UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 22, 2009
SUPPORT.COM, INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 000-30901 | 94-3282005 | ||
|
(State or Other Jurisdiction of Incorporation) |
(Commission File No.) |
(I.R.S. Employer Identification No.) |
1900 Seaport Blvd., Third Floor, Redwood City, CA 94063
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code:
(650) 556-9440
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01 Completion of Acquisition or Disposition of Assets.
On June 23, 2009, support.com, Inc. (formerly known as SupportSoft, Inc.) (the “Company”) completed the sale of the Company’s Enterprise Business (the “Enterprise Business”) to Consona Corporation (“Buyer”) pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) dated as of April 5, 2009. Pursuant to the terms of the Purchase Agreement, Buyer has acquired certain assets and assumes certain liabilities related to the Enterprise Business as set forth in the Purchase Agreement (collectively, the “Transaction”).
Pursuant to the terms of the Purchase Agreement, at the closing of the Transaction (the “Closing”), the Company received a cash payment of approximately $20.0 million. The Purchase Agreement contained customary representations, warranties, covenants and indemnities.
The foregoing description of the Transaction does not purport to be a complete statement of the parties’ rights and obligations under the Purchase Agreement and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which was filed with the Current Report on Form 8-K on April 6, 2009, as Exhibit 2.1 and is incorporated by reference herein.
The Company has included in Exhibit 99.1 pro forma financial statements giving effect to the Transaction as if it had occurred at the start of each period presented.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 30, 2009, as a consequence of the sale of the Enterprise Business, Michael Sayer will be leaving his employment with the Company and therefore will cease to be a Named Executive Officer of the Company under Securities and Exchange Commission rules. As described in a Current Report on Form 8-K filed by the Company with the SEC on April 6, 2009, the Company amended and restated the employment offer letter with Mr. Sayer to provide that certain payments may be provided to Mr. Sayer under certain circumstances following the closing of an Enterprise Sale (as such term is defined in the amended and restated employment offer letter). The Transaction qualifies as an Enterprise Sale and, therefore, Mr. Sayer became entitled to such payments as of the Closing.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On June 22, in connection with the Transaction, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Name Change Amendment”) with the Secretary of State of the State of Delaware in order to effect a change in its name from SupportSoft, Inc. to support.com, Inc. A copy of the Name Change Amendment is attached hereto as Exhibit 3.1.
Safe Harbor for Forward-Looking Statements
This Current Report on Form 8-K, and the documents incorporated by reference herein, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We are subject to many risks and uncertainties that may materially affect our business and future performance and cause those forward-looking statements to be inaccurate. All statements in this Current Report on Form 8-K, other than statements that are purely historical, are forward-looking statements. Forward-looking statements in this Current Report on Form 8-K include, without limitation, certain assumptions described in the pro forma financial statements.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in these forward-looking statements. These risks and uncertainties include, but are not limited to, the risks detailed from time to time in the Company’s SEC filings, including those described in the “Risk Factors” section in the Company’s most recent Annual Report on Form 10-K filed with the SEC on March 11, 2009 and those described in the “Special Risk Considerations You Should Take Into Account In Deciding How To Vote On The Proposal To Sell The Enterprise Business” in the Company’s definitive proxy statement on Schedule 14A filed with the SEC on May 27, 2009. You can locate these filings on the Investor Relations page of the Company’s website, www.supportsoft.com/Company/investor_relations.html .
Statements included or incorporated by reference into this Current Report on Form 8-K are based upon information known to the Company as of the date of this Current Report on Form 8-K, and the Company assumes no obligation to publicly revise or update any forward-looking statement for any reason.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits. |
| 3.1 | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation | |
| 99.1 | Pro Forma Financial Statements | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: June 23, 2009
| SUPPORT.COM, INC. | ||
| By: |
/s/ Anne-Marie Eileraas |
|
| Name: | Anne-Marie Eileraas | |
| Title: | Senior Vice President, General Counsel and Secretary | |
EXHIBIT INDEX
|
Exhibit No. |
Description |
|
| 3.1 | Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation | |
| 99.1 | Pro Forma Financial Statement | |
Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SUPPORTSOFT, INC.
SupportSoft, Inc., a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify that:
1. The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by deleting Article I in its entirety and replacing it with the following:
“ARTICLE I
The name of this Corporation is support.com, Inc.”
2. The foregoing amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer on this 22 nd day of June, 2009.
| SUPPORTSOFT, INC. | ||
| By: |
/s/ Anne-Marie Eileraas |
|
| Name: | Anne-Marie Eileraas | |
| Office: |
Senior Vice President, Secretary and General Counsel |
|
Exhibit 99.1
SUPPORTSOFT, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information has been prepared to reflect the June 23, 2009 sale of substantially all of the assets and assumption of certain liabilities of the Company’s Enterprise Business (the Enterprise Business) to Consona, which we refer to herein as “Consona” or the “Buyer”. The unaudited pro forma consolidated financial information sets forth the pro forma consolidated results of operations of SupportSoft, Inc. (“SupportSoft” or the “Company”) for the three months ended March 31, 2009 and for the years ended December 31, 2008 and 2007 and the pro forma consolidated financial position of the Company as of March 31, 2009.
The unaudited pro forma consolidated statements of operations have been derived from the Company’s historical consolidated financial information and gives effect to the sale of the Enterprise Business to Consona as if it had occurred on January 1, 2007. In addition, the unaudited pro forma consolidated balance sheet has been derived from the Company’s historical consolidated financial information and gives effect to the sale of the Enterprise Business in exchange for approximately $20 million in cash as if it had occurred on March 31, 2009.
The unaudited pro forma consolidated statements of operations are based on the assumptions and adjustments described in the accompanying notes and do not reflect any adjustments for non-recurring items or changes in operating strategies arising as a result of the transaction. These unaudited pro forma consolidated financial statements include no assumptions regarding the use of proceeds (other than to pay transaction related expenses), which are presented as additional cash on the unaudited pro forma consolidated balance sheet. Accordingly, the actual effect of the transaction, due to this and other factors, could differ from the pro forma adjustments presented herein. However, management believes that the assumptions used and the adjustments made are reasonable under the circumstances and given the information available.
These unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the transaction been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma consolidated financial statements and the accompanying notes should be read together with the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as amended, and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009.
SUPPORTSOFT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2009
(in thousands)
|
Historical
SupportSoft |
Pro Forma
Adjustments |
Pro Forma
SupportSoft |
||||||||||
|
ASSETS |
||||||||||||
|
Current assets: |
||||||||||||
|
Cash and cash equivalents |
$ | 45,284 | $ | 17,850 | a | $ | 63,134 | |||||
|
Short-term investments |
21,402 | — | 21,402 | |||||||||
|
Accounts receivable, net |
7,604 | (5,464 | )b | 2,140 | ||||||||
|
Prepaid expenses and other current assets |
1,420 | (507 | )b | 913 | ||||||||
|
Total current assets |
75,710 | 11,879 | 87,589 | |||||||||
|
Long-term investments |
18,216 | — | 18,216 | |||||||||
|
Auction rate securities put option |
5,037 | — | 5,037 | |||||||||
|
Property and equipment, net |
1,033 | (180 | )b | 853 | ||||||||
|
Goodwill |
12,646 | (9,792 | )b | 2,854 | ||||||||
|
Purchased technology, net |
1,249 | (1,249 | )b | — | ||||||||
|
Intangible assets, net |
374 | — | 374 | |||||||||
|
Other assets |
934 | — | 934 | |||||||||
|
Total assets |
$ | 115,199 | $ | 658 | $ | 115,857 | ||||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
|
Current liabilities: |
||||||||||||
|
Accounts payable |
$ | 330 | $ | — | $ | 330 | ||||||
|
Accrued compensation |
1,940 | (451 | )b | 1,489 | ||||||||
|
Other accrued liabilities |
2,927 | — | 2,927 | |||||||||
|
Deferred revenue, less long-term portion |
7,626 | (7,551 | )b | 75 | ||||||||
|
Total current liabilities |
12,823 | (8,002 | ) | 4,821 | ||||||||
|
Deferred revenue—long-term portion |
790 | (790 | )b | — | ||||||||
|
Other long-term liabilities |
1,594 | (29 | )b | 1,565 | ||||||||
|
Total liabilities |
15,207 | (8,821 | ) | 6,386 | ||||||||
|
Commitments and contingencies |
||||||||||||
|
Stockholders’ equity |
||||||||||||
|
Preferred stock; par value $0.0001, 5,000,000 shares authorized; no shares issued or outstanding |
— | — | — | |||||||||
|
Common stock; par value $0.0001, 150,000,000 shares authorized; 46,358,673 issued and outstanding at March 31, 2009 |
5 | — | 5 | |||||||||
|
Additional paid-in capital |
219,093 | — | 219,093 | |||||||||
|
Accumulated other comprehensive loss |
(2,045 | ) | — | (2,045 | ) | |||||||
|
Accumulated deficit |
(117,061 | ) | 9,479 | c | (107,582 | ) | ||||||
|
Total stockholders’ equity |
99,992 | 9,479 | 109,471 | |||||||||
|
Total liabilities and stockholders’ equity |
$ | 115,199 | $ | 658 | $ | 115,857 | ||||||
SUPPORTSOFT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2009
(in thousands)
|
Historical
SupportSoft |
Pro Forma
Adjustments |
Pro Forma
SupportSoft |
||||||||||
| d | ||||||||||||
|
Revenue: |
||||||||||||
|
License |
$ | 807 | $ | (807 | ) | $ | — | |||||
|
Maintenance |
3,668 | (3,668 | ) | — | ||||||||
|
Services |
2,443 | (2,443 | ) | — | ||||||||
|
Consumer |
3,614 | — | 3,614 | |||||||||
|
Total Revenue |
10,532 | (6,918 | ) | 3,614 | ||||||||
|
Costs and expenses: |
— | |||||||||||
|
Cost of license |
110 | (110 | ) | — | ||||||||
|
Cost of maintenance |
420 | (372 | ) | 48 | ||||||||
|
Cost of services |
2,569 | (2,110 | ) | 459 | ||||||||
|
Cost of consumer |
4,421 | — | 4,421 | |||||||||
|
Amortization/write down of intangible assets |
43 | — | 43 | |||||||||
|
Research and development |
1,926 | (451 | ) | 1,475 | ||||||||
|
Sales and marketing |
5,200 | (2,148 | ) | 3,052 | ||||||||
|
General and administrative |
2,831 | (59 | ) | 2,772 | ||||||||
|
Total costs and expenses |
17,520 | (5,250 | ) | 12,270 | ||||||||
|
Loss from continuing operations before interest income and other, net |
(6,988 | ) | (1,668 | ) | (8,656 | ) | ||||||
|
Interest income and other, net |
(302 | ) | — | (302 | ) | |||||||
|
Loss from continuing operations before income taxes |
(7,290 | ) | (1,668 | ) | (8,958 | ) | ||||||
|
Provision for income taxes |
(106 | ) | (68 | ) | (38 | ) | ||||||
|
Loss from continuing operations |
$ | (7,396 | ) | $ | (1,600 | ) | $ | (8,996 | ) | |||
|
Basic loss per share |
$ | (0.16 | ) | $ | (0.19 | ) | ||||||
|
Shares used in computing basic loss per share |
46,330 | 46,330 | ||||||||||
|
Diluted loss per share |
$ | (0.16 | ) | $ | (0.19 | ) | ||||||
|
Shares used in computing diluted loss per share |
46,330 | 46,330 | ||||||||||
SUPPORTSOFT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2008
(in thousands)
|
Historical
SupportSoft |
Pro Forma
Adjustments |
Pro Forma
SupportSoft |
||||||||||
| d | ||||||||||||
|
Revenue: |
||||||||||||
|
License |
$ | 11,813 | $ | (11,813 | ) | $ | — | |||||
|
Maintenance |
15,881 | (15,881 | ) | — | ||||||||
|
Services |
14,365 | (14,365 | ) | — | ||||||||
|
Consumer |
6,811 | — | 6,811 | |||||||||
|
Total Revenue |
48,870 | (42,059 | ) | 6,811 | ||||||||
|
Costs and expenses: |
— | |||||||||||
|
Cost of license |
337 | (337 | ) | — | ||||||||
|
Cost of maintenance |
1,930 | (1,688 | ) | 242 | ||||||||
|
Cost of services |
13,652 | (11,644 | ) | 2,008 | ||||||||
|
Cost of consumer |
9,615 | — | 9,615 | |||||||||
|
Amortization/write down of intangible assets |
202 | (90 | ) | 112 | ||||||||
|
Research and development |
8,896 | (2,874 | ) | 6,022 | ||||||||
|
Sales and marketing |
24,305 | (10,197 | ) | 14,108 | ||||||||
|
General and administrative |
11,006 | (266 | ) | 10,740 | ||||||||
|
Total costs and expenses |
69,943 | (27,096 | ) | 42,847 | ||||||||
|
Loss from continuing operations before interest income and other, net |
(21,073 | ) | (14,963 | ) | (36,036 | ) | ||||||
|
Interest income and other, net |
2,506 | — | 2,506 | |||||||||
|
Loss from continuing operations before income taxes |
(18,567 | ) | (14,963 | ) | (33,530 | ) | ||||||
|
Provision for income taxes |
(539 | ) | (175 | ) | (364 | ) | ||||||
|
Loss from continuing operations |
$ | (19,106 | ) | $ | (14,788 | ) | $ | (33,894 | ) | |||
|
Basic loss per share |
$ | (0.41 | ) | $ | (0.74 | ) | ||||||
|
Shares used in computing basic loss per share |
46,098 | 46,098 | ||||||||||
|
Diluted loss per share |
$ | (0.41 | ) | $ | (0.74 | ) | ||||||
|
Shares used in computing diluted loss per share |
46,098 | 46,098 | ||||||||||
SUPPORTSOFT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2007
(in thousands)
|
Historical
SupportSoft |
Pro Forma
Adjustments |
Pro Forma
SupportSoft |
||||||||||
| d | ||||||||||||
|
Revenue: |
||||||||||||
|
License |
$ | 15,780 | $ | (15,780 | ) | $ | — | |||||
|
Maintenance |
16,084 | (16,084 | ) | — | ||||||||
|
Services |
14,888 | (14,888 | ) | — | ||||||||
|
Consumer |
1,050 | — | 1,050 | |||||||||
|
Total Revenue |
47,802 | (46,752 | ) | 1,050 | ||||||||
|
Costs and expenses: |
— | |||||||||||
|
Cost of license |
218 | (218 | ) | — | ||||||||
|
Cost of maintenance |
2,586 | (2,283 | ) | 303 | ||||||||
|
Cost of services |
15,652 | (13,729 | ) | 1,923 | ||||||||
|
Cost of consumer |
4,608 | — | 4,608 | |||||||||
|
Amortization/write down of intangible assets |
2,815 | (2,815 | ) | — | ||||||||
|
Research and development |
9,441 | (5,427 | ) | 4,014 | ||||||||
|
Sales and marketing |
30,410 | (20,072 | ) | 10,338 | ||||||||
|
General and administrative |
9,296 | (239 | ) | 9,057 | ||||||||
|
Total costs and expenses |
75,026 | (44,783 | ) | 30,243 | ||||||||
|
Loss from continuing operations before interest income and other, net |
(27,224 | ) | (1,969 | ) | (29,193 | ) | ||||||
|
Interest income and other, net |
6,526 | — | 6,526 | |||||||||
|
Loss from continuing operations before income taxes |
(20,698 | ) | (1,969 | ) | (22,667 | ) | ||||||
|
Provision for income taxes |
(671 | ) | (402 | ) | (269 | ) | ||||||
|
Loss from continuing operations |
$ | (21,369 | ) | $ | (2,371 | ) | $ | (22,936 | ) | |||
|
Basic loss per share |
$ | (0.47 | ) | $ | (0.50 | ) | ||||||
|
Shares used in computing basic loss per share |
45,610 | 45,610 | ||||||||||
|
Diluted loss per share |
$ | (0.47 | ) | $ | (0.50 | ) | ||||||
|
Shares used in computing diluted loss per share |
45,610 | 45,610 | ||||||||||
See accompanying notes.
SUPPORTSOFT INC.
NOTES TO PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL INFORMATION
Basis of Presentation
The unaudited pro forma consolidated financial information gives effect to the sale of substantially all of the assets and assumption of certain liabilities of the Company’s Enterprise Business by Consona in exchange for approximately $20 million in cash. The Company will account for the disposition as a discontinued operation in its consolidated financial statements in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets .
During the periods presented, the Enterprise Business was operated as an operating segment within the Company. As such, the Company did not maintain separate, stand-alone financial statements for the Enterprise Business. Accordingly, the financial information of the Enterprise Business has been prepared from the historical accounting records of the Company and does not purport to reflect a balance sheet and statement of operations that would have resulted if the Enterprise Business had been a separate, stand-alone company.
Prior to 2007, SupportSoft’s only business was the Enterprise Business. Accordingly, the historical statement of operations of SupportSoft for the year ended December 31, 2006, represents the Enterprise Business in its entirety. Therefore, pro forma financial information for any period prior to January 1, 2007 is not presented.
The unaudited pro forma consolidated statements of operations for the three months ended March 31, 2009 and the years ended December 31, 2008 and 2007 have been derived from the Company’s historical consolidated financial information and give effect to the transaction as if it had occurred on January 1, 2007. In addition, the unaudited pro forma consolidated balance sheet as of March 31, 2009 has been derived from the Company’s historical consolidated financial information and gives effect to the transaction as if it had occurred on March 31, 2009.
The unaudited pro forma consolidated statements of operations are based on the assumptions and adjustments described in the accompanying notes and do not reflect any adjustments for non-recurring items or changes in operating strategies arising as a result of the transaction. These unaudited pro forma consolidated financial statements include no assumptions regarding the use of proceeds (other than to pay transaction related expenses), which are presented as additional cash on the unaudited pro forma consolidated balance sheet. Accordingly, the actual effect of the transaction, due to this and other factors, could differ from the pro forma adjustments presented herein. However, management believes that the assumptions used and the adjustments made are reasonable under the circumstances and given the information available.
These unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the transaction been consummated as of the dates indicated or of the results that may be obtained in the future. These unaudited pro forma consolidated financial statements and the accompanying notes should be read together with the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as amended, and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009.
SUPPORTSOFT INC.
NOTES TO PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL INFORMATION
Pro Forma Adjustments
Pro forma adjustments reflect those adjustments which are directly attributable to the transaction and include the following:
| (a) | Represents sale proceeds, less estimated direct transaction costs, as follows: |
| Amount | |||
| (in thousands) | |||
|
Cash consideration |
$ | 20,000 | |
|
Less: Estimated transaction costs |
2,150 | ||
|
Adjustment to cash and cash equivalents |
$ | 17,850 | |
| (b) | Eliminates the assets acquired and liabilities assumed by Consona in connection with the disposition of the Enterprise Business. |
| (c) | Represents the estimated gain on sale of net assets before federal, state and foreign taxes. |
| (d) | Eliminates the financial results of operations of the Enterprise Business, as adjusted for certain direct costs, facilities overhead, and corporate general and administrative costs that have been attributed to the Enterprise Business but are expected to be borne by the Company after the disposition of the Enterprise Business. |