As filed with the Securities and Exchange Commission on November 29, 2022

Registration Statement No. 333-267301

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 3

TO

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Empatan Public Limited Company

(Exact name of Registrant as Specified in its articles of association)*

 

 

N/A

(Translation of registrant name into English)

 

Ireland		3590		N/A
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

+353-1-920-1000

Mespil Business Centre, Mespil House, Sussex Road, Dublin 4, Ireland

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Puglisi & Associates

850 Library Avenue, Suite 204

Newark, DE 19715

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Robert S. Matlin K&L Gates LLP 599 Lexington Avenue New York, NY 10022 Tel: (212) 536-3900		Doron Afik Adv. Afik & Co. 103 Hahashmonaim Street Tel Aviv, Israel 6120101 Tel: +972.3.6093609		Connor Manning Arthur Cox Ten Earlsfort Terrace Dublin 2 D02 T380		Joshua M. Samek Steven D. Pidgeon DLA Piper LLP (US) 200 South Biscayne Boulevard, Suite 2500 Miami, FL 33131-5341 Telephone: (305) 423-8500

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the transactions contemplated by the Business Combination Agreement, described in the included proxy statement/prospectus, have been satisfied or waived.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third Party Tender Offer)  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company  ☒

 

(*)	Upon the closing of the business combination referred to in the proxy statement/prospectus within this registration statement, the name of the registrant is expected to change to SMX Public Limited Company

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.1  ☐

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, pursuant to said Section 8(a), may determine.

 

 

 

The information in this proxy statement/prospectus is not complete and may be changed. Parent may not issue these securities until the registration statement filed with the Securities and Exchange Commission, of which this proxy statement/prospectus is a part, is effective. This proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROXY STATEMENT/PROSPECTUS

SUBJECT TO COMPLETION, DATED NOVEMBER 29, 2022

LIONHEART III CORP

4218 NE 2nd Avenue

Miami, Florida 33137

 

On July 26, 2022, Lionheart III Corp, a Delaware corporation (the “Company”, “us”, “we”, “our” or “Lionheart”), entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “BCA”) by and among Lionheart, Security Matters Limited, a publicly traded company on the Australian Securities Exchange (“ASX”)(“SMX”), Empatan Public Limited Company, a public limited company incorporated in Ireland (“Parent”), and Aryeh Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”) and a scheme implementation deed (as it may be amended, supplemented or otherwise modified from time to time, the “SID”) by and among Lionheart, SMX and Parent.

Subject to the terms and conditions set forth in the BCA, including the approval of Lionheart’s stockholders, the parties thereto will enter into a business combination transaction (the “Business Combination”), pursuant to which, among other things Merger Sub shall be merged with and into Lionheart with Lionheart continuing as a wholly owned subsidiary of Parent.

Under the SID, SMX has agreed to propose a scheme of arrangement under Part 5.1 of the Corporations Act (“Scheme”) and capital reduction (“Capital Reduction”) which, if implemented, will result in all shares in SMX being cancelled in return for the issue of ordinary shares of Parent (“Parent Shares”), with Parent then being issued one share in SMX (“SMX Shares”) (resulting in SMX becoming a wholly owned subsidiary of Parent), subject to SMX shareholder approval, Australian court approval and the satisfaction of various conditions.

In addition, SMX has agreed to propose an option scheme of arrangement under Part 5.1 of the Corporations Act (“Option Scheme”) which, if implemented, will result in the SMX options held by participants in the Option Scheme being subject to a cashless exercise based on a Black-Scholes valuation, in exchange for SMX Shares. Under the Scheme those shares will be cancelled with such participants receiving Parent Shares on the basis of the Scheme consideration, subject to SMX option holder approval, Australian court approval and the satisfaction of various conditions.

Subject to the terms and conditions set forth in the BCA and the SID, SMX shareholders will receive consideration under the Scheme of 1 Parent Share per 10.3490 SMX shares having an implied value of $10.00 per Parent Share and Parent will become the holder of all of the issued shares in SMX and Lionheart, with SMX being delisted from the ASX.

Under the BCA, Merger Sub will merge with and into Lionheart, with Lionheart surviving the merger as a wholly owned subsidiary of Parent, with existing Lionheart stockholders receiving Parent Shares in exchange for their existing Lionheart shares and existing Lionheart warrant holders having their warrants automatically adjusted to become exercisable in respect of Parent Shares instead of Lionheart shares (“Parent Warrants”), as further described in the BCA, subject to Lionheart stockholder approval and the satisfaction of various other conditions.

We are actively pursuing to enter into subscription agreements (collectively, the “Subscription Agreements”) with certain institutional and accredited investors (collectively, the “PIPE Investors”), pursuant to which the PIPE Investors will agree to subscribe for and purchase, and we will agree to issue and sell to such PIPE Investors, prior to or substantially concurrently with the closing of the Business Combination, up to $25 million in securities of the Company (the “PIPE Financing”). The securities to be issued pursuant to the Subscription Agreements will not be registered under the Securities Act of 1933, as amended (the “Securities

Act”), in reliance upon the exemption provided in Section 4(a)(2) thereof. Currently, we have not confirmed whether the Sponsor, directors, officers or their affiliates will participate in the PIPE Financing nor are aware of any material differences in the terms and price of securities issued at the time of the IPO and the securities to be issued in connection with the PIPE financing at this time.

The closing of any PIPE Financing would be subject to customary conditions for a financing of this nature, including the substantially concurrent consummation of the Business Combination. The Subscription Agreements are expected to provide that the Company will grant the PIPE Investors customary registration rights with respect to any securities issued to such investors in connection with any PIPE Financing following the Closing.

In connection with the Closing, the Class B common stock, par value $0.0001 per share, of the Company (the “Class B Common Stock”), issued prior to the initial public offering of the Company, held by our sponsor, Lionheart Equities, LLC (the “Sponsor”), and certain other Company stockholders will automatically convert into shares of Class A Common Stock on a one-for-one basis, not subject to adjustment. In connection with the signing of the BCA, the Sponsor and certain members of our board of directors and management team waived all of the adjustment rights they were granted in connection with our IPO. In addition, the Sponsor and certain members of our board of directors and/or management team have agreed to (a) vote all of their shares of Class B Common Stock and all of their shares of Class A Common Stock in favor of the Business Combination and each other proposal described in the accompanying proxy statement/prospectus, (b) certain restrictions on their shares of Class A Common Stock and (c) in the case of the Sponsor, use best efforts to contain any transaction costs that are allocable to the Company in accordance with the BCA.

Our publicly traded Class A Common Stock, redeemable warrants to purchase one share of Class A Common Stock (“Company Public Warrants”) and Company Public Units comprising one share of Class A Common Stock and one-half of one Company Public Warrant (“Company Public Units”) are currently listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “LION,” “LIONW” and “LIONU,” respectively.

Although the Parent is not currently a public reporting company, following the effectiveness of the registration statement of which this proxy statement/prospectus is a part and the closing of the Transactions (as defined in the BCA), Parent will become subject to the reporting requirements of the Exchange Act. Parent will apply for listing, to be effective at the time of the consummation of the Transactions, of the Parent Shares and warrants on Nasdaq under the symbols “SMX” and “SMXW”, respectively, and Parent is expected to be publicly traded on Nasdaq under those symbols following the completion of the Transactions, subject to receipt of Nasdaq’s approval and official notice of issuance. While trading on Nasdaq is expected to begin on the first business day following the date of completion of the Transactions, there can be no assurance that Parent’s securities will be listed on Nasdaq or that a viable and active trading market will develop. See “Risk Factors” for more information.

The Company will hold a special meeting of stockholders in lieu of the 2022 annual meeting (the “Special Meeting”) to consider matters relating to the proposed Business Combination. In connection with the Special Meeting, you will be asked to consider and vote upon (i) a proposal (the “Business Combination Proposal”) to approve the BCA, a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, and the transactions contemplated thereby; and (ii) a proposal to adjourn the Special Meeting to a later date or dates, if necessary, (A) to ensure that any supplement or amendment to the accompanying proxy statement/prospectus that the Lionheart Board of Directors (the “Lionheart Board”) has determined in good faith is required by applicable law to be disclosed to Lionheart stockholders and for such supplement or amendment to be promptly disseminated to Lionheart stockholders prior to the Special Meeting, (B) if, as of the time for which the Special Meeting is originally scheduled, there are insufficient shares of common stock represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the Special Meeting or (C) to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal (the “Adjournment Proposal”). Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which each stockholder is encouraged to read carefully.

The Special Meeting will be held at                a.m. Eastern Time, on                , 2022, in virtual format.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF COMMON STOCK YOU OWN. To ensure your representation at the Special Meeting, please complete and return the

enclosed proxy card or submit your proxy by following the instructions contained in the accompanying proxy statement/prospectus and on your proxy card. Please submit your proxy promptly whether or not you expect to attend the Special Meeting. Submitting a proxy now will NOT prevent you from being able to vote in person at the Special Meeting. If you hold your shares in “street name,” you should instruct your broker, bank, or other nominee how to vote in accordance with the voting instruction form you receive from your broker, bank, or other nominee.

The Lionheart Board has unanimously approved the BCA and the transactions contemplated thereby and recommends that the Lionheart stockholders vote “FOR” the approval of the BCA, and “FOR” the other matters to be considered at the Special Meeting. When you consider the Lionheart Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the Business Combination that may conflict with your interests as a stockholder. Please see the section entitled “Summary of the Proxy Statement/Prospectus — Interests of Certain Persons in the Business Combination” for additional information.

Parent will be an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, and is therefore eligible to take advantage of certain reduced reporting requirements otherwise applicable to other public companies.

Parent will also be a “foreign private issuer” as defined in the Exchange Act and will be exempt from certain rules under the Exchange Act that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, Parent’s officers, directors and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions under Section 16 of the Exchange Act. Moreover, Parent will not be required to file periodic reports and financial statements with the U.S. Securities and Exchange Commission as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

This proxy statement/prospectus provides you with detailed information about the BCA, the SID, the Transactions, and other matters to be considered at the special meeting of Lionheart’s stockholders. We encourage you to carefully read this entire document. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 52 of this proxy statement/prospectus.

If you have any questions regarding the accompanying proxy statement/prospectus, you may contact our proxy solicitor, MacKenzie Partners, Inc.:

1407 Broadway, 27^th Floor

New York, New York 10018

(212) 929-5500 (Call Collect)

or

Call Toll-Free (800) 322-2885

Email:

proxy@mackenziepartners.com

Sincerely,

Ophir Sternberg

Chairman, President and Chief Executive Officer

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE BUSINESS COMBINATION, OR DETERMINED IF THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This proxy statement/prospectus is dated             , 2022, and is first being mailed to Lionheart’s stockholders on or about             , 2022.

LIONHEART III CORP

4218 NE 2nd Avenue

Miami, Florida 33137

(305) 573-3900

NOTICE OF SPECIAL MEETING IN LIEU OF THE 2022 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON             , 2022

TO THE STOCKHOLDERS OF LIONHEART III CORP:

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2022 annual meeting of stockholders of Lionheart III Corp, a Delaware corporation (“we,” “us,” “our,” or the “Company”), will be held at              a.m. Eastern Time, on             , 2022, in virtual format (the “Special Meeting”). You are cordially invited to attend the Special Meeting, which will be held for the following purposes:

 

(1)

The Business Combination Proposal — To consider and vote upon a proposal to approve the Business Combination Agreement, dated as of July 26, 2022 (as it may be amended, supplemented or otherwise modified from time to time, the “BCA”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, by and among Lionheart, Security Matters Limited, a publicly traded company on the Australian Securities Exchange (“ASX”) (“SMX”), Empatan Public Limited Company, a public limited company incorporated in Ireland (“Parent”), and Aryeh Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and a scheme implementation deed (“SID”), a copy of which is attached to the accompany proxy statement/prospectus as Annex B, by and among Lionheart, SMX and Parent, and the transactions contemplated thereby. Under the SID, SMX has agreed to propose a scheme of arrangement under Part 5.1 of the Corporations Act (“Scheme”) and capital reduction (“Capital Reduction”) which, if implemented, will result in all shares in SMX being cancelled in return for the issuance of ordinary shares of Parent (“Parent Shares”), with Parent then being issued one share in SMX (“SMX Shares”) (resulting in SMX becoming a wholly owned subsidiary of Parent), subject to SMX shareholder approval, Australian court approval and the satisfaction of various conditions. In addition, SMX has agreed to propose an option scheme of arrangement under Part 5.1 of the Corporations Act (“Option Scheme”) which, if implemented, will result in the SMX options held by participants in the Option Scheme being subject to a cashless exercise based on a Black-Scholes valuation, in exchange for SMX Shares. Under the Scheme those shares will be cancelled and such participants receiving Parent Shares on the basis of the Scheme consideration, subject to SMX option holder approval, Australian court approval and the satisfaction of various conditions. Subject to the terms and conditions set forth in the BCA and the SID, SMX shareholders will receive consideration under the Scheme of 1 Parent Share per 10.3490 SMX shares having an implied value of $10.00 per Parent Share and Parent will become the holder of all of the issued shares in SMX and Lionheart, with SMX being delisted from the ASX. Under the BCA, Merger Sub will merge with and into Lionheart, with Lionheart surviving the merger as a wholly owned subsidiary of Parent, with existing Lionheart stockholders receiving Parent Shares in exchange for their existing Lionheart shares and existing Lionheart warrant holders having their warrants automatically adjusted to become exercisable in respect of Parent Shares instead of Lionheart shares (“Parent Warrants”), as further described in the BCA, subject to Lionheart stockholder approval and the satisfaction of various other conditions.

 

(2)

The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, (A) to ensure that any supplement or amendment to the accompanying proxy statement/prospectus that the Board of Directors of the Company (the “Lionheart Board”) has determined in good faith is required by applicable law to be disclosed to Company stockholders and for such supplement or amendment to be promptly disseminated to Company stockholders prior to the Special Meeting, (B) if, as of the time for which the Special Meeting is originally scheduled, there are insufficient shares of common stock represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the Special Meeting or

(C) to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, each, a “Proposal” and collectively, the “Proposals”).

These items of business are described in the accompanying proxy statement/prospectus, which we encourage you to read in its entirety before voting. Only holders of record of our common stock at the close of business on [●], 2022 (the “Record Date”) are entitled to notice of the Special Meeting and to vote and have their votes counted at the Special Meeting and any adjournments or postponements of the Special Meeting.

Pursuant to our Existing Charter, we will provide holders of our Class A Common Stock with the opportunity to redeem their Company Public Shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of our initial public offering, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest not previously released to us to pay its taxes). For illustrative purposes, based on funds in the Trust Account of approximately $[●] million on [●], the estimated per share redemption price would have been approximately $10.10, excluding interest not previously released to us to pay our taxes. The Company originally had until November 8, 2022 to complete a business combination. On November 8, 2022, the Company caused $412,500 (representing $0.033 per share of Class A common stock) to be deposited into the Trust Account to extend the date by which it has to consummate its initial business combination to December 8, 2022 (or until May 8, 2023 if the Company extends the period of time to consummate its initial business combination pursuant to any further Extension Period). Accordingly, if the Company takes the full time through December 8, 2022 to complete the Business Combination (or until May 8, 2023 if it extends the period of time to consummate its initial business combination pursuant to any further Extension Period), the conversion amount per share at the special meeting for such business combination or the Company’s subsequent liquidation will be approximately $[●] per share (without taking into account any interest), in comparison to the current conversion amount of approximately $10.10 per share.

Company Public Stockholders may elect to redeem their shares even if they vote “FOR” the Business Combination Proposal. A holder of Company Public Shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the Company Public Shares without our prior consent. Accordingly, all Company Public Shares in excess of 15% held by a Company Public Stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash without our prior consent. Each redemption of shares by Company Public Stockholders will decrease the amount in the Trust Account. We will not consummate the Business Combination if the redemption of shares would result in the Company’s failure to have at least $5,000,001 of net tangible assets. Lionheart Equities, LLC, a Delaware limited liability company (the “Sponsor”) and our directors and officers have entered into a letter agreement with us pursuant to which they agreed to waive their redemption rights in connection with the consummation of the Business Combination with respect to any shares of common stock they may hold. Nomura Securities International, Inc. (“Nomura”), Northland Securities, Inc. (“Northland”) and Drexel Hamilton, LLC (“Drexel”, and together with Nomura and Northland, the “Underwriters”), the underwriters of our IPO (as defined herein), have also agreed to waive their redemption rights with respect to the Company Public Shares held by them, other than Company Public Shares held directly or indirectly by it on behalf of a third-party client. The Sponsor, the Underwriters, SMX, Parent and/or their respective affiliates may purchase shares of Class A Common Stock on the open market. Such purchases (“Open Market Purchases”) will be made prior to the Special Meeting and will be separate from the redemption process conducted in connection with the Business Combination. The purposes of any Open Market Purchases would be to reduce the number of shares of Class A Common Stock that may be redeemed in connection with the Business Combination, and may include a business decision to increase such purchaser’s ownership at an attractive price. The Sponsor, the Underwriters, SMX, Parent and/or their respective affiliates shall only make Open Market Purchases to the extent the price per Class A Common Stock so acquired is no higher than the redemption price that would be available in connection with the redemption procedures described in the accompanying proxy statement/prospectus. In addition, the Sponsor, the Underwriters, SMX, Parent and/or their respective affiliates will waive any redemption rights with respect to any shares of Class A Common Stock

purchased in Open Market Purchases and will not vote any shares of Class A Common Stock purchased in Open Market Purchases in favor of the Proposals. Currently, the Initial Stockholders (as defined herein) own 21.4% of our common stock, consisting of the Founder Shares and the Company Private Shares (each, as defined herein). Founder Shares and Company Private Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. We have entered into a letter agreement with the Sponsor and our directors and officers, pursuant to which, among other things, each such person has agreed to vote all shares of our common stock owned by them in favor of the Proposals. However, we intend to waive such obligations of the Sponsor, our directors and/or our officers to vote their shares of common stock in favor of the Proposals in respect of any shares purchased by such purchasers in Open Market Purchases. The Underwriters have agreed to vote any shares of our common stock held by them in favor of the Business Combination. However, we intend to waive such obligations of the Underwriters to vote their shares of common stock in favor of the Proposals in respect of any shares purchased by the Underwriters in Open Market Purchases. In addition, the Underwriters have contingent fees owing to them upon the successful completion of the Business Combination consisting of deferred underwriting fees of $4,375,000.

After careful consideration, the Lionheart Board has determined that the Business Combination Proposal and the Adjournment Proposal are fair to and in the best interests of the Company and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the Business Combination Proposal and “FOR” the Adjournment Proposal, if presented.

The approval of each of the Business Combination Proposal and the Adjournment Proposal, if presented, requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon at the Special Meeting, voting as a single class.

Consummation of the Business Combination is conditioned on the approval of the Business Combination Proposal at the Special Meeting, subject to the terms of the BCA and the SID. The Business Combination is not conditioned on the Adjournment Proposal. The proxy statement/prospectus accompanying this notice explains the BCA and the SID and the transactions contemplated thereby, as well as the Proposals to be considered at the Special Meeting. Please review the proxy statement/prospectus carefully and in its entirety.

All our stockholders are cordially invited to attend the Special Meeting in virtual format. There will be no physical meeting location and the Special Meeting will only be conducted via live webcast at the following address: [•]. Our stockholders may attend, vote and examine the list of our stockholders entitled to vote at the Special Meeting by visiting and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. In light of ongoing public health concerns regarding the coronavirus (“COVID-19”) pandemic, the Special Meeting will be held in virtual format only. You will not be able to attend the Special Meeting physically. To ensure your representation at the Special Meeting, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker, bank, or other nominee on how to vote your shares.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the Special Meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

If you have any questions or need assistance voting your shares, please call our proxy solicitor, MacKenzie Partners, Inc.:

1407 Broadway, 27^th Floor

New York, New York 10018

(212) 929-5500 (Call Collect)

or

Call Toll-Free (800) 322-2885

Email:

proxy@mackenziepartners.com

Thank you for your participation. We look forward to your continued support.

 

                , 2022

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS. TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE THE COMPANY REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE COMPANY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANKS OR BROKERS TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “THE COMPANY’S SPECIAL MEETING OF STOCKHOLDERS — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.

This proxy statement/prospectus is dated             , 2022, and is first being mailed to Lionheart’s stockholders on or about             , 2022.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on             , 2022: Lionheart’s proxy statement/prospectus is available at             .

TABLE OF CONTENTS

 

 

You should rely only on the information contained in this proxy statement/prospectus in determining whether to vote in favor of the business combination proposals and the other proposals presented. No one has been authorized to provide you with information that is different from the information contained in this proxy statement/prospectus. The information in this proxy statement/prospectus speaks only as of the date hereof, and you should not assume that the information contained in this proxy statement/prospectus is accurate as of any other date. Neither the mailing of this proxy statement/prospectus to Lionheart stockholders nor the issuance by Parent of securities in connection with the transaction will create any implication to the contrary.

FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “Lionheart” refer to Lionheart III Corp, and the term “Post-Combination Company” refers to the Parent following the consummation of the Business Combination. As used in this proxy statement/prospectus, unless otherwise noted or the context otherwise requires, the following terms will have the ensuing definitions:

“Amended and Restated Bylaws” means the proposed Amended and Restated Bylaws of the Company;

“Ancillary Agreements” means the Voting Agreement, the Registration Rights Agreement, the Lock-up Agreement, the Sponsor Support Agreement, the SID, the Deed Poll, and all other agreements, certificates and instruments executed and delivered by the Company, Parent, Merger Sub, or SMX in connection with the Transactions and specifically contemplated by this Agreement.

“ASX” means ASX Limited ACN 008 624 691 or the market operated by it, as the context requires;

“Action” means litigation, suit, claim, charge, grievance, action, proceeding, audit, order, writ, judgment, injunction or investigation by or before any Governmental Authority;

“Affiliate” of a specified Person means a Person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person;

“BCA” means the Business Combination Agreement, dated as of July 26, 2022, by and among the Company, SMX, Parent and Merger Sub, a copy of which is attached to this proxy statement/prospectus as Annex A (as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms);

“Board” means the board of directors of the Post-Combination Company;

“Business Combination” means the transactions contemplated by the BCA and the SID;

“Capital Reduction” means the equal reduction of capital under section 256B of the Corporations Act pursuant to which all SMX Shares are to be cancelled in accordance with the terms of the Capital Reduction Resolution;

“Capital Reduction Resolution” means the resolution of SMX Shareholders to approve the Capital Reduction in the form approved by Lionheart in writing;

“Cashless Exercise” has the meaning given in the Option Scheme;

“Class A Common Stock” means shares of the Company’s Class A Common Stock, par value $0.0001 per share;

“Class B Common Stock” means shares of the Company’s Class B Common Stock, par value $0.0001 per share;

“Closing” means the closing of the Business Combination;

“Code” means the Internal Revenue Code of 1986, as amended;

“common stock” means the Class A Common Stock and Class B Common Stock prior to the effectiveness of the Proposed Charter, and to shares of the Company’s Class A Common Stock, following the effectiveness of the Proposed Charter;

 

1

“Company” means Lionheart III Corp;

“Company Private Shares” means the 400,000 shares of Class A Common Stock included in the Company Private Units;

“Company Private Units” means the units issued in private placements at the time of the consummation of the IPO, including (a) one Class A Common Share and (b) one-half of a warrant, with whole warrants entitling the holder thereof to purchase one Class A Common Share at an exercise price of $11.50 per share;

“Company Private Warrants” means (a) each warrant issued in private placements at the time of the consummation of the IPO, entitling the holder thereof to purchase one Class A Common Share at an exercise price of $11.50 per share and (b) each warrant issued as a component of Company Private Units;

“Company Public Shares” means shares of Class A Common Stock included in the Public Units issued in the IPO (whether they were purchased in the IPO or thereafter in the open market);

“Company Public Stockholders” means the holders of the Company Public Shares, including the Sponsor and the Company’s management team to the extent the Sponsor and/or members of the Company’s management team purchase Company Public Shares; provided, that the Sponsor’s and each member of the management team’s status as a “Company Public Stockholder” will only exist with respect to such Company Public Shares;

“Company Public Units” means the units issued in the IPO, with each unit issued therein including (a) one Class A Common Share and (b) one-half of a warrant, with whole warrants entitling the holder thereof to purchase one Class A Common Share at an exercise price of $11.50 per share;

“Company Public Warrants” means each warrant issued as a component of the Company Public Units;

“control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise;

“Corporations Act” means the Corporations Act 2001 (Cth);

“COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions, variation, derivative or mutations thereof (including any subsequent waves or outbreaks thereof);

“Deed Poll” means a deed pool in respect of the Scheme substantially in the form of Annexure 3 to the SID or in such other form as Lionheart and SMX agree in writing;

“DGCL” means the Delaware General Corporation Law, as may be amended from time to time;

“Duty” means any stamp, transaction or registration duty or similar charge which is imposed by any Governmental Authority and includes any associated interest, penalty, charge or other amount which is imposed;

“Effective Date” means the date on which the Scheme or the Option Scheme (as applicable) becomes Effective;

“Employee Benefit Plan” means any plan that is a bonus, stock option, stock purchase, restricted stock, phantom stock, other equity-based compensation arrangement, performance award, incentive, deferred compensation, pension scheme or insurance, retiree medical or life insurance, death or disability benefit, health or welfare, retirement, supplemental retirement, severance, retention, change in control, employment, consulting, fringe benefit, sick pay and vacation plans or arrangements or other employee benefit plans, programs or arrangements, whether written or unwritten;

 

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“End Date” means 8 May 2023 or such later date agreed in writing by Lionheart and SMX;

“Exchange Act” means the Securities Exchange Act of 1934, as amended;

“Excluded SMX Optionholder” has the meaning given to Excluded Optionholder in the Option Scheme;

“Existing Charter” means the Amended and Restated Certificate of Incorporation of the Company, dated November 3, 2021;

“Existing Warrant Agreement” means the Warrant Agreement dated as of November 3, 2021, by and between the Company and Continental Stock Transfer & Trust Company;

“Extension Period” means the six additional one-month extension periods, (for a total of up to 18 months from the closing of the IPO) to complete the Company’s initial business combination; provided that at the beginning of each one-month extension, the Sponsor (or its designees) must deposit into the trust account funds equal to thirty-three hundredths of one percent (0.33%) of the gross proceeds of the IPO for each one-month extension of the time period to complete the Company’s initial business combination, in each case, in exchange for a non-interest bearing, unsecured promissory note.

“Founder Shares” means the shares of the Class B Common Stock and the shares of Class A Common Stock issued upon the automatic conversion of the Class B Common Stock at the time of the Business Combination as provided in the Existing Charter. 2,875,000 Founder Shares are held of record by the Initial Stockholders as of the Record Date;” means the shares of the Class B Common Stock and the shares of Class A Common Stock issued upon the automatic conversion of the Class B Common Stock at the time of the Business Combination as provided in the Existing Charter. 2,875,000 Founder Shares are held of record by the Initial Stockholders as of the Record Date;

“GAAP” means generally accepted accounting principles as in effect in the United States from time to time.

“Governmental Authority” means any legislature, agency, bureau, branch, department, division, commission, court, tribunal, magistrate, justice, multinational organization, quasigovernmental body, or other similar recognized organization or body of any federal, state, tribal, county, municipal, local, or foreign government, or other similar regulatory agency or recognized organization or body exercising similar powers or authority.

“IFRS” means international financial reporting standards, as adopted by the International Accounting Standards Board.

“IPO” means the initial public offering by the Company, which closed on November 8, 2021;

“Incentive Plan” means the SMX Public Limited Company 2022 Incentive Equity Plan;

“Initial Stockholders” means holders of the Founder Shares prior to the Business Combination;

“Investment Company Act” means the Investment Company Act of 1940, as amended;

“Investment Management Trust Agreement” means that certain investment management trust agreement, dated November 3, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as trustee;

“Law” means any federal, national, state, county, municipal, provincial, local, foreign or multinational, statute, constitution, common law, ordinance, code, decree, order, judgment, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority;

 

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“Lionheart Board” means the board of directors of the Company prior to Closing;

“Lionheart Competing Transaction” means an offer, proposal, transaction or arrangement (whether by way of stock purchase, tender offer, exchange offer, merger, consolidation, share exchange, business combination, joint venture, reorganization, recapitalization, takeover bid, scheme of arrangement, capital reduction, buy back, sale, lease or assignment of assets, sale or issue of securities, reverse takeover bid, dual listed company structure (or other synthetic merger), deed of company arrangement, debt for equity arrangement or otherwise), or a series of any of the foregoing or other transaction or arrangement (other than the Scheme, Option Scheme or other Transaction) which, if entered into or completed, would mean a person (other than Lionheart, its Related Bodies Corporate, or holders of Lionheart Shares as of the date of this document), whether alone or together with its Associates, would:

 

(a)

directly or indirectly acquire a Relevant Interest in or become the holder of or have a right to acquire a legal, beneficial or economic interest in, or control of, securities representing 20% or more of the total outstanding voting power of Lionheart (other than as a custodian, nominee or bare trustee); or

 

(b)

directly or indirectly acquire, obtain a right to acquire, or otherwise obtain an interest in (including through any license arrangement) 20% or more of the consolidated assets of the Lionheart Group.

“Merger” means the business combination transaction pursuant to which Merger Sub will merge with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Parent; upon the terms and subject to the conditions set forth in the BCA and in accordance with the DGCL, the Irish Companies Act 2014 (the “ICA”), and the Corporations Act;

“Merger Sub” means Aryeh Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”);

“Nomura” means Nomura Securities International, Inc.;

“Option Scheme” means the scheme of arrangement under part 5.1 of the Corporations Act between SMX and Option Scheme Participants in respect of all the Scheme Options, substantially in the form set out Annexure 2 of the SID, or in such other form as is agreed between Lionheart and SMX, together with any amendment or modification made pursuant to section 411(6) of the Corporations Act and approved by SMX and Lionheart;

“Option Scheme Participant” means an SMX Optionholder, other than an Excluded SMX Optionholder;

“Option Scheme Record Date” means 7:00 pm on the 2nd Business Day following the Effective Date or any other date as agreed by SMX, Parent and Lionheart;

“Parent Amended and Restated Memorandum and Articles of Association” means the amended and restated Memorandum and Articles of Association in the form attached to the accompanying proxy statement/prospectus as Annex C;

“Parent Shares” means the ordinary shares of Parent, with a par value of $0.0001 each;

“Parent Warrant” means one warrant to acquire one (1) Parent Share at an exercise price of $11.50 per share;

“PCAOB” means the Public Company Accounting Oversight Board (United States);

“PIPE Financing” means, collectively, the potential commitments by the PIPE Investors to purchase up to $25 million in the aggregate in securities of the Company;

 

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“PIPE Investors” means those certain institutional and accredited investors that will enter into Subscription Agreements in connection with any potential PIPE Financing;

“Post-Combination Company” means the Parent following the consummation of the Business Combination and the other transactions contemplated by the BCA and the SID;

“Scura Partners” means Scura Partners LLC, the fairness opinion provider to the Lionheart Board;

“Scheme” means the scheme of arrangement under part 5.1 of the Corporations Act substantially in the form set out Annexure 1, or in such other form as is agreed between Lionheart and SMX, together with any amendment or modification made pursuant to section 411(6) of the Corporations Act and approved in writing by Lionheart, Parent and SMX;

“Scheme Option” means an SMX Option on issue at the Option Scheme Record Date which is held by an Option Scheme Participant;

“Scheme Participant” means each person who is an SMX Shareholder at the Record Date, other than Parent;

“Scheme Share” means an SMX Share held by a Scheme Participant at the Record Date;

“SEC” means the U.S. Securities and Exchange Commission;

“Second Court Date” means the first day on which an application made to the Court for an order under section 411(4)(b) of the Corporations Act approving the Share Scheme and/or Option Scheme is heard or scheduled to be heard or, if the application is adjourned for any reason, the date on which the adjourned application is heard or scheduled to be heard;

“Securities Act” means the Securities Act of 1933, as amended;

“SID” means the scheme implementation deed, dated as of July 26, 2022, by and among the Company, SMX, Parent and Merger Sub, a copy of which is attached to this proxy statement/prospectus as Annex B (as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms);

“SMX” means Security Matters Limited;

“SMX Optionholder” has the meaning given in the Option Scheme;

“SMX Scheme Acquisition” means Parent’s acquisition of SMX by means of implementation of a scheme of arrangement under Part 5.1 of the Australian Corporations Act 2001 (Cth) (the “Corporations Act”) upon the terms and conditions of the SID;

“SMX Share” means an ordinary fully paid share in the capital of SMX;

“SMX Shareholder” means each person registered in the Register as a holder of a SMX Share;

“Sponsor” means Lionheart Equities, LLC, a Delaware limited liability company;

“Tax” or “Taxes” means any and all taxes, levies, duties, withholdings, assessments, fees or other charges, in each case in the nature of taxes, imposed, administered or collected by any Governmental Authority, including wage taxes, income taxes, corporate taxes, capital gains taxes, franchise taxes, sales taxes, use taxes, payroll taxes, employment taxes, withholding taxes, value added taxes, gross receipts taxes, turnover taxes, environmental taxes, car taxes, energy taxes, customs and other import or export duties, escheat or unclaimed

 

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property obligations, excise duties, transfer taxes or duties, property taxes, capital taxes, or duties, social security or other similar contributions, together with all related interest, fines, penalties, costs, charges and surcharges, whether disputed or not;

“Transactions” means the Merger, the SMX Scheme Acquisition and the other transactions contemplated by the BCA, the SID and the Ancillary Agreements;

“Trust Account” means the trust account established by the Company for the benefit of its stockholders with Continental Stock Transfer & Trust Company;

“Underwriters” means Nomura Securities International, Inc. (“Nomura”), Northland Securities, Inc. (“Northland”) and Drexel Hamilton, LLC;

Unless specified otherwise, amounts in this proxy statement/prospectus are presented in U.S. dollars.

Defined terms in the financial statements contained in this proxy statement/prospectus have the meanings ascribed to them in the financial statements.

Unless otherwise specified, the voting and economic interests of the Company’s stockholders set forth in this proxy statement/prospectus assume (a) that no Company Public Stockholders elect to have their Company Public Shares redeemed and (b) that there are no other issuances of equity interests of the Company.

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

General

This document, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Empatan Public Limited Company (“Parent”), constitutes a prospectus of Parent under Section 5 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), with respect to the Parent Shares, Parent Warrants, and Parent Shares issuable upon the exercise of Parent Warrants, to be issued to securityholders of Lionheart III Corp (“Lionheart”) if the business combination transactions described herein are consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to Lionheart’s special meeting, at which Lionheart stockholders will be asked to consider and vote upon a proposal to approve the business combination, among other matters.

Financial Statement Presentation

The historical financial statements of Lionheart were prepared in accordance with U.S. GAAP.

The historical financial statements of SMX were prepared in accordance with International Financial Reporting Standards as adopted by the International Accounting Standards Board (“IFRS”). Following the Transactions, Parent will qualify as a Foreign Private Issuer and will prepare its financial statements in accordance with IFRS. Accordingly, the unaudited pro forma condensed combined financial information and the comparative per share information presented in this proxy statement/prospectus has been prepared in accordance with IFRS.

MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this proxy statement/prospectus concerning SMX’s industry and the regions in which it operates, including SMX’s general expectations and market position, market opportunity, market share and other management estimates, is based on information obtained from various independent publicly available sources and other industry publications, surveys and forecasts, which SMX’s believes to be reliable based upon its management’s knowledge of the industry. SMX has not independently verified the accuracy and completeness of such third-party information to the extent included in this proxy statement/prospectus. Such assumptions and estimates of SMX’s future performance and growth objectives and the future performance of its industry and the markets in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those discussed under the headings “Risk Factors,” “Cautionary Statement Regarding Forward-Looking Statements” and “Security Matters’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this proxy statement/prospectus.

TRADEMARKS, TRADENAMES AND SERVICE MARKS

This proxy statement/prospectus includes trademarks, tradenames and service marks, certain of which belong to Lionheart or SMX and others that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this proxy statement/prospectus may appear without the ^®, TM and SM symbols, but the absence of those symbols is not intended to indicate, in any way, that Lionheart or SMX will not assert their rights or that the applicable owner will not assert its rights to these trademarks, tradenames and service marks to the fullest extent under applicable law. Neither Lionheart nor SMX intend that their use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of Lionheart or SMX by, these other parties.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE SPECIAL MEETING

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the Business Combination, the Special Meeting, and the proposals to be presented at the Special Meeting. The following questions and answers do not include all the information that is important to Company stockholders. You are urged to read this entire proxy statement/prospectus carefully, including the Annexes and the other documents referred to herein, to fully understand the Business Combination and the voting procedures for the Special Meeting.

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

 

Q:	WHAT IS THE BUSINESS COMBINATION?

 

A:

Pursuant to the BCA, the parties thereto will enter into a business combination transaction, pursuant to which, among other things Merger Sub shall be merged with and into Lionheart with Lionheart continuing as a wholly owned subsidiary of Parent. Under the SID, SMX has agreed to propose the Scheme and Capital Reduction which, if implemented, will result in all shares in SMX being cancelled in return for the issuance of Parent Shares, with Parent then being issued one SMX Share (resulting in SMX becoming a wholly owned subsidiary of Parent), subject to SMX shareholder approval, Australian court approval and the satisfaction of various conditions. In addition, SMX has agreed to propose the Option Scheme which, if implemented, will result in the SMX options held by participants in the Option Scheme being subject to a cashless exercise based on a Black-Scholes valuation, in exchange for SMX Shares. Under the Scheme, those shares will be cancelled and such participants receiving Parent Shares on the basis of the Scheme consideration, subject to SMX option holder approval, Australian court approval and the satisfaction of various conditions. Subject to the terms and conditions set forth in the BCA and the SID, SMX shareholders will receive consideration under the Scheme of 1 Parent Share per 10.3490 SMX shares having an implied value of $10.00 per Parent Share and Parent will become the holder of all of the issued shares in SMX and Lionheart, with SMX being delisted from the ASX. Under the BCA, Merger Sub will merge with and into Lionheart, with Lionheart surviving the merger as a wholly owned subsidiary of Parent, with existing Lionheart stockholders receiving Parent Shares in exchange for their existing Lionheart shares and existing Lionheart, warrant holders, having their warrant automatically adjusted to become exercisable in respect of Parent Shares instead of Lionheart shares, as further described in the BCA, subject to Lionheart stockholder approval and the satisfaction of various other condition.

 

Q:	WHY AM I RECEIVING THIS DOCUMENT?

 

A:

The Company is sending this proxy statement/prospectus to its stockholders to help them decide how to vote their shares of the Company’s common stock with respect to the matters to be considered at the Special Meeting. The Business Combination cannot be completed unless Company stockholders approve the Business Combination Proposal set forth in this proxy statement/prospectus for their approval. Information about the Special Meeting, the Business Combination and the other business to be considered by stockholders at the Special Meeting is contained in this proxy statement/prospectus. This document constitutes a proxy statement of the Company and a prospectus of the Company. It is a proxy statement because the Lionheart Board is soliciting proxies from its stockholders using this proxy statement/prospectus. It is a prospectus because the Company is offering the Parent Shares in connection with the Business Combination. See “Business Combination Agreement.”

This proxy statement/prospectus and its Annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its Annexes.

 

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Q:	WHAT WILL SMX STOCKHOLDERS RECEIVE IN THE BUSINESS COMBINATION?

 

A:

Subject to the terms and conditions set forth in the BCA and the SID, SMX shareholders will receive consideration under the Scheme of 1 Parent Share per 10.3490 SMX shares having an implied value of $10.00 per Parent Share and Parent will become the holder of all of the issued shares in SMX and Lionheart, with SMX being delisted from the ASX. Under the BCA, Merger Sub will merge with and into Lionheart, with Lionheart surviving the merger as a wholly owned subsidiary of Parent, with existing Lionheart stockholders receiving Parent Shares in exchange for their existing Lionheart shares and existing Lionheart warrant holder having their warrants automatically adjusted to become exercisable in respect of Parent Shares instead of Lionheart shares, as further described in the BCA, subject to Lionheart stockholder approval and the satisfaction of various other conditions.

 

Q:	WHEN DO YOU EXPECT THE BUSINESS COMBINATION TO BE COMPLETED?

 

A:

It is currently anticipated that the Business Combination will be consummated promptly following the Special Meeting, which is set for             , 2022; however, such meeting could be adjourned, as described herein. Neither the Company nor SMX can assure you of when or if the Business Combination will be completed and it is possible that factors outside of the control of both companies could result in the Business Combination being completed at a different time or not at all. Prior to the Closing, the Company must obtain the approval of its stockholders for certain of the proposals set forth in this proxy statement/prospectus for their approval and the Company and SMX must obtain certain necessary regulatory approvals and satisfy other closing conditions. See “The Business Combination Agreement and Scheme Implementation Deed — Conditions to the Business Combination” beginning on page [●].

 

Q:	WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT COMPLETED?

 

A:

If the Business Combination Proposal is not approved and we do not consummate a business combination by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period), we will be required to dissolve and liquidate our Trust Account, unless we amend our current certificate of incorporation (which requires the affirmative vote of the holders of 65% of all then outstanding shares of common stock) and amend certain other agreements into which we have entered to extend the life of the Company.

 

Q:	HOW WILL THE COMPANY BE MANAGED AND GOVERNED FOLLOWING THE BUSINESS COMBINATION?

 

A:

The Company does not currently have any management-level employees other than Ophir Sternberg, our Chairman, President and Chief Executive Officer, Paul Rapisarda, our Chief Financial Officer, and Faquiry Diaz, our Chief Operating Officer. Following the Closing, the current management team of SMX are expected to be the Parent’s executive officers, including Haggai Alon and Limor Moshe Lotker. See “Management of the Post-Combination Company Following the Business Combination” for more information. Following the Closing, the Board will consist of the following seven members: Amir Bader, Haggai Alon, Ophir Sternberg, Pauline Khoo, Roger Meltzer, Thomas Hawkins and Zeren Browne. In addition, following the Closing, we expect that a majority of the directors will be “independent” under applicable Nasdaq listing rules. See the section entitled “Management of the Post-Combination Company Following the Business Combination” beginning on page [●] for more information.

 

Q:	WHAT EQUITY STAKE WILL CURRENT STOCKHOLDERS, THE INITIAL STOCKHOLDERS, AND THE COMPANY PUBLIC STOCKHOLDERS HOLD IN THE POST-COMBINATION COMPANY?

 

A:	It is anticipated that, upon completion of the Business Combination, and assuming (1) the no redemption scenario and (2) that the holders of the Company’s existing Company Public Warrants and Company Private

 

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Warrants exercise those warrants: (i) the Company Public Stockholders will hold approximately [●]% of the Parent Shares of the Post-Combination Company; (ii) the Initial Stockholders will hold approximately [●]% of the Parent Shares of the Post-Combination Company; and (iii) the [●] (or their designees) will acquire approximately [●]% of the Parent Shares of the Post-Combination Company. Additionally, we anticipate that the Sponsor and its affiliates will hold, assuming exercise and conversion of all securities, 7.53%, 8.10%, 9.52% and 9.97% of the Parent Shares of the Post-Combination Company, respectively, under the no redemption, the 25% redemption, the 75% redemption and the maximum redemption scenarios. Such ownership percentages will be affected by the level of redemptions by Company Public Stockholders and the exercise of outstanding warrants. See “Summary — Impact of the Business Combination on Parent’s Public Float.”

 

Q:	FOLLOWING THE BUSINESS COMBINATION, WILL THE COMPANY’S COMMON STOCK CONTINUE TO TRADE ON A STOCK EXCHANGE?

 

A:

Yes. We intend to apply to list the Parent Shares and Parent Warrants on Nasdaq under the symbols “SMX” and “SMXW,” respectively,” upon the closing of the Business Combination. At the Closing, each Unit will separate into its components, comprising one share of Class A Common Stock and one-half of one Company Public Warrant. Following the Closing, SMX will list on Nasdaq via Parent to be named “SMX Public Limited Company.”

 

Q:	WHAT CONDITIONS MUST BE SATISFIED TO COMPLETE THE BUSINESS COMBINATION?

 

A:

There are a number of closing conditions in the BCA and the SID, including the approval by the stockholders of the Company of the Business Combination Proposal. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “Business Combination Agreement and Scheme Implementation Deed — Conditions to the Closing the Business Combination.”

 

Q:	WHAT IS THE PIPE INVESTMENT?

 

A:

We are actively pursuing to enter into subscription agreements (collectively, the “Subscription Agreements”) with certain institutional and accredited investors (collectively, the “PIPE Investors”), pursuant to which, among other things, we will agree to issue and sell, in private placements to close immediately prior to the closing of the Business Combination, up to $25 million in the aggregate, in securities of the Company.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

 

Q:	WHEN AND WHERE IS THE SPECIAL MEETING?

 

A:

The Special Meeting will be held at [●] a.m. Eastern Time, on [●], 2022 in virtual format. The Special Meeting can be accessed by visiting [●], where Company stockholders will be able to listen to the meeting live and vote during the meeting. Additionally, Company stockholders have the option to listen to the Special Meeting by dialing [●] (toll-free within the U.S. and Canada) or [●] (outside of the U.S. and Canada, standard rates apply). The passcode for telephone access is [●], but please note that Company stockholders who choose to participate telephonically cannot vote or ask questions. Company stockholders who wish to join the Special Meeting telephonically may be counted as present, vote at and examine the list of Company stockholders entitled to vote at the Special Meeting by visiting and entering the control number included in the proxy card, voting instruction form or notice included in their proxy materials.

Company stockholders of record will need their respective control number to join the Special Meeting. Company stockholders may obtain their control number from the proxy card, voting instruction form or notice received from Broadridge Financial Solutions (“Broadridge”). Any Company stockholder who holds his, her or its position through a bank or broker and would like to join the Special Meeting must contact Broadridge at [●], or www.[●].com to obtain a control number. In light of ongoing public health concerns regarding the COVID-19 pandemic, the Special Meeting will be held in virtual meeting format only. Company stockholders will not be able to attend the Special Meeting physically.

 

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Q:	WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY?

 

A:	Company stockholders are being asked to vote on the following:

 

•

A proposal to adopt the BCA and the transactions contemplated thereby. See the section entitled “Proposal No. 1 — The Business Combination Proposal.”

 

•

A proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, (A) to ensure that any supplement or amendment to the accompanying proxy statement/prospectus that the Lionheart Board has determined in good faith is required by applicable law to be disclosed to Company stockholders and for such supplement or amendment to be promptly disseminated to Company stockholders prior to the Special Meeting, (B) if, as of the time for which the Special Meeting is originally scheduled, there are insufficient shares of common stock represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the Special Meeting or (C) to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal. See the section entitled “Proposal No. 2 — The Adjournment Proposal.”

The vote of stockholders is important. Stockholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

 

Q:	ARE THE PROPOSALS CONDITIONED ON ONE ANOTHER?

 

A:

No. The Closing is conditioned on the approval of the Business Combination Proposal at the Special Meeting, subject to the terms of the BCA and the SID. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. If we do not consummate the Business Combination and fail to complete an initial business combination by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period), we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to the Public Stockholders.

 

Q:	WHAT IS SMX’s BUSINESS?

 

A:

SMX provides one solution to solve both authentication and track and trace challenges in order to uphold supply chain integrity and provide quality assurance and brand accountability to producers of goods. Its technology works as a track and trace system using a marker, a reader and an algorithm to identify embedded sub-molecular particles in order to track and trace different components along a production process (or any other marked good along a supply chain) to the end producer.

 

Q:	WHY IS THE COMPANY PROPOSING THE BUSINESS COMBINATION?

 

A:

We are a blank check company incorporated as a Delaware corporation on January 28, 2021 and incorporated for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Our acquisition plan is not limited to a particular industry or geographic region for purposes of consummating an initial business combination. However, we (a) must complete an initial business combination with one or more target businesses that together have a fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into the initial business combination and (b) are not, under the Existing Charter, permitted to effect an initial business combination with a blank check company or a similar company with nominal operations.

We have identified several criteria and guidelines we believe are important for evaluating acquisition opportunities. We use these criteria and guidelines in evaluating acquisition opportunities, but we can decide

 

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to enter into an initial business combination with a target business that does not meet these criteria and guidelines. We are seeking to acquire companies that we believe: (a) can utilize the extensive networks we have built in the real estate industries; (b) have a defensible core business, sustainable revenues and established customer relationships; (c) are undergoing change in capital structure, strategy, operations or growth; (d) can benefit from our operational and strategic approach; (e) offer a unique value proposition with transformational potential that can be substantiated during our detailed due diligence process; and (f) have reached a transition point in their lifecycle presenting an opportunity for transformation. Based on its due diligence investigations of SMX and the industry in which it operates, including the financial and other information provided by SMX in the course of their negotiations in connection with the Business Combination, the Lionheart Board has unanimously determined that the Business Combination with SMX is fair and advisable to, and in the best interests of, the Company and its stockholders. See the section entitled “The Business Combination Proposals — Lionheart’s Board of Directors’ Reasons for the Approval of the Business Combination.”

 

Q:	DID THE LIONHEART BOARD OBTAIN A FAIRNESS OPINION IN DETERMINING WHETHER OR NOT TO PROCEED WITH THE BUSINESS COMBINATION?

 

A:

Yes. The Lionheart Board obtained a fairness opinion from Scura Partners, dated July 24, 2022, which provided that, as of that date and based on and subject to the assumptions, qualifications and other matters set forth therein, (i) the consideration in the Transactions is fair from a financial point of view to the Company and (ii) the fair market value of SMX equals or exceeds 80% of the amount held by the Company in trust for benefit of its public stockholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account). The opinion of Scura Partners was limited to the fairness of the aggregate consideration to be received by all of the Lionheart stockholders, collectively as a group, including the Sponsor and its affiliates. Scura Partners did not express an opinion as to the fairness or the differences in consideration to be given to the Sponsor and its affiliates as opposed to all other stockholders of Lionheart. See the section entitled “The Business Combination Agreement — Fairness Opinion of Scura Partners LLC” of this proxy statement/prospectus for additional information.

 

Q:	WHY IS THE COMPANY PROVIDING STOCKHOLDERS WITH THE OPPORTUNITY TO VOTE ON THE BUSINESS COMBINATION?

 

A:

We are seeking approval of the Business Combination for purposes of complying with our Existing Charter. In addition, pursuant to the Existing Charter, we must provide all Company Public Stockholders with the opportunity to redeem all or a portion of their Company Public Shares upon the consummation of an initial business combination (as defined in our Existing Charter), either in conjunction with a tender offer or in conjunction with a stockholder vote to approve such initial business combination. If we submit an initial business combination to the stockholders for their approval, our Existing Charter requires us to conduct a redemption offer in conjunction with the proxy solicitation (and not in conjunction with a tender offer) pursuant to the applicable SEC proxy solicitation rules.

 

Q:	DO SMX SHAREHOLDERS NEED TO APPROVE THE BUSINESS COMBINATION?

 

A:	SMX shareholders are separately voting to approve the Scheme and the Capital Reduction as discussed in the section entitled “The Business Combination Agreement and Scheme Implementation Deed”.

 

Q:	DO I HAVE REDEMPTION RIGHTS?

 

A:

If you are a holder of Company Public Shares, you have the right to demand that the Company redeem such shares for a pro rata portion of the cash held in the Trust Account, which holds the proceeds of the IPO, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes) upon the Closing (“Redemption Rights”).

Notwithstanding the foregoing, a holder of Company Public Shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in

 

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Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption with respect to more than 15% of the Public Shares without our consent. Accordingly, all Company Public Shares in excess of 15% held by a Company Public Stockholder, together with any affiliate of such stockholder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed without our consent.

Under the Existing Charter, the Business Combination may be consummated only if the Company has at least $5,000,001 of net tangible assets after giving effect to all redemption requests from holders of Company Public Shares that properly demand redemption of their shares for cash.

 

Q:	WILL MY VOTE AFFECT MY ABILITY TO EXERCISE REDEMPTION RIGHTS?

 

A:

No. You may exercise your redemption rights whether you vote your Company Public Shares for or against, or whether you abstain from voting on, the Business Combination Proposal or any other Proposal described in this proxy statement/prospectus. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Company Public Shares and no longer remain stockholders, and the Business Combination may be consummated even though the funds available from the Trust Account and the number of Company Public Stockholders are substantially reduced as a result of redemptions by Company Public Stockholders. The Sponsor, the Underwriters, SMX, Parent and/or their respective affiliates may purchase shares of Class A Common Stock on the open market. Such purchases (“Open Market Purchases”) will be made prior to the Special Meeting and will be separate from the redemption process conducted in connection with the Business Combination. The purposes of any Open Market Purchases would be to reduce the number of shares of Class A Common Stock that may be redeemed in connection with the Business Combination, and may include a business decision to increase such purchaser’s ownership at an attractive price. The Sponsor, the Underwriters, SMX, Parent and/or their respective affiliates shall only make Open Market Purchases to the extent the price per Class A Common Stock so acquired is no higher than the redemption price that would be available in connection with the redemption procedures described in this proxy statement/prospectus. In addition, the Sponsor, the Underwriters, SMX, Parent and the stockholders and/or their respective affiliates will waive any redemption rights with respect to any shares of Class A Common Stock purchased in Open Market Purchases and will not vote any shares of Class A Common Stock purchased in Open Market Purchases in favor of the Proposals.

 

Q:	HOW DO I EXERCISE MY REDEMPTION RIGHTS?

 

A:

In order to exercise your redemption rights, you must (i) if you hold Company Public Units, separate the underlying Company Public Shares and Company Public Warrants, and (ii) prior to 5:00 p.m. Eastern Time on, [●], 2022 (two business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your Company Public Shares for cash to Continental Stock Transfer & Trust Company, our transfer agent (“Transfer Agent”), at the following address:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

Attention: Mark Zimkind

Email: Mzimkind@continentalstock.com

Please check the box on the enclosed proxy card marked “Stockholder Certification” if you are not acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of common stock. Notwithstanding the foregoing, a holder of the Company Public Shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares of Class A Common Stock included in the Company Public Units sold in our IPO. Accordingly, all Company Public Shares in excess of the 15% threshold beneficially owned by a Company Public Stockholder or group will not be redeemed for cash without our prior consent.

 

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Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, we do not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name” are required to either tender their certificates to our Transfer Agent prior to the date set forth in these proxy materials, or up to two business days prior to the vote on the Business Combination Proposal at the Special Meeting, or to deliver their shares to the Transfer Agent electronically using Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system, at such stockholder’s option. The requirement for physical or electronic delivery prior to the Special Meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

For a discussion of the material U.S. federal income tax considerations for holders of Company Public Shares with respect to the exercise of these redemption rights, see “Certain Material U.S. Federal Income Tax Considerations” beginning on page [●].

 

Q:	DO I HAVE APPRAISAL RIGHTS IF I OBJECT TO THE PROPOSED BUSINESS COMBINATION?

 

A:	Holders of our Class A Common Stock are not entitled to appraisal rights in connection with the Business Combination under the DGCL. Holders of our Class B Common Stock have appraisal rights in certain circumstances as provided for under the DGCL.

 

Q:	WHAT HAPPENS TO THE FUNDS DEPOSITED IN THE TRUST ACCOUNT AFTER CONSUMMATION OF THE BUSINESS COMBINATION?

 

A:

A total of $126,250,000 in net proceeds of the IPO was placed in the Trust Account following the IPO. After consummation of the Business Combination, the funds in the Trust Account will be used to pay holders of the Company Public Shares who exercise redemption rights, to pay fees and expenses incurred in connection with the Business Combination (including aggregate fees of up to $4,375,000 as deferred underwriting commissions) and for the Post-Combination Company’s working capital and general corporate purposes. We currently have $126,425,233 remaining in our Trust Account to consummate a business combination or to fund any additional redemptions that could be requested as more fully provided herein.

 

Q:	WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT CONSUMMATED?

 

A:

There are certain circumstances under which the BCA and the SID may be terminated. Please see the section entitled “The Business Combination Agreement and Scheme Implementation Deed — Termination of the Business Combination Agreement” and “— Termination of the SID” for information regarding the parties’ specific termination rights.

 

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If we do not consummate the Business Combination, we may continue to try to complete a business combination with a different target business until December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period). Unless we amend the Existing Charter (which requires the affirmative vote of the holders of 65% of all then outstanding shares of Common Stock) and amend certain other agreements into which we have entered to extend the life of the Company, if we fail to complete an initial business combination by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period), then we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem our Company Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to the Company to pay its taxes (less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding Company Public Shares, which redemption will completely extinguish our Company Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Lionheart Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the IPO. See the section entitled “Risk Factors — Risks Related to the Company and the Business Combination.”

Holders of our Founder Shares have waived any right to any liquidation distribution with respect to such shares. In addition, if we fail to complete a business combination by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period), there will be no redemption rights or liquidating distributions with respect to our outstanding warrants, which will expire worthless.

 

Q:	HOW DO THE SPONSOR, AND OUR DIRECTORS AND OFFICERS INTEND TO VOTE ON THE PROPOSALS?

 

A:

The Sponsor and the Company’s directors and officers are entitled to vote an aggregate of 22.0% of the outstanding shares of common stock (which includes the Founder Shares and the Company Private Shares). The Company has entered into a letter agreement with the Sponsor and our directors and officers pursuant to which, among other things, each such person has agreed to vote all shares of our common stock owned by them in favor of the Proposals. However, we intend to waive such obligations of the Sponsor, our directors and/or our officers to vote their shares of common stock in favor of the Proposals in respect of any shares purchased by such purchasers in Open Market Purchases. The underwriters of our IPO, have agreed to vote shares of our common stock held by them in favor of the Business Combination. However, we intend to waive such obligations of the Underwriters to vote their shares of common stock in favor of the Proposals in respect of any shares purchased by the Underwriters in Open Market Purchases. As a result, in addition to the shares of common stock held by the Underwriters, the Sponsor and our officers and directors, we may need only 4,487,501, or 35.9% (assuming all outstanding shares are voted), or approximately 3.85% (assuming only the minimum number of shares representing a quorum are voted), of the Company Public Shares to be voted in favor of the Business Combination Proposal in order to have the Business Combination Proposal approved.

 

Q:	WHAT CONSTITUTES A QUORUM AT THE SPECIAL MEETING?

 

A:

A majority of the voting power of the common stock entitled to vote at the Special Meeting must be present, in person or represented by proxy at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The Underwriters, the Sponsor and our directors and officers, who

 

15

collectively currently own 22.0% of the issued and outstanding shares of common stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. As of the Record Date for the Special Meeting, [●] shares of common stock would be required to be present in person or represented by proxy to achieve a quorum.

 

Q:	WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE SPECIAL MEETING?

 

A:

The Business Combination Proposal: The approval of the Business Combination Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon at the Special Meeting, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Business Combination Proposal, will have no effect on the Business Combination Proposal. Company stockholders must approve the Business Combination Proposal in order for the Business Combination to occur.

The Adjournment Proposal: The approval of the Adjournment Proposal, if presented, requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon at the Special Meeting, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Adjournment Proposal, will have no effect on the Adjournment Proposal. The Business Combination is not conditioned on the approval of the Adjournment Proposal.

The Company has entered into a letter agreement with the Sponsor and our directors and officers pursuant to which, among other things, each such person has agreed to vote all shares of our common stock owned by it, him or her in favor of the Proposals. However, we intend to waive such obligations of the Sponsor, our directors and/or our officers to vote their shares of common stock in favor of the Proposals in respect of any shares purchased by such purchasers in Open Market Purchases. Nomura, Northland Securities, Inc. (“Northland”) and Drexel Hamilton, LLC (“Drexel”), the underwriters of our IPO, have agreed to vote any shares of our common stock held by it in favor of the Business Combination. However, we intend to waive such obligations of the Underwriters to vote their shares of common stock in favor of the Proposals in respect of any shares purchased by the Underwriters in Open Market Purchases.

 

Q:	DO ANY OF THE COMPANY’S OFFICERS OR DIRECTORS HAVE INTERESTS IN THE BUSINESS COMBINATION THAT MAY DIFFER FROM OR BE IN ADDITION TO THE INTERESTS OF STOCKHOLDERS?

 

A:	The Sponsor and our directors and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Proposals. These interests include:

 

•

the fact that our Initial Stockholders have agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve the proposed Business Combination;

 

•

the fact that Ophir Sternberg, Roger Meltzer and Thomas Hawkins will serve as directors of the Post-Combination Company. Ophir Sternberg, Roger Meltzer and Thomas Hawkins are affiliated with the Company. Ophir Sternberg currently serves as the Company’s Chairman, President and Chief Executive Officer and Roger Meltzer and Thomas Hawkins currently serve as directors of the Company;

 

•

the fact that the Sponsor paid an aggregate of $25,000 for 2,875,000 Founder Shares in January 2021. Without giving effect to the sales or transfer of Founder Shares to the Underwriters and in connection with the IPO to certain insiders, the remaining 3,125,000 Founder Shares will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would

 

16

be valued at approximately $31,250,000 but, given the restrictions on such shares, we believe such shares have less value;

 

•

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period) (or such later date as may be approved by the Company’s stockholders);

 

•

the fact that the Sponsor paid an aggregate of $2,750,000 for Company Private Units comprised of 275,000 shares of Class A Common stock and 137,500 Company Private Warrants to purchase shares of Class A Common Stock and that such Company Private Warrants will expire worthless if a business combination is not consummated by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period);

 

•

the continued right of the Sponsor to hold Class A Common Stock and the shares of Class A Common Stock to be issued to the Sponsor upon exercise of its Company Private Warrants following the Business Combination, subject to certain lock-up periods;

 

•

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.10 per Public Share, or such lesser per Company Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

•

the Sponsor (including its representatives and affiliates) and the Company directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to the Company. For example, each of the Company’s officers may be considered an affiliate of the Sponsor. The Sponsor and the Company’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to the Company completing its initial business combination. Moreover, certain of the Company’s directors and officers have time and attention requirements for certain other companies. The Company’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to the Company and the other entities to which they owe certain fiduciary or contractual duties.

Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in the Company’s favor and such potential business opportunities may be presented to other entities prior to their presentation to the Company, subject to applicable fiduciary duties. The Existing Charter provides that the Company renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company and such opportunity is one the Company is legally and contractually permitted to undertake and would otherwise be reasonable for the Company to pursue, and to the extent the director or officer is permitted to refer that opportunity to the Company without violating another legal obligation. For more information, see “Management of the Company — Conflicts of Interests.”

 

•

the fact that Ophir Sternberg has certain business dealings tied to shares of the Post-Combination Company. For more information, see “Certain Relationships and Related Person Transactions”;

 

•

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

•

the fact that the Sponsor and our directors and officers will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not

 

17

consummated by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period). The approximate value of Sponsor’s interest in the Post Combination Company is $34,000,000 million, consisting of 3,400,000 shares of Class B Common Stock at a price of $10.00 per share, which will automatically convert into Shares of Class A Common Stock at the Closing of the Business Combination. The cost basis of this investment was approximately $4.78 million, consisting of 3,125,000 Founder Shares at $0.008, per share, or $25,000, 275,000 private placement units at $10.00 per unit, or $2,750,000, plus 2,000,000 private warrants at a price of $1.00 per warrant, or $2,000,000;

 

•

that, at the closing of the Business Combination we will enter into the amended and restated registration rights agreement (“Registration Rights Agreement”), substantially in the form attached as Annex E to this proxy statement/prospectus, with the Sponsor and our directors and officers, which provides for registration rights to such persons and their permitted transferees;

 

•

that, Ophir Sternberg entered into a chairman agreement (“Chairman Agreement”), with Parent and Faquiry Diaz entered into an independent contractor agreement, with Parent, which provides for certain services to the Post-Combination Company and a grant of restricted stock units in the Post-Combination Company; and

 

•

that, certain independent directors of the Post-Combination Company will be granted restricted stock units in the Post-Combination Company.

These interests may influence our directors and officers in making their recommendation that you vote in favor of the approval of the Business Combination.

 

Q:	WHAT DO I NEED TO DO NOW?

 

A:

The Company urges you to read carefully and consider the information contained in this proxy statement/prospectus, including the Annexes and the other documents referred to herein, and to consider how the Business Combination will affect you as a stockholder of the Company. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

 

Q:	WHAT HAPPENS IF I SELL MY SHARES OF CLASS A COMMON STOCK BEFORE THE SPECIAL MEETING?

 

A:

The Record Date for the Special Meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Class A Common Stock after the Record Date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares of Class A Common Stock because you will no longer be able to tender them prior to the Special Meeting in accordance with the provisions described herein. If you transferred your shares of Class A Common Stock prior to the Record Date, you have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

 

Q:	HOW DO I VOTE?

 

A:

If you are a holder of record of common stock on the Record Date, you may vote in person at the Special Meeting by attending the meeting virtually or by submitting a proxy for the Special Meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. You may also vote by telephone or Internet by following the instructions printed on the proxy card.

If you hold your shares in “street name,” which means your shares are held of record by a broker, bank, or nominee, you should contact your broker, bank, or other nominee to ensure that votes related to the shares

 

18

you beneficially own are properly counted. In this regard, you must provide the broker, bank, or nominee with instructions on how to vote your shares or, if you wish to attend the meeting and vote in person, obtain a proxy from your broker, bank, or nominee.

 

Q:	IF MY SHARES ARE HELD IN “STREET NAME” BY A BROKER, BANK, OR OTHER NOMINEE, WILL MY BROKER, BANK, OR OTHER NOMINEE VOTE MY SHARES FOR ME?

 

A:

If your shares are held in “street name” in a stock brokerage account or by a broker, bank, or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank, or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to the Company or by voting in person at the Special Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank, or other nominee.

Under the rules of Nasdaq, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that Nasdaq determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the Special Meeting are “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power.

If you are a Company stockholder holding your shares in “street name” and you do not instruct your broker, bank, or other nominee on how to vote your shares, your broker, bank, or other nominee will not vote your shares on the Business Combination Proposal or the Adjournment Proposal. Such broker non-votes will will have no effect on the vote count for such other proposals.

 

Q:	WHAT IF I ATTEND THE SPECIAL MEETING AND ABSTAIN OR DO NOT VOTE?

 

A:	For purposes of the Special Meeting, an abstention occurs when a stockholder attends the meeting in person and does not vote or returns a proxy with an “abstain” vote.

If you are a Company stockholder that attends the Special Meeting virtually and fails to vote on the Business Combination Proposal and the Adjournment Proposal, your failure to vote will have no effect on the Business Combination Proposal or the Adjournment Proposal; however, your attendance will be counted for the purpose of establishing a quorum at the Special Meeting.

 

Q:	WHAT WILL HAPPEN IF I RETURN MY PROXY CARD WITHOUT INDICATING HOW TO VOTE?

 

A:	If you are a holder of record of common stock on the Record Date and you sign and return your proxy card without indicating how to vote on any particular Proposal, the common stock represented by your proxy will be voted “FOR” each of the Proposals presented at the Special Meeting.

 

Q:	MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?

 

A:	Yes. If you are a holder of record of common stock on the Record Date, you may change your vote at any time before your proxy is exercised by doing any one of the following:

 

•

send another proxy card with a later date;

 

•

notify the Company’s Secretary in writing before the Special Meeting that you have revoked your proxy; or

 

19

•

attend the Special Meeting and vote electronically by visiting and entering the control number found on your proxy card, voting instruction form or notice you previously received.

 

•

If you are a stockholder of record and you choose to send a written notice or to mail a new proxy, you must submit your notice of revocation or mail your new proxy to MacKenzie Partners, Inc., 1407 Broadway, 27th Floor, New York, New York, 10018, and it must be received at any time before the vote is taken at the Special Meeting. Any proxy that you submitted may also be revoked by submitting a new proxy by mail, or online or by telephone, not later than 11:59 p.m. Eastern Time on the day prior to the Special Meeting date, or by voting online at the Special Meeting. Simply attending the Special Meeting will not revoke your proxy. If you have instructed a broker, bank, or other nominee to vote your shares of common stock, you must follow the directions you receive from your broker, bank, or other nominee in order to change or revoke your vote.

 

Q:	WHAT HAPPENS IF I FAIL TO TAKE ANY ACTION WITH RESPECT TO THE SPECIAL MEETING?

 

A:

If you fail to take any action with respect to the Special Meeting and the Business Combination is approved by stockholders and consummated, you will become a stockholder of the Post-Combination Company. Failure to take any action with respect to the Special Meeting will not affect your ability to exercise your redemption rights. If you fail to take any action with respect to the Special Meeting and the Business Combination is not approved, you will continue to be a stockholder of the Company while the Company searches for another target business with which to complete a business combination.

 

Q:	WHAT SHOULD I DO WITH MY SHARE, AND WARRANT CERTIFICATES?

 

A:

Stockholders should not submit their certificates now, unless you are a stockholder exercising your redemption rights. After the consummation of the Transactions, Parent will send instructions to stockholders regarding the delivery of their share and warrant certificates in return for securities of Parent.

 

Q:	WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?

 

A:

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares.

 

Q:	WHAT ARE THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE BUSINESS COMBINATION TO ME?

 

A:

As described more fully under the section entitled “Certain Material U.S. Federal Income Tax Considerations — Material U.S. Federal Tax Considerations — The Business Combination” below, the Business Combination has been structured to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, though there is substantial uncertainty as to whether the requirements for a “reorganization” can be satisfied, and in the event that the Business Combination does not satisfy the requirements of a “reorganization,” the Business Combination also has been structured to, and it is the opinion of our counsel will, qualify as a transaction described in Section 351(a) of the Code. Assuming the Business Combination qualifies as a “reorganization” under Section 368(a) of the Code of a transaction described in Section 351(a) of the Code, U.S. holders (as defined below) should not generally recognize gain or loss for U.S. federal income tax purposes with respect to the shares that they own as a result of the Business Combination. Should the Business Combination not satisfy the requirements of a “reorganization,” qualifying only as a transaction described in Section 351(a) of the Code, the exchange of Company Public Warrants for Parent Warrants would be taxable. For a more detailed discussion of certain material U.S.

 

20

federal income tax considerations that may be relevant to a U.S. holder in respect of the Business Combination, please see the section titled “Certain Material U.S. Federal Income Tax Considerations.”

 

Q:	WHAT ARE THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY REDEMPTION RIGHTS?

 

A:

Whether the redemption is subject to U.S. federal tax depends on the particular facts and circumstances. For instance, if the redemption were to occur after December 31, 2022, the Excise Tax (as defined below) may apply to the Business Combination which may have a material impact on a holder’s economic return. The Excise Tax, if imposed, will create a tax liability on the Company repurchasing shares after the Business Combination and not on the shareholders who exercise their redemption rights. The Company’s Existing Charter permits the use of interest earned on the proceeds placed in the Trust Account to pay taxes that may be levied on the Company, including the possible Excise Tax. For a more detailed discussion of certain material U.S. federal tax considerations that may be relevant to a U.S. holder (as defined below) in respect of the exercise of redemption rights, please see the section titled “Certain Material U.S. Federal Income Tax Considerations.”

 

Q:	WHO CAN HELP ANSWER MY QUESTIONS?

 

A:	If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact our proxy solicitor, MacKenzie Partners, Inc.:

1407 Broadway, 27^th Floor

New York, New York 10018

(212) 929-5500 (Call Collect)

or

Call Toll-Free (800) 322-2885

Email:

proxy@mackenziepartners.com

You may also obtain additional information about the Company from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of Public Shares and you intend to seek redemption of your Company Public Shares, you will need to deliver your stock (either physically or electronically) to our transfer agent at the address below prior to the vote at the Special Meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the Business Combination and the proposals to be considered at the special meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section entitled “Where You Can Find More Information.” Each item in this summary refers to sections of this proxy statement on what that subject is discussed in more detail.

Parties to the Business Combination

Lionheart III Corp

The Company is a blank check company incorporated on January 14, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

The Company’s securities are traded on Nasdaq under the ticker symbols “LION,” “LIONU” and “LIONW.” The mailing address of the Company’s principal executive office is 4218 NE 2nd Avenue, Miami, Florida 33137 and the telephone number of the Company’s principal executive office is (305) 573-3900.

Security Matters Limited

Security Matters Limited (together with its subsidiaries, “SMX”) provides one solution to solve both authentication and track and trace challenges in order to uphold supply chain integrity and provide quality assurance and brand accountability to producers of goods. Its technology works as a track and trace system using a marker, a reader and an algorithm to identify embedded sub-molecular particles in order to track and trace different components along a production process (or any other marked good along a supply chain) to the end producer

SMX was incorporated in May 2018 under Australian law. In October 2018, SMX was listed on the Australian Securities Exchange under the symbol “SMX.”

The mailing address of SMX’s principal executive office is Level 25, 525 Collins Street, Melbourne, VIC, Australia, 3000 and its telephone number is +61 3 9321 9888.

For more information about SMX, see the sections entitled “Business of Security Matters” and “Security Matters’ Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

Parent

Parent will serve as a holding company for SMX and Lionheart after consummation of the Transactions. Parent’s current sole shareholder is Doron Afik.

Parent was formed on July 1, 2022 as a public limited company under the name Empatan Public Limited Company, incorporated in Ireland. Parent’s principal executive office is located at Mespil Business Centre, Mespil House, Sussex Road, Dublin 4, Ireland, D04 T4A6. Parent’s telephone number is +353 1 920 1000. Parent is newly incorporated for the purposes of becoming a holding company following the Business Combination. Accordingly, Parent has no operation activities and only has nominal assets consisting of cash and cash equivalents and no liabilities. As such, no financial statements of Parent are required or included in this proxy statement/prospectus. After the consummation of the Transactions, Parent will become the continuing public company. Parent expects to apply to list its shares on Nasdaq under the symbols “SMX” and “SMXW”, respectively.

 

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Merger Sub

Merger Sub was formed solely as a vehicle for consummating the Merger under the name Aryeh Merger Sub, Inc., and is a wholly owned subsidiary of Parent.

Merger Sub, a Delaware corporation , was formed on July 22, 2022. Merger Sub’s principal executive office is located at K&L Gates LLP, Level 25, 525 Collins Street, Melbourne VIC 3000, Australia. Merger Sub’s telephone number is +61-3-9205-2000. After the consummation of the Transactions, it will cease to exist.

Emerging Growth Company

Parent qualifies as an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), which means that it can take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation (to the extent applicable to a foreign private issuer).

Parent could remain an emerging growth company until the last day of Parent’s fiscal year following the fifth anniversary of Lionheart’s initial public offering. However, if Parent’s annual gross revenue is $1.07 billion or more, if its non-convertible debt issued within a three year period exceeds $1 billion or the market value of its shares that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, Parent would cease to be an emerging growth company as of the following fiscal year.

Foreign Private Issuer

Parent will be a “foreign private issuer” as defined under the Exchange Act. As a foreign private issuer under the Exchange Act, Parent will be exempt from certain rules under the Exchange Act, including the proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations. Moreover, Parent will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic U.S. companies with securities registered under the Exchange Act, and Parent will not be required to comply with Regulation FD, which imposes certain restrictions on the selective disclosure of material information. In addition, Parent’s officers, directors and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of Parent Shares.

As a foreign private issuer, Parent will also be permitted to follow certain home country corporate governance practices instead of those otherwise required under the applicable rules of Nasdaq for domestic U.S. issuers. In order to rely on this exception, Parent is required to disclose each Nasdaq rule that it does not intend to follow and describe the home country practice that Parent will follow in lieu thereof. Parent does not currently intend to follow any Irish corporate governance practices in lieu of Nasdaq corporate governance rules.

The Business Combination, the BCA and the SID

The Business Combination Agreement

The terms and conditions of the Business Combination are contained in the BCA and the SID, which are attached as Annex A and Annex B, respectively, to this proxy statement/prospectus. We encourage you to read the BCA and the SID carefully, as they are the legal documents that govern the Business Combination.

Subject to the terms and conditions set forth in the BCA and the SID, including the approval of Lionheart’s stockholders, the parties thereto will enter into a business combination transaction (the “Business Combination”), pursuant to which, among other things Merger Sub shall be merged with and into Lionheart with Lionheart continuing as a wholly owned subsidiary of Parent.

 

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Scheme Implementation Deed

Under the SID, SMX has agreed to propose a scheme of arrangement under Part 5.1 of the Corporations Act (“Scheme”) and capital reduction (“Capital Reduction”) which, if implemented, will result in all shares in SMX being cancelled in return for the issuance of ordinary shares of Parent (“Parent Shares”), with Parent then being issued one share in SMX (“SMX Shares”) (resulting in SMX becoming a wholly owned subsidiary of Parent), subject to SMX shareholder approval, Australian court approval and the satisfaction of various conditions.

In addition, SMX has agreed to propose an option scheme of arrangement under Part 5.1 of the Corporations Act (“Option Scheme”) which, if implemented, will result in the SMX options held by participants in the Option Scheme being subject to a cashless exercise based on a Black-Scholes valuation, in exchange for SMX Shares. Under the Scheme those shares will be cancelled and such participants receiving Parent Shares on the basis of the Scheme consideration, subject to SMX option holder approval, Australian court approval and the satisfaction of various conditions.

Consideration

Subject to the terms and conditions set forth in the BCA and the SID, SMX shareholders will receive consideration under the Scheme of 1 Parent Share per 10.3490 SMX shares having an implied value of $10.00 per Parent Share and Parent will become the holder of all of the issued shares in SMX and Lionheart, with SMX being delisted from the ASX.

Under the BCA, Merger Sub will merge with and into Lionheart, with Lionheart surviving the merger as a wholly owned subsidiary of Parent, with existing Lionheart stockholders receiving Parent Shares in exchange for their existing Lionheart shares and existing Lionheart warrant holders having their warrants automatically adjusted to become exercisable in respect of Parent Share instead of Lionheart shares (“Parent Warrants”), as further described in the BCA, subject to Lionheart stockholder approval and the satisfaction of various other conditions.

Conditions to the Closing of the Business Combination

Conditions to the Obligations of Each Party

The obligations of SMX, Lionheart, Parent and Merger Sub to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) of certain condition precedents of the SID.

Conditions to the Obligations of Lionheart

The obligations of the Company to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) of additional conditions, including:

 

•

certain conditions precedent of the SID;

 

•

the Scheme and the Option Scheme becoming effective;

 

•

the Company, Parent and Merger Sub having performed or complied in all material respects with all agreements and covenants required by the BCA;

 

•

delivery of certain certificates required by the SID;

 

•

delivery of the Registration Rights Agreement, Lock-up Agreement and Voting Agreement, each duly executed by Parent and certain shareholders of Parent;

 

•

stockholder approval of the Proposals described above; and

 

•

certain employment and consulting agreements shall not have been terminated.

 

24

Conditions to the Obligations of SMX

The obligations of SMX, Parent and Merger Sub to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) of additional conditions, including:

 

•

certain conditions precedent of the SID;

 

•

the Company having performed or complied in all material respects with all other agreements and covenants required by the BCA;

 

•

delivery of certain certificates required by the SID;

 

•

delivery of resignation letters from the officers and directors of the Company;

 

•

delivery of the Registration Rights Agreement, Lock-up Agreement and Voting Agreement, each duly executed by certain shareholders of Parent; and

 

•

approval of the stockholders of Parent and Merger Sub, approving the BCA and the Business Combination.

Conditions to the Closing the Scheme and Option Scheme

The obligations of the parties to consummate the Scheme and Option Scheme are subject to the satisfaction or waiver (where permissible) of certain condition precedents, including:

Certain Conditions Which Cannot be Waived

 

•

approval by the SMX shareholders, approving the Scheme and the Capital Reduction;

 

•

approval by the SMX option holders, approving the Option Scheme;

 

•

approval by the Court, approving the Scheme and Option Scheme; and

 

•

approval by the board of directors of Parent approving the issuance of Parent Shares in connection with the Business Combination, the issuance of the Parent Shares to be issued as Scheme Consideration and the issuance of the Parent Shares to be issued as Cancellation Consideration.

Certain Conditions for the Benefit of the Company and SMX

 

•

the Company and SMX shall have obtained all material regulatory approvals which the Company and SMX agree are necessary or desirable to implement the Scheme, the Option Scheme and the Business Combination;

 

•

no order, temporary restraining order, preliminary or permanent injunction, decree or ruling issued by a court of competent jurisdiction or governmental authority in effect, imposing a legal restraint or prohibition preventing the Scheme, Option Scheme or the Business Combination;

 

•

the Parent Shares and the Parent Warrants have been approved for quotation on NASDAQ, subject only to official notice of issuance;

 

•

the Company and SMX shall have collectively at least US$5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act);

 

•

the Company and SMX shall be reasonably expected to have, immediately following the Implementation Date (as defined in the SID) at least US$5,000,001 of net tangible asset (as determined in accordance with 3a51-1(g)(1) of the Exchange Act) assuming certain redemptions as described in the SID;

 

•

entry by Parent into a composition agreement with the Revenue Commissioners of Ireland and a special eligibility agreement for Securities with the Depository Trust Company in respect of the Parent Shares and Parent Warrants;

 

25

•

evidence that Parent qualifies as a foreign private issuer pursuant to Rule 3b-4 of the Exchange Act; and

 

•

in the case of the Option Scheme, the Scheme becoming effective.

Certain Conditions for the Benefit of the Company

 

•

the registration statement being declared effective;

 

•

approval by Company stockholders of the Proposals described above;

 

•

SMX, SMX’s subsidiaries and Parent having performed or complied in all material respects with the obligations, covenants, and agreements required to be performed or complied with by the SID;

 

•

the accuracy of certain representations and warranties of SMX and Parent, subject to the materiality standards provided in the SID;

 

•

no SMX Material Adverse Effect or SMX Prescribed Event (each, as defined in the SID) has occurred;

 

•

delivery of certain transaction documents referenced in the BCA;

 

•

compliance with obligations relating to certain options and convertible notes as described in the SID; and

 

•

certain employment and consulting agreements shall not have been terminated.

Certain Conditions for the Benefit of SMX

 

•

issuance of an independent expert’s report concluding that the Capital Reduction and Scheme are in the best interests of SMX shareholders;

 

•

the Company and its subsidiaries having performed or complied in all material respects with the obligations, covenants, and agreements required to be performed or complied with by the SID;

 

•

the accuracy of certain representations and warranties of the Company, subject to the materiality standards provided in the SID;

 

•

no Lionheart Material Adverse Effect or Lionheart Prescribed Event (each, as defined in the SID) has occurred; and

 

•

delivery of certain transaction documents referenced in the BCA.

Termination of the Business Combination Agreement

The BCA may be terminated under certain customary and limited circumstances prior to the Second Court Date, including (a) by mutual written consent of Lionheart and SMX, (b) by either Lionheart or SMX if the Effective Date has not occurred prior to the End Date, (c) by either Lionheart or SMX, as applicable, in each instance that a party is entitled to terminate the SID that is not otherwise addressed in the BCA, (d) by either Lionheart or SMX if Lionheart fails to obtain approval of certain proposals to be set forth in this proxy Statement/prospectus, (e) by either Lionheart or SMX if the SID has been terminated in accordance with its terms, (f) by Lionheart if SMX, Parent or Merger Sub has breached or failed to perform any of its covenants or agreements set forth in the BCA such that the condition requiring material compliance with covenants would not be satisfied (provided if such breach is curable by SMX, Parent or Merger Sub, Lionheart may not terminate the BCA pursuant to this provision for so long as SMX, Parent or Merger Sub continues to exercise its reasonable efforts to cure such breach, unless such breach is not cured by the earlier of thirty (30) days after notice of such breach is provided by Lionheart to SMX and the End Date) or (g) by SMX if Lionheart has breached or failed to perform any of its covenants or agreements set forth in the BCA such that the condition requiring material compliance with covenants would not be satisfied (provided if such breach is curable by Lionheart, SMX may

 

26

not terminate the BCA pursuant to this provision for so long as Lionheart continues to exercise its reasonable efforts to cure such breach, unless such breach is not cured by the earlier of thirty (30) days after notice of such breach is provided by SMX to Lionheart and the End Date).

Termination of the SID

The SID may be terminated under certain customary and limited circumstances prior to 8:00 am on the Second Court Date (as defined in the SID), including: (a) by either party if the Scheme has not become Effective (as defined in the SID) on or before May 8, 2023 (the “End Date”); (b) by Lionheart if at any time prior to 8:00 am on the Second Court Date any member of the SMX Board of Directors (i) fails to make, changes, withdraws or adversely modifies his or her recommendation in favor of the transaction or otherwise makes a public statement indicating that such director no longer supports the transaction or (ii) recommends, supports or endorses a SMX Competing Transaction, (c) by SMX if at any time prior to 8:00 am on the Second Court Date any member of the Lionheart Board of Directors (i) fails to make, changes, withdraws or adversely modifies his or her recommendation in favor of certain proposals or otherwise makes a public statement indicating that such director no longer supports such proposals or (ii) recommends, supports or endorses a Lionheart Competing Transaction, (c) by Lionheart or SMX, on or prior to the Second Court Date, if the other party is in material breach of a term of the SID (other than a representation and warranty not being true) and such breach continues to exist 30 business days (or any shorter period ending on the Second Court Date) after notice thereof, (e) by SMX at any time prior to 8:00am on the Second Court Date if the SMX Board of Directors determinates, after giving effect to matching rights of Lionheart, that an SMX Competing Transaction is a SMX Superior Proposal (as defined in the SID), (f) under certain circumstances, when a condition to closing (including a condition regarding accuracy of each of SMX’s and Lionheart’s representations and warranties and the condition relating to approval of Lionheart stockholders ) is not satisfied, (h) if agreed in writing by Lionheart and SMX, and (g) if the BCA is terminated in accordance with its terms.

Other Agreements Related to the Business Combination Agreement

Lock-up Agreements

Prior to the Second Court Date, certain shareholders will enter into lock-up agreements (each, a “Lock-up Agreement”) with the Parent pursuant to which, among other things, such shareholders will agree not to offer, sell, contract to sell or otherwise dispose of, directly or indirectly, any Parent Shares beneficially owned by such shareholders immediately following the closing (the “Lock-Up”), other than (i) Parent Shares transferred to a pledgee pursuant to a bona fide pledge after a default in the obligation secured by the pledge and (ii) the ability of the shareholders to pledge any such Parent Shares in connection with securing financing or otherwise. Certain directors and officers of SMX and Lionheart will enter into Lock-up Agreements that terminate upon the earlier to occur of (a) fourteen months after the Closing Date and (b) if, subsequent to the Closing Date, the Parent consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the Parent’s shareholders having the right to exchange their Parent Shares for cash, securities or other property, provided that 10% of the Parent Shares will not be subject to the Lock-Up and 25% of the Parent Shares that are subject to the Lock-Up will no longer be subject to the Lock-Up if the Parent Shares trade at or above $12.50 per share for twenty (20) Nasdaq Stock Market trading days in any 30-day period commencing after the Closing Date. Lionheart Equities, LLC, Lionheart’s sponsor, and its members (other than those members who enter into the fourteen month Lock-up Agreement referenced above) will enter into Lock-up Agreements that terminate upon the earlier to occur of (a) six months after the Closing Date and (b) if, subsequent to the Closing Date, the Parent consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the Parent’s shareholders having the right to exchange their Parent Shares for cash, securities or other property provided that 10% of the Parent Shares will not be subject to the Lock-Up and 25% of the Parent Shares will no longer be subject to the Lock-Up if the Parent Shares trade at or above $12.50 per share for twenty (20) Nasdaq Stock Market trading days in any 30-day period commencing after the Closing Date. The form of Lock-up Agreement is attached to this proxy statement as Annex G.

 

27

Amended and Restated Sponsor Agreement

Lionheart entered into an amended and restated Sponsor Agreement (the “A&R Sponsor Agreement”) with Lionheart Equities, LLC (the “Sponsor”) and certain directors and officers of Lionheart (the “Insiders”) pursuant to which the Sponsor and Insiders have agreed to take, or not take, certain actions, including: (a) to vote any shares of common stock of Lionheart owned by it, him or her (all such shares of common stock, the “Covered Shares”) in favor of the Business Combination and each other related proposal related at the Lionheart stockholder meeting and any other special meeting of Lionheart’s stockholders called for the purpose of soliciting the approval of Lionheart’s stockholders in connection with the consummation of the Business Combination; (b) to vote the Covered Shares owned by it, him or her against any Lionheart Competing Transaction or change in the capitalization of Lionheart except as contemplated by the BCA and the SID, and (c) not redeem any Covered Shares owned by it, him or her for redemption in connection with such shareholder approval. The A&R Sponsor Agreement is attached to this proxy statement as Annex D.

Registration Rights Agreement

The BCA and the SID contemplates that, prior to the Second Court Date, the Parent, the Sponsor, certain Lionheart stockholders, and certain SMX shareholders will enter into an amended and restated registration rights agreement (the “A&R Registration Rights Agreement”) pursuant to which, among other things, the Parent will agree to undertake certain shelf registration obligations in accordance with the Securities Act, and certain subsequent related transactions and obligations, including, among other things, undertaking certain registration obligations, and the preparation and filing of required documents. The A&R Registration Rights Agreement is attached to this proxy statement as Annex E.

Voting Agreement

Prior to the Second Court Date, the Parent and the Shareholders (as defined in the Voting Agreement) will enter into a Voting Agreement (the “Voting Agreement”) pursuant to which, among other things, during the Term (as defined in the Voting Agreement) the Parent and the Shareholders have agreed to take all such action within its power as may be necessary or appropriate (including the Parent nominating or appointing certain persons and the Shareholders voting or providing a written consent or proxy, if applicable, in each case with respect to ordinary shares of the Parent) such that the board of directors of the Parent (a) consists of seven (7) members as set forth in the Voting Agreement and (b) is divided into three classes of directors, with each class serving for staggered three year terms. The Voting Agreement also provides for certain board observer rights and director indemnification obligations. The Voting Agreement is attached to this proxy statement as Annex F.

PIPE Subscription Agreements

We are actively pursuing to enter into the Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors will agree to subscribe for and purchase, and we will agree to issue and sell to such PIPE Investors, prior to or substantially concurrently with the closing of the Business Combination, up to $25 million in securities of the Company. The securities to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption provided in Section 4(a)(2) thereof. Currently, we have not confirmed whether the Sponsor, directors, officers or their affiliates will participate in the PIPE Financing nor are aware of any material differences in the terms and price of securities issued at the time of the IPO and the securities to be issued in connection with the PIPE financing at this time.

The closing of any PIPE Financing will be subject to customary conditions for a financing of this nature, including the substantially concurrent consummation of the Business Combination. The Subscription Agreements are expected to provide that the Company will grant the PIPE Investors customary registration rights with respect to any securities issued to such investors in connection with any PIPE Financing following the Closing.

 

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2022 Incentive Equity Plan

Prior to the effectiveness of the registration statement, Parent’s board of directors and its shareholders will approve and adopt the SMX Public Limited Company 2022 Incentive Equity Plan (the “2022 Incentive Equity Plan”) which will reserve for grant a number of Parent Shares equal to 15% of the number of issued and outstanding Parent Shares immediately after the closing of the Business Combination. Additionally, pursuant to the 2022 Incentive Equity Plan, the Parent Shares reserved for issuance thereunder will automatically increase annually by 5% on the first day of each fiscal year beginning with the 2023 fiscal year. The 2022 Incentive Equity Plan is attached to this proxy statement as Annex J.

Recent Developments

In August 2022, SMX entered into a Standby Equity Facility to raise up to US $1,400,000 (AU$ 2,000,000) for the period until October 31, 2022. Under the Standby Equity Facility, SMX retains full control of the subscription process, with the discretion as to whether to request share placements, the timing of the share placements and the maximum number of shares to be requested to be issued under each placement; the purchase price per SMX share is of 91.5% of the of the volume weighted average price of SMX’s shares during the relevant valuation period with a floor price of AU$ 0.17 (approximately US$ 0.12).

SMX and Parent entered into term sheets dated August 24, 2022 and September 05, 2022, with three private investors and entered into a note dated September 06, 2022 (the “Warrants Bridge Loan”), with one of such private investors, which investors agreed to lend SMX and Parent an aggregated term sheets amount of $2,500,000 against 10% interest per annum (paid quarterly in arrears) with 50% of the loan to be repaid with interest on the first anniversary of the date of issue and 50% on the earlier of (i) the second anniversary of the date of issue, and (ii) a change in control event (which does not include the Business Combination). It has also been agreed that each investor will receive warrants to subscribe for Parent Shares and a first priority security interest in the shares of SMX’s interest in trueGold Consortium Pty Ltd. The investors may redeem part of the warrants at closing of the Business Combination against 50% of the amount lent.

Interests of Certain Persons in the Business Combination

The Sponsor and our directors and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Proposals. As a result of such interests, the Sponsor and our directors and officers may be incentivized to complete a business combination with a less favorable combination partner or on terms less favorable to Company Public Stockholders rather than fail to complete a business combination by December 8, 2022 or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period) (or such later date as may be approved by the Company’s stockholders) and be forced to liquidate and dissolve the Company. These interests include:

 

•

the fact that our Initial Stockholders have agreed not to redeem any of the Founder Shares in connection with a stockholder vote to approve the proposed Business Combination;

 

•

the fact that Ophir Sternberg, Roger Meltzer and Thomas Hawkins will serve as directors of the Post-Combination Company. Ophir Sternberg, Roger Meltzer and Thomas Hawkins are affiliated with the Company. Ophir Sternberg currently serves as the Company’s Chairman, President and Chief Executive Officer and Roger Meltzer and Thomas Hawkins currently serve as directors of the Company;

 

•

the fact that the Sponsor paid an aggregate of $25,000 for 2,875,000 Founder Shares in January 2021. Without giving effect to the sales or transfer of Founder Shares to the Underwriters and in connection with the IPO to certain insiders, the remaining 3,125,000 Founder Shares will have a significantly higher value at the time of the Business Combination, which if unrestricted and freely tradable would be valued at approximately $31,250,000 but, given the restrictions on such shares, we believe such shares have less value;

 

29

•

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period) (or such later date as may be approved by the Company’s stockholders);

 

•

the fact that the Sponsor paid an aggregate of $2,000,000 for 2,000,000 Company Private Warrants to purchase shares of Class A Common Stock and such Company Private Warrants will expire worthless if a business combination is not consummated by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period);

 

•

the fact that the Sponsor paid an aggregate of $2,750,000 for Company Private Units comprised of 275,000 shares of Class A Common stock and 137,500 Company Private Warrants to purchase shares of Class A Common Stock and that such Company Private Warrants will expire worthless if a business combination is not consummated by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period);

 

•

the continued right of the Sponsor to hold Class A Common Stock and the shares of Class A Common Stock to be issued to the Sponsor upon exercise of its Company Private Warrants following the Business Combination, subject to certain lock-up periods;

 

•

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.10 per Public Share, or such lesser per Company Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

•

the Sponsor (including its representatives and affiliates) and the Company directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to the Company. For example, each of the Company’s officers may be considered an affiliate of the Sponsor, which is a blank check company incorporated for the purpose of effecting their respective initial business combinations. The Sponsor and the Company’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to the Company completing its initial business combination. Moreover, certain of the Company’s directors and officers have time and attention requirements for certain other companies. The Company’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to the Company and the other entities to which they owe certain fiduciary or contractual duties.

Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in the Company’s favor and such potential business opportunities may be presented to other entities prior to their presentation to the Company, subject to applicable fiduciary duties. The Existing Charter provides that the Company renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the Company and such opportunity is one the Company is legally and contractually permitted to undertake and would otherwise be reasonable for the Company to pursue, and to the extent the director or officer is permitted to refer that opportunity to the Company without violating another legal obligation. For more information, see “Management of the Company — Conflicts of Interests.”

 

•

the fact that Ophir Sternberg has certain business dealings tied to shares of the Post-Combination Company. For more information, see “Certain Relationships and Related Party Transactions”;

 

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•

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

•

the fact that the Sponsor and our directors and officers will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period). The approximate value of Sponsor’s interest in the Post Combination Company is $34,000,000 million, consisting of 3,400,000 shares of Class B Common Stock at a price of $10.00 per share, which will automatically convert into Shares of Class A Common Stock at the Closing of the Business Combination. The cost basis of this investment was approximately $4,780,000, consisting of 3,125,000 Founder Shares at $0.008, per share, or $25,000, 275,000 private placement units at $10.00 per unit, or $2,750,000, plus 2,000,000 private warrants at a price of $1.00 per warrant, or $2,000,000;

 

•

that, at the closing of the Business Combination we will enter into the amended and restated registration rights agreement (“Registration Rights Agreement”), substantially in the form attached as Annex E to this proxy statement/prospectus, with the Sponsor and our directors and officers, which provides for registration rights to such persons and their permitted transferees;

 

•

that, Ophir Sternberg entered into a chairman agreement (“Chairman Agreement”), with Parent and Faquiry Diaz entered into an independent contractor agreement, with Parent, which provides for certain services to the Post-Combination Company and a grant of restricted stock units in the Post-Combination Company; and

 

•

that, certain independent directors of the Post-Combination Company will be granted restricted stock units in the Post-Combination Company.

Reasons for the Approval of the Business Combination

In reaching its unanimous resolution (i) determining that the BCA, the SID and the transactions contemplated thereby, including the Business Combination and the issuance of shares in connection therewith, are fair and advisable to, and in the best interests of, the Company and its stockholders and (ii) recommending that Company stockholders adopt the BCA and the SID and approve the Business Combination and the other transactions contemplated by the BCA and the SID, the Lionheart Board consulted with the Company’s legal and financial advisors in connection with its evaluation of the BCA, the SID and the Business Combination, reviewed the results of due diligence conducted by the Company’s management, together with its legal and financial advisors and considered a range of factors, including, but not limited to, the factors discussed below. In light of the large number and wide variety of factors considered in connection with its evaluation of the Business Combination, the Lionheart Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. The Lionheart Board viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors.

The officers and directors of Lionheart have substantial experience with mergers and acquisitions and in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds enabled them to make the necessary analyses and determinations regarding the Business Combination with SMX. In analyzing the Business Combination, the Lionheart Board conducted due diligence on the Company and researched the industry in which it operates and concluded that the Business Combination was in the best interest of stockholders.

In the prospectus for the IPO, the Company identified general criteria and guidelines that the Company believed would be important in evaluating prospective target businesses. The Company indicated its intention to acquire companies that it believes possess the following characteristics:

 

•

consider reasonably accepted valuation standards and methodologies to seek businesses, as determined in the sole discretion of the Company’s officers and directors.

 

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businesses that have generated attractive unit economics at scale, have established and growing revenue streams. The Company did not expect to acquire startup companies, companies with speculative business plans or companies that are excessively leveraged.

 

•

businesses that have a leading, growing or unique niche market position in their respective sectors. The Company expected to analyze the strengths and weaknesses of target businesses relative to their competitors and seek to invest in one or more businesses that demonstrate advantages when compared to their competitors, including capable management team, defensible proprietary technology, strong adoption rates and relevant domain expertise.

 

•

businesses that have experienced management teams or those that provide a platform to assemble an effective and capable management team. The Company expected to focus on management teams with a track record of driving revenue growth and creating value for their stockholders.

 

•

businesses that will benefit from being publicly listed and can effectively utilize the broader access to capital and the public profile to grow and accelerate shareholder value creation.

 

•

companies that have a leading or niche market position and that demonstrate advantages when compared to their competitors, which may help to create barriers to entry against new competitors.

 

•

businesses that have historically generated, or has the near-term potential to generate, strong and sustainable free cash flow.

In considering the Business Combination, the Lionheart Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the BCA, the SID and the transactions contemplated thereby, including, but not limited to, the following factors (not necessarily in order of relative importance):

 

•

Reasonableness of the aggregate consideration to be paid to the Stockholders under the BCA and the SID. Following a review of the financial data provided to the Company, including certain unaudited prospective financial information of SMX (including, where applicable, the assumptions underlying such unaudited prospective financial information) and the Company’s due diligence review of SMX’s business, the Lionheart Board determined that (i) the consideration in the Transactions is fair from a financial point of view to the Company and (ii) the fair market value of SMX equals or exceeds 80% of the amount held by the Company in trust for benefit of its public stockholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account). In this context “reasonable” means (i) given the uniqueness of the SMX business model, that the work done by the third party due diligence advisors supported the “reasonableness” of the assumptions used to validate the business model, (ii) that the variables considered by the Lionheart Board in relation to the financial analysis for the SMX business were a reasonable basis to compute the valuation, and (iii) given the inherent uncertainties in any long-term projections, particularly in a business like SMX’s where there is limited historical financial information to extrapolate.

 

•

Due Diligence. The Company’s management and advisors conducted due diligence examinations of SMX, including: commercial, financial, legal and regulatory due diligence, and extensive discussions with SMX’s management and the Company’s management and legal advisors concerning such due diligence examinations of SMX.

 

•

Industry and Trends. SMX’s business is based in a blockchain and technology industry focused on supply chain integrity, and that the Lionheart Board considers attractive, and which, following a review of industry trends and other industry factors (including, among other things, historic and projected market growth), the Lionheart Board believes has continued growth potential in future periods.

 

•

Opportunity to introduce an attractive asset class to public investors that has historically been transacted in non-US public market settings. The Company’s belief that recent transactions involving SPACs indicate a market trend to bring companies with novel business models and innovative asset classes to the US public markets.

 

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•

Negotiated Transaction. The Lionheart Board considered the terms and conditions of the BCA, the SID and the related agreements and the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to consummate the Business Combination and the termination provisions, as well as the strong commitment by both the Company and SMX to complete the Business Combination. The Lionheart Board also considered the financial and other terms of the Business Combination and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between SMX and the Company.

 

•

Other Alternatives. After a review of other business combination opportunities reasonably available to the Company, the Lionheart Board believes that the proposed Business Combination represents the best potential business combination reasonably available to the Company taking into consideration, among other things, the timing and likelihood of accomplishing the goals of any alternatives.

 

•

Post-Closing Governance. The fact that the Sponsor had negotiated the right to nominate three members of the Board following the Business Combination, which the Lionheart Board believes will allow for the Post-Combination Company to benefit from the Sponsor’s professional relationships to identify potential board members that will have appropriate industry and/or financial knowledge and professional experience to oversee the Post-Combination Company and drive returns for stockholders.

 

•

Limitations of Review. The Lionheart Board considered what they were presented and did obtain a fairness opinion from Scura Partners. The opinion confirmed (i) the consideration in the Transactions is fair from a financial point of view to the Company and (ii) the fair market value of SMX equals or exceeds 80% of the amount held by the Company in trust for benefit of its public stockholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account). Additionally, the opinion of Scura Partners was limited to the fairness of the aggregate consideration to be received by all of the Lionheart stockholders, collectively as a group, including the Sponsor and its affiliates. Scura Partners did not express an opinion as to the fairness or the differences in consideration to be given to the Sponsor and its affiliates as opposed to all other stockholders of Lionheart.

The Lionheart Board also considered various uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

•

Benefits May Not Be Achieved. The potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe.

 

•

Regulation. The risk that changes in the regulatory and legislative landscape or new industry developments may adversely affect the projected financial results and the other business benefits anticipated to result from the Business Combination.

 

•

Stockholder Vote. The Company’s stockholders may fail to approve the proposals necessary to effect the Business Combination.

 

•

Closing Conditions. The completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within the Company’s control, including the receipt of certain required regulatory approvals.

 

•

Litigation Related to the Business Combination. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

 

•

Listing Risks. The challenges associated with preparing SMX, for the applicable disclosure and listing requirements to which SMX will be subject as a publicly traded company.

 

•

Market Volatility: The possibility that the SPAC market experiences volatility and disruptions, causing deal disruption.

 

•

Liquidation. The risks and costs to the Company if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in the Company being unable to effect an initial business combination

 

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by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period).

 

•

Fees and Expenses. The fees and expenses associated with completing the Business Combination. In addition, the Lionheart Board considered the fact that the Underwriters have contingent fees owing to it upon the successful completion of the Business Combination, consisting of deferred underwriting fees of approximately $4,375,000.

In addition to considering the factors described above, the Lionheart Board also considered other factors, including, without limitation:

 

•

Interests of Certain Persons. The Sponsor, our officers and certain of our directors may have interests in the Business Combination (see “— Interests of the Company’s Directors and Executive Officers in the Business Combination”).

 

•

Other Risk Factors. Various other risk factors associated with the business of SMX, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.

 

•

Fairness Opinion. Scura Partners LLC provided its Fairness Opinion to the Lionheart Board that, subject to the assumptions, qualifications, limitations and other matters set forth in the opinion, (i) the consideration in the Transactions is fair from a financial point of view to the Company and (ii) the fair market value of SMX equals or exceeds 80% of the amount held by the Company in trust for benefit of its public stockholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account). Additionally, the opinion of Scura Partners was limited to the fairness of the aggregate consideration to be received by all of the Lionheart stockholders, collectively as a group, including the Sponsor and its affiliates. Scura Partners did not express an opinion as to the fairness or the differences in consideration to be given to the Sponsor and its affiliates as opposed to all other stockholders of Lionheart.

The Lionheart Board concluded, in its business judgment, that the potential benefits that it expects the Company and its stockholders to achieve as a result of the Business Combination outweigh the potentially negative and other factors associated with the Business Combination. Accordingly, the Lionheart Board unanimously determined that the Business Combination and the transactions contemplated by the BCA and the SID are fair and advisable to, and in the best interests of, the Company and its stockholders.

Voting Power; Record Date

Stockholders will be entitled to vote or direct votes to be cast at the Special Meeting if they owned shares of common stock at the close of business on [●], 2022, the Record Date for the Special Meeting. Stockholders are entitled to one vote for each share of common stock owned at the close of business on the Record Date. If stockholders’ shares are held in “street name” or are in a margin or similar account, stockholders should contact their broker, bank, or other nominee to ensure that votes related to the shares they beneficially own are properly counted. On the Record Date, there were [●] shares of common stock outstanding, of which [●] were Public Shares, [●] were Founder Shares and [●] were Private Shares.

Redemption Rights

If you are a holder of Company Public Shares, you have the right to demand that the Company redeem such shares for a pro rata portion of the cash held in the Trust Account, which holds the proceeds of the IPO, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes) upon the Closing.

Impact of the Business Combination on Parent’s Public Float

It is anticipated that, upon completion of the Business Combination, (i) Lionheart’s existing Stockholders, including the Sponsor, will own approximately 54.27% of the issued and outstanding Parent Shares.

 

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The following table illustrates the ownership levels in Parent (excluding the impact of shares underlying the Company Public Warrants) immediately after the Closing based on each of the scenarios indicated:

 

		No Redemption Scenario								25% Redemption Scenario								75% Redemption Scenario								Maximum Redemption Scenario
		Shares				%				Shares				%				Shares				%				Shares				%
Shares Outstanding At Business Combination (Actual)
Class A – Company Public Stockholders and holders of Company Private Shares			12,500,000				35.99	%			9,375,000				29.66	%			3,125,000				12.33	%			1,500,000				6.32	%
Class B – Company Initial Stockholders (including the Underwriters)			3,525,000				10.15	%			3,525,000				11.16	%			3,525,000				13.90	%			3,525,000				14.86	%
Total Lionheart			16,025,000				46.14	%			12,900,000				40.82	%			6,650,000				26.23	%			5,025,000				21.18	%
Shares Issuable to SMX Shareholders			18,704,153				53.86	%			18,704,153				59.18	%			18,704,153				73.77	%			18,704,153				78.82	%
Total SMX			18,704,153				53.86	%			18,704,153				59.18	%			18,704,153				73.77	%			18,704,153				78.82	%
Total Shares at Closing			34,729,153				100	%			31,604,153				100	%			25,354,153				100	%			23,729,153				100	%

The following table illustrates the ownership levels in Parent (including all possible sources of dilution) immediately after the Closing based on each of the scenarios indicated:

 

		No Redemption Scenario								25% Redemption Scenario								75% Redemption Scenario								Maximum Redemption Scenario
		Shares				%				Shares				%				Shares				%				Shares				%
Shares Outstanding At Business Combination (Diluted)
Class A – Company Public Stockholders			12,500,000				27.71	%			9,375,000				22.33	%			3,125,000				8.75	%			1,500,000				4.40	%
Shares Issuable Upon Exercise of Public Warrants			6,250,000				13.86	%			6,250,000				14.89	%			6,250,000				17.49	%			6,250,000				18.33	%
Company Public Stockholders			18,750,000				41.57	%			15,625,000				37.22	%			9,375,000				26.24	%			7,750,000				22.73	%
Class B – Company Initial Stockholders (including the Underwriters)			3,525,000				7.81	%			3,525,000				8.40	%			3,525,000				9.87	%			3,525,000				10.34	%
Shares Issuable Upon Exercise of Sponsor Warrants			2,200,000				4.88	%			2,200,000				5.24	%			2,200,000				6.16	%			2,200,000				6.45	%
Company Initial Stockholders (including the Underwriters)			5,725,000				12.70	%			5,725,000				13.64	%			5,725,000				16.03	%			5,725,000				16.79	%
Total Lionheart			24,475,000				54.26	%			21,350,000				50.86	%			15,100,000				42.27	%			13,475,000				39.52	%
Shares Issuable to SMX Shareholders			18,704,153				41.47	%			18,704,153				44.56	%			18,704,153				52.36	%			18,704,153				54.85	%
Shares Issuable Upon Exercise of SMX ESOP			1,295,847				2.88	%			1,295,847				3.09	%			1,295,847				3.62	%			1,295,847				3.80	%
Total SMX			20,000,000				44.35	%			20,000,000				47.65	%			20,000,000				55.98	%			20,000,000				58.65	%
Shares Issuable Upon Exercise of Empatan Warrants Bridge Loan			625,000				1.39	%			625,000				1.49	%			625,000				1.75	%			625,000				1.83	%
Total Shares at Closing			45,100,000				100	%			41,975,000				100	%			35,725,000				100	%			34,100,000				100	%

For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

 

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The following table illustrates effective underwriting fee per share (assuming a $10.00 per share price) incurred and payable upon the completion of the Business Combination and as a percentage of 12,500,000 shares of Class A Common Stock subject to redemption, assuming no redemptions, 25% redemptions, 75% redemptions and the maximum redemptions by the Public Stockholders:

 

		Redemption Threshold
		No Redemptions								25% Redemptions								75% Redemptions								Maximum Redemptions
		$/share				%				$/share				%				$/share				%				$/share				%
Underwriting fee		$	0.35				3.5	%		$	0.47				4.7	%		$	1.40				14	%		$	2.92				29.2	%

Organizational Structure

SMX has four wholly-owned subsidiaries: Security Matters Ltd. (Israel), Security Matters France (France), Security Matters Canada Ltd. (Canada) and SMX Beverages Pty Ltd. (Australia), along with owning 50% of Yahaloma Technologies Inc. (Canada) and 44.8% of trueGold Consortium Pty Ltd. (Australia).

 

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Board of Directors of Parent Following the Business Combination

Following the Closing, the Board will consist of the following seven members: Amir Bader, Haggai Alon, Ophir Sternberg, Pauline Khoo, Roger Meltzer, Thomas Hawkins and Zeren Browne. In addition, following the Closing, we expect that a majority of the directors will be “independent” under applicable Nasdaq listing rules. See “Management of the Post-Combination Company Following the Business Combination” for more information.

Appraisal or Dissenters’ Rights

Holders of our Class A Common Stock are not entitled to appraisal rights in connection with the Business Combination under the DGCL. Holders of our Class B Common Stock have appraisal rights in certain circumstances as provided for under the DGCL.

Recommendation of the Lionheart Board

The Lionheart Board has unanimously determined that the Business Combination, on the terms and conditions set forth in the BCA and the SID, is fair and advisable to, and in the best interests of, the Company and its stockholders and has directed that the Proposals set forth in this proxy statement/prospectus be submitted to its stockholders for approval at the Special Meeting on the date and at the time and place set forth in this proxy statement/prospectus. The Lionheart Board unanimously recommends that Company stockholders vote “FOR” the Business Combination Proposal, and “FOR” the Adjournment Proposal, if presented. See “The Business Combination — Recommendation of the Lionheart Board and Reasons for the Business Combination” beginning on page [●].

In considering the Business Combination, the Lionheart Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the BCA and the SID and the transactions contemplated thereby, including, but not limited to, the following factors (not necessarily in order of relative importance):

 

•

Following a review of the financial data provided to the Company, including certain unaudited financial information and models regarding SMX (including, where applicable, the assumptions underlying such unaudited financial information and models) and the Company’s due diligence review of SMX’s business, the Lionheart Board determined that the consideration to be paid to SMX shareholders was reasonable in light of such data and financial information.

 

•

Scura Partners delivered an opinion to the Lionheart Board to the effect that, as of the date of such opinion, and subject to and based on the assumptions, limitations, qualifications, conditions and other matters set forth therein, that (i) the consideration in the Transactions is fair from a financial point of view to the Company and (ii) the fair market value of SMX equals or exceeds 80% of the amount held by the Company in trust for benefit of its public stockholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account).

 

•

The Company’s management and advisors conducted due diligence examinations of SMX, including: commercial, financial, legal and regulatory due diligence, and extensive discussions with SMX’s management and the Company’s management and legal advisors concerning such due diligence examinations of SMX.

 

•

The agreement by Mr. Alon to be subject to a post-Closing lockup in respect of his Parent Shares, subject to certain exceptions, and to enter into an employment agreement with the Post-Combination Company, which is expected to provide important stability to the leadership and governance of SMX.

 

•

The terms and conditions of the BCA, the SID and the related agreements and the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to consummate the Business Combination and the termination provisions, as well as the strong commitment by both the Company and SMX to complete the Business Combination.

 

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•

After a review of other business combination opportunities reasonably available to the Company, the Lionheart Board believes that the proposed Business Combination represents the best potential business combination reasonably available to the Company taking into consideration, among other things, the timing and likelihood of accomplishing the goals of any alternatives.

The Lionheart Board also considered various uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

•

Haggai Alon is a key business driver of SMX and the success of SMX remains highly dependent on his continued involvement.

 

•

The potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe.

 

•

The Company’s stockholders may fail to approve the proposals necessary to effect the Business Combination.

 

•

The completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within the Company’s control, including the receipt of certain required regulatory approvals.

 

•

The Company Public Stockholders will hold a minority position in the Post-Combination Company (approximately [●]%, assuming (1) the no redemption scenario and (2) that the holders of the Company’s existing Company Public Warrants and Company Private Warrants exercise those warrants), as such, the Company’s current stockholders are unlikely to have an influence on the management of the Post-Combination Company. Such ownership percentage will be affected by the level of redemptions by Company Public Stockholders and the exercise of outstanding warrants. See “Summary — Impact of the Business Combination on Parent’s Public Float”.

 

•

The challenges associated with preparing SMX, which is an Australian public company, for the applicable disclosure and listing requirements to which SMX will be subject as a publicly traded company in the United States.

 

•

The possibility that the SPAC market experiences volatility and disruptions, causing deal disruption.

 

•

The risks and costs to the Company if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in the Company being unable to effect an initial business combination by December 8, 2022 (or until May 8, 2023 if we extend the period of time to consummate our initial business combination pursuant to any further Extension Period).

 

•

The fees and expenses associated with completing the Business Combination. In addition, the Lionheart Board considered the fact that the Underwriters have contingent fees owing to the upon the successful completion of the Business Combination, consisting of deferred underwriting fees of approximately $4,375,000.

In addition to considering the factors described above, the Lionheart Board also considered other factors, including, without limitation the fact that some officers and directors of the Company may have interests in the Business Combination (see “The Business Combination — Interests of the Company’s Directors and Executive Officers in the Business Combination” beginning on page [●]) and various other risk factors associated with the business of SMX, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.

Opinion of Scura Partners

Lionheart retained Scura Partners to evaluate the fairness, from a financial point of view, to SMX Shareholders of the merger consideration to be paid to such holders in the transaction. On July 24, 2022, Scura

 

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Partners rendered its opinion to the Lionheart Board, which provided that, as of that date and based on and subject to the assumptions, qualifications and other matters set forth therein, (i) the consideration in the Transactions is fair from a financial point of view to the Company, (ii) the fair market value of SMX equals or exceeds 80% of the amount held by the Company in trust for benefit of its public stockholders (excluding any deferred underwriting commissions and taxes payable on interest earned on the trust account) and (iii) the Transaction is fair to all of Lionheart Stockholders and SMX Shareholders, collectively as a group, as opposed to shareholders that are unaffiliated with the Sponsor and its affiliates.

The full text of Scura Partners’ written fairness opinion, dated July 24, 2022, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is included as Annex H to this proxy statement/prospectus and is incorporated by reference herein in its entirety. The summary of Scura Partners’ opinion is included in the section of this proxy statement/prospectus entitled “Proposal No. 1: The Business Combination Proposal — Opinion of Scura Partners LLC” beginning on page [●]. You are encouraged to read Scura Partners’ opinion and that section carefully and in their entirety. Scura Partners’ opinion was provided for the benefit of the Lionheart Board (in its capacity as such) and Scura Partners’ opinion was rendered to the Lionheart Board in connection with the Lionheart Board’s evaluation of the transaction. Scura Partner’s opinion did not address the relative merits of the transaction as compared to any other transaction or business strategy in which Lionheart might engage or the merits of the underlying decision by Lionheart to engage in the transaction. Scura Partners’ opinion was not intended to and does not constitute a recommendation to any Lionheart stockholder as to how such stockholder should vote or act with respect to the transaction or any matter relating thereto.

For a summary of Scura Partner’s opinion and the methodology that Scura Partners used to render its opinion, see the section entitled “Summary of the Proxy Statement/Prospectus — Opinion of Scura Partners” of this proxy statement/prospectus for additional information.

Lionheart’s Special Meeting of Stockholders

The Special Meeting will be held at              a.m. Eastern Time, on             , 2022 in virtual format. The Special Meeting can be accessed by visiting [●], where Company stockholders will be able to listen to the meeting live and vote during the meeting. Additionally, Company stockholders have the option to listen to the Special Meeting by dialing [●] (toll-free within the U.S. and Canada) or [●] (outside of the U.S. and Canada, standard rates apply). The passcode for telephone access is [●], but please note that Company stockholders who choose to participate telephonically cannot vote or ask questions. Please note that you will only be able to access the Special Meeting by means of remote communication. At the Special Meeting, Company stockholders will be asked to vote on the Business Combination Proposal and, if necessary, the Adjournment Proposal.

Stockholders will be entitled to vote or direct votes to be cast at the Special Meeting if they owned shares of common stock at the close of business on [●], 2022, the Record Date for the Special Meeting. Stockholders are entitled to one vote for each share of common stock owned at the close of business on the Record Date. If stockholders’ shares are held in “street name” or are in a margin or similar account, stockholders should contact their broker, bank, or other nominee to ensure that votes related to the shares they beneficially own are properly counted. On the Record Date, there were [●] shares of common stock outstanding, of which [●] were Company Public Shares, [●] were Founder Shares and [●] were Company Private Shares.

A quorum of Company stockholders is necessary to hold a valid Special Meeting. A majority of the voting power of the common stock entitled to vote at the Special Meeting must be present, in person or represented by proxy at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The Underwriters, the Sponsor and our directors and officers, who collectively currently own 22.0% of the issued and outstanding shares of common stock, will count towards this quorum. As of the Record Date for the Special Meeting, [●] shares of common stock would be required to be present in person or represented by proxy to achieve a quorum.

 

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The Company has entered into a letter agreement with the Sponsor and our directors and officers pursuant to which, among other things, each such person has agreed to vote all shares of our common stock owned by it, him or her in favor of the Proposals. However, we intend to waive such obligations of the Sponsor, our directors and/or our officers to vote their shares of common stock in favor of the Proposals in respect of any shares purchased by such purchasers in Open Market Purchases. The Underwriters of our IPO have agreed to vote any shares of our common stock held by them in favor of the Business Combination. However, we intend to waive such obligations of the Underwriters to vote their shares of common stock in favor of the Proposals in respect of any shares purchased by them in Open Market Purchases. As a result, in addition to the shares of common stock held by the Underwriters, the Sponsor and our officers and directors, we may need only 4,487,501, or 35.9% (assuming all outstanding shares are voted), or approximately 3.85% (assuming only the minimum number of shares representing a quorum are voted), of the Company Public Shares to be voted in favor of the Business Combination in order to have the Business Combination approved. The Proposals presented at the Special Meeting will require the following votes:

 

•

The Business Combination Proposal: The approval of the Business Combination Proposal requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon at the Special Meeting, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Business Combination Proposal, will have no effect on the Business Combination Proposal. Company stockholders must approve the Business Combination Proposal in order for the Business Combination to occur.

 

•

The Adjournment Proposal: The approval of the Adjournment Proposal, if presented, requires the affirmative vote (in person or by proxy) of the holders of a majority of the shares of Class A Common Stock and Class B Common Stock entitled to vote and actually cast thereon at the Special Meeting, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Adjournment Proposal, will have no effect on the Adjournment Proposal. The Business Combination is not conditioned on the approval of the Adjournment Proposal.

Nasdaq Listing

The Class A Common Stock, the Company Public Warrants and the Company Public Units are currently listed on Nasdaq under the symbols “LION,” “LIONW” and “LIONU,” respectively. Upon the closing of the Business Combination, we intend to apply to list the ordinary shares and warrants of Parent on NASDAQ under the new ticker symbols “SMX” and “SMXW”, respectively, and SMX shall cease to be quoted on the ASX. At the Closing, each Unit will separate into its components, comprising one share of Parent Share and one-half of one Parent Warrant.

Material Tax Considerations

For a detailed discussion of certain U.S. federal income tax consequences of the Business Combination, see the sections titled “Certain Material U.S. Federal Income Tax Considerations” in this proxy statement/prospectus.

Anticipated Accounting Treatment of the Transactions

Since the Parent and Lionheart are not businesses as defined in IFRS 3, the transaction is not a business combination. Based on IFRS 3’s provisions, such a transaction is accounted for in the consolidated financial statements of the Parent (the legal acquirer) as a continuation of the financial statements of SMX (the legal acquiree), together with a deemed issuance of shares by SMX at fair value and a re-capitalization of its equity. This deemed issuance of shares is in fact both an equity transaction under IAS 32 (receiving the net assets of

 

40

Lionheart, primarily cash) and an equity-settled share-based payment transaction under IFRS 2 (receiving the listing status of the Parent/Lionheart). The difference between the fair value of the shares deemed to have been issued by SMX and the fair value of Lionheart’s identifiable net assets represents a payment for the service of obtaining a stock exchange listing for its shares and a cost of raising capital. Transaction costs are allocated on a relative fair value basis of the amounts allocated to each equity transaction as mentioned above, such that the amount attributed to the equity transaction is deducted from equity and the amount attributed to the listing service is charged as expense in profit or loss. For purposes of the unaudited pro forma condensed combined financial information, it is assumed that the fair value of each individual SMX ordinary share issued to Lionheart Stockholder is equal to the fair value of each individual SMX ordinary share resulting from the $200 million proforma combined enterprise value assigned to SMX in the Business Combination Agreement.

Summary Risk Factors

In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors”

Some of the risks related to the Transactions, Lionheart and SMX are summarized below:

Risks related to the Company and the Business Combination

 

•

Lionheart may not have sufficient funds to consummate the business combination.

 

•

If Lionheart’s stockholders fail to properly demand redemption rights, they will not be entitled to redeem their Lionheart Class A common shares for a pro rata portion of the trust account.

 

•

The Business Combination remains subject to conditions that Lionheart cannot control and if such conditions are not satisfied or waived, the Business Combination may not be consummated.

 

•

Lionheart may waive one or more of the conditions to the Business Combination.

 

•

The exercise of discretion by our directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the BCA and the SID may result in a conflict of interest when determining whether such changes to the terms of the BCA and the SID or waivers of conditions are appropriate and in the best interests of the Lionheart stockholders.

 

•

Termination of the BCA and the SID could negatively impact SMX and Lionheart.

 

•

Lionheart and SMX will incur significant transaction and transition costs in connection with the Business Combination.

 

•

If Lionheart is unable to complete an initial business combination, Lionheart’s Company Public Stockholders may receive only approximately $10.10 per share on the liquidation of the Trust Account (or less than $10.10 per share in certain circumstances where a third party brings a claim against Lionheart that the Sponsor is unable to indemnify), and Lionheart’s warrants will expire worthless.

 

•

Subsequent to Lionheart’s completion of the Business Combination, Lionheart may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on Lionheart’s financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.

 

•

Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

 

41

•

Parent’s Shares may not be listed on a national securities exchange after the Business Combination, which could limit investors’ ability to make transactions in such securities, subject Parent to additional trading restrictions, and subject Parent’s security holders to Irish stamp tax upon securities transfers.

 

•

The stock price of the Parent Shares may be volatile.

 

•

The trading market in the Parent Shares may become substantially less liquid than the average trading market for a stock quoted on Nasdaq following the consummation of the business combination, and this low trading volume may adversely affect the price of the Parent Shares.

 

•

Parent may issue additional Parent Shares or other equity securities without seeking approval of the Parent shareholders, which would dilute your ownership interests and may depress the market price of the Parent Shares.

 

•

Future resales of the Parent Shares issued in connection with the transactions may cause the market price of the Parent Shares to drop significantly, even if SMX’s business is doing well.

 

•

Lionheart stockholders may decide to sell their Lionheart securities or Parent Shares, which could cause a decline in their market prices and the value of the Parent Shares after consummation of the transactions.

 

•

Because the market price of Parent Shares may fluctuate, Lionheart stockholders cannot be sure of the value of the Parent Shares they will receive in the transactions.

 

•

There may be less publicly available information concerning Parent than there is for issuers that are not foreign private issuers because it is anticipated that Parent will be considered a foreign private issuer and will be exempt from a number of rules under the Exchange Act and will be permitted to file less information with the SEC than issuers that are not foreign private issuers and Parent, as a foreign private issuer, will be permitted to follow home country practice in lieu of the listing requirements of Nasdaq, subject to certain exceptions.

 

•

Parent may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses. This would subject Parent to GAAP reporting requirements which may be difficult for it to comply with.

 

•

As a “foreign private issuer” under the rules and regulations of the SEC, the Parent is permitted to, and will, file less or different information with the SEC than a company incorporated in the United States or otherwise subject to these rules, and will follow certain home country corporate governance practices in lieu of certain Nasdaq requirements applicable to U.S. issuers.

 

•

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about Parent’s business, the market price of the Parent Shares and trading volume could decline.

 

•

Upon completion of the business combination, Lionheart stockholders will become Parent shareholders, Lionheart warrant holders will become holders of Parent Warrants, and the market price for the Parent Shares may be affected by factors different from those that historically have affected Lionheart.

 

•

The business combination may be completed even though material adverse effects may result from the announcement of the business combination, industry-wide changes and other causes.

 

•

Delays in completing the business combination may substantially reduce the expected benefits of the business combination.

 

•

The proposed business combination with SMX may be delayed or ultimately prohibited since such initial business combination may be subject to regulatory review and approval requirements, including pursuant to foreign investment regulations and review by governmental entities such as the Committee on Foreign Investment in the United States (“CFIUS”). However, we believe it is unlikely that the Business Combination would be subject to CFIUS jurisdiction or impacted by a CFIUS review.

 

42

•

Parent has no operating history. The unaudited pro forma condensed combined financial information may not be an indication of Parent’s financial condition or results of operations following the business combination, and accordingly, you have limited financial information on which to evaluate Parent and your investment decision.

 

•

Failure to effectively retain, attract and motivate key employees could diminish the anticipated benefits of the business combination.

 

•

The fairness opinion delivered by Scura Partners will not reflect changes in circumstances between the date of the BCA and the SID and the completion of the business combination.

 

•

Lionheart and SMX will be subject to business uncertainties and contractual restrictions while the Business Combination is pending.

 

•

Parent is an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the Parent Shares less attractive to investors.

 

•

Parent may need additional capital in the future to meet its financial obligations and to pursue its business objectives. Additional capital may not be available on favorable terms, or at all, which could compromise Parent’s ability to meet its financial obligations and grow its business.

 

•

Parent will incur significant costs and devote substantial management time as a result of being subject to reporting requirements in the United States, which may adversely affect the operating results of Parent in the future.

 

•

Because Parent currently does not have plans to pay cash dividends on the Parent Shares, you may not receive any return on investment unless you sell your Parent Shares for a price greater than that which you paid for Lionheart Class A Common Stock.

 

•

An active trading market of the Parent Shares may not be sustained and investors may not be able to resell their Parent Shares at or above the price for which they purchased the Lionheart securities.

 

•

The trading price of the Parent Shares may be volatile, and holders of the Parent Shares could incur substantial losses.

 

•

Lionheart and Parent may be targets of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the transaction from being completed.

 

•

Parent’s management has limited experience in operating a public company in the United States.

 

•

There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

 

•

Lionheart has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement. As such, there is a risk that Lionheart will be unable to continue as a going concern if it does not consummate an initial business combination by December 8, 2022 (or until May 8, 2023 if it extends the period of time to consummate its initial business combination pursuant to any further Extension Period). If Lionheart is unable to effect an initial business combination by December 8, 2022 (or until May 8, 2023 if it extends the period of time to consummate its initial business combination pursuant to any further Extension Period), it will be forced to liquidate and its warrants will expire worthless.

 

•

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.

 

•

Future changes in U.S. and foreign tax laws could adversely affect Parent.

 

•

Past performance by members of our management team, may not be indicative of future performance of an investment in the Company or the Post-Combination Company.

 

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•

We may be unable to obtain additional financing to fund the operations and growth of the Post-Combination Company.

 

•

Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations.

 

•

The Company’s and SMX’s ability to consummate the Business Combination, and the operations of the Post-Combination Company following the Business Combination, may be materially adversely affected by the COVID-19 pandemic.

 

•

Because Parent will become a public reporting company by means other than a traditional underwritten initial public offering, Parent’s shareholders may face additional risks and uncertainties.

 

•

We have not registered the shares of Class A Common Stock issuable upon exercise of the Public Warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise Company Public Warrants, thus precluding such investor from being able to exercise its Company Public Warrants except on a cashless basis and potentially causing such Parent Warrants to expire worthless.

 

•

We may amend the terms of the Company Public Warrants in a manner that may be adverse to holders with the approval by the holders of at least 50% of the then-outstanding Company Public Warrants. As a result, the exercise price of a holder’s Company Public Warrants could be increased, the exercise period could be shortened and the number of shares of the Company’s Common Stock purchasable upon exercise of a Company Public Warrant could be decreased, all without the approval of that warrant holder.

 

•

We may redeem unexpired Company Public Warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making such warrants worthless.

 

•

Because each Public Unit contains one-half of one Public Warrant and only a whole Public Warrant may be exercised, the Public Units may be worth less than Public Units of other blank check companies.

 

•

Warrants will become exercisable for our Class A Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

 

•

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

 

•

The Company has identified material weaknesses in its internal control over financial reporting. These material weaknesses could continue to adversely affect its ability to report its results of operations and financial condition accurately and in a timely manner. We may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. If we fail to remediate our material weaknesses, we may not be able to report our financial results accurately or to prevent fraud.

 

•

Our internal control over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

 

•

The Company’s stockholders may be held liable for claims by third parties against the Company to the extent of distributions received by them.

Risks related to Tax

 

•

The enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies, or changes in tax legislation or policies could impact Parent’s future financial position and results of operations.

 

44

•

U.S. holders that directly or indirectly own 10% or more of our equity interests may be subject to adverse U.S. federal income tax consequences under rules applicable to U.S. shareholders of “controlled foreign corporations.”

 

•

Parent’s U.S. shareholders may suffer adverse tax consequences if Parent is classified as a “passive foreign investment company.”

 

•

The Internal Revenue Service may not agree that Parent should be treated as a non-U.S. corporation for U.S. federal income tax purposes.

 

•

Section 7874 of the Code may limit the ability of Lionheart to use certain tax attributes following the Business Combination, increase Parent’s U.S. affiliates’ U.S. taxable income or have other adverse consequences to Parent and Parent’s shareholders.

 

•

The Business Combination may be treated as a taxable exchange to holders of Company Public Shares or Company Public Warrants.

 

•

The Excise Tax included in the Inflation Reduction Act of 2022 may impose a significant tax liability on the Company after the Business Combination.

Risks related to Irish Law

 

•

The Post-Combination Company does not intend to pay dividends for the foreseeable future, but if the Post-Combination Company pays dividends, such dividends may be subject to Irish dividend withholding tax or Irish income tax, and certain transfers of Parent Shares and Parent Warrants may be subject to Irish capital acquisitions tax or stamp duty.

 

•

Irish law differs from the laws in effect in Australia and the United States, and there will be differences between your current rights as a holder of the Company securities and the rights one can expect as a holder of the Post-Combination Company securities, some of which may adversely affect you.

 

•

Provisions in the Parent Amended and Restated Memorandum and Articles of Association and under Irish law could make an acquisition of the Post-Combination Company more difficult, may limit attempts by the Post-Combination Company shareholders to replace or remove the Post-Combination Company’s management, may limit shareholders’ ability to obtain a favorable judicial forum for disputes with the Post-Combination Company or the Post-Combination Company’s directors, officers, or employees, and may limit the market price of the Parent Shares and/or the Parent Warrants.

Risks related to the business and operations of Parent following the Transaction

 

•

The Post-Combination Company will incur significant increased expenses and administrative burdens as a public company, which could materially and adversely affect its business, results of operations, financial condition, and growth prospects.

 

•

If the Post-Combination Company fails to maintain an effective system of disclosure controls and internal controls over financial reporting, its ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

 

•

The Parent’s management has limited experience as executive officers of a U.S. public company.

 

•

A market for the Post-Combination Company’s securities may not continue, which would adversely affect the liquidity and price of its securities.

Other Risks Associated with the Business of Parent

 

•

If the PIPE Financing is not consummated and sufficient stockholders exercise their Redemption Rights in connection with the Business Combination, Lionheart may lack sufficient funds to consummate the Business Combination.

 

•

Lionheart stockholders may not realize a benefit from the Business Combination and any potential Pipe Financing commensurate with the ownership dilution they will experience in connection with the merger and the any potential PIPE Financing.

 

45

SELECTED HISTORICAL FINANCIAL DATA OF LIONHEART

The following table contains summary historical financial information for Lionheart for the periods and as of the dates indicated prepared in accordance with U.S. GAAP.

Lionheart’s statement of operations and cash flows data for the period from January 14, 2021 (inception) through December 31, 2021 and balance sheet data as of December 31, 2021 are derived from the Company’s audited financial statements included elsewhere in this proxy statement/prospectus. The selected historical financial data of the Company for the period from January 14, 2021 (Inception) through September 30, 2021, for the three months ended September 30, 2022 and 2021, for the nine months ended September 30, 2022 and the consolidated balance sheet as of September 30, 2022 are derived from the Company’s unaudited interim consolidated financial statements included elsewhere in this proxy statement/prospectus.

This information is only a summary and should be read in conjunction with the Company’s financial statements and related notes, and “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contained elsewhere in this proxy statement/prospectus. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of the Company.

 

		Three Month Ended September 30,								Nine Months Ended September 30,				For the Period from January 14, 2021 (Inception) through September 30, 2021 (unaudited)
(except share and per share data)		2022				2021				2022
Statement of Operations Data		(unaudited)								(unaudited)
Operating and formation costs		$	2,327,837			$	2,830			$	3,840,607			$	3,859
Loss from operations			(2,327,837	)			(2,830	)			(3,840,607	)			(3,859	)
Other income:
Interest earned on marketable securities held in Trust Account			558,668				—				732,301				—
Loss before provision for income taxes			(1,769,169	)			(2,830	)			(3,108,306	)			(3,859	)
Provision for income taxes			(101,735	)			—				(115,301	)			—
Net loss		$	(1,870,904	)		$	(2,830	)		$	(3,223,607	)		$	(3,859	)
Basic and diluted weighted average shares outstanding, Class A common stock			12,900,000				—				12,900,000				—
Basic and diluted net loss per share, Class A common stock		$	(0.12	)		$	(0.00	)		$	(0.20	)		$	(0.00	)
Basic and diluted weighted average shares outstanding, Class B common stock			3,125,000				2,875,000				3,125,000				2,875,000
Basic and diluted net loss per share, Class B common stock		$	(0.12	)		$	(0.00	)		$	(0.20	)		$	(0.00	)
Statement of Operations Data
Net cash (used in) operating activities										$	(911,630	)		$	(410	)
Net cash provided by (used in) investing activities											—				—
Net cash (used in) provided by financing activities										$	(14,840	)		$	4,700

 

46

Balance Sheet Data		As of September 30,				As of December 31,
		2022				2021
		(unaudited)
Total assets		$	127,634,775			$	128,020,208
Total liabilities			7,564,680				4,726,506
Class A common stock subject to possible redemption			126,683,750				126,250,000
Total stockholders’ deficit			(6,613,655	)			(2,956,298	)

 

 

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SELECTED HISTORICAL FINANCIAL DATA OF SECURITY MATTERS

The information presented below is derived from SMX’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus as of December 31, 2021 and 2020 (“Security Matters Consolidated Financial Statements”) and from SMX’s unaudited interim consolidated financial statements included elsewhere in this proxy statement/prospectus as of June 30, 2022 and 2021 (“Security Matters Unaudited Interim Consolidated Financial Statements”). The information presented below should be read alongside with Security Matters Consolidated Financial Statements and accompanying footnotes included elsewhere in this proxy statement/prospectus. You should read the following financial data together with “Risks Related to Security Matters” and “Security Matters’ Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

SMX’s consolidated financial statements and SMX’s unaudited interim consolidated financial statements included in this prospectus were prepared in accordance with IFRS, as issued by the IASB. The following table highlights key measures of SMX’s financial condition and results of operations (in U.S. dollars):

 

		Six Months Ended June 30,								Year Ended December 31,
U.S. dollars in thousands (except for per share data)		2022				2021				2021				2020
Research and development expenses, net			933				885				2,039				1,689
Sales and marketing expenses			378				197				453				427
General and administrative expenses			1,200				1,338				2,482				2,447
Operating Loss			(2,511	)			(2,420	)			(4,974	)			(4,560	)
Finance expenses			36				5				101				79
Finance income			105				45				237				67
Share of net loss of associated companies			—				—				101				1
Loss before income tax			(2,442	)			(2,380	)			(4,939	)			(4,573	)
Income tax			—				—				—				—
Loss for the year		$	(2,442	)		$	(2,380	)		$	(4,939	)		$	(4,573	)
Basic and diluted loss per share		$	(0.01	)		$	(0.02	)		$	(0.03	)		$	(0.04	)

 

		June 30,				Year Ended December 31,
U.S. dollars in thousands		2022				2021				2020
Balance Sheet Data:
Cash and cash equivalents		$	859			$	4,171			$	4,341
Total assets		$	9,368			$	10,338			$	8,465
Total liabilities		$	3,618			$	2,447			$
Accumulated losses		$	(26,278	)		$	(23,836	)		$	(18,897	)
Total shareholders’ equity		$	5,750			$	7,891			$	6,441

Amounts of share-based compensation expense:

 

		Six Months Ended June 30,								As of Ended December 31,
U.S. dollars in thousands		2022				2021				2021				2020
Research and Development		$	86			$	19			$	100			$	47
General and Administrative		$	79			$	237			$	331			$	436
Total share-based compensation		$	165			$	256			$	431			$	483

 

48

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined financial information (the “selected pro forma information”) gives effect to the Business Combination and related transactions described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information”. The Transactions will be accounted for as an assets acquisition in accordance with IFRS. Lionheart is not considered a business as defined by IFRS 3 (Business Combinations) given it consists predominately of cash in the Trust Account. Therefore, the Transactions will be accounted for under IFRS 2 (Share-based Payment). Under this method of accounting, there is no acquisition accounting and no recognition of goodwill. Lionheart will be treated as the “acquired” company for financial reporting purposes, and SMX will be the accounting “acquirer.” The selected unaudited pro forma condensed combined balance sheet as of June 30, 2022 gives pro forma effect to the Business Combination and related transactions as if they had occurred on June 30, 2022. The selected unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2022 and for the year ended December 31, 2021 give pro forma effect to the Business Combination and related transactions as if they had been consummated on January 1, 2021. For further details, see the section titled “Anticipated Accounting Treatment” beginning on page [●] of this proxy statement/prospectus. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Defined terms included below have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus.

The selected pro forma information has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information of the combined company appearing elsewhere in this proxy statement/ prospectus and the accompanying notes. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements of Lionheart and related notes and the historical financial statements of SMX and related notes included in this proxy statement/prospectus. The selected pro forma information has been presented for informational purposes only and is not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the Business Combination and related transactions been completed as of the dates indicated. In addition, the selected pro forma information do not purport to project the future financial position or operating results of the combined company.

 

49

The tables below illustrates four scenarios with respect to the potential redemption by Company Public Stockholders of Company Public Shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account: no redemption, 25% redemption, 75% redemption and maximum redemptions.

SELECTED UNAUDITED PRO FORMA COMBINED BALANCE SHEET

JUNE 30, 2022

 

(all amounts in 000 USD)		Pro Forma (No Redemptions)				Pro Forma (25% Redemptions)				Pro Forma (75% Redemptions)				Pro Forma (Maximum Redemptions)
Assets
Current assets
Cash and cash equivalents			112,834				80,334				17,834				1,584
Other current assets			1,669				1,669				1,669				1,669
Non-current assets			6,055				6,055				6,055				6,055
Total assets			120,558				88,058				25,558				9,308
Liabilities
Current liabilities			3,790				3,790				3,790				3,790
Non-current liabilities			564				564				564				564
Total liabilities			4,354				4,354				4,354				4,354
Equity
Issued capital, additional paid in capital and warrants			182,741				152,240				92,938				78,823
Other equity			(66,537	)			(68,536	)			(71,734	)			(73,869	)
Total equity			116,204				83,704				21,204				4,954
Total liabilities and equity			120,558				88,058				25,558				9,308

SELECTED UNAUDITED PRO FORMA COMBINED STATEMENT OF PROFIT AND LOSS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

 

(all amounts in 000 USD)		Pro Forma (No Redemptions)				Pro Forma (25% Redemptions)				Pro Forma (75% Redemptions)				Pro Forma (Maximum Redemptions)
Operating Loss			4,067				4,067				4,067				4,067
Net loss for the year			10,810				10,810				10,810				10,810

SELECTED UNAUDITED PRO FORMA COMBINED STATEMENT OF PROFIT AND LOSS

FOR THE YEAR ENDED DECEMBER 31, 2021

 

(all amounts in 000 USD)		Pro Forma (No Redemptions)				Pro Forma (25% Redemptions)				Pro Forma (75% Redemptions)				Pro Forma (Maximum Redemptions)
Operating Loss			46,441				48,433				51,597				53,708
Net loss for the year			44,004				45,996				49,160				51,271
Weighted average number of ordinary shares outstanding			34,753,728				31,628,278				25,378,278				23,753,278

 

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COMPARATIVE PER SHARE INFORMATION

The following table sets forth the historical comparative share information for SMX and Lionheart on a stand-alone basis and the unaudited pro forma condensed combined per share information after giving effect to the Transactions, (1) assuming no Lionheart stockholders exercise redemption rights with respect to their Class A common shares; (2) assuming that Lionheart stockholders exercise their redemption rights with respect to a maximum of 11,000,000 shares of Class A common shares upon consummation of the Business Combination; (3) assuming that 3,125,000 shares of Class A Common Stock are redeemed for an aggregate payment of approximately $31,562,000 million (based on the estimated per share redemption price of approximately $10.10 per share) from the Trust Account, which represents a midpoint redemption scenario between no redemption and the maximum redemption scenario and (4) assuming that 9,375,000 shares of Class A Common Stock are redeemed for an aggregate payment of approximately $94,687,500 million (based on the estimated per share redemption price of approximately $10.10 per share) from the Trust Account, which represents a quarter point redemption scenario between no redemption and the maximum redemption scenario.

The financial statements of SMX have been prepared in accordance with IFRS as issued by the IASB. The historical financial statements of Lionheart have been prepared in accordance with U.S. GAAP.

The historical information should be read in conjunction with the selected historical financial information summary included elsewhere in this proxy statement/prospectus and the historical financial statements of Lionheart and SMX. The unaudited pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined share information below does not purport to represent what the actual results of operations or the earnings per share would been had the companies been combined during the periods presented, nor to project the Post-Combination Company’s results of operations or earnings per share for any future date or period. The unaudited pro forma condensed combined shareholders’ equity per share information below does not purport to represent what the value of Lionheart and SMX would have been had the companies been combined during the periods presented.

 

(all amounts in 000 USD, except of share and per share data)		Lionheart IFRS								Security Matters				Pro Forma (No Redemptions)				Pro Forma (25% Redemptions)				Pro Forma (75% Redemptions)				Pro Forma (Maximum Redemptions)
Six months ended June 30, 2022		Class A Common Stock				Class B Common Stock
Net loss (profit)			3,266				4,899				2,442				10,810				10,810				10,810				10,810
Weighted average number of ordinary shares outstanding			12,900,000				3,125,000				165,629,666				34,729,153				31,604,153				25,354,153				23,729,153
Net loss (earnings) per share – basic and diluted ($)			0.25				1.57				0.01				0.31				0.34				0.43				0.46

 

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