Business Context and Reporting Period
Hub Cyber Security Ltd. filed this Form 6-K as a foreign private issuer for March 2023. On February 28, 2023, the company completed its previously announced business combination with Mount Rainier Acquisition Corp. (RNER) and Rover Merger Sub Inc.
The company’s ordinary shares and existing warrants began trading on Nasdaq on March 1, 2023 under the symbols HUBC and HUBCZ, respectively. New warrants began trading under HUBCW.
Key Financial and Capitalization Matters
| Item | Reported terms |
|---|---|
| RNER redemptions | 2,580,435 shares redeemed at approximately $10.28 per share, for aggregate proceeds of approximately $26.5 million. This was in addition to 14,535,798 shares previously redeemed. |
| PIPE financing | Planned purchase of 5,000,000 ordinary shares at $10.00 per share for gross proceeds of $50.0 million; the financing did not close. |
| Convertible notes | AGP purchased notes with an aggregate principal amount of $5,219,318.54, and a vendor purchased notes of $349,318.54. The notes bear 6% annual interest, mature March 1, 2024, and are convertible at the holders’ option. |
| Convertible loan agreement | The company received gross proceeds of 10.0 million Israeli shekels. The loan bears no interest, has a 24-month maturity, and is convertible into ordinary shares upon the start of Nasdaq trading. |
| Equity line of credit | The company obtained a commitment to issue up to $100.0 million of ordinary shares over 36 months. Dominion also agreed to advance $2.5 million as an upfront commitment. |
| Secured promissory note | The $2.5 million upfront commitment is evidenced by a senior secured demand note bearing 10% annual interest and payable on demand. |
The filing does not provide revenue, profit, cash flow, margin, cash balance, total debt, or liquidity figures for a comparable reporting period.
Material Changes and Unusual Items
- RNER merged with Rover Merger Sub and became a wholly owned subsidiary of Hub Cyber Security. Former RNER shareholders received 0.899 Hub ordinary shares for each RNER share.
- The company completed a reverse stock split with a reported ratio of 0.712434, intended to result in a $10.00 value per share after the split.
- The company waived the $50.0 million minimum cash condition because of the substantial redemptions and failure of the PIPE financing to close.
- The proposed amended compensation policy was not submitted for shareholder approval and did not become effective; the existing compensation policy remains in effect.
- AGP received registration rights for shares issuable upon conversion of its notes and a right of first refusal covering future equity, equity-linked, debt, advisory, and equity-line transactions. The right generally expires 12 months after closing, or earlier if the AGP notes are repaid within six months.
Outlook, Risks, and Governance
The filing contains no operating forecast or formal financial guidance. Key financing risks include the failure of the planned $50.0 million PIPE financing, substantial shareholder redemptions, reliance on an equity line that may result in future share issuance and dilution, and the company’s obligation to repay a secured demand note bearing 10% interest.
The convertible notes may result in additional ordinary shares, and the company must satisfy or refinance obligations maturing in March 2024. The filing also indicates that the company waived a contractual minimum cash condition, which may heighten liquidity risk.
Kasbian Nuriel Chirich was appointed director and chairman. Liat Aaronson joined the board and its Audit, Compensation, and Nominating committees. Moti Franko and Zeev Zell resigned from the board effective at closing.
Investor Verification Checklist
- Verify the company’s post-closing cash balance and actual proceeds available after redemptions and transaction expenses.
- Confirm the status, terms, and utilization of the $100.0 million equity line and the $2.5 million secured demand note.
- Review the conversion terms, outstanding balances, and potential dilution from the convertible notes and Israeli-shekel convertible loan.
- Confirm the final number of ordinary shares, warrants, and other securities outstanding after the reverse split and business combination.
- Assess the company’s ability to meet the March 2024 convertible-note maturity and other near-term obligations.
- Review subsequent filings for operating results, liquidity disclosures, related-party arrangements, and any use of the equity line.