(Alliance News) - Shares in biotechnology company ValiRx PLC fell on Monday as it warned that it is "critically short" of working capital.
The stock closed 28% lower at 0.031 pence each on Monday afternoon in London.
It said that it remains dependent on relief from creditors to keep going, adding that it is also in discussions with potential funders who have agreed to invest should shareholder approval be granted.
In February, shareholders rejected a motion proposed by ValiRx to allow it to issue new shares to raise some funding. ValiRx had warned in January a lack of shareholder backing would "impair" its ability to keep funding clinical trials.
A general meeting was due to be held last Wednesday but was postponed due to government-imposed restrictions.
"The company is reviewing options available to it in order to reconvene the meeting, bearing in mind the current restrictions on public gatherings. There is no guarantee that resolutions will be passed by shareholders at the general meeting or that funding will ultimately be available to the company or that creditors will be willing to extend their support to enable potential funding to occur," ValiRx said.
On March 10, the company announced a shareholder meeting, seeking shareholder approval to consolidate 125 existing shares into one share, then sub-divide that share into one new ordinary share and one new deferred share.
The consolidation plan came after speaking with shareholders following the rejection of the attempt to issue new shares.
On March 4, ValiRx said a group of investors owning more than 5% of the firm asked for a meeting to remove Chief Executive Satu Vainikka and Chief Operations Officer George Morris.
By Ife Taiwo; ifetaiwo@alliancenews.com
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ValiRx (VAL)