NEW YORK/SÃO PAULO - SMX PLC (NASDAQ:SMX), currently trading at $0.30 and down nearly 99% year-to-date according to InvestingPro data, and Ybyra Capital (B3:YBRA4), a Brazilian holding company, have announced a non-binding agreement that could lead to a merger aimed at enhancing global trade transparency and accountability. This strategic move, pending further due diligence and shareholder approvals, is anticipated to create a new standard in sustainable and ethical certification for commodities, particularly between South America and the United States.
The proposed merger, which was approved in principle by Ybyra's shareholders on December 5, 2024, is expected to be finalized in the first half of 2025. SMX enters this deal with challenging financials, showing an EBITDA of -$14.27M and a concerning current ratio of 0.02, as revealed by InvestingPro metrics. Ybyra Capital plans to contribute various assets, including fertilizer holdings and real estate in Brazil, to a new Irish company fully owned by SMX. The assets' valuation will be determined by an independent appraiser, and Ybyra shareholders will receive SMX shares in exchange for their contributions.
SMX, known for its digital platform traceability technologies, aims to integrate these capabilities with Ybyra's operational infrastructure. This synergy is expected to drive transparent and accountable global trade by marking, tracking, and certifying the authenticity and provenance of products like coffee, tea, metals, palm oil, and natural rubber.
The merger seeks to capitalize on the growing trade between South America and Asia, driven by the demand for natural resources and the need for real-time information on product sourcing and sustainability. With SMX showing high market sensitivity (beta of -2.04), InvestingPro subscribers can access detailed analysis and over 30 additional financial metrics to evaluate this strategic move's potential impact. SMX's blockchain technology, coupled with Ybyra's logistical expertise, is expected to offer a scalable solution for efficient and transparent global trade, potentially enhancing shareholder value in a multi-trillion-dollar market.
SMX expressed optimism about the merger's potential to set a transformative benchmark in global trade, while Ybyra's CEO, Tiago Moura e Silva, highlighted the anticipated synergy's emphasis on efficiency, transparency, and sustainability.
This announcement is based on a press release statement and should be considered a roadmap with no guarantee of the merger's finalization, as it is subject to further due diligence, regulatory and shareholder approvals, and the execution of definitive merger documents. According to InvestingPro's Fair Value analysis, SMX currently appears to be fairly valued, with a weak overall Financial Health Score of 1.45.
In other recent news, SMX Public Limited Company secured approximately $5.35 million through a private placement deal with institutional investors. The transaction includes the sale of Ordinary Shares and a combination of pre-funded and investor warrants. This capital raise, expected to close in the future, will be directed towards the company's general corporate purposes and working capital needs. Aegis Capital Corp. and ClearThink Securities have acted as the Placement Agents for the deal.
In a separate development, SMX initiated a reverse stock split of its ordinary shares at a 75:1 ratio. This move aims to increase the per-share trading price of the company's common stock and meet NASDAQ's minimum bid price requirement for continued listing. The number of outstanding ordinary shares will decrease significantly as a result.
These recent developments reflect SMX's strategic efforts to maintain its listing status on the NASDAQ exchange and secure funding for its operations.
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