HUB Cyber Security .(HUBC) - 2023 Q2 - Quarterly Report

Financial Performance - For the fiscal year 2022, HUB Security reported revenue of $79.7 million, a gross profit of $6.4 million, and an operating loss of $(79.5) million [12][24]. - The company reported a net loss of $80,000,000 for the year ended December 31, 2022, compared to a net loss of $13,623,000 in 2021, indicating a significant increase in losses [28]. - HUB Security's adjusted EBITDA loss for the fiscal year 2022 was $(21.1) million [12]. - The company reported an adjusted EBITDA of $(21,128,000) for 2022, compared to $(4,580,000) in 2021, indicating a worsening operational performance [31]. - Cash flows from operating activities resulted in a net cash outflow of $23,432,000 in 2022, compared to an outflow of $5,280,000 in 2021 [28]. Assets and Liabilities - Total current assets decreased to $33,198,000 in 2022 from $49,761,000 in 2021, reflecting a decline of approximately 33% [26]. - Total assets decreased from $120,732,000 in 2021 to $74,793,000 in 2022, representing a reduction of about 38% [26]. - Cash and cash equivalents at the end of the period decreased to $3,994,000 in 2022 from $13,974,000 in 2021, a decline of approximately 71% [28]. - Total current liabilities increased to $57,836,000 in 2022 from $37,958,000 in 2021, marking an increase of about 52% [26]. - Total shareholders' equity decreased significantly from $65,778,000 in 2021 to $8,810,000 in 2022, a decline of approximately 87% [26]. Impairments and Charges - The company recorded a non-cash impairment charge of $23.4 million for goodwill and intangible assets due to macroeconomic factors [11]. - The company experienced an impairment of goodwill and intangible assets amounting to $23,356,000 in 2022, which was not present in 2021 [28]. - Operating expenses for the full year 2022 totaled $(86.0) million, which included $26 million of impairments and $15.8 million of SPAC transaction costs [12]. Strategic Partnerships and Developments - The company has partnered with Getronics to form a global strategic partnership, including a contract worth 1.3 million Euros [8]. - HUB Security has developed the "HUB Secure File Vault" in collaboration with Virtual I Technologies, aimed at enhancing cyber risk management for insurance carriers [9]. Management Changes - The company terminated the employment of its former CEO for misappropriating approximately NIS 2 million (approximately $582 thousand) [4]. Future Outlook - The company plans to report its first half results for the period ended June 30, 2023, and will hold a conference call to discuss its outlook [2]. Backlog and Pipeline - As of December 31, 2022, HUB Security had a backlog of approximately $39 million in customer contracts and an estimated $103 million in pipeline [8].