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United States securities and exchange commission logo
September 23, 2022
Eyal Moshe
Chief Executive Officer
Hub Cyber Security (Israel) Ltd.
17 Rothchild Blvd
Tel Aviv, Israel 6688120
Re: Hub Cyber Security
(Israel) Ltd.
Registration
Statement on Form F-4
Filed August 24,
2022
File No. 333-267035
Dear Mr. Moshe:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form F-4 filed August 24, 2022
Cover Page
1. Given that the parties
are unable to make a representation as to the tax consequences of
the business
combination, provide a prominent discussion of the legal and factual
uncertainties
associated with the potential tax consequences and highlight that the
business combination
may be a taxable event for U.S. Holders of RNER Securities.
2. We note that on March
26, 2021, the Sponsor Group received 4,312,500 shares for an
aggregate purchase
price of $25,000. Revise your discussion of the organizational
transactions and IPO of
Mount Rainier Acquisition here and throughout to clearly
highlight this
transaction and the resulting interests of the Sponsor Group wherever the
private placement
transactions are discussed.
Eyal Moshe
Hub Cyber Security (Israel) Ltd.
September 23, 2022
Page 2
Put and Call Option Agreement, page 4
3. Provide a summary in plain English of the purpose and effect of the
Put and Call Option
Agreement. Disclose which parties are the beneficiaries of the
agreement and which
parties, such as the public stockholders, will be subject to the
related risks.
Summary Unaudited Pro Forma Condensed Combined Financial Information, page 14
4. Revise your disclosure to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders by including a
sensitivity analysis
showing a range of redemption scenarios, including minimum, maximum
and interim
redemption levels.
Risk Factors
Hub's business may be affected by sanctions . . ., page 34
5. Please identify any import or export control restrictions and
sanctions that are currently
applicable to your business and describe the impact on the company and
investors.
Additionally, to provide investors with appropriate context, disclose
whether you have in
the past identified any suppliers, customers, or business partners
that were or are the target
of sanctions and describe the course of action taken.
6. To the extent material, disclose any new or heightened risk of
potential cyberattacks by
state actors or others since Russia s invasion of Ukraine and
whether you have taken
actions to mitigate such potential risks.
Background of the Merger, page 83
7. Supplement the information regarding the various potential acquisition
targets considered
by RNER to disclose when you ceased discussions with those potential
targets to focus
solely on HUB Security.
The Background of RNERs Interactions with HUB Security, page 86
8. Expand your discussion of the negotiations related to the Put and Call
Option Agreement,
including each material stage of negotiation, the discussions about
the agreement, and
which parties proposed the agreement.
Unaudited Projected Financial Information of HUB Security, page 96
9. Revise to disclose all material assumptions underlying each set of
financial projections.
Such disclosure should be quantified.
FirstName LastNameEyal Moshe
10. Provide an explanation for the basis of your projections beyond 2024.
Your discussion
Comapany NameHub
should Cyber
include the Security
growth (Israel) Ltd.
assumptions used to formulate the
projections and an
explanation
September 23, 2022ofPage
management's
2 belief as to why such assumptions are
reasonable.
FirstName LastName
Eyal Moshe
FirstName
Hub Cyber LastNameEyal
Security (Israel)Moshe
Ltd.
Comapany 23,
September NameHub
2022 Cyber Security (Israel) Ltd.
September
Page 3 23, 2022 Page 3
FirstName LastName
HUB Security's Business, page 124
11. Please disclose the revenue generated in each of the geographic
markets where you have
operations. Additionally, state whether there is any material revenue
concentration among
certain customers.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
149
12. We note your discussion of large enterprise customer headcount and
gross retention rate.
Please tell us whether these are key performance indicators relied
upon by management.
Further, disclose how you define large enterprise customer.
Unaudited Pro Forma Condensed Combined Financial Information
Basis of Pro Forma Presentation
Ownership, page 168
13. Please update the unaudited pro forma condensed combined balance sheet
through June
30, 2022. Additionally, include pro forma Statements of Profit or Loss
for the six months
then ended. In this regard, we note significant subsequent events
reported under Note 29
of HUB's 2021 financial statements.
Notes to Unaudited Pro Forma Condensed Combined Financial Information
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
Transaction Adjustments to Unaudited Pro Forma Condensed Combined Statement of
Financial
Position, page 176
14. We understand from the second Q&A on page (xi) that the consummation
of the Business
Combination is conditioned upon, among other things, RNER having an
aggregate cash
amount of at least $50 million available at Closing from the Trust
Account and the PIPE
Investors, after payment of business combination agreement fees (the
Minimum Cash
Condition ). Please expand footnote (J) to state that the pro forma
cash balance of $26
million under the maximum redemption scenario is premised on HUB
Security's waiver of
the Minimum Cash Condition.
15. We note that Adjustment (K) reflects the repurchase of 1.3 million HUB
security ordinary
shares, resulting from the exercise of the put option issued to RNER
stockholders based
on the probability that the maximum redemption scenario will be
considered a taxable
transaction to certain shareholders of RNER. However, we further note
on page 209, due
to the absence of guidance bearing directly on whether the acquisition
of a corporation
with no active business and only investment-type asset such as RNER
can qualify as a
"reorganization" under Section 368(a) of the Code, counsel is unable
to render an opinion
that the Business Combination will qualify as a "reorganization" under
Section 368(a) of
the Code. In this regard, tell us how you considered a transaction
adjustment for the
repurchase of such shares under a no redemption scenario. Refer to the
guidance under
Eyal Moshe
Hub Cyber Security (Israel) Ltd.
September 23, 2022
Page 4
paragraphs 25 and BC12 of IAS 32 and Article 11-02(a)(6)(i)(A) of
Regulation S-X.
16. Please clarify whether adjustments (G) and (L) cover unpaid
reimbursable
expenses incurred by RNER's sponsors and affiliates. We note that the
subject amount
was left blank on page xiv.
4. Income (loss) per Share, page 178
17. Please revise your calculation of the weighted average shares
outstanding - basic and
diluted to give effect to the put option exercise under the no
redemption scenario. Refer to
IAS 33.63 and Article 11-02(a)(6)(i)(B).
Description of HUB Security Ordinary Shares, page 226
18. We note reference to lock-up provisions with the Sponsor Group, SPAC
underwriters, and
their respective affiliates throughout the registration statement.
Please disclose the
material terms of the lock-ups with these parties. Your discussion
should include any
exceptions to the lock-up and relevant termination dates.
HUB Cyber Security (Israel) Ltd.
Notes to Consolidated Financial Statements
2: Impairment of financial assets , page F-22
19. We note that you measure the loss allowance in an amount equal to the
lifetime expected
credit losses of short-term financial assets such as trade receivables
based on a simplified
approach. We also note on page F-33 that the allowance for doubtful
accounts is
attributable to trade receivables which are more than 120 days past
due. In light of the
recent HUB-ALD merger and the Comsec acquisition, which account for
most of your
trade receivables, please disclose your inputs, assumptions, and
estimation techniques
under the simplified approach. Further, disclose your basis for
determining the historical
loss rate of trade receivables and your consideration of different
loss patterns for different
customer groups. Refer to paragraphs 35(G) and (I) of IFRS 7.
Note 8 - Other Accounts Receivable, page F-33
20. Please disclose the nature of Other Accounts Receivable from
government authorities.
Note 18: - Financial Instruments
d. Financial risks factors, page F-44
21. On page 44, you cited your dependence on a few suppliers to which you
have advanced
funds presented as Other Accounts Receivable per Note 8. Please expand
your disclosure
FirstName LastNameEyal Moshe
to address your credit risk exposure from your commitments to extend
credit to certain of
Comapany
thoseNameHub
suppliers,Cyber Security
including (Israel)credit
significant Ltd. risk concentrations. Refer
to paragraph
35(B)(c)
September of IFRS
23, 2022 Page7.4
FirstName LastName
Eyal Moshe
FirstName
Hub Cyber LastNameEyal
Security (Israel)Moshe
Ltd.
Comapany 23,
September NameHub
2022 Cyber Security (Israel) Ltd.
September
Page 5 23, 2022 Page 5
FirstName LastName
Note 22: - Commitments, Guarantees, Charges and Contingent Liabilities
c. Contingent liabilities:, page F-53
22. Tell us your evaluation of further developments subsequent to May,
2021 following
Rotam's submittal of a response in connection with the legal action
from Rotem Amfert
Negev Ltd. ( Rotem ) and Migdal Insurance Company Ltd., Rotem s
insurer.
Note 28: Segments, page F-61
23. With respect to your major customers, tell us how you considered
whether a government
(including government agencies and similar bodies whether local,
national or
international) and entities known to you to be under the control of
that government may be
deemed a single customer. Refer to paragraph 34 of IFRS 8.
Mount Rainier Acquisition Corp
Notes to Financial Statements
Note 5 - Commitments and Contingencies
Business Combination Agreement, page F-95
24. Please make clear how the $7.61 HUB share value was determined and how
it relates to a
contemplated reverse stock split as disclosed elsewhere in the filing.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Kathryn Jacobson, Senior Staff Accountant, at (202)
551-3365 or
Robert Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have
questions regarding
comments on the financial statements and related matters. Please contact Austin
Pattan, Staff
Attorney, at (202) 551-6756 or Joshua Shainess, Legal Branch Chief, at (202)
551-7951 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Michael J. Rosenberg