Answer by taking a quote from the following article:

Steven Paul Smith was born at the Clarkson Hospital in Omaha, Nebraska, the only child of Gary Smith, a student at the University of Nebraska Medical Center, and Bunny Kay Berryman, an elementary school music teacher. His parents divorced when he was six months old, and Smith moved with his mother to Duncanville, Texas. Smith later had a tattoo of a map of Texas drawn on his upper arm and said: "I didn't get it because I like Texas, kind of the opposite. But I won't forget about it, although I'm tempted to because I don't like it there."

His first release, Roman Candle (1994), came about when Smith's girlfriend at the time convinced him to send a tape of "the most recent eight songs that [he'd] recorded on borrowed four-tracks and borrowed guitar" to Cavity Search Records. Owner Christopher Cooper immediately requested to release the entire album of songs, which surprised Smith, as he was expecting only a deal for a seven-inch record.  Regarding the record, Smith said: "I thought my head would be chopped off immediately when it came out because at the time it was so opposite to the grunge thing that was popular ... The thing is that album was really well received, which was a total shock, and it immediately eclipsed [Heatmiser], unfortunately." Smith felt his solo songs were not representative of the music Heatmiser was making: "The idea of playing [my music] for people didn't occur to me... because at the time it was the Northwest--Mudhoney and Nirvana--and going out to play an acoustic show was like crawling out on a limb and begging for it to be sawed off."  The instrumentation of the recordings was primarily acoustic guitar, occasionally accompanied by brief electric guitar riffs or a small drum set played with brushes. Only the final track, an instrumental titled "Kiwi Maddog 20/20" (a reference to the low-end fortified wine), had full band instrumentation.  One of Smith's first solo performances was at the now-defunct Umbra Penumbra on September 17, 1994. Only three songs from Roman Candle were performed, with the majority of the ten-song set being B-sides, Heatmiser tunes and unreleased tracks. Soon after this performance, Smith was asked to open for Mary Lou Lord on a week-long U.S. tour. She later recorded one of his songs, "I Figured You Out", which he had discarded for sounding "too much like the Eagles".  The same year, Smith released a split 7" single with Pete Krebs, contributing the track "No Confidence Man" as the single's B-side.

Did they sign him to a contract?
Owner Christopher Cooper immediately requested to release the entire album of songs, which surprised Smith, as he was expecting only a deal for a seven-inch record.