Smith Micro Announces Launch of Follow-on Public Offering

Rhea-AI Summary

Smith Micro Software (SMSI) has announced a $62 million underwritten public offering of its common stock. The proceeds will primarily fund the acquisition of Avast's Family Safety Mobile Software Business and for general corporate purposes. In addition, the underwriters have a 30-day option to purchase an extra 15% of shares to cover over-allotments. B. Riley Securities and Roth Capital Partners are the joint book-running managers for this offering. The relevant prospectus has been filed with the SEC and is available online.

Positive

• The $62 million offering aims to finance the acquisition of Avast's Family Safety Mobile Software Business, potentially enhancing SMSI's product portfolio.
• The inclusion of a 30-day option for underwriters to purchase an additional 15% of shares could indicate strong demand for the offering.

Negative

• The public offering may lead to dilution of existing shareholders' equity.
• The stock price volatility may increase due to the acquisition announcements and the public offering.

Smith Micro Software, Inc. (the “Company” or “Smith Micro”) (NASDAQ: SMSI), a software development company that sells proven solutions to wireless carriers and Cable MSOs, today announced the launch of a $62 million underwritten public offering of the Company’s common stock pursuant to a registration statement filed with the Securities and Exchange Commission (“SEC”). In addition, Smith Micro expects to grant the underwriters of the offering a 30-day option to purchase up to an additional 15% of its shares of the Company’s common stock at the public offering price, less underwriting discounts and commissions, to cover over-allotments.

Smith Micro intends to use the net proceeds from this offering to fund the purchase price payable to Avast plc (“Avast”) pursuant to the Company’s planned acquisition of Avast’s Family Safety Mobile Software Business and for general corporate purposes.

B. Riley Securities and Roth Capital Partners are acting as joint book-running managers for the offering, with Lakestreet Capital Markets and The Benchmark Company acting as Co-Managers. SEG Group, a division of Bradley Woods & Company, is acting as a Financial Advisor.

A shelf registration statement on Form S-3, File No. 333-238053, relating to the public offering of the shares of common stock described above was filed with the Securities and Exchange Commission (“SEC”) and declared effective on May 13, 2020. A preliminary prospectus supplement describing the terms of the offering and the accompanying base prospectus have been filed with the SEC and are available for free on the SEC’s website located at www.sec.gov.

The offering of these securities may be made only by means of a prospectus. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to the offering may be obtained by contacting: B. Riley Securities, Attention: Prospectus Department, 1300 17th St. North, Ste. 1300, Arlington, VA 22209, or by email at prospectuses@brileyfin.com, or by telephone at (703) 312-9580.

This press release is not an offer to sell, or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Smith Micro Software, Inc.

Smith Micro develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless service providers and cable MSOs around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, our solutions enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer IoT devices. The Smith Micro portfolio also includes a wide range of products for creating, sharing and monetizing rich content, such as visual voice messaging, optimizing retail content display and performing analytics on any product set. For more information, visit www.smithmicro.com.

Forward-Looking Statements

Certain statements in this release are forward-looking statements regarding future events or results, including statements related to our financial prospects, the anticipated impact of our announced acquisition of the Family Safety Mobile Business from Avast, the successful launch of our underwritten public offering of common stock, the proceeds of which will be used to fund the acquisition from Avast, the benefits that we believe our products will offer to our customers, and other statements using such words as “expect,” “anticipate,” “believe,” “plan,” “intend,” “could,” “may,” “will” and other similar expressions. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Among the important factors that could cause or contribute to such differences are: our continued customer concentration and ability to establish and maintain strategic relationships with customers and manufacturers; our ability to retain key personnel; possible harm to our business from future security and privacy breaches; effective operation with operating systems; devices and networks that we do not control; the existence of undetected software defects in our products; competition in our industry and the core vertical markets in which we operate; changes resulting from or relating to the ongoing COVID-19 pandemic; the rapid technological evolution in our market; risks inherent with international operations; compliance with applicable laws and regulations; our ability to protect our intellectual property and operate without infringing on the intellectual property of others; any failure to meet the continued listing requirements of NASDAQ; our ability to continue to raise adequate capital; maintaining ongoing profitability; ability to continue as a going concern; changes in operating income due to shifts in our sales mix and variability in our operating expenses; our reliance on third-party intellectual property and licenses; the difficulty of predicting our quarterly revenues and operating results; fluctuation in our stock price, including as a result of the announcement of the Avast acquisition and/or our announced public offering; the dilutive impact of potential equity offerings; potential non-accretive impacts of the Avast acquisition; unexpected changes in our financial position or results of operations following the Avast acquisition; and a failure to consummate the Avast acquisition. These and other factors discussed in our filings with the Securities and Exchange Commission, including our filings on Forms 10-K and 10-Q, and the preliminary prospectus with respect to our public offering, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. The forward-looking statements contained in this release are made on the basis of the views and assumptions of management, and we do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date of this release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210308005866/en/

FAQ

What is the purpose of Smith Micro's $62 million stock offering?

The offering aims to fund the acquisition of Avast's Family Safety Mobile Software Business and for general corporate purposes.

Who are the underwriters for Smith Micro's public offering?

B. Riley Securities and Roth Capital Partners are acting as joint book-running managers, along with Lakestreet Capital Markets and The Benchmark Company as Co-Managers.

How can investors access the offering's prospectus?

The preliminary prospectus supplement and accompanying base prospectus are available for free on the SEC’s website.

What are the potential risks associated with the public offering by Smith Micro?

There is a risk of dilution for existing shareholders and increased stock price volatility linked to the offering and acquisition announcements.