Delaware | 001-35525 | 33-0029027 | ||||||
(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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5800 Corporate Drive
Pittsburgh, PA
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15237 | ||||
(Address of Principal Executive Offices)
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(Zip Code) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class |
Trading
Symbol(s)
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Name of each exchange on which registered | ||||||||||||
Common Stock, par value $0.001 per share | SMSI | NASDAQ |
Exhibit | Description | ||||
99.1 |
Press Release issued on August 9, 2023 |
||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Smith Micro Software, Inc. | ||||||||
Date: August 9, 2023 |
By: | /s/ James M. Kempton | ||||||
James M. Kempton | ||||||||
Vice President and Chief Financial Officer |
Smith Micro Software Second Quarter 2023 Financial Results |
Page 2 |
Smith Micro Software Second Quarter 2023 Financial Results |
Page 3 |
Smith Micro Software Second Quarter 2023 Financial Results |
Page 4 |
Smith Micro Software, Inc. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(in thousands except share and par value data) | |||||||||||
June 30, 2023 |
December 31, 2022 |
||||||||||
(unaudited) | (audited) | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 6,417 | $ | 14,026 | |||||||
Accounts receivable, net of allowance for doubtful accounts of $3 and $3 (2023 and 2022, respectively) |
11,871 | 10,501 | |||||||||
Prepaid expenses and other current assets | 3,351 | 1,983 | |||||||||
Total current assets | 21,639 | 26,510 | |||||||||
Equipment and improvements, net | 1,117 | 1,498 | |||||||||
Right-of-use assets | 3,033 | 3,722 | |||||||||
Other assets | 485 | 490 | |||||||||
Intangible assets, net | 33,355 | 36,320 | |||||||||
Goodwill | 35,041 | 35,041 | |||||||||
Total assets | $ | 94,670 | $ | 103,581 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 3,343 | $ | 3,236 | |||||||
Accrued payroll and benefits | 2,708 | 3,883 | |||||||||
Current operating lease liabilities | 1,454 | 1,441 | |||||||||
Other current liabilities | 1,829 | 1,589 | |||||||||
Current portion of convertible notes payable | 7,062 | 9,007 | |||||||||
Derivative liabilities | 217 | 1,575 | |||||||||
Total current liabilities | 16,613 | 20,731 | |||||||||
Non-current liabilities: | |||||||||||
Warrant liabilities | 1,194 | 3,317 | |||||||||
Operating lease liabilities | 2,196 | 2,976 | |||||||||
Deferred tax liabilities, net | 178 | 178 | |||||||||
Total non-current liabilities | 3,568 | 6,471 | |||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity: | |||||||||||
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 65,202,050 and 56,197,910 shares issued and outstanding (2023 and 2022, respectively) |
65 | 56 | |||||||||
Additional paid-in capital | 368,527 | 357,875 | |||||||||
Accumulated comprehensive deficit | (294,103) | (281,552) | |||||||||
Total stockholders’ equity | 74,489 | 76,379 | |||||||||
Total liabilities and stockholders' equity | $ | 94,670 | $ | 103,581 |
Smith Micro Software Second Quarter 2023 Financial Results |
Page 5 |
Smith Micro Software, Inc. | |||||||||||||||||||||||
Consolidated Statement of Operations | |||||||||||||||||||||||
(in thousands except share data) | |||||||||||||||||||||||
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||
Revenues | $ | 10,338 | $ | 12,674 | $ | 21,268 | $ | 25,409 | |||||||||||||||
Cost of revenues (including depreciation of $13, $27, $27, and $60 in the three and six months ended June 30, 2023 and 2022, respectively) |
2,589 | 3,617 | 5,871 | 7,253 | |||||||||||||||||||
Gross profit | 7,749 | 9,057 | 15,397 | 18,156 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and marketing | 2,628 | 3,720 | 6,182 | 6,701 | |||||||||||||||||||
Research and development | 3,705 | 8,080 | 9,573 | 15,346 | |||||||||||||||||||
General and administrative | 3,040 | 3,753 | 6,515 | 7,677 | |||||||||||||||||||
Depreciation and amortization | 1,620 | 1,877 | 3,305 | 3,844 | |||||||||||||||||||
Total operating expenses | 10,993 | 17,430 | 25,575 | 33,568 | |||||||||||||||||||
Operating loss | (3,244) | (8,373) | (10,178) | (15,412) | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Change in fair value of warrant and derivative liabilities | 429 | — | 3,413 | — | |||||||||||||||||||
Loss on derecognition of debt | (775) | — | (1,402) | — | |||||||||||||||||||
Interest (expense) income, net | (2,037) | 2 | (4,297) | (2) | |||||||||||||||||||
Other expense, net | (36) | (91) | (76) | (32) | |||||||||||||||||||
Loss before provision for income taxes | (5,663) | (8,462) | (12,540) | (15,446) | |||||||||||||||||||
Provision for income tax expense | 2 | 31 | 11 | 50 | |||||||||||||||||||
Net loss | $ | (5,665) | $ | (8,493) | $ | (12,551) | $ | (15,496) | |||||||||||||||
Loss per share: | |||||||||||||||||||||||
Basic and diluted | $ | (0.09) | $ | (0.15) | $ | (0.21) | $ | (0.28) | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic and diluted | 62,453 | 55,183 | 59,726 | 55,844 |
Smith Micro Software Second Quarter 2023 Financial Results |
Page 6 |
Smith Micro Software, Inc. | |||||||||||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||
Operating activities: | |||||||||||||||||||||||
Net loss | $ | (5,665) | $ | (8,493) | $ | (12,551) | $ | (15,496) | |||||||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 1,633 | 1,904 | 3,332 | 3,902 | |||||||||||||||||||
Non-cash lease expense | 345 | 335 | 689 | 673 | |||||||||||||||||||
Change in fair value of warrant and derivative liabilities | (429) | — | (3,413) | — | |||||||||||||||||||
Loss on derecognition of debt | 775 | — | 1,402 | — | |||||||||||||||||||
Amortization of debt discount and issuance costs | 1,938 | — | 4,055 | — | |||||||||||||||||||
Provision for doubtful accounts | — | (5) | — | — | |||||||||||||||||||
Stock based compensation | 1,030 | 1,688 | 1,975 | 2,754 | |||||||||||||||||||
Gain on disposal of assets | 14 | — | 11 | — | |||||||||||||||||||
Changes in operating accounts: | |||||||||||||||||||||||
Accounts receivable | (688) | 497 | (1,373) | (975) | |||||||||||||||||||
Prepaid expenses and other assets | (94) | (309) | 69 | (527) | |||||||||||||||||||
Accounts payable and accrued liabilities | (1,872) | (640) | (2,309) | (1,812) | |||||||||||||||||||
Other liabilities | 857 | (15) | 622 | (146) | |||||||||||||||||||
Net cash used in operating activities | (2,156) | (5,038) | (7,491) | (11,627) | |||||||||||||||||||
Investing activities: | |||||||||||||||||||||||
Capital expenditures, net | — | (49) | 3 | (112) | |||||||||||||||||||
Other investing activities | 71 | 71 | 71 | 83 | |||||||||||||||||||
Net cash provided by (used in) investing activities | 71 | 22 | 74 | (29) | |||||||||||||||||||
Financing activities: | |||||||||||||||||||||||
Proceeds from financing arrangements | — | 750 | 442 | 1,291 | |||||||||||||||||||
Repayments of financing arrangements | (222) | (210) | (642) | (391) | |||||||||||||||||||
Other financing activities | — | 2 | 8 | 35 | |||||||||||||||||||
Net cash (used in) provided by financing activities | (222) | 542 | (192) | 935 | |||||||||||||||||||
Net decrease in cash and cash equivalents | (2,307) | (4,474) | (7,609) | (10,721) | |||||||||||||||||||
Cash and cash equivalents, beginning of period | $ | 8,724 | $ | 9,831 | $ | 14,026 | $ | 16,078 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 6,417 | $ | 5,357 | $ | 6,417 | $ | 5,357 |
Smith Micro Software Second Quarter 2023 Financial Results |
Page 7 |
Smith Micro Software, Inc. | ||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Results | ||||||||||||||||||||||||||
(in thousands, except per share data) - unaudited | ||||||||||||||||||||||||||
GAAP | Stock Compensation | Intangibles Amortization | Depreciation | Fair Value Adjustments | Amortization of Debt Issuance Costs and Discount | Personnel Severance and Reorganization Activities | Non-GAAP | |||||||||||||||||||
Three Months Ended June 30, 2023 |
||||||||||||||||||||||||||
Gross profit | $ | 7,749 | $ | — | $ | — | $ | 13 | $ | — | $ | — | $ | — | $ | 7,762 | ||||||||||
Selling and marketing | 2,628 | (190) | — | — | — | — | — | 2,438 | ||||||||||||||||||
Research and development | 3,705 | (240) | — | — | — | — | (9) | 3,456 | ||||||||||||||||||
General and administrative | 3,040 | (600) | — | — | — | — | (75) | 2,365 | ||||||||||||||||||
Depreciation and amortization | 1,620 | — | (1,491) | (129) | — | — | — | — | ||||||||||||||||||
Total operating expenses | 10,993 | (1,030) | (1,491) | 142 | — | — | (84) | 8,259 | ||||||||||||||||||
Loss before provision for income taxes | (5,663) | 1,030 | 1,491 | 142 | 346 | 1,938 | 84 | (632) | ||||||||||||||||||
Net loss | (5,665) | 1,030 | 1,491 | 142 | 346 | 1,938 | 84 | (634) | ||||||||||||||||||
(Loss) earnings per share: basic and diluted | (0.09) | 0.02 | 0.02 | — | 0.01 | 0.03 | — | (0.01) | ||||||||||||||||||
Three Months Ended June 30, 2022 |
||||||||||||||||||||||||||
Gross profit | $ | 9,057 | $ | 1 | $ | — | $ | 27 | $ | — | $ | — | $ | — | $ | 9,085 | ||||||||||
Selling and marketing | 3,720 | (73) | — | — | — | — | (721) | 2,926 | ||||||||||||||||||
Research and development | 8,080 | (268) | — | — | — | — | — | 7,812 | ||||||||||||||||||
General and administrative | 3,753 | (767) | — | — | — | — | — | 2,986 | ||||||||||||||||||
Depreciation and amortization | 1,877 | — | (1,577) | (300) | — | — | — | — | ||||||||||||||||||
Total operating expenses | 17,430 | (1,108) | (1,577) | (300) | — | — | (721) | 13,724 | ||||||||||||||||||
Loss before provision for income taxes | (8,462) | 1,109 | 1,577 | 327 | — | — | 721 | (4,728) | ||||||||||||||||||
Net loss | (8,493) | 1,109 | 1,577 | 327 | — | — | 721 | (4,759) | ||||||||||||||||||
(Loss) earnings per share: basic and diluted | (0.15) | 0.02 | 0.03 | 0.01 | — | — | 0.01 | (0.09) | ||||||||||||||||||
Smith Micro Software Second Quarter 2023 Financial Results |
Page 8 |
Smith Micro Software, Inc. | ||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Results | ||||||||||||||||||||||||||
(in thousands, except per share data) - unaudited | ||||||||||||||||||||||||||
GAAP | Stock Compensation | Intangibles Amortization | Depreciation | Fair Value Adjustments | Amortization of Debt Issuance Costs and Discount | Personnel Severance and Reorganization Activities | Non-GAAP | |||||||||||||||||||
Six Months Ended June 30, 2023 |
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Gross profit | $ | 15,397 | $ | — | $ | — | $ | 27 | $ | — | $ | — | $ | 183 | $ | 15,607 | ||||||||||
Selling and marketing | 6,182 | (353) | — | — | — | — | (93) | 5,736 | ||||||||||||||||||
Research and development | 9,573 | (464) | — | — | — | — | (471) | 8,638 | ||||||||||||||||||
General and administrative | 6,515 | (1,159) | — | — | — | — | (210) | 5,146 | ||||||||||||||||||
Depreciation and amortization | 3,305 | — | (2,965) | (340) | — | — | — | — | ||||||||||||||||||
Total operating expenses | 25,575 | (1,976) | (2,965) | (340) | — | — | (774) | 19,520 | ||||||||||||||||||
Loss before provision for income taxes | (12,540) | 1,976 | 2,965 | 367 | (2,011) | 4,055 | 957 | (4,231) | ||||||||||||||||||
Net loss | (12,551) | 1,976 | 2,965 | 367 | (2,011) | 4,055 | 957 | (4,242) | ||||||||||||||||||
(Loss) earnings per share: basic and diluted | (0.21) | 0.03 | 0.05 | 0.01 | (0.03) | 0.07 | 0.02 | (0.07) | ||||||||||||||||||
Six Months Ended June 30, 2022 |
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Gross profit | $ | 18,156 | $ | 1 | $ | — | $ | 60 | $ | — | $ | — | $ | — | $ | 18,217 | ||||||||||
Selling and marketing expenses | 6,701 | (157) | — | — | — | — | (721) | 5,823 | ||||||||||||||||||
Research and development expenses | 15,346 | (529) | — | — | — | — | — | 14,817 | ||||||||||||||||||
General and administrative expenses | 7,677 | (1,488) | — | — | — | — | — | 6,189 | ||||||||||||||||||
Change in fair value of contingent consideration | — | — | — | — | — | — | — | — | ||||||||||||||||||
Depreciation and amortization | 3,844 | — | (3,221) | (623) | — | — | — | — | ||||||||||||||||||
Total operating expenses | 33,568 | (2,174) | (3,221) | (623) | — | — | (721) | 26,829 | ||||||||||||||||||
(Loss) Income before provision for income taxes | (15,446) | 2,175 | 3,221 | 683 | — | — | 721 | (8,646) | ||||||||||||||||||
Net (loss) income | (15,496) | 2,175 | 3,221 | 683 | — | — | 721 | (8,696) | ||||||||||||||||||
(Loss) earnings per share: basic and diluted | (0.28) | 0.04 | 0.06 | 0.01 | — | — | 0.01 | (0.16) |