SMSI Smith Micro Software Inc

Item 1.01.  Entry into a Material Definitive Agreement.

On December 17, 2018, Smith Micro Software, Inc. (the “ Company ”) entered into an Asset Purchase Agreement (the “ Purchase Agreement ”) to acquire substantially all the assets, and certain specified liabilities, of the Smart Retail Division of ISM Connect, LLC (“ ISM ”), a Nevada limited liability company. The parties’ obligations to consummate the transaction are subject to certain customary asset purchase agreement closing conditions and termination rights.

Under the terms of the Purchase Agreement, the Company will pay an aggregate purchase price consisting of (i) Four Million Dollars ($4,000,000.00) in cash, reduced on a dollar-for-dollar basis 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, 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, totaling 404,930 shares of common stock (the “ Escrow Shares ”), to be held in escrow pursuant to an Escrow Agreement to be executed by and among the Company, ISM and Computershare Trust Company, N.A., as escrow agent (the “ Escrow Agreement ”).

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 also contains customary representations, warranties, covenants and indemnities by the parties, including, among others, covenants requiring ISM to conduct its Smart Retail Division business in the ordinary course in the period between execution of the Purchase Agreement and the closing. Under the Purchase Agreement, the closing of the transaction is subject to certain customary closing conditions.

The foregoing description of the terms and conditions of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is attached as Exhibit 2.1 to this Current Report on Form 8-K and 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 is being filed as an exhibit to this Current Report on Form 8-K to provide information regarding its terms 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.