Security Matters Limited (ASX:SMX) entered into a non-binding letter of intent to acquire Lionheart III Corp (NasdaqGM:LION) from a group of shareholders in a reverse merger transaction on March 11, 2022. Security Matters Limited (ASX:SMX) entered into an agreement to acquire Lionheart III Corp from a group of shareholders for approximately $200 million in a reverse merger transaction on July 26, 2022. As per the terms of the transaction, SMX shareholders will receive consideration via a scheme of arrangement consisting of an aggregate of 20 million ordinary shares of SMX Ireland being 10.2432 SMX Shares per one share in SMX Ireland, with an issued value of $10.00 per SMX Ireland Share. The merger transaction is anticipated to generate proceeds of up to approximately $116 million cash, assuming no redemptions by Lionheart's stockholders. These funds will be used by the combined entity to fund operations and support strategic growth opportunities. At the closing, SMX shareholders will own approximately 55.5% stake in the combined company. Upon the closing of the transaction, SMX will list on NASDAQ via a newly-formed Irish company (“SMX Ireland”) to be named “SMX Public Limited Company” or “SMX (Security Matters) PLC” and the ordinary shares and warrants of SMX Ireland are expected to trade on NASDAQ under the new ticker symbols “SMX” and “SMXW”, respectively, and SMX shall cease to be quoted on the ASX. As of September 7, 2022, SMX will list on NASDAQ via a newly formed Irish company to be named “Empatan Public Limited Company”. Under the agreement, a subsidiary of SMX Ireland will merge with and into Lionheart, with Lionheart surviving the merger as a wholly owned subsidiary of SMX Ireland. Haggai Alon shall be appointed as Chief Executive Officer of SMX Ireland, the parent of the SMX Group and its subsidiaries. The Advisory Board will be comprised of Yair Seroussi, Major General Ami Shafran and Yigal Unna. SMX shall pay a termination fee of $2 million to Lionheart and vice versa.

The transaction is subject to receipt of required regulatory approvals, the approval of shareholders of both SMX and Lionheart, Australian court approval and other customary condition. The board of directors of Lionheart has unanimously approved the deal and the board of directors of SMX considers the deal to be in the best interest of SMX shareholders and option holders and unanimously recommends that SMX shareholders vote in favor of the transaction. The shareholders meeting of SMX shareholders is scheduled on February 1, 2023 to ratify the proposed Scheme Of Arrangement. As of January 19, 2023, registration statement on Form F-4 has been declared effective by the U.S. Securities and Exchange Commission. As of January 30, 2023, shareholders of Lionheart III approved the transaction. As of February 28, 2023, the Federal Court has approved the deal. It is expected that the implementation date and start trading on the NASDAQ will be March 7, 2023. As of March 1, 2023, the scheme of arrangement became effective. The transaction is expected to close in the fourth quarter of 2022. As of March 1, 2023, the transaction is expected to close on May 8, 2023. The deal is anticipated to generate proceeds of up to approximately $116 million in cash, assuming no redemptions by Lionheart's public stockholders. These funds will be used to fund operations and strategic growth opportunities.

ClearThink Capital is serving as financial advisor to SMX. EF Hutton, a division of Benchmark Investments, LLC, is serving as financial advisor to Lionheart III Corp. Robert S. Matlin and Julie F. Rizzo of K&L Gates, Doron Afik of Afik & Co Attorneys & Notary and Connor Manning, Louise O'Byrne and Ailish Finnerty of Arthur Cox LLP are serving as legal counsel to SMX. David Ryan, Cassian Ho, Eddie Ahn, Elliott Cheung, Kenny Mui, Roger Hawkins, Steven Pidgeon, Jeremy Lustman, Maruti Narayan, Joshua Samek, Jeffrey Scharfstein and Gabriel de Corral of DLA Piper acted as legal advisors to Lionheart III Corp. Mark Zimkind of Continental Stock Transfer & Trust Company acted as transfer agent to LION. LION has hired MacKenzie Partners, Inc., to assist in the proxy solicitation process. MacKenzie Partners, Inc. will receive a fee of up to $0.1 million, under normal circumstances. EF Hutton, division of Benchmark Investments, LLC and DLA Piper LLP (US) acted as due diligence provider to Lionheart III Corp. Scura Partners LLC acted as financial advisor and fairness opinion provider to LION. In connection with Scura Partners' services as a financial advisor to the Lionheart Board, Lionheart agreed to pay Scura Partners an aggregate fee of $0.2 million.