HUB Security secures up to $20 million in convertible note financing

TEL AVIV - HUB Cyber Security Ltd. (NASDAQ:HUBC) has entered into definitive agreements for up to $20 million in subordinated convertible note private placement financing, with more than half led by existing investors, the company announced Wednesday. According to InvestingPro data, this financing comes at a crucial time for the company, which currently operates with a market capitalization of $28.33 million and faces significant debt obligations.

The financing consists of convertible notes with 4.0% annual interest payable quarterly and a maturity date of August 2027. Proceeds are expected to be used to reduce debt, accelerate U.S. operations, and expand the company’s AI-powered enterprise intelligence and crypto infrastructure capabilities. InvestingPro analysis reveals the company’s pressing financial challenges, with a current ratio of 0.17 indicating short-term obligations exceed liquid assets, and a concerning 30.7% year-over-year revenue decline.

"This financing marks a defining inflection point for HUB," said Noah Hershcoviz, Chief Executive Officer of HUB.

The company also announced a six-month extension of its Senior Secured Debt Facility, which it says provides additional balance-sheet flexibility.

HUB’s core offering is its AI-native Secured Data Fabric (SDF) platform, which the company describes as an institutional control layer for regulated data. The company reports that its SDF is currently used by Tier-1 banks and government contracts.

The financing will be provided under multiple closings, subject to customary closing conditions. Rodman & Renshaw LLC is acting as sole placement agent for the transaction.

HUB currently operates in six countries and says it has invested approximately $200 million into its platform to date. While historically focused on Israel and Europe, the company indicates this financing will enable accelerated North American expansion.

The securities being issued and sold in the private placement have not been registered under the Securities Act of 1933 and are being issued in reliance on Section 4(a)(2) of the Securities Act, according to the company’s press release statement.

Founded in 2017 by veterans of Israeli Defense Forces intelligence units, HUB specializes in secured data infrastructure and confidential computing solutions. InvestingPro subscribers can access 14 additional key insights about HUBC’s financial health, valuation metrics, and growth prospects, essential for understanding the company’s investment potential in the cybersecurity sector.

In other recent news, HUB Cyber Security Ltd. has signed a significant agreement with Kyrrex and an unnamed crypto merchant vendor for Know Your Customer (KYC) and compliance services. This deal, commencing on July 1, 2025, is projected to bring in approximately $25 million in recurring annual revenue for the company. In a move to strengthen its leadership, HUB has appointed Paul Parisi as Global Chief Revenue Officer. Parisi, with over 25 years of experience, previously served as President of PayPal Canada and held senior roles at American Express and Silicon Valley Bank. Additionally, HUB has appointed Aviv Eyal to lead its new Digital Asset Infrastructure Division, bringing his expertise from Spacemesh and Subnet. The company has also regained full compliance with Nasdaq’s listing requirements, meeting both the minimum bid price and market value of listed securities thresholds. This compliance was confirmed by the Nasdaq Hearings Panel, marking a significant milestone for HUB.

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