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].