Support.com Reminds Investors of Its Net Operating Loss Carryforwards and Tax Benefits Preservation Plan
Sunnyvale, CA – January 18, 2018 – Support.com, Inc. (NASDAQ: SPRT), a leading provider of tech support and turnkey support center services, producer of SUPERAntiSpyware® anti-malware products, and the maker of Support.com® software, today reminded its current and potential shareholders that in April 2016 its Board of Directors adopted a tax benefits preservation plan intended to preserve the utilization of Support.com’s federal net operating loss carryforwards, or NOLs, to reduce its future federal income tax liability. As of October 31, 2017, Support.com had approximately $140 million of (pre-tax) federal NOLs.
Section 382 of the Internal Revenue Code imposes limitations on the future use of a company’s NOLs if the company undergoes an “ownership change.” Support.com’s ability to benefit from its tax assets would be substantially limited by Section 382 if an “ownership change” occurred. A company experiences an “ownership change” for tax purposes if the percentage of stock owned by one or a group of its 5% stockholders (as defined for tax purposes) increases by more than 50 percentage points over a rolling three-year period over the lowest percentage of stock of such corporation owned by such stockholders at any time during that period.
In order to prevent the unintended limitation of its future use of its NOLs, Support.com’s tax benefits preservation plan provides that if any person or group (as defined in the plan) acquires 4.99% or more of our outstanding common shares without the approval of the Board of Directors, there would be a triggering event causing significant dilution in the ownership interest of such person or group subject to certain exemptions. The tax benefits preservation plan remains in effect and will expire no later than April 20, 2019 unless earlier terminated by the Board of Directors. Additional information with respect to the plan is contained in Support.com’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which Support.com filed with the Securities and Exchange Commission (“SEC”) on March 7, 2017.
“Our improvement in year-over-year profitability through the third quarter of 2017 has generated increased shareholder interest. Since our earnings release for that period, two shareholders have acquired more than 4.99% of our common stock and, as a result, have put us closer to an ownership change for purposes of Section 382. We determined that both acquisitions were inadvertent under our tax benefits preservation plan and have exempted such acquisitions from the plan, but there can be no assurance that any future acquisitions of more than 4.99% of our common shares by any investor or group will be determined to be inadvertent, thereby triggering our plan and significantly diluting the ownership interest of that investor or group. As a courtesy to our shareholders, we wanted to remind everyone of these limitations” said Rick Bloom, Interim President and Chief Executive Officer of the company.
Support.com, Inc. (NASDAQ: SPRT) is a leading provider of support services and software to deliver next-generation technical support. Support.com helps leading brands in software, electronics, communications, retail, and other connected technology industries deepen their customer relationships. Customers want technology that works the way it’s intended. By using Support.com services and software, companies can deliver a fantastic customer experience, leading to happier customers, greater brand loyalty and growing revenues. For more information, please visit https://corporate.support.com or follow us @support_com.
This press release contains “forward-looking statements” as defined under the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995, and is subject to the safe harbors created by such laws. Forward-looking statements contained in this press release may relate to, but are not limited to, statements regarding our future taxable income, our ability to utilize and realize the value of our net operating loss carryforwards and how they could be substantially limited if we experienced an ownership change as defined in Section 382 of the Internal Revenue Code, and whether the tax benefits preservation plan will reduce the likelihood of such an unintended ownership change from occurring. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. Information on factors that may impact these forward-looking statements can be found in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections contained in Support.com’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its latest Annual Report on Form 10-K and its latest Quarterly Report on Form 10-Q, copies of which may be obtained from www.sec.gov. The forward-looking statements in this press release are made as of the date hereof. Notwithstanding changes that may occur with respect to matters relating to any forward-looking statements, Support.com assumes no obligation to publicly update, amend or clarify its forward-looking statements, whether as a result of new information, future events or otherwise, except as may otherwise be required by the federal securities laws. Support.com, however, reserves the right to update such statements or any portion thereof at any time for any reason.
Support.com, Inc. is an Equal Opportunity Employer. For more information, visit https://corporate.support.com/about-us/careers.
© 2018 Support.com, Inc. All rights reserved. Support.com and the Support.com logo are trademarks or registered trademarks of Support.com, Inc. in the United States and other countries. All other marks are the property of their respective owners.
Investor Relations, Support.com
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