Support.com 2006 Annual Report Download - page 28

We may be required to change our business practices if there are changes in accounting regulations and related
interpretations and policies.
Accounting standards groups and regulators are actively re−examining various accounting policies, guidelines and interpretations
related to revenue recognition, income taxes, investments in equity securities, facilities consolidation, accounting for acquisitions,
allowance for doubtful accounts and other financial reporting matters. These standards groups and regulators could promulgate
interpretations and guidance that could result in material and potentially adverse changes to our business practices and accounting
policies.
New rules and regulations for public companies have increased and may continue to increase our administrative costs.
The Sarbanes−Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission
and the Nasdaq Global Select Market, has required changes in corporate governance practices of public companies. These rules and
regulations are increasing our legal and financial compliance costs, and making some activities more time−consuming and costly.
These rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and we
may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These new rules and regulations
could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our
audit committee, and qualified executive officers.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2. PROPERTIES.
In the fourth quarter of 2006, we signed a lease for our new corporate headquarters facility with approximately 37,400 square feet
at 1900 Seaport Boulevard, 3rd Floor, Redwood City, California. We are currently transitioning our headquarters from 575 Broadway
in Redwood City, California, where our lease for approximately 23,600 square feet expires in May 2007. The new corporate
headquarters lease expires in July, 2012. We believe the new facilities are adequate and suitable for our business requirements.
ITEM 3. LEGAL PROCEEDINGS.
Between December 2004 and January 2005, several purported securities class action suits were filed in the United States District
Court for the Northern District of California against us, our former Chief Executive Officer, Radha R. Basu, and our former Chief
Financial Officer, Brian M. Beattie. These actions were consolidated on March 22, 2005 as In re SupportSoft, Inc. Securities
Litigation, Civil Action No.: c 04−5222 SI. The consolidated complaint alleges generally violations of certain federal securities laws
and seeks unspecified damages on behalf of a class of purchasers of our common stock between January 20, 2004 and October 1,
2004. Plaintiffs allege, among other things, that defendants made false and misleading statements concerning our business and
guidance for the third quarter 2004, purportedly violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and
Rule 10b−5 promulgated thereunder. On June 1, 2006, this action was certified to proceed as a class action on behalf of all persons
and entities who purchased or otherwise acquired the securities of the Company from January 29, 2004 to October 1, 2004 and who
were allegedly damaged thereby. The case is currently in discovery. A trial date has been set for October 29, 2007. Defendants intend
to vigorously defend themselves against the consolidated lawsuit. While we cannot predict with certainty the outcome of the litigation,
we believe that we have meritorious defenses to such claims.
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Source: SUPPORTSOFT INC, 10−K, March 16, 2007