smsi-10q_20210331.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10‑Q

(Mark One)

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

For the quarterly period ended March 31, 2021

☐	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 ☒ No ☐

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 ☒ No ☐

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.

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. ☐

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

As of May 6, 2021, there were 53,200,076 shares of common stock outstanding.

SMITH MICRO SOFTWARE, INC.

QUARTERLY REPORT ON FORM 10-Q

March 31, 2021

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	2
	Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	2
	Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020	3
	Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2021 and 2020	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	5
	Notes to the Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 4.	Controls and Procedures	18

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 6.	Exhibits	20

SIGNATURES		21

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SMITH MICRO SOFTWARE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value data)

	March 31,			December 31,
	2021			2020
	(unaudited)			(audited)
Assets
Current assets:
Cash and cash equivalents	$	89,247		$	25,754
Accounts receivable, net of allowance for doubtful accounts and other adjustments of $5 and $10 (2021 and 2020, respectively)		8,333			12,347
Prepaid expenses and other current assets		908			1,189
Total current assets		98,488			39,290
Equipment and improvements, net		2,161			2,170
Right-of-use assets		5,690			5,785
Other assets		679			694
Intangible assets, net		10,400			12,698
Goodwill		12,266			12,266
Total assets	$	129,684		$	72,903
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	2,640		$	2,282
Accrued payroll and benefits		3,150			2,867
Current operating lease liabilities		1,427			1,433
Other accrued liabilities		188			216
Deferred revenue		1,027			1,572
Total current liabilities		8,432			8,370
Non-current liabilities:
Operating lease liabilities		4,627			4,805
Deferred rent		845			887
Deferred tax liabilities, net		59			59
Other long term liabilities		66			66
Total non-current liabilities		5,597			5,817
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 51,645,718 and 41,232,804 shares issued and outstanding (2021 and 2020, respectively)		52			41
Additional paid-in capital		340,058			279,905
Accumulated comprehensive deficit		(224,455	)		(221,230	)
Total stockholders’ equity		115,655			58,716
Total liabilities and stockholders' equity	$	129,684		$	72,903

See accompanying notes to the consolidated financial statements.

SMITH MICRO SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	For the Three Months Ended
	March 31,
	2021			2020
	(unaudited)			(unaudited)
Revenues	$	11,381		$	13,322
Cost of revenues		1,545			1,173
Gross profit		9,836			12,149
Operating expenses:
Selling and marketing		4,232			2,787
Research and development		5,183			3,729
General and administrative		3,658			3,668
Restructuring expense		—			6
Total operating expenses		13,073			10,190
Operating income (loss)		(3,237	)		1,959
Other income:
Interest income, net		8			86
Other income		4			—
Income (loss) before provision for income taxes		(3,225	)		2,045
Provision for income tax expense		—			—
Net income (loss)	$	(3,225	)	$	2,045

Earnings (loss) per share:
Basic and diluted	$	(0.07	)	$	0.05

Weighted average shares outstanding:
Basic		43,368			39,482
Diluted		43,368			42,194

See accompanying notes to the consolidated financial statements.

SMITH MICRO SOFTWARE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)


						Additional			Accumulated
	Common Stock					Paid-in			Comprehensive
	Shares			Amount		Capital			Deficit			Total
BALANCE, December 31, 2020 (audited)		41,233		$	41	$	279,905		$	(221,230	)	$	58,716
Non-cash compensation recognized on stock options and ESPP		—			—		18			—			18
Restricted stock grants, net of cancellations		970			1		997			—			998
Cancellation of shares for payment of withholding tax		(121	)		—		(824	)		—			(824	)
Employee stock purchase plan		4			—		15			—			15
Common shares issued in stock offering, net of offering costs		9,521			10		59,888			—			59,898
Exercise of common stock warrants		33			—		40			—			40
Exercise of stock options		6			—		19			—			19
Net loss		—			—		—

SEC Form 10-Q filed by Smith Micro Software, Inc.