Stamps.com 2006 Annual Report Download - page 12

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Section 382 Update
Under Internal Revenue Code Section 382 rules, a change in ownership can occur whenever there is a shift in ownership by more than
50 percentage points by one or more five-percent shareholders within a three-year period. When a change of ownership is triggered, the NOLs
may be impaired. We estimate that, as of December 31, 2006 we were approximately at 30% compared with the 50% level that would trigger
impairment of our NOL asset. As part of our ongoing program to preserve future use of our NOL assets, Stamps.com requests that all of our
investors contact us prior to allowing their ownership interest to reach a five-percent level .
Employees
As of December 31, 2006, we had 165 employees not including temporary or contract workers. Our employees work in various
departments including customer support, research and development, sales and marketing, information technology and general administration.
None of our employees are represented by a labor union. We believe that our relationship with our employees is good.
Recent Developments
On November 3, 2006 Stamps.com’s Board of Directors approved a one-year share repurchase program authorizing our Company to
purchase up to $20 million of Stamps.com stock as market and business conditions warrant (the “November 2006 Program”).
During the fourth
quarter and in the first quarter of 2007 to date, our Company purchased approximately 0.8 million shares for a total amount of $12.0 million
under the November 2006 Program.
On February 8, 2007, Stamps.com’s Board of Directors approved an additional share repurchase program authorizing our Company to
purchase up to $20 million of Stamps.com stock as market and business conditions warrant (the “February 2007 Program”).
The February 2007
Program will commence when the November 2006 Program is completed and will expire one year from its commencement date.
Share purchases may be made from time to time on the open market or in negotiated transactions in compliance with Rule 10b-18 of the
Securities and Exchange Act of 1934. Our Company’s purchase of any of our shares is subject to limitations that may be imposed on such
purchases by applicable securities laws and regulations and the rules of the Nasdaq Stock Market. Purchases may be made in the open market,
or in privately negotiated transactions from time to time at our Company’
s discretion. The timing of purchases, if any, and the number of shares
to be bought at any one time will depend on market conditions.
In February 2007, Stamps.com announced our plan to change our publicly available customer metrics starting with the fourth quarter 2006
earnings release and continuing forward into fiscal 2007. The new metrics will be based primarily on paid subscribers whereas our prior
customer metrics were based primarily on registered subscribers. We believe that the new metrics will provide a simpler and clearer depiction
of our business while also providing an improved means of comparing our metrics to those of other subscription-based Internet companies. A
complete set of the old and new quarterly customer metrics is available currently at http://investor.stamps.com.
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