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 November 8, 2023 |
||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Smith Micro Software, Inc. | ||||||||
Date: November 8, 2023 |
By: | /s/ James M. Kempton | ||||||
James M. Kempton | ||||||||
Vice President and Chief Financial Officer |
Smith Micro Software Third Quarter 2023 Financial Results |
Page 2 |
Smith Micro Software Third Quarter 2023 Financial Results |
Page 3 |
Smith Micro Software Third Quarter 2023 Financial Results |
Page 4 |
Smith Micro Software, Inc. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(in thousands except share and par value data) | |||||||||||
September 30, 2023 |
December 31, 2022 |
||||||||||
(unaudited) | (audited) | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 7,982 | $ | 14,026 | |||||||
Accounts receivable, net of allowance for doubtful accounts of $3 and $3 (2023 and 2022, respectively) |
10,290 | 10,501 | |||||||||
Prepaid expenses and other current assets | 2,940 | 1,983 | |||||||||
Total current assets | 21,212 | 26,510 | |||||||||
Equipment and improvements, net | 998 | 1,498 | |||||||||
Right-of-use assets | 2,686 | 3,722 | |||||||||
Other assets | 475 | 490 | |||||||||
Intangible assets, net | 31,901 | 36,320 | |||||||||
Goodwill | 35,041 | 35,041 | |||||||||
Total assets | $ | 92,313 | $ | 103,581 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 3,027 | $ | 3,236 | |||||||
Accrued payroll and benefits | 2,502 | 3,883 | |||||||||
Current operating lease liabilities | 1,434 | 1,441 | |||||||||
Other current liabilities | 1,714 | 1,589 | |||||||||
Current portion of convertible notes payable | 3,456 | 9,007 | |||||||||
Derivative liabilities | 46 | 1,575 | |||||||||
Total current liabilities | 12,179 | 20,731 | |||||||||
Non-current liabilities: | |||||||||||
Warrant liabilities | 1,278 | 3,317 | |||||||||
Operating lease liabilities | 1,787 | 2,976 | |||||||||
Deferred tax liabilities, net | 178 | 178 | |||||||||
Total non-current liabilities | 3,243 | 6,471 | |||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity: | |||||||||||
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 70,384,838 and 56,197,910 shares issued and outstanding (2023 and 2022, respectively) |
70 | 56 | |||||||||
Additional paid-in capital | 376,057 | 357,875 | |||||||||
Accumulated comprehensive deficit | (299,236) | (281,552) | |||||||||
Total stockholders’ equity | 76,891 | 76,379 | |||||||||
Total liabilities and stockholders' equity | $ | 92,313 | $ | 103,581 |
Smith Micro Software Third Quarter 2023 Financial Results |
Page 5 |
Smith Micro Software, Inc. | |||||||||||||||||||||||
Consolidated Statement of Operations | |||||||||||||||||||||||
(in thousands except share data) | |||||||||||||||||||||||
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||
Revenues | $ | 11,001 | $ | 11,699 | $ | 32,269 | $ | 37,108 | |||||||||||||||
Cost of revenues (including depreciation of $12, $25, $40, and $85 in the three and nine months ended September 30, 2023 and 2022, respectively) |
2,528 | 3,629 | 8,400 | 10,882 | |||||||||||||||||||
Gross profit | 8,473 | 8,070 | 23,869 | 26,226 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling and marketing | 2,449 | 2,986 | 8,631 | 9,687 | |||||||||||||||||||
Research and development | 3,704 | 7,409 | 13,276 | 22,756 | |||||||||||||||||||
General and administrative | 2,934 | 4,208 | 9,448 | 11,885 | |||||||||||||||||||
Depreciation and amortization | 1,567 | 1,822 | 4,872 | 5,665 | |||||||||||||||||||
Total operating expenses | 10,654 | 16,425 | 36,227 | 49,993 | |||||||||||||||||||
Operating loss | (2,181) | (8,355) | (12,358) | (23,767) | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Change in fair value of warrant and derivative liabilities | 73 | 3,457 | 3,486 | 3,457 | |||||||||||||||||||
Loss on derecognition of debt | (1,583) | — | (2,985) | — | |||||||||||||||||||
Interest expense, net | (1,443) | (896) | (5,740) | (898) | |||||||||||||||||||
Other income (expense), net | 15 | 9 | (62) | (22) | |||||||||||||||||||
Loss before provision for income taxes | (5,119) | (5,785) | (17,659) | (21,230) | |||||||||||||||||||
Provision for income tax expense | 14 | 27 | 25 | 77 | |||||||||||||||||||
Net loss | $ | (5,133) | $ | (5,812) | $ | (17,684) | $ | (21,307) | |||||||||||||||
Loss per share: | |||||||||||||||||||||||
Basic and diluted | $ | (0.08) | $ | (0.10) | $ | (0.28) | $ | (0.39) | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic and diluted | 67,354 | 55,722 | 62,297 | 55,140 |
Smith Micro Software Third Quarter 2023 Financial Results |
Page 6 |
Smith Micro Software, Inc. | |||||||||||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||
Operating activities: | |||||||||||||||||||||||
Net loss | $ | (5,133) | $ | (5,812) | $ | (17,684) | $ | (21,307) | |||||||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 1,580 | 1,849 | 4,912 | 5,751 | |||||||||||||||||||
Non-cash lease expense | (82) | (220) | (160) | (374) | |||||||||||||||||||
Non-cash transaction costs including amortization of debt discount and issuance costs | 1,343 | 1,422 | 5,398 | 1,422 | |||||||||||||||||||
Change in fair value of warrant and derivative liabilities | (73) | (3,457) | (3,486) | (3,457) | |||||||||||||||||||
Loss on derecognition of debt | 1,583 | — | 2,985 | — | |||||||||||||||||||
Stock based compensation | 1,341 | 1,095 | 3,316 | 3,849 | |||||||||||||||||||
Loss on disposal of assets | 1 | 31 | 12 | 31 | |||||||||||||||||||
Changes in operating accounts: | |||||||||||||||||||||||
Accounts receivable | 1,581 | 2,083 | 208 | 1,108 | |||||||||||||||||||
Prepaid expenses and other assets | 151 | 713 | 220 | 186 | |||||||||||||||||||
Accounts payable and accrued liabilities | (682) | (540) | (2,224) | (1,526) | |||||||||||||||||||
Other liabilities | (69) | (15) | 553 | (161) | |||||||||||||||||||
Net cash provided by (used in) operating activities |
1,541 | (2,851) | (5,950) | (14,478) | |||||||||||||||||||
Investing activities: | |||||||||||||||||||||||
Capital expenditures, net | (8) | 27 | (5) | (85) | |||||||||||||||||||
Other investing activities | — | 11 | 71 | 94 | |||||||||||||||||||
Net cash (used in) provided by investing activities |
(8) | 38 | 66 | 9 | |||||||||||||||||||
Financing activities: | |||||||||||||||||||||||
Proceeds from notes and warrants offering | — | 15,000 | — | 15,000 | |||||||||||||||||||
Proceeds from stock and warrants offering | — | 3,000 | — | 3,000 | |||||||||||||||||||
Stock, notes, and warrants offering costs | — | (1,227) | — | (1,227) | |||||||||||||||||||
Proceeds from financing arrangements | 539 | 250 | 981 | 1,541 | |||||||||||||||||||
Repayments of financing arrangements | (514) | (587) | (1,156) | (978) | |||||||||||||||||||
Other financing activities | 7 | 21 | 15 | 56 | |||||||||||||||||||
Net cash provided by (used in) financing activities |
32 | 16,457 | (160) | 17,392 | |||||||||||||||||||
Net increase (decrease) in cash and cash equivalents |
1,565 | 13,644 | (6,044) | 2,923 | |||||||||||||||||||
Cash and cash equivalents, beginning of period | $ | 6,417 | $ | 5,357 | $ | 14,026 | $ | 16,078 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 7,982 | $ | 19,001 | $ | 7,982 | $ | 19,001 |
Smith Micro Software Third 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 September 30, 2023 |
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Gross profit | $ | 8,473 | $ | — | $ | — | $ | 12 | $ | — | $ | — | $ | — | $ | 8,485 | ||||||||||
Selling and marketing | 2,449 | (300) | — | — | — | — | — | 2,149 | ||||||||||||||||||
Research and development | 3,704 | (290) | — | — | — | — | — | 3,414 | ||||||||||||||||||
General and administrative | 2,934 | (749) | — | — | — | — | — | 2,185 | ||||||||||||||||||
Depreciation and amortization | 1,567 | — | (1,454) | (113) | — | — | — | — | ||||||||||||||||||
Total operating expenses | 10,654 | (1,339) | (1,454) | (113) | — | — | — | 7,748 | ||||||||||||||||||
(Loss) income before provision for income taxes | (5,119) | 1,339 | 1,454 | 125 | 1,510 | 1,343 | — | 652 | ||||||||||||||||||
Net (loss) income | (5,133) | 1,339 | 1,454 | 125 | 1,510 | 1,343 | — | 638 | ||||||||||||||||||
(Loss) earnings per share: basic | (0.08) | 0.02 | 0.02 | — | 0.02 | 0.02 | — | 0.01 | ||||||||||||||||||
(Loss) earnings per share: diluted | (0.07) | 0.02 | 0.02 | — | 0.02 | 0.02 | — | 0.01 | ||||||||||||||||||
Three Months Ended September 30, 2022 |
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Gross profit | $ | 8,070 | $ | — | $ | — | $ | 25 | $ | — | $ | — | $ | — | $ | 8,095 | ||||||||||
Selling and marketing | 2,986 | (180) | — | — | — | — | (49) | 2,757 | ||||||||||||||||||
Research and development | 7,409 | (279) | — | — | — | — | — | 7,130 | ||||||||||||||||||
General and administrative | 4,208 | (636) | — | — | — | (630) | (3) | 2,939 | ||||||||||||||||||
Depreciation and amortization | 1,822 | — | (1,545) | (277) | — | — | — | — | ||||||||||||||||||
Total operating expenses | 16,425 | (1,095) | (1,545) | (277) | — | (630) | (52) | 12,826 | ||||||||||||||||||
(Loss) income before provision for income taxes | (5,785) | 1,095 | 1,545 | 302 | (3,457) | 1,421 | 52 | (4,827) | ||||||||||||||||||
Net (loss) income | (5,812) | 1,095 | 1,545 | 302 | (3,457) | 1,421 | 52 | (4,854) | ||||||||||||||||||
(Loss) earnings per share: basic and diluted | (0.10) | 0.02 | 0.03 | 0.01 | (0.06) | 0.03 | — | (0.09) | ||||||||||||||||||
Smith Micro Software Third 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 | |||||||||||||||||||
Nine Months Ended September 30, 2023 |
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Gross profit | $ | 23,869 | $ | — | $ | — | $ | 40 | $ | — | $ | — | $ | 183 | $ | 24,092 | ||||||||||
Selling and marketing | 8,631 | (653) | — | — | — | — | (93) | 7,885 | ||||||||||||||||||
Research and development | 13,276 | (753) | — | — | — | — | (471) | 12,052 | ||||||||||||||||||
General and administrative | 9,448 | (1,907) | — | — | — | — | (210) | 7,331 | ||||||||||||||||||
Depreciation and amortization | 4,872 | — | (4,419) | (453) | — | — | — | — | ||||||||||||||||||
Total operating expenses | 36,227 | (3,313) | (4,419) | (453) | — | — | (774) | 27,268 | ||||||||||||||||||
(Loss) income before provision for income taxes | (17,659) | 3,313 | 4,419 | 493 | (501) | 5,397 | 957 | (3,581) | ||||||||||||||||||
Net (loss) income | (17,684) | 3,313 | 4,419 | 493 | (501) | 5,397 | 957 | (3,606) | ||||||||||||||||||
(Loss) earnings per share: basic and diluted | (0.28) | 0.05 | 0.07 | 0.01 | (0.01) | 0.09 | 0.02 | (0.06) | ||||||||||||||||||
Nine Months Ended September 30, 2022 |
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Gross profit | $ | 26,226 | $ | 2 | $ | — | $ | 85 | $ | — | $ | — | $ | — | $ | 26,313 | ||||||||||
Selling and marketing | 9,687 | (336) | — | — | — | — | (769) | 8,582 | ||||||||||||||||||
Research and development | 22,756 | (808) | — | — | — | — | — | 21,948 | ||||||||||||||||||
General and administrative | 11,885 | (2,124) | — | — | — | (630) | (3) | 9,128 | ||||||||||||||||||
Depreciation and amortization | 5,665 | — | (4,766) | (899) | — | — | — | — | ||||||||||||||||||
Total operating expenses | 49,993 | (3,268) | (4,766) | (899) | — | (630) | (772) | 39,658 | ||||||||||||||||||
(Loss) income before provision for income taxes | (21,230) | 3,270 | 4,766 | 984 | (3,457) | 1,421 | 772 | (13,474) | ||||||||||||||||||
Net (loss) income | (21,307) | 3,270 | 4,766 | 984 | (3,457) | 1,421 | 772 | (13,551) | ||||||||||||||||||
(Loss) earnings per share: basic and diluted | (0.39) | 0.06 | 0.09 | 0.02 | (0.06) | 0.03 | 0.01 | (0.25) |