(Alliance News) - Clinical stage biotechnology firm ValiRx PLC on Monday warned it may not be able to continue trading after a "six-week period", after shareholder rejected a motion which would have allowed the company to issue new shares.
Shares in the company were 19% lower at 0.059 pence each in London on Monday afternoon.
The company in January warned that if it did not secure shareholder backing, it would be "impaired in its ability to fund" a clinical trial programme.
ValiRx said on Monday: "Resolution one proposed at the general meeting held earlier today was not passed, therefore, the proposed capital reorganisation will not occur and the other resolutions relating to new shareholder authorities, which would have allowed the company to issue new shares were consequently withdrawn.
"As a consequence of the resolution not being passed by shareholders, the company is unable to raise new funds by the way of issuing new shares. The directors are considering their options to resolve this situation."
The company said it is "dependent on the ongoing cooperation" with its creditors to manage its cash position and keep its head above water.
ValiRx added: "In the event that the company is unable to raise further funds and its creditors are unwilling to provide their continued support, the company is unlikely to be able to continue trading after a six-week period.
"The directors are actively seeking alternative sources of finance to provide the company with funding."
By Eric Cunha; ericcunha@alliancenews.com
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ValiRx (VAL)