smsi20260319_pre14a.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☒	Preliminary Proxy Statement

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☐	Definitive Proxy Statement

☐	Definitive Additional Materials

☐	Soliciting Material under 240.14a-12

Smith Micro Software, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☒	No fee required

☐	Fee paid previously with preliminary materials

☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

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PRELIMINARY PROXY STATEMENT DATED APRIL 2, 2026

SUBJECT TO COMPLETION

April [__], 2026

Dear Smith Micro Stockholders:

We are pleased to invite you to the 2026 Annual Meeting of Stockholders of Smith Micro Software, Inc. to be held on [_____], 2026, at [____] a.m. Eastern Time via live webcast at the virtual meeting site, meetnow.global/MCVKKST.

We will conduct a virtual online Annual Meeting this year, so our stockholders can participate from any geographic location with Internet connectivity. We believe this will enhance accessibility to our Annual Meeting for all of our stockholders, regardless of geographic location. Stockholders will be able to attend and participate in the Annual Meeting online, vote shares electronically, and submit questions prior to and during the Annual Meeting as described in the enclosed proxy statement. We are pleased to embrace the latest technology to provide expanded access and enable greater stockholder attendance and participation from any location around the world.

The expected actions to be taken at the Annual Meeting, which include the election of two directors, are described in the attached proxy statement and notice of annual meeting of stockholders. In addition to the proxy statement, we are mailing or making available to you a copy of our Annual Report on Form 10-K for the year ended December 31, 2025, which we encourage you to read. Our Annual Report includes our audited financial statements for 2025 and information about our operations, markets and products.

We are mailing to most of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of the attached proxy statement and our 2025 Annual Report. The Notice contains instructions on how to access those documents over the Internet. The Notice also contains instructions on how to request a paper copy of our proxy materials, including the attached proxy statement, our 2025 Annual Report and a form of proxy card. All stockholders who have previously requested a paper copy of our proxy materials will continue to receive a paper copy of the proxy materials by mail.

Your vote is important. Whether or not you plan to participate in the Annual Meeting, which will be held online this year, you can be sure your shares are represented at the meeting by promptly voting your shares as instructed in the Notice, or by requesting a printed proxy card, if you prefer, and completing, signing, dating and returning the printed proxy card by mail. If you later decide to participate in the Annual Meeting and wish to change your vote, you may do so simply by voting online during the meeting.

To log in to and participate in this year’s virtual Annual Meeting, you will need the stockholder control number located on the Notice, on your proxy card or on the instructions that accompanied your proxy materials. Please keep this information in a safe place so it is available to you for the meeting.

We look forward to having you join us online at the Annual Meeting.

	Sincerely,


	William W. Smith, Jr.
	Executive Chairman of the Board of Directors
	Smith Micro Software, Inc.

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SMITH MICRO SOFTWARE, INC.

5800 Corporate Dr.

Pittsburgh, PA 15237

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON [___], 2026

Notice is hereby given that the 2026 Annual Meeting of Stockholders (the “Annual Meeting”) of Smith Micro Software, Inc. (the “Company”) will be held on [_____], 2026, at [____] a.m. Eastern Time, at the virtual meeting site meetnow.global/MCVKKST. The Annual Meeting will be held solely online, and as such there is no physical address for the Annual Meeting. The Annual Meeting will be held for the following purposes as more fully described in the proxy statement accompanying this notice:

Election of Directors. The election of two (2) directors to serve on our Board of Directors until the 2029 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified.

“Say on Pay” Proposal. Non-binding advisory vote to approve the 2025 compensation of named executive officers.

Ratification of the Appointment of SingerLewak LLP. Ratification of the appointment of SingerLewak LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2026.

Approval of an Amendment to our Amended and Restated Omnibus Equity Incentive Plan. Approval of an amendment to authorize additional shares for issuance under our Amended and Restated Omnibus Equity Incentive Plan and as otherwise set out in the proxy statement.

Nasdaq Proposal I. Approval, for purposes of Nasdaq listing rule 5635(d), of the issuance of shares of our common stock underlying the common warrants issued by us pursuant to the terms of note purchase agreements, dated September 11, 2025 and September 29, 2025, in amounts that may equal or exceed 20% of our common stock outstanding.

Nasdaq Proposal II. Approval, for purposes of Nasdaq listing rules 5635(c) and (d), of the issuance of shares of our common stock underlying the common warrants issued by us pursuant to the terms of that certain private placement securities purchase agreement, dated November 5, 2025.

Reverse Stock Split Proposal. Approval of an amendment to our Amended and Restated Certificate of Incorporation to effect a reverse stock split of our outstanding shares of common stock, par value $0.001 per share, at a ratio, ranging from one-for-three (1:3) to one-for-ten (1:10), with the exact ratio to be set within that range at the discretion of our Board of Directors without further approval or authorization of our stockholders (the “Reverse Stock Split Proposal”);

Adjournment Proposal. Approval of an adjournment of the Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of any of Proposals 4, 5, 6, or 7 (the “Adjournment Proposal”).

Other Business. Any other business properly brought before the stockholders at the Annual Meeting, or at any adjournment or postponement thereof.

The close of business on April 2, 2026 has been fixed as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. Only stockholders of record at such time will be so entitled to vote. A list of stockholders entitled to vote at the Annual Meeting will be available for inspection by stockholders on the Annual Meeting site at meetnow.global/MCVKKST.

You are cordially invited to participate in the Annual Meeting. Whether or not you plan to participate in the Annual Meeting online, we urge you to ensure your representation by voting by proxy promptly in accordance with the Notice of Internet Availability of Proxy Materials (the “Notice”) or by requesting a printed proxy card, if you prefer, and completing, signing, dating and returning the proxy card, or the form forwarded by your bank, broker or other holder of record, by mail. If you attend the Annual Meeting online and vote your shares at that time, your proxy will not be used.

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Forty percent (40%) of the outstanding shares of Common Stock entitled to vote must be represented at the Annual Meeting in order to constitute a quorum. Please vote your shares in accordance with the Notice or return your proxy card to ensure that a quorum is obtained.

	By Order of the Board of Directors,


	Jennifer M. Reinke
	Secretary
	Pittsburgh, Pennsylvania
	[_______], 2026

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Important notice regarding the availability of proxy materials for the stockholder meeting to be held [_____], 2026: The proxy statement and Annual Report are available at www.envisionreports.com/SMSI.

Your vote is very important, regardless of the number of shares you own. In accordance with Securities and Exchange Commission (“SEC”) rules, instead of mailing a printed copy of our proxy materials to each stockholder of record, we are furnishing proxy materials to our stockholders via the Internet. If you received a Notice of Internet Availability of Proxy Materials (the “Notice”) by mail, you will not receive a printed copy of the proxy materials unless you request to receive them in accordance with the instructions provided in the Notice. The Notice contains instructions on how to access and review all of the important information contained in the proxy materials over the Internet. The Notice also instructs how you may submit your proxy over the Internet. If you received a Notice and would like to receive a printed copy of our proxy materials, including our Annual Report on Form 10-K, follow the instructions for requesting such materials included in the Notice.

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SMITH MICRO SOFTWARE, INC.

PROXY STATEMENT

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Information about the Annual Meeting and Voting	1
Matters to Be Considered at Annual Meeting	6
Proposal 1: Election of Directors	6
Proposal 2: Non-Binding Advisory Vote to Approve the Compensation of Named Executive Officers	10
Proposal 3: Ratification of Appointment of Independent Registered Public Accounting Firm	11
Proposal 4: Approval of Amendment to Amended and Restated Omnibus Equity Incentive Plan	13
Proposal 5: Nasdaq Proposal I	20
Proposal 6: Nasdaq Proposal II	24
Proposal 7: Reverse Stock Split Proposal	28
Proposal 8: Adjournment Proposal	37
Corporate Governance	38
Audit Committee Report	44
Security Ownership of Certain Beneficial Owners and Management	45
Delinquent Section 16(a) Reports	46
Executive Officers and Other Key Executives	46
Executive Compensation	47
Annual Report	56
Householding of Proxy Materials	57
Other Matters	57
Amendment to Amended and Restated Omnibus Equity Incentive Plan	Appendix A
Form of Common Warrant	Appendix B
Form of Purchase Agreement	Appendix C
Form of Reverse Stock Split Charter Amendment	Appendix D

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SMITH MICRO SOFTWARE, INC.

PROXY STATEMENT

FOR ANNUAL MEETING OF STOCKHOLDERS

To Be Held [_____], 2026

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

General

This proxy statement contains information related to the 2026 Annual Meeting of Stockholders (the “Annual Meeting”) of Smith Micro Software, Inc. (“Smith Micro,” the “Company,” “we,” “our” or “us”), which will be held on [_____], 2026, at [____] a.m. Eastern Time, and any postponements or adjournments thereof. We will host the Annual Meeting solely online via live webcast this year, so our stockholders can participate from any geographic location with Internet connectivity. We believe this will enhance accessibility to our Annual Meeting for all of our stockholders, regardless of geographic location.

In accordance with Securities and Exchange Commission (“SEC”) rules, instead of mailing a printed copy of our proxy materials to each stockholder of record, we are furnishing proxy materials to our stockholders via the Internet. If you received a Notice of Internet Availability of Proxy Materials (the “Notice”) by mail, you will not receive a printed copy of the proxy materials other than as described below. The Notice contains instructions on how to access and review all of the important information contained in the proxy materials over the Internet. The Notice also instructs how you may submit your proxy over the Internet. If you received a Notice and would like to receive a printed copy of our proxy materials, including our 2025 Annual Report on Form 10-K, follow the instructions for requesting such materials included in the Notice.

Stockholders of record at the close of business on April 2, 2026 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. It is anticipated that the Notice will first be sent to stockholders, and this proxy statement and the form of proxy relating to our Annual Meeting, are being first mailed or made available to stockholders on or about [_____], 2026. These materials are available for viewing, printing and downloading on the Internet at www.envisionreports.com/SMSI.

Purpose of the Meeting

The specific proposals to be considered and acted upon at the Annual Meeting are summarized in the Notice of Annual Meeting of Stockholders accompanying this proxy statement and are described in more detail in this proxy statement. We are not aware of any matter to be presented other than those described in this proxy statement.

How to Participate in the Annual Meeting

The Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively by webcast. You are entitled to participate in the Annual Meeting only if you were a stockholder of the Company as of the close of business on the Record Date or if you hold a valid proxy for the Annual Meeting. No physical meeting will be held.

You will be able to participate in the Annual Meeting online and submit your questions during the meeting by visiting meetnow.global/MCVKKST. You also will be able to vote your shares online by attending the Annual Meeting by webcast. To participate in the Annual Meeting, you will need to enter the control number included on your Notice, on your proxy card, or on the instructions that accompanied your proxy materials. If you hold your shares through an intermediary, such as a bank or broker, you must register in advance using the instructions below.

The online meeting will begin promptly at [____] a.m. Eastern Time. We encourage you to access the meeting prior to the start time leaving ample time for check-in. Online access will begin fifteen minutes prior to the meeting start time. Please follow the registration instructions as outlined in this proxy statement.

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The virtual meeting platform is fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Please note that Internet Explorer is not a supported browser. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start time. For further assistance should you need it you may call (U.S.) 1-888-724-2416 or (International) +1 781-575-2748.

Registration to Participate in the Annual Meeting

If you are a stockholder of record, as explained below, you do not need to register to attend the Annual Meeting virtually on the Internet. Please follow the instructions on the Notice or proxy card that you received.

If you own shares in “street name,” as explained below, you must register in advance to participate in the Annual Meeting virtually on the Internet. To register to attend the Annual Meeting virtually on the Internet, you must submit proof of your proxy power (legal proxy) reflecting your Company stock holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on [_____], 2026. You will receive a confirmation of your registration by email after your registration materials have been received.

Requests for registration should be directed to the following:

•

By email: Forward the email from your bank, broker, or other intermediary, or attach an image of your legal proxy, to legalproxy@computershare.com

•

By mail: Computershare, Smith Micro Software, Inc. Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001

Difference Between a “Stockholder of Record” and a Beneficial Owner of Shares Held in “Street Name”

Stockholder of Record. If your shares are registered directly in your name with our transfer agent, Computershare, then you are considered the “stockholder of record” of those shares. In this case, your Notice or printed proxy materials have been sent to you directly by us. You may vote your shares by proxy prior to the Annual Meeting by following the instructions contained on the Notice or, if you received a printed version of the proxy materials by mail, by following the instructions provided with your proxy materials and on your proxy card.

Beneficial Owners of Shares Held in “Street Name.” If your shares are held in a brokerage account or by a bank, trust or other nominee or custodian, then you are considered the beneficial owner of those shares, which are held in “street name.” In this case, your proxy materials have been forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to instruct that organization as to how to vote the shares held in your account by following the instructions contained on the voting instruction card provided to you by that organization.

Voting

Our outstanding common stock, par value $0.001 per share (the “Common Stock”) is the only class of securities entitled to vote on the proposals presented at the Annual Meeting. Stockholders of record on the Record Date are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, there were [__] shares of Common Stock outstanding and approximately [__] stockholders of record, according to information provided by our transfer agent. Each share of Common Stock is entitled to one vote on each proposal; provided, that, in accordance with applicable Nasdaq rules, the shares of Common Stock purchased by the Affiliated Purchaser (as defined below) pursuant to the Purchase Agreement (as defined below) are not entitled to be voted at the Annual Meeting with respect to Nasdaq Proposal II (as defined below). Stockholders may not cumulate votes in the election of directors. Forty percent (40%) of the outstanding shares of Common Stock entitled to vote at the Annual Meeting will constitute a quorum. Abstentions and broker non-votes count as present for establishing a quorum but will not be counted as votes cast. If a quorum is not present, the meeting may be adjourned until a quorum is obtained.

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All votes will be tabulated by our inspector of elections for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and “broker non-votes” (i.e., shares held by a broker or other nominee having discretionary power to vote on some matters but not others). Broker non-votes occur when your broker or other nominee submits a proxy for your shares (because the broker or other nominee has received instructions from you on one or more proposals, but not all, or has not received instructions from you but is entitled to vote your shares on a particular “discretionary” or “routine” matter) but does not indicate a vote for a particular proposal because the broker or other nominee either does not have the authority to vote on that proposal and has not received voting instructions from you, or has discretionary authority but chooses not to exercise it. Abstentions and broker non-votes are counted as present for purposes of determining the presence or absence of a quorum for the transaction of business.

Vote Required for Each Proposal

The voting requirements for each of the Proposals under consideration at the Annual Meeting to be approved, and the effect of abstentions and broker non-votes on each Proposal, are as follows:

Proposal	Voting Approval Standard	Effect of Abstentions	Effect of Broker Non-Votes⁽¹⁾
1: Election of Directors	The two nominees receiving the highest number of votes will be elected	No effect –not counted as a vote	No effect –not counted as a vote
2: Non-Binding Advisory Vote to Approve the Compensation of Named Executive Officers ⁽²⁾	Majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote	Same effect as a vote against	No effect –not counted as a vote
3: Ratification of the Appointment of SingerLewak LLP	Majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote	Same effect as a vote against	Routine matter –brokers will have discretionary authority to vote
4: Approval of Amendment to Amended and Restated Omnibus Equity Incentive Plan	Majority of votes cast on such proposal	No effect –not counted as a vote	No effect –not counted as a vote
5: Nasdaq Proposal I	Majority of votes cast on such proposal	No effect –not counted as a vote	No effect –not counted as a vote
6: Nasdaq Proposal II	Majority of votes cast on such proposal	No effect –not counted as a vote	No effect –not counted as a vote
7: Reverse Stock Split Proposal	Majority of the votes cast on the proposal	No effect –not counted as a vote	No effect –not counted as a vote
8: Adjournment Proposal	Majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote	Same effect as a vote against	No effect –not entitled to vote

(1)

Brokers are permitted to vote their customers’ shares on routine matters when the brokers have not received voting instructions from their customers. Proposal 3 is a routine matter on which brokers may vote in this way. Brokers may not vote their customers’ shares on non-routine matters, unless they have received voting instructions from their customers. Proposals 1, 2, 4, 5, 6, 7 and 8 are non-routine matters. Shares that are not voted by brokers on non-routine matters because their customers have not provided instructions are called broker non-votes.

(2)

With respect to Proposal 2, the advisory vote on this proposal is non-binding on the Company; however, the Compensation Committee, which is responsible for designing and administering our executive compensation program, values the opinions expressed by our stockholders and will consider the outcome of these votes when making future compensation decisions.

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How to Vote

The way your shares may be voted depends on how your shares are held. If you are a stockholder of record, meaning that your shares are represented by certificates or book entries in your name so that you appear as a stockholder on the records of Computershare, our stock transfer agent, you may vote by proxy, meaning you authorize the individuals named on your proxy card or Notice to vote your shares. If you choose to vote by proxy, you may do so by telephone, via the Internet or by mail. Each of these methods is explained below. If you hold your shares of Common Stock in multiple accounts, you should vote your shares as described in each set of proxy materials you receive. If no direction is made on your proxy and it is otherwise properly executed, your proxy will be voted FOR the election of the director nominees and will be voted FOR each of the other proposals at the Annual Meeting. You also may participate in and vote during the Annual Meeting.

Voting by proxy. You may vote your shares by proxy by telephone, via the Internet or by mail:

•

By Telephone. You may transmit your proxy voting instructions by calling the telephone number specified on the Notice, or if you received a printed version of the proxy materials by mail, by following the instructions provided with your proxy materials and on your proxy card. You will need to have the Notice or proxy card in hand when you call. If you choose to vote by telephone, you do not have to return a proxy card by mail.

•

Via the Internet. You may transmit your proxy voting instructions via the Internet by accessing the website specified on the Notice, or if you received a printed version of the proxy materials by mail, by following the instructions provided with your proxy materials and on your proxy card. You will need to have the Notice or proxy card in hand when you access the website. If you choose to vote via the Internet, you do not have to return a proxy card by mail.

•

By Mail. If you received printed proxy materials, you may vote by proxy by completing, signing and dating the proxy card enclosed with your printed proxy materials and returning it in the enclosed prepaid envelope.

Voting online during the Annual Meeting. Stockholders who elect to participate in the Annual Meeting may vote online during the Annual Meeting by following the instructions provided. Even if you plan to attend the Annual Meeting, we urge you to vote your shares by proxy in advance of the Annual Meeting so that if you should become unable to attend the Annual Meeting your shares will still be voted in accordance with your direction.

Telephone and Internet voting for stockholders of record will be available up until the conclusion of the Annual Meeting, and mailed proxy cards must be received by _____, 2026 in order to be counted at the Annual Meeting. If the Annual Meeting is adjourned or postponed, this deadline may be extended.

The voting deadlines and availability of telephone and Internet voting for beneficial owners of shares held in “street name” will depend on the voting processes of the organization that holds your shares. Therefore, we urge you to carefully review and follow the voting instruction card and any other materials that you receive from that organization.

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Revoking a Proxy; Changing Your Vote

If you are a stockholder of record, you may revoke your proxy before the vote is taken at the meeting:

•

by submitting a new proxy with a later date before the Annual Meeting either signed and returned by mail or transmitted using the telephone or Internet voting procedures described in the “How to Vote” section above;

•

by voting online at the virtual meeting site; or

•

by filing a written revocation with our corporate Secretary.

If your shares are held in “street name,” you may submit new voting instructions by contacting your broker or other organization holding your account. You may also vote online at the Annual Meeting, which will have the effect of revoking any previously submitted voting instructions, if you obtain a legal proxy from the organization that holds your shares as described in the “How to Vote” section above.

Your attendance alone at the Annual Meeting will not automatically revoke your proxy.

Solicitation

The proxies being solicited for the Annual Meeting as described in this proxy statement are being solicited by the Company’s Board of Directors. We will pay all of the costs of soliciting proxies. We will provide copies of our proxy materials to brokerage firms, fiduciaries and custodians for forwarding to beneficial owners who request printed copies of these materials and will reimburse these persons for their costs of forwarding these materials. Our directors, officers and employees may also solicit proxies by telephone, facsimile or personal solicitation; however, we will not pay them additional compensation for any of these services. We have engaged Georgeson LLC (“Georgeson”) to assist us with the solicitation of proxies for the Annual Meeting. We expect to pay Georgeson approximately $15,500, plus expenses, for its services.

Deadlines for Receipt of Stockholder Proposals and Director Nominations

Stockholders may present proposals for action at a future meeting only if they comply with the requirements of the proxy rules established by the Securities and Exchange Commission (“SEC”) and our Bylaws. For stockholder proposals submitted pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to be presented at and included in our proxy statement for our 2027 Annual Meeting of Stockholders (the “2027 Annual Meeting”), such proposals must be submitted to and received by the Company’s corporate Secretary no later than December [__], 2026. Pursuant to our Bylaws, any stockholder intending to present a proposal for action at an annual meeting must give written notice to the Company’s corporate Secretary not less than 30 days and not more than 60 days prior to the date of the annual meeting, except that if less than 40 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, then the deadline for submitting a stockholder proposal is 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. Under our Bylaws, the deadline for submitting a nomination for a director to be included in our proxy materials for an annual meeting is 60 days prior to the date of the annual meeting. In addition to satisfying the requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information as required by Rule 14a-19 under the Exchange Act no later than [_____], 2027. Please note that these rules are separate from the SEC’s requirements that a stockholder must meet to have a stockholder proposal included in our proxy statement pursuant to Rule 14a-8, as discussed above. The proxy solicited by the Board of Directors for the 2027 Annual Meeting will confer discretionary authority to vote on any stockholder proposal presented at that meeting, unless we receive notice of such proposal no later than [_____], 2027, which is 45 calendar days prior to the anniversary date of the mailing of this proxy statement. Stockholder proposals and nominations must be in writing and should be addressed to our corporate Secretary at our principal executive offices located at 5800 Corporate Drive, 5^th Floor, Pittsburgh, PA 15237. The Chairman of the Annual Meeting reserves the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements, including conditions set forth in our Bylaws and conditions established by the Securities and Exchange Commission.

We have not been notified by any stockholder of his or her intent to present a stockholder proposal from the floor at this year’s Annual Meeting. Your proxy grants the proxy holders discretionary authority to vote on any matter properly brought before the Annual Meeting that is not included in this proxy statement.

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MATTERS TO BE CONSIDERED AT ANNUAL MEETING

PROPOSAL 1:

ELECTION OF DIRECTORS

Our Amended and Restated Certificate of Incorporation and Bylaws provide for our Board of Directors (the “Board”) to be divided into three classes. Each class of directors serves for a three-year term, with one class being elected by the Company’s stockholders at each annual meeting. Our Board currently has eight directors: Andrew Arno, Thomas G. Campbell, Steven L. Elfman, Samuel Gulko, Asha Keddy, Chetan Sharma, William W. Smith, Jr. and Gregory J. Szabo. Messrs. Sharma, Smith and Szabo serve as directors with terms expiring at this year’s Annual Meeting, Mr. Campbell, Mr. Elfman and Ms. Keddy serve as directors with terms expiring at the 2027 annual meeting of stockholders, and Messrs. Arno and Gulko serve as directors with terms expiring at the 2028 annual meeting of stockholders. Effective as of the date of this year’s Annual Meeting, by resolution of our Board of Directors adopted on March 31, 2026, the number of directors on the Board will be reduced from eight directors to seven.

Given the reduction in the number of directors on our Board, two directors will be elected at the Annual Meeting to serve a three-year term expiring on the date of the annual meeting of stockholders to be held in 2029 (the “2029 Annual Meeting”) or until their respective successors shall have been elected and qualified. The Governance and Nominating Committee of the Board of Directors has recommended to the Board for nomination, and the Board has nominated, Messrs. Smith and Huffmyer as its nominees for election to the Board at the Annual Meeting. Your proxy will be voted, unless authority is withheld or the proxy is revoked, FOR the election of each of Mr. Smith and Mr. Huffmyer to hold office until the date of our 2029 Annual Meeting or until his successor has been duly elected and qualified or until in either case he earlier resigns, becomes disqualified or disabled, or is otherwise removed. Each returned proxy cannot be voted for a greater number of persons than the nominees named on the proxy. In the unanticipated event that a nominee becomes unable or declines to serve at the time of the Annual Meeting, the proxies will be voted for a substitute person recommended by the Governance and Nominating Committee and approved by the Board. Each of Mr. Smith and Mr. Huffmyer has agreed to serve if elected, and the Board has no reason to believe that he will be unavailable to serve.

DIRECTORS AND NOMINEES

Provided below is certain information with respect to each nominee for election as a director and each continuing director.

Director Nominee for Term Ending at the 2029 Annual Meeting of Stockholders:

Name	Age	Present Position with the Company
Timothy C. Huffmyer	52	President and Chief Executive Officer
William W. Smith, Jr.	78	Executive Chairman of the Board

Mr. Huffmyer serves as the Company’s President and Chief Executive Officer. Prior to assuming his current role in March 2026, from June 2025 he served as our Chief Operating Officer, Chief Financial Officer and Treasurer, overseeing core operational and financial responsibilities, including key strategic initiatives and ongoing transformation efforts. Prior to rejoining Smith Micro, from September 2021 through June 2025, Mr. Huffmyer served as Chief Financial Officer of Urgent.ly Inc. (Nasdaq: ULY), a mobile assistance software company focused on roadside assistance. Prior to joining Urgent.ly, Mr. Huffmyer served as Smith Micro’s Chief Financial Officer from June 2017 through September 2021. Earlier in his career, Mr. Huffmyer served in various senior positions at Black Box Corporation (at that time a publicly traded company), an IT solutions company, from January 2008 to June 2017, including Vice President, Chief Financial Officer and Treasurer, and Director of Finance. Throughout his career, Mr. Huffmyer has participated in complex debt and equity financing arrangements, more than thirty mergers, acquisitions and divestitures, and successfully partnered with executive leadership and boards to achieve operational cost alignments and other business objectives. Mr. Huffmyer earned a Bachelor of Arts degree in Accounting from Michigan State University. In addition to his strategic, operational and financial expertise, Mr. Huffmyer brings to the Board his understanding of the Company’s day-to-day operations and the unique opportunities and issues facing the Company.

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Mr. Smith co-founded Smith Micro and serves as our Executive Chairman of the Board. Prior to his appointment as Executive Chairman in March 2026, Mr. Smith served as Chairman of the Board, President and Chief Executive Officer from the Company’s inception in 1982 through March 2026. Mr. Smith was employed by Rockwell International Corporation in a variety of technical and management positions from 1975 to 1984. Mr. Smith served with Xerox Data Systems from 1972 to 1975 and RCA Computer Systems Division from 1969 to 1972 in mainframe sales and pre-sale technical roles. Mr. Smith received a Bachelor of Arts degree in Business Administration from Grove City College. As the co-founder of our Company who served as the Company’s President and Chief Executive Officer for more than four decades, Mr. Smith provides the Board with valuable insight into the Company’s business operations, opportunities and challenges, as well as his extensive knowledge of the telecommunications and wireless industries, garnered during his 44 years of service with our Company. Mr. Smith also possesses particular strengths in leadership, management and sales strategy.

Vote Required for Approval and Recommendation of Board of Directors

The affirmative vote of the holders of a plurality of the outstanding shares of Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote is required for approval of the election of directors standing for election at the Annual Meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE NOMINEES NAMED ABOVE OR IN EACH CASE HIS SUBSTITUTE AS SET FORTH HEREIN.

Continuing Directors with Terms Ending at the 2027 Annual Meeting of Stockholders:

Name	Age	Present Position with the Company
Thomas G. Campbell ⁽¹⁾	75	Director
Steven L. Elfman ⁽²⁾	70	Director
Asha Keddy ⁽³⁾	52	Director

(1)	Member of the Audit, Compensation, and Governance and Nominating Committees

(2)	Member of the Compensation, Governance and Nominating, and Mergers and Acquisitions Committees

(3)	Member of the Audit Committee

Mr. Campbell became a director in 1995. From 1999 until his retirement in October 2021, he served as the Executive Vice President of King Printing, Inc., a book printing and manufacturing company. Mr. Campbell currently serves in volunteer roles for the grant program of Cummings Foundation, which seeks to support nonprofits in eastern Massachusetts, where he has served since February 2021, and for Rivier University, a private university where he has served since September 2023. From 1996 to 1999, he was the Vice President of Operations of Complete Concepts, Ltd., a manufacturer and distributor of women’s accessories. From 1995 to 1996, Mr. Campbell was an independent management consultant specializing in corporate turnarounds, and prior to that served during 1995 as the Chief Operating Officer of Laser Atlanta Optics, Inc. From 1985 to 1995, he served in several senior management positions at Hayes Microcomputer Products, Inc., including Vice President of Operations and Business Development and as Chief Operating Officer and a member of the board of directors of Practical Peripherals, a Hayes subsidiary. Prior to 1985, Mr. Campbell was employed by Digital Equipment Corporation. Mr. Campbell attended Boston University. Mr. Campbell brings to our Board extensive executive management experience in the retail and consumer products industries, along with strengths in leadership, management, financial, international business and corporate governance.

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Mr. Elfman became a director in 2014. He is the former President of Network Operations and Wholesale at Sprint, a telecommunications company and leading wireless carrier prior to its acquisition by T-Mobile in 2020, having had responsibility for product, technology development, network, wholesale operations, value-added services, procurement and real estate, and digital. Mr. Elfman joined the Sprint senior leadership team in 2008 from mobile data technology services company, Infospace, where he was Executive Vice President of Infospace Mobile, then President and Chief Operating Officer of Motricity following the acquisition of Infospace Mobile. He also has held leadership positions at Terabeam, as Executive Vice President of Operations, and at AT&T Wireless, where he was Chief Information Officer. Mr. Elfman was the CIO at GE Capital (Fleet Services Company) as well as head of IT at 3M Company for international operations. Mr. Elfman graduated from the University of Western Ontario in Canada with a degree in computer science and business. He previously served on the board of directors of Syntonic Limited, a software company and provider of mobile software solutions, where he served as non-executive chairman and as a member of the compensation committee of the board of directors. Mr. Elfman also previously served on the boards of Affirmed Networks, Inc., a mobile network solutions company, CollabIP, Inc., a communications intelligence platform provider, Competitive Carriers Association, Bethany College and Clearwire. Mr. Elfman brings to our Board extensive knowledge of the telecommunications and wireless data and cellular industries, particularly with respect to large wireless providers.

Ms. Keddy joined the Board in 2022. She has nearly three decades of industry experience, including in senior executive roles, currently serving as Vice President, Global Technology Standards at Cisco, a worldwide technology leader, where she is focused on current and emerging technology areas, including AI, data, and network areas. Prior to joining Cisco in January 2025, Ms. Keddy served as Chief Executive Officer of Henna Business Services, LLC, a consulting firm specializing in strategy, innovation and execution with a focus on private market and startup companies. Her consultancy practice followed more than 23 years of service in various roles at Intel Corporation, a Fortune 50 company, most recently serving as Intel’s Corporate Vice President and General Manager, Next Generation Systems and Standards from 2019 until her retirement from the company in 2023. Ms. Keddy is a business innovation leader, technology futurist and patent-holder. Ms. Keddy has spent her career building enterprise and consumer systems and defining policies to transform working and living environments. Ms. Keddy served as a pivotal force, including serving as Intel’s 5G Executive Sponsor, in leading the creation of 5G and Wi-Fi market opportunities for Intel using incubation efforts, product development, industry forums, standards creation, ecosystem enablement, and policy governance. Ms. Keddy is a highly networked industry thought leader, and a global spokesperson providing insights to government agencies, the media, analysts, academia, and investors. She has served as a representative before Congress and other international government agencies, including testimonies to the U.S. Senate on 5G. Ms. Keddy helped establish Intel as a leader within key wireless, industrial, and edge standards bodies, and multiple industry fora, such as the 3GPP, IEEE, Wi-Fi Alliance, ETSI and Open-RAN. Ms. Keddy holds a Bachelor of Science degree in computer engineering from Mumbai University and a Master of Science degree in computer science from Clemson University. She completed the Intel Executive Accelerator Program at Stanford University Graduate School of Business and has earned the NACD Directorship Certification from the National Association of Corporate Directors. Ms. Keddy brings to the Smith Micro Board extensive industry expertise and in-depth insight into the wireless industry across the entire ecosystem, spanning a near three-decade career of technology, business, and operational leadership experience including in consumer, enterprise, and IOT markets.

Continuing Directors with Terms Ending at the 2028 Annual Meeting of Stockholders:

Name	Age	Present Position with the Company
Andrew Arno ⁽¹⁾	66	Director
Samuel Gulko ⁽²⁾	94	Director

(1)	Member of the Governance and Nominating and Mergers and Acquisitions Committees

(2)	Member of Audit and Compensation Committees

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Mr. Arno joined our Board of Directors in 2011 and has more than 30 years of experience handling a wide range of corporate and financial matters, primarily including work as an investment banker and strategic advisor to emerging growth companies. Mr. Arno currently serves as a managing member of Unterberg Legacy, LLC, a merchant bank and multi-family office, where he has served since 2023. He previously served, from 2015 to 2023, as vice chairman of Special Equities Group, LLC, a privately held investment banking firm affiliated with Dawson James Securities Inc. and previously affiliated with Bradley Woods & Co. Ltd. and Chardan Capital Markets LLC. From 2013 until 2015, Mr. Arno served as managing director of Emerging Growth Equities, an investment banking firm, and was previously president of LOMUSA Limited, an investment banking firm. Earlier in his career, Mr. Arno served as vice chairman and chief marketing officer of Unterberg Capital, LLC, an investment advisory firm that he co-founded. He was also vice chairman and head of the equity capital markets division of Merriman Capital LLC, an investment banking firm, and served on the board of the parent company, Merriman Holdings, Inc. Mr. Arno currently serves on the boards of IMDX Insight Molecular Diagnostic, Inc. (IMDX), a precision diagnostics company, where he serves as chairman; XXII Century Group (XXII), a biotechnology company; Catheter Precision, Inc. (VTAK), a medical device company; Independa, Inc., a privately held software company; and ComHear Inc., a privately held audio technology R&D company, where he serves as chairman. Mr. Arno received a Bachelor of Science degree from George Washington University. Mr. Arno brings to the Board valuable understanding of public markets, significant experience in investment matters, and a keen understanding of stockholder perspectives as it relates to enhancing value for our stakeholders.

Mr. Gulko became a director in 2004 and has extensive experience and expertise in financial and accounting matters. Since 2002, he has provided tax and consulting services on a part-time basis to a limited number of clients. From 1996 until his retirement in 2002, Mr. Gulko served as the Chief Financial Officer, and as the Vice President of Finance, Secretary and Treasurer of Neotherapeutics, Inc., a publicly traded biotechnology company (now known as Spectrum Pharmaceuticals, Inc.). During this same period, he also served as a member of the board of directors of Neotherapeutics, Inc. Earlier in his career, Mr. Gulko was self-employed as a certified public accountant and business consultant, as well as the part time chief financial officer of several privately-owned companies, and previously served as a partner in the audit practice of Ernst & Young LLP, an accounting and business services firm. Mr. Gulko holds a Bachelor of Science degree in Accounting from the University of Southern California. Mr. Gulko brings to our Board extensive qualifications and experience in finance and public accounting, including his prior service as an audit partner at Ernst & Young LLP and as the CFO of a publicly traded company.

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PROPOSAL 2:

ADVISORY VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS

Section 14A of the Exchange Act requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding and advisory basis, the compensation of our named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission (the “SEC”). At our 2023 Annual Meeting of Stockholders, our Board of Directors recommended, and our stockholders voted on an advisory basis, to conduct this vote annually. Since the vote on this compensation program is advisory in nature, it will not affect any compensation already awarded to any named executive officer and will not be binding on or overrule any decisions made by the Compensation Committee or the Board with respect to compensation to be awarded in the future. The vote on this resolution is not intended to address any specific element of compensation. Rather, this vote relates to the totality of the compensation of our named executive officers as described in this proxy statement.

The Compensation Committee annually reviews named executive officer compensation. As discussed in the narrative under the heading “Executive Compensation” beginning on page [47] of this proxy statement, our compensation program is designed to align executive pay with Company performance, and we seek to closely align the interests of our named executive officers with the interests of our stockholders.

The Compensation Committee and the Board will consider the results of this advisory vote when formulating future executive compensation policy. As such, your vote will serve as an additional tool to guide the Compensation Committee and the Board in continuing to align the Company’s executive compensation program with the interests of the Company and its stockholders. Your vote will also guide the Compensation Committee and the Board to ensure that our executive compensation program is consistent with our commitment to high standards of corporate governance.

We ask our stockholders to vote on the following resolution at the Annual Meeting:

"RESOLVED, that the Company’s stockholders approve on an advisory basis the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2026 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation tables and narrative disclosure contained therein."

Vote Required for Approval and Recommendation of the Board of Directors

Approval of this non-binding, advisory resolution requires the affirmative vote of a majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

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PROPOSAL 3:

RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

SingerLewak LLP has been engaged as the Company’s independent registered public accounting firm since 2005. The Audit Committee has selected SingerLewak LLP as the Company’s independent auditors for the fiscal year ending December 31, 2026 and has further directed that the selection of the independent auditors be submitted for ratification by the stockholders at the Annual Meeting.

Stockholder ratification of the selection of SingerLewak LLP as the Company’s independent auditors is not required by the Company’s Bylaws or otherwise. However, the Board of Directors is submitting the selection of SingerLewak LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether to retain SingerLewak LLP. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders. Representatives of SingerLewak LLP are not expected to be present at the Annual Meeting and accordingly will not have an opportunity to make a statement or be available to respond to questions from stockholders.

Principal Accounting Fees and Services

The following is a summary of the fees billed to Smith Micro by SingerLewak LLP for professional services rendered for the fiscal years ended December 31, 2024 and December 31, 2025:

Fee Category	Fiscal 2024 Fees		Fiscal 2025 Fees
Audit Fees	$	489,436	$	422,661
Audit-Related Fees		—		—
Tax Fees		—		—
All Other Fees		—		—

Audit Fees: This category consists of fees billed for professional services rendered for the audit of our consolidated annual financial statements, review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements.

Audit-Related Fees: This category consists of assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.”

Tax Fees: This category consists of fees billed for professional services rendered for tax compliance, tax advice and tax planning.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

The Audit Committee pre-approves all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has adopted a policy for the pre-approval of services provided by the independent registered public accounting firm. Under the policy, pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. In addition, the Audit Committee may also pre-approve particular services on a case-by-case basis. For each proposed service, the independent registered public accounting firm is required to provide detailed back-up documentation at the time of approval. The Audit Committee may delegate pre-approval authority to one or more of its members. Such member must report any decisions to the Audit Committee at the next scheduled meeting.

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Vote Required for Approval and Recommendation of the Board of Directors

The affirmative vote of a majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal is being sought to ratify the appointment of SingerLewak LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2026.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF SINGERLEWAK LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2026.

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PROPOSAL 4:

APPROVAL OF AMENDMENT TO

AMENDED AND RESTATED OMNIBUS EQUITY INCENTIVE PLAN

The Company’s stockholders are being asked to approve an amendment (the “Equity Plan Amendment”) to the Company’s Amended and Restated Omnibus Equity Incentive Plan (the “Equity Plan”), which would increase the number of shares of Common Stock currently issuable under the Equity Plan by an additional three million shares and would amend the multiple for counting full value awards against the Equity Plan’s share reserve from 1.2 shares to one share per share covered by such awards. The Equity Plan Amendment has been approved by the Company’s Board of Directors.

The Company is seeking to increase the number of shares under the Equity Plan to have a sufficient number of shares (and an appropriate buffer amount) to issue equity awards to new as well as current employees eligible to receive equity awards as part of their overall compensation packages, to provide the Company with sufficient flexibility to offer equity incentive compensation to employees in lieu of cash incentive compensation as appropriate, and to attract, incentivize and retain highly qualified employees. The Company’s Board of Directors has approved, subject to stockholder ratification and approval, the Equity Plan Amendment to increase the maximum number of shares of the Company’s Common Stock reserved under the Equity Plan (the “Share Reserve”) by three million shares to a total of 10,578,125 shares. As of March 31, 2026, there were 1,571,175 remaining shares available for issuance under the Equity Plan.

Pursuant to the Equity Plan Amendment, the Company is also seeking to amend the multiple for counting full value awards against the Share Reserve. The Equity Plan currently provides that, for purposes of counting the number of shares remaining available for future grants, any award that is a full value award shall be debited against the Share Reserve as 1.2 shares for each share subject to such full value award. The Equity Plan Amendment would change this multiple from 1.2 shares to one share, such that each share subject to a full value award would be counted against the Share Reserve on a one-for-one basis (for example, a full value award of 100 shares would reduce the shares available for future grants by 100 shares). As used herein, a “full value award” means any award under the Equity Plan that is settled in shares, other than an option or stock appreciation right, including any restricted stock award, performance stock award, dividend equivalent right or restricted stock unit award, in each case, to the extent settled in shares.

The following table sets forth certain information about awards currently outstanding under the Equity Plan:

Amended and Restated Omnibus Equity Incentive Plan	As of March 31, 2026
Total Stock Options Outstanding		41,723
Total Restricted Stock Awards Outstanding (unvested shares remaining)		726,219
Weighted-Average Exercise Price of Stock Options Outstanding ($)		3.89
Weighted-Average Remaining Duration (yrs) of Stock Options Outstanding		8.62
Total Shares Available for Grant under the Equity Plan		1,571,175
Total Common Stock Outstanding	25,609,766

The closing price of the Company’s Common Stock on March 31, 2026 was $0.7196 per share.

The ratification and approval of the Equity Plan Amendment is not anticipated to have any effect on the benefits to be received by the Company’s employees and officers under the Equity Plan.

Vote Required for Approval and Recommendation of the Board of Directors

Approval of the Equity Plan Amendment proposal requires the affirmative vote of a majority of votes cast on such proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE EQUITY PLAN AMENDMENT AS DESCRIBED HEREIN.

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Summary of Material Features of the Equity Plan

Administration. The Equity Plan is administered by the Compensation Committee of the Board of Directors (the “Plan Committee”) consisting of persons who are each (i) “Outside Directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) “Non-Employee Directors” within the meaning of Rule 16b-3 of the Exchange Act, and (iii) “independent” for purposes of any applicable listing requirements. Notwithstanding the foregoing, a committee consisting of one or more persons who do not qualify as Outside Directors may be delegated authority to grant awards to eligible persons who are not “covered employees” (within the meaning of Section 162(m) of the Code, and who are not expected to be “covered employees” at the time of recognition of income resulting from such award) or with respect to whom we wish to comply with the requirements of Section 162(m) of the Code. Further, a committee consisting of one or more persons who are not Non-Employee Directors may be delegated authority to grant awards to eligible persons who are not then subject to the requirements of Section 16 of the Exchange Act. If a member of the Plan Committee is eligible to receive an award under the Equity Plan, such Plan Committee member shall have no authority with respect to his or her own award. Among other things, the Plan Committee has complete discretion, subject to the terms of the Equity Plan, to determine the employees, non-employee directors and non-employee consultants to be granted awards under the Equity Plan, the type of awards to be granted, the number of shares subject to each award, the exercise price under each option and the base price for each stock appreciation right (“SAR”), the term of each award, the vesting schedule for an award, the value of the shares underlying the award, and the required withholdings, if any. The Plan Committee is also authorized to construe the award agreements and may prescribe rules relating to the Equity Plan.

Grant of Awards; Shares Available for Awards. The Equity Plan provides for the grant of awards which are incentive stock options (“ISOs”), non-qualified stock options (“NQSOs”), unrestricted shares, restricted shares, restricted stock units (“RSUs”), performance stock and units, SARs, tandem stock appreciation rights, distribution equivalent rights, or any combination of the foregoing, to employees, non-employee directors, and non-employee consultants of the Company or any of its subsidiaries (each a “participant”) (however, solely Company employees or employees of the Company’s subsidiaries are eligible for ISO awards). Prior to the adoption of the Equity Plan Amendment, a total of 7,578,125 shares are currently reserved for issuance under the Equity Plan. Prior to the adoption of the Equity Plan Amendment, shares awarded as restricted stock, RSUs, performance stock, or dividend equivalent rights, which convey the full value of the shares subject to the award, are counted against the available share pool as 1.2 shares for every one share awarded, while options and SARs count as one share for every share awarded. To the extent that an award (or portion of an award) lapses, expires, is canceled, is terminated unexercised or ceases to be exercisable for any reason, or the rights of its holder terminate, any shares subject to such award shall be deemed not to have been issued for purposes of determining the maximum aggregate shares which may be issued under the Equity Plan and shall again be available for the grant of a new award. However, shares not issued or delivered as a result of the net settlement of an SAR or option, shares used to pay the exercise price or withholding taxes related to an award and shares repurchased on the open market with the proceeds from the exercise of any option will not be available for future issuance under the Equity Plan.

The Equity Plan will continue in effect, unless sooner terminated, until June 18, 2034, which is the tenth (10th) anniversary of the date on which it was approved by the stockholders (except as to awards outstanding on that date). The Board of Directors in its discretion may terminate the Equity Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the Equity Plan’s termination shall not materially and adversely impair the rights of a holder, without the consent of the holder, with respect to any award previously granted. The maximum value of awards that may be granted under the Equity Plan to any non-employee director during any fiscal year is $500,000, subject to certain limited exceptions.

Future new hires, non-employee directors and additional non-employee consultants are eligible to participate in the Equity Plan as well. The number of awards to be granted to officers, non-employee directors, employees and non-employee consultants cannot be determined at this time as the grant of awards is dependent upon various factors such as hiring requirements and job performance.

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Options. The term of each stock option shall be as specified in the option agreement; provided, however, that no option shall be exercisable after the expiration of ten (10) years from the date of its grant (five (5) years for an employee who is a ten percent stockholder). The Equity Plan expressly prohibits the re-pricing of options (including the cancellation and re-grant of outstanding options) without prior stockholder approval. The Equity Plan also requires a minimum vesting period of one year before any portion of a stock option award will be vested. The price at which a share may be purchased upon exercise of a stock option shall not be less than the fair market value of a share on the date such stock option is granted and shall be subject to adjustment as provided in the Equity Plan. The Plan Committee or the Board of Directors shall determine the time or times at which, or the circumstances under which, a stock option may be exercised in whole or in part, the time or times at which options shall cease to be or become exercisable following termination of the stock option holder’s employment or upon other conditions, the methods by which such exercise price may be paid or deemed to be paid, the form of such payment, and the methods by or forms in which shares will be delivered or deemed to be delivered to participants who exercise stock options. Options which are ISOs shall comply in all respects with Section 422 of the Code.

Unrestricted Stock Awards. Pursuant to the terms of the applicable unrestricted stock award agreement, an unrestricted stock award is the award or sale of shares to employees, non-employee directors or non-employee consultants, which are not subject to transfer restrictions in consideration for past services rendered to the Company or any of its subsidiaries or for other valid consideration.

Restricted Stock Awards. Restricted stock awards shall include such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Plan Committee or the Board of Directors may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Plan Committee or the Board of Directors may determine at the date of grant or purchase or thereafter. If provided for under the restricted stock award agreement, a participant who is granted or has purchased restricted stock shall have all of the rights of a stockholder, including the right to vote the restricted stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Plan Committee or the Board of Directors or in the award agreement). During the restricted period applicable to the restricted stock, subject to certain exceptions, the restricted stock may not be sold, transferred, pledged, exchanged, hypothecated, or otherwise disposed of by the participant.

Restricted Stock Unit Awards. A restricted stock unit (“RSU”) award provides for a grant of shares or a cash payment to be made to the holder upon the satisfaction of predetermined individual service-related vesting requirements, based on the number of units awarded to the holder. The Plan Committee shall set forth in the applicable RSU award agreement the individual service-based vesting requirements which the holder would be required to satisfy before the holder would become entitled to payment and the number of units awarded to the holder. The Plan Committee has discretion to prescribe additional terms and conditions or restrictions. The holder of a RSU shall be entitled to receive a cash payment equal to the fair market value of a share, or one (1) share, as determined and as set forth in the RSU award agreement, for each RSU subject to such RSU award, if and to the extent the holder satisfies the applicable vesting requirements. Such payment or distribution shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the calendar year in which the RSU first becomes vested, unless otherwise structured to comply with Code Section 409A.

Performance Stock Awards. A performance stock award provides for the distribution of shares (or cash equal to the fair market value of shares) to the holder upon the satisfaction of predetermined individual and/or Company goals or objectives. The Plan Committee shall set forth in the applicable performance stock award agreement the performance goals and objectives (and the period of time to which such goals and objectives shall apply) required to be satisfied before the holder would become entitled to the receipt of shares (or cash equal to the fair market value of shares) pursuant to such holder’s performance stock award and the number of shares of shares subject to such performance stock award. The vesting restrictions under any performance stock award shall constitute a “substantial risk of forfeiture” under Section 409A of the Code and, if such goals and objectives are achieved, the distribution of such shares shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of our fiscal year to which such goals and objectives relate, unless otherwise structured to comply with Code Section 409A. At the time of such award, the Plan Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions. The holder of a performance stock award shall have no rights as a stockholder until such time, if any, as the holder receives shares pursuant to the performance stock award.

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Performance Unit Awards. A performance unit award provides for a cash payment to be made to the holder upon the satisfaction of predetermined individual and/or Company (or affiliate) performance goals or objectives based on selected performance criteria, based on the number of units awarded to the holder. The Plan Committee shall set forth in the applicable performance unit award agreement the performance goals and objectives (and the period of time to which such goals and objectives shall apply) which the holder and/or Company would be required to satisfy before the holder would become entitled to payment, the number of units awarded to the holder and the dollar value assigned to each such unit. At the time of such award, the Plan Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions. The holder of a performance unit shall be entitled to receive a cash payment equal to the dollar value assigned to such unit under the applicable performance unit award agreement if the holder and/or the Company satisfies (or partially satisfies, if applicable under the applicable performance unit award agreement) the performance goals and objectives set forth in such performance unit award agreement. If achieved, such payment shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year to which such performance goals and objectives relate, unless otherwise structured to comply with Code Section 409A.

Stock Appreciation Rights. A stock appreciation right (“SAR”) provides the participant to whom it is granted the right to receive, upon its exercise, cash or shares equal to the excess of (A) the fair market value of the number of shares subject to the SAR on the date of exercise, over (B) the product of the number of shares subject to the SAR multiplied by the base value for the SAR, as determined by the Plan Committee or the Board of Directors. The Plan Committee shall set forth in the applicable SAR award agreement the terms and conditions of the SAR, including the base value for the SAR (which shall not be less than the fair market value of a share on the date of grant), the number of shares subject to the SAR and the period during which the SAR may be exercised and any other special rules and/or requirements which the Plan Committee imposes on the SAR. No SAR shall be exercisable after the expiration of ten (10) years from the date of grant, and each SAR shall have a minimum vesting period of one year before any portion of an award will be vested. A tandem SAR is a SAR granted in connection with a related option, the exercise of some or all of which results in termination of the entitlement to purchase some or all of the shares under the related option. If the Plan Committee grants a SAR which is intended to be a tandem SAR, the tandem SAR shall be granted at the same time as the related option and additional restrictions apply. The Equity Plan expressly prohibits the re-pricing of SARs (including the cancellation and re-grant of outstanding SARs) without prior stockholder approval.

Distribution Equivalent Rights. A distribution equivalent right entitles the holder to receive bookkeeping credits, cash payments and/or share distributions equal in amount to the distributions that would be made to the holder had the holder held a specified number of shares during the period the holder held the distribution equivalent rights. The Plan Committee shall set forth in the applicable distribution equivalent rights award agreement the terms and conditions, if any, including whether the holder is to receive credits currently in cash, is to have such credits reinvested (at fair market value determined as of the date of reinvestment) in additional shares or is to be entitled to choose among such alternatives. Such receipt shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code and, if such award becomes vested, the distribution of such cash or shares shall be made no later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year in which the holder’s interest in the award vests, unless otherwise structured to comply with Code Section 409A. Distribution equivalent rights awards may be settled in cash or in shares, as set forth in the applicable distribution equivalent rights award agreement. A distribution equivalent rights award may, but need not be, awarded in tandem with another award (but not an option or SAR award), whereby, if so awarded, such distribution equivalent rights award shall expire, terminate or be forfeited by the holder, as applicable, under the same conditions as under such other award. The distribution equivalent rights award agreement for a distribution equivalent rights award may provide for the crediting of interest on a distribution equivalent rights award to be settled in cash at a future date (but in no event later than by the fifteenth (15th) day of the third (3rd) calendar month next following the end of the Company’s fiscal year in which such interest was credited and vested), at a rate set forth in the applicable distribution equivalent rights award agreement, on the amount of cash payable thereunder.

Recapitalization or Reorganization. Subject to certain restrictions, the Equity Plan provides for the adjustment of shares underlying awards previously granted if, and whenever, prior to the expiration or distribution to the holder of shares underlying such an award, the Company would undertake a subdivision or consolidation of our shares or payment of a stock dividend on shares without receipt of consideration. If the Company recapitalizes or otherwise changes its capital structure, thereafter upon any exercise or satisfaction, as applicable, of a previously granted award, the holder shall be entitled to receive (or entitled to purchase, if applicable) under such award, in lieu of the number of shares then covered by such award, the number and class of shares and securities to which the holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to such recapitalization, the holder had been the holder of record of the number of shares then covered by such award. The Equity Plan also provides for the adjustment of shares underlying awards previously granted in the event of changes to the outstanding shares by reason of an extraordinary cash dividend, reorganization, merger, consolidation, combination, split-up, spin-off, exchange or other relevant change in capitalization occurring after the date of the grant of any award, subject to certain restrictions.

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Amendment and Termination. The Equity Plan shall continue in effect, unless sooner terminated pursuant to its terms, until the tenth (10th) anniversary of the effective date of the Equity Plan (except as to awards outstanding on that date). The Board of Directors may terminate the Equity Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the Equity Plan’s termination shall not materially and adversely impair the rights of a holder with respect to any award theretofore granted without the consent of the holder. The Board of Directors shall have the right to alter or amend the Equity Plan or any part thereof from time to time; provided, however, that without the approval by a majority of the votes cast at a meeting of our stockholders at which a quorum representing forty percent (40%) of our shares entitled to vote generally in the election of directors is present in person or by proxy, no amendment or modification of the Equity Plan may (i) materially increase the benefits accruing to holders, (ii) except as otherwise expressly provided in the Equity Plan, materially increase the number of shares subject to the Equity Plan or the individual award agreements, (iii) materially modify the requirements for participation, or (iv) amend, modify or suspend certain re-pricing prohibitions or amendment and termination provisions as specified therein. In addition, no change in any award theretofore granted may be made which would materially and adversely impair the rights of a holder with respect to such award without the consent of the holder (unless such change is required in order to cause the benefits under the Equity Plan to qualify as “performance-based” compensation within the meaning of Section 162(m) of the Code or to cause the Equity Plan and/or Award to be exempt from or comply with Section 409A of the Code).

Certain U.S. Federal Income Tax Consequences of the Equity Plan

The following is a general summary of certain U.S. federal income tax consequences under current tax law to the Company (to the extent it is subject to U.S. federal income taxation on its net income) and to participants in the Equity Plan who are individual citizens or residents of the United States for federal income tax purposes (“U.S. Participants”) of stock options which are ISOs, or stock options which are NQSOs, unrestricted stock, restricted stock, RSU, performance stock, performance units, SARs, and dividend equivalent rights. This summary does not purport to cover all of the special rules that may apply, including special rules relating to limitations on our ability to deduct certain compensation, special rules relating to deferred compensation, golden parachutes, U.S. Participants subject to Section 16(b) of the Exchange Act or the exercise of a stock option with previously acquired shares. This summary assumes that U.S. Participants will hold their shares as capital assets within the meaning of Section 1221 of the Code. In addition, this summary does not address the foreign, state or local or other tax consequences, or any U.S. federal non-income tax consequences, inherent in the acquisition, ownership, vesting, exercise, termination or disposition of an award under the Equity Plan, or shares issued pursuant thereto. Participants are urged to consult with their own tax advisors concerning the tax consequences to them of an award under the Equity Plan or shares issued thereunder pursuant to the Equity Plan.

Nonstatutory Stock Options. A U.S. Participant generally does not recognize taxable income upon the grant of a NQSO. Upon the exercise of a NQSO, the U.S. Participant generally recognizes ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the shares acquired on the date of exercise over the exercise price thereof, and the Company generally will be entitled to a deduction for such amount at that time. If the U.S. Participant later sells shares acquired pursuant to the exercise of a NQSO, the U.S. Participant recognizes a long-term or short-term capital gain or loss, depending on the period for which the shares were held. The capital gain (or loss) will be short-term if the shares are disposed of within one year after the NQSO is exercised and long-term if the shares are held more than 12 months as of the sale date. A long-term capital gain is generally subject to more favorable tax treatment than ordinary income or a short-term capital gain. The deductibility of capital losses is subject to certain limitations.

Incentive Stock Options. A U.S. Participant generally does not recognize ordinary taxable income upon the grant or the exercise, of an ISO; provided, however, upon the exercise of an ISO the excess of the fair market value of the shares received under the ISO over the exercise price is an item of tax preference for purposes of calculating a U.S. Participant’s alternative minimum tax. If a U.S. Participant disposes of the shares acquired pursuant to the exercise of an ISO more than two years after the date of grant and more than one year after the transfer of the shares to the U.S. Participant (the “ISO Holding Period”), a U.S. Participant generally recognizes a long-term capital gain or loss, and the Company will not be entitled to a deduction. However, if the U.S. Participant disposes of such shares prior to the end of the ISO Holding Period, the U.S. Participant will recognize ordinary compensation income equal to the excess (if any) of the fair market value of such shares on the date of exercise (or, if less, the amount realized on the disposition of such shares) over the exercise price paid for such shares, and the Company generally will be entitled to a corresponding tax deduction of such amount.

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Stock Appreciation Rights. A U.S. Participant generally does not recognize income upon the grant of a SAR. A U.S. Participant recognizes ordinary compensation income upon exercise of the SAR equal to the increase in the value of the underlying shares, and the Company generally will be entitled to a corresponding tax deduction of such amount.

Performance Awards, Performance Shares, Restricted Stock Units, Unrestricted Stock Award and Dividend Equivalents. A U.S. Participant generally does not recognize income on the receipt of a performance stock award, performance unit award, RSU award, unrestricted stock award or dividend equivalent rights award until a cash payment or a distribution of shares is received thereunder. At such time, a U.S. Participant recognizes ordinary compensation income equal to the excess, if any, of the fair market value of the shares or the amount of cash received over any amount paid therefor, and the Company generally will be entitled to a corresponding tax deduction of such amount.

Restricted Stock. A U.S. Participant who receives a restricted stock award generally recognizes ordinary compensation income equal to the excess, if any, of the fair market value of such shares at the time the restriction lapses over any amount paid for the shares. Alternatively, the U.S. Participant may make an election under Section 83(b) of the Code to be taxed on the fair market value of such shares at the time of grant. The Company generally will be entitled to a corresponding tax deduction at the same time and in the same amount as the income that is required to be recognized by a U.S. Participant.

Internal Revenue Code Section 409A. Awards under the Equity Plan may, in certain instances, result in the deferral of compensation that is subject to the requirements of Section 409A of the Code. Generally, to the extent that any such award fails to meet the requirements of Section 409A, the regulations issued thereunder or an exception thereto, the award recipient will be subject to immediate taxation, interest and tax penalties in the year the award vests. While awards issued under the Equity Plan are intended to be structured and administered in a manner that complies with the requirements of Section 409A of the Code (or an exception thereto), no assurance can be given that compensation will, in fact, satisfy the requirements of Section 409A (or an exception thereto).

Limitation on Deduction; Consequences of Change in Control. Section 162(m) of the Code generally places a $1 million limit on the amount of compensation the Company can deduct in any one year for certain executive officers and certain former executive officers. Historically, the $1 million deduction limit generally has not applied to compensation that qualifies as performance-based compensation under Section 162(m). Effective for taxable years beginning on or after January 1, 2018, the exemption for qualified performance-based compensation under Section 162(m) has been repealed, such that compensation in excess of $1 million paid to any individual who served in 2017 or any later year as the Company’s principal executive officer (PEO), principal financial officer (PFO), or one of the Company’s other three most highly compensated executive officers will generally not be deductible. Additionally, beginning on or after January 1, 2027, the American Rescue Plan Act of 2021 expands the applicability of Section 162(m) to also include the next five highest paid corporate officers so that the total number of covered employees subject to the $1 million deduction limitation will be at least 10. It is possible the compensation attributable to awards under the Equity Plan may cause this limitation to be exceeded in any particular year. While the Compensation Committee considers tax deductibility as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by the Company for tax purposes.

In addition, if a “change in control” of the Company causes compensation under the Company’s incentive plans, including awards under the Equity Plan, to accelerate vesting or result in the attainment of performance goals, U.S. Participants could, in some cases, be considered to have received “parachute payments.” If so, any such participant could be subject to a 20% excise tax under Section 4999 of the Code on the amount of “excess parachute payments” received and the Company’s tax deduction could be disallowed under Section 280G of the Code.

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Summary Conclusion

Our Board of Directors is requesting this vote by the stockholders to approve the Equity Plan Amendment to increase of the number of shares available for issuance under the Equity Plan by an additional three million shares and to reduce the multiple for counting full value awards against the Share Reserve from 1.2 shares to one share per share covered by such an award. If the stockholders do not approve the Equity Plan Amendment, the Equity Plan will continue in effect pursuant to its current terms and conditions, and we may continue to grant awards under the Equity Plan, subject to its terms, conditions and limitations. The increase in shares reserved for issuance under the Equity Plan and the decrease in the multiple for counting full value awards against the Share Reserve will be the only material changes to the existing Equity Plan resulting from the stockholders’ approval of the Equity Plan Amendment. Stockholders should carefully read this proxy statement in its entirety for more detailed information concerning the proposal to approve the Equity Plan Amendment. Additionally, stockholders are directed to the full text of the Equity Plan Amendment, which is attached as Appendix A to this proxy statement, as any summary or description of the Equity Plan Amendment contained herein is qualified in its entirety by reference to Appendix A. Further, the foregoing summary of certain provisions of the existing Equity Plan is qualified in its entirety by reference to the complete text of the Equity Plan, as amended. A copy of the original Equity Plan is attached as Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on May 9, 2024, as amended by that certain amendment attached as Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on April 23, 2025. Capitalized terms not otherwise defined in this proposal shall have the meaning ascribed to them in the Equity Plan.

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PROPOSAL 5:

NASDAQ PROPOSAL I:

APPROVAL, FOR PURPOSES OF NASDAQ LISTING RULE 5635(D), OF THE ISSUANCE OF SHARES OF OUR COMMON STOCK UNDERLYING THE COMMON WARRANTS ISSUED BY US PURSUANT TO THE TERMS OF THOSE CERTAIN NOTE PURCHASE AGREEMENTS, DATED SEPTEMBER 11, 2025 AND SEPTEMBER 29, 2025, IN AN AMOUNT THAT MAY BE EQUAL TO OR EXCEED 20% OF OUR COMMON STOCK OUTSTANDING

Background

We are asking our stockholders to approve a proposal (“Nasdaq Proposal I”) relating to the issuance by the Company of shares of company Common Stock that would permit the Company to issue 20% or more of our common stock, which were outstanding at the time of the closing of the issuance of the Common Warrants pursuant to the Note Purchase Agreements (as defined below), upon the exercise of the Common Warrants which were issued to the Purchasers (as defined below) pursuant to the terms of the Note Purchase Agreements.

On September 11, 2025 and September 29, 2025, pursuant to a private placement transaction, we entered into note purchase agreements (the “Note Purchase Agreements”) with certain accredited investors (the “Purchasers”) relating to the issuance of secured notes in the aggregate principal amount of $1,194,736, together with unregistered Common Warrants to purchase up to an aggregate of 1,650,405 shares of common stock (the “Warrant Shares”), subject to adjustment as described below (collectively, the “Private Placement”). Each unregistered Common Warrant had an initial exercise price of either $0.73 or $0.74 per share, is exercisable beginning on the sixth month anniversary of issuance and will expire on the five year anniversary of the date the Common Warrants become exercisable. The Common Warrants contain a “full-ratchet” anti-dilution adjustment, such that the exercise price will be adjusted if the Company issues shares of Common Stock (or common stock equivalents) at a price below the exercise price of the Common Warrant. The number of shares issuable upon exercise of such shares will then be proportionately adjusted. Additionally, in the event of a reverse stock split, the exercise price of each Common Warrant is subject to adjustment (along with a proportionate adjustment in the number of shares) if the market price of our Common Stock is less than the exercise price of the Common Warrant (after giving effect to the split) during a period before and after the effective date of the reverse split (the anti-dilution adjustment and the reverse stock split adjustment are collectively, referred to herein as the “Warrant Adjustments”).

Since the Warrant Adjustments could result in the Company issuing more than 19.9% of the Company’s outstanding shares of Common Stock, in accordance with applicable Nasdaq guidance, no Warrant Adjustments will be made unless and until the stockholders of the Company have approved the Warrant Adjustments.

We expect to use any net proceeds received by us in connection with the exercise of the Common Warrants for working capital and general corporate purposes.

Summary of the Common Warrants

Each unregistered Common Warrant had an initial exercise price of either $0.73 or $0.74 per share, is exercisable on the sixth month anniversary of the issuance date of the Common Warrant, subject to certain ownership limitations described in the Common Warrant and will expire on the five-year anniversary of the initial exercise date of the Common Warrant. The Common Warrants contain a “full-ratchet” anti-dilution adjustment, such that the exercise price will be adjusted if the Company issues shares of Common Stock (or common stock equivalents) at a price below the exercise price of the Common Warrant. The number of shares issuable upon exercise of such shares will then be proportionately adjusted. Additionally, in the event of a reverse stock split, the exercise price of each Common Warrant is subject to adjustment (along with a proportionate adjustment in the number of shares) if the market price of our Common Stock is less than the exercise price of the Common Warrant (after giving effect to the split) during a period before and after the effective date of the reverse split. There is no established trading market for the Common Warrants, and we do not expect a market to develop. We do not intend to apply for a listing of the Common Warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Common Warrants will be limited.

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We have agreed to seek approval of the Warrant Adjustments that would permit the issuance of greater than 19.9% of the Company’s Common Stock pursuant to the Common Warrants by June 30, 2026. Additionally, if we do not obtain approval of the Nasdaq Proposal I at this Annual Meeting of our stockholders, we will call an additional stockholder meeting within ninety (90) days of this Annual Meeting and then every six months thereafter until we obtain such approval. We also agreed to prepare and file a registration statement with the SEC for the purpose of registering the resale of shares of Common Stock underlying the Common Warrants, which registration statement was declared effective by the SEC on December 12, 2025.

As noted above, the terms of the Common Warrants prohibit the Company from implementing any Warrant Adjustments until stockholder approval is obtained. If stockholder approval is obtained, due to dilutive issuances by the Company following the issuance of the Common Warrants, the exercise price of the Common Warrants will be reduced to $0.6708 per share and the aggregate number of shares of Common Stock underlying the Common Warrants will be increased from 1,650,405 to 1,802,126.

This discussion of the Common Warrants is a summary only and is qualified in its entirety by reference to the text of the form of Common Warrant, which is attached as Appendix B to this proxy statement.

Reasons for the Nasdaq Proposal

Our Common Stock is listed on Nasdaq Capital Market and, as such, we are subject to the listing rules of the Nasdaq Stock Market, LLC (“Nasdaq”). Nasdaq Listing Rule 5635(d) is referred to as the “Nasdaq 20% Rule.” To comply with the Nasdaq 20% Rule and to satisfy conditions under the Common Warrants, we are seeking stockholder approval to approve the Warrant Adjustments and permit the potential issuance of more than 20% of our outstanding Common Stock upon exercise of the Common Warrants.

Since the number of shares issuable upon exercise of the Common Warrants is subject to adjustment in certain instances, including pursuant to the Warrant Adjustments, the aggregate number of shares of Common Stock issuable upon the exercise of the Common Warrants could potentially exceed 20% of our outstanding Common Stock on the date we issued the Common Warrants. Therefore, the prohibition on implementing the Warrant Adjustments was added to the provisions of the Common Warrants, which restrict the exercise price from being adjusted and the number of shares of Common Stock issuable upon exercise of the Common Warrants from being increased, in order to prevent the issuance of greater than 19.9% of our outstanding Common Stock on the date we issued the Common Warrants.

To meet the requirements of the Nasdaq 20% Rule, we need stockholder approval under the Nasdaq Listing Rules to permit the Warrant Adjustments and to permit the potential issuance of more than 20% of our outstanding Common Stock upon exercise of the Common Warrants.

Possible Effects if Nasdaq Proposal I is Approved

If our stockholders approve Nasdaq Proposal I, we will eliminate the prohibition on implementing the Warrant Adjustments pursuant to the Common Warrants and therefore potentially issue shares of Common Stock upon the exercise of the Common Warrants that could exceed 20% of our issued and outstanding shares of Common Stock as of the date we issued the Common Warrants.

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Dilution

If Nasdaq Proposal I is approved and the number of shares issuable upon exercise of the Common Warrants is materially adjusted in accordance with the terms of the Common Warrants and the Purchasers elect to exercise the Common Warrants in full based on those adjustments, current stockholders may experience significant dilution of their current equity ownership in the Company. Currently, the Common Warrants are exercisable for 1,650,405 shares of Common Stock at an exercise price of either $0.73 or $0.74 per share. However, if Nasdaq Proposal I is approved, the Common Warrants will be immediately adjusted such that the exercise price will be reduced to $0.6708 per share and the number of shares of Common Stock for which the Common Warrants will be exercisable will be increased to 1,802,126. If the exercise price of the Common Warrants is further adjusted below $0.6708 per share and the number of shares issuable upon exercise of the Common Warrants is proportionately increased, then the Company could potentially issue substantially more shares of Common Stock. As a result of any such exercise, our existing stockholders would own a smaller percentage of our outstanding shares of Common Stock and, accordingly a smaller percentage interest in the voting power, liquidation value, and book value of the shares of Common Stock. However, there is no guarantee the Purchasers will exercise the Common Warrants.

Improved Capital Levels and Reserves

If the Purchasers were to exercise for cash the Common Warrants for the full number of shares, the proceeds we would receive from the exercise of the Common Warrants would equal approximately $1.2 million and would strengthen our balance sheet, increase our capital levels and reserves, and further enhance our ability to execute our business plan while pursuing opportunities for further growth. However, there is no guarantee the Purchasers will exercise the Common Warrants.

Valuable Investors

The Purchasers have previously invested in the Company, and we believe each Purchaser’s continued willingness to invest in the Company is valuable, particularly given our present financial condition and the anticipated timing of future revenue growth.

Possible Effects if Nasdaq Proposal I is Not Approved

Under the terms of the Common Warrants, we have agreed that if we do not obtain approval of Nasdaq Proposal I at the Annual Meeting of our stockholders, we will call an additional stockholder meeting within ninety (90) days thereafter and then every six months thereafter until we obtain such approval. This could result in us seeking stockholder approval every six months for five years. The costs and expenses associated with seeking such approval could be material. In addition, several further significant consequences could follow, which could materially affect the company’s financial condition, stability, and future operations, including the following.

Possible Limited Participation in Future Financings by the Purchasers

If Nasdaq Proposal I is not approved, the Purchasers may be less likely to participate in a meaningful way in future capital raising activities of the Company.

Diminished Capital Levels and Liquidity

If Nasdaq Proposal I is not approved, the exercise price of the Common Warrants would remain at either $0.73 or $0.74 per share, which could restrict the Purchaser’s willingness to exercise the Common Warrants, and could cause the Company to lose a meaningful source of potential funding. The lack of this potential source of funding would deny the Company the enhanced ability to execute our business plan while pursuing opportunities for further growth that this funding would provide.

Without the potential funding from the exercise of the Common Warrants, in the event our liquidity and capital resources face additional strain, the Company may be required to implement financial measures, such as cash conservation, reducing or delaying key expenditures, or scaling back certain aspects of our operations or anticipated growth initiatives, including additional workforce reductions, all of which could negatively impact our business.

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Need for Alternative Financing

If Nasdaq Proposal I is not approved, the Common Warrants may not serve as a meaningful source of potential capital to the Company, and the Company may need to seek alternative sources of financing to meet its operational and strategic needs. Such alternative sources of financing may be on terms that are less desirable than the terms of the Common Warrants. This might involve exploring alternative debt or equity financing options. However, there is no assurance that such financing would be available on commercially reasonable terms, or that it would be available at all. The inability to secure alternative financing could place the Company at a competitive and strategic disadvantage, limit its ability to capitalize on growth opportunities, and materially adversely affect the Company’s financial condition, including causing the Company to implement financial measures discussed above.

If alternative equity financing is pursued, it may involve issuing shares of our Common Stock at a potentially lower price than the exercise price of the Common Warrants, resulting in greater dilution to existing stockholders. Furthermore, any debt financing that we may obtain may come with high interest rates and restrictive covenants, increasing the Company’s cost of capital and restricting its operational flexibility.

Securities Law Matters

Nasdaq Proposal I, together with the other disclosures contained in this proxy statement, is neither an offer to sell nor a solicitation of an offer to buy any of our securities. The issuance and sale of the Common Warrants were, and the shares of our Common Stock issuable upon exercise of the Common Warrants in accordance with the terms of the Common Warrants will be, exempt from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.

No Appraisal Rights

No appraisal rights are available under the Delaware General Corporation Law, under our Amended and Restated Certificate of Incorporation, as amended, or under our Amended and Restated Bylaws with respect to Nasdaq Proposal I, and we will not independently provide stockholders with any such rights.

Vote Required for Approval and Recommendation of the Board of Directors

Approval of Nasdaq Proposal I requires that a majority of the votes cast on the proposal vote for approval. Abstentions and broker non-votes will have no effect on the outcome of Nasdaq Proposal I, because they are not votes cast.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL, FOR PURPOSES OF NASDAQ LISTING RULE 5635(D), OF THE ISSUANCE OF SHARES OF OUR COMMON STOCK UNDERLYING THE COMMON WARRANTS ISSUED BY US PURSUANT TO THE TERMS OF NOTE PURCHASE AGREEMENTS, DATED SEPTEMBER 11, 2025 AND SEPTEMBER 29, 2025, IN AMOUNTS THAT MAY EQUAL OR EXCEED 20% OF OUR COMMON STOCK OUTSTANDING.

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PROPOSAL 6:

NASDAQ PROPOSAL II:

APPROVAL, FOR PURPOSES OF NASDAQ LISTING RULE 5635(C) AND (D), OF THE ISSUANCE OF SHARES OF OUR COMMON STOCK UNDERLYING THE COMMON WARRANTS ISSUED BY US PURSUANT TO THE TERMS OF THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED NOVEMBER 5, 2025

Background

We are asking our stockholders to approve a proposal (“Nasdaq Proposal II”) relating to the issuance by the Company of shares of company Common Stock that would permit the Company to issue shares of our common stock pursuant to the Purchase Agreement (as defined below), upon the exercise of the Common Warrants which were issued to an affiliate of William W. Smith, our Executive Chairman (and CEO at the time of the transaction) (the “Affiliated Investor”), pursuant to the terms of the Purchase Agreement.

On November 5, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with the Affiliated Investor relating to a private placement (the “Private Placement”) of 2,236,136 shares of the Company’s Common Stock at a price per share of $0.6708 per share, together with common warrants to purchase up to an aggregate of 2,236,136 shares of Common Stock (the “Warrant Shares”) at an exercise price of $0.6708 per share (the “November Warrants”). Concurrently with the Private Placement, the Company consummated a registered direct offering and sale of an aggregate of 1,714,373 shares of our Common Stock at an offering price of $0.6708 per share of Common Stock (the “RDO” and together with the Private Placement, the “November Offerings”), together with warrants to purchase up to 1,714,373 shares of Common Stock of the Company (the “RDO Warrants”). Pursuant to the RDO, the shares of Common Stock were offered by the Company pursuant to a prospectus supplement dated November 5, 2025, and accompanying prospectus dated May 16, 2025, in connection with a takedown from the Company’s shelf registration statement on Form S-3 (File No. 333-287029), which was declared effective by the Securities and Exchange Commission on May 16, 2025. The RDO Warrants were exercisable on the sixth month anniversary of their issuance and expire on the five-year anniversary of the initial exercise date. The November Warrants are not exercisable unless and until the stockholders of the Company approve Nasdaq Proposal II.

Because no separate consideration was paid for the November Warrants, the shares of Common Stock issued to the Affiliated Purchaser pursuant to the Purchase Agreement may be deemed issued at a discount to the then market value of the Common Stock and therefore, may be deemed compensatory in nature. Additionally, the exercisability of the November Warrants may cause the Company to issue more than 19.9% of the Company’s outstanding shares of Common Stock pursuant to the November Offerings. The potential compensatory nature of the Private Placement transaction and the potential issuance of more than 19.9% of the Company’s outstanding Common Stock caused by the exercisability of the November Warrants requires stockholder approval in accordance with Nasdaq listing standards.

We expect to use any net proceeds received by us in connection with any exercise of the November Warrants for working capital and general corporate purposes.

Summary of the Purchase Agreement

The Purchase Agreement contains representations, warranties, and covenants made by the Company and the Affiliated Purchaser that are customary for transactions of this type. Under the Purchase Agreement, we have agreed to hold a meeting of the stockholders for the purpose of approving Nasdaq Proposal II on or before June 30, 2026. If we do not obtain approval of Nasdaq Proposal II at this Annual Meeting of our stockholders, we will call an additional stockholder meeting within ninety (90) days of this Annual Meeting and then every six months thereafter until we obtain such approval. We also agreed to prepare and file a registration statement with the SEC for the purpose of registering the resale of shares of Common Stock underlying the Common Warrants, which registration statement was declared effective by the SEC on December 12, 2025.

This discussion of the Purchase Agreement is a summary only and is qualified in its entirety by reference to the text of the Purchase Agreement, a copy of which is attached as Appendix C to this proxy statement.

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Summary of the November Warrants

Each unregistered November Warrant had an initial exercise price of $0.6708 per share and becomes exercisable on the date the stockholders of the Company approve the November Warrants. The November Warrants will expire on the five-year anniversary of date such November Warrants become exercisable. There is no established trading market for the November Warrants, and we do not expect a market to develop. We do not intend to apply for a listing of the November Warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the November Warrants will be limited.

This discussion of the November Warrants is a summary only and is qualified in its entirety by reference to the text of the form of November Warrant, which is attached as Exhibit A to Appendix C to this proxy statement.

Reasons for the Nasdaq Proposal

Our Common Stock is listed on Nasdaq and, as such, we are subject to Nasdaq listing rules. Pursuant to Nasdaq Listing Rule 5635(c), stockholder approval is required prior to the issuance of securities to officers, directors, employees, or consultants of the Company when such issuance is compensatory in nature. Because the issuance of the November Warrants may cause the Common Stock issued in the Private Placement to be deemed by Nasdaq to be issued at a discount, Nasdaq rules may treat such issuance as compensatory in nature, thus requiring stockholder approval. Additionally, in accordance with Nasdaq Listing Rule 5635(d), referred to as the “Nasdaq 20% Rule,” we are seeking stockholder approval to permit the potential issuance of more than 20% of our outstanding Common Stock upon exercise of the November Warrants, after taking into consideration applicable securities issued or issuable in connection with the November Offerings.

The Nasdaq 20% Rule requires that an issuer obtain stockholder approval prior to certain issuances of Common Stock or securities convertible into or exchangeable for Common Stock at a price less than the greater of market price or book value of such securities (on an as exercised basis) if such issuance equals 20% or more of the Common Stock or voting power of the issuer outstanding before the transaction. Since the number of shares issuable upon exercise of the November Warrants, after taking into consideration applicable securities issued pursuant to the November Offerings, would exceed 20% of our outstanding Common Stock on the date we issued closed the November Offerings, we are required to seek stockholder approval under applicable Nasdaq rules.

Possible Effects if Nasdaq Proposal II is Approved

If our stockholders approve Nasdaq Proposal II, the November Warrants will become exercisable.

Dilution

If Nasdaq Proposal II is approved, the Affiliated Purchaser may exercise the November Warrants, which may cause additional dilution to the existing stockholders of the Company. The November Warrants are exercisable for 2,236,136 shares of Common Stock at an exercise price of $0.6708. As a result of any such exercise, our existing stockholders would own a smaller percentage of our outstanding shares of Common Stock and, accordingly a smaller percentage interest in the voting power, liquidation value, and book value of the shares of Common Stock. However, there is no guarantee the Affiliated Purchaser will exercise the November Warrants.

Improved Capital Levels and Reserves

If the Affiliated Purchaser were to exercise for cash the November Warrants for the full number of shares, the proceeds we would receive from the exercise of the November Warrants would equal approximately $1.5 million and would strengthen our balance sheet, increase our capital levels and reserves, and further enhance our ability to execute our business plan while pursuing opportunities for further growth. However, there is no guarantee the Affiliated Purchaser will exercise the November Warrants.

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Valuable Investors

The Affiliated Purchaser has previously invested in the Company, and we believe such purchaser’s continued willingness to invest in the Company is valuable, particularly given our present financial condition and the anticipated timing of future revenue growth.

Possible Effects if the Nasdaq Proposal is Not Approved

Under the Purchase Agreement, we have agreed that if we do not obtain approval of Nasdaq Proposal II at this Annual Meeting of our stockholders, we will call an additional stockholder meeting within ninety (90) days thereafter and then every six months thereafter until we obtain such approval. This could result in us seeking stockholder approval every six months until stockholder approval is obtained. The costs and expenses associated with seeking such approval could be material. In addition, several further significant consequences could follow, which could materially affect the company’s financial condition, stability, and future operations, including the following.

Possible Limited Participation in Future Financings by the Affiliated Purchaser

If Nasdaq Proposal II is not approved, the Affiliated Purchaser may be less likely to participate in a meaningful way in future capital raising activities of the Company.

Diminished Capital Levels and Liquidity

If Nasdaq Proposal II is not approved, the outstanding November Warrants would remain unexercisable and the Company may lose a meaningful source of potential funding. The lack of this potential source of funding would deny the Company the enhanced ability to execute its business plan while pursuing opportunities for further growth that this funding would provide.

Without the potential funding from the exercise of the November Warrants, in the event our liquidity and capital resources face additional strain, the Company may be required to implement financial measures, such as cash conservation, reducing or delaying key expenditures, or scaling back certain aspects of our operations or anticipated growth initiatives, including additional workforce reductions, all of which could negatively impact our business.

Need for Alternative Financing

If Nasdaq Proposal II is not approved, the Common Warrants would not serve as a meaningful source of potential capital to the Company, and the Company may need to seek alternative sources of financing to meet its operational and strategic needs. Such alternative sources of financing may be on terms that are less desirable than the terms of the November Warrants. This might involve exploring alternative debt or equity financing options. However, there is no assurance that such financing would be available on commercially reasonable terms, or that it would be available at all. The inability to secure alternative financing could place the Company at a competitive and strategic disadvantage, limit its ability to capitalize on growth opportunities, and materially adversely affect the Company’s financial condition, including causing the Company to implement financial measures discussed above.

If alternative equity financing is pursued, it may involve issuing shares of our Common Stock at a potentially lower price than the exercise price of the November Warrants, resulting in greater dilution to existing stockholders. Furthermore, any debt financing that we may obtain may come with high interest rates and restrictive covenants, increasing the Company’s cost of capital and restricting its operational flexibility.

Securities Law Matters

Nasdaq Proposal II, together with the other disclosures contained in this proxy statement, is neither an offer to sell nor a solicitation of an offer to buy any of our securities. The issuance and sale of the November Warrants were, and the shares of our Common Stock issuable upon exercise of the November Warrants in accordance with the terms of the November Warrants and Purchase Agreement will be, exempt from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.

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No Appraisal Rights

No appraisal rights are available under the Delaware General Corporation Law, under our Amended and Restated Certificate of Incorporation, as amended, or under our Amended and Restated Bylaws with respect to Nasdaq Proposal II, and we will not independently provide stockholders with any such rights.

Vote Required for Approval and Recommendation of the Board of Directors

Approval of Nasdaq Proposal II requires that a majority of the votes cast on the proposal vote for approval. Abstentions and broker non-votes will have no effect on the outcome of Nasdaq Proposal II, because they are not votes cast.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL, FOR PURPOSES OF NASDAQ LISTING RULES 5635(C) AND (D), OF THE ISSUANCE OF SHARES OF OUR COMMON STOCK UNDERLYING THE COMMON WARRANTS ISSUED BY US PURSUANT TO THE TERMS OF THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED NOVEMBER 5, 2025.

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PROPOSAL 7:

REVERSE STOCK SPLIT PROPOSAL:

APPROVAL OF AN AMENDMENT TO

THE COMPANY’S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT
THE REVERSE STOCK SPLIT

Background

On March 31, 2026, subject to stockholder approval, the Company’s Board of Directors (the “Board”) approved an amendment (the “Charter Amendment”) to our amended and restated certificate of incorporation (our “Charter”) to, at the discretion of the Board, effect a reverse stock split of our Common Stock at a ratio of 1:3 to 1:10 (the “Reverse Stock Split”), with the exact ratio within such range to be determined by the Board at its discretion. The primary goal of the Reverse Stock Split is to increase the per share market price of our Common Stock to meet the minimum per share bid price requirements for continued listing on the Nasdaq Capital Market and to provide additional flexibility with respect to capital raising efforts and general corporate needs. We believe that a range of Reverse Stock Split ratios provides us with the most flexibility to achieve the desired results of the Reverse Stock Split. The Reverse Stock Split is not intended as, and will not have the effect of, a “going private transaction” covered by Rule 13e-3 promulgated under the Exchange Act. The Reverse Stock Split is not intended to modify the rights of existing stockholders in any material respect.

If the Reverse Stock Split Proposal is approved by our stockholders and the Reverse Stock Split is effected, up to every 10 shares of our outstanding Common Stock would be combined and reclassified into one share of Common Stock. The actual timing for implementation of the Reverse Stock Split would be determined by the Board based upon its evaluation as to when such action would be most advantageous to the Company and our stockholders. Notwithstanding approval of the Reverse Stock Split Proposal by our stockholders, the Board will have the sole authority to elect whether or not and when to amend our Charter to effect the Reverse Stock Split. If the Reverse Stock Split Proposal is approved by our stockholders, the Board will make a determination as to whether effecting the Reverse Stock Split is in the best interests of the Company and our stockholders in light of, among other things, the Company’s ability to increase the trading price of our Common Stock to meet the minimum stock price standards of Nasdaq without effecting the Reverse Stock Split, the per share price of the Common Stock immediately prior to the Reverse Stock Split, the expected stability of the per share price of the Common Stock following the Reverse Stock Split and the need to increase flexibility with respect to potential capital raising efforts. If the Board determines that it is in the best interests of the Company and its stockholders to effect the Reverse Stock Split, it will convene to determine the ratio of the Reverse Stock Split. For additional information concerning the factors the Board will consider in deciding whether to effect the Reverse Stock Split, see below under the headings “Determination of the Reverse Stock Split Ratio” and “Board Discretion to Effect the Reverse Stock Split.”

The text of the proposed Charter Amendment to effect the Reverse Stock Split is included as Appendix D to this Proxy Statement. If the Reverse Stock Split Proposal is approved by the Company’s stockholders, the Company will have the authority to file the Charter Amendment with the Secretary of State of the State of Delaware, which will become effective upon its filing; provided, however, that the Charter Amendment is subject to revision to include such changes as may be required by the Office of the Secretary of State of the State of Delaware and as the Board deems necessary and advisable. The Board has determined that the Charter Amendment is advisable and in the best interests of the Company and its stockholders and has submitted the Charter Amendment for consideration by our stockholders at this Annual Meeting.

Purpose and Effect of the Reverse Stock Split and Charter Amendment

We are submitting this proposal to our stockholders for approval to increase the trading price of our Common Stock to meet the minimum per share bid price requirement for continued listing on the Nasdaq Capital Market and to give the Company additional flexibility with respect to capital raising efforts. We believe increasing the trading price of our Common Stock may assist in our capital-raising efforts by making our Common Stock more attractive to a broader range of investors. The Board also believes that some potential employees are less likely to work for the Company if we have a low stock price or are no longer listed on the Nasdaq Capital Market, irrespective of the size of our overall market capitalization.

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Additionally, since we are not adjusting the number of shares of Common Stock that the Company is authorized to issue, the Reserve Stock Split will have the benefit of increasing the number of shares of Common Stock the Company could issue. Currently, as of the Record Date, the Company has 100,000,000 authorized shares of Common Stock, of which [_____] are issued and outstanding and [_____] of which are reserved for issuance under outstanding equity awards or convertible securities or otherwise reserved for issuance under our equity incentive plan. Therefore, the Company currently has the ability to issue [_____] additional shares of Common Stock as of the Record Date. Accordingly, we believe that the Reverse Stock Split is in our stockholders’ best interests.

Nasdaq Requirement for Continued Listing. On the date of the mailing of this proxy statement, our Common Stock was listed on the Nasdaq Capital Market under the symbol “SMSI.” On June 23, 2025, the Company received a written notice from the staff of Nasdaq advising that the Company was not in compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”) as a result of the closing bid price of the Company’s Common Stock having been below $1.00 for thirty consecutive business days. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was granted a period of 180 calendar days from the notification date, or until December 22, 2025, to regain compliance with the Minimum Bid Price Requirement. On December 23, 2025, the Company received a written notice from Nasdaq granting an additional 180 days, or until June 22, 2026, to regain compliance with the Minimum Bid Price Requirement. If at any time before June 22, 2026, the closing bid price of the Company’s Common Stock is at least $1.00 per share for a minimum of ten consecutive business days, unless Nasdaq exercises its discretion to extend this ten-day period, Nasdaq will provide written confirmation stating that the Company has achieved compliance with the Minimum Bid Price Requirement.

We believe that the Reverse Stock Split, if necessary, is currently our best option to meet the criteria to satisfy the Minimum Bid Price Requirement for continued listing on the Nasdaq Capital Market. On the Record Date, the last reported sale price of our Common Stock on the Nasdaq Capital Market was $[___] per share. A decrease in the number of issued shares of Common Stock resulting from the Reverse Stock Split should, absent other factors, cause the per share market price of our Common Stock to trade above the required price. However, we cannot provide any assurance that (i) we will regain compliance with the Minimum Bid Price Requirement, or other listing requirements, of the Nasdaq Capital Market or (ii) even if we do, that our minimum bid price would remain over the Minimum Bid Price Requirement of the Nasdaq Capital Market following the Reverse Stock Split. We have in the past, and may in the future, be unable to comply with certain of the listing standards that we are required to meet to maintain the listing of our Common Stock on the Nasdaq Capital Market.

Increased Credibility and Investor Interest. In addition, as noted above, we believe that the Reverse Stock Split and the resulting anticipated increase in the per share price of our Common Stock could encourage increased investor interest in our Common Stock and promote greater liquidity for our stockholders. The Board believes that continued listing on the Nasdaq Capital Market provides overall credibility to an investment in our stock, given the stringent listing and disclosure requirements of the Nasdaq Capital Market. If our common stock is delisted from the Nasdaq Capital Market, we cannot provide assurance that our Common Stock would be listed on another national securities exchange, a national quotation service, the over-the-counter markets or the pink sheets. Delisting from the Nasdaq Capital Market, or even the issuance of a notice of potential delisting, could also result in negative publicity, make it more difficult for us to raise additional capital, adversely affect the market liquidity of our securities, decrease securities analysts’ coverage of us or diminish investor, supplier and employee confidence.

A greater price per share of our Common Stock could allow a broader range of institutions to invest in our Common Stock (namely, funds that are prohibited or discouraged from buying stocks with a price below a certain threshold), potentially increasing marketability, trading volume and liquidity of our Common Stock. Many institutional investors view stocks trading at low prices as unduly speculative in nature and, as a result, avoid investing in such stocks. We believe that the Reverse Stock Split will provide flexibility to make our Common Stock a more attractive investment for these institutional investors, which we believe will enhance the liquidity for the holders of our Common Stock and may facilitate future sales of our Common Stock. The Reverse Stock Split could also increase interest in our Common Stock for analysts and brokers who may otherwise have policies that discourage or prohibit them from following or recommending companies with low stock prices. Additionally, because brokers’ commissions on transactions in low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of our Common Stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were substantially higher.

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Ability to meet Present Capital Needs and Future Anticipated Growth. As discussed below under the heading “Effects of the Reverse Stock Split on the Number of Shares of Common Stock Available for Future Issuance” the Reverse Stock Split will have the effect of increasing the number of shares of Common Stock that we have the ability to issue. The availability of additional shares of Common Stock may provide us with the flexibility to consider and respond to future business opportunities and needs as they arise, including public or private financings, subscription rights offerings, mergers, acquisitions, stock dividends, stock splits and the granting of equity incentive awards. The Reverse Stock Split may permit us to undertake certain of the foregoing actions without the delay and expense associated with holding a meeting of stockholders to obtain stockholder approval each time such an opportunity arises that would require the issuance of shares of Common Stock.

The Board believes it is important for the Company to maintain its flexibility in accessing the equity capital markets. As we have done in the past, we intend to raise capital through equity or debt financing to fund our current operations and support growth of our products. Such additional financing could take a variety of forms, including a private investment in our Common Stock or preferred stock, convertible debt securities or other debt financing, an at-the-market offering of our Common Stock, rights offering or other public offering of equity or debt securities. The availability of additional equity or debt financing will depend on the continued execution of our business plan, our ability to demonstrate a path to long-term profitable growth, as well as market conditions. There can be no assurance that such equity or debt financing will be available in amounts or on terms acceptable to us, if at all.

The sale of additional equity would result in dilution to our stockholders, which could be significant. The incurrence of debt financing would result in additional debt service obligations and the instruments governing such debt could provide for restrictive operating and financial covenants, security interests on our assets, and other terms that could be adverse to our current stockholders and other stakeholders. Failure to raise additional capital through equity or debt financing could have a material adverse effect on our ability to meet our short and long-term liquidity needs and achieve our business objectives.

As previously noted, we do not intend to use the Reverse Stock Split as a part of or a first step in a “going private” transaction within the meaning of Rule 13e-3 of the Exchange Act. There is no plan or contemplated plan by us to take ourselves private at the date of this Proxy Statement.

Employee Retention. The Board believes that the Company’s employees and directors who are compensated in the form of our equity-based securities may be less incentivized and invested in the Company if we are no longer listed on the Nasdaq Capital Market. Accordingly, the Board believes that maintaining Nasdaq listing qualifications for our Common Stock can help attract, retain, and motivate employees.

Risks Associated with the Reverse Stock Split

The Reverse Stock Split May Not Result in an Increased Price of our Common Stock over the Medium or Long-Term. As noted above one principal purpose of the Reverse Stock Split is to increase the trading price of our Common Stock to meet the minimum stock price standards of the Nasdaq Capital Market. However, the effect of the Reverse Stock Split on the market price of our Common Stock cannot be predicted with any certainty, and we cannot assure you that the Reverse Stock Split will accomplish this objective for any meaningful period of time, or at all. While we expect that the reduction in the number of outstanding shares of Common Stock will proportionally increase the market price of our Common Stock, we cannot assure you that the Reverse Stock Split will increase the market price of our Common Stock by a multiple of the Reverse Stock Split ratio, or result in any permanent or sustained increase in the market price of our Common Stock. The market price of our Common Stock may be affected by other factors which may be unrelated to the number of shares outstanding, including the Company’s business and financial performance, general market conditions, and prospects for future success.

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The Reverse Stock Split May Decrease the Liquidity of our Common Stock. The Board believes that the Reverse Stock Split may result in an increase in the market price of our Common Stock, which could lead to increased interest in our Common Stock and possibly promote greater liquidity for our stockholders. However, the Reverse Stock Split will also reduce the total number of outstanding shares of Common Stock, which may lead to reduced trading and a smaller number of market makers for our Common Stock, particularly if the price per share of our Common Stock does not increase as a result of the Reverse Stock Split.

The Reverse Stock Split May Result in Some Stockholders Owning “Odd Lots” That May Be More Difficult to Sell or Require Greater Transaction Costs per Share to Sell. If the Reverse Stock Split is implemented, it will increase the number of stockholders who own “odd lots” of less than 100 shares of Common Stock. A purchase or sale of less than 100 shares of Common Stock (an “odd lot” transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those stockholders who own fewer than 100 shares of Common Stock following the Reverse Stock Split may be required to pay higher transaction costs if they sell their Common Stock.

The Reverse Stock Split May Lead to a Decrease in our Overall Market Capitalization. The Reverse Stock Split may be viewed negatively by the market and, consequently, could lead to a decrease in our overall market capitalization. If the per share market price of our Common Stock does not increase in proportion to the Reverse Stock Split ratio, or following such increase does not maintain or exceed such price, then the value of our Company, as measured by our market capitalization, will be reduced. Additionally, any reduction in our market capitalization may be magnified as a result of the smaller number of total shares of Common Stock outstanding following the Reverse Stock Split.

The Reverse Stock Split May Lead to Additional Dilution to the Stockholders. Additionally, in the event that the Reverse Stock Split is effected, certain outstanding warrants to purchase Common Stock are subject to adjustment such that the exercise price of such warrants will be reduced and the number of shares issuable upon exercise of those warrants will be proportionately increased if the market price of our Common Stock is less than the exercise price of such warrant (after giving effect to the split) during a period before and after the effective date of the Reverse Stock Split (the “Reverse Split Warrant Adjustment”). Currently (and assuming Nasdaq Proposal I is approved), there are warrants outstanding to purchase 4,687,465 shares of Common Stock, each with an exercise price of $0.6708 per share, that could be further adjusted pursuant to the Reverse Split Warrant Adjustment. Therefore, those warrants could be adjusted in a manner that is more advantageous to those warrant holders and detrimental to all other stockholders. If those warrant holders exercise their warrants following the Reverse Split Warrant Adjustment, our existing stockholders would own a smaller percentage of our outstanding shares of Common Stock and, accordingly, a smaller percentage interest in the voting power, liquidation value, and book value of the shares of Common Stock. However, there is no guarantee that a Reverse Split Warrant Adjustment will occur or that the holders of those warrants will exercise those warrants even if an adjustment did occur.

Potential Consequences if the Reverse Stock Split Proposal is Not Approved

If the Reverse Stock Split Proposal is not approved by our stockholders, our Board will not have the authority to effect the Charter Amendment to, among other things, facilitate the continued listing of our Common Stock on the Nasdaq Capital Market by increasing the per share trading price of our Common Stock to help ensure a share price high enough to satisfy the $1.00 per share Minimum Bid Price Requirement. Any inability of our Board to effect the Reverse Stock Split could expose us to delisting from the Nasdaq Capital Market. If stockholder approval for the Reverse Stock Split is not obtained, the number of shares of Common Stock that are issued will not change and the anticipated benefits of the Reverse Stock Split described above will not be achieved.

Treatment of Fractional Shares in the Reverse Stock Split

The Company will not issue fractional certificates for post-reverse stock split shares in connection with the Reverse Stock Split. In lieu of issuing fractional shares, stockholders of record who otherwise would be entitled to receive fractional shares will be entitled to rounding up of the fractional share to the nearest whole number.

Determination of the Reverse Stock Split Ratio

The Board believes that stockholder approval of a range of potential Reverse Stock Split ratios is in the best interests of our Company and stockholders because it is not possible to predict market conditions at the time the Reverse Stock Split would be implemented. We believe that a range of Reverse Stock Split ratios provides us with the most flexibility to achieve the desired results of the Reverse Stock Split. The Reverse Stock Split ratio to be selected by our Board will not be more than 1-for-10.

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The selection of the specific Reverse Stock Split ratio will be based on several factors, including, among other things:

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SEC Form PRE 14A filed by Smith Micro Software Inc.