UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
| [X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended February 28, 2009 | |
| [ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period __________ to __________ | |
Commission File Number: 333-143901 |
SupportSave Solutions, Inc.
(Exact name of small business issuer as specified in its charter)
| Nevada | 98-0534639 |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
1451 Danville Blvd., Suite 201 Alamo, CA 94501 |
| (Address of principal executive offices) |
| (925) 304-4400 |
| (Issuer’s telephone number) |
_______________________________________________________________ |
| (Former name, former address and former fiscal year, if changed since last report) |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| [ ] Large accelerated filer Accelerated filer | [ ] Non-accelerated filer |
| [X] Smaller reporting company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 13,255,198 common shares as of February 28, 2009.
TABLE OF CONTENTS  | Page | |
PART I – FINANCIAL INFORMATION | ||
PART II – OTHER INFORMATION | ||
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our consolidated unaudited financial statements included in this Form 10-Q are as follows: | |
These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended February 28, 2009 are not necessarily indicative of the results that can be expected for the full year.
SUPPORTSAVE SOLUTIONS, INC.
(A NEVADA CORPORATION)
CONSOLIDATED BALANCE SHEETS
FEBRUARY 28, 2009 (UNAUDITED) AND MAY 31, 2008 (AUDITED)
February 28, 2009 (unaudited) | May 31, 2008 (audited) | ||||
| ASSETS | |||||
| CURRENT ASSETS | |||||
| Cash and cash equivalents | $ | 252,245 | $ | 436,719 | |
| Investment in marketable securities | 137,213 | 1,538 | |||
| Accounts receivable | 6,816 | 6,545 | |||
| TOTAL CURRENT ASSETS | 396,274 | 444,802 | |||
| PROPERTY AND EQUIPMENT | |||||
| Real estate | 230,318 | -0- | |||
| Furniture and equipment | 214,585 | 131,076 | |||
| Less accumulated depreciation | (65,859) | (23,295) | |||
| NET PROPERTY AND EQUIPMENT | 379,044 | 107,781 | |||
| OTHER ASSETS | |||||
| Security deposits | 13,682 | 7,482 | |||
| Membership equity | 15,000 | -0- | |||
| Deferred income tax | 119,000 | -0- | |||
| TOTAL OTHER ASSETS | 147,682 | 7,482 | |||
| $ | 923,000 | $ | 560,065 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| CURRENT LIABILITIES | |||||
| Accounts payable - trade | $ | 43,177 | $ | 10,714 | |
| Deferred revenue | 2,898 | 17,733 | |||
| TOTAL CURRENT LIABILITIES | 46,075 | 28,447 | |||
| STOCKHOLDERS' EQUITY | |||||
Common stock, $.00001 par value, 100,000,000 shares authorized, 13,255,198 shares issued and outstanding | 132 | 126 | |||
| Additional paid-in-capital | 1,143,291 | 921,297 | |||
| Cumulative translation adjustment | (21,187) | (9,833) | |||
| Retained earnings (deficit) | (245,311) | (379,972) | |||
| STOCKHOLDERS' EQUITY | 876,925 | 531,618 | |||
| $ | 923,000 | $ | 560,065 | ||
See accountants' report and accompanying notes.
SUPPORTSAVE SOLUTIONS, INC.
(A NEVADA CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008
(UNAUDITED)
| 2009 | 2008 | ||||
| REVENUE | |||||
| Sales | $ | 491,692 | $ | 338,540 | |
| Less returns and allowances | (6,637) | (5,631) | |||
| TOTAL REVENUE | 485,055 | 332,909 | |||
| EXPENSES | |||||
| Operating expenses | 371,861 | 218,171 | |||
| OPERATING INCOME (LOSS) | 113,194 | 114,738 | |||
| OTHER INCOME (EXPENSE) | |||||
| Interest income | 837 | 1,619 | |||
| Other income | 310 | -0- | |||
| Gain (loss) on sale of investments | (487) | -0- | |||
| Gains/(losses) from currency hedging contracts | (45,859) | -0- | |||
| Federal income tax (expense) benefit | (24,000) | (29,550) | |||
| TOTAL OTHER INCOME (EXPENSE) | (69,199) | (27,931) | |||
| NET INCOME | $ | 43,995 | $ | 86,807 | |
See accountants' report and accompanying notes.
SUPPORTSAVE SOLUTIONS, INC.
(A NEVADA CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008
(UNAUDITED)
| 2009 | 2008 | ||||
| REVENUE | |||||
| Sales | $ | 1,358,006 | $ | 672,861 | |
| Less returns and allowances | (41,405) | (14,733) | |||
| TOTAL REVENUE | 1,316,601 | 658,128 | |||
| EXPENSES | |||||
| Operating expenses | 1,220,027 | 461,487 | |||
| OPERATING INCOME (LOSS) | 96,574 | 196,641 | |||
| OTHER INCOME (EXPENSE) | |||||
| Interest income | 4,863 | 2,488 | |||
| Other income | 4,906 | -0- | |||
| Gain (loss) on sale of investments | 15,699 | -0- | |||
| Gains/(losses) from currency hedging contracts | (106,381) | -0- | |||
| Federal income tax (expense) benefit | 119,000 | (50,225) | |||
| TOTAL OTHER INCOME (EXPENSE) | 38,087 | (47,737) | |||
| NET INCOME | $ | 134,661 | $ | 148,904 | |
See accountants' report and accompanying notes.
SUPPORTSAVE SOLUTIONS, INC.
(A NEVADA CORPORATION)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2009
(UNAUDITED)
| Common Stock | Additional Paid-in | Cumulative Translation | Retained Earnings | Stockholders' | |||||||||||||
| Shares | Amount | Capital | Adjustment | (Deficit) | Equity | ||||||||||||
| Balance, May 31, 2008 | 12,655,198 | $ | 126 | $ | 921,297 | $ | (9,833) | $ | (379,972) | $ | 531,618 | ||||||
| Issuance of common stock | 600,000 | 6 | 221,994 | -0- | -0- | 222,000 | |||||||||||
Net income and translation adjustment | -0- | -0- | -0- | (11,354) | 134,661 | 123,307 | |||||||||||
| Balance, February 28, 2009 | 13,255,198 | $ | 132 | $ | 1,143,291 | $ | (21,187) | $ | (245,311) | $ | 876,925 | ||||||
See accountants' report and accompanying notes.
F-4
SUPPORTSAVE SOLUTIONS, INC.
(A NEVADA CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008
(UNAUDITED)
| 2009 | 2008 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
| Net income (loss) | $ | 134,661 | $ | 148,904 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation | 42,564 | 11,360 | |||
| Stock based compensation expense | 222,000 | -0- | |||
| Changes in: | |||||
| Accounts receivable | (271) | -0- | |||
| Prepaid expenses | -0- | 2,100 | |||
| Security deposit | (6,200) | (7,482) | |||
| Membership equity | (15,000) | -0- | |||
| Deferred income tax | (119,000) | -0- | |||
| Accounts payable | 32,463 | -0- | |||
| Accrued federal income tax | -0- | 50,225 | |||
| Deferred revenue | (14,835) | 16,178 | |||
| Payroll tax withholdings payable | -0- | (5,000) | |||
| TOTAL ADJUSTMENTS | 141,721 | 67,381 | |||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 276,382 | 216,285 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
| Purchases of property and equipment | (313,827) | (99,520) | |||
| Change in investment in marketable securities | (135,675) | -0- | |||
| Currency translation adjustment | (11,354) | (2,054) | |||
NET CASH (USED BY) INVESTING ACTIVITIES | (460,856) | (101,574) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
| Issuance of common stock | -0- | 8 | |||
| Additional paid in capital | -0- | 83,956 | |||
| Cash from stock subscriptions receivable | -0- | 7,415 | |||
| Payments on loan payable | (248,400) | (34,157) | |||
| Proceeds from office building purchase | 248,400 | -0- | |||
| Proceeds from loan payable to officer | -0- | 28,272 | |||
NET CASH PROVIDED BY FINANCING ACTIVITIES | -0- | 85,494 | |||
NET INCREASE IN CASH AND CASH EQUIVALENTS | (184,474) | 200,205 | |||
| CASH AND CASH EQUIVALENTS - BEGIN OF PERIOD | 436,719 | 122,675 | |||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 252,245 | $ | 322,880 | |
| SUPPLEMENTAL DISCLOSURES | |||||
| Cash paid during the year for: | |||||
| Interest expense | $ | -0- | $ | -0- | |
| Income taxes | $ | -0- | $ | -0- | |
See accountants' report and accompanying notes.
To the Shareholders of
SUPPORTSAVE SOLUTIONS, INC.
We have compiled the accompanying consolidated balance sheet of SUPPORTSAVE SOLUTIONS, INC. as of February 28, 2009 and the related consolidated statements of operations for the three months and nine months ended February 28, 2009 and 2008, changes in stockholders’ equity and cash flows for the nine months ended February 28, 2009 and 2008, and the accompanying supplementary information, which is presented for supplementary analysis purposes, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements and supplementary schedules information that is the representation of management. We have not audited or reviewed the accompanying financial statements and supplementary schedules and, accordingly, do not express an opinion or any other form of assurance on them.
The consolidated balance sheet as of May 31, 2008, was audited by other accountants and they expressed an unqualified opinion on it in their report dated August 19, 2008, but they have not performed any auditing procedures since that date.
Tama, Budaj & Raab, P.C.
March 29, 2009
SUPPORTSAVE SOLUTIONS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2009
| 1. | NATURE OF BUSINESS |
SupportSave Solutions, Inc. was incorporated in Nevada on May 2, 2007, and provides offshore business process outsourcing, or BPO, services from an outsourcing center through its wholly-owned subsidiary of the same name, which was incorporated in the Philippines on October 17, 2006 and operates in the Philippines. Both the parent and its subsidiary are hereinafter referred to as "the Company".
The consolidated financial statements of the Company include the accounts of the parent company and its wholly-owned Philippines subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| A. | Basis of Presentation |
Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. We believe that the disclosures are adequate to make the financial information presented not misleading. These condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended May 31, 2008. All adjustments were of a normal recurring nature unless otherwise disclosed. In the opinion of management, all adjustments necessary for a fair statement of the results of operations for the interim period have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year.
| B. | Cash and Cash Equivalents |
SupportSave considers all highly liquid investments with maturities of 3 months or less to be cash equivalents.
| C. | Property and Equipment |
Property and equipment are recorded at cost. Depreciation is provided by straight-line and accelerated methods, over the estimated useful lives of the assets, ranging from 39 years for real estate (building) and 5 to 7 years for furniture and equipment. Normal expenditures for repairs and maintenance are charged to operations as incurred.
| D. | Deferred Revenue |
Deferred revenue represents advances received on services to be rendered for the period subsequent to February 28, 2009.
SUPPORTSAVE SOLUTIONS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2009
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
| E. | Income Taxes |
The Company uses an asset and liability approach to financial accounting and reporting for income taxes. The difference between the financial statements and tax bases of assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the periods in which they are expected to affect taxable income. Valuation allowances are established, if necessary, to reduce the deferred tax assets to the amount that will more likely than not be realized. Income tax expense is the current tax payable or refundable for the period, plus or minus the net change in the deferred tax assets and liabilities.
| F. | Foreign Currency Translation |
The functional currency of the Company is the United States Dollar. The financial statements of the Company’s Philippine operations are translated to U.S. dollars using the period exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transaction occurs. Net gains and losses resulting from foreign exchange translations are included in the Statement of operations and changes in stockholders’ equity as other comprehensive income (loss).
| G. | Currency Hedging Contract Transactions |
The Company's operating expenses consist primarily of salaries, payroll taxes and employee benefit costs paid to the professionals that the Company employs in the Philippines. Since employee related costs are paid in the local currency, the Company is exposed to the risk of foreign currency fluctuations. In an effort to try to minimize the downside risk of fluctuating currency rates, the Company has entered into foreign exchange forward contracts. Any gains or losses from the settled and outstanding forward contracts are recorded as other income/expense in the Statement of operations.
| H. | Use of Estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
| I. | Advertising Costs |
The Company follows the policy of expensing advertising costs as they are incurred.
SUPPORTSAVE SOLUTIONS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 2009
| 3. | MARKETABLE SECURITIES |
Marketable securities are shown on the balance sheet. The first-in, first-out (FIFO) method is used to determine the cost of each security at the time of sale.
Cost and market value of marketable equity securities at February 28, 2009 are as follows:
| Cost | Gross Unrealized Gains/(Losses) | Market Value | ||||||
February 28, 2009: Equities/options | $ | 137,213 | $ | (12,004) | $ | 125,209 | ||
| 4. | OPERATING LEASE |
The Company leased its facility in Cebu, Philippines at the rate of approximately $2,000 per month. The lease was for a term of one year and expired on August 26, 2007. The Company is leasing the space on a month-to-month basis. The Company began leasing a new facility in Cebu, Philippines on December 1, 2007. The lease is for 5 years at the rate of approximately $3,750 per month. The Company also operates an administrative office in Troy, Michigan. The office facilities are provided at no charge by a friend of an officer of the Company. The Company also leases an office in Alamo, California. The office facilities are provided at no charge by a client of the Company. There can be no assurances that the facilities will continue to be provided at no charge in the future.
Minimum annual rents for all leases for the next five years are as follows:
Year Ending May 31, | Amount | ||
| 2011 | $ | 45,000 | |
| 2012 | 45,000 | ||
| 2013 | 45,000 | ||
| 2014 | 45,000 | ||
| 2015 | 45,000 | ||
| $ | 225,000 | ||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Overview
We provide offshore business process outsourcing, or BPO, services which we deliver primarily to U.S.-based clients from our facilities in the Philippines. BPO services involves contracting with an external organization to take primary responsibility for providing a business process or function, such as customer management, transcription and captioning, processing services, human resources, procurement, logistics support, finance and accounting, engineering, facilities management, information technology and training. These customer care services and solutions are provided by our skilled customer service representatives to small and mid-sized companies in the healthcare, communication, business services, financial services, publishing, and travel and entertainment industries.
Our Facilities
The Philippines
From our inception in May of 2007, we have continued executing our strategy to aggressively grow our business while continuing to optimize capacity of our existing facility. We began operations at our interim facility in Cebu, Philippines. This was a 5,000 sq. ft facility with 125 seats (workstations) for our dedicated employee services. However, in the first three quarters of 2007, we completed the build-out of our primary facility in the Philippines and transitioned operations from our interim facility that we had leased pending completion of the new site. Our new 9,000 sq. ft. primary facility is able to accommodate 326 workstations for our dedicated employee services. This expanded facility can accommodate 400-600 employees; depending upon utilization needs, we are able to operate 24 hours per day, 7 days per week. This is nearly three times the previous location’s capacity. The lease on our new facility is for 5 years at the rate of approximately $3,750 per month.
Furniture and desktop technology continue to be added to this new facility as necessary to establish production seats to meet client demands.
We plan to reach capacity at our current center within the next 1-3 months. To address this we have acquired additional space within our current building to accommodate an additional 100 seats (workstations). We will seek additional capacity through additional centers to meet excess demand. Our revised plan is to continue to add space and capacity to keep up with demand. We continue to scale up to larger more recognized clients and this should help accelerate our growth even further. We have a very robust pipeline that includes clients with the potential of over $1 million revenue annually in size.
Boca Raton, Florida
During the current reporting period, we purchased an investment property in Boca Raton, Florida for a total of $267,832.68. We anticipate that in the near future this investment opportunity will double as new office space to extend our market reach and provide additional support and services that are critical to our expanding customer base and partner channel. We chose Boca Raton because of the many talented financial and mortgage professionals displaced by the financial crisis and the ability to attract and retain these sales professionals with our lucrative residual income model. We hope to attract these professionals to service our BPO operations and complement our existing staff in the Philippines. We have a team of three sales professionals at our Boca Raton, Florida office.
Our Service Representatives
As of February 28, 2009, we had approximately 240 of the 326 workstations operating in our new facility in the Philippines. We increased our full-time employee count and have a backlog of potential candidates to select from. We plan to hire additional employees as needed until we reach capacity, at which point we will look to acquire space for further expansion.
We have a remotely viewable camera system that allows our clients to watch their “dedicated employee” working live with 8 full color cameras viewable from our website. We believe this provides significant value to our clients and potential clients in adding a visual aspect to our services.
Sales and Marketing
Our sales and marketing support group is and will continue to be responsible for increasing the awareness of our services in the marketplace and generating meetings with prospective clients through leads, sales calls, membership in industry associations, web-based marketing, public relations activity, attendance at trade shows and participation in industry conferences and events. We market our services through our website at www.SupportSave.com. We also run 30 second commercials on CNBC through the Dish Network.
We have thus far marketed our services through our website, online advertising and direct contact via email. In the next 12 months, our plan is to continue to expand our indirect channels through resellers, partners and affiliates. This allows us to greatly reduce our sales and marketing expense while broadening our reach. Under our current model our resellers mark up our price and keep the difference, our margins are not impacted and our volume is increased through resellers.
We have also formulated a plan to reduce exposure to risk of currency fluctuations and weakness in the US dollar through non-deliverable forward contracts. We hope to implement this plan in the next nine months. During the fiscal year we executed Non-deliverable forward contracts between the USD and the Philippine Peso to protect our business and clients from further weakness in the US Dollar.
Research and Development
We will not be conducting any product research or development during the next 12 months.
Results of Operations for the three months ended February 28, 2009 and 2008
To become more profitable and competitive, we have to attract more clients, sell our services and generate more revenues.
Our revenue reported for the three months ended February 28, 2009 was $491,692, compared with $338,540 for the three months ended February 29, 2008. Our revenue reported for the nine months ended February 28, 2009 was $1,358,006, compared with $672,861 for the nine months ended February 29, 2008.
Our revenue generated for all periods was attributable to the sale of our BPO services. The increase in revenues for the three and nine months ended February 28, 2009 from the same periods in 2008 is attributable to an increase in the sale of our BPO services as a result of expanding our facilities and operations.
Returns and allowances are refunds for services not provided. Returns and allowances for the three months ended February 28, 2009 amounted to $6,637, compared with $5,631 for the same period ended February 29, 2008. Returns and allowances for the nine months ended February 28, 2009 amounted to $41,405, compared with $14,733 for the same period ended February 29, 2008. We experienced more returns and allowances in the three and nine months ended February 28, 2009 compared with the same periods 2008 as a result of our increased customer base.
Our revenue less returns and allowances is our total revenue. Total revenue for the three months ended February 28, 2009 was $485,055, compared with $332,909 for the same period ended February 29, 2008. Total revenue for the nine months ended February 28, 2009 was $1,316,601, compared with $658,128 for the same period ended February 29, 2008.
Our operating expenses for the three months ended February 28, 2009 was $371,861, compared with $218,171 for the same period ended February 29, 2008. The increase in our operating expenses for the three months ended February 28, 2009 compared with February 29, 2008 is mainly attributable to increased payment for commissions, computer services, depreciation, dues and subscriptions, employee benefits, internet, rent, salaries, telephone, travel and utilities expenses. The increase was caused by increased operational activity.
Our operating expenses for the nine months ended February 28, 2009 was $1,220,027, compared with $461,497 for the period ended February 29, 2008. The increase in our operating expenses for the nine months ended February 28, 2009 compared with the same period 2008 is mainly attributable to increased payment for bank charges, commissions, computer services, consulting, depreciation, dues and subscriptions, internet, licenses and fees, rent, salaries, telephone, travel and utilities. The increase was caused by increased operational activity.
We had other expenses of $69,199 for the three months ended February 28, 2009. Other expenses for this period consisted mainly of $45,859 in losses from currency hedging transactions and $24,000 as a result of federal income tax expenses. In comparison, we experienced other expenses of $27,931 for the three months ended February 29, 2008. Other expenses for this period consisted mainly of $29,550 as a result of federal income tax expenses.
We had other income of $38,087 for the nine months ended February 28, 2009. Other income consisted of interest from cash balances on deposit at a financial institution of $4,863 added with $4,906 from other income, $15,699 for gains on the sale of investments and $119,000 in federal income tax benefits, offset by losses from currency hedging transactions in the amount of $106,381. In comparison, we experienced other expenses of $47,737 as a result of federal income tax expenses of $50,225 offset by interest income of $2,488 for the nine months ended February 29, 2008.
We had net income of $43,995 for the three months ended February 28, 2009, compared with net income of $86,807 for the three months ended February 29, 2008. We had net income of $134,661 for the nine months ended February 28, 2009, compared with net income of $148,904 for the nine months ended February 29, 2008. We have been operating with a positive cash flow since inception, albeit reduced in 2009 compared with 2008.
Liquidity and Capital Resources
As at February 28, 2009, we had $396,274 in current assets and $46,075 in current liabilities. On February 28, 2009, we had working capital of $350,199.
Operating activities provided $276,382 in cash for nine months ended February 28, 2009. Our stock based compensation expense of $222,000 net income of $134,661, along with depreciation of $42,564 and accounts payable of $32,463 were the primary components of our positive operating cash flow, offset mainly by deferred income tax of $119,000. Cash flows used by investing activities during the nine months ended February 28, 2009 was $460,856 for the purchase of property and equipment and changes in investment in marketable securities, combined with a currency translation adjustment. Cash flows provided by financing activities during the nine months ended February 28, 2009 was $0.
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.
Off Balance Sheet Arrangements
As of February 28, 2009, there were no off balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4T. Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of February 28, 2009. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Christopher Johns, and our Chief Financial Officer, Michael C. Palasick. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of February 28, 2009, our disclosure controls and procedures are effective. There have been no changes in our internal controls over financial reporting during the quarter ended February 28, 2009.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended February 28, 2009.
Item 5. Other Information
None
Item 6. Exhibits
Exhibit Number | Description of Exhibit |
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SupportSave Solutions, Inc. | |
| Date: | April 13, 2009 |
By: /s/ Christopher Johns Christopher Johns Title: Chief Executive Officer and Director |