QXO (QXO) PRE 14APreliminary proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________

SCHEDULE 14A
(Rule 14a-101)

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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Check the appropriate box:

SILVERSUN TECHNOLOGIES, INC.
(Name of Registrant as Specified in its Charter)

_________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check in the appropriate box):

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION,
DATED JANUARY 16, 2024

Dear SilverSun Stockholders:

We invite you to attend the Special Meeting of Stockholders of SilverSun Technologies, Inc. (“SilverSun” or the “Company”) to be held at the Company corporate offices located at 120 Eagle Rock Avenue, East Hanover, New Jersey 07936 on [    ], 2024, at [    ] a.m. Eastern time (the “Special Meeting”).

On December 3, 2023, the Company entered into an Investment Agreement (as it may be amended or supplemented, the “Investment Agreement”) with Jacobs Private Equity II, LLC, a Delaware limited liability company (“JPE”), and the other investors listed on Schedule I thereto (the “Other Investors,” and together with JPE, the “Investors”), providing for an aggregate investment by the Investors of $1,000,000,000 in cash in the Company, including $900,000,000 from JPE (collectively, the “Equity Investment”). The Investment Agreement has been unanimously approved by the Board of Directors of the Company (the “Company Board”). Following the closing of the Equity Investment (together with all of the other transactions contemplated by the Investment Agreement, the “Transactions”), JPE will become the controlling stockholder of the Company, and Brad Jacobs, the Managing Member of JPE, will become Chairman of the Company Board and the Chief Executive Officer of the Company.

Following the closing of the Equity Investment, under the leadership of Mr. Jacobs, the Company intends to pursue a business strategy of creating a tech-forward leader in the building products distribution industry. After spinning off the existing Company business as described below, the remaining company, which will be renamed QXO, Inc., will be a standalone platform for acquisitions and operations in the building products distribution industry.

Prior to the closing of the Equity Investment, the Company will amend and restate its certificate of incorporation (the “Charter Amendment”) to, among other things, effect an 8:1 reverse stock split (the “Reverse Stock Split”) with respect to the Company’s common stock, par value $0.00001 per share (the “Common Stock”). Upon the closing of the Equity Investment and giving effect to the Reverse Stock Split, the Company will issue to the Investors, in the aggregate: (a) 1,000,000 shares of Convertible Perpetual Preferred Stock of the Company (the “Convertible Preferred Stock”) that, in the aggregate, will be convertible into approximately 219 million shares of the Company’s common stock at an initial conversion price of $4.566 per share (equivalent to $0.571 per share pre-Reverse Stock Split), subject to customary anti-dilution adjustments, and (b) warrants to purchase an additional approximately 219 million shares of the Company’s common stock (the “Warrants,” and together with the Convertible Preferred Stock, the “Securities”) at initial exercise prices of $4.566 per share (equivalent to $0.571 per share pre-Reverse Stock Split) with respect to 50% of the Warrants, $6.849 per share (equivalent to $0.856 per share pre-Reverse Stock Split) with respect to 25% of the Warrants, and $13.698 per share (equivalent to $1.712 per share pre-Reverse Stock Split) with respect to the remaining 25% of the Warrants, in each case subject to customary anti-dilution adjustments. Following the closing of the Equity Investment, the Investors will own approximately 99.85% of the Company’s common stock on an as-converted, as-exercised basis.

Under the terms of the Investment Agreement, the Company will, six days after the closing of the Equity Investment (the “Distribution Date”), separate the existing Company business into SilverSun Technologies Holdings, Inc., a Nevada corporation and currently a wholly owned subsidiary of the Company (“SpinCo”), and distribute all of the shares of SpinCo to the stockholders of the Company as of the close of business on a record date (the “Dividend and Distribution Record Date”) that is expected to be one day prior to the closing date of the Equity Investment (collectively, the “Spin-Off”). Also pursuant to the Investment Agreement, the Company will declare a $2.5 million aggregate cash dividend to its stockholders of record as of the Dividend and Distribution Record Date (the “Dividend”). The Dividend will be paid on the Distribution Date from proceeds received by the Company from the Equity Investment.

Following the closing of the Equity Investment, the Company Board will be reconstituted such that (a) the number of seats on the Company Board will be as directed by JPE, (b) each of such directors (including Mr. Jacobs) will be individuals designated by JPE, (c) each standing committee of the Company Board will be reconstituted in a manner designated by JPE and (d) Mr. Jacobs will be appointed as the Chairman of the Company Board and Chief Executive Officer of the Company. In addition, the current executive officers of the Company will resign and new officers designated by JPE will be appointed.

At the Special Meeting, Company stockholders will be asked to consider and vote upon the following proposals:

1.      To approve the issuance and sale to the Investors of the Securities (including shares of common stock that may be issued pursuant to the Securities) in accordance with the Investment Agreement, and the other transactions contemplated by the Investment Agreement (the “Investment Proposal”). A copy of the Investment Agreement is attached as Annex A to the accompanying proxy statement.

2.      To approve the adoption of the Fifth Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), a copy of the form of which is attached as Annex B to the accompanying proxy statement, which, if approved, would become effective prior to and in connection with the closing of the Equity Investment (the “General Charter Proposal”).

3.      To approve separately a feature of the Amended and Restated Certificate of Incorporation implementing the Reverse Stock Split.

4.      To approve separately a feature of the Amended and Restated Certificate of Incorporation effecting an increase in the number of authorized shares of Common Stock to 2,000,000,000 and an increase in the number of authorized shares of Preferred Stock to 10,000,000.

5.      To approve separately a feature of the Amended and Restated Certificate of Incorporation specifying the circumstances under which stockholders are able to act by written consent in lieu of a stockholder meeting.

6.      To approve separately a feature of the Amended and Restated Certificate of Incorporation specifying the circumstances under which a special meeting of stockholders may be called.

7.      To approve separately a feature of the Amended and Restated Certificate of Incorporation designating the exclusive forums in which certain claims relating to the Company may be brought.

8.      To approve separately a feature of the Amended and Restated Certificate of Incorporation providing for exculpation of directors and officers to the extent permitted by the Delaware General Corporation Law (this Proposal, together with the General Charter Proposal and Proposals 3 through 7, collectively, the “Charter Proposals”).

9.      To approve the QXO, Inc. 2024 Omnibus Incentive Plan, a copy of which is attached as Annex C to the accompanying proxy statement (the “2024 Plan Proposal”).

10.    To approve one or more adjournments of the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes for the approval of the Investment Proposal, the Charter Proposals or the 2024 Plan Proposal at the time of the Special Meeting (the “Adjournment Proposal”).

On December 2, 2023, the Company Board unanimously determined that the Company’s entry into the Investment Agreement and the consummation of the Equity Investment and all of the other transactions contemplated by the Investment Agreement, including the Charter Amendment, were advisable and in the best interests of the Company and its stockholders, and recommended that the stockholders of the Company vote in favor of the approval of (i) the Equity Investment and all of the other transactions contemplated by the Investment Agreement, (ii) the Charter Amendment (including the Reverse Stock Split, increase in authorized shares, written consent change, special meeting rights change, and exclusive forum change contemplated thereby), and (iii) any equity incentive plan proposed by JPE prior to the mailing of the accompanying proxy statement, which includes the 2024 Plan.

The Company Board unanimously recommends that stockholders vote “FOR” the approval of each of the Proposals to be voted on at the Special Meeting.

Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting. The Transactions are not conditioned on Company stockholders approving the Adjournment Proposal.

The accompanying proxy statement describes the proposals to be considered and voted upon at the Special Meeting and related matters. Every vote is important. Whether or not you plan to attend the Special Meeting, please take the time to vote by following the instructions on your proxy card and in the accompanying Notice of Special Meeting of Stockholders.

The accompanying proxy statement provides you with detailed information about the Equity Investment, the Spin-Off, the Dividend, and the Proposals. You may also obtain more information about the Company from documents we have filed with the Securities and Exchange Commission. Please see “Where You Can Find Additional Information” in the accompanying proxy statement. If you have any questions regarding the accompanying proxy statement, you may contact the Company at 120 Eagle Rock Avenue, East Hanover, NJ 07936 (973-396-1720).

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE EQUITY INVESTMENT OR RELATED TRANSACTIONS CONTEMPLATED BY THE INVESTMENT AGREEMENT OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement is dated [    ], 2024 and, together with the enclosed form of proxy card, is first being mailed to the Company stockholders on or about [    ], 2024.

PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION,
DATED JANUARY 16, 2024

SILVERSUN TECHNOLOGIES, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD [    ], 2024

To the Stockholders of SilverSun Technologies, Inc.

NOTICE IS HEREBY GIVEN of a Special Meeting of the Stockholders of SilverSun Technologies, Inc. (the “Company”), which will be held on [    ], 2024, at [    ], local time, at the Company corporate offices located at 120 Eagle Rock Avenue, East Hanover, New Jersey 07936. At the Special Meeting, you will be asked to consider and vote on the following proposals:

1.      To approve the issuance and sale to Jacobs Private Equity II, LLC, a Delaware limited liability company (“JPE”), and the Other Investors (as defined in the Investment Agreement, dated as of December 3, 2023 (as may be amended), by and among the Company, JPE and the Other Investors (the “Investment Agreement”)) of the Securities (as defined in the Investment Agreement) (including shares of Common Stock that may be issued pursuant to the Securities) in accordance with the Investment Agreement, and the other transactions contemplated by the Investment Agreement (the “Investment Proposal”). A copy of the Investment Agreement is attached as Annex A to the accompanying proxy statement.

2.      To approve the adoption of the Fifth Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), a copy of the form of which is attached as Annex B to the accompanying proxy statement, which, if approved, would become effective prior to and in connection with the closing of the Equity Investment (as defined in the Investment Agreement) (the “General Charter Proposal”).

3.      To approve separately a feature of the Amended and Restated Certificate of Incorporation effecting an 8:1 reverse stock split with respect to the Company’s common stock.

4.      To approve separately a feature of the Amended and Restated Certificate of Incorporation effecting an increase in the number of authorized shares of Common Stock to 2,000,000,000 and an increase in the number of authorized preferred shares of the Company to 10,000,000.

5.      To approve separately a feature of the Amended and Restated Certificate of Incorporation specifying the circumstances under which stockholders are able to act by written consent in lieu of a stockholder meeting.

6.      To approve separately a feature of the Amended and Restated Certificate of Incorporation specifying the circumstances under which a special meeting of stockholders may be called.

7.      To approve separately a feature of the Amended and Restated Certificate of Incorporation designating the exclusive forums in which certain claims relating to the Company may be brought.

8.      To approve separately a feature of the Amended and Restated Certificate of Incorporation providing for exculpation of directors and officers to the extent permitted by the Delaware General Corporation Law (this Proposal, together with the General Charter Proposal and Proposals 3 through 7, collectively, the “Charter Proposals”).

9.      To approve the QXO, Inc. 2024 Omnibus Incentive Plan, a copy of which is attached as Annex C to the accompanying proxy statement, which, if approved, would become effective at the closing of the Equity Investment (the “2024 Plan Proposal”).

10.    To approve one or more adjournments of the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes for the approval of the Investment Proposal, the Charter Proposals or the 2024 Plan Proposal at the time of the Special Meeting (the “Adjournment Proposal”).

The Company will transact no other business at the Special Meeting, except for business properly brought before the Special Meeting or any adjournment or postponement thereof.

Only holders of record of shares of Common Stock at the close of business on [    ], 2024, the record date for the Special Meeting, are entitled to notice of, and a vote at, the Special Meeting and any adjournments or postponements thereof.

The Company Board unanimously recommends that stockholders vote “FOR” the approval of each of the Proposals to be voted on at the Special Meeting.

Your vote is important regardless of the number of shares you own.    We encourage you to sign and return your proxy card, or use the telephone or Internet voting procedures, before the Special Meeting, so that your shares will be represented and voted at the Special Meeting even if you cannot attend in person.

Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting. The Transactions are not conditioned on Company stockholders approving the Adjournment Proposal.

TABLE OF CONTENTS

CERTAIN DEFINED TERMS

The following sets forth certain defined terms used throughout this proxy statement. Other capitalized terms used in this proxy statement are defined in various other sections of this proxy statement.

Unless the context otherwise requires, references in this proxy statement to:

•        “2024 Plan” are to the QXO, Inc. 2024 Omnibus Incentive Plan;

•        “2024 Plan Proposal” are to the proposal by the Company Board for stockholder approval of the 2024 Plan providing for stock-based incentive compensation to select officers, employees, non-employee directors, consultants, and service providers of the Company;

•        “Adjournment Proposal” are to the proposal by the Company Board for stockholder approval to adjourn the Special Meeting if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt that the Investment Proposal, the Charter Proposals or the 2024 Plan Proposal at the time of the Special Meeting;

•        “Amended and Restated Bylaws” are to the Amended and Restated Bylaws of the Company, the form of which is attached as Annex F to this proxy statement;

•        “Amended and Restated Certificate of Incorporation” are to the Fifth Amended and Restated Certificate of Incorporation of the Company, the form of which is attached as Annex B to this proxy statement;

•        “CCDC” are to Critical Cyber Defense Corporation, a Nevada corporation and indirect wholly owned subsidiary of the Company;

•        “Certificate of Designation” are to the Certificate of Designation of Convertible Perpetual Preferred Stock of the Company, to be filed with the Secretary of State of the State of Delaware in connection with the closing of the Equity Investment, the form of which is attached as Exhibit A to the Investment Agreement;

•        “Charter Proposals” are to the General Charter Proposal and Charter Amendment Feature Proposals 3 through 8, collectively;

•        “Closing” are to the closing of the Equity Investment;

•        “Closing Date” are to the date on which the Closing occurs;

•        “Common Stock” are to the Company’s common stock, $0.00001 par value per share;

•        “Company” are to SilverSun Technologies, Inc., a Delaware corporation, prior to the consummation of the Transactions or thereafter (and renamed as “QXO, Inc.”), as the context requires;

•        “Company Board” are to the Board of Directors of the Company;

•        “Company Legacy Stockholders” are to holders of Common Stock as of the Dividend and Distribution Record Date;

•        “Convertible Preferred Stock” are to the convertible perpetual preferred stock of the Company, par value $0.001 per share, having the terms set forth in the Certificate of Designation, shares of which are to be issued to the Investors in the Equity Investment;

•        “DGCL” are to the Delaware General Corporation Law;

•        “Distribution” are to the distribution of SpinCo Common Stock on a pro rata basis to persons that were holders of record of Common Stock as of the close of business on the Dividend and Distribution Record Date pursuant to the Separation and Distribution Agreement;

•        “Distribution Date” are to the date on which the Company will effect the Distribution and the Dividend, which date will be six days following the Closing Date;

•        “Dividend” are to the Company’s aggregate cash dividend of $2.5 million to be paid to persons that were Company stockholders of record as of the Dividend and Distribution Record Date;

•        “Dividend and Distribution Record Date” are to the close of business on the date that is one day prior to the Closing Date;

•        “Equity Investment” are to the issuance and sale by the Company to the Investors, and the purchase from the Company by the Investors, of the Securities in accordance with the Investment Agreement;

•        “Exchange Act” are to the Securities Exchange Act of 1934, as amended;

•        “HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

•        “Investment Agreement” are to the Investment Agreement, dated as of December 3, 2023, by and among the Company, JPE and the Other Investors, as the same may be amended, supplemented, or modified;

•        “Investment Proposal” are to the proposal by the Company Board for stockholder approval of the issuance and sale to the Investors of the Securities (including shares of common stock that may be issued pursuant to the Securities) in accordance with the Investment Agreement, and the other transactions contemplated by the Investment Agreement;

•        “Investors” are to JPE and the Other Investors, collectively;

•        “JPE” are to Jacobs Private Equity II, LLC, a Delaware limited liability company;

•        “Meller Employment Agreement” are to the Amended and Restated Employment Agreement, dated as of February 4, 2016, by and between SilverSun Technologies, Inc. and Mark Meller.

•        “Nasdaq” are to The Nasdaq Stock Market LLC;

•        “Other Investors” are to the investors, other than JPE, that are party to the Investment Agreement, as set forth on Schedule I thereto;

•        “Post-Closing Company Board” are to the Board of the Company following the Closing;

•        “Post-Closing Spin-Off Period” are to the 7-day period following the Dividend and Distribution Record Date;

•        “Preferred Stock” are to the preferred stock, par value $0.001 per share, authorized to be issued by the Company;

•        “Proposals” are to the proposals that Company stockholders will be asked to consider and vote upon at the Special Meeting, namely, the Investment Proposal, the Charter Proposals, the 2024 Plan Proposal, and, if applicable, the Adjournment Proposal;

•        “Reverse Stock Split” are to the 8:1 reverse stock split of the Common Stock to be effected at 11:59 p.m. Eastern time two days prior to the Closing Date pursuant to the Amended and Restated Certificate of Incorporation;

•        “SCS” are to Secure Cloud Services, Inc., a Nevada corporation and indirect wholly owned subsidiary of the Company;

•        “SEC” are to the U.S. Securities and Exchange Commission;

•        “Securities” are to the Convertible Preferred Stock and the Warrants, collectively;

•        “Securities Act” are to the Securities Act of 1933, as amended;

•        “Separation” are to the Company’s separation of the SpinCo Business, pursuant to the Separation and Distribution Agreement;

•        “Separation and Distribution Agreement” are to the Separation and Distribution Agreement to be entered into by the Company and SpinCo one day prior to the Distribution Date, the form of which is attached as Exhibit I to the Investment Agreement;

•        “Special Meeting” are to the Special Meeting of Stockholders of SilverSun Technologies, Inc. to be held at the Company’s corporate offices located at 120 Eagle Rock Avenue, East Hanover, New Jersey 07936 on [    ], 2024, at [    ] a.m. Eastern time;

•        “SpinCo” are to the Company’s recently formed direct wholly owned subsidiary, SilverSun Technologies Holdings, Inc., a Nevada corporation;

•        “SpinCo Business” are to (a) the business conducted by the Company or any of its subsidiaries prior to the Closing and (b) the business conducted by the Company or any of its subsidiaries following the Closing and prior to the effective time of the Distribution (other than, in the case of this clause (b), the business of the Company that the Company conducts at the direction of the Company Board from and after the Closing (other than the business described in the foregoing clause (a)));

•        “SpinCo Common Stock” are to Common Stock, par value $0.00001 per share, of SpinCo;

•        “Spin-Off” are to the Separation and the Distribution, collectively;

•        “Spin-Off Effective Time” are to 12:01 a.m., New York City time, on the Distribution Date;

•        “Stockholder Approvals” are to the affirmative vote of the holders of Common Stock voting at the Special Meeting or any adjournment or postponement thereof in favor of the approval of (a) the Equity Investment and all of the other transactions contemplated by the Investment Agreement, (b) the Amended and Restated Certificate of Incorporation (including the Reverse Stock Split contemplated by the Amended and Restated Certificate of Incorporation), and (c) any equity incentive plan proposed by JPE, including the 2024 Plan, prior to the mailing of the definitive proxy statement;

•        “SWK” are to SWK Technologies, Inc., a Delaware corporation and indirect wholly owned subsidiary of the Company;

•        “Transactions” are to the Equity Investment, the Dividend, the Spin-Off, and the related transactions set forth in the Investment Agreement; and

•        “Warrants” are to the warrants to purchase an additional approximately 219 million shares of Common Stock (giving effect to the Reverse Stock Split and subject to anti-dilution adjustments) to be issued to the Investors in the Equity Investment.

QUESTIONS AND ANSWERS ABOUT THE MEETING

Below are brief answers to questions you may have concerning the transactions described in this proxy statement and the Special Meeting. These questions and answers do not, and are not intended to, address all of the information that may be important to you. You should read carefully this entire proxy statement and the other documents to which we refer you.

Q:     Why am I receiving these proxy materials?

A:     We are providing these proxy materials in connection with the solicitation by the Company Board of proxies to be voted at the Special Meeting in connection with the transactions contemplated by the Investment Agreement, as further described in this proxy statement.

Q:     What will happen in the proposed transactions?

A:     Pursuant to the Investment Agreement, prior to the closing of the Equity Investment, the Company will amend and restate its certificate of incorporation pursuant to, among other things, effect Reverse Stock Split. Upon the closing of the Equity Investment and giving effect to the Reverse Stock Split, the Investors will invest an aggregate of $1,000,000,000 in cash in the Company in exchange for: (a) 1,000,000 shares of Convertible Preferred Stock that, in aggregate, will be convertible into approximately 219 million shares of Common Stock at an initial conversion price of $4.566 per share, subject to customary anti-dilution adjustments, and (b) Warrants to purchase an additional approximately 219 million shares of Common Stock at initial exercise prices of $4.566 per share with respect to 50% of the Warrants, $6.849 per share respect to 25% of the Warrants, and $13.698 per share with respect to the remaining 25% of the Warrants, in each case subject to customary anti-dilution adjustments. Following the closing of the Equity Investment, the Investors will own approximately 99.85% of the Company’s common stock on an as-converted, as-exchanged basis.

In addition, under the terms of the Separation and Distribution Agreement, the Company will, on the Distribution Date, separate the existing Company business into SpinCo, and distribute all of the shares of SpinCo to Company Legacy Stockholders. Also pursuant to the Investment Agreement, the Company will declare the Dividend. The Dividend will be paid to Company Legacy Stockholders on the Distribution Date from proceeds received by the Company from the Equity Investment.

Additional information on the Equity Investment, the Dividend and the Spin-Off is set forth in the section of this proxy statement entitled “The Transactions” beginning on page [    ].

Q:     When and where is the Special Meeting of the stockholders?

A:     The Special Meeting will be held at [    ] a.m., Eastern Time, on [    ], 2024, at the Company corporate offices located at 120 Eagle Rock Avenue, East Hanover, New Jersey 07936.

Q:     Who can answer any questions I may have about the Special Meeting and the Proposals?

A:     Any questions that Company stockholders or banks, brokers or other nominee record holders may have concerning the Special Meeting can be addressed to SilverSun Technologies, Inc., 120 Eagle Rock Avenue, East Hanover, NJ 07936, attention: Joseph Macaluso, (973-396-1720), email: joe.macaluso@swktech.com.

Q:     What constitutes a quorum for the transaction of business at the Special Meeting?

A:     Holders of a majority of the issued and outstanding shares of Common Stock must be present, in person or represented by proxy, at the Special Meeting to constitute a quorum. Abstentions will be counted as present, and broker non-votes will not be counted, for the purpose of determining a quorum.

Q:     What are broker non-votes?

A:     A broker non-vote occurs when a nominee record holder, such as a broker, holding shares of Common Stock for a beneficial owner of such shares does not vote on a particular proposal because the nominee does not have discretionary authority to vote on that particular proposal and has not received instructions from the beneficial owner as to how to vote its shares. If you do not provide your broker with voting instructions, none of your

shares held by the broker will be voted on any of those proposals and will not count for purposes of determining a quorum at the Special Meeting. Please see “If my shares are held in “street name” by a broker, bank, or other nominee, will my broker or other nominee vote my shares for me?” beginning on page [    ] for more information.

Q:     Who can vote at the Special Meeting?

A:     Only stockholders of record at the close of business on [    ], 2024 (which is the record date for the Special Meeting), will be entitled to vote at the Special Meeting. On this record date, there were [    ] shares of Common Stock outstanding.

Stockholder of Record: Shares Registered in Your Name

If on the record date, your shares were registered directly in your name with the Company’s transfer agent, then you are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy.

Beneficial Owner: Shares Registered in the Name of a Broker, Bank, or Other Nominee

If on the record date, your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, rather than in your name, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that entity. The entity holding your account is considered to be the stockholder of record for purposes of voting at the Special Meeting. As a beneficial owner, you have the right to direct your broker or other nominee record holder regarding how to vote the shares in your account. You are also invited to attend the Special Meeting. As you are not the stockholder of record, however, you may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker or other agent record holder.

Q:     What vote is required to approve the proposals subject to a stockholder vote at the Special Meeting?

A:     The affirmative vote of a majority of the shares of Common Stock outstanding and entitled to vote as of the close of business on the record date for the Special Meeting is required to approve the Charter Proposals. The affirmative vote of stockholders representing a majority of the votes properly cast on the Proposals by stockholders present in person or represented by proxy at the Special Meeting is required to approve the Investment Proposal and the 2024 Plan Proposal, assuming a quorum is present. Approval of the Adjournment Proposal requires the affirmative vote of stockholders representing a majority of votes properly cast on the Proposal by stockholders present in person or represented by proxy at the Special Meeting, whether or not a quorum is present. A stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Investment Proposal, the 2024 Plan Proposal, and the Adjournment Proposal, if applicable, will have no effect on such Proposals, assuming a quorum is present. A stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting or a broker non-vote, with regard to the Charter Proposals, will have the same effect as a vote “against” the Charter Proposals.

At the record date for the Special Meeting, directors and executive officers of the Company and their respective affiliates have the right to vote an aggregate of 2,006,534 (approximately 38%) of the then outstanding shares of Common Stock. Mark Meller (the Company’s President, Chief Executive Officer and Chairman) and certain related parties that collectively own an aggregate of 2,006,534 (approximately 38%) of the outstanding shares of Common Stock have entered into a Voting and Support Agreement with JPE pursuant to which, among other things, they have agreed to vote in favor of each of the Proposals. Each of the Company’s directors and executive officers, and certain affiliated persons, have indicated, verbally or in writing, their present intention to vote, or cause to be voted, the shares of Common Stock owned by them in favor of each of the Proposals.

Q:     How does the Company Board recommend that I vote with respect to the Proposals?

A:     The Company Board unanimously recommends that the Company stockholders vote “FOR” each of the Proposals.

Additional information on the recommendation of the Company Board is set forth in “The Transactions — The Company’s Reasons for the Transactions; Recommendation of the Company Board” beginning on page [    ].

You should note that some the Company directors and executive officers, and their affiliates, have interests in the Transactions that are different from, or in addition to, the interests of other Company stockholders generally. Information relating to the interests of the Company’s directors and executive officers, and their affiliates, in the Transactions is set forth in “The Transactions — Interests of Certain Company Directors and Executive Officers in the Transactions” beginning on page [    ].

Q:     Are the Proposals conditioned on one another?

A:     The Closing is conditioned upon the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal. The Transactions are not conditioned on Company stockholders approving the Adjournment Proposal. Each of the Investment Proposal and the Charter Proposals are conditioned upon the approval of such other Proposals. Neither the 2024 Plan Proposal nor the Adjournment Proposal is conditioned on the approval of any other Proposal set forth in this proxy statement.

It is important for you to note that in the event that the Investment Proposal or any of the Charter Proposals does not receive the requisite vote for approval, the Company will not consummate the Transactions. It is also important for you to note in the event that the 2024 Plan Proposal does not receive the requisite vote for approval, the Transaction will not be consummated unless such condition is waived. If the Transactions are not consummated, the Company will remain an independent public company and retain its current name, and the Equity Investment, the Spin-Off and the Dividend will not take place.

Q:     What will stockholders of the Company and the Company Legacy Stockholders receive if the Transactions are completed?

A:     As the result of the Transactions, SpinCo will own and operate the Company’s pre-Transactions business (i.e., the SpinCo Business) and the Company will own and operate new businesses acquired following the Closing. The Company will also receive $1.0 billion in cash from the Equity Investment, $2.5 million of which will be used to pay the Dividend.

Upon completion of the Transactions, each holder of Common Stock as of the Dividend and Distribution Record Date will own (a) the same number of shares of Common Stock that such stockholder owned immediately prior to the Distribution (which will be one-eighth of the number of shares owned prior to the effective time of the Reverse Stock Split) and (b) such number of shares of SpinCo Common Stock that represents the same proportionate interest in SpinCo that the shares of Common Stock it owned immediately prior to the Dividend and Distribution Record Date represented in the Company, in each case, assuming no interim transfers of Common Stock by such Company Legacy Stockholder. After the completion of the Transactions, however, the Company Legacy Stockholders will own a significantly smaller percentage of the Company than they owned immediately prior to the Closing. Upon the Closing, the Company Legacy Stockholders will retain approximately 0.15% of the Common Stock, and the Investors will own approximately 99.85% of the Common Stock on an as-converted, as-exercised basis.

Six days after the Closing, the Company will distribute an aggregate amount of $2.5 million to the Common Legacy Stockholders (the amount per share will equal $2.5 million divided by the number of outstanding shares of Common Stock on the Dividend and Distribution Record Date). The Dividend amount will be paid out of the $1.0 billion of cash paid to the Company from the Investors upon the Closing of the Equity Investment.

Additional information on the Equity Investment, the Dividend and the Spin-Off is set forth in the section of this proxy statement entitled “The Transactions” beginning on page [    ], “Investment Agreement — Preparation of Form 10 and the Spin-Off” and “The Spin-Off” beginning on page [    ].

Q:     What will happen if the Investment Proposal, the Charter Proposals or the 2024 Plan Proposal are not approved and the Transactions are not completed?

A:     In the event that the Investment Proposal or any of the Charter Proposals does not receive the requisite vote for approval, then the Transactions will not be consummated. It is also important for you to note in the event that the 2024 Plan Proposal does not receive the requisite vote for approval, the Transaction will not be consummated unless such condition is waived. If the Transactions are not consummated, the Company will remain an independent public company and retain its current name, and the Equity Investment, the Spin-Off and the Dividend will not take place. In any event, the Company will continue to file periodic reports with the SEC.

Q:     When do you expect to complete the Transactions?

A:     We anticipate completing the Transactions during the first half of 2024, subject to receipt of Stockholder Approvals and satisfaction of the other closing conditions. We cannot, however, assure completion by any particular date or that the Transactions will be completed.

Q:     Do I have appraisal rights?

A:     No. Holders of Common Stock are not entitled to appraisal rights under the DGCL in connection with the Transactions.

Q:     What do I need to do now?

A:     After carefully reading and considering the information contained in this proxy statement, please complete and sign your proxy card and return it in the enclosed postage-paid envelope as soon as possible so that your shares may be represented at the Special Meeting. Alternatively, you may cast your vote by telephone or Internet by following the instructions on your proxy card. In order to ensure that your vote is recorded, please vote your proxy as instructed on your proxy card, or on the voting instruction form provided by the record holder if your shares are held in the name of your broker or other nominee, even if you currently plan to attend the Special Meeting in person.

Please see “The Special Meeting” beginning on page [    ] for additional information regarding voting procedures.

Q:     What should I do if I receive more than one set of voting materials?

A:     You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please follow the instructions and vote in accordance with each proxy card and voting instruction card you receive.

Q:     If my shares are held in “street name” by a broker, bank, or other nominee, will my broker or other nominee vote my shares for me?

A:     No. Under the rules of various national and regional securities exchanges, if you do not provide your broker with instructions on how to vote your “street name” shares, your broker will not be permitted to vote on the Investment Proposal, the Charter Proposals, or the 2024 Plan Proposal. You should therefore be sure to provide your broker with instructions on how to vote your shares. You should check the voting form used by your broker to see if your broker offers telephone or Internet voting. If you do not give voting instructions to your broker, your shares will not be counted towards a quorum at the Special Meeting, and will effectively will be treated as voting against the approval of the Charter Proposals. If your broker holds your shares and you wish to attend and vote at the Special Meeting in person, you must obtain and bring with you a “legal proxy” from your broker, bank or other nominee record holder.

If your shares are held in street name by a bank or other nominee (other than a broker), you must similarly provide the record holder of your shares with instructions on how to vote your shares if you wish them to be voted on any of the Proposals at the Special Meeting, unless you have an arrangement with the nominee granting such nominee discretionary authority to vote your shares.

Q:     What if I do not vote on any of the Proposals?

A:     Because approval of the Charter Proposals requires the affirmative vote of a majority of the shares of Common Stock outstanding and entitled to vote as of the record date for the Special Meeting, and the Charter Proposals and the Investment Proposal are each conditioned on each other, if you abstain or fail to vote your shares in favor of the Charter Proposals, it will have the same effect as voting your shares against each of the foregoing Proposals. If you fail to respond with a vote or fail to instruct your broker or other nominee how to vote on the Charter Proposals it will have the same effect as a vote against the Charter Proposals. If you respond but do not indicate how you want to vote on the Proposals included herein, your proxy will be counted as a vote in favor of

all Proposals. A stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Investment Proposal, the 2024 Plan Proposal, and the Adjournment Proposal will have no effect on such Proposals, assuming a quorum is present.

Q:     What will happen if I return my proxy card without indicating how to vote?

A:     If you sign and return your proxy card without indicating how to vote on any particular proposal, the shares of Common Stock represented by your proxy will be voted “FOR” such proposal.

Q:     Can I change my vote after submitting my proxy?

A:     Yes. You can revoke your proxy at any time before it is voted. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:

•        You may submit another properly completed proxy card with a later date;

•        You may send a timely written notice that you are revoking your proxy to the Company at 120 Eagle Rock Avenue, East Hanover, NJ 07936, Attn: Joseph Macaluso; or

•        You may attend the Special Meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy.

If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank to change your vote.

CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements. Statements that are not historical facts, including statements about beliefs or expectations, are forward-looking statements. These statements are based on plans, estimates, expectations and projections at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Factors that could cause actual results to differ materially from those described herein include, among others:

•        uncertainties as to the ability of the parties to consummate the Equity Investment, the Spin-Off and the other Transactions, including the risk that one or more of the Transactions may involve unexpected costs, liabilities or delays;

•        the risks associated with the Company’s relatively low public float, which may result in its common stock experiencing significant price volatility;

•        the possibility that competing transaction proposals may be made;

•        the risks associated with raising additional equity or debt capital from public or private markets to pursue acquisitions or other strategic investments, including in an amount that may significantly exceed the initial equity investment, and the effects that raising such capital may have on the Company’s business and the trading price of the Company’s common stock, including the possibility of substantial dilution;

•        the possibility that additional future financings may not be available to the Company on acceptable terms or at all;

•        the effects that the announcement, pendency or consummation of the Equity Investment, the Spin-Off and the other Transactions may have on the Company and its current or future business and on the price of the Company’s Common Stock;

•        the possibility that an active, liquid trading market for the Company’s Common Stock may not develop or, if developed, may not be sustained;

•        the possibility that the Warrants, if issued, may not be exercised;

•        the possibility that various closing conditions for the Transactions may not be satisfied or waived, or any other required consents or approvals may not be obtained within the expected timeframe, on the expected terms, or at all, including the possibility that the Company may fail to obtain the required Stockholder Approvals;

•        the effects that a termination of the Investment Agreement may have on the Company, including the risk that the price of the Company’s Common Stock may decline significantly if the Equity Investment is not completed;

•        the risk that the Spin-Off may be more difficult, time-consuming, or costly than expected or the possibility that the anticipated benefits of the Spin-Off may not be realized;

•        uncertainties regarding the Company’s focus, strategic plans and other management actions;

•        the risk that the Company, following the closing of the Equity Investment, is or becomes highly dependent on the continued leadership of Mr. Jacobs as Chairman and Chief Executive Officer and the possibility that the loss of Mr. Jacobs in these roles could have a material adverse effect on the Company’s business, financial condition and results of operations;

•        the risk that Mr. Jacobs’ past performance may not be representative of future results;

•        the risk that the Company is unable to attract or retain world-class talent;

•        the risk that the Company may be unable to identify suitable acquisition candidates or expeditiously consummate any particular acquisition candidate on acceptable terms or at all;

•        the risk that the failure to consummate an acquisition expeditiously, or at all, could have a material adverse effect on the Company’s business prospects, financial condition, results of operations or the price of the Company’s Common Stock;

•        the risk that the Company may fail to satisfy the ongoing requirements of Nasdaq if it is unable to expeditiously consummate an acquisition following the consummation of the Spin-Off;

•        the risks associated with cybersecurity and technology, including attempts by third parties to defeat the security measures of the Company and its business partners, and the loss of confidential information and other business disruptions;

•        the possibility that new investors in any future financing transactions could gain rights, preferences, and privileges senior to those of the Company’s existing stockholders;

•        the risks associated with the uncertain nature of the building products distribution industry in which Mr. Jacobs, upon becoming Chairman and Chief Executive Officer of the Company, plans to pursue acquisitions after consummation of the Transactions;

•        the possibility that industry demand may soften or shift substantially due to the cyclicality and seasonality of the building products distribution industry and its dependence on general economic conditions, including inflation or deflation, interest rates, consumer confidence, labor and supply shortages, weather and commodity prices;

•        the possibility that regional or global barriers to trade or a global trade war could increase the cost of products in the building products distribution industry, which could adversely impact the competitiveness of such products and the financial results of businesses in the industry;

•        the risks associated with potential litigation related to the Transactions or related to any possible subsequent financing transactions or acquisitions or investments;

•        uncertainties regarding general economic, business, competitive, legal, regulatory, tax and geopolitical conditions; and

•        other factors, including those set forth in the Company’s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and subsequent Quarterly Reports on Form 10-Q.

Forward-looking statements herein speak only as of the date each statement is made. None of the Company, JPE or any other person undertakes any obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law.

THE PARTIES TO THE TRANSACTIONS

SilverSun Technologies, Inc. (the “Company”)

The Company, through its wholly owned subsidiaries, is a business application, technology and consulting company providing strategies and solutions to meet its clients’ information technology and business management needs. The Company’s current principal executive office is located at 120 Eagle Rock Avenue, East Hanover, New Jersey 07936. The Company’s current telephone number is (973) 396-1720. More information about the Company may be found in the documents we file with the SEC. Please see “Where You Can Find Additional Information” beginning on page [    ].

Jacobs Private Equity II, LLC (“JPE”)

JPE is an investment vehicle controlled by Brad Jacobs.

Brad Jacobs has completed approximately 500 M&A transactions in his career, and built five multibillion-dollar, publicly traded companies to date: XPO, Inc., one of the largest providers of less-than-truckload services in North America; GXO Logistics, Inc., the largest pure-play contract logistics provider in the world; RXO, Inc., a leading tech-enabled freight brokerage platform; United Rentals, Inc., the world’s largest equipment rental company; and United Waste Systems, Inc., the fifth largest U.S. waste management company at the time of its sale. Each of these companies has a history of attracting world-class talent, establishing advantages through technology, and scaling up through accretive capital allocations for M&A and organic growth.

The mailing address of the principal executive offices of JPE is Jacobs Private Equity II, LLC, Five American Lane, Greenwich, CT 06831. The telephone number is 888-998-6000.

THE SPECIAL MEETING

General Information

The Company Board has sent these proxy statement materials to you to solicit your vote at the Special Meeting. The meeting will be held at the Company corporate offices located at 120 Eagle Rock Avenue, East Hanover, New Jersey 07936, on [    ], 2024, at [    ] a.m. Eastern Time. Check-in will begin one-half hour prior to the meeting. If you plan to attend the Special Meeting in person, please allow ample time for the check-in procedures.

Agenda

The Special Meeting will be held for the following purposes:

1.      To approve the issuance and sale to the Investors of the Securities (including shares of common stock that may be issued pursuant to the Securities) in accordance with the Investment Agreement, and the other transactions contemplated by the Investment Agreement (the “Investment Proposal”). A copy of the Investment Agreement is attached as Annex A to this proxy statement.

2.      To approve the adoption of the Amended and Restated Certificate of Incorporation, a copy of the form of which is attached as Annex B to this proxy statement, which will, if approved, would become effective prior to and in connection with the closing of the Equity Investment (the “General Charter Proposal”).

3.      To approve separately a feature of the Amended and Restated Certificate of Incorporation, implementing the Reverse Stock Split.

4.      To approve separately a feature of the Amended and Restated Certificate of Incorporation effecting an increase in the number of authorized shares of Common Stock to 2,000,000,000 and an increase in the number of authorized Preferred Stock of the Company to 10,000,000.

5.      To approve separately a feature of the Amended and Restated Certificate of Incorporation specifying the circumstances under which stockholders are able to act by written consent in lieu of a stockholder meeting.

6.      To approve separately a feature of the Amended and Restated Certificate of Incorporation specifying the circumstances under which a special meeting of stockholders may be called.

7.      To approve separately a feature of the Amended and Restated Certificate of Incorporation designating the exclusive forums in which certain claims relating to the Company may be brought.

8.      To approve separately a feature of the Amended and Restated Certificate of Incorporation providing for exculpation of directors and officers to the extent permitted by the DGCL (this Proposal, together with the General Charter Proposal and Proposals 3 through 7, collectively, the “Charter Proposals”).

9.      To approve the QXO, Inc. 2024 Omnibus Incentive Plan, a copy of which is attached as Annex C to this proxy statement, which will, if approved, would become effective as of the closing of the Equity Investment (the “2024 Plan Proposal”).

10.    To approve one or more adjournments of the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes for the approval of the Investment Proposal, the Charter Proposals or the 2024 Plan Proposal at the time of the Special Meeting (the “Adjournment Proposal”).

Stockholders Entitled to Vote

Holders of record of Common Stock at the close of business on [    ], 2024 are entitled to notice of and to vote at the Special Meeting. At the close of business on [    ], 2024, there were [    ] shares of Common Stock issued and outstanding. Each share of Common Stock entitles the holder thereof to one vote on all matters submitted to a vote at the Special Meeting and any adjournment or postponement of the meeting. A complete list of the Company stockholders entitled to vote will be available for examination at the meeting and for at least ten days prior to the meeting at the Company’s principal executive offices.

Stockholder of Record: Shares Registered in Your Name

If on [    ], 2024, your shares were registered directly in your name with the Company’s transfer agent, Pacific Stock Transfer, Inc., then you are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy.

Beneficial Owner: Shares Registered in the Name of a Broker, Bank, or Other Nominee

If on [    ], 2024, your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, rather than in your name, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that entity. The entity holding your account is considered to be the stockholder of record for purposes of voting at the Special Meeting. As a beneficial owner, you have the right to direct your broker or other nominee record holder regarding how to vote the shares in your account.

Under the rules of various national and regional securities exchanges, if you do not provide your broker with instructions on how to vote your “street name” shares, your broker will not be permitted to vote on the Investment Proposal, the Charter Proposals, or the 2024 Plan Proposal. You should therefore be sure to provide your broker with instructions on how to vote your shares. You should check the voting form used by your broker to see if your broker offers telephone or Internet voting. If you do not give voting instructions to your broker, your shares will not be counted towards a quorum at the Special Meeting, and effectively will be treated as voting against the approval of the Charter Proposals.

If your shares are held in street name by a bank or other nominee (other than a broker), you must similarly provide the record holder of your shares with instructions on how to vote your shares if you wish them to be voted on any of the Proposals at the Special Meeting, unless you have an arrangement with the nominee granting such nominee discretionary authority to vote your shares.

If your shares are held in street name, you may attend the Special Meeting but may not vote your shares at the meeting unless you obtain a “legal proxy” from your broker, bank, or other nominee record holder.

Quorum and Required Votes

A quorum of stockholders is necessary for a valid Special Meeting. The presence in person or by proxy of the holders of a majority of the outstanding shares of Common Stock as of the record date will constitute a quorum for the Special Meeting.

Approval of the Charter Proposals requires the affirmative vote of holders of a majority of all shares of Common Stock outstanding as of the record date for the Special Meeting. Approval of each of the Investment Proposal and the 2024 Plan Proposal requires the affirmative vote of stockholders representing a majority of votes properly cast on the Proposals by stockholders present in person or represented by proxy at the Special Meeting, assuming a quorum is present. Approval of the Adjournment Proposal requires the affirmative vote of stockholders representing a majority of votes properly cast on the Proposal by stockholders present in person or represented by proxy at the Special Meeting, whether or not a quorum is present.

All proxies that the Company receives in connection with the Special Meeting will be voted as directed by the stockholder. A proxy, if executed and not revoked, will be voted FOR each of the Proposals (unless it contains instructions to the contrary, in which event it will be voted in accordance with such instructions).

Consummation of the Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting. Consummation of the Transactions is not conditioned upon approval of the Adjournment Proposal.

It is important for you to note that in the event the Investment Proposal and the Charter Proposals do not receive the requisite vote for approval, the Transaction will not be consummated. It is also important for you to note in the event that the 2024 Plan Proposal does not receive the requisite vote for approval, the Transaction will not be consummated unless such condition is waived.

How to Vote

Because many stockholders cannot attend the Special Meeting in person, it is necessary that a large number of stockholders be represented by proxy. If you hold your shares through a bank, broker, custodian or other nominee record holder, please refer to your voting instruction form or the information forwarded by your bank, broker, custodian or other nominee record holder to see which voting options are available to you; alternatively, you may obtain a “legal proxy” from your broker, bank or other nominee and attend the meeting and vote in person. If you are a stockholder of record of Common Stock, you can vote your proxy by the following three methods as set forth on the enclosed proxy card:

•        Internet.    You can vote over the Internet by accessing the website listed on your proxy card and following the instructions on the website prior to the deadline set forth in the proxy card. Internet voting is available 24 hours a day. If you vote over the Internet, do not return your proxy card(s).

•        Telephone.    You can vote by telephone by calling the toll-free number listed on your proxy card in the United States, Canada, or Puerto Rico on a touch-tone phone prior to the deadline set forth in the proxy card. You will then be prompted to enter the control number printed on your proxy card and to follow subsequent instructions. Telephone voting is available 24 hours a day. If you vote by telephone, do not return your proxy card(s).

•        Mail.    You can vote by mail by completing, signing, dating, and mailing your proxy card(s) in the postage-paid envelope included herewith.

Where internet and telephone voting procedures are available for voting a proxy, procedures have been established to authenticate Company stockholders of record by use of a control number and to allow you to confirm that your instructions have been properly recorded.

You may receive more than one proxy card or voting instruction form depending on how you hold your shares. You should vote each proxy card or voting instruction form provided to you.

Revocation of a Proxy

If you are a stockholder of record of Common Stock, you may revoke a proxy that you previously provided at any time before it is voted in any one of three ways:

•        You may submit another properly completed proxy card with a later date;

•        You may send a timely written notice that you are revoking your proxy to the Company at 120 Eagle Rock Avenue, East Hanover, NJ 07936, Attn: Joseph Macaluso; or

•        You may attend the Special Meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy.

•        If your shares are held by your broker, bank or other nominee, you should follow the instructions provided by your bank, broker or other recordholder to revoke or change your vote.

Proxy Solicitation

This solicitation is made on behalf of the Company Board. The Company is paying the costs and expenses of printing and mailing this proxy statement and all fees paid to the SEC. Proxies are being solicited by mail and may be solicited by telephone, email or other electronic communication, or in person by Company employees, who will not receive additional compensation for any such solicitation. Any questions that Company stockholders, banks or brokers may have concerning the Special Meeting can be addressed to SilverSun Technologies, Inc., 120 Eagle Rock Avenue, East Hanover, NJ 07936, Attn: Joseph Macaluso, (973-396-1720), email: joe.macaluso@swktech.com. The Company will also request brokers and other fiduciaries to forward proxy soliciting material to the beneficial owners of shares of Common Stock that are held of record by such brokers and fiduciaries and will reimburse their reasonable out-of-pocket expenses.

Householding

The Company has adopted a procedure approved by the SEC called “householding,” by which certain stockholders who do not participate in electronic delivery of proxy materials but who have the same address and appear to be members of the same family receive only one copy of the Company’s annual report and proxy statements. Each stockholder participating in householding continues to receive a separate proxy card. Householding reduces both the environmental impact of the Company’s annual meetings and the Company’s mailing and printing expenses.

If you would like to change your householding election, request that a single copy of the proxy materials be sent to your address, or request a separate copy of the proxy materials, please contact the Company, by calling Joseph Macaluso: (973-396-1720), email: joe.macaluso@swktech.com.

Questions About the Special Meeting

Any questions that Company stockholders, banks or brokers may have concerning the Special Meeting can be addressed to SilverSun Technologies, Inc., 120 Eagle Rock Avenue, East Hanover, NJ 07936, Attn: Joseph Macaluso, (973-396-1720), email: joe.macaluso@swktech.com.

THE TRANSACTIONS

The discussion in this proxy statement of the Transactions and the principal terms of the Investment Agreement and the Separation and Distribution Agreement are subject to, and are qualified in their entirety by reference to, the Investment Agreement, a copy of which is attached to this proxy statement as Annex A, and the Separation and Distribution Agreement, set forth in Exhibit I to the Investment Agreement, and in each case incorporated into this proxy statement by reference.

Description of the Transactions

On December 3, 2023, the Company entered into the Investment Agreement with JPE and the other Investors, providing for, among other things, an aggregate investment by the Investors of $1,000,000,000 in cash in the Company, including $900,000,000 from JPE. The Investment Agreement has been unanimously approved by the Company Board. Following the Closing of the Transactions, JPE will be the controlling stockholder of the Company, and Brad Jacobs, the Managing Member of JPE, will become Chairman of the Company Board. Mr. Jacobs will also become the Company’s Chief Executive Officer following the Closing.

Prior to the Closing of the Equity Investment, the Company will amend and restate its Certificate of Incorporation to, among other things, effect an 8:1 Reverse Stock Split with respect to the Company’s Common Stock. Upon the Closing of the Equity Investment and giving effect to the Reverse Stock Split, the Company will issue to the Investors, in the aggregate: (a) 1,000,000 shares of Convertible Preferred Stock of the Company that, in aggregate, will be convertible into approximately 219 million shares of the Company’s Common Stock at an initial conversion price of $4.566 per share, subject to customary anti-dilution adjustments, and (b) warrants to purchase additional shares of the Company’s Common Stock (the “Warrants” and, together with the Convertible Preferred Stock, the “Securities”) at initial exercise prices of $4.566 per share with respect to 50% of the Warrants, $6.849 per share with respect to 25% of the Warrants, and $13.698 per share with respect to the remaining 25% of the Warrants, in each case subject to customary anti-dilution adjustments. Following the Closing of the Equity Investment, the Investors will own approximately 99.85% of the Company’s Common Stock on an as-converted, as-exchanged basis. The terms of the Amended and Restated Certificate of Incorporation (which includes the Reverse Stock Split) are more fully set forth in Exhibit D to the Investment Agreement attached as Annex A to this proxy statement and incorporated by reference herein.

The Convertible Preferred Stock will pay quarterly cash dividends equal to the greater of (a) the as-converted dividends on the underlying Common Stock for the relevant quarter and (b) 9% of the then-applicable liquidation preference per annum. Accrued and unpaid dividends for any quarter will accrete to liquidation preference for all purposes. The Convertible Preferred Stock will not be redeemable or subject to any required offer to purchase and will vote together with the Company’s Common Stock on an as-converted basis on all matters, except as otherwise required by law, and separately as a class with respect to certain matters implicating the rights of holders of shares of Convertible Preferred Stock. The terms of the Convertible Preferred Stock are more fully set forth in the Certificate of Designation, the form of which is attached as Exhibit A to the Investment Agreement and incorporated by reference herein.

Each Warrant will initially be exercisable at any time and from time to time from the Closing Date until the tenth anniversary of the Closing Date, at the option of the holder thereof, into one share of Common Stock at the exercise prices described above, subject to customary anti-dilution adjustments. The initial aggregate number of shares of Common Stock subject to Warrants will be 219,007,375 shares. The terms of the Warrants are more fully set forth in Exhibit B to the Investment Agreement and incorporated by reference herein.

Under the terms of the Investment Agreement, the Company will, six days after the Closing of the Equity Investment, separate the existing Company business (i.e., the SpinCo Business) into SpinCo and distribute all of the shares SpinCo Common Stock to the Company Legacy Stockholders in the Distribution. The terms of the Separation and Distribution are more fully set forth in the Separation and Distribution Agreement to be entered into by the Company and SpinCo one day prior to the Distribution Date, the form of which is attached as Exhibit I to the Investment Agreement and incorporated by reference herein. Also pursuant to the Investment Agreement, the Company will declare the Dividend to the Company Legacy Stockholders. The Dividend will be paid on the Distribution Date from proceeds received by the Company from the Equity Investment.

The Company and SpinCo will also enter into the Tax Matters Agreement and the Employee Matters Agreement in the forms attached as Exhibits J and K, respectively, to the Investment Agreement and incorporated by reference herein, providing for certain tax and employee compensation and benefits matters in connection with the Spin-Off.

Following the Spin-Off, the Company’s current executive officers and directors, including Mark Meller, the Company’s Chief Executive Officer, are expected to continue in their current roles at SpinCo and its subsidiaries barring retirements and other terminations of their positions with the Company prior to consummation of the Transactions. SpinCo will apply for the public quotation of its shares on the OTCQX tier of OTC Markets, which shares will be registered pursuant to a registration statement on Form 10 that will be filed with the SEC.

Following the Closing of the Equity Investment, the Company Board will be reconstituted such that (a) the number of seats on the Post-Closing Company Board will be as directed by JPE, (b) each of such directors (including Mr. Jacobs) will be individuals designated by JPE, (c) each standing committee of the Board of the Company will be reconstituted in a manner designated by JPE and (d) Mr. Jacobs will be appointed as the Chairman of the Post-Closing Company Board and Chief Executive Officer of the Company. In addition, the current executive officers of the Company will resign and new officers designated by JPE will be appointed.

Under the Investment Agreement, until the Closing of the Equity Investment, the Company will cooperate with JPE in JPE’s efforts for the Company to consummate an acquisition of one or more businesses selected by JPE, the consummation of which will not occur until the consummation of the Spin-Off. Such cooperation by the Company will include signing any definitive agreements with respect to such acquisition so long as the closing thereunder does not occur until the Closing. JPE will pay for the expenses of this cooperation until the Closing of the Spin-Off, at which point the Company will reimburse JPE for all such expenses (with the intention being that these expenses will not reduce cash otherwise available to SpinCo).

If JPE consummates an acquisition of a business or businesses before the Closing, at the sole election of JPE, JPE may contribute such business or businesses to the Company and the Company will cooperate with JPE to effectuate any such contribution. As part of such contribution, the Company will issue to JPE (and as directed by JPE) shares of Convertible Preferred Stock and Warrants with a value equal to the amount paid by JPE to purchase such business or businesses contributed by JPE, based on the same per share of Convertible Preferred Stock/per Warrant prices set forth above, and in such case the portion of the purchase price otherwise payable by JPE to the Company pursuant to the Investment Agreement will be reduced by the amount JPE paid for the contributed business or businesses.

Business Strategy

Following the Closing, under the leadership of Brad Jacobs, the Company intends to pursue a business strategy of creating a tech-forward leader in the building products distribution industry through accretive M&A and organic growth, including greenfield openings, with the goal of generating outsized stockholder value. After spinning off the existing Company business as described above, the remaining company, which will be renamed QXO, Inc., will be a standalone platform for significant acquisitions.

Distributors of building products offer materials, finished goods, value-added solutions and expertise to a broad range of customers across residential, nonresidential, industrial and infrastructure end-markets. Their products are used in new construction and in repair and remodeling. Key categories include access control, construction supplies, waterworks, doors and windows, electrical components, fencing and decking, HVAC, infrastructure, landscaping, lumber, plumbing, pools, roofing, siding and water, among others.

JPE expects to achieve a revenue run-rate for QXO of at least $1 billion by the end of year one, at least $5 billion within three years, and tens of billions of dollars over the next decade, leveraging its scale to elevate the customer experience, increase sales force effectiveness and enable margin expansion.

The industry’s nascent use of technology, particularly AI and B2B e-commerce, represents a compelling opportunity for tech-focused entrants. According to industry data, the percentage of industry revenue derived from e-commerce is currently only mid-single digits, and this share is expected to triple by 2030. Additional types of tech adoption by distributors have the potential to be transformative through price optimization, demand forecasting, warehouse automation and robotics, automated inventory management, route optimization for delivery fleets, supply chain visibility, and end-to-end digital customer connectivity. QXO’s strategy anticipates that these drivers, among others, will be central to the company’s goal of outsized stockholder value creation.

The building products distribution industry is highly fragmented, with approximately 7,000 distributors in North America and 13,000 in Europe, according to industry observers. The industry has generated compound annual revenue growth of 7% over the last five years, based on industry data, and continues to benefit from powerful secular growth drivers for building products distribution in the residential, nonresidential and infrastructure sectors.

For example, industry reports estimate that the current supply of U.S. homes is 3 million units short of demand, potentially creating long-term tailwinds for both new construction and the repair and remodeling of aging homes. In the nonresidential sector, long-term demand is expected to be driven by growth across multiple industrial and commercial verticals, according to industry sources. Infrastructure should benefit from the widely reported need for repair or replacement of America’s public transportation, utility and communication systems, among others.

These market dynamics, together with the fragmented nature of the industry, offer a significant opportunity to unlock growth potential through scale and technology. National distributors can serve large customers across multiple geographies and project types with standardized efficiencies, providing consistent, data-driven customer services across a broad operating scope. Additionally, a scaled technology ecosystem can expand the array of value-added services offered to customers, such as jobsite visibility into product consumption, digital configuration tools for custom ordering and tracking, and virtual design capabilities that interface with product order flow.

The foregoing description of the post-Closing business strategy of the Company includes forward-looking statements that are subject to numerous risks and uncertainties. Please see “Cautionary Information Regarding Forward-Looking Statements” beginning on page [    ].

Effect on the Company If the Transactions Are Not Completed

If the Transactions are not completed for any reason, the Company will remain an independent public company and retain its current name, and the Equity Investment, the Spin-Off and the Dividend will not take place. In any event, the Company will continue to file periodic reports with the SEC.

If the Transactions are not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of the shares of Common Stock. If the Transactions are not completed, the Company Board will continue to evaluate and review the Company’s business operations, properties, dividend policy and capitalization, among other things, and make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to enhance stockholder value. If the Transactions are not completed, there can be no assurance that any comparable transaction acceptable to the Company will be offered or that the Company’s business, prospects or results of operation will not be adversely impacted.

Background of the Transactions

The Company Board, together with senior management, regularly reviews the Company’s performance, growth prospects and overall strategic direction and evaluates potential opportunities to strengthen the Company’s business and enhance value for the Company’s stockholders. These reviews and evaluations have included analyzing the Company’s strategy as a standalone company and potential opportunities for business combinations, strategic partnerships, mergers and acquisitions and other financial and strategic alternatives. From time to time, the Company has received inbound inquiries from, and has held discussions with, third parties, including potential acquirers, regarding the possibility of pursuing strategic transactions.

On August 15, 2023, Mr. Meller received an inquiry from a representative of Goldman Sachs & Co. LLC (“Goldman Sachs”), a financial advisor to JPE, seeking to introduce JPE to the Company in connection with a possible transaction (the “Possible Transaction”). Mr. Meller and a representative of Goldman Sachs spoke later that day via telephone, during which discussion representatives of Goldman Sachs briefly explained JPE’s potential interest in the Possible Transaction. Mr. Meller informed Goldman Sachs that the Company could not engage in any discussions regarding the Possible Transaction under the terms of the non-solicitation provisions of the Company’s September 29, 2022 merger agreement (the “Rhodium Merger Agreement”) with Rhodium Enterprises, Inc. and the other parties thereto. Mr. Meller advised Goldman Sachs that he would let Goldman Sachs know should circumstances change.

On September 6, 2023, the Company and the other parties to the Rhodium Merger Agreement amended the Rhodium Merger Agreement to, among other things, remove the non-solicitation and related provisions from the Rhodium Merger Agreement and provide that the parties could enter into certain transactions without the consent of the other party.

On September 7, 2023, Mr. Meller contacted representatives of Goldman Sachs and advised them that the Rhodium Merger Agreement had been so amended. Mr. Meller and representatives of Goldman Sachs discussed JPE’s continuing potential interest in a Possible Transaction as well as the need for a confidentiality agreement to facilitate the sharing of information between the Company and JPE that the Company believed would be conducive to further discussions and engagement.

From September 2023 through the signing of the Investment Agreement, Mr. Meller updated and kept the other directors of the Company informed about discussions with representatives of JPE and Goldman Sachs regarding the Possible Transaction, and the Company Board held a number of meetings throughout this time to discuss these matters.

Between September 7, 2023 and September 13, 2023, JPE and the Company negotiated the terms of the confidentiality agreement, with representatives of Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”), JPE’s legal advisor, and Lucosky Brookman LLP (“Lucosky Brookman”), the Company’s legal advisor, participating in such negotiations.

On September 13, 2023, JPE and the Company entered into the confidentiality agreement (the “Confidentiality Agreement”).

Following entry into the Confidentiality Agreement, on September 14, 2023, representatives of Goldman Sachs provided to the Company a preliminary term sheet outlining JPE’s proposed terms for the Possible Transaction.

On September 15, 2023, representatives of JPE, including Mr. Jacobs and Austin Landow, Managing Director of JPE, held an introductory virtual meeting with Mr. Meller regarding the Possible Transaction and the terms contained in the preliminary term sheet.

On September 22, 2023, various representatives of JPE, including Mr. Jacobs and Mr. Landow met with Mr. Meller and other representatives of the Company at the Company’s offices in East Hanover, New Jersey, to discuss the Company’s business, the Possible Transaction, Mr. Jacobs’ background, and Mr. Jacobs’ business strategy.

On September 26, 2023, Mr. Meller and representatives of Goldman Sachs and Morgan Stanley & Co. LLC (“Morgan Stanley”), a financial advisor to JPE, discussed potential next steps with respect to the Possible Transaction, and Mr. Meller agreed to meet in person with Mr. Jacobs at the Greenwich Economic Forum, to be held October 3 and October 4, 2023.

On September 30, 2023, representatives of Wachtell Lipton and Lucosky Brookman held a preliminary call regarding various topics, including, among others, the Rhodium Merger Agreement, and the due diligence process for the Possible Transaction.

On October 3, 2023, Mr. Meller attended the Greenwich Economic Forum and met in person with Mr. Jacobs and Mr. Landow, during which meeting they discussed the general terms and parameters of the Possible Transaction.

On October 4, 2023, representatives of Wachtell Lipton sent representatives of Lucosky Brookman a preliminary due diligence request list in connection with the Possible Transaction. Also on October 4, 2023, Mr. Meller and Mr. Landow spoke about various components of the Possible Transaction and other business matters relating thereto.

On October 5, 2023, representatives of Wachtell Lipton sent a revised draft of the term sheet to the Company and Lucosky Brookman outlining the proposed terms of the Possible Transaction, including the amount of the proposed investment, the terms of the Securities, JPE’s governance rights following the Closing, and certain matters related to the Spin-Off.

Between October 5, 2023 and October 10, 2023, representatives of JPE, the Company, Wachtell Lipton and Lucosky Brookman had various discussions regarding the Term Sheet, certain of the terms of the Possible Transaction and related matters.

On October 13, 2023, the Company terminated the Rhodium Merger Agreement in accordance with its terms and informed JPE and Wachtell Lipton of the termination.

On October 16, 2023, the Company provided JPE and Wachtell Lipton with access to a confidential data room containing certain due diligence materials requested by JPE.

Between October 16, 2023 and December 3, 2023, JPE, with the assistance of Wachtell Lipton, Goldman Sachs, Morgan Stanley, and JPE’s other advisors, conducted due diligence on the Company, including through the materials made available in the confidential data room and telephone and videoconference calls with members of Company management.

Between October 23, 2023 and October 25, 2023, representatives of Wachtell Lipton provided to representatives of the Company and Lucosky Brookman drafts of the Investment Agreement and other transaction documentation.

Between October 23, 2023 and December 4, 2023, Mr. Meller, Mr. Jacobs, Mr. Landow and other representatives of JPE and the Company, as well as representatives of Wachtell Lipton and Lucosky Brookman, engaged in negotiations regarding the terms of the Investment Agreement and the other transaction documentation, including the exhibits to the Investment Agreement. During the course of these negotiations, significant areas of discussion and negotiation between the parties included, among other things, the length of time that JPE would be permitted to delay the Closing, the consequences of delaying the Closing, the terms and amount of the cash dividend to be paid by the Company to stockholders as of the record date for the Spin-Off, the terms of the Spin-Off, the allocation of costs and expenses of the Transactions, and the terms related to the termination of Mr. Meller’s employment agreement.

On December 2, 2023, the Company Board held a meeting via videoconference, which was attended by all members of the Company Board as well as members of the Company’s senior management and representatives of Lucosky Brookman and Benchmark. Lucosky Brookman presented a summary of the terms of the Investment Agreement and the exhibits thereto, and discussed the fiduciary duties of the members of the Company Board. Next, Benchmark reviewed with the Company Board Benchmark’s financial analyses of the consideration and delivered to the Company Board an oral opinion, which opinion was confirmed by delivery of a written opinion, dated December 3, 2023, to the effect that, as of that date and based on and subject to various assumptions, matters considered and limitations described in its opinion, the Transactions were fair, from a financial point of view, to the Company’s stockholders. Following discussion, during which the members of the Company Board considered the matters reviewed and discussed at that meeting and prior meetings, including factors set forth in “The Transactions — The Company’s Reasons for the Transactions; Recommendation of the Company Board,” the Company Board, by unanimous vote, determined that the Company’s entry into the Investment Agreement and the consummation of the Equity Investment and all of the other transactions contemplated by the Investment Agreement, including the Charter Amendment, were advisable and in the best interests of the Company and its stockholders, and resolved to recommend that the stockholders of the Company vote in favor of the approval of (i) the Equity Investment and all of the other transactions contemplated by the Investment Agreement, (ii) the Charter Amendment (including the Reverse Stock Split, increase in authorized shares, written consent change, special meeting rights change, and exclusive forum change contemplated thereby), and (iii) any equity incentive plan proposed by JPE prior to the mailing of the accompanying proxy statement, which includes the 2024 Plan.

On December 3, 2023, the Company and JPE entered into the Investment Agreement.

On December 4, 2023, prior to the opening of the market, the Company and JPE issued a joint press release announcing the execution of the Investment Agreement and filed a Form 8-K with the SEC describing the terms of the Transactions.

The Company’s Reasons for the Transactions; Recommendation of the Company Board

The Company’s Reasons for the Transactions

In reaching its unanimous determination, the Company Board consulted with and received the advice of its financial and legal advisors, discussed certain issues with the Company’s senior management team, and considered a number of factors that it believed supported its decision to recommend that the Company enter into the Investment Agreement and consummate the Equity Investment, and recommend that the stockholders vote in favor of the Proposals, including, but not limited to, the following material factors, which are not intended to be exhaustive and are not presented in any relative order of importance:

•        the financial analyses presented to the Company Board by Benchmark, as well as the written opinion of Benchmark, dated December 3, 2023, to the Company Board to the effect that the Transactions are fair to the SilverSun stockholders from a financial point of view;

•        the fact that, pursuant to the Transactions, the Company’s stockholders of record as of the Dividend and Distribution Record Date will receive the Dividend and the Distribution, which the Company Board views as accretive to the value of the Company’s stockholders’ investment in the Company;

•        the fact that the Company’s stockholders, through the Spin-Off, will be able to maintain an interest in a public company that will continue the Company’s existing operations;

•        the fact that the Company’s stockholders will have the ability to share in any upside that might result from any future improved performance on the part of the Company, including as a result of JPE’s business strategy, through the interest they will retain in the Company following the Closing;

•        the reputation of JPE and Mr. Jacobs, including with respect to Mr. Jacobs’ ability to raise funds in follow-on offerings and complete accretive acquisitions on a large-scale basis;

•        the belief of the Company Board, after a review of strategic alternatives and discussions with the Company’s management and advisors, and based on the SilverSun Board’s knowledge of the Company’s business, operations, financial condition, strategy and prospects, as well as the risks involved in achieving those prospects, that the value offered to stockholders pursuant to the Transactions is more favorable to the stockholders of the Company than the value that might have resulted if the Company were to continue to operate independently or from other strategic opportunities potentially available to the Company;

•        the likelihood and anticipated timing of completing the Transactions, including the absence of any financing condition in the Investment Agreement;

•        the limited scope of the conditions to the parties’ obligations to consummate the Transactions, and the likelihood that such conditions would be satisfied in a reasonable timeframe;

•        the Company’s right under the Investment Agreement, subject to the terms and conditions thereof, to consider and respond to an unsolicited written acquisition proposal, to furnish confidential information to the person making such a proposal and to engage in discussions or negotiations with the person making such a proposal, if the Company Board, prior to taking any such actions, determines in good faith that such acquisition proposal either constitutes a superior proposal or would reasonably be expected to lead to a superior proposal;

•        the Company Board’s ability, under certain circumstances, to withhold, withdraw, qualify or modify its recommendation that its stockholders vote to approve the Proposals;

•        the Company’s ability, under certain circumstances, to terminate the Investment Agreement, including in order to enter into an agreement providing for a superior acquisition proposal, provided that the Company complies with its obligations relating to the entering into of any such agreement and concurrently with the termination of the Investment Agreement pays to JPE a termination fee of $600,000; and

•        the terms and conditions of the Investment Agreement and related agreements, which were reviewed by the Company Board with its financial and legal advisors, including the representations, covenants, deal protection and termination provisions, and closing conditions, and the fact that such terms were the product of robust arm’s-length negotiations over several months between the parties.

The Company Board also considered the following uncertainties, risks and potentially negative factors in its deliberations concerning the Investment Agreement and the related transactions, which are not intended to be exhaustive and are not presented in any relative order of importance:

•        the risk that the Transactions might not be completed in a timely manner or at all;

•        the restrictions on the conduct of or the Company’s business prior to the Closing, which may delay or prevent SilverSun from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of the Company pending completion of the Transactions;

•        the significant costs involved in connection with entering into the Investment Agreement and the related agreements and completing the Transactions, and the substantial time and effort of the Company’s management and the Company Board required to consummate the Transactions and related disruptions to the operation of the Company’s business;

•        the risks and costs to the Company associated with the pendency of the Transactions and/or the failure to complete the Transactions, including the diversion of management and employee attention, potential employee attrition, potential adverse effects on the market price of the Common Stock and market perception of the Company, and the potential disruptive effect on business and customer relationships;

•        the risks associated with potential litigation related to the Transactions;

•        the risk that the Spin-Off may be more difficult, time-consuming or costly than expected or the possibility that the anticipated benefits of the Spin-Off may not be realized; and

•        the fact that some of the Company’s directors and executive officers have interests in the Transactions that are different from, or in addition to, the Company’s stockholders generally (see “The Transactions — Interests of Certain Company Directors and Executive Officers in the Transactions”).

The Company Board concluded that the uncertainties, risks and potentially negative factors relevant to the Investment Agreement and the Transactions were outweighed by the potential benefits. The foregoing discussion is not exhaustive but is intended to summarize the material information and factors considered by the Company Board in its consideration of the Investment Agreement and the Transactions. The Company Board reached the unanimous decision to recommend and approve the entry into the Investment Agreement and the Transactions in light of the factors described above and other factors that the members of the Company Board believed were appropriate. In view of the wide variety of factors considered by the Company Board in connection with its evaluation of the Transactions and the complexity of these matters, the Company Board did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the Company Board. Rather, the Company Board made its recommendation based on the totality of information presented to it and the investigation conducted by it. In considering the factors discussed above, individual members of the special committee may have given different weights to different factors.

The foregoing discussion of the reasoning of the Company Board and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in the section titled “Cautionary Information Regarding Forward-Looking Statements” beginning on page [    ].

Recommendation of the Company Board

After careful consideration, the Company Board:

•        has unanimously determined that the Transactions and the related Proposals are advisable and in the best interests of the Company and its stockholders;

•        unanimously recommends that the Company’s stockholders vote “FOR” the approval of the Investment Proposal, the Charter Proposals, and the 2024 Plan Proposal; and

•        if necessary and appropriate, unanimously recommends the approval of the adjournment of the Special Meeting to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the Investment Proposal, the Charter Proposal or the 2024 Plan Proposal.

Opinion of Financial Advisor to the Company

In making its recommendation, the Company Board considered the oral opinion of an independent investment bank, Benchmark, subsequently confirmed in a written opinion and supporting analysis (the “Fairness Opinion”) providing that, as of such date, the Transactions were fair to the Company’s stockholders from a financial point of view. Benchmark provides investment banking and advisory services to institutions and companies. Benchmark’s investment banking practice provides valuation services in connection with financings and mergers and acquisitions for both public and private companies. Benchmark was selected to provide the opinion based on their substantial experience and industry knowledge and their ability to complete the assignment in a timely manner. Pursuant to an engagement letter dated October 23, 2023, the Company retained Benchmark to evaluate whether the Transactions were fair to the stockholders of the Company from a financial point of view.

On December 2, 2023, Benchmark rendered to the Company Board its oral opinion, subsequently confirmed in a written opinion dated as of December 3, 2023, providing that, as of such date, the Transactions were fair to the Company’s stockholders from a financial point of view.

The following description of the Fairness Opinion is qualified in its entirety by reference to the full text of such Fairness Opinion, a copy of which is annexed as Annex D to this proxy statement and is incorporated herein by reference. The Fairness Opinion describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Benchmark in preparing the Fairness Opinion. Benchmark’s Fairness Opinion speaks only as of the date of the Fairness Opinion. The Fairness Opinion was for the information of and addressed to the Company Board (solely in its capacity as such) in connection with and for the purposes of

its evaluation of the Investment Agreement and the Transactions. The Fairness Opinion addressed only the fairness of the Transactions from a financial point of view and did not address the underlying business decision of the Company Board, the Company, or the Company’s executives to engage in the Transactions or enter into the Investment Agreement or constitute a recommendation to the Company Board or the Company’s stockholders in connection with the Transactions. The full text of the written opinion of Benchmark, attached as Annex D, should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Benchmark in preparing its opinion.

In connection with rendering the Fairness Opinion described above and performing its related financial analyses, Benchmark has, among other things:

•        reviewed and considered an execution version of the Investment Agreement and final drafts of the forms of Certificate of Designation and Warrant Certificate provided to Benchmark by the Company;

•        conducted discussions with certain members of the management of the Company and certain of its advisors and representatives regarding the Company, the Transactions and related matters;

•        reviewed and considered the current and historical market prices, trading characteristics and financial performance of the publicly traded securities of certain companies that Benchmark deemed to be relevant; and

•        reviewed and considered such other information, economic and market criteria and data, financial studies, analyses and investigations and such other factors as Benchmark deemed relevant.

In arriving at its opinion, Benchmark assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of the Company that it is not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. Benchmark assumed that the Transactions will be consummated in a manner that complies in all respects with applicable foreign, federal, state and local laws, rules and regulations. Benchmark assumed, with the Company’s consent, that the final executed forms of the Investment Agreement, the Certificate of Designation and the Warrant Certificate do not differ in any material respect from the drafts Benchmark reviewed and that the Transactions will be consummated on the terms set forth in the Investment Agreement, without further amendments thereto, and without waiver by the Company of conditions to any of its obligations thereunder or in the alternative that any such amendments or waivers thereto will not be detrimental to the Company or its stockholders in any material respect.

In connection with rendering the Fairness Opinion, Benchmark performed certain financial, comparative and other analyses as summarized below. Each of the analyses conducted by Benchmark was carried out to provide a different perspective on the Transactions, and to enhance the total mix of information available. Benchmark did not form a conclusion as to whether any individual analysis, considered in isolation, supported or failed to support its opinion. Further, the summary of Benchmark’s analyses described below is not a complete description of the analyses underlying Benchmark’s opinion. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, Benchmark made qualitative judgments as to the relevance of each analysis and factors that it considered. Also, Benchmark may have given various analyses more or less weight than other analyses, and may have deemed various assumptions more or less probable than other assumptions, so that the range of valuations resulting from any particular analysis described below should not be taken to be Benchmark’s view of the value of our assets. The estimates contained in Benchmark’s analyses and the ranges of valuations resulting from any particular analysis are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by such analyses. Also, analyses relating to the value of businesses or assets neither purport to be appraisals nor do they necessarily reflect the prices at which businesses or assets may actually be sold. Accordingly, Benchmark’s analyses and estimates are inherently subject to substantial uncertainty. Benchmark believes that its analyses must be considered as a whole and that selecting portions of its analyses or the factors it considered, without considering all analyses and factors collectively, could create a misleading or incomplete view of the process underlying the analyses performed by Benchmark in connection with the preparation of its opinion.

Benchmark’s conclusion is based on Benchmark’s analysis that the equity value attributable to the Company’s stockholders at the Closing, consisting of the value of SpinCo Common Stock, the Dividend, and the 5,256,177 shares (pre-Reverse Stock Split) of Common Stock, and taking into account the fact that (i) JPE will if the Closing occurs, pay up to $900,000 of the out-of-pocket expenses incurred by the Company in connection with the Investment Agreement and the Transactions and related agreements contemplated thereby, and (ii) all fees and expenses relating to the Spin-Off (including the Separation and the Distribution) incurred by the Company or any of its subsidiaries, including SpinCo, will be paid by SpinCo (except that all taxes imposed as a result of the Spin-Off in excess of $1,500,000 will be borne by SpinCo, and taxes imposed as a result of the Spin-Off up to $1,500,000 will be borne by the Company), is estimated to be between approximately $3.99 and $4.48 per share if SpinCo Common Stock is valued based on 0-10% discount to the Company’s closing price of $3.69 as of December 1, 2023, and between $3.74 and $4.20 per share if SpinCo Common Stock is valued based on 0-10% discount to the Company’s 90-day VWAP of $3.37 as of December 1, 2023. At the time Benchmark performed its review, there were 5,256,177 shares of Common Stock outstanding.

Financial Analyses

The following is a summary of the material financial analyses performed by Benchmark in connection with the preparation of the Fairness Opinion. The following summary, however, does not purport to be a complete description of the financial analyses performed by Benchmark, nor does the order of analyses described represent the relative importance or weight given to those analyses.

The order in which these analyses are presented below, and the results of those analyses, should not be taken as an indication of the relative importance or weight given to these analyses by Benchmark or the Company Board. Except as otherwise noted, the following quantitative information, to the extent it is based on market data, is based on market data as it existed on or before December 3, 2023, and is not necessarily indicative of current market conditions. Benchmark used a database provided by FactSet as its primary source of market data. All analyses conducted by Benchmark were going-concern analyses and Benchmark expressed no opinion regarding the liquidation value of any entity.

Benchmark completed a series of financial analyses to derive a range of implied equity value estimates of the equity attributable to SilverSun’s stockholders at the Closing, which will primarily consist of the following components: all the issued and outstanding shares of SpinCo Common Stock, the Dividend, and SilverSun’s remaining shares of the Common Stock (5,256,177 shares). In arriving at the estimated value attributable to SilverSun’s stockholders, Benchmark employed the financial analyses set forth below to estimate the values of SpinCo Common Stock and of the Common Stock as of the Closing.

Valuation of SpinCo Common Stock

In accordance with the terms of the Investment Agreement, Benchmark assumed that SpinCo will comprise all of the SpinCo Business and the shares of SpinCo Common Stock to be distributed to the Company Legacy Stockholders on the Distribution Date shall have been approved for quotation on the OTCQX tier of the OTC Markets. As such, the Company Legacy Stockholders will own 100% of the shares of SpinCo Common Stock and the SpinCo Business will be the same as SilverSun’s existing business, with the main difference being that the shares of SpinCo Common Stock will be quoted on the OTCQX instead of on the Nasdaq. Share trading on a major exchange such as Nasdaq tends to be more liquid, and Benchmark applied a discount of 0-10% to the current SilverSun equity market value to take into account the possible reduction of trading liquidity due to SpinCo being traded on OTCQX. The 0-10% discount Benchmark used was based on the following considerations:

•        The “illiquidity discount” for private companies tends to range between 20-30% of the estimated value as a general rule of thumb (e.g., Private Company Valuation, Aswath Damodaran). As SpinCo will not be private following the Separation and instead will be quoted and publicly-traded on the OTCQX, Benchmark would expect the discount due to a possible decrease in trading liquidity to be less than the lower end of the 20-30% range for a private company, that is less than 20%.

•        While the shares of Common Stock are currently listed on Nasdaq, their trading liquidity is already limited. The 90-day average daily trading volume of shares of Common Stock was approximately 11,700 shares as of December 1, 2023, or 0.22% of the shares of Common Stock outstanding, compared to an average of 0.8% for S&P 500 stocks, 1.0% for S&P 400 stocks, and 1.5% for the stocks of US companies listed on a major exchange (New York Stock Exchange, NYSE American or Nasdaq) with a market cap between $10 million and $50 million (Benchmark used primarily a database provided by FactSet for market and

the date of the Fairness Opinion, JPE and the Company had not disclosed the nature or type of business envisioned or planned for the Company following the closing of the Equity Investment. Accordingly Benchmark estimated the implied volatility of the Common Stock using the average volatility of three stocks of companies currently or previously held by JPE or its affiliates listed above as a proxy of the volatility the Common Stock following the closing of the Equity Investment. This was more conservative than using the average volatility of broader market groups such as S&P 500 or S&P 400 companies, which had an average volatility of 27.7% and 33.6%, respectively. Based on this analysis, the estimated value of the warrant to purchase shares of the Common Stock at $0.571 per share (pre-Reverse Stock Split) ranged from $0.069 to $0.148 per warrant (pre-Reverse Stock Split), the estimated value of Warrant to purchase shares of Common Stock at $0.856 per share (pre-Reverse Stock Split) ranged from $0.049 to $0.111 per warrant (pre-Reverse Stock Split), and the estimated value of Warrant to purchase shares of Common Stock at $1.712 per share (pre-Reverse Stock Split) ranged from $0.023 to $0.061 per warrant (pre-Reverse Stock Split). In aggregate, the estimated value of the Warrants ranged from $91.7 million to $206.4 million.

Based on the estimated value ranges of the incremental value of the Preferred Stock and the Warrants, the remaining equity value attributable to the holders of Common Stock is estimated to be in the range of $373.4 million to $591.0 million (net of estimated Transaction-related expenses to be incurred by the Company), which resulted in a value of Common Stock of $0.212 to $0.336 per share (pre-Reverse Stock Split) based on total shares outstanding of 1.757 billion (pre-Reverse Stock Split, including as-converted Common Stock assuming the conversion of the Preferred Stock).

Summary

Based on Benchmark’s analysis, the equity value attributable to Company Legacy Stockholders, consisting of the value of SpinCo Common Stock, the Dividend, and the 5,256,177 shares (pre-Reverse Stock Split) of Common Stock, and taking into account the fact that (i) JPE will pay up to $900,000 of the out-of-pocket expenses incurred by the Company in connection with the Investment Agreement and the Transactions and related agreements contemplated thereby, and (ii) all fees and expenses relating to the Spin-Off (including the Separation and the Distribution) incurred by the Company or any of its subsidiaries, including SpinCo, will be paid by SpinCo (except that all taxes imposed as a result of the Spin-Off in excess of $1,500,000 will be borne by SpinCo, and taxes imposed as a result of the Spin-Off up to $1,500,000 will be borne by the Company), is estimated to be between approximately $3.99 and $4.48 per share if SpinCo Common Stock is valued based on SilverSun’s closing price of $3.69 as of December 1, 2023, and between $3.74 and $4.20 per share if SpinCo Common Stock is valued based on SilverSun’s 90-day VWAP of $3.37 as of December 1, 2023.

Miscellaneous

In performing its analyses, Benchmark considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of SilverSun. These analyses were prepared solely as part of Benchmark’s analysis of the fairness, from a financial point of view, to SilverSun’s stockholders of the Transactions and were provided to the Company Board in connection with the delivery of the Fairness Opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be Benchmark’s view of the actual value of the Company’s equity.

SilverSun paid Benchmark for its services in connection with the Fairness Opinion a cash fee equal to $100,000, which was not contingent upon either the conclusion expressed in the Fairness Opinion or on the consummation of the Transactions. SilverSun has also agreed to indemnify Benchmark against certain potential liabilities in connection with Benchmark’s services in rendering the Fairness Opinion and to reimburse Benchmark for certain of its expenses, if any, incurred in connection with Benchmark’s engagement with SilverSun. Benchmark has provided other advisory services to SilverSun over the last two years for which it received compensation. Benchmark received a total of $275,000 from SilverSun under two separate engagement letters in 2022 with respect to proposed transactions that were subsequently abandoned. Benchmark may seek to provide other financial advisory or investment banking services to SilverSun and/or its affiliates and other participants in the Transactions in the future for which Benchmark may receive compensation, although as of the date of the Fairness Opinion, there was no agreement to do so nor any mutual understanding that such services were contemplated.

The analysis was only one of the many factors considered by the Company Board in its evaluation of the Transactions and should not be viewed as determinative of the views of the Company Board.

Interests of Certain Company Directors and Executive Officers in the Transactions

In considering the recommendation of the Company Board to vote for the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal, Company stockholders should be aware that certain of the Company’s directors and executive officers have interests in the proposed Transactions that may be different from, or in addition to, the interests of other Company stockholders generally. The members of the Company Board were aware of and considered these interests, among other matters, in evaluating and negotiating the proposed Transactions, and in recommending to Company’s stockholders that the Proposals be approved. These interests include the following:

•        The Company’s directors and executive officers will become the directors and executive officers, respectively, of SpinCo, and will receive compensation and benefits from SpinCo in respect of their services.

•        Concurrently with the execution of the Investment Agreement, the Company and Mr. Meller entered into a letter agreement pursuant to which Mr. Meller’s existing employment agreement with the Company will be terminated as of immediately prior to the Closing and, in full satisfaction of all obligations of the Company under such employment agreement, the Company will pay to Mr. Meller a lump sum termination payment equal to the lesser of (i) $3.0 million and (ii) 300% of the average annual amount paid by the Company or any parent or subsidiary thereof to Mr. Meller and included in his gross income for services rendered in each of the five calendar years immediately prior to the Closing, less $100, which is the amount that he is entitled to receive under such employment agreement with the Company for certain terminations of his employment within three years following a change in control of the Company.

The information set forth in the table below is intended to comply with Item 402(t) of the SEC’s Regulation S-K, which requires disclosure of information about certain compensation for each named executive officer of the Company that is based on, or otherwise relates to, the proposed Transactions. The table below sets forth the amount of payments that Mr. Meller would receive in connection with the Closing, assuming that the Closing occurs during calendar year 2024.

Golden Parachute Compensation Table

____________

(1)      Joseph Macaluso, the Company’s Chief Financial Officer, is not entitled to receive any compensation that is based on, or otherwise relates to, the proposed Transactions.

(2)      Calculated in accordance with the letter agreement between the Company and Mark Meller as the lesser of (a) $3.0 million and (b) 300% of the average annual amount paid by the Company or any parent or subsidiary thereof to Mr. Meller and included in his gross income for services rendered in each of calendar years 2023, 2022, 2021, 2020 and 2019, less $100.

Regulatory Approvals

Under the Investment Agreement, the Company and the Investors have agreed to use their reasonable best efforts to obtain all required governmental approvals in connection with the completion of the Transactions. The Company and JPE have determined that a filing under the HSR Act is required in connection with the Equity Investment. We are unaware of any other material federal, state or foreign regulatory requirements or approvals required for completion of the Equity Investment, other than in connection with this proxy statement or the Form 10. The Company and JPE submitted the requisite notification and report forms under the HSR Act on January 11, 2024.

Absence of Appraisal Rights

The Company is incorporated in the State of Delaware and, accordingly, subject to the DGCL. The Company’s stockholders are not entitled to appraisal rights under the DGCL with respect to the Transactions.

THE INVESTMENT AGREEMENT

On December 3, 2023, the Company entered into the Investment Agreement with the Investors. The summary of the material terms of the Investment Agreement below and elsewhere in this proxy statement is qualified in its entirety by reference to the Investment Agreement, a copy of which is attached to this proxy statement as Annex A and which we incorporate by reference into this document. This summary may not contain all of the information about the Investment Agreement that is important to you. We encourage you to read carefully the Investment Agreement in its entirety.

Consideration to Be Paid in the Equity Investment

Subject to the terms and conditions of the Investment Agreement, upon the Closing, the Company will issue to the Investors, for $1,000,000,000 in cash, (a) an aggregate of 1,000,000 shares of Convertible Preferred Stock (convertible into 219,007,375 shares of Common Stock (giving effect to the Reverse Stock Split)) and (b) Warrants to purchase 219,007,375 shares of Common Stock (giving effect to the Reverse Stock Split).

Principal Investor

In the Investment Agreement, JPE is empowered to act on behalf of the Other Investors in connection with the transactions contemplated thereunder. This appointment entitles JPE to, among other things:

•        exercise discretion in agreeing to amendments or modifications to the Investment Agreement;

•        exercise discretion in executing and delivering waivers and consents in connection with the Investment Agreement, the Equity Investment and the other transactions contemplated by the Investment Agreement;

•        exercise discretion in making necessary agreements in connection with the Investment Agreement; and

•        communicate to, and receive communications from, the Company on behalf of the Investors.

Closing of the Equity Investment

Unless the Company and JPE agree otherwise in writing, the Equity Investment will close on the fifth business day after the satisfaction or waiver of all the conditions in the Investment Agreement (other than those conditions that by their nature are to be satisfied or waived at the Closing).

However, under the Investment Agreement, even if the Closing conditions are satisfied or waived, JPE will be permitted, at JPE’s written election, to delay the Closing, on one or more occasions, to a date that does not exceed 12 months following the date of the Investment Agreement (subject to the continued satisfaction of closing conditions at such time). If JPE delays the Closing by more than 7 months following the date of the Investment Agreement, JPE will pay the Company the following fees on the first day of each additional month, starting with the first day of the eighth month: (a) month eight (8): $40,000, (b) month nine (9): $40,000, (c) month ten (10): $50,000, (d) month eleven (11): $50,000; and (e) month twelve (12): $50,000.

In the event of any breach by any Investor (other than JPE) that would result in the failure of a closing condition, JPE is entitled, in its sole discretion, to either purchase such Securities from the Company or assign to another person the rights and obligations to purchase from the Company the Securities otherwise allocable to such defaulting Investor, and the Company will issue and deliver such Securities according to such election.

Potential Acquisitions and Contributions

Under the Investment Agreement, until the Closing, the Company will cooperate with JPE in JPE’s efforts for the Company to consummate an acquisition of one or more businesses selected by JPE, the consummation of which will not occur until the consummation of the Spin-Off. Such cooperation by the Company will include signing any definitive agreements with respect to such acquisition so long as the closing thereunder does not occur until the Closing. JPE will pay for the expenses of this cooperation until the Closing of the Spin-Off, at which point the Company will reimburse JPE for all such expenses (with the intention being that these expenses will not reduce cash otherwise available to SpinCo).

JPE may consummate an acquisition of a business or businesses prior to the Closing of the Equity Investment, and at, or substantially contemporaneously with, the Closing, at its election, JPE may contribute such business or businesses to the Company, in which case the Company will be required to cooperate to effectuate such contribution. As part of such contribution, the Company will be required to issue to JPE, as directed by JPE, shares of Convertible Preferred Stock and Warrants with a value equal to the amount paid by JPE to purchase the business or businesses contributed by JPE, based on the same per share/per Warrant price as contemplated by the Investment Agreement. In such case, and notwithstanding anything in the Investment Agreement to the contrary, the portion of the purchase price otherwise payable by JPE to the Company pursuant to the Investment Agreement will be reduced by the amount JPE paid for the contributed business or businesses. Such contributed business or businesses would remain with the Company following the consummation of the Spin-Off.

Representations and Warranties of the Company and the Investors

The representations and warranties of the Company contained in the Investment Agreement have been made solely for the benefit of the Investors. In addition, such representations and warranties (a) have been made only for purposes of the Investment Agreement, (b) have been qualified by confidential disclosures made to the Investors in connection with the Investment Agreement, (c) are subject to materiality qualifications contained in the Investment Agreement which may differ from what may be viewed as material by investors generally, (d) were made only as of the date of the Investment Agreement or such other date as is specified in the Investment Agreement and (e) have been included in the Investment Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Accordingly, the summary of the representations and warranties set forth below and the Investment Agreement annexed hereto are included in this filing only to provide stockholders with information regarding the terms of the Investment Agreement and not to provide investors with any other factual information regarding the Company or its business. The Company’s stockholders should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Investment Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

The Company’s representations and warranties relate to, among other things:

•        the Company’s and its subsidiaries’ due organization, valid existence, good standing and requisite corporate power to own, lease and operate assets and properties and carry on its business;

•        the Company’s certificate of incorporation and by-laws;

•        required consents and approvals of governmental entities as a result of the transactions contemplated by the Investment Agreement;

•        the Company’s corporate power and authority to enter into the Investment Agreement and to consummate the transactions contemplated thereby;

•        the absence of any violation of or conflict with the Company’s and its subsidiaries’ organizational documents, applicable law or certain agreements, as a result of entering into the Investment Agreement and consummating the transactions contemplated thereby;

•        the Company’s capitalization, including in particular the number of shares of Preferred Stock, Common Stock and stock options outstanding and the status of the Company’s indebtedness;

•        ownership of the Company’s subsidiaries;

•        the Company’s SEC filings since December 31, 2018;

•        the Company’s financial statements contained in SEC filings and implementation of certain internal controls over financial reporting and a system of disclosure controls as required by the Exchange Act and the Sarbanes-Oxley Act;

•        the absence of any undisclosed liabilities;

•        the absence of certain changes and events, including any “Material Adverse Effect”, since December 31, 2022;

•        the absence of any legal action pending or, to the Company’s knowledge, threatened against the Company or its subsidiaries in the last five years, or orders outstanding against the Company or its subsidiaries that would reasonably be expected to be material;

•        material and other specified contracts;

•        employee benefit plans;

•        employment and labor matters;

•        tax matters;

•        environmental matters;

•        intellectual property;

•        owned and leased real property and title to assets;

•        possession of all licenses and permits necessary to operate the Company’s properties and carry on its business;

•        compliance with anti-corruption laws, applicable sanctions laws, anti-money laundering laws and export-import laws;

•        regulatory matters;

•        the absence of any application of Section 203 of the DGCL or other state takeover laws to the Transactions;

•        the absence of any transactions with affiliates that would be required to be reported pursuant to Item 404 of Regulation S-K;

•        insurance arrangements;

•        the absence of performance of any “At The Market” transactions since November 1, 2021;

•        receipt by the Company of a fairness opinion from Benchmark;

•        the absence of undisclosed broker’s fees;

•        the Company Board approving the Amended and Restated Certificate of Incorporation and the Certificate of Designation with respect to the Convertible Preferred Stock;

•        the due and valid authorization and, when issued and paid for, valid issuance of the Convertible Preferred Stock;

•        the absence of material omissions and untrue statements of material fact in the information included or incorporated by reference in this proxy statement or the Form 10;

•        the stockholder approvals required in connection with the Transactions;

•        compliance with applicable securities laws;

•        the termination of the agreement and plan of merger by and among the Company, Rhodium Enterprises Acquisition Corp., and Rhodium Enterprises Acquisition LLC; and

•        the absence of indebtedness of the Company and its subsidiaries (other than SpinCo).

For purposes of the Investment Agreement, “Material Adverse Effect” means any state of facts, change, development, event, effect, condition, occurrence, action or omission (each, an “Effect”) that, alone or together with any other Effects, (a) materially and adversely affects the business, assets, liabilities, properties, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, or (b) prevents, materially impedes or materially delays the consummation by the Company of the Equity Investment or the other transactions contemplated by the Investment Agreement.

However, none of the following will be deemed either alone or in combination to constitute, and none of the following will be taken into account in determining whether there has been or would be, a Material Adverse Effect on the Company:

•        changes after the date of the Investment Agreement in general legal, market, economic or political conditions affecting the industry in which the Company operates, provided that such Effects do not disproportionately affect the Company or its subsidiaries in relation to other companies in the industry or geographic areas in which the Company or its subsidiaries operate;

•        changes after the date of the Investment Agreement affecting general worldwide economic or capital market conditions (including changes in interest or exchange rates), provided that such Effects do not disproportionately affect the Company or its subsidiaries in relation to other companies in the industry or geographic areas in which the Company or its subsidiaries operate;

•        the pendency or announcement of the Investment Agreement or the anticipated consummation of the Equity Investment, including any reaction of any customer, employee, supplier, service provider, partner or other constituency to the identity of the Investors or any of the transactions contemplated by the Investment Agreement (provided that the exception in this bullet will not apply to any representation or warranty in the Investment Agreement to the extent the purpose of such representation or warranty is to address the consequences resulting from the execution of or performance under the Investment Agreement or the consummation of the transactions contemplated thereby);

•        any decrease in and of itself in the market price or trading volume of the Common Stock (except that the underlying cause or causes of any such decrease may be deemed to constitute, in and of itself or themselves, a Material Adverse Effect and may be taken into consideration when determining whether there has occurred a Material Adverse Effect);

•        the Company’s failure to meet any internal or published projections, forecasts or other predictions or published industry analyst expectations of financial performance (except that the underlying cause or causes of any such failure may be deemed to constitute, in and of itself and themselves, a Material Adverse Effect and may be taken into consideration when determining whether there has occurred a Material Adverse Effect);

•        any change after the date of the Investment Agreement in GAAP;

•        actions or omissions of the Company or any of its subsidiaries taken with the express prior written consent of JPE; and

•        any natural disaster, or the commencement or escalation of any war, material armed hostilities or other material international or national calamity or act of terrorism, provided that such Effects do not disproportionately affect the Company or its subsidiaries in relation to other companies in the industry or geographic areas in which the Company or its subsidiaries operate.

In the Investment Agreement, the Investors make various customary representations and warranties to the Company.

Their representations and warranties relate to, among other things:

•        their due organization, valid existence and good standing;

•        their corporate or other power or capacity, and authority, to enter into the Investment Agreement and, subject to receipt by the Company of Stockholder Approvals, to consummate the transactions contemplated by the Investment Agreement;

•        the absence of material omissions and untrue statements of material fact in the information supplied by the Investors in this proxy statement;

•        the sufficiency of available funds at Closing to consummate the Equity Investment;

•        matters relating to the absence of any application of Section 203 of the DGCL;

•        their status as “accredited investors”;

•        the appropriate advice obtained and the due diligence investigation made with respect to the Investment Agreement, the Stockholders Agreement, the Equity Investment and the transactions contemplated thereby; and

•        their understanding of the limitations on transfers and other restrictions on the Securities they will receive pursuant to the Equity Investment.

Conduct of Business Pending the Closing

Under the Investment Agreement, the Company has agreed that, subject to certain exceptions set forth in the Investment Agreement, between the date of the Investment Agreement and the Closing, the Company and its subsidiaries will use reasonable best efforts to:

•        conduct its business and operations in the ordinary course of business consistent with past practice; and

•        maintain and preserve intact its business organization, to retain the services of its current officers and employees and to preserve the goodwill of its business and its relationships with its customers, suppliers, agents, employees, and other persons with whom the Company and its subsidiaries have material business relationships.

The Company also agreed that during the same period, subject to certain exceptions set forth in the Investment Agreement, neither the Company nor its subsidiaries will:

•        amend, modify, change or waive any of the Company organizational documents or those of its subsidiaries;

•        make, declare, set aside, or pay any dividend or distribution on or with respect to its or its subsidiaries’ capital stock or other equity interests, other than dividends or distributions by wholly owned subsidiaries in the ordinary course of business consistent with past practice, or enter into any agreement restricting or limiting the Company’s ability or its subsidiaries’ ability to make, declare, set aside or pay any dividends or distributions (provided that the Company, in connection with the Distribution, will be permitted to declare and distribute the Dividend to the Company Legacy Stockholders);

•        except for the Reverse Stock Split in accordance with the Amended and Restated Certificate of Incorporation, adjust, split, subdivide, combine, reclassify, redeem, purchase or otherwise acquire (directly or indirectly), any shares of its capital stock or other equity interests or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, issue, deliver, grant, encumber or sell any of its capital stock or other equity interests or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or such equity interests or securities or enter into any contract with respect to the sale, voting, registration or repurchase of its capital stock or other equity interests;

•        increase compensation or benefits payable or to become payable to, grant any equity or equity base incentive award to, renew or enter into or amend any new employment or severance agreement with, any current or former employees or any directors, managers or officers of the Company or its subsidiaries, or establish, adopt, amend or terminate any Company benefit plan;

•        enter into, terminate, amend or negotiate any collective bargaining agreement or other agreement or contract with any labor organization, works council, trade union, labor association, or other employee representative;

•        implement any employee layoffs that could trigger any liability or notice requirements under the WARN Act;

•        take any action to accelerate the vesting, payment, or funding of any compensation or benefits to any current or former company employee or any directors, managers, or officers;

•        sell, lease, exclusively license, transfer, pledge, encumber, otherwise subject to any lien (as defined in the Investment Agreement), grant or dispose of any assets of the Company or any of its subsidiaries, including any intellectual property rights, the capital stock, or other equity interests, subject to certain exceptions;

•        acquire, by merger, consolidation, acquisition of equity interests or assets, or otherwise, any business, any material assets or properties, or any corporation, partnership, limited liability company, joint venture or other business organization or division of such business organization, subject to certain exceptions;

•        enter into any contract which if in effect of the date of the Investment Agreement would be a “Material Contract” (as defined in the Investment Agreement) or “Company Real Property Lease” (as defined in the Investment Agreement), or would otherwise restrict the Company or its subsidiaries or affiliates from engaging or competing in any line of business or in any geographic area;

•        terminate, amend or waive any material rights under a Material Contract or Company Real Property lease or any provisions of any confidentiality or standstill agreements in place with any third parties;

•        incur, assume, issue or guarantee any indebtedness for borrowed money, or otherwise issue or sell any debt securities or calls, options, warrants, or other rights to acquire any debt securities;

•        make any loans, advances or capital contributions to (other than business advances (that are not material in amount) in the ordinary course of business consistent with past practice), or investments in, any other person (including any of its officers, directors, managers, employees, agents or consultants), other than by the Company or a wholly owned subsidiary of the Company to, or in, the Company or any of its wholly owned subsidiaries in the ordinary course of business consistent with past practice;

•        make any material change in the Company or its subsidiaries’ existing borrowing or lending arrangements for or on behalf of such persons;

•        make, change or revoke any material tax election, adopt or change any tax accounting period or material method of tax accounting, amend any material tax return, settle or compromise any material liability for taxes for any tax audit, claim, or other proceeding, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. law), surrender any right to claim a material refund of taxes, request any material ruling from any taxing authority, or agree to an extension, modification or waiver of the statute of limitations with respect to a material amount of taxes;

•        materially change accounting policies or procedures or any of its methods of reporting income, deductions, or other items for material accounting purposes or revalue any of its material assets, other than as required by changes in GAAP or applicable law;

•        commence, initiate, waive, release, assign, settle, or compromise any legal action or enter into any settlement agreement or understanding with any governmental entity, subject to certain exceptions;

•        enter into or amend any arrangement or contract with any affiliate, director, officer, or stockholder of the company;

•        take any action that would reasonably be expected to result in any of the conditions to the Transactions not being satisfied or satisfaction of those conditions being materially delayed;

•        except for transactions involving SpinCo that JPE has approved in writing and except for the dissolution of certain of the Company’s subsidiaries, merge, consolidate, liquidate, dissolve, restructure, recapitalize or effect any other reorganization or similar transaction, or adopt any plan or resolution providing for any of the foregoing;

•        adopt or implement any stockholder rights plan or comparable arrangement; and

•        authorize, agree, or otherwise enter into an agreement to take any of the foregoing actions.

Stockholders’ Meeting

The Company has agreed to, as promptly as reasonably practicable after the date of the Investment Agreement, establish a record date for, duly call, give notice of, convene and hold a meeting of the Company’s stockholders for the purpose of obtaining the Stockholder Approvals, regardless of whether the Company Board has determined at any time that the Investment Agreement is no longer advisable or recommends that the stockholders of the Company vote against the Proposals (subject to the Company’s right to terminate the Investment Agreement in certain circumstances), subject to certain exceptions specified in the Investment Agreement.

In addition, the Company has agreed, subject to the exceptions set forth below, that the Company Board will recommend to the Company’s stockholders that they vote in favor of the Proposals and include such recommendation in this proxy statement, and to use the Company’s reasonable best efforts to solicit stockholder approval of the Proposals.

Preparation of Form 10 and the Spin-Off

The Company has agreed to, as promptly as reasonably practicable, prepare and file with the SEC a registration statement on Form 10 relating to the registration of the shares of SpinCo Common Stock to be distributed to Company Legacy Stockholders. The Company has agreed to cooperate with JPE and its representatives (and keep them reasonably informed on a current basis) in connection with all matters relating to the Spin-Off and has agreed not to make material decisions relating to the Spin-Off, including with respect to the terms of any documents relating to the Spin-Off and directors and officers of SpinCo without reasonably consulting with, and obtaining prior written consent of, JPE (such consent not to be unreasonably withheld, conditioned or delayed). Without limiting the foregoing, neither the Company nor any of its subsidiaries will amend or modify any terms of the Separation and Distribution Agreement, Tax Matters Agreement or the Employee Matters Agreement, or approve or enter into any such agreements that have different terms than set forth in the exhibits to the Investment Agreement.

During the Post-Closing Spin-Off Period:

•        neither the Company, the Post-Closing Company Board, JPE, nor its controlled affiliates, will take any action by or on behalf of the Company (or any of JPE or its controlled affiliates) that would be likely to delay, compromise or otherwise jeopardize the consummation of the Spin-Off;

•        each member of JPE or its controlled affiliates will act in good faith in connection with the continued operation of the Company’s legacy business, consistent with past practice in all material respects, and will use his, her, or its reasonable best efforts to cooperate with the Company in effecting the Spin-Off; and

•        no member of JPE or its controlled affiliates will make any material decisions relating to or impacting the Company’s legacy businesses, including without limitation, modifying any of the organizational documents of SpinCo or any of its subsidiaries other than as contemplated by the Investment Agreement, or modifying any contracts to the extent relating to or impacting the legacy businesses, other than as contemplated by the Investment Agreement, without consulting with and obtaining the prior written consent of Mark Meller, the present CEO of the Company or in his absence, the then-current CEO of SpinCo (in each case which consent will not be unreasonably withheld, conditioned or delayed), or preventing or terminating the Spin-Off.

The Company, JPE, and the Post-Closing Company Board will be permitted to operate the Company and its subsidiaries (other than SpinCo and the legacy businesses that have been contributed to be SpinCo) during the Post-Closing Spin-Off Period in any manner they deem to be appropriate, including consummating an acquisition of one or more businesses or entities, purchasing any assets of one or more businesses or entities, entering into financing transactions, or engaging in any similar transactions and actions in connection with the foregoing.

No Solicitation of Transactions

The Company has agreed, subject to certain exceptions set forth in the Investment Agreement, that neither the Company nor any of its subsidiaries will, nor will the Company authorize or permit any of its or its subsidiaries’ affiliates, directors, officers, employees, investment bankers, attorneys, accountants or other advisors or representatives to, directly or indirectly:

•        solicit, initiate, respond to or propose, or encourage, facilitate or assist in any proposal or offer that constitutes, or could reasonably be expected to lead to a takeover proposal;

•        terminate, waive, amend or modify any provision of any existing confidentiality, standstill or similar agreement with respect to a potential takeover proposal, other than informing persons of the existence of the Company’s no-solicitation obligations;

•        enter into, authorize continue or otherwise participate in any discussions, negotiations or other communications, or any acquisition agreement, business combination, merger agreement or similar definitive agreement, or any letter of intent, memorandum of understanding or agreement in principle, or any other agreement regarding or related to, or furnish to any person any confidential or other non-public information of the Company and its subsidiaries for the purpose of encouraging, facilitating or responding to, any takeover proposal or any proposal or inquiry that could reasonably be expected to lead to a takeover proposal; or

•        recommend for approval or authorize the entry of, or enter into or propose to enter into any agreement requiring us or any of the Company’s subsidiaries to abandon, terminate, or fail to consummate the Equity Investment and the other transactions contemplated by this Agreement (including the Spin-Off).

However, prior to the obtaining of the Stockholder Approvals, if the Company receives a bona fide written unsolicited takeover proposal from a third party that the Company Board, after consultation with its financial advisor and outside legal counsel, determines in good faith constitutes or would reasonably be expected to lead to a “superior proposal,” and which takeover proposal did not result from a breach of the Company’s non-solicitation obligations, the Company may, and the Company may permit and authorize its subsidiaries and representatives and its subsidiaries’ representatives to, furnish non-public information with respect to the Company and its subsidiaries to the person making such takeover proposal (and its representatives) pursuant to a nondisclosure agreement which contains terms that are not less restrictive with respect to the obligations (including confidentiality obligations, use restrictions, non-solicit provisions and no hire provisions, but excluding any standstill provisions) of such person making such takeover proposal, than those contained in the nondisclosure agreement with JPE dated September 13, 2023 (provided that all such information has been provided or is concurrently provided to JPE), and engage in discussions or negotiations with the person making such takeover proposal.

For purposes of the Investment Agreement, “Takeover Proposal” means any inquiry, proposal, offer, or indication of interest (whether written, oral or otherwise, or binding or non-binding) from any “person” or “group” (as defined in Section 13 and 14 of the Exchange Act) (other than any Investor) relating to, or that could reasonably be expected to lead to, in one transaction or a series of related transactions:

•        any merger, consolidation, share exchange or other business combination involving the Company or any of its subsidiaries;

•        a sale, lease, exchange, mortgage, transfer, or other disposition of 20% or more of the assets, revenues or earnings of the Company and its subsidiaries on a consolidated basis;

•        any direct or indirect acquisition, issuance or sale of 20% or more of the shares of capital stock, equity interests or other stock equivalents of the Company (including the Common Stock) or any of its subsidiaries, including by way of an issuance, dividend, distribution, merger, consolidation, license, transfer, sale, option, right of first refusal with respect to a sale or similar preemptive right with respect to a sale, share exchange, tender offer or exchange offer, or other business combination or similar transaction;

•        a reorganization, recapitalization, liquidation or dissolution of the Company or its subsidiaries;

•        any direct or indirect acquisition, including by way of any merger, consolidation, tender offer, exchange offer, stock acquisition, asset acquisition, binding share exchange, business combination, recapitalization, liquidation, dissolution, joint venture or similar transaction, of assets or businesses that constitute or represent 20% or more of the total revenue, net income, EBITDA or assets of the Company and its subsidiaries, taken as a whole; or

•        any other transaction having a similar effect to the foregoing, or any combination of the transactions in the foregoing in each case other than the Equity Investment.

“Superior proposal” means any binding bona fide unsolicited written takeover proposal (substituting “50%” for “20%” in each instance in the definition of takeover proposal) which did not result from a breach of the above restrictions, and that the Company Board determines in good faith, in consultation with outside legal counsel and financial advisors and taking into account all the terms and conditions and the financial, legal, regulatory, timing, financing, conditionality and other aspects and risks of such takeover proposal and the Investment Agreement (after taking into account any revisions to the terms and conditions to the Investment Agreement made or proposed in writing by JPE prior to the time of determination that would be immediately binding on JPE upon acceptance by the Company and execution of definitive documents), including the availability of financing, regulatory approvals, breakup fee and expense reimbursement provisions, the identity and wherewithal of the person or group making the proposal to consummate the transaction, and such other factors as the Company Board considers appropriate:

•        is more favorable to the Company’s stockholders (solely in their capacities as such) than the Equity Investment and the other transactions contemplated by this Agreement (including the Dividend and Spin-Off);

•        the financing of which, if applicable, is fully committed on customary terms for a transaction of the type; and

•        the Company Board believes is reasonably likely to be consummated in accordance with its terms taking into account all the factors described above and other aspects and terms of such proposal and the identity of the person or group making the proposal.

The Company has agreed that neither the Company Board nor any committee thereof will (or will agree or resolve to):

•        withhold, amend, withdraw, qualify or modify in a manner adverse to the Investors, or propose publicly to withhold, amend, withdraw, qualify or modify in a manner adverse to the Investors, the approval, recommendation or declaration of advisability by the Company Board or any such committee of the Investment Agreement, the Equity Investment and the other transactions contemplated by the Investment Agreement;

•        fail to publicly announce, within ten business days after a tender offer or exchange offer relating to the Common Stock will have been formally commenced or after any change in the consideration being offered thereunder, a statement disclosing that the Company Board recommends rejection of such tender or exchange offer;

•        fail to publicly reaffirm such recommendation and declaration of advisability within two business days after the Company receives a written request from the JPE to do so;

•        fail to include such recommendation and declaration of advisability in the Proxy Statement and fail to use reasonable best efforts to solicit such approval; or

•        adopt, approve, endorse, recommend or declare advisable, or propose publicly an intention to adopt, approve, endorse, recommend or declare advisable, any takeover proposal or any proposal that could reasonably be expected to lead to a takeover proposal.

We refer to any action, resolution or agreement to take such action described in the foregoing bullets as an “adverse recommendation change.”

In addition, the Company has agreed that neither the Company Board nor any committee thereof will (or will agree or resolve to) cause or permit the Company to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other agreement constituting or related to, or which is intended to or could reasonably be expected to lead to, any takeover proposal (other than a permitted nondisclosure agreement) (each of which we refer to as an “alternative acquisition agreement”).

Notwithstanding the foregoing, at any time prior to receipt of the Stockholder Approvals, the Company Board may:

•        in response to a superior proposal or an intervening event, effect an adverse recommendation change; and

•        in response to a superior proposal, cause the Company to enter into a definitive agreement to consummate such superior proposal and concurrently with executing such definitive agreement, upon payment of the termination fee, terminate the Investment Agreement;

in each case, the Company Board must first determine in good faith, after consultation with its financial advisors and outside legal counsel, that the failure to do so would be a breach of the fiduciary duties of the Company Board under applicable law. However, the Company Board and the committees thereof will not, and will cause the Company not to, take any of the actions described in the foregoing two bullets unless:

•        the Company Board has first provided prior written notice to JPE at least five business days in advance advising JPE that it is prepared to take such action in response to a superior proposal or an intervening event, which notice must, in the case of a superior proposal, attach the most current version of any written agreement relating to the transaction that constitutes such superior proposal, and, in the case of an intervening event, attach information describing the intervening event; and

•        JPE does not make, within five business days after the receipt of such notice, a proposal that would, in the good faith judgment of the Company Board, after consultation with its financial advisors and outside legal counsel, cause the offer previously constituting a superior proposal to no longer constitute a superior proposal, or obviate the need for an adverse recommendation change as a result of an intervening event (and any amendment or modification of such superior proposal requires a new notice and a new five business day period) (and provided that any purported termination of the Investment Agreement will be void and of no force or effect unless the Company pays to JPE the termination fee prior to or concurrently with such termination).

During the five business day period prior to effecting an adverse recommendation change or taking an action described above, the Company and its officers, directors and representatives will negotiate in good faith with JPE and its representatives regarding any revisions to the terms of the Investment Agreement, the Equity Investment and the other transactions contemplated by the Investment Agreement proposed by JPE.

For purposes of the Investment Agreement, the term “intervening event” means any material event, change, effect, development or occurrence occurring or arising after the date of this Agreement that:

•        was unknown to and not reasonably foreseeable by the Company Board as of the date of this Agreement (or, if known, the consequences of which were not known or reasonably foreseeable to the Company Board) and results in the standalone financial condition of the Company and its subsidiaries, taken as a whole, being materially more favorable to the stockholders of the Company than this Agreement, the Equity Investment and the other transactions contemplated by this Agreement (including the Spin-Off and the Dividend); and

•        does not relate to or involve a takeover proposal; or any changes in the market price, or change in trading volume, of the Common Stock, any change of the ratings or ratings outlook for the Company and the consequences of any such ratings or outlook changes, or the Company or its subsidiaries meeting, failing to meet, or exceeding any projections, forecasts, budgets, operational metrics or estimates (it being understood that the underlying causes of any such changes or developments may, if they are not otherwise excluded from the definition of Intervening Event, be taken into account in determining whether an Intervening Event has occurred), or any event, fact, development, circumstance or occurrence excluded from the definition of Material Adverse Effect.

In addition, the Company has agreed to, as promptly as possible and in any event within 24 hours after the receipt thereof, advise JPE in writing of any written or oral takeover proposal and the terms and conditions of such takeover proposal, furnish to JPE a copy of the alternative acquisition agreement providing for such takeover proposal and other material written proposals or offers delivered with, or in connection with such takeover proposal, provide to JPE the identity of the person making such takeover proposal, and keep JPE informed on a reasonably current basis of any material developments with respect to such takeover proposal and promptly provide JPE with copies of all documents and material written or electronic communication relating to such takeover proposal, in each case, as soon as is reasonably practicable and in any event within 24 hours of receipt, provision or occurrence thereof. In addition, the Company has agreed to provide JPE with at least one business day’s prior written notice of a meeting of the Company Board at which the Company Board is reasonably expected to consider any takeover proposal and as soon as is reasonably practicable and in any event within 24 hours following a determination by the Company Board that a takeover proposal is a superior proposal, notify JPE in writing of such determination.

The Company has further agreed to, and agreed to cause all representatives to, (a) cease immediately all discussions and negotiations that commenced prior to the date of this agreement regarding any proposal that would constitute, or could reasonably be expected to lead to, a takeover proposal, (b) within two (2) business days of the date of the Investment Agreement, request the prompt return or destruction of all confidential or other non-public information concerning the Company or its subsidiaries furnished to any person with whom a confidentiality agreement in contemplation of an acquisition transaction was entered into and (c) immediately terminate all access granted to any such persons or their respective representatives.

Agreement to Use Reasonable Best Efforts

Subject to the terms and conditions of the Investment Agreement, each party has agreed to use its reasonable best efforts to obtain all required governmental approvals in connection with the completion of the Transactions. The Company and JPE have determined that a filing under the HSR Act is required in connection with the Equity Investment. We are unaware of any other material federal, state or foreign regulatory requirements or approvals required for completion of the Equity Investment, other than in connection with this proxy statement or the Form 10. The Company and JPE submitted the requisite notification and report forms under the HSR Act on January 11, 2024.

Composition of the Post-Closing Company Board

Effective as of the Closing, the Company Board will be reconstituted (the Company and the Company Board will cause such reconstitution to occur) such that: (a) the number of seats on the Post-Closing Company Board will be as directed by JPE at least five business days prior to Closing, (b) each of such directors (including Brad Jacobs) will be individuals designated by JPE at least 5 business days prior to Closing, (c) each standing committee of the Board will be reconstituted in a manner designated by JPE at least 5 business days prior to Closing and (d) Brad Jacobs will be appointed the Chairman of the Post-Closing Company Board and Chief Executive Officer of the Company.

In connection with each meeting of stockholders of the Company at which directors are to be elected to serve on the Company Board, the Company has agreed to take all necessary steps to nominate the candidates appointed by JPE and to use its reasonable best efforts to cause the Company Board to unanimously recommend that the stockholders of the Company vote in favor of each such person for election to the Company Board. If, for any reason, a candidate appointed by JPE is determined to be unqualified to serve on the Company Board because such appointment would constitute a breach of the fiduciary duties of the Company Board or applicable law or stock exchange requirements, JPE will have the right to designate an alternative person. Each person so appointed will hold office as a director of the Company for such term as is provided in the Company’s constituent documents or until his or her death, resignation or removal from the Company Board or until his or her successor has been duly elected and qualified. If any such appointee ceases to serve as a director of the Company for any reason during his or her term, the Company will use its reasonable best efforts to cause the Company Board to fill the vacancy created thereby with a replacement designated by JPE.

Subject to applicable law and applicable stock exchange requirements, JPE will have the right to designate directors to the Company Board as follows:

•        all of the members of the Company Board for so long as the Investors collectively own or control (together with their affiliates) Convertible Preferred Stock, Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 80% of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as-converted basis;

•        75% of the total number of seats (rounded up to the nearest whole number) on the Company Board for so long as the Investors collectively own or control (together with their affiliates) Convertible Preferred Stock, Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 65% (but less than 80%) of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as-converted basis;

•        a majority of the total number of seats (rounded up to the nearest whole number) on the Company Board for so long as the Investors collectively own or control (together with their affiliates) Convertible Preferred Stock, Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 45% (but less than 65%) of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as-converted basis;

•        40% of the total number of seats (rounded up to the nearest whole number) on the Company Board for so long as the Investors collectively own or control (together with their affiliates) Convertible Preferred Stock, Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 30% (but less than 45%) of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as-converted basis;

•        33% of the total number of seats (rounded up to the nearest whole number) on the Company Board for so long as the Investors collectively own or control (together with their affiliates) Convertible Preferred Stock, Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 15% (but less than 30%) of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as-converted basis; and

•        two members of the Company Board for so long as the Investors collectively own or control (together with their Affiliates) Convertible Preferred Stock, Common Stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 5% (but less than 15%) of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as converted basis.

The Company Board will have no obligation to appoint or nominate any appointee or nominee of JPE if such appointment or nomination would violate applicable law or stock exchange requirements or result in a breach by the Company Board of its fiduciary duties to its stockholders; provided, that the foregoing will not affect the right of JPE to designate an alternate nominee or appointee.

The board representation rights of JPE under the Investment Agreement are in addition to, and not in limitation of, JPE’s voting rights as a holder of capital stock of the Company.

Conditions to Closing

The respective obligations of the Investors and the Company to complete the Equity Investment are subject to the satisfaction or waiver on or prior to the Closing of the following conditions:

��        the Stockholder Approvals have been obtained;

•        any waiting period (or extension thereof) applicable to the Investment Agreement, the Equity Investment or other transactions contemplated by the Investment Agreement under the HSR Act will have been terminated or will have expired, and any other approval or waiting period under any other applicable competition, merger control, antitrust or similar law will have been obtained or terminated or will have expired;

•        no temporary restraining order, preliminary or permanent injunction or other orders issued by any court of competent jurisdiction or other legal restraint or prohibition that has the effect of preventing, prohibiting or making illegal the consummation of the Equity Investment or any of the other transactions contemplated by the Investment Agreement will be in effect; and

•        The Form 10 will have become effective under the Securities Act and no stop order suspending the effectiveness of the Form 10 will have been issued by and no proceeding for that purpose will have been initiated or threatened in writing by the SEC or its staff and not withdrawn.

The obligations of the Investors to complete the Equity Investment are further subject to the satisfaction or waiver on or prior to the Closing of the following conditions:

•        The representations and warranties of the Company with respect to organization and power, corporate authorizations, subsidiaries, business operations, takeover statutes, opinion of financial advisor, information supplied, and indebtedness must have been true and correct in all material respects as of the date of the Investment Agreement and must be true and correct in all material respects as of the Closing as though made on and as of the Closing (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty must be true and correct in all material respects at and as of such time);

•        The representations and warranties of the Company with respect to capitalization must have been true and correct in all respects other than for any de minimis inaccuracies as of the date of the Investment Agreement and will be true and correct in all respects other than for any de minimis inaccuracies as of the Closing as though made on and as of the Closing (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty must be true and correct in all but de minimis respects at and as of such time);

•        the representations and warranties of the Company with respect to absence of certain changes, brokers, the Amended and Restated Certificate of Incorporation and Convertible Preferred Stock Certificate of Designation, valid issuance, voting requirements, and securities law compliance must have been true and correct as of the date of the Investment Agreement and must be true and correct as of the Closing as though made on and as of the Closing (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty must be true and correct at and as of such time);

•        the other representations and warranties of the Company must have been true and correct as of the date of the Investment Agreement and must be true and correct as of the Closing as if made at and as of such time (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty must be true and correct at and as of such time), with only such exceptions with respect to this bullet, as stated in the Investment Agreement, as have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; provided, that, with respect to the first bullet point and this bullet point, any exceptions and qualifications with regard to materiality or Material Adverse Effect contained in such representations or warranties will be disregarded;

•        the Company has performed in all material respects all obligations required to be performed by it under the Investment Agreement at or prior to the Closing;

•        there being no pending claim suit, action or proceeding brought or threatened by any governmental entity challenging or seeking to restrain or prohibit the consummation of the Equity Investment or the other transactions contemplated by the Investment Agreement or seeking to obtain from the Investors or any of their affiliates any damages in relation thereto, or seeking to impose limitations on the Investors’ ability to acquire or hold or exercise full ownership of any Warrants or any shares of Convertible Preferred Stock or Common Stock, including the right to vote the Convertible Preferred Stock or Common Stock on all matters properly presented to the Company stockholders;

•        there being no legal restraint that could reasonably be expected to result, directly or indirectly, in any of the effects referred to the bullet point immediately above;

•        since the date of the Investment Agreement, there will not have occurred any Material Adverse Effect or any state of facts, change, development, event, effect, condition, occurrence, action or omission that is reasonably likely to have a Material Adverse Effect;

•        JPE has received a certificate dated as of the Closing Date and signed on behalf of the Company by the Chief Executive Officer and the Chief Financial Officer of the Company to the effect that the conditions set forth in the first, second, third, fourth, fifth and eighth bullet points above have been satisfied;

•        the Amended and Restated Certificate of Incorporation and Certificate of Designation have been duly adopted by the Company and duly filed with, and accepted by, the Secretary of State of the State of Delaware in accordance with the laws of the State of Delaware;

•        Nasdaq has approved the listing of shares of Common Stock issuable upon conversion of the Convertible Preferred Stock and exercise of the Warrants on the Nasdaq, upon official notice of issuance;

•        JPE will have received a counterpart of the Registration Rights Agreement, in a form reasonably acceptable to JPE and reflecting the terms consistent with those set forth on Exhibit C of the Investment Agreement, that will have been executed and delivered by a duly authorized officer of the Company;

•        JPE has received a counterpart to the Jacobs Employment Agreement duly executed by the Company, in the form directed by JPE in writing prior to the Closing (but in no event earlier than 2 business days prior to the Closing);

•        The Meller Employment Agreement has been terminated in accordance with the Meller Letter Agreement and the Company will have taken all action necessary to cause such termination to occur in accordance with Treasury Regulation Section 1.409A-3(j)(4)(ix)(B); and

•        there being no stop order or suspension of trading imposed by the Nasdaq, the SEC or any other governmental or regulatory body with respect to public trading in the Company’s Common Stock.

The obligation of the Company to complete the Equity Investment is further subject to the satisfaction or waiver on or prior to the Closing of the following conditions:

•        the representations and warranties of each Investor in the Investment Agreement that are qualified as to materiality must be true and correct (as so qualified) and the representations and warranties of each Investor which are not so qualified must be true and correct in all material respects, in each case as of the date of the Investment Agreement (or, with respect to any Investor made a party to the Investment Agreement by joinder, as of the date of the applicable joinder) and as of the Closing with the same effect as though made as of the Closing (except that the accuracy of those representations and warranties that by their terms speak as of a specified date will be determined as of such date); and

•        each Investor has performed in all material respects all obligations required to be performed by it under the Investment Agreement at or prior to Closing.

In the event of any breach by any Investor (other than JPE) that would result in the failure of a Closing condition, JPE will be entitled, in its sole discretion, to purchase the shares of Convertible Preferred Stock and Warrants otherwise allocable to the breaching Investor on the terms set forth in the Investment Agreement and, in such event, the breach by such Investor that would otherwise result in the failure of a Closing condition will be deemed cured for purposes of the Closing.

Termination

The Company and JPE may agree in writing to terminate the Investment Agreement, and the Equity Investment and other transactions contemplated by the Investment Agreement may be abandoned, at any time prior to the Closing, whether before or after the Stockholder Approvals have been obtained. The Investment Agreement may also be terminated:

•        by either JPE or the Company if:

•        the Closing has not occurred on or prior to December 31, 2024, provided that such right to terminate the Investment Agreement will not be available to any party whose action or failure to act has been a principal cause of, or resulted in the failure of, the Closing to occur on or before such date and such action or failure to act constitutes a breach of the Investment Agreement;

•        certain legal restraints will be in effect and will have become final and non-appealable; or

•        the stockholders meeting in respect of the Transactions has been held and the Stockholder Approvals have not been received there, or at any adjournment or postponement of such meeting (except that the right to terminate this Agreement will not be available to the Company where the failure to obtain the Stockholder Approvals has been caused by the action or failure to act by the Company and such action or failure to act constitutes a material breach by the Company of the Investment Agreement);

•        by JPE prior to the receipt of Stockholder Approvals if an adverse recommendation change has occurred;

•        by JPE if the Company has breached any of its non-solicitation obligations in any material respect;

•        by JPE if:

•        the Company has breached any of its representations or warranties or failed to perform any of its covenants or other agreements contained in the Investment Agreement, which breach of failure to perform (a) would give rise to the failure of a Closing condition to not be satisfied, and (b) that is incapable of being cured by the Company, or if capable of being cured by the Company, the Company does not cure such breach or failure within 20 business days after its receipt of written notice thereof from JPE, provided that the right to terminate the Investment Agreement will not be available to JPE if JPE is then in material breach of any of its representations, warranties, agreements or covenants contained in the Investment Agreement; or

•        certain legal restraints will be in effect and will have become final and nonappealable;

•        by the Company:

•        if any Investor will have breached any of its representations or warranties or failed to perform any of its covenants or other agreements contained in the Investment Agreement, which breach or failure to perform (a) would give rise to the failure of a Closing condition, and (b) is incapable of being cured by such Investor or JPE, or if capable of being cured by such Investor or JPE, such Investor or JPE does not cure such breach or failure within 20 business days after its receipt of written notice thereof from the Company, provided that the right to terminate the Investment Agreement will not be available to the Company if the Company is then in material breach of any of its representations, warranties, agreements or covenants contained in the Investment Agreement; or

•        prior to receipt Stockholder Approvals, in order to concurrently enter into a definitive agreement to consummate a “superior proposal.”

Termination Fees and Expenses

A termination fee of $600,000 is payable by the Company to JPE in the event that:

•        all of the following occur:

•        the Investment Agreement is terminated by either JPE or the Company if the Closing has not occurred on or prior to December 31, 2024 or because the stockholders meeting was held and the Proposals were not approved at such meeting, or by JPE due to a breach by the Company of any of its representations or warranties or failure to perform any of its covenants or other agreements in the Investment Agreement, which give rise to the failure of a closing condition, and are incapable of being cured or are uncured within 20 days after receipt of written notice thereof from JPE;

•        a takeover proposal has been made to the Company or the Company stockholders or any person has publicly disclosed, announced or otherwise communicated a takeover proposal or an intention to make a takeover proposal or a takeover proposal otherwise becomes publicly known after the date of the Investment Agreement and prior to its termination; and

•        prior to the date that is 12 months after such termination, the Company or any of its subsidiaries enters into an alternative acquisition agreement or any other definitive contract to consummate any takeover proposal or any takeover proposal is consummated (solely for purposes of this bullet, the term “takeover proposal” has the meaning set forth in section “The Investment Agreement — No Solicitation of Transactions” except that all references to 20% are deemed references to 50%); or

•        that the Investment Agreement is terminated by JPE prior to receipt of the Stockholder Approvals in the event an adverse recommendation change has occurred or if the Company has breached any of its non-solicitation obligations.

All fees and expenses relating to the Spin-Off (including the Separation and the Distribution) incurred by the Company or any of its subsidiaries, including SpinCo, will be paid by SpinCo (provided that all taxes imposed as a result of the Spin-Off in excess of $1,500,000 will be borne by SpinCo, and taxes imposed as a result of the Spin-Off up to $1,500,000 will be borne by the Company). If the Closing occurs, the Company will reimburse JPE within 2 business days following the consummation of the Spin-Off for all reasonable costs and expenses incurred by JPE and its affiliates in connection with the transactions contemplated by the Investment Agreement. In addition, JPE will be responsible for all government filing fees relating to the HSR filing by the Company, which amount will be reimbursed by the Company to JPE promptly following the consummation of the Spin-Off. In addition, if the Closing occurs, JPE will pay up to $900,000 of the out-of-pocket expenses incurred by the Company in connection with the Investment Agreement and the Transactions and related agreements contemplated thereby, including all fees of its legal counsel, financial advisers, and accountants incurred by the Company in connection therewith.

The reimbursement of JPE’s expenses as provided above does not relieve the Company of any obligation to pay the termination fee, if applicable.

THE CONVERTIBLE PREFERRED STOCK

The following is a summary of the material terms of the Convertible Preferred Stock as contained in the Certificate of Designation. The Certificate of Designation is set forth in Exhibit A to the Investment Agreement, which is attached as Annex A to this proxy statement. We urge you to carefully read the Certificate of Designation in its entirety.

Authorized Shares and Liquidation Preference

The Company will designate 1,000,000 authorized preferred shares as Convertible Preferred Stock, par value of $0.001 per share. Each share of Convertible Preferred Stock will have an initial liquidation preference of $1,000 per share, for an aggregate initial liquidation preference of $1,000,000,000.

Ranking

The Convertible Preferred Stock will rank, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, senior to the Common Stock and each other class or series of capital stock, whether outstanding or established after the date of issuance of the Convertible Preferred Stock, the terms of which do not expressly provide that it ranks senior to or on a parity with the Convertible Preferred Stock as to payment of dividends and distribution of assets upon liquidation, winding-up or dissolution. The Convertible Preferred Stock will rank on a parity with or junior to each class or series of capital stock, the terms of which expressly provide for a pari passu or senior ranking, respectively, relative to the Convertible Preferred Stock.

Dividends

Dividends on the Convertible Preferred Stock will be payable quarterly, when, as and if declared by the Company Board or a duly authorized committee thereof, out of the assets legally available for the payment of dividends, on the 15th calendar day (or the following business day if the 15th is not a business day) of January, April, July and October of each year at the rate per annum of 9% per share on the then-applicable liquidation preference (subject to the following paragraph). The amount of dividends payable for any period that is shorter or longer than a full quarterly dividend period, other than for the period commencing on the issuance date and ending on the first date after Closing on which the Convertible Preferred Stock would be entitled to a dividend payment, will be computed on the basis of a 360-day year consisting of twelve 30-day months.

In the event that the Company pays dividends on shares of Common Stock in any dividend period with respect to the Convertible Preferred Stock, then the dividend payable in respect of each share of Convertible Preferred Stock for such period will be equal to the greater of (a) the amount otherwise payable in respect of such share of Convertible Preferred Stock in accordance with the foregoing paragraph and (b) the product of (i) the aggregate dividends payable per share of Common Stock in such dividend period multiplied by (ii) the number of shares of Common Stock into which such share of Convertible Preferred Stock is then convertible.

A dividend period with respect to a dividend payment date is the period commencing on the preceding dividend payment date or, if none, the date of original issuance, and ending on the day immediately prior to the next dividend payment date.

The Company will make each dividend payment on the Convertible Preferred Stock in cash.

Accretion

If the Company is unable, or otherwise fails to pay dividends in full on the Convertible Preferred Stock on any dividend payment date, the then-applicable liquidation preference on each share of Convertible Preferred Stock will be increased automatically as of the first day of the immediately succeeding dividend period by the amount of the unpaid dividends. The amount of dividends payable for any dividend period following a non-payment of dividends will be calculated on the basis of the liquidation preference of each share of Convertible Preferred Stock, including such accreted dividends, determined as of the first day of the relevant dividend period. The Company may pay all or a portion of any dividends so accreted on any regular dividend payment date or any other date fixed by the Company Board or a duly authorized committee thereof.

Payment Restrictions

No dividends may be declared or paid on any capital stock of the Company ranking on a parity with or junior to the Convertible Preferred Stock (including the Common Stock), other than dividends and distribution payable solely in stock and cash paid in lieu of fractional shares, and no such capital stock may be redeemed or repurchased by or on behalf of the Company, unless all accrued and unpaid dividends have been paid on the Preferred Stock and any capital stock of the Company ranking on a parity with the Preferred Stock. Notwithstanding the foregoing, if full dividends have not been paid on the Preferred Stock and any parity stock, dividends may be declared and paid on the Preferred Stock and such parity stock so long as the dividends are declared and paid pro rata.

Liquidation

In the event that the Company voluntarily or involuntarily liquidates, dissolves or winds up, the holders of the Convertible Preferred Stock will be entitled, before any distribution to the holders of shares of Common Stock or any other junior capital stock, and subject to the rights of the Company’s creditors, to receive an amount equal to the greater of (a) the aggregate accreted liquidation preference on their shares of Convertible Preferred Stock plus an amount equal to any accrued and unpaid dividends (whether or not declared) for the then-current dividend period and (b) the payment or distribution to which such holders would have been entitled if their shares of Convertible Preferred Stock were converted into shares of Common Stock immediately before such liquidation, dissolution or winding-up (without accounting for the accreted liquidation preference otherwise payable).

Voting Rights

Holders of Convertible Preferred Stock will vote together with the holders of the Common Stock on an “as-converted” basis on all matters, except as otherwise required by law. In addition, the approval of the holders of at least a majority of the outstanding shares of the Convertible Preferred Stock, voting separately as a single class, will be required (a) to amend, alter or repeal (whether by merger, consolidation or otherwise) any provision of the Certificate of Designation, (b) to amend, alter or repeal (whether by merger, consolidation or otherwise) any provision of the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws if such amendment, alteration or appeal would have an adverse effect on the powers, preferences, privileges or rights of the holders of the Convertible Preferred Stock, (c) to authorize, create, issue or increase the authorized amount of, or issue or authorize any obligation or security convertible into exchangeable for or evidencing a right to purchase, any capital stock of the Company ranking on a parity with or senior to the Convertible Preferred Stock, (d) to reclassify any authorized capital stock of the Company into any parity stock or senior stock, or any obligation or security convertible into, exchangeable for or evidencing a right to purchase any parity stock or senior stock, or (e) for any increase or decrease in the authorized number of shares of Convertible Preferred Stock or the issuance of shares of Convertible Preferred Stock after the date of issuance of the Convertible Preferred Stock.

Conversion

The Convertible Preferred Stock will be convertible at any time, in whole or in part, at the option of holder thereof into a number of shares of Common Stock equal to the then-applicable liquidation preference divided by the then-applicable conversion price, which will initially be $0.571 per share of Common Stock (without giving effect to the Reverse Stock Split).

After giving effect to the Reverse Stock Split, the Convertible Preferred Stock will have a conversion price of $4.566 per share of Common Stock.

The Convertible Preferred Stock will have the benefit of customary anti-dilution adjustments.

Transfer of Securities

The offer and sale of the Convertible Preferred Stock will not be registered under the Securities Act and may not be offered or sold by the holders thereof except in compliance with the registration requirements of the Securities Act and any other applicable securities laws or exemptions from such registration requirements. The above-mentioned securities will have the benefit of certain registration rights under the Securities Act pursuant to a Registration Rights Agreement to be entered into by the Company, as described below.

Redemption

The Convertible Preferred Stock is not redeemable or subject to any required offer to purchase.

THE WARRANTS

The summary of the material terms of the warrants to be issued in the Equity Investment (the “Warrants”) below is qualified in its entirety by reference to the Warrant Certificate, a copy of which is attached as Exhibit B to the Investment Agreement, which is attached as Annex A to this proxy statement. This summary may not contain all of the information about the Warrants that is important to you. We encourage you to read carefully the Warrant Certificate in its entirety.

After giving effect to the Reverse Stock Split, the aggregate number of shares of Common Stock subject to the Warrants will initially be 219,007,375 shares. The Warrants will be exercisable at the option of the holder at any time from the Closing Date until the tenth anniversary of the Closing Date.

After giving effect to the Reverse Stock Split, and subject to customary anti-dilution adjustments, the Warrants will have an exercise price of $4.566 per share of Common Stock with respect to 50% of the Warrants, $6.849 per share of Common Stock with respect to 25% of the Warrants, and $13.698 per share of Common Stock with respect to the remaining 25% of the Warrants.

Cashless Exercise Option

Each Warrant may be exercised, in whole or in part, at any time or times on or after the issuance date and on or before the expiration date at the election of the holder (in such holder’s sole discretion) by means of a “cashless exercise” in which the holder will be entitled to receive a number of shares of Common Stock equal to the quotient of the product of Closing Sale Price (as defined in the Warrant Certificate) of a share of Common Stock on the trading day immediately preceding the date on which holder elects to exercise its Warrant, less the adjusted exercise price, multiplied by the number of shares of Common Stock issuable upon exercise of such Warrant, divided by the aforementioned Closing Sale Price of a share of Common Stock on the trading day immediately preceding the date on which holder elects to exercise its Warrant.

Transfer of Securities

The offer and sale of the Warrants and the shares of Common Stock issuable upon exercise thereof will not be registered under the Securities Act and may not be offered or sold by the holders thereof except in compliance with the registration requirements of the Securities Act and any other applicable securities laws or exemptions from such registration requirements. The above-mentioned securities will have the benefit of certain registration rights under the Securities Act pursuant to a Registration Rights Agreement to be entered into by the Company as described below.

Voting Rights and Dividends

Holders of the Warrants (in their capacity as such) will not be entitled to any rights of a stockholder of the Company, including the right to vote or to consent with respect to any matter or to receive dividends, prior to exercising their Warrants.

THE REGISTRATION RIGHTS AGREEMENT

Pursuant to the Investment Agreement, the Company has agreed to enter into a Registration Rights Agreement (“Registration Rights Agreement”) with the Investors concurrently with the Closing. The summary of the material terms of the Registration Rights Agreement below is qualified in its entirety by reference to the Summary of Principal Registration Rights Provisions, a copy of which is set forth in Exhibit C to the Investment Agreement, which is attached as Annex A to this proxy statement. This summary may not contain all of the information about the Summary of Principal Registration Rights Provisions that is important to you. We encourage you to read carefully the Summary of Principal Registration Rights Provisions in its entirety. You should also keep in mind that the complete terms of the Registration Rights Agreement are not yet final.

The Registration Rights Agreement will provide the Investors or their affiliate transferees with certain rights to cause the Company to register the sale of shares of Convertible Preferred Stock, the Warrants and the shares of Common Stock issued or issuable upon conversion of the Convertible Preferred Stock or upon exercise of the Warrants, in each case other than any such securities that are then freely transferable without registration pursuant to Rule 144 under the Securities Act without limitation as to volume, manner of sale or other restrictions under Rule 144 (the “Registrable Securities”).

Demand Registration Rights

At any time on or after the Closing Date, Investors or their affiliate transferees holding Registrable Securities representing no less than a majority of the shares of Common Stock constituting Registrable Securities or issuable upon conversion of shares of Convertible Preferred Stock or exercise of Warrants constituting Registrable Securities may request registration of the sale of such securities by giving the Company written notice thereof. The Company must then use reasonable best efforts to (i) file a registration statement (or amend an existing registration statement) registering such Registrable Securities (including for purposes of underwritten offering, shelf takedowns and block trades) as promptly as reasonably practicable and in any event within 30 days (if on Form S-3) or 45 days (if on Form S-1) and (ii) have such registration statement declared effective as promptly as reasonably practicable thereafter (subject to customary exceptions to be agreed). Such majority holders may request a total of 10 demand registrations.

Piggyback Registration Rights

If the Company registers the offer and sale of its securities on a registration statement that permits the inclusion of the Registrable Securities, the Company must give JPE prompt written notice thereof. The Company must then include on such registration statement all Registrable Securities requested to be included therein (subject to certain exceptions to be agreed).

Selection of Underwriters

Managing underwriter(s) will be selected by Investors or their affiliate transferees representing a majority of the Registrable Securities included in any demand registration, subject to the Company’s approval, not to be unreasonably withheld.

Expenses of Registration and Selling

The Company will bear all expenses incurred in connection with the registration or resale of the Registrable Securities, other than brokers’ discounts or commissions.

Other Registration Rights

The Company will not grant any person any registration rights with respect to its securities that are prior in right, in conflict or inconsistent with (including rights that would reduce the number of securities an Investor or affiliate transferee may include in any demand or piggyback registration) the rights of the Investors or their affiliate transferee pursuant to the Registration Rights Agreement, or that would allow for a holder to demand registration, without providing the Investors or their affiliate transferees piggyback registration rights.

THE VOTING AND SUPPORT AGREEMENT

Concurrently with the execution and delivery of the Investment Agreement, certain stockholders of the Company entered into a Voting and Support Agreement with JPE and the Company. The summary of the material terms of the Voting and Support Agreement below and elsewhere in this proxy statement is qualified in its entirety by reference to the Voting and Support Agreement, a copy of which is attached as Annex E to this proxy statement to this proxy statement and which we incorporate by reference into this document. This summary may not contain all of the information about the Voting and Support Agreement that is important to you. We encourage you to read carefully the Voting and Support Agreement in its entirety.

Pursuant to the Voting and Support Agreement, each of Mark Meller, Chief Executive Officer and a director of the Company, Sharieve Meller Family Trust, for which Mark Meller is Trustee, and Mark M. Meller Family Trust, for which Sharieve Meller is Trustee (collectively, the “Meller Parties”), have agreed to vote their shares of Common Stock in favor of the Stockholders Approvals and related matters, and against certain other matters, such as other takeover proposals. In the event that any of the Meller Parties acquires ownership of, or otherwise acquires voting power with respect to, any shares of Common Stock following the date of the Voting and Support Agreement and prior to the Expiration Time (as defined below), such party will be subject to the provisions of the Voting and Support Agreement with respect to such shares.

In addition, pursuant to the Voting and Support Agreement, other than in a “permitted transfer”, the Meller Parties have agreed not to transfer any shares of Common Stock beneficially owned by them until the “Expiration Time,” which is the earliest to occur of (a) the time that the Investment Agreement has been approved by the Company’s stockholders and all of the other stockholder approvals required for the Transactions have been obtained, (b) the delivery of written notice of termination of the Voting and Support Agreement by the Meller Parties to JPE following any amendment to the Investment Agreement that alters or changes the amount or form of consideration to be paid to the Company or the Company’s stockholders in connection with the Transactions in a manner adverse in any material respect to the Meller Parties, made without prior written consent of the Meller Parties, (c) the valid termination of the Investment Agreement pursuant to its terms, and (d) the termination of the Voting and Support Agreement by the mutual written consent of JPE and the Meller Parties.

The Voting and Support Agreement provides that a “permitted transfer” includes a sale of up to 50% of shares of Common Stock beneficially owned, collectively, by the Meller Parties so long as, (a) such sale and transfer is in accordance with applicable law, (b) each purchaser of such shares, in connection with, and prior to, such sale and transfer, executes a joinder to the Voting and Support Agreement, in form and substance reasonably acceptable to JPE, pursuant to which such purchaser agrees to become a party to the Voting and Support Agreement and be subject to the restrictions and obligations therein, (c) such sale and transfer is effected as a private sale, pursuant to a private sale exception from the registration requirements of the securities laws and (d) such sale and transfer does not and would not reasonably be expected to prevent, impair, materially delay or materially adversely affect the consummation of the Equity Investment or any of the other transactions contemplated by the Investment Agreement.

The Voting and Support Agreement will automatically terminate upon the Expiration Time.

THE STOCKHOLDERS AGREEMENT

Pursuant to the Investment Agreement, JPE and the Other Investors have agreed to enter into a stockholders agreement concurrently with and in connection with the Closing (the “Stockholders Agreement”). The summary of the material terms of the Stockholders Agreement below and elsewhere in this proxy statement is qualified in its entirety by reference to the Form of Stockholders Agreement, a copy of which is attached as Exhibit G to the Investment Agreement, which is attached as Annex A to this proxy statement.

Voting Agreement

Pursuant to the Stockholders Agreement, each of the Other Investors will agree to (a) appear in person or by proxy at any stockholder meeting and (b) vote, or cause to be voted, or execute written consents with respect to, as applicable, all voting securities that such Other Investor beneficially owns (i) in favor of the election of each candidate designated or nominated for election by JPE, (ii) in favor of the removal of each person designated for removal by JPE and (iii) except with respect to matters that would adversely affect such Other Investor in a manner disproportionate to any other Investor, in accordance with JPE’s written direction with respect to any other matter presented at such stockholder meeting. Each Other Investor will also agree to take all other necessary or desirable actions within such Other Investor’s control to effectuate the foregoing.

Lock-Up

Pursuant to the Stockholders Agreement, each Other Investor will agree that, except with the prior written consent of JPE, and subject to certain specified exceptions, such Other Investor will not, and will cause its affiliates not to, transfer all or any portion of the Convertible Preferred Stock, Warrants or shares of Common Stock issuable upon conversion or exercise thereof beneficially owned by such Other Investor during the five-year period beginning on the Closing Date.

The foregoing transfer restriction will not restrict transfers by any Other Investor (i) to its affiliates, (ii) in the case of an individual, to a member of such individual’s immediate family, (iii) in connection with a pledge to a financial institution pursuant to a bona fide financing, or (iv) to any person approved in writing by JPE (provided that the Other Investors and their permitted transferees under the Stockholders Agreement will not transfer any such securities beneficially owned by them to any permitted transferee unless such permitted transferee becomes a party to and fully subject to and bound by the Stockholders Agreement).

In addition, if JPE transfers (other than to an affiliate) all or any portion of the Convertible Preferred Stock, Warrants or shares of Common Stock issuable upon conversion or exercise thereof beneficially owned by JPE, then the transfer restrictions applicable to the Other Investors will not apply solely with respect to the percentage of such securities beneficially owned by each such Other Investor equal to (a) the amount of such securities transferred by JPE (other than to an affiliate) divided by (b) the amount of such securities beneficially owned by JPE as of the Closing Date. For illustrative purposes, if JPE transfers 5% of the Convertible Preferred Stock, Warrants or shares of Common Stock issuable upon conversion or exercise thereof beneficially owned by JPE as of the Closing Date, then each Other Investor may transfer up to 5% of such securities that such Other Investor beneficially owned as of the Closing Date.

THE SPIN-OFF

Prior to the consummation of the Spin-Off, the Company and SpinCo will enter into several agreements effecting the Spin-Off and related transactions and governing the relationship of the parties following the Spin-Off, including a Separation and Distribution Agreement, a Tax Matters Agreement and an Employee Matters Agreement. The forms of each of these agreements are summarized below. The following summaries are not complete and are qualified in their entirety by reference to the full text of the forms of the agreements, copies of which are attached as Exhibits I through K to the Investment Agreement, which is attached as Annex A to this proxy statement.

Separation and Distribution Agreement

Pursuant to the Separation and Distribution Agreement, prior to the consummation of the Spin-Off, the Company will transfer all remaining assets, and SpinCo will assume all remaining liabilities, to the extent related to the Company’s existing business. Six days after the Closing, the Company will pay the Dividend and distribute all of the issued and outstanding shares of SpinCo Common Stock, in each case on a pro rata basis to the Company Legacy Stockholders. The cash to pay the Dividend will be funded from the $1.0 billion to be received from the Investors at the Closing pursuant to the Equity Investment.

The other cash proceeds received by the Company from the Equity Investment will be retained by the Company. In addition, any contract or other assets contributed by JPE to the Company at the Closing of the Equity Investment, or any contracts entered into, or any other assets acquired by the Company on or after the Closing and before the consummation of the Spin-Off at the written direction of JPE or with the approval of the Post-Closing Company Board, will be retained by the Company and will not be transferred to SpinCo.

Each of the following entities will be contributed to SpinCo as part of the Separation: (a) SWK, (b) SCS, (c) CDC and (d) SWK Technologies Canada, Inc.

Prior to the Closing, SpinCo and the Company will prepare and SpinCo will file with the SEC the Form 10, which will include an information statement setting forth the disclosures concerning SpinCo, the Separation and the Distribution.

Tax Matters Agreement

The Company and SpinCo will enter into the Tax Matters Agreement (the “Tax Matters Agreement”), which will govern the respective rights, responsibilities and obligations of the Company and SpinCo after the Spin-Off with respect to tax liabilities and benefits, tax attributes, certain indemnification rights with respect to tax matters, the preparation and filing of tax returns, the control of audits and other tax proceedings, the intended federal income tax characterization of the Spin-Off and the agreed-upon reporting thereof and certain other tax matters. Subject to certain exceptions, under the Tax Matters Agreement:

•        SpinCo generally will be responsible for (a) taxes of the Company, SpinCo and their respective subsidiaries for tax periods (or portions thereof) ending on or before the Distribution Date, (b) taxes imposed on the Company, SpinCo and their respective subsidiaries as a result of, in connection with or relating to the Distribution and certain related transactions, other than the first $1.5 million of such taxes, which will be borne by the Company, and (c) taxes of SpinCo and its subsidiaries for tax periods (or portions thereof) beginning after the Distribution Date; and

The Company generally will be responsible for (a) the first $1.5 million of taxes imposed on SilverSun, SpinCo and their respective subsidiaries as a result of, in connection with or relating to the Distribution and certain related transactions, and (b) taxes of the Company and its subsidiaries for tax periods (or portion thereof) beginning after the Distribution Date.

Employee Matters Agreement

The Company and SpinCo will enter into an employee matters agreement (“Employee Matters Agreement”) in connection with the Separation and Distribution to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and programs, and other related matters. The Employee Matters Agreement will govern certain compensation and employee benefit obligations with respect to current and former employees and non-employee directors of each company.

The Employee Matters Agreement will provide that for purposes of compensation and benefit matters, unless otherwise specified, SpinCo will be responsible for liabilities for all current and former employees of the Company and its subsidiaries (including SpinCo and its subsidiaries) as of the Distribution.

JACOBS EMPLOYMENT AGREEMENT

Effective as of the Closing, the Company will enter into an employment agreement with Brad Jacobs (the “Jacobs Employment Agreement”). The principal terms of the Jacobs Employment Agreement are described below.

Term

The Jacobs Employment Agreement will provide for a five-year term, commencing on the Closing Date.

Position and Reporting

Mr. Jacobs will serve as Chief Executive Officer of the Company, reporting to the Company Board and, effective on the first day of the term, Mr. Jacobs will also be appointed as a member and Chairman of the Company Board.

Salary and Target Annual Bonus

Mr. Jacobs’ annual base salary will have an initial annual rate of $750,000 and his target annual bonus will initially be 100% of his base salary. Mr. Jacobs’ annual base salary and target annual bonus will increase (but not decrease) each calendar year of the term depending on the Company’s annualized revenue run rate as of the preceding December 31 as follows:

Potential Salary increases based on Annual Revenue Run Rate Band

Potential Target Bonus Amounts based on Annual Revenue Run Rate Band

Termination Event

The Company may terminate Mr. Jacobs’ employment during the term with or without cause and Mr. Jacobs may resign his employment on 30 days’ prior written notice to the Company (or may resign for good reason in certain circumstances as described below). The term will also end upon Mr. Jacobs’ permanent disability or death. The severance payments described below are subject to and conditioned upon Mr. Jacobs (a) signing an irrevocable waiver and general release in favor of the Company and (b) complying with the restrictive covenants contained in the Jacobs Employment Agreement.

Non-CIC Termination.    In the event that either prior to a change in control of the Company or more than two years after a change in control of the Company occurs, the Company terminates Mr. Jacobs’ employment without cause, Mr. Jacobs will be entitled to receive:

•        a cash payment equal to 12 months of base salary;

•        medical and dental coverage for a period of six months from the date of termination; and

•        vesting of equity-based or other long-term incentive compensation awards solely to the extent set forth in the applicable award agreement.

CIC Termination.    In the event that upon or within the two-year period following a change in control of the Company, Mr. Jacobs’ employment is terminated by the Company without cause or he resigns for good reason, Mr. Jacobs will receive:

•        2.99 times the sum of Mr. Jacobs’ annual base salary and target bonus;

•        a pro rata target bonus for the year of termination;

•        medical and dental coverage for a period of 24 months from the date of termination; and

•        vesting of equity-based or other long-term incentive compensation awards solely to the extent set forth in the applicable award agreement.

In the event that any benefits due or amounts payable to Mr. Jacobs in connection with a change in control of the Company constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then any such amounts will be reduced to avoid triggering the excise tax imposed by Section 4999 of the Code, provided that such reduction will be applied solely if it would result in Mr. Jacobs retaining a greater portion of the payments on a net after-tax basis.

Clawbacks.    Mr. Jacobs will be subject to any compensation recovery policy maintained by the Company, as in effect from time to time.

Restrictive Covenants

Mr. Jacobs is generally subject to the following restrictive covenants: employee and customer non-solicitation covenants during his employment and for a period of four years thereafter; confidentiality and mutual non-disparagement covenants during his employment and thereafter; and non-competition covenants during his employment and for a period of 12 months thereafter (during which period the Company will make monthly noncompete payments to Mr. Jacobs equal to one-twelfth of his base salary), except that the Company will have the right (other than following a change in control of the Company) to extend the non-compete for up to three additional one-year periods so long as the Company pays Mr. Jacobs an amount equal to the sum of one-twelfth of his base salary for each month during each applicable one-year extension period.

Initial Equity Awards

Grant of Initial Equity Awards.    In connection with the execution of the Jacobs Employment Agreement, following the Closing on a date selected by the Compensation Committee of the Company Board (which is anticipated to be no later than the 120th day after the Closing), the Company will grant to Mr. Jacobs an award of time-based restricted stock units relating to 3,832,676 shares of Common Stock (the “RSUs”) and an award of performance-based restricted stock units relating to 7,117,828 shares of Common Stock at target (the “PRSUs”). Any RSUs and PRSUs that vest will be settled for Common Stock or, at the Company’s election, an equivalent amount of cash. Except in the event of a change in control of the company, all shares delivered in settlement of RSUs and PRSUs (net of any shares withheld to cover taxes) will be subject to a transfer restriction that prohibits Mr. Jacobs from disposing of such shares prior to December 31, 2029. The Jacobs Employment Agreement does not contemplate that any additional equity awards will be granted to Mr. Jacobs during the five-year term of the Jacobs Employment Agreement.

RSU Vesting.    The RSUs will vest in five tranches on each of the first five anniversaries of the grant date, with the first tranche covering 15% of the RSUs, each of the next two tranches covering 17.5% of the RSUs, and each of the final two tranches covering 25% of the awards. Vesting of RSUs will generally be subject to Mr. Jacobs’s continued service with the Company through the applicable vesting date.

PRSU Vesting.    The PRSUs will be earned based on performance goals relating to the Company’s total stockholder return (“TSR”) compared to the TSR ranking of each company that is in the S&P 500 Index. The PRSUs may be earned at a level ranging from zero to 225% of the target number, depending upon the degree of achievement of the applicable performance goal. The degree of achievement of the Company TSR relative to the S&P 500 companies’ TSR will be measured against a specified payout matrix, pursuant to which Company TSR below the 55th percentile of the S&P 500 companies will result in zero payout, while achievement at the 90th percentile or above will result in a payout of 225% of target. The performance goals for a portion of the PRSUs will be measured over a cumulative performance period beginning on the grant date and ending on December 31, 2028 and the performance goals for the

remainder of the PRSUs will be measured based on designated performance periods that occur within such cumulative period. Vesting of the PRSUs will generally be subject to Mr. Jacobs’s continued service through the applicable performance period.

Termination of Employment.    The RSUs and PRSUs will be subject to special rules providing for either partial or full vesting on a qualifying termination of employment, including due to death, disability, termination without cause or, during the two years following a change in control, termination for good reason.

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
TO U.S. HOLDERS

The following is a general discussion of the material U.S. federal income tax consequences of the Distribution, the Dividend, and the Reverse Stock Split to U.S. Holders (as defined below) of Common Stock. This discussion is based on the Code, the Treasury Regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as in effect as of the date of this proxy statement and all of which are subject to differing interpretations or change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. Neither the Company nor SpinCo has sought or will seek an advance ruling from the IRS regarding any matter discussed in this section. This discussion assumes that the Distribution, the Dividend and the Reverse Stock Split will be consummated in accordance with the Separation and Distribution Agreement and as described in this proxy statement.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of the Common Stock that is for U.S. federal income tax purposes:

•        an individual who is a citizen or resident of the United States;

•        a corporation created or organized in or under the laws of the United States, any state therein, or the District of Columbia;

•        an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

•        a trust if it: (a) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to the control all substantial decisions of the trust; or (b) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes.

This discussion addresses only the consequences of the Distribution, the Dividend, and the Reverse Stock Split to U.S. Holders that hold the Common Stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). It does not address all aspects of U.S. federal income taxation that may be relevant to a U.S. Holder in light of that holder’s particular circumstances or to a U.S. Holder subject to special treatment under the Code, such as:

•        a financial institution, underwriter, real estate investment trust, regulated investment company, or insurance company;

•        a tax-exempt organization or government organization;

•        a dealer or broker in stock, securities, commodities or currencies;

•        a trader in securities that elects mark-to-market treatment;

•        a stockholder that holds Common Stock as part of a hedge, appreciated financial position, straddle, conversion, or other risk reduction transaction for U.S. federal income tax purposes;

•        former citizens or former long-term residents of the United States;

•        a stockholder that owns, or is deemed to own, at least 10%, by voting power or value, of the Company’s equity;

•        a stockholder that is subject to the alternative minimum tax;

•        a partnership, S corporation or other pass-through entity (or an investor in a partnership, S corporation or other pass-through entity);

•        a stockholder that is required to accelerate the recognition of any item of gross income with respect to the Common Stock as a result of such income being recognized on an applicable financial statement;

•        a stockholder that has a functional currency other than the U.S. dollar;

•        a stockholder that holds Common Stock in a tax-deferred account, such as an individual retirement account; or

•        a stockholder that acquired Common Stock pursuant to the exercise of employee stock options or otherwise as compensation.

If a partnership, or any entity treated as a partnership for U.S. federal income tax purposes, holds Common Stock, the tax treatment of a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax adviser regarding the tax consequences of the Distribution, the Dividend and the Reverse Stock Split to its specific circumstances.

This discussion of material U.S. federal income tax consequences is not a complete analysis or description of all potential U.S. federal income tax consequences of the Distribution, the Dividend, or the Reverse Stock Split and, in particular, does not address any tax consequences to holders of SilverSun common stock that are not U.S. Holders or any tax consequences arising under the Medicare contribution tax on net investment income or the Foreign Account Tax Compliance Act of 2010 (including the U.S. Treasury regulations promulgated thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith). In addition, it does not address any estate, gift, or other non-income tax consequences or any non-U.S., state, or local tax consequences of the Distribution, the Dividend or the Reverse Stock Split. Accordingly, holders of Common Stock should consult their tax advisers to determine the particular U.S. federal, state, or local or non-U.S. income or other tax consequences of the Distribution, the Dividend and the Reverse Stock Split.

HOLDERS OF COMMON STOCK ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF THE DISTRIBUTION, THE DIVIDEND AND THE REVERSE STOCK SPLIT TO THEIR PARTICULAR SITUATION, Including the applicability and effect of the alternative minimum tax and any U.S. federal, U.S. state or local, non-U.S. or other tax laws and of changes in such laws. THIS DISCUSSION DOES NOT APPLY TO NON-US HOLDERS WHO ARE ENCOURAGED TO CONSULT WITH THEIR OWN TAX ADVISORS.

The Distribution and the Dividend

Each U.S. Holder of Common Stock that receives shares of SpinCo Common Stock in the Distribution and cash in the Dividend will be treated as receiving a taxable distribution in an amount equal to the fair market value of the SpinCo Common Stock received in the Distribution and cash received in the Dividend (the “Distribution Amount”).

The Distribution Amount received by a U.S. Holder generally will be treated as a taxable dividend to the extent of such holder’s ratable share of the Company’s current or accumulated earnings and profits (including the Company’s taxable gain, if any, recognized in connection with the Distribution and the Dividend). The Company will not be able to advise U.S. Holders of the amount of its earnings and profits until after the end of the calendar year in which the Distribution and Dividend occur. However, the Company anticipates that it will recognize capital gain for tax purposes in connection with the Distribution that will have the effect of increasing its earnings and profits for the year in which the Distribution and Dividend occur.

To the extent that the Distribution Amount received by a U.S. Holder exceeds such U.S. Holder’s ratable share of the Company’s current and accumulated earnings and profits (as determined under U.S. federal income tax principles), any such excess will generally be treated as a return of capital and will not be taxable to a U.S. Holder to the extent of such U.S. Holder’s adjusted tax basis in its Common Stock. Any portion of the Distribution Amount that is treated as a nontaxable return of capital will reduce the adjusted tax basis of the U.S. Holder’s shares of Common Stock.

To the extent that any such excess portion of the Distribution Amount received by a U.S. Holder exceeds such U.S. Holder’s adjusted tax basis in its shares of Common Stock, such excess will be treated as capital gain recognized on a sale or exchange of such Common Stock. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for its Common Stock exceeds one year. Long term capital gains recognized by noncorporate U.S. Holders may be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations. A U.S. Holder’s holding period in its shares of Common Stock will not be affected by the Distribution or the Dividend.

U.S. Holders who hold different blocks of Common Stock (shares of Common Stock purchased or acquired on different dates or at different prices) should consult their tax advisors to determine how the above rules apply to them.

A U.S. Holder’s tax basis in the shares of SpinCo Common Stock received in the Distribution generally will equal the fair market value of those shares on the date of the Distribution, and a U.S. Holder’s holding period for those shares will begin the day after the date of the Distribution.

Although the Company will ascribe a value to the shares of SpinCo Common Stock it distributes in the Distribution for tax purposes, this valuation is not binding on the IRS or any other tax authority. These taxing authorities could ascribe a higher valuation to those shares, particularly if shares of SpinCo Common Stock trade at prices significantly above the value ascribed to those shares by the Company in the period following the Distribution. Such a higher valuation may cause a U.S. Holder to recognize additional dividend or capital gain income or may cause a larger reduction in the tax basis of a U.S. Holder’s shares of Common Stock.

The Reverse Stock Split

The Reverse Stock Split is intended to qualify as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code and/or an exchange described in Section 1036 of the Code and the Company intends to report the Reverse Stock Split consistent with such qualification. However, it is not a condition to the Company’s obligation or SpinCo’s obligation to complete the transactions that the Reverse Stock Split be treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the code or an exchange described in Section 1036 of the Code or that the Company or SpinCo receive an opinion from counsel to that effect. The Company and SpinCo have not sought, and will not seek, any ruling from the IRS regarding any matters related to the transactions, and, as a result, there can be no assurance that the IRS would not assert that the Reverse Stock Split does not qualify as a “reorganization” within the meaning of Section 368(a)(1)(E) of the Code or an exchange described in Section 1036 of the Code, or that a court would not sustain such a position.

If the Reverse Stock Split qualifies as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code or an exchange described in Section 1036 of the Code, a U.S. Holder of shares of Common Stock generally is not expected to recognize gain or loss upon the Reverse Stock Split, except with respect to cash received in lieu of a fractional share of Common Stock, as discussed below. A U.S. Holder’s aggregate adjusted tax basis in the shares of Common Stock received pursuant to the Reverse Stock Split (including any fractional share of Common Stock deemed received and sold as discussed below) generally will equal the aggregate adjusted tax basis of the shares of Common Stock surrendered, and such U.S. Holder’s holding period in the shares of Common Stock received in the Reverse Stock Split generally will include the holding period in the shares of Common Stock surrendered. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of the shares of Common Stock surrendered to the shares of Common Stock received pursuant to the Reverse Stock Split. U.S. Holders of shares of Common Stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

A U.S. Holder that receives cash in lieu of a fractional share of Common Stock pursuant to the Reverse Stock Split will be treated as having sold such fractional share for cash and is expected to recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the U.S. holder’s adjusted tax basis in such fractional share of Common Stock. Such gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for its Common Stock exceeds one year at the time of the Reverse Stock Split.

If the Reverse Stock Split does not qualify as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code or an exchange described in Section 1036 of the Code, then a U.S. Holder of shares of Common Stock that exchanges such shares for Common Stock in the Reverse Stock Split generally will recognize gain or loss equal to the difference, if any, between (a) the sum of the fair market value of the shares of Common Stock received by such U.S. Holder in the Reverse Stock Split and the amount of any cash received in lieu of a fractional share of Common Stock and (b) such U.S. Holder’s adjusted tax basis in the Common Stock exchanged therefor. Gain or loss must be calculated separately for each block of Common Stock exchanged by such U.S. Holder if such blocks were acquired at different times or for different prices. Such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder’s holding period in a particular block of Common Stock exceeds one year at the effective time of the Reverse Stock Split. A U.S. Holder’s aggregate tax basis in the Common

Stock received in the Reverse Stock Split will equal the fair market value of such shares of Common Stock as of the effective time of the Reverse Stock Split, and the holding period of such Common Stock will begin on the date after the date of the Reverse Stock Split.

Information Reporting and Backup Withholding

The Dividend, the Distribution and the Reverse Stock Split may be subject to information reporting and backup withholding (currently at a rate of 24%) if a U.S. Holder fails to provide a properly completed IRS Form W-9 certifying such U.S. Holder’s correct taxpayer identification number and certain other information or otherwise establish an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability, if any, provided that the required information is timely furnished to the IRS.

U.S. Holders should consult their tax advisors regarding any information reporting requirements and their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.

EXECUTIVE COMPENSATION

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the Company’s President and Chief Executive Officer and the Company’s Chief Financial Officer (together, the “Named Executive Officers”) by the Company during the years ended December 31, 2023 and 2022.

Named Executive Officer Employment Agreements

Mark Meller, Chief Executive Officer

On February 4, 2016, the Company entered into an amended and restated employment agreement with Mark Meller, pursuant to which Mr. Meller serves as the Company’s President and Chief Executive Officer. The employment agreement provided for a term ending September 14, 2023; on November 11, 2021, the Company and Mr. Meller entered into an amendment to Mr. Meller’s employment agreement to extend the term thereof through September 14, 2028. As the Company entered into an Investment Agreement on December 3, 2023, the Company executed a letter agreement with Mr. Meller to agree that the consummation of the transaction contemplated by the Investment Agreement and Mr. Meller’s cessation of employment with the Company upon the occurrence of the Spin-Off will entitle Mr. Meller to receive the termination payment under his employment agreement. The parties to the Investment Agreement also agree to terminate and liquidate the employment agreement and provide for a payment to Mr. Meller in full satisfaction of any and all obligations of the Company pursuant to the employment agreement. The parties also agree that the termination payment will not exceed $3 million.

Mr. Meller’s employment agreement provides that the Company will pay Mr. Meller an initial annual salary of $565,000, with a 10% increase on each September 1 for the duration of the term of the agreement. The agreement also provides that Mr. Meller is entitled to fringe benefits, including but not limited to a luxury automobile of his choice not to exceed $1,000 per month, health insurance, disability insurance, long term care insurance, auto insurance, $600.00 per month travel, and an annual bonus, in accordance with the Company policies and plans in effect, from time to time, for executive officers of the Company.

Potential Payments upon Termination or Change in Control

As previously discussed, Mr. Meller’s employment agreement provides for a severance payment to Mr. Meller of 300% of his average annual gross income for services rendered to the Company in each of the five prior calendar years, less $100, should his employment be terminated following a Change in Control (as defined therein).

Joseph Macaluso, Chief Financial Officer

In connection with his appointment as Chief Financial Officer of the Company, the Company provided Mr. Macaluso an offer letter setting forth the terms of his employment, which provides that Mr. Macaluso is to receive a base annual salary of $215,000 and a one-time cash sign on bonus of $30,000, and that Mr. Macaluso is eligible for an annual discretionary bonus of up to 20% of his annual base salary. Pursuant to the offer letter, Mr. Macaluso’s employment with the Company is at-will and it may be terminated with or without cause.

Grants of Plan-based Awards Table for Fiscal Year 2023

There were no stock option grants for the year ended December 31, 2023.

Outstanding Plan-based Awards at December 31, 2023

The Company had no outstanding equity awards to the executives named above at the end of the most recently completed fiscal year.

Options Exercised During Fiscal Year 2023

Clawback Policy

The Company has adopted a clawback policy that states that, in the event that the Company is required to prepare an accounting restatement, it will recover incentive-based compensation received by any current or former executive officer that was based upon the attainment of a financial reporting measure that was erroneously awarded during the three-year period preceding the date that the restatement was required.

Director Compensation

The following table sets forth the compensation paid by the Company to its directors for the fiscal year ending on December 31, 2023.

The Company pays its non-employee directors for their service on the Company Board. Mr. Wunderlich is paid $1,000 per month, payable quarterly for his service as a member of the Company Board and as Chairman of the Nominating and Governance Committee. Mr. Edwards was paid $1,667 per month, payable quarterly for his service as a member of the Company Board and as Chairman of the Audit Committee. Mr. Schachtel is paid $1,500 per month, payable quarterly for his service as a member of the Company Board and as Chairman of the Compensation Committee.

Director Agreements

The Company and Stanley Wunderlich are parties to an Amended and Restated Director Agreement dated as of August 3, 2011, with respect to Mr. Wunderlich’s service on the Company Board. The agreement provides for compensation to Mr. Wunderlich for his service on the Company Board as follows: (a) a quarterly stipend of $1,000, (b) upon execution thereof, a warrant to purchase shares of Common Stock in an amount equal to $20,000 divided by the Closing price of the Common Stock on the OTC Markets on the date of grant (the “Formula”), and (c) every three months for the duration of his service on the Company Board, a warrant exercisable for the number of shares of Common Stock resulting from the application of the Formula on the applicable grant date. The agreement provides that the exercise price of the Warrants will be the Closing price of the Common Stock on the date of grant plus $0.01, and that the Warrants will be exercisable upon receipt for a period of five years. The agreement also provides that the Company will reimburse Mr. Wunderlich for reasonable out-of-pocket expenses he incurs in attending any in-person meetings.

In connection with a recapitalization of the Company in 2012, Mr. Wunderlich and the Company agreed to amend his Director Agreement to: (a) change the stipend to $1,000 per month, payable quarterly, (b) forego the issuance of any Warrants due to Mr. Wunderlich under the Director Agreement, and (c) cancel the future issuance of any Warrants due to Mr. Wunderlich under the Director Agreement. To date no Warrants have been issued pursuant to Mr. Wunderlich’s Director Agreement.

The Company entered into a director agreement with John Schachtel dated as of March 27, 2017, in connection with Mr. Schachtel’s appointment to the Company Board effective March 27, 2017. The agreement provides for compensation to Mr. Schachtel for his service on the Company Board as follows: (a) a stipend of $1,500 per month, and (b) upon execution thereof, a warrant to purchase shares of Common Stock in an amount equal to $20,000 divided by the Formula, at an exercise price per share equal to be the Closing price of the Common Stock on the date of grant plus $0.01. The agreement provides that the Warrants are exercisable upon receipt for a period of five years. The agreement also provides that the Company will reimburse Mr. Schachtel for reasonable out-of-pocket expenses he incurs in attending any in-person meetings.

The Company and Kenneth Edwards have entered into a Director Agreement dated as of January 4, 2021, in connection with Mr. Edwards’ appointment to the Company Board effective January 4, 2021. The agreement provides that Mr. Edwards will receive a quarterly stipend of $5,000 for his service on the Company Board. The agreement also provides that the Company will reimburse Mr. Edwards for reasonable out-of-pocket expenses he incurs in attending any in-person meetings.

Pay Versus Performance Table

The following table shows the total compensation for the named executive officers as set forth in the Summary Compensation Table, the compensation “actually paid” (“CAP”) to the Named Executive Officers, the Company’s TSR, and the Company’s net loss for the years ended December 31, 2023 and 2022.

2023 Pay vs. Performance Table

____________

(1)      In the table above, our PEO is Mark Meller.

(2)      In the table above, our only non-PEO NEO is Joseph Macaluso.

(3)      Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period.

(4)      SEC rules require that certain adjustments be made to the Summary Compensation Table totals to determine CAP, as reported in the Pay versus Performance table above. The following table details the applicable adjustments that were made to determine CAP for the year ended December 31, 2023 (no such adjustments were required for the year ended December 31, 2022).

(5)      Cumulative TSR is calculated based on the value of an initial fixed investment of $100 in Common Stock as of December 31, 2021.

Relationship Between Compensation Actually Paid and Performance Measures

CAP for the PEO and the other Named Executive Officer is primarily wage-based, and changes in the value of the unvested and vested equity awards are not significant. The compensation is based upon contractual requirements as well as industry standards. While the Company reviews performance measures in order to align executive compensation with the Company’s performance, all of those Company measures are not presented in the Pay Versus Performance table above. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align its performance measures with compensation actually paid (which, for all purposes hereof, will be as computed in accordance with SEC rules) for a particular year.

The increase in the Company’s TSR reflects management’s efforts to increase stockholder value, however, the Company’s stock price is very volatile and may not be an indicator of future performance. The increase in the Company’s TSR reflects management’s efforts to increase stockholder value, however, the higher stock price at December 31, 2023 is a result of the announcement on December 4, 2023 that the Company entered into the Investment Agreement with JPE and the Investors, providing for an aggregate investment by the Investors of $1,000,000,000 in cash in the Company. Following the closing of the Equity Investment, JPE will be the controlling stockholder of the Company and Mr. Brad Jacobs, who controls JPE, will become Chairman and Chief Executive Officer of the Company.

PROPOSAL 1:
THE INVESTMENT PROPOSAL

General

The Company Board has unanimously approved the issuance to JPE and the Other Investors of 1,000,000 shares of Convertible Preferred Stock (convertible into 219,007,375 shares of Common Stock, giving effect to the Reverse Stock Split (1,752,059,000 shares of Common Stock without giving effect to the Reverse Stock Split)) and of 219,007,375 shares subject to Warrants (giving effect to the Reverse Stock Split (1,752,059,000 shares of Common Stock without giving effect to the Reverse Stock Split)).

The Convertible Preferred Stock will have an initial liquidation preference of $1,000 per share, for an aggregate initial liquidation preference of $1,000,000,000. The Convertible Preferred Stock will be convertible at any time, in whole or in part and from time to time, at the option of the holder thereof, into a number of shares of Common Stock equal to the then-applicable liquidation preference divided by the conversion price, which will initially be $0.571 per share of Common Stock (before giving effect to the contemplated 8:1 Reverse Stock Split, and subject to customary anti-dilution adjustments). The Convertible Preferred Stock will pay quarterly cash dividends equal to the greater of (a) the “as-converted” dividends on the underlying Common Stock for the relevant quarter, and (b) 9% of the then-applicable liquidation preference per annum. Accrued and unpaid dividends for any quarter will accrete to liquidation preference for all purposes. The Convertible Preferred Stock is not redeemable or subject to any required offer to purchase, and will vote together with the Common Stock on an “as-converted” basis on all matters, except as otherwise required by law, and separately as a class with respect to certain matters implicating the rights of holders of shares of the Convertible Preferred Stock.

The terms of the Convertible Preferred Stock are more fully set forth in the Certificate of Designation, which is attached as Exhibit A to the Investment Agreement, filed herewith as Annex A to this proxy statement and incorporated by reference herein.

Each Warrant will initially be exercisable at any time and from time to time from the closing date until the tenth anniversary of the closing date, at the option of the holder thereof, into one share of Common Stock at initial exercise prices of $4.566 per share with respect to 50% of the Warrants, $6.849 per share with respect to 25% of the Warrants, and $13.698 per share with respect to the remaining 25% of the Warrants, giving effect to the Reverse Stock Split, (or, before giving effect to the Reverse Stock Split, of $0.571 per share with respect to 50% of the Warrants, $0.856 per share with respect to 25% of the Warrants, and $1.712 per share with respect to the remaining 25% of the Warrants) in each case subject to customary anti-dilution adjustments. The initial aggregate number of shares of Common Stock subject to Warrants will be 219,007,375 shares, giving effect to the Reverse Stock Split (1,752,059,000 shares without giving effect to the Reverse Stock Split).

The terms of the Warrants are more fully set forth in the Warrant Certificate attached as Exhibit B to the Investment Agreement, filed herewith as Annex A and incorporated by reference herein.

Purpose of the Equity Issuance

The purpose of Proposal 1 is to permit the Equity Investment, which will result in JPE becoming the Company’s controlling stockholder and Brad Jacobs becoming the Chairman of the Company Board and Chief Executive Officer, and provide an opportunity for the Company’s existing stockholders to participate in JPE’s plans to grow the Company and create value for Company stockholders. The Equity Investment will also provide initial capital to support the Company’s plans, under the leadership of Mr. Jacobs, to pursue strategic acquisitions, as described further under “The Transactions — Business Strategy.”

Under the Investment Agreement, receipt of stockholder approval for the issuance of the Securities is a condition to closing the Equity Investment. If such approval is not obtained, the investment by the Investors will not be made, JPE will not become majority stockholder of the Company and Brad Jacobs will not become Chairman of the Company Board and Chief Executive Officer of the Company. You should read “The Transactions — Background of the Transactions” and “The Transactions — The Company’s Reasons for the Transactions; Recommendation of the Company Board” for a discussion of the factors that the Company Board considered in deciding to recommend the approval of Proposal 1.

Effect of Proposal

If the Company’s stockholders approve this Proposal and the Equity Investment is consummated, the Investors will pay the Company $1.0 billion in cash and the Investors will receive 1,000,000 shares of Convertible Preferred Stock and Warrants initially exercisable for an aggregate of 219,007,375 shares of Common Stock (giving effect to the Reverse Stock Split). Based on the number of outstanding shares of Common Stock on the record date for the Special Meeting, the Investors will own approximately [    ]% of the total voting power of the capital stock of the Company outstanding upon Closing, and JPE would own approximately [    ]% of the total voting power of the capital stock of the Company upon Closing, making JPE the largest stockholder of the Company. If the Investors were to exercise their Warrants in full at Closing, the Investors would own approximately 99.85% of the total voting power of the capital stock of the Company and JPE alone would own approximately [___]% of the total voting power of the capital stock of the Company. Additionally, the issuance of the Convertible Preferred Stock and the Warrants (when the Warrants are exercised) will have the effect of diluting the aggregate interest owned by the Company’s existing stockholders from 100% of the total voting power of the capital stock of the Company prior to the transaction to approximately 0.15% of the total voting power of the capital stock of the Company immediately following consummation of the Equity Investment, assuming the Investors exercise their Warrants in full immediately following the Closing.

Relationship to Other Proposals

Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting. Each of the Investment Proposal and the Charter Proposals are conditioned upon the approval of such other Proposals.

Vote Required for Approval

Assuming a quorum is present, the affirmative vote of holders of a majority of the votes properly cast on the Proposal at the Special Meeting is required to approve the Investment Proposal.

Stockholder approval of this proposal will constitute stockholder approval for purposes of Nasdaq Listing Rules 5635(b) and 5635(d). If stockholder approval is not obtained, the Company will not be able to consummate the Equity Investment or the other Transactions.

THE SILVERSUN BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 1.

PROPOSAL 2:
GENERAL CHARTER PROPOSAL

General

On December 2, 2023, the Company Board unanimously approved, subject to stockholder approval, the amendment and restatement of the Company’s certificate of incorporation in the form of the Amended and Restated Certificate of Incorporation attached as Annex B to this proxy statement. The following discussion is qualified by the text of the Amended and Restated Certificate of Incorporation.

Stockholders are being asked to approve the adoption of the Amended and Restated Certificate of Incorporation. The Amended and Restated Certificate of Incorporation will include, among other things, the features described in Proposals 3 through 8. This Proposal is referred to as the “General Charter Proposal” (together with Proposals 3 through 8, the “Charter Proposals”).

Relationship to Other Proposals

The approval of each of the Charter Proposals is required to approve the adoption of the Amended and Restated Certificate of Incorporation. The Amended and Restated Certificate of Incorporation will not be filed and will not become effective if any of the Charter Proposals are not approved by the Company’s stockholders. The Charter Proposals are conditioned on the Investment Proposal. Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting.

Description of Other Immaterial Changes

The form of the Amended and Restated Certificate of Incorporation included as Annex B to this proxy statement also reflects certain immaterial changes. These changes, which do not substantively affect stockholder rights, include providing for indemnification of officers and directors and mandatory advancement of expenses in connection with legal proceedings related to their service to the Company in such capacities to the fullest extent authorized by the DGCL and the other changes set forth in the form of the Amended and Restated Certificate of Incorporated Certificate of Incorporation included as Annex B to this proxy statement other than the changes reflected in the other Proposals.

Vote Required for Approval

Approval of the adoption of the Amended and Restated Certificate of Incorporation requires the affirmative vote of holders of a majority of the shares of Common Stock outstanding at the close of business on the record date for the Special Meeting. If stockholder approval is not obtained for any of the Charter Proposals, then the Amended and Restated Certificate of Incorporation will not become effective and the Transactions will not be consummated.

THE COMPANY BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 2.

PROPOSAL 3:
CHARTER AMENDMENT FEATURE PROPOSAL — REVERSE STOCK SPLIT

General

Stockholders are being asked to approve separately a feature of the Amended and Restated Certificate of Incorporation that will effect the Reverse Stock Split. In connection with the Reverse Stock Split, which is expected to become effective at 11:59 p.m. Eastern time two days prior to the Closing, each eight shares of Common Stock will be combined into one share of Common Stock. The provision of the Amended and Restated Certificate of Incorporation effecting the Reverse Stock Split would not proportionately be reduced by a corresponding amount in the number of shares of authorized Common Stock and Preferred Stock.

No fractional shares of Common Stock will be issued in connection with the Reverse Stock Split. Instead, stockholders of record who would otherwise be entitled to a fraction of a share of Common Stock as a result of the Reverse Stock Split will be entitled to receive a cash payment (without interest and subject to applicable withholding taxes) in lieu of such fractional share. The total amount of cash that will be paid to holders of fractional shares following the Reverse Stock Split will be an amount equal to the net proceeds attributable to the sale of such fractional shares following the aggregation and sale by the Company’s transfer agent of all fractional shares otherwise issuable. Holders of fractional shares as a result of the Reverse Stock Split will be paid such proceeds on a pro rata basis, according to the fractional shares that they would otherwise be entitled to receive.

The Reverse Stock Split will affect all Company stockholders uniformly and will not affect any of the Company stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split results in any of the Company stockholders owning a fractional share. Shares of Common Stock issued pursuant to the Reverse Stock Split will remain fully paid and nonassessable.

Purpose of the Reverse Stock Split

The intent of the Reverse Stock Split is (a) to ensure that the market price of shares of Common Stock is maintained or increased after giving effect to the Equity Investment and the Distribution to ensure that the Common Stock continues to meet applicable Nasdaq listing requirements and continues to be listed on Nasdaq, and (b) to make the Common Stock more attractive to a broader range of investors and thereby increase the Company’s flexibility for future equity financings to support JPE’s intended growth through acquisitions. We believe that the Reverse Stock Split will make the Common Stock more attractive to, and may affect its acceptability to, certain institutional investors, professional investors and other members of the investing public.

It should be noted, however, that although the Reverse Stock Split is being proposed for the purpose of maintaining or increasing the market price of the Common Stock, there can be no assurance that such price maintenance or increase can be achieved or maintained. A number of factors will influence the future trading price of the Common Stock, many of which are not within the Company’s control. As a result, there can be no assurance that the Reverse Stock Split will result in the intended benefits described above or that the market price of the Common Stock will not decrease in the future.

The Company stockholders should be aware that, under the escheat laws of the various jurisdictions where the stockholders reside, where the Company is domiciled, and where the funds will be deposited, sums due for fractional shares that are not timely claimed after the effective date of the Reverse Stock Split may be required to be paid to the designated agent for each such jurisdiction, unless correspondence has been received by the Company or the exchange agent concerning ownership of such funds within the time permitted in such jurisdiction. Thereafter, stockholders otherwise entitled to receive such funds will have to seek to obtain them directly from the state to which they were paid.

Effect of the Reverse Stock Split

If our stockholders approve this Reverse Split Proposal and the Board of Directors elects to effect a reverse stock split (the “Reverse Stock Split”), the principal effect will be that every eight shares of Common Stock would be reclassified and combined into one share of Common Stock. The Reverse Stock Split would be effected simultaneously for all of the Common Stock, and the exchange ratio would be the same for all shares of Common Stock. The Reverse Stock Split would affect all of our stockholders uniformly and would not affect any stockholder’s percentage ownership

interests in the Company, except to the extent that it results in a stockholder receiving cash in lieu of fractional shares. The Reverse Stock Split would not affect the relative voting or other rights that accompany the shares of the Common Stock, except to the extent that it results in a stockholder receiving cash in lieu of fractional shares. Common Stock issued pursuant to the Reverse Stock Split would remain fully paid and non-assessable.

In addition to the change in the number of shares of Common Stock outstanding, the Reverse Stock Split would have the following effects:

Increase the Per Share Price of the Common Stock — By effectively condensing a number of pre-split shares into one share of Common Stock, the per share price of a post-split share is generally greater than the per share price of a pre-split share. The amount of the initial increase in per share price and the duration of such increase, however, is uncertain.

Increase in the Number of Shares of Common Stock Available for Future Issuance — By reducing the number of shares outstanding without reducing the number of shares of available but unissued Common Stock, a reverse stock split will increase the number of authorized but unissued shares.

The following table contains approximate information relating to the Common Stock, based on share information as of January 1, 2024:

Certain Procedural Matters

Beneficial Holders of Common Stock

Upon the implementation of the Reverse Stock Split, we intend to treat shares of Common Stock held by stockholders through a broker, dealer, commercial bank, trust company or other nominee in the same manner as registered stockholders whose shares are registered in their names. Brokers and other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding Common Stock in street name. These brokers and other nominees, however, may have different procedures than registered stockholders for processing the Reverse Stock Split. We encourage stockholders who hold shares of Common Stock with a broker or other nominee and who have any questions in this regard to contact their broker or other nominee.

Registered “Book-Entry” Holders of Common Stock

Certain registered holders of Common Stock may hold some or all of their shares electronically in book-entry form with the Company’s transfer agent. These stockholders do not have stock certificates evidencing their ownership of Common Stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts. If a stockholder holds registered shares in book-entry form with the transfer agent, the transfer agent will send them a transmittal letter and they will need to return a properly completed and duly executed transmittal letter in order to receive any cash payment in lieu of fractional shares that may be payable to holders of record following the Reverse Stock Split.

Holders of Certificated Shares

Holders of shares of Common Stock in certificated form will be sent a transmittal letter by the transfer agent after the Reverse Stock Split is effective. The letter of transmittal will contain instructions on how a stockholder should surrender his, her or its certificate(s) representing shares of Common Stock (the “Old Shares”) to the transfer agent in exchange for a book entry with the Company’s transfer agent representing the appropriate number of shares of post-Reverse Stock Split Common Stock (the “New Shares”). No New Shares will be issued to a stockholder until such stockholder has surrendered all Old Shares, together with a properly completed and executed letter of transmittal, to the transfer agent. No stockholder will be required to pay a transfer or other fee to exchange Old Shares. Stockholders will then receive confirmation from the transfer agent that a book entry has been made for the New Shares, representing the number of shares of Common Stock to which such stockholder is entitled as a result of the Reverse Stock Split. Until surrendered, we will deem outstanding Old Shares held by stockholders to be cancelled and only to represent the number of shares of post-Reverse Stock Split Common Stock to which these stockholders are entitled. Any Old

Shares submitted for exchange, whether because of a sale, transfer or other disposition of stock, will automatically be exchanged for New Shares. If Old Shares contain a restrictive legend, the book entry for the New Shares will include a restrictive legend notation as well. Upon request to the transfer agent, stockholders may elect for the transfer agent to deliver physical stock certificates representing the New Shares in lieu of the book entry described above.

STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.

Accounting Matters

The Reverse Stock Split will not affect the per-share par value of the Common Stock or the Preferred Stock, which will continue to have a par value per share of $0.00001 and $0.001, respectively. As a result, the stated capital attributable to the Common Stock will be reduced proportionately based on the 8:1 Reverse Stock Split ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced.

Relationship to Other Proposals

The approval of each of the Charter Proposals is required to approve the adoption of the Amended and Restated Certificate of Incorporation. The Amended and Restated Certificate of Incorporation will not be filed and become effective if any of the Charter Proposals are not approved by the Company’s stockholders. The Charter Proposals are conditioned on the Investment Proposal. Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting.

Vote Required for Approval

Approval of the adoption of the Amended and Restated Certificate of Incorporation, including the amendment described in this Proposal, requires the affirmative vote of holders of a majority of the shares of Common Stock outstanding at the close of business on the record date for the Special Meeting. If stockholder approval is not obtained for any of the Charter Proposals, then the Amended and Restated Certificate of Incorporation will not become effective and the Transactions will not be consummated.

THE COMPANY BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 3.

PROPOSAL 4:
CHARTER AMENDMENT FEATURE PROPOSAL — INCREASE IN AUTHORIZED SHARES

General

Stockholders are being asked to approve separately a feature of the Amended and Restated Certificate of Incorporation that will provide for an increase in the number of authorized shares of Common Stock from 75,000,000 to 2,000,000,000 and an increase in the number of authorized shares of Preferred Stock from 1,000,000 to 10,000,000. The Company will need to authorize additional amounts of Common Stock and Preferred Stock prior to the Closing in order to fulfill its obligations under the Investment Agreement, the Certificate of Designation and the Warrants, and to provide sufficient capacity for future financings and acquisitions.

Purpose of the Increase in Authorized Shares

The purpose of increasing the authorized number of shares of Common Stock is to provide for a sufficient number of authorized shares to permit the full conversion of the Preferred Stock and the full exercise of the Warrants, as well as to provide the Company with sufficient capacity to allow the flexibility for future equity financings to raise funds to support the intended growth of the Company’s business, including through strategic acquisitions.

Effect of the Increase in Authorized Shares

If this Proposal is approved, there will be a sufficient number of shares of Common Stock to permit the full conversion of the Preferred Stock and the full exercise of the Warrants and to provide adequate financing flexibility to support JPE’s plan to grow the Company’s business for the foreseeable future (see “Transactions — Business Strategy” for more information). We do not currently have any material commitments which would require the issuance of additional shares of Common stock, other than as described in this proxy statement and the documents attached hereto or incorporated herein by reference. The Company Board does not believe that an increase in the number of authorized shares of Common Stock, without more, will have a significant impact on the market price of Common Stock. The availability of significant authorized but unissued shares of Common Stock will, however (in addition to enabling the consummation of the Equity Investment), give the Company the flexibility to issue additional common equity and create dilution without further approval of stockholders. The Company Board believes, however, that this additional flexibility is warranted, as it would facilitate execution of future financings and strategic acquisitions and thereby facilitate the growth of the Company’s business.

Relationship to Other Proposals

The approval of each of the Charter Proposals is required to approve the adoption of the Amended and Restated Certificate of Incorporation. The Amended and Restated Certificate of Incorporation will not be filed and become effective if any of the Charter Proposals is not approved by the Company’s stockholders. The Charter Proposals are conditioned on the Investment Proposal. Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting.

Vote Required for Approval

Approval of the adoption of the Amended and Restated Certificate of Incorporation, including the amendment described in this Proposal, requires the affirmative vote of holders of a majority of the shares of Common Stock outstanding at the close of business on the record date for the Special Meeting. If stockholder approval is not obtained for any of the Charter Proposals, then the Amended and Restated Certificate of Incorporation will not become effective and the Transactions will not be consummated.

THE COMPANY BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 4.

PROPOSAL 5:
CHARTER AMENDMENT FEATURE PROPOSAL — STOCKHOLDER ACTION BY WRITTEN CONSENT

General

Stockholders are being asked to approve separately a feature of the Amended and Restated Certificate of Incorporation that will permit stockholder action to be taken only at a duly called annual or special meeting and to eliminate action by written consent of stockholders, except if the Investors and their Affiliates (as defined in the Investment Agreement) continue to own at least 30% of the voting power of the outstanding shares of the Company’s capital stock entitled to vote generally in the election of directors. The DGCL provides that, unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action taken is signed by the holders of not less than the minimum number of votes that would be necessary to take such action at a meeting at which all stockholders having a right to vote thereon were present and voted. The Company’s current certificate of incorporation does not limit the right of its stockholders to act by written consent. The Company’s current bylaws permit stockholder action by written consent to the same extent permitted by the DGCL and stockholder action by written consent is not prohibited by the certificate of incorporation. The proposed amendment to the Company’s certificate of incorporation would eliminate the ability of Company stockholders to act by written consent without a meeting, thus requiring all stockholder action to be taken at an annual or special meeting of stockholders, unless the Investors and their Affiliates (as defined in the Investment Agreement) continue to own at least 30% of the voting power of the Company. Following the closing of the Equity Investment, the Investors will own approximately 99.85% of the Common Stock on an as-converted, as-exercised basis.

Purpose of the Change to Written Consent Rights

The Company Board believes that the approval of this Proposal will be in the best interests of the Company and its stockholders. By permitting action to be taken only at a duly called annual or special meeting of stockholders and eliminating action by written consent of stockholders following such time as the Investors and their affiliates no longer hold at least 30% of the voting power of the Company, the amendment would give all of Company stockholders entitled to vote on a particular matter advance notice of and the opportunity to participate in the determination of any proposed action.

Relationship to Other Proposals

The approval of each of the Charter Proposals is required to approve the adoption of the Amended and Restated Certificate of Incorporation. The Amended and Restated Certificate of Incorporation will not be filed and become effective if any of the Charter Proposals is not approved by the Company’s stockholders. The Charter Proposals are conditioned on the Investment Proposal. Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting.

Vote Required for Approval

Approval of the adoption of the Amended and Restated Certificate of Incorporation, including the amendment described in this Proposal, requires the affirmative vote of holders of a majority of the shares of Common Stock outstanding at the close of business on the record date for the Special Meeting. If stockholder approval is not obtained for any of the Charter Proposals, then the Amended and Restated Certificate of Incorporation will not become effective and the Transactions will not be consummated.

THE COMPANY BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 5.

PROPOSAL 6:
CHARTER AMENDMENT FEATURE PROPOSAL — SPECIAL MEETING RIGHTS

General

Stockholders are being asked to approve separately a feature of the Amended and Restated Certificate of Incorporation that will provide for a change in stockholders’ right to call a special meeting. The DGCL provides that special meetings of stockholders may be called by the Company Board or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws. The Company’s current certificate of incorporation does not address the right to call a special meeting of stockholders, and the Company’s current bylaws provide that special meetings may be called by the chairman of the board, the president, or the Company Board (or by the secretary upon application by a majority of directors). As a result, the Company stockholders currently do not have the right to call special meetings. In addition to codifying special meeting rights in the Company’s Amended and Restated Certificate of Incorporation rather than only in the bylaws (which will be amended and restated following the Closing in the form attached to this proxy statement as Annex F and in a manner consistent with this Proposal), the Amended and Restated Certificate of Incorporation, if adopted, would extend the ability to call special meetings of stockholders to the Lead Independent Director (if one has been appointed) and would modify the Company Board’s ability to call special meetings, in particular by specifying that the latter requires a resolution adopted by a majority of the “Whole Board,” which means a majority of the directors that would constitute the Company Board if there were no vacancies.

Purpose of the Change to Special Meeting Rights

The Company Board believes it is in the best interests of the Company and its stockholders to provide for limitations on the ability to call special meetings in the Amended and Restated Certificate of Incorporation. Convening a special meeting of stockholders imposes significant costs, both administrative and operational, given that the Company Board and management must devote significant time and attention to preparing for a special meeting, taking their attention away from their primary focus of operating the Company’s business. The Company Board believes that special meetings should only be called to discuss critical, time-sensitive issues that cannot be delayed until the Company’s next annual meeting and should not be used as a means to permit a group of stockholders to advance their own interests at the expense of stockholders generally. In light of the foregoing, the Company Board believes that amending the provisions of its certificate of incorporation to include limitations on the ability to call a special meeting of stockholders is a prudent corporate governance measure to ensure that any proposal before stockholders will be presented after stockholders have had the full benefit of the knowledge, advice and participation of the Company’s management and Company Board.

Relationship to Other Proposals

The approval of each of the Charter Proposals is required to approve the adoption of the Amended and Restated Certificate of Incorporation. The Amended and Restated Certificate of Incorporation will not be filed and become effective if any of the Charter Proposals is not approved by the Company’s stockholders. The Charter Proposals are conditioned on the Investment Proposal. Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting.

Vote Required for Approval

Approval of the adoption of the Amended and Restated Certificate of Incorporation, including the amendment described in this Proposal, requires the affirmative vote of holders of a majority of the shares of Common Stock outstanding at the close of business on the record date for the Special Meeting. If stockholder approval is not obtained for any of the Charter Proposals, then the Amended and Restated Certificate of Incorporation will not become effective and the Transactions will not be consummated.

THE COMPANY BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 6.

PROPOSAL 7:
CHARTER AMENDMENT FEATURE PROPOSAL — EXCLUSIVE FORUM

General

Stockholders are being asked to approve separately a feature of the Amended and Restated Certificate of Incorporation that would provide for courts in Delaware to be the exclusive forum for certain legal actions and for federal courts of the United States of America to be the exclusive forum for certain other legal actions, in each case unless otherwise consented to by the Company. The Amended and Restated Certificate of Incorporation, if adopted, would provide that, unless the Company consents in writing to the selection of an alternative forum, the state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware) would be the exclusive forum for (a) any derivative action or proceeding brought on the Company’s behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by the Company’s directors, officers or other employees or its stockholders, (c) any action asserting a claim against the Company or any of its directors, officers or employees arising pursuant to any provision of the DGCL, the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws, (d) any action asserting a claim governed by the internal affairs doctrine, or (e) any action asserting an “internal corporate claim,” as that term is defined in Section 115 of the DGCL. Additionally, the Amended and Restated Certificate of Incorporation would provide that, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act (but that this provision does not apply to a cause of action arising under the Exchange Act).

Purpose of the Change to Exclusive Forum

The exclusive forum provisions are intended to avoid multiple lawsuits in multiple jurisdictions on matters relating to the DGCL and the Securities Act, thereby reducing inefficiencies, costs, and uncertainty regarding outcomes when two or more similar cases proceed in different jurisdictions. Additionally, the background and experience of the Delaware State Courts and the U.S. federal district courts in resolving issues under the DGCL and the Securities Act, respectively, place these courts in the best positions to resolve claims arising under the applicable bodies of law. Accordingly, the Company Board believes that the exclusive forum provisions are a prudent and proactive means for managing these types of potential litigation and promote efficient and consistent resolutions in the event these types of litigation arise. Although some plaintiffs might prefer to litigate these matters in different jurisdictions, the Company Board believes that the substantial benefits to the Company and its stockholders outweigh these concerns.

Relationship to Other Proposals

The approval of each of the Charter Proposals is required to approve the adoption of the Amended and Restated Certificate of Incorporation. The Amended and Restated Certificate of Incorporation will not be filed and become effective if any of the Charter Proposals is not approved by the Company’s stockholders. The Charter Proposals are conditioned on the Investment Proposal. Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting.

Vote Required for Approval

Approval of the adoption of the Amended and Restated Certificate of Incorporation, including the amendment described in this Proposal, requires the affirmative vote of holders of a majority of the shares of Common Stock outstanding at the close of business on the record date for the Special Meeting. If stockholder approval is not obtained for any of the Charter Proposals, then the Amended and Restated Certificate of Incorporation will not become effective and the Transactions will not be consummated.

THE COMPANY BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL��7.

PROPOSAL 8:
CHARTER AMENDMENT FEATURE PROPOSAL — OFFICER EXCULPATION

General

Stockholders are being asked to approve separately a feature of the Amended and Restated Certificate of Incorporation that will provide for exculpation of directors and officers to the extent permitted by the DGCL. Article IX of the Company’s certificate of incorporation currently exculpates the Company’s directors from personal liability for monetary damages associated with breaches of the duty of care, to the extent permitted by the DGCL. The State of Delaware, which is the Company’s state of incorporation, recently amended Section 102(b)(7) of the DGCL to allow Delaware corporations to exculpate certain senior officers, in addition to its directors, for certain fiduciary duty breaches. Under amended Section 102(b)(7), officers eligible for exculpation include (a) a company’s president, chief executive officer, chief operating officer, chief financial officer, chief legal officer, controller, treasurer or chief accounting officer, (c) any named executive officer identified in the company’s filings with the SEC, or (c) any other officer who has consented to service of process in Delaware by written agreement. For both directors and officers, exculpation is not permitted for breaches of the duty of loyalty, acts or omissions not in good faith or those that involve intentional misconduct or a knowing violation of law, or any transaction in which the director or senior officer derived an improper personal benefit. In addition, for senior officers, amended Section 102(b)(7) only permits exculpation for direct claims brought by stockholders (as opposed to derivative claims made by stockholders on behalf of the Company, with respect to which exculpation of senior officers is not permitted).

In light of this legislative update, stockholders are being asked to approve this Proposal in order to align with current Delaware law to permit the exculpation of its senior officers from monetary liability from certain breaches of fiduciary duty in limited circumstances. Pursuant to the Amended and Restated Certificate of Incorporation, if adopted, the Company’s senior officers, in addition to the Company’s directors, would be exculpated from monetary liability for certain fiduciary duty breaches, solely to the extent permitted under Section 102(b)(7) of the DGCL.

Purpose of the Director and Officer Exculpation Provision

The Company Board believes it is important to provide exculpation to the Company’s officers to the extent permitted by the DGCL. This protection has long been afforded to directors and, as Delaware law now allows exculpation to be extended to certain senior officers, the Company Board believes that aligning the Company’s governing documents with current Delaware law will enhance the ability of the Company’s senior officers to make decisions that will maximize the Company’s value. Like the Company’s directors, senior officers are often called upon to respond to crucial and time-sensitive challenges and opportunities, which, in the current litigious environment, carry a substantial risk of claims, actions, suits or proceedings that will require the Company’s time and resources to address, regardless of the merit of the claims.

Adopting an exculpation provision that aligns with amended Section 102(b)(7) of the DGCL would allow the Company’s directors and senior officers to more freely exercise their independent business judgment to advance the goals of the Company and maximize value for the Company’s stockholders. Even with exculpation, directors and senior officers still would not be protected from liability for breaches of the duty of loyalty, acts or omissions not in good faith or those that involve intentional misconduct or a knowing violation of law, or any transactions in which a director or senior officer derived an improper personal benefit.

In addition, many other companies have updated their charters to align with amended Section 102(b)(7) and provide exculpation to both directors and senior officers, and we expect other companies will follow suit. The Company Board believes that the Company’s ability to attract and retain highly qualified officer candidates may be adversely impacted if we do not similarly do so.

Relationship to Other Proposals

The approval of each of the Charter Proposals is required to approve the adoption of the Amended and Restated Certificate of Incorporation. The Amended and Restated Certificate of Incorporation will not be filed and become effective if any of the Charter Proposals is not approved by the Company’s stockholders. The Charter Proposals are conditioned on the Investment Proposal. Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting.

Vote Required for Approval

Approval of the adoption of the Amended and Restated Certificate of Incorporation, including the amendment described in this Proposal, requires the affirmative vote of holders of a majority of the shares of Common Stock outstanding at the close of business on the record date for the Special Meeting. If stockholder approval is not obtained for any of the Charter Proposals, then the Amended and Restated Certificate of Incorporation will not become effective and the Transactions will not be consummated.

THE COMPANY BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 8.

PROPOSAL 9:
THE QXO, INC. 2024 OMNIBUS INCENTIVE COMPENSATION PLAN

General

We are asking Company stockholders to approve the 2024 Omnibus Incentive Compensation Plan (the “2024 Plan”) to authorize 30,000,000 shares of Common Stock for issuance thereunder, subject to an annual increase under a 3% evergreen provision. The 2024 Plan is being implemented in connection with the Equity Investment and would be effective only upon, and subject to the occurrence of, the Closing. If the Closing does not occur for any reason, then the 2024 Plan will not become effective, regardless of whether Company stockholders have approved the 2024 Plan. Because the 2024 Plan will only become effective at the Closing, the 2024 Plan name reflects the anticipated change of the name of the company to QXO, Inc. The 2024 Plan was approved by the Board on January 12, 2024 (a) subject to approval by Company stockholders and (b) subject to, and effective upon the occurrence of, the Closing. If the stockholders do not approve the 2024 Plan, the 2024 Plan will not become effective. The SilverSun Technologies, Inc. 2019 Equity and Incentive Plan (the “2019 Plan”) will be terminated at the Closing and no further awards will be granted by the Company under the 2019 Plan after the Closing, regardless of whether the 2024 Plan is approved by stockholders.

Purpose of the 2024 Plan

The purpose of the 2024 Plan is to promote the Company’s interests and those of Company stockholders by (a) enabling us to grant awards that attract and retain exceptional directors, officers, employees and consultants (including prospective directors, officers, employees and consultants), and (b) enabling such individuals to participate in, and motivating their efforts toward, the Company’s long-term growth and financial success.

Summary of the Material Terms of the 2024 Plan

The material terms of the 2024 Plan are summarized below. This summary does not contain all information about the 2024 Plan. This summary is qualified in its entirety by reference to, and should be read together with, the full text of the 2024 Plan, which is attached hereto as Annex E. The 2024 Plan Proposal is conditioned on the Investment Proposal and the Charter Proposals.

Types of Awards

The 2024 Plan provides for the grant of options intended to qualify as incentive stock options (“ISOs”) under Section 422 of the Code, nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted share awards, restricted stock units (“RSUs”), performance awards, cash incentive awards, deferred share units and other equity-based and equity-related awards, as well as cash-based awards.

2024 Plan Administration

The 2024 Plan is administered by the Compensation Committee of the Company Board or such other committee the Company Board designates to administer the 2024 Plan (the “Committee”). Subject to the terms of the 2024 Plan and applicable law, the Committee has sole authority to administer the 2024 Plan, including, but not limited to, the authority to (a) designate plan participants, (b) determine the type or types of awards to be granted to a participant, (c) determine the number of shares of Common Stock to be covered by awards, (d) determine the terms and conditions of awards, (e) determine the vesting schedules of awards and, if certain performance criteria were required to be attained in order for an award to vest or be settled or paid, establish such performance criteria and certify whether, and to what extent, such performance criteria have been attained, (f) interpret, administer, reconcile any inconsistency in, correct any default in and/or supply any omission in, the 2024 Plan, (g) establish, amend, suspend or waive such rules and regulations and appoint such agents as it should deem appropriate for the proper administration of the 2024 Plan, (h) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, awards, and (i) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the 2024 Plan.

Shares Available For Awards

Subject to adjustment for changes in capitalization, the maximum aggregate number of shares of Common Stock that may be delivered pursuant to awards granted under the 2024 Plan shall be equal to 30,000,000 (the “Plan Share Limit”), of which 30,000,000 shares of Common Stock may be delivered pursuant to ISOs granted under the 2024 Plan (such amount, the “Plan ISO Limit”). The number of shares of Common Stock covered by the Plan Share Limit shall automatically increase on January 1 of each calendar year commencing with January 1, 2025 and on each January 1 thereafter until the 2024 Plan expiration date in an amount equal to three percent (3%) of the sum of (1) the number of shares of Common Stock outstanding as of December 31 of the preceding calendar year and (2) the number of shares of Common Stock into which the Convertible Preferred Stock outstanding on December 31 of the preceding calendar year are convertible. Notwithstanding the foregoing, the Company Board or the Committee may in its sole discretion act prior to the first day of any calendar year to provide that there shall be no increase in the Plan Share Limit for such calendar year or that the increase in the Plan Share Limit for such calendar year shall be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. The following shares of Common Stock shall not be treated as delivered pursuant to Awards granted under the 2024 Plan for purposes of applying the Plan Share Limit: (a) shares subject to an award that is forfeited (or otherwise expires, terminates or is canceled without the delivery of all shares subject thereto), (b) shares issued or issuable upon exercise, vesting or settlement of an award that are surrendered to the Company in payment of the exercise price of an award (including any stock appreciation right) or any taxes required to be withheld in respect of an award, and (c) shares subject to an award that is settled in cash. In any calendar year, the total (i) grant date value of shares covered by awards granted under the 2024 Plan to any non-employee director in such year, plus (ii) the total cash compensation paid to such non-employee director during such calendar year, shall not exceed $1,000,000. The closing per share price of the Common Stock on the Nasdaq Stock Market on [    ], 2024 was $[    ].

If the 2024 Plan is approved by stockholders and becomes effective, then it is expected that the initial equity awards to be granted to Mr. Jacobs pursuant to the Jacobs Employment Agreement, consisting of time-based restricted stock units relating to 3,832,676 shares of Common Stock and performance-based restricted stock units relating to 7,117,828 shares of Common Stock at target, will be granted under the 2024 Plan and will therefore count against the Plan Share Limit. Please see “Jacobs Employment Agreement” beginning on page [    ] for additional information regarding the initial equity awards to be granted to Mr. Jacobs.

Changes in Capitalization

In the event of any extraordinary dividend or other extraordinary distribution (whether in the form of cash, Common Stock, other securities or other property), recapitalization, rights offering, stock split, reverse stock split, split-up or spin-off, the Committee shall equitably adjust any or all of (a) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or property) with respect to which awards may be granted, including (i) the Plan Share Limit, and (ii) the Plan ISO Limit, and (b) the terms of any outstanding award, including (i) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or property) subject to outstanding awards or to which outstanding awards relate, (ii) the exercise price, if applicable, with respect to any award, and (iii) the performance goals applicable to any award; provided, however, that the Committee shall determine the method and manner in which to effect such equitable adjustment.

In the event that the Committee determines that any reorganization, merger, consolidation, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company, or other similar corporate transaction or event affects the shares of Common Stock (including any change of control) such that an adjustment is determined by the Committee in its discretion to be appropriate or desirable, then the Committee may (A) in such manner as it may deem appropriate or desirable, equitably adjust any or all of (1) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or property) with respect to which awards may be granted, including (i) the Plan Share Limit, and (ii) the Plan ISO Limit, and (2) the terms of any outstanding award, including (i) the number of shares of Common Stock or other securities of the Company (or number and kind of other securities or property) subject to outstanding awards or to which outstanding awards relate, (ii) the exercise price, if applicable, with respect to any award and (iii) the performance goals applicable to any award, (B) if deemed appropriate or desirable by the Committee, make provision for a cash payment to the holder of an outstanding award in consideration for the cancelation of such award, including, in the case of an outstanding ISO, NSO or SAR, a cash payment to the holder of such ISO, NSO or SAR in consideration for the cancelation of such ISO, NSO or SAR in

an amount equal to the excess, if any, of the fair market value (as of a date specified by the Committee) of the shares of Common Stock subject to such ISO, NSO or SAR over the aggregate exercise price of such ISO, NSO or SAR, and (C) if deemed appropriate or desirable by the Committee, cancel and terminate any ISO, NSO or SAR having a per-share exercise price equal to, or in excess of, the fair market value of a share of Common Stock subject to such ISO, NSO or SAR without any payment or consideration therefor.

Substitute Awards

The Committee is permitted to grant awards in assumption of, or in substitution for, outstanding awards previously granted by us or any of the Company affiliates or a company that we acquired or with which we combined. Any shares issued by us through the assumption of or substitution for outstanding awards granted by a company that we acquired do not reduce the aggregate number of shares of Common Stock available for awards under the 2024 Plan, except that awards issued in substitution for ISOs will reduce the number of shares of Common Stock available for ISOs under the 2024 Plan.

Source of Shares

Any shares of Common Stock issued under the 2024 Plan consist, in whole or in part, of authorized and unissued shares or of treasury shares.

Eligible Participants

Any director, officer, employee or consultant (including any prospective director, officer, employee or consultant) of the Company or the Company’s affiliates following the Closing is eligible to participate in the 2024 Plan. As of January 1, 2024, there were 3 non-employee directors, 2 executive officers, approximately 199 employees, and approximately 133 consultants.

Stock Options

The Committee is permitted to grant both ISOs and NSOs under the 2024 Plan. The exercise price for stock options may not be less than the fair market value (as defined in the 2024 Plan) of the Common Stock on the grant date. The Committee may not reprice any stock option granted under the 2024 Plan without the approval of the Company stockholders. All stock options granted under the 2024 Plan are NSOs unless the applicable award agreement expressly stated that the stock option was intended to be an ISO. Subject to the provisions of the 2024 Plan and the applicable award agreement, the Committee determines, at or after the grant of a stock option, the vesting criteria, term, methods of exercise and any other terms and conditions of any stock option. Unless otherwise set forth in the applicable award agreement, each stock option expires upon the earlier of (i) the tenth anniversary of the date the stock option was granted and (ii) three months after the participant who was holding the stock option ceased to be a director, officer, employee or consultant for the Company or one of the Company’s affiliates. The exercise price is permitted to be paid with cash (or its equivalent) or, in the sole discretion of the Committee, with previously acquired shares of the Common Stock or through delivery of irrevocable instructions to a broker to sell the Common Stock otherwise deliverable upon the exercise of the stock option (provided that there was a public market for the Common Stock at such time), or, in the sole discretion of the Committee, a combination of any of the foregoing, provided that the combined value of all cash and cash equivalents and the fair market value of any such shares so tendered to us as of the date of such tender, together with any shares withheld by us in respect of taxes relating to a stock option, was at least equal to such aggregate exercise price.

Stock Appreciation Rights

The Committee is permitted to grant SARs under the 2024 Plan. The exercise price for SARs may not be less than the fair market value (as defined in the 2024 Plan) of the Common Stock on the grant date. The Committee may not reprice any SAR granted under the 2024 Plan without the approval of the Company stockholders. Upon exercise of a SAR, the holder receives cash, shares of the Common Stock, other securities, other awards, other property or a combination of any of the foregoing, as determined by the Committee, equal in value to the excess, if any, of the fair market value of a share of the Common Stock on the date of exercise of the SAR over the exercise price of the SAR. Subject to the provisions of the 2024 Plan (including the minimum vesting period described below) and the applicable award agreement, the Committee determines, at or after the grant of a SAR, the vesting criteria,

term, methods of exercise, methods and form of settlement and any other terms and conditions of any SAR. Unless otherwise set forth in the applicable award agreement, each SAR expires upon the earlier of (a) the tenth anniversary of the date the SAR was granted and (b) three months after the participant who was holding the SAR ceased to be a director, officer, employee or consultant for the Company or one of its affiliates. Under certain circumstances, the Committee has the ability to substitute, without the consent of the affected participant, SARs for outstanding NSOs. No SAR granted under the 2024 Plan could be exercised more than 10 years after the date of grant.

Restricted Shares and Restricted Stock Units

Subject to the provisions of the 2024 Plan, the Committee is permitted to grant restricted shares and RSUs. Restricted shares and RSUs are not permitted to be sold, assigned, transferred, pledged or otherwise encumbered except as provided in the 2024 Plan or the applicable award agreement, except that the Committee may determine that restricted shares and RSUs are permitted to be transferred by the participant for no consideration. Restricted shares may be evidenced in such manner as the Committee determines.

An RSU is granted with respect to one share of the Common Stock or has a value equal to the fair market value of one such share. Upon the lapse of restrictions applicable to an RSU, the RSU may be paid in cash, shares of the Common Stock, other securities, other awards or other property, as determined by the Committee, or in accordance with the applicable award agreement. In connection with each grant of restricted shares, except as provided in the applicable award agreement, the holder is entitled to the rights of a stockholder (including the right to vote and receive dividends) in respect of such restricted shares. The Committee is permitted to, on such terms and conditions as it might determine, provide a participant who holds RSUs with dividend equivalents, payable in cash, shares of the Common Stock, other securities, other awards or other property.

Performance Awards

Subject to the provisions of the 2024 Plan, the Committee is permitted to grant awards under the 2024 Plan that are conditioned on the achievement of performance goals established by the Committee. In its discretion, the Committee sets performance goals that, depending on the extent to which they were met during a specified performance period, determine the number and/or value of performance units that are paid out to the participant. The Committee, in its sole discretion, is permitted to pay earned performance awards in the form of cash, shares of the Common Stock or any combination thereof that has an aggregate fair market value equal to the value of the earned performance units at the close of the applicable performance period. The determination of the Committee with respect to the form and timing of payout of performance units is set forth in the applicable award agreement. The Committee is permitted to, on such terms and conditions as it might determine, provide a participant who holds performance units with dividends or dividend equivalents, payable in cash, shares of the Common Stock, other securities, other awards or other property.

Cash Incentive Awards

Subject to the provisions of the 2024 Plan, the Committee is permitted to grant cash incentive awards to participants. In its discretion, the Committee determines the number of cash incentive awards to be awarded, the duration of the period in which, and any condition under which, the cash incentive awards vest or are forfeited, and any other terms and conditions applicable to the cash incentive awards. Subject to the provisions of the 2024 Plan, the holder of a cash incentive award may receive payment based on the number and value of the cash incentive award earned, which is determined by the Committee, in its discretion, based on the extent to which performance goals or other conditions applicable to the cash incentive award have been achieved.

Other Stock-Based Awards

Subject to the provisions of the 2024 Plan, the Committee is permitted to grant to participants other equity-based or equity-related compensation awards, including vested stock. The Committee is permitted to determine the amounts and terms and conditions of any such awards.

Clawbacks

The Company may claw back awards provided to eligible employees in accordance with any compensation recovery policy maintained by the Company.

Amendment and Termination of the 2024 Plan

Subject to any applicable law or government regulation and to the rules of the applicable national stock exchange or quotation system on which the shares of the Common Stock may be listed or quoted, the 2024 Plan may be amended, modified or terminated by the Company Board without the approval of the Company stockholders, except that stockholder approval is required for any amendment that (a) increases the maximum number of shares of the Common Stock available for awards under the 2024 Plan or increases the maximum number of shares of the Common Stock that could be delivered pursuant to ISOs granted under the 2024 Plan, (b) changes the class of employees or other individuals eligible to participate in the 2024 Plan, (c) amends or decreases the exercise price of any option or SAR, (d) cancels or exchanges any option or SAR at a time when its exercise price exceeds the fair market value of the underlying shares, (e) allows repricing of any option or SAR without stockholder approval, or (f) constitutes a material increase in the benefits to be provided to eligible employees within the meaning of the applicable exchange rules as of the date hereof. Under these provisions, stockholder approval is not required for all possible amendments that might increase the cost of the 2024 Plan. No modification, amendment, or termination of the 2024 Plan that materially and adversely impairs the rights of any participant is effective without the consent of the affected participant, unless otherwise provided by the Committee in the applicable award agreement.

The Committee is permitted to waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel, or terminate any award previously granted under the 2024 Plan, prospectively or retroactively. However, unless otherwise provided by the Committee in the applicable award agreement or in the 2024 Plan, any such waiver, amendment, alteration, suspension, discontinuance, cancellation, or termination that materially and adversely impairs the rights of any participant to any award previously granted is not effective without the consent of the affected participant.

The Committee is authorized to make adjustments in the terms and conditions of awards in the event of any unusual or nonrecurring corporate event (including the occurrence of a change of control of the Company) affecting the Company, any of the Company’s affiliates or the financial statements of the Company or any of the Company’s affiliates, or of changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles or law whenever the Committee, in its discretion, determined that those adjustments were appropriate or desirable, including providing for the substitution or assumption of awards, accelerating the exercisability of, lapse of restrictions on, or termination of, awards or providing for a period of time for exercise prior to the occurrence of such event and, in its discretion, the Committee is permitted to provide for a cash payment, if any, to the holder of an award in consideration for the cancellation of such award.

Change of Control

The 2024 Plan provides that, unless otherwise provided in an award agreement, in the event of a change of control of the Company, awards will be assumed and replaced by awards of equivalent value in connection with the change of control and such assumed awards will have so-called “double trigger” vesting provisions, such that the awards will vest in full and become immediately exercisable upon qualifying terminations of employment during the two-year period following the change of control. However, in the event that awards are not replaced with awards of equivalent value the vesting of the awards will generally accelerate immediately prior to the change of control.

Unless otherwise provided pursuant to an award agreement, a change of control is defined to mean any of the following events, generally:

•        during any period, a change in the composition of a majority of the Company Board, as constituted on the first day of such period, that was not supported by a majority of the Post-Closing Company Board;

•        consummation of certain mergers or consolidations of the Company with any other corporation following which the Company stockholders hold 50% or less of the combined voting power of the surviving entity;

•        the stockholders approve a plan of complete liquidation or dissolution of the Company; or

•        an acquisition by any individual, entity or group of beneficial ownership of a percentage of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors that was equal to or greater than 30%.

Although award agreements may provide for a different definition of change of control than is provided for in the 2024 Plan, except in the case of a transaction described in the third bullet above, any definition of change of control set forth in any award agreement must provide that a change of control will not occur until consummation or effectiveness of a change of control of the Company, rather than upon the announcement, commencement, stockholder approval or other potential occurrence of any event or transaction that, if completed, will result in a change of control of the Company.

Term of the 2024 Plan

The 2024 Plan is being implemented in connection with the Equity Investment and would be effective only upon, and subject to the occurrence of, the Closing. No award may be granted under the 2024 Plan after the tenth anniversary of such effective date.

New Plan Benefits

As of the date of this proxy statement, no awards have been granted under the 2024 Plan. All awards to be made under the 2024 Plan are subject to the future exercise of discretion by the Committee or its delegates, and accordingly are not presently determinable.

Certain U.S. Federal Income Tax Aspects of the 2024 Plan

The following summary describes the U.S. Federal income tax treatment associated with awards granted under the 2024 Plan. The summary is based on the law as in effect on the date of this filing, which is subject to change (possibly retroactively). The summary does not purport to cover federal employment tax or other federal tax consequences that may be associated with the 2024 Plan, nor does it discuss state, local and foreign tax consequences. The tax treatment of participants in the 2024 Plan may vary depending on each participant’s particular situation and may, therefore, be subject to special rules not discussed below. Participants are advised to consult with a tax advisor concerning the specific tax consequences of participating in the 2024 Plan.

Incentive Stock Options

Neither the grant nor the exercise of an ISO results in taxable income to the optionee for regular U.S. federal income tax purposes. However, an amount equal to (i) the per-share fair market value on the exercise date minus the exercise price at the time of grant multiplied by (ii) the number of shares with respect to which the ISO is being exercised will count as “alternative minimum taxable income” which, depending on the particular facts, could result in liability for the “alternative minimum tax” or AMT. If the optionee does not dispose of the shares issued pursuant to the exercise of an ISO until the later of the two-year anniversary of the date of grant of the ISO and the one-year anniversary of the date of the acquisition of those shares, then (a) upon a later sale or taxable exchange of the shares, any recognized gain or loss will be treated for tax purposes as a long term capital gain or loss and (b) the Company will not be permitted to take a deduction with respect to that ISO for federal income tax purposes.

If shares acquired upon the exercise of an ISO were disposed of prior to the expiration of the two-year and one-year holding periods described above (a “disqualifying disposition”), generally the optionee will realize ordinary income in the year of disposition in an amount equal to the lesser of (i) any excess of the fair market value of the shares at the time of exercise of the ISO over the amount paid for the shares or (ii) the excess of the amount realized on the disposition of the shares over the participant’s aggregate tax basis in the shares (generally, the exercise price). A deduction will generally be available to the Company equal to the amount of ordinary income recognized by the optionee. Any further gain realized by the optionee will be taxed as short-term or long-term capital gain and will not result in any deduction by us. A disqualifying disposition occurring in the same calendar year as the year of exercise will eliminate the alternative minimum tax effect of the ISO exercise.

Special rules may apply where all or a portion of the exercise price of an ISO is paid by tendering shares, or if the shares acquired upon exercise of an ISO are subject to substantial forfeiture restrictions. The foregoing summary of tax consequences associated with the exercise of an ISO and the disposition of shares acquired upon exercise of an ISO assumes that the ISO is exercised during employment or within three months following termination of

employment. The exercise of an ISO more than three months following termination of employment will result in the tax consequences described below for NSOs, except that special rules apply in the case of disability or death. An individual’s stock options otherwise qualifying as ISOs will be treated for tax purposes as NSOs (and not as ISOs) to the extent that, in the aggregate, they first become exercisable in any calendar year for stock having a fair market value (determined as of the date of grant) in excess of $100,000.

Nonqualified Stock Options

An NSO (that is, a stock option that does not qualify as an ISO) results in no taxable income to the optionee or deduction to us at the time it is granted. An optionee exercising an NSO will, at that time, realize taxable compensation equal to (i) the per-share fair market value on the exercise date minus the exercise price at the time of grant multiplied by (ii) the number of shares with respect to which the stock option is being exercised. If the NSO was granted in connection with employment, this taxable income will also constitute “wages” subject to withholding and employment taxes. A corresponding deduction will generally be available to the Company. The foregoing summary assumes that the shares acquired upon exercise of an NSO option are not subject to a substantial risk of forfeiture.

Restricted Stock and RSUs

A restricted stock award results in no taxable income to the grantee or deduction to the Company at the time it is granted, unless the award agreement permitted the grantee to elect to realize ordinary income in the year the award is granted in an amount equal to the fair market value of the restricted stock awarded, determined without regard to the restrictions, and the grantee in fact made such election. If no such election has been made, when the restrictions lapse with regard to any installment of restricted stock, the grantee will recognize ordinary income in an amount equal to the fair market value of the shares with respect to which the restrictions lapse. A grantee will not recognize income at the time an award of RSUs is granted. The grantee will generally recognize ordinary income at the time the RSUs vest and are settled, in an amount equal to the cash paid or the fair market value of the shares delivered. If the award of restricted stock or RSUs was granted in connection with employment, this taxable income will also constitute “wages” subject to withholding and employment taxes. A corresponding deduction will generally be available to the Company.

Section 162(m)

In general, Section 162(m) of the Code currently provides that if, in any year, the compensation that is paid to any “covered employee” (as defined under Section 162(m)) exceeds $1,000,000 per person, any amounts that exceed the $1,000,000 threshold will not be deductible by the company for federal income tax purposes.

Section 409A

Section 409A of the Code imposes restrictions on nonqualified deferred compensation. Failure to satisfy these rules results in accelerated taxation, an additional tax to the holder in an amount equal to 20% of the deferred amount, and a possible interest charge. Stock options granted with an exercise price that is not less than the fair market value of the underlying shares on the date of grant will not give rise to “deferred compensation” for this purpose unless they involve additional deferral features. Stock options that are awarded under the 2024 Plan are intended to be eligible for this exception.

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2023 with respect to compensation plans (including individual compensation arrangements) under which the Common Stock is authorized for issuance, aggregated as follows:

Relationship to Other Proposals

Consummation of the proposed Transactions is conditioned on the approval of the Investment Proposal, each of the Charter Proposals and the 2024 Plan Proposal at the Special Meeting. The 2024 Plan Proposal is not conditioned on the approval of any other Proposal set forth in this proxy statement.

Vote Required for Approval

Assuming a quorum is present, the affirmative vote of holders of a majority of the votes properly cast on this Proposal at the Special Meeting is required to approve the 2024 Plan.

THE COMPANY BOARD RECOMMENDS THE STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 9.

PROPOSAL 10:
THE ADJOURNMENT PROPOSAL

General

The Company is asking its stockholders to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Investment Proposal, the Charter Proposals and the 2024 Plan Proposal at the time of the Special Meeting. The Adjournment Proposal is in addition to, and not in lieu of, the authority of the chair of the meeting to adjourn the meeting without a vote of stockholders in appropriate circumstances.

Purpose of Adjournment

In this Proposal, the Company is asking its stockholders to authorize the holder of any proxy solicited by the Company Board to vote in favor of adjourning or postponing the Special Meeting to another time or place for the purpose of soliciting additional proxies. If the stockholders approve this Proposal 10, the Company could adjourn the Special Meeting and use the additional time to solicit additional proxies, including from stockholders who have previously voted.

Relationship to Other Proposals

The Adjournment Proposal is not conditioned on the approval of any other Proposal set forth in this proxy statement. The Transactions are not conditioned on Company stockholders approving the Adjournment Proposal.

Vote Required for Approval

The affirmative vote of holders of a majority of the votes properly cast on the Proposal at the Special Meeting, whether or not a quorum is present, is required to approve Proposal 10.

THE COMPANY BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL 10 to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies.

Other Matters to Come Before the Special Meeting

The business transacted at a Special Meeting is limited to the purposes stated in the notice of the meeting. Accordingly, no other items of business may be properly brought before the Special Meeting. If, however, any other matters properly come before the meeting, the persons named in the proxy will vote the shares represented thereby in accordance with the judgment of management on any such matter.

Important

To ensure the representation of the Company’s stockholders and a quorum for the transaction of business at the Special Meeting, including consideration of the adoption of the Investment Agreement, each Company stockholder is urged to please complete, sign, date and return the enclosed proxy card promptly or otherwise vote by using the toll-free number or visiting the website listed on the proxy card if eligible to do so.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY

The following table sets forth certain information regarding the beneficial ownership of the Common Stock as of January 1, 2024, by: (a) each stockholder who is known to us to own beneficially 5% or more of the outstanding shares of Common Stock; (b) each director of the Company; (c) each executive officer of the Company, and (d) all executive officers and directors of the Company as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of Common Stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of Common Stock.

For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock that such person has the right to acquire within 60 days of January 1, 2024. For purposes of computing the percentage of outstanding shares of Common Stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of January 1, 2024 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership. Unless otherwise identified, the address of the Company’s directors and officers is c/o SilverSun Technologies, Inc. at 120 Eagle Rock Ave, East Hanover, NJ 07936.

____________

*        Less than one percent.

(1)      Based on 5,315,581 shares of Common Stock outstanding as of January 1, 2024.

(2)      Includes 800,000 shares owned by Sharieve Meller Family Trust, Sharieve is Mr. Meller’s wife. Mr. Meller disclaims beneficial ownership of these shares. Also includes 800,000 shares owned by the Mark M. Meller Family Trust. Mr. Meller beneficially owns 406,534 shares.

STOCKHOLDER PROPOSALS

In order to be considered for inclusion in the proxy materials for the Company’s next annual meeting of stockholders, stockholder proposals submitted to the Company in compliance with SEC Rule 14a-8 (which concerns stockholder proposals that are requested to be included in a company’s proxy statement) must be received on or before July 30, 2024; provided, however, that if the date of such annual meeting is more than 30 days before or after December 19, 2024 (the one-year anniversary date of the annual meeting of stockholders held in 2023), then the deadline is a reasonable time before the Company begins to print and send its proxy materials in connection with such annual meeting.

Under the Company’s current bylaws, notice of any stockholder proposal to be submitted outside of the Rule 14a-8 process for consideration at the next annual meeting of stockholders must be received by October 13, 2024; provided, however, that if the date such annual meeting is more than 30 days before or after December 19, 2024, then the deadline is a reasonable time before the Company begins to print and send its proxy materials in connection with such annual meeting. Under the Amended and Restated Bylaws, which will be the Company’s bylaws following the Closing, if it occurs, Company stockholders who wish to submit a proposal that is not intended to be included in the Company’s annual meeting proxy statement but to be presented for consideration at the 2024 annual meeting of stockholders, or who propose to nominate a candidate for election as a director at the 2024 annual meeting of stockholders, will be required to provide written notice of such proposal no earlier than August 21, 2024 and no later than September 20, 2024, unless we change the date of the 2024 annual meeting by more than 30 days before or more than 60 days after December 19, 2024, the anniversary date of the 2023 annual meeting of stockholders, in which case notice must be delivered not earlier than the 120th day prior to the date of such annual meeting and not later than the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. Under the Amended and Restated Bylaws, if a Company stockholder’s written notice is not received between the dates specified above and does not satisfy the additional informational requirements set forth in the Amended and Restated Bylaws, the notice will not be considered properly submitted and will not be acted upon at the 2024 annual meeting of stockholders.

In addition to satisfying the foregoing requirements, to comply with the universal proxy rules, Company stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees, must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than sixty 60 days before the first anniversary of the date of the 2023 annual meeting of stockholders. If the date of the Company’s 2024 annual meeting is changed by more than thirty 30 days from the first anniversary of the date of the 2023 annual meeting of stockholders, then notice must be provided by the later of 60 days prior to the date of the annual meeting or within 10 days of the Company’s first public announcement of the date of the 2024 annual meeting. This deadline under Rule 14a-19 does not supersede or replace any of the timing requirements for advance notice under the Amended and Restated Bylaws. The supplemental notice and information required under Rule 14a-19 is in addition to the advance notice requirements of the Amended and Restated Bylaws and does not extend the deadline specified in the Amended and Restated Bylaws.

Any stockholder who wishes to submit a proposal or an above-referenced notice of solicitation of proxies should submit such proposal by certified mail, return receipt requested. Notices should be directed to: SilverSun Technologies, Inc., 120 Eagle Rock Ave., East Hanover, NJ 07936, Attention: Chief Financial Officer.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

The Company files reports, proxy statements and other information with the SEC as required by the Exchange Act. You can read the Company’s SEC filings, including this proxy statement, over the Internet at the SEC’s website at http://www.sec.gov or the Company’s website at http://ir.silversuntech.com. The Company’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement. If you would like additional copies of this proxy statement or if you have questions about the Equity Investment or the other Transactions or the proposals to be presented at the Special Meeting, you should contact the Company by telephone or in writing:

SilverSun Technologies, Inc.
120 Eagle Rock Avenue
East Hanover, NJ 07936
www.silversuntech.com
(973) 396-1720

Incorporation by Reference

The SEC’s rules allow us to “incorporate by reference” information into this proxy statement, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement, and subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this proxy statement to the extent that a statement contained in this proxy statement modifies or replaces that statement.

We incorporate by reference the documents listed below, and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this proxy statement, between the date of this proxy statement and the termination of the offering of the securities described in this proxy statement (other than, in each case, those documents, or the portions of those documents or exhibits thereto, deemed to be furnished and not filed in accordance with SEC rules). These documents contain important information about the Company and its financial performance.

This proxy statement incorporates by reference the documents set forth below that have previously been filed with the SEC:

•        Our Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 28, 2023.

•        Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed on November 14, 2023.

•        Our Proxy Statement for the 2023 annual meeting, filed on November 27, 2023.

•        Our Current Reports on Form 8-K, filed on March 15, 2023, July 12, 2023, August 11, 2023, September 8, 2023, October 16, 2023, November 15, 2023, December 4, 2023, and December 19, 2023.

Information furnished under Item 2.02 or Item 7.01 of any Current Report on Form 8-K, including related exhibits, is not and will not be incorporated by reference into this proxy statement, unless expressly stated otherwise therein.

All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, including all such documents we may file with the SEC after the date of this proxy statement and prior to the date of the Special Meeting, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this proxy statement and deemed to be part of this proxy statement from the date of the filing of such reports and documents.

You may request a free copy of any of the documents incorporated by reference in this proxy statement (other than exhibits, unless they are specifically incorporated by reference in the documents) by writing or telephoning us at the following address:

SilverSun Technologies, Inc.
120 Eagle Rock Ave
East Hanover, NJ 07936
(973) 396-1720

Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this proxy statement/and any accompanying supplement.

If you would like to request documents, please do so by no later than five business days before the date of the Special Meeting.

*                *                *

THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. THE COMPANY HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED [    ], 2024. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE (OR AN EARLIER DATE IF SO INDICATED IN THIS PROXY STATEMENT), AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.

Annex A

INVESTMENT AGREEMENT

among

JACOBS PRIVATE EQUITY II, LLC,

THE OTHER INVESTORS PARTY HERETO

and

SILVERSUN TECHNOLOGIES, INC.

Dated as of December 3, 2023

TABLE OF CONTENTS

GLOSSARY

INVESTMENT AGREEMENT dated as of December 3, 2023 (this “Agreement”), by and among JACOBS PRIVATE EQUITY II, LLC, a Delaware limited liability company (the “Principal Investor”), each of the other Investors listed on Schedule I hereto (including by joinder pursuant to Section 8.08) (including the Principal Investor, each an “Investor,” and together, the “Investors”) and SilverSun Technologies, Inc., a Delaware corporation (the “Company”).

WHEREAS, each Investor wishes to purchase, and the Company wishes to sell to each Investor, (a) that number of shares of the Company’s convertible perpetual preferred stock having the terms set forth in Exhibit A to this Agreement (the “Preferred Stock”) set forth opposite such Investor’s name in Schedule I to this Agreement, and (b) warrants in the form of Exhibit B to this Agreement (the “Warrants”) representing the right to purchase the number of shares of the Company’s common stock, par value $0.00001 per share (the “Company Common Stock”), set forth opposite such Investor’s name in Schedule I to this Agreement, in each case for the price and upon the terms and conditions set forth in this Agreement (the Preferred Stock and the Warrants, collectively, the “Securities”);

WHEREAS, the Company and the Investors are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the Securities Act of 1933, as amended, and the rules promulgated by the SEC thereunder (collectively, the “Securities Act”), including Section 4(a)(2) of the Securities Act;

WHEREAS, concurrently with the Closing, the parties hereto will execute and deliver the registration rights agreement (the “Registration Rights Agreement”) containing the terms set forth in Exhibit C to this Agreement, pursuant to which the Company will agree to provide certain registration rights under the Securities Act with respect to the Securities and the securities issuable upon conversion or exercise thereof;

WHEREAS, the parties hereto desire that, prior to the Closing, for the Company to amend and restate its (a) certificate of incorporation to be in the form set forth on Exhibit D to this Agreement or as otherwise directed by the Principal Investor in writing prior to the mailing of the Proxy Statement (the “Fifth A&R Certificate of Incorporation”), and (b) bylaws to be in the form directed by the Principal Investor in writing prior to the Closing (the “A&R Bylaws”);

WHEREAS, the Company intends to separate (the “Separation”) its business application, technology and consulting businesses (including the business of providing business management applications and technologies and professional consulting services, and its cyber defense products and security services business) into SilverSun Technologies Holdings, Inc., a Nevada corporation and direct wholly owned subsidiary of the Company (“SpinCo”) and, seven (7) days following the Record Date (such seven (7)-day period, the “Post-Closing Spin-Off Period”), distribute (the “Distribution” and the date of such distribution, the “Distribution Date”) all of the issued and outstanding shares of common stock of SpinCo (such common stock, the “SpinCo Common Stock”) to each stockholder of the Company as of the close of business on the date that is one (1) day prior to the Closing Date (the “Record Date,” and the Separation and the Distribution, the “Spin-Off” ), pursuant to that certain Separation and Distribution Agreement, by and between the Company and SpinCo, in the form attached hereto as Exhibit I (the “Separation Agreement”);

WHEREAS, in connection with the Spin-Off, the Company intends to enter into a Tax Matters Agreement, by and between the Company and SpinCo, in the form attached hereto as Exhibit J (the “Tax Matters Agreement”);

WHEREAS, in connection with the Spin-Off, the Company intends to enter into an Employee Matters Agreement, by and between the Company and SpinCo, in the form attached hereto as Exhibit K (the “Employee Matters Agreement”);

WHEREAS, in connection with declaring the Distribution, the Company shall declare a cash dividend, in an amount per share of Company Common Stock equal to $2,500,000 divided by the number of shares of Company Common Stock issued and outstanding as of the Record Date, to the Company’s stockholders of record as of the Record Date (the “Cash Dividend”), to be funded by proceeds to be received by the Company from the Equity Investment and to be paid on the Distribution Date;

WHEREAS, the Board of Directors of the Company has unanimously (a) approved, adopted and declared advisable this Agreement and the transactions contemplated by this Agreement, including the Equity Investment, Fifth A&R Certificate of Incorporation, A&R Bylaws, the Spin-Off and the Cash Dividend, (b) declared that it is in the best interests of the Company and the stockholders of the Company that the Company enter into this Agreement and consummate the Equity Investment, Fifth A&R Certificate of Incorporation, A&R Bylaws, the Spin-Off and the Cash Dividend, on the terms and subject to the conditions set forth in this Agreement, and (c) recommended to the stockholders of the Company that they vote in favor of the approval of (i) the Equity Investment and all of the other

transactions contemplated by this Agreement, (ii) the Fifth A&R Certificate of Incorporation (including the Reverse Split contemplated by the Fifth A&R Certificate of Incorporation) and (iii) any equity incentive plan proposed by the Principal Investor prior to the mailing of the definitive Proxy Statement;

WHEREAS, concurrently with the execution and delivery of this Agreement and as a condition to the Investors’ willingness to enter into this Agreement, certain stockholders of the Company are entering into a voting and support agreement with the Principal Investor in the form attached hereto as Exhibit F (the “Voting and Support Agreement”), pursuant to which, among other things, such stockholders will agree to vote all of their shares of Company Common Stock vote in favor of the approval of (a) the Equity Investment and all of the other transactions contemplated by this Agreement, (b) the Fifth A&R Certificate of Incorporation (including the Reverse Split contemplated by the Fifth A&R Certificate of Incorporation) and (c) any equity incentive plan proposed by the Principal Investor pursuant to this Agreement;

WHEREAS, concurrently with the execution and delivery of this Agreement and as a condition to the Investors’ willingness to enter into this Agreement, the Company and Mark Meller entered into a letter agreement in the form attached hereto as Exhibit L (the “Meller Letter Agreement”) pursuant to which, among other things, the Meller Employment Agreement will automatically be terminated effective immediately prior to the Closing; and

WHEREAS, at the Closing, the Investors will enter into a stockholders agreement in the form attached hereto as Exhibit G (the “Stockholders Agreement”).

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I
THE EQUITY INVESTMENT

SECTION 1.01. Purchase. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), at the Closing, the Company shall issue and sell to each Investor, and each of the Investors, severally and not jointly (subject to Section 2.04), shall purchase from the Company, the shares of Preferred Stock and the Warrants in the respective amounts set forth opposite such Investor’s name on Schedule I hereto (such sale, issuance and purchase, the “Equity Investment”).

SECTION 1.02. Principal Investor. (a) The Principal Investor hereby is appointed, authorized and empowered to act on behalf of each of the other Investors, during the period from and including the date of this Agreement through and including the Closing, in connection with and to facilitate this Agreement, the Equity Investment and the other transactions contemplated by this Agreement, and in connection with the activities to be performed on behalf of the Investors under this Agreement, for the purposes and with the powers and authority hereinafter set forth in this Section 1.02, which shall include the power and authority:

(i) to agree to such amendments or modifications hereto as the Principal Investor, in its sole discretion, may deem necessary or desirable (other than any amendment or modification increasing the purchase obligation of any other Investor with respect to the Equity Investment or modifying in any material respect the terms of the Securities as contemplated hereby, or adversely affecting the terms of this Agreement as they apply to another Investor in a manner disproportionate to the effect on the Investors generally), and each Investor hereby agrees to any such amendment or modification;

(ii) to execute and deliver such waivers and consents in connection with this Agreement, the Equity Investment and the other transactions contemplated by this Agreement as the Principal Investor, in its sole discretion, may deem necessary or desirable, and each Investor hereby agrees to any such waiver or consent (subject to the parenthetical in Section 1.02(a)(i));

(iii) to make, execute, acknowledge and deliver, on behalf of itself and the other Investors, all such other agreements, and, in general, to do any and all things and to take any and all actions that the Principal Investor, in its sole discretion, may consider necessary, proper or convenient in connection with this Agreement, the Equity Investment and the other transactions contemplated by this Agreement (subject to the parenthetical in Section 1.02(a)(i));

set forth opposite the name of such Investor on Schedule I hereto, which is referred to as the Equity Investment, and (b) each Investor shall pay to the Company, in respect of the shares of Preferred Stock and Warrants set forth opposite the name of such Investor on Schedule I hereto, such Investor’s applicable purchase price for such shares of Preferred Stock and Warrants as set forth on Schedule I hereto (the aggregate of such amounts, the “Purchase Price”).

SECTION 2.03. Actions to be Taken prior to or at the Closing.

(a) At least two days prior to the Closing, the Company shall file with the Secretary of State of the State of Delaware the Fifth A&R Certificate of Incorporation and have the Fifth A&R Certificate of Incorporation become effective in accordance with the laws of the State of Delaware as of 11:59 p.m., New York Time, on the date that is two (2) days prior to the Closing.

(b) To effect the purchase and sale of Securities as set forth in Section 2.02 and the other transactions contemplated by this Agreement, upon the terms and subject to the conditions set forth in this Agreement, at the Closing:

(i) The Company shall issue and deliver to each Investor a certificate or certificates, registered in such names as the applicable Investor may designate in writing to the Company (through the Principal Investor) no less than three (3) business days prior to the Closing, representing the shares of Preferred Stock and the Warrants to be issued and delivered to such Investor as set forth in Schedule I hereto, against payment in full of such Investor’s applicable portion of the Purchase Price as set forth on Schedule I hereto.

(ii) Each Investor shall cause a wire transfer in same day funds to an account of the Company, which account shall be designated in writing by the Company to the Principal Investor no less than three (3) business days prior to the Closing, in an amount equal to such Investor’s applicable portion of the Purchase Price as set forth in Schedule I hereto.

(iii) The Board of Directors of the Company shall be reconstituted as provided in Section 5.06, and such reconstituted Board of Directors of the Company shall appoint Bradley S. Jacobs as the Chairman of the Board of Directors of the Company and as Chief Executive Officer of the Company.

(iv) Each of the Company and the Investors shall take all such other actions required hereby to be performed and deliver all other documents, certificates and other items required to be delivered on its part, prior to or on the Closing Date, including delivering the documents and satisfying the conditions set forth in Article VI. All such documents and instruments delivered to any party pursuant hereto shall be in form and substance, and shall be executed in a manner, reasonably satisfactory to such party and its counsel.

SECTION 2.04. Defaulting Investor. Notwithstanding anything to the contrary (but subject to the satisfaction or (to the extent permitted by Law) waiver of the conditions to Closing set forth in this Agreement), in the event that any Investor (other than the Principal Investor) shall breach its obligation to pay to the Company at the Closing its applicable portion of the Purchase Price in accordance with Section 2.03, the Principal Investor shall, at its election, either purchase from the Company or assign to another Person the rights and obligations to purchase from the Company the shares of Preferred Stock and the Warrants otherwise allocable to such defaulting Investor in accordance with this Agreement, and the Company shall issue and deliver such shares of Preferred Stock and Warrants according to such election. In the event that the Principal Investor shall become obligated to purchase shares of Preferred Stock and Warrants otherwise allocable to a defaulting Investor in accordance with the foregoing sentence, then the Principal Investor shall have the right, in its sole discretion, upon written notice to the Company, to delay the Closing for a period of up to five (5) business days. This Section 2.04 shall be without prejudice to any rights or remedies that the Principal Investor may have against the defaulting Investor in respect of such breach.

SECTION 2.05. Potential Acquisitions and Contributions. The parties hereto acknowledge and agree that, without limiting the obligations of the Company under Section 5.09, the Principal Investor may consummate an acquisition of a business or businesses prior to the Closing, and at (or substantially contemporaneously with) the Closing, at the sole election of the Principal Investor, the Principal Investor may contribute such business or businesses to the Company and the Company shall cooperate with the Principal Investor to effectuate any such contribution. As part of such contribution, the Company shall issue to the Principal Investor, and as directed by the Principal Investor, shares of Preferred Stock and Warrants with a value equal to the amount paid by the Principal Investor to purchase

of the State of Delaware, (v) any filings required under the rules and regulations of the Nasdaq and (vi) such other consents, approvals, orders, authorizations, registrations, declarations, filings and notices the failure of which to be obtained or made, individually or in the aggregate, have not had and not reasonably be expected to have a Material Adverse Effect.

(d) Corporate Authorization. The Company has all necessary corporate power and authority to enter into this Agreement and, subject to the receipt of the Stockholder Approvals, to consummate the Equity Investment, the Cash Dividend and the other transactions contemplated by this Agreement. The Board of Directors of the Company has unanimously (i) approved and declared advisable this Agreement, the Fifth A&R Certificate of Incorporation, the A&R Bylaws, the Equity Investment, the Cash Dividend and the other transactions contemplated by this Agreement, (ii) declared that it is in the best interests of the stockholders of the Company that the Company enter into this Agreement and to consummate the Equity Investment, the Cash Dividend and the other transactions contemplated by this Agreement, on the terms and subject to the conditions set forth in this Agreement, and (iii) recommended to the stockholders of the Company that they vote in favor of the approval of (A) the Equity Investment and all of the other transactions contemplated by this Agreement, (B) the Fifth A&R Certificate of Incorporation (including the Reverse Split contemplated by the Fifth A&R Certificate of Incorporation) and (C) any equity incentive plan proposed by the Principal Investor pursuant to this Agreement prior to the mailing of the definitive Proxy Statement. This Agreement has been duly and validly executed and delivered by the Company and constitutes a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms (except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). The Stockholder Approvals are the only votes of the holders of any class or series of capital stock of the Company required to approve and adopt this Agreement, the Fifth A&R Certificate of Incorporation (including the Reverse Split contemplated by the Fifth A&R Certificate of Incorporation), the A&R Bylaws, the Equity Investment and the other transactions contemplated by this Agreement. Prior to the execution of the Voting and Support Agreement, the Board of Directors of the Company approved the Voting and Support Agreement and the transactions contemplated by the Voting and Support Agreement. Prior to the Closing, the Board of Directors of the Company will approve the Stockholders Agreement and the transactions contemplated by the Stockholders Agreement.

(e) Non-Contravention.

(i) Subject to obtaining the Stockholder Approvals, the receipt of the consents, approval, authorizations and other requirements set forth in Section 3.01(c), and except as set forth on Section 3.01(e) of the Company Letter, the execution, delivery and performance of this Agreement by the Company and the consummation and implementation of the Equity Investment and the other transactions contemplated by this Agreement, including the Spin-Off, do not and will not (A) contravene or conflict with, or result in any violation or breach of, any provision of (1) the Company Organizational Documents or (2) the comparable organizational or governing documents of any of the Subsidiaries of the Company, (B) contravene or conflict with, or result in any material violation or breach of, any Permit or Law applicable to Company or its Subsidiaries or by which any assets of the Company or its Subsidiaries are bound, assuming that all Governmental Authorizations described in Section 3.01(c) have been obtained or made, (C) result in any violation, termination, acceleration of any material obligation, cancellation or breach of, or constitute a default (with or without notice or lapse of time or both) or require any notice or consent under, any Material Contracts or Company Real Property Lease to which the Company or any of its Subsidiaries is a party or by which any assets of the Company or its Subsidiaries are bound or (D) result in the creation of any Liens (other than Permitted Liens) upon any of the assets of the Company or its Subsidiaries, except, in the case of clauses (B), (C) and (D), as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. None of the Company nor any of its Subsidiaries has received any written notice from any Governmental Entity regarding any actual, alleged, possible or potential violation by, or failure of the Company or any of its Subsidiaries to comply with any Permit or Law.

(vii) Section 3.01(f)(vii) of the Company Letter sets forth a true, complete and correct list of all persons who, as of the date of this Agreement, hold Company Stock Options, indicating, with respect to each such holder, the number of shares of Company Common Stock subject to such option, the exercise price of each Company Stock Option, the date of grant, the vesting schedule and the expiration date.

(g) Subsidiaries.

(i) Section 3.01(g)(i) of the Company Letter sets forth a complete and accurate list of each Subsidiary of the Company. The Company has made available to the Principal Investor the organizational documents of each Subsidiary of the Company.

(ii) Each of the Subsidiaries of the Company is wholly owned by the Company, directly or indirectly, free and clear of any Liens (other than restrictions on transfer arising under applicable securities laws). The Company does not own, directly or indirectly, any capital stock or other equity securities of, or any other securities convertible or exchangeable into or exercisable for capital stock or other equity securities of, any person other than the Subsidiaries of the Company. The Company has not agreed to, is not obligated to make, and is not bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to, any person.

(h) Business Operations. Except as set forth on Section 3.01(h) or Section 3.01(n) of the Company Letter, the Company (i) has not owned and does not own any assets or property (other than equity interests of its wholly-owned Subsidiaries), (ii) has not had and does not have any employees, (iii) except for this Agreement, is not and has not been a party to, and does not have and, following the Spin-Off, will not have, any obligations under, any Contracts, (iv) has not conducted and does not conduct any business (other than the ownership of equity interests of its Subsidiaries) and (v) except: (A) for Taxes accrued and not yet payable, (B) for obligations under the Company Organizational Documents applicable to the Company, and (C) as contemplated by this Agreement, does not have any indebtedness for borrowed money or material Liabilities.

(i) SEC Filings.

(i) The Company has filed with or furnished to the SEC (subject to extensions pursuant to Exchange Act Rule 12b-25) each report, statement, schedule, form, certification or other document (including exhibits and all other information incorporated in such documents) or filing required by applicable Law to be filed with or furnished by the Company to the SEC in a timely manner, except for the filings listed in Section 3.01(i) of the Company Letter. The Company has delivered to the Principal Investor accurate and complete copies of all reports, statements (including registration and proxy statements), schedules, forms, certifications or other documents (including exhibits and all other information incorporated in such documents) filed by the Company with the SEC since December 31, 2018, other than such documents that can be obtained on the SEC’s website at www.sec.gov. No Subsidiary of the Company is required to file or furnish any report, statement, schedule, form, registration statement, proxy statement, certification or other document with, or make any other filing with, or furnish any other material to, the SEC.

(ii) As of its filing date (or, if amended, supplemented, modified or superseded by a filing prior to the date of this Agreement, on the date of such filing), each Filed SEC Document complied, and each such report, statement, schedule, form, certification or other document or filing required by applicable Law to be filed with or furnished by the Company to the SEC that was filed subsequent to the date of this Agreement and prior to the Closing Date will comply in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC promulgated that are applicable to each such Filed SEC Document.

(iii) As of its filing date (or, if amended, supplemented, modified or superseded by another filing prior to the date of this Agreement, on the date of such filing), each Filed SEC Document (not including any Filed SEC Document filed with the SEC as an exhibit to an SEC filing) filed on or prior to the date of this Agreement did not, and each such report, statement, schedule, form, certification or other document or filing required by applicable Law to be filed with or furnished by the Company to the SEC that was filed subsequent to the date of this Agreement and prior

the case of any unaudited interim financial statements, to normal, not material year-end adjustments and the absence of notes). The Company maintains and since January 1, 2018, has maintained, disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the Exchange Act. Such disclosure controls and procedures are reasonably designed to ensure that all material information relating to the Company and its Subsidiaries is made known to the Company’s principal executive officer and its principal financial officer by others within the Company and its Subsidiaries, to allow timely decisions regarding required disclosure, and such disclosure controls and procedures are effective as of September 30, 2023. The Company maintains “internal control over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) reasonably sufficient to provide reasonable assurance (1) regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, (2) that receipts and expenditures are executed only in accordance with the authorization of management and the Board of Directors of the Company, and (3) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of the Company’s properties or assets that could have a material effect on the financial statements. The Company has disclosed to the Company’s auditors and the audit committee of the Board of Directors of the Company and made available to the Principal Investor prior to the date of this Agreement any record with respect to (x) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s or any of its Subsidiaries’ ability to record, process, summarize and report financial information in any material respect and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting, in each case, if any, since January 1, 2018. From January 1, 2018, until the date of this Agreement, to the knowledge of the Company, neither the Company nor any of its Subsidiaries has received any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or its Subsidiaries or their respective internal accounting controls.

(ii) To the knowledge of the Company, the Company’s independent registered accounting firm has, since January 1, 2018 been: (A) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act); (B) “independent” with respect to the Company within the meaning of Regulation S-X under the Exchange Act; and (C) in compliance with subsections (g) through (l) of Section 10A of the Exchange Act and the rules and regulations promulgated by the SEC and the Public Company Accounting Oversight Board under the Exchange Act.

(iii) There have been no investigations regarding financial reporting or accounting policies and practices discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, principal accounting officer, general counsel or similar officer of the Company, the Board of Directors of the Company or any committee of the Board of Directors of the Company, other than ordinary course audits or reviews of accounting policies and practices or internal controls over financial reporting required by the Sarbanes-Oxley Act.

(iv) Each director and executive officer of the Company has filed with the SEC on a timely basis all statements required by Section 16(a) of the Exchange Act and the rules and regulations promulgated under the Exchange Act. The Company has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.

(k) Undisclosed Liabilities. Except as set forth in Section 3.01(k) of the Company Letter, there are no Liabilities of the Company or any of its Subsidiaries, whether or not such Liabilities are required to be recorded or reflected on a balance sheet prepared in accordance with GAAP, other than:

(i) Liabilities reflected or reserved against in the consolidated balance sheet of the Company and its consolidated Subsidiaries as of June 30, 2023 (the “Balance Sheet Date”) or the related footnotes set forth in the Filed SEC Documents;

(ii) Liabilities incurred since the Balance Sheet Date in the ordinary course of business consistent with past practice (none of which is a Liability for tort, breach of contract or environmental Liability);

(iii) Liabilities incurred in connection with the Equity Investment and the other transactions contemplated by this Agreement or as expressly required by this Agreement; and

(iv) Liabilities that would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries.

(l) Absence of Certain Changes. Since December 31, 2022 to the date of this Agreement, (i) the business of the Company and each of its Subsidiaries has been conducted, in all material respects, in the ordinary course of business consistent with past practice, (ii) there has not been any Material Adverse Effect and (iii) there has not been, and there has not occurred, any event, condition, action or effect that, if taken after the date of this Agreement, would constitute a breach of Section 4.01.

(m) Litigation. Except as set forth in Section 3.01(m) of the Company Letter, (i) there are no and, in the last five (5) years there have not been any, Legal Actions pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries or any of its or their assets or properties that have been or would reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries and (ii) there are no Orders outstanding against the Company or any of its Subsidiaries or any of its or their assets or properties that have been or would reasonably be expected to be, individually or in the aggregate, material to the Company or its Subsidiaries.

(n) Material Contracts.

(i) Section 3.01(n)(i) of the Company Letter sets forth a list of each of the following Contracts to which, as of the date of this Agreement, the Company or its Subsidiaries is a party or to which its assets are subject (each, a “Material Contract”):

(A) each “material contract” (as described in Item 601(b)(10) of Regulation S-K of the SEC as determined as of the date of this Agreement, other than those agreements and arrangements described in Item 601(b)(10)(iii)) with respect to the Company;

(B) each Contract (1) that includes obligations not to (or that otherwise restricts or limits the ability of the Company or its Subsidiaries or affiliates to) compete or engage in any line of business or geographic area or (2) that includes obligations that restrict the ability of the Company or its Subsidiaries or affiliates to conduct business in any geographic area;

(C) each Contract (other than any Company Benefit Plan) providing for or resulting in payments by the Company or any of its Subsidiaries that exceeded $100,000 in the calendar year ended December 31, 2022, or that is reasonably likely to require, during the remaining term of such Contract, annual payments by the Company or any of its Subsidiaries that exceed $100,000;

(D) all Contracts granting to any person an option or a first refusal, first offer or similar preferential right to purchase or acquire any material assets of the Company or its Subsidiaries;

(E) all Contracts (1) for the granting or receiving of a license, sublicense, covenant not to sue or similar right with respect to Company Intellectual Property material to the business of the Company and its Subsidiaries (2) under which any person is obligated to pay or has the right to receive a royalty, license fee, franchise fee or similar payment in which it is reasonably expected to pay or receive a royalty, license fee, franchise fee or similar payment in excess of $100,000, or (3) that materially restricts the Company’s or its Subsidiaries’ right to use or exploit any Company Owned Intellectual Property, in each case of clause (1) and clause (2), other than agreements with employees, non-exclusive licenses granted to the Company’s or its Subsidiaries’ customers, and non-exclusive licenses to commercially available, off-the-shelf Software or information technology services that have been granted on standardized, generally available terms;

(F) all partnership, joint venture or other similar agreements or arrangements;

(G) any agreement with any director, officer or stockholder of the Company or any Subsidiary;

(H) any agreement relating to indebtedness for borrowed money or the deferred purchase price of any asset or property (in either case, whether incurred, assumed, guaranteed or secured by any asset), except any such agreement with an aggregate outstanding principal amount not exceeding $100,000;

(I) any agreement for the disposition or acquisition by the Company or any of its Subsidiaries, with material obligations of the Company or its Subsidiaries (other than confidentiality obligations) remaining to be performed or Liabilities of the Company or its Subsidiaries continuing after the date of this Agreement, of any business or any assets other than in the ordinary course of business consistent with past practice;

(J) any agreement restricting or limiting the payment of dividends or the making of distributions to stockholders, including intercompany dividends or distributions other than such restrictions or limitations that are required by applicable Law; and

(K) all agreements with any Governmental Entity.

(ii) Intentionally Omitted.

(iii) A true and complete copy of each Material Contract (including any related amendments) entered into prior to the date of this Agreement has been filed as an exhibit (by reference or otherwise) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 28, 2023 disclosed by the Company in a subsequent Filed SEC Document or made available to the Principal Investor prior to the date of this Agreement. Each Material Contract is a valid and binding agreement of the Company or its applicable Subsidiary, except where the failure to be valid and binding has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Except as has not been and would not be material to the Company or its Subsidiaries, (A) neither the Company or such Subsidiary nor, to the knowledge of the Company, any other party, is in breach of or default under any such Material Contract, (B) as of the date of this Agreement, there are no material disputes with respect to any such Material Contract and (C) as of the date of this Agreement, no party under any Material Contract has given written notice of its intent to terminate or otherwise seek a material amendment to such Material Contract.

(o) Benefit Plans.

(i) Section 3.01(o)(i) of the Company Letter lists all material Company Benefit Plans. For purposes of this Agreement a “Company Benefit Plan” is, whether or not written, (A) any “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (B) any compensation, stock purchase, stock option, equity or equity-based compensation, retention, severance, employment, individual consulting, change-of-control, transaction bonus, bonus, incentive, deferred compensation and other employee benefit plan, agreement, arrangement, program or policy, whether or not subject to ERISA, (C) any plan, agreement, program or policy providing vacation benefits, medical, dental, vision or prescription benefits, disability or sick leave benefits, life insurance, employee assistance program, supplemental unemployment benefits and post-employment or retirement benefits (including compensation or pension benefits), in each case (1) under which any current or former director, manager, officer, employee or individual independent contractor of the Company or any of its Subsidiaries has any right to benefits and for which the Company or any of its Subsidiaries has any Liability or (2) which are maintained, sponsored or contributed to by the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries makes or is required to make contributions or with respect to which the Company or any of its Subsidiaries has any material Liability.

(ii) With respect to each material Company Benefit Plan, if applicable, the Company has made available to the Principal Investor prior to the date of this Agreement true and complete copies of (A) such Company Benefit Plan, including the current plan document and any amendments thereto and for any unwritten plan, a summary of the material terms, (B) the most recent summary plan description, (C) the most recent annual report on Form 5500 (including all schedules), (D) if the Company Benefit Plan is intended to qualify under Section 401(a) of the Code, the most recent determination or opinion letter received from the IRS, and (E) all material non-routine correspondence with respect to any Company Benefit Plan with a Governmental Entity within the last three (3) years.

(iii) Neither the Company nor any of its Subsidiaries maintains, sponsors, or contributes to (or is required to sponsor, maintain, or contribute to), or has within the preceding six (6) years maintained, sponsored or contributed to, or has any Liability, including on account of an ERISA Affiliate, under or with respect to, (A) any “defined benefit plan” (as defined in Section 3(35) of ERISA) that is subject to Section 412 or Section 430 of the Code or Title IV of ERISA, (B) any “multiemployer plan” (as defined in Section 3(37) of ERISA and 4001(a)(3) of ERISA), (C) any “multiple employer plan” (within the meaning of Section 210 of ERISA or Section 413(c) of the Code) or that is or has been subject to Section 4063 or 4064 of ERISA, or (D) any “multiple employer welfare arrangement” (as defined in Section 3(40)(A) of ERISA). Neither Company nor any of its Subsidiaries has any Liability as a result of any time being considered a single employer with any other person under Section 414 of the Code. No Company Benefit Plan is a voluntary employee benefit association under Section 501(c)(9) of the Code. Neither the Company nor any of its Subsidiaries has engaged in any transaction described in sections 4069 or 4212(c) of ERISA or to which Section 4204 of ERISA applied.

(iv) Each Company Benefit Plan is in compliance in all material respects with all applicable requirements of ERISA, the Code and other applicable Laws and has been administered in all material respects in accordance with its terms and such Laws. With respect to each Company Benefit Plan that is intended to qualify under Section 401(a) of the Code, (A) such Company Benefit Plan has received a favorable determination or opinion letter has been issued by the IRS with respect to such qualification, (B) its related trust has been determined to be exempt from taxation under Section 501(a) of the Code and (C) to the knowledge of the Company, no event has occurred since the date of such qualification or exemption that would reasonably be expected to adversely affect such qualification or exemption. All contributions, premiums and expenses to or in respect of each Company Benefit Plan have been paid in full or, to the extent not yet due, have been accrued on the applicable financial statements of the Company in accordance with GAAP. Neither the Company nor any trustee, administrator or other third-party fiduciary and/or party in interest has engaged in any breach of fiduciary responsibility or any prohibited transaction to which Section 406 or ERISA or Section 4975 of the Code applies and which would subject, or impose an indemnification obligation on, the Company or any of its Subsidiaries with respect to the Tax or penalty on prohibited transactions imposed by Section 4975 of the Code or Section 406 of ERISA.

(v) Neither the Company nor any of its Subsidiaries has any Liability with respect to, and no Company Benefit Plan provides, retiree or post-employment health, medical, life insurance or death benefits to current or former employees or other individual service providers of the Company or any of its Subsidiaries beyond their retirement or other termination of service, other than coverage mandated by COBRA or Section 4980B of the Code, or any similar state group health plan continuation Law, the premium cost of which is fully paid by such current or former employees or other individual service providers or their dependents. No Company Benefit Plan is maintained (or governed by the Laws) outside of the United States or provides benefits to any service provider who is based or provides substantial services (in whole or in part) outside of the United States.

(vi) Neither the execution and delivery of this Agreement nor the consummation of the Equity Investment and the other transactions contemplated by this Agreement could (either alone or in combination with another event) (A) result in any payment from the Company or any of its Subsidiaries becoming due, or increase the amount of any compensation due, to any current or former employee, director, manager or individual independent contractor of the Company or any of its Subsidiaries, (B) increase any benefits otherwise payable under any Company Benefit Plan,

(C) result in the acceleration of the time of payment, vesting of any compensation or benefits or forgiveness of indebtedness with respect to any current or former employee, director, manager or individual independent contractor of the Company or any of its Subsidiaries, (D) result in any funding, through a grantor trust or otherwise, of any compensation or benefits to any current or former employee, director, manager or individual independent contractor of the Company or any of its Subsidiaries under any Company Benefit Plan or (E) result in any breach or violation of or default under or limit the Company’s right to amend, modify or terminate any Company Benefit Plan.

(vii) Neither the execution and delivery of this Agreement nor the consummation of the Equity Investment and the other transactions contemplated by this Agreement could (either alone or in combination with another event) cause any amount to fail to be deductible by reason of Section 280G of the Code or be characterized as an “excess parachute payment” (as such term is defined in Section 280G(b)(1) of the Code).

(viii) Each Company Benefit Plan that constitutes in any part a “nonqualified deferred compensation” (as defined in Section 409A(d)(1) of the Code) has been operated and maintained, in form and operation, in all respects in accordance with Section 409A of the Code and applicable guidance of the Department of the Treasury and the Internal Revenue Service, and no amount under any such Company Benefit Plan has been, is or is reasonably expected to be subject to any Tax set forth under Section 409A(a)(1)(B) of the Code. No person is entitled to any gross-up, make-whole or other additional payment from the Company or any of its Subsidiaries in respect of any Tax (including taxes imposed under Section 4999 or 409A of the Code).

(ix) Since January 1, 2018, there have been no pending, or, to the knowledge of the Company, threatened, material claims, investigations, audits or litigation against or involving any Company Benefit Plan, other than ordinary claims for benefits by participants and beneficiaries.

(x) Each Company Benefit Plan can be terminated at any time for any or no reason by the Company or any of its Subsidiaries without any past, present or future Liability or obligation to the Company or any of its Subsidiaries (other than solely administrative expenses related to such termination). No consents, approvals or other actions of any third party (other than solely administrative processes) are required to effect the actions contemplated by the Separation Agreement with respect to the Company Benefit Plans.

(p) Labor Relations.

(i) Since January 1, 2018, (A) no employee of the Company or any of its Subsidiaries is or has been represented by a union and, to the knowledge of the Company, no union organizing efforts are currently being, or have been, conducted, (B) neither the Company nor any of its Subsidiaries is or has been a party to, or is currently negotiating any entry into, any collective bargaining agreement or other labor Contract, and (C) there have been no actual or, to the knowledge of the Company, threatened strike, picket, work stoppage, work slowdown or other organized labor dispute in respect of the Company or its Subsidiaries.

(ii) The Company and each of its Subsidiaries is, and has been since January 1, 2018, in compliance in all material respects with all Laws regarding labor, employment and employment practices, including but not limited to all Laws relating to: (A) the hiring, promotion, assignment and termination of employees (including but not limited to timing and usage of employment applications, drug testing and pre-employment testing); (B) discrimination; (C) harassment; (D) retaliation; (E) equal employment opportunities; (F) disability; (G) labor relations; (H) wages and hours; (I) the Fair Labor Standards Act of 1938 and applicable state and local wage and hour Laws (the “FLSA”); (J) hours of work; (K) payment of wages (including but not limited to the timing of payments, recordkeeping and reporting of wages to employees); (L) immigration; (M) workers’ compensation; (N) employee benefits; (O) background and credit checks; (P) working conditions; (Q) occupational safety and health; (R) family and medical leave; (S) classification of employees; (T) unfair competition/noncompetition; (U) any bargaining or other obligations under the National Labor Relations Act; and (V) COVID-19.

(iii) Neither the Company nor any of its Subsidiaries has incurred any material Liability or obligation under the Worker Adjustment and Retraining Notification Act or any similar state or local Law (“WARN Act”) that remains unsatisfied.

(iv) Since January 1, 2018, (A) no allegations of harassment, sexual misconduct or discrimination have been made against any employee with the title of vice president or above (or equivalent title based on role, responsibility or pay grade) of the Company or any of its Subsidiaries through the Company’s anonymous employee hotline or any formal human resources communication channels at the Company or any of its Subsidiaries, and (B) there are no Legal Actions against the Company or any of its Subsidiaries or, to the Company’s knowledge, investigations pending or threatened related to any allegations of harassment, sexual misconduct or discrimination by any employee with the title of vice president or above (or equivalent title based on role, responsibility or pay grade) of the Company or any of its Subsidiaries. Since January 1, 2018, neither the Company nor any of its Subsidiaries has entered into any settlement agreements related to allegations of harassment, sexual misconduct or discrimination by any employee with the title of vice president or above (or equivalent title based on role, responsibility or pay grade) of the Company or any of its Subsidiaries.

(v) There are no pending or, to the Company’s knowledge, threatened Legal Actions against the Company or any of its Subsidiaries brought by or on behalf of any applicant for employment, any current or former employees or other individual service providers of the Company or any of its Subsidiaries, any current or former leased employee, intern, volunteer or “temp” of the Company or any of its Subsidiaries, or any person alleging to be a current or former employee, or any group or class of the foregoing, or any Governmental Entity, alleging: (A) violation of any labor or employment Laws; (B) breach of any collective bargaining agreement; (C) breach of any express or implied contract of employment; (D) wrongful termination of employment; or (E) any other discriminatory, wrongful or tortious conduct in connection with any employment relationship, including before the Equal Employment Opportunity Commission.

(vi) Since January 1, 2018, all individuals who perform or have performed services for the Company or any of its Subsidiaries have been properly classified under applicable Law in all material respects (A) as employees or individual independent contractors and (B) for employees, as an “exempt” employee or a “non-exempt” employee (within the meaning of the FLSA and state Law), and no such individual has been improperly included or excluded from any Company Benefit Plan, and neither the Company nor any of its Subsidiaries has notice of any pending or, to the Company’s knowledge, threatened inquiry or audit from any Governmental Entity concerning any such classifications.

(vii) Since January 2, 2021, no executive officer has terminated employment with the Company and, to the Company’s knowledge, no executive officer intends to terminate employment with the Company or is otherwise likely to become unavailable to continue as an executive officer of the Company.

(q) Taxes.

(i) (A) All income and other material Tax Returns required to be filed by or with respect to the Company or its Subsidiaries have been timely filed (taking into account all valid applicable extensions), and all such Tax Returns are true, complete and correct in all material respects, (B) the Company and its Subsidiaries have fully and timely paid (or have had paid on their behalf) all material Taxes due and payable (whether or not shown to be due on any Tax Return) and have made adequate provision in accordance with GAAP for all material Taxes not yet due and payable in the most recent financial statements contained in the Filed SEC Documents, and (C) the Company and its Subsidiaries have (1) timely withheld, deducted and collected all material Taxes required to have been withheld, deducted or collected in connection with amounts paid, received or owing to or from any employee, creditor, stockholder, independent contractor, customer or other third party; (2) timely paid over any amounts so withheld, deducted or collected to the appropriate Governmental Entity; and (3) otherwise complied in all material respects with all applicable Laws relating to the withholding, collection and remittance of Taxes (including information reporting requirements).

(ii) (A) There are no outstanding agreements extending, modifying or waiving the statutory period of limitations applicable to any claim for, or the period for the collection, assessment or reassessment of, any material Taxes due from the Company or its Subsidiaries for any taxable period and no request for any such waiver, modification or extension is currently pending, (B) except as set forth in Section 3.01(q) of the Company Letter, no audit, investigation, examination, claim, suit, inquiry or other proceeding is ongoing, pending or threatened in writing with respect to any material Taxes due from or with respect to the Company or its Subsidiaries, (C) no claim in writing has been made by any Governmental Entity in a jurisdiction where the Company or any of its Subsidiaries do not file Tax Returns of a particular type that the Company or such Subsidiary is or may be subject to taxation of such type by, or required to file Tax Returns of such type in, that jurisdiction, and (D) no material deficiencies, claims, issues or adjustments have been asserted, assessed, proposed or threatened by a Governmental Entity in connection with any Taxes or Tax Returns of the Company or its Subsidiaries that have not been fully and timely paid.

(iii) There are no Liens for Taxes upon the assets of the Company or its Subsidiaries, except for Permitted Liens.

(iv) Neither the Company nor any of its Subsidiaries has participated in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4(b) (or any similar provision of state, local or non-U.S. Tax Law).

(v) Neither the Company nor any of its Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the past two (2) years that was purported or intended to be governed by Section 355 of the Code.

(vi) Neither the Company nor any of its Subsidiaries has (A) been a member of an affiliated, consolidated, combined, unitary or similar Tax group for purposes of filing any Tax Return, other than a group of which the Company is the common parent or (B) any Liability for the Taxes of any person (other than the Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or non-U.S. Law), as a transferee, successor, by Contract (other than pursuant to customary provisions in any ordinary course commercial Contract, the principal purpose of which does not relate to Taxes) or otherwise.

(vii) Neither the Company nor any of its Subsidiaries is a party to or bound by any Tax sharing, allocation or indemnification agreement or similar contract or arrangement or any agreement that obligates it to make any payment computed by reference to the Taxes, taxable income or taxable losses of any other person (other than the Company or any of its Subsidiaries), other than customary indemnification provisions in any ordinary course commercial Contract, the principal purpose of which does not relate to Taxes.

(viii) No closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into with or issued by any Governmental Entity with respect to the Company or its Subsidiaries that would bind the Company or any of its Subsidiaries in any taxable period (or portion thereof) after the Closing and no request for any such closing agreement, private letter ruling, technical advice memorandum or similar agreement or ruling is currently pending. Neither the Company nor any of its Subsidiaries is the beneficiary of any Tax holidays, concessions, exemptions, incentives, credits, rebates or similar arrangements or agreements.

(ix) Neither the Company nor any of its Subsidiaries: (A) is resident for Tax purposes in a country outside of its jurisdiction of organization or incorporation; (B) has, or has ever had, a permanent establishment or other taxable presence in any country other than its jurisdiction of organization or incorporation; or (C) is, or has ever been, subject to income Tax in a country outside its jurisdiction of organization or incorporation.

(x) Neither the Company nor any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion of any taxable period) ending after the Closing Date as a result of (A) any change in or improper method of accounting adopted or used prior to the Closing, (B) any intercompany

transaction or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any similar provision of state, local or non-U.S. income Tax law), (C) any installment sale or open transaction disposition made prior to the Closing, (D) any item of deferred revenue, (E) any election under Section 965 of the Code, (F) any prepaid amounts received prior to the Closing, or (G) any agreement entered into with any Governmental Entity with respect to Taxes.

(xi) Neither the Company nor any of its Subsidiaries has deferred the payment of any Tax that remains unpaid or claimed or received any Tax refund or credit pursuant to the CARES Act, any other Tax legislation related to COVID-19 or any written agreement with a Governmental Entity. The Company and each of its Subsidiaries has (A) properly complied with all applicable Laws with respect to any deferral of the employer’s share of any “applicable employment taxes” under Section 2302 of the CARES Act, (B) properly complied with all applicable Laws and duly accounted for any available Tax credits under Sections 7001 through 7005 of the Families First Act and Section 2301 of the CARES Act, and (C) not sought and does not intend to seek a covered loan under paragraph (36) of Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by Section 1102 of the CARES Act.

(xii) The Company and its Subsidiaries have complied in all material respects with all applicable Laws regarding transfer pricing, including the execution and maintenance of contemporaneous documentation required to substantiate transfer pricing practices of the Company and each of its Subsidiaries.

(xiii) The Company is not, nor has it ever been, a U.S. real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable period specified in Section 897(c)(1)(A) of the Code.

(xiv) Each of the Company and each of its Subsidiaries is registered for sales Tax, value-added Tax, goods and services Tax or any similar Tax in each jurisdiction where it is required to be so registered and has complied with all applicable Laws related to such Taxes, including any obligation to collect and remit any such Taxes in respect of services provided by it.

(xv) The unpaid Taxes of the Company and its Subsidiaries do not exceed the reserves therefor (other than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth in the most recent financial statements contained in the Filed SEC Documents and will not exceed such reserves as adjusted for the passage of time through and including the Closing Date in accordance with the past custom and practices of the Company and its Subsidiaries in filing their Tax Returns. Since December 31, 2022, the Company and its Subsidiaries have not incurred any material Tax liability outside the ordinary course of business.

(r) Environmental Matters.

(i) The Company and its Subsidiaries are in compliance and for the past five (5) years have complied with all applicable Environmental Laws, in all material respects;

(ii) The Company and its Subsidiaries possess all material franchises, grants, authorizations, licenses, registrations, easements, variances, exceptions, consents, certificates, approvals, waivers, notices, and other permits of any Governmental Entity (“Permits”) required under Environmental Laws necessary for their respective operations as currently conducted, and are in compliance with such Permits, which are, and through the Closing Date shall remain, in full force and effect;

(iii) Neither the Company nor any Subsidiary has received any notice or request for information from any Governmental Entity or other third party related to any actual or alleged Liability under Environmental Law, including any investigatory, remedial or corrective obligations or otherwise pertaining to Hazardous Substances;

(iv) To the knowledge of the Company, no condition exists on any property owned or operated by the Company and its Subsidiaries or any other location, in each case, which has given rise to, or would reasonably be expected to give rise to, any Liability for the Company or any of its Subsidiaries relating to environmental or Hazardous Substances matters or Environmental Laws; and

(v) To the knowledge of the Company, the Equity Investment and the other transactions contemplated by this Agreement do not require notice to, or approval from, any Governmental Entity under any Environmental Law.

(s) Intellectual Property.

(i) Section 3.01(s)(i) of the Company Letter sets forth a true and complete list of the following which are owned by the Company or any of its Subsidiaries: (A) patents and patent applications, (B) registered trademarks and applications therefor, (C) registered copyrights and applications therefor, and (D) domain name registrations (clauses (A) – (D), (the “Company Registered IP”)).

(ii) The Company and its Subsidiaries own, are licensed to use, pursuant to valid, enforceable and binding Contracts, or otherwise have the right to use all Intellectual Property used, held for use or necessary for the operation of the business of the Company and its Subsidiaries (collectively, the “Company Intellectual Property”). The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the Equity Investment and the other transactions contemplated by this Agreement do not and will not encumber, impair or extinguish any of, or any of the Company’s or its Subsidiaries rights in or to, any Company Intellectual Property.

(iii) The Company and each of its Subsidiaries exclusively owns all Company Intellectual Property owned or purported to be owned by such entities (“Company Owned Intellectual Property”) material to their businesses, free and clear of all Liens other than permitted Liens. To the Company’s knowledge, no material Company Intellectual Property (A) has been adjudged invalid or unenforceable in whole or in part, or (B) is the subject of any cancellation or reexamination proceeding or any other proceeding challenging its ownership, use, registrability, validity and enforceability, and, to the knowledge of the Company, all material Company Registered IP is subsisting, in full force and effect and, to the Company’s knowledge, valid and enforceable, and all renewal fees and other maintenance fees have been paid. There exist no material contractual restrictions on the disclosure, use, license or transfer of any Company Owned Intellectual Property.

(iv) (A) Except as has not resulted in, and would not reasonably be expected to result in, individually or in the aggregate, material liability or business disruption, the conduct of the business of the Company and its Subsidiaries does not infringe upon, misappropriate or otherwise violate, and has not, since January 1, 2018 infringed upon, misappropriated, or otherwise violated, the Intellectual Property rights of any third party, (B) no Legal Action is pending, asserted in writing, or to the knowledge of the Company, threatened against the Company or any of its Subsidiaries that the conduct of the business of the Company or any of its Subsidiaries infringes upon, misappropriates or otherwise violates the Intellectual Property rights of any third party, and (C) to the knowledge of the Company, no person is infringing upon, misappropriating or otherwise violating, or has, since January 1, 2018, infringed upon, misappropriated, or otherwise violated, any Intellectual Property owned by the Company or its Subsidiaries.

(v) The Company and its Subsidiaries have taken reasonable steps in accordance with normal industry practice to maintain and protect the confidentiality of all Company Intellectual Property that is material to the business of the Company and its Subsidiaries and the value of which is contingent upon confidentiality being maintained. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, none of the Company Owned Intellectual Property has been disclosed to any person other than to third parties that are bound by customary, written confidentiality agreements entered into in the ordinary course of business consistent with past practice and that are valid and enforceable.

(vi) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, all persons who have contributed, developed or conceived any Company Owned Intellectual Property have done so pursuant to a valid and enforceable Contract (subject to enforceability exceptions for bankruptcy and insolvency and subject to principles of equity) that protects the confidential information of the Company and its Subsidiaries and assigns to the Company (or one of its Subsidiaries, as applicable) exclusive ownership of the person’s contribution, development or conception, other than Intellectual Property excluded by Law or non-assignable moral rights.

(vii) Neither the Company nor any of its Subsidiaries have used, modified, incorporated, linked, distributed or made available for remote access any Software that is subject to any “open source,” “copyleft” or similar obligation in a manner that requires that any of the Company’s or its Subsidiaries’ material proprietary Software be (A) disclosed, distributed or otherwise made available in source code format, (B) licensed for the purpose of permitting others to modify or prepare derivative works, or (C) or distributed or otherwise made available for use on a royalty-free or low-fee basis.

(viii) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (A) the Company and its Subsidiaries have sufficient rights to use all of the Software, including middleware, databases, and systems, information technology equipment, and associated documentation used or held for use in connection with the operation of the business of the Company and its Subsidiaries (“IT Assets”), (B) in each case, the IT Assets operate and perform in accordance with their documentation and functional specifications and are sufficient or configurable to effectively perform all operations necessary for the current operation of the business of the Company and its Subsidiaries, and all IT Assets are owned or licensed under valid licenses and operated by and are under the control of the Company and its Subsidiaries, (C) the IT Assets have not malfunctioned or failed in the past three (3) years, to the knowledge of the Company, do not contain any viruses, bugs, faults or other devices or effects that (1) enable or assist any person to access without authorization or disable or erase the IT Assets, or (2) otherwise materially adversely affect the functionality of the IT Assets, (D) the Company and its Subsidiaries have taken commercially reasonable steps to provide for the remote-site back-up of data and information critical to the conduct of the business of the Company and its Subsidiaries and have in place commercially reasonable disaster recovery and business continuity plans, procedures and facilities, (E) no person has gained unauthorized access to any IT Assets in the past three (3) years, (F) the Company and its Subsidiaries have maintained, continue to maintain, and caused their vendors to maintain, safeguards, security measures and procedures against the unauthorized access, disclosure, destruction, loss, or alteration of customer data or information (including any personal or device-specific information) in its possession or control that comply with any applicable contractual and legal requirements and meet industry standards, and (G) the Company and its Subsidiaries have in place with the third-party owners and operators of all data centers which provide services related to the business of Company and its Subsidiaries written agreements that ensure that such third parties adhere to and are in compliance with commercially reasonable standards and requirements.

(t) Real Property; Personal Property.

(i) Section 3.01(t)(i) of the Company Letter sets forth a true and complete list of the address of each owned and leased Company Real Property. The Company and its Subsidiaries have good and marketable title to, or have a valid and enforceable right to use or a valid and enforceable leasehold interest in, all real property (including all buildings, fixtures and other improvements) used by the business of the Company and its Subsidiaries (the “Company Real Property”) and the ownership of or leasehold interest in any Company Real Property is not subject to any Lien (except in all cases for Permitted Liens). Neither the Company nor its Subsidiaries have leased, subleased, licensed, sublicensed or otherwise granted to any person the right to use or occupy any Company Real Property or any portion of Company Real Property, there are no outstanding options, rights of first offer or rights of first refusal to purchase any Company Real Property or any portion of or interest, and neither the Company nor any of its Subsidiaries are parties to any Contract to sell, transfer, or encumber any Company Real Property.

(ii) Each of the leases, subleases and other agreements under which the Company or any of its Subsidiaries use or occupy or have the right to use or occupy, now or in the future, any Company Real Property (the “Company Real Property Leases”) is valid and binding (except as may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditor’s rights, and to general equitable principles). No termination event or breach or default on the part of the Company or its Subsidiaries exists under any Company Real Property Lease and no event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, would constitute such a termination event

or breach or default under any Company Real Property Lease. Neither the Company nor any of its Subsidiaries have collaterally assigned or granted any other security interest in any Company Real Property Lease or any interest therein. The Company has made available to the Principal Investor prior to the date of this Agreement, true and complete copies of each Company Real Property Lease document (including all amendments, extensions, renewals, guaranties and other agreements with respect thereto).

(iii) (A) The Company and its Subsidiaries have good and marketable title to, or a valid and enforceable leasehold interest in, all material assets of the Company and its Subsidiaries and (B) none of the Company’s or any of its Subsidiaries’ ownership of or leasehold interest in any such material assets of the Company and its Subsidiaries is subject to any Liens (except in all cases for Permitted Liens).

(u) Permits; Compliance with Law.

(i) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and each of its Subsidiaries is in possession of all Permits necessary for the Company and each of its Subsidiaries to own, lease and operate their respective properties and assets or to carry on their respective business as it is now being conducted (collectively, the “Company Permits”). All such Company Permits are in full force and effect in all material respects and no revocation, termination, suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, has been threatened in writing against the Company or any of its Subsidiaries.

(ii) The Company and each of its Subsidiaries has at all times since January 1, 2018 been in compliance in all material respects with (A) all Laws applicable to the Company or such Subsidiary or by which any of the material assets of the Company or its Subsidiaries is bound and (B) all Laws applicable to, and the terms and conditions of, any Company Permits.

(v) Certain Business Practices.

(i) None of the Company or any of its Subsidiaries, nor any of their respective directors, managers, or officers, or, to the knowledge of the Company, any employee, agent, or representative thereof, has in the past three (3) years offered, paid, promised to pay, or authorized the payment of any money or any other thing of value to any person (A) with the intention of inducing improper conduct on the part of the recipient, (B) acceptance of which would violate the policies of the recipient’s employer or cause the recipient to breach a duty owed to his or her employer, or (C) to otherwise secure an undue or improper advantage for the Company or its Subsidiaries in violation of any Anti-Corruption Law.

(ii) None of the Company or its Subsidiaries, nor any of their respective directors, managers, or officers, or, to the knowledge of the Company, any employee, agent, or representative thereof in the past three (3) years (A) has been or is a Sanctioned Person, (B) has (acting for or on behalf of the Company or its Subsidiaries) transacted business with or for the benefit of a Sanctioned Person or otherwise violated applicable Sanctions, or (C) committed a violation of any applicable Ex-Im Law.

(iii) The operations of the Company and its Subsidiaries have been and are conducted in compliance with applicable Anti-Money Laundering Laws, including any financial recordkeeping and reporting requirements, and the Company’s books and records fairly and accurately reflect, in reasonable detail, their transactions and disposition of assets consistent with the requirements of the U.S. Foreign Corrupt Practices Act of 1977, as amended.

(iv) To the knowledge of the Company, neither the Company nor any of its Subsidiaries has been, in the last three (3) years, the subject of any allegation, voluntary disclosure, investigation, prosecution or enforcement action related to any Anti-Corruption Laws, Sanctions, Ex-Im Laws.

(w) Regulatory Matters.

(i) (A) The Company and its Subsidiaries currently conduct, and have at all times since January 1, 2018, conducted their respective business in compliance in all material respects with all Laws applicable to their respective operations, activities or services and any Orders to which they are a party or are subject, including any settlement agreements or corporate integrity agreements, (B) except for routine matters arising in the ordinary course of business, none of the Company or any of its Subsidiaries has received any written notice, citation, suspension, revocation, limitation, warning, or request for repayment or refund issued by a Governmental Entity which alleges or asserts that the Company or any of its Subsidiaries has violated any Laws or which requires or seeks to adjust, modify or alter the Company’s or any of its Subsidiary’s operations, activities, services or financial condition that has not been fully and finally resolved to the Governmental Entity’s satisfaction without further Liability to the Company and its Subsidiaries and (C) there are no restrictions imposed by any Governmental Entity upon the Company’s or any of its Subsidiaries’ business, activities or services which would restrict or prevent the Company or any of its Subsidiaries from operating as it currently operates.

(ii) The Company and each of its Subsidiaries, and to the knowledge of the Company, all of their respective directors, managers, officers, agents and employees, are in compliance in all material respects with, and the Company and each of its Subsidiaries have compliance programs including policies and procedures reasonably designed to cause the Company and its Subsidiaries and their respective directors, managers, officers, agents and employees to be in compliance in all material respects with, to the extent applicable, all Laws.

(x) Takeover Statutes. The Board of Directors of the Company has taken all necessary action to ensure that the restrictions on business combinations that are set forth in Section 203 of the DGCL, and any other similar Law applicable to the Company, will not apply to this Agreement, the Voting and Support Agreement, the Stockholders Agreement, the Equity Investment and the other transactions contemplated by this Agreement and such other agreements, including by approving this Agreement, the Equity Investment and the other transactions and agreements contemplated by this Agreement. There is no stockholder rights plan, “poison pill” anti-takeover plan or other similar plan, device or arrangement to which the Company or any of its Subsidiaries is a party or by which it or they are bound with respect to any capital stock of the Company or any of its Subsidiaries.

(y) Transactions with Affiliates. Except as disclosed in the Filed SEC Documents, no event has occurred that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K and there are no transactions, arrangements or Contracts between the Company or any of its Subsidiaries, on the one hand, and any stockholder, officer, director, manager or Affiliate of the Company or any of its Subsidiaries, on the other hand, other than employment relationships, equity arrangements and compensation and benefits arrangements in the ordinary course of business consistent with past practice and disclosed to the Principal Investor prior to the date of this Agreement.

(z) Insurance. The Company and its Subsidiaries are covered by valid and currently effective insurance policies and all premiums payable under such policies have been duly paid to date. None of the Company or any of its Subsidiaries have received any written notice of default or cancellation of any such policy. All material fire and casualty, general Liability, business interruption, product Liability, and sprinkler and water damage insurance policies maintained by or on behalf of the Company or any of its Subsidiaries provide adequate coverage for all normal risks incident to the business of the Company and its Subsidiaries and their respective properties and assets.

(aa) Certain Transactions. Since November 1, 2021, the Company has not raised capital through, and has not performed, any “At The Market” (the “ATM”) transactions. Since December 8, 2021, the Company has not, directly or indirectly, raised capital, whether directly or indirectly through the issuance of equity securities, convertible debt instruments, or otherwise, under the ATM or any other method of raising capital.

(bb) Opinion of Financial Advisor. The Benchmark Company, LLC (the “Company Financial Advisor”) has delivered to the Board of Directors of the Company an opinion to the effect that, as of the date of such opinion, and based on and subject to the assumptions, limitations, qualifications and other matters set forth in such opinion, the Equity Investment is fair, from a financial point of view, to the stockholders of the Company. A copy of the written opinion will be promptly provided to the Principal Investor, solely for informational purposes, following receipt of such written opinion by the Board of Directors of the Company (it being understood and agreed that such written opinion may not be relied upon by the Company or its Affiliates).

(cc) Brokers. Except for the Company Financial Advisor, no broker, finder, adviser or investment banker is entitled to any brokerage, success, finder’s or other similar fee or commission in connection with this Agreement or any of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any of its Subsidiaries or any of their respective affiliates. The Company has delivered to the Principal Investor complete and correct copies of all agreements under which any such fees or commissions are payable and all indemnification and other agreements related to the engagement of the persons to whom such fees are payable. The fees and expenses of any accountant, broker, financial advisor, consultant, legal counsel and any other person retained by the Company or any of its Subsidiaries in connection with this Agreement or the Equity Investment and the other transactions contemplated by this Agreement will not exceed the fees and expenses set forth in Section 3.01(cc) of the Company Letter.

(dd) Fifth A&R Certificate of Incorporation and Preferred Stock Certificate of Designation. Each of the Fifth A&R Certificate of Incorporation and the Certificate of Designation with respect to the Preferred Stock (the “Certificate of Designation”) has been duly adopted by the Company and the Board of Directors of the Company and will be duly filed with the Secretary of State of the State of Delaware in accordance with the Laws of the State of Delaware prior to the Closing, to be effective as of 11:59 p.m., New York Time, on the date that is two (2) days prior to the Closing. The Preferred Stock, when issued, will have the designations, preferences and relative, participating, optional and other special rights and qualifications, limitations and restrictions set forth in the Certificate of Designation.

(ee) Valid Issuance. The shares of Preferred Stock have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and shall be free and clear of all Liens (other than Liens created by the Investors), except for restrictions on transfer imposed by applicable securities Laws. The Warrants have been duly and validly authorized. Upon the due exercise of the Warrants or conversion of the shares of Preferred Stock, the shares of the Company Common Stock issuable or issued upon exercise of the Warrants or conversion of the shares of Preferred Stock, as applicable, will be validly issued, fully paid and nonassessable, free and clear of all Liens, except for restrictions on transfer imposed by applicable securities Laws. The Company will as of the Closing Date have reserved a sufficient number of shares of Company Common Stock for issuance upon the exercise of the Warrants and conversion of the shares of Preferred Stock.

(ff) Information Supplied. None of the information included or incorporated by reference in the Proxy Statement or the Form 10 will, at the date it is first mailed to the Company’s stockholders, at the time of the Stockholders Meeting or at the time of any amendment or supplement thereof, as amended or supplemented at such date or time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by or on behalf of the Investors specifically for inclusion or incorporation by reference in the Proxy Statement. The Proxy Statement and the Form 10 will comply as to form in all material respects with the requirements of the Exchange Act.

(gg) Voting Requirements. The affirmative vote of the holders of a majority of the shares of Company Common Stock voting at the Stockholders Meeting or any adjournment or postponement thereof in favor of (i) the approval of (A) the Equity Investment and all of the other transactions contemplated by this Agreement, (B) the Fifth A&R Certificate of Incorporation (including the Reverse Split contemplated by the Fifth A&R Certificate of Incorporation) and (C) any equity incentive plan proposed by the Principal Investor prior to the mailing of the definitive Proxy Statement pursuant to Section 5.01(c) (collectively, the “Stockholder Approvals”) are the only votes of the holders of any class or series of the Company’s capital stock necessary to approve this Agreement and to consummate the Equity Investment and the other transactions contemplated by this Agreement.

(hh) Securities Law Compliance. Neither the Company nor any of its Affiliates, nor any person acting on its or their behalf, has conducted any general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) in connection with the offer or sale of any of the Securities. Neither the Company nor any of its Affiliates, nor any person acting on its or their behalf, has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) of the Securities Act for the exemption from registration for the transactions contemplated hereby or would require registration under the Securities Act of the offer or sale of the Securities as contemplated hereby. Assuming the accuracy of the representations and warranties set forth in Section 3.02(f), Section 3.02(g) and Section 3.02(h), the offer and sale of the Securities to the Investors as contemplated hereby is exempt from the registration requirements of the Securities Act.

(ii) Termination of Rhodium Agreement. On September 29, 2022, the Company entered into an agreement and plan of merger (as amended, the “Rhodium Merger Agreement”) by and among the Company, Rhodium Enterprises Acquisition Corp., a Delaware corporation and direct wholly owned subsidiary of the Company, Rhodium Enterprises Acquisition LLC, a Delaware limited liability company and direct wholly owned subsidiary of the Company, and Rhodium Enterprises, Inc., a Delaware corporation. The Company has made available to the Principal Investor prior to the date of this Agreement true, complete and accurate copies of the Rhodium Merger Agreement, all amendments, waivers and modifications thereto, all notices and consents given thereunder (including a copy of the termination notice regarding the termination referred to below), and all schedules and exhibits thereto. Prior to the consummation of the Mergers (as defined in the Rhodium Merger Agreement) and the other transactions contemplated by the Rhodium Merger Agreement, on October 13, 2023, the Company validly terminated the Rhodium Merger Agreement in accordance with its terms pursuant to Section 7.02(a) of the Rhodium Merger Agreement, without any Liabilities to the Company, its Subsidiaries or affiliates. Without limiting the foregoing, there are no Liabilities of the Company or any of its Subsidiaries arising out of, with respect to or in connection with, the Rhodium Merger Agreement or the other transactions contemplated by the Rhodium Merger Agreement.

(jj) Indebtedness. Except as set forth on Section 3.01(jj) of the Company Letter, neither the Company nor any of its Subsidiaries has incurred, assumed, issued, guaranteed or otherwise become liable under, any indebtedness in an amount in excess of $50,000 (including, but not limited to, any indebtedness in respect of any letters of credit or deferred purchase price). Immediately prior to and on the Closing Date, neither the Company nor any of its Subsidiaries (other than SpinCo) is or will be an obligor or otherwise liable under any contract relating to indebtedness in an amount in excess of $50,000 (including, but not limited to, any indebtedness in respect of any letters of credit or deferred purchase price).

(kk) No Reliance. Except for the representations and warranties of the Investors expressly set forth in Section 3.02, the Company hereby agrees and acknowledges that none of the Investors have made and are not making any express or implied representation or warranty with respect to any Investor, the Equity Investment or the Company or its prospects, including with respect to any information provided or made available to the Company or its representatives by or on behalf of any of the Investors or their respective representatives, and none of the Investors will have or be subject to any liability to the Company or any other person resulting from the delivery to or use by the Company or any of its representatives of any projections, forecasts or other forward-looking information, business plans or other similar material.