SilverSun Stockholders Currently Expected to Receive Cash Dividend of at least $1.50 per Share, a Stock Dividend of 100% of the Outstanding Shares in the Aggregate of Subsidiary SWK Technologies Holdings, Inc., and Will Collectively Retain Approximately 3.2% of the Combined Company's Total Common Stock
EAST HANOVER, NJ AND ROCKDALE, TX / ACCESSWIRE / September 29, 2022 / SilverSun Technologies, Inc. (NASDAQ:SSNT) ('SilverSun'), a national provider of transformational business technology solutions and services, announced today that it has entered into a definitive agreement and plan of merger (the 'Merger Agreement') with Rhodium Enterprises, Inc. ('Rhodium'), an industrial-scale digital asset technology company utilizing proprietary technologies to mine bitcoin.
Rhodium is one of the largest bitcoin miners in the United States. Rhodium designs and develops its large-scale, liquid cooling systems and proprietary software to optimize the performance, efficiency, and control of its miners, infrastructure, and operations. Rhodium's flagship liquid cooling technology helps keep miners online and extracts heat which could otherwise lead to equipment damage or failure. Rhodium's proprietary software enables it to make quicker, data-informed decisions, securely and rapidly put miners online, and more effectively manage temperature and energy.
Under the terms of the Merger Agreement, which has been unanimously approved by the Boards of Directors of both SilverSun and Rhodium, upon the consummation of the business combination, each holder of an outstanding share of SilverSun common stock will receive:
- 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.
The proposed business combination is expected to close by year-end of 2022, subject to the receipt of any applicable regulatory approvals, the approval of SilverSun's and Rhodium's respective stockholders, and other customary closing conditions.
Chase Blackmon, Chairman & Chief Executive Officer of Rhodium, said 'We believe this strategic transaction will unlock long-term accretive value for Rhodium's shareholders. We believe access to U.S. capital markets is paramount to sustainable, long-term success in our capital intensive industry. Rhodium represents an exciting new paradigm for bitcoin mining, with proprietary technology that creates industry-leading efficiency, while simultaneously controlling and managing operational risks. We are excited to begin our relationship with public markets and to prove our ability to execute.'
Mark Meller, Chief Executive Officer of SilverSun, said 'We believe this transaction provides ideal outcomes for our stockholders, customers and employees. We also believe that it provides our stockholders with the opportunity to realize a substantial upfront cash payment while continuing to benefit from the value of our existing businesses and provides them with the opportunity to participate in the potential upside of Rhodium at an exciting time for the cryptocurrency marketplace. The agreement we believe is a significant advance in providing enhanced value for all our stockholders.'
B. Riley Securities, Inc. is serving as financial advisor and Kirkland & Ellis LLP is serving as legal advisor to Rhodium. Lucosky Brookman LLP is serving as legal advisor to SilverSun.
Rhodium Enterprises, Inc. is an industrial scale digital asset technology company utilizing innovative liquid-cooling technology and proprietary software to create efficient, large-scale bitcoin mining operations. For more information, visit www.rhdm.com.
SilverSun Technologies, Inc. is a business application, technology and consulting company providing software and IT 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, Warehouse Management Systems, Customer Relationship Management, Business Intelligence and other business applications. Our value-added services focus on consulting and professional services, specialized programming, training, and technical support. We have a dedicated network managed services practice that provides 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, Chicago, Arizona, Southern California, Connecticut, North Carolina, Washington and Oregon.
Additional Information and Where to Find It
In connection with the proposed business combination, SilverSun intends to file relevant materials with the SEC, including a registration statement on Form S-4 that will contain a prospectus, a proxy statement and an information statement. Investors and security holders of SilverSun and Rhodium are urged to read these materials when they become available because they will contain important information about SilverSun, Rhodium and the proposed business combination. Following the filing of the definitive proxy statement with the SEC, SilverSun will mail the definitive proxy statement and a proxy card to each stockholder entitled to vote at the special meeting relating to the proposed transaction. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by directing a written request to: SilverSun Technologies, Inc., 120 Eagle Rock Avenue, East Hanover, New Jersey 07936, Attention: Corporate Secretary. The prospectus, the proxy statement, any other relevant documents, and all other materials filed with the SEC concerning SilverSun are (or, when filed, will be) available free of charge at http://www.sec.gov. Stockholders should read carefully the proxy statement and any other relevant documents that SilverSun files with the SEC when they become available before making any voting decision because they will contain important information with respect to the proposed business combination.
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Participants in the Solicitation
SilverSun's directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders in connection with the proposed business combination and may have direct or indirect interests in the business combination. Information regarding the names of such persons and their respective interests in the transaction, through securities holdings or otherwise, will be set forth in the definitive proxy statement when it is filed with the SEC. Additional information regarding these individuals is set forth in its annual report on Form 10-K for the fiscal year ended December 31, 2021, and its definitive proxy statement for SilverSun's annual meeting held on December 16, 2021. To the extent SilverSun directors and executive officers or their holdings of SilverSun securities have changed from the amounts disclosed in those filings, to SilverSun's knowledge, such changes have been reflected on initial statements of beneficial ownership on Form 3 or statements of a change in ownership on Form 4 on file with the SEC. These materials are (or, when filed, will be) available free of charge at https://ir.silversuntech.com/all-sec-filings.
Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, impairment, gain (loss), depreciation and amortization, further adjusted by the removal of one-time transaction costs, convertible instrument discount, and expenses related to stock-based compensation.
Forward Looking Statements
This communication contains 'forward-looking statements' within the meaning of the U.S. federal securities laws. Such statements include statements concerning anticipated future events and expectations that are not historical facts. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements involve risks and uncertainties, and include, but are not limited to, statements about the structure, timing and completion of the proposed business combination; the combined company's listing on Nasdaq after closing of the proposed business combination; expectations regarding the ownership structure of the combined company; the future operations of the combined company; the ability of the combined company to successfully integrate its operations; the nature, strategy and focus of the combined company; the development and commercial potential of the combined company; the executive and board structure of the combined company; and other statements that are not historical fact. Actual results may vary materially from those expressed or implied by forward-looking statements based on a number of risks, including, without limitation: (1) risks related to the consummation of the business combination, including the risks that (a) the business combination may not be consummated within the anticipated time period or on the currently proposed terms, or at all, (b) the parties may fail to timely obtain stockholder approval to adopt the Merger Agreement and the transactions contemplated by the Merger Agreement, if at all, (c) other conditions to the consummation of the business combination under the Merger Agreement may not be satisfied, (d) all or part of Rhodium's contemplated financing in connection with the business combination may not become available, and (e) the significant limitations on remedies contained in the Merger Agreement may limit or entirely prevent a party from specifically enforcing another party's obligations under the Merger Agreement or recovering damages for any breach; (2) approval of the combined company's application to list its shares on Nasdaq and its ability to maintain such listing; (3) no assurance that future developments affecting Rhodium will be those that it has anticipated; (4) the effects that any termination of the Merger Agreement may have on a party or its business, including the risks that (a) the price of SilverSun's common stock may decline significantly if the business combination is not completed, (b) the Merger Agreement may be terminated in certain circumstances requiring SilverSun to pay Rhodium a termination fee of $5 million (or vice versa), or (c) the circumstances of the termination, may have a chilling effect on alternatives to the business combination; (5) the effects that the announcement or pendency of the business combination may have on SilverSun and its business, including the risks that as a result (a) the business, operating results or stock price of SilverSun may suffer, (b) its current plans and operations may be disrupted, (c) the ability of SilverSun to retain or recruit key employees may be adversely affected, (d) its business relationships (including, with customers, franchisees and suppliers) may be adversely affected, and (e) management and employee attention may be diverted from other important matters; (6) the effect of limitations that the Merger Agreement places on SilverSun's ability to operate its business, return capital to stockholders or engage in alternative transactions; (7) the nature, cost and outcome of pending and future litigation and other legal proceedings, including any such proceedings related to the transactions and instituted against SilverSun and others; (8) the risk that the transaction may involve unexpected costs, liabilities or delays; (9) other economic, business, competitive, legal, regulatory, and/or tax factors; and (10) other factors described under the heading 'Risk Factors' in Part I, Item 1A of SilverSun's annual report on Form 10-K for the fiscal year ended December 31, 2021, and any subsequent filings that SilverSun has made and will make with the SEC including in connection with the proposed transactions such as those described under 'Additional Information about the Proposed Merger and Where to Find It.' Potential investors, stockholders and other readers are cautioned not to rely on these forward-looking statements, which speak only as of the date on which they are made. Rhodium and SilverSun disclaim any obligation or undertaking to publicly update any forward-looking statement after it is made, whether as a result of new information, future events or otherwise, except as required by law.
Rhodium Enterprises, Inc.
Chief Executive Officer
Telephone: (956) 746-3486
SilverSun Technologies, Inc.
Chief Executive Officer
Telephone: (973) 758-6108
SOURCE: SilverSun Technologies, Inc.
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