SMX (Security Matters) Public Limited Company — Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, dated June 27, 2023, reports the closing of SMX’s underwritten public offering of ordinary shares and warrants. The filing covers June 2023 and does not provide operating results for a quarterly or annual reporting period.
Offering, Liquidity, and Capitalization
| Item | Reported amount or terms |
|---|---|
| Gross offering proceeds | Approximately $3.24 million, before underwriting discounts, commissions, and offering expenses |
| Net proceeds | Approximately $2.68 million |
| Firm ordinary shares | 13,333,333 shares at $0.24 per share, subject to substitution by pre-funded warrants for certain purchasers |
| Firm Warrants | 13,333,333 Warrant A instruments and 13,333,333 Warrant B instruments; each exercisable for one ordinary share at $0.24 |
| Option Warrants exercised | 3,999,998 additional warrants were issued pursuant to the underwriter’s option |
| Warrant expiration | Warrant A and Warrant B are exercisable through June 27, 2028 |
| Underwriter compensation | 8.0% cash fee on gross proceeds, 1.0% non-accountable expense fee, and reimbursement of specified expenses, including $135,000 of underwriters’ counsel fees |
| Underwriter’s warrants | Warrants for 5.0% of the ordinary shares sold, exercisable at $0.264 per share after a six-month lockout and expiring five years after closing |
The filing does not provide revenue, profit, cash flow, operating margin, debt, or prior-period comparison data. The offering increased available liquidity by approximately $2.68 million before considering subsequent use of proceeds, while the shares and potential warrant exercises may materially dilute existing shareholders.
Use of Proceeds and Material Changes
- Management intends to use the net proceeds for sales and marketing, operating costs, product development, product and service expansion, payment of outstanding liabilities, working capital, and general corporate purposes.
- The offering closed on June 27, 2023, and the Company delivered the firm securities and option warrants to the underwriter on that date.
- The transaction introduced substantial potential dilution through ordinary shares, pre-funded warrants, Warrant A, Warrant B, and underwriter warrants.
- Warrant A may permit cashless exercise after specified timing or trading-volume conditions, resulting in the issuance of fewer shares than a cash exercise.
- Warrant holders are generally subject to beneficial ownership limitations of 4.99%, or 9.99% at the holder’s election, subject to the warrant terms.
- The Company agreed to a generally applicable three-month restriction on issuing, selling, or registering additional equity securities, subject to stated exceptions.
Outlook, Risks, and Unusual Items
The filing provides no quantitative operating guidance or forecast. Forward-looking statements concerning the intended use of proceeds and business plans are subject to risks described in the Company’s Form 20-F filed May 1, 2023 and its Form F-1 registration statement. The Company cautions that actual results may differ materially and undertakes no obligation to update forward-looking statements.
Important transaction-specific risks include execution of the Company’s planned use of proceeds, possible future dilution from warrant exercises, market-price and trading-volume effects, and the financial impact of outstanding liabilities and ongoing operating costs. The filing text does not provide a clear value for outstanding liabilities, cash on hand before the offering, or expected cash runway.
Investor Verification Checklist
- Verify the final number of ordinary shares, pre-funded warrants, and all warrant instruments issued at closing.
- Review the warrant agreements for exercise, cashless-exercise, anti-dilution, ownership-limit, and expiration provisions.
- Confirm the Company’s post-offering share count and the potential fully diluted share count.
- Assess whether approximately $2.68 million of net proceeds is sufficient for planned operations and liabilities.
- Review subsequent filings for actual use of proceeds, additional financing, warrant exercises, and changes in liquidity.
- Compare the transaction terms with the Company’s Form 20-F and Form F-1 risk factors and financial statements.