Shares in Celadon Pharmaceuticals PLC (AIM:CEL) crashed 45% lower in early trading on Wednesday but then recovered after the developer of cannabis-based medicines said it has suffered another delay in drawing down funds from a credit facility.
Management confirmed a requested £1.95 million of funds from a new lender had not been received by the company.
"The institutions responsible for transferring the funds, on behalf of the facility provider, have requested further due diligence checks on the company given the nature of its business," it said, adding that discussions with the lender indicating work to satisfy the institutions' requirements is expected to be done by around the end of the month.
Funds to be provided under the new facility are expected to provide the company with sufficient working capital through to the third quarter of the year.
Based on the delay, Celadon has decided to separately draw down a further £2 million from an existing committed credit facility "to ensure that the company can maximise its working capital position".
This facility has also had delays in the past, so the company said there is "no certainty" on when funds will be received.
Having fallen to 7.38p from yesterday's close of 13.5p, the shares recovered to 14.2p by mid-morning.