SMX Announces Effective Date of Reverse Stock Split

Rhea-AI Summary

SMX announced the implementation of a 28.5:1 reverse stock split effective January 15, 2025. The split will reduce outstanding ordinary shares from approximately 33 million to 1 million, while maintaining the existing 'SMX' ticker symbol. The company's ordinary shares will receive a new CUSIP number (G8267K 158) and ISIN code (IE000WZ90ZV5).

The reverse split, approved by shareholders on December 10, 2024, will proportionally adjust all outstanding options, warrants, and convertible securities. Continental Stock Transfer & Trust Company will manage the exchange process. Fractional shares will be aggregated and sold at market prices. The primary objective of this corporate action is to increase the per-share trading price of SMX's ordinary shares.

Positive

• Strategic move to increase per-share trading price
• Maintains Nasdaq listing compliance potential

Negative

• Significant share consolidation (28.5:1 ratio) indicating potential listing price concerns
• Shareholders with holdings not divisible by 28.5 will receive cash instead of shares

Insights

Financial Markets Expert

The announced 28.5:1 reverse stock split represents a critical financial maneuver for SMX, reducing outstanding shares from 33 million to approximately 1 million. This corporate action is primarily aimed at boosting the per-share trading price to maintain NASDAQ listing compliance, which requires maintaining a minimum bid price of $1 per share.

The mechanics of this split suggest a defensive strategy, as reverse splits are typically implemented when companies face delisting risks or need to artificially enhance their stock price. The unusually precise ratio of 28.5:1 indicates careful calibration to achieve a specific target price range. The treatment of fractional shares through market sales shows consideration for smaller shareholders, though this could result in forced liquidation of positions for some investors.

For retail investors, this restructuring doesn't change the fundamental value of their holdings, but historically, reverse splits often signal underlying company challenges and frequently lead to additional price deterioration post-split. The market's reaction in the coming weeks will be crucial, particularly given the micro-cap status of the company with a market cap of just $3.47 million.

Corporate Governance Analyst

The timing and execution of this reverse split reveal significant corporate governance implications. The swift implementation following the December shareholder approval indicates urgency in the company's compliance strategy. The involvement of Continental Stock Transfer & Trust Company as the exchange agent adds procedural legitimacy to the process.

The technical aspects of the split, including CUSIP and ISIN changes, demonstrate proper regulatory compliance, while the proportional adjustment of options and warrants preserves the integrity of all securities classes. However, the need for such a substantial ratio adjustment suggests deeper structural challenges that management needs to address beyond this cosmetic change to share price.

NEW YORK, NY / ACCESSWIRE / January 13, 2025 / SMX (Security Matters) Public Limited Company (NASDAQ:SMX)(NASDAQ:SMXWW) (the "Company"), today announced that the reverse stock split of the Company's ordinary shares, which was previously approved by the Company's shareholders on December 10, 2024, will begin trading on an adjusted basis giving effect to the reverse stock split on January 15, 2025 under the existing ticker symbol "SMX". The new CUSIP number of the Company's ordinary shares will be G8267K 158 and the new ISIN code will be IE000WZ90ZV5.

In accordance with the proposal approved by the Company's shareholders and the Board of Directors' subsequent determination to fix the split ratio at 28.5:1, every twenty-eight and one-half (28.5) ordinary shares of the Company will be automatically combined into one (1) ordinary share. This will reduce the number of outstanding ordinary shares of the Company from approximately 33 million to approximately 1 million.

Outstanding Company options, warrants and other applicable convertible securities, including the Company's warrants listed on the Nasdaq Capital Market under the symbol SMXWW which will retain its existing CUSIP number, will be proportionately adjusted in accordance with their respective terms. No fractional shares will be issued in connection with the reverse stock split. Instead, the Company will aggregate the fractional entitlements of shareholders who otherwise would be entitled to receive fractional shares because they hold a number of ordinary shares not evenly divisible by twenty-eight and one-half (28.5) ordinary shares pursuant to the reverse stock split or they hold less than the number of ordinary shares which should be consolidated into one ordinary share pursuant to the reverse stock split and, to the extent possible, sell such aggregated fractional ordinary shares on the basis of prevailing market prices at such time.

Continental Stock Transfer & Trust Company is acting as exchange agent for the reverse stock split and will send instructions to any shareholders of record who hold stock certificates regarding the exchange of certificates. Shareholders with shares held in book-entry form or through a bank, broker, or other nominee are not required to take any action and will see the impact of the reverse stock split reflected in their accounts on or after January 16, 2025. Such beneficial holders may contact their bank, broker, or nominee for more information. Continental Stock Transfer may be reached for questions at (212) 509-4000.

The purpose for seeking shareholder approval to effect the reverse stock split was to increase the per share trading price of the Company's ordinary shares.

Additional information concerning the reverse stock split can be found in the Company's notice of and proxy statement for the extraordinary general meeting of shareholders filed with the Securities and Exchange Commission on November 8, 2024.

-Ends-

For further information contact:

SMX GENERAL ENQUIRIES
E: info@securitymattersltd.com

About SMX

As global businesses face new and complex challenges relating to carbon neutrality and meeting new governmental and regional regulations and standards, SMX is able to offer players along the value chain access to its marking, tracking, measuring and digital platform technology to transition more successfully to a low-carbon economy.

Forward-Looking Statements

The information in this press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions, or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "forecast," "intends," "may," "will," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release may include, for example, the Company's ability to regain compliance with applicable Nasdaq standards or comply with the continued listing standards of Nasdaq even if the Company regains compliance. These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing views as of any subsequent date, and no obligation is undertaken to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: the ability to maintain the listing of the Company's shares on Nasdaq; changes in applicable laws or regulations; any lingering effects of the COVID-19 pandemic on SMX's business; the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; the risk of downturns and the possibility of rapid change in the highly competitive industry in which SMX operates; the risk that SMX and its current and future collaborators are unable to successfully develop and commercialize SMX's products or services, or experience significant delays in doing so; the risk that the Company may never achieve or sustain profitability; the risk that the Company will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; the risk that the Company experiences difficulties in managing its growth and expanding operations; the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations; the risk that SMX is unable to secure or protect its intellectual property; the possibility that SMX may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties described in SMX's filings from time to time with the Securities and Exchange Commission.

SOURCE: SMX (Security Matters)

View the original press release on accesswire.com

FAQ

When will SMX's reverse stock split take effect?

SMX's reverse stock split will begin trading on an adjusted basis on January 15, 2025.

What is the ratio of SMX's reverse stock split?

The reverse stock split ratio is 28.5:1, meaning every 28.5 ordinary shares will be combined into one ordinary share.

How many shares will SMX have outstanding after the reverse split?

After the reverse split, SMX's outstanding shares will reduce from approximately 33 million to approximately 1 million shares.

What happens to fractional shares in SMX's reverse split?

Fractional shares will be aggregated and sold at prevailing market prices, with proceeds distributed to affected shareholders.

Will SMX's ticker symbol change after the reverse split?

No, SMX will continue trading under the same ticker symbol 'SMX' after the reverse split.