Investors must be exasperated as tiny UK technology business CyanConnode (CYAN:AIM) once again trawls round the City with its cap in hand.

It has today confirmed plans to raise £5.6m of fresh funding, with more than 10m new shares needed to be issued, priced at an 18.5% discount to yesterday’s 12.25p close to lure investors in.

Hence today's 15% slump in the share price to 10.4p.

This is not really new news since Cyan, which designs smart metering, wireless networking kit and supportive software, revealed in September’s interims how tight cash had become. Net cash had then dropped from £5.4m to £2.4m.

It needs the cash for a multitude of reasons, including investment in extra research and development and working capital to execute on the company’s ‘order book, pipeline and growth plan’. To cut to the chase, it needs the cash to essentially keep the lights on.

CyanConnode is always happily willing to talk through its list of multi-million pound contracts signed across the globe for various smart metering projects. India and Scandinavia are hotspots as well as here in the UK.

TINY FISH IN LARGE POND

But it remains a very small business heavily reliant on large customers and big contracts, while any delays in orders can pose significant problems, for the company and City forecasters. And yet these supposed mega-deals continue to fail to move the revenue needle in a meaningful way.

Since 2013 the company has generated £3.59m of revenue. In that time it has burned through an incredible £26.7m of cash.

Little wonder the share price performance is appalling.

It says today that it remains on track to meet full year expectations, yet this calls for £8m of revenue. At the half year stage income stood at just £1.64m, although it is believed to added an extra £600,000 or so during the third quarter, so £2.24m after nine months.

This implies £4.5m of pre-tax losses but none of this can be really relied on with management admitting that forecasts remain uncertain as the company's performance is driven by large contracts. These remain high profile and politically sensitive.

It was interesting to note the lengthy Going Concern note in the half year announcement as CyanConnode continues to balance revenue versus cash demands. Getting this latest cash call away will ease the short-term pressure but for how long, even after taking the axe to its cost base?

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