TEL AVIV - HUB Cyber Security Ltd (NASDAQ:HUBC), an Israeli cybersecurity firm, has been notified by Nasdaq that it currently fails to meet the continued listing requirements concerning financial thresholds. The company, known for its advanced encrypted computing solutions, was informed on August 23, 2024, that its total assets and total revenue fell below the minimum $50 million required for listing on The Nasdaq Global Market.
The notification from Nasdaq's Listing Qualifications department does not immediately affect the trading of HUB Cyber Security's ordinary shares, which will continue under the ticker symbol HUBC. The company is now expected to submit a Compliance Plan by October 7, 2024, to demonstrate how it will regain compliance with Nasdaq's requirements. If Nasdaq accepts the plan, HUB Cyber Security may be granted up to 180 days, until February 19, 2025, to meet the criteria.
If the Compliance Plan is not accepted, the company could face delisting. However, HUB Cyber Security would then have the option to request a hearing before the Nasdaq Hearings Panel, which would delay any delisting until the hearing process is completed.
HUB Cyber Security, founded in 2017 by veterans of the Israeli Defense Forces' elite intelligence units, specializes in cybersecurity solutions aimed at protecting sensitive commercial and government information. The company operates in over 30 countries and offers a range of cybersecurity services globally.
The company's recent challenges have been compounded by a range of factors, including economic pressures and geopolitical risks. The war between Israel and Hamas that began in October 2023 has also been cited as a potential disruptor to its operations and the broader economic environment.
This development follows the company's business combination in February 2023, as HUB Cyber Security continues to navigate its strategic and financial path forward. The information provided is based on a press release statement from HUB Cyber Security.
In other recent news, HUB Cyber Security Ltd. has been making notable strides. The Israeli cybersecurity firm has teamed up with US-based enterprise-AI vendor Blackswan Technologies to develop Secured Data Fabric (SDF) solutions. This collaboration is expected to reduce data management and security costs by over 30% for large financial institutions and government entities. The company is also reportedly advancing towards a settlement in a $12 million dispute with Oppenheimer & Co., related to a SPAC merger.
HUB Cyber Security has secured two government contracts and won a $2 million contract with the Israel Airports Authority, showcasing its strategic growth within the cybersecurity domain. The firm has also secured an $8 million straight debt arrangement to bolster its financial base and support growth initiatives. However, the company has delayed the filing of its annual financial statements for the fiscal year ended December 31, 2023, due to ongoing debt restructuring efforts and the recent acquisition of QPoint.
The company has been notified by the Nasdaq Stock Market of non-compliance with the exchange's minimum bid price requirement. HUB Security has been given an initial 180-calendar day period to address the deficiency and regain compliance. These are the latest developments from HUB Cyber Security, demonstrating their strategic decisions and activities.
InvestingPro Insights
In light of HUB Cyber Security Ltd's (NASDAQ:HUBC) recent notification from Nasdaq regarding its listing requirements, a closer look at the company's financial health is warranted. According to InvestingPro data, HUB Cyber Security's market capitalization stands at approximately $14.62 million USD, a figure that underscores the company's challenges in maintaining the financial thresholds required by Nasdaq.
The company's financial struggles are further reflected in its negative price-to-earnings (P/E) ratios, with an adjusted P/E ratio for the last twelve months as of Q4 2023 at -0.22. This metric indicates that investors are not expecting earnings growth in the near future. Additionally, HUB Cyber Security's revenue for the same period was reported at $42.66 million USD, with a notable decline of 14.69% in revenue growth, which may contribute to concerns over the company's ability to meet Nasdaq's listing criteria.
InvestingPro Tips highlight several areas of concern for HUB Cyber Security, including its significant debt burden and the fact that it has been quickly burning through cash. These factors, combined with weak gross profit margins and the reality that short-term obligations exceed liquid assets, paint a picture of a company facing considerable financial strain. Over the last week, the stock has taken a significant hit, and the price has performed poorly over various timeframes, including the last month, quarter, and year.
For investors looking for a deeper dive into HUB Cyber Security's financials and performance, InvestingPro offers a comprehensive set of additional tips. There are currently 14 more InvestingPro Tips available that could provide valuable insights into HUB Cyber Security's future prospects and investment potential. To explore these insights, interested parties can visit https://www.investing.com/pro/HUBC.
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