What the changes say
- The company added significant risk disclosures regarding newly issued senior secured convertible notes and associated warrants.
What changed since the prior 10-K
New
- NewRisks Related to our Business Operations
increase our expense from potential remediation costs
Data security breaches or failures in safeguards could increase our expenses from potential remediation costs.
- NewFinancial, Investment and Indebtedness Risks
Sell or license intellectual property
If we cannot continue normal operations, significant adjustments to asset and liability classifications in our financial statements would be required.
- NewRisks Related to Our Convertible Notes
The terms of our Convertible Notes, and our debt repayment obligations thereunder, may restrict our ability to obtain additional financing, and adversely affect our financial condition and cash flows from operations in the future
Our senior secured convertible notes issued in March 2026 restrict our future financing ability and require debt service cash flows.
- NewRisks Related to Our Convertible Notes
Conversion of the Convertible Notes and exercise of the warrants issued in connection with the Convertible Notes will dilute the ownership interest of our existing stockholders or may otherwise depress the price of our common stock
Conversion of our convertible notes and exercise of related warrants will dilute existing stockholders and may depress our common stock price.
- NewRisks Related to Our Convertible Notes
Our obligations to the holders of our Convertible Notes are secured by a security interest certain of our assets, including our accounts receivable, and if we default on those obligations, the note holders could foreclose on those assets
Holders of our convertible notes hold a security interest in assets including accounts receivable and could foreclose upon default.
- NewRisks Related to Our Convertible Notes
The holders of our Convertible Notes have certain additional rights upon an event of default under the Convertible Notes which could harm our business, financial condition and results of operations and could require us to curtail or cease our operations
Default on our convertible notes could trigger higher interest rates and cash redemption demands we may be unable to pay.
- NewRisks Related to our Industry and Macroeconomic Conditions
potentially adverse tax consequences
Adverse economic conditions may increase our cost of doing business and disrupt our customers, harming our operations.
- NewLegal and Regulatory Risks
The December Notice has no immediate effect on the continued listing status of the Company’s Common Stock on The Nasdaq Capital Market, and the Company’s listing remains fully effective
A reverse stock split to regain compliance with Nasdaq minimum bid price rules carries delisting risks if non-compliance recurs within one year.
- NewOther General Risks
general economic and market conditions
Subscriber churn across our wireless carrier customers drives revenue volatility and unpredictability.
Dropped
- DroppedRisks Related to our Business Operations
operating 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
- DroppedLegal and Regulatory Risks
costs 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
Reworded
- 95% rewrittenRisks Related to our Business Operations
Interruptions or delays in service from data center hosting facilities or virtual cloud infrastructures could impair the delivery of our service and harm our business
Added specific mention of AWS virtual cloud infrastructure and disaster recovery reliance.
Was: Interruptions or delays in service from data center hosting facilities could impair the delivery of our service and harm our business
- 89% rewrittenLegal and Regulatory Risks
If 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
Updated listing venue to Nasdaq Capital Market and referenced a June 23, 2025 Form 8-K disclosure.
- 44% rewrittenRisks Related to our Business Operations
Security breaches, improper access to or disclosure of our data, our customers’ data or their end users’ data, other hacking attacks on our systems or the third-party systems that we use, or other cyber incidents and privacy breaches could harm our reputation and adversely affect our business
Reiterated cyber-attack and data security risks without material textual changes.
- 41% rewrittenFinancial, Investment and Indebtedness Risks
Our results of operations may be adversely affected if we fail to realize the full value of our intangible assets
Updated net intangible assets figure down to $18.5 million as of December 31, 2025, from $34.6 million of goodwill and net intangibles.
Was: Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets
- 33% rewrittenFinancial, Investment and Indebtedness Risks
We may raise additional capital through the issuance of equity or convertible debt securities or by entering into borrowing arrangements in order to meet our capital needs. Additional funds to allow us to meet our capital needs may not be available on terms acceptable to us or at all
Added a proviso that outstanding warrants and convertible notes do not hinder future capital access.
- 32% rewrittenOther General Risks
Our quarterly revenues and operating results are difficult to predict and could fall below analyst or investor expectations, which could cause the price of our common stock to fall
Minor formatting adjustments to revenue fluctuation factors without substantive text changes.
- 31% rewrittenFinancial, Investment and Indebtedness Risks
Exercise 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
Updated outstanding warrants figure to 18,348,471 shares at exercise prices ranging from $0.67 to $21.20 as of February 28, 2026.
- 30% rewrittenFinancial, Investment and Indebtedness Risks
The Company has a history of net losses and may incur substantial net losses in the future
Updated historical net loss context following the 2023 loss of a U.S. Tier 1 customer.
- 26% rewrittenFinancial, Investment and Indebtedness Risks
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
All 33 risk factors
Headings as the filing states them, in filing order.
Risks Related to our Business Operations
- 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
- 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
- 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
- 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 business44% rewritten
- 05increase our expense from potential remediation costsNew
- 06Interruptions or delays in service from data center hosting facilities or virtual cloud infrastructures could impair the delivery of our service and harm our business95% rewritten
- 07Our products may contain undetected software defects, which could negatively affect our revenues
Financial, Investment and Indebtedness Risks
- 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 concern26% rewritten
- 09Sell or license intellectual propertyNew
- 10We 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 all33% rewritten
- 11Additionally, the securities purchase agreements we have entered into in the past, and may enter into in the future, may include certain restrictions or otherwise impair our ability to obtain additional financing using certain types of transactions
- 12The Company has a history of net losses and may incur substantial net losses in the future30% rewritten
- 13The results of cost reduction efforts undertaken by the Company could negatively impact the Company's future operational goals and may negatively impact the Company
- 14Our operating income or loss may continue to change due to shifts in our sales mix and variability in our operating expenses
- 15Our results of operations may be adversely affected if we fail to realize the full value of our intangible assets41% rewritten
- 16Exercise 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 stock31% rewritten
Risks Related to Our Convertible Notes
- 17The terms of our Convertible Notes, and our debt repayment obligations thereunder, may restrict our ability to obtain additional financing, and adversely affect our financial condition and cash flows from operations in the futureNew
- 18Conversion of the Convertible Notes and exercise of the warrants issued in connection with the Convertible Notes will dilute the ownership interest of our existing stockholders or may otherwise depress the price of our common stockNew
- 19Our obligations to the holders of our Convertible Notes are secured by a security interest certain of our assets, including our accounts receivable, and if we default on those obligations, the note holders could foreclose on those assetsNew
- 20The holders of our Convertible Notes have certain additional rights upon an event of default under the Convertible Notes which could harm our business, financial condition and results of operations and could require us to curtail or cease our operationsNew
Risks Related to our Industry and Macroeconomic Conditions
- 21We 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
- 22Technology 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
- 23Competition within our target markets is intense and includes numerous established competitors and new entrants, which could negatively affect our revenues and results of operations
- 24Our business, financial condition and operating results could be adversely affected as a result of legal, business, and economic risks specific to international operations
- 25potentially adverse tax consequencesNew
Legal and Regulatory Risks
- 26Regulations affecting our customers and our business and future regulations, to which they or we may become subject, may harm our business
- 27If 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 decline89% rewritten
- 28The December Notice has no immediate effect on the continued listing status of the Company’s Common Stock on The Nasdaq Capital Market, and the Company’s listing remains fully effectiveNew
Other General Risks
- 29Our acquisitions of companies or technologies may disrupt our business and divert management attention and cause our other operations to suffer
- 30We rely directly and indirectly on third-party intellectual property and licenses, which may not be available on commercially reasonable terms or at all
- 31Our 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 fall32% rewritten
- 32general economic and market conditionsNew
- 33Because 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
Other Smith Micro Software 10-Ks
- FY2024 10-K risk factors26 risks
The company relies heavily on a small group of large wireless carrier customers for its revenue. Substantial doubt exists regarding the company's ability to continue as a going concern without additional capital. The loss of a major U.S. Tier 1 customer contract in 2023 continues to impact financial results.
Filed Mar 12, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.