Business Context and Reporting Period
This Form 6-K filing by SMX (Security Matters) Public Limited Company covers the month of December 2024. The report details a material financing transaction entered into on December 28, 2024, with Abri Advisors Ltd.
Key Financial Metrics
The filing does not provide standard financial statements, revenue, profit, cash flow, or margin data. The primary financial metric disclosed is the new debt obligation:
- Principal Borrowed: $1,000,000
- Maturity Date: June 30, 2025
- Total Repayment Amount: $1,400,000
- Original Issue Discount (OID): 28.57%
- Interest Rate: 15% absolute rate on the repayment amount
Material Changes
The Company has incurred a new senior debt obligation of $1,000,000. This represents a significant change in the Company's capital structure and liquidity position compared to the prior period, introducing a fixed repayment liability of $1,400,000 due within six months.
Terms, Risks, and Contingencies
The Loan Agreement contains restrictive covenants and severe default penalties:
- Debt Restriction: The Company cannot issue other debt ranking senior or pari passu without the Lender's consent while this loan is outstanding.
- Equity Financing Trigger: If the Company raises equity or equity-related securities ("Financing"), it must repay 25% of the then Loan Balance within three business days. This repayment does not reduce the final maturity amount due.
- Default Penalties: Upon an Event of Default (subject to a 3-day cure period), the outstanding balance plus any Financing Repayment due is multiplied by 150% and becomes immediately payable.
- Default Interest: The Default Payment Amount compounds interest at a monthly rate of 5.0% until paid.
Investor Verification Checklist
- Verify the Company's current cash position to assess ability to repay $1,400,000 by June 30, 2025.
- Confirm whether the Company has any pending equity financing plans that would trigger the 25% mandatory repayment clause.
- Review the full text of the Loan Agreement (Exhibit 10.1) for specific definitions of "Event of Default."
- Assess the impact of the 150% default multiplier and 5% monthly compounding interest on the Company's solvency in a distress scenario.