Business Context and Reporting Period
HUB Cyber Security Ltd., an Israeli foreign private issuer, furnished this Form 6-K for August 2023, dated August 25, 2023. The filing reports amendments entered into on August 24, 2023 with Lind Global Asset Management VI LLC regarding the company’s securities purchase agreement, senior secured convertible promissory note, and warrant.
Key Financial and Capital Markets Terms
- Lind agreed to fund $1.0 million, less the applicable commitment fee, immediately upon execution of the amendment.
- Lind agreed to provide an additional $500,000, less the commitment fee, within five business days after the company files a Form F-1 registration statement covering shares issuable upon conversion of the note and exercise of the warrant, subject to specified no-default conditions.
- The note’s principal amount increased from $7.2 million to $9.0 million.
- The note’s conversion price was amended to $0.45 per ordinary share.
- The warrant was amended to cover 5,000,000 ordinary shares in total, with an exercise price of $0.45 per share. The amendment added 2,541,790 shares to the warrant.
- In connection with the additional $1.0 million funding, the company agreed to issue a new warrant for 2,500,000 ordinary shares at an exercise price of $0.45 per share.
- If the company files the registration statement and receives the additional $500,000, it must issue another warrant based on the company’s closing share price and recent VWAPs. The number of shares and exercise price were not fixed in the filing.
The filing does not provide revenue, profit, cash flow, operating margin, cash balance, or other operating-period financial metrics.
Material Changes Versus the Prior Comparable Disclosure
- The funding structure was amended to provide an immediate $1.0 million funding amount and a potential additional $500,000 tranche.
- The convertible note principal increased by $1.8 million, from $7.2 million to $9.0 million.
- The note conversion price and warrant exercise price were set at $0.45 per ordinary share.
- The existing warrant increased to 5,000,000 underlying shares, and a separate 2,500,000-share warrant was agreed in connection with the $1.0 million funding.
Outlook, Risks, Contingencies, and Unusual Items
- The additional $500,000 funding is contingent on filing the Form F-1 registration statement and confirming that no event of default exists or will result from the funding.
- The transactions create potential dilution from conversion of the $9.0 million note and exercise of the existing and newly issued warrants.
- The filing does not state the net cash proceeds after commitment fees or confirm whether all contemplated funding was received.
- The securities are senior secured convertible obligations, increasing the company’s secured financing exposure.
- The filing provides no operating guidance or management outlook.
Investor Verification Checklist
- Verify the amount of net cash actually received after commitment fees and the timing of each funding tranche.
- Confirm whether the Form F-1 registration statement was filed and became effective, and whether the additional $500,000 was funded.
- Review the complete amendment, note, warrant, and purchase agreement for default provisions, collateral, maturity, interest, repayment terms, and conversion mechanics.
- Assess the potential dilution from the $9.0 million note and all warrants, including the contingent warrant tied to the registration filing.
- Review subsequent filings for changes to the financing, defaults, share issuances, or additional liquidity constraints.