20-F: Hub Cyber Security Amends Securities Purchase Agreement

Hub Cyber Security Ltd. has amended its Securities Purchase Agreement, increasing the aggregate principal amount of notes issuable and adding new investors.

Summary

• Hub Cyber Security Ltd. has executed Amendment No. 1 to its Securities Purchase Agreement, dated October 15, 2025, which amends the original agreement dated August 27, 2025.
• The amendment increases the aggregate principal amount of notes issuable under the agreement from $20,000,000 to $35,000,000.
• The amendment also includes provisions for new buyers to join the agreement by executing a joinder.
• Key changes include replacing references to $20,000,000 with $35,000,000 in Recital B and amending the definition of Transaction Documents to include the Amendment and a Joinder.
• The agreement also addresses the satisfaction and cancellation of approximately $2,750,000 of indebtedness owed to Agile Capital Funding LLC.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a neutral to slightly negative development, as it signifies continued reliance on debt financing and amendments to secure capital, rather than a fundamental improvement in the company's financial health.

Positives

• Increase in the aggregate principal amount of notes issuable under the Securities Purchase Agreement to $35,000,000, indicating potential for increased capital inflow.
• Inclusion of new buyers, suggesting expanded investor interest and confidence in the company's financing.
• Amendment to the form of Additional Note, potentially improving terms or structure for future issuances.
• Designation and satisfaction/cancellation of indebtedness to Agile Capital Funding LLC, which could improve the company's balance sheet.

Negatives

• The company continues to rely on debt financing and amendments to existing agreements, which may indicate ongoing financial challenges.
• The need to amend the agreement suggests that the original terms may not have been fully optimal or achievable.
• The company's financial situation, as detailed in the Form 20-F, indicates significant going concern issues, which are not directly addressed by this amendment.

Risks

• The company's ability to continue as a going concern remains a significant risk, as highlighted in its Form 20-F filing.
• The company has identified material weaknesses in its internal control over financial reporting, which could impact its ability to produce accurate financial statements.
• The company has experienced significant management turnover, creating uncertainties regarding its future strategy and financial results.
• The company's securities have experienced extreme volatility, and there is a risk of further significant price declines.
• The company is subject to ongoing litigation, including a securities class action lawsuit, which could result in substantial costs and liabilities.

Future Outlook

The amendment indicates ongoing efforts to secure financing through the issuance of convertible notes and the potential addition of new investors, which is crucial for the company's continued operations given its stated liquidity issues.

Industry Context

StockSavvy.ai notes that amendments to securities purchase agreements are common in the cybersecurity sector, particularly for companies seeking to adjust financing terms or broaden their investor base amidst challenging market conditions and ongoing liquidity needs.

Stakeholder Impact

• Existing shareholders may experience further dilution if the convertible notes are converted into ordinary shares.
• Investors participating in the financing may benefit from potentially improved terms or increased capital for the company.
• Creditors of the company may see this as a positive step towards stabilizing the company's financial position, although the reliance on debt remains a concern.

Next Steps

• The company will proceed with additional closings under the amended Securities Purchase Agreement.
• New buyers will execute joinders to become parties to the agreement.
• The company will manage the satisfaction and cancellation of existing indebtedness to Agile Capital Funding LLC.

Key Dates

Recommendation

The amendment to the Securities Purchase Agreement is a necessary step for Hub Cyber Security to continue its operations by securing additional financing. However, given the company's ongoing financial challenges, material weaknesses in internal controls, and significant management turnover, the situation remains highly uncertain. While the capital raise is positive, it does not fundamentally alter the company's precarious financial standing. Therefore, a 'hold' recommendation is appropriate, pending significant improvements in operational stability and financial health.

Keywords

Hub Cyber Security, Securities Purchase Agreement, Amendment, Convertible Note, Financing, Capital Raise, Investor, Israel