F-1/A: SMX (Security Matters) Public Limited Company Files Amendment No. 1 to Form F-1 Registration Statement

SMX (Security Matters) Public Limited Company files an amendment to its Form F-1 registration statement related to the resale of up to 4,000,000 ordinary shares by YA II PN, LTD.

Summary

• SMX (Security Matters) Public Limited Company filed Amendment No.
• 1 to its Form F-1 registration statement with the SEC on March 7, 2024.
• The registration statement pertains to the resale of up to 4,000,000 ordinary shares by YA II PN, LTD (Yorkville).
• These shares may be issued and sold to Yorkville under a Reciprocal Standby Equity Purchase Agreement (SEPA) where Yorkville committed to purchase up to $25,000,000 of the company's ordinary shares.
• As of the prospectus date, the company has not issued any ordinary shares to Yorkville pursuant to an Advance, but has borrowed an aggregate of $3.5 million from Yorkville under the SEPA evidenced by promissory notes, of which approximately $3.0 million principal amount of such promissory notes have been repaid either in cash or as a result of conversions in accordance with the terms of the promissory notes.
• The company will not receive any proceeds from the sale of ordinary shares by Yorkville pursuant to this prospectus.
• However, the company may receive up to $25,000,000 in aggregate gross proceeds from sales of its ordinary shares to Yorkville that it may, in its discretion, elect to make, from time to time after the date of this prospectus, pursuant to the SEPA.

Sentiment

Score: 5

Explanation: The document is neutral in tone, primarily outlining the terms of a financial agreement. The potential for capital raising is a positive, but the reliance on equity financing and potential dilution are negatives.

Positives

• The company has access to a committed equity facility of up to $25,000,000 with Yorkville, providing potential funding for future operations.
• The company retains control over the timing and amount of share sales to Yorkville, except for conversions of pre-paid advances, allowing flexibility in managing its funding needs.
• The company has already repaid approximately $3.0 million of the $3.5 million borrowed from Yorkville, indicating some ability to manage its debt obligations.

Negatives

• The company will not receive any proceeds from the sale of ordinary shares by Yorkville pursuant to this prospectus.
• The company's stock price was $0.1998 on March 6, 2024, indicating a low valuation.
• The company is an emerging growth company and a foreign private issuer, which may entail reduced disclosure obligations.

Risks

• Investing in the company's securities involves risks, as highlighted in the Risk Factors section of the prospectus.
• The actual sales of ordinary shares to Yorkville will depend on various factors, including market conditions and the trading price of the company's ordinary shares.
• Yorkville may offer, sell, or distribute the ordinary shares publicly or through private transactions at prevailing market prices or at negotiated prices, which could impact the market price of the company's shares.

Future Outlook

The company may receive up to $25,000,000 in aggregate gross proceeds from sales of its ordinary shares to Yorkville that it may, in its discretion, elect to make, from time to time after the date of this prospectus, pursuant to the SEPA.

Industry Context

Standby equity purchase agreements are a relatively common financing tool for small-cap companies, providing access to capital but also potentially diluting existing shareholders.

Comparison to Industry Standards

• Comparable companies that have used similar financing structures include those in the biotech and resource sectors, which often rely on equity lines of credit to fund ongoing operations and research.
• The terms of the SEPA, such as the purchase price discount (96% or 97% of VWAP), are typical for these types of agreements.

Related Party Transactions

• The Reciprocal Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD (Yorkville) constitutes a related party transaction.

Stakeholder Impact

• Shareholders may experience dilution if the company issues a significant number of shares to Yorkville.
• The company's ability to access capital through the SEPA could benefit its employees and other stakeholders by ensuring continued operations.
• The market price of the company's ordinary shares could be affected by Yorkville's sales of shares.

Next Steps

• The company may elect to issue and sell ordinary shares to Yorkville from time to time, depending on market conditions and its funding needs.
• Yorkville may offer, sell, or distribute the ordinary shares publicly or through private transactions.
• The company will need to file a registration statement within 25 days of funding and use best efforts to cause it to be declared effective within 70 days from funding.

Key Dates

Keywords

ordinary shares, registration statement, SEPA, Yorkville, financing, equity, SMX