Management of Nexbis have been contacting fund managers and...

Management of Nexbis have been contacting fund managers and brokers over the last couple of days. They claim that their cash position by June 30 will be between $10 and $20m. This is a worry.

They had $18m at 3 Feb 2010 and raised another $10m via share placements in March/April. If this has fallen to b/w $10 and 20m by June 2010, then this implies they are spending somewhere b/w $6 and 10m every six months (assuming they will have paid either $2m or $4m to trust defender). However cash burn could be higher if the current cash level is closer to $10m. In the next 12 months they will have had to pay another $8m to Trust defender. That leaves anywhere between $2m and $10m to run the business over the next 12 months.

Looks like a binary outcome for this stock. Either they get a paying contract pretty soon (e.g. China or Malaysia recommencing)and the share price will jump or they will need a very dilutive cash injection.