Support.com 2006 Annual Report Download - page 26

We have recorded long−lived assets, and our results of operations would be adversely affected if their value becomes impaired.
Goodwill and identifiable intangible assets were recorded in part due to our acquisition of substantially all of the assets of Core
Networks Incorporated in September 2004. We also have certain intangible assets with an indefinite life. We assess the impairment of
goodwill and indefinite life intangible assets annually or more often if events or changes in circumstances indicate that the carrying
value may not be recoverable. We assess the impairment of acquired product rights and other finite life intangible assets whenever
events or changes in circumstances indicate that its carrying amount may not be recoverable. An impairment loss would be recognized
when the sum of the discounted future net cash flows expected to result from the use of the asset and its eventual disposition is less
than its carrying amount. Such impairment loss would be measured as the difference between the carrying amount of the asset and its
fair value. Material differences may result in write−downs of net long−lived and intangible assets, which would cause our operating
results to suffer.
Failure to resolve pending securities claims and other lawsuits may lead to continued costs and expenses and divert
management’s attention from our business, which could cause our revenue and our stock price to decline.
Securities class action lawsuits were filed against us in November 2001 and again in December 2004. In addition, a derivative
stockholder lawsuit was filed against us in December 2005. Should these lawsuits linger for a long period of time, whether ultimately
resolved in our favor or not, or further lawsuits be filed against us, coverage limits of our insurance or our ability to pay such amounts
may not be adequate to cover the fees and expenses and any ultimate resolution associated with such litigation. The size of these
payments, if any, individually or in the aggregate, could seriously impair our cash reserves and financial condition. The continued
defense of these lawsuits also could result in diversion of our management’s time and attention away from business operations, which
could cause our financial results to decline. A failure to resolve definitively current or future material litigation in which we are
involved or in which we may become involved in the future, regardless of the merits of the respective cases, could also cast doubt as
to our prospects in the eyes of customers, potential customers and investors, which could cause our revenue and stock price to decline.
Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our solutions or harm our
reputation and cause us to lose customers.
Our software contains features which allow our customers to control, monitor or collect information from computers running the
software. Federal, state and foreign government bodies and agencies, however, have adopted or are considering adopting laws and
regulations regarding the collection, use and disclosure of personal information obtained from consumers and individuals. Liability for
violation of, costs of compliance with, and other burdens imposed by such laws and regulations may limit the use and adoption of our
solutions and reduce overall demand for them. Even the perception of privacy concerns, whether or not valid, may inhibit adoption of
our solutions. In addition, we may face claims about invasion of privacy or inappropriate disclosure, use or loss of this information.
Any imposition of liability could harm our reputation, cause us to lose customers and cause our operating results to suffer.
We may not obtain sufficient patent protection, which could harm our competitive position, increase our expenses and harm
our business.
Our success and ability to compete depend to a significant degree upon the protection of our software and other proprietary
technology. It is possible that:
• our pending patent applications may not be issued;
• competitors may independently develop similar technologies or design around any of our patents;
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Source: SUPPORTSOFT INC, 10−K, March 16, 2007