Reverse Stock Split FAQ

What is a reverse stock split?

Our reverse stock split reduces the total number of the Company’s issued and outstanding shares by combining each three shares into one. Because the company is only changing the number of outstanding shares, the reverse stock split alone should not change the Company’s overall valuation, although market prices may decline following the reverse split. Assuming the Company’s overall valuation does not change, the price per share should increase proportionally. A reverse stock split does not change the rights of stockholders nor does it affect any stockholder’s ownership percentage of the Company’s shares.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Support.com
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Why is Support.com, Inc. (the “Company”) implementing a reverse stock split?

The Company has previously received notification from NASDAQ that it was not in compliance of the NASDAQ minimum bid price listing requirement of $1.00 for its common stock. To cure this, the stock needs to trade above $1.00 per share for ten (10) consecutive trading days prior to February 13, 2017. NASDAQ views the reverse split as a legitimate means to regain compliance by achieving a higher share price. The Company believes that the expected increase in stock price resulting from the reverse stock split will allow us to exceed the minimum bid price requirement of at least $1.00 to remain listed on The NASDAQ Capital Market.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Support.com
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Why does the Company need to remain on the NASDAQ Capital Market?

For a number of reasons, the Company believes it is desirable to remain listed on The NASDAQ Capital Market. In particular, maintaining the NASDAQ listing helps provide liquidity for the Company’s stockholders on an established stock exchange.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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What is the timing and effective date of the reverse stock split?

The Company announced the reverse stock split today, January 13, 2017, and will effect the reverse stock split with NASDAQ and the State of Delaware on January 20, 2017. The Company’s common stock will begin trading on a reverse split basis at the opening of the market on January 20, 2017.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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What will be the impact of the Company’s reverse stock split?

The reverse stock split affects all common stockholders uniformly and will not affect any stockholder’s percentage of ownership interests in the company, except that fractional shares will not be issued and instead fractional share amounts will be converted to cash, as described further below. Shares of the Company common stock have the same proportional voting and other rights, and are identical in all other respects to our common stock previously authorized and outstanding.

The number of authorized shares of the Company’s authorized but unissued preferred stock remains the same at 5 million.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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How many shares will I get in the Company’s reverse stock split?

In the one-for-three reverse stock split, each stockholder will receive one new share in exchange for every 3 shares held. For example, if a stockholder holds 300 shares before the reverse split becomes effective in trading, he/she will own 100 shares after the one-for-three reverse stock split.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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How are fractional shares treated in the reverse stock split?

As a result of the reverse stock split, at the effective time, every three (3) shares of the Company’s issued and outstanding common stock will be converted into one (1) newly issued and outstanding share of common stock, without any change in the par value per share. Fractional shares will not be issued as a result of the reverse stock split; instead, holders of pre-reverse stock split shares of the Company’s common stock who otherwise would have been entitled to receive a fractional share as a result of the reverse stock split, will receive a cash payment in lieu of fractional shares to which they would otherwise be entitled on a post-reverse stock split share basis for such fractional interests.

For example, if a stockholder owned 100 shares, he/she would be entitled to receive 33.33 shares after the reverse split. Instead of receiving a fraction of a share, that stockholder will receive 33 shares plus a cash payment in lieu of 0.33 shares.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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What do I do with the shares of the Company common stock that I own?

If your shares are held in a brokerage account, you do not need to take any action to effect the exchange of shares. Your broker is likely authorized to exchange the shares for you and the number of shares you own after the split should be reflected in your account. You can contact your broker for more information. If your shares are held in book-entry form, you do not need to take any action to effect the exchange of your shares. The Company’s transfer agent, Computershare Trust Company, N.A. (“Computershare”), will automatically update your holding in the Direct Registration System and you will receive a statement of holdings reflecting your new shares of common stock.

If you currently hold your shares in the form of a stock certificate (i.e. you are a stockholder of record), the Company’s transfer agent, Computershare, will act as the exchange agent for the reverse stock split and will send you an Exchange Form with instructions regarding the exchange of your existing stock certificates for new ones. You must complete and return the Exchange Form to Computershare in order to receive new stock certificates and the cash payment in lieu of any fractional shares.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Support.com
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What effect will the reverse stock split have on the total authorized shares of the Company’s common stock?

As a result of the reverse stock split, the total authorized number of shares of the Company’s common stock will be reduced from 150,000,000 shares to 50,000,000 shares. The number of authorized shares of the Company’s preferred stock will not be affected and will remain at 5 million shares.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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What if I cannot find my stock certificates for the Company’s common stock?

If you determine that some or all of your stock certificates have been lost, stolen or destroyed, follow the instructions provided in the Exchange Form that you will receive in the mail from Computershare shortly after the effective date of the reverse stock split.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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What are the accounting consequences of the reverse stock split?

The reverse stock split will not affect the common stock capital account on our balance sheet.

After the reverse stock split, net income or loss per share, and other per share amounts will be increased because there will be fewer shares of Company stock outstanding. In subsequent financial statements, net income or loss per share and other per share amounts for periods ending before the reverse stock split will be recast to give retroactive effect to the reverse stock split.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Support.com
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Who should I call if I have questions regarding how the reverse stock split will affect my shares of Common Stock?

If you are a registered stockholder (i.e., the holder of a certificate), you can contact Computershare for more information. If you are a beneficial stockholder (you hold your shares through a broker, bank or other nominee), you should contact your broker, bank or other nominee directly.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Support.com
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How many shares of Company common stock will be outstanding after the reverse split?

Before the reverse split was effected, the Company had approximately 55,652,323 shares of issued and outstanding common stock. This will be reduced according to the ratio of the reverse split of 1-for-3. After the reverse split, there will be approximately 18,550,774 shares of Company common stock issued and outstanding.

Who can I contact if I have additional questions? For additional questions regarding the reverse split, please contact your broker, the Company’s transfer agent Computershare at (800) 546-5141, or Support.com’s Investor Relations at (650) 556-8595.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Support.com
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What are the tax consequences of the reverse stock split to the Company’s stockholders?

Other than with respect to the cash payments for fractional shares discussed above, no gain or loss should be recognized by the Company stockholders in the reverse stock split for U.S federal income tax purposes. We encourage you to consult your own tax advisor regarding the particular consequences of the distribution to you, including the applicability and effect of any U.S. federal, state and local and foreign tax laws.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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What is the impact of the reverse stock split on stock options and warrants?

An adjustment will be made to the Company’s stock options and warrants based on the split ratio. Warrant and option holders do not need to submit their warrants or option agreements for exchange. The adjustment will be made automatically. The number of shares of common stock issued subject to stock options, warrants, or convertible securities will automatically be proportionately decreased by the split ratio and the exercise price or conversion ratio will automatically be proportionately increased by the same split ratio.

For illustrative purposes, an option to purchase 90 shares at an exercise price of $1.00 per share outstanding before the reverse stock split will become, after the reverse split of 1-for-3, an option to purchase 30 shares at an exercise price of $3.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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What action is required on my part if I own the Company options and warrants?

For your options and warrants, no action is required by you; the necessary adjustments will be made by the Company and E*Trade.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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How does the reverse stock split affect trading of the Company’s shares?

The Company’s common stock will continue to trade on The NASDAQ Capital Market without interruption. Trading of the Company’s common stock on The NASDAQ Capital Market will continue, on a post-split basis, with the opening of the markets on Friday, January 20, 2017, under the existing trading symbol “SPRT” and under new CUSIP number 86858W200.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Support.com
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Safe Harbor for Forward-Looking Statements
This document contains “forward-looking statements” as defined under the U.S. federal securities laws, including the Private Securities Litigation Reform Act of 1995, and is subject to the safe harbors created by such laws. Forward-looking statements include, for example, all statements relating to stock price performance and future performance in economic and other terms. Such forward-looking statements are based on current expectations that involve a number of uncertainties and risks that may cause actual events or results to differ materially from those indicated by such forward-looking statements, including, among others, market reaction to the reverse stock split, and our ability to maintain and grow revenue. These and other risks may be detailed from time to time in Support.com’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its latest Annual Report on Form 10-K and its latest Quarterly Report on Form 10-Q, copies of which may be obtained from www.sec.gov. Support.com assumes no obligation to update its forward-looking statements, except as may otherwise be required by the federal securities laws.

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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Reverse Stock Split FAQ
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Support.com
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