SupportSave Solutions Inc - FORM 10-Q

Attached files

file	filename
EX-31.1 - EXHIBIT 31.1 - SupportSave Solutions Inc	ex31_1.htm
EX-31.2 - EXHIBIT 31.2 - SupportSave Solutions Inc	ex31_2.htm
EX-32.1 - EXHIBIT 31.2 - SupportSave Solutions Inc	ex32_1.htm

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, 2011

[ ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from __________ to __________

	Commission File Number: 333-143901

SupportSave Solutions, Inc.

(Exact name of Registrant as specified in its charter)

Nevada	98-0534639
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

3400 Cahuenga Blvd. W, Suite 114, Los Angeles, CA 90068

(Address of principal executive offices)

(925) 304-4400

(Registrant’s telephone number)

_______________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days

[ ] Yes [X] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]

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: 21,342,280 common shares as of April 14, 2011.

Table of Contents

	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	8
Item 4:	Controls and Procedures	8
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	9
Item 1A:	Risk Factors	9
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3:	Defaults Upon Senior Securities	9
Item 4:	(Removed and Reserved)	9
Item 5:	Other Information	9
Item 6:	Exhibits	9

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our financial statements included in this Form 10-Q are as follows:
F-1	Consolidated Balance Sheets as of February 28, 2011 and May 31, 2010 (unaudited);
F-2	Consolidated Statements of Operations for the three and nine months ended February 28, 2011 and 2008 (unaudited);
F-4	Consolidated Statement of Stockholders’ Equity as of February 28, 2011 (unaudited);
F-5	Consolidated Statements of Cash Flows for the nine months ended February 28, 2011 and February 28, 2010 (unaudited);
F-6	Notes to Consolidated Financial Statements;

These 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, 2011 are not necessarily indicative of the results that can be expected for the full year.

Table of Contents

SUPPORTSAVE SOLUTIONS, INC.

(A NEVADA CORPORATION)

CONSOLIDATED BALANCE SHEETS

FEBRUARY 28, 2011 (UNAUDITED) AND MAY 31, 2010 (AUDITED)

ASSETS	February 28, 2011			May 31, 2010
CURRENT ASSETS
Cash and cash equivalents	$	886,254		$	1,588,056
Investment in marketable securities		273			610
Accounts receivable - trade		139,157			170,249
Accounts receivable - other		-0-			15,441
Note receivable - Florida office building		-0-			210,000
Accrued interest receivable		6,521			3,541

TOTAL CURRENT ASSETS		1,032,205			1,987,897

PROPERTY AND EQUIPMENT
Furniture and equipment		364,682			320,417
Construction in progress		541,173			-0-
Less accumulated depreciation		(171,606	)		(118,694)

NET PROPERTY AND EQUIPMENT		734,249			201,723

OTHER ASSETS
Security deposits		66,396			64,208
Note receivable - related party		100,000			50,000
Deferred tax asset		249,000			-0-

TOTAL OTHER ASSETS		415,396			114,208
	$	2,181,850		$	2,303,828

F-1

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SUPPORTSAVE SOLUTIONS, INC.

(A NEVADA CORPORATION)

CONSOLIDATED BALANCE SHEETS

FEBRUARY 28, 2011 (UNAUDITED) AND MAY 31, 2010 (AUDITED)

LIABILITIES AND STOCKHOLDERS' EQUITY	February 28, 2011			May 31, 2010
CURRENT LIABILITIES
Accounts payable - trade	$	35,648		$	50,985
Accrued expenses		37,500			39,185
Payroll tax withholdings		1			12,062
Accrued wages		54,809			62,621
Deferred income taxes		97,000			97,000
Loan payable - officer		800			800

TOTAL CURRENT LIABILITIES		225,758			267,734

STOCKHOLDERS' EQUITY
Common stock, $.00001 par value, 100,000,000 shares authorized, 15,186,031 and 14,503,531 shares issued and outstanding at February 28, 2011 and May 31, 2010, respectively		151			145
Additional paid-in-capital		2,355,519			1,958,084
Treasury stock		(3,029	)		(3,029)
Cumulative translation adjustment		(61,333	)		(43,818)
Unrealized loss on investments		(19,740	)		(19,403)
Retained earnings (deficit)		(315,476	)		149,196

STOCKHOLDERS' EQUITY		1,956,092			2,041,175

	$	2,181,850		$	2,303,828

F-2

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SUPPORTSAVE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED FEBRUARY 28, 2011 AND 2010 (UNAUDITED)

	2011			2010
REVENUE
Sales	$	770,893		$	732,906
Less returns and allowances		(15,902	)		(19,942)

TOTAL REVENUE		754,991			712,964

EXPENSES
Wages and benefits		601,413			338,460
Rent		76,793			27,867
Telephone, internet and utilities		41,057			29,904
Commissions		42,695			67,653
Selling, general & administrative		112,400			86,730

TOTAL EXPENSES		874,358			550,614

OPERATING INCOME (LOSS)		(119,367	)		162,350

OTHER INCOME (EXPENSE)
Interest income		(42	)		4,087
Other income		-0-			110
Bad debt expense		(110,000	)		-0-
Settlement expense		(32,000	)		-0-
Gains/(losses) from currency hedging contracts		-0-			13,002

TOTAL OTHER INCOME (EXPENSE)		(142,042	)		17,199

NET INCOME (LOSS) BEFORE PROVISION FOR FEDERAL INCOME TAX BENEFIT		(261,409	)		179,549

PROVISION FOR FEDERAL INCOME TAX (BENEFIT)		(91,000	)		56,000

NET INCOME (LOSS)	$	(170,409	)	$	123,549

WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC AND DILUTED		15,186,031			13,838,531

NET INCOME (LOSS) PER SHARE:
BASIC AND DILUTED	$	(0.01	)	$	0.01

F-3

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SUPPORTSAVE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED FEBRUARY 28, 2011 AND 2010 (UNAUDITED)

	2011			2010
REVENUE
Sales	$	2,093,904		$	2,180,766
Less returns and allowances		(25,616	)		(28,144)

TOTAL REVENUE		2,068,288			2,152,622

EXPENSES
Wages and benefits		1,988,461			816,633
Rent		132,004			75,328
Telephone, internet and utilities		118,647			95,143
Commissions		96,729			187,198
Selling, general & administrative		315,709			299,353

TOTAL EXPENSES		2,651,550			1,473,655

OPERATING INCOME (LOSS)		(583,262	)		678,967

OTHER INCOME (EXPENSE)
Interest income		11,386			11,060
Other income		204			235
Gains on sales of investments		-0-			24,395
Bad debt expense		(110,000	)		-0-
Settlement expense		(32,000	)		-0-
Gains/(losses) from currency hedging contracts		-0-			39,883
Gains/(losses) on sales of assets		-0-			(3,152)

TOTAL OTHER INCOME (EXPENSE)		(130,410	)		72,421

NET INCOME BEFORE PROVISION FOR FEDERAL INCOME TAX BENEFIT		(713,672	)		751,388

PROVISION FOR FEDERAL INCOME TAX (BENEFIT)		(249,000	)		260,000


NET INCOME (LOSS)	$	(464,672	)	$	491,388

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		14,993,531			13,449,642

NET INCOME (LOSS) PER SHARE	$	(0.03	)	$	0.04

F-4

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SUPPORTSAVE SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE NINE MONTHS ENDED FEBRUARY 28, 2011 AND YEAR ENDED MAY 31, 2010 (UNAUDITED)

	Common Stock				Additional Paid-in		Treasury			Cumulative Translation			Unrealized Gain (loss)			Retained Earnings			Stockholders'
	Shares		Amount		Capital		Stock			Adjustment			on Investments			(Deficit)			Equity

Balance, May 31, 2009		13,255,198	$	132	$	1,143,291	$	(64,207	)	$	(21,958	)	$	-0-		$	(124,859	)	$	932,399

Purchase of treasury stock		-0-		-0-		-0-		(9,017	)		-0-			-0-			-0-			(9,017)

Private placement of common stock		875,000		9		524,992		-0-			-0-			-0-			-0-			525,001

Sale of treasury stock		-0-		-0-		9,805		70,195			-0-			-0-			-0-			80,000

Issuance of common stock		373,333		4		279,996		-0-			-0-			-0-			-0-			280,000

Net income and translation adjustment		-0-		-0-		-0-		-0-			(21,860	)		(19,403	)		274,055			232,792

Balance, May 31, 2010		14,503,531	$	145	$	1,958,084	$	(3,029	)	$	(43,818	)	$	(19,403	)	$	149,196		$	2,041,175

Issuance of common stock		682,500		6		397,435		-0-			-0-			-0-			-0-			397,441

Net (loss) and translation adjustment		-0-		-0-		-0-		-0-			(17,515	)		(337	)		(464,672	)		(482,524)

Balance, February 28, 2011		15,186,031	$	151	$	2,355,519	$	(3,029	)	$	(61,333	)	$	(19,740	)	$	(315,476	)	$	1,956,092

F-5

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SUPPORTSAVE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED FEBRUARY 28, 2011 AND 2010 (UNAUDITED)

	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(464,672	)	$	491,388
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		52,912			41,434
Stock based compensation expense		397,442			-0-
(Gain) loss on sale of property		-0-			3,152
Bad debt expense		110,000			-0-
Changes in:
Accounts receivable - trade		31,092			(146,134)
Accounts receivable - other		15,441			6,200
Accrued interest receivable		(2,980	)		(1,225)
Deferred tax asset		(249,000	)		50,000
Accounts payable		(15,338	)		(13,999)
Accrued wages		(7,812	)		14,771
Accrued federal income tax		-0-			210,000
Deferred revenue		-0-			1,554
Payroll tax withholdings payable		(12,061	)		6,345
Accrued expenses		(1,685	)		-0-

TOTAL ADJUSTMENTS		318,011			172,098

NET CASH PROVIDED BY (USED BY) OPERATING ACTIVITIES		(146,661	)		663,486

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(585,438	)		(105,364)
Sale of property and equipment		-0-			15,000
Security deposit		(2,188	)		(7,478)
Change in investment of marketable securities		-0-			78,050
Increase in note receivable - related party		(50,000	)		-0-
Currency translation adjustment		(17,515	)		(16,982)

NET CASH PROVIDED BY (USED BY) INVESTING ACTIVITIES		(655,141	)		(36,774)

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		-0-			525,000
Proceeds from note receivable		100,000			-0-
Private placement of common stock		-0-			80,000
Purchase and sale of treasury stock		-0-			(9,017)
Investment in closely held company		-0-			(66,500)
Net borrowings on note payable		-0-			28,923
Proceeds from loan payable to officer		-0-			800

NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES		100,000			559,206

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS		(701,802	)		1,185,918

CASH AND CASH EQUIVALENTS - BEGINNING		1,588,056			474,626

CASH AND CASH EQUIVALENTS - ENDING	$	886,254		$	1,660,544

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-0-		$	-0-
SUPPLEMENTAL NONCASH TRANSACTIONS:
Conversion of warrants to common stock	$	-0-		$	-0-

F-6

Table of Contents

SUPPORTSAVE SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 28, 2011

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".

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in U.S. dollars. The Company uses the accrual basis of accounting and has adopted a May 31 year end.

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, 2010. 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.

Principles of Consolidation

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.

Cash and Cash Equivalents

SupportSave considers all highly liquid investments with maturities of 3 months or less to be cash equivalents.

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.

F-7

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SUPPORTSAVE SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FEBRUARY 28, 2011

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Deferred Revenue

Deferred revenue represents advances received on services to be rendered for the period subsequent to February 28, 2011 and May 31, 2010. Deferred revenue was $0 and $0 as of February 28, 2011 and May 31, 2010, respectively.

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.

Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

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).

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.

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SUPPORTSAVE SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FEBRUARY 28, 2011

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Advertising Costs

The Company follows the policy of expensing advertising costs as they are incurred. Advertising expenses for the nine months ended February 28, 2011 and 2010 were $54,939 and $87,609, respectively.

Impairment of Long-Lived Assets

The Company reviews its major assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an asset is considered impaired, then impairment will be recognized in an amount determined by the excess of the carrying amount of the asset over its fair value.

Financial Instruments

The carrying amounts of financial instruments are considered by management to be their estimated fair values due to their short-term maturities. Securities that are publicly traded are valued at their fair market value based as of the balance sheet date presented.

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.

Treasury Stock

Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock in recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to capital in excess of par value using the average-cost method.

Basic Income per Share

Basic loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.

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SUPPORTSAVE SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FEBRUARY 28, 2011

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with SFAS No. 123 and 123 (R) (ASC 718). To date, the Company has not adopted a stock option plan and has not granted any stock options. During the nine months ended February 28, 2011 and the year ended May 31, 2010, the Company issued 682,500 and 373,333 shares of common stock to employees, respectively. See Note 8.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

3.	NOTE RECEIVABLE - BUILDING

On May 11, 2009, the Company sold its office building for $260,000 on a note receivable. The Company received $50,000 down and the remainder was payable in 23 monthly interest only installments of $1,225 beginning June 11, 2009, with a balloon payment of the remaining principal and all accrued interest due May 11, 2011. On January 28, 2011, the Company settled the note receivable for $100,000. The Company has written off the remaining balance of the note receivable as bad debt expense and has no further obligation from the purchaser.

4.	NOTE RECEIVABLE - RELATED PARTY

During the year ended May 31, 2010, the Company loaned $50,000 to a related party to fund an investment in a film project. The loan is due on June 14, 2011, and at that time, a total balloon payment of $55,000 is due that will satisfy the principal and accrued interest.

On June 2, 2010, the Company loaned an additional $50,000 to a related party. The loan is due eighteen (18) months from the date of issuance and a balloon payment of $55,000, consisting of principal and interest, will be due at that time.

5.	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. We consider our investment portfolio and marketable equity investments available-for-sale. Accordingly, these investments are recorded at fair market value. As of February 28, 2011 and May 31, 2010, unrealized losses of $19,740 and $19,403, respectively, have been recorded.

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SUPPORTSAVE SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FEBRUARY 28, 2011

5.	MARKETABLE SECURITIES (CONTINUED)

Cost and market value of marketable equity securities at February 28, 2011 and May 31, 2010 are as follows:

	Cost		Gross Unrealized Gains/(Losses)			Market Value
February 28, 2011:
Equities/options	$	20,013	$	(19,740	)	$	273

May 31, 2010:
Equities/options	$	20,013	$	(19,403	)	$	610

6.	INVESTMENTS

During the year ended May 31, 2010, the Company invested in a company, Affordacars, LLC, in the amount of $16,500. As of May 31, 2010, the Affordacars, LLC is insolvent and the investment has been written off in full.

7.	ACCRUED EXPENSES

Accrued expenses consisted of the following as of February 28, 2011 and May 31, 2010:

	February 28, 2011		May 31, 2010
Accrued professional fees	$	5,500	$	12,015
Accrued foreign taxes		-0-		25,985
Accrued miscellaneous		-0-		1,185
Employment settlement		32,000		-0-

Total accrued expenses	$	37,500	$	39,185

8.	COMMON STOCK

The Company issued shares at various times to employees for services rendered. During the nine months ended February 28, 2011 and the year ended May 31, 2010, 682,500 and 373,333 shares were issued to employees for a total value of $397,442 and $280,000, respectively. The shares were valued at the market price on the grant date.

On January 1, 2010, the Company sold 875,000 shares of its common stock in a private offering at $0.60 per share for a total cash value of $525,000.

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SUPPORTSAVE SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FEBRUARY 28, 2011

8.	COMMON STOCK (CONTINUED)

The Company purchased back 266,769 shares of treasury stock for a total cost of $64,207 during the year ended May 31, 2009. The Company purchased an additional 20,500 shares for a total cost of $9,017 during the year ended May 31, 2010. On August 21, 2009, the Company sold 275,387 shares of this treasury stock for $80,000 through a subscription agreement in a private placement. The proceeds and cost of these shares have been accounted for in additional paid in capital. The remaining 11,882 shares continue to be held as treasury stock, as a reduction to shareholders’ equity.

The Company issued 682,500 shares of common stock as compensation during the nine months ended February 28, 2011. The shares were valued at $397,442, which was the fair market value as of the grant dates.

As of February 28, 2011, the Company has 15,186,031 shares of common stock issued and outstanding.

9.	OPERATING LEASE

The Company operates out of a leased facility in Cebu, Philippines. The lease began on December 1, 2007, and is for 5 years at the rate of approximately $3,500 per month. Additional space has recently been added at an additional $1,720 per month. On August 15, 2010, the Company signed a lease in Los Angeles for approximately $1,200 per month for a term of twelve months.

In March 2010, the Company signed a new lease for a facility in Cebu, Philippines. The lease begins on July 30, 2010, and is for 5 years at the rate of approximately $10,650 per month. The lease contains a rent-free fit-out period from March 30 to July 29, 2010. The lease also contains an option for additional 5 years upon mutual agreement of the parties. The Company has begun moving into their new facility during the current fiscal quarter.

Minimum annual rents for all leases for the next five years are as follows:

Twelve Months Ended February 28,	Amount

2011	$	203,225
2012		185,831
2013		146,083
2014		153,533
2015		65,281

	$	753,954

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SUPPORTSAVE SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FEBRUARY 28, 2011

10.	INCOME TAXES

The provision for Federal income taxes consists of the following at February 28:

	2011			2010

Current expense	$	-0-		$	204,000
Deferred (benefit) expense		(249,000	)		-0-

	$	(249,000	)	$	204,000

The cumulative tax effect at the expected rate of 35% of significant items comprising our net deferred tax amount is as follows at February 28, 2011 and May 31, 2010:

	February 28, 2011		May 31, 2010

Deferred tax asset attributable to:
Net operation loss carryover	$	249,000	$	(97,000)
Less: valuation allowance		-0-		-0-

Net deferred tax asset	$	249,000	$	(97,000)

11.	CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at three financial institutions. At February 28, 2011, the Company’s cash and cash equivalents exceeded federally insured limits by $536,002. Of the total cash and cash equivalents, $8,565 is invested in a broker/dealer money market account.

12.	SALES TO MAJOR CUSTOMER

Sales to one customer amounted to 32% and 26% of net sales in the nine months ended February 28, 2011 and 2010, respectively.

13.	SIGNIFICANT EVENTS

On December 20, 2010, the Company moved their Philippine operations to their new facility as described in Note 9. The Company has not completely moved from the old facility and is trying to settle its lease obligation.

In February 2011, the Company terminated employment with an executive and two other employees. The Company reached a settlement with one of the employees in April for $32,000, which has been expensed in the current quarter. The Company is currently in negotiations with the other former employee and the results of these negotiations are indeterminable at this time.

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SUPPORTSAVE SOLUTIONS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FEBRUARY 28, 2011

14.	SUBSEQUENT EVENTS

During the current quarter, the Company entered into a settlement agreement with an investor who invested $500,000 in January 2010. The investor made an investment after a bankruptcy filing, to which the court has requested the money back. Under terms of the agreement, the Company will pay $200,000 once the settlement is approved by the court and the investor has six months to sell the remainder of his stock. At that point, the Company will owe the investor the balance of unsold shares or the difference between what the Company paid and what the investor sold them at. The resulting amount the Company may be liable for is indeterminable at this point.

Management has evaluated subsequent events through the date of which the financial statements were submitted to the Securities and Exchange Commission and has determined it does not have any other material subsequent events to disclose.

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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.

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Results of Operations for the three and nine months ended February 28, 2011 and 2009

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, 2011 was $770,893, compared with $732,906 for the three months ended February 28, 2010. Our revenue reported for the nine months ended February 28, 2011 was $2,093,904, compared with $2,180,766 for the nine months ended February 28, 2010. Our revenue generated for all periods was attributable to the sale of our BPO services.

Returns and allowances are refunds for services not provided. Returns and allowances for the three months ended February 28, 2011 amounted to $15,902, compared with $19,942 for the same period ended February 28, 2010. Returns and allowances for the nine months ended February 28, 2011 amounted to $25,616, compared with $28,144 for the same period ended February 28, 2010. We experienced more returns and allowances in the three and nine months ended February 28, 2011 compared with the same period 2010 as a result of some infrastructure issues related to our current facility.

Our revenue less returns and allowances is our total revenue. Total revenue for the three months ended February 28, 2011 was $754,991, compared with $712,964 for the same period ended February 28, 2010. Total revenue for the nine months ended February 28, 2011 was $2,068,288, compared with $2,152,622 for the same period ended February 28, 2010.

Our operating expenses for the three months ended February 28, 2011 was $874,358, compared with $550,614 for the same period ended February 28, 2010. The increase in our operating expenses for the three months ended February 28, 2011 compared with February 28, 2010 is mainly attributable to an increase in wages and benefits, which amounted to $601,413 in 2011 compared with $338,460 in 2010. We also spend $76,793 in rent for 2011 as compared with only $27,867 in 2010. This was the result of the move to our new facility in Cebu, Philippines. Our administrative expenses also increased to $112,400 in 2011 from $86,730 in 2010.

Our operating expenses for the nine months ended February 28, 2011 was $2,651,550, compared with $1,473,655 for the same period ended February 28, 2010. Again, the increase in our operating expenses for the nine months ended February 28, 2011 compared with February 28, 2010 is mainly attributable to an increase in wages and benefits, which amounted to $1,988,461 in 2011 compared with $816,633 in 2010. Our rent also increased to $132,004 in 2011 compared with $75,328 in 2010. Our commission expenses decreased to $96,729 in 2011 from $187,198 in 2010.

As we reported last quarter, we expected to 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. This quarter we terminated our former President, Mr. Joseph Duryea, and other sales employees which we believe will have the effect of lowering our wages and salary expenses in the coming year, to somewhat offset our initial expectation. However, our new facility was opened in early December 2010 and we experienced higher costs as we migrated to the facility, and we expect to continue to incur higher costs with the move to a larger, more modern facility during 2011. Also, we have not completely moved from the old facility and we are trying to settle this lease obligation. We are still hopeful that our move to this new facility will result in 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 our 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.

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In addition, next quarter we expect to incur increased expenses associated with stock-based compensation. On April 11, 2011, we sold 3,000,000 shares of our common stock in a private offering for working capital. This issuance triggered the anti-dilution provisions in our employment agreements with Mr. Chris Johns, our President, and Ms. Aina Dumlao, our CEO. As required by their employment agreements, we were required to issue them additional shares of common stock so that their proportionate ownership in our company’s common and voting shares is not decreased. Thus, this new issuance will result in an increase in our stock-based compensation expenses for our fourth quarter and will stand in addition to the increased expenses associated with our new facility and the anticipated settlement costs of our old facility.

We had other expenses of $142,042 for the three months ended February 28, 2011, compared with other income of $17,199 for the three months ended February 28, 2010. We had other expenses of $130,410 for the nine months ended February 28, 2011, compared with other income of $72,421 for the nine months ended February 20, 2010. Other expenses in 2011 resulted from a bad debt expense of $110,000 and settlement expenses of $32,000 that were not incurred in 2010. On May 11, 2009, we sold our office building for $260,000 on a note receivable. We received $50,000 down and the remainder was payable in 23 monthly interest only installments of $1,225 beginning June 11, 2009, with a balloon payment of the remaining principal and all accrued interest due May 11, 2011. On January 28, 2011, we settled the note receivable for $100,000. We have written off the remaining balance of the note receivable as bad debt expense and have no further obligation from the purchaser.

We had a net loss of $170,409 for the three months ended February 28, 2011, compared with net income of $123,549 for the three months ended February 28, 2010. We had a net loss of $464,672 for the nine months ended February 28, 2011, compared with net income of $491,388 for the nine months ended February 28, 2010.

Liquidity and Capital Resources

As at February 28, 2011, we had $1,032,205 in current assets and $225,758 in current liabilities. On February 28, 2011, we had working capital of $806,447.

As explained more fully below, we settled a case brought against us by Joseph Loomis in the United States Bankruptcy Court for the District of Arizona (Case No. 2:10-bk-01885). Under the settlement, we paid Mr. Loomis $200,000, and may have to pay Mr. Loomis the remaining $300,000 if he is unable to sell his shares in the open market. This contingency may negatively affect our liquidity in the next 12 months.

Operating activities used $146,661 in cash for the nine months ended February 28, 2011. Our net loss of $464,672, along with deferred tax asset of $249,000 were the primary components of our negative operating cash flow, offset by mainly stock-based compensation of $397,442 and bad debt expenses of $110,000. Cash flows used by investing activities during the nine months ended February 28, 2011 was $655,141 mainly as a result of $585,438 in the purchase of property and equipment. Cash flows provided $100,000 for the nine months ended February 28, 2011 from the proceeds of a note receivable.

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.

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Off Balance Sheet Arrangements

As of February 28, 2011, 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 4. 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, 2011. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Aina Dumlao. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of February 28, 2011, 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, 2011.

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.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

On or about January 6, 2011, a complaint was filed against us in the United States Bankruptcy Court for the District of Arizona (Case No. 2:10-bk-01885) by Joseph Charles Loomis (the “Debtor”). The Debtor is the subject of a Chapter 11 bankruptcy case. The complaint alleges that on January 26, 2010, after the commencement of his bankruptcy case, the Debtor made a payment of $500,000 to us without prior bankruptcy court approval and that the entire payment is subject to being ordered immediately returned to the bankruptcy estate. The payment was made pursuant to a written Stock Subscription Agreement executed between us and the Debtor or about January 1, 2010 whereby the Debtor agreed to purchase 833,333 shares of our common stock (the “Stock Sale”).

On February 28, 2011, the United States Bankruptcy Court approved a settlement agreement (the “Settlement Agreement”) between us and the Debtor. Under the Settlement Agreement, we are required to pay the Debtor $200,000 within 48 hours of entry of the order by the Bankruptcy Court approving the Settlement Agreement. In exchange for the above-referenced payment, the Debtor will return to us 333,332 shares of our common stock purchased as part of the Stock Sale.

Further under the Settlement Agreement, the Debtor shall be permitted to sell his remaining shares of stock acquired in the Stock Sale for a price of not less than $0.35 per share. At the expiration of 180 days from the date of entry of an order by the Bankruptcy Court approving the Settlement Agreement, we will buy back all of the remaining shares of stock sold by means of the Stock Sale for an amount such that the Debtor is reimbursed in the total amount of $500,000 as a result of the above transactions. In exchange, the Debtor will return to us all remaining shares of our common stock in his possession acquired on account of the Stock Sale.

Once the entire $500,000 is returned to the Debtor at the end of the 180 day period, the parties will jointly dismiss the bankruptcy action.

Item 1A: Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On April 11, 2011, we sold 3,000,000 shares of our common stock in a private offering at $0.05 per share. Under the terms of the subscription agreement, we received $100,000 of the investment at closing, and will receive the remaining $50,000 no later than 60 days from the closing. Further under the subscription agreement, the investor agreed to a three-year lockup on open market transactions.

As stated in our employment agreements with our President, Chris Johns, and our CEO, Aina Dumlao, if we issue additional securities of any class, then both Mr. Johns and Ms. Dumlao will be entitled to receive a corresponding increase in the amount of securities they hold so that their proportionate ownership in our company’s common and voting shares is not decreased. The above issuance of 3,000,000 has triggered these anti-dilution provisions in the employment agreements with Mr. Johns and Ms. Dumlao. We therefore issued 975,000 shares of common stock to Ms. Dumlao and 1,050,000 shares of common stock to Mr. Johns to fulfill these anti-dilution provisions.

We issued shares at various times to employees for services rendered. During the nine months ended February 28, 2011, 682,500 shares were issued to employees for a total value of $397,442. The shares were valued at the market price on the grant date.

The private offering was exempt under Section 4(2) of the Securities Act of 1933, as amended (the “Act”), and/or Rule 506 promulgated under the Act.

Item 3. Defaults upon Senior Securities

None

Item 4. (Removed and Reserved)

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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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 14, 2011

	By: /s/ Aina Dumlao Aina Dumlao Title: Chief Executive Officer and Director

Attached files

SupportSave Solutions Inc Reports

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