Less than two months since Israeli company HUB Cyber Security (TASE: HUB) began delisting from Nasdaq, it has been announced that the company is investigating if founder and former CEO Eyal Moshe embezzled the company's money. The company has hired a private investigator who has presented the company with information from his investigation and at this stage the company is continuing its examination in in order to substantiate its findings and check whether all the expenses made in recent years were indeed for the needs of the company.
HUB Cyber Security reached Wall Street after enduring quite a few hardships. The company started trading on the Tel Aviv Stock Exchange (TASE) after a reverse merger with ALD and one year after that announced a SPAC merger at a company valuation of $1.28 billion, four times its market cap of the TASE.
The company hoped that the US market would know how to better price its cybersecurity activities and feared that trading on the TASE would weigh on its share, and so it sought court approval to delist from the TASE as soon as it started trading on Nasdaq.
HUB Cyber Security currently has a market cap of $143 million, which is lower than its market cap when it delisted from the TASE. This is due to its difficulties in completing the fund raised as part of its Nasdaq listing because investors who committed to the offering did not transfer the funds and the company is in talks with them on this.
Shortly before completing the SPAC merger, HUB Cyber Security unexpectedly announced management changes. CEO and founder Eyal Moshe became president of US operations and chairman Uzi Moscovich, former head of the IDF cyber, defense communications division, replaced him as CEO.
As far as is known, there were no suspicions of embezzlement before the IPO and before the management changes, but after Moscovich took over as CEO and examined the company's revenue and expenditure, suspicions were aroused that are now being investigated.
Published by Globes, Israel business news - en.globes.co.il - on April 20, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.