Hub Cyber Security Raises Additional $1.5M via Convertible Notes & Warrants
Ticker: HUBCZ · Form: 6-K · Filed: Jan 24, 2024 · CIK: 1905660
Complexity: simple
Sentiment: mixed
Topics: capital-raise, convertible-debt, warrants, dilution
TL;DR
**HUBC just raised another $1.5M through convertible notes, watch out for potential dilution.**
AI Summary
Hub Cyber Security Ltd. (HUBC) announced on January 24, 2024, that it completed additional sales of convertible promissory notes and warrants to accredited investors, raising an additional principal amount of up to $1,500,000. This follows a previous sale of up to $1,600,000 in notes and warrants reported on December 4, 2023. The terms for these new sales are consistent with the prior agreement, but the warrant exercise prices have been adjusted from $0.15 and $0.25 to $1.50 and $2.50, respectively, due to a 1-for-10 reverse share split that became effective on December 14, 2023. This matters to investors because it indicates the company is raising capital through debt that can convert into equity, potentially diluting existing shareholders, even with the reverse stock split adjusting the conversion prices.
Why It Matters
This filing shows Hub Cyber Security is securing additional funding, which can be positive for operations, but the issuance of convertible notes and warrants could lead to dilution for current shareholders if converted into ordinary shares.
Risk Assessment
Risk Level: medium — The issuance of convertible notes and warrants carries a medium risk due to potential future share dilution for existing shareholders, even with the price adjustments from the reverse stock split.
Analyst Insight
A smart investor should monitor the company's cash burn rate and future financing needs. While the capital raise provides liquidity, the potential for dilution from convertible notes and warrants, even with adjusted prices, warrants careful consideration of the company's long-term value proposition and share structure.
Key Numbers
- $1,500,000 — Additional Principal Amount (New capital raised through convertible notes and warrants.)
- $1,600,000 — Previous Principal Amount (Capital raised in the prior convertible note and warrant sale.)
- $1.50 — Adjusted Warrant Price 1 (New exercise price for warrants after the 1-for-10 reverse split.)
- $2.50 — Adjusted Warrant Price 2 (New exercise price for warrants after the 1-for-10 reverse split.)
- 1-for-10 — Reverse Share Split Ratio (The ratio by which ordinary shares were consolidated, impacting warrant prices.)
Key Players & Entities
- Hub Cyber Security Ltd. (company) — the registrant raising capital
- $1,600,000 (dollar_amount) — aggregate principal amount of notes from previous sale
- December 4, 2023 (date) — date of previous 6-K report
- $1,500,000 (dollar_amount) — additional principal amount of notes sold in current transaction
- January 23, 2024 (date) — date of the last additional sale
- $0.15 (dollar_amount) — original warrant exercise price before split
- $0.25 (dollar_amount) — original warrant exercise price before split
- $1.50 (dollar_amount) — adjusted warrant exercise price after split
- $2.50 (dollar_amount) — adjusted warrant exercise price after split
- December 14, 2023 (date) — effective date of the 1-for-10 reverse share split
Forward-Looking Statements
- Hub Cyber Security Ltd. will continue to seek additional capital through similar financing methods. (Hub Cyber Security Ltd.) — medium confidence, target: Q2 2024
- The conversion of these notes and warrants will lead to an increase in the outstanding share count. (Hub Cyber Security Ltd. Ordinary Shares) — high confidence, target: Q4 2024
FAQ
What type of securities did Hub Cyber Security Ltd. sell to accredited investors?
Hub Cyber Security Ltd. sold convertible promissory notes ("Notes") and warrants ("Warrants") exercisable into ordinary shares to accredited investors.
What was the aggregate principal amount of the additional notes sold in this filing?
The aggregate principal amount of the additional notes sold was up to $1,500,000.
When did the last of these additional sales occur?
The last of these additional sales occurred on January 23, 2024.
How were the warrant exercise prices adjusted, and why?
The warrant exercise prices were adjusted from $0.15 and $0.25 to $1.50 and $2.50, respectively, to account for a 1-for-10 reverse share split of the Ordinary Shares that became effective on December 14, 2023.
When was the previous report regarding similar sales filed?
The previous report on Form 6-K regarding similar sales was furnished to the SEC on December 4, 2023.
Filing Stats: 400 words · 2 min read · ~1 pages · Grade level 13.5 · Accepted 2024-01-24 16:01:19
Key Financial Figures
- $1,600,000 — an aggregate principal amount of up to $1,600,000 and warrants (“Warrants”) e
- $1,500,000 — an additional principal amount of up to $1,500,000 and Warrants in accordance with the sam
- $0.15 — e avoidance of doubt, references to the $0.15 and $0.25 price figures being adjusted
- $0.25 — e of doubt, references to the $0.15 and $0.25 price figures being adjusted to $1.50 a
- $1.50 — d $0.25 price figures being adjusted to $1.50 and $2.50 to account for the 1-for-10 r
- $2.50 — ice figures being adjusted to $1.50 and $2.50 to account for the 1-for-10 reverse sha
Filing Documents
- ea192140-6k_hubcyber.htm (6-K) — 15KB
- 0001213900-24-006076.txt ( ) — 16KB
SIGNATURES
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Hub Cyber Security Ltd. Date: January 24, 2024 By: /s/ Noah Hershcoviz Noah Hershcoviz Chief Executive Officer 2