TEL AVIV - HUB Cyber Security Ltd. (NASDAQ: HUBC), a global cybersecurity solutions provider with a market capitalization of $15.76 million, has reached an agreement to significantly reduce its convertible note obligations and secured additional investment to bolster its balance sheet. According to InvestingPro data, the company has been operating with significant debt burden and weak financial health metrics. The company announced a 70% reduction in its $5.7 million convertible note obligations through a settlement with AGP. This move is part of HUB Security's strategic initiative to strengthen its financial position and reduce debt.
In a further boost to its financial health, HUB Security has received an additional $1 million from a private investor, adding to a previous aggregate investment of $10 million. The company is also in the process of refinancing a $7.5 million debt into a long-term settlement, aiming to solidify its financial foundation.
The company's board of directors will also see a change with the appointment of Ms. Renah Persofsky, who replaces Ms. Lior Lurye. Persofsky brings a wealth of experience from her service on multiple boards, including both Nasdaq listed and private companies. Her strong financial background and strategic insights are expected to contribute significantly to HUB Security's growth and corporate governance. She will serve as an independent director on the board.
Noah Hershcoviz, CEO of HUB Cyber Security, expressed confidence in the company's strategic direction. "These valuable achievements reflect HUB Security's ongoing strength and strategic focus as we position the Company for sustainable growth and long-term success," he said.
HUB Cyber Security, established in 2017 by veterans of the Israeli Defense Forces' elite intelligence units, specializes in advanced cybersecurity solutions and operates in over 30 countries. The company generated revenue of $42.66 million in the last twelve months, though facing challenges with a negative gross profit margin of 1.5% and significant cash burn rate, as highlighted by InvestingPro analysis. The company's Secured Data Fabric product, developed in partnership with BlackSwan Technologies, aims to offer highly secured and advanced data management.
The press release also contains forward-looking statements regarding the company's financial condition, results of operations, and earnings outlook. The company cautions that these statements are subject to uncertainties and changes in circumstances and may differ materially from actual future results or performance.
This news article is based on a press release statement from HUB Cyber Security Ltd.
In other recent news, HUB Cyber Security Ltd has been grappling with a series of financial challenges. The Israeli cybersecurity firm was notified by Nasdaq that it fails to meet the continued listing requirements due to its total assets and total revenue falling below the minimum $50 million. As a response, HUB Cyber Security is expected to submit a Compliance Plan to demonstrate how it will regain compliance with Nasdaq's requirements.
In the midst of these financial issues, the company has secured multiple contracts, including a $2 million contract with the Israel Airports Authority. They have also entered into an $8 million straight debt arrangement to support growth initiatives.
In further developments, HUB Cyber Security has partnered with US-based enterprise-AI vendor Blackswan Technologies to develop Secured Data Fabric solutions, aiming to reduce data management and security costs by over 30% for major financial institutions and government entities. The company is also nearing a settlement in a $12 million dispute with Oppenheimer & Co. These recent developments underscore the company's strategic decisions and activities in navigating its financial challenges.
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