F-1/A: SMX (Security Matters) Public Limited Company Files Amendment No. 1 to Form F-1 Registration Statement for Potential $30 Million Share Issuance

SMX (Security Matters) Public Limited Company has filed an amendment to its Form F-1 registration statement, outlining a potential offering of up to 15,000,000 ordinary shares through a stock purchase agreement with Generating Alpha Ltd., potentially raising up to $30 million.

Summary

• SMX (Security Matters) Public Limited Company filed Amendment No. 1 to its Form F-1 registration statement.
• The document pertains to the resale of up to 15,000,000 ordinary shares of the company.
• These shares may be issued and sold to Generating Alpha Ltd. (Alpha) under a Stock Purchase Agreement (SPA).
• Alpha has committed to purchase up to $30,000,000 of the company's ordinary shares, subject to the terms of the SPA.
• The company will control the timing and amount of any sales of ordinary shares to Alpha.
• The company will not receive any proceeds from the sale of Ordinary Shares by Alpha pursuant to this prospectus.
• The company may receive up to $30,000,000 in aggregate gross proceeds from sales of its Ordinary Shares to Alpha.
• The company intends to use the net proceeds from the offering for working capital and general corporate purposes.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced disclosure requirements.
• The closing price of the company's Ordinary Shares on June 17, 2024, was $0.10.
• The company has six wholly owned subsidiaries: Lionheart, Security Matters PTY, SMX Circular Economy Platform PTE, Ltd., trueSilver SMX Platform Ltd., SMX Fashion and Luxury and SMX (Security Matters) Ireland Limited.
• Security Matters PTY has two wholly-owned subsidiaries: Security Matters Ltd. (Israel), and SMX Beverages Pty Ltd. (Australia), along with being the record holder of 50% of Yahaloma Technologies Inc. and 51.9% of trueGold Consortium Pty Ltd.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While it highlights the potential for a significant capital raise, it also acknowledges the company's low share price, reliance on external funding, and potential dilution for existing shareholders.

Positives

• The company has the potential to raise up to $30,000,000 through the stock purchase agreement with Generating Alpha Ltd.
• The company retains control over the timing and amount of share sales to Alpha, allowing flexibility in capital raising.
• The company is an emerging growth company and a foreign private issuer, which provides certain exemptions from reporting requirements.
• The company has a diverse portfolio of subsidiaries, indicating a broad range of business activities.

Negatives

• The company will not receive any proceeds from the sale of Ordinary Shares by Alpha pursuant to this prospectus.
• The company's share price is low, with a closing price of $0.10 on June 17, 2024.
• The company is reliant on external funding, as evidenced by the stock purchase agreement and convertible promissory note.
• The company is subject to the risks associated with being an emerging growth company and a foreign private issuer.

Risks

• The company may not be able to access the full $30,000,000 commitment from Generating Alpha Ltd.
• The sale of shares to Alpha will cause dilution to existing shareholders.
• The company's management team will have broad discretion over the use of the net proceeds.
• The company may not be able to comply with the continued listing standards of Nasdaq.
• 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.
• The company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.
• The company's management has limited experience in operating a public company in the United States.

Future Outlook

The company plans to use the net proceeds from the offering for working capital and general corporate purposes. The company expects that its existing cash and cash equivalents, along with amounts it may draw down from time to time under the $30,000,000 SPA, 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 announcement reflects a company seeking capital to fund its operations in the competitive brand protection, authentication, and track and trace technology market. The company's focus on sustainability and the circular economy aligns with growing industry trends and regulatory pressures.

Comparison to Industry Standards

• The document does not provide enough information to make a detailed comparison to industry standards.
• However, the company's focus on brand protection, authentication, and track and trace technology aligns with the activities of companies like Avery Dennison, OpSec Security, and Systech.
• The company's emphasis on sustainability and the circular economy is also in line with current industry trends, as seen in initiatives by companies like Unilever and Patagonia.

Stakeholder Impact

• Shareholders will experience dilution as a result of the potential issuance of new shares.
• The company's ability to fund its operations and execute its business plan will be enhanced by the potential capital raise.
• The company's stakeholders will benefit from the company's continued efforts to comply with regulatory requirements.

Next Steps

• The company will file the Registration Statement with the SEC.
• The company will seek to have the Registration Statement declared effective by the SEC.
• The company may elect to issue and sell shares to Alpha under the Stock Purchase Agreement.
• Alpha may offer, sell, or distribute the Ordinary Shares publicly or through private transactions.

Key Dates

Keywords

Ordinary Shares, Stock Purchase Agreement, Generating Alpha Ltd., Registration Statement, Emerging Growth Company, Foreign Private Issuer, Commitment Amount, Resale, Securities Act, Prospectus