Merger

SilverSun Technologies the parent company of Sage/Acumatica VAR SWK Technologies announced on September 29, 2022 that their board had approved a business combination with Rhodium Enterprises which is described in the press release as “an industrial-scale digital asset technology company utilizing proprietary technologies to mine bitcoin”.

The press release further describes Rhodium Enterprises as a company utilizing innovative liquid-cooling technology and proprietary software to create efficient, large-scale bitcoin mining operations.

The terms of the deal, which apparently is still subject to regulatory and shareholder approval as well as closing conditions:

  • A cash dividend of at least $1.50 per share, which equates to approximately $8.5 million in the aggregate;
  • A stock dividend of one share of SWK Technologies Holdings, Inc. (“HoldCo”), a recently formed subsidiary of SilverSun. HoldCo’s sole assets are its 100% ownership of SWK Technologies, Inc. (“SWK”) and Secure Cloud Services, Inc. (“SCS” and, together with SWK, the “Subsidiaries”), which Subsidiaries accounted for the large majority of SilverSun’s revenue in 2021. It is expected that the capital structure of HoldCo will roughly approximate the current capital structure of SilverSun;
  • Following the consummation of the business combination, the business of the Subsidiaries will continue to be operated consistent with past practices. The current management and Board of Directors of SilverSun, including Mark Meller, the Chief Executive Officer of both SilverSun and SWK, will continue in their current roles at both HoldCo and the Subsidiaries.
  • HoldCo will apply for public listing and the shares distributed in the stock dividend will be registered pursuant to a Form 10 that will be filed by HoldCo with the United States Securities and Exchange Commission (the “SEC”) (subject to regulatory and exchange regulations and approvals); and
  • The shares of SilverSun’s common stock to be retained by the current SilverSun stockholders following the consummation of the business combination will collectively represent approximately 3.2% of SilverSun’s pro forma common equity ownership.

As of now it doesn’t appear shareholders can calculate their total value of what appears to be a reverse merger designed to list Rhodium Enterprises, Inc on the NASDAQ exchange.

As discussed in the Bloomberg article:

Rhodium initially filed last October with the US Securities and Exchange Commission to raise up to $100 million in an initial public offering. The Texas-based company launched the IPO in January, but postponed it in the same month.

Rhodium is one of the few major Bitcoin miners that use a proprietary liquid-cooling system. Bitcoin miners use powerful computers to validate transaction data on the Bitcoin network and earn rewards in the form of the token. Those machines tend to get overheated. A high ambient temperature can lower the rigs’ efficiency and accelerate their depreciation.

According to the SilverSun Technologies website they current have over 5,000 clients and offer three business divisions within their organization

  • A provider of curated and tightly integrated technology stacks composed of third party financial management and business operations softwares that enhance and automate our clients’ finance and accounting, manufacturing, human capital, and other business functions
  • A provider of proprietary cloud services leveraging strategically located data centers to provide state of the art Infrastructure-as-a-Service and hosting services that utilize our own internal technologies and public cloud offerings cybersecurity, application hosting, and business continuity
  • A provider of managed IT and cybersecurity services utilizing best in class technologies and software to ensure the continuity and security of our clients’ IT and network assets

SilverSun Technologies, Inc.’s primary operations are headquartered in East Hanover, NJ with additional offices/operating subsidiaries throughout the United States:

SWK Technologies, Inc. (our principal operating subsidiary); Business Tech Solutions Group, Inc.; IncorTech; HighTower, Inc.; Point Solutions, LLC; Accounting Technology Resources; Wolen Katz Associates; AMP-BEST Consulting, Inc.; Micro-Point, Inc.; ESC Software; Productive Tech; Macabe Associates; Oates & Co.; Accupointe; Information Systems Management, Inc. (ISM); Partners in Technology, CT-Solution; Computer Management Solutions (CMS); Prairie Technology Solutions Group; and PeopleSense.

SWK Technologies is a reseller and consulting firm for Sage and Acumatica accounting as well as offering managed IT and cloud computing services.

Update October 4, 2022: The 8-K from SilverSun Technologies outlining the terms of the merger is now available.