Financial Performance - Total revenues for the six months ended June 30, 2024, were $15,708,000, a decrease of 37.3% compared to $25,008,000 for the same period in 2023[8]. - Gross profit for the first half of 2024 was $1,496,000, compared to a gross loss of $1,973,000 in the first half of 2023, indicating a significant improvement[8]. - Operating loss for the six months ended June 30, 2024, was $15,031,000, a reduction from the operating loss of $59,559,000 in the same period of 2023[8]. - Net loss from continuing operations for the first half of 2024 was $25,306,000, compared to a net loss of $64,956,000 in the first half of 2023, reflecting a 61.0% improvement[11]. - The company reported a total comprehensive loss of $24,360,000 for the six months ended June 30, 2024, compared to a total comprehensive loss of $62,794,000 for the same period in 2023[11]. - For the six months ended June 30, 2024, the net loss was $26,363 thousand, compared to a net loss of $64,486 thousand for the same period in 2023, indicating a significant reduction in losses[17]. Assets and Liabilities - Total assets decreased to $28,636,000 as of June 30, 2024, down from $32,590,000 as of December 31, 2023[5]. - Current liabilities increased to $85,455,000 as of June 30, 2024, compared to $80,479,000 as of December 31, 2023[5]. - Share capital and premium rose to $123,907,000 as of June 30, 2024, up from $103,386,000 as of December 31, 2023[5]. - As of June 30, 2024, the company has accumulated losses totaling $213,579 thousand and a negative working capital of $67,113 thousand, raising concerns about its liquidity[28]. - The company used $10,785 thousand in operating activities for the six months ended June 30, 2024, which is a decrease from $12,583 thousand used in the same period in 2023[19]. - The company had cash and cash equivalents of $1,169,000 as of June 30, 2024, a decrease from $3,522,000 as of December 31, 2023[4]. Legal and Compliance Issues - The company is facing several legal claims, which may impact its financial stability[28]. - The Company is defending against a class action suit alleging material misstatements in offering materials, with shareholders seeking damages and/or recovery of shares[121]. - A provision of $300 thousand has been recorded in the financial statements based on legal counsel assessment regarding ongoing litigation risks[118]. - The preliminary hearing for the insolvency petition filed by Dominion Capital LLC is set for October 14, 2024, with ongoing negotiations for a mutual understanding[119]. - The Company was notified by Nasdaq that it is no longer in compliance with the Minimum Bid Price Requirement, as the bid price per share closed below $1.00 for 30 consecutive business days[142]. - The Company also failed to meet the Total Assets and Total Revenue Requirement, with total assets and total revenue below the $50,000 thousand threshold for two of the last three fiscal years[143]. Financing and Capital Raising - The company raised $7,208 thousand through the issuance of shares related to the RNER merger transaction[15]. - The Company raised approximately $3,300 thousand through the issuance of convertible notes with an aggregate principal amount of approximately $4,000 thousand on August 18, 2024[135]. - On August 18, 2024, the Company received an investment of $3,325 thousand from Claymore Investors, with convertible notes that can be converted at a price of $0.70 or a minimum of $0.50[143]. - Claymore Investors agreed to extend a loan of $500,000 to the Company at an interest rate of 10%, with penalties for late repayment increasing by 5% weekly[143]. - The Company has entered into amendments to the Shayna Loan Agreements, including converting a cash payment of $1,151 thousand into 1,278,666 ordinary shares at a conversion rate of $0.9 per share[59]. Operational Changes and Cost Management - Research and development expenses for the first half of 2024 were $625,000, significantly lower than $2,759,000 in the first half of 2023, indicating a focus on cost management[8]. - The operating loss for the Product and Technology segment was $9,905 thousand for the six months ended June 30, 2024, compared to an operating loss of $31,762 thousand for the same period in 2023[132]. - The salaries and benefits to the CEO and director employed by the Company amounted to $338 thousand for the six months ended June 30, 2024, compared to $132 thousand for the same period in 2023[126]. Shareholder and Investment Activities - The Company issued 1,150,217 ordinary shares at a weighted average exercise price of $1.83 as of December 31, 2023, following conversions of the 2023 Accredited Investor Notes[67]. - The Company issued 2023 Accredited Investor Warrants exercisable into 1,412,925 ordinary shares with a weighted average exercise price of $2.43[68]. - Accredited Investors converted a total of $1,000 thousand into 666,668 ordinary shares in January 2024[89]. - Lind converted an aggregated amount of $3,595 thousand into 3,773,177 ordinary shares during 2024[90]. Impairments and Discontinued Operations - An impairment loss of $2,331 thousand was recognized for account receivables and inventory related to the discontinued operation[101]. - The discontinued operation of Comsec Distribution reported revenues of $5,704 thousand in 2023, with a gross profit of $970 thousand[102].
HUB CYSEC(HUBCZ) - 2024 Q2 - Quarterly Report