Supportsave Soluti Com Stk Usd0 (GREY:SSVE)

On November 1, 2010, we entered into an employment agreement with Chris Johns to serve as an executive officer or our company. The employment agreement was filed on November 3, 2010 in our Current Report on Form 8-K with the Securities and Exchange Commission and amended and filed as Exhibit 10.2 on March 8, 2011. On July 12, 2012, we entered into a second amendment of his employment agreement. Under the terms of the amendment, Mr. Johns was granted 10,000,000 shares. The shares will vest in equal installments over a period of four years.

On February 17, 2012, we entered into an Asset Purchase Agreement (the “Agreement”) with Global Services Corporation, a Republic of Seychelles corporation (“GSC”) for the acquisition of certain assets in exchange for cash and a promissory note.

On May 15, 2012, we entered into a termination agreement (the “Termination Agreement”) with GSC to terminate the Agreement. As a result of the Termination Agreement, all rights, obligations and duties under the Agreement have been terminated. We have agreed to forfeit $100,000 already paid under the Agreement, and GSC has agreed to return all of the shares of our common stock issued under the Agreement.

 

SUPPORTSAVE SOLUTIONS, INC.

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED FEBRUARY 29, 2012 AND FEBRUARY 28, 2011 (UNAUDITED)

 

 

 

		2012				2011
REVENUE
Sales		$	1,143,538			$	770,893
Less returns and allowances			-0-				(15,902	)
TOTAL REVENUE			1,143,538				754,991
EXPENSES
Wages and benefits			561,532				601,413
Rent			59,667				76,793
Telephone, internet and utilities			66,728				41,057
Commissions			13,820				42,695
Selling, general and administrative			294,431				112,400
TOTAL EXPENSES			996,178				874,358
OPERATING INCOME (LOSS)			147,360				(119,367	)
OTHER INCOME (EXPENSE)
Interest income			1,092				(42	)
Other income			22,286				-0-
Bad debt expense			-0-				(110,000	)
Settlement expense			(10,235	)			(32,000	)
TOTAL OTHER INCOME (EXPENSE)			13,143				(142,042	)
NET INCOME (LOSS) BEFORE PROVISION FOR FEDERAL INCOME TAX (BENEFIT)			160,503				(261,409	)
PROVISION FOR FEDERAL INCOME TAX (BENEFIT)			56,000				(91,000	)
NET INCOME (LOSS)		$	104,503			$	(170,409	)
NET INCOME (LOSS) PER SHARE:
BASIC AND DILUTED		$	0.01			$	(0.01	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC AND DILUTED			17,164,617				15,186,031

On February 17, 2012, we entered into an Asset Purchase Agreement (the “Agreement”) with Global Services Corporation, a Republic of Seychelles corporation (“GSC”) for the acquisition of certain assets in exchange for cash and a promissory note. GCS owns and operates a remote technical support business and we have agreed to purchase selected assets in association with that business from GCS that we believe will complement our own business model. The acquired assets consist of intellectual property, namely the websites www.techbuddha.com and www.virtualpcdoctor.com, customer lists, contracts, service records and goodwill.

We have also agreed to assume certain liabilities associated with the contracts and customer support agreements we acquired in the transaction.

The total purchase price consists of $1,170,000 and 1,656,834 shares of our common stock. We have agreed to deliver $30,000 at execution of the Agreement, $100,000 at closing and the balance in the form of a promissory note. The no-interest promissory note will provide for monthly installment payments at a rate of $57,000 that will commence on March 15, 2012 and continue until paid in full.

SUPPORTSAVE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2011 AND 2010 (UNAUDITED)

 

 

		2011				2010
REVENUE
Sales		$	899,505			$	750,424
Less returns and allowances			-0-				(3,780	)
TOTAL REVENUE			899,505				746,644
EXPENSES
Wages and benefits			443,483				706,096
Rent			53,500				28,177
Advertising			132				13,076
Telephone, internet and utilities			28,199				52,340
Commissions			11,167				37,124
Settlements expense			(2,000	)			-0-
Legal and accounting			15,217				20,374
Depreciation			18,230				14,825
Selling, general and administrative			172,167				66,837
TOTAL EXPENSES			740,095				938,849
OPERATING INCOME (LOSS)			159,410				(192,205	)
OTHER INCOME (EXPENSE)
Interest income			2,291				5,622
Other income			2				204
Gains/(losses) on sales of investments			(4,995	)			-0-
Gains/(losses) on sales of assets			(2	)			-0-
TOTAL OTHER INCOME (EXPENSE)			(2,704	)			5,826
NET INCOME (LOSS) BEFORE PROVISION FOR FEDERAL INCOME TAX (BENEFIT)			156,706				(186,379	)
PROVISION FOR FEDERAL INCOME TAX (BENEFIT)			54,000				(65,000	)
NET INCOME (LOSS)		$	102,706			$	(121,379	)
NET INCOME (LOSS) PER SHARE:
BASIC AND DILUTED		$	0.01			$	(0.01	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC AND DILUTED			18,417,143				14,728,558

 

 

 

 

SUPPORTSAVE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED AUGUST 31, 2011 AND 2010 (UNAUDITED)

 

 

 

		Three Months Ended				Three Months Ended
		August 31, 2011				August 31, 2010
REVENUE
Sales		$	911,171			$	572,587
Less returns and allowances			(2,651	)			(5,934	)
TOTAL REVENUE			908,520				566,653
EXPENSES
Wages and benefits			407,895				680,948
Rent			67,595				27,034
Advertising			16,434				20,539
Telephone, internet and utilities			45,979				25,250
Commissions			14,550				16,910
Settlements expense			4,500				-0-
Legal and accounting			6,737				8,381
Depreciation			17,798				14,480
Selling, general and administrative			109,717				44,799
TOTAL EXPENSES			691,205				838,343
OPERATING INCOME (LOSS)			217,315				(271,690	)
OTHER INCOME (EXPENSE)
Interest income			1,698				5,806
TOTAL OTHER INCOME (EXPENSE)			1,698				5,806
NET INCOME (LOSS) BEFORE PROVISION FOR FEDERAL INCOME TAX (BENEFIT)			219,013				(265,884	)
PROVISION FOR FEDERAL INCOME TAX (BENEFIT)			77,000				(93,000	)
NET INCOME (LOSS)		$	142,013			$	(172,884	)
NET INCOME (LOSS) PER SHARE:
BASIC AND DILUTED		$	0.01			$	(0.01	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC AND DILUTED			19,769,266				14,728,558

LOS ANGELES, CA -- (Marketwire - October 04, 2011) - SupportSave Solutions, Inc. (OTCBB: SSVE) (www.supportsave.com), a provider of Business Process Outsourcing (BPO) services in the Philippines, has announced the execution of a stock buyback program, subject to market conditions, with purchases to be made out of ongoing positive cash flow from operations. Under the program, the Company may acquire approximately 3,000,000 shares at prices of up to $0.10 per share over the next 90 days.

On June 27, 2011, Mr. Joseph Duryea, our former President, filed a complaint (the “Complaint”) against us in the United States District Court for the District of Nevada (Case No. 2:11-cv-01054-GMN CWH) alleging breach of contract, breach of the covenant of good faith and fair dealing, tortious breach of contract, and fraud (the “Litigation”) in relation to an employment agreement (the “Employment Agreement”) we entered into with him on January 15, 2010.

On September 15, 2011, we entered into a settlement agreement (the “Settlement Agreement”) with Mr. Duryea to resolve the above Litigation. Under the terms of the Settlement Agreement, we agreed to pay Mr. Duryea a total of $85,000 (the “Settlement Funds”). Of this total amount, we agreed to pay $45,000 upon execution of the Settlement Agreement and the remaining $40,000 shall be paid in four equal installments, payable on or before October 15, 2011, November 15, 2011, December 15, 2011 and January 15, 2012.

On September 9, 2011 we entered in to an Amendment (the “Amendment”) to the Settlement Agreement (the “Agreement”) we entered into on February 28, 2011 with Joseph Charles Loomis (the “Debtor”). Under the Agreement, as detailed more fully in the Current Report on Form 8-K filed with the SEC on March 3, 2011, the Debtor was paid $200,000 and permitted 180 days to sell his shares of stock for a price of not less than $0.35 per share for a total payout of $500,000. Any shares not sold would then be purchased by us. At the end of the 180 days, however, the Debtor was unable to sell his shares and we were unable to pay him the remaining $300,000 for his shares.

As demonstrated above and going forward, we will experience higher costs related to the compensation of our new management team and the build out and migration to our new 550 seat operation center in the Cybergate building in Cebu, Philippines. The new management team’s stock-based compensation awards are scheduled to continue through the end of the fiscal year, significantly increasing our salary and compensation expense in the near-term. In addition, our new facility was opened in early December 2010 and we experienced higher costs as we migrate to the facility. We believe the new management team and larger, more modern facility will position us to pursue new business contracts that are much larger than the typical and traditionally smaller BPO contracts we now have. Consequently, we anticipate the increased expense associated with the management team and facility will impair our profitability in the near-term and mid-term, but we also anticipate significant improvement in both overall revenues and profits in the long-term as these new contracts are secured and ramp up.

Currently, our primary source of liquidity is cash flows provided by our operations. We will not require additional capital to execute our plan, unless we expand into additional facilities or grow through the acquisition of complementary businesses. Our current cash flows from operations are sufficient to meet our working capital requirements over the next 12 months.

Added to the GeoSpecial list on October 20, 2009 @ $0.55

Catalyst: We're speculating that above average revenue growth would begin to translate into meaningful EPS numbers; Trend for business outsourcing will intensify. 
Peak performance: Reached a high of $1.35 January 10, 2010
Current Price: $0.69
 
Current road block:  Lack of investor awareness; Shares are quite illiquid; P/E is over 25; EPS has still has not broken out to a meaningful number, as we had hoped. (Quarterly EPS has never exceeded $0.01).

Removing from the GeoSpecial list and placed on the GeoSpecial on the radar list until EPS growth accelerates. 

Risky investors may want to follow this story.  On  February 8, 2010 we reported that Supportsave Solutions President purchased 50 thousand shares. We feel that there is an outside chance that SSVE becomes an acquisition target down the line, a similar route that competitors have taken in the recent past.

Liquidity seems in tact:

"Currently, our primary source of liquidity is cash flows provided by our operations. We will not require additional capital to execute our plan, unless we expand into additional facilities or grow through the acquisition of complementary businesses. Our current cash flows from operations are sufficient to meet our working capital requirements over the next 12 months."

Positive Development:

GeoSpecial Supportsave Solutions President purchases 50K shares.  We view this as a bullish sign, especially since the stock is trading near its 52 week high.

Supportsave Solutions is starting to pique our curiosity. While the company is not producing earth-shattering EPS numbers in an absolute sense, it has remained profitable throughout the global recession.  In fact, SSVE believes that the recession is spurring demand for its management outsourcing business:

"Our services are in great demand as small to mid-sized corporations across the globe look to reduce costs to withstand the economic downturn. Going forward we plan to cater to a wider segment of the market and expand our client base."

Furthermore, it appears that the SSVE is beginning to embark on an aggressive growth strategy:

• The Company understands its position: "To become more profitable and competitive, we have to attract more clients, sell our services and generate more revenues."
• Increase in advertising budget:  Larger cash flows have allowed SSVE to reposition the company to attract larger clients via a more vigorous marketing campaign.
• The company has issued impressive financial guidance which it stresses is still conservative:

May Fiscal Year	Fiscal 2011 Guidance	Fiscal 2010 Guidance	2009 Reported	2008 Reported
GAAP Revenue	$10.0 million	$5.0 million	$1.9 million	$1.0 million
EBITDA Margin	35.0%	35.0%	16.3%	n/a
EBITDA	$3.50 million	$1.75 million	$322 thousand	-$365 thousand
EPS a	$0.15 b	$0.08 b	$0.02	-$0.03
Fully Diluted Shares b	13,255,198	13,255,198	12,918,508	11,880,772

^a EPS figures eliminate one time charges/gains as well as any tax benefits. A tax rate of 36% and first quarter pre-tax margins of 32% are applied.

^b SSVE did not provide EPS guidance.  The GeoTeam® used the company's first quarter pre-tax margins and outstanding share count to calculate an implied EPS figure.

Strong Financials Characteristics:

• Current Ratio: 9.93 to 1
• Strong cash position: $766 thousand in Cash representing 63% of total assets
• "GOING CONCERN" warning recently removed from financials
• No long-term debt
• No short-term notes
• 32% pre-tax margins

Shareholder Friendly Management:

• Shareholder letter stressing importance of saving money and enhancing shareholder growth.
• Management Confidence:
  
  • "We have repurchased 266,869 shares on the open market and will continue to do so at our discretion until we reach 500,000 shares. We truly believe the company's shares are very undervalued and will take advantage of buying opportunities."  
    
  • "We finance our operations through significant positive cash flows and not through the sale of stock. Our management team and directors have never sold a single share of stock or exercised a single option since inception and have no plans to do so for the foreseeable future. With our strong liquidity position we will not require additional capital to execute our plans for the future, unless we expand into additional facilities or grow through the acquisition of complementary businesses."

We still would like to interview SupportSave.  The company is tiny and certainly will carry a level of perceived risk with investors.  Furthermore, SSVE has not been able to break out of the $0.01 EPS range, a factor that does not support our implied EPS assumption based on company guidance.

The Company seems to have a conservative management philosophy as evidenced by its balance sheet structure--our view that it is maybe a little too conservative. If we gain confidence that SSVE guidance will lead to more substantial EPS figures, then the SSVE story may have legs.

We are actually excited to track SSVE and are coding it as a low tier GeoSpecial.