Security Matters books its highest positive cash flows in Q3 as global pipeline continues to build
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Along with its financial metrics, the company also took major steps forward on key strategic and operational partnerships.
For ASX blockchain technology company Security Matters (ASX:SMX), the September quarter reflected a key momentum shift for the company as it builds out a global pipeline of deal flow, research engagements and commercial partnerships.
That momentum was evident in the company’s quarterly update today, which showed it booked record-high customer receipts of US$299,000 in Q3.
Demonstrating its strong traction throughout 2021, the Q3 total represented a 12% increase on the June quarter (US$267,000) and was 38% higher than Q1 (US$215,000).
And with its recent $3.1m capital raise, the company is now well funded to pursue additional growth opportunities into FY22.
Along with its growth in cash receipts, SMX also executed on a more streamlined business model, reducing its administrative expenses by US$64,000 in the quarter to US$503,000.
In addition, the company invested US$191,000 on software development and patent protection, as it builds out intellectual property protection in the development of its blockchain platform.
The cash generating potential of SMX’s business model allows for plenty of upside in the near-term, in the wake of its strategic share placement which leaves the company fully-funded until the end of 2022.
While SMX established momentum across its core financial metrics in Q3, the company also executed on a number of key operational highlights as it lays the foundations for a global expansion.
Those included a strategic partnership with Tier-1 global tyre manufacturer and automotive company Continental, to develop and test market technology to improve transparency and traceability across the tyre supply chain.
As part of the development, tyres will be embedded with information that confirm their geographical origin, allowing for efficient tracking from manufacturing through to recycling.
“Extensive laboratory testing has been carried out on different types of rubber, yielding successful results, with additional testing forthcoming,” SMX said.
More broadly, the partnership is tied to Security Matters’ strategic vision to create a circular closed-loop economy in some of the world’s largest supply chains – a vision shared by Continental.
In that context, the deal “validates” SMX’s goal as it builds towards the commercialisation of its patented technology, CEO Haggai Alon said.
The company also significantly boosted its presence in the Asia-Pacific region, by becoming a member of PRAS (the Plastic Recycling Association of Singapore).
The two sides will work together to identify suitable pilot projects for the application of SMX’s technology.
And the company’s product tracing technology is expected to play a key role in both detection of recycling opportunities, and the amount of recycled plastic content.
From its Asia Pacific base in Singapore, SMX now also intends to expand its regional focus to Japan in 2022.
When combining both its financial momentum and commercial opportunities, Alon said the pieces are now in place for a global expansion.
With a stable cash runway and strong balance sheet, SMX is “well-resourced and confident in its progression towards the adoption and commercialisation of its technology, across its strategic market segments globally”, Alon said.
This article was developed in collaboration with Security Matters, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.