F-1/A: SMX (Security Matters) Public Limited Company Files Amendment No. 3 to Form F-1 Registration Statement

SMX (Security Matters) Public Limited Company files an amendment to its Form F-1 registration statement for the resale of up to 21,484,375 ordinary shares by selling stockholders.

Summary

• The document is an amendment to a Form F-1 registration statement filed with the SEC by SMX (Security Matters) Public Limited Company.
• It concerns the resale of up to 21,484,375 ordinary shares by selling stockholders, which may be received upon conversion of a convertible promissory note with a principal amount of $6,875,000.
• The company will not receive any proceeds from the sale of these shares by the selling stockholders.
• 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 27, 2025, was $4.11.
• Recent developments include a 1:4.1 reverse stock split on June 16, 2025, an amendment to promissory notes with PMB Partners LP, and the termination of a stock purchase agreement with Generating Alpha Ltd.
• The company entered into a Securities Purchase Agreement with Secure Net Capital LLC and Target Capital 16 LLC to issue promissory notes for aggregate gross proceeds of up to $5.5 million.
• The company amended its 2022 Incentive Equity Plan to increase the number of authorized Ordinary Shares under the plan to 4,267,480.
• The company is involved in an arbitration process with R&I Trading regarding a terminated contract.

Sentiment

Score: 3

Explanation: The document contains a mix of positive and negative information, with a stronger emphasis on negative aspects such as the going concern warning and ongoing legal issues.

Positives

• The company has secured a Securities Purchase Agreement with Secure Net Capital LLC and Target Capital 16 LLC for potential gross proceeds of up to $5.5 million.
• The company has amended its 2022 Incentive Equity Plan, increasing the number of authorized Ordinary Shares, which can be used to attract and retain employees and consultants.
• The company has terminated the Stock Purchase Agreement with Generating Alpha Ltd., resolving potential disputes and streamlining its financial structure.
• The company has shifted its Eastern European operations to Prague, Czechia (Czech Republic).

Negatives

• The company's financial statements for the year ended December 31, 2024, contain an explanatory paragraph regarding substantial doubt about its ability to continue as a going concern.
• The company is subject to significant accounts payable and other current liabilities, totaling approximately $13.782 million as of December 31, 2024.
• The company is involved in an arbitration process with R&I Trading regarding a terminated contract, which could result in legal costs and reputational damage.
• The company has a limited operating history, which may result in increased risks and uncertainties.
• The company is generating negative cash flow and requiring constant and immediate cash injections to continue to operate.

Risks

• The company's financial statements contain an explanatory paragraph regarding substantial doubt about its ability to continue as a going concern.
• The company is subject to significant accounts payable and other current liabilities.
• A market for the company's securities may not continue, which would adversely affect the liquidity and price of its securities.
• The company is a company with a relatively limited operating history, which may result in increased risks, uncertainties, expenses and difficulties, and it may be difficult to evaluate its future prospects.
• If the company fails to effectively manage its growth, its business, financial condition, and results of operations could be adversely affected.
• If the Isorad License Agreement is terminated, the company's business, financial condition and results of operations may be harmed.
• The company will need in the future to raise additional funds, inter alia, by equity, debt, or convertible debt financings, to fund its day to day operations and to support its growth, and those funds may be unavailable on acceptable terms, or at all.
• Legal proceedings, investigations or claims against the company may be costly and time-consuming to defend and may harm its reputation and damage its business regardless of the outcome.
• Conditions in Israel and relations between Israel and other countries could adversely affect the company's business.
• The company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.

Future Outlook

The document contains forward-looking statements regarding the company's financial performance, ability to maintain Nasdaq listing, strategy, operations, revenues, losses, costs, prospects, and plans, as well as its ability to develop and launch products and services, integrate expansion plans, grow its business, manage product development, and secure intellectual property protection.

Industry Context

The company operates in the anti-counterfeit market and aims to provide brand protection, authentication, and track and trace technology for the digital economy, focusing on sustainable consumption and production patterns.

Legal Proceedings

• The company is currently engaged in an arbitration process with R&I Trading regarding a terminated contract. R&I Trading's statement of claim demands full restitution of the amounts paid by it under the agreement. The company's statement of claim alleges that R&I Trading breached the agreement and has requested the arbitrator to grant relief for the division of remedies in the event that the company is presented with further expenses by suppliers and employees that have not yet been included in its damage estimate. The company also raised claims regarding loss of opportunities and requested declaratory relief in favor of the company.

Related Party Transactions

• The document mentions related party transactions involving trueGold, Lionheart, and certain debtholders, including the issuance of shares and warrants, as well as the restructuring of debt.
• The document mentions that the company is engaged in Proof of Concept (POC) agreements according to which it receives funds for financing research and development expenses from prospective customers and affiliated companies. Affiliated companies paid for reimbursement of POC projects the amount of $1,154,000 in 2024 and $858,000 in 2023.

Stakeholder Impact

• Shareholders may experience dilution due to the potential issuance of additional Ordinary Shares.
• The company's ability to continue as a going concern is uncertain, which could impact stakeholders.
• The outcome of the arbitration process with R&I Trading could affect the company's financial position and reputation.
• The company's ability to meet its financial obligations and grow its business depends on securing additional funding.

Next Steps

• The selling stockholders may offer the Ordinary Shares for resale from time to time.
• The company intends to use the net proceeds from the sale of the RBW Note for working capital and general corporate purposes, and to pay down certain outstanding indebtedness and other liabilities of the Company.

Key Dates

Recommendation

Keywords

SEC filing, ordinary shares, convertible promissory note, emerging growth company, foreign private issuer, reverse stock split, PMB Partners LP, RBW transaction, Incentive Equity Plan, financial risk, going concern, PMB Amendment, Alpha, RBW Transaction, PMB Amendment, PMB, Alpha SPA, RBW Purchase Agreement, RBW Offering, RBW Principal Amount, RBW Engagement Letter, RBW Warrants, Alpha Release Agreement, March 2025 Purchase Agreement, March 2025 Note, 2022 Incentive Equity Plan, August Note, 1800 SPA, PMB LOI, PMB Amendment