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SEC DOCS OUTLINE HIGHTOWER MESS

Hightower logoThe slide of Hightower from important reseller to fire sale special is outlined in documents filed with the SEC by SilverSun Technologies, parent of  SWK Technologies, which picked up the pieces. Hightower lost just under $400,000 on revenue of $3.3 million for the year ended December 31. It also ended 2011 with $53,248 in cash, which shrank to $11,609 on March 31.

 

Not surprisingly, the Chicago-based company had a qualified opinion for 2011. We don't get comparables for the year, but first-quarter revenue of $594,982 was down from $945,125 a year earlier. The first-quarter loss was $57,703, down from $152,402, as the company shed expenses. The balance sheet is of obvious interest. Customer deposits were $613,414 on March 31, up from $576,014 while deferred revenue dropped to $299,634 from $342,035 over the three months. Hightower ended the first quarter with assets of $86,815, liabilities of $2.5 million and an accumulated deficit of $2.4 million. Some liabilities stemmed from attempts to keep the operation going. There was an unsecured loan of $102,402 from an owner, along with a promissory note of $763,567, guaranteed by the owners in 2009. By August, the outstanding principal was $409,807, possibly helped by proceeds from the sale to SWK. However, SWK did not assume the note, which is in default. SWK purchased some Hightower assets for $741,595, which included $441,964 in cash. Part the cash was to go to settling payroll and related employer taxes, and handling the performance obligation for that chunk of deferred revenue. Deferred revenue includes support plans and Hightower was known for selling prepaid plans. It also had deposits for future consulting services.

 

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