Smith Micro Software, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Smith Micro Software, Inc. has filed its annual 10-K report for the fiscal year ending December 31, 2023.</b>

AI Summary

SMITH MICRO SOFTWARE, INC. (SMSI) filed a Annual Report (10-K) with the SEC on February 26, 2024. Filed Form 10-K for the fiscal year ended December 31, 2023. Company is Smith Micro Software, Inc., Central Index Key 0000948708. Incorporated in Delaware, with a principal business address in Pittsburgh, PA. Fiscal year end is December 31. The filing includes information on fair value adjustments of warrants and derivative liabilities.

Why It Matters

For investors and stakeholders tracking SMITH MICRO SOFTWARE, INC., this filing contains several important signals. This 10-K filing provides a comprehensive overview of the company's financial performance, operations, and risk factors for the fiscal year 2023. Investors and stakeholders can use this report to assess the company's financial health, strategic direction, and potential future performance.

Risk Assessment

Risk Level: medium — SMITH MICRO SOFTWARE, INC. shows moderate risk based on this filing. The company's financial statements and disclosures in this 10-K are crucial for understanding its current financial health and operational status, which can be complex for software companies.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to assess Smith Micro Software's financial stability and future prospects.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed Period of Report)
• 2024-02-26 — Filing Date (As of Date)
• 2023-01-01 — Fiscal Year Start (Reporting period start date)
• 2023-12-31 — Fiscal Year End (Reporting period end date)

Key Players & Entities

• SMITH MICRO SOFTWARE, INC. (company) — Filer name
• 0000948708 (company) — Central Index Key
• 7372 (industry) — Standard Industrial Classification
• DE (location) — State of Incorporation
• 5800 CORPORATE DRIVE (address) — Business Address Street 1
• PITTSBURGH (location) — Business Address City
• PA (location) — Business Address State
• 15237 (postal_code) — Business Address ZIP

FAQ

Industry Context

Smith Micro Software operates in the pre-packaged software industry, providing solutions for mobile device management and digital content.

Regulatory Implications

The company is subject to SEC regulations for public companies, including the requirement to file annual reports on Form 10-K.

What Investors Should Do

1. Analyze the financial statements for revenue, net income, and cash flow.
2. Review the risk factors section for potential business challenges.
3. Examine management's discussion and analysis for strategic insights.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-02-26: Filing Date — Date the 10-K was officially filed with the SEC.

Year-Over-Year Comparison

This is the 2023 annual report (10-K) filing, providing updated financial and operational information compared to previous filings.

Key Financial Figures

• $0.001 — ich registered Common Stock, par value $0.001 per share SMSI The Nasdaq Capital Marke

Filing Documents

• smsi-20231231.htm (10-K) — 1631KB
• smsi-20231231xexx211.htm (EX-21.1) — 2KB
• smsi-20231231xexx231.htm (EX-23.1) — 3KB
• smsi-20231231xexx311.htm (EX-31.1) — 10KB
• smsi-20231231xexx312.htm (EX-31.2) — 10KB
• smsi-20231231xexx321.htm (EX-32.1) — 6KB
• policyfortherecoveryoferro.htm (EX-97.1) — 23KB
• 0000948708-24-000009.txt (&nbsp;) — 8249KB
• smsi-20231231.xsd (EX-101.SCH) — 54KB
• smsi-20231231_cal.xml (EX-101.CAL) — 93KB
• smsi-20231231_def.xml (EX-101.DEF) — 209KB
• smsi-20231231_lab.xml (EX-101.LAB) — 803KB
• smsi-20231231_pre.xml (EX-101.PRE) — 495KB
• smsi-20231231_htm.xml (XML) — 1127KB

BUSINESS

BUSINESS 5 Item 1A.

RISK FACTORS

RISK FACTORS 8 Item 1B. UNRESOLVED STAFF COMMENTS 20 Item 1C. C YBERSEC U R ITY 20 Item 2.

PROPERTIES

PROPERTIES 21 Item 3.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 21 Item 4. MINE SAFETY DISCLOSURES 21 PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 22 Item 6. RESERVED 22 Item 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 23 Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 29 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 29 Item 9A.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 30 Item 9B. OTHER INFORMATION 30 Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS 31 PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 32 Item 11.

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 39 Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 47 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 48 Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 48 PART IV Item 15. EXHIBITS 50 Item 16. FORM 10-K SUMMARY 53

SIGNATURES

SIGNATURES 54 2 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS In this document, the terms "Smith Micro," "Company," "we," "us," and "our" refer to Smith Micro Software, Inc. and, where appropriate, its subsidiaries. This Annual Report on Form 10-K (this "Report") contains forward-looking statements regarding Smith Micro which include, but are not limited to, statements concerning customer concentration, projected revenues, market acceptance of products, the success and timing of new product introductions, the competitive factors affecting our business, our ability to raise additional capital, gross profit and income, our expenses, the protection of our intellectual property, and our ability to remain a going concern. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us. Words such as "anticipates," "expects," "intends," "plans," "predicts," "potential," "believes," "seeks," "estimates," "should," "may," "will," and variations of these words or similar expressions are intended to identify forward-looking statements. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, our actual results or performance could differ materially from those expressed or implied in any forward-looking statements as a result of various factors. Such factors include, but are not limited to, the following: our customer concentration, given that the majority of our sales currently depend on a few large client relationships; our ability to establish and maintain strategic relationships with our customers and mobile device manufacturers, their ability to attract customers, and their willingness to promote our products; our abil

BUSINESS

Item 1. BUSINESS General Smith Micro provides software solutions that simplify and enhance the mobile experience to some of the leading wireless service providers around the globe. From enabling the Digital Family Lifestyle to providing powerful voice messaging capabilities, we strive to enrich today's connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer Internet of Things ("IoT") devices. Our portfolio includes family safety software solutions to support families in the digital age and a wide range of products for creating, sharing, and monetizing rich content, such as visual voice messaging, retail content display optimization and performance analytics on any product set. We continue to innovate and evolve our business to respond to industry trends and maximize opportunities in growing and evolving markets, such as digital lifestyle services and online safety, "Big Data" analytics, automotive telematics, and the consumer IoT marketplace. The key to our longevity, however, is not simply technological innovation, but our focus on understanding our customers' needs and delivering value. Historically we have provided white label Family Safety applications to all three Tier 1 wireless carriers in the United States; however, our Family Safety contract with one of our U.S. Tier 1 customers terminated effective June 30, 2023, with post-termination services ending in November 2023. The revenues associated with that customer contract constituted approximately 36% of our total revenues for 2023. In 2024, we expect no further revenues related to that contract. To address the impact of the contract termination, starting in the first quarter of 2023, we undertook restructuring efforts that resulted in the elimination of approximately 26% of the Company's global workforce. These actions, coupled with other cost reduction measures taken, have resulted in a 26% reduction in operating expenses in 2023 as compared to 2022. Desp

RISK FACTORS

Item 1A. RISK FACTORS Our future operating results are highly uncertain. Before deciding to invest in our common stock or to maintain or change your investment, you should carefully consider the risks described below, in addition to the other information contained in this Report and in our other filings with the SEC, including our other Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business operations. If any of these risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment. Risks Related to our Business Operations We derive a significant portion of our revenues from sales to a concentrated number of clients, and a reduction in sales to any of them have adversely impacted, and in the future may adversely impact, our revenues and operating results. We sell our wireless products and solutions primarily to large wireless carriers, so there are a limited number of actual and potential customers for our products, resulting in significant customer concentration. For the year ended December 31, 2023, sales to our three largest customers comprised 41%, 35%, and 13% of our revenues. No other customer was greater than 10% of our revenues individually. As a result of the termination of our family safety contract with our largest customer in 2023, the percentage of our revenues that will be attributable to our other two largest customers is likely to grow in future years if we are not successful i

View Full Filing

View this 10-K filing on SEC EDGAR