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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Support com Inc | NASDAQ:SPRT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 11.80 | 11.92 | 11.96 | 0 | 01:00:00 |
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
94-3282005
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
☐
|
Accelerated filer
☐
|
Non-accelerated filer
☒
(Do not check if a smaller reporting company)
|
Smaller reporting company
☐
|
Page
|
||
Part I. Financial Information
|
||
Item 1.
|
3
|
|
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
Item 2.
|
19
|
|
Item 3.
|
23
|
|
Item 4.
|
24
|
|
Part II. Other Information
|
||
Item 1.
|
25
|
|
Item 1A.
|
25
|
|
Item 6.
|
37
|
|
38
|
||
39
|
March 31,
2017
|
December 31,
2016
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
21,823
|
$
|
16,890
|
||||
Short-term investments
|
28,931
|
36,519
|
||||||
Accounts receivable, net
|
10,224
|
9,567
|
||||||
Prepaid expenses and other current assets
|
980
|
1,211
|
||||||
Total current assets
|
61,958
|
64,187
|
||||||
Property and equipment, net
|
1,552
|
1,706
|
||||||
Intangible assets, net
|
256
|
266
|
||||||
Other assets
|
1,073
|
1,070
|
||||||
Total assets
|
$
|
64,839
|
$
|
67,229
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
1,022
|
$
|
1,085
|
||||
Accrued compensation
|
1,965
|
2,974
|
||||||
Other accrued liabilities
|
2,118
|
2,496
|
||||||
Short-term deferred revenue
|
2,876
|
2,759
|
||||||
Total current liabilities
|
7,981
|
9,314
|
||||||
Long-term deferred revenue
|
88
|
106
|
||||||
Other long-term liabilities
|
510
|
501
|
||||||
Total liabilities
|
8,579
|
9,921
|
||||||
Commitments and contingencies (Note 3)
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock; par value $0.0001, 50,000,000 shares authorized; 19,042,852 issued and 18,561,008 outstanding at March 31, 2017; 19,030,024 issued and 18,548,180 outstanding at December 31, 2016
|
2
|
2
|
||||||
Additional paid-in capital
|
267,490
|
267,400
|
||||||
Treasury stock, at cost (481,844 shares at March 31, 2017 and December 31, 2016)
|
(5,295
|
) |
(5,295
|
)
|
||||
Accumulated other comprehensive loss
|
(2,181
|
) |
(2,329
|
)
|
||||
Accumulated deficit
|
(203,756
|
) |
(202,470
|
)
|
||||
Total stockholders’ equity
|
56,260
|
57,308
|
||||||
Total liabilities and stockholders’ equity
|
$
|
64,839
|
$
|
67,229
|
Three Months Ended
March 31,
|
||||||||
2017
|
2016
|
|||||||
Revenue:
|
||||||||
Services
|
$
|
12,915
|
$
|
15,283
|
||||
Software and other
|
1,375
|
1,314
|
||||||
Total revenue
|
14,290
|
16,597
|
||||||
Cost of revenue:
|
||||||||
Cost of services
|
11,211
|
13,860
|
||||||
Cost of software and other
|
94
|
119
|
||||||
Total cost of revenue
|
11,305
|
13,979
|
||||||
Gross profit
|
2,985
|
2,618
|
||||||
Operating expenses:
|
||||||||
Research and development
|
923
|
1,708
|
||||||
Sales and marketing
|
807
|
2,072
|
||||||
General and administrative
|
2,616
|
3,248
|
||||||
Amortization of intangible assets and other
|
10
|
267
|
||||||
Total operating expenses
|
4,356
|
7,295
|
||||||
Loss from operations
|
(1,371
|
)
|
(4,677
|
)
|
||||
Interest income and other, net
|
133
|
133
|
||||||
Loss from continuing operations, before income taxes
|
(1,238
|
)
|
(4,544
|
)
|
||||
Income tax provision
|
48
|
52
|
||||||
Loss from continuing operations, after income taxes
|
(1,286
|
)
|
(4,596
|
)
|
||||
Income (loss) from discontinued operations, after income taxes
|
—
|
284
|
||||||
Net loss
|
$
|
(1,286
|
)
|
$
|
(4,312
|
)
|
||
Basic and diluted earnings per share:
|
||||||||
Loss from continuing operations
|
$
|
(0.07
|
)
|
$
|
(0.25
|
)
|
||
Income (loss) from discontinued operations
|
0.00
|
0.01
|
||||||
Basic and diluted net loss per share
|
$
|
(0.07
|
)
|
(0.24
|
)
|
|||
Shares used in computing basic net loss per share
|
18,557
|
18,295
|
||||||
Shares used in computing diluted net loss per share
|
18,557
|
18,295
|
Three Months Ended
March 31,
|
||||||||
2017
|
2016
|
|||||||
Net loss
|
$
|
(1,286
|
)
|
$
|
(4,312
|
)
|
||
Other comprehensive income:
|
||||||||
Change in foreign currency translation adjustment
|
144
|
10
|
||||||
Change in net unrealized loss on investments
|
4
|
95
|
||||||
Other comprehensive income
|
148
|
105
|
||||||
Comprehensive loss
|
$
|
(1,138
|
)
|
$
|
(4,207
|
)
|
Three Months Ended
March 31,
|
||||||||
2017
|
2016
|
|||||||
Operating Activities:
|
||||||||
Net loss
|
$
|
(1,286
|
)
|
$
|
(4,312
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
185
|
141
|
||||||
Amortization of premiums and discounts on investments
|
32
|
103
|
||||||
Amortization of intangible assets and other
|
10
|
267
|
||||||
Stock-based compensation
|
90
|
661
|
||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable, net
|
(657
|
)
|
(447
|
)
|
||||
Prepaid expenses and other current assets
|
234
|
(297
|
)
|
|||||
Other long-term assets
|
11
|
(21
|
)
|
|||||
Accounts payable
|
(63
|
)
|
1,365
|
|||||
Accrued compensation
|
(1,008
|
)
|
(184
|
)
|
||||
Other accrued liabilities
|
(376
|
)
|
(1,313
|
)
|
||||
Other long-term liabilities
|
15
|
(293
|
)
|
|||||
Deferred revenue
|
99
|
160
|
||||||
Net cash used in operating activities
|
(2,714
|
)
|
(4,170
|
)
|
||||
Investing Activities:
|
||||||||
Purchases of property and equipment
|
(31
|
)
|
(300
|
)
|
||||
Purchases of investments
|
(5,173
|
)
|
(9,414
|
)
|
||||
Maturities of investments
|
12,733
|
8,910
|
||||||
Net cash provided by (used in) investing activities
|
7,529
|
(804
|
)
|
|||||
Financing Activities:
|
||||||||
Repurchase of common stock
|
—
|
(31
|
)
|
|||||
Net cash used in financing activities
|
—
|
(31
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
118
|
61
|
||||||
Net increase (decrease) in cash and cash equivalents
|
4,933
|
(4,944
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
16,890
|
27,598
|
||||||
Cash and cash equivalents at end of period
|
$
|
21,823
|
$
|
22,654
|
||||
Supplemental schedule of cash flow information:
|
||||||||
Income taxes paid
|
$
|
36
|
$
|
66
|
· |
Persuasive evidence of an arrangement exists;
|
· |
Delivery has occurred;
|
· |
Collection is considered probable; and
|
· |
The fees are fixed or determinable.
|
· |
Hourly-Based Services - In connection with the provisions of certain services programs, fees are calculated based on contracted hourly rates with partners. For these programs, we recognize revenue as services are performed, based on billable hours of work delivered by our technology specialists. These services programs also include performance standards, which may result in incentives or penalties, which are recognized as earned or incurred.
|
· |
Subscription-Based Services - Customers purchase subscriptions or “service plans” under which certain services are provided over a fixed subscription period. Revenues for subscriptions are recognized ratably over the respective subscription periods.
|
· |
Incident-Based Services - Customers purchase a discrete, one-time service. Revenue recognition occurs at the time of service delivery. Fees paid for services sold but not yet delivered are recorded as deferred revenue and recognized at the time of service delivery.
|
· |
Service Cards / Gift Cards - Customers purchase a service card or a gift card, which entitles the cardholder to redeem a certain service at a time of their choosing. For these sales, revenue is deferred until the card has been redeemed and the service has been provided.
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
As of March 31, 2017
|
||||||||||||||||
Cash
|
$
|
6,816
|
$
|
—
|
$
|
—
|
$
|
6,816
|
||||||||
Money market funds
|
13,009
|
—
|
—
|
13,009
|
||||||||||||
Certificates of deposit
|
1,278
|
—
|
—
|
1,278
|
||||||||||||
Commercial paper
|
5,492
|
—
|
—
|
5,492
|
||||||||||||
Corporate notes and bonds
|
19,770
|
2
|
(35
|
)
|
19,737
|
|||||||||||
U.S. government agency securities
|
4,426
|
—
|
(4
|
)
|
4,422
|
|||||||||||
$
|
50,791
|
$
|
2
|
$
|
(39
|
)
|
$
|
50,754
|
||||||||
Classified as:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
21,823
|
$
|
—
|
$
|
—
|
$
|
21,823
|
||||||||
Short-term investments
|
28,968
|
2
|
(39
|
)
|
28,931
|
|||||||||||
$
|
50,791
|
$
|
2
|
$
|
(39
|
)
|
$
|
50,754
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair Value
|
|||||||||||||
As of December 31, 2016
|
||||||||||||||||
Cash
|
$
|
7,593
|
$
|
—
|
$
|
—
|
$
|
7,593
|
||||||||
Money market funds
|
9,297
|
—
|
—
|
9,297
|
||||||||||||
Certificates of deposit
|
1,273
|
—
|
—
|
1,273
|
||||||||||||
Commercial paper
|
4,989
|
—
|
—
|
4,989
|
||||||||||||
Corporate notes and bonds
|
19,357
|
—
|
(40
|
)
|
19,317
|
|||||||||||
U.S. government agency securities
|
10,941
|
1
|
(2
|
)
|
10,940
|
|||||||||||
$
|
53,450
|
$
|
1
|
$
|
(42
|
)
|
$
|
53,409
|
||||||||
Classified as:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
16,890
|
$
|
—
|
$
|
—
|
$
|
16,890
|
||||||||
Short-term investments
|
36,560
|
1
|
(42
|
)
|
36,519
|
|||||||||||
$
|
53,450
|
$
|
1
|
$
|
(42
|
)
|
$
|
53,409
|
March 31, 2017
|
December 31, 2016
|
|||||||
Due within one year
|
$
|
20,686
|
$
|
27,730
|
||||
Due within two years
|
8,245
|
8,789
|
||||||
$
|
28,931
|
$
|
36,519
|
· |
Level 1 - Quoted prices in active markets for identical assets or liabilities.
|
· |
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
· |
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
As of March 31, 2017
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Money market funds
|
$
|
13,009
|
$
|
—
|
$
|
—
|
$
|
13,009
|
||||||||
Certificates of deposit
|
—
|
1,278
|
—
|
1,278
|
||||||||||||
Commercial paper
|
—
|
5,492
|
—
|
5,492
|
||||||||||||
Corporate notes and bonds
|
—
|
19,737
|
—
|
19,737
|
||||||||||||
U.S. government agency securities
|
—
|
4,422
|
—
|
4,422
|
||||||||||||
Total
|
$
|
13,009
|
$
|
30,929
|
$
|
—
|
$
|
43,938
|
As of December 31, 2016
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Money market funds
|
$
|
9,297
|
$
|
—
|
$
|
—
|
$
|
9,297
|
||||||||
Certificates of deposit
|
—
|
1,273
|
—
|
1,273
|
||||||||||||
Commercial paper
|
—
|
4,989
|
—
|
4,989
|
||||||||||||
Corporate notes and bonds
|
—
|
19,317
|
—
|
19,317
|
||||||||||||
U.S. government agency securities
|
—
|
10,940
|
—
|
10,940
|
||||||||||||
Total
|
$
|
9,297
|
$
|
36,519
|
$
|
—
|
$
|
45,816
|
Foreign
Currency
Translation
Losses
|
Unrealized
Losses on
Investments
|
Total
|
||||||||||
Balance as of December 31, 2016
|
$
|
(2,288
|
)
|
$
|
(41
|
)
|
$
|
(2,329
|
)
|
|||
Current-period other comprehensive income
|
144
|
4
|
148
|
|||||||||
Balance as of March 31, 2017
|
$
|
(2,144
|
)
|
$
|
(37
|
)
|
$
|
(2,181
|
)
|
Stock Option Plan
|
Employee Stock Purchase Plan
|
|||||||||||||||
Three Months Ended March 31,
|
||||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
Risk-free interest rate
|
1.4
|
%
|
1.1
|
%
|
0.6
|
%
|
0.3
|
%
|
||||||||
Expected term (in years)
|
3.6
|
3.9
|
0.5
|
0.5
|
||||||||||||
Volatility
|
46.2
|
%
|
48.3
|
%
|
44.5
|
%
|
43.1
|
%
|
||||||||
Expected dividend
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||||
Weighted average grant-date fair value
|
$
|
0.96
|
$
|
0.96
|
$
|
0.60
|
$
|
0.90
|
Three Months Ended
March 31,
|
||||||||
2017
|
2016
|
|||||||
Stock-based compensation expense related to grants of:
|
||||||||
Stock options
|
$
|
14
|
$
|
236
|
||||
Employee Stock Purchase Plan (“ESPP”)
|
6
|
11
|
||||||
Restricted stock units (“RSUs”)
|
70
|
414
|
||||||
$
|
90
|
$
|
661
|
|||||
Stock-based compensation expense recognized in:
|
||||||||
Cost of service
|
$
|
42
|
$
|
56
|
||||
Cost of software and other
|
3
|
2
|
||||||
Research and development
|
41
|
98
|
||||||
Sales and marketing
|
7
|
84
|
||||||
General and administrative
|
(3
|
)
|
421
|
|||||
$
|
90
|
$
|
661
|
Three Months Ended
March 31,
|
||||||||
2017
|
2016
|
|||||||
Net loss
|
$
|
(1,286
|
)
|
$
|
(4,312
|
)
|
||
Basic:
|
||||||||
Weighted-average shares of common stock outstanding
|
18,557
|
18,295
|
||||||
Shares used in computing basic loss per share
|
18,557
|
18,295
|
||||||
Basic loss per share
|
$
|
(0.07
|
)
|
$
|
(0.24
|
)
|
||
Diluted:
|
||||||||
Weighted-average shares of common stock outstanding
|
18,557
|
18,295
|
||||||
Add: Common equivalent shares outstanding
|
—
|
—
|
||||||
Shares used in computing diluted loss per share
|
18,557
|
18,295
|
||||||
Diluted loss per share
|
$
|
(0.07
|
)
|
$
|
(0.24
|
)
|
Three Months Ended
March 31,
|
||||||||
2017
|
2016
|
|||||||
Stock options
|
793
|
1,439
|
||||||
RSUs
|
270
|
511
|
||||||
Warrants
|
—
|
163
|
||||||
Total common share equivalents
|
1,063
|
2,113
|
Non-
compete
|
Partner
Relationships
|
Customer
Base
|
Technology
Rights
|
Tradenames
|
Indefinite
Life
Intangibles
|
Total
|
||||||||||||||||||||||
As of March 31, 2017
|
||||||||||||||||||||||||||||
Gross carrying value
|
$
|
593
|
$
|
145
|
$
|
641
|
$
|
5,330
|
$
|
760
|
$
|
250
|
$
|
7,719
|
||||||||||||||
Accumulated amortization
|
(587
|
)
|
(145
|
)
|
(641
|
)
|
(5,330
|
)
|
(760
|
)
|
—
|
(7,463
|
)
|
|||||||||||||||
Net carrying value
|
$
|
6
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
250
|
$
|
256
|
||||||||||||||
As of December 31, 2016
|
||||||||||||||||||||||||||||
Gross carrying value
|
$
|
593
|
$
|
145
|
$
|
641
|
$
|
5,330
|
$
|
760
|
$
|
250
|
$
|
7,719
|
||||||||||||||
Accumulated amortization
|
(581
|
)
|
(145
|
)
|
(637
|
)
|
(5,330
|
)
|
(760
|
)
|
—
|
(7,453
|
)
|
|||||||||||||||
Net carrying value
|
$
|
12
|
$
|
—
|
$
|
4
|
$
|
—
|
$
|
—
|
$
|
250
|
$
|
266
|
Fiscal Year
|
Amount
|
|||
2017 (April-June)
|
$
|
6
|
||
Weighted average remaining useful life
|
0.21 years
|
March 31,
2017
|
December 31,
2016
|
|||||||
Accrued expenses
|
$
|
1,014
|
$
|
842
|
||||
Self-insurance accruals
|
799
|
911
|
||||||
Customer deposits
|
185
|
556
|
||||||
Restructuring obligations
|
—
|
81
|
||||||
Other accrued liabilities
|
120
|
106
|
||||||
Total other accrued liabilities
|
$
|
2,118
|
$
|
2,496
|
Number of
Shares
|
Weighted
Average
Exercise Price
per Share
|
Weighted
Average
Remaining
Contractual
Term (in years)
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||||||||
Outstanding options at December 31, 2016
|
1,381,843
|
$
|
5.87
|
4.95
|
$
|
5
0
|
||||||||||
Granted
|
2,000
|
$
|
2.57
|
|||||||||||||
Exercised
|
—
|
—
|
||||||||||||||
Forfeited
|
(591,069
|
)
|
$
|
5.23
|
||||||||||||
Outstanding options at March 31, 2017
|
792,774
|
$
|
6.35
|
5.44
|
$
|
0
|
||||||||||
Options vested and expected to vest
|
763,992
|
$
|
6.48
|
5.22
|
$
|
0
|
||||||||||
Exercisable at March 31, 2017
|
486,368
|
$
|
8.48
|
3.19
|
$
|
0
|
Number of
Shares
|
Weighted
Average
Grant-Date
Fair Value
per Share
|
Weighted
Average
Remaining
Contractual
Term (in years)
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||||||||
Outstanding RSUs at December 31, 2016
|
351,921
|
$
|
4.59
|
1.06
|
$
|
908
|
||||||||||
Awarded
|
—
|
—
|
||||||||||||||
Released
|
(12,868
|
)
|
$
|
4.04
|
||||||||||||
Forfeited
|
(69,123
|
)
|
$
|
8.25
|
||||||||||||
Outstanding RSUs at March 31, 2017
|
269,930
|
$
|
3.68
|
0.78
|
$
|
592
|
Contract
Terminations
|
Severance
|
Total
|
||||||||||
Restructuring obligations, December 31, 2016
|
$
|
31
|
$
|
50
|
$
|
81
|
||||||
Cash payments
|
(31
|
)
|
(50
|
)
|
(81
|
)
|
||||||
Restructuring obligations, March 31, 2017
|
$
|
—
|
$
|
—
|
$
|
—
|
Three Months Ended
March 31,
|
||||||||
2017
|
2016
|
|||||||
Revenue:
|
||||||||
Services
|
90
|
%
|
92
|
%
|
||||
Software and other
|
10
|
8
|
||||||
Total revenue
|
100
|
100
|
||||||
Cost of revenue:
|
||||||||
Cost of services
|
78
|
83
|
||||||
Cost of software and other
|
1
|
1
|
||||||
Total cost of revenue
|
79
|
84
|
||||||
Gross profit
|
21
|
16
|
||||||
Operating expenses:
|
||||||||
Research and development
|
7
|
10
|
||||||
Sales and marketing
|
6
|
12
|
||||||
General and administrative
|
18
|
20
|
||||||
Amortization of intangible assets and other
|
—
|
2
|
||||||
Total operating expenses
|
31
|
44
|
||||||
Loss from operations
|
(10
|
)
|
(28
|
)
|
||||
Interest income and other, net
|
1
|
1
|
||||||
Loss from continuing operations, before income taxes
|
(9
|
)
|
(27
|
)
|
||||
Income tax provision
|
-
|
1
|
||||||
Loss from continuing operations, after income taxes
|
(9
|
)
|
(28
|
)
|
||||
Income (loss) from discontinued operations, after income taxes
|
—
|
2
|
||||||
Net loss
|
(9
|
)%
|
(26
|
)%
|
Three Months Ended
March 31,
|
$
|
%
|
||||||||||||||
In thousands, except percentages
|
2017
|
2016
|
Change
|
Change
|
||||||||||||
Services
|
$
|
12,915
|
$
|
15,283
|
$
|
(2,368
|
)
|
(15
|
)%
|
|||||||
Software and other
|
1,375
|
1,314
|
61
|
5
|
%
|
|||||||||||
Total revenue
|
$
|
14,290
|
$
|
16,597
|
$
|
(2,307
|
)
|
(14
|
)%
|
Three Months Ended
March 31,
|
$
|
%
|
||||||||||||||
In thousands, except percentages
|
2017
|
2016
|
Change
|
Change
|
||||||||||||
Cost of services
|
$
|
11,211
|
$
|
13,860
|
$
|
(2,649
|
)
|
(19
|
)%
|
|||||||
Cost of software and other
|
94
|
119
|
(25
|
)
|
(21
|
)%
|
||||||||||
Total cost of revenue
|
$
|
11,305
|
$
|
13,979
|
$
|
(2,674
|
)
|
(19
|
)%
|
Three Months Ended
March 31,
|
$
|
%
|
||||||||||||||
In thousands, except percentages
|
2017
|
2016
|
Change
|
Change
|
||||||||||||
Research and development
|
$
|
923
|
$
|
1,708
|
$
|
(785
|
)
|
(46
|
)%
|
|||||||
Sales and marketing
|
$
|
807
|
$
|
2,072
|
$
|
(1,265
|
)
|
(61
|
)%
|
|||||||
General and administrative
|
$
|
2,616
|
$
|
3,248
|
$
|
(632
|
)
|
(19
|
)%
|
|||||||
Amortization of intangible assets and other
|
$
|
10
|
$
|
267
|
$
|
(257
|
)
|
(96
|
)%
|
Three Months Ended
March 31,
|
$
|
% | |||||||||||||||
In thousands, except percentages
|
2017
|
2016
|
Change
|
Change | |||||||||||||
Interest and other, net
|
$
|
133
|
$
|
133
|
$
|
—
|
0
|
%
|
Three Months Ended
March 31,
|
$
|
% | |||||||||||||||
In thousands, except percentages
|
2017
|
2016
|
Change
|
Change | |||||||||||||
Income tax provision
|
$
|
48
|
$
|
52
|
$
|
(4
|
) |
(8
|
)%
|
● |
Our expectations and beliefs regarding future financial results;
|
● |
Our expectations regarding partners, renewal of contracts with these partners and the anticipated timing and magnitude of revenue from programs with these partners;
|
● |
Our ability to offer subscriptions to our services in a profitable manner;
|
● |
Our expectations regarding our ability to deliver technology services efficiently and through arrangements that are profitable, including both in SKU-based and time-based pricing models and other pricing models we may employ;
|
● |
Our ability to successfully license, implement and support our Support.com Cloud offering;
|
● |
Our expectations regarding sales of our end-user software products, and our ability to source, develop and distribute enhanced versions of these products;
|
● |
Our ability to successfully monetize customers who receive free versions of our end-user software products;
|
● |
Our ability to expand and diversify our customer base;
|
● |
Our ability to execute effectively in the SMB market;
|
● |
Our ability to attract and retain qualified management and employees;
|
● |
Our ability to hire, train, manage and retain technology specialists in a home-based model in quantities sufficient to meet forecast requirements, and our ability to continue to enhance the flexibility of our staffing model;
|
● |
Our ability to match staffing levels with service volume in a cost-effective manner;
|
● |
Our ability to manage contract labor as a component of our workforce;
|
● |
Our ability to operate successfully in a time-based billing model;
|
● |
Our ability to adapt to changes in the market for technology support services;
|
● |
Our ability to manage sales costs in programs where we are responsible for sales;
|
● |
Our ability to successfully manage marketing costs associated with our software products;
|
● |
Our beliefs and expectations regarding the introduction of new services and products, including additional cloud application software products and service offerings for devices beyond computers and routers;
|
● |
Our expectations regarding revenues, cash flows, expenses, including cost of revenue, sales and marketing, research and development efforts, and administrative expenses, and profits, including the expected effects of our cost reduction plans;
|
● |
Our assessment of seasonality, mix of revenue, and other trends for our business and the business of our partners;
|
● |
Our ability to deliver projected levels of profitability;
|
● |
Our expectations regarding the costs and other effects of acquisition and disposition transactions;
|
● |
Our expectations regarding unit volumes, pricing and other factors in the market for computers and other technology devices, and the effects of such factors on our business;
|
● |
Our ability to successfully operate in markets that are subject to extensive regulation, such as support for home security systems;
|
● |
Our expectations regarding the results of pending, threatened or future litigation;
|
● |
Our expectations regarding the results of pending, threatened or future government investigations and audits, including, without limitation, those investigations and audits described in Item 1 Legal Proceedings of this report;
|
● |
The assumptions underlying our Critical Accounting Policies and Estimates, including our assumptions regarding revenue recognition; assumptions used to estimate self-insurance accruals, assumptions used to estimate the fair value of stock-based compensation; assumptions regarding the impairment of goodwill and intangible assets; and expected accounting for income taxes; and
|
● |
Maintain our current relationships and service programs, and develop new relationships, with service partners and licensees of our Support.com Cloud offering on acceptable terms or at all;
|
● |
Reach prospective customers for our software products in a cost-effective fashion;
|
● |
Reduce our dependence on a limited number of partners for a substantial majority of our revenue;
|
● |
Successfully license and grow our revenue related to our Support.com Cloud offering;
|
● |
Attract and retain qualified management and employees in competitive markets for talent;
|
● |
Hire, train, manage and retain our home-based technology specialists and enhance the flexibility of our staffing model in a cost-effective fashion and in quantities sufficient to meet forecast requirements;
|
● |
Manage substantial headcount changes, including in connection with our cost reduction plan, over short periods of time;
|
● |
Manage contract labor efficiently and effectively;
|
● |
Meet revenue targets;
|
● |
Maintain gross and operating margins;
|
● |
Match staffing levels with demand for services and forecast requirements;
|
● |
Obtain bonuses and avoid penalties in contractual arrangements;
|
● |
Operate successfully in a time-based pricing model;
|
● |
Operate effectively in the SMB market;
|
● |
Offer subscriptions to our products and services in a profitable manner;
|
● |
Successfully introduce new, and adapt our existing, services and products for consumers and businesses;
|
● |
Respond effectively to changes in the market for technology support services;
|
● |
Respond effectively to changes in the online advertising markets in which we participate;
|
● |
Respond effectively to competition;
|
● |
Respond to changes in macroeconomic conditions as they affect our and our partners’ operations;
|
● |
Realize benefits of any acquisitions we make;
|
● |
Adapt to changes in the markets we serve, including the decline in sales of personal computers, the proliferation of tablets and other mobile devices and the introduction of new devices into the connected home and the “Internet of Things”;
|
● |
Adapt to changes in our industry, including consolidation;
|
● |
Respond to government regulations relating to our current and future business;
|
● |
Manage and respond to present, threatened, and future litigation;
|
● |
Manage and respond to present, threatened or future government investigations and audits, including, without limitation, those audits and investigations described in Item 1 Legal Proceedings of this report; and
|
● |
Manage our operations and implement and improve our operational, financial and management controls.
|
● |
Demand for our services and products;
|
● |
The performance of our partners;
|
● |
Change, or reduction in or discontinuance of our principal programs with partners;
|
● |
Our reliance on a small number of partners for a substantial majority of our revenue;
|
● |
Instability or decline in the global macroeconomic climate and its effect on our and our partners’ operations;
|
● |
Our ability to successfully license and grow revenue related to our Support.com Cloud offering;
|
● |
The availability and cost-effectiveness of advertising placements for our software products and our ability to respond to changes in the online advertising markets in which we participate;
|
● |
Our ability to serve the SMB market;
|
● |
Our ability to attract and retain qualified management and employees in competitive markets;
|
● |
The efficiency and effectiveness of our technology specialists;
|
● |
Our ability to effectively match staffing levels with service volumes on a cost-effective basis;
|
● |
Our ability to manage contract labor;
|
● |
Our ability to hire, train, manage and retain our home-based technology specialists and enhance the flexibility of our staffing model in a cost-effective fashion and in quantities sufficient to meet forecast requirements;
|
● |
Our ability to manage substantial headcount changes over short periods of time;
|
● |
Our ability to manage costs under our self-funded health insurance program;
|
● |
Our ability to manage sales costs in programs where we are responsible for sales;
|
● |
Our ability to operate successfully in a time-based pricing model;
|
● |
Our ability to attract and retain partners;
|
● |
The price and mix of products and services we or our competitors offer;
|
● |
Pricing levels and structures in the market for technology support services;
|
● |
Usage rates on the subscriptions we offer;
|
● |
The rate of expansion of our offerings and our investments therein;
|
● |
Changes in the markets for computers and other technology devices relating to unit volume, pricing and other factors, including changes driven by declines in sales of personal computers and the growing popularity of tablets, and other mobile devices and the introduction of new devices into the connected home;
|
● |
Our ability to adapt to our customers’ needs in a market space defined by frequent technological change;
|
● |
The amount and timing of operating costs and capital expenditures in our business;
|
● |
Diversion of management’s attention from other business concerns, incurrence of costs and disruption of our ongoing business activities as a result of acquisitions or divestitures by us;
|
● |
Costs related to the defense and settlement of litigation which can also have an additional adverse impact on us because of negative publicity, diversion of management resources and other factors;
|
● |
Costs related to the defense and settlement of government investigations and audits which can also have an additional adverse impact on us because of negative publicity, diversion of management resources and other factors, including, without limitation, those audits and investigations described in Item 1 Legal Proceedings of this report;
|
● |
Potential losses on investments, or other losses from financial instruments we may hold that are exposed to market risk; and
|
● |
The exercise of judgment by our management in making accounting decisions in accordance with our accounting policies.
|
● |
Unanticipated costs and liabilities and unforeseen accounting charges or fluctuations;
|
● |
Delays and difficulties in delivery of services and products;
|
● |
Failure to effectively integrate or separate management information systems, personnel, research and development, marketing, sales and support operations;
|
● |
Loss of key employees;
|
● |
Economic dilution to gross and operating profit;
|
● |
Diversion of management’s attention from other business concerns and disruption of our ongoing business;
|
● |
Difficulty in maintaining controls and procedures;
|
● |
Uncertainty on the part of our existing customers about our ability to operate after a transaction;
|
● |
Loss of customers;
|
● |
Loss of partnerships;
|
● |
Inability to execute our growth plans;
|
● |
Declines in revenue and increases in losses;
|
● |
Declines in cash balances as a result of cash usage on any acquisitions;
|
● |
Failure to realize the potential financial or strategic benefits of the acquisition or divestiture; and
|
● |
Failure to successfully further develop the combined or remaining technology, resulting in the impairment of amounts recorded as goodwill or other intangible assets.
|
● |
Risks of product malfunction after new technology is integrated;
|
● |
Risks that we may be unable to obtain or continue to obtain support, maintenance and updates from the technology supplier;
|
● |
The diversion of resources from the development of our own proprietary technology; and
|
● |
Our inability to generate revenue from new technology sufficient to offset associated acquisition and maintenance costs.
|
● |
Laws and contractual restrictions may not adequately prevent infringement of our proprietary rights and misappropriation of our technologies or deter others from developing similar technologies; and
|
● |
Policing infringement of our patents, trademarks and copyrights, misappropriation of our trade secrets, and unauthorized use of our products is difficult, expensive and time-consuming, and we may be unable to determine the existence or extent of this infringement or unauthorized use.
|
● |
We may not be issued patents we may seek to protect our technology;
|
● |
Competitors may independently develop similar technologies or design around any of our patents;
|
● |
Patents issued to us may not be broad enough to protect our proprietary rights; and
|
● |
Our issued patents could be successfully challenged.
|
● |
Localization of our services, including translation into foreign languages and adaptation for local practices and regulatory requirements;
|
● |
Lack of familiarity with and unexpected changes in foreign regulatory requirements;
|
● |
Longer accounts receivable payment cycles and difficulties in collecting accounts receivable;
|
● |
Difficulties in managing and staffing international operations;
|
● |
Fluctuations in currency exchange rates;
|
● |
Potentially adverse tax consequences, including the complexities of foreign value added or other tax systems and restrictions on the repatriation of earnings;
|
● |
Dependence on certain third parties, including channel partners with whom we do not have extensive experience;
|
● |
The burdens of complying with a wide variety of foreign laws and legal standards;
|
● |
Increased financial accounting and reporting burdens and complexities;
|
● |
Political, social and economic instability abroad, terrorist attacks and security concerns in general; and
|
● |
Reduced or varied protection for intellectual property rights in some countries.
|
● |
be exploited by our competitors, cause concern to our current or potential clients,
|
● |
result in the loss of current customers or potential business opportunities, or
|
● |
make it more difficult to attract and retain qualified personnel and business partners.
|
10.1
|
Change Management Form Number 12 to Statement of Work 3 between Comcast and Company, signed March 7, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed with the SEC on March 16, 2017 ) (1)
|
10.2
|
Change Management Form Number 9 to Statement of Work 1 between Comcast and Company, signed February 24, 2017 (incorporated by reference to Exhibit 10.2 of the Company’s current report on Form 8-K filed with the SEC on March 16, 2017 ) (1)
|
10.3
|
Change Management Form Number 13 to Statement of Work 3 between Comcast and Company, signed February 24, 2017 (incorporated by reference to Exhibit 10.3 of the Company’s current report on Form 8-K filed with the SEC on March 16, 2017 ) (1)
|
10.4
|
Change Management Form Number 14 to Statement of Work 3 between Comcast and Company, signed February 24, 2017(incorporated by reference to Exhibit 10.4 of the Company’s current report on Form 8-K filed with the SEC on March 16, 2017 ) (1)
|
10.5
|
Standard Sublease between Support.com, Inc. and NantMobile, LLC dated April 29, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed with the SEC on May 3, 2017
|
10.6
|
Second Amended and Restated Executive Incentive Compensation Plan, approved by the Company’s Board of Directors on May 8, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed with the SEC on May 11, 2017)
|
10.7
|
Chris Koverman Bonus Letter dated May 8, 2017 (incorporated by reference to Exhibit 10.2 of the Company’s current report on Form 8-K filed with the SEC on May 11, 2017)
|
31.1
|
Chief Executive Officer Section 302 Certification
|
31.2
|
Principal Financial Officer Section 302 Certification
|
32.1
|
Statement of the Chief Executive Officer under 18 U.S.C. § 1350 (2)
|
32.2
|
Statement of the Principal Financial Officer under 18 U.S.C. § 1350 (2)
|
(1) |
Confidential treatment has been requested for portions of this exhibit.
|
(2) |
The certifications filed as Exhibits 32.1 and 32.2 are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the Company under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference.
|
May 15, 2017
|
SUPPORT.COM, INC.
|
|
By:
|
/s/
Richard Bloom
|
|
Richard Bloom
|
||
Interim President and Chief Executive Officer and Principal Financial Officer
|
10.1
|
Change Management Form Number 12 to Statement of Work 3 between Comcast and Company, signed March 7, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed with the SEC on March 16, 2017) (1)
|
|
10.2
|
Change Management Form Number 9 to Statement of Work 1 between Comcast and Company, signed February 24, 2017 (incorporated by reference to Exhibit 10.2 of the Company’s current report on Form 8-K filed with the SEC on March 16, 2017) (1)
|
|
10.3
|
Change Management Form Number 13 to Statement of Work 3 between Comcast and Company, signed February 24, 2017 (incorporated by reference to Exhibit 10.3 of the Company’s current report on Form 8-K filed with the SEC on March 16, 2017) (1)
|
|
10.4
|
Change Management Form Number 14 to Statement of Work 3 between Comcast and Company, signed February 24, 2017(incorporated by reference to Exhibit 10.4 of the Company’s current report on Form 8-K filed with the SEC on March 16, 2017) (1)
|
|
10.5
|
Standard Sublease between Support.com, Inc. and NantMobile, LLC dated April 29, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed with the SEC on May 3, 2017)
|
|
10.6
|
Second Amended and Restated Executive Incentive Compensation Plan, approved by the Company’s Board of Directors on May 8, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed with the SEC on May 11, 2017)
|
|
10.7
|
Chris Koverman Bonus Letter dated May 8, 2017 (incorporated by reference to Exhibit 10.2 of the Company’s current report on Form 8-K filed with the SEC on May 11, 2017)
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Chief Executive Officer Section 302 Certification
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Principal Financial Officer Section 302 Certification
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Statement of the Chief Executive Officer under 18 U.S.C. § 1350 (2)
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Statement of the Principal Financial Officer under 18 U.S.C. § 1350 (2)
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(1)
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Confidential treatment has been requested for portions of this exhibit.
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(2)
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The certifications filed as Exhibits 32.1 and 32.2 are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the Company under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference.
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