HUB Security Announces $3.3 Million Investment to Accelerate Corporate Growth

Rhea-AI Summary

HUB Cyber Security (NASDAQ: HUBC) has successfully completed a $3.3 million private placement from non-U.S. investors. The investment is in the form of convertible notes with a conversion price of $0.70 per share, accompanied by warrants with an exercise price of $1.00 per share. Simultaneously, HUB Security is in discussions to extend the maturity date of a $4.0 million principal note originally due in August 2024. CEO Noah Hershcoviz stated that this capital will enable the company to advance growth initiatives and expand market presence. HUB Security specializes in developing confidential computing cybersecurity solutions and advanced data fabric.

Positive

• Secured $3.3 million in private placement funding
• Potential extension of $4.0 million note maturity
• Warrants issued with $1.00 per share exercise price, above current share price

Negative

• Convertible notes may lead to future dilution at $0.70 per share
• Reliance on non-U.S. investors for funding

Insights

Financial Analyst

The $3.3 million investment through convertible notes is a positive development for HUB Security, providing important capital for growth initiatives. The $0.70 conversion price and $1.00 warrant exercise price suggest investor confidence in potential share price appreciation. However, the need for this funding and the ongoing discussions to extend the maturity of a $4.0 million note indicate potential liquidity challenges. The non-U.S. investor base might reflect broader market interest but could also suggest domestic funding options. This capital injection, while helpful, may not be sufficient for long-term stability, especially if the company is struggling to meet existing obligations.

Cybersecurity Expert

HUB Security's focus on confidential computing and advanced data fabric positions it in a high-growth sector of cybersecurity. The investment could accelerate product development and market expansion in this critical area. However, the cybersecurity market is highly competitive and rapidly evolving. The $3.3 million might not be enough to gain a significant edge over well-funded competitors. The company's ability to convert this capital into tangible market share and technological advancements will be crucial. Investors should closely monitor HUB's product roadmap and customer acquisition metrics to gauge the effectiveness of this capital injection in strengthening its market position.

Market Research Analyst

The $3.3 million investment, while modest, signals some market confidence in HUB Security's potential. However, the use of convertible notes and warrants, rather than a straight equity raise, suggests a cautious approach by investors. The 30% premium on the warrant exercise price ($1.00 vs. $0.70 conversion) indicates optimism about future growth. Yet, the ongoing negotiations to extend existing debt maturities hint at financial strain. The non-U.S. investor base could be a strategic move to tap into global markets or might reflect domestic interest. Investors should watch for improved financial metrics and expanded global partnerships as indicators of successful utilization of this new capital.

TEL AVIV, Israel, Aug. 19, 2024 (GLOBE NEWSWIRE) -- via IBN – HUB Cyber Security Ltd. (NASDAQ: HUBC), a developer of confidential computing cybersecurity solutions and advanced data fabric ("HUB Security" or the "Company"), is pleased to announce the successful completion of a $3.3 million private placement from non-U.S. investors.

This investment is in the form of convertible notes with a conversion price of $0.70 per share. As part of the transaction, the Company has also issued warrants with an exercise price of $1.00 per share.

In parallel, HUB Security is engaged in discussions to extend the maturity date of a $4.0 million principal note, originally due in August 2024, as part of its broader financial strategy.

Noah Hershcoviz, CEO of HUB, commented, “We are pleased to secure an investment from a group of esteemed investors who value our strategic vision and operational strengths. This capital will enable us to advance our growth initiatives and continue to deliver value to our stakeholders as we expand our market presence.”

For further information or inquiries, please contact:

info@hubsecurity.com

About HUB Security Ltd.

HUB Cyber Security Ltd ("HUB") was established in 2017 by veterans of the elite intelligence units of the Israeli Defense Forces. The Company specializes in unique cyber security solutions protecting sensitive commercial and government information. The company debuted an advanced encrypted computing solution to prevent hostile intrusions at the hardware level while introducing a novel set of data theft prevention solutions. HUB Security operates in over 30 countries and provides innovative cybersecurity computing appliances and a wide range of cybersecurity services worldwide.

Forward-Looking Statements

This press release contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements about the anticipated benefits of the transaction and the financial condition, results of operations, earnings outlook, and prospects of the combined company. Forward-looking statements are typically identified by words such as "plan," "believe," "expect," "anticipate," "intend," "outlook," "estimate," "future," "forecast," "project," "continue," "could," "may," "might," "possible," "potential," "predict," "seem," "should," "will," "would" and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of HUB Security, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties, or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made with the SEC by the HUB Security and the following: (i) significant uncertainty regarding the adequacy of HUB Security’s liquidity and capital resources and its ability to repay its obligations as they become due; (ii) the war between Israel and Hamas commenced in October 2023, and the potential expansion of hostilities to other fronts, which may harm Israel’s economy and HUB Security’s business; (iii) expectations regarding HUB Security's strategies and future financial performance, including its future business plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and HUB Security's ability to invest in growth initiatives and pursue acquisition opportunities; (iv) the outcome of any legal or regulatory proceedings against HUB Security in connection with our previously announced internal investigation or otherwise; (v) the ability to cure and meet stock exchange continued listing standards; (vi) competition, the ability of HUB Security to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (vii) limited liquidity and trading of HUB Security’s securities; (viii) geopolitical risk, including military action and related sanctions, and changes in applicable laws or regulations; (ix) the possibility that HUB Security may be adversely affected by other economic, business, and/or competitive factors; (i) other risks and uncertainties set forth in the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in HUB Security’s Annual Report on Form 20-F filed on August 16, 2023.

Should one or more of these risks or uncertainties materialize, or should any of the assumptions made by the management of HUB Security prove incorrect, actual results may vary in material respects from those expressed or implied in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the business combination or other matters addressed in this press release and attributable to HUB Security or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in the press release. Except to the extent required by applicable law or regulation, HUB Security undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release to reflect the occurrence of unanticipated events.

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FAQ

What is the amount of the recent investment received by HUB Security (HUBC)?

HUB Security (HUBC) recently received a $3.3 million investment through a private placement from non-U.S. investors.

What is the conversion price for the convertible notes issued by HUB Security (HUBC)?

The convertible notes issued by HUB Security (HUBC) have a conversion price of $0.70 per share.

What is the exercise price of the warrants issued by HUB Security (HUBC) in August 2024?

The warrants issued by HUB Security (HUBC) in August 2024 have an exercise price of $1.00 per share.

What is HUB Security (HUBC) discussing regarding its $4.0 million principal note?

HUB Security (HUBC) is in discussions to extend the maturity date of its $4.0 million principal note, which was originally due in August 2024.