F-1: SMX (Security Matters) Public Limited Company Announces Offering of Ordinary Shares

SMX (Security Matters) Public Limited Company is offering 15,921,787 ordinary shares at an assumed price of $0.179 per share.

Summary

• SMX (Security Matters) Public Limited Company is offering 15,921,787 ordinary shares at an assumed public offering price of $0.179 per share.
• The offering is being conducted on a firm commitment basis.
• The company intends to use the net proceeds from this offering for sales and marketing, consulting services, payment of outstanding liabilities, and working capital and other general corporate purposes.
• SMX is an emerging growth company and a foreign private issuer, which allows for reduced disclosure requirements.
• The company's ordinary shares are listed on The Nasdaq Capital Market under the symbol SMX.
• The company has six wholly owned subsidiaries: Lionheart, Security Matters PTY, SMX Circular Economy Platform PTE, Ltd. (Singapore), TrueSilver SMX Platform Ltd. (Canada), SMX Fashion and Luxury (France) and SMX (Security Matters) Ireland Limited (Ireland).
• Security Matters PTY has two wholly-owned subsidiaries: Security Matters Ltd. (Israel) and SMX Beverages Pty Ltd. (Australia), along with the record holder of 50% of Yahaloma Technologies Inc. (Canada) and 51.9% of trueGold Consortium Pty Ltd. (Australia).

Sentiment

Score: 3

Explanation: The document highlights a capital raise at a discount, a Nasdaq compliance issue, and various risk factors, indicating a negative outlook despite potential growth opportunities.

Positives

• The company is an emerging growth company and a foreign private issuer, which allows for reduced disclosure requirements.

Negatives

• The assumed public offering price of $0.179 is 17.5% off of the last sale price of the Ordinary Shares as reported by The Nasdaq Capital Market on January 24, 2024.
• The company may not apply its cash from this offering in ways that ultimately increase the value of any investment in our securities or enhance stockholder value.
• You will experience immediate and substantial dilution as a result of this offering.
• The Company received a deficiency letter from Nasdaq stating that it is not in compliance with the Minimum Bid Price Requirement for continued listing on the Nasdaq Capital Market.

Risks

• The company may not be able to effectively manage its growth, which could adversely affect its business, financial condition, and results of operations.
• The COVID-19 pandemic has adversely affected, and may continue to affect, the company's business, financial condition, liquidity and results of operations.
• The company's operations in foreign jurisdictions will subject it to risks associated with operating in those jurisdictions and may adversely affect its business, cash flows, financial condition and results of operations.
• The company may be unable to, and it may be difficult and costly to, obtain, maintain, protect, or enforce its intellectual property and other proprietary rights sufficiently.
• Changes in laws, regulations and standards and failure to comply with laws, regulations and standards may adversely affect the company's financial and operating performance and profitability.
• The company may be unable to anticipate or adapt to consumer preferences which may have an adverse effect on its business, cash flows, financial condition and results of operations.
• The company will need in the future to raise additional funds, inter alia, by equity, debt, or convertible debt financings, to support its growth, and those funds may be unavailable on acceptable terms, or at all.
• The stock price of the Ordinary Shares may be volatile.
• The Company is an emerging growth company and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the Ordinary Shares less attractive to investors.
• There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

Future Outlook

The company expects that its existing cash and cash equivalents, and along with amounts it may draw down under the SEPA, and receivables from clients once paid, will be sufficient to fund its operations for the foreseeable future but perhaps at a delayed or reduced scope.

Industry Context

The company operates in the anti-counterfeit, track and trace, and circular economy industries, which are subject to increasing regulatory and consumer pressure for sustainable practices.

Related Party Transactions

• The document mentions several related party transactions, including loans from related parties, services provided by related parties, and the True Gold Consortium Pty Ltd Investment Agreement.

Stakeholder Impact

• The offering will dilute the ownership interests of existing shareholders.
• The company's ability to comply with Nasdaq listing standards will impact shareholders.
• The company's success in implementing its business plan will impact stakeholders.

Next Steps

• The underwriters expect to deliver the Ordinary Shares on or about [*], 2024.
• The company has until July 24, 2024 to regain compliance with the Minimum Bid Price Requirement.

Key Dates

Keywords

ordinary shares, offering, Security Matters, SMX, capital, warrants, business