NEW YORK, Sept. 17, 2023 (GLOBE NEWSWIRE) — Pomerantz LLP (“Pomerantz”) gives notice of the revised lead plaintiff motion deadline of October 16, 2023 in the securities lawsuit pending against Hub Cyber Security Ltd. (“HUB” or the “Company”) (NASDAQ: HUBC; HUBCZ; HUBCW) f/k/a Hub Cyber Security (Israel) Ltd. (“Legacy HUB”), and certain officers and directors. The caption for the action is: Green v. Hub Cyber Security Ltd. et al., Case No. 1:23-cv-06668 (“Green”), pending in the United States District Court for the Southern District of New York (“S.D.N.Y.”) before the Honorable Arun Subramanian, U.S.D.J.
The complaint in Green, filed on July 31, 2023, is on behalf of a class (the “Class”) consisting of all: (a) Legacy HUB stockholders who acquired the Company’s common stock through Legacy HUB’s merger (the “Merger”) with Mount Rainier Acquisition Corp. (“Mount Rainier”); (b) Mount Rainier investors who acquired the Company’s securities pursuant and/or traceable to the registration statement and proxy statement/prospectus (collectively, the “Offering Documents”) issued in connection with the Merger; and/or (c) persons and entities that purchased or otherwise acquired Mount Rainier or U.S.-listed HUB securities between March 23, 2022 and June 13, 2023, both dates inclusive (the “Class Period”). Plaintiff pursues claims against Defendants under the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”).
The initial deadline to move for lead plaintiff was September 5, 2023, pursuant to the notice of a related, earlier-filed action, captioned Efrat Investments LLC v. Hub Cyber Security Ltd., Case No. 1:23-cv-05764 (“Efrat”), which is also pending in S.D.N.Y. before the Honorable Arun Subramanian, U.S.D.J. Because Green covers a broader class and class period than Efrat, on August 9, 2023, Judge Subramanian ordered publication of a new notice to investors, consistent with Section 78u-4(a)(3)(A) of the Private Securities Litigation Reform Act of 1995. Accordingly, Pomerantz, which is counsel for the plaintiff in Green, hereby issues this notice of a revised deadline of October 16, 2023 to move for appointment as lead plaintiff on behalf of the Class. If you are a Legacy HUB stockholder who acquired the Company’s common stock through the Merger, a Mount Rainier investor who acquired the Company’s securities pursuant and/or traceable to the Offering Documents in connection with the Merger, and/or an investor who purchased or otherwise acquired Mount Rainier or U.S.-listed HUB securities during the Class Period, you have until October 16, 2023 to ask the Court to appoint you as Lead Plaintiff for the Class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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Legacy HUB was founded in 2017 by veterans of the elite Unit 8200 and Unit 81 of the Israeli Defense Forces and described itself as having “developed unique technology and products in the field of Confidential Computing, and it intends to be a significant player providing effective cybersecurity solutions for a broad range of government entities, enterprises and organizations.” Before the Merger, Legacy HUB’s ordinary shares and existing warrants traded on the Tel Aviv Stock Exchange.
Mount Rainier was a special purpose acquisition company, also called a blank-check company, which is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person. Before the Merger, Mount Rainier’s common stock, units, and redeemable warrants traded on the Nasdaq Stock Market (“NASDAQ”). Following the Merger, Mount Rainier became a wholly owned subsidiary of the Company.
On March 23, 2022, Legacy HUB and Mount Rainier issued a joint press release stating “that they have entered into a definitive business combination agreement” and that the Company’s Founder and Chief Executive Officer (“CEO”) Defendant Eyal Moshe (“Moshe”) “and the current management team will continue to lead the Combined Company.”
On or about October 6, 2022, Legacy HUB solicited its stockholders’ approval of the Merger through a mailing, with that solicitation stating that the private investment in public equity (“PIPE”) investors made an absolute and irrevocable commitment to invest in the Company at a value of $10 per share as part of a private placement, and that the PIPE is equal to the minimum amount required to close the Merger.
The complaint alleges that the Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the Offering Documents and Defendants made false and/or misleading statements and/or failed to disclose that: (i) PIPE financing in connection with the Merger was not committed; (ii) HUB would not be led by Legacy HUB’s then-current management team, including Defendant Moshe; (iii) the Company had downplayed the full scope and severity of deficiencies in its compliance controls and procedures, including its disclosure controls and procedures and internal controls over financial reporting; (iv) the Company overstated its remediation of, and/or ability to remediate, the foregoing deficiencies; (v) accordingly, the Company had hundreds of thousands of dollars of unexplained expenses incurred, and/or funds misappropriated or otherwise fraudulently obtained, by a senior officer of the Company; (vi) the foregoing increased the risk that the Company would be unable to timely file one or more of its periodic financial reports with the U.S. Securities and Exchange Commission (“SEC”), as required by the NASDAQ’s listing rules; (vii) as a result, the Company was also at an increased risk of being delisted from the NASDAQ; (viii) all the foregoing, once revealed, was likely to negatively impact the Company’s business, financial results, and reputation; and (ix) as a result, the Offering Documents and Defendants’ public statements throughout the Class Period were materially false and/or misleading and failed to state information required to be stated therein.
On January 26, 2023, the Company issued a press release announcing “that following the receipt of all approvals and compliance with the conditions for the expected merger with Mount Rainier . . . and transition to trading on the [NASDAQ],” the Company expected its shares and warrants to begin trading on the NASDAQ on February 28, 2023, representing a delay of nearly one month from Mount Rainier’s earlier announcement that the Merger would close in late January 2023.
On this news, Mount Rainier’s share price fell $0.48 per share over two consecutive trading days, or 4.75%, to close at $9.63 per share on January 27, 2023.
On February 2, 2023, the Company issued a press release stating that Defendant “Moshe will be promoted to undertake the role of President of US operations to better focus resources and attention on the North American strategic business development” and “will be replac[ed] . . . as [CEO].” The same press release also stated, in relevant part, that the Company “has received an irrevocable commitment by A-Labs Advisory & Finance Ltd. to substitute a current HUB PIPE investor, Clover Wolf Fund, in the sum US$ 10 million on the same terms.”
On this news, Mount Rainier’s share price fell $0.29 per share, or 3.05%, to close at $9.21 per share on February 3, 2023.
On February 3, 2023, the Company filed a Form 6-K with the SEC, stating that “on February 2, 2023, Ayelet Bitan, the Company’s Vice President of Human Resources, resigned from her position as an officer of the Company, effective immediately”; and that, on February 2, 2023, the Board of Directors (“Board”) of “HUB Cyber Security Ltd. (TASE: HUB) (the ‘Company’) accepted the resignation of [Defendant] Moshe as the Company’s [CEO], effective immediately, and appointed him as President of the Company’s U.S. operations.”
On this news, Mount Rainier’s share price fell $0.38 per share, or 4.13%, to close at $8.83 per share the next trading day on February 6, 2023.
On February 28, 2023, the Company consummated the Merger with Mount Rainier, Mount Rainier became a wholly owned subsidiary of the Company, and the Company’s shares closed at $4.99 per share.
On March 1, 2023, the combined Company’s securities began trading on the NASDAQ, with a first post-Merger closing stock price of $1.59 per share (the “Initial Closing Price”).
Also on March 1, 2023, HUB filed a Form 6-K with the SEC stating, inter alia, that “[t]he PIPE Financing did not consummate at closing of the Business Combination” and that, “[a]s a result of the redemptions from [Mount Rainier]’s trust account and the failure of the PIPE Financing to be consummated, the Company waived the Minimum Cash Condition in order to proceed to close the Business Combination.”
On this news, HUB’s stock price fell $0.34 per share, or 21.38%, to close at $1.25 per share on March 2, 2023.
On April 20, 2023, HUB filed a Form 6-K with the SEC stating, inter alia, that “[o]n April 19th, 2023, [the Board] of [HUB] appointed a special committee of independent directors . . . in order to investigate and asses [sic] certain allegations of potential misappropriation and other potential fraudulent actions raised against a former senior officer of the Company.” The Form 6-K further disclosed that “[t]he allegations were raised during on-going reviews by the new management of the Company, and within this framework the new management of the Company discovered certain unexplained expenses . . . estimated at approximately NIS[ New Israel Shekel ]2.5 million”—i.e., approximately $675,110.
On this news, HUB’s stock price fell $0.03 per share, or 2.52%, to close at $1.16 per share on April 20, 2023.
On May 15, 2023, HUB issued a press release disclosing that “due to the previously disclosed internal investigation by a special committee of independent directors . . . that was appointed by the [Board], the Company requires additional time to complete the process and file its Annual Report on Form 20-F for the fiscal year ended December 31, 2022.”
On May 22, 2023, HUB issued a press release disclosing that HUB received a notice that the Company was non-compliant with applicable NASDAQ listing rules because the Company had failed to “timely file its Annual Report on Form 20-F for the fiscal year ended December 31, 2022 . . . with the [SEC.]” The Company also disclosed, inter alia, that “[t]he Company’s management and the Audit Committee are also reviewing the effectiveness of the Company’s controls over its disclosure and internal accounting and financial reporting for the year ended December 31, 2022”; and that, “[i]f the Company fails to timely regain compliance with the Nasdaq Listing Rules, the securities of the Company will be subject to delisting from Nasdaq.”
On this news, HUB’s stock price fell $0.04 per share, or 6.15%, to close at $0.61 per share on May 22, 2023.
Then, on June 13, 2023, HUB issued a press release disclosing that HUB received another notice of non-compliance with applicable NASDAQ listing rules “because for the past 30 consecutive business days preceding the date of the notification . . . the bid price per share of the Company’s ordinary shares, no par value (‘Ordinary Shares’) had closed below the $1.00 per share minimum bid price required for continued listing on Nasdaq[.]” The Company further disclosed that “[i]f the Company has not regained compliance within the period(s) granted by Nasdaq, including any extensions, the Ordinary Shares will be subject to delisting, pending an appeal to the Nasdaq Hearing Panel.”
On this news, HUB’s stock price fell $0.04 per share, or 6.78%, to close at $0.55 per share on June 14, 2023—a 65.41% decline from its Initial Closing Price.
On July 5, 2023, the price of HUB’s stock closed at $0.3918 per share—a 75.36% decline from its Initial Closing Price.
As of the time the complaint was filed, HUB’s stock was trading significantly below its Initial Closing Price and continues to trade below its initial value from the Merger, damaging investors.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980