Smith Micro Software (SMSI) risk factors, FY2024 10-K

Risks Related to our Business Operations

1. 01We derive a significant portion of our revenues from sales to a concentrated number of customers, and a reduction in sales to any of them have adversely impacted, and in the future may adversely impact, our revenues and operating results
2. 02Our growth depends in part on our customers’ ability and willingness to timely launch and deliver our products and services, to promote our products and services, and to attract and retain new end user customers or achieve other goals outside of our control
3. 03If we are unable to retain key personnel, the loss of their services could materially and adversely affect our business, financial condition, and results of operations
4. 04Security breaches, improper access to or disclosure of our data, our customers’ data or their end users’ data, other hacking attacks on our systems or the third-party systems that we use, or other cyber incidents and privacy breaches could harm our reputation and adversely affect our business
5. 05Interruptions or delays in service from data center hosting facilities could impair the delivery of our service and harm our business
6. 06operating systems, devices, networks, standards, or third-party technology, or interference with those relationships may seriously harm our customers’ ability to retain or attract new users and may harm our revenue and growth
7. 07Our products may contain undetected software defects, which could negatively affect our revenues

Financial, Investment and Indebtedness Risks

1. 08If 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
2. 09We may raise additional capital through the issuance of equity or convertible debt securities or by entering into borrowing arrangements in order to meet our capital needs. Additional funds to allow us to meet our capital needs may not be available on terms acceptable to us or at all
3. 10Additionally, the securities purchase agreements we have entered into in the past, and may enter into in the future, may include certain restrictions restricts or otherwise impair our ability to obtain additional financing using certain types of transactions
4. 11The Company has a history of net losses and may incur substantial net losses in the future
5. 12The results of cost reduction efforts undertaken by the Company could negatively impact the Company's future operational goals and may negatively impact the Company
6. 13Our operating income or loss may continue to change due to shifts in our sales mix and variability in our operating expenses
7. 14Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets
8. 15Exercise of outstanding warrants issued in connection with our capital raising efforts will dilute the ownership interest of our existing stockholders or may otherwise depress the price of our common stock

Risks Related to our Industry and Macroeconomic Conditions

1. 16We derive a significant portion of our revenues from wireless carriers, and changes within this vertical market, or failure to penetrate new markets, could adversely impact our revenues and operating results
2. 17Technology and customer needs change rapidly in our market, which could render our products obsolete and negatively affect our business, financial condition, and results of operations
3. 18Competition within our target markets is intense and includes numerous established competitors and new entrants, which could negatively affect our revenues and results of operations
4. 19Our business, financial condition and operating results could be adversely affected as a result of legal, business, and economic risks specific to international operations

Legal and Regulatory Risks

1. 20costs of compliance with, and other burdens imposed by, these laws and regulations may become substantial and may limit the use and adoption of our offerings, require us to change our business practices, impede the performance and development of our solutions
2. 21Regulations affecting our customers and our business and future regulations, to which they or we may become subject, may harm our business
3. 22If we fail to comply with the requirements for continued listing on the Nasdaq Stock Market, our common stock could be delisted from trading on Nasdaq, which would likely reduce the liquidity of our common stock and could cause our trading price to decline

Other General Risks

1. 23Our acquisitions of companies or technologies may disrupt our business and divert management attention and cause our other operations to suffer
2. 24We rely directly and indirectly on third-party intellectual property and licenses, which may not be available on commercially reasonable terms or at all
3. 25Our quarterly revenues and operating results are difficult to predict and could fall below analyst or investor expectations, which could cause the price of our common stock to fall
4. 26Because we sell primarily to large wireless carriers, we have no direct relationship with most end users of our products. This indirect relationship delays feedback and blurs signals of change in the quick-to-evolve wireless ecosystem and is one of the reasons we have difficulty predicting demand