<SEC-DOCUMENT>0001493152-23-039376.txt : 20231103
<SEC-HEADER>0001493152-23-039376.hdr.sgml : 20231103
<ACCEPTANCE-DATETIME>20231103172546
ACCESSION NUMBER:		0001493152-23-039376
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20231103
DATE AS OF CHANGE:		20231103

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SMX (Security Matters) Public Ltd Co
		CENTRAL INDEX KEY:			0001940674
		STANDARD INDUSTRIAL CLASSIFICATION:	MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			L2
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-274378
		FILM NUMBER:		231377429

	BUSINESS ADDRESS:	
		STREET 1:		MESPIL BUSINESS CENTRE, MESPIL HOUSE
		STREET 2:		SUSSEX ROAD
		CITY:			DUBLIN 4
		STATE:			L2
		ZIP:			D04 T4A6
		BUSINESS PHONE:		353 1 920 1000

	MAIL ADDRESS:	
		STREET 1:		MESPIL BUSINESS CENTRE, MESPIL HOUSE
		STREET 2:		SUSSEX ROAD
		CITY:			DUBLIN 4
		STATE:			L2
		ZIP:			D04 T4A6

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Empatan Public Ltd Co
		DATE OF NAME CHANGE:	20220801
</SEC-HEADER>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Filed
pursuant to 424(b)(3)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registration
Statement No. 333-274378</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PROSPECTUS
SUPPLEMENT NO. 3</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(To
Prospectus dated September 18, 2023)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SMX
(SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Issuance
of up to 1,406,853 Ordinary Shares</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
prospectus supplement (this &ldquo;Prospectus Supplement&rdquo;) is being filed to update and supplement our prospectus dated September
18, 2023, as supplemented (the &ldquo;Prospectus&rdquo;), relating to the to the resale, from time to time of up to 1,406,853 ordinary
shares of the Company, $0.0022 par value per share, by YA II PN, LTD, a Cayman Islands exempt limited partnership.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Specifically,
this Prospectus Supplement is being filed to update and supplement the information included in the Prospectus with certain information
contained in our Report on Form 6-K submitted to the U.S. Securities and Exchange Commission (the &ldquo;SEC&rdquo;) on November 3,
2023 (the &ldquo;Form 6-K&rdquo;). Accordingly, we have attached the Form 6-K to this Prospectus Supplement. Any statement contained
in the Prospectus shall be deemed to be modified or superseded to the extent that information in this Prospectus Supplement modifies
or supersedes such statement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Capitalized
terms used but not defined herein have the meanings ascribed to them in the Prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Prospectus Supplement is not complete without, and may not be utilized except in connection with, the Prospectus, including any supplements
and amendments thereto.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may further amend or supplement the Prospectus and this Prospectus Supplement from time to time by filing amendments or supplements as
required. You should read the entire Prospectus, this Prospectus Supplement and any amendments or supplements carefully before you make
your investment decision.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Ordinary Shares are listed on The Nasdaq Global Market under the symbol &ldquo;SMX&rdquo; and our public warrants are listed on The Nasdaq
Capital Market under the symbol &ldquo;SMXWW&rdquo;. On November 2, 2023, the closing price of our Ordinary Shares was $1.81. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Investing
in our Ordinary Shares involves significant risks. You should read the section entitled &ldquo;Risk Factors&rdquo; beginning on page
15 of the Prospectus for a discussion of certain risk factors that you should consider before investing in our Ordinary Shares.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Neither
the Securities and Exchange Commission nor any state securities commission or other regulatory body has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
date of this Prospectus Supplement is November 3, 2023</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 18pt; color: Black"><B>UNITED
STATES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 18pt; color: Black"><B>SECURITIES
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt; color: Black"><B>Washington,
D.C. 20549</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 18pt; color: Black"><B>FORM
6-K</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>REPORT
OF FOREIGN PRIVATE ISSUER</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER THE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>SECURITIES
EXCHANGE ACT OF 1934</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>For
the month of November 2023</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Commission
File Number: 001-41639</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 18pt; color: Black"><B><FONT STYLE="text-decoration: underline">SMX
(SECURITY MATTERS) PUBLIC LIMITED COMPANY</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>(Exact
Name of Registrant as Specified in Charter)</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Mespil
Business Centre, Mespil House </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Sussex
Road, Dublin 4, Ireland</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Tel:
+353-1-920-1000</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">(Address
of Principal Executive Offices) (Zip Code)</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F &#9746; Form
40-F &#9744;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">This
Report on Form 6-K of SMX (Security Matters) Public Limited Company (the &#8220;Company&#8221;) includes (1) a Management&#8217;s Discussion
and Analysis of Financial Condition and Results of Operations of the Company for the six months ended June 30, 2023 and 2022 and (2)
attaches as Exhibit 99.1 the unaudited interim condensed consolidated financial statements and related notes of the Company as and for
the six months ended June 30, 2023.</FONT></P>

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STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Certain
statements in this Current Report on Form 6-K or attached as exhibits hereto may constitute &#8220;forward-looking statements&#8221;
within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to,
statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer
to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking
statements. The words &#8220;anticipate,&#8221; &#8220;believe,&#8221; &#8220;contemplate,&#8221; &#8220;continue,&#8221; &#8220;could,&#8221;
&#8220;estimate,&#8221; &#8220;expect,&#8221; &#8220;forecast,&#8221; &#8220;intends,&#8221; &#8220;may,&#8221; &#8220;might,&#8221;
&#8220;plan,&#8221; &#8220;possible,&#8221; &#8220;potential,&#8221; &#8220;predict,&#8221; &#8220;project,&#8221; &#8220;should,&#8221;
&#8220;would&#8221; and similar expressions may identify forward-looking statements, but the absence of these words does not mean that
a statement is not forward-looking. Forward-looking statements in this Current Report on Form 6-K may include, for example, statements
about:</FONT></P>

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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">developments
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">the
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">These
forward-looking statements are based on information available as of the date of this Current Report on Form 6-K, and current expectations,
forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should
not be relied upon as representing views as of any subsequent date, and no obligation is undertaken to update forward-looking statements
to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
a result of a number of known and unknown risks and uncertainties, actual results or performance may be materially different from those
expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

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<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify">&#160;</TD>
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<TR STYLE="font: 10pt Times New Roman, Times, Serif">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>MANAGEMENT&#8217;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><I>The
following discussion and analysis provide information which our management believes is relevant to an assessment and understanding of
the Company&#8217;s consolidated results of operations and financial condition. This discussion and analysis should be read together
with our unaudited interim condensed consolidated financial statements and related notes as of June 30, 2023 included elsewhere in this
Report on Form 6-K, and the audited consolidated financial statements and related notes as of December 31, 2022 of our company and our
predecessor companies included in our Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 1, 2023. This
discussion and analysis should also be read together with the section of the Annual Report on Form 20-F entitled &#8220;Item 4. Information
of the Company.&#8221; In addition to historical financial information, this discussion and analysis contains forward-looking statements
based upon current expectations that involve risks, uncertainties and assumptions. See the section entitled &#8220;Cautionary Statement
Regarding Forward-Looking Statements&#8221; above. Actual results and timing of selected events may differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those set forth under &#8220;Risk Factors&#8221; or elsewhere
in the Annual Report on Form 20-F. </I></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Business</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white">SMX
integrates chemistry, physics, and computer science to give materials memory and create a culture of transparency and trust across
multiple industries. The Company&#8217;s nearly 100 patents support unique marking, measuring, and tracking technologies allowing
clients to seamlessly deploy transparency at all levels of development and provide stakeholders with a complete provenance of
material composition and history, from virgin material to recycled, to address manufacturing challenges and ESG goals while
maintaining sustainable growth. As a result, SMX&#8217;s technologies are designed and developed to help companies address ESG
commitments and transition more successfully to a low-carbon economy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white">The
Company&#8217;s technology seeks to enable global companies across various industries to transition more successfully to a
sustainable circular economy. By adopting our technology, they would be able to tangibly measure and track the raw material from
origination, through the supply chain and at the end of life&#8212;where the amount of material recycled/reused from that product
item can be measured and as well as the number of times that specific material/item has been recycled/reused.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Its
proprietary marker system embeds a permanent or removable (depending on the needs of the customer) mark on solid, liquid or gaseous objects
or materials. Each marker is comprised of a combination of marker codes such that each marker is designed to be unique and unable to
be duplicated. The marker system is coupled with an innovative patented reader that responds to signals from the marker and, together
with a patented algorithm, captures the details of the product retrieved and stored on a blockchain digital ledger. Each marker can be
stored, either locally on the reader and on private servers, cloud servers or on a blockchain ledger, to protect data integrity and custody.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>History</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">SMX
Security Matters Ltd. (Israel Corporate Number 515125771) (&#8220;SMX Israel&#8221;) was incorporated in 2014 to provide brand protection
and supply chain integrity solutions to businesses. It provides these solutions through the commercialization of the initial technology
of tracking and tracing materials by observing and identifying markers (the &#8220;Source IP&#8221;). SMX Israel&#8217;s Source IP was
initiated from the Soreq Nuclear Research Center, an Israeli government research and development institute for nuclear and photonic technologies
under the Israeli Atomic Energy Commission (&#8220;Soreq&#8221;). In January 2015, SMX Israel entered into the Isorad License Agreement
with Isorad Ltd. (an IP holding company of Soreq) to license the Source IP and develop and commercialize the technology (the &#8220;Isorad
License Agreement&#8221;). Under the Isorad License Agreement, as amended, the Source IP can be utilized in almost any industry and with
any product.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">SMX
Israel merged into Security Matters PTY Ltd., an Australian company with Australian Company Number (ACN) 626 192 998 (&#8220;Security
Matters PTY&#8221;), to effect a listing on the Australian Securities Exchange under the symbol &#8220;ASX: SMX.&#8221; At that time,
Security Matters PTY had three wholly-owned subsidiaries: Security Matters Ltd. (Israel), SMX Fashion and Luxury (France), and SMX Beverages
Pty Ltd. (Australia). It also held 50% of Yahaloma Technologies Inc., a Canadian company and, as of October 3, 2023, 51.9% of trueGold
Consortium Pty Ltd., an Australian company.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">On
March 7, 2023 (the &#8220;Closing Date&#8221;), the Company consummated its previously announced business combination with Lionheart
III Corp (&#8220;Lionheart&#8221;) pursuant to which, among other things (the &#8220;Business Combination&#8221;):</FONT></P>

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    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
a result of the Business Combination, the Company owns the entire share capital of Security Matters PTY. Accordingly, for financial reporting
purposes, Security Matters PTY (the legal subsidiary) is the accounting acquirer and the Company (the legal parent) is the accounting
acquiree. The consolidated financial statements prepared following the reverse acquisition are issued under the name of the Company,
but they are a continuance of the financial statements of Security Matters PTY and reflect the fair values of the assets and liabilities
of the Company (the acquiree for accounting purposes), together with a deemed issuance of shares by Security Matters PTY at fair value
based on the quoted opening share price of the Company in its first trading day following the closing of the Business Combination, and
a recapitalization of its equity. This deemed issuance of shares is in fact both an equity transaction under IAS 32 (receiving the net
assets of the Company) and an equity-settled share-based payment transaction under IFRS 2 (receiving the listing status of the Company).
The difference between the fair value of the shares deemed to have been issued by Security Matters PTY and the fair value of the Company&#8217;s
identifiable net assets represent a payment for the service of obtaining a stock exchange listing for its shares and it is therefore
expensed immediately to profit or loss at the closing date. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Key
Factors Affecting Operating Results</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company believes that its performance and future success depend on several factors that present significant opportunities for us but
also pose risks and challenges, including those discussed below and in the risk factors of the Company included from time to time in
the Company&#8217;s filings with the Securities and Exchange Commission.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><FONT STYLE="text-decoration: underline">Commercial
Agreements</FONT></FONT></P>

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Company&#8217;s technology seeks to enable global companies across various industries to transition more successfully to a sustainable
circular economy. By adopting our technology, they can be able to tangibly measure and track the raw material from origination, through
the supply chain and at the end of life&#8212;where the amount of material recycled/reused from that product item can be measured and
as well as the number of times that specific material/item has been recycled/reused.</FONT></P>

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to the fact that we aim our sales efforts at large international market-makers conglomerates, our sale cycle is relatively slow and there
is a larger risk that at any time, due to many reasons that are beyond our control, the sale cycle will be broken and all efforts will
be lost.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company has received interest in its technology from several international market-makers conglomerates as well as parties interested
in making such technology a market standard, which will greatly assist the creation of future income. Any delays in the successful completion
of projects or the creation of a market standard, as well as the materialization of any of the risks described in the section entitled
&#8220;<I>Risk Factors</I>&#8221; above may impact the ability to generate revenue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Components
of Operating Results</B></FONT></P>

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results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included
elsewhere in this Report and in the Company&#8217;s Annual Report on Form 20-F for the fiscal year ended December 31, 2022.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

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date, we have not yet generated significant revenue from the sale of our technology, partly as a result of focusing on onboarding
a client portfolio, building the foundation to be an industry standard and best practice and to be ready for full and fast
deployment to commercial global service. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

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Expenses</I></B></FONT></P>

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Company&#8217;s current operating expenses consist of the following components: research and development expenses, general and administrative
expenses and selling and marketing expenses. The Company has proven an ability to maintain discipline on expense over time with creating
greater delivery and outcome.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

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and Development Expenses, net</I></B></FONT></P>

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Company&#8217;s research and development expenses consist primarily of wage and salary related expenses, subcontractors and consultants,
depreciation and amortization of equipment, research expenses and share-based compensation expenses. The Company expects that its research
and development expenses will increase as the Company continues to develop its products and recruit additional research and development
employees.</FONT></P>

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Company is engaged in Proof of Concept (POC) agreements according to which it receives funds for financing research and development expenses
from prospective customers. Those funds are reimbursements for expenses and therefore are offset against the related R&amp;D expenses
in profit or loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

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and administrative expenses consist primarily of professional services fees, wages and salary related expenses, share-based compensation,
facility-related costs, insurance and other general and administrative expenses. In the six months ended June 30, 2023, general and administrative
expenses also include the costs that are related to the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Finance
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expenses, net consists primarily of revaluation of financial liabilities at fair value, interest on borrowings, exchange rate difference,
fees and commissions to banks and income on short-term deposits.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Foreign
currency</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
consolidated financial statements are prepared in US Dollars, which is the presentation currency of the Company. Security Matters PTY&#8217;s
functional currency is Australian Dollars. The functional currency of SMX Israel is New Israeli Shekels.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Transactions
and balances in foreign currencies are converted into US Dollars in accordance with the principles set forth by International Accounting
Standard (IAS) 21 (&#8220;The Effects of Changes in Foreign Exchange Rates&#8221;). Accordingly, transactions and balances have been
converted as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Assets
                                            and liabilities &#8211; at the rate of exchange applicable at the reporting date;</FONT></TD></TR><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
                                                                                                                                              </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Expense
                                            items &#8211; at annual average rate at the statements of financial position date.</FONT></TD></TR><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
                                                                                                                                               </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Share
                                            capital, capital reserve and other capital movement items were at rate of exchange as of
                                            the date of recognition of those items.</FONT></TD></TR><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
                                                                                                    </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Accumulated
                                            deficit was based on the opening balance for the beginning of the reporting period in addition
                                            to the movements mentioned above.</FONT></TD></TR><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
                                                                                              </TABLE>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Exchange
                                            gains and losses from the aforementioned conversion are recognized in the statement of other
                                            comprehensive lose in Foreign.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Comparison
of the Six Months Ended June 30, 2023, and 2022</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"></FONT>The
following table summarizes our historical results of operations for the periods indicated:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in; border-collapse: collapse; width: 80%">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(228</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(378</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">General and administrative
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1,200</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Listing
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    <TD STYLE="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(-
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
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    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(31,552</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">*
After giving effect to the reverse stock split</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">**
Restated as a result of the Business Combination and after giving effect to the reverse stock split</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Operating
loss for the six months ended June 30, 2023 was $31,552 thousand compared to $2,511 thousand for the six months ended June 30, 2022,
an increase of $29,041 thousand, or 1,156%. The major increase is due to the costs that are related to the Business Combination, with
listing expenses which amounted to $16,802 thousand and transaction cost which amounted to $7,792 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Research
and Development Expenses, net</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s research and development expenses for the six months ended June 30, 2023, amounted to $1,172 thousand representing an
increase of $239 thousand, or 26%, compared to $933 thousand for the six months ended June 30, 2022. The major changes in research and
development expenses were an increase of $169 thousand in Share based compensation, a decrease of 327 thousand in salaries and related
expenses and a decrease of $265 thousand in Subcontractors and research expenses that were offset against the reimbursement from paid
pilots and proof of concept projects that decreased in $671 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>General
and Administrative Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s general and administrative expenses amounted to $13,350 thousand for the six months ended June 30, 2023, an increase
of $12,150 thousand, or 1,013%, compared to $1,200 for the six months ended June 30, 2022. The increase was primarily attributable to
$7,792 thousand in transaction cost, an increase of $1,526 thousand in Advertising, Public and Investors Relations, an increase of $1,723
thousand in share-based compensation, an increase of $375 thousand in travel expenses, an increase of $310 thousand in insurance costs
and an increase of $235 thousand in wages and salaries related expenses reflecting an increase in the number of employees and in related
salary expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Selling
and Marketing Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s selling and marketing expenses totaled $228 thousand for six months ended June 30, 2023, a decrease of $150 thousand,
or 40%, compared to $378 thousand for the six months ended June 30, 2022, and was primarily due to a decrease in digital advertising
cost.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Finance
Income and Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s finance income for the six months ended June 30, 2023, totaled $1,143 thousand, an increase of $1,038 thousand, or 989%,
compared to $105 thousand for the six months ended June 30, 2022. The increase is primarily due to revaluation of financial liabilities,
which consist of warrants and a Convertible note, at fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
finance expense for the six months ended June 30, 2023, totaled $2,496 thousand, an increase of $2,460 thousand, or 6,833%,
compared to $36 thousand for the six months ended June 30, 2022. The increase is related to a revaluation of financial liabilities,
which consist of bridge loans, at fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Share
of Net Profit/Loss of Associated Companies</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
of June 30, 2023, and December 31, 2022, the carrying amount of the investment in associated companies is $112 thousand and $221 thousand,
respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Share
of net loss of associated companies consists of equity loss from associated joint venture activity for the six months ended June 30,
2023, totaled $104 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Income
Tax</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
of June 30, 2023, the Company estimated carry forward tax losses was $56,106 thousand (June 30, 2022: $19,927 thousand) which may be
carried forward and offset against taxable income for an indefinite period in the future. The Company did not recognize deferred tax
assets relating to carry forward losses in the financial statements because their utilization in the foreseeable future is not probable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Net
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
a result of the forgoing, our net loss for the six months ended June 30, 2023, was $33,009 thousand, compared to $2,442 thousand for
the six months ended June 30, 2022, an increase of $30,567 thousand, or 1,252%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Comparison
of the Years Ended December 31, 2022 and December 31, 2021</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; background-color: white">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
following table summarizes our historical results of operations for the periods indicated:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in; border-collapse: collapse; width: 80%">
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    dollars in thousands (except of per share data)</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: Black; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; color: Black"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
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    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">**
Restated as a result of the Business Combination and after giving effect to the reverse stock split</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
a result of the foregoing, our operating loss for year ended December 31, 2022 was $5,190 thousand compared to an operating loss of $4,974
thousand for year ended December 31, 2021, an increase of $216 thousand, or 4.3%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Research
and Development Expenses, net</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s research and development expenses for the year ended December 31, 2022, amounted to $1,898 thousand, representing a decrease
of $141 thousand, or 7%, compared to $2,039 thousand for the year ended December 31, 2021. The major changes in research and development
expenses were an increase of $371 thousand in salaries and related expenses that were offset against the reimbursement from paid pilots
and proof of concept projects that increased in $335 thousand and Subcontractors and consultants&#8217; expenses that decreased in $257
thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>General
and Administrative Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s general and administrative expenses totaled $2,723 thousand for the year ended December 31, 2022, a net increase of $241
thousand, or 10%, compared to $2,482 for the year ended December 31, 2021. The net increase was primarily attributable to an increase
of $183 thousand in wages and salaries related expenses reflecting an increase in the number of employees and an increase of $223 thousand
in travel expenses offset by decrease of $194 thousand in share-based compensation expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Selling
and Marketing Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s selling and marketing expenses totaled $569 thousand for the year ended December 31, 2022, an increase of $116 thousand,
or 26%, compared to $453 thousand for the year ended December 31, 2021, and was primarily due to an increase in digital advertising cost
associated with our marketing efforts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Finance
Income and Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s finance income for the year ended December 31, 2022, totaled $28 thousand, a decrease of $209 thousand, or 88%, compared
to $237 thousand for the year ended December 31, 2021. The Company&#8217;s finance expenses totaled $1,128 thousand for the year ended
December 31, 2022, an increase of $1,027 thousand or 1,017%, compared to $101 thousand for the year ended December 31, 2021.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Share
of Net Profit/Loss of Associated Companies</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Shares
of net profit of associated companies consists of equity profit from associated joint venture activity for the year ended on December
31, 2022 at the amount of $106 thousand and share of net loss of associated companies consists of equity loss from associated joint venture
activity for the year ended on December 31, 2021 at the amount of $101 thousand. As of December 31, 2022 and December 31, 2021, the carrying
amount of the investment in associated companies is $221 thousand and $147 thousand, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Income
Tax</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
of December 31, 2022, the Company estimated carry forward tax losses of approximately $24,106 thousand (December 31, 2021: $17,659 thousand)
which may be carried forward and offset against taxable income for an indefinite period in the future. The Company and its subsidiaries
did not recognize deferred tax assets relating to carry forward losses in the financial statements because their utilization in the foreseeable
future is not probable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Net
Loss attributable to shareholders</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
a result of the forgoing, our net loss for the year ended December 31, 2022 was $6,184 thousand, compared to $4,939 thousand for the
year ended December 31, 2021, an increase of $1,245 thousand, or 25%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Liquidity
and Capital Resources</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Overview</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Since
our inception through June 30, 2023 and thereafter, the Company has funded its operations principally through the issuance of Ordinary
Shares, warrants, convertible notes, loans from investors and related parties and reimbursement from prospected customers for paid pilots
and proof-of-concept projects. As of June 30, 2023, the Company had $3,020 thousand in cash and cash equivalents. In addition, in September
2023, the Company raised gross proceeds of approximately $2,500 thousand, before deducting fees and other offering expenses payable by
the Company, from the sale of a convertible promissory note and warrants to an institutional investor.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
table below presents our cash flows for the periods indicated:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in; border-collapse: collapse; width: 80%">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2,504</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">445</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I></I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Operating
Activities</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Net
cash used in operating activities was $7,675 thousand during the six months ended June 30, 2023, compared to net cash used in operating
activities of $2,862 thousand during the six months ended June 30, 2022. The increase was primarily used for transaction costs and payments
that are related to the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Net
cash used in operating activities was $5,223 thousand during the year ended December 31, 2022, compared to net cash used in operating
activities of $3,908 thousand during the year ended December 31, 2021. The increase was primarily used for payment of salaries and related
expenses, travel expenses, research and development, subcontractors, consultants and materials. In addition, the increase in cash used
in operating activities derived from a material increase in prepaid expenses related to the Business Combination Agreement, dated
as of July 26, 2022, by and among the Company, Security Matters PTY, Lionheart and <FONT STYLE="background-color: white">Aryeh Merger
Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (the &#8220;</FONT>BCA&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Investing
Activities</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Net
cash used in investing activities was $393 thousand during the six months ended June 30, 2023 and consisted of cost of capitalized development
expenses in the amount of $383 thousand and $10 thousand used for purchasing property, plant and equipment. Net cash used in investing
activities was $966 thousand during the six months ended June 30, 2022, consisted of cost of capitalized development expenses in the
amounts of $783 thousand and $183 thousand, which were used for purchasing property and equipment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Net
cash used in investing activities was $1,127 thousand during the year ended December 31, 2022 and consisted of cost of capitalized development
expenses in the amount of $975 thousand and $152 thousand used for purchasing property, plant and equipment. Net cash used in investing
activities was $1,765 thousand during the year ended December 31, 2021, and consisted of cost of capitalized development expenses in
the amounts of $1,468 thousand and $297 thousand, which were used for purchasing property and equipment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Financing
Activities</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Net
cash provided by financing activities was $9,703 thousand during the six months ended June 30, 2023, consisted mainly of $3,220 thousand
in advance payment for equity, $2,923 thousand for net proceeds from issuance of shares in the Business Combination, an aggregate of
$2,811 thousand net proceeds from the issuance of bundled securities, $550 thousand in proceeds from bridge loans and $250 thousand in
proceeds from the issuance of a convertible note.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Net
cash provided by financing activities was $542 thousand during the six months ended June 30, 2022, consisted mainly of $581 thousand
in proceeds from the issuance of convertible notes, which was partially offset by payment of $39 thousand for lease liabilities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Net
cash provided by financing activities was $3,846 thousand during the year ended December 31, 2022, consisted mainly of $3,310 thousand
in proceeds from bridge loans and warrants and $581 thousand of net proceeds from issuance of convertible notes and $182 thousand net
issuance of shares, which was partially offset by payment of $172 thousand for loan repayment to related parties. Net cash provided by
financing activities was $6,118 thousand during the year ended December 31, 2021, consisted mainly of $5,892 thousand in proceeds from
net issuance of shares and warrants and $395 thousand of net proceeds from the exercise of warrants, which was partially offset by payment
of $98 thousand for lease liabilities and loan repayment to related parties of $103 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Current
Outlook</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company has incurred and continues to incur losses, and continues to generate negative cash flows from operations since inception in
2015. Since the Company&#8217;s inception, it has not generated significant revenue from the sale of products.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
of June 30, 2023 and December 31, 2022, the Company had $3,020 thousand and $1,398 thousand, respectively, in cash and cash
equivalents. The Company expects that its existing cash and cash equivalents, including the approximately $2.5 million in net
proceeds raised on September 6, 2023, and along with amounts it may draw down under the SEPA, and receivables from clients once paid,
will be sufficient to fund its operations for the foreseeable future but perhaps at a delayed or reduced scope. In addition, the
Company has outstanding approximately $12 million in existing payables and other liabilities related to expenses of the Business
Combination, of which approximately $8.5 million is deferred through the second quarter of 2024 when such amounts are expected to be
paid. The Company expects to fund the payment of such amounts out of available cash, the Yorkville SEPA, referred to below, ongoing
activities of the Company and possibly other capital raisings in 2023. Further, the Company&#8217;s operating plans may change as a
result of many factors that may currently be unknown to it, and it may need to seek additional funds sooner than planned. The
Company&#8217;s future capital requirements will depend on many factors, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

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                                            progress and costs of our research and development activities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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                                            costs of filing, prosecuting, enforcing and defending patent claims and other intellectual
                                            property rights;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">the
                                            potential costs of contracting with third parties to provide marketing and distribution services
                                            for us or for building such capacities internally; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">the
                                            magnitude of our general and administrative expenses.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Until
the Company can generate significant recurring revenues and profit, the Company expects to satisfy its future cash needs through capital
raising and shareholders&#8217; financial support. The Company cannot be certain that additional funding will be available when needed,
on acceptable terms, if at all. The Company&#8217;s outstanding warrants are either out of the money or have nominal exercise prices;
accordingly, the Company does not expect to raise any material additional funds from the exercise of outstanding warrants in at least
the short-term. If funds are not available, the Company may be required to delay or reduce the scope of research or development plans.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">We
can give no assurances that we will be able to secure additional sources of funds to support our operations on acceptable terms, or at
all, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. If we raise additional
funds by issuing equity or convertible debt securities, including pursuant to the SEPA, it could result in dilution to our existing stockholders
or increased fixed payment obligations. In addition, as a condition to providing additional funds to us, future investors may demand,
and may be granted, rights superior to those of existing stockholders. If we incur additional indebtedness, we could become subject to
covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur
additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions
that could adversely impact our ability to conduct our business. Additionally, any future collaborations we enter into with third parties
may provide capital in the near term but may not be on terms that are favorable to us. Any of the foregoing could significantly harm
our business, financial condition and results of operations. If we are unable to raise additional capital in sufficient amounts or on
terms acceptable to us, we may be required to reduce the scope of the commercialization of our planned products or delay, scale back
or discontinue the development of one or more of our product candidates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">We
may also need to take certain other actions to allow us to maintain our projected cash and projected financial position, including but
not limited to additional reductions in general and administrative costs, sales and marketing costs, and other discretionary costs. Although
we believe such plans, if executed and coupled with the above described sources of liquidity, should provide us with financing to meet
our needs, successful completion of such plans is dependent on factors outside of our control.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">We
anticipate that we will continue to incur net losses into the foreseeable future as we continue our development of our product candidates,
and expand our corporate infrastructure.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Contractual
Obligations</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Reciprocal
Standby Equity Purchase Agreement</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Effective
March 7, 2023, we entered into the SEPA with Yorkville, whereby we have the right, but not the obligation, to sell to Yorkville up to
$25.0 million of our Ordinary Shares at our request, subject to the terms therein. We have received as loans Pre-Advances of $3.5 million,
of which as of the date of this Report on Form 6-K, an aggregate of $1.8 million in principal have been converted into our Ordinary Shares
or repaid in cash. We may from time to time offer and sell our Ordinary Shares under the SEPA, which is expected to provide us with an
additional source of liquidity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Our
decision to make any Advance under the SEPA will depend on a variety of factors to be determined by us from time to time, including,
among other things, the trading price of our Ordinary Shares and determination by us that other sources of capital may be more beneficial,
and determinations by us as to the appropriate sources of funding for our business and operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">We
do not believe that the existence of the SEPA will have any adverse effect on our ability to raise any capital from other sources except
that pursuant to the SEPA, we are not permitted to enter into any variable rate transactions during the term of the SEPA, which could
result in potential investors declining to consider investing in our Company on terms agreeable to us or at all.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Leases</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">SMX
Israel is a party to a lease agreement dated January 14, 2020, and amended as of December 24, 2020 (the &#8220;Lease&#8221;). Under the
Lease, it is obligated to pay ILS 253 thousand plus VAT per year. The Lease will expire on May 31, 2027, with an additional option of
5 years, unless terminated by the landlord due to a requirement of a governmental authority to modify or terminate the Lease, pursuant
to the terms of the lease.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Borrowings</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">On
September 19, 2023, the Company amended its loan agreements dated September 7, 2015, by and between the Company, its shareholders and
Kamea Fund. Pursuant to the amendment to the loan agreements, Kamea agreed to convert US$657 thousand of indebtedness under the loan
agreements into 487,281 ordinary shares (post share reverse split) of the Company, as payment in full for such indebtedness; provided
however, that in the event the proceeds received from Kamea with respect to any sales of the shares are not at least equal to the indebtedness
amount, the Company will remain liable to Kamea for the balance of the indebtedness amount</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Additionally,
Kibbutz Ketura provides administrative services for SMX Israel for which it was debited $19 thousand and $25 thousand for the six month
ended June 30, 2023 and June 30, 2022, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Security
Matters PTY and the Company borrowed an aggregate of $3,860 thousand from private investors between September 2022 and February
2023, which loans are due no earlier than May 31, 2024. All of such loans have an interest rate of 10% per annum. Each such lender (except
for one lender which lent an amount of $1,000 thousand which is not entitled to the redeemable warrants), further received 20%
redeemable 5-year warrant coverage to subscribe for Ordinary Shares at $11.50 per share, plus 5% 5-year bonus warrant coverage to subscribe
for Ordinary Shares at $11.50 per share and a first priority security interest in the shares of Security Matters PTY&#8217;s interest
in trueGold Consortium Pty Ltd. In March 2023, the Company signed an addendum to the Bridge Loans agreements which converted $1,350 thousand
into common shares and deferred the remaining cash payments to March 31, 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">In
January 2023, the Company borrowed $250 thousand from a private investor, which loan is due December 31, 2024. Such loan has an
interest rate of 15% per annum, and is convertible at a conversion price of $10.00 per share, and the holder further received 5% redeemable
5-year warrant coverage to subscribe for Ordinary Shares at $11.50 per share, plus 5% 5-year bonus warrant coverage to subscribe for
Ordinary Shares at $11.50 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">On
September 6, 2023, the Company consummated the transactions pursuant to a Securities Purchase Agreement dated as of September 5, 2023
and issued and sold to an institutional investor a promissory note with a fixed conversion price of $1.6378 and warrants, for gross proceeds
to SMX of approximately $2,500 thousand, before deducting fees and other offering expenses payable by the Company. The note is in the
principal amount of $4,290 thousand. The actual amount loaned by the investor pursuant to the Note is $2,574 thousand after a 40% original
issue discount. The maturity date of the note is the 12-month anniversary of the Effective Date, and is the date upon which the principal
amount, as well as any accrued and unpaid interest and other fees, shall be due and payable. Interest accrues in the amount of 12% per
year and shall be payable on the maturity date or upon acceleration or by prepayment or otherwise. The investor has the right, at any
time, to convert all or any portion of the then outstanding and unpaid principal amount and interest (including any costs, fees and charges)
into Ordinary Shares at a fixed conversion price of $1.6378 per share. Any such conversion is subject to customary adjustments and limitations
set forth in the note, including for fundamental transactions. Additionally, as part of the transaction, we issued two warrants to the
Investor, an &#8220;A&#8221; Warrant and a &#8220;B&#8221; Warrant. The A Warrant for 3,929,051 Ordinary Shares has an exercise price
of $0.0022 per share, subject to customary adjustments, and may be exercised at any time until the five year anniversary of the A Warrant.
The B Warrant for 2,619,367 Ordinary Shares has an exercise price of $1.6378 per share, subject to customary adjustments, and may be
exercised at any time until the five year anniversary of the B Warrant. In no case shall the Company convert the note or exercise the
A Warrants or the B Warrants if the result of the issuance of Ordinary Shares thereby would result in the beneficial ownership of the
investor of ordinary shares in excess of 4.99% of the Company&#8217;s issued and outstanding Ordinary Shares.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Government
Grants</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
of June 30, 2023 and December 31, 2022, the Company has a contingent liability of $141 and $135 thousand respectively, for government
grant it received for the use of research and development activities from Israel Innovation Authority (IIA). The Company is subject to
paying 3% of its relevant revenues for the first three years, and 4% of the relevant revenues for further years, until repayment of the
entire grant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Isorad
License Agreement</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">In
January 2015, the Company entered into the Isorad License Agreement with Isorad Ltd. (a company wholly owned by the State of Israel with
rights to exclusively commercialize the Soreq Research Center technology for civilian uses), according to which the Company was granted
technological license in return for future royalties based on 2.2% of gross sales by the Company and its affiliates and after 25 years
the license becomes royalty-free. Upon the occurrence of an M&amp;A event (as such event is defined in the agreement to include mergers,
sale of all or substantially all the assets of ours and similar event), in the first M&amp;A event, the Company is to pay a consideration
equal to 1% of the amount received or transferred and in the second M&amp;A event, a consideration equal to 2% of the amount received
or transferred. This will not apply to any future offer of shares, merger or sale of assets thereafter.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white">In
January 2023, the Company signed an amendment to the Isorad License Agreement that provided for the following: (1) for the BCA with
Lionheart, (a) Isorad was issued 864,000 options to purchase shares of the Company, which options were issued in January 2023 and
valued using the Black-Scholes pricing model, with the main parameters used being: (1) risk-free rate: 3.42%; (2) expected volatility:
81.92%: (3) expected term: up to 3 years; and (4) expected dividend yield: 0%; and (b) Isorad will be entitled to 1% of any amount
actually received against equity or other funding convertible into equity at the closing of the transaction and until 13 months
thereafter (to be paid after reaching an aggregated received amount of <FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT>27
million, or at the end of such 13 months, the earlier thereof); and (2) Exit fee - in the occurrence of the first M&amp;A event (as such event is defined in such agreement to include
mergers, sale of all or substantially all the assets of the Company and similar event) after the closing of the BCA, the Company is
to pay a cash amount equal to 1.5% of the amount received or transferred. This will not apply to any future offer of shares, merger
or sale of assets thereafter. In the six months ended June 30, 2023, based on the funds the Company actually received, the Company recognized a technology
license intellectual property at the amount of $101 thousand against a liability that reflects the due amount.</P>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Quantitative
and Qualitative Disclosures about Market Risk</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company is exposed to market risks in the ordinary course of business. Market risk represents the risk of loss that may impact our financial
position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of U.S. dollar/ILS
Israeli Shekels exchange rates, which is discussed in detail in the following paragraph.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Foreign
Currency Exchange Risk</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><I>Currency
Fluctuations</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s operating expenses are denominated in USD and ILS, and therefore are currently subject to foreign currency risk. We have
been affected by changes in the rate of ILS currency compared to the U.S. dollar, as the ILS decreased against the U.S. dollar by approximately
6% and 13% in the six months ended June 30, 2023 and June 30 2022, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company&#8217;s policy is not to enter into any currency hedging transactions, and we cannot assure you that we will not be adversely
affected by currency fluctuations in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Credit
Risk</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Credit
risk is a risk of financial loss if a counterparty or customer fails to meet its contractual obligations. We closely monitor the activities
of our counterparties and control the access to its intellectual property which enables it to ensure a prompt collection. Our main financial
assets are cash and cash equivalents as well as other receivables and represent the Company&#8217;s maximum exposure to credit risk in
connection with its financial assets. Wherever possible and commercially practical, the Company holds cash with major and sound financial
institutions in Israel and Australia.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Liquidity
Risk</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Liquidity
risk is the risk that we will encounter in meeting our obligations associated with our financial liabilities that are settled by delivering
cash or another financial asset. The Company has procedures to minimize that risk by maintaining sufficient cash and other highly liquid
current assets and by having available an adequate amount of committed credit facilities. For more details, please refer to the section
titled, &#8220;Liquidity and Capital Resources&#8221;.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>Critical
Accounting Policies and Estimates</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B><I>Reverse
Acquisition Transaction </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">As
a result of the Business Combination, the Company owns the entire share capital of Security Matters PTY Ltd. Accordingly, for financial
reporting purposes, Security Matters PTY Ltd. (the legal subsidiary) is the accounting acquirer, and the Company (the legal parent) is
the accounting acquiree. The consolidated financial statements prepared following the reverse acquisition are issued under the name of
the Company, but they are a continuance of the financial statements of Security Matters PTY Ltd. and reflect the fair values of the assets
and liabilities of the Company (the acquiree for accounting purposes), together with a deemed issuance of shares by Security Matters
PTY Ltd. at fair value based on the quoted opening share price of the Company in its first trading day following the closing of the transaction
($11,599 thousand), and a recapitalization of its equity. This deemed issuance of shares is in fact both an equity transaction under
IAS 32 (receiving the net assets of the Company) and an equity-settled share-based payment transaction under IFRS 2 (receiving the listing
status of the Company). The difference, in the amount of $16,802 thousand, between the fair value of the shares deemed to have been issued
by Security Matters PTY Ltd. and the fair value of the Company&#8217;s identifiable net assets represent a payment for the service of
obtaining a stock exchange listing for its shares and it is therefore expensed immediately to profit or loss at closing date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">The
Company is initially consolidated in the financial statements from the Closing Date of the Business Combination. Substantially all of
the assets and liabilities of the Company were comprised of marketable securities held in a trust account ($4,921 thousand) and trade
and other payables and warrants ($10,127 thousand) respectively, with fair values that were equivalent to their carrying amounts. Below
are the implications of the accounting treatment on the financial statements:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    assets and liabilities of Security Matters PTY have been recognized and measured in the consolidated financial statements of the
    Company for the six month period ended June 30, 2023, at their pre-combination carrying amounts. </FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    retained earnings and other equity balances recognized in the consolidated financial statements of the Company for the six month
    period ended June 30, 2023, are the retained earnings and other equity balances of Security Matters PTY immediately before the Business
    Combination. </FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    amount recognized as issued equity instruments in the consolidated financial statements of the Company for the six month period ended
    June 30, 2023, has been determined by adding to the issued equity of Security Matters PTY immediately before the Business Combination
    the fair value of the deemed issuance of shares, as described above. However, the equity structure (the number and type of shares
    issued) reflects the equity structure of the Company, including the shares issued by the Company through recapitalization. Accordingly,
    the equity structure of Security Matters PTY (issued capital and addition paid in capital) in comparative periods is restated using
    the exchange ratio established in the Business Combination to reflect the number and par value of shares of the Company issued in
    the reverse acquisition transaction. </FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    statement of comprehensive loss in the consolidated financial statements of the Company for the six month period ended June 30, 2023,
    reflects that of Security Matters PTY for the full period together with the post-acquisition results of the Company from the Closing
    Date. Loss per share of Security Matters PTY for periods prior to the acquisition date is restated such the denominator of the historical
    loss per share calculation is adjusted by multiplying the weighted-average shares used in each historically reported loss per share
    calculation by the exchange ratio established in the Business Combination. </FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#ex99_001"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interim Condensed Consolidated Financial Statements as of June 30, 2023</FONT></A></TD></TR>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black"><B>SIGNATURES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black">Date:
November 3, 2023</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><B><A NAME="ex99_001"></A>Exhibit 99.1</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">SMX
(SECURITY MATTERS) </FONT></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">PUBLIC
LIMITED COMPANY</FONT></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS </FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">AS
OF JUNE 30, 2023</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">UNAUDITED</FONT></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">SMX
(SECURITY MATTERS) PUBLIC LIMITED COMPANY</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">AS
OF JUNE 30, 2023</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">UNAUDITED</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">TABLE
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT ID="s_001"></FONT><FONT STYLE="font-size: 10pt"><B>SMX
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>UNAUDITED
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>STATEMENTS
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P>

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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-decoration: underline; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Current
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,673</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4,057</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,071</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-decoration: underline; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-current
    assets</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">820</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">969</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible
    assets, net</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,269</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,027</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">112</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">221</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6,201</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

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    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief
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    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="s_002"></FONT>SMX
(SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>UNAUDITED
INTERIM CONDENSED CONSOLIDATED </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>STATEMENTS
OF COMPREHENSIVE LOSS</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"></P>

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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: center">&#160;</TD>
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD>
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD>
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD></TR>
<TR STYLE="vertical-align: bottom">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,442</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Foreign currency translation</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(165</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(639</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
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</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
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</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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(SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>UNAUDITED
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    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">&#160;</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt">&#160;</TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
accompanying notes are an integral part of the consolidated financial statements.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(*)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents an amount
lower than US$ 1 thousand, see Note 2D.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"><IMG SRC="fin_001.jpg" ALT="" STYLE="width: 104px; height: 36px"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SMX
(SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>UNAUDITED
INTERIM CONDENSED CONSOLIDATED CHANGES IN SHAREHOLDERS&#8217; EQUITY</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(US$
in thousands)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Issued
                                            capital and</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Additional
                                            paid-in capital</B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Foreign
    currency translation reserve</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accumulated
    loss</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
    equity</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="14" STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; font-weight: bold; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance
    as of January 1, 2022</FONT></TD><TD STYLE="width: 2%; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 11%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">31,504</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 11%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">223</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 11%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(23,836</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="width: 2%; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 11%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,891</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">31,504</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">223</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(23,836</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,891</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Comprehensive income</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loss after income tax for the period</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,442</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,442</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other comprehensive
    loss for the period</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(639</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(639</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total comprehensive
    loss for the period</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(639</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,442</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(3,081</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Issuance of shares, net</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">721</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">721</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share-based compensation</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">219</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">219</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
accompanying notes are an integral part of the consolidated financial statements.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
(US$ in thousands)</B></FONT></P>

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    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD>
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD>
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<TR STYLE="vertical-align: bottom">
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">831</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">110</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Repayment of bridge loans</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
accompanying notes are an integral part of the consolidated financial statements.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>UNAUDITED
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
(US$ in thousands)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six Months Ended</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Appendix A &#8211; Non-Cash
    transactions during the period:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Conversion of warrants to ordinary shares
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Conversion of bridge loans and derivative financial
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Conversion of convertible notes to ordinary
    shares</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">175</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
accompanying notes are an integral part of the consolidated financial statements.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SMX (SECURI<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">TY
MATTERS) PUBLIC LIMITED COMPANY</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTES
TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(US$
in thousands except share and per share data)</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="V_00001"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
1 - GENERAL:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SMX
                                            (Security Matters) Public Limited Company (&#8220;Security Matters&#8221; or the &#8220;Company&#8221;
                                            and together with its subsidiaries, the &#8220;Group&#8221;) was incorporated in July 1,
                                            2022 under the laws of Ireland with registered number 722009 and its registered office at
                                            Mespil Business Center, Mespil House, Sessex Road, Dublin 4, Ireland, D04 T4A6. The Company
                                            was incorporated in 2022 as part of the Business Combination (see Note 1.B).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group 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. Its proprietary marker system embeds a permanent or removable
(depending on the needs of the customer) mark on solid, liquid or gaseous objects or materials. Each marker is comprised of a combination
of marker codes such that each marker is designed to be unique and unable to be duplicated. The marker system is coupled with an innovative
patented reader that responds to signals from the marker and, together with a patented algorithm, captures the details of the product
retrieved and stored on a blockchain digital ledger. Each marker can be stored, either locally on the reader and on private servers,
cloud servers or on a blockchain ledger, to protect data integrity and custody.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            Business Combination - the SPAC transaction (&#8220;Business Combination&#8221;):</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 7, 2023 (the &#8220;Closing Date&#8221;) the Company completed its Business Combination with Lionheart III Corp
(&#8220;Lionheart&#8221;), following that Lionheart and Security Matters PTY Ltd. (formerly named Security Matters Limited, which
was incorporated in May 2018 under Australian law) became the Company&#8217;s wholly-owned subsidiaries and the Company listed its
ordinary shares and public warrants on the NASDAQ stock market under the tickers SMX and SMXWW, respectively. On July 26, 2022, Security Matters PTY Ltd.
and Lionheart, a publicly traded special purpose acquisition company (SPAC), entered into a business combination agreement (the
&#8220;BCA&#8221;) and accompanying scheme implementation deed (&#8220;SID&#8221;). Under the BCA, the existing Lionheart
stockholders received the Company&#8217;s shares and warrants in exchange for their existing Lionheart shares and warrants and all
shares existed in Security Matters PTY Ltd were cancelled in return for the Company&#8217;s shares and resulting in Security Matters
PTY Ltd. becoming a wholly owned subsidiary of the Company. Security Matters PTY Ltd. shareholders received consideration of 1
ordinary share per 10.3624
Security Matters PTY Ltd. shares, having an implied value of $10.00
per ordinary share and the Company became the holder of all of the issued shares in Security Matters PTY Ltd. and Lionheart, with
Security Matters PTY Ltd. being delisted from the Australian Stock Exchange.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Business Combination resulted in 97.58% redemption by Lionheart&#8217;s public shareholders which resulted in leaving $3,061 of funds
remaining in the trust account (See also Note 6 and Note 2.E as for the accounting treatment of the transaction in these financial statements).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SMX (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><B>(US$ in thousands
except share and per share data)</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
1 &#8211; GENERAL (CONT.):</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            Company operates primarily through 8 wholly owned subsidiaries, all of which have been consolidated
                                            in these consolidated financial statements.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">SCHEDULE
OF COMPANIES SUBSIDIARIES</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 96%; margin-left: 0.25in">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Controlled
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Percentage
                                            Owned</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
                     30, 2023</B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Percentage
                                            Owned</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>December
                                            31, 2022</B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="width: 48%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Security Matters PTY Ltd.<BR>(Formerly
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">SMX Circular Economy Platform PTE, Ltd.</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Singapore</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">SMX (Security Matters) Ireland Limited</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ireland</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">SMX (Security Matters) Israel Ltd.<BR>(Formerly
    - Security Matters Ltd.)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Israel</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Security Matters Canada Ltd.</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Security Matters France Ltd.</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">SMX Beverages Pty Ltd.</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Australia</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the Company&#8217;s has the following investments in associated companies:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 96%; margin-left: 0.25in">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Entity</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Percentage
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">True Gold Consortium Pty Ltd</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
proportion of ownership interest is equal to the proportion of voting power held.</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incorporated in
2023.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">**</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Merger occurred
in March 2023.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">***</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Owned by Security
Matters PTY Ltd. (formerly - Security Matters Limited) as of December 31, 2022.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 14.2pt"></P><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
                                                                                                                                                            the six months ended June 30, 2023, the Company incurred operating losses and negative cash flows from operating activities. The
                                                                                                                                                            Company has not yet generated revenues. As discussed in Note 4, during the period, the Company entered into binding loan agreements
                                                                                                                                                            with existing shareholders. As discussed in Note 5.1, the Company executed an equity line agreement to raise up to $25,000
                                                                                                                                                            in consideration of the issuance of common stock over the course of 36 months with YA II PN, LTD (&#8220;Yorkville&#8221;). As
                                                                                                                                                            discussed in Notes 4 and 9.4, the Company signed agreements to convert indebtedness by issuance of shares. As discussed in Note 9.3
                                                                                                                                                            the Company is continuing with additional capital raising, and post balance sheet date it received an additional $2,500
                                                                                                                                                            in funding. The Company has also the ability to decrease its expenses in order to meet its existing cash flow streams.
                                                                                                                                                            Management believes that the proceeds from the recent funding agreements, combined with its cash on hand, equity line and the
                                                                                                                                                            Company&#8217;s plans, are sufficient to meet the Company&#8217;s obligations as they come due in the foreseeable future. There are
                                                                                                                                                            no assurances, however, that the Company will be able to obtain an adequate level of financial resources that are required for its
                                                                                                                                                            long-term business plan.</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SMX
                                            (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><B>(US$ in thousands
except share and per share data)</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>A.</B></FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Basis of preparation</B></FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
interim consolidated financial statements have been prepared in a condensed format in accordance with IAS 34 Interim Financial Reporting.
They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in
conjunction with the annual consolidated financial statements as of December 31, 2022 of the Company and of Security Matters PTY Ltd.
(formerly - Security Matters Limited).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>B.</B></FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Functional currency</B></FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements are prepared in US Dollars, which is the functional and presentation currency of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>C.</B></FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Application of accounting policies </B></FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Group has applied the same accounting policies and methods of computation in its interim condensed consolidated financial statements
as in its 2022 annual financial statements and as in the 2022 annual financial statements of Security Matters PTY Ltd, except as
stated below in note 2D and 2E.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Several
amendments to IFRS Standards apply for the first time in 2023, but do not have an impact on the interim condensed consolidated financial
statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>D.</B></FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Issue of a unit of financial instruments </B></FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
issue of a unit of financial instruments such as a financial liability (e.g., a loan) and free-standing derivative (e.g. warrants) involves
the allocation of the proceeds received (before issuance costs) to financial derivatives and other financial instruments measured at
fair value in each period and to financial liabilities that are measured at amortized cost, with residual allocated to equity instruments.
Issuance costs are allocated to each component pro rata to the amounts determined for each component in the unit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>E.</B></FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Reverse acquisition transaction</B></FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
result of the merger between the Company and Security Matters PTY Ltd. as described in Note 1B is that legally the Company owns the entire
share capital of Security Matters PTY Ltd.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
for financial reporting purposes, Security Matters PTY Ltd. (the legal subsidiary) is the accounting acquirer, and the Company (the
legal parent) is the accounting acquiree. The consolidated financial statements prepared following the reverse acquisition are
issued under the name of the Company, but they are a continuance of the financial statements of Security Matters PTY Ltd. and
reflect the fair values of the assets and liabilities of the Company (the acquiree for accounting purposes), together with a deemed
issuance of shares by Security Matters PTY Ltd. at fair value based on the quoted opening share price of the Company in its first
trading day following the closing of the business combination transaction ($11,599),
and a recapitalization of its equity. This deemed issuance of shares is in fact both an equity transaction under IAS 32 (receiving
the net assets of the Company) and an equity-settled share-based payment transaction under IFRS 2 (receiving the listing status of
the Company). The difference, in the amount of $16,802,
between the fair value of the shares deemed to have been issued by Security Matters PTY Ltd. and the fair value of the
Company&#8217;s identifiable net assets represent a payment for the service of obtaining a stock exchange listing for its shares and
it is therefore expensed immediately to profit or loss at the closing date. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SMX
                                            (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><B>(US$ in thousands
except share and per share data)</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="vertical-align: top">
  <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>E.</B></FONT></TD>
  <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Reverse acquisition transaction (Cont.)</B></FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is initially consolidated in the financial statements from the Closing Date of the Business Combination. Substantially all of
the assets and liabilities of the Company were comprised of marketable securities held in a trust account ($4,921) and trade and other
payables and warrants ($10,127) respectively, with fair values that were equivalent to their carrying amounts. Below are the implications
of the accounting treatment on the financial statements:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            assets and liabilities of Security Matters PTY Ltd. have been recognized and measured in
                                            these consolidated financial statements at their pre-combination carrying amounts.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            retained earnings and other equity balances recognized in those consolidated financial statements
                                            are the retained earnings and other equity balances of Security Matters PTY Ltd. immediately
                                            before the Business Combination.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            amount recognized as issued equity instruments in these consolidated financial statements
                                            has been determined by adding to the issued equity of Security Matters PTY Ltd. immediately
                                            before the Business Combination the fair value of the deemed issuance of shares, as described
                                            above. However, the equity structure (the number and type of shares issued) reflects the
                                            equity structure of the Company, including the shares issued by the Company through recapitalization.
                                            Accordingly, the equity structure of Security Matters PTY Ltd. (issued capital and addition
                                            paid in capital) in comparative periods is restated using the exchange ratio established
                                            in the Business Combination to reflect the number and par value of shares of the Company
                                            issued in the reverse acquisition transaction.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            statement of comprehensive loss reflects that of Security Matters PTY Ltd. for the full period
                                            together with the post-acquisition results of the Company from the Closing Date. Loss per
                                            share of Security Matters PTY Ltd. for periods prior to the acquisition date is restated
                                            such the denominator of the historical loss per share calculation is adjusted by multiplying
                                            the weighted-average shares used in each historically reported loss per share calculation
                                            by the exchange ratio established in the Business Combination.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>F.</B></FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Reverse stock split </B></FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
presentation of loss per share amounts has been retrospectively adjusted to give effect to the reverse share split which occurred on
August 8, 2023. Except otherwise specifically provided, no other adjustments have
been made in these notes to reflect the reverse share split. See also Note 9.1.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
3 &#8211; <FONT STYLE="text-transform: uppercase">CONVERTIBLE NOTES</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 25, 2023, the Company received an amount of $250
in consideration for issuance of convertible notes (the &#8220;Convertible Notes&#8221;) and two types of warrants. The Convertible
Notes principal amount is $250
and maturity date is the earlier between December
31, 2024, and the date of any change in control (excluding the Business Combination). The Convertible Notes have an interest
rate of 15%
per annum and shall be converted into ordinary shares: (1) at the note holder&#8217;s discretion, at a fixed conversion price of USD 10
per ordinary share, or (2) through issuance of the Company&#8217;s ordinary shares at a 20%
discount.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
part of the Convertible Note agreements, the investor was granted two types of warrants:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bonus
                                            Warrants &#8211; 12,500 warrants to purchase ordinary shares of the Company at an exercise
                                            price of USD 11.50 per share. The Bonus Warrants term is five years commencing upon the Business
                                            Combination.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Redeemable
                                            Warrants &#8211; 12,500 warrants to purchase ordinary shares of the Company at a purchase
                                            price of USD 11.50 per share. The Redeemable Warrants term is five years commencing upon
                                            the Business Combination. The Redeemable Warrants shall be redeemable on a non-cumulative
                                            basis at the option of the holder, according to a schedule for USD 5.00 per warrant. The
                                            investor has the option to decide that the Company will satisfy any or each redemption through
                                            the issuance of ordinary shares of the Company based upon a 20% discount to the 20-trading
                                            day VWAP preceding each such anniversary.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Convertible Notes are recorded in accordance with their fair value. The Redeemable Warrants are accounted for as a derivative financial
liability. Management utilized a third-party appraiser to assist them in valuing the Convertible Notes and Redeemable Warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to calculate the fair value of the Convertible Notes, the Company discounted the payment schedule by a discount rate of 30.7%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of the Redeemable Warrants was calculated using Monte-Carlo simulation model with expected volatility of 71.54% and the risk-free
interest rate used is 4.19%. As of June 30, 2023, the fair value of the Convertible Notes was $218 and the fair value of the Redeemable
Warrants was $71.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SMX (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><B>(US$ in thousands
except share and per share data)</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
4 &#8211; BRIDGE LOANS AND DERIVATIVE FINANCIAL LIABILITY:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Between
August 2022 to January 2023, Security Matters PTY Ltd. entered into bridge loan agreements (the &#8220;Bridge Loans&#8221;) with eleven
lenders, which lent Security Matters PTY Ltd. an aggregate amount of $3,860. The Bridge Loans have a maturity date of up to two years
and bear an interest rate of 10% per annum. The Bridge Loans were accounted for in accordance with the amortized cost method.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
part of the Bridge Loans agreements, the lenders were granted two types of warrants:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iii)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bonus
                                            Warrants &#8211; 243,000 warrants to purchase ordinary shares of the Company at an exercise
                                            price of USD 11.50 per share. The Bonus Warrants term is five years commencing upon the Business
                                            Combination.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iv)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Redeemable
                                            Warrants &#8211; 572,000 warrants to purchase ordinary shares of the Company at a purchase
                                            price of USD 11.50 per share. The Redeemable Warrants term is five years commencing upon
                                            the Business Combination. The Redeemable Warrants shall be redeemable on a non-cumulative
                                            basis at the option of the holder, according to a schedule for USD 5.00 per warrant.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
investor has the option to decide that the Company will satisfy any or each redemption through the issuance of ordinary shares of the
Company based upon a 20% discount to the 20-trading day VWAP preceding each such anniversary.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
with the assistance of a third-party appraiser valued the Bonus and the Redeemable Warrants. The fair value of the Bonus Warrants was
calculated using the Black-Scholes model. As of June 30, 2023, the fair value of the Bonus Warrants was less than $1 (December 31,
2022 - the fair value of the Bonus Warrants was $24).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of the Redeemable Warrants was calculated using Monte-Carlo simulation model. As of June 30, 2023, the fair value of the Redeemable
Warrants was 2,133
</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(December 31, 2022, the fair value of the Redeemable
Warrants was $2,669</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
main assumptions used in the three valuation models described above were: (1) risk free rate 3.99%; (2) volatility of assets 81.03%;
and (3) excepted terms of the warrants -5.18 years. All warrants were classified as a derivative financial liability and are re-measured
each reporting date, with changes in fair value recognized in finance expense (income), net.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
2023, the Company entered into an additional bridge loan agreement (the &#8220;Additional Bridge Loans&#8221;), in which the Company
raised an aggregate amount of $550. The Additional Bridge Loans have a maturity date of up to two years and bear interest rate of 10%
per annum. In March 2023, the Company signed an addendum to the Bridge Loans agreements which convert principal amount of $1,350 and
redeemable warrants at the amount of $1,000 into 872,418 ordinary shares and defer the remaining cash payments to March 31, 2024.</FONT></P>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SMX
                                            (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><B>(US$ in thousands
except share and per share data)</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
5 &#8211; MATERIAL EVENTS DURING THE PERIOD</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            Company entered in February 2023 into a Standby Equity Purchase Agreement (&#8220;SEPA&#8221;)
                                            to raise up to $25,000 in consideration of the issuance of ordinary shares over the course of
                                            36 months with Yorkville. According to the SEPA, the Company
                                            may issue Yorkville the ordinary shares at a purchase price as one of two options (i) equal
                                            to 96% of the weighted average price (&#8220;VWAP&#8221;) of the common stock during the
                                            applicable pricing period (ii) equal to 97% of the lowest VWAP of the common stock during
                                            a pricing period of 3 consecutive trading days commencing on the relevant period.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yorkville
advanced to the Company an aggregate principal amount of $3,500
(the &#8220;Pre-Paid Advance&#8221;). The Pre-Paid Advance was disbursed in two separate installments evidenced as convertible loans, the first for $1,500
at the closing of the Business Combination, and the second, as subsequently amended, for $2,000
upon the effectiveness of the Initial Yorkville Registration Statement. The
purchase price for the Pre-Paid Advance is 92.0% of the Pre-Paid Advance. Such Pre-Paid Advances will be offset upon the issuance of
ordinary shares to Yorkville at a price per share equal to the lower of (a) 100% of the daily VWAP of the Ordinary Shares on The
Nasdaq Stock Market as of the trading day immediately prior to the date of the disbursement of the Pre-Paid Advance (the
&#8220;Fixed Price&#8221;) (in the case of the first Pre-Paid Advance, $3.65), or (b) 93.0% of the lowest daily VWAP of the Ordinary
Shares on Nasdaq during the seven trading days immediately prior to each purchase (the &#8220;Variable Price&#8221; and the lower of
the Fixed Price and the Variable Price shall be referred to as the &#8220;Purchase Price&#8221;); however, in no event shall the
Purchase Price be less than $1.10 (the &#8220;Floor Price&#8221;). On July 27, 2023, the Company amended the promissory note
evidencing the remaining Pre-Paid Advance to decrease the Floor Price to $1.10 (as adjusted for reverse stock split which occurred
on August 21, 2023, see also Note 9.1), after the Company was required to repay in cash $500
of principal amount as a result of the Company&#8217;s share price being below the original Floor Price. The maturity date
will be 12-months after the initial closing of <FONT STYLE="background-color: white">each </FONT> Pre-Paid Advance. In July 2023, the Company repaid in full the first Pre-Paid
Advance in the amount of $1,500.
In the period, the Company issued ordinary shares in consideration of $450
in accordance with the terms of the SEPA.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                            June 22, 2023, the Company entered into an underwriting agreement (the &#8220;Underwriting
                                            Agreement&#8221;) with EF Hutton, LLC (the &#8220;Underwriter&#8221;) relating to the public
                                            offering of (i) 13,333,333 ordinary shares of the Company, at a subscription price per share
                                            of $0.24 (the &#8220;Firm Shares&#8221;), (ii) 13,333,333 warrants in the form of Warrant
                                            A to subscribe for 13,333,333 ordinary shares, at an exercise price of $0.24 per share (&#8220;Warrant
                                            A&#8221;), and (iii) 13,333,333 warrants in the form of Warrant B to subscribe for 13,333,333
                                            ordinary shares, at an exercise price of $0.24 per share (&#8220;Warrant B&#8221; and together
                                            with Warrant A, the &#8220;Firm Warrants&#8221; and, collectively with the Firm Shares, the
                                            &#8220;Firm Securities&#8221;).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also granted the Underwriter a 45-day option to subscribe for, in the aggregate, (a) up to 1,999,999 additional ordinary shares
(15% of the Firm Shares) at a subscription price per share of $0.24 (100% of the public offering price allocated to each Firm Share)
(the &#8220;Option Shares&#8221; and together with the Firm Shares, the &#8220;Shares&#8221;) or Pre-Funded Warrants to subscribe for
up to 1,999,999 ordinary shares at a price per share of $0.2399 (100% of the public offering price allocated to each Firm Share less
$0.0001) and the remaining non pre-funded exercise price of each pre-funded warrant will be $0.0001 per share, and/or (b) 1,999,999 warrants
in the form of Warrant A to subscribe for an aggregate of 1,999,999 ordinary shares (15% of the Firm Warrants) at an exercise price of
$0.24 per warrant (100% of the public offering price allocated to each set of warrants in the form of Warrant A), and/or (c) 1,999,999
warrants in the form of Warrant B to purchase an aggregate of 1,999,999 ordinary shares (15% of the Firm Warrants) at a purchase price
of $0.24 per warrant (100% of the public offering price allocated to each set of warrants in the form of Warrant B) (the &#8220;Option
Warrants&#8221; and together with the Firm Warrants and Pre-Funded Warrants, if any, the &#8220;Warrants&#8221;), which may be subscribed
for in any combination of Option Shares and/or the Option Warrants. The Option Shares and the Option Warrants are referred to as the
&#8220;Option Securities&#8221;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
offering closed on June 27, 2023. The Company delivered the Firm Shares (or Firm Share equivalents in the form of Pre-Funded Warrants),
the Firm Warrants and the Option Warrants to the Underwriter on the same day.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Warrant A terms specify that the warrants may be exercised at any time on or before June 27, 2028. On or after the earlier of (i) the
thirty day anniversary of the date of the Underwriting Agreement and (ii) the date on which the aggregate composite trading volume of
the Company&#8217;s ordinary shares as reported by Bloomberg LP beginning on the date of the Underwriting Agreement exceeds 15,000,000
ordinary shares, a holder of Warrant A warrants may also provide notice and elect a &#8220;cashless exercise&#8221; pursuant to which
the holder would receive an aggregate number <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">of
ordinary shares equal to the product of (x) the aggregate number of ordinary shares that would be issuable upon a cash exercise and (y)
$0.50. As of the date of publication of these financial statements, an aggregate of 15,195,332 Warrant A warrants were cashless exercised
into an aggregate of 7,597,665 ordinary shares.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SMX
                                            (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><B>(US$ in thousands
except share and per share data)</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
5 &#8211; MATERIAL EVENTS DURING THE PERIOD (CONT.)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Warrant B terms specify that the warrants may be exercised at any time on or before June 27, 2028. All of such Warrant B warrants remain
outstanding as of the end of period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrant
A was valued at $0.0635
which is half of the share market price at the end of the period, assuming cashless exercise. Warrants A were considered to be a
derivative financial liability. The terms of warrants B specify that each warrant has a cash exercise price of $0.24.
Warrant B was valued at $0.0602
by using the Black-Scholes option-pricing model, with expected volatility of 70.39%
and the risk-free interest rate used is 4.13%.
Warrants A and B expire in June 2028.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
net proceeds to the Company upon the closing of this offering were approximately $2,580. The capital raise fee amounted to $660.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also granted to the Underwriter, 666,667
warrants at an exercise price of $0.264
per share, which expires after 5
years. The Underwriter&#8217;s warrants were valued at $0.0575
per option by using the Black &amp; Scholes option-pricing, with expected volatility of 70.39%
and the risk-free interest rate used is 4.13%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">3.</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In January 2023, the Company signed an amendment to the agreement with Isorad that determine the following:</FONT></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1) for the BCA
                                                                                with Lionheart, (a) Isorad was issued 864,000
                                                                                options to purchase shares of the Company, which options were issued in January 2023 and valued using the Black-Scholes pricing
                                                                                model, with the main parameters used are: (1) risk-free rate: 3.42%;
                                                                                (2) expected volatility: 81.92%:
                                                                                (3) expected term: up to 3
                                                                                years; and (4) expected dividend yield: 0%;
                                                                                and (b) Isorad will be entitled to 1%
                                                                                of any amount actually received against equity or other funding convertible into equity at the closing of the transaction and until
                                                                                13 months thereafter (to be paid after reaching an aggregated received amount of $27
                                                                                million, or at the end of such 13 months, the earlier thereof). In the period, based on the funds the Company actually received, the
                                                                                Company recognized a technology license intellectual property at the amount of $101 against a liability that reflects the due
                                                                                amount; and</FONT></P></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)
Exit fee - in the occurrence of the first M&amp;A event (as such event is defined in such agreement to include mergers, sale of all or
substantially all the assets of the Company and similar event) after the closing of the BCA, the Company is to pay a cash amount equal
to 1.5% of the amount received or transferred. This will not apply to any future offer of shares, merger or sale of assets thereafter.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.7pt"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 18pt">4<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                            March 2, 2023, the Company amended its loan agreement dated September 7, 2015, between the
                                            Company, its Shareholders and Kamea Fund that postponed the repayment of the borrowings from
                                            related party (Bonus Payment) to March 31, 2024 (refer also to Note 9.4 &#8211; Subsequent
                                            Events).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SMX
(SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTES
TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(US$
in thousands except share and per share data)</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
6 - SHAREHOLDERS&#8217; EQUITY </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>A.
Share capital:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;<FONT STYLE="display: none">SCHEDULE
OF SHARE CAPITAL</FONT></B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD COLSPAN="14" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Number of shares</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">June 30, 2023</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Authorized</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Authorized</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Issued and outstanding</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</TD></TR>
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    <TD STYLE="text-align: left; width: 36%">Ordinary shares <BR> USD 0.0001 par value</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 12%; text-align: right">800,000,000,000</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 2%">&#160;</TD>
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    <TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 12%; text-align: right">1</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD></TR>
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    <TD>Ordinary shares <BR> USD 0.0001 par value</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">800,000,000,000</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">38,364,447</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">500,000,000</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="text-align: left">Preferred shares <BR>USD 0.0001 par value</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">200,000,000,000</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="text-align: left">Deferred shares <BR> Euro 1 par value</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ordinary
shares</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ordinary
shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number
of and amounts paid on the shares held. The fully paid ordinary shares have a par value per share of $0.0001 (before the reverse
split) and par value per share of $0.0022 (post reverse split) and the Company does not have a limited amount of authorised
capital.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Preferred
shares</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">preferred
shares with such designation, rights and preferences as may be determined from time to time by the Company&#8217;s Board of Directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Deferred
shares</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
Ordinary Shares are non-voting shares and do not convey upon the holder the right to be paid a dividend or to receive notice of or to
attend, vote or speak at a general meeting. The Deferred Shares confer the right on a return of capital, on a winding-up or otherwise,
only to the repayment of the nominal value paid up on the Deferred Shares after repayment of the nominal value of the Ordinary Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I><FONT STYLE="text-decoration: underline">Changes
in Share capital </FONT></I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                            March 7, 2023 (the &#8220;Closing Date&#8221;), the Company consummated the Business Combination
                                            pursuant the BCA, dated July 26, 2022, and also consummated the SID, dated July 26, 2022.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beginning
on the day immediately prior to the Closing Date and ending on the day immediately after the Closing Date, the following transactions
occurred:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            AUD 828,240 of the 2022 Convertible Notes have been cancelled in consideration for the issuance
                                            of 1,000,000 ordinary shares in Security Matters PTY Ltd.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Security
                                            Matters PTY Ltd. performed acceleration of vesting for all unvested warrants and options,
                                            the expense for the acceleration amounted to $186.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">32,211,716
                                            warrants have been exercised on cashless basis to 24,568,773 shares in Security Matters PTY
                                            Ltd.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18,673,253
                                                                                                                                                                                                                                     ordinary shares of the Company have been issued to Security Matters PTY Ltd.&#8217;s shareholders in return for their 193,500,379
                                                                                                                                                                                                                                     ordinary shares in Security Matters PTY Ltd. that were cancelled. Security Matters PTY Ltd.&#8217;s shareholders received as
                                                                                                                                                                                                                                     consideration 1
                                                                                                                                                                                                                                     ordinary share of the Company per 10.3624
                                                                                                                                                                                                                                     Security Matters PTY Ltd.&#8217;s ordinary shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                                                                                                                                                                                                                     Company issued 3,525,000
                                                                                                                                                                                                                                     ordinary shares, 2,200,000
                                                                                                                                                                                                                                     private warrants and 6,250,000
                                                                                                                                                                                                                                     public warrants to Lionheart&#8217;s stockholders, in exchange for their existing Lionheart shares and warrants. The warrants
                                                                                                                                                                                                                                     exercise price is $11.5 per share,
                                                                                                                                                                                                                                     expiring in March 2028. The warrants are considered to be a derivative financial liability and measured at fair value, which is the
                                                                                                                                                                                                                                     market price as of the end of the period, amounted to $0.0204
                                                                                                                                                                                                                                     per warrant.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SMX
                                            (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTES
TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(US$
in thousands except share and per share data)</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
6 &#8211; SHAREHOLDERS&#8217; EQUITY (CONT.)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            Company issued 303,053 ordinary shares for an aggregate of $3,110 net proceeds.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                                                                                                                                                                                                                     Company issued 872,418
                                                                                                                                                                                                                                     ordinary shares for the conversion of bridge loan at principal amount of $1,350
                                                                                                                                                                                                                                     and 200,000
                                                                                                                                                                                                                                     redeemable warrants ($5
                                                                                                                                                                                                                                     per warrant, 5
                                                                                                                                                                                                                                     years, exercise price of $11.5 per share).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                            May and June 2023, the Company issued 675,168 ordinary shares to Yorkville, for an aggregate
                                            of $450 net proceeds (see also Note 5.1).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                            June 2023, the Company raised capital as part of issuance of a unit of financial instruments
                                            in consideration of an aggregate of $2,580 net proceeds. As part of this issuance, the Company
                                            issued 13,333,333 shares, 15,333,332 warrants A and 15,333,332 warrants B (see also Note
                                            5.2).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After
                                            the balance sheet date, on August 21, 2023, the Company&#8217;s ordinary shares began trading
                                            on the Nasdaq Global Market on a post-Reverse Stock Split basis, after consolidating  every
                                            twenty-two ordinary shares of the Company into one ordinary share (see also Note 9.1).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I><FONT STYLE="text-decoration: underline">Incentive
Equity Plan</FONT></I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
April 25, 2023, the Company&#8217;s board of directors and its shareholders approved and adopted the SMX Public Limited Company 2022
Incentive Equity Plan, which was subsequently amended the Company&#8217;s board of directors, subject to applicable Nasdaq requirements,
which reserved for grant a number of ordinary shares equal to 15% of the number of issued and outstanding ordinary shares on a fully
diluted basis immediately after the closing of the Business Combination, or 5,082,417 authorized ordinary shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
                                            the six-month period ended June 30, 2023, the Company granted 4,334,000 RSUs to employees,
                                            directors and service providers. The fair value at grant date of RSUs granted in the period
                                            were $1-$1.09. The related share-based expenses that were recognized in the period amounted
                                            to $1,738.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RSUs
granted to employees, directors and service providers:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;SCHEDULE
OF RESTRICTED SHARES UNITS GRANTED</FONT></B></FONT></FONT></P>

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    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Six
                                            months period ended</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
                                            30, 2023 (in thousands)</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Six
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                                            30, 2022 <BR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Outstanding at beginning of period</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right">&#160;&#160;&#160;&#160;<FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 60%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Granted</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,334</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Vested</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(945</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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                                            the six-month period ended June 30, 2023, the Company granted 790,408 options to employees
                                            and service providers. These grants carry an exercise price of between $1.04 - $4.0, vesting
                                            period up to 4 years from the grant date, contractual life of the options under the plan
                                            is 5 years. The fair value of the grant at grant date is $185. The related share based expenses
                                            that were recognized in the six months period ended June 30, 2023 amounted to $168.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SMX (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(US$ in thousands except share and per share
data)</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
6 - SHAREHOLDERS&#8217; EQUITY (CONT.)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Options
granted to employees and service providers:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;SCHEDULE
OF SHARE OPTION GRANTED</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left; text-indent: 0in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Six
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  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Weighted
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    <TD STYLE="width: 60%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Outstanding at beginning of period</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Granted</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exercised</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(7</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.39</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Expired</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Outstanding at June
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    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,034</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.58</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exercisable options
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    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,825</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.48</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.25in">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Six
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  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,346</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.02</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Granted</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">989</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.86</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exercised</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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options to employees and service providers outstanding as of June 30, 2023, are comprised, as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 23.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;SCHEDULE
OF OPTIONS TO EMPLOYEES AND SERVICE PROVIDERS OUTSTANDING</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 96%; margin-left: 0.25in">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exercise
    price (US$)</FONT></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Weighted
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Weighted
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                                            term</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="width: 17%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.84-1.39</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.18</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 15%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">845</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 15%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.18</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.81-2.51</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">335</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.59</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">335</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.59</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 23.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SMX (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(US$ in thousands except share and per share
data)</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
7 &#8211; GENERAL AND ADMINISTRATIVE EXPENSES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="display: none">SCHEDULE
OF GENERAL AND ADMINISTRATIVE EXPENSES</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD>
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD>
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center">&#160;</TD></TR>
<TR STYLE="vertical-align: bottom">
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<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">718</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Wages and salaries related</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">664</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">429</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Travel expenses</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">379</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Insurance</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">329</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">19</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">37</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">80</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">26</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,200</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
8 - LOSS PER SHARE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="display: none">SCHEDULE
OF LOSS PER SHARE</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%">
  <TR STYLE="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center">&#160;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">June
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Net loss
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    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; font-weight: bold; text-align: left">$<FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 16%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(33,009</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="width: 2%; font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 16%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,442</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Basic
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    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(39.46</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Weighted average number
    of ordinary shares</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Weighted average number
    of ordinary shares used in calculating basic and diluted loss per share (in thousands)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">837</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">*727</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>*</SUP></FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the reverse share split described in Note 9.1, the calculation of the basic and diluted loss per share for all periods presented
have been adjusted retrospectively based on the new number of shares as derived from the conversion ratio.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Restated as a result
of the SPAC transaction</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><IMG SRC="fin_001.jpg" ALT=""></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SMX (SECURITY MATTERS) PUBLIC LIMITED COMPANY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>(US$ in thousands except share and per share
data)</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTE
9 &#8211; SUBSEQUENT EVENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
the reporting date, the following significant events have occurred:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reverse
                                            Stock Split - On August 8, 2023, at the Extraordinary General Meeting of Shareholders of the
                                            Company, the Company&#8217;s shareholders voted in favor of consolidating every twenty-two ordinary shares in the authorized
                                            but unissued and in the authorized and issued share capital of the Company into one ordinary
                                            share (the &#8220;Reverse Stock Split&#8221;).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 21, 2023, the Company&#8217;s ordinary shares began trading on the Nasdaq Global Market on a post-Reverse Stock Split basis under
the current symbol &#8220;SMX&#8221;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
is a table which presents the loss per share before the change (see also Note 8).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loss
per share have been calculated using the weighted average number of shares in issue during the relevant financial periods, the weighted
average number of equity shares in issue and loss for the period as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="display: none">SCHEDULE OF LOSS PER SHARE</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 96%; margin-left: 0.25in">
  <TR STYLE="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center">&#160;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Six
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  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">June
    30, 2023</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">June
    30, 2022</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Net loss
    attributable to the owners of the Company</FONT></TD><TD STYLE="width: 2%; font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 16%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(33,009</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="width: 2%; font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 16%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,442</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Basic
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    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(1.79</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Weighted average number
    of ordinary shares</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Weighted average number
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    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">18,404</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15,984</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                                                                                                                                            July 27, 2023, the Company amended <FONT STYLE="background-color: white">its </FONT> Pre-Paid Advance agreement with Yorkville (see
                                                                                                                                                            also Note 5.1) evidencing the remaining Pre-Paid Advance to decrease the Floor Price to $1.10
                                                                                                                                                            (as adjusted for the Reverse <FONT STYLE="background-color: white">S</FONT>tock <FONT STYLE="background-color: white">S</FONT>plit which occurred on August 21, 2023, see also Note 9.1), after the Company was required to
                                                                                                                                                            repay in cash $500
                                                                                                                                                            of principal amount as a result of the Company&#8217;s share price being below the original Floor Price. The maturity date will be
                                                                                                                                                            12-months after the initial closing of the Pre-Paid Advance. In July 2023, the Company repaid in full the first Pre-Paid Advance in
                                                                                                                                                            the amount of $1,500.
                                                                                                                                                            In the period, the Company repaid approximately $450
                                                                                                                                                            principal amount by ordinary share issuance in accordance with the terms of the SEPA and subsequent to the period, the Company repaid approximately $1,350 through September 30, 2023.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                            September 6, 2023, the Company consummated the transactions pursuant to a Securities Purchase
                                            Agreement dated as of September 5, 2023 and issued and sold to an institutional investor
                                            a promissory note with a fixed conversion price of $1.6378 and warrants, for gross proceeds
                                            to SMX of approximately $2,500, before deducting fees and other offering expenses
                                            payable by the Company to their service providers. The note is in the principal amount of
                                            $4,290. The actual amount loaned by the investor pursuant to the Note is $2,574 after a 40%
                                            original issue discount. The maturity date of the note is the 12-month anniversary of the
                                            Effective Date, and is the date upon which the principal amount, as well as any accrued and
                                            unpaid interest and other fees, shall be due and payable. Interest accrues in the amount
                                            of 12% per year and shall be payable on the maturity date. The investor has the right, at
                                            any time, to convert all or any portion of the then outstanding and unpaid principal amount
                                            and interest (including any costs, fees and charges) into the Company&#8217;s ordinary shares,
                                            at a fixed conversion price of $1.6378 per share. Any such conversion is subject to customary
                                            conversion limitations set forth in the Purchase Agreement so the investor beneficially owns
                                            less than 4.99% of the Company&#8217;s ordinary shares. Additionally, the Company has the
                                            right to convert in whole or in part the note into ordinary shares; provided that in no case
                                            shall the Company so convert the note if the result of the issuance of Ordinary Shares thereby
                                            would result in the beneficial ownership of the investor of ordinary shares in excess of
                                            4.99%.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                            September 15, 2023, the Company paid $250 to EF Hutton, division of Benchmark Investments,
                                            LLC, pursuant to a Satisfaction and Discharge of Indebtedness Pursuant to Promissory Note
                                            Dated March 7, 2023. Upon paying such amount, the promissory note dated March 7, 2023 in
                                            the principal sum of $900 was deemed fully paid and satisfied and the Note was thereafter
                                            canceled, discharged and no longer of any further force or effect.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                                                                                                                                                                                                                     September 19, 2023, the Company amended its loan agreements dated September 7, 2015, by and between the Company, its shareholders
                                                                                                                                                                                                                                     and Kamea Fund (the &#8220;Loan Agreements&#8221;). Pursuant to the amendment to the Loan Agreements, Kamea agreed to convert $657
                                                                                                                                                                                                                                     of indebtedness under the Loan Agreements (the &#8220;Indebtedness Amount&#8221;) into 487,281
                                                                                                                                                                                                                                     ordinary shares (post Reverse Stock Split) of the Company, as payment in full for the Indebtedness Amount; provided however, that in the
                                                                                                                                                                                                                                     event the proceeds received from Kamea with respect to any sales of such shares are not at least equal to the Indebtedness Amount,
                                                                                                                                                                                                                                     the Company will remain liable to Kamea for the balance of the Indebtedness Amount.</FONT></TD></TR><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&#160;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD></TR>
                                                                                                                                                                                                                                                                                                                                         <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">6.</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On
                                            October 3, 2023, the Company has signed an agreement with True Gold Consortium Pty Ltd (&#8220;TrueGold&#8221;)
                                            (see also Note 1C) shareholders to acquire an additional 7.5% which will increase the Company&#8217;s
                                            holdings to 51.9% in TrueGold and result in the Company&#8217;s gain control over TrueGold.
                                            As part of the agreement and in consideration for the additional 7.5%, it was agreed that
                                            the outstanding payables from TrueGold to the Company which amounted to AU$ 475 as of June
                                            30, 2023 (approximately $307) would be forgiven in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The transaction is based on past valuation, which
was prepared in October 2021, which evaluates TrueGold&#8217;s fair value in the range of $78.5 million to $90 million and at a mean
of $84.3 million. This past valuation was not audited or reviewed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">As of the agreement&#8217;s closing date, both parties agreed to engage
an independent third party appraiser to prepare an updated TrueGold valuation as of closing date by November 30, 2023. Accordingly, the
Company will recognize in its financial statements the fair value of TrueGold&#8217;s assets &amp; liabilities at closing date as will
be valued by the independent third party appraiser. Once this valuation will be completed, there may be material differences between
TrueGold&#8217;s past valuation from October 2021 to the updated valuation.</P></TD></TR>
                                                                                                                                                                                                                                                                                                                                         </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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