0000948708FALSE00009487082023-11-082023-11-08


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2023
Smith Micro Software, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware001-3552533-0029027
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
5800 Corporate Drive
Pittsburgh, PA
15237
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (412) 837-5300
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:

Title of each class 
Trading
Symbol(s)
 Name of each exchange on which registered
Common Stock, par value $0.001 per share SMSI NASDAQ
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 2.02Results of Operations and Financial Condition
On November 8, 2023, Smith Micro Software, Inc. issued a press release announcing its financial results for the three and nine months ended September 30, 2023. A copy of the press release is hereby furnished to the Securities and Exchange Commission as Exhibit 99.1 and incorporated by reference herein.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Item 7.01Regulation FD
The information set forth under Item 2.02 is incorporated into this Item 7.01 by reference.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits
ExhibitDescription
99.1
Press Release issued on November 8, 2023
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Smith Micro Software, Inc.
Date: November 8, 2023
By:/s/ James M. Kempton
James M. Kempton
Vice President and Chief Financial Officer


Exhibit 99.1
gnyzmd4ldoop000001a.jpg
IR INQUIRIES:
Charles Messman
Investor Relations
949-362-5800
IR@smithmicro.com
Smith Micro Reports Third Quarter and Year-to-Date 2023 Financial Results
Company Reports Sequential Revenue Growth and $1.5 million of Cash Flow From Operations During the Quarter
PITTSBURGH, PA, November 8, 2023 – Smith Micro Software, Inc. (Nasdaq: SMSI) (“Smith Micro” or the “Company”) today reported financial results for its third quarter ended September 30, 2023.
“Launching our flagship SafePath® platform at another Tier 1 carrier during the third quarter was a prerequisite to drive both marketing investment and anticipated revenue growth with this customer," said William W. Smith, Jr., president, chief executive officer, and chairman of the board of Smith Micro. “In today’s world, carriers recognize the strength and value our technology provides for protecting their family subscribers, both in the digital and physical worlds they face.”

“From a financial perspective, I am delighted that we exceeded the cost reduction targets that we outlined back in March.” Smith continued, “We created an aggressive plan that improved our gross margins and further reduced operating expenses. We have executed rigorously, and, although we have reported a GAAP net loss, we have achieved non-GAAP profitability while generating cash flow from operations during the third quarter.”
Third Quarter 2023 Financial Results
Smith Micro reported revenue of $11.0 million for the quarter ended September 30, 2023, compared to $11.7 million reported in the quarter ended September 30, 2022. Sequentially, revenue grew by $0.7 million from the $10.3 million reported in the second quarter of 2023.
Gross profit for the quarter ended September 30, 2023 was $8.5 million, compared to $8.1 million for the quarter ended September 30, 2022.
Gross profit as a percentage of revenue was 77 percent for the quarter ended September 30, 2023, compared to 69 percent for the quarter ended September 30, 2022.
GAAP net loss for the quarter ended September 30, 2023 was $5.1 million, or $0.08 loss per share, compared to GAAP net loss of $5.8 million, or $0.10 loss per share, for the quarter ended September 30, 2022.
Non-GAAP net income for the quarter ended September 30, 2023 was $0.6 million, or $0.01 income per share, compared to non-GAAP net loss of $4.9 million, or $0.09 loss per share, for the quarter ended September 30, 2022. Non-GAAP net income and net loss excludes the items noted below under "Non-GAAP Measures."


Smith Micro Software Third Quarter 2023 Financial Results
Page 2
Third Quarter Year to Date 2023 Financial Results
Smith Micro reported revenue of $32.3 million for the nine months ended September 30, 2023, compared to $37.1 million reported in the nine months ended September 30, 2022.
Gross profit for the nine months ended September 30, 2023 was $23.9 million compared to $26.2 million reported for the same period in 2022.
Gross profit as a percentage of revenue was 74 percent for the nine months ended September 30, 2023 compared to 71 percent for the nine months ended September 30, 2022.
GAAP net loss for the nine months ended September 30, 2023 was $17.7 million, or $0.28 loss per share, compared to GAAP net loss of $21.3 million, or $0.39 loss per share, for the nine months ended September 30, 2022.
Non-GAAP net loss for the nine months ended September 30, 2023 was $3.6 million, or $0.06 loss per share, compared to non-GAAP net loss of $13.6 million, or $0.25 loss per share, for the nine months ended September 30, 2022. Non-GAAP net loss excludes the items noted below under "Non-GAAP Measures."
Total cash and cash equivalents as of September 30, 2023 were $8.0 million.

Non-GAAP Measures

To supplement our financial information presented in accordance with GAAP, the Company considers, and has included in this press release, the following non-GAAP financial measures and a non-GAAP reconciliation from the equivalent GAAP metric: non-GAAP net (loss) income, non-GAAP gross profit, non-GAAP gross profit as a percentage of revenue and non-GAAP diluted (loss) earnings per share in the presentation of financial results in this press release. Management believes this non-GAAP presentation may be more meaningful in analyzing our income generation and has therefore excluded the following items from GAAP earnings calculations: stock compensation, intangibles amortization, depreciation, fair value adjustments, amortization of debt issuance costs and discount, and personnel severance and reorganization activities. Additionally, since the Company currently has federal and state net operating loss carryforwards that can be utilized to reduce future cash payments for income taxes, these non-GAAP adjustments have not been tax effected, and the resulting income tax expense reflects actual taxes paid or accrued during each period. This presentation may be considered more indicative of our ongoing operational performance. The table below presents the differences between non-GAAP net loss and net loss on an absolute and per-share basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and the non-GAAP financial measures as reported by Smith Micro may not be comparable to similarly titled amounts reported by other companies.
Investor Conference Call
Smith Micro will hold an investor conference call today, November 8, 2023, at 4:30 p.m. ET, to discuss the Company’s third quarter 2023 financial results. To access the call, dial 1-844-701-1164; international participants can call 1-412-317-5492. A passcode is not required to join the call; ask the operator to be placed into the Smith Micro conference. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. An internet webcast is available at https://event.choruscall.com/mediaframe/webcast.html?webcastid=iYPh0ex6. In addition, the conference call will be available on the Smith Micro website in the Investor Relations section.

Smith Micro Software Third Quarter 2023 Financial Results
Page 3
About Smith Micro Software, Inc.
Smith Micro develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless service providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, our solutions enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer IoT devices. The Smith Micro portfolio also includes a wide range of products for creating, sharing, and monetizing rich content, such as visual voice messaging, optimizing retail content display and performing analytics on any product set. For more information, visit www.smithmicro.com.
Smith Micro, the Smith Micro logo and SafePath are registered trademarks or trademarks of Smith Micro Software, Inc. All other trademarks and product names are the property of their respective owners.
Forward-Looking Statements
Certain statements in this press release are, and certain statements on the related conference call may be, forward-looking statements regarding future events or results within the meaning of the Private Securities Litigation Reform Act, including statements related to our financial prospects, goals and other projections of our outlook or performance and our future business plans, and statements using such words as “expect,” “anticipate,” “believe,” “plan,” “intend,” “could,” “will” and other similar expressions. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Among the important factors that could cause or contribute to such differences are customer concentration, given that the majority of our sales depend on a few large customer relationships and the loss of any of them could materially and negatively affect our business, delay or failure of our customers to accept and deploy our products and services or new or upgraded versions thereof, delay or failure of our customers’ end users to adopt our products and services or new or upgraded versions thereof, our reliance on third party application stores for the distribution of our software applications to users and any barriers to such distribution, including any delay or failure of such third party to approve new versions of our applications or their implementation and/or application of policies that may be harmful to our business, unanticipated delays or obstacles in our development and release cycles, the degree to which competing business needs may affect our allocation of resources to planned projects, the risk of harm to our business resulting from our recent and any future cost reduction efforts, our ability to attract and retain key technical personnel that are essential to our product development and support efforts, changes in demand for our products from our customers and their end users, changes in requirements for our products imposed by our customers or by the third party providers of software and/or platforms that we use, our ability to effectively integrate, market and sell acquired product lines, new and changing technologies and customer acceptance and timing of deployment of those technologies, our ability to compete effectively with other software and technology companies, and the existence and terms of our convertible notes and related agreements, including that they may restrict our ability to obtain additional financing, and adversely affect our business, financial condition and cash flows from operations in the future. These and other factors discussed in our filings with the Securities and Exchange Commission, including our filings on Forms 10-K and 10-Q, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. The forward-looking statements contained in this release are made on the basis of the views and assumptions of management, and we do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date of this release.



Smith Micro Software Third Quarter 2023 Financial Results
Page 4
Smith Micro Software, Inc.  
Consolidated Balance Sheets 
(in thousands except share and par value data)  
 
 September 30,
2023		December 31,
2022
 (unaudited)(audited)
Assets
Current assets:
Cash and cash equivalents$7,982 $14,026 
Accounts receivable, net of allowance for doubtful accounts of $3 and $3 (2023 and 2022, respectively)
10,290 10,501 
Prepaid expenses and other current assets2,940 1,983 
Total current assets21,212 26,510 
Equipment and improvements, net998 1,498 
Right-of-use assets2,686 3,722 
Other assets475 490 
Intangible assets, net31,901 36,320 
Goodwill35,041 35,041 
Total assets$92,313 $103,581 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$3,027 $3,236 
Accrued payroll and benefits2,502 3,883 
Current operating lease liabilities1,434 1,441 
Other current liabilities1,714 1,589 
Current portion of convertible notes payable3,456 9,007 
Derivative liabilities46 1,575 
Total current liabilities12,179 20,731 
Non-current liabilities:
Warrant liabilities1,278 3,317 
Operating lease liabilities1,787 2,976 
Deferred tax liabilities, net178 178 
Total non-current liabilities3,243 6,471 
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 70,384,838 and 56,197,910 shares issued and outstanding (2023 and 2022, respectively)
70 56 
Additional paid-in capital376,057 357,875 
Accumulated comprehensive deficit(299,236)(281,552)
Total stockholders’ equity76,891 76,379 
Total liabilities and stockholders' equity$92,313 $103,581 

Smith Micro Software Third Quarter 2023 Financial Results
Page 5
Smith Micro Software, Inc.
Consolidated Statement of Operations
(in thousands except share data)
For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
2023202220232022
(unaudited)(unaudited)(unaudited)(unaudited)
Revenues$11,001 $11,699 $32,269 $37,108 
Cost of revenues (including depreciation of $12, $25, $40, and $85 in the three and nine months ended September 30, 2023 and 2022, respectively)
2,528 3,629 8,400 10,882 
Gross profit8,473 8,070 23,869 26,226 
Operating expenses:
Selling and marketing2,449 2,986 8,631 9,687 
Research and development3,704 7,409 13,276 22,756 
General and administrative2,934 4,208 9,448 11,885 
Depreciation and amortization1,567 1,822 4,872 5,665 
Total operating expenses10,654 16,425 36,227 49,993 
Operating loss(2,181)(8,355)(12,358)(23,767)
Other income (expense):
Change in fair value of warrant and derivative liabilities73 3,457 3,486 3,457 
Loss on derecognition of debt(1,583)— (2,985)— 
Interest expense, net(1,443)(896)(5,740)(898)
Other income (expense), net15 9 (62)(22)
Loss before provision for income taxes(5,119)(5,785)(17,659)(21,230)
Provision for income tax expense14 27 25 77 
Net loss$(5,133)$(5,812)$(17,684)$(21,307)
Loss per share:
Basic and diluted$(0.08)$(0.10)$(0.28)$(0.39)
Weighted average shares outstanding:
Basic and diluted67,354 55,722 62,297 55,140 

Smith Micro Software Third Quarter 2023 Financial Results
Page 6
Smith Micro Software, Inc.  
Consolidated Statements of Cash Flows  
(in thousands)  
 
 For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
 2023202220232022
 (unaudited)(unaudited)(unaudited) (unaudited)
Operating activities:
Net loss$(5,133)$(5,812)$(17,684)$(21,307)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization1,580 1,849 4,912 5,751 
Non-cash lease expense(82)(220)(160)(374)
Non-cash transaction costs including amortization of debt discount and issuance costs1,343 1,422 5,398 1,422 
Change in fair value of warrant and derivative liabilities(73)(3,457)(3,486)(3,457)
Loss on derecognition of debt1,583 — 2,985 — 
Stock based compensation1,341 1,095 3,316 3,849 
Loss on disposal of assets1 31 12 31 
Changes in operating accounts:
Accounts receivable1,581 2,083 208 1,108 
Prepaid expenses and other assets151 713 220 186 
Accounts payable and accrued liabilities(682)(540)(2,224)(1,526)
Other liabilities(69)(15)553 (161)
Net cash provided by (used in) operating activities
1,541 (2,851)(5,950)(14,478)
Investing activities:
Capital expenditures, net(8)27 (5)(85)
Other investing activities— 11 71 94 
Net cash (used in) provided by investing activities
(8)38 66 9 
Financing activities:
Proceeds from notes and warrants offering— 15,000 — 15,000 
Proceeds from stock and warrants offering— 3,000 — 3,000 
Stock, notes, and warrants offering costs— (1,227)— (1,227)
Proceeds from financing arrangements539 250 981 1,541 
Repayments of financing arrangements(514)(587)(1,156)(978)
Other financing activities7 21 15 56 
Net cash provided by (used in) financing activities
32 16,457 (160)17,392 
Net increase (decrease) in cash and cash equivalents
1,565 13,644 (6,044)2,923 
Cash and cash equivalents, beginning of period$6,417 $5,357 $14,026 $16,078 
Cash and cash equivalents, end of period$7,982 $19,001 $7,982 $19,001 

Smith Micro Software Third Quarter 2023 Financial Results
Page 7
Smith Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP Results
(in thousands, except per share data) - unaudited
 GAAPStock CompensationIntangibles AmortizationDepreciationFair Value AdjustmentsAmortization of Debt Issuance Costs and DiscountPersonnel Severance and Reorganization ActivitiesNon-GAAP
Three Months Ended
September 30, 2023		   
Gross profit$8,473 $— $— $12 $— $— $— $8,485 
Selling and marketing2,449 (300)— — — — — 2,149 
Research and development3,704 (290)— — — — — 3,414 
General and administrative2,934 (749)— — — — — 2,185 
Depreciation and amortization1,567 — (1,454)(113)— — — — 
Total operating expenses10,654 (1,339)(1,454)(113)— — — 7,748 
(Loss) income before provision for income taxes(5,119)1,339 1,454 125 1,510 1,343 — 652 
Net (loss) income(5,133)1,339 1,454 125 1,510 1,343 — 638 
(Loss) earnings per share: basic(0.08)0.02 0.02 — 0.02 0.02 — 0.01 
(Loss) earnings per share: diluted(0.07)0.02 0.02 — 0.02 0.02 — 0.01 
     
Three Months Ended
September 30, 2022		   
Gross profit$8,070 $— $— $25 $— $— $— $8,095 
Selling and marketing2,986 (180)— — — — (49)2,757 
Research and development7,409 (279)— — — — — 7,130 
General and administrative4,208 (636)— — — (630)(3)2,939 
Depreciation and amortization1,822 — (1,545)(277)— — — — 
Total operating expenses16,425 (1,095)(1,545)(277)— (630)(52)12,826 
(Loss) income before provision for income taxes(5,785)1,095 1,545 302 (3,457)1,421 52 (4,827)
Net (loss) income(5,812)1,095 1,545 302 (3,457)1,421 52 (4,854)
(Loss) earnings per share: basic and diluted(0.10)0.02 0.03 0.01 (0.06)0.03 — (0.09)
Note: (Loss) earnings per share: basic and diluted - may be impacted by rounding to allow rows to calculate.

Smith Micro Software Third Quarter 2023 Financial Results
Page 8
Smith Micro Software, Inc. 
Reconciliation of GAAP to Non-GAAP Results
(in thousands, except per share data) - unaudited
GAAPStock CompensationIntangibles AmortizationDepreciationFair Value AdjustmentsAmortization of Debt Issuance Costs and DiscountPersonnel Severance and Reorganization ActivitiesNon-GAAP
Nine Months Ended
September 30, 2023		   
Gross profit$23,869 $— $— $40 $— $— $183 $24,092 
Selling and marketing8,631 (653)— — — — (93)7,885 
Research and development13,276 (753)— — — — (471)12,052 
General and administrative9,448 (1,907)— — — — (210)7,331 
Depreciation and amortization4,872 — (4,419)(453)— — — — 
Total operating expenses36,227 (3,313)(4,419)(453)— — (774)27,268 
(Loss) income before provision for income taxes(17,659)3,313 4,419 493 (501)5,397 957 (3,581)
Net (loss) income(17,684)3,313 4,419 493 (501)5,397 957 (3,606)
(Loss) earnings per share: basic and diluted(0.28)0.05 0.07 0.01 (0.01)0.09 0.02 (0.06)
Nine Months Ended
September 30, 2022
Gross profit$26,226 $2 $— $85 $— $— $— $26,313 
Selling and marketing9,687 (336)— — — — (769)8,582 
Research and development22,756 (808)— — — — — 21,948 
General and administrative11,885 (2,124)— — — (630)(3)9,128 
Depreciation and amortization5,665 — (4,766)(899)— — — — 
Total operating expenses49,993 (3,268)(4,766)(899)— (630)(772)39,658 
(Loss) income before provision for income taxes(21,230)3,270 4,766 984 (3,457)1,421 772 (13,474)
Net (loss) income(21,307)3,270 4,766 984 (3,457)1,421 772 (13,551)
(Loss) earnings per share: basic and diluted(0.39)0.06 0.09 0.02 (0.06)0.03 0.01 (0.25)
Note: (Loss) earnings per share: basic and diluted - may be impacted by rounding to allow rows to calculate.

v3.23.3
Cover
Nov. 08, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 08, 2023
Entity Registrant Name Smith Micro Software, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-35525
Entity Tax Identification Number 33-0029027
Entity Address, Address Line One 5800 Corporate Drive
Entity Address, City or Town Pittsburgh
Entity Address, State or Province PA
Entity Address, Postal Zip Code 15237
City Area Code 412
Local Phone Number 837-5300
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.001 per share
Trading Symbol SMSI
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000948708
Amendment Flag false
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