# EDGAR Filing Document

**Accession Number:** 0000948708
**File Stem:** 0001437749-25-033340
**Filing Date:** 2025-11
**Character Count:** 195645
**Document Hash:** b5a8892b3bca0150ec833732a8c9ea3a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-033340.hdr.sgml**: 20251105

**ACCESSION NUMBER**: 0001437749-25-033340

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 75

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251105

**DATE AS OF CHANGE**: 20251105

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SMITH MICRO SOFTWARE, INC.
- **CENTRAL INDEX KEY:** 0000948708
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 330029027
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-35525
- **FILM NUMBER:** 251453986

**BUSINESS ADDRESS:**
- **STREET 1:** 5800 CORPORATE DRIVE
- **CITY:** PITTSBURGH
- **STATE:** PA
- **ZIP:** 15237
- **BUSINESS PHONE:** 4128375300

**MAIL ADDRESS:**
- **STREET 1:** 5800 CORPORATE DRIVE
- **CITY:** PITTSBURGH
- **STATE:** PA
- **ZIP:** 15237

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SMITH MICRO SOFTWARE, INC
- **DATE OF NAME CHANGE:** 20181023

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SMITH MICRO SOFTWARE INC
- **DATE OF NAME CHANGE:** 19950731

?xml version='1.0' encoding='ASCII'? smsi20250930_10q.htm

[**Table of Contents**](#toc)

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

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**FORM 10-Q**

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**(Mark One)**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended September 30, 2025**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Commission File Number 001-35525**

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## SMITH MICRO SOFTWARE, INC.
**(Exact name of registrant as specified in its charter)**

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---

| | |
|:---|:---|
| **Delaware** | **33-0029027** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(I.R.S. Employer**<br> **Identification No.)** |

---

---

| | |
|:---|:---|
| **5800 Corporate Drive, Pittsburgh, PA**  | **15237** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**(412) 837-5300**

**(Registrant**'**s telephone number, including area code)**

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Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br> **Symbol(s)** | **Name of each exchange on which registered** |
| **Common Stock, par value $0.001 per share** | **SMSI** | **The Nasdaq Capital Market** |

---

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.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☐ |  |  |

---

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 November 3, 2025 there were 21,585,712 shares of Common Stock outstanding.

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[**Table of Contents**](#toc)

**SMITH MICRO SOFTWARE, INC.**

**QUARTERLY REPORT ON FORM 10-Q**

**September 30, 2025**

**<u>**TABLE OF CONTENTS**</u>**

---

| | | |
|:---|:---|:---|
| **<u>Explanatory Note</u>** | **<u>Explanatory Note</u>** |  |
| **PART I.** | [**<u>FINANCIAL INFORMATION</u>**](#part1) |  |
| Item 1. | [<u>Financial Statements (Unaudited)</u>](#finstmts) | [2](#finstmts) |
|  | [<u>Consolidated Balance Sheets</u> as of September 30, 2025 and December 31, 2024](#bs) | [2](#bs) |
|  | [<u>Consolidated Statements of Operations</u> for the Three and Nine Months Ended September 30, 2025 and 2024](#ops) | [3](#ops) |
|  | [<u>Consolidated Statements of Stockholders</u><u>'</u> <u>Equity</u> for the Three and Nine Months Ended September 30, 2025 and 2024](#se) | [4](#se) |
|  | [<u>Consolidated Statements of Cash Flows</u> for the Nine Months Ended September 30, 2025 and 2024](#cf) | [6](#cf) |
|  | [<u>Notes to the Consolidated Financial Statements</u>](#notes) | [7](#notes) |
| Item 2. | [<u>Management</u><u>'</u><u>s Discussion and Analysis of Financial Condition and Results of Operations</u>](#mda) | [23](#mda) |
| Item 4. | [<u>Controls and Procedures</u>](#controls) | [29](#controls) |
| **PART II.** | [**<u>OTHER INFORMATION</u>**](#part2) |  |
| Item 1. | [<u>Legal Proceedings</u>](#legal) | [30](#legal) |
| Item 1A. | [<u>Risk Factors</u>](#risk) | [30](#risk) |
| Item 2. | [<u>Unregistered Sales of Equity Securities and Use of Proceeds</u>](#unregistered) | [31](#unregistered) |
| Item 6. | [<u>Exhibits</u>](#exhibits) | [32](#exhibits) |
| [**<u>SIGNATURES</u>**](#sigs) | [**<u>SIGNATURES</u>**](#sigs) | [33](#sigs) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1

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[**Table of Contents**](#toc)

**PART I. FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**SMITH MICRO SOFTWARE, INC.**

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except share and par value data)**

---

| | | |
|:---|:---|:---|
|  | ***September 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
|  | **(unaudited)** | **(audited)** |
| **Assets** |  |  |
| Current assets: |  |  |
| Cash and cash equivalents | $1394 | $2808 |
| Accounts receivable, net of related allowances of $106 and $3 at 2025 and 2024, respectively | 2577 | 5721 |
| Prepaid expenses and other current assets | 1088 | 1467 |
| Total current assets | 5059 | 9996 |
| Equipment and improvements, net | 372 | 538 |
| Right-of-use assets | 1437 | 2367 |
| Other assets | 493 | 496 |
| Intangible assets, net | 19768 | 23597 |
| Goodwill |  | 11052 |
| Total assets | $27129 | $48046 |
| **Liabilities and Stockholders' Equity** |  |  |
| Current liabilities: |  |  |
| Accounts payable | $2279 | $1738 |
| Accrued payroll and benefits | 1597 | 1694 |
| Current operating lease liabilities | 1137 | 1279 |
| Other current liabilities | 778 | 940 |
| &nbsp;&nbsp;&nbsp; Notes payable net of discount | 731 |  |
| Total current liabilities | 6522 | 5651 |
| Non-current liabilities: |  |  |
| Warrant liabilities | 87 | 224 |
| Operating lease liabilities | 501 | 1287 |
| Deferred tax liabilities, net | 128 | 128 |
| Total non-current liabilities | 716 | 1639 |
| Commitments and contingencies |  |  |
| Stockholders' equity: |  |  |
| Common stock, par value $0.001 per share; 100,000,000 shares authorized; 21,477,754 and 17,673,404 shares issued and outstanding at 2025 and 2024, respectively | 21 | 18 |
| Additional paid-in capital | 399924 | 395383 |
| Accumulated comprehensive deficit | (380054) | (354645) |
| Total stockholders' equity | 19891 | 40756 |
| Total liabilities and stockholders' equity | $27129 | $48046 |

---

See accompanying notes to the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2

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[**Table of Contents**](#toc)

**SMITH MICRO SOFTWARE, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(in thousands, except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended*** | ***For the Three Months Ended*** | ***For the Nine Months Ended*** | ***For the Nine Months Ended*** |
|  | ***September 30,*** | ***September 30,*** | ***September 30,*** | ***September 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
|  | **(unaudited)** | **(unaudited)** | **(unaudited)** | **(unaudited)** |
| Revenues | $4347 | $4648 | $13389 | $15585 |
| Cost of revenues (including depreciation of $0, $3, $1, and $14 in the three and nine months ended September 30, 2025 and 2024, respectively) | 1136 | 1321 | 3566 | 4915 |
| Gross profit | 3211 | 3327 | 9823 | 10670 |
| Operating expenses: |  |  |  |  |
| Selling and marketing | 1478 | 2060 | 4787 | 7202 |
| Research and development | 2603 | 3637 | 8213 | 11328 |
| General and administrative | 2268 | 2715 | 7660 | 8213 |
| Depreciation and amortization | 1347 | 1422 | 4045 | 4872 |
| &nbsp;&nbsp;&nbsp; Gain on sale of ViewSpot, net |  |  | (1287) |  |
| Goodwill impairment |  |  | 11052 | 23989 |
| Total operating expenses | 7696 | 9834 | 34470 | 55604 |
| Operating loss | (4485) | (6507) | (24647) | (44934) |
| Other income (expense): |  |  |  |  |
| Change in fair value of warrant liabilities | 34 | 221 | 137 | 448 |
| Interest (expense) income, net | (66) | (12) | (114) | 89 |
| Other (expense) income, net | (18) | (71) | (149) | 130 |
| Loss before provision for income tax | (4535) | (6369) | (24773) | (44267) |
| Provision for income tax expense |  |  | 1 | 39 |
| Net loss | $(4535) | $(6369) | $(24774) | $(44306) |
| Deemed dividend | (635) |  | (635) |  |
| Net loss attributable to common stockholders | $(5170) | $(6369) | $(25409) | $(44306) |
| Net loss per share attributable to common stockholders – basic and diluted |  |  |  |  |
| Basic and diluted | $(0.25) | $(0.54) | $(1.30) | $(4.17) |
| Weighted average shares outstanding: |  |  |  |  |
| Basic and diluted | 20977 | 11832 | 19547 | 10626 |

---

See accompanying notes to the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

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[**Table of Contents**](#toc)

**SMITH MICRO SOFTWARE, INC.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS**' **EQUITY**

**(in thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | ***Additional*** | ***Accumulated*** |  |
|  | ***Common Stock*** | ***Common Stock*** | ***Paid-in*** | ***Comprehensive*** |  |
|  | ***Shares*** | ***Amount*** | ***Capital*** | ***Deficit*** | ***Total*** |
| BALANCE, June 30, 2025 (unaudited) | 19382 | $19 | $397280 | $(374884) | $22415 |
| Non-cash compensation recognized on stock options and employee stock purchase plan ("ESPP") | *—* |  | 4 |  | 4 |
| Restricted stock grants, net of cancellations | 634 | 1 | 639 |  | 640 |
| Cancellation of shares for payment of withholding tax | (151) |  | (120) |  | (120) |
| Issuance of common stock and warrants in connection with common stock offering, net of issuance costs | 1613 | 1 | 964 |  | 965 |
| Debt discount for warrants issued | *—* |  | 522 |  | 522 |
| Deemed dividend | *—* |  | 635 | (635) |  |
| Net loss | *—* |  |  | (4535) | (4535) |
| BALANCE, September 30, 2025 (unaudited) | 21478 | $21 | $399924 | $(380054) | $19891 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | ***Additional*** | ***Accumulated*** |  |
|  | ***Common Stock*** | ***Common Stock*** | ***Paid-in*** | ***Comprehensive*** |  |
|  | ***Shares*** | ***Amount*** | ***Capital*** | ***Deficit*** | ***Total*** |
| BALANCE, December 31, 2024 (audited) | 17673 | $18 | $395383 | $(354645) | $40756 |
| Non-cash compensation recognized on stock options and ESPP | *—* |  | 15 |  | 15 |
| Restricted stock grants, net of cancellations | 2625 | 2 | 2810 |  | 2812 |
| Cancellation of shares for payment of withholding tax | (436) |  | (407) |  | (407) |
| ESPP shares issued | 3 |  | 2 |  | 2 |
| Issuance of common stock and warrants in connection with common stock offering, net of issuance costs | 1613 | 1 | 964 |  | 965 |
| Debt discount for warrants issued | *—* |  | 522 |  | 522 |
| Deemed dividend | *—* |  | 635 | (635) |  |
| Net loss | *—* |  |  | (24774) | (24774) |
| BALANCE, September 30, 2025 (unaudited) | 21478 | $21 | $399924 | $(380054) | $19891 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

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**SMITH MICRO SOFTWARE, INC.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS**' **EQUITY**

**(in thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | ***Additional*** | ***Accumulated*** |  |
|  | ***Common Stock*** | ***Common Stock*** | ***Paid-in*** | ***Comprehensive*** |  |
|  | ***Shares*** | ***Amount*** | ***Capital*** | ***Deficit*** | ***Total*** |
| BALANCE, June 30, 2024 (unaudited) | 10625 | $11 | $386775 | $(343885) | $42901 |
| Non-cash compensation recognized on stock options and ESPP | *—* |  | 7 |  | 7 |
| Restricted stock grants, net of cancellations | 417 |  | 1243 |  | 1243 |
| Cancellation of shares for payment of withholding tax | (33) |  | (39) |  | (39) |
| ESPP shares issued | 4 |  | 3 |  | 3 |
| Issuance of Common Stock for Pre-Funded Warrants Exercise | 844 | 1 | (1) |  |  |
| Net loss | *—* |  |  | (6369) | (6369) |
| BALANCE, September 30, 2024 (unaudited) | 11857 | $12 | $387988 | $(350254) | $37746 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | ***Additional*** | ***Accumulated*** |  |
|  | ***Common Stock*** | ***Common Stock*** | ***Paid-in*** | ***Comprehensive*** |  |
|  | ***Shares*** | ***Amount*** | ***Capital*** | ***Deficit*** | ***Total*** |
| BALANCE, December 31, 2023 (audited) | 9348 | $9 | $381329 | $(305948) | $75390 |
| Non-cash compensation recognized on stock options and ESPP | *—* |  | 16 |  | 16 |
| Restricted stock grants, net of cancellations | 683 | 1 | 3506 |  | 3507 |
| Cancellation of shares for payment of withholding tax | (88) |  | (217) |  | (217) |
| ESPP shares issued | 5 |  | 5 |  | 5 |
| Issuance of Common Stock, Warrants, and Pre-Funded Warrants in connection with Common Stock Offering, net of issuance costs | 1065 | 1 | 3350 |  | 3351 |
| Issuance of Common Stock for Pre-Funded Warrants Exercise | 844 | 1 | (1) |  |  |
| Net loss | *—* |  |  | (44306) | (44306) |
| BALANCE, September 30, 2024 (unaudited) | 11857 | $12 | $387988 | $(350254) | $37746 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

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[**Table of Contents**](#toc)

**SMITH MICRO SOFTWARE, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

---

| | | |
|:---|:---|:---|
|  | ***For the Nine Months Ended*** | ***For the Nine Months Ended*** |
|  | ***September 30,*** | ***September 30,*** |
|  | ***2025*** | ***2024*** |
|  | **(unaudited)** | **(unaudited)** |
| **Operating activities:** |  |  |
| Net loss | $(24774) | $(44306) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Depreciation and amortization | 4046 | 4886 |
| Goodwill impairment | 11052 | 23989 |
| Non-cash lease expense | 2 | (227) |
| Change in fair value of warrant liabilities | (137) | (448) |
| &nbsp;&nbsp;&nbsp; Amortization of debt discount and financing issuance costs | 20 |  |
| Provision for credit losses | 172 |  |
| Stock based compensation | 2828 | 3520 |
| &nbsp;&nbsp;&nbsp; Gain on sale of ViewSpot, net | (1287) |  |
| Gain on license of patents, net |  | (198) |
| Changes in operating accounts: |  |  |
| Accounts receivable | 2972 | 4506 |
| Prepaid expenses and other assets | 382 | 315 |
| Accounts payable, accrued, and other liabilities | (283) | (1405) |
| Net cash used in operating activities | (5007) | (9368) |
| **Investing activities:** |  |  |
| Capital expenditures, net | (52) | (17) |
| &nbsp;&nbsp;&nbsp; Proceeds from sale of ViewSpot, net | 1287 |  |
| Proceeds from license of patents, net |  | 198 |
| Net cash provided by investing activities | 1235 | 181 |
| **Financing activities:** |  |  |
| Issuance of common stock and warrants in connection with common stock offering, net of issuance costs | 966 | 3351 |
| &nbsp;&nbsp;&nbsp; Issuance of notes payable and warrants | 1233 |  |
| Proceeds from financing arrangements | 933 | 1044 |
| Repayments of financing arrangements | (776) | (829) |
| Other financing activities | 2 | 5 |
| Net cash provided by financing activities | 2358 | 3571 |
| Net decrease in cash and cash equivalents | (1414) | (5616) |
| **Cash and cash equivalents, beginning of period** | 2808 | 7125 |
| **Cash and cash equivalents, end of period** | $1394 | $1509 |
| **Supplemental disclosure of non-cash financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp; Deemed dividend | $635 | $— |

---

See accompanying notes to the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6

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[**Table of Contents**](#toc)

**SMITH MICRO SOFTWARE, INC.**

**Notes to the Consolidated Financial Statements**

**(Unaudited)**

***1.* The Company**

Smith Micro Software, Inc. ("Smith Micro" or "the Company") develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless service providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, the Company strives to enrich today's connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer Internet of Things ("IoT") devices. Smith Micro's portfolio includes family safety software solutions to support families in the digital age and visual voice messaging.

Smith Micro's solution portfolio is comprised of proven products that enable its customers to provide:

• In-demand digital services that connect today's digital lifestyle, including family location services, parental controls, and consumer IoT devices to mobile consumers worldwide; and

• Easy visual access to voice messages on mobile devices through visual voicemail and voice-to-text transcription functionality

On *June 3, 2025,* the Company sold its ViewSpot product for total consideration of $1.3 million, of which $1.0 million was paid on the closing date, with the remaining amounts to be paid in *two* installments, the *first* of which was collected on *July 1, 2025,* and the final balance was collected on *October 1, 2025.*

On *April 3, 2024,* the Company filed a certificate of amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a *one*-for-eight (*1:8*) reverse stock split of the shares of the Company's common stock, par value $0.001 per share (the "Common Stock"), with an effective time of *11:59* p.m., Eastern Time on *April 10, 2024 (*the "Reverse Stock Split"). At the effective time, every *eight* shares of Common Stock, whether issued and outstanding or held by the Company as treasury stock were automatically combined and converted (without any further act) into *one* share of fully paid and nonassessable Common Stock, with any fractional shares resulting from the Reverse Stock Split rounded up to the nearest whole share. At the effective time, the number of shares of Common Stock then outstanding was reduced from approximately 76.8 million shares to approximately 9.6 million shares due to the Reverse Stock Split.

The Reverse Stock Split did *not* change the Company's authorized shares of Common Stock from 100,000,000 shares or the par value of the Common Stock. Proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise of stock options and the settlement of restricted stock awards and the number of shares authorized and reserved for issuance pursuant to the Company's equity incentive plans (see Note *9*). Additionally, there were adjustments to the per share exercise price and the number of shares issuable upon exercise of warrants (see Note *5*).

All share and per share amounts for Common Stock (including share amounts underlying convertible securities and the applicable exercise prices of such convertible securities) in these consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split, including reclassifying an amount equal to the reduction in the number of shares of Common Stock at par value to additional paid-in capital.

***2.* Accounting Policies**

***Basis of Presentation***

The accompanying interim consolidated balance sheet as of *September 30, 2025*, and the related consolidated statements of operations and stockholders' equity for the *three* and *nine* months ended *September 30, 2025* and *2024*, and the consolidated statements of cash flows for the *nine* months ended *September 30, 2025* and *2024*, 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 of America ("U.S. GAAP") have been omitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *7*

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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 the Company's Annual Report on Form *10*-K for the fiscal year ended *December 31, 2024* filed with the SEC on *March 12, 2025* (the "*2024* Form *10*-K").

Intercompany balances and transactions have been eliminated in consolidation.

Operating results for the *three* and *nine* months ended *September 30, 2025* are *not* necessarily indicative of the results that *may* be expected for any other interim period or for the fiscal year ending *December 31, 2025*.

***Recently Adopted Accounting Pronouncements***

In *November 2023,* the Financial Accounting Standards Board, ("FASB") issued Accounting Standards Update ("ASU") *2023*-*07, Segment Reporting (Topic *280*)* – *Improvements to Reportable Segment Disclosures.* The amendments in this update are intended to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The improved disclosure requirements apply to all public entities that are required to report segment information, including those with only reportable segment. In addition to the current requirements, the amendments require all segment profit or loss and asset disclosures to be provided on an annual and interim basis. The amendments are effective for fiscal years beginning after *December 15, 2023* and will be effective for interim reporting periods beginning after *December 15, 2024.* The Company adopted ASU *2023*-*07* with *no* material effect on its consolidated financial statements other than the additional disclosure requirements, which are included in Note *11.*

***Recently Issued Accounting Pronouncements***

In *December 2023,* the FASB issued ASU *2023*-*09, Income Taxes (Topic *740*): Improvements to Income Tax Disclosures*, which provides for improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after *December 15, 2024,* and the adoption of this standard is *not* anticipated to have a significant impact on the Company's consolidated financial statements other than adding new disclosures, which the Company is currently evaluating.

In *November 2024,* the FASB issued ASU *2024*-*03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic *220*-*40*)*, which is intended to improve the decision-usefulness of expense information on public companies' income through disaggregation of relevant expense captions in the notes to the financial statements. This ASU is effective for fiscal years beginning after *December 15, 2026* and interim periods beginning after *December 15, 2027,* with early adoption permitted. The Company is currently evaluating the impact of this ASU on the consolidated financial statements and related disclosures.

In *September 2025,* the FASB issued ASU *2025*-*06, Intangibles*—*Goodwill and Other*—*Internal-Use Software (Subtopic *350*-*40*): Targeted Improvements to the Accounting for Internal-Use Software*. The amendments in this update make targeted improvements to increase the operability of the recognition guidance considering different software development methods. The amendments in this update will be effective for annual and interim reporting periods beginning after *December 15, 2027,* with early adoption permitted. The Company is evaluating the impact of this ASU on the consolidated financial statements and related disclosures.

***3.* Going Concern**

The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In connection with preparing consolidated financial statements for the *three* and *nine* months ended *September 30, 2025*, certain conditions in the Company's evaluation, considered in the aggregate, have 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, which has *not* been alleviated. The evaluation considered the Company's financial condition, including its liquidity sources, funds necessary to maintain the Company's operations considering the current financial condition, obligations, and other expected cash flows, and negative financial trends of recurring operating losses and negative cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *8*

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The Company's short term notes payable agreements do *not* contain financial covenants, and the Company is continuing operations and generating revenues in the normal course, however the Company is dependent, to an extent, on the timing of subscriber and revenue growth for its products and the related cash generation from that growth and/or the ability to obtain the necessary capital to meet its obligations and fund its working capital requirements to maintain normal business operations. Management believes that the Company's strategic plans, including cost reductions announced in *October,* which primarily consisted of a workforce reorganization and are aimed at enhancing operational efficiencies and reducing costs in line with the Company's priorities and vision for the future and the broader initiative to realign the Company's cost structure with long-term business goals, strengthen its financial foundation, and accelerate the Company's path to profitability, combined with plans to expand subscriber growth, to acquire new customers, and to expand its offerings to existing customers to generate increased revenues, and, as necessary, to raise additional capital will be sufficient to support the Company's operations; as such the financial statements do *not* include any adjustments that *may* be necessary if the Company is unable to continue as a going concern. The Company believes, based on its history of being able to complete debt and equity financings, that it would be able to raise additional funds as necessary, through public or private equity offerings, including by filing *one* or more registration statements, through debt financings, or from a combination of these funding sources. However, it *may not* be able to secure such incremental capital in a timely manner or on favorable terms, if at all. To preserve liquidity, the Company *may* also take *one* or more of the following additional actions:

• Implement additional restructuring and cost reductions,

• Secure a revolving line of credit, if available,

• Dispose of *one* or more product lines and/or,

• Sell or license intellectual property.

While management believes that the Company's plans for growing revenue and the other potential actions available to it would alleviate the conditions that raise substantial doubt, these strategies are *not* entirely within the Company's control and cannot be assessed as being probable of occurring.

***4.* Common Stock**

***Minimum Bid Price Requirement and Reverse Stock Split***

On *December 27, 2023,* the Company received a notice from the Nasdaq Stock Market ("Nasdaq") that the Company was *not* in compliance with the *$1.00* minimum bid price requirement for continued listing, as set forth in Nasdaq Listing Rule *5550*(a)(*2*) (the "Minimum Bid Price Requirement"), as the closing bid price of the Company's Common Stock had been below *$1.00* per share for more than *thirty* (*30*) consecutive business days as of the date of that notice. The Company undertook the Reverse Stock Split to enable the Company to regain compliance with the Minimum Bid Price Requirement. On *April 29, 2024,* the Company received notice from Nasdaq that it had regained compliance with the Minimum Bid Price Requirement, and the matter is now closed.

On *November 26, 2024,* the Company received a notice from Nasdaq that the Company's Common Stock did *not* meet the *$1.00* Minimum Bid Price Requirement, and in accordance with Nasdaq Listing Rule *5810*(c)(*3*)(A), the Company was provided an initial compliance period of *180* calendar days, or until *May 26, 2025,* to regain compliance with the Minimum Bid Price Requirement. On *January 8, 2025,* the Company received written notification from Nasdaq indicating that the Company's Common Stock had a closing price at or greater than *$1.00* per share for the last *10* consecutive business days, from *December 23, 2024* to *January 7, 2025,* and that, as a result, the Company has regained compliance with the Minimum Bid Price Requirement and the matter is now closed.

On *June 23, 2025,* the Company received a notice from Nasdaq that the Company's Common Stock did *not* meet the *$1.00* Minimum Bid Price Requirement, and in accordance with Nasdaq Listing Rule *5810*(c)(*3*)(A), the Company was provided an initial compliance period of *180* calendar days, or until *December 22, 2025,* to regain compliance with the Minimum Bid Price Requirement. If the Company is *not* deemed in compliance before the expiration of the *180* calendar day compliance period, the Company intends to request an additional *180* calendar day compliance period in accordance with Nasdaq Listing Rule *5810*(c)(*3*)(A)(ii).

 ***May 2024* Registered Direct Offering & Private Placement***

On *May 10, 2024,* the Company entered into a securities purchase agreement (the *"May 2024* Purchase Agreement") with certain institutional and accredited investors (the *"May 2024* Purchasers") relating to the registered direct offering and sale of an aggregate of 1,065,000 shares of the Company's Common Stock at an offering price of $2.15 per share of Common Stock and pre-funded warrants (*"May 2024* Pre-Funded Warrants") to purchase up to 845,000 shares of Common Stock (the *"May 2024* Registered Direct Offering"). The *May 2024* Pre-Funded Warrants were purchased at a price of $2.149 per underlying share and had an exercise price of $0.001 per share and could be exercised at any time after their original issuance until such *May 2024* Pre-Funded Warrants were exercised in full. The shares of Common Stock and *May 2024* Pre-Funded Warrants (including the shares of Common Stock underlying the warrants) were offered by the Company pursuant to a prospectus supplement dated *May 10, 2024,* and accompanying prospectus dated *May 12, 2022,* in connection with a takedown from the Company's shelf registration statement on Form S-*3* (File *No. 333*-*264667*), which was declared effective by the SEC on *May 12, 2022.*

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In a private placement on *May 14, 2024,* concurrent with the *May 2024* Registered Direct Offering, the Company also sold to the *May 2024* Purchasers unregistered warrants (the *"May 2024* Common Warrants") to purchase up to an aggregate of 1,910,000 shares of Common Stock (the *"May 2024* Private Placement"). Each unregistered *May 2024* Common Warrant has an exercise price of $2.34 per share, is exercisable at any time beginning *November 14, 2024* and will expire *November 14, 2029.* Both the *May 2024* Registered Direct Offering and the *May 2024* Private Placement closed on *May 14, 2024.*

Roth Capital Partners, LLC ("Roth") acted as the exclusive placement agent for the *May 2024* Registered Direct Offering and the *May 2024* Private Placement pursuant to a placement agency agreement (the "Placement Agency Agreement") dated *May 10, 2024,* by and between the Company and Roth, and a related engagement letter with Roth. Pursuant to the Placement Agency Agreement, on *May 14, 2024* the Company issued to Roth warrants to purchase up to 133,700 shares of Common Stock (the *"May 2024* Placement Agent Warrants"), which represented 7.0% of the aggregate number of shares of Common Stock and *May 2024* Pre-Funded Warrants sold in the *May 2024* Registered Direct Offering. The *May 2024* Placement Agent Warrants are exercisable at any time beginning *November 14, 2024,* have an exercise price equal to $2.86, and expire *November 16, 2026.*

The shares of Common Stock underlying the *May 2024* Common Warrants and the *May 2024* Placement Agent Warrants (collectively referred to herein as the *"May 2024* Warrants") were registered on a registration statement on Form S-*1* (File *No. 333*-*280542*) filed with the SEC on *June 27, 2024,* which was declared effective by the SEC on *July 10, 2024.* Shares of Common Stock issued by the Company upon exercise of the *May 2024* Warrants *may* be resold by the holders pursuant to the prospectus dated *July 11, 2024.* The filings made by the Company in connection with the potential resale of the Common Stock underlying the *May 2024* Warrants were filed within the time period agreed by the parties in the Purchase Agreement.

The net cash proceeds to the Company, after deducting offering related expenses was $3.4 million. The *May 2024* Pre-Funded Warrants, *May 2024* Common Warrants, and *May 2024* Placement Agent Warrants were all assessed and recorded as equity instruments.

During the *third* quarter of *2024,* all 845,000 *May 2024* Pre-Funded Warrants from the *May 2024* Registered Direct Offering and *May 2024* Private Placement were exercised on a cashless basis resulting in the issuance of 844,061 shares of Common Stock.

 ***October 2024* Registered Direct Offering and Private Placement***

On *October 3, 2024,* the Company announced its completion of *two* securities offerings raising aggregate gross proceeds of $6.9 million: a registered direct offering of 3,321,881 registered shares of Common Stock and concurrent private placement of unregistered warrants exercisable for an equal number of shares of Common Stock (collectively, the *"October 2024* RDO") for gross proceeds of approximately $3.9 million, including $0.2 million from a related party, and an unregistered private placement transaction of 2,575,107 shares of Common Stock and warrants exercisable for an equal number of shares of Common Stock with William W. Smith Jr., the Company's Chief Executive Officer, a related party, who participated in the private placement through a trust for which he serves as co-trustee (the *"October 2024* Private Placement"), for gross proceeds of approximately $3.0 million. Both offerings were approved by an independent special committee of the Company's Board of Directors and were priced based on the market value of the offered securities, at a purchase price of $1.165 per share of Common Stock with a warrant exercise price of $1.04 per share of Common Stock. Each of the warrants issued in the *October 2024* offerings was initially exercisable at any time beginning *six* months following its original issuance and expires *five* and *one*-half years from the initial issuance of the warrant. In *January 2025,* at the request of certain holders of the warrants issued in the *October 2024* RDO, the Company provided all of the *October 2024* RDO warrant holders the opportunity to amend their warrants to adjust the start of the warrant exercise period to *January 9, 2025,* and as a result a portion of the warrants issued in connection with the *October 2024* RDO were so amended. *No* other terms were changed as a result of that amendment to certain of the warrants.

In addition, concurrent with the offerings, the Company issued to Roth a warrant to purchase up to 20,000 shares of the Company's Common Stock (the "Roth Warrant"), which has substantially the same terms as the warrants issued in the registered offering, except that the Roth Warrant has an exercise price of $1.46 per share of Common Stock and will expire *two*-and-a-half years from the effective date of the *October* registered offering.

On *October 21, 2024,* the Company filed a definitive proxy statement for a Special Meeting of Stockholders to approve the issuance of the number of shares of the Company's Common Stock that would cause William W. Smith, Jr. to beneficially own *twenty* percent or more of the Company, through the exercise of the warrants purchased in the unregistered private placement transaction. The shareholders approved this proposal on *December 10, 2024.*

On *October 28, 2024,* the Company filed a registration statement with the SEC (File *No. 333*-*282858*) registering the resale of the shares of stock issued in the *October 2024* Private Placement and the shares of common stock issuable upon exercise of the warrants issued in the *October 2024* RDO and the *October 2024* Private Placement. This registration statement was declared effective by the SEC on *November 8, 2024.*

The net cash proceeds to the Company from both offerings, after deducting offering related expenses was $6.6 million. All warrants associated with these transactions were assessed and recorded as equity instruments

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****July 2025* Registered Direct Offering and Private Placement***

On *July 18, 2025,* the Company announced the closing of a registered direct offering of 1,612,903 shares of Common Stock for $0.93 per share and concurrent private placement of unregistered warrants to purchase an equal number of shares of the Company's Common Stock with certain institutional and accredited investors, which resulted in gross proceeds to the Company of approximately $1.5 million, prior to offering fees and transaction expenses. The registered offering and concurrent private placement were approved by the Company's Board of Directors and a special Pricing Committee thereof. The warrants issued to the investors in the concurrent private placement have an exercise price of $1.20 per share, are immediately exercisable, expire five years after issuance, and contain a "full-ratchet" anti-dilution adjustment, such that the exercise price will be adjusted if the Company issues shares of Common Stock (or Common Stock equivalents) at a price below the exercise price of the warrant. The number of shares issuable upon exercise of such shares will then be proportionately adjusted. Additionally, in the event of a reverse stock split, the exercise price of each warrant is subject to adjustment (along with a proportionate adjustment in the number of shares) if the market price of the Common Stock is less than the exercise price of the Common Warrant (after giving effect to the split) during a period before and after the effective date of the reverse split. However, pursuant to the securities purchase agreement between the company and the investors relating to the registered offering and concurrent private placement dated *July 17, 2025,* an investor's right to exercise the warrants, and the Company's ability to issue shares upon exercise, is subject to certain limitations set forth in the purchase agreement pursuant to which the warrants were issued, including a limit on the number of shares that *may* be issued until the time, if any, that the Company's stockholders have approved the issuance of more than 19.9% of the Company's outstanding shares of common stock pursuant to the registered offering and concurrent private placement in accordance with Nasdaq listing standards. The Company obtained stockholder approval of these matters at a meeting held on *October 16, 2025.* The Company has agreed to file a registration statement with the SEC registering the resale of the shares of common stock issuable upon exercise of the unregistered warrants issued in connection with the private placement concurrent with the registered offering.

The net cash proceeds to the Company from the offering, after deducting offering related expenses was $1.0 million. All warrants associated with the transaction were assessed and recorded as equity instruments.

***Warrants***

The Company's outstanding Common Stock warrants are a combination of equity and liability classified. As of *September 30, 2025* and *December 31, 2024,* the Company had 12,546,330 and 8,382,048 warrants outstanding, each having the right to purchase one share of the Company's Common Stock at a weighted average exercise prices of $1.41 and $1.74, respectively, and expire at various dates through *March 2031.* 

***5.* Debt and Warrants Transactions** 

***Note Purchase Agreements***

 *September 11, 2025* Note Purchase Agreements*

Effective *September 11, 2025,* the Company entered into note purchase agreements (the *"September 11, 2025* Note Agreements") with the Smith Living Trust, for which William W. Smith, Jr., the Company's chairman, president and chief executive officer, and his wife, Dieva L. Smith, serve as co-trustees ("Smith") and with Timothy C. Huffmyer, the Company's chief operating officer and chief financial officer ("Huffmyer"). Pursuant to the *September 11, 2025* Note Agreements, Smith agreed to loan to the Company an amount *not* to exceed approximately $0.7 million and Huffmyer agreed to loan to the Company an amount *not* to exceed $0.1 million, in each case in return for *one* or more secured promissory notes (the *"September 11, 2025* Notes") and accompanying unregistered common stock purchase warrants. The *September 11, 2025* Notes are secured by the Company's accounts receivable and certain other assets, bear interest at a rate of 15.0% per annum, and are due on or before *March 31, 2026,* unless otherwise mutually agreed to by the parties. The transactions were approved by an independent committee of the Company's Board of Directors and the Company's Audit Committee.

Each *September 11, 2025* Note was accompanied by the issuance by the Company of an unregistered warrant (each, *"September 11, 2025* Warrant") to purchase up to a number of shares of the Company's Common Stock equal to the principal amount of such *September 11, 2025* Note divided by the Market Price (as defined under Nasdaq regulations) of the Company's Common Stock on the date of issuance of the note (the *"September 11, 2025* Warrant Shares"). The Company received an amount equal to $0.125 per *September 11, 2025* Warrant Share for each *September 11, 2025* Warrant issued. Each *September 11, 2025* Warrant is exercisable at any time beginning *six* (6) months following its original issuance, will expire five years from the initial exercise date and has an exercise price equal to the greater of the Market Price on the date of the *September 11, 2025* Note Agreement or on the date of issuance of the warrant. The *September 11, 2025* Warrants contain a "full-ratchet" anti-dilution adjustment, such that the exercise price will be adjusted if the Company issues Common Stock (or Common Stock equivalents) at a price below the exercise price of the Warrants. The number of shares issuable upon exercise of the *September 11, 2025* Warrants will then be proportionately adjusted. Additionally, in the event of a reverse stock split, the exercise price of each *September 11, 2025* Warrant is subject to adjustment (along with a proportionate adjustment in the number of shares) if the market price of the Common Stock is less than the exercise price of the *September 11, 2025* Warrants (after giving effect to the split) during a period before and after the effective date of the reverse split. However, *no* adjustment to the exercise price (or proportional adjustment to the number of shares) will be made under the "full-ratchet" adjustment or the anti-dilution adjustment, unless and until the Company has received approval from the Company's stockholders in accordance with Nasdaq Listing Rule *5635.*

The Company and Smith completed an initial closing of the transactions contemplated by the *September 11, 2025* Note Agreements on *September 11, 2025,* and the Company completed subsequent closings with each of Smith and Huffmyer on *September 17, 2025.* The gross proceeds to the Company from the closings with Smith totals approximately $0.8 million (comprised of approximately $0.7 million as a loan and approximately $0.1 million for the purchase of the accompanying *September 11, 2025* Warrants) and the gross proceeds to the Company from the closing with Huffmyer totals approximately $0.1 million (comprised of approximately $85 thousand as a loan and approximately $15 thousand for the purchase of the accompanying *September 11, 2025* Warrants), in each case, before deducting transaction expenses payable by the Company. Pursuant to the *September 11, 2025* Note Agreements, the Company has agreed to file a registration statement with the SEC registering the *September 11, 2025* Warrant Shares for resale.

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 *September 29, 2025* Note Purchase Agreement*

On *September 29, 2025,* the Company entered into a note purchase agreement (the *"September 29, 2025* Note Agreement") with certain accredited investors ("Purchasers"), pursuant to which the Purchasers agreed to provide loans in an aggregate amount of $0.4 million, of which $0.3 million was received and recorded on *September 30, 2025,* and the remaining *$0.1* million was received by *October 2, 2025* and recorded in the *fourth* quarter, in each case, in return for a secured promissory note (collectively, the *"September 29, 2025* Notes") and an accompanying unregistered common stock purchase warrant (collectively, the *"September 29, 2025* Warrants"). The *September 29, 2025* Notes have substantially the same terms as the *September 11, 2025* Notes.

Each *September 29, 2025* Note was accompanied by the issuance of a warrant to purchase up to a number of shares of the Company's Common Stock equal to the principal amount of such Note divided by the Market Price (as defined under Nasdaq regulations) of the Company's Common Stock on the date of issuance (the *"September 29, 2025* Warrant Shares"). Each *September 29, 2025* Warrant is exercisable at any time beginning *six* (6) months following its original issuance, will expire five years from the initial exercise date, and has an exercise price equal to the greater of $0.73 or the Market Price on the date of issuance of the warrant. The *September 29, 2025* Warrants contain a "full-ratchet" anti-dilution adjustment, such that the exercise price will be adjusted if the Company issues Common Stock (or Common Stock equivalents) at a price below the exercise price of the warrants. The number of shares issuable upon exercise of the *September 29, 2025* Warrants will then be proportionately adjusted. Additionally, in the event of a reverse stock split, the exercise price of each *September 29, 2025* Warrant is subject to adjustment (along with a proportionate adjustment in the number of shares) if the market price of the Common Stock is less than the exercise price of the *September 29, 2025* Warrants (after giving effect to the split) during a period before and after the effective date of the reverse split. However, *no* adjustment to the exercise price (or proportional adjustment to the number of shares) will be made under the "full-ratchet" adjustment or the anti-dilution adjustment, unless and until the Company has received approval from the Company's stockholders in accordance with Nasdaq Listing Rule *5635.* Neither the *September 29, 2025* Warrants nor the *September 29, 2025* Warrant Shares have been registered under the Securities Act. Pursuant to the *September 29, 2025* Note Agreement, the Company has agreed to file a registration statement with the SEC registering the *September 29, 2025* Warrant Shares for resale.

The Company received total cash proceeds from the *September 11, 2025* Note Purchase Agreements and the *September 29, 2025* Note Purchase Agreement of approximately $1.2 million in the *three* and *nine* months ended *September 30, 2025.* Furthermore the proceeds were allocated to the notes and their 1,512,934 equity-classified warrants on a relative fair value basis, resulting in a debt discount of approximately $0.4 million which is being amortized over the term of the agreements using the effective interest method. This resulted in an immaterial amount of amortization expense in the *three* and *nine* months ended *September 30, 2025.* The valuation of the equity-classified warrants was based on a Black-Scholes model at inception. The following assumptions were utilized in the Black Scholes option pricing model for the *three* and *nine* months ended *September 30, 2025:* common stock market price of $0.72 to $0.73, risk-free interest rate of 3.6% - *3.7%,* expected volatility of 88.67% - 89.81%, and expected term of 5.5 years. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of valuation. Expected volatility is based on the historical volatility over the expected remaining term of the warrants. The Company has no reason to believe future volatility over the expected remaining life of the warrants is likely to differ materially from historical volatility. Expected life is based on the term of the applicable warrants.

***Deemed Dividends***

In connection with the issuance of the *September 11, 2025* Warrants with an exercise price of $0.73, pursuant to the full-ratchet anti-dilution provisions of the *July 2025* Warrants, the exercise price of each of the *July 2025* Warrants was adjusted from $1.20 to $0.73 and the aggregate number of warrant shares underlying the *July 2025* Warrants increased from 1,612,903 to 2,651,348. As a result, the Company recorded a deemed dividend of $0.6 million and a reduction in income available to common shareholders in the Basic EPS calculation during the *three* months ended *September 30, 2025.* In accordance with US GAAP, the incremental fair value of the warrants resulting from the decrease in the exercise price and the increase in the number of warrant shares was measured using Black-Scholes valuation models at the time of the event. The following assumptions were utilized in the Black Scholes option pricing model for the *three* and *nine* months ended *September 30, 2025:* common stock market price of $0.73, risk-free interest rate of 3.6%, expected volatility of 90.66%, and expected term of 4.85 years. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of valuation. Expected volatility is based on the historical volatility over the expected remaining term of the warrants. The Company has *no* reason to believe future volatility over the expected remaining life of the warrants is likely to differ materially from historical volatility. Expected life is based on the term of the applicable warrants.

***Warrant Liabilities***

On *August 11, 2022,* the Company issued warrants (the "Notes Warrants") to purchase Common Stock in conjunction with a senior secured convertible notes (the "Notes") and warrants offering (the "Notes and Warrants Offering"), at an initial fair value of $3.8 million. The Notes sold by the Company in the Notes and Warrants Offering were subsequently retired upon maturity at *December 31, 2023.* The exercise price of and number of shares underlying the Notes Warrants were immediately proportionately adjusted pursuant to the Reverse Stock Split to $26.80 and 279,851 shares, respectively, and on *May 2, 2024,* the exercise price for each of the Notes Warrants was further adjusted to $2.06 in accordance with their terms.

The Company issued additional warrants (the "Additional Warrants") to purchase Common Stock on *August 12, 2022* in conjunction with a registered direct offering for the sale of shares of the Company's Common Stock and the Additional Warrants. The Additional Warrants do *not* reprice further beyond the immediate proportionate adjustments to the per share exercise price and number of shares issuable of $21.20 and 141,509 shares, respectively, that occurred upon and as a result of the Reverse Stock Split.

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All changes in the fair value of the Notes Warrants and Additional Warrants liabilities are recognized in the Company's consolidated statements of operations until they are either exercised or expire. Since their issuance, *none* of the Notes Warrants or Additional Warrants have been exercised. The Notes Warrants and Additional Warrants are *not* traded in an active securities market and, as such, the estimated fair value is determined by using a Black-Scholes option pricing model which considers the likelihood of repricing adjustments and utilizes assumptions noted in the following table. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of valuation. Expected volatility is based on the historical volatility over the expected remaining term of the warrants. The Company has *no* reason to believe future volatility over the expected remaining life of the Notes Warrants and Additional Warrants is likely to differ materially from historical volatility. Expected life is based on the term of the applicable warrants. Below are the specific assumptions utilized (unaudited, except for *December 31, 2024*):

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| | | |
|:---|:---|:---|
| **Notes Warrants** | ***September 30, 2025*** | ***December 31, 2024*** |
| Common stock market price | $0.72 | $1.31 |
| Risk-free interest rate | 3.6% | 4.2% |
| Expected dividend yield |  |  |
| Expected term (in years) | 1.86 | 2.61 |
| Expected volatility | 121.7% | 105.9% |

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| | | |
|:---|:---|:---|
| **Additional Warrants** | ***September 30, 2025*** | ***December 31, 2024*** |
| Common stock market price | $0.72 | $1.31 |
| Risk-free interest rate | 3.6% | 4.3% |
| Expected dividend yield |  |  |
| Expected term (in years) | 2.37 | 3.12 |
| Expected volatility | 115.7% | 99.6% |

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***6.* Fair Value of Financial Instruments** 

The Company measures and discloses fair value measurements as required by FASB Accounting Standards Codification ("ASC") Topic *No. 820, Fair Value Measurements and Disclosures*.

Fair value is an exit price, representing the amount that would be received upon the sale of an asset or the amount that would be 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:

• Level *1* – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level *2* – Include other inputs that are directly or indirectly observable in the marketplace.

• Level *3* – Unobservable inputs which are supported by little or *no* market activity.

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.

The following table presents information about the financial liabilities that are measured at fair value on a recurring basis at *September 30, 2025* and *December 31, 2024* (unaudited except for *December 31, 2024*, in thousands):

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| | | |
|:---|:---|:---|
| **Level 3** | ***September 30, 2025*** | ***December 31, 2024*** |
| Notes Warrants | $78 | $197 |
| Additional Warrants | 9 | 27 |
| Total | $87 | $224 |

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The following tables present the changes in the fair value (unaudited, except for *December 31, 2024*, in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | ***Notes*** | ***Additional*** |  |
|  | ***Warrants*** | ***Warrants*** | ***Total*** |
| Measurement at December 31, 2024 | $197 | $27 | $224 |
| Change in fair value | $(107) | $(16) | $(123) |
| Measurement at March 31, 2025 | $90 | $11 | $101 |
| Change in fair value | $17 | $3 | $20 |
| Measurement at June 30, 2025 | $107 | $14 | $121 |
| &nbsp;&nbsp;&nbsp; Change in fair value | $(29) | $(5) | $(34) |
| Measurement at September 30, 2025 | $78 | $9 | $87 |

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| | | | |
|:---|:---|:---|:---|
|  | ***Notes*** | ***Additional*** |  |
|  | ***Warrants*** | ***Warrants*** | ***Total*** |
| Measurement at December 31, 2023 | $334 | $263 | $597 |
| Change in fair value | $28 | $(214) | $(186) |
| Measurement at March 31, 2024 | $362 | $49 | $411 |
| Change in fair value | $(24) | $(18) | $(42) |
| Measurement at June 30, 2024 | $338 | $31 | $369 |
| &nbsp;&nbsp;&nbsp; Change in fair value | $(203) | $(17) | $(220) |
| Measurement at September 30, 2024 | $135 | $14 | $149 |

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***7.* Goodwill and Intangible Assets**

In accordance with FASB ASC Topic *No. 350, Intangibles-Goodwill and Other*, Smith Micro reviews the recoverability of the carrying value of the Company's single reporting unit goodwill at least annually or whenever events or circumstances indicate a potential impairment. The annual impairment testing date is *December 31* of each year. Recoverability of goodwill is determined by comparing the estimated fair value of the reporting unit to the carrying value of the underlying net assets in the reporting unit. If the estimated fair value of a reporting unit is determined to be less than the carrying value, goodwill is deemed impaired, and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the fair value.

During the *three* months ended *March 31, 2024,* the Company performed an interim quantitative impairment test on its goodwill as of *February 29, 2024* and as a result of this interim assessment, including the impact of the projections of revenue growth, earnings before interest taxes depreciation and amortization ("EBITDA"), and discount rates along with market multiples, the Company recorded a goodwill impairment charge totaling $24.0 million.

In connection with the preparation of its quarterly financial statements for the *second* quarter of *2025,* the Company assessed changes in circumstances to determine whether it was more likely than *not* that the fair value of its single reporting unit was below its carrying amount. While there was *no* single determinative event or factor, considerations including recent financial performance compared to expected forecasts, trends in stock valuation, pricing of the most recent equity raise, and the receipt of the Nasdaq minimum bid price requirement notice on *June 24, 2025* led the Company to conclude that when considering the events and factors in totality it was necessary to perform an interim quantitative valuation assessment. The fair value of the reporting unit was determined based on a combination of the income approach using estimated discounted cash flows and a market-based valuation methodology utilizing market multiples. The assessment utilized Level *3* inputs including estimates of revenue growth, EBITDA contribution and discount rates. Based on the results of the assessment, a full goodwill impairment charge of $11.1 million was recorded.

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The components of the Company's intangible assets were as follows for the periods presented (unaudited, except for *December 31, 2024*, in thousands, except for useful life data):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***September 30, 2025*** | ***September 30, 2025*** | ***September 30, 2025*** | ***September 30, 2025*** |
|  | ***Weighted*** |  |  |  |
|  | ***Average*** |  |  |  |
|  | ***Remaining*** | ***Gross*** |  |  |
|  | ***Useful Life*** | ***Carrying*** | ***Accumulated*** |  |
|  | ***(in Years)*** | ***Amount*** | ***Amortization*** | ***Net Book Value*** |
| Purchased technology | 3 | $11076 | $(7586) | $3490 |
| Customer relationships | 8 | 24573 | (10327) | 14246 |
| Customer contracts | 0 | 7000 | (6852) | 148 |
| Software license | 3 | 5419 | (3664) | 1755 |
| Patents | 2 | 600 | (471) | 129 |
| Total |  | $48668 | $(28900) | $19768 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Weighted** |  |  |  |
|  | **Average** |  |  |  |
|  | **Remaining** | **Gross** |  |  |
|  | **Useful Life** | **Carrying** | **Accumulated** |  |
|  | **(in Years)** | **Amount** | **Amortization** | **Net Book Value** |
| Purchased technology | 4 | $13330 | $(8762) | $4568 |
| Customer relationships | 9 | 27548 | (11280) | 16268 |
| Customer contracts | 0 | 7000 | (6725) | 275 |
| Software license | 4 | 5419 | (3126) | 2293 |
| Patents | 2 | 600 | (407) | 193 |
| Total |  | $53897 | $(30300) | $23597 |

---

The Company amortizes intangible assets over the pattern of economic benefit expected to be generated from the use of the assets, with a total weighted average amortization period of approximately seven years as of *September 30, 2025* and eight years as of *December 31, 2024*. During the *three* months ended *September 30, 2025* and *2024*, intangible asset amortization expense was $1.3 million and $1.3 million, respectively. During the *nine* months ended *September 30, 2025* and *2024*, intangible asset amortization expense was $3.8 million and $4.6 million, respectively.

As of *September 30, 2025*, estimated amortization expense for the remainder of *2025* and thereafter was as follows (unaudited, in thousands):

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| | |
|:---|:---|
|  | ***Amortization*** |
| **Year Ending December 31,** | ***Expense*** |
| 2025 | $1276 |
| 2026 | 4709 |
| 2027 | 3834 |
| 2028 | 2790 |
| 2029 | 2095 |
| 2030 and thereafter | 5064 |
| Total | $19768 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *15*

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***8.* Earnings Per Share**

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 attributable 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 attributable 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.

The 845,000 shares of the Company's Common Stock issuable upon exercise of the Pre-Funded Warrants, described in Note *4* to these consolidated financial statements, were included in the weighted average outstanding Common Stock in the calculation of basic and diluted net loss per share from *May 2024* through their exercise in *August 2024,* as the exercise price was non-substantive at $0.001 per share.

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, warrants (other than the Pre-Funded Warrants), and convertible notes 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 (unaudited, in thousands, except per share amounts):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended September 30,*** | ***For the Three Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| **Numerator:** |  |  |  |  |
| Net loss | $(4535) | $(6369) | $(24774) | $(44306) |
| Deemed dividend | $(635) | $— | $(635) | $— |
| Net loss attributable to common stockholders for basic and diluted loss per share | $(5170) | $(6369) | $(25409) | $(44306) |
| **Denominator:** |  |  |  |  |
| Weighted average shares outstanding – basic | 20977 | 11832 | 19547 | 10626 |
| Potential common shares – options / warrants (treasury stock method) |  |  |  |  |
| Weighted average shares outstanding – diluted | 20977 | 11832 | 19547 | 10626 |
| Shares excluded (anti-dilutive) | 9813 | 2474 | 8997 | 1468 |
| Net loss per share attributable to common stockholders – basic and diluted |  |  |  |  |
| Basic | $(0.25) | $(0.54) | $(1.30) | $(4.17) |
| Diluted | $(0.25) | $(0.54) | $(1.30) | $(4.17) |

---

The following weighted average shares were excluded from the computation of diluted net loss per share attributable to common stockholders as the impact of including those shares would be anti-dilutive (unaudited, in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended September 30,*** | ***For the Three Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Outstanding stock options | 31 | 9 | 31 | 9 |
| Outstanding warrants | 9782 | 2465 | 8966 | 1459 |
| Total anti-dilutive shares | 9813 | 2474 | 8997 | 1468 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *16*

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***9.* Stock-Based Compensation**

***Stock Plans***

On *June 18, 2024,* the Company's stockholders approved the Company's Amended and Restated Omnibus Equity Incentive Plan (as currently amended, the "OEIP") which amended and restated (and renamed) the Company's *2015* Omnibus Equity Incentive Plan (as previously amended, the *"2015* Plan") and increased the number of shares reserved thereunder by 3.0 million shares, and on *June 3, 2025,* the Company's stockholders approved an increase to the number of shares reserved thereunder by an additional 3.0 million shares. As of *September 30, 2025*, there were approximately 3.2 million shares available for future grants under the Company's OEIP. References to the OEIP herein include the *2015* Plan prior to its amendment and restatement. The maximum number of shares available for issuance over the term of the OEIP *may not* exceed 7.2 million shares.

During the *nine* months ended *September 30, 2025*, the Company granted 2.7 million shares of restricted stock and 25,000 stock options under the OEIP.

The OEIP provides for the issuance of full value awards (restricted stock, performance stock, dividend equivalent right or restricted stock units) and partial value awards (stock options or stock appreciation rights) to employees, non-employee members of the Company's Board of Directors and consultants. Any full value award settled in shares will be debited as 1.2 shares, and partial value awards settled in shares will be debited as 1.0 shares against the share reserve. The exercise price per share for stock option grants is *not* to be less than the fair market value per share of the Company's Common Stock on the date of grant. The Compensation Committee of the Board of Directors administers the OEIP and determines the vesting schedule at the time of grant. Stock options *may* be exercisable immediately or in installments but generally vest over a one-year or four-year period from the date of grant. In the event the holder ceases to be employed by the Company, all unvested stock awards terminate, and all vested stock options *may* be exercised within a period of *90* days following termination of employment. In general, stock options expire ten years from the date of grant. Restricted stock is valued using the closing stock price on the grant date. The total value is expensed over the vesting period, which is typically up to *48* months.

***Employee Stock Purchase Plan***

The Company has a stockholder approved employee stock purchase plan (as amended, the "ESPP"), under which substantially all employees *may* purchase the Company's Common Stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the stock as of the beginning and end of *six*-month offering periods. Payroll deductions under the ESPP are limited to 10% of the employee's compensation and in any calendar year employees *may not* purchase more than the lesser of $25,000 of stock or 250 shares, as set by the Compensation Committee of the Board of Directors in accordance with the terms of the ESPP. On *June 3, 2025,* the Company's stockholders approved an amendment to the ESPP to increase the aggregate number of shares of Common Stock authorized for issuance under the ESPP by 250,000 shares, therefore *no* more than 281,250 shares in the aggregate *may* be purchased under the ESPP.

***Stock Compensation Expense***

The Company accounts for all stock-based payment awards made to employees and directors based on their fair values and recognizes compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic *No. 718, Compensation-Stock Compensation*.

Non-cash stock-based compensation expenses related to stock options, restricted stock grants and the ESPP are recorded in the consolidated financial statements as follows (unaudited, in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended September 30,*** | ***For the Three Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Sales and marketing | $210 | $315 | $708 | $968 |
| Research and development | 154 | 318 | 573 | 827 |
| General and administrative | 280 | 616 | 1547 | 1725 |
| Total non-cash stock compensation expense | $644 | $1249 | $2828 | $3520 |

---

As of *September 30, 2025*, there was approximately $2.4 million in unrecognized compensation costs related to unvested stock options and restricted stock awards granted under the OEIP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *17*

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***Stock Options***

For the *nine* months ended *September 30, 2025*, there were 25,000 stock option awards granted. A summary of the Company's stock options outstanding under the OEIP as of *September 30, 2025* and related activity during *2025* is as follows (unaudited, in thousands except weighted average exercise price and weighted average remaining contractual life):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  | ***Wtd. Avg.*** |  |
|  |  |  | ***Remaining*** | ***Aggregate*** |
|  |  | ***Weighted Avg.*** | ***Contractual*** | ***Intrinsic*** |
|  | ***Shares*** | ***Exercise Price*** | ***Life (Yrs)*** | ***Value*** |
| Outstanding as of December 31, 2024 | 5 | $27.57 | 4.1 | $*—* |
| Granted | 25 | 1.26 | *—* | $*—* |
| Outstanding as of September 30, 2025 | 30 | $5.99 | 8.3 | $*—* |
| Vested and expected to vest at September 30, 2025 | 30 | $5.99 | 8.3 | $*—* |
| Exercisable as of September 30, 2025 | 5 | $27.57 | 3.4 | $*—* |

---

***Restricted Stock Awards***

A summary of the Company's restricted stock awards outstanding under the OEIP for the *nine* months ended *September 30, 2025* and the activity during the period therein are as follows (unaudited, in thousands, except weighted average grant date fair value):

---

| | | |
|:---|:---|:---|
|  |  | ***Weighted*** |
|  |  | ***Average*** |
|  |  | ***Grant Date*** |
|  | ***Shares*** | ***Fair Value*** |
| Unvested at December 31, 2024 | 419 | $7.85 |
| Granted | 2672 | 1.05 |
| Vested | (1390) | 2.33 |
| Canceled and forfeited | (48) | 1.66 |
| Unvested at September 30, 2025 | 1653 | $1.69 |

---

***10.* Revenues**

***Revenue Recognition***

In accordance with FASB ASC Topic *No. 606, Revenue from Contracts with Customers*, the Company recognizes the sale of goods and services based on the *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. For all contracts with customers, the Company *first* identifies the contract, which usually is established when a contract is fully executed by each party and consideration is expected to be received. Next, the Company identifies 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. The Company then determines the transaction price in the arrangement and allocates 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. The Company evaluates the total amount of variable consideration expected to be earned by using the expected value method, as the Company believes this method represents the most appropriate estimate for this consideration, based on historical service trends, the individual contract considerations, and its best judgment at the time. The Company includes 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. The Company generates the majority of its revenue on usage-based fees which are variable and depend entirely on customers' use of perpetual licenses, transactions processed on the Company's hosted environment and activity on the Company's cloud-based service platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *18*

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The Company's contracts with mobile network operator ("MNO") 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. Smith Micro's cloud-based services include a software solution license integrated with cloud-based services. Since the Company does *not* allow its customers to take possession of the cloud-based elements of its software solutions, and since the utility of the license comes from the cloud-based services that the Company provides, Smith Micro considers the software license and the cloud services to be a single performance obligation. The Company recognizes revenue associated with its MNO customers based upon their active subscribers' access and usage of Smith Micro's software licenses and cloud-based services on Smith Micro's platforms or satisfaction of the performance obligations as indicated in the contracts.

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

***Disaggregation of Revenues***

Revenues on a disaggregated basis are as follows (unaudited, in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended September 30,*** | ***For the Three Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| License and service fees | $796 | $788 | 2386 | $2326 |
| Hosted environment usage fees | 791 | 644 | 2302 | 1840 |
| Cloud based usage fees | 2744 | 3196 | 8666 | 10865 |
| Consulting services and other | 16 | 20 | 35 | 554 |
| Total revenues | $4347 | $4648 | $13389 | $15585 |

---

***11.* Segment, Customer Concentration and Geographical Information**

***Segment Information***

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 one primary business unit based on how management internally evaluates separate financial information, business activities and management responsibility: Wireless. The Wireless segment includes the Family Safety (which includes SafePath<sup>®</sup>), CommSuite<sup>®</sup>, and ViewSpot<sup>®</sup> families of products.

The Company does *not* separately allocate operating expenses to these product lines, nor does it allocate specific assets. Therefore, product line information reported includes only revenues.

The accounting policies of the Company's single operating segment are the same as those described in the summary of significant accounting policies appearing in Note *1.* Although the Company's Chief Operating Decision Maker ("CODM") uses other measures of operating performance, the Company concluded that consolidated net loss is the measure required to be disclosed as the segment measure of profit or loss. Adjusted operating loss and net loss are used to evaluate the effectiveness of Smith Micro's performance and to monitor budget versus actual results. The measure of segment assets is reflected as "total assets" in the accompanying consolidated balance sheet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *19*

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Revenue and expenses regularly provided to the CODM are included in the following reconciliation of the Company's net adjusted operating loss and net loss. It includes the significant expense categories computed under US GAAP, reconciled to the Company's total net loss as presented in the consolidated statement of operations (unaudited, in thousands).

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended September 30,*** | ***For the Three Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Revenues | $4347 | $4648 | $13389 | $15585 |
| Less: |  |  |  |  |
| Adjusted cost of revenues¹ | 1136 | 1318 | 3565 | 4889 |
| Adjusted selling and marketing² | 1268 | 1725 | 4079 | 6060 |
| Adjusted research and development² | 2449 | 3086 | 7640 | 10180 |
| Adjusted general and administrative² | 1988 | 2004 | 6035 | 6197 |
| Adjusted operating loss | (2494) | (3485) | (7930) | (11741) |
| Other segment expenses³ |  | (348) | (79) | (798) |
| Stock-based compensation expense | (644) | (1249) | (2828) | (3520) |
| Depreciation | (71) | (91) | (217) | (285) |
| Amortization | (1276) | (1334) | (3828) | (4601) |
| Goodwill impairment |  |  | (11052) | (23989) |
| Proceeds from sale of ViewSpot, net |  |  | 1287 |  |
| Total other (expenses) income, net | (50) | 138 | (126) | 667 |
| Loss before provision for income taxes | (4535) | (6369) | (24773) | (44267) |
| Provision for income tax expense |  |  | 1 | 39 |
| Net loss | $(4535) | $(6369) | $(24774) | $(44306) |
| Deemed dividend | (635) |  | (635) |  |
| Net loss attributable to common stockholders | $(5170) | $(6369) | $(25409) | $(44306) |

---

<sup>*1*</sup> Adjusted amounts exclude depreciation expense.

<sup>*2*</sup> Adjusted amounts exclude stock-based compensation expense and other adjustments as further described in footnote *3* to this table.

<sup>*3*</sup> Other segment expenses include personnel severance and reorganization activities and other corporate non-recurring expenditures.

The following table presents the disaggregation of Wireless revenues by product line (unaudited, in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended September 30,*** | ***For the Three Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Family Safety | $3529 | $3939 | $10944 | $12623 |
| CommSuite | 792 | 644 | 2303 | 1840 |
| ViewSpot | 26 | 65 | 142 | 1122 |
| Total Wireless revenues | $4347 | $4648 | $13389 | $15585 |

---

***Customer Concentration Information***

The Company has certain customers whose revenues individually represented greater than *10%* of the Company's total revenues, or whose accounts receivable balances individually represented greater than *10%* of the Company's total accounts receivable, for the *three* and *nine* months ended *September 30, 2025* and *2024*.

During the *three* months ended *September 30, 2025*, three customers made up 61%, 21% and 18% of revenues. For the *three* months ended *September 30, 2024*, three customers made up 63% , 21% and 14% of revenues.

During the *nine* months ended *September 30, 2025*, three customers made up 61%, 20% and 17% of revenues. For the *nine* months ended *September 30, 2024*, three customers made up 58%, 20% and 12% of revenues.

As of *September 30, 2025*, three customers accounted for 41% , 33% and 11% of accounts receivable. As of *September 30, 2024*, two customers accounted for 53% and 25% of accounts receivable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *20*

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***Geographical Information***

During the *three* and *nine* months ended *September 30, 2025* and *2024*, the Company operated in *two* geographic locations: the Americas and Europe, Middle East and Africa ("EMEA"). Revenues attributed to the geographic location of the customers' bill-to address were as follows (unaudited, in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended September 30,*** | ***For the Three Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** | ***For the Nine Months Ended September 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Americas | $4331 | $4628 | $13354 | $15047 |
| EMEA | 16 | 20 | 35 | 538 |
| Total revenues | $4347 | $4648 | $13389 | $15585 |

---

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

***12.* Commitments and Contingencies**

***Litigation***

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.

***Other Contingent Contractual Obligations***

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: indemnities to the Company's customers pursuant to contracts for the Company's products and services, including indemnities with respect to intellectual property, confidentiality and data privacy; 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 or *may* make 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.

***13.* Leases**

The Company leases office space and equipment. The Company 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.

Operating lease costs were $0.4 million for each of the *three* months ended *September 30, 2025* and *2024*. Operating lease costs were $1.2 million for each of the *nine* months ended *September 30, 2025* and *2024*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *21*

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

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| | |
|:---|:---|
|  | ***As of September 30, 2025*** |
| 2025 | $431 |
| 2026 | 977 |
| 2027 | 377 |
| 2028 | 62 |
| Total lease payments | 1847 |
| Less imputed interest | 209 |
| Present value of lease liabilities | $1638 |

---

Additional information relating to the Company's operating leases follows (unaudited):

---

| | |
|:---|:---|
|  | ***As of September 30, 2025*** |
| Weighted average remaining lease term (years) | 1.5 |
| Weighted average discount rate | 8.2% |

---

***14.* Income Taxes**

The Company accounts for income taxes as required by FASB ASC Topic *No. 740, Income Taxes*. 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 given to evidence that can be objectively verified. Realization of deferred tax assets is dependent upon the generation of future taxable income. As required by ASC *740,* Smith Micro has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets and determined that it was more likely than *not* that the Company would *not* realize the deferred tax assets due to the Company's cumulative losses and uncertain near-term market and economic conditions, which reduce 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 *September 30, 2025*, and after consideration of the Company's cumulative loss position as of *December 31, 2024*, the Company will continue to reserve its U.S.-based deferred tax amounts, which total $70.2 million as of *September 30, 2025*.

The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. As of *September 30, 2025*, there are *no* audits in process or pending from Federal or state tax authorities. 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. Smith Micro *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 the consolidated financial results of the Company. 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.

***15.* Subsequent Events**

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.

On *November 5, 2025,* the Company announced that it has entered into definitive agreements with respect to *two* separate offerings; a registered offering with certain institutional and accredited investors, and an unregistered offering with the Company's chief executive officer. Both offerings have been priced based on the market value of the offered securities as of the time of signing the purchase agreements and the Company will issue approximately 4.0 million shares of Common Stock and an equivalent amount of warrants exercisable for one share of the Company's Common Stock at an exercise price of $0.6708 per share. The aggregate gross proceeds of the *two* offerings are expected to be approximately $2.7 million, which includes a committed investment of $1.5 million from the Company's chief executive officer. The offerings are expected to close on or about *November 6, 2025,* subject to customary closing conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *22*

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**Item 2. Management**'**s Discussion and 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 (this* "*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 expenses, the protection of our intellectual property, and our ability to remain a going concern. 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 or performance 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:*

• our customer concentration, given that the majority of our sales currently depend on a few large client relationships;

• our ability to establish and maintain strategic relationships with our customers and mobile device manufacturers, their ability to attract customers, and their willingness to promote our products;

• 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;

• our dependency upon effective operation with operating systems, devices, networks and standards that we do not control and on our continued relationships with mobile operating system providers, device manufacturers and mobile software application stores on commercially reasonable terms or at all;

• our ability to hire and retain key personnel;

• the possibility of security and privacy breaches in our systems and in the third-party software and/or systems that we use, damaging client relations and inhibiting our ability to grow;

• interruptions or delays in the services we provide from our data center hosting facilities that could harm our business;

• the existence of undetected software defects in our products and our failure to resolve detected defects in a timely manner;

• our ability to remain a going concern;

• our ability to raise additional capital and the risk of such capital not being available to us at commercially reasonable terms or at all;

• our ability to be profitable;

• changes in our operating income due to shifts in our sales mix and variability in our operating expenses;

• our current client concentration within the vertical wireless carrier market, and the potential impact to our business resulting from changes within this vertical market, or failure to penetrate new markets;

• rapid technological evolution and resulting changes in demand for our products from our key customers and their end users;

• intense competition in our industry and the core vertical markets in which we operate, and our ability to successfully compete;

• the risks inherent with international operations;

• the impact of evolving information security and data privacy laws on our business and industry;

• the impact of governmental regulations on our business and industry;

• our ability to protect our intellectual property and our ability to operate our business without infringing on the rights of others;

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• the risk of being delisted from Nasdaq if we continue to fail to meet any of its applicable listing requirements;

• our ability to assimilate acquisitions without diverting management attention and impacting current operations;

• failure to realize the expected benefits of prior acquisitions;

• the availability of third-party intellectual property and licenses needed for our operations on commercially reasonable terms, or at all;

• the difficulty of predicting our quarterly revenues and operating results and the chance of such revenues and results falling below analyst or investor expectations, which could cause the price of our Common Stock to fall; and

• those additional factors which are listed under Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 12, 2025 (the "2024 Form 10-K") under the caption "RISK FACTORS."

*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.*

**Overview**

Smith Micro provides software solutions that simplify and enhance the mobile experience to some of the leading wireless service providers around the globe. From enabling the Digital Family Lifestyle™ to providing powerful voice messaging capabilities, we strive to enrich today's connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer Internet of Things ("IoT") devices. Our portfolio includes family safety software solutions to support families in the digital age and visual voice messaging.

We continue to innovate and evolve our business to respond to industry trends and maximize opportunities in growing and evolving 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 our focus on understanding our customers' needs and delivering value.

In the third quarter of 2025, our revenues decreased by 6% to $4.3 million compared to the third quarter of 2024, primarily driven by a $0.4 million decrease in our Family Safety product line, coupled with a nominal decrease in ViewSpot revenue, partially offset by an increase of $0.1 million in CommSuite revenues. The revenue decline primarily resulted from decreases associated with legacy Sprint Safe & Found revenue as subscribers migrate to the T-Mobile network. As a result of the decline in revenues, our gross profit during the third quarter of 2025 was $3.2 million, representing a decrease of $0.1 million as compared to the third quarter of the prior year. In connection with the preparation of our second quarter 2025 financial statements, we evaluated our goodwill and determined that the carrying value of our single reporting unit exceeded its fair value which resulted in a non-cash pretax impairment charge of $11.1 million for the quarter. On June 3, 2025, we sold our ViewSpot product for total consideration of $1.3 million, of which $1.0 million was paid on the closing date, with the remaining amounts were paid in two installments, the first of which was collected on July 1, 2025, and the final balance was collected on October 1, 2025. Our operating expenses decreased during the third quarter of 2025 compared to the third quarter of 2024 by approximately $2.1 million. This was primarily due to quarter-over-quarter reductions in sales and marketing and research and development expenses due to cost reduction initiatives undertaken during 2025. The net loss attributable to common stockholders for the third quarter of 2025 was $5.2 million, resulting in a net loss of $0.25 per basic and diluted share.

We believe that we still remain strategically positioned to offer our market-leading family safety platform to the majority of U.S. mobile subscribers, as we currently provide white-label Family Safety applications to two Tier 1 wireless carriers operating in the United States. Further, a Tier 1 carrier in Europe launched a new SafePath-based family safety solution in the fourth quarter of 2024 and began conducting robust marketing activities related to that solution during the first quarter of 2025. In addition, with the recent expansion of our SafePath product line, most notably with SafePath Kids and SafePath OS, we believe that we are well-positioned to grow our Family Safety revenues more broadly with these Tier 1 carriers as well as with other operators in our industry. Further, our development of SafePath 8 is completed, and we expect to launch the new features that it enables with our customers. We believe that we have an opportunity to increase the respective subscriber bases, and in turn, grow the revenues associated with these Tier 1 carriers.

In the third quarter we received approximately $1.1 million in gross proceeds in exchange for short-term notes and warrants. Additionally, in October we announced strategic cost reductions in our organization, primarily comprised of workforce reorganization, which we expect to result in cost savings of approximately $1.8 million per quarter as compared to the second quarter of 2025, or approximately $7.2 million reduction in costs for 2026, excluding payment of employee separation costs of which approximately $0.5 million is currently expected to be paid by the end of the second quarter of 2026. These efforts are part of our broader initiative to realign the Company's cost structure with long-term business goals, strengthen the financial foundation, and accelerate our path to profitability.

Refer to the section titled "Liquidity and Capital Resources" for discussion of material changes in cash, Note 4 of our Notes to the Consolidated Financial Statements for discussion regarding the changes related to Common Stock, Note 5 for discussion regarding changes related to the warrant liabilities and Note 7 for discussion regarding changes to goodwill.

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**Results of Operations**

On April 3, 2024, we filed a certificate of amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a one-for-eight (1:8) reverse stock split of the shares of the Company's Common Stock, par value $0.001 per share, with an effective time of 11:59 p.m., Eastern Time on April 10, 2024 (the "Reverse Stock Split"). At the effective time, every eight shares of our Common Stock, whether issued and outstanding or held by the Company as treasury stock were automatically combined and converted (without any further act) into one share of fully paid and nonassessable Common Stock, with any fractional shares resulting from the Reverse Stock Split rounded up to the nearest whole share. See further information in Note 1. All shares and per share amounts in this Report have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split.

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, 2025 and 2024. Our historical results are not necessarily indicative of the operating results that may be expected in the future.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Revenues | 100.0% | 100.0% | 100.0% | 100.0% |
| Cost of revenues | 26.1 | 28.4 | 26.6 | 31.5 |
| Gross profit | 73.9% | 71.6% | 73.4% | 68.5% |
| Operating expenses: |  |  |  |  |
| Selling and marketing | 34 | 44.3 | 35.8 | 46.2 |
| Research and development | 59.9 | 78.2 | 61.3 | 72.7 |
| General and administrative | 52.2 | 58.4 | 57.2 | 52.7 |
| Depreciation and amortization | 31 | 30.6 | 30.2 | 31.3 |
| &nbsp;&nbsp;&nbsp; Proceeds from sale of ViewSpot, net |  |  | (9.6) |  |
| Goodwill impairment |  |  | 82.5 | 153.9 |
| Total operating expenses | 177.0% | 211.6% | 257.5% | 356.8% |
| Operating loss | (103.2) | (140.0) | (184.1) | (288.3) |
| Change in fair value of warrant liabilities | 0.8 | 4.8 | 1 | 2.9 |
| Interest (expense) income, net | (1.5) | (0.3) | (0.9) | 0.6 |
| Other (expense) income, net | (0.4) | (1.5) | (1.1) | 0.8 |
| Loss before provision for income tax provision | (104.3)% | (137.0)% | (185.0)% | (284.0)% |
| Provision for income tax expense |  |  |  | 0.3 |
| Net loss | (104.3)% | (137.0)% | (185.0)% | (284.3)% |
| Deemed dividend | (14.6)% | —% | (4.7)% | —% |
| Net loss attributable to common stockholders | (118.9)% | (137.0)% | (189.8)% | (284.3)% |

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**Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024**

*Revenues*. Revenues were $4.3 million and $4.6 million for the three months ended September 30, 2025 and 2024, respectively, representing a decrease of $0.3 million, or 6%. This decrease was primarily related to declines associated with our Family Safety product line of $0.4 million, which was mostly driven by Sprint Safe & Found revenue declining as legacy Sprint subscribers migrated to the T-Mobile network, coupled with a nominal decline in ViewSpot revenue that was primarily due to a contract that concluded during 2024 and the sale of that product in June 2025, partially offset by an increase in CommSuite revenues of approximately $0.1 million.

*Cost of revenues*. Cost of revenues were $1.1 million and $1.3 million for the three months ended September 30, 2025 and 2024, respectively. This decrease of $0.2 million was primarily due to the period-over-period decline in revenue coupled with the impact of cost reduction efforts undertaken.

*Gross profit*. Gross profit was $3.2 million, or 73.9% of revenues, for the three months ended September 30, 2025, compared to $3.3 million, or 71.6% of revenues, for the three months ended September 30, 2024. The decrease of $0.1 million in gross profit was driven by the period-over-period decline in revenue volume.

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*Selling and marketing*. Selling and marketing expenses were $1.5 million and $2.1 million for the three months ended September 30, 2025 and 2024, respectively. This decrease of $0.6 million was primarily due to decreases in personnel related costs due to cost reduction activities undertaken.

*Research and development*. Research and development expenses were $2.6 million and $3.6 million for the three months ended September 30, 2025 and 2024, respectively. This decrease of $1.0 million was primarily due to decreases in personnel related costs due to cost reduction activities undertaken.

*General and administrative*. General and administrative expenses were $2.3 million and $2.7 for each of the three months ended September 30, 2025 and 2024, respectively. This decrease of approximately $0.4million was primarily due to decreases in personnel related costs due to cost reduction activities undertaken.

*Depreciation and amortization*. Depreciation expense was $0.1 million for both the three months ended September 30, 2025 and 2024. Amortization expense was $1.3 million for the three months ended September 30, 2025 and 2024, respectively. Amortization expense is recognized based on the pattern of economic benefit expected to be generated from the use of the intangible assets.

*Change in fair value of warrant liabilities.* Change in fair value of warrant liabilities was nominal for the three months ended September 30, 2025 and 2024, respectively. Change in fair value of warrant liabilities was nominal and $0.2 million for the three months ended September 30, 2025 and 2024, respectively. The total decrease in income of $0.2 million resulted from valuation related impacts to the warrant liabilities in the respective periods.

*Interest (expense) income, net.* Interest expense, net was nominal for each of the three months ended September 30, 2025 and 2024.

*Other (expense) income, net.* Other expense, net was nominal for each of the three months ended September 30, 2025 and 2024.

*Provision for income tax expense.* Because of our cumulative loss position, the provision for income tax expense consists of state income taxes, foreign tax withholdings, and foreign income taxes for the three months ended September 30, 2025 and 2024. There were no material changes in the period-to-period comparison.

**Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024**

*Revenues*. Revenues were $13.4 million and $15.6 million for the nine months ended September 30, 2025 and 2024, respectively, representing a decrease of $2.2 million, or 14%. This decrease was primarily related to declines associated with our Family Safety product line of $1.7 million, which was mostly driven by Sprint Safe & Found revenue declining as legacy Sprint subscribers migrated to the T-Mobile network, coupled with a decline in ViewSpot revenue of $1.0 million partially offset by an increase in CommSuite revenues of $0.5 million.

*Cost of revenues*. Cost of revenues were $3.6 million and $4.9 million for the nine months ended September 30, 2025 and 2024, respectively. This decrease of $1.3 million was primarily due to the period-over-period decline in revenue coupled with the impact of cost reduction efforts undertaken.

*Gross profit*. Gross profit was $9.8 million, or 73.4% of revenues, for the nine months ended September 30, 2025, compared to $10.7 million, or 68.5% of revenues, for the nine months ended September 30, 2024. The decrease of approximately $0.8 million in gross profit was driven by the period-over-period decline in revenue volume.

*Selling and marketing*. Selling and marketing expenses were $4.8 million and $7.2 million for the nine months ended September 30, 2025 and 2024, respectively. This decrease of approximately $2.4 million was primarily due to decreases in personnel related costs due primarily to cost reduction activities undertaken by the Company.

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*Research and development*. Research and development expenses were $8.2 million and $11.3 million for the nine months ended September 30, 2025 and 2024, respectively. This decrease of approximately $3.1 million was primarily due to decreases in personnel related costs due to cost reduction activities undertaken by the Company.

*General and administrative*. General and administrative expenses were $7.7 million and $8.2 million for the nine months ended September 30, 2025 and 2024, respectively. This decrease of approximately $0.6 million was primarily related to declines in personnel related costs of $0.2 million, stock compensation costs of approximately $0.2 million and other corporate expense reductions.

*Depreciation and amortization*. Depreciation expense was $0.2 million and $0.3 million for the nine months ended September 30, 2025 and 2024, respectively. Amortization expense was $3.8 million and $4.6 million for the nine months ended September 30, 2025 and 2024, respectively. Amortization expense is recognized based on the pattern of economic benefit expected to be generated from the use of the intangible assets, and as such it decreased by approximately $0.8 million period-over-period.

*Gain on Sale of ViewSpot*. On June 3, 2025, we sold our ViewSpot product for total consideration of $1.3 million, of which $1.0 million was paid on the closing date, with the remaining amounts paid in two installments, the first of which was collected on July 1, 2025, and the final balance was collected on October 1, 2025. There were no such amounts for the nine months ended September 30, 2024.

*Goodwill impairment.* A goodwill impairment charge of $11.1 million was recorded for the nine months ended September 30, 2025 due to an analysis whereby we concluded that the carrying value of our single reporting unit exceeded its fair value. A goodwill impairment charge was recorded in the amount of $24.0 million for the nine months ended September 30, 2024.

*Change in fair value of warrant liabilities.* Change in fair value of warrant liabilities was $0.1 million and $0.4 million for the nine months ended September 30, 2025 and 2024, respectively. The total decrease in income of $0.3 million resulted from valuation related impacts to the warrant liabilities in the respective periods.

*Interest (expense) income, net.* Interest expense, net was $0.1 million for the nine months ended September 30, 2025 and interest income, net was $0.1 million for the nine months ended September 30, 2024.The period-over-period change is related to additional interest incurred on short-term obligations.

*Other (expense) income, net.* Other expense, net was $0.1 million for the nine months ended September 30, 2025 and other income, net was $0.1 million for the nine months ended September 30, 2024. The period over period change was primarily related to the licensing of several of our patents in February 2024.

*Provision for income tax expense.* Because of our cumulative loss position, the provision for income tax expense consists of state income taxes, foreign tax withholdings, and foreign income taxes for the nine months ended September 30, 2025 and 2024. There were no material changes in the period-to-period comparison.

**Liquidity and Capital Resources**

The Company's principal sources of liquidity are its existing cash and cash equivalents, and cash generated by operations. As of September 30, 2025, the Company's cash and cash equivalents were approximately $1.4 million. Since December 31, 2024, we have utilized cash collections, including the proceeds from the sale of our ViewSpot product and cash on hand to cover routine working capital requirements. On July 18, 2025, we closed on a registered direct offering of Common Stock and a concurrent placement of warrants, which provided gross proceeds to the Company of approximately $1.5 million, prior to offering fees and transaction expenses. Additionally, on September 11, 2025 and September 29, 2025, we entered into Notes Purchase Agreements, as more fully described in Note 5, which provided gross cash proceeds of approximately $1.2 million by September 30, 2025.

The timing of our anticipated revenue growth relative to the costs of operating, maintaining, innovating and evolving our business to respond to industry trends and maximize growth opportunities may result in cash and cash equivalents being insufficient to fund operations at current levels over the next twelve months and beyond.

This adverse impact on liquidity does not trigger a violation of any covenants in our material agreements, particularly as the September 11, 2025 and September 29, 2025 Notes Purchase Agreements do not contain any material financial covenants. The availability of sufficient funds will depend to an extent on the existence and timing of subscriber growth and the related cash generation thereof, and/or the ability to obtain the necessary capital to meet our obligations and fund our working capital requirements to maintain normal business operations. To meet future cash needs, the Company may determine to take additional actions, as noted in the Risk Factor appearing in our 2024 Form 10-K under the heading, "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." There can be no assurance that any such potential actions will be available or will be available on satisfactory terms. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry. As a result of these uncertainties, and notwithstanding management's plans and efforts to date, we have been unable to alleviate substantial doubt about our ability to continue as a going concern within one year from the date that the financial statements are issued.

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***Cash Flows***

Changes in cash and cash equivalents are as follows:

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| | | |
|:---|:---|:---|
|  | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30,** | **September 30,** |
| *(in thousands)* | **2025** | **2024** |
| Net cash used in operating activities | $(5007) | $(9368) |
| Net cash provided by investing activities | 1235 | 181 |
| Net cash provided by financing activities | 2358 | 3571 |
| Net decrease in cash and cash equivalents | $(1414) | $(5616) |

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*Operating activities*

Net cash used in operating activities was $5.0 million for the nine months ended September 30, 2025. The primary uses of operating cash were a net loss of $24.8 million less non-cash expenses totaling $18.0 million, including a goodwill impairment charge of $11.1 million, and depreciation and amortization of $4.0 million and stock compensation expense of $2.8 million, coupled with a decrease in accounts payable and accrued liabilities of $0.3 million, primarily due to the timing and change in payments for accounts payable and payroll, partially offset by a decrease in accounts receivable of $3.0 million.

Net cash used in operating activities was $9.4 million for the nine months ended September 30, 2024. The primary uses of operating cash were a net loss of $44.3 million less non-cash expenses totaling $31.7 million, driven by a goodwill impairment charge of $24.0 million, depreciation and amortization of $4.9 million and stock compensation expense of $3.5 million, and a decrease in accounts payable and accrued liabilities of $1.4 million, partially offset by a decrease in accounts receivable of $4.5 million.

*Investing activities*

Net cash provided by investing activities of $1.2 million for nine months ended September 30, 2025 was primarily due to the net proceeds from the sale of ViewSpot in June 2025, offset by capital expenditures. Net cash provided by investing activities of $0.2 million for the nine months ended September 30, 2024 was primarily attributable to the net proceeds from licensing several of our patents in February 2024.

*Financing activities*

Net cash provided by financing activities of $2.4 million for the nine months ended September 30, 2025 was attributable to the net cash proceeds to the Company of $1.0 million from the July 2025 Registered Direct and Private Placement offering, and the September 2025 gross proceeds of $1.2 million from the issuance of notes and warrants, and the timing of borrowings of $0.9 million less repayments of $0.8 million from short-term insurance premium financing arrangements.

Net cash provided by financing activities of $3.6 million for the nine months ended September 30, 2024 was primarily attributable to the net cash proceeds of $3.4 million from the Registered Direct Offering and Private Placement conducted in May 2024, and borrowings of $1.0 million less repayments of $0.8 million from short-term insurance premium financing arrangements.

**Recent Accounting Guidance**

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

**Critical Accounting Estimates**

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 we believe to be reasonable under the circumstances. Actual results may materially differ from these estimates under different assumptions or conditions. On an ongoing basis, we review our estimates to ensure that they appropriately reflect changes in our business or new information as it becomes available. See Note 1 of our Notes to the Consolidated Financial Statements in our 2024 Form 10-K for information regarding our critical accounting estimates. There have been no material changes to the Company's critical accounting estimates since the 2024 Form 10-K.

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**Item 4. Controls and Procedures**

*Evaluation of disclosure controls and procedures*

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 Rule 13a-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of September 30, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have determined that as of September 30, 2025, 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 SEC'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.

*Management*'*s responsibility for financial statements*

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.

*Changes in internal control over financial reporting*

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings**

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.

**Item 1A. Risk Factors**

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 2024 Form 10-K, 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 2024 Form 10-K 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. Other than as set forth below in this Item 1, there have been no material changes to the risk factors included in our 2024 Form 10-K.

***If we continue to fail to meet the requirements for continued listing on the Nasdaq Capital 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.***

Our common stock is currently listed for quotation on the Nasdaq Capital Market. We are required to meet specified financial requirements in order to maintain our listing on Nasdaq. We could lose our listing on Nasdaq if the closing bid price of our common stock does not increase or if in the future, we fail to meet any of the other Nasdaq listing requirements. The loss of our Nasdaq listing would in all likelihood make our common stock significantly less liquid and adversely affect its value.

As initially disclosed on our Current Report on Form 8-K filed with the SEC on June 24, 2025, we received a letter from the Listing Qualifications Department, or the Staff, of The Nasdaq Stock Market LLC, or Nasdaq, on June 23, 2025, indicating that as result of the closing bid price of the Company's common stock for the last 30 consecutive business days having been below the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the "Minimum Bid Price Requirement") the Company was not in compliance with the Minimum Bid Price Requirement (the "Minimum Bid Price Notice"). The Minimum Bid Price Notice has no immediate effect on the continued listing status of the Company's common stock on The Nasdaq Capital Market, and, therefore, the Company's listing remains fully effective.

Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or until December 22, 2025 to regain compliance with the Minimum Bid Price Requirement. If at any time before December 22, 2025, the closing bid price of the common stock is at least $1.00 per share for a minimum of ten consecutive business days, unless Nasdaq exercises its discretion to extend this ten-day period, Nasdaq will provide written confirmation stating that the Company has achieved compliance with the Minimum Bid Price Requirement. If the Company's common stock does not regain compliance with the Minimum Bid Price Requirement during this initial 180-day compliance period, the Company may be eligible for an additional compliance period of 180 calendar days provided that (i) the Company satisfies Nasdaq's continued listing requirement for market value of publicly held shares and all other initial listing standards, other than the Minimum Bid Price Requirement; and (ii) the Company provides written notice to Nasdaq of its intention to cure the deficiency during the second grace period.

The Company intends to monitor the closing bid price of its common stock and assess its available options in order to regain compliance with the Minimum Bid Price Requirement. If among such options the Company elects to pursue a reverse stock split to regain compliance with the Minimum Bid Price requirement, there can be no assurance that it would accomplish this objective for any meaningful period of time, or at all, or that it would result in any permanent or sustained increase in the market price of our Common Stock; and if such an event would be viewed unfavorably by the market, it could have the effect of reducing our market capitalization. Furthermore, pursuant to a recent modification to Nasdaq's listing standards, if a company effects a reverse stock split and within one year thereafter becomes non-compliant with the Minimum Bid Price Requirement, it would immediately receive a notification letter from the Nasdaq Listing Qualifications Department commencing delisting proceedings, with no opportunity for a compliance period.

There can be no assurance that the Company will regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with the other Nasdaq listing requirements. In the event of a delisting from the Nasdaq Capital Market, our common stock would likely be traded in the over-the-counter inter-dealer quotation system, more commonly known as the OTC. OTC transactions involve risks in addition to those associated with transactions in securities traded on the securities exchanges, such as the Nasdaq Capital Market, or, together, Exchange-listed stocks. Many OTC stocks trade less frequently and in smaller volumes than Exchange-listed stocks. Accordingly, our stock would be less liquid than it would be otherwise. Also, the prices of OTC stocks are often more volatile than Exchange-listed stocks. Additionally, institutional investors are usually prohibited from investing in OTC stocks, and it might be more challenging to raise capital when needed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 30

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**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

The table set forth below shows all repurchases of securities by us during the three months ended September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **ISSUER PURCHASES OF EQUITY SECURITIES** | **ISSUER PURCHASES OF EQUITY SECURITIES** | **ISSUER PURCHASES OF EQUITY SECURITIES** | **ISSUER PURCHASES OF EQUITY SECURITIES** | **ISSUER PURCHASES OF EQUITY SECURITIES** |
|  |  |  |  | **Maximum Number (or** |
|  |  |  |  | **Approximate Dollar** |
|  |  |  | **Total Number of Shares** | **Value) of Shares** |
|  |  |  | **(or Units) Purchased** | **(or Units) that May** |
|  |  |  | **as Part of Publicly** | **Yet Be Purchased** |
|  | **Total Number of Shares** | **Average Price Paid** | **Announced Plans** | **Under the Plans** |
|  | **(or Units) Purchased (1)** | **per Share (or Unit)** | **or Programs** | **or Programs** |
| **Period** | **(a)** | **(b)** | **(c)** | **(d)** |
| July 1 - 31, 2025 |  | $— |  |  |
| August 1 - 31, 2025 | 145903 | $0.80 |  |  |
| September 1 - 30, 2025 | 5225 | $0.70 |  |  |
| Total | 151128 | $0.79 |  |  |

---

(1) Shares of the Company's Common Stock repurchased by the Company as payment of withholding taxes in connection with the vesting of restricted stock awards during the applicable period. All the shares were cancelled when they were acquired by the Company.

**Item *5.* Other Information**

*Trading Arrangements*

During the fiscal quarter ended on *September 30, 2025*, *none* of the Company's directors or "officers", as defined in Rule *16a*-*1*(f) of the Exchange Act, adopted, modified or terminated any "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" as each term is defined in Item *408* of Regulation S-K.

*Amendment to Bylaws*

The information set forth below is included for the purpose of providing the disclosure required by "Item *5.03* - Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year" of Form *8*-K.

On *October 30, 2025,* the Company's Board of Directors adopted resolutions that approved an amendment to the Amended and Restated Bylaws of the Company, as amended, (the "Bylaws Amendment") to provide that the holders of *forty* percent (*40%*) of the stock issued and outstanding and entitled to vote, present in person or represented by proxy, will constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the Company's Certificate of Incorporation. The previous quorum requirement was the holders of a majority of the stock issued and outstanding, except as otherwise provided by statute or by the Company's Certificate of Incorporation. The amendment became effective immediately.

The above summary of the amendment to the Amended and Restated Bylaws, as amended, is qualified in its entirety to the full text of the Company's bylaws, as amended, a copy of which is attached as Exhibit *3.2* to this Form *10*-Q.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 31

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**Item 6. Exhibits**

---

| | |
|:---|:---|
| <u>Exhibit</u> | <u>Description</u> |
| 3.2 | [Amended and Restated Bylaws as amended through October 30, 2025, filed herewith](ex_881521.htm) |
| 4.1 | [<u>Form of Common Stock Purchase Warrant issued pursuant to Securities Purchase Agreement dated July 17, 2025, incorporated by reference to Exhibit 4.1 to the Registrant'</u><u>s Current Report on Form 8-K filed on July 18, 2025</u>](http://www.sec.gov/Archives/edgar/data/948708/000162828025035358/exhibit41-8xk.htm) |
| 4.2 | [<u>Form of Common Stock Purchase Warrant issued pursuant to Note Purchase Agreement effective September 11, 2025, incorporated by reference to Exhibit 4.1 to the Registrant'</u><u>s Current Report on Form 8-K filed on September 17, 2025</u>](http://www.sec.gov/Archives/edgar/data/948708/000143774925029302/ex_862123.htm) |
| 4.3 | [<u>Form of Common Stock Purchase Warrant issued pursuant to Note Purchase Agreement dated September 29, 2025, incorporated by reference to Exhibit 4.1 to the Registrant'</u><u>s Current Report on Form 8-K filed on October 2, 2025</u>](http://www.sec.gov/Archives/edgar/data/948708/000143774925030331/ex_865803.htm) |
| 10.1\* | [<u>Form of Securities Purchase Agreement (Registered Shelf Takedown Offering) by and among the Registrant and the Purchasers party thereto, dated July 17, 2025, incorporated by reference to Exhibit 10.1 to the Registrant'</u><u>s Current Report on Form 8-K filed July 18, 2025</u>](http://www.sec.gov/Archives/edgar/data/948708/000162828025035358/exhibit101-8xk.htm) |
| 10.2\* | [<u>Form of Note Purchase Agreement by and among the Registrant and the Purchasers party thereto, effective September 11, 2025, incorporated by reference to Exhibit 10.1 to the Registrant'</u><u>s Current Report on Form 8-K filed on September 17, 2025</u>](http://www.sec.gov/Archives/edgar/data/948708/000143774925029302/ex_862124.htm) |
| 10.3\* | [Form of Note Purchase Agreement by and among the Registrant and the Purchasers party thereto, dated September 29, 2025, incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on October 2, 2025](http://www.sec.gov/Archives/edgar/data/948708/000143774925030331/ex_865804.htm)  |
| 10.4 | [Form of Secured Promissory Note, incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on September 17, 2025](http://www.sec.gov/Archives/edgar/data/948708/000143774925029302/ex_862125.htm)  |
| 10.5 | [<u>Form of Secured Promissory Note, incorporated by reference to Exhibit 10.2 to the Registrant'</u><u>s Current Report on Form 8-K filed on October 2, 2025</u>](http://www.sec.gov/Archives/edgar/data/948708/000143774925030331/ex_865805.htm) |
| 31.1 | [<u>Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](ex_856512.htm) |
| 31.2 | [<u>Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</u>](ex_856513.htm) |
| 32.1 | [<u>Certifications of the Chief Executive Officer and the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</u>](ex_856514.htm) |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |

---

------

\* Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish a copy any of the omitted exhibits or schedules upon request by the SEC.

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**SIGNATURES**

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.

---

| | | |
|:---|:---|:---|
|  | SMITH MICRO SOFTWARE, INC. | SMITH MICRO SOFTWARE, INC. |
| November 5, 2025 | By /s/ | William W. Smith, Jr. |
|  | William W. Smith, Jr. | William W. Smith, Jr. |
|  | Chairman of the Board, President and Chief Executive Officer | Chairman of the Board, President and Chief Executive Officer |
|  | *(Principal Executive Officer)* | *(Principal Executive Officer)* |
| November 5, 2025 | By /s/ | Timothy C. Huffmyer |
|  | Timothy C. Huffmyer | Timothy C. Huffmyer |
|  | Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer | Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer |
|  | *(Principal Financial and Accounting Officer)* | *(Principal Financial and Accounting Officer)* |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 33

## Exhibit 3.2

**Exhibit 3.2**

**AMENDED AND RESTATED**

**BYLAWS**

**OF**

**SMITH MICRO SOFTWARE, INC.**

**(a Delaware corporation)**

**(as amended through October 30, 2025)**

------

**ARTICLE I**

**OFFICES**

Section 1. <u>Registered Office</u>. The registered office shall be at the office of The Prentice-Hall Corporation System, Inc.

Section 2. <u>Other Offices</u>. The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may on an annual basis determine or the business of the corporation may require.

**ARTICLE II**

**MEETINGS OF STOCKHOLDERS**

Section 1. <u>Annual Meeting</u>. An annual meeting of the stockholders for the election of directors shall be held at such place either within or without the State of Delaware as shall be designated on an annual basis by the Board of Directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof.

Section 2. <u>Notice of Annual Meeting</u>. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting.

Section 3. <u>Voting List</u>. The officer who has charge of the stock ledger of the corporation shall prepare and make, or cause a third party to prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 4. <u>Special Meetings</u>. Special meetings of the stockholders of this corporation, for any purpose or purposes unless otherwise prescribed by statute or by the Certificate of Incorporation, shall be called by the President or Secretary at the request in writing of the President, a majority of the members of the Board of Directors or holders of at least 50% of the total voting power of all outstanding shares of stock of this corporation then entitled to vote, and may not be called absent such a request. Such request shall state the purpose or purposes of the proposed meeting.

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Section 5*.* <u>Notice of Special Meetings</u>. As soon as reasonably practicable after receipt of a request as provided in Section 4 of this Article II, written notice of a special meeting, stating the place, date (which shall be not less than ten (10) nor more than sixty (60) days from the date of the notice) and hour of the special meeting and the purpose or purposes for which the special meeting is called, shall be given to each stockholder entitled to vote at such special meeting.

Section 6. <u>Scope of Business at Specia1 Meeting</u>. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 7. <u>Quorum</u>. The holders of forty percent (40%) of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairman of the meeting or the stockholders entitled to vote thereat present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting as provided in Section 5 of this Article II.

Section 8. <u>Qualifications to Vote</u>. The stockholders of record on the books of the corporation at the close of business on the record date as determined by the Board of Directors and only such stockholders shall be entitled to vote at any meeting of stockholders or any adjournment thereof.

Section 9. <u>Record Date</u>. The Board of Directors may fix a record date for the determination of the stockholders entitled to notice of or to vote at any stockholders' meeting and at any adjournment thereof, and to fix a record date for any other purpose. The record date shall not be more titan sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or if notice is waived at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 10. <u>Action at Meetings</u>. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of applicable law or of the Certificate of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question.

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Section 11. <u>Voting and Proxies</u>. Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one (1) vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three (3) years from its date, unless the proxy provides for a longer period. Each proxy shall be revocable unless expressly provided therein to be irrevocable and unless it is coupled with an interest sufficient in law to support an irrevocable power.

Section 12. <u>Nominations for Board of Directors</u>. Nominations for election to the Board of Directors must be made by the Board of Directors or by any stockholder of any outstanding class of capital stock of the corporation entitled to vote for the election of directors. Nominations, other than those made by the Board of Directors of the corporation, must be preceded by notification in writing in fact received by the Secretary of the corporation not less than sixty (60) days prior to any meeting of stockholders called for the election of directors. Such notification shall contain the written consent of each proposed nominee to serve as a director if so elected and the following information as to each proposed nominee and as to each person, acting alone or in conjunction with one or more other persons as a partnership, limited partnership, syndicate or other group, who participates or is expected to participate in making such nomination or in organizing, directing or financing such nomination or solicitation of proxies to vote for the nominee:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the name, age, residence, address, and business address of each proposed nominee and of each such person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the principal occupation or employment, the name, type of business and address of the corporation or other organization in which such employment is carried on of each proposed nominee and of each such person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the amount of stock of the corporation owned beneficially either directly or indirectly, by each proposed nominee and each such person; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) a description of any arrangement or understanding of each proposed nominee and of each such person with each other or any other person regarding future employment or any future transaction to which the corporation will or may be a party.

The presiding officer of the meeting shall have the authority to determine and declare to the meeting that a nomination not preceded by notification made in accordance with the foregoing procedure shall be disregarded.

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Section 13. <u>Stockholder Proposals for Meetings</u>. At any meeting of the stockholders, only such business shall be conducted as shall be properly before the meeting. To be properly before a meeting business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before a meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal place of business of the corporation not less than thirty (30) days nor more than sixty (60) days prior to the meeting; provided, however, that in the event that less than forty (40) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A stockholder's written notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (b) the name and address as they appear on the corporation's books of the stockholder proposing such business (c) the class and number of shares of the corporation which are beneficially owned by such stockholder, and (d) any material interest of such stockholder in such business. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at a meeting unless properly brought before such meeting in accordance with the procedures set forth in this Section 13 of Article II. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with. the provisions of this Section 13 of Article II and if it shall be so determined, the chairman of the meeting shall so declare this to the meeting and such business not properly brought before the meeting shall not be transacted.

**ARTICLE III**

**DIRECTORS**

Section 1. <u>Powers</u>. The business of the corporation shall be managed by or under the direction of its Board of Directors, which may exercise all such powers of the corporation and do all such lawful acts and things as are not by applicable law or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

Section 2. <u>Number; Election; Tenure and Qualification</u>. The number of directors which shall constitute the whole of the Board of Directors shall be fixed from time to time by resolution of the Board of Directors or by the stockholders provided that the number of directors shall not be less than five (5) nor more than nine (9). The directors shall be elected as hereinbelow provided, except as provided in the corporation's Certificate of Incorporation or in Section 3 of this Article III. The directors shall be c1assified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as is reasonably possible. One class shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1998, another class shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1997, and another class shall be originally elected for a term expiring at the annual meeting of stockholders to be held in 1996, with each member of each class to hold office until a successor is elected and qualified unless such member shall resign, become disqualified, disabled, or otherwise removed. At each annual meeting of stockholders of the corporation, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term of three years by a plurality vote of the shares represented in person or by proxy and entitled to vote in the election of directors. Directors need not be stockholders.

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Section 3. <u>Vacancies and Newly Created Directorships</u>. Unless otherwise provided in the Certificate of Incorporation, vacancies and newly-created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum or by a sole remaining director. The directors so chosen shall hold office until the next election of the class for which such directors shall have been chosen and until their successors are duly elected and qualified, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute.

Section 4. <u>Location of Meetings</u>. The Board of Directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware.

Section 5. <u>Meetings of Newly Elected Board of Directors</u>. The first meeting of each newly elected Board of Directors shall be held immediately following the annual meeting of stockholders and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting provided a quorum shall be present. In the event such meeting is not held at such time, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors.

Section 6. <u>Regular Meetings</u>. Regular meetings of the Board of Directors may be held upon at least seven (7) days prior written notice at such time and at such place as shall from time to time be determined by the Board of Directors; provided that any director who is absent when such a determination is ma.de shall be given notice of such location. Notice may be waived in accordance with Section 229 of the Delaware General Corporation Law.

Section 7. <u>Special Meetings</u>. Special meetings of the Board of Directors may be called by the President on seven (7) days' notice to each director by mail or two (2) days' notice to each director by overnight courier service or facsimile; special meetings shall be called by the President or Secretary in a like manner and on like notice on the written request of two (2) directors unless the Board of Directors consists of only one (1) director, in which case special meetings shall be called by the President or Secretary in a like manner and on like notice on the written request of the sole director. Notice may be waived in accordance with Section 229 of the Delaware General Corporation Law.

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Section 8. <u>Quorum and Action at Meetings</u>. At all meetings of the Board of Directors, a majority of the directors then in office shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 9. <u>Action Without a Meeting</u>. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

Section 10. <u>Telephonic Meetings</u>. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, upon proper notice duly given, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 11. <u>Committees</u>. The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one (1) or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence of disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

Section 12. <u>Committee Authority</u>. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, amending the Bylaws of the corporation, or any action requiring unanimous consent of the Board of Directors pursuant to the terms of the Certificate of Incorporation; and, unless the resolution or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.

Section 13. <u>Committee Minutes</u>. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

------

Section 14. <u>Directors Compensation</u>. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

Section 15. <u>Resignation</u>. Any director or officer of the corporation may resign at any time. Each such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time is specified, at the time of its receipt by either the Board of Directors, the President or the Secretary. The acceptance of a resignation shall not be necessary to make it effective unless expressly so provided in the resignation.

**ARTICLE IV**

**NOTICES**

Section 1. <u>Notice to Directors and Stockholders</u>. Whenever, under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent of the corporation that the notice has been given shall in the absence of fraud, be prima facie evidence of the facts stated therein. Notice to directors may also be given by telephone, facsimile or telegram.

Section 2. <u>Waiver</u>. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein) shall be deemed equivalent thereto. The written waiver need not specify the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

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**ARTICLEV**

**OFFICERS**

Section 1. <u>Enumeration</u>. The officers of the corporation shall be chosen by the Board of Directors and shall be a President, a Secretary, a Treasurer or Chief Financial Officer and such other officers with such other titles as the Board of Directors shall determine. The Board of Directors may elect from among its members a Chairman or Chairmen of the Board and a Vice Chairman of the Board. The Board of Directors may also choose one (1) or more Vice Presidents and Assistant Secretaries. Any number of offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide.

Section 2. <u>Election</u>. The Board of Directors at its first meeting after each annual meeting of stockholders shall elect a President, a Secretary, a Treasurer and such other officers with such other titles as the Board of Directors shall determine.

Section 3. <u>Appointment of Other Agents</u>. The Board of Directors may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

Section 4. <u>Compensation</u>. The salaries of all officers of the corporation shall be fixed by the Board of Directors or a committee thereof. The salaries of agents of the corporation shall, unless fixed by the Board of Directors, be fixed by the President or the Executive Vice President of the corporation.

Section 5. <u>Tenure</u>. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the directors of the Board of Directors. Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.

Section 6. <u>Chairman of the Board and Vice-Chairman of the Board</u>. The Chairman or Chairmen of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he or they shall be present. He or they shall have and may exercise such powers as are, from time to time, assigned to him or them by the Board and as may be provided by law. In the absence of the Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders at which he shall be present. He shall have and may exercise such powers as are, from time to time, assigned to him by the Board of Directors and as may be provided by law.

Section 7. <u>President</u>. The President shall be the Chief Executive Officer of the corporation unless such title is assigned to a Chairman of the Board; and in the absence of a Chairman and Vice Chairman of the Board he shall preside as the chairman of meetings of the stockholders and the Board of Directors; he shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President or the Executive Vice President shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.

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Section 8. <u>Executive Vice-President</u>. In the absence of the President or in the event of his inability or refusal to act, the Executive Vice-President, if any, shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. The Executive Vice-President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe,

Section 9. <u>Vice-President</u>. In the event of the President's and the Executive Vice-President's inability to act, the Vice-President, if any (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated by the Board of Directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President and the Executive Vice-President, and when so acting shall have all the powers of and be subject to the restrictions upon the President and the Executive Vice-President, the Vice-President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

Section 10. <u>Secretary</u>. The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be subject. He shall have custody of the corporate seal of the corporation and he or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature.

Section 11. <u>Assistant Secretary</u>. The Assistant Secretary or if there be more than one (1), the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination. then in the order of their election) shall, in the absence of the Secretary or in the event of his inability or refusal to act perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

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Section 12. <u>Treasurer</u>. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the corporation as may be ordered by the Board of Directors, President or Chief Operating Officer, taking proper vouchers for such disbursements and shall render to the President, Chief Operating Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the corporation. If required by the Board of Directors, the Treasurer shall give the corporation a bond (which shall be renewed every six (6) years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

**ARTICLE VI**

**CAPITAL STOCK**

Section 1. <u>Certificates</u>. The shares of the corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Certificates for the shares of stock of the corporation shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the corporation shall be entitled to have a certificate signed by, or in the name of the corporation by, the Chairman of the Board (if there be such an officer appointed), or by the President or any Vice-President and by the Treasurer or assistant treasurer or the Secretary or assistant secretary, certifying the number of shares owned by him in the corporation. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefore and the amount paid thereon shall be specified.

Section 2. <u>Class or Series</u>. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class1 the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

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Section 3. <u>Signature</u>. Any of or all of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before ·such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

Section 4. <u>Lost Certificates</u>. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 5. <u>Transfer of Stock</u>. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Section 6. <u>Record Date</u>. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholder or any adjournment thereof or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however) that the Board of Directors may fix a new record date for the adjourned meeting.

Section 7. <u>Registered Stockholders</u>. The corporation· shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

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**ARTICLE VII**

**GENERAL PROVISIONS**

Section 1. <u>Dividends</u>. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purposes as the Board of Directors shall think conducive to the interest of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

Section 2. <u>Checks</u>. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 3. <u>Fiscal Year</u>. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

Section 4. <u>Seal</u>. The Board of Directors may adopt a corporate seal having inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 5. <u>Loans</u>. The Board of Directors of this corporation may, without stockholder approval, authorize loans to, or guaranty obligations of, or otherwise assist, including, without limitation, the adoption of employee benefit plans under which loans and guarantees may be made, any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the Board of Directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation.

**ARTICLE VIII**

**INDEMNIFICATION**

Section 1. <u>Scope</u>. The corporation shall, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as that Section may be amended and supplemented from time to time, indemnify any director, officer, employee or agent of the corporation, against expenses (including attorneys' fees), judgments, fines, amounts paid in settlement and/or other matters referred to in or covered by that Section, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture1 trust or other enterprise.

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Section 2. <u>Advancing Expenses</u>. Expenses incurred by a director of the corporation in defending a civil or criminal action, suit or proceeding by reason of the fact that he is or was a director, officer, employee or agent of the corporation (or is or was serving at the request of the corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized by relevant provisions of the Delaware General Corporation Law; provided, however, the corporation shall not be required to advance such expenses to a director (i) who commences any action, suit or proceeding as a plaintiff unless such advance is specifically approved by a majority of the Board of Directors, or (ii) who is a party to an action, suit or proceeding brought by the corporation and approved by a majority of the Board of Directors which alleges willful misappropriation of corporate assets by such director, disclosure of confidential information in violation of such director's fiduciary or contractual obligations to the corporation, or any other willful and deliberate breach in bad faith of such director's duty to the corporation or its stockholders.

Section 3. <u>Liability Offset</u>. The corporation's obligation to provide indemnification under this Article VIII shall be offset to the extent the indemnified party is indemnified by any other source including, but not limited to, any applicable insurance coverage under a policy maintained by the corporation, the indemnified party or any other person.

Section 4. <u>Continuing Obligation</u>. The provisions of this Article VIII shall be deemed to be a contract between the corporation and each director of the corporation who serves in such capacity at any time while this Bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts.

Section 5*.* <u>Nonexclusive</u>. The indemnification and advancement of expenses provided for in this Article VIII shall (i) not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement or vote of stockholders or disinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, (ii) continue as to a person who has ceased to be a director and (iii) inure to the benefit of the heirs, executors and administrators of such a person.

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Section 6. <u>Other Persons</u>. In addition to the indemnification rights of directors, officers, employees, or agents of the corporation, the Board of Directors in its discretion shall have the power on behalf of the corporation to indemnify any other person made a party to any action, suit or proceeding who the corporation may indemnify under Section 145 of the Delaware General Corporation Law.

Section 7. <u>Definitions</u>. The phrases and terms set forth in this Article VIII shall be given the same meaning as the identical terms and phrases are given in Section 145 of the Delaware General Corporation Law, as that Section may be amended and supplemented from time to time.

**ARTICLE IX**

**AMENDMENTS**

Except as otherwise provided in the Certificate of Incorporation, these Bylaws may be altered, amended or repealed, or new Bylaws may be adopted, by the holders of a majority of the outstanding voting shares or by the Board of Directors, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meeting. If the power to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the Certificate of Incorporation, it shall not divest or limit the power of the stockholders to adopt, amend or repeal Bylaws.

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATIONS**

I, William W. Smith, Jr., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of Smith Micro Software, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | |
|:---|:---|
| Date: November 5, 2025 | /s/ William W. Smith, Jr. |
| | William W. Smith, Jr. |
| | Chairman of the Board, President and Chief Executive Officer |
| | *(Principal Executive Officer)* |

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATIONS**

I, Timothy C. Huffmyer, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of Smith Micro Software, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;<br>

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;<br>

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | |
|:---|:---|
| Date: November 5, 2025 | /s/ Timothy C. Huffmyer |
| | Timothy C. Huffmyer |
| | Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer |
| | *(Principal Financial and Accounting Officer)* |

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION** 

**PURSUANT TO 18 U.S.C. SECTION 1350 (AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, William W. Smith Jr., the Chief Executive Officer of Smith Micro Software, Inc. (the "Company"), and Timothy C. Huffmyer, the Chief Financial Officer of the Company, hereby certify, that, to their knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The quarterly report on Form 10-Q for the period ended September 30, 2025 of the Company (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| November 5, 2025 | By | /s/ William W. Smith, Jr. |
|  | William W. Smith, Jr. | William W. Smith, Jr. |
|  | Chairman of the Board, President and Chief Executive Officer | Chairman of the Board, President and Chief Executive Officer |
|  | *(Principal Executive Officer)* | *(Principal Executive Officer)* |
| November 5, 2025 | By | /s/ Timothy C. Huffmyer |
|  | Timothy C. Huffmyer | Timothy C. Huffmyer |
|  | Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer | Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer |
|  | *(Principal Financial and Accounting Officer)* | *(Principal Financial and Accounting Officer)* |

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