smsi-20220630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________

FORM 10-Q

_____________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-35525

_____________________________

SMITH MICRO SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

_____________________________


Delaware			33-0029027
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

5800 CORPORATE DRIVE

PITTSBURGH, PA 15237

(Address of principal executive offices, including zip code)

(412) 837-5300

(Registrant’s telephone number, including area code)

_____________________________

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: (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 o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of August 9, 2022, there were 55,102,055 shares of common stock outstanding.

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SMITH MICRO SOFTWARE, INC.

QUARTERLY REPORT ON FORM 10-Q

June 30, 2022

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PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	2
	Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	2
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021	3
	Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021	4
	Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2022 and 2021	6
	Notes to the Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 4.	Controls and Procedures	21

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 6.	Exhibits	24

SIGNATURES		25

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SMITH MICRO SOFTWARE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value data)


	June 30, 2022		December 31, 2021
	(unaudited)		(audited)
Assets
Current assets:
Cash and cash equivalents	$	5,357	$	16,078
Accounts receivable, net of allowance for doubtful accounts of $3 and $2 (2022 and 2021, respectively)	11,562		10,590
Prepaid expenses and other current assets	2,514		1,988
Total current assets	19,433		28,656
Equipment and improvements, net	2,129		2,698
Right-of-use assets	4,291		4,866
Other assets	541		620
Intangible assets, net	39,410		42,631
Goodwill	35,041		35,041
Total assets	$	100,845	$	114,512
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	3,774	$	3,301
Accrued payroll and benefits	3,759		4,055
Current operating lease liabilities	1,400		1,400
Other accrued liabilities	1,227		612
Total current liabilities	10,160		9,368
Non-current liabilities:
Operating lease liabilities	3,640		4,467
Deferred tax liabilities, net	117		117
Total non-current liabilities	3,757		4,584
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 55,121,767 and 54,259,390 shares issued and outstanding (2022 and 2021, respectively)	55		54
Additional paid-in capital	354,641		352,779
Accumulated comprehensive deficit	(267,768)		(252,273)
Total stockholders’ equity	86,928		100,560
Total liabilities and stockholders' equity	$	100,845	$	114,512

See accompanying notes to the consolidated financial statements.

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SMITH MICRO SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues	$	12,674	$	15,919	$	25,409	$	27,300
Cost of revenues	3,617		3,358		7,253		4,903
Gross profit	9,057		12,561		18,156		22,397
Operating expenses:
Selling and marketing	3,720		3,117		6,706		5,361
Research and development	8,213		7,063		15,615		11,936
General and administrative	4,026		4,946		8,073		8,604
Amortization of intangible assets	1,577		2,645		3,221		4,943
Total operating expenses	17,536		17,771		33,615		30,844
Operating loss	(8,479)		(5,210)		(15,459)		(8,447)
Other income (expense):
Interest income (expense), net	2		16		(2)		24
Other income, net	15		5		15		9
Loss before provision for income taxes	(8,462)		(5,189)		(15,446)		(8,414)
Provision for income tax expense	31		14		50		14
Net loss	$	(8,493)	$	(5,203)	$	(15,496)	$	(8,428)

Loss per share:
Basic and diluted	$	(0.15)	$	(0.10)	$	(0.28)	$	(0.17)

Weighted average shares outstanding:
Basic and diluted	55,183		53,017		55,844		48,219

See accompanying notes to the consolidated financial statements.

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SMITH MICRO SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)


	Common Stock			Additional Paid-in Capital		Accumulated Comprehensive Deficit		Total
	Shares	Amount
BALANCE, March 31, 2022 (unaudited)	55,156	$	55	$	353,403	$	(259,275)	$	94,183
Non-cash compensation recognized on stock options and ESPP	—	—		23		—		23
Restricted stock grants, net of cancellations	127	—		1,665		—		1,665
Cancellation of shares for payment of withholding tax	(164)	—		(452)		—		(452)
Exercise of stock options	1	—		2		—		2
Net loss	—	—		—		(8,493)		(8,493)
BALANCE, June 30, 2022 (unaudited)	55,120	$	55	$	354,641	$	(267,768)	$	86,928


	Common Stock			Additional Paid-in Capital		Accumulated Comprehensive Deficit		Total
	Shares	Amount
BALANCE, December 31, 2021 (audited)	54,259	$	54	$	352,779	$	(252,273)	$	100,560
Non-cash compensation recognized on stock options and ESPP	—	—		44		—		44
Restricted stock grants, net of cancellations	1,132	1		2,708		—		2,709
Cancellation of shares for payment of withholding tax	(285)	—		(925)		—		(925)
Employee stock purchase plan	6	—		19		—		19
Exercise of stock options	8	—		16		—		16
Net loss	—	—		—		(15,496)		(15,496)
BALANCE, June 30, 2022 (unaudited)	55,120	55		354,641		(267,768)		86,928

See accompanying notes to the consolidated financial statements.

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SMITH MICRO SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)


	Common Stock			Additional Paid-in Capital		Accumulated Comprehensive Deficit		Total
	Shares	Amount
BALANCE, March 31, 2021 (unaudited)	51,646	$	52	$	340,058	$	(224,455)	$	115,655
Non-cash compensation recognized on stock options and ESPP	—	—		21		—		21
Restricted stock grants, net of cancellations	100	—		1,258		—		1,258
Cancellation of shares for payment of withholding tax	(90)	—		(484)		—		(484)
Costs associated with common stock offering	—	—		(188)		—		(188)
Common shares issued in connection with Avast Family Safety Mobile acquisition, net	1,460	1		8,380				8,381
Exercise of common stock warrants	451	1		(1)		—		—
Exercise of stock options	9	—		33		—		33
Net loss	—	—		—		(5,203)		(5,203)
BALANCE, June 30, 2021 (unaudited)	53,576	54		349,077		(229,658)		119,473


	Common Stock			Additional Paid-in Capital		Accumulated Comprehensive Deficit		Total
	Shares	Amount
BALANCE, December 31, 2020 (audited)	41,233	$	41	$	279,905	$	(221,230)	$	58,716
Non-cash compensation recognized on stock options and ESPP	—	—		39		—		39
Restricted stock grants, net of cancellations	1,070	1		2,254		—		2,255
Cancellation of shares for payment of withholding tax	(211)	—		(1,309)		—		(1,309)
Employee stock purchase plan	4	—		15		—		19
Common shares issued in stock offering, net of offering costs	9,521	10		59,701		—		59,711
Common shares issued in connection with Avast Family Safety Mobile acquisition, net	1,460	1		8,380				8,381
Exercise of common stock warrants	484	1		39		—		40
Exercise of stock options	15	—		53		—		53
Net loss	—	—		—		(8,428)		(8,428)
BALANCE, June 30, 2021 (unaudited)	53,576	54		349,077		(229,658)		119,473

See accompanying notes to the consolidated financial statements.

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SMITH MICRO SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	For the Six Months Ended June 30,
	2022		2021
	(unaudited)		(unaudited)
Operating activities:
Net loss	$	(15,496)	$	(8,428)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	3,902		5,481
Non-cash lease expense	673		618
Provision for doubtful accounts	—		(3)
Provision for excess and obsolete inventory	—		(97)
Stock based compensation	2,754		2,295
Changes in operating accounts:
Accounts receivable	(975)		3,640
Prepaid expenses and other assets	(527)		(225)
Accounts payable and accrued liabilities	(1,812)		(1,077)
Deferred revenue	(146)		(708)
Net cash (used in) provided by operating activities	(11,627)		1,496
Investing activities:
Acquisitions, net	—		(56,865)
Capital expenditures	(112)		(336)
Other investing activities	83		69
Net cash used in investing activities	(29)		(57,132)
Financing activities:
Proceeds from common stock offering, net of offering expenses	—		59,711
Proceeds from exercise of common stock warrants	—		40
Proceeds from financing arrangements	1,291		—
Repayments of financing arrangements	(391)		—
Other financing activities	35		67
Net cash provided by financing activities	935		59,818
Net (decrease) increase in cash and cash equivalents	(10,721)		4,182
Cash and cash equivalents, beginning of period	16,078		25,754
Cash and cash equivalents, end of period	$	5,357	$	29,936

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	174	$	63

Non-cash investing and financing activities:
Issuance of common stock in connection with acquisition	$	—	$	8,381

See accompanying notes to the consolidated financial statements.

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SMITH MICRO SOFTWARE, INC.

Notes to the Consolidated Financial Statements

(Unaudited)

1. The Company

Smith Micro Software, Inc. (“Smith Micro” or “the Company”) develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless and cable service providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, the Company strives to enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer Internet of Things (“IoT”) devices. Smith Micro’s portfolio includes 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 various product sets.

Smith Micro’s solution portfolio is comprised of proven products that enable its customers to provide:

•In-demand digital services that connect today’s digital lifestyle, including family location services, parental controls, and consumer IoT devices to mobile consumers worldwide;

•Easy visual access to voice messages on mobile devices through visual voicemail and voice-to-text transcription functionality; and

•Strategic, consistent, and measurable digital demonstration experiences that educate retail shoppers, create awareness of products and services, drive in-store sales, and optimize retail experiences with actionable analytics derived from in-store customer behavior.

2. Accounting Policies

Basis of Presentation

The accompanying interim consolidated balance sheet as of June 30, 2022, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the three and six months ended June 30, 2022 and 2021, are unaudited. The unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted.

In the opinion of management, the accompanying unaudited consolidated financial statements for the periods presented reflect all adjustments which are normal and recurring, and necessary to fairly state the financial position, results of operations, and cash flows of the Company. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on March 11, 2022.

Intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the prior period consolidated financial statements have been reclassified for comparative purposes principally to conform to the presentation of the current year period.

Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2022.

New Accounting Pronouncements

In June 2016, FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This updated guidance sets forth a current expected credit loss model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions and forecasted information rather than the current methodology of delaying recognition of credit losses until it is probable a loss has been incurred. This guidance becomes effective for the Company beginning in interim periods starting in fiscal year 2023. The impact of adopting the new standard is not anticipated to have a material impact on the Company's consolidated financial statements.

Reclassifications

Certain reclassification have been made to the prior year financial statements to conform to the current presentation.

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3. Credit Facility

On March 31, 2022, the Company and its wholly-owned subsidiary, Smith Micro Software, LLC, as co-borrowers entered into a credit agreement with Wells Fargo Bank, National Association providing for a $7.0 million secured revolving credit facility (the “Credit Facility”) that can be utilized to finance the Company’s working capital requirements and other general corporate purposes, and of which up to $0.5 million is available for letters of credit.

The Credit Facility will mature on March 31, 2023. The loans under the Credit Facility bear interest at the secured overnight financing rate plus 2%. The Credit Facility allows voluntary repayment of outstanding loans at any time without premium or penalty. The Credit Facility is secured by substantially all of the property of the borrowers.

The Credit Facility contains representations and warranties, affirmative and negative covenants and events of default customary for financings of this type, including negative covenants that, among other things, limit the ability of the borrowers to incur liens, limit the ability of the borrowers to make certain fundamental changes and limit the ability of the borrowers to incur other indebtedness, in each case subject to exceptions and qualifications. The Credit Facility also contains a current asset coverage ratio covenant for any quarter in which the Credit Facility has an outstanding balance. This covenant requires the ratio of (i) the sum of cash plus marketable securities, plus accounts receivable to (ii) the principal balance outstanding of the Credit Facility to not be less than 2.0 to 1.0. As of June 30, 2022, there were no borrowings outstanding under the Credit Facility and there were no instances of noncompliance with covenants.

In connection with the transactions described further in Note 12, the Credit Facility was terminated on August 11, 2022.

4. Goodwill and Intangible Assets

In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, Smith Micro reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing will be performed annually on December 31. Recoverability of goodwill is determined by comparing the fair value of the Company’s reporting unit to the carrying value of the underlying net assets in the reporting unit. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. The Company determined that there were no goodwill impairment indicators at June 30, 2022 and December 31, 2021.

The components of the Company’s intangible assets were as follows for the periods presented:


	June 30, 2022							December 31, 2021
	(unaudited, in thousands, except for useful life data)							(audited, in thousands, except for useful life data)
	Weighted Average Remaining Useful Life (in Years)	Gross		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (in Years)	Gross		Accumulated Amortization		Net Book Value
Purchased technology	7	$	13,529	$	(4,804)	$	8,725	8	$	13,529	$	(3,764)	$	9,765
Customer relationships	12	27,960		(3,858)		24,102		13	27,960		(2,816)		25,144
Customer contracts	2	7,000		(5,119)		1,881		2	7,000		(4,441)		2,559
Software license	8	5,419		(1,173)		4,247		9	5,419		(793)		4,626
Non-compete	1	283		(235)		48		1	283		(196)		87
Patents	5	600		(193)		407		5	600		(150)		450
Total		$	54,791	$	(15,381)	$	39,410		$	54,791	$	(12,160)	$	42,631

The Company amortizes intangible assets over the pattern of economic benefit expected to be generated from the use of the assets, with a total weighted average amortization period of approximately 10 years as of June 30, 2022 and December 31, 2021.

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As of June 30, 2022, estimated amortization expense for the remainder of 2022 and thereafter was as follows:


Year Ending December 31,	Amortization Expense (unaudited, in thousands)
2022	$	3,090
2023	5,874
2024	5,635
2025	5,402
2026	5,007
2027 and thereafter	14,402
Total	$	39,410

5. Earnings Per Share

The Company calculates earnings per share (“EPS”) as required by FASB ASC Topic No. 260, Earnings Per Share. Basic EPS is calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, excluding common stock equivalents. Diluted EPS is computed by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, plus the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For periods with a net loss, the dilutive common stock equivalents are excluded from the diluted EPS calculation. For purposes of this calculation, common stock subject to repurchase by the Company, options, and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.

The following table sets forth the details of basic and diluted earnings per share:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(unaudited, in thousands, except per share amounts)				(unaudited, in thousands, except per share amounts)
Numerator:
Net loss	$	(8,493)	$	(5,203)	$	(15,496)	$	(8,428)
Denominator:
Weighted average shares outstanding – basic	55,183		53,017		55,844		48,219
Potential common shares – options / warrants (treasury stock method)	—		—		—		—
Weighted average shares outstanding – diluted	55,183		53,017		55,844		48,219

Shares excluded (anti-dilutive)	640		1,871		869		1,965

Net loss per common share:
Basic	$	(0.15)	$	(0.10)	$	(0.28)	$	(0.17)
Diluted	$	(0.15)	$	(0.10)	$	(0.28)	$	(0.17)

6. Stock-Based Compensation

Stock Plans

During the six months ended June 30, 2022, the Company granted 1.3 million shares of restricted stock under the Company’s 2015 Omnibus Equity Incentive Plan, as amended. On June 18, 2015, Smith Micro’s stockholders approved the 2015 Omnibus Equity Incentive Plan (“2015 OEIP”) and subsequent amendments to the 2015 OEIP to increase the number of shares reserved thereunder were approved by its stockholders on June 14, 2018 and June 9, 2020. The 2015 OEIP

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replaced the 2005 Stock Option / Stock Issuance Plan (“2005 Plan”) which was due to expire on July 28, 2015. As of June 30, 2022, there were approximately 2.5 million shares available for future grants under the Company’s 2015 Plan.

All outstanding options under the 2005 Plan remain outstanding, but no new grants will be made under the 2005 Plan. The maximum number of shares of the Company’s common stock available for issuance over the term of the 2015 OEIP may not exceed 9,625,000 shares.

The 2015 OEIP provides for the issuance of full value awards (restricted stock, performance stock, dividend equivalent right or restricted stock units) and partial value awards (stock options or stock appreciation rights) to employees, non-employee members of the board and consultants. Any full value award settled in shares will be debited as 1.2 shares, and partial value awards settled in shares will be debited as 1.0 shares against the share reserve. The exercise price per share for stock option grants is not to be less than the fair market value per share of the Company’s common stock on the date of grant. The Board of Directors has the discretion to determine the vesting schedule. Stock options may be exercisable immediately or in installments, but generally vest over a four-year period from the date of grant. In the event the holder ceases to be employed by the Company, all unvested stock options terminate, and all vested stock options may be exercised within a period of 90 days following termination. In general, stock options expire ten years from the date of grant. Restricted stock is valued using the closing stock price on the date of the grant. The total value is expensed over the vesting period of 12 to 48 months.

Employee Stock Purchase Plan

The Company has a shareholder approved employee stock purchase plan (“ESPP”), under which substantially all employees may purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning and end of six-month offering periods. An employee’s payroll deductions under the ESPP are limited to 10% of the employee’s compensation and employees may not purchase more than the lesser of $25,000 of stock, or 250 shares, for any purchase period. Additionally, no more than 250,000 shares in the aggregate may be purchased under the plan.

Stock Compensation Expense

The Company accounts for all stock-based payment awards made to employees and directors based on their fair values and recognized as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation.

Compensation Costs

Non-cash stock-based compensation expenses related to stock options, restricted stock grants and the ESPP were recorded in the financial statements as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of sales	$	1	$	—	$	1	$	1
Sales and marketing	652		236		735		425
Research and development	268		241		529		434
General and administrative	767		802		1,488		1,435
Total non-cash stock compensation expense	$	1,688	$	1,279	$	2,753	$	2,295

As of June 30, 2022, there was approximately $9.5 million unrecognized compensation costs related to non-vested stock options and restricted stock granted under the 2015 OEIP and the 2005 Plan. In the second quarter of 2022 there was a modification of a restricted stock award which accelerated the vesting of that award. As such an additional $0.6 million of stock compensation expense was recorded in Sales and marketing expense in that period. At June 30, 2022, there were 2.5 million shares available for future grants under the 2015 OEIP Plan.

Stock Options

A summary of the Company’s stock options outstanding and related information under the 2015 OEIP and 2005 Plan for the six months ended June 30, 2022 are as follows (in thousands except weighted average exercise price and weighted average remaining contractual life):

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	Shares	Weighted Avg. Exercise Price		Wtd. Avg. Remaining Contractual Life (Yrs)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	194	$	4.12		$	—
Granted	—	$	—		$	—
Exercised	(8)	$	2.15		$	11
Forfeited	(1)	$	5.52		$	—
Expired	(5)	$	6.80		$	—
Outstanding as of June 30, 2022	180	$	4.12	4.5	$	21
Vested and expected to vest at June 30, 2022	176	$	4.10	4.3	$	21
Exercisable as of June 30, 2022	145	$	4.03	3.7	$	17

Restricted Stock Awards

A summary of the Company’s restricted stock awards outstanding under the 2015 OEIP and 2005 Plan for the six months ended June 30, 2022 are as follows (in thousands, except weighted average grant date fair value):


	Shares	Weighted average grant date fair value
Unvested at December 31, 2021	1,668	$	5.83
Granted	1,340	$	3.82
Vested	(760)	$	5.00
Canceled and forfeited	(208)	$	6.08
Unvested at June 30, 2022	2,040	$	4.80

7. Revenues

Revenue Recognition

In accordance with FASB ASC Topic No. 606, Revenue from Contracts with Customers, the Company recognizes the sale of goods and services based on the five-step analysis of transactions as provided in Topic 606, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods and services.

The Company recognizes sales of goods and services based on the five-step analysis of transactions as provided in Topic 606. For all contracts with customers, the Company first identifies the contract which usually is established when a contract is fully executed by each party and consideration is expected to be received. Next, the Company identifies the performance obligations in the contract. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company then determines the transaction price in the arrangement and allocates the transaction price, if necessary, to each performance obligation identified in the contract. The allocation of the transaction price to the performance obligations are based on the relative standalone selling prices for the goods and services contained in a particular performance obligation. The transaction price is adjusted for the Company’s estimate of variable consideration which may include certain incentives and discounts, product returns, distributor fees, and storage fees. The Company evaluates the total amount of variable consideration expected to be earned by using the expected value method, as the Company believes this method represents the most appropriate estimate for this consideration, based on historical service trends, the individual contract considerations, and its best judgment at the time. The Company includes estimates of variable consideration in revenues only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company also generates the majority of its revenue on usage-based fees which are variable and depend entirely on customers’ use of perpetual licenses, transactions processed on the Company’s hosted environment, advertisement placements on the Company’s service platform, and activity on the Company’s cloud-based service platform.

The Company’s contracts with the mobile network operator (“MNO”) customers include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that

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should be accounted for separately versus together may require significant judgment. Smith Micro’s cloud-based services include a software solution license integrated with cloud-based services. Since the Company does not allow its customers to take possession of the cloud-based elements of its software solutions, and since the utility of the license comes from the cloud-based services that the Company provides, Smith Micro considers the software license and the cloud services to be a single performance obligation. The Company recognizes revenue associated with its MNO customers based on their active subscribers’ access and usage of Smith Micro’s software licenses and cloud-based services on Smith Micro’s platforms.

Smith Micro has made accounting policy elections to exclude all taxes by governmental authorities from the measurement of the transaction price, and since the Company’s standard payment terms are less than one year, the Company has elected the practical expedient not to assess whether a contract has a significant financing component.

Disaggregation of Revenues

Revenues on a disaggregated basis are as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(unaudited, in thousands)				(unaudited, in thousands)
License and service fees	$	1,033	$	795	$	1,861	$	2,382
Hosted environment usage fees	1,434		3,956		2,863		8,097
Cloud based usage fees	9,670		10,555		19,548		15,602
Consulting services and other	537		613		1,137		1,219
Total revenues	$	12,674	$	15,919	$	25,409	$	27,300

8. Segment, Customer Concentration and Geographical Information

Segment Information

Public companies are required to report financial and descriptive information about their reportable operating segments as required by FASB ASC Topic No. 280, Segment Reporting. The Company has one primary business unit based on how management internally evaluates separate financial information, business activities and management responsibility: Wireless. The Wireless segment includes the Family Safety (which includes SafePath®), CommSuite®, and ViewSpot® families of products.

The Company does not separately allocate operating expenses to these product lines, nor does it allocate specific assets. Therefore, product line information reported includes only revenues.

The following table presents the Wireless revenues by product line:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(unaudited, in thousands)				(unaudited, in thousands)
Family Safety	$	10,161	$	11,119	$	20,528	$	17,385
CommSuite	1,433		3,944		2,862		8,073
ViewSpot	1,080		817		2,014		1,746
Other	—		39		5		96
Total wireless revenues	$	12,674	$	15,919	$	25,409	$	27,300

Customer Concentration Information

The Company has certain customers whose revenues individually represented greater than 10% of the Company’s total revenues, or whose accounts receivable balances individually represented greater than 10% of the Company’s total accounts receivable.

For the three months ended June 30, 2022 two customers made up 44% and 37% of revenues. For the three months ended June 30, 2021 two customers made up 57% and 25% of revenues.

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For the six months ended June 30, 2022 two customers made up 42% and 37% of revenues. For the six months ended June 30, 2021 two customers made up 63% and 16% of revenues.

As of June 30, 2022 three customers accounted for 47%, 26%, and 14% of accounts receivable, and as of June 30, 2021, three customers accounted for 44%, 29%, and 12% of accounts receivable.

Geographical Information

During the three and six months ended June 30, 2022 and 2021, the Company operated in two geographic locations: the Americas and Europe, Middle East and Africa (EMEA). Revenues attributed to the geographic location of the customers’ bill-to address were as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(unaudited, in thousands)				(unaudited, in thousands)
Americas	$	12,222	$	15,351	$	24,407	$	25,496
EMEA	452		568		1,002		1,804
Total revenues	$	12,674	$	15,919	$	25,409	$	27,300

The Company does not separately allocate specific assets to these geographic locations.

9. Commitments and Contingencies

Litigation

The Company may become involved in various legal proceedings arising from its business activities. While management does not believe the ultimate disposition of these matters will have a material adverse impact on the Company’s consolidated results of operations, cash flows, or financial position, litigation is inherently unpredictable, and depending on the nature and timing of these proceedings, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows, or financial position in a particular period.

Other Contingent Contractual Obligations

During its normal course of business, the Company has made certain indemnities, commitments, and guarantees under which it may be required to make payments in connection with certain transactions. These include: indemnities to the Company’s customers pursuant to contracts for the Company’s products and services, including indemnities with respect to intellectual property, confidentiality and data privacy; indemnities to various lessors in connection with facility leases for certain claims arising from use of such facility or under such lease; indemnities to vendors and service providers pertaining to claims based on the negligence or willful misconduct of the Company; indemnities involving the accuracy of representations and warranties in certain contracts; and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. In addition, the Company has made or may make contractual commitments to employees providing for severance payments upon the occurrence of certain prescribed events. The Company may also issue a guarantee in the form of a standby letter of credit as security for contingent liabilities under certain customer contracts. The duration of these indemnities, commitments, and guarantees varies, and in certain cases may be indefinite. The majority of these indemnities, commitments, and guarantees may not provide for any limitation of the maximum potential for future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets.

10. Leases

The Company leases office space and equipment, and certain office space is subleased. Management determines if a contract is a lease at the inception of the arrangement and reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised.

Leases with an initial term of greater than twelve months are recorded on the consolidated balance sheet. Lease expense is recognized on a straight-line basis over the lease term.

The Company’s lease contracts generally do not provide a readily determinable implicit rate. For these contracts, the estimated incremental borrowing rate is based on information available at the inception of the lease.

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Operating lease cost consists of the following:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
	(unaudited, in thousands)				(unaudited, in thousands)
Lease cost	$	406	$	560	$	833	$	1,120
Sublease income	—		(151)		(18)		(301)
Total lease cost	$	406	$	409	$	815	$	819

The maturity of operating lease liabilities is presented in the following table:


	As of June 30, 2022
	(unaudited, in thousands)
2022	$	819
2023	1,657
2024	1,505
2025	1,151
2026	471
Total lease payments	5,603
Less imputed interest	(563)
Present value of lease liabilities	$	5,040

Additional information relating to the Company’s operating leases follows:


	As of June 30, 2022
	(unaudited)
Weighted average remaining lease term (years)	3.53
Weighted average discount rate	6.3	%

11. Income Taxes

The Company accounts for income taxes as required by FASB ASC Topic No. 740, Income Taxes. The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard. The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are: (1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax liabilities against gross deferred tax assets); (2) taxable income in prior carryback years, if carryback is permitted under the applicable tax law; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards.

In assessing whether a valuation allowance is required, significant weight is to be given to evidence that can be objectively verified. A significant factor in the Company’s assessment is that the Company was in a three-year historical cumulative loss as of the end of fiscal 2021. In addition, the Company was also in a loss for fiscal 2017 and 2018. These facts, combined with uncertain near-term market and economic conditions, reduced the Company’s ability to rely on projections of future taxable income in assessing the realizability of its deferred tax assets.

After a review of the four sources of taxable income as of December 31, 2021, and after consideration of the Company’s cumulative loss position as of December 31, 2021, the Company will continue to reserve its U.S.-based deferred tax amounts, which total $57.3 million as of June 30, 2022.

The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. Currently there are no audits in process or pending from federal or state tax authorities. The Company is no longer subject to examination for U.S. federal income tax returns for years before December 31, 2018 and for state income tax returns, the Company is no longer subject to examination for years before December 31, 2017. As of June 30, 2022, the company had no outstanding tax audits. The outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax

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audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. Smith Micro may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to the consolidated financial results of the Company. It is the Company’s policy to classify any interest and/or penalties in the consolidated financial statements as a component of income tax expense.

12. Subsequent Events

The Company evaluates and discloses subsequent events as required by FASB ASC Topic No. 855, Subsequent Events. The Topic establishes general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the financial statements are issued or are available to be issued.

On August 11, 2022, the Company entered into a private placement of senior secured convertible notes with an aggregate original principal amount of $15 million and a conversion price of $3.35 per share, subject to adjustment, and warrants to acquire an aggregate amount of 2,238,805 shares of the Company's common stock.. The warrants are exercisable immediately at an exercise price of $3.35 per share and expire five years from the date of issuance. Concurrently with the convertible note transaction, the Company entered into a securities purchase agreement to sell 1,132,075 shares of the Company's common stock at a purchase price of $2.65 per share of stock together with an equivalent number of warrants. Each warrant will be exercisable on the six-month anniversary of the date of its issuance at an exercise price of $2.65 per share and will expire five years from the date it first becomes exercisable.

Subsequent events have been evaluated as of the date of this filing and no further disclosures are required.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this document, the terms “Smith Micro,” “Company,” “we,” “us,” and “our” refer to Smith Micro Software, Inc. and, where appropriate, its subsidiaries.

This Quarterly Report on Form 10-Q (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 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 ability to hire and retain key personnel;

•the possibility of security and privacy breaches in our systems and in the third-party software and/or systems that we use, damaging client relations and inhibiting our ability to grow;

•failure to realize the expected benefits of recent acquisitions;

•interruptions or delays in the services we provide from our data center hosting facilities that could harm our business;

•our dependency upon effective operation with operating systems, devices, networks and standards that we do not control and on our continued relationships with mobile operating system providers, device manufacturers and mobile software application stores on commercially reasonable terms or at all;

•our ability and/or customers’ ability to distribute our mobile software applications to their end users through third party mobile software application stores, which we do not control;

•the existence of undetected software defects in our products and our failure to resolve detected defects in a timely manner;

•our current client concentration within the vertical wireless carrier market, and the potential impact to our business resulting from changes within this vertical market, or failure to penetrate new markets;

•the impact of the COVID-19 pandemic on our business and financial results;

•rapid technological evolution and resulting changes in demand for our products from our key customers and their end users;

•intense competition in our industry and the core vertical markets in which we operate, and our ability to successfully compete;

•the risks inherent with international operations;

•the impact of evolving information security and data privacy laws on our business and industry;

•the impact of governmental regulations on our business and industry;

•our ability to protect our intellectual property and our ability to operate our business without infringing on the rights of others;

•the risk of being delisted from NASDAQ if we fail to meet any of its applicable listing requirements;

•our ability to raise additional capital and the risk of such capital not being available to us at commercially reasonable terms or at all;

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•risks related to the existence and terms of our outstanding convertible notes, 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, and could require us to curtail or cease our operations;

•the risk that the conversion of our outstanding convertible notes and exercise of the warrants issued in connection therewith will dilute the ownership interest of our existing stockholders or may otherwise depress the price of our common stock;

•the risk that our obligations to the holders of our convertible notes are secured by a security interest in substantially all of our assets, and if we default on those obligations, the note holders could foreclose on our assets;

•our ability to be profitable;

•our ability to remain a going concern;

•changes in our operating income due to shifts in our sales mix and variability in our operating expenses;

•our ability to assimilate acquisitions without diverting management attention and impacting current operations;

•the availability of third-party intellectual property and licenses needed for our operations on commercially reasonable terms, or at all;

•the difficulty of predicting our quarterly revenues and operating results and the chance of such revenues and results falling below analyst or investor expectations, which could cause the price of our common stock to fall; and

•those additional factors which are listed under Item 1A of Part I of our Annual Report on Form 10-K filed with the SEC on March 11, 2022 under the caption “RISK FACTORS.”

The forward-looking statements contained in this Report are made on the basis of the views and assumptions of management regarding future events and business performance as of the date this Report is filed with the Securities and Exchange Commission (the “SEC”). In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. We do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date this Report is filed.

Overview

Smith Micro provides software solutions that simplify and enhance the mobile experience to some of the leading wireless and cable 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 IoT devices. Our portfolio includes 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 emerging 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 never-ending focus on understanding our customers’ needs and delivering value.

In the second quarter of 2022 our revenues declined by 20% to $12.7 million compared to the second quarter of 2021, primarily driven by the $2.5 million decrease in CommSuite revenues coupled with a $1.0 million decrease in our family safety product line. These revenue declines resulted from the acceleration of T-Mobile's efforts to migrate legacy Sprint subscribers to the T-Mobile network. As part of this initiative, T-Mobile is winding down Sprint's legacy premium visual voicemail services, which we expect to result in the CommSuite deployment reaching its end-of-life before the end of 2022. Since our acquisitions of Circle Media Labs, Inc.'s ("Circle") operator business in 2020 and Avast plc's and certain of its subsidiaries' family safety mobile business (the "Family Safety Mobile Business") in April 2021, we have been focused on migrating the customers from the acquired software platforms to our flagship SafePath platform, with the first such migration being completed during the first quarter of 2022 at one of our U.S. Tier 1 carrier customers. Until we complete these migrations, we must continue to maintain multiple family safety platforms and as a result, we have experienced a decrease in our gross margin during the second quarter of 2022, resulting in a gross profit of $9.1 million. Our operating

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expenses have increased during the second quarter of 2022 as a result of our ongoing migration efforts and severance costs incurred during the quarter, offset by a decline in acquisition related costs. The net loss for the second quarter of 2022 was $8.5 million, resulting in a net loss per basic and diluted share of $0.15 per share.

We now provide white label family safety applications to all three Tier 1 wireless carriers in the United States. In future quarters, we expect our overall family safety platform revenue to increase because of our competitive positioning with U.S. Tier 1 carrier customers, as we continue to believe that we remain strategically positioned to offer our market-leading family safety platform to the majority of U.S. mobile subscribers. We believe that as we complete our development efforts associated with the migration to the SafePath platform, our development costs should decline, which we expect will begin to occur during the third quarter of 2022. In addition, we anticipate that certain costs of sales related to the acquired platforms will be eliminated once the SafePath migrations are completed over the next year, which is expected to result in an increase in our gross margins.

Results of Operations

The table below sets forth certain statements of operations and comprehensive loss data expressed as a percentage of revenues for the three and six months ended June 30, 2022 and 2021. Our historical results are not necessarily indicative of the operating results that may be expected in the future.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenues	28.5		21.1		28.5		18.0
Gross profit	71.5		78.9		71.5		82.0
Operating Expenses
Selling and marketing	29.4		19.6		26.4		19.6
Research and development	64.8		44.4		61.5		43.7
General and administrative	31.8		31.1		31.8		31.5
Amortization of intangible assets	12.4		16.6		12.7		18.1
Total operating expenses	138.4		111.6		132.3		113.0
Operating loss	(66.9)		(32.7)		(60.8)		(30.9)
Interest income, net	—		0.1		—		0.1
Other income	0.1		—		0.1		—
Loss before provision for income taxes	(66.8)		(32.6)		(60.8)		(30.8)
Provision for income tax expense	0.2		0.1		0.2		0.1
Net loss	(67.0)	%	(32.7)	%	(61.0)	%	(30.9)	%

Three Months Ended June 30, 2022 Compared to the Three Months Ended June 30, 2021

Revenues. Revenues were $12.7 million and $15.9 million for the three months ended June 30, 2022 and 2021, respectively, representing a decrease of $3.2 million, or 20%. This decrease was primarily related to decreases associated with CommSuite of $2.5 million and our legacy family safety product lines of $1.0 million, offset by an increase in ViewSpot revenue of $0.3 million .

Cost of revenues. Cost of revenues were $3.6 million and $3.4 million for the three months ended June 30, 2022 and 2021, respectively. This increase of $0.2 million was primarily due to incremental costs associated with maintaining multiple family safety platforms.

Gross profit. Gross profit was $9.1 million, or 71.5% of revenues, for the three months ended June 30, 2022, compared to $12.6 million, or 78.9% of revenues, for the three months ended June 30, 2021. The decrease of $3.5 million in gross profit was a result of increased costs associated with operating the Family Safety Mobile Business and higher operational costs associated with maintaining multiple family safety platforms as we continue to transition our Tier 1 customers onto a single platform, combined with the period-over-period decline in revenue volume.

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Selling and marketing. Selling and marketing expenses were $3.7 million and $3.1 million for the three months ended June 30, 2022 and 2021, respectively. This increase of $0.6 million was primarily due to charges for severance costs, including stock based compensation, of $0.7 million.

Research and development. Research and development expenses were $8.2 million and $7.1 million for the three months ended June 30, 2022 and 2021 respectively. This increase of $1.1 million was primarily due to the increase in contractor costs associated with supporting SafePath development.

General and administrative. General and administrative expenses were $4.0 million and $4.9 million for the three months ended June 30, 2022 and 2021, respectively. This decrease of $0.9 million was primarily due to acquisition related costs of $1.0 million incurred in 2021 relating to the acquisition of the Family Mobile Safety Business.

Amortization of intangible assets. Amortization of intangible assets was $1.6 million and $2.6 million for the three months ended June 30, 2022 and 2021, respectively. This decrease of $1.0 million was primarily related to amortization of intangible assets in 2021 that have now been fully amortized.

Six Months Ended June 30, 2022 Compared to the Six Months Ended June 30, 2021

Revenues. Revenues were $25.4 million and $27.3 million for the six months ended June 30, 2022 and 2021, respectively, representing a decrease of $1.9 million, or 7%. This decrease was driven by a decline in CommSuite revenues of approximately $5.2 million as a result of the continued migration of legacy Sprint customers onto the T-Mobile network. Partially offsetting this decline were increases in our Family Safety and ViewSpot product lines of $3.1 million and $0.3 million respectively.

Cost of revenues. Cost of revenues were $7.3 million and $4.9 million for the six months ended June 30, 2022 and 2021, respectively. This increase of $2.4 million was primarily due to supporting the increased revenues associated with the Family Safety Mobile Business and incremental costs associated with maintaining multiple family safety platforms.

Gross profit. Gross profit was $18.2 million, or 71.5% of revenues, for the six months ended June 30, 2022, compared to $22.4 million, or 82.0% of revenues, for the six months ended June 30, 2021. The decrease of $4.2 million in gross profit is a result of increased costs associated with the acquired Family Safety Mobile Business and higher operational costs associated with maintaining multiple family safety platforms combined with the period-over-period decline in revenue volume.

Selling and marketing. Selling and marketing expenses were $6.7 million and $5.4 million for the six months ended June 30, 2022 and 2021, respectively. This increase of $1.3 million is primarily due to charges for severance costs, including stock based compensation of $0.7 million in the current period, combined with increases in personnel related costs.

Research and development. Research and development expenses were $15.6 million and $11.9 million for the six months ended June 30, 2022 and 2021, respectively. This increase of $3.7 million was primarily due to personnel related expenses and contractor costs associated with supporting SafePath development.

General and administrative. General and administrative expenses were $8.1 million and $8.6 million for the six months ended June 30, 2022 and 2021, respectively. This decrease of $0.5 million was due to a decline of $1.6 million in transaction and professional service costs associated with our acquisition of the Family Safety Mobile Business in 2021, partially offset by increased costs associated with the full period effect of the acquisition, which occurred in April 2021.

Amortization of intangible assets. Amortization of intangible assets was $3.2 million and $4.9 million for the six months ended June 30, 2022 and 2021, respectively. This decrease of $1.7 million was primarily related to amortization of intangible assets in 2021 that have now been fully amortized.

Liquidity and Capital Resources

The Company’s principal sources of liquidity are its existing cash and cash equivalents, cash generated by operations, and the available capacity under its secured revolving credit facility (the “Credit Facility”), which provides for a total commitment of up to $7.0 million, of which $0.5 million is available for letters of credit. The Company's primary needs for liquidity relate to working capital requirements for operations. As of June 30, 2022, there were no borrowings under the revolving Credit Facility and there were no instances of noncompliance with covenants. In connection with the transactions discussed in Note 12, the Credit Facility was terminated on August 11, 2022.

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	June 30, 2022
	(unaudited, in thousands)
Cash and cash equivalents			$	5,357
Credit Facility
Total availability under the Credit Facility	$	7,000
Outstanding borrowings on Revolving Credit Facility	—
Letters of credit outstanding	(27)
Net availability under Revolving Credit Facility			6,973
Total available funding capacity			$	12,330

Operating activities

Net cash used in operating activities was $11.6 million for the six months ended June 30, 2022. The primary uses of operating cash were a net loss of $15.5 million less non-cash expenses totaling $7.3 million, an increase in accounts receivable of $1.0 million, an increase in prepaid expenses and other assets of $0.5 million, and a decrease in accounts payable and accrued liabilities of $1.8 million.

Net cash provided by operating activities was $1.5 million for the six months ended June 30, 2021. The net loss of $8.4 million for the quarter was offset by net non-cash expenses totaling $8.3 million. The primary sources of operating cash were a decrease in accounts receivable of $3.6 million and an increase in prepaid expenses and other assets of $0.2 million. The primary uses of operating cash were a decrease in accounts payable and accrued liabilities of $1.1 million, and a decrease in deferred revenue of $0.7 million.

Investing activities

Net cash used in investing activities was nominal for the six months ended June 30, 2022. Net cash used in investing activities for six months ended June 30, 2021 of $57.1 million was primarily attributable to the Family Safety Mobile Business acquisition.

Financing activities

Net cash provided by financing activities was $0.9 million for the six months ended June 30, 2022, relating primarily to proceeds from insurance premium financing arrangements of $1.3 million, offset by repayments on those arrangements of $0.4 million.

Net cash provided by financing activities was $59.8 million for the six months ended June 30, 2021, relating primarily to the March 2021 common stock offering, the proceeds of which were used, in part, to finance the Family Safety Mobile Business acquisition.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

During our normal course of business, we have made certain indemnities, commitments, and guarantees under which we may be required to make payments in relation to certain transactions. These include: indemnities to our customers pursuant to contracts for the Company’s products and services, including indemnities with respect to intellectual property, confidentiality and data privacy; indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease; indemnities to vendors and service providers pertaining to claims based on negligence or willful misconduct; indemnities involving the accuracy of representations and warranties in certain contracts; and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. We may also issue a guarantee in the form of a standby letter of credit as security for contingent liabilities under certain customer contracts. The duration of these indemnities, commitments and guarantees varies, and in certain cases, may be indefinite. The majority of these indemnities, commitments, and guarantees may not provide for any limitation of the maximum potential for future payments we could be obligated to make. We have not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets.

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Recent Accounting Guidance

See Note 2 of our Notes to the Consolidated Financial Statements for information regarding our recent accounting guidance.

Critical Accounting Policies and Estimates

Our discussion and analysis of results of operations, financial condition, and liquidity are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may materially differ from these estimates under different assumptions or conditions. On an on-going basis, we review our estimates to ensure that they appropriately reflect changes in our business or new information as it becomes available. See Note 1 of our Notes to the Consolidated Financial Statements in our Annual Report for information regarding our critical accounting policies and estimates.

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of June 30, 2022. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have determined that as of June 30, 2022, our disclosure controls and procedures were effective to ensure that the information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management’s responsibility for financial statements

Our management is responsible for the integrity and objectivity of all information presented in this Report. The consolidated financial statements were prepared in conformity with U.S. GAAP and include amounts based on management’s best estimates and judgments. Management believes the consolidated financial statements fairly reflect the form and substance of transactions and that the financial statements fairly represent the Company’s financial position and results of operations for the periods and as of the dates stated therein.

The Audit Committee of the Company’s Board of Directors, which is composed solely of independent directors, meets regularly with our independent registered public accounting firm, SingerLewak LLP, and representatives of management to review accounting, financial reporting, internal control, and audit matters, as well as the nature and extent of the audit effort. The Audit Committee is responsible for the engagement of the independent auditors. The independent auditors have free access to the Audit Committee.

Changes in internal control over financial reporting

There have been no changes in our internal controls over financial reporting during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

In addition to the other information included in this Report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report, and the factors identified at the beginning of Part I, Item 2 of this Report, under the heading, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which could materially affect our business, financial condition, cash flows, or results of operations. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently considers immaterial also may materially adversely affect its business, financial condition, and/or operating results. There have been no material changes to the risk factors included in our Annual Report for the year ended December 31, 2021, other than as described below.

Risks Related to Our Convertible Notes

The terms of our notes, and our debt repayment obligations thereunder, may restrict our ability to obtain additional financing, and adversely affect our financial condition and cash flows from operations in the future.

Our indebtedness under the notes, and certain restrictions included within the terms of the notes, may restrict, and otherwise impair our ability to obtain additional financing in the future for general corporate purposes, including working capital, capital expenditures, potential acquisitions and strategic transactions. Further, a portion of our cash flows from operations may have to be dedicated to repaying the principal and interest of the notes during 2023. Our ability to meet our debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors, many of which are outside of our control. Our future operations may not generate sufficient cash to enable us to repay our debt, including the notes. If we fail to make a payment on our debt, we could be in default on such debt. If we are at any time unable to pay our indebtedness under the notes in cash when due, we may be required to issue additional shares of common stock on unfavorable terms.

Conversion of the notes and exercise of the warrants will dilute the ownership interest of our existing stockholders or may otherwise depress the price of our common stock.

The conversion of some or all of the notes or exercise of some or all of the warrants issued along with the notes will dilute the ownership interests of existing stockholders. Any sales in the public market of our common stock issuable upon such conversion of the notes or exercise of the warrants could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes may encourage short selling by market participants because the conversion of the notes or exercise of the warrants could be used to satisfy short positions, or anticipated conversion of the notes into, or exercise of warrants for, shares of our common stock could depress the price of our common stock.

We may require additional financing to sustain or grow our operations and such additional capital may not be available to us, or only available to us on unfavorable terms.

To the extent that revenues generated by our ongoing operations are insufficient to fund future requirements, we may need to raise additional funds through debt or equity financings or curtail our growth. The notes contain limitations on our ability to raise money through equity offerings and to incur additional indebtedness. We cannot be sure that we will be able to raise equity or debt financing on terms favorable to us and our stockholders in the amounts that we require, or at all. Our inability in the future to obtain additional equity or debt capital on acceptable terms, or at all, could adversely impact our ability to execute our business strategy, which could adversely affect our growth prospects and future stockholder returns.

Our obligations to the holders of our notes are secured by a security interest in substantially all of our assets, and if we default on those obligations, the note holders could foreclose on our assets.

Our obligations under the notes and the transaction documents relating to those notes are secured by a security interest in substantially all of our and our subsidiaries’ assets. As a result, if we default under our obligations under the

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notes or the transaction documents, the holders of the notes, acting through their appointed agent, could foreclose on their security interests and liquidate some or all of these assets, which would harm our business, financial condition and results of operations and could require us to curtail or cease operations.

The holders of our notes have certain additional rights upon an event of default under the notes which could harm our business, financial condition and results of operations and could require us to curtail or cease our operations.

Under our notes, the holders have various rights upon an event of default. Such rights include (i) an increase in the interest rate; (ii) the holders having the right to demand redemption of all or a portion of the notes and (iii) the holders have the right to convert the note into our common stock at a discount over then current market price of our common stock. At any time after certain notice requirements for an event of default are triggered, a holder of the notes may require us to redeem all or any portion of the note by delivering written notice. Each portion of the note subject to redemption would be redeemed by us in cash by wire transfer of immediately available funds at a price equal to the greater of (i) the product of (A) the conversion amount to be redeemed multiplied by (B) the redemption premium (equal to 125%) and (ii) the product of (X) the conversion rate with respect to the conversion amount in effect at such time as the holder delivers an event of default redemption notice multiplied by (Y) the product of (1) the redemption premium (equal to 125%) multiplied by (2) the greatest closing sale price of the common stock on any trading day during the period commencing on the date immediately preceding the event of default and ending on the date we make the entire payment required to be made under the notes. We may not have sufficient funds to settle the redemption price and, as described above, this could trigger rights under the security interest granted to the holders and result in the foreclosure of their security interests and liquidation of some or all of our assets.

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

The table set forth below shows all repurchases of securities by us during the three months ended June 30, 2022:


ISSUER PURCHASES OF EQUITY SECURITIES
Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
April 1 - 30, 2022	27,835	$	3.67	—	—
May 1 - 31, 2022	116,133	2.56		—	—
June 1 - 30, 2022	19,766	2.61		—	—
Total	163,734	$	2.95

(1)Shares of stock repurchased by the Company as payment of withholding taxes in connection with the vesting of restricted stock awards during the applicable period. All of the shares were cancelled when they were acquired by the Company.

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Item 6. Exhibits


Exhibit			Description
3.1			Bylaws of Smith Micro Software, Inc. (as amended, effective April 11, 2022)
10.1			Separation Agreement and General Release dated May 18, 2022, between Smith Micro Software, Inc. and Gail Mackiewicz Redmond
31.1			Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2			Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1			Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document
101.SCH			Inline XBRL Taxonomy Extension Schema Document
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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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.

August 12, 2022	By /s/	William W. Smith, Jr.
	William W. Smith, Jr.
	Chairman of the Board, President and Chief Executive Officer
	(Principal Executive Officer)

August 12, 2022	By /s/	James M. Kempton
	James M. Kempton
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

Document

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Exhibit 3.1

AMENDED AND RESTATED

BYLAWS

SMITH MICRO SOFTWARE, INC.

(a Delaware corporation)

(as amended through April 11, 2022)

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ARTICLE I

OFFICES

Section 1. Registered Office. The registered office shall be at the office of The Prentice-Hall Corporation System, Inc.

Section 2. Other Offices. The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may on an annual basis determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Annual Meeting. An annual meeting of the stockholders for the election of directors shall be held at such place either within or without the State of Delaware as shall be designated on an annual basis by the Board of Directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2. Notice of Annual Meeting. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting.

Section 3. Voting List. The officer who has charge of the stock ledger of the corporation shall prepare and make, or cause a third party to prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 4. Special Meetings. Special meetings of the stockholders of this corporation, for any purpose or purposes unless otherwise prescribed by statute or by the Certificate of Incorporation, shall be called by the President or Secretary at the request in writing of the President, a majority of the members of the Board of Directors or holders of at least 50% of the total voting power of all outstanding shares of stock of this corporation then entitled to vote, and

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may not be called absent such a request. Such request shall state the purpose or purposes of the proposed meeting.

Section 5. Notice of Special Meetings. As soon as reasonably practicable after receipt of a request as provided in Section 4 of this Article II, written notice of a special meeting, stating the place, date (which shall be not less than ten (10) nor more than sixty (60) days from the date of the notice) and hour of the special meeting and the purpose or purposes for which the special meeting is called, shall be given to each stockholder entitled to vote at such special meeting.

Section 6. Scope of Business at Specia1 Meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 7. Quorum. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman of the meeting or the stockholders entitled to vote thereat present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting as provided in Section 5 of this Article II.

Section 8. Qualifications to Vote. The stockholders of record on the books of the corporation at the close of business on the record date as determined by the Board of Directors and only such stockholders shall be entitled to vote at any meeting of stockholders or any adjournment thereof.

Section 9. Record Date. The Board of Directors may fix a record date for the determination of the stockholders entitled to notice of or to vote at any stockholders’ meeting and at any adjournment thereof, and to fix a record date for any other purpose. The record date shall not be more titan sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or if notice is waived at the close of business

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on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 10. Action at Meetings. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable law or of the Certificate of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 11. Voting and Proxies. Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three (3) years from its date, unless the proxy provides for a longer period. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless it is coupled with an interest sufficient in law to support an irrevocable power.

Section 12. Nominations for Board of Directors. Nominations for election to the Board of Directors must be made by the Board of Directors or by any stockholder of any outstanding class of capital stock of the corporation entitled to vote for the election of directors. Nominations, other than those made by the Board of Directors of the corporation, must be preceded by notification in writing in fact received by the Secretary of the corporation not less than sixty (60) days prior to any meeting of stockholders called for the election of directors. Such notification shall contain the written consent of each proposed nominee to serve as a director if so elected and the following information as to each proposed nominee and as to each person, acting alone or in conjunction with one or more other persons as a partnership, limited partnership, syndicate or other group, who participates or is expected to participate in making such nomination or in organizing, directing or financing such nomination or solicitation of proxies to vote for the nominee:

(a)the name, age, residence, address, and business address of each proposed nominee and of each such person;

(b)the principal occupation or employment, the name, type of business and address of the corporation or other organization in which such employment is carried on of each proposed nominee and of each such person;

(c)the amount of stock of the corporation owned beneficially either directly or indirectly, by each proposed nominee and each such person; and

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(d)a description of any arrangement or understanding of each proposed nominee and of each such person with each other or any other person regarding future employment or any future transaction to which the corporation will or may be a party.

The presiding officer of the meeting shall have the authority to determine and declare to the meeting that a nomination not preceded by notification made in accordance with the foregoing procedure shall be disregarded.

Section 13. Stockholder Proposals for Meetings. At any meeting of the stockholders, only such business shall be conducted as shall be properly before the meeting. To be properly before a meeting business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before a meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal place of business of the corporation not less than thirty (30) days nor more than sixty (60) days prior to the meeting; provided, however, that in the event that less than forty (40) days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A stockholder's written notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (b) the name and address as they appear on the corporation’s books of the stockholder proposing such business (c) the class and number of shares of the corporation which are beneficially owned by such stockholder, and (d) any material interest of such stockholder in such business. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at a meeting unless properly brought before such meeting in accordance with the procedures set forth in this Section 13 of Article II. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with. the provisions of this Section 13 of Article II and if it shall be so determined, the chairman of the meeting shall so declare this to the meeting and such business not properly brought before the meeting shall not be transacted.

ARTICLE III

DIRECTORS

Section 1. Powers. The business of the corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the corporation and do

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all such lawful acts and things as are not by applicable law or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 2. Number; Election; Tenure and Qualification. The number of directors which shall constitute the whole of the Board of Directors shall be fixed from time to time by resolution of the Board of Directors or by the stockholders provided that the number of directors shall not be less than five (5) nor more than nine (9). The directors shall be elected as hereinbelow provided, except as provided in the corporation's Certificate of Incorporation or in Section 3 of this Article III. The directors shall be c1assified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as is reasonably possible. One class shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1998, another class shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1997, and another class shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1996, with each member of each class to hold office until a successor is elected and qualified unless such member shall resign, become disqualified, disabled, or otherwise removed. At each annual meeting of stockholders of the corporation, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term of three years by a plurality vote of the shares represented in person or by proxy and entitled to vote in the election of directors. Directors need not be stockholders.

Section 3. Vacancies and Newly Created Directorships. Unless otherwise provided in the Certificate of Incorporation, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum or by a sole remaining director. The directors so chosen shall hold office until the next election of the class for which such directors shall have been chosen and until their successors are duly elected and qualified, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute.

Section 4. Location of Meetings. The Board of Directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5. Meetings of Newly Elected Board of Directors. The first meeting of each newly elected Board of Directors shall be held immediately following the annual meeting of stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting provided a quorum shall be present. In the event such meeting is not held at such time, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors.

Section 6. Regular Meetings. Regular meetings of the Board of Directors may be held upon at least seven (7) days prior written notice at such time and at such place as shall from time to time be determined by the Board of Directors; provided that any director who is absent when such a determination is ma.de shall be given notice of such location. Notice may be waived in accordance with Section 229 of the Delaware General Corporation Law.

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Section 7. Special Meetings. Special meetings of the Board of Directors may be called by the President on seven (7) days' notice to each director by mail or two (2) days' notice to each director by overnight courier service or facsimile; special meetings shall be called by the President or Secretary in a like manner and on like notice on the written request of two (2) directors unless the Board of Directors consists of only one (1) director, in which case special meetings shall be called by the President or Secretary in a like manner and on like notice on the written request of the sole director. Notice may be waived in accordance with Section 229 of the Delaware General Corporation Law.

Section 8. Quorum and Action at Meetings. At all meetings of the Board of Directors, a majority of the directors then in office shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 9. Action Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

Section 10. Telephonic Meetings. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, upon proper notice duly given, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 11. Committees. The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one (1) or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence of disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

Section 12. Committee Authority. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such

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committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, amending the Bylaws of the corporation, or any action requiring unanimous consent of the Board of Directors pursuant to the terms of the Certificate of Incorporation; and, unless the resolution or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

Section 13. Committee Minutes. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Section 14. Directors Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

Section 15. Resignation. Any director or officer of the corporation may resign at any time. Each such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time is specified, at the time of its receipt by either the Board of Directors, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective unless expressly so provided in the resignation.

ARTICLE IV

NOTICES

Section 1. Notice to Directors and Stockholders. Whenever, under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the corporation that the notice has been given shall in the absence of fraud, be prima facie evidence of the facts stated therein. Notice to directors may also be given by telephone, facsimile or telegram.

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Section 2. Waiver. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein) shall be deemed equivalent thereto. The written waiver need not specify the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

ARTICLEV

OFFICERS

Section 1. Enumeration. The officers of the corporation shall be chosen by the Board of Directors and shall be a President, a Secretary, a Treasurer or Chief Financial Officer and such other officers with such other titles as the Board of Directors shall determine. The Board of Directors may elect from among its members a Chairman or Chairmen of the Board and a Vice Chairman of the Board. The Board of Directors may also choose one (1) or more Vice Presidents and Assistant Secretaries. Any number of offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide.

Section 2. Election. The Board of Directors at its first meeting after each annual meeting of stockholders shall elect a President, a Secretary, a Treasurer and such other officers with such other titles as the Board of Directors shall determine.

Section 3. Appointment of Other Agents. The Board of Directors may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

Section 4. Compensation. The salaries of all officers of the corporation shall be fixed by the Board of Directors or a committee thereof. The salaries of agents of the corporation shall, unless fixed by the Board of Directors, be fixed by the President or the Executive Vice President of the corporation.

Section 5. Tenure. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the directors of the Board of Directors. Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.

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Section 6. Chairman of the Board and Vice-Chairman of the Board. The Chairman or Chairmen of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he or they shall be present. He or they shall have and may exercise such powers as are, from time to time, assigned to him or them by the Board and as may be provided by law. In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He shall have and may exercise such powers as are, from time to time, assigned to him by the Board of Directors and as may be provided by law.

Section 7. President. The President shall be the Chief Executive Officer of the corporation unless such title is assigned to a Chairman of the Board; and in the absence of a Chairman and Vice Chairman of the Board he shall preside as the chairman of meetings of the stockholders and the Board of Directors; he shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President or the Executive Vice President shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.

Section 8. Executive Vice-President. In the absence of the President or in the event of his inability or refusal to act, the Executive Vice-President, if any, shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. The Executive Vice-President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe,

Section 9. Vice-President. In the event of the President's and the Executive Vice-President's inability to act, the Vice-President, if any (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated by the Board of Directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President and the Executive Vice-President, and when so acting shall have all the powers of and be subject to the restrictions upon the President and the Executive Vice-President, the Vice-President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

Section 10. Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be subject. He shall have custody of the corporate seal of the corporation and he or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature

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of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.

Section 11. Assistant Secretary. The Assistant Secretary or if there be more than one (1), the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination. then in the order of their election) shall, in the absence of the Secretary or in the event of his inability or refusal to act perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

Section 12. Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the corporation as may be ordered by the Board of Directors, President or Chief Operating Officer, taking proper vouchers for such disbursements and shall render to the President, Chief Operating Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the corporation. If required by the Board of Directors, the Treasurer shall give the corporation a bond (which shall be renewed every six (6) years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

ARTICLE VI

CAPITAL STOCK

Section 1. Certificates. The shares of the corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Certificates for the shares of stock of the corporation shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the corporation shall be entitled to have a certificate signed by, or in the name of the corporation by, the Chairman of the Board (if there be such an officer appointed), or by the President or any Vice-President and by the Treasurer or assistant treasurer or the Secretary or assistant secretary, certifying the number of shares owned by him in the corporation. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect

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as if he were such officer, transfer agent, or registrar at the date of issue. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefore and the amount paid thereon shall be specified.

Section 2. Class or Series. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class1 the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative

participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 3. Signature. Any of or all of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before ·such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

Section 4. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its

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discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 5. Transfer of Stock. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 6. Record Date. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholder or any adjournment thereof or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however) that the Board of Directors may fix a new record date for the adjourned meeting.

Section 7. Registered Stockholders. The corporation· shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE VII

GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the Board of Directors shall think conducive to the interest of the corporation, and the

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Board of Directors may modify or abolish any such reserve in the manner in which it was created.

Section 2. Checks. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 3. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

Section 4. Seal. The Board of Directors may adopt a corporate seal having inscribed thereon the name of the corporation, the year of its organization and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5. Loans. The Board of Directors of this corporation may, without stockholder approval, authorize loans to, or guaranty obligations of, or otherwise assist, including, without limitation, the adoption of employee benefit plans under which loans and guarantees may be made, any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation.

ARTICLE VIII

INDEMNIFICATION

Section 1. Scope. The corporation shall, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as that Section may be amended and supplemented from time to time, indemnify any director, officer, employee or agent of the corporation, against expenses (including attorneys’ fees), judgments, fines, amounts paid in settlement and/or other matters referred to in or covered by that Section, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture1 trust or other enterprise.

Section 2. Advancing Expenses. Expenses incurred by a director of the corporation in defending a civil or criminal action, suit or proceeding by reason of the fact that he is or was a director, officer, employee or agent of the corporation (or is or was serving at the request of the corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) shall be paid by the corporation in advance of the final

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disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized by relevant provisions of the Delaware General Corporation Law; provided, however, the corporation shall not be required to advance such expenses to a director (i) who commences any action, suit or proceeding as a plaintiff unless such advance is specifically approved by a majority of the Board of Directors, or (ii) who is a party to an action, suit or proceeding brought by the corporation and approved by a majority of the Board of Directors which alleges willful misappropriation of corporate assets by such director, disclosure of confidential information in violation of such director’s fiduciary or contractual obligations to the corporation, or any other willful and deliberate breach in bad faith of such director’s duty to the corporation or its stockholders.

Section 3. Liability Offset. The corporation’s obligation to provide indemnification under this Article VIII shall be offset to the extent the indemnified party is indemnified by any other source including, but not limited to, any applicable insurance coverage under a policy maintained by the corporation, the indemnified party or any other person.

Section 4. Continuing Obligation. The provisions of this Article VIII shall be deemed to be a contract between the corporation and each director of the corporation who serves in such capacity at any time while this Bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts.

Section 5. Nonexclusive. The indemnification and advancement of expenses provided for in this Article VIII shall (i) not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, (ii) continue as to a person who has ceased to be a director and (iii) inure to the benefit of the heirs, executors and administrators of such a person.

Section 6. Other Persons. In addition to the indemnification rights of directors, officers, employees, or agents of the corporation, the Board of Directors in its discretion shall have the power on behalf of the corporation to indemnify any other person made a party to any action, suit or proceeding who the corporation may indemnify under Section 145 of the Delaware General Corporation Law.

Section 7. Definitions. The phrases and terms set forth in this Article VIII shall be given the same meaning as the identical terms and phrases are given in Section 145 of the Delaware General Corporation Law, as that Section may be amended and supplemented from time to time.

ARTICLE IX

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AMENDMENTS

Except as otherwise provided in the Certificate of Incorporation, these Bylaws may be altered, amended or repealed, or new Bylaws may be adopted, by the holders of a majority of the outstanding voting shares or by the Board of Directors, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meeting. If the power to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the Certificate of Incorporation, it shall not divest or limit the power of the stockholders to adopt, amend or repeal Bylaws.

Document

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Agreement”) is between Smith Micro Software, Inc. (“Company”) and Gail Mackiewicz Redmond (“Employee”).

WHEREAS, the Company terminated Employee’s employment on May 2, 2022 (“Termination Date”);

WHEREAS, the Company is willing to pay Employee certain severance in exchange for a release of claims and other commitments.

NOW THEREFORE, intending to be legally bound and for good and valuable consideration, Company and Employee agree as follows:

1.Recitals. The foregoing recitals are true and correct and incorporated herein.

2.Termination of Employment.

(a)The Company timely paid or will timely pay Employee, in accordance with its normal payroll and other procedures (or as otherwise required by law), for (i) Employee’s work through the Termination Date, (ii) Employee’s accrued but unused vacation pay as of the Termination Date, (iii) Employee’s earned sales commission as of the Termination Date, which amounts to $53,533.60, and (iv) Employee’s properly reported and reimbursable business expenses.

(b)Employee’s eligibility to participate in the Company’s group insurance and other welfare benefit plans and programs ceased as of the Termination Date, except that Employee’s group insurance medical benefits ceased or will cease on May 31, 2022, unless otherwise extended under COBRA.

(c)The foregoing payments and benefits have been or will be provided to Employee regardless of whether Employee signs or revokes this Agreement.

3.Severance Benefits. In exchange for the promises herein (including this Agreement becoming effective and Employee abiding by its terms), the parties agree:

(d)Severance Payment. The Company will pay Employee severance in an amount equal to $99,615.42, less all required tax withholdings and other deductions (“Severance”). The Company will pay Severance in six equal semi-monthly installments with the first such installment payment occurring on the first standard semi-monthly payroll date of the month immediately after this Agreement becomes final, binding, and irrevocable (as described below).

(e)COBRA Payment. If Employee timely elects to continue Employee’s group health benefits under COBRA, the Company agrees to pay the full monthly cost of Employee’s COBRA premiums for four (4) months of coverage from June 1, 2022 through September 30, 2022 (which is $2,147.30 per month by the Company) or when Employee ceases to be eligible for COBRA, whichever occurs first. Thereafter, Employee must pay the full cost of Employee’s COBRA premiums to continue Employee’s COBRA coverage.

(f)Vesting of Restricted Shares. In further consideration for Employee entering into this Agreement, and notwithstanding any contrary provision of the applicable award agreement, pursuant to Section 4.3 of the Company’s 2015 Omnibus Equity Incentive Plan (as amended, the “2015 Plan”), all of the shares of restricted stock issued to Employee pursuant to

restricted stock awards under the 2015 Plan which were unvested as of the Termination Date shall be accelerated and shall become fully vested immediately upon the effectiveness of this Agreement. Such shares are not eligible to receive any tax gross up and will be subject to the same share withholding procedure for the payment of any applicable taxes as the Company has applied to Employee's previous stock vesting.

The Severance and other benefits described in this Section 3 are referred to herein as the “Severance Benefits.”

4.Release of Claims.

(a)Release of all Releasable Claims. Subject to Sections 4(b) and (c), Employee, on behalf of Employee and Employee’s heirs and personal representatives, hereby releases and forever discharges the Company, its direct and indirect subsidiaries, divisions, parents, affiliates, companies under common control of any of the foregoing predecessors, successors, and assigns, and its and their past, present, and future shareholders, partners, principals, managers, members, directors, officers, employees, agents, attorneys, insurers, employee benefit plans, trustees, and all others acting in concert with them (collectively, the “Released Parties”), from any and all claims, actions, suits, proceedings, complaints, causes of action, grievances, debts, costs, and expenses (including attorney’s fees), at law or in equity, known or unknown, that Employee has or may have through the date Employee signs this Agreement, arising out of, based on, or relating in any way to any acts or omissions that occurred, in whole or in part, prior to the time that Employee signs this Agreement, including, but not limited to, claims for breach of any express or implied contract, wrongful termination, retaliation, defamation of character, personal injury, intentional or negligent infliction of emotional distress, discrimination or harassment based on race, religion, sex, age, color, handicap and/or disability, national origin, or any other protected class and any other claim based on or related to Employee’s employment with the Company or Employee’s departure therefrom, including, but not limited to, claims for violation of the Employee Retirement Income Security Act of 1974, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, the Family and Medical Leave Act, the False Claims Act, Florida Civil Rights Act; the Florida Whistleblower’s Act; and any other federal, state, or local statute or regulation, all as amended.

(b)No Release of Non-releasable Claims. Notwithstanding anything in this Agreement to the contrary, the release set forth in Section 4(a) does not and is not intended to release any claims that cannot be released by law, such as claims for vested pension benefits or claims for workers’ compensation benefits, or release any rights to a defense or indemnification from the Company or its insurers for actions Employee took or failed to take during the course of Employee’s employment with the Company.

(c)No Interference with Rights. Notwithstanding anything in this Agreement to the contrary, the release set forth in Section 4(a) does not and is not intended to prevent, restrict, or otherwise interfere with Employee’s right to (i) file a charge or complaint with any appropriate federal, state, or local agency or court, (ii) testify, assist, participate in, or cooperate with the investigation of any charge or complaint pending before or being investigated by such agency or court, (iii) enforce this Agreement, (iv) seek a judicial determination of the validity of the release of Employee’s rights under the Age Discrimination in Employment Act, or (v) report violations of any law administered by the Securities and Exchange Commission (“SEC”) or Occupational Safety and Health Administration (“OSHA”), receive any financial awards from the SEC or OSHA for reporting possible violations of federal law or regulation, or make other disclosures protected under the whistleblower provisions of state or federal law or regulation.

(d)No Acceptance of Monies. If an administrative agency or court assumes jurisdiction over any charge or complaint involving claims that are released by Section 4(a) of this Agreement, Employee hereby agrees to not, directly or indirectly, accept, recover, or receive any resulting monetary damages or other equitable relief that otherwise would be due, and Employee hereby expressly waives any rights to any such recovery or relief, except as permitted by Section 4(c)(v).

5.Time Limits, Revocation, and Effective Date.

(g)Time Period to Consider. Employee acknowledges and agrees that Employee received this Agreement on April 28, 2022. Employee has up to twenty-one (21) days from the date Employee received this Agreement to consider its terms. Any changes to this Agreement during that period, whether material or not, will not extend the 21-day period. If Employee signs this Agreement, Employee may still revoke Employee’s acceptance of the Agreement for up to seven (7) days after Employee signs it by notifying the Company in writing before the expiration of that seven-day period. The written notice should be delivered in person or, if sent by mail, postmarked no later than the 7th day and mailed to:

Smith Micro Software, Inc.

Attn: Angel Hermes,

5800 Corporate Drive, 5th floor

Pittsburgh, PA 15237 and

by e-mailing a copy of the notice to ahermes@smithmicro.com.

(h)Effective Date of Agreement. If not revoked, this Agreement will become effective on the 8th day after Employee signs it. If Employee does not sign this Agreement within the 21-day period, or if Employee timely revokes this Agreement during the seven-day revocation period, this Agreement will not become effective and Employee will not be entitled to the Severance Benefits provided for in Section 3.

6.Consult With an Attorney. The Company hereby advises Employee to consult with an attorney of Employee’s choice (at Employee’s expense) before Employee signs this Agreement. The Company will rely on Employee’s signature on this Agreement as Employee’s representation that Employee read this Agreement carefully before signing it and that Employee has a full and complete understanding of its terms.

7.Representations. By signing below, Employee represents and agrees that the following are true and correct:

(e)Except for the wages and benefits to be paid to Employee regardless of whether Employee signs this Agreement, as described in Section 2, the Severance Benefits to be paid under this Agreement and any vested pension benefits Employee may be entitled to receive, the Company does not owe Employee any other wages, compensation, commissions, bonuses, or benefits of any kind or nature.

(f)The Company has provided Employee with all leave to which Employee was entitled and, to the best of Employee’s knowledge, Employee is not suffering from any work-related injuries.

(g)Employee has not received, is not receiving, and has not applied for Medicare.

(h)Employee has notified the Company of any charge or complaint Employee filed with any agency or court that is still pending before such court or agency.

(i)Employee has and will continue to abide by all applicable laws, obligations and policies related to or arising out of Employee’s employment with the Company.

(j)The Severance Benefits described in Section 3 are things that Employee is not entitled to receive in the absence of this Agreement.

(k)Employee has returned to the Company all property and information that belongs to the Company, including, but not limited to, the following (where applicable): automobile; computers (desktop and laptop); phone; tablet; iPad; devices (including usb, external hard drives, etc.); handheld devices; keys, access cards, passwords, and/or ID cards; all electronically stored and paper copies of all financial data, customer information, business plans and reports, and Company files; and all records, customer lists, written information, forms, plans, and other documents, including electronically stored information. Employee shall search Employee’s electronic devices, device back-ups, residence, and automobile and agrees that by signing below, Employee has disclosed all Company property in Employee’s possession or control and returned such property as directed by Company.

(l)Employee has not asserted a claim for sexual harassment or sexual abuse against any of the Released Parties, Employee is not aware of any facts supporting such a claim, and Employee and the Company expressly acknowledge and agree that the Separation Benefits described in Section 3 are not being paid in settlement of any claim for sexual harassment or sexual abuse or attorneys’ fees related to such a claim.

(m)Employee is not aware of any violations of the law or Company agreements or policies and is not aware of wrongdoing by the Company or its officers, including any alleged corporate fraud, that should be reported to authorities.

8.No Re-employment. Employee acknowledges and agrees that she shall not knowingly re-apply for employment with the Released Parties nor will Employee knowingly accept any employment or otherwise work for the Released Parties. Further, Employee agrees that Employee’s forbearance to seek future employment with the Released Parties is purely contractual and is in no way involuntary, discriminatory, retaliatory, or in violation of any contract or policy of the Released Parties. If Employee applies for employment with the Released Parties, the Released Parties are not under any obligation to process or otherwise act upon such application.

9.Confidential Information.

(i)Employee will not disclose to any third parties any of the trade secrets and other confidential proprietary information of the Company, including, but not limited to, the Company’s Propriety Information as defined in its Proprietary Information & Inventions Agreement as well as information regarding the Company’s operations, customers, sales, products, services, suppliers, research, development, new products, marketing, marketing plans, business plans, budgets, finances, licenses, prices, and costs (collectively, “Confidential Information”) without the express written consent of the Company, which consent may be withheld by the Company in its sole and absolute discretion. Notwithstanding the foregoing, this Agreement does not prohibit Employee from disclosing Confidential Information (i) as part of truthful testimony in response to compulsory legal process, (ii) while participating or assisting in any investigation or inquiry by a governmental agency acting within the scope of its statutory or regulatory jurisdiction, (iii) to a government official or to an attorney for the purpose of reporting or investigating a suspected violation of law in conformity with the Defend Trade Secrets Act, or (iv) in a complaint or other document filed in a lawsuit or other legal proceeding, so long as such filing is made under seal and in conformity with the Defend Trade Secrets Act.

(j)Employee’s obligations under this Section include, but are not limited to, any and all Confidential Information the Company provided to Employee, Employee developed on behalf of the Company, or to which Employee had access, as well as information third parties provided to the Company that the Company is obligated to keep confidential.

10.Applicable Law; Jurisdiction and Venue.

(a)This Agreement shall be governed by and construed in accordance with the laws of Pennsylvania without giving effect to the principles of conflicts of law.

(b)Employee consents to the exclusive jurisdiction of any state or federal court of competent jurisdiction located within Allegheny County in the Commonwealth of Pennsylvania, and Employee irrevocably agrees that all actions or proceedings relating to this Agreement may be litigated in such courts. Employee irrevocably waives Employee’s right to object to or challenge the above selected forum on the basis of inconvenience or unfairness under 28 U.S.C. § 1404, or similar state or federal statutes.

11.Entire Agreement; Other Agreements. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and no representation, promise, or agreement, oral or written, relating hereto that is not contained herein shall be of any force or effect. Moreover, if Employee entered in any other enforceable agreements with the Company that contain provisions that are not in direct conflict with the provisions of this Agreement, those other agreements shall remain in effect and the terms of this Agreement shall be in addition to such other such agreements. For example and without limitation, Employee remains subject to the the Noncompetition provision set forth in Section 10 of the Restricted Stock Award Agreement dated March 7, 2022 between Employee and the Company, and Employee agrees to continue to abide by the Company’s Proprietary Information & Inventions Agreement.

12.No Disparagement. Employee will not make any defamatory or intentionally disparaging statements to any third parties regarding the Company, its services, or any of its employees, officers, or owners. Notwithstanding the foregoing, this Agreement does not prohibit Employee from (a) providing truthful testimony in response to compulsory legal process, (b) participating or assisting in any investigation or inquiry by a governmental agency acting within the scope of its statutory or regulatory jurisdiction, or (c) making truthful statements in connection with any claim permitted to be brought by Employee under Sections 4(b) or (c).

13.No Admissions. Neither the execution of this Agreement nor the performance of its terms and conditions shall be construed or considered by any party or by any other person as an admission of liability or wrongdoing by either party.

14.Counterparts. This Agreement may be executed in one or more counterparts, each of which will be considered an original instrument and all of which together will be considered one and the same agreement and will become effective when all executed counterparts have been delivered to the respective parties. Delivery of executed pages by facsimile transmission or e-mail will constitute effective and binding execution and delivery of this Agreement.

15.Assignment. This Agreement shall be binding upon and shall inure to the benefit of the Company and its respective successors and assigns, and any such successors and assigns shall be considered third-party beneficiaries of this Agreement. Employee has no right to assign this Agreement.

16.Acknowledgements. Employee hereby acknowledges that Employee (a) has read this Agreement and understands all of its provisions; and (b) voluntarily enters into this Agreement which is contractual in nature and contains a general release of claims.

17.Severability. If any term, provision, or Section of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable for any reason, such determination shall be limited to the narrowest possible scope in order to preserve the enforceability of the remaining portions of the term, provision, or Section, and such determination shall not affect the remaining terms, provisions, or Sections of this Agreement, which shall continue to be given full force and effect.

18.409A. The provisions of this Agreement will be administered, interpreted, and construed in a manner intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, the regulations issued thereunder, or any exception thereto (or disregarded to the extent such provision cannot be so administered, interpreted, or construed). Each payment under this Agreement shall be considered a separate and distinct payment. Employee shall have no right to designate the date of any payment under this Agreement. Nothing contained in this Agreement shall constitute any representation or warranty by the Company regarding compliance with Section 409A. The Company has no obligation to take any action to prevent the assessment of any tax under Section 409A on any person and neither the Company, nor its subsidiaries or affiliates, nor any of their employees, officers, directors, or other representatives shall have any liability to Employee with respect thereto.

19.Further Assurances. Employee and the Company each agree to execute and deliver after the date hereof, without additional consideration, any additional documents and to take any further actions as may be necessary to fulfill the intent of this Agreement and the transactions contemplated hereby.

20.Cooperation.

(k)Employee will (i) cooperate with the Company in all reasonable respects concerning any transitional matters which require Employee’s assistance, cooperation, or knowledge, including communicating with persons inside or outside the Company as directed by the Company, and (ii) in the event that the Company (or any of its affiliates or other related entities) becomes involved in any legal action relating to events which occurred during Employee’s employment with the Company, reasonably cooperate in the preparation, prosecution, or defense of their case, including, but not limited to, the execution of affidavits or documents, testifying, or providing information requested by the Company.

(l)To the extent that Employee incurs (i) travel-related expenses, (ii) out-of-pocket expenses, and/or (iii) loss of wages as a result of Employee’s cooperation with the Company as contemplated by this Section 20 (“Cooperation Expenses”), the Company will promptly reimburse Employee (or will cause Employee to be promptly reimbursed) for such Cooperation Expenses, provided they are reasonable and were approved by the Company in advance.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date(s) set forth below.

Smith Micro Software, Inc.:

By: /s/James M. Kempton

Name: James M. Kempton

Title: Chief Financial Officer

Date: 05/18/2022

Gail Mackiewicz Redmond:

/s/Gail Mackiewicz Redmond

05/18/2022

Date

Document

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

I, William W. Smith, Jr., certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Smith Micro Software, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 12, 2022			/s/ William W. Smith, Jr.
			William W. Smith, Jr.
			Chairman of the Board, President and Chief Executive Officer
			(Principal Executive Officer)

Document

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

I, James M. Kempton, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Smith Micro Software, Inc.;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 12, 2022			/s/ James M. Kempton
			James M. Kempton
			Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)

Document

Exhibit 32.1

CERTIFICATIONS OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Smith Micro Software, Inc., that, to his knowledge, the Quarterly Report on Form 10-Q for the period ended June 30, 2022 of Smith Micro Software, Inc. (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Smith Micro Software, Inc.


August 12, 2022	By	/s/ William W. Smith, Jr.
	William W. Smith, Jr.
	Chairman of the Board, President and Chief Executive Officer
	(Principal Executive Officer)

August 12, 2022	By	/s/ James M. Kempton
	James M. Kempton
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to Smith Micro Software, Inc. and will be retained by Smith Micro Software, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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