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HUB Cyber Security Ltd. Loan Agreement Report: $2.65M Financing & Shareholder Impact

$HUBC
Form 6-K
Filed on: 2025-02-10
Source
HUB Cyber Security Ltd. Loan Agreement Report: $2.65M Financing & Shareholder Impact

Here are the key insights extracted from the provided financial report (SEC Form 6-K) related to HUB Cyber Security Ltd.:

  1. Loan Agreement Details:
  • Date: February 4, 2025.
  • Lender: Julestar LLC, a New York limited liability company.
  • Loan Amount: $2,650,000.
  • Promissory Note Amount: $3,117,647.
  • Repayment Terms: The principal and interest must be repaid in 40 weekly installments over a 10-month period.
  • Interest Rate: 10% per annum.
  1. Collateral:
  • The repayment of the Note is secured by a subordinated pledge over shares of certain subsidiaries, pending consent from a senior lender within 60 days.
  1. Warrants Issuance:
  • The Loan Agreement includes the issuance of five-year warrants to purchase 5,300,000 Ordinary Shares at an exercise price of $0.50 per share.
  • The number of underlying shares is subject to adjustment based on repayment status of the Note.
  1. Prepayment Conditions:
  • The Company can prepay a minimum of $100,000 of the Note at any time without penalties.
  • If total financing or asset sales exceed $5 million (or $7 million in total), proceeds must be used to prepay the Note.
  • Early repayment could lead to a reduction in the number of shares issued under the Warrants.
  1. Potential Adjustments:
  • If the Note is not repaid in full within 90 days, the number of shares under the Warrants could increase, and the exercise price may be adjusted to half the lowest 10-day average market price during that period.
  1. Impact on Existing Warrants:
  • The issuance of the new Warrants reduces the exercise price of previously issued warrants from $0.85 to $0.50 per share due to automatic adjustments.
  1. Regulatory Compliance:
  • The Company has pledged to register the shares issuable upon the exercise of the Warrants with the SEC using Form F-1 or Form F-3.
  1. Forward-Looking Statements:
  • The report contains forward-looking statements that are not guaranteed and may not occur due to various factors beyond the Company’s control.
  1. Company Information:
  • Name: HUB Cyber Security Ltd.
  • Address: 2 Kaplan Street, Tel Aviv, 6473403, Israel.
  • Contact: +972-3-924-4074.
  • Commission File Number: 001-41634.

This report provides important financial commitments and potential impacts on shareholder equity through the issuance of warrants and the terms of the loan, which are crucial for stakeholders in evaluating the company's financial health and future prospects.