Business Context and Reporting Period
This Form 6-K filing by Hub Cyber Security Ltd. covers the month of February 2025. The report details the resolution of significant legacy litigation and a restructuring of existing debt obligations. The company is a foreign private issuer headquartered in Tel Aviv, Israel.
Key Financial Metrics and Settlements
The filing does not provide standard financial statements (revenue, profit, cash flow, or margins) for the period. Instead, it focuses on the following material financial events:
- Dominion Capital Settlement: Total settlement amount of $4.5 million to resolve a $2.5 million loan dispute and insolvency petition. Payments are structured as $400,000 by Feb 21, 2025, $200,000 by March 3, 2025, and ten monthly payments of $390,000 thereafter.
- Oppenheimer & Co. Settlement: Total settlement amount of $3 million to resolve a claim exceeding $12 million. Payments include $1.1 million upfront and ten monthly payments of $200,000 (first payment $100,000) from March to December 2025.
- Claymore Capital Financing: Claymore Capital agreed to fund the Dominion and Oppenheimer settlements on the Company's behalf. In exchange, the Company issued two convertible notes totaling $13.5 million ($7.5 million for Dominion; $6 million for Oppenheimer). These notes are non-interest-bearing and convertible into ordinary shares by February 2030.
- Debt Restructuring (Tamas Gottdiener): Amended terms for $11 million in convertible notes. Maturity extended to August 16, 2025. Interest rate increases from 15% to 20% per annum if not paid/converted by April 1, 2025.
Material Changes and Contingencies
The filing outlines significant changes to the company's liability structure and potential equity dilution:
- Insolvency Risk Mitigation: Upon receipt of the first and second installment payments to Dominion, the creditor agreed to stay and then cancel Israeli insolvency proceedings.
- Collateral and Liens: The Company granted Claymore liens on shares in BlackSwan Technologies, Inc. and incoming revenues up to $6 million if an insolvency event occurs before August 20, 2025, or if Nasdaq compliance is not achieved by March 31, 2025.
- Warrant Adjustments: Exercise prices for existing warrants held by the Investor were unified at NIS 1.777 (~$0.50). New warrants were issued for 2,055,556 shares and pre-funded warrants for 10,000,000 shares, all exercisable until February 17, 2030.
- Default Penalties: If Claymore defaults on payments to creditors, the principal of the convertible notes issued to Claymore will be reduced (1.667x for Dominion, 2x for Oppenheimer).
Outlook and Management Commentary
Management indicates that the settlements resolve $16.6 million in legacy liabilities and secure $13.5 million in financing. The restructuring of the $11 million notes provides a six-month extension, though it introduces a penalty interest rate increase if conversion or repayment does not occur by April 1, 2025. The filing includes standard forward-looking statement disclaimers, noting that future events may differ from current expectations.
Investor Verification Checklist
- Verify the status of the Israeli insolvency proceedings following the first installment payment to Dominion.
- Confirm the Company's ability to meet the March 31, 2025 Nasdaq compliance deadline to avoid triggering liens on BlackSwan Technologies shares.
- Monitor the April 1, 2025 deadline for the $11 million notes to determine if the interest rate will escalate to 20%.
- Assess the potential dilution impact from the $13.5 million in new convertible notes and the additional warrants issued to the Investor.
- Review the terms of the third-party sale of conversion shares by the Investor, which could result in a shortfall note if proceeds are insufficient.