SMSI Smith Micro Software Inc

Item 2.01 Completion of Acquisition or D isposition of Assets.

On January 9, 2019, Smith Micro Software, Inc. (the “ Company ”) completed its previously announced acquisition of substantially all the assets, and certain specified liabilities, of the Smart Retail Division of ISM Connect, LLC (“ ISM ”), a Nevada limited liability company. The acquisition was completed pursuant to the terms and conditions of the Asset Purchase Agreement, dated as of December 17, 2018 (the “ Purchase Agreement ”) by and between the Company and ISM.

Pursuant to the terms of the Purchase Agreement, the Company paid an aggregate purchase price consisting of (i) Four Million Dollars ($4,000,000.00) in cash, less Twenty-Five Thousand Seven Hundred Fifty-Five Dollars ($25,755) to offset specified Assumed Liabilities, (ii) Four Million Eight Hundred Eighty-Seven Thousand Five Hundred Dollars ($4,887,500.00) in value of the Company’s common stock based on the Closing Share Price as defined in the Purchase Agreement, totaling 2,294,601 shares of common stock (the “ Initial Shares ”), and (iii) Eight Hundred Sixty-Two Thousand Five Hundred Dollars ($862,500.00) in value of the Company’s common stock based on the Closing Share Price as defined in the Purchase Agreement, totaling 404,930 shares of common stock (the “ Escrow Shares ”), to be held in escrow pursuant to an Escrow Agreement executed by and among the Company, ISM and Computershare Trust Company, N.A., as escrow agent (the “ Escrow Agreement ”). The number of Initial Shares and Escrow Shares was determined based on the average closing price of the Company’s common stock as reflected on Nasdaq.com for the twenty (20) trading days prior to the date of the Purchase Agreement, rounded to the nearest whole cent.

The Company has agreed to register the Initial Shares and Escrow Shares for resale with the Securities and Exchange Commission pursuant to customary registration rights. The Purchase Agreement contains customary representations, warranties, covenants and indemnities by the parties.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by the full text of the Purchase Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 18, 2018 and is incorporated herein by reference.

The Purchase Agreement governs the contractual rights between the parties in relation to the purchase and sale of the assets. The Purchase Agreement was filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on December 18, 2018 to provide information regarding the terms thereof and is not intended to provide, modify or supplement any information about the Company, ISM or any of their respective subsidiaries or affiliates, or their respective businesses. In particular, the Purchase Agreement is not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to the Company or ISM. The representations and warranties contained in the Purchase Agreement have been negotiated with the principal purpose of allocating risk between the parties, rather than establishing matters as facts. The representations and warranties may also be subject to contractual standards of materiality that may be different from those generally applicable under the securities laws. For the foregoing reasons, the representations and warranties should not be relied upon as statements of factual information.