Versatile 18-year-old Smith struggled to find a way into the Shots first team reckoning this season and made just a handful of appearances before eventually being made available for loan.
It is believed Smith turned down a chance to sign a contract extension with the club over Christmas in the hope of holding out for a more concrete deal this summer.
That didn't materialise, thus sparking rumours of a bust-up between player and manager.
The boss, however, insists there was no falling out between the two and still rates Smith as a future prospect despite adding him to his list of end-of-season casualties.
He said: “There was no falling out at all, in fact I love him to death, I just think he needs first team football. He's had reserve team football and as and when he's come in the team he's done well, but that's too infrequent.
“We are making an effort to improve on last year and his chances of getting first team football would be minimal and he needs to play every single week.”
In fact, the boss reckons Smith could do well at neighbours Farnborough Town.
“I would love him to go to Farnborough, he's a local lad, so somewhere like Farnborough or Basingstoke could be good for him. He's a smashing lad, he's no trouble and has got bags of talent, he just needs first team football,” added Brown.
Another player who is not expected to return to the Recreation Ground is right-back Phil Warner, who has been out on loan at Eastbourne Borough since February and could be staying on permanently at the Conference South Play-Off finallists.
Brown said: “There has been some interest in Phil and I would expect him to take up one of the offers. Tobi is a bit different because he's been injured and he didn't have the greatest of seasons so I would expect him to be back at the Rec for pre-season training.”
The young defender who has come into his own this season has been attracting interest from League Two side Northampton Town, although the boss believes he would be better off staying with the Shots.
“It's 50/50 whether he'll stay, we've sat down and had a chat and some of the senior players have talked to him. He's better off staying and playing in our first team than he would be playing in the reserves at Northampton, he would develop a lot quicker and we would like him to stay,” added Brown.
Despite speculation that the boss needs to look at bringing in a more experienced reserve goal-keeper, Brown has said he feels the money could be better used elsewhere.
“Nikki doesn't need someone to push him for the shirt, the sort of player he is, the way he trains, he pushes himself more than anyone else could.
“I feel that Andy Glasspool is able to come in and do a job for me, and if necessary I could always bring in someone on loan. I was spending say £400 a week on Richard Barnard, that could be another player,” said Brown.
Meanwhile Jamie Slabber has been released despite scoring the crucial equaliser at Brunton Park earlier this month, as Brown looks for a “more experienced” striker, while Jon Challinor has joined Conference rivals Exeter City this week.
For the boss the priority this week is tying up the deals with the current squad as well as meeting three new players.
“The main area is still two strikers, but as I haven't tied down Brett [Johnson] or Will [Antwi] yet I'm also keeping an eye on centre halves.
“I also need to tie down my senior players that are out of contracts as the worst thing would be finding out in a couple of weeks that one of my midfielder is off, so that's the priority this week,” added Brown.
With thanks to the Aldershot News.