Smith Micro Software (SMSI)

Risks

• We derive a significant portion of our revenues from sales to a concentrated number of clients, and a reduction in sales to any of them may adversely impact our revenues and operating results.
• Our growth depends in part on our customers’ ability and willingness to timely launch and deliver our products and services, to promote our products and services and to attract and retain new end user customers or achieve other goals outside of our control.
• Security breaches, improper access to or disclosure of our data, our customers’ data or their end users’ data, other hacking attacks on our systems or the third-party systems that we use, or other cyber incidents and privacy breaches could harm our reputation and adversely affect our business.
• We rely on our ability and/or customers’ ability to distribute our mobile software applications to their end users through third party mobile software application stores, which we do not control. Changes in the application stores’ policies and/or terms of service and other barriers to our distribution via mobile software application stores may seriously harm our ability to maintain and/or grow the subscriber base for our products and services and could materially and adversely affect our financial condition and results of operations.
• Our products may contain undetected software defects, which could negatively affect our revenues.
• We derive a significant portion of our revenues from wireless carriers, and changes within this vertical market, or failure to penetrate new markets, could adversely impact our revenues and operating results.
• Our results of operations and financial condition may be adversely affected by public health epidemics, including the ongoing COVID-19 global health pandemic.
• Competition within our target markets is intense and includes numerous established competitors and new entrants, which could negatively affect our revenues and results of operations.
• Our business, financial condition and operating results could be adversely affected as a result of legal, business, and economic risks specific to international operations.
• Evolving information security and data privacy laws and regulations may result in increased compliance costs, impediments to the development or performance of our offerings, and monetary or other penalties.
• Regulations affecting our customers and our business and future regulations, to which they or we may become subject, may harm our business.
• If we fail to meet the requirements for continued listing on the NASDAQ Stock Market, our common stock could be delisted from trading on NASDAQ, which would likely reduce the liquidity of our common stock and could cause our trading price to decline.
• We may raise additional capital through the issuance of equity or convertible debt securities or by entering into borrowing arrangements in order to meet our capital needs. Additional funds to allow us to meet our capital needs may not be available on terms acceptable to us or at all.
• The Company has a history of net losses and may incur substantial net losses in the future.
• If we are unable to meet our obligations as they become due over the next twelve months, the Company may not be able to continue as a going concern.
• Our operating income or loss may continue to change due to shifts in our sales mix and variability in our operating expenses.
• Our acquisitions of companies or technologies may disrupt our business and divert management attention and cause our other operations to suffer.
• We rely directly and indirectly on third-party intellectual property and licenses, which may not be available on commercially reasonable terms or at all.
• Our quarterly revenues and operating results are difficult to predict and could fall below analyst or investor expectations, which could cause the price of our common stock to fall.