The latest high-profile attack by hackers was on the email accounts of Members of the Scottish Parliament.
One wonders what they were looking for.
That aside, the security breach was one of a series that included the WannaCry blitz that threatened to disable the NHS.
The company recently took advantage of the strength of its share price to launch a stock placing to raise a gross £1.74mln in what CFO Philipp Prince describes as “investing to accelerate growth”.
It is part of a two-pronged approach that will also see the company bring in as much as a further £2mln via UK Bond Network, the successful peer-to-peer platform.
While opportunistic, the decision to tap the debt and equity markets was strategically and commercially well thought out.
In fact, the development capital ought to allow Defenx to bring forward a significant potential growth opportunity.
For it plans to invest £2.7mln (€3mln) developing its suite of consumer-focused products for the corporate arena, which accounts for more than half of the multi-billion dollar cyber security market.
It isn’t doing this alone. In the spring, it struck up a collaboration with the Italian tech firm BV-Tech that effectively gets Defenx’s foot through the door to see companies.
“[The investment] will allow us to add on features and ‘corporatise’ products so they are addressing the needs of companies,” said Prince.
The software must also anticipate the needs of the general data protection regulations (GDPR) being enacted late next May.
“So, really ours is a time-limited opportunity,” explained the Defenx CFO.
“A whole host of things are coming together, a perfect storm if you will, that means by raising money now and despite bringing forward the dilution we had intended we will be in a much stronger position commercially.”
As mentioned above, Defenx hopes to raise up to £2mln via the UK Bond Network, with £1.25mln of that underwritten.
The coupon will be 8-10%, depending on how competitive the tendering process is, and the debt is convertible at 200p a share – some 25% above the level at which equity was issued as part of the placing.
The company’s stock has achieved the £2 landmark in recent history, so there is a realistic chance that it can get there again.
That said, the equity would probably have to consistently trade at a decent premium to the conversion price for a number of weeks or months to tempt the switch.
But it does give debt holders ‘optionality’, Prince pointed out. The conversion price also mitigates dilution and offers investors unable to take part in the placing the chance to participate in the Defenx growth story.
It says a great deal about the dysfunctional nature of the UK financial system that the banks couldn’t or wouldn’t fund the expansion of a business at the base of the value ‘hockey stick’.
UK Bond Network offered a financially competitive alternative that was more professional and far less punitive than some of the other funding routes open to AIM companies.
“There are a number of services, many of them with terms that were less than ideal,” said Prince.
“We met UK Bond Network last year, we got to know them and as far as we could see their structure is properly implemented; it is built on much bigger corporate bond structuring.
“It is industry-standard recognisable, while the conversion is at a premium. So it worked for us.”