ValiRx Plc (LON:VAL) said it is carefully monitoring its working capital position as advanced talks to terminate a subscription agreement with European High Growth Opportunities Securitisation Fund continue.
In late April, European High Growth agreed to subscribe for a total of 213mln shares in ValiRX at a price of 0.6p each, raising gross proceeds of £1.28mln.
The money was to be drawn down in three equal tranches of £426,000, which would have helped fund the Phase II trial of ValiRx's prostate cancer drug, VAL201, through to completion.
However, last month ValiRX said it was in advanced discussions to terminate the agreement following a delay to the issue of Tranche 2 shares, and enter into a new convertible bond facility with the investor.
READ: ValiRx in talks to terminate subscription agreement and enter into a new convertible bond facility
The biotechnology company on Monday said it expects to announce the outcome of talks with European High Growth “shortly” and no longer intends to enter into further arrangements with the investor.
ValiRx added that it understands that European High Growth no longer has a holding in the company.
The group’s working capital position is dependent on new funds being raised in the short term so it has arranged to dispose of its investment in an unlisted security for £140,000. The proceeds are expected to be received in the next week.
ValiRx is also due to receive a £400,000 payment form the HMRC in July for a research and development tax credit.
“The directors will continue to monitor the company's working capital position and will make further announcements as necessary,” it said.