Security Matters' (ASX: SMX) share price soared 17.6% in the past two days of trading last week on the Australian Securities Exchange (ASX), after the company reported last Thursday that it had achieved an important technological milestone.
Security Matters, which held its IPO on the ASX in October 2018, has developed and begun marketing of technology that "marks" various products -solid, liquid, or gas - in order to track them in the supply chain and guarantee their authenticity. The surge in the company's share price brought it to A$0.40, double the price in its offering, although the share price reached as high as A$0.60 in recent months. This week's gains brought Security Matters' market cap to $41 million (NIS 103 million).
Security Matters' offices are located in the Arava region on Kibbutz Ketura, which holds 18.4% of Security Matters' shares.
The report that boosted the company's share price states that Security Matters supplied 500,000 codes in the first half of the year, 10 times the target it set for the entire year at the time of the IPO. Adv. Doron Afik, who advised Security Matters in its IPO and is still a company adviser, said, "Security Matters is definitely progressing on all fronts." Afik also mentioned the company's secondary offering in April, six months after the IPO: Security Matters raise A$6 million at A$0.20 per share in the IPO and the same amount at $0.50 per share in the secondary offering. Afik says that the company originally planned to raise half that amount, but that demand in the secondary offering was very strong.
Agreement with blockchain software company
Last month, Security Matters reported signing a memorandum of understanding with R3, a software company in the blockchain field. The company agreed to work together in order to leverage Security Matters' technology and intellectual property in order to jointly create new blockchain applications for enhancing security and tracking products. In this context, Afik commented that the company's technology was combination of three factors: "The company's mark can be used on any material, from food to microchips. It provides a reader through which the material can be read. The third side is blockchain technology capable of connecting the mark and the reader. In blockchain technology, each component contains all of the information within it. The system is a kind of barcode, which the company is able to read in encrypted fashion and know when the material was produced, where it is in the supply chain, and to verify that it was not counterfeited on the way with a very high level of information security."
Security Matters was one of a number of Israeli companies that held offerings on the ASX late last year. Others were Shekel Scales, a manufacturer of weighing systems, whose share price has fallen 57% since its offering, and HeraMed , which developed a home monitor for keeping track of fetal heartbeats, whose share has had a 10% return since its offering. Joining them in early 2019 was fintech company Splitit, whose share price has multiplied itself several times over since its offering, and which has since held a secondary offering (the return on its share since the company's IPO is currently 160%).
It appears that the stampede of small Israeli companies to the ASX has subsided somewhat since last year. One of the main reasons is the maturing of the Australian market, with investors there and the ASX requiring companies holding offerings to be at a slightly more advanced stage, not merely startups with no revenue, and certainly no without profits. At the same time, the ASX today has over 20 Israeli companies, and Israel is the third largest foreign market on it, following the US and New Zealand.
Published by Globes, Israel business news - en.globes.co.il - on July 7, 2019
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