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].
Security Matters(SMX) - 2023 Q4 - Annual Report