Corporate Governance and Compliance - The Company is classified as an "emerging growth company" and will maintain this status until it reaches total annual gross revenue of $1.07 billion or other specified conditions [143]. - The Company has received three deficiency letters from Nasdaq regarding non-compliance with the Minimum Bid Price Requirement, as the bid price was below $1.00 for 30 consecutive business days [148]. - The Company is subject to less stringent corporate governance requirements as a foreign private issuer, which may result in less publicly available information [159]. - If the Company is delisted from Nasdaq, it may face significant adverse consequences, including reduced liquidity and increased regulatory scrutiny [151]. - The Company intends to follow Irish corporate governance practices instead of Nasdaq standards, which may lead to less stringent oversight [161]. - The Company may lose its foreign private issuer status in the future, which could result in significant additional costs and compliance challenges [162]. - The Company has elected to take advantage of extended transition periods for complying with new accounting standards under the JOBS Act [143]. - There is no guarantee that the exemptions under the JOBS Act will result in significant savings, and opting out of these exemptions may incur additional compliance costs [144]. Financial Position and Capital Needs - The Company may need to raise additional capital to fund operations, pay existing liabilities, and finance future growth, which may not be available on favorable terms [145]. - Future capital raising efforts may dilute existing shareholders and could reduce the market price of Ordinary Shares [156]. - The Company’s liquidity risk is managed by maintaining sufficient cash and liquid assets, alongside committed credit facilities [413]. - The Company’s credit risk is monitored closely, with main financial assets being cash and cash equivalents, ensuring prompt collection from counterparties [412]. Business Operations and Innovations - The Company successfully completed the marking of 21 tons of natural rubber sourced in Latin America, achieving a 100% success rate for origin authentication and full traceability from tree to tire [421]. - In 2022, the Company conducted successful trials for marking recycled plastics, demonstrating the ability to manage the process remotely, indicating potential for industrial scale adoption [415]. - The Company announced the planned launch of a plastic cycle token, scheduled for release at the end of 2025, aimed at creating a reliable digital credit platform for recyclable plastics [422]. - The Company has marked 2.2 tons of silver in cooperation with Sunshine, successfully completing proof of concept for ethical sourcing and authentication of silver [435]. - Security Matters PTY achieved a 100% success rate on all marked products throughout the production process, ensuring quality and brand authentication for stakeholders [438]. - Security Matters PTY has a target to reach $35 million in sales over the coming years through its exclusive distribution agreement with Sumitomo [441]. - The company has advanced source tracing technology for alcoholic beverages, focusing on key ingredients and packaging solutions [442]. - Security Matters PTY is part of the Circular Electronics Partnership, aiming to reduce e-waste and promote a circular economy for electronics by 2030 [450]. - The company launched a Fashion Sustainability Competence Centre to help fashion brands transition to a sustainable circular economy [451]. - Security Matters PTY's technology is applicable across various materials, including leather and plastics, for recycling and sustainability efforts [451]. - The company plans to integrate its markers in wearable technology and active wear, with a coating that withstands temperatures up to 150 degrees Celsius [452]. Intellectual Property and Technology - The company has over 20 patent families and more than 100 patents filed globally, crucial for maintaining proprietary technology [453]. - The company has a total of 20 patent families related to X-ray fluorescence (XRF) technology, with several patents granted and pending in various countries [456][457][458][459][460][461][462][463]. - Patent Family 1 includes a system for reading XRF markings, with patents granted that expire in 2036 [458]. - Patent Family 2 focuses on an anti-counterfeit marking technique for verifying the authenticity of metallic objects, with a patent expiring in 2040 [459]. - Patent Family 4 presents a method for verifying compatibility of electronic system components using XRF signatures, with patents expiring in 2037 [461]. - Patent Family 5 introduces a novel XRF analyzer capable of identifying multiple solid objects simultaneously, with a patent expiring in 2037 [462]. - Patent Family 6 details a method for marking and authenticating precious stones, with patents expiring in 2038 [463]. - The company has filed applications for new technologies, including a method for detecting mishandling of food products and a system for virtual currency based on blockchain architecture [456][457]. - The company is actively pursuing market expansion through innovative product development and strategic patent filings across multiple jurisdictions [456][457]. - The company aims to enhance its product offerings by integrating advanced XRF technology into various applications, including supply chain management and authentication systems [460][461]. - The company is focused on maintaining a robust intellectual property portfolio to support its growth and competitive advantage in the market [456][457]. Mergers and Acquisitions - The merger with Security Matters PTY resulted in the Company owning the entire share capital of Security Matters PTY, with a deemed issuance of shares valued at $11,599 thousand [482]. - The difference of $16,802 thousand between the fair value of shares deemed issued and the fair value of the Company's identifiable net assets is expensed immediately to profit or loss [483]. - The Company acquired an additional 7.5% of trueGold, increasing its holdings to 51.9%, gaining control over trueGold and diversifying operations into research and development [485]. - The fair value of the previous investment in trueGold was remeasured at $22,164 thousand upon obtaining control, resulting in a recognized gain of the same amount [487]. - The consolidated financial statements for the year ended December 31, 2023, reflect the retained earnings and equity balances of Security Matters PTY immediately before the Business Combination [486]. - Substantially all assets of the Company comprised marketable securities valued at $4,921 thousand and trade payables and warrants valued at $10,127 thousand [484]. - The Company’s financial statements post-acquisition include the full period results of Security Matters PTY along with the post-acquisition results from the Closing Date [486]. - The equity structure of Security Matters PTY is restated to reflect the number and par value of shares of the Company issued in the reverse acquisition transaction [486]. - The Company’s consolidated financial statements for 2023 include the results of Security Matters PTY for the full period and the post-acquisition results [486]. - The fair value of non-controlling interests in trueGold was estimated using the discounted cash flow method, reflecting the entire goodwill of trueGold [488]. - The total cost of the business combination included a full forgiveness of outstanding payables from trueGold to the Company amounting to AUD 475 thousand (approximately $307 thousand) at acquisition date [488]. - The Company's ownership percentage in trueGold increased from 51.9% to 52.9% after restructuring $1.3 million of debt owed to PMB [490]. - PMB exchanged its shares in trueGold for 1,022 (1%) Company shares as part of the restructuring agreement [490]. Market Trends and Economic Factors - As of December 31, 2024, the ILS increased against the U.S. dollar by approximately 0.6%, while the AUD, EUR, and SGD decreased by approximately 8.5%, 5.5%, and 2.6% respectively [410]. - The company’s policy is not to enter into any currency hedging transactions, exposing it to potential adverse effects from future currency fluctuations [411]. - The Company is not aware of any trends or events likely to materially affect its revenue, income, profitability, liquidity, or capital resources [480].

Core Insights - The article emphasizes the importance of hardware integrity as a foundational element for artificial intelligence (AI) systems [1] - SMX is presented as a solution provider that ensures hardware integrity, which is critical for the reliability and performance of AI applications [1] Industry Overview - The AI industry is rapidly evolving, with increasing reliance on robust hardware to support complex algorithms and data processing [1] - Hardware failures can lead to significant operational risks and inefficiencies in AI systems, highlighting the need for stringent integrity measures [1] Company Focus - SMX specializes in providing solutions that enhance hardware integrity, thereby supporting the overall performance of AI technologies [1] - The company’s approach includes advanced monitoring and validation techniques to ensure that hardware components meet necessary standards [1]

Core Points - The company SMX (Security Matters) Public Limited Company will implement a reverse stock split at a ratio of 75:1, effective July 15, 2024, reducing outstanding shares from approximately 39.6 million to about 528 thousand [1][2] - The primary objective of the reverse stock split is to increase the per share trading price to meet NASDAQ's minimum bid price requirement for continued listing [3] - All outstanding options, warrants, and convertible securities will be proportionately adjusted according to their terms, and no fractional shares will be issued [4] Company Actions - Continental Stock Transfer & Trust Company will act as the exchange agent for the reverse stock split, providing instructions to shareholders holding stock certificates [5] - Shareholders with shares in book-entry form will see the impact of the reverse stock split reflected in their accounts on or after July 16, 2024 [5] Industry Context - SMX offers technology solutions to assist businesses in transitioning to a low-carbon economy, addressing challenges related to carbon neutrality and compliance with new regulations [10]

Core Insights - The collaboration between SMX and Tradepro Inc. aims to enhance the traceability and transparency of recycled plastic materials, supporting the Sustainable Management of Plastics as outlined by the U.S. Environmental Protection Agency [1][7][13] - SMX technology will enable end-to-end traceability in the natural rubber supply chain, allowing brands to authenticate and provide proof of quality, quantity, and origin for credible ESG reporting [4][15] - The partnership is expected to establish a new industry standard for digital reporting in the plastics sector, moving away from traditional human and paper-based methods [13][19] Company Overview - SMX (Security Matters) PLC is focused on digitizing physical objects for a circular economy and is listed on NASDAQ [7] - Tradepro Inc. has over 35 years of experience in the plastics recycling industry and plans to distribute over 85,000 metric tonnes of recycled plastic materials in 2024 [5][24] Technology and Innovation - SMX's technology provides a comprehensive solution for tracking, tracing, and reporting across the plastic supply chain, ensuring compliance with industry best practices [9][20] - The SMX platform will facilitate near real-time reporting on supply chains, meeting the five-year document storage requirement of EUDR regulations [9][22] Market Impact - The collaboration is expected to help U.S. organizations transition from linear to circular reporting operations for plastics, enhancing material efficiency within the sector [7][13] - The inclusion of natural rubber in the EU Deforestation Regulation will benefit companies using SMX's solutions by ensuring transparent supply chains [22]

Core Viewpoint - SMX stock is experiencing a significant rally with a 69.7% increase, driven by heavy trading activity despite the absence of clear news or analyst coverage [4][6]. Group 1: Trading Activity - Over 57 million shares of SMX stock have changed hands, significantly exceeding the daily average trading volume of approximately 4.8 million shares [3]. - The stock's float is reported to be 26.03 million units, indicating a relatively low supply available for trading [3]. Group 2: Stock Characteristics - SMX is classified as a penny stock, with a prior closing price of 12 cents per share and a market capitalization of $4.688 million [7]. - Being a penny stock subjects SMX to extreme volatility, often influenced by speculative trading [8]. Group 3: Market Dynamics - The current trading activity may be driven by retail and day traders, who could potentially sell their shares for profit, adding to the investment risk [2].

Company Classification and Compliance - The Company is classified as an "emerging growth company" and is required to provide only two years of audited financial statements and selected financial data [141]. - The Company will remain an emerging growth company until it reaches total annual gross revenue of $1.07 billion or other specified conditions [142]. - The Company received a deficiency letter from Nasdaq due to its ordinary shares trading below $1.00 for 30 consecutive business days [148]. - The Company has until July 24, 2024, to regain compliance with the Minimum Bid Price Requirement [149]. - If the Company fails to regain compliance, it may face delisting from Nasdaq, which could adversely affect its stockholders [153]. - The Company is exempt from certain reporting requirements as a foreign private issuer, resulting in less publicly available information [161]. - The Company intends to follow Irish corporate governance practices, which may differ from Nasdaq requirements [163]. - The Company may lose its foreign private issuer status, which could lead to significant additional costs and compliance with GAAP reporting requirements [164]. Financial Position and Capital Needs - The Company needs additional capital to meet financial obligations and pursue business objectives, which may not be available on favorable terms [145]. - Future issuances of debt and equity securities may dilute existing shareholders and adversely affect the market price of ordinary shares [158]. - The financial statements reflect the fair values of the assets and liabilities of the Company, indicating a recapitalization of its equity following the reverse acquisition [435]. - The Company’s financial information is expected to be indicative of future operational results and financial condition [433]. - No trends or uncertainties are identified that could materially affect revenue, income from continuing operations, profitability, liquidity, or capital resources [433]. Research and Development Initiatives - The Company’s research and development processes are tailored according to industry needs, focusing on sustainable practices and technology [367]. - The Company has successfully completed the marking of 21 tons of natural rubber sourced in Latin America, achieving a 100% success rate for origin authentication and traceability [373]. - The Company announced the successful completion of proof of concept for ethical sourcing and authentication of silver in cooperation with Sunshine Minting Inc. [386]. - The successful trial of marking recycled plastics enables companies to promote sustainable operations and reduce human errors in auditing [369]. - The technology developed by Security Matters PTY is applicable across various materials, including metals and plastics, enhancing recycling capabilities [402]. - The company’s research and development efforts are directed towards creating systems that improve the management and classification of samples, which could enhance operational efficiencies [410]. Intellectual Property and Patents - The Company has filed over 100 patents globally since 2015, protecting its proprietary marking and reading technologies [405]. - The company has filed multiple patents related to X-ray fluorescence (XRF) technology, with significant applications in authentication and detection, including a registered patent for a system and method for reading XRF marking, expiring in July 2036 [408]. - A pending patent application for a method and system for detecting and identifying foreign elements in substances has been filed, indicating ongoing innovation in detection technologies [410]. - The company is actively pursuing blockchain technology for verification processes, as evidenced by a patent application related to object marking and authentication via blockchain [409]. - The company has a registered patent for a method of managing recyclable goods and their sources, highlighting a commitment to sustainability and resource management [411]. - A patent application for a traceable composite polymer preparation method is pending, which aims to enhance transparency in production value chains [410]. - The company has multiple patents pending in various countries, including the US, Australia, and Europe, indicating a broad international strategy for intellectual property protection [410]. - The company’s innovations in XRF technology are aimed at anti-counterfeit measures, particularly for precious stones and metallic objects, enhancing security in valuable asset transactions [412]. - The company is focusing on expanding its patent portfolio in the field of supply chain management and integrity, which may lead to new market opportunities [410]. Strategic Partnerships and Acquisitions - Security Matters PTY formed a joint initiative with Perth Mint to develop a mine-to-marketplace ethical gold supply chain technology solution [377]. - The Investment Agreement with trueGold resulted in Security Matters PTY increasing its holdings to 51.9% of trueGold, making it the majority owner [383]. - A distribution agreement with Sumitomo Corporation targets $35 million in sales over the next five years in the Non-Ferrous Metals Market [392]. - The Company has acquired SMX Beverages Pty Ltd to promote solutions in the alcoholic beverage industry, focusing on counterfeit prevention and circular economy concepts [393]. - Security Matters PTY is collaborating with luxury fashion brands to trace the origin of raw materials, facilitating a transition to a sustainable circular economy [402]. - Security Matters PTY is jointly developing technology with Trifecta Industries for the diamonds and precious stones industry, with shared ownership of intellectual property [396]. - The Company’s strategic transaction with true-Gold diversifies its operations into pioneering ventures in research and development and revenue commercialization [438]. Financial Transactions and Accounting - The merger with Security Matters PTY resulted in the Company owning the entire share capital of Security Matters PTY, with a deemed issuance of shares valued at $11,599 thousand [434]. - The difference of $16,802 thousand between the fair value of shares deemed issued and the fair value of the Company's identifiable net assets is expensed immediately to profit or loss [435]. - Substantially all assets and liabilities of the Company comprised marketable securities held in a trust account valued at $4,921 thousand and trade and other payables and warrants valued at $10,127 thousand [436]. - The Company is initially consolidated in the financial statements from the Closing Date of the Business Combination, ensuring continuity of financial reporting [435]. - The Company’s financial statements are issued under its name but represent a continuation of the financial statements of Security Matters PTY [434]. - The Company’s marketable securities and liabilities are recorded at fair values equivalent to their carrying amounts, ensuring accurate financial representation [436]. - The Company acquired an additional 7.5% of true-Gold, increasing its holdings to 51.9% and gaining control over true-Gold [438]. - The fair value of the previous investment in true-Gold was remeasured at $22,164 thousand, resulting in a recognized gain of $22,164 thousand recorded in the statement of comprehensive loss [439]. - The total cost of the business combination included a full forgiveness of outstanding payables from true-Gold to the Company amounting to AUD 475 thousand (approximately $307 thousand) at the acquisition date [440]. - The Company has elected to measure non-controlling interests in true-Gold at full fair value, which includes their share in the entire goodwill of true-Gold [440]. - The fair value of true-Gold was estimated using the discounted cash flow method, as it is a private company with no quoted market prices [440]. - The retained earnings and other equity balances recognized in the consolidated financial statements for the year ended December 31, 2023, are those of Security Matters PTY immediately before the Business Combination [437]. - The statement of comprehensive loss for the year ended December 31, 2023, reflects the full period results of Security Matters PTY along with post-acquisition results [437]. - The equity structure of Security Matters PTY has been restated using the exchange ratio established in the Business Combination to reflect the shares issued in the reverse acquisition transaction [437]. - Loss per share for Security Matters PTY prior to the acquisition date has been restated to adjust the denominator by the exchange ratio established in the Business Combination [437].

Company Status and Financial Needs - The Company is classified as an "emerging growth company" and will maintain this status until it reaches total annual gross revenue of $1.07 billion or other specified conditions [148]. - The Company anticipates needing additional capital in the future to meet financial obligations and pursue business objectives, which may not be available on favorable terms [150]. - Future issuances of debt or equity securities may dilute existing shareholders and adversely affect the market price of the Ordinary Shares [156]. - The Company may lose its foreign private issuer status, resulting in increased regulatory and compliance costs, including the need to comply with GAAP [164]. - The Company is subject to the risk of being delisted from Nasdaq if it fails to meet continued listing standards, which could lead to reduced liquidity and increased regulatory scrutiny [154]. Currency and Operating Expenses - The Company's operating expenses are primarily in ILS, and it has experienced a 13% decrease in ILS against the U.S. dollar in 2022, following a 26% increase in 2021 [303]. - The Company does not engage in currency hedging transactions, exposing it to potential adverse effects from future currency fluctuations [304]. Legal and Compliance Costs - The Company may incur significant legal and compliance costs due to U.S. reporting requirements, which could adversely affect its operating results [153]. - The Company has not guaranteed that the exemptions under the JOBS Act will lead to significant savings, and opting out of these exemptions may increase compliance costs [149]. - The Company is currently exempt from certain SEC rules and will file less information than U.S. companies, which may limit the availability of public information [165]. Technology and Innovation - In 2022, the company successfully completed a trial of marking recycled plastics, demonstrating the viability of industrial scale adoption [308]. - The company verified a marker substance for natural rubber in tires, enabling transparency in the supply chain and responsible sourcing verification [310]. - A joint initiative with Perth Mint aims to develop a mine-to-marketplace ethical gold supply chain technology, promoting transparency in responsible mining [313]. - The company launched a Fashion Sustainability Competence Centre to help fashion brands transition to a sustainable circular economy [328]. - The company is collaborating with luxury fashion conglomerates on R&D projects to trace the origin of raw materials in their supply chains [328]. - The company is exploring the integration of marker technology with blockchain for tamper-free monitoring of compliance in the natural rubber supply chain [312]. - The company has established a new entity, Yahaloma Technologies Inc., for the commercialization of trace technology in the diamonds and precious stones industry [321]. Patent Portfolio and Intellectual Property - Since 2015, the company has protected its technology with over 20 patent families and more than 100 patents filed globally [329]. - SMX has registered multiple patents related to X-ray fluorescence marking and authentication, with expiration dates extending to 2038 and beyond [330]. - The company has a total of 13 patent families filed under the PCT, covering various technologies including supply chain management and blockchain applications [332]. - The US patent US10539521B2, related to a system and method for reading X-ray fluorescence, is set to expire in July 2036 [330]. - The patent US11446951B2 for the authentication of metallic objects is registered and will expire in January 2040 [330]. - The company has pending applications for several patents, including a method for detecting mishandling and misuse of food products [332]. - The patent US11112372B2 for an X-ray fluorescence system is published and will expire in June 2038 [332]. - The company is actively expanding its patent portfolio, with applications filed in multiple countries including Australia, China, and Europe [332]. - The patent US11221305B2 for an object marking system is registered and will expire in October 2038 [332]. - The company has filed a patent for a system based on blockchain architecture for virtual currency, indicating a focus on innovative financial technologies [332]. - The management of recyclable goods and their source materials is also a focus area, with an application filed in October 2020 [332]. - The company has filed multiple patents related to X-ray fluorescence (XRF) technology, including a system for reading XRF markings and methods for authentication of precious stones, with expiration dates extending to 2038 [334][338]. - Patent applications include a method for managing recyclable goods and their source materials, indicating a focus on sustainability and innovation in product lifecycle management [335]. - The company is developing traceable composite polymers and methods for providing transparency in production value chains, highlighting advancements in material science [336][340]. - A novel XRF analyzer capable of identifying multiple solid objects simultaneously has been granted, which could enhance operational efficiency in various industrial applications [341]. - The company is pursuing a blockchain-based system for managing transactions of marked objects, indicating a strategic move towards integrating digital solutions with physical product authentication [346]. - The expiration dates for several key patents extend into the late 2030s, suggesting a long-term commitment to maintaining competitive advantages in XRF technology [338][341]. - The company has a pending patent for a method of labeling products with XRF identifiable labels, which could improve traceability and safety in food and cosmetic industries [344]. - The focus on anti-counterfeit techniques through XRF analysis demonstrates the company's commitment to enhancing product security and consumer trust [338]. - The company has filed for patents in multiple countries, including the US, Canada, and Europe, indicating a strategic approach to global market expansion [335][336]. - The development of XRF-identifiable transparent polymers suggests potential applications in various industries, enhancing product functionality and compliance [345]. Market Strategy and Partnerships - The company is focusing on the U.S. market for future sales and marketing efforts, including recruitment of sales and marketing personnel [371]. - The company has established partnerships with industry leaders to advance proof-of-concept pilots and further develop its innovative technology [372]. - The company targets leading brands and manufacturers to create a new market standard for circular economy solutions, brand authentication, and supply chain integrity [372]. - The company has significant investment in the development of marking and reading capabilities, with a focus on achieving commercial contracts following successful proof-of-concept pilots [361]. - The company believes that adequate technical and financial resources are available to complete development, with a high probability of commencing commercial agreements after successful pilots [373]. - The company has capitalized development activities that focus on creating a digital platform for end-to-end traceability from raw material to final product [375]. - The company estimates that customization for clients' specific needs will be completed in approximately two years, at which point amortization will commence [378]. - The company has a strategy to create strategic partnerships with market leaders across its main segments of activity, indicating a strong potential market for its development [372]. Financial Reporting and Asset Management - The company utilizes a Black-Scholes model for measuring share-based expenses and fair value of financial liabilities [363][364]. - The company has a comprehensive financial system in place to reliably measure expenditures attributable to intangible assets during development [374]. - Intangible assets with a finite useful life are amortized over their estimated useful lives and reviewed for impairment at least annually [379]. - The carrying amount of intangible assets is assessed for recoverability whenever events indicate potential impairment [380]. - Impairment is measured as the difference between carrying value and fair value of the impaired asset [380]. - Development expenditures are capitalized only if they lead to new or substantially improved products and are commercially feasible [380]. - All other expenditures to maintain intangible assets are expensed as incurred [381]. - Recent accounting pronouncements are discussed in "Note 2—Significant Accounting Policies" of the Annual Report [382].

Supply Chain Transparency - Continental and SMX have successfully verified a marker substance for natural rubber in tires, enhancing transparency in the supply chain[1]. - The marker technology allows for the verification of the geographical origin of natural rubber, ensuring responsible sourcing throughout the production process[2]. - SMX is actively onboarding other major tire manufacturers to establish an industry standard for supply chain transparency[5]. - The implementation of marker technology is expected to make complex supply chain processes more transparent and verifiable[2]. Sustainability and Circularity - The collaboration with SMX focuses on improving sustainability and circularity in the natural rubber supply chain[5]. - By 2050, Continental expects all materials used in tire production to come from responsible sources[1]. Marker Technology and Innovation - A field test demonstrated that the marker substance remained intact during the tire manufacturing process, confirming its resilience[2]. - Continental plans to scale up the use of marker technology in rubber products and potentially integrate it with blockchain for enhanced monitoring[4]. - The SMX technology has been operational for over ten years in Israel, providing a proven solution for supply chain authentication and traceability[7]. - The marker technology aims to create a commoditized, tradable certified asset from recycled materials, addressing global waste issues[8].