Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of ~~October 30, 2019,~~May 7, 2020, there were ~~38,502,511~~41,420,954 shares of common stock outstanding.

	September 30,			December 31,			March 31,			December 31,
	2019			2018			2020			2019
	(unaudited)			(audited)			(unaudited)			(audited)
Assets
Current assets:
Cash and cash equivalents	$	23,870		$	12,159		$	19,456		$	28,268
Accounts receivable, net of allowances for doubtful accounts and other adjustments of $244 (2019) and $135 (2018)		11,087			7,130
Accounts receivable, net of allowances for doubtful accounts and other adjustments of $247 (2020) and $253 (2019)								11,882			10,894
Prepaid expenses and other current assets		763			795			591			802
Total current assets		35,720			20,084			31,929			39,964
Equipment and improvements, net		1,392			865			2,152			2,109
Right-of-use assets		6,459			—			6,349			6,464
Deferred tax assets, net		191			191			94			94
Other assets		239			140			458			234
Intangible assets, net		4,761			238			15,875			4,535
Goodwill		7,797			3,685			11,493			7,797
Total assets	$	56,559		$	25,203		$	68,350		$	61,197
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,536		$	1,160		$	3,463		$	2,050
Accrued payroll and benefits		2,128			1,745			2,285			2,107
Current operating lease liabilities		1,154			—			1,273			1,221
Other accrued liabilities		212			450			271			244
Deferred revenue		105			28			1,690			98
Total current liabilities		5,135			3,383			8,982			5,720
Non-current liabilities:
Operating lease liabilities		5,809			—			5,548			5,774
Deferred rent		677			723			850			885
Other long term liabilities		151			534			117			134
Total non-current liabilities		6,637			1,257			6,515			6,793
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.001 per share; 5,000,000 shares authorized; 5,500 shares issued (2019 and 2018); 0 and 1,345 shares outstanding (2019 and 2018, respectively)		—			—
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 38,487,090 and 28,241,129 shares issued and outstanding (2019 and 2018, respectively)		38			28
Preferred stock, par value $0.001 per share; 5,000,000 shares authorized; 5,500 shares issued (2020 and 2019); 0 shares outstanding (2020 and 2019)								—			—
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 40,383,056 and 38,475,084 shares issued and outstanding (2020 and 2019, respectively)								40			38
Additional paid-in capital		273,815			256,626			276,163			274,041
Accumulated comprehensive deficit		(229,066	)		(236,091	)		(223,350	)		(225,395	)
Total stockholders’ equity		44,787			20,563			52,853			48,684
Total liabilities and stockholders' equity	$	56,559		$	25,203		$	68,350		$	61,197

	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended
	September 30,						September 30,						March 31,
	2019			2018			2019			2018			2020		2019
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)		(unaudited)
Revenues	$	11,782		$	6,525		$	31,068		$	18,933		$	13,322	$	8,432
Cost of revenues		1,011	��		979			2,902			3,404			1,173		916
Gross profit		10,771			5,546			28,166			15,529			12,149		7,516
Operating expenses:
Selling and marketing		1,793			1,311			5,529			4,488			2,787		1,968
Research and development		3,063			2,049			8,487			6,499			3,729		2,682
General and administrative		2,396			2,048			7,522			6,299			3,668		2,700
Restructuring expense		39			83			154			135			6		104
Total operating expenses		7,291			5,491			21,692			17,421			10,190		7,454
Operating income (loss)		3,480			55			6,474			(1,892	)
Operating income														1,959		62
Other income (expense):
Interest income (expense), net		87			(128	)		117			(445	)
Change in fair value of warrant liability		—			(902	)		—			(3,126	)
Gain on sale of software product		—			—			483			—
Interest income, net														86		—
Other expense		—			(1	)		(15	)		(48	)		—		(10	)
Income (loss) before provision for income taxes		3,567			(976	)		7,059			(5,511	)
Income before provision for income taxes														2,045		52
Provision for income tax expense		—			7			8			30			—		4
Net income (loss)	$	3,567		$	(983	)	$	7,051		$	(5,541	)
Net income													$	2,045	$	48

Net earnings (loss) per share:
Earnings per share:
Basic	$	0.10		$	(0.04	)	$	0.21		$	(0.28	)	$	0.05	$	0.00
Diluted	$	0.09		$	(0.04	)	$	0.20		$	(0.28	)	$	0.05	$	0.00

Weighted average shares outstanding:
Basic		36,094			25,020			33,170			20,771			39,482		31,297
Diluted		39,472			25,020			35,287			20,771			42,194		31,323

Preferred dividends per share	$	70.50		$	31.58		$	104.58		$	105.54		$	—	$	25.00

											Additional			Accumulated															Additional			Accumulated
	Series B Preferred Stock					Common Stock					Paid-in			Comprehensive						Series B Preferred Stock				Common Stock					Paid-in			Comprehensive
	Shares			Amount		Shares			Amount		Capital			Deficit			Total			Shares		Amount		Shares			Amount		Capital			Deficit			Total
BALANCE, June 30, 2019 (unaudited)		1		$	—		32,042		$	32	$	262,215		$	(232,581	)	$	29,666
BALANCE, December 31, 2019 (audited)																					—	$	—		38,475		$	38	$	274,041		$	(225,395	)	$	48,684
Non-cash compensation recognized on stock options and ESPP		—			—		—			—		10			—			10			—		—		—			—		13			—			13
Restricted stock grants, net of cancellations		—			—		—			—		340			—			340			—		—		1,000			1		618			—			619
Cancellation of shares for payment of withholding tax		—			—		(38	)		—		(191	)		—			(191	)		—		—		(110	)		—		(571	)		—			(571	)
Employee stock purchase plan		—			—		2			—		6			—			6			—		—		2			—		5			—			5
Exercise of warrants		—			—		5,301			5		11,398			—			11,403			—		—		1,009			1		2,044			—			2,045
Exercise of stock options		—			—		10			—		38			—			38			—		—		7			—		13			—			13
Conversion of preferred stock to common stock		(1	)		—		1,171			1		(1	)		—			—
Preferred stock dividends		—			—		—			—		—			(52	)		(52	)
Other		—			—		—			—		—			—			—
Comprehensive loss		—			—		—			—		—			3,567			3,567
BALANCE, September 30, 2019 (unaudited)		—		$	—		38,488		$	38	$	273,815		$	(229,066	)	$	44,787
Net income																					—		—		—			—		—			2,045			2,045
BALANCE, March 31, 2020 (unaudited)																					—	$	—		40,383		$	40	$	276,163		$	(223,350	)	$	52,853


											Additional			Accumulated															Additional			Accumulated
	Series B Preferred Stock					Common Stock					Paid-in			Comprehensive						Series B Preferred Stock				Common Stock					Paid-in			Comprehensive
	Shares			Amount		Shares			Amount		Capital			Deficit			Total			Shares		Amount		Shares			Amount		Capital			Deficit			Total
BALANCE, December 31, 2018 (audited)		1		$	—		28,242		$	28	$	256,626		$	(236,091	)	$	20,563			1	$	—		28,242		$	28	$	256,626		$	(236,091	)	$	20,563
Non-cash compensation recognized on stock options and ESPP		—			—		—			—		30			—			30			—		—		—			—		9			—			9
Restricted stock grants, net of cancellations		—			—		1,225			1		1,108			—			1,109			—		—		1,225			1		445			—			446
Cancellation of shares for payment of withholding tax		—			—		(176	)		—		(506	)		—			(506	)		—		—		(103	)		—		(207	)		—			(207	)
Employee stock purchase plan		—			—		4			—		10			—			10			—		—		2			—		5			—			5
Common shares issued in stock offering, net of offering costs		—			—		—			—		(14	)		—			(14	)		—		—		—			—		(14	)		—			(14	)
Common shares issued in connection with Smart Retail acquisition, net		—			—		2,699			3		5,126			—			5,129			—		—		2,699			3		5,126			—			5,129
Exercise of warrants		—			—		5,304			5		11,398			—			11,403
Exercise of stock options		—			—		10			—		38			—			38
Conversion of preferred stock to common stock		(1	)		—		1,180			1		(1	)		—			—
Preferred stock dividends		—			—		—			—		—			(119	)		(119	)		—		—		—			—		—			(34	)		(34	)
Cumulative effect of adoption of ASC 842		—			—		—			—		—			93			93			—		—		—			—		—			93			93
Comprehensive loss		—			—		—			—		—			7,051			7,051
BALANCE, September 30, 2019 (unaudited)		—		$	—		38,488		$	38	$	273,815		$	(229,066	)	$	44,787
Net income																					—		—		—			—		—			48			48
BALANCE, March 31, 2019 (unaudited)																					1	$	—		32,065		$	32	$	261,990		$	(235,984	)	$	26,038

Additional

Accumulated

Series B Preferred Stock

Common Stock

Paid-in

Comprehensive

Shares

Amount

Shares

Amount

Capital

Deficit

Total

BALANCE, June 30, 2018 (unaudited)

1

$
—

25,004

$
25

$
241,790

$
(237,831
)

$
3,984

Non-cash compensation recognized on
   stock options and ESPP

—

—

—

—

10

—

10

Restricted stock grants, net of cancellations

—

—

—

—

254

—

254

Cancellation of shares for payment of
   withholding tax

—

—

(26
)

—

(64
)

—

(64
)
Employee stock purchase plan

—

—

2

—

2

—

2

Common shares issued in stock offering,
   net of offering costs

—

—

—

—

(10
)

—

(10
)
Issuance of warrants in stock offering

—

—

—

—

(12
)

—

(12
)
Exercise of warrants

—

—

25

—

—

—

—

Preferred stock dividends

—

—

—

—

—

(43
)

(43
)
Other

—

—

—

—

—

—

—

Comprehensive loss

—

—

—

—

—

(983
)

(983
)
BALANCE, September 30, 2018 (unaudited)

1

$
—

25,005

$
25

$
241,970

$
(238,857
)

$
3,138

Additional

Accumulated

Series B Preferred Stock

Common Stock

Paid-in

Comprehensive

Shares

Amount

Shares

Amount

Capital

Deficit

Total

BALANCE, December 31, 2017 (audited)

5

$
—

14,269

$
14

$
237,486

$
(232,933
)

$
4,567

Non-cash compensation recognized on
   stock options and ESPP

—

—

—

—

31

—

31

Restricted stock grants, net of cancellations

—

—

1,124

1

642

—

643

Cancellation of shares for payment of
   withholding tax

—

—

(68
)

—

(151
)

—

(151
)
Employee stock purchase plan

—

—

5

—

5

—

5

Common shares issued in stock offering,
   net of offering costs

—

—

6,027

6

10,742

—

10,748

Issuance of warrants in stock offering

—

—

—

—

(6,792
)

—

(6,792
)
Conversion of preferred stock to common
   stock

(4
)

—

3,623

4

(4
)

—

—

Exercise of warrants

—

—

25

—

—

—

—

Preferred stock dividends

—

—

—

—

—

(370
)

(370
)
Other

—

—

—

—

11

(12
)

(1
)
Comprehensive loss

—

—

—

—

—

(5,542
)

(5,542
)
BALANCE, September 30, 2018 (unaudited)

1

$
—

25,005

$
25

$
241,970

$
(238,857
)

$
3,138

	For the Nine Months Ended						For the Three Months Ended
	September 30,						March 31,
	2019			2018			2020			2019
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating activities:
Net income (loss)	$	7,051		$	(5,541	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net income							$	2,045		$	48
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		997			651			644			321
Non-cash lease expense		730			—			244			194
Amortization of debt discounts and financing issuance costs		—			197
Restructuring costs		154			135			6			104
Provision for doubtful accounts and other adjustments to accounts receivable		127			6			(4	)		(9	)
Provision for excess and obsolete inventory		1			(18	)		—			1
Loss on disposal of fixed assets		6			—			—			(1	)
Stock based compensation		1,139			674			632			455
Change in fair value of warrant liability		—			3,126
Gain on sale of software product		(483	)		—
Change in operating accounts:
Changes in operating accounts:
Accounts receivable		(4,031	)		(1,189	)		(983	)		(1,759	)
Prepaid expenses and other assets		52			(145	)		215			194
Accounts payable and accrued liabilities		(701	)		(973	)		(840	)		(117	)
Deferred revenue		(214	)		47			302			(85	)
Net cash provided by (used in) operating activities		4,828			(3,030	)		2,261			(654	)
Investing activities:
Acquisition of Smart Retail business, net		(3,974	)		—			—			(3,974	)
Proceeds from sale of software product		363			—
Acquisition of Circle operator business, net								(12,150	)		—
Capital expenditures		(824	)		(172	)		(771	)		(110	)
Other investing activities								(215	)		—
Net cash used in investing activities		(4,435	)		(172	)		(13,136	)		(4,084	)
Financing activities:
Proceeds from stock sale for employee stock purchase plan		10			5
Proceeds from (payments related to) the issuance of common stock		(14	)		10,749
Proceeds from exercise of common stock warrants		11,403			—			2,045			—
Proceeds from exercise of stock options		38			—
Repayments of short-term secured promissory notes		—			(1,000	)
Dividends paid on preferred stock		(119	)		(370	)		—			(34	)
Net cash provided by financing activities		11,318			9,384
Net increase in cash and cash equivalents		11,711			6,182
Other financing activities								18			(9	)
Net cash provided by (used in) financing activities								2,063			(43	)
Net decrease in cash and cash equivalents								(8,812	)		(4,781	)
Cash and cash equivalents, beginning of period		12,159			2,205			28,268			12,159
Cash and cash equivalents, end of period	$	23,870		$	8,387		$	19,456		$	7,378

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	60		$	4		$	19		$	9
Cash paid for interest expense		—			334

Supplemental disclosures of non-cash activities:
Issuance of common stock in connection with Smart Retail acquisition	$	5,129		$	—		$	—		$	5,129
Issuance of common stock warrants in connection with stock offering		—			6,792
Cancellation of shares for payment of withholding tax		(506	)		(151	)

Smith Micro Software, Inc. (“Smith Micro”, the “Company”, “we”, “us”, or ~~the “Company”~~“our”) develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless ~~service providers~~ and cable ~~multiple~~ service ~~operators (“MSOs”)~~providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, ~~our solutions~~we strive to enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer ~~internet of things (“IoT”)~~IoT devices. Our portfolio ~~also~~ includes a wide range of products for creating, sharing and monetizing rich content, such as visual voice messaging, ~~optimizing~~ retail content display optimization and performance analytics ~~capabilities, and graphics applications.~~on any product set.

The accompanying interim consolidated balance sheet as of ~~September 30, 2019,~~March 31, 2020, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ are unaudited. The unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted.

In the opinion of management, the accompanying unaudited consolidated financial statements for the periods presented reflect all adjustments which are normal and recurring, and necessary to fairly state the financial position, results of operations, and cash flows of the Company. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018~~2019 filed with the SEC on March ~~27, 2019.~~13, 2020.

Operating results for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, ~~2019.~~

~~The Company adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 842,~~ ~~Leases,~~ and related amendments, as of January 1, 2019, utilizing the modified retrospective approach through a cumulative-effect adjustment to equity. We elected the package of practical expedients permitted under the transition guidance within the new standard which allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of approximately $3.1 million as of January 1, 2019, and an adjustment to retained earnings of $0.1 million. The standard did not materially impact our consolidated net income or earnings per share and had no impact on cash flows. See Note 11 for further details.2020.

The Company adopted FASB ASC Topic No. 606, Revenue from Contracts with Customers, as of January 1, 2018, and recognizes the sale of goods and services based on the ~~five step~~five-step analysis of transactions as provided in Topic 606, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods and services.

In our Wireless segment, we transfer software licenses to our customers on a royalty free, non-exclusive, non-transferrable, limited use basis during the term of the agreement. In some instances, we perform customization services to ensure the software operates within our customer’s operating platforms as well as the operating platforms of the mobile devices used by their end customers, before transferring the license. Revenue related to these services is recognized at a point in time upon acceptance of the software license by the customer. We also earn usage based revenue on our platforms. Usage based revenue is generated based on active licenses used by our customer’s end customers, the provision of hosting services, revenue share based on media placements on our platform, and use of our cloud based services. We recognize our usage based revenue when we have completed our performance obligation and have the right to invoice the customer. This revenue is generally recognized monthly or quarterly. Finally, in this segment, we ratably recognize revenue over the contract period when customers pay in advance of our service delivery.

On February 12, 2020, we acquired certain assets from Circle (as defined in Note 3 below), including a source code license to Circle’s parental control software solution and two customer contracts. Pursuant to these contracts, the customer parties thereto license the parental control software solution for distribution to their respective subscribers in designated markets. In each case, the contracts allow the customer to take possession of the software solution and to host it on their platform or with an independent third party hosting service provider without significant cost. We also provide significant services that are required by the customer to ensure they have the utility of the license. As the license to the software solution and the services we provide are highly interrelated, we have concluded that the license and our services are a single performance obligation. The license fee is earned and recognized on a pro-rata basis over the contract term based on our customer’s continued use of the license and our services.

We also provide consulting services to develop ~~customer specified~~customer-specified functionality that are generally not on our software development roadmap. We recognize revenue from our consulting services upon delivery and acceptance by the customer of our software

enhancements and upgrades. For certain Wireless segment customers we provide maintenance and technology support services for which the customer either pays upfront or as we provide the services. When the customer pays upfront, we record the payments as contract liabilities and recognize revenue ratably over the contract period as this is our stand ready performance obligation that is satisfied ratably over the maintenance and technology services period.

As discussed in Note 3, during the first quarter of 2019 we acquired the net assets of ISM Connect, LLC associated with the Smart Retail product suite, later branded ViewSpot™. Our ViewSpot contracts with Tier 1 customers include promises to provide multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. When a cloud-based service includes both on-premises software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. Certain cloud services, primarily ViewSpot, depend on a significant level of integration, interdependency, and interrelation between the on-premise applications and cloud services, and are accounted for together as a single performance obligation. Revenue from ViewSpot is recognized ratably over the period in which the cloud services are provided.

We receive upfront payments from customers from services to be provided under our ViewSpot arrangements. The advance receipts are deferred and subsequently recognized ratably over the contract period. We also provide consulting services to configure ad hoc targeted promotional content for our customers upon request. These requests are driven by our customers’ marketing initiatives and tend to be short term “bursts” of activity. We recognize these revenues upon delivery of the configured promotional content to the cloud platform.

InFor our Graphics ~~segment~~products where we sell off-the-self software products with no customization or post sale technology support services, we recognize revenue at the time we transfer control of the product to the customer. This occurs upon shipment of the product or when the customer downloads the software from our website or website of our resellers. We offer a 30 day return option to our customers; a return reserve is established at the time revenue is recorded and the reserve is monitored and adjusted based on actual experience. Historically, returns have been insignificant.

The Company measures and discloses fair value measurements as required by FASB ASC Topic No. 820, Fair Value Measurements and Disclosures.

Fair value is an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the FASB establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

As required by FASB ASC Topic No. 820, we measure our cash and cash equivalents at fair value. Our cash equivalents are classified within Level 1 by using quoted market prices utilizing market observable inputs.

As required by FASB ASC Topic No. 820, we measured our warrant liability at fair value. Our warrant liability was classified within Level 3 as some of the inputs to our valuation model are either not observable quoted prices or are not derived principally from, or corroborated by, observable market data by correlation or other means.

~~As required by FASB ASC Topic No.~~ 350, for goodwill and other intangibles impairment analysis, we utilize fair value measurements which are categorized within Level 3 of the fair value hierarchy.

~~In December 2018,~~On February 12, 2020, the Company ~~entered into~~acquired the operator business of Circle Media Labs Inc. (“Circle”) pursuant to a ~~definitive agreement to acquire~~certain Asset Purchase Agreement by and between the ~~net assets of ISM Connect, LLC’s Smart Retail product suite (“Smart Retail”). The transaction closed on January 9, 2019.~~ Company and Circle.

The following table summarizes the consideration paid for the ~~Smart Retail~~Circle acquisition in ~~2019~~2020 (unaudited, in thousands):

Fair value of assets acquired	$	9,394	$	14,966
Fair value of liabilities assumed		291		1,466
Total purchase price	$	9,103	$	13,500

Components of purchase price:
Cash	$	3,974	$	12,150
Common stock		5,129
Cash holdback				1,350
Total purchase price	$	9,103	$	13,500

The Company’s preliminary allocation of the purchase price is summarized as follows (unaudited, in thousands):

Assets:
Costs incurred on projects not complete	$	53
Inventory, net			$	14
Intangible assets		5,229		11,256
Goodwill		4,112		3,696
Total assets	$	9,394	$	14,966
Liabilities:
Deferred revenue	$	291	$	1,290
Amounts due to seller				176
Total liabilities		291		1,466
Total purchase price	$	9,103	$	13,500

The primary goal of the Smart Retail acquisition was to acquire a new growing and profitable revenue stream while deepening the relationships with our customers. The Smart Retail platform, which we now call ViewSpot, enables wireless carriers and retailers to offer powerful on-screen, interactive device demos that deliver consistent, secure and targeted content that showcase the features of the devices that consumers want to see and learn more about. ViewSpot also provides analytics capabilities, which allow customers to gain valuable insights into buying behaviors. The platform is a logical additionPursuant to the ~~Company’s existing product line that reaches wireless carriers~~transaction, Smith Micro acquired certain assets related to the Circle operator business, including two new customer contracts and ~~provides them with services that can attract~~a source code license to Circle’s currently deployed parental control software and ~~retain customers.~~related technology.

Unaudited pro forma results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ are included below as if the ~~Smart Retail~~Circle acquisition occurred on January 1, ~~2018.~~2019. This summary of the unaudited pro forma results of operations is not necessarily indicative of what the Company’s results of operations would have been had ~~Smart Retail~~the operator business of Circle been acquired at the beginning of ~~2018,~~2019, nor does it purport to represent results of operations for any future periods.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,					For the Three Months Ended March 31,
	2019		��	2018			2019		2018			2020		2019
	(unaudited, in thousands, except per share amounts)						(unaudited, in thousands, except per share amounts)					(unaudited, in thousands, except per share amounts)
Revenues	$	11,782		$	7,389		$	31,068	$	21,621		$	13,789	$	9,266
Net income (loss)		3,567			(705	)		7,051		(4,790	)		2,105		(889	)
Earnings (loss) per share:
Basic	$	0.10		$	(0.03	)	$	0.21	$	(0.25	)	$	0.05	$	(0.03	)
Diluted	$	0.09		$	(0.03	)	$	0.20	$	(0.25	)	$	0.05	$	(0.03	)

In connection with preparing consolidated financial statements for the three and nine months ended September 30, 2019, management evaluated whether there were conditions and events that, when considered in the aggregate, raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the financial statements are issued.

~~The Company considered the historical operating loss and negative cash flow from operating activities trends, including the positive trends occurring in the recent year.~~

~~Ordinarily, conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the entity’s ability to meet its obligations as they become due.~~

~~The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following:~~

~~Management believes the Company will generate enough cash from operations to satisfy its obligations for the next twelve months from the issuance date.~~

The Company will take the following actions, if it starts to trend unfavorably against its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern:

In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, we review the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing will be performed annually at December 31. Recoverability of goodwill is determined by comparing the fair value of the Company’s reporting units to the carrying value of the underlying net assets in the reporting units. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. The Company determined that there was no goodwill impairment at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.

The Company calculates earnings per share (“EPS”) as required by FASB ASC Topic No. 260, Earnings Per Share. Basic EPS is calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, excluding common stock equivalents. Diluted EPS is computed by dividing the net income available to common stockholders by the weighted average number of common shares outstanding for the period, plus the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For periods with a net loss, the dilutive common stock equivalents are excluded from the diluted EPS calculation. For purposes of this calculation, common stock

subject to repurchase by the Company, options, and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive.

The following table sets forth the details of basic and diluted earnings per share:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2019			2018			2019			2018			2020		2019
	(unaudited, in thousands, except per share amounts)						(unaudited, in thousands, except per share amounts)						(unaudited, in thousands, except per share amounts)
Numerator:
Net income (loss)	$	3,567		$	(983	)	$	7,051		$	(5,541	)
Net income													$	2,045	$	48
Dividends paid to preferred stockholders		(52	)		(43	)		(119	)		(370	)		—		(34	)
Net income (loss) available to common stockholders	$	3,515		$	(1,026	)	$	6,932		$	(5,911	)
Net income available to common stockholders													$	2,045	$	14
Denominator:
Weighted average shares outstanding – basic		36,094			25,020			33,170			20,771			39,482		31,297
Potential common shares – options / warrants (treasury stock method)		3,378			—			2,117			—			2,712		26
Weighted average shares outstanding – diluted		39,472			25,020			35,287			20,771			42,194		31,323

Shares excluded (anti-dilutive)		67			126			131			1,086			77		11,213

Net earnings (loss) per common share:
Net earnings per common share:
Basic	$	0.10		$	(0.04	)	$	0.21		$	(0.28	)	$	0.05	$	0.00
Diluted	$	0.09		$	(0.04	)	$	0.20		$	(0.28	)	$	0.05	$	0.00

During the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, the Company granted ~~0 and 1,250,000~~1,000,000 shares of restricted stock and ~~0 and 55,000~~ incentive stock options ~~respectively,~~exercisable for 5,000 shares under the Company’s 2015 Omnibus Equity Incentive Plan, as amended. As of ~~September 30, 2019,~~March 31, 2020, there were ~~1.3 million~~approximately 74,000 shares available for future grants under the 2015 Omnibus Equity Incentive Plan.

We ~~sell products and services to customers in our Wireless and Graphics segments. In our Wireless segment, we~~primarily sell our software ~~solution, cloud based~~solutions, cloud-based services and consulting services to major wireless network and cable operators. We sell our off-the-shelf Graphics software products directly to end users as well as through our distribution and reseller channel partners.

We recognize sales of goods and services based on the five-step analysis of transactions as provided in Topic 606. For all contracts with customers, we first identify the contract which usually is established when a contract is fully executed by each party and consideration is expected to be received. Next, we identify the performance obligations in the contract. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. We then determine the transaction price in the arrangement and allocate the transaction price, if necessary, to each performance obligation identified in the contract. The allocation of the transaction price to the performance obligations are based on the relative standalone selling prices for the goods and services contained in a particular performance obligation. The transaction price is adjusted for the Company’s estimate of variable consideration which may include certain incentives and discounts, product returns, distributor fees, and storage fees. We evaluate the total amount of variable consideration expected to be earned by using the expected value method, as we believe this method represents the most appropriate estimate for this consideration, based on historical service trends, the individual contract considerations and our best judgment at the time. We include estimates of variable consideration in revenues only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We also generate the majority of our revenue on usage based fees which are variable and depend entirely on our customers use of perpetual licenses, transactions processed on our hosted environment, advertisement placements on our service platform, and activity on our cloud based service platform. As discussed in Note 3, on February 12, 2020, we purchased two customer contracts from Circle. Under these contracts, we provide our customers with licenses to software solutions and related services, for which we earn license fees, managed and hosting service fees, and consulting services which are provided throughout the life of the licensing arrangement.

~~During the first quarter of 2019, we acquired the Smart Retail assets from ISM Connect, LLC.~~ Our contracts with the Tier 1 customers include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. ~~When a cloud based~~Our cloud-based service includes ~~both on-premises~~a software ~~licenses and cloud services, judgment~~solution license integrated with cloud-based services. Judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. ~~Certain cloud~~Since we do not allow our customers to take possession of the software solution, and since the utility of the license comes from the could-based services ~~primarily ViewSpot, depend on a significant level of integration, interdependency,~~that we provide, we consider the software license and ~~interrelation between the on-premise applications and cloud services, and are accounted for together as one performance obligation. Revenue from ViewSpot is recognized ratably over the period in which~~ the cloud services to be single performance obligation. We provide the Circle software solution license together with highly integrated consulting services to generate the utility of the license to the customers. Since the software solution and consulting services provided are ~~provided.~~

~~We receive upfront payments from customers from~~highly interrelated, we consider the license and the consulting services to be ~~provided under our ViewSpot arrangements. The advance receipts are deferred and subsequently recognized ratably over the contract period.~~ a single performance obligation.

We also provide consulting services to configure ad hoc targeted promotional content to be presented on our solutions as well as consulting services to provide additional functionality for our ~~customers upon~~software solutions based on our customer’s request. These requests are driven by our customer’s marketing initiatives and tend to be short term “bursts” of ~~activity.~~activity or specific incremental functionality to existing software solutions. We recognize these revenues upon delivery and acceptance of the configured promotional content or additional functionality to the ~~cloud platform.~~software solution.

We have made accounting policy elections to exclude all taxes by governmental authorities from the measurement of the transaction price, and since our standard payment terms are less than one year, we have elected the practical expedient not to assess whether a contract has a significant financing component.

Deferred revenue represents amounts billed to customers for which revenue has not been recognized. Deferred revenue primarily consists of the unearned portion of monthly, quarterly and annually billed service fees and prepayments made by customers for a future period. We recognize revenue upon transfer of control. During the three and nine months ended September 30, 2019, we recognized $0 and $27 thousand, respectively, in our consolidated statements of operations that was previously recorded as deferred revenue in the consolidated balance sheet at January 1, 2019. As of ~~September 30, 2019,~~March 31, 2020, our total deferred revenue balance was ~~$0.1 million.~~$1.7 million, of which $1.3 million was related to the acquisition of the Circle operator business.

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
	(unaudited)				(unaudited)				(unaudited)
Wireless:
CommSuite & Netwise	$	4,916	$	4,958	$	14,863	$	13,721
SafePath		5,200		1,028		11,108		2,106
ViewSpot		450		—		1,971		—
License and service fees									$	555	$	—
Hosted environment usage fees										4,549		4,653
Cloud based usage fees										7,478		2,920
Consulting services and other		1,035		287		2,442		1,485		633		599
Legacy software licenses		13		10		38		293
Total wireless		11,614		6,283	$	30,422	$	17,605	$	13,215	$	8,172
Graphics:
Software		168		242		646		1,328		107		260
Total revenues	$	11,782	$	6,525	$	31,068	$	18,933	$	13,322	$	8,432

Public companies are required to report financial and descriptive information about their reportable operating segments as required by FASB ASC Topic No. 280, Segment Reporting. The Company has ~~two~~one primary business ~~units~~unit based on how management internally evaluates separate financial information, business activities and management ~~responsibility.~~responsibility: Wireless. The Wireless segment includes our ~~NetWise®~~SafePath®, CommSuite®, ~~SafePath®~~ViewSpot®, and ~~ViewSpot™~~NetWise® family of products. Graphics includes our consumer-based products: Moho®, MotionArtist®, Rebelle, PhotoDonut and StuffIt®. Graphics also included the Poser® 3D animation software until our divestiture of that product line in June 2019, and through April 2018 included third-party software products under the Clip Studio® brand, which we distributed under an agreement which expired in October 2017 and permitted certain post-termination distribution rights until April 2018.

The Company does not separately allocate operating expenses to these business units, nor does it allocate specific assets. Therefore, business unit information reported includes only revenues.

The following table ~~shows~~presents the Wireless revenues ~~generated~~ by ~~each business unit~~product (in thousands):

~~A summary~~Revenues generated from our sales to Sprint and their respective affiliates in the Wireless business segment accounted for 88% and 77% of the Company’s ~~customers that represent 10% or more of~~total revenues for the ~~Company’s net revenues is as follows:~~

~~The~~three months ended March 31, 2020 and 2019, respectively. This customer ~~listed above~~ comprised ~~80%~~84% and ~~86%~~77% of our accounts receivable as of ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.

During the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company operated in three geographic locations; the Americas, EMEA (Europe, the Middle East, and Africa), and Asia Pacific. Revenues attributed to the geographic location of the customers’ bill-to address were as follows (in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended March 31,
	2019		2018		2019		2018		2020		2019
	(unaudited)				(unaudited)				(unaudited)
Americas	$	11,755	$	6,483	$	30,978	$	18,724	$	13,304	$	8,392
EMEA		18		18		56		77		8		19
Asia Pacific		9		24		34		132		10		21
Total revenues	$	11,782	$	6,525	$	31,068	$	18,933	$	13,322	$	8,432

The Company does not separately allocate specific assets to these geographic locations.

The Company may become involved in various legal proceedings arising from its business activities. While management does not believe the ultimate disposition of these matters will have a material adverse impact on the Company’s consolidated results of operations, cash flows, or financial position, litigation is inherently unpredictable, and depending on the nature and timing of these proceedings, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows, or financial position in a particular period.

During its normal course of business, the Company has made certain indemnities, commitments, and guarantees under which it may be required to make payments in connection with certain transactions. These include: intellectual property indemnities to the Company’s customers and licensees in connection with the use, sale, and/or license of Company products; indemnities to various lessors in connection with facility leases for certain claims arising from use of such facility or under such lease; indemnities to vendors and service providers pertaining to claims based on the negligence or willful misconduct of the Company; indemnities involving the accuracy of representations and warranties in certain contracts; and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. In addition, the Company has made contractual commitments to employees providing for severance payments upon the occurrence of certain prescribed events. The Company may also issue a guarantee in the form of a

standby letter of credit as security for contingent liabilities under certain customer contracts. The duration of these indemnities, commitments, and guarantees varies, and in certain cases may be indefinite. The majority of these indemnities, commitments, and guarantees may not provide for any limitation of the maximum potential for future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets.

The Company leases office space and equipment, and certain office space is subleased. Management determines if a contract is a lease at the inception of the arrangement and reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised.

Leases with an initial term of greater than twelve months are recorded on the consolidated balance sheet. Lease expense is recognized on a straight-line basis over the lease term.

The Company’s lease contracts generally do not provide a readily determinable implicit rate. For these contracts, the estimated incremental borrowing rate is based on information available at the inception of the lease.

During the second quarter of 2019, the Company extended the lease term on its Pittsburgh, PA headquarters, which resulted in a net increase in right-of-use assets and lease liabilities of approximately $3.0 million. Additionally, an office lease in Aliso Viejo, CA commenced during the second quarter, which increased right-of-use assets and lease liabilities by approximately $1.5 million.

~~Operating lease assets and liabilities are summarized as follows (in thousands):~~

The maturity of operating lease liabilities is presented in the following table (in thousands):

	As of September 30, 2019		As of March 31, 2020
	(unaudited)		(unaudited)
2019	$	354
2020		1,654	$	1,270
2021		1,631		1,669
2022		1,220		1,413
2023		1,231		1,425
2024				1,182
Thereafter		2,338		1,158
Total lease payments		8,428		8,117
Less imputed interest		1,465		(1,296	)
Present value of lease liabilities	$	6,963	$	6,821

~~12. Equity Transactions~~Additional information relating to the Company’s operating leases follows:

~~In January 2019, the Company issued 2,699,531 shares of Common Stock in connection with its acquisition of the Smart Retail product suite of ISM Connect, LLC. See Note 3 for further details.~~

We account for income taxes as required by FASB ASC Topic No. 740, Income Taxes. This Topic clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Topic also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Topic requires an entity to recognize the financial statement impact of a tax position when it is more likely than not that the position will be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. In addition, the Topic permits an entity to recognize interest and penalties related to tax uncertainties as either income tax expense or operating expenses. The Company has chosen to recognize interest and penalties related to tax uncertainties as income tax expense.

The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard. The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are: (1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax liabilities against gross deferred tax assets); (2) taxable income in prior carryback years, if carryback is permitted under the applicable tax law; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards.

In assessing whether a valuation allowance is required, significant weight is to be given to evidence that can be objectively verified. A significant factor in the Company’s assessment is that the Company ~~has been~~was in a five-year historical cumulative loss as of the end of fiscal ~~2017.~~2018. These facts, combined with uncertain near-term market and economic conditions, reduced the Company’s ability to rely on projections of future taxable income in assessing the realizability of its deferred tax assets.

After a review of the four sources of taxable income as of December 31, ~~2018 as described above,~~2019, and after consideration of the Company’s ~~continuing~~ cumulative loss position as of December 31, ~~2018,~~2019, the Company will continue to reserve its U.S.-based deferred tax amounts, which total ~~$52.4~~$50.4 million as of ~~September 30, 2019.~~March 31, 2020.

The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. Currently there are no audits in process or pending from Federal ~~income~~or state tax ~~returns of the Company are currently subject to IRS examination for the 2015 – 2017 tax years.~~authorities. State income tax returns are subject to examination for a period of three to four years after ~~filing and currently~~filing. As of December 31, 2019, the ~~2014-2017~~company had no outstanding tax ~~years are open for audit.~~audits. The outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. We may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our consolidated financial results. It is the Company’s policy to classify any interest and/or penalties in the consolidated financial statements as a component of income tax expense.

~~In June 2019, pursuant to an Asset Purchase Agreement entered earlier in~~On March 27, 2020, President Trump signed into U.S. federal law the same month, the Company sold certain assets of its Poser 3D animation software product to Bondware, Inc. for $500,000, of which $350,000 was paid at closing, with the remainder to be paid in quarterly installments over three years. The Company recorded a gain on the transaction in the amount of approximately $483,000,Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which is ~~presented as Other Income~~aimed at providing emergency assistance and health care for individuals, families and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. In particular, under the CARES Act, (i) for taxable years beginning before 2021, net operating loss carryforwards and carrybacks may offset 100% of taxable income, (ii) NOLs arising in 2018, 2019 and 2020 taxable years may be carried back to each of the ~~consolidated statements~~preceding five years to generate a refund and (iii) for taxable years beginning in 2019 and 2020, the base for interest deductibility is increased from 30% to 50% of ~~operations.~~EBITDA. We are analyzing the different aspects of the CARES Act to determine whether any specific provisions may impact us.

The Company evaluates and discloses subsequent events as required by FASB ASC Topic No. 855, Subsequent Events. The Topic establishes general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the financial statements are issued or are available to be issued. Subsequent events have been evaluated as of the date of this filing and no further disclosures are required.

During April 2020, certain holders of common stock warrants exercised the warrants for approximately 1.0 million common shares, resulting in cash proceeds of approximately $2.3 million.

In March 2020, the World Health Organization categorized coronavirus disease 2019 (COVID-19) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects are currently unknown. While the response to the COVID-19 outbreak continues to rapidly evolve, it has led to stay-at-home orders and social distancing guidelines that have seriously disrupted activities in large segments of the economy.

In April 2020, we saw a reduction in the number of SafePath platform subscribers compared to March 2020, which we believe was driven by the COVID-19 related economic slowdown. The Company considers the outbreak of COVID-19 as a non-recognized subsequent event in accordance with accounting standards codification Topic 855, Subsequent Events, requiring disclosure in these unaudited condensed consolidated financial Statements. The Company’s consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented.

As the impact of the COVID-19 pandemic on the economy and the Company’s operations evolves, we will continue to monitor the impact on the Company’s operations and, if needed, postpone non-essential capital expenditures, reduce operating costs, and substantially reduce discretionary spending.

Item 2. Management’s Discussion and ~~Analysis~~Analysis of Financial Condition and Results of Operations

In this document, the terms “Smith Micro,” “Company,” “we,” “us,” and “our” refer to Smith Micro Software, Inc. and, where appropriate, its subsidiaries.

This Quarterly Report on Form 10-Q (“Report”) contains forward-looking statements regarding Smith Micro which include, but are not limited to, statements concerning customer concentration, projected revenues, market acceptance of products, the success and timing of new product introductions, the competitive factors affecting our business, our ability to raise additional capital, gross profit and income, our ability to remain a going concern, our expenses, and the protection of our intellectual property. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us. Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “potential,” “believes,” “seeks,” “estimates,” “should,” “may,” “will,” and variations of these words or similar expressions are intended to identify forward-looking statements. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, our actual results could differ materially from those expressed or implied in any forward-looking statements as a result of various factors. Such factors include, but are not limited to, the following:

The forward-looking statements contained in this Report are made on the basis of the views and assumptions of management regarding future events and business performance as of the date this Report is filed with the Securities and Exchange Commission (the “SEC”). In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. We do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date this Report is filed.

Smith Micro develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless ~~service providers~~ and cable ~~multiple~~ service ~~operators (“MSOs”)~~providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, ~~our solutions~~we strive to enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer ~~devices for the Internet of Things (“IoT”).~~IoT devices. Our portfolio ~~also~~ includes a wide range of products for creating, sharing and monetizing rich content, such as visual voice messaging, ~~optimizing~~ retail content display optimization and performance analytics ~~capabilities, and graphics applications.~~on any product set.

We continue to innovate and evolve our business to ~~take advantage of~~respond to industry trends and maximize opportunities in emerging markets, such as digital lifestyle services and online safety, “Big Data” analytics, automotive telematics, and the consumer IoT marketplace. The key to our longevity, however, is not simply technological innovation, but aour never-ending focus on ~~customer~~understanding our customers’ needs and delivering value.

The table below sets forth certain statements of operations and comprehensive loss data expressed as a percentage of revenues for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019. Our historical results are not necessarily indicative of the operating results that may be expected in the future.

	For the Three Months Ended September 30,							For the Nine Months Ended September 30,							For the Three Months Ended March 31,
	2019			2018				2019			2018				2020			2019
Revenues		100.0	%		100.0		%		100.0	%		100.0		%		100.0	%		100.0		%
Cost of revenues		8.6			15.0				9.3			18.0				8.8			10.9
Gross profit		91.4			85.0				90.7			82.0				91.2			89.1
Operating expenses:
Selling and marketing		15.2			20.1				17.8			23.7				20.9			23.3
Research and development		26.0			31.4				27.3			34.3				28.0			31.8
General and administrative		20.3			31.4				24.2			33.3				27.5			32.0
Restructuring expense		0.3			1.3				0.5			0.7				—			1.2
Total operating expenses		61.8			84.2				69.8			92.0				76.4			88.3
Operating income (loss)		29.6			0.8				20.9			(10.0	)
Interest income (expense), net		0.7			(2.0	)			0.4			(2.4	)
Change in fair value of warrant liability		—			(13.8	)			—			(16.5	)
Gain on sale of software product		—			—				1.6			—
Operating income																14.8			0.8
Interest income, net																0.6			—
Other expense		—			—				—			(0.3	)			—			(0.1	)
Income (loss) before provision for income taxes		30.3			(15.0	)			22.9			(29.2	)
Income before provision for income taxes																15.4			0.7
Provision for income tax expense		—			0.1				—			0.2				—			0.0
Net income (loss)		30.3	%		(15.1	)	%		22.9	%		(29.4	)	%
Net income																15.4	%		0.7		%

~~The following table shows the revenues generated by each business segment for the three and nine months ended September 30, 2019 and 2018 (in thousands):~~

Three Months Ended ~~September 30, 2019~~March 31, 2020 Compared to the Three Months Ended ~~September 30, 2018~~March 31, 2019

Revenues. Revenues were ~~$11.8~~$13.3 million and ~~$6.5~~$8.4 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively, representing an increase of ~~$5.3~~$4.9 million, or ~~81%~~58%. ~~Excluding the ViewSpot acquisition, revenue growth was 61% compared to the same period in 2018.~~ Wireless revenue of ~~$11.6~~$13.2 million increased ~~$5.3~~$5.0 million, or ~~85%~~62%, primarily due to increased subscribers and resulting revenues from our largest customer, Sprint, associated with growth in the SafePath product. ~~Our~~This increase included revenue of $0.6 million related to the newly acquired ~~product, ViewSpot, generated approximately $1.3 million in revenues during the quarter.~~Circle operator business. Graphics revenue decreased by ~~$0.1~~$0.2 million, or ~~31%~~28% over last year, primarily due to lower demand as a result of reduced strategic focus and marketing efforts in the segment.

Cost of revenues. Cost of revenues were ~~$1.0~~$1.2 million and $0.9 million for ~~each of~~ the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018.~~respectively.

Gross profit. Gross profit was ~~$10.8~~$12.1 million, or 91% of revenues, for the three months ended ~~September 30, 2019,~~March 31, 2020, compared to ~~$5.5~~$7.5 million, or ~~85%~~89% of revenues, for the three months ended ~~September 30, 2018.~~March 31, 2019. This increase was due primarily to lower variable costs in conjunction with the revenue mix during the quarter.

Selling and marketing. Selling and marketing expenses were ~~$1.8~~$2.8 million and ~~$1.3~~$2.0 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. This increase was primarily due to additional headcount related expenses, an increase in ~~headcount for ViewSpot~~marketing event participation, and ~~commissions due to~~ increased ~~performance levels.~~intangibles amortization. The amortization of intangible assets in selling and marketing expense was ~~$0.1 million~~$267 thousand and $91 thousand for ~~each of~~ the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018.~~respectively.

Research and development. Research and development expenses were ~~$3.1~~$3.7 million and ~~$2.0~~$2.7 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. This increase was primarily due to additional headcount related expenses for ~~ViewSpot~~SafePath development, as well as increased intangibles amortization. The amortization of intangible assets in research and ~~SafePath development.~~development expense was $248 thousand and $105 thousand for the three months ended March 31, 2020 and 2019, respectively.

General and administrative. General and administrative expenses were ~~$2.4~~$3.7 million and ~~$2.0~~$2.7 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. This increase was primarily due to $0.9 million of acquisition expenses incurred in 2020 and an increase in non-cash stock ~~compensation and variable compensation expense.~~compensation.

Restructuring expense. Restructuring expense was ~~$39~~$6 thousand and ~~$83~~$104 thousand for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. Restructuring charges in both periods related primarily to one-time employee termination costs.

Interest income (expense), net. Interest income of ~~$87~~$86 thousand for the three months ended ~~September 30, 2019~~March 31, 2020 related primarily to interest earned on cash equivalents. Interest expense was $0.1 million for the three months ended September 30, 2018, which consisted of interest on notes payable and amortization of the debt discount and issuance costs. This period to period decrease was due to a reduction in outstanding debt from the previous year.

~~Change in fair value of warrant liability.~~ The change in the fair value of warrant liability was $1.0 million for the three months ended September 30, 2018. The warrants were reclassified from liabilities to equity in connection with the November 2018 stock offering.

~~Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018~~

~~Revenues~~. Revenues were $31.1 million and $18.9 million for the nine months ended September 30, 2019 and 2018, respectively, representing an increase of $12.1 million, or 64%. Excluding the ViewSpot acquisition, revenue growth was 45% compared to the same period in 2018. Wireless revenue of $30.4 million increased $12.8 million, or 73%, primarily due to increased subscribers and resulting revenues from our largest customer, Sprint, associated with growth in the SafePath product. Our newly acquired product, ViewSpot,

generated approximately $3.7 million in revenues during the period. The growth in Wireless revenues from these products was slightly offset by a reduced strategic focus on the NetWise products. Graphics revenue decreased by $0.6 million, or 56% over last year, primarily related to the termination of our reseller agreement with Japanese software developer Celsys in October 2017, which permitted certain post-termination distribution rights for the English-language version of Clip Studio Paint (formerly Manga Studio), through April 2018. Graphics revenues also declined during the period due to lower demand as a result of reduced strategic focus and marketing efforts in the segment.

~~Cost of revenues~~. Cost of revenues were $2.9 million and $3.4 million for the nine months ended September 30, 2019 and 2018, respectively, representing a decrease of $0.5 million, or 15%, primarily related to lower internal and external variable costs in conjunction with the mix of revenue.

~~Gross profit~~. Gross profit was $28.2 million, or 91% of revenues, for the nine months ended September 30, 2019, compared to $15.5 million, or 82% of revenues, for the nine months ended September 30, 2018. This increase was due primarily to lower variable costs in conjunction with the revenue mix during the quarter.

~~Selling and marketing~~. Selling and marketing expenses were $5.5 million and $4.5 million for the nine months ended September 30, 2019 and 2018, respectively. This increase was primarily due to an increase in headcount for ViewSpot and commissions due to increased performance levels. The amortization of intangible assets was $0.3 million and $0.1 million for the nine months ended September 30, 2019 and 2018, respectively.

~~Research and development~~. Research and development expenses were $8.5 million and $6.5 million for the nine months ended September 30, 2019 and 2018, respectively. This increase was primarily due to additional headcount related expenses for ViewSpot and SafePath development.

~~General and administrative~~. General and administrative expenses were $7.5 million and $6.3 million for the nine months ended September 30, 2019 and 2018, respectively. This increase was primarily due to an increase in non-cash stock compensation, variable compensation expense, consulting fees, and acquisition fees.

~~Restructuring expense.~~ Restructuring expense was $154 thousand and $135 thousand for the nine months ended September 30, 2019 and 2018, respectively. Restructuring charges in both periods related primarily to one-time employee termination costs.

~~Interest income (expense), net~~. Interest income of $117 thousand for the nine months ended September 30, 2019 related primarily to interest earned on cash equivalents. Interest expense was $0.4 million for the nine months ended September 30, 2018, which consisted of interest on notes payable and amortization of the debt discount and issuance costs. This period to period decrease was due to a reduction in outstanding debt from the previous year.

~~Gain on sale of software product.~~ ~~The gain on sale of software product of $0.5 million resulted from the sale of the Company’s Poser 3D animation software in June 2019.~~

~~Change in fair value of warrant liability.~~ The change in the fair value of warrant liability was $3.1 million for the nine months ended September 30, 2018. The warrants were reclassified from liabilities to equity in connection with the November 2018 stock offering.

~~See Note 4 of the consolidated financial statements for management’s going concern evaluation of the Company.~~

At ~~September 30, 2019,~~March 31, 2020, we had ~~$23.9~~$19.5 million in cash and cash equivalents and ~~$30.6~~$22.9 million of working capital.

Net cash provided by operating activities was $2.3 million for the three months ended March 31, 2020. The primary sources of operating cash were income from operations of $2.0 million, an add-back of non-cash expenses totaling $1.5 million, a decrease in prepaid expenses and other assets of $0.2 million, and an increase in deferred revenue of $0.3 million. The primary uses of operating cash were an increase in accounts receivable of $1.0 million and a decrease in accounts payable and accrued expenses of $0.8 million.

Net cash used in operating activities was ~~$4.8~~$0.7 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2019. The primary uses of operating cash were an increase in accounts receivable of ~~$4.0~~$1.8 million, a decrease in accounts payable and accrued expenses of $0.1 million, and a decrease in deferred revenue of $0.1 million. This usage was partially offset by a decrease in prepaid expenses and other assets of ~~$54 thousand, a decrease in accounts payable and accrued expenses of $0.7~~$0.2 million, and ~~a decrease in deferred revenue of $0.2 million. This usage was partially offset by~~ an add-back of non-cash expenses totaling ~~$2.6~~$1.1 million.

Net cash used in operating activities was $3.0 million for the nine months ended September 30, 2018. The primary uses of operating cash were to fund our net loss of $5.5 million, adding back non-cash net expenses of $4.6 million, an increase in accounts receivable of $1.2 million, an increase in prepaid expenses and other assets of $0.1 million, and a decrease in accounts payable and accrued expenses of $0.8 million. This usage was partially offset by an increase in deferred revenue of $47 thousand.

Net cash used in investing activities was ~~$4.4~~$13.1 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2020, relating primarily to a $12.2 million net cash payment for the Circle operator business acquisition and $0.8 million of capital expenditures.

Net cash used in investing activities was $4.1 million for the three months ended March 31, 2019, relating to a $4.0 million net cash payment for the Smart Retail acquisition ~~proceeds of $0.4 million from the sale of the Poser 3D animation software product,~~ and ~~$0.8~~$0.1 million of ~~capital expenditures.~~

~~Net cash used in investing activities was $172 thousand for the nine months ended September 30, 2018, which related to~~ capital expenditures.

Net cash ~~used in~~provided by financing activities was ~~$11.3~~$2.1 million for the ~~nine~~three months ended ~~September 30, 2019, relating~~March 31, 2020, due primarily to ~~$11.4~~$2.0 million from proceeds from the exercise of common stock ~~warrants and $119 thousand in payments of dividends on preferred stock.~~warrants.

Net cash ~~provided by~~used in financing activities was ~~$9.4 million~~$43 thousand for the ~~nine~~three months ended ~~September 30, 2018. We received net proceeds~~March 31, 2019, of ~~approximately $10.7 million from the sale of our common stock in two private placements,~~ which ~~was partially offset by payments of $1.0 million of~~$34 thousand related ~~party notes payable and $0.4 million~~to a payment of dividends on preferred stock.

During our normal course of business, we have made certain indemnities, commitments, and guarantees under which we may be required to make payments in relation to certain transactions. These include: intellectual property indemnities to our customers and licensees in connection with the use, sale and/or license of our products; indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease; indemnities to vendors and service providers pertaining to claims based on negligence or willful misconduct; indemnities involving the accuracy of representations and warranties in certain contracts; and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. We may also issue a guarantee in the form of a standby letter of credit as security for contingent liabilities under certain customer contracts. The duration of these indemnities, commitments and guarantees varies, and in certain cases, may be indefinite. The majority of these indemnities, commitments, and guarantees may not provide for any limitation of the maximum potential for future payments we could be obligated to make. We have not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets. There were no material changes in our contractual obligations and other commercial commitments that would require an update to the disclosure provided in our ~~2018~~2019 Annual Report on Form 10-K, filed with the SEC on March ~~27, 2019.~~13, 2020 (“Annual Report”).

See Note 2 of our Notes to the Consolidated Financial Statements for information regarding our recent accounting guidance.

Our discussion and analysis of results of operations, financial condition, and liquidity are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may materially differ from these estimates under different assumptions or conditions. On an on-going basis, we review our estimates to ensure that they appropriately reflect changes in our business or new information as it becomes available. See Note 2 of our Notes to the Consolidated Financial Statements for information regarding our critical accounting policies and estimates.

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of ~~September 30, 2019.~~March 31, 2020. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have determined that as of ~~September 30, 2019,~~March 31, 2020, our disclosure controls and procedures were effective to ensure that the information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management is responsible for the integrity and objectivity of all information presented in this Report. The consolidated financial statements were prepared in conformity with U.S. GAAP and include amounts based on management’s best estimates and judgments. Management believes the consolidated financial statements fairly reflect the form and substance of transactions and that the financial statements fairly represent the Company’s financial position and results of operations for the periods and as of the dates stated therein.

The Audit Committee of the Company’s Board of Directors, which is composed solely of independent directors, meets regularly with our independent registered public accounting firm, SingerLewak LLP, and representatives of management to review accounting, financial reporting, internal control, and audit matters, as well as the nature and extent of the audit effort. The Audit Committee is responsible for the engagement of the independent auditors. The independent auditors have free access to the Audit Committee.

There have been no changes in our internal controls over financial reporting during the quarter ended ~~September 30, 2019~~March 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

In addition to the other information included in this Report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report, and the factors identified at the beginning of Part I, Item 2 of this Report, under the heading, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which could materially affect our business, financial condition, cash flows, or results of operations. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently considers immaterial also may materially adversely affect its business, financial condition, and/or operating results. There have been no material changes to the risk factors included in our Annual Report for the year ended December 31, 2019, other than as described below.

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.

In our Wireless business segment, we sell primarily to large wireless carriers, cable operators, and OEMs, so there are a limited number of actual and potential customers for our products, resulting in significant customer concentration. For the year ended December 31, 2019, sales to Sprint and its affiliates comprised 84% of our total revenues.

Because of our relatively high customer concentration, a small number of significant customers possess a relative level of pricing and negotiating power over us, enabling them to achieve advantageous pricing and other contractual terms, including the ability to terminate their agreements with us with a limited amount of notice. Any material decrease in our sales to any of these customers would materially affect our revenue and profitability.

On April 1, 2020, Sprint Corporation and T-Mobile (US), Inc. (“T-Mobile”) completed their previously announced merger transaction, with the combined company continuing to operate as T-Mobile. In the event that the combined company does not elect to continue using the solutions that we currently deliver, or that our sales to the combined company materially decrease as compared with our sales to Sprint pre-merger, our revenues and profitability would be materially and adversely affected. In addition and in connection with the Sprint/T-Mobile merger, the combined company has agreed to divest certain assets to DISH Network Corporation, including Sprint’s Boost Mobile pre-paid wireless services business (“Boost”). A portion of our solutions sales to Sprint includes sales to Boost. In the event that the divested business does not elect to continue using the solutions that we currently deliver to it, or that our sales to the divested business materially decrease as compared with our sales for Boost pre-divestiture, our revenues and profitability may be materially and adversely affected.

If there are delays in the distribution of our products or if customer negotiations for our new products cannot occur on a timely basis, we may not be able to generate revenues sufficient to meet the needs of the business in the foreseeable future or at all.

Our results of operations and financial condition may be adversely affected by public health epidemics, including the ongoing COVID-19 global health pandemic.

On March 11, 2020, the World Health Organization declared the global outbreak of COVID-19 to be a pandemic. The COVID-19 pandemic has significantly impacted economic activity and markets around the world. The circumstances relating to the pandemic are complex and evolving, with a broad number of governmental and commercial efforts to contain the spread of the virus globally. We have implemented a number of measures in an effort to protect our employees’ health and well-being, including having office workers work remotely, suspending employee travel, and withdrawing from certain industry events. The duration and extent of the impact of the coronavirus pandemic on our business, operations and financial results depends on factors that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, the impact on economic activity, including the possibility of recession or financial market instability, and the impact of these and other factors on our employees, customers, industry partners, and suppliers.

In the event of illnesses to key employees or a significant portion of our workforce resulting from COVID-19, we may experience inefficiencies, delays, and/or disruptions in research and development activities and increased costs resulting from our efforts to mitigate the impact of COVID-19, all of which may adversely affect our business, operations and financial results.

Additionally, government reaction to the pandemic and restrictions and limitations applied by the government as a result, continued widespread growth in infections, travel restrictions, quarantines, or other business and industry closures as a result of the pandemic could, among other things, impact the ability of our employees and contractors to perform their duties, cause increased technology and security risk due to extended and company-wide telecommuting, lead to disruptions with our suppliers, hamper our ability to integrate recent technology acquisitions and cause disruption in our relationship with our customers or prospective customers. Many of our customers and suppliers have temporarily modified their business operations as a result of the coronavirus pandemic and government reaction. Our customers may experience decreased demand for the value-added products and services that we provide to them and may seek to suspend or delay existing or new initiatives involving our products and services. A decrease in demand for our products and services or the suspension or delay of existing or new initiatives by our customers could materially adversely affect our business, financial condition, and results of operations.

To the extent the pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks set forth in Item 1A “Risk Factors” in our Annual Report and those additional risks set forth above.

The table set forth below shows all repurchases of securities by us during the three months ended ~~September 30, 2019:~~March 31, 2020:

ISSUER PURCHASES OF EQUITY SECURITIES	ISSUER PURCHASES OF EQUITY SECURITIES										ISSUER PURCHASES OF EQUITY SECURITIES
Period		Total Number of Shares (or Units) Purchased			Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs			Total Number of Shares (or Units) Purchased			Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1 - 31, 2019			14,920	(1)	$	3.41		—		—
August 1 - 31, 2019			12,784	(2)		6.27		—		—
September 1 - 30, 2019			12,783	(2)		5.67		—		—
January 1 - 31, 2020													14,812		$	4.70		—		—
February 1 - 29, 2020													14,377			6.41		—		—
March 1 - 31, 2020													80,399			5.14		—		—
Total			40,487		$	5.03							109,588	(1)	$	5.25

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

DELAWARE	33‑0029027
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	2
	Consolidated Balance Sheets as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019	2
	Consolidated Statements of Operations ~~and Comprehensive Loss~~ for the Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018~~2019	3
	Consolidated Statement of Stockholders’ Equity for the Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018~~2019	4
	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	65
	Notes to the Consolidated Financial Statements	76
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1614
Item 4.	Controls and Procedures	2117

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	2218
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2219
Item 6.	Exhibits	2320

SIGNATURES		2421

	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
	(unaudited)			(unaudited)
Lease cost	$	518		$	1,553
Sublease income		(151	)		(452	)
Total lease cost	$	367		$	1,101

	For the Three Months Ended March 31,
	2020			2019
	(unaudited)
Lease cost	$	527		$	397
Sublease income		(151	)		(151	)
Total lease cost	$	376		$	246

	As of March 31, 2020
	(unaudited)
Weighted average remaining lease term (years)		5.22
Weighted average discount rate		6.89	%

Exhibit		Description

2.1	Asset Purchase Agreement, dated as of February 12, 2020, between the Company and Circle Media Labs Inc., incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, filed on February 19, 2020

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

	SMITH MICRO SOFTWARE, INC.

~~November 1, 2019~~May 11, 2020	By /s/	William W. Smith, Jr.
	William W. Smith, Jr.
	Chairman of the Board, President and Chief Executive Officer
	(Principal Executive Officer)

~~November 1, 2019~~May 11, 2020	By /s/	Timothy C. Huffmyer
	Timothy C. Huffmyer
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company