May 12, 2009 / 1:17 PM / 10 years ago

UPDATE 1-Genta sees running out of funds in June

May 12 (Reuters) - Biopharmaceutical company Genta Inc GNTA.OB said it expects to run out of funds in June and could be required to reduce its workforce or file for bankruptcy, among other options, if it is unable to raise money.

In a statement, the company said it does not have any additional financing in place. At March 31, it had cash and cash equivalents totaling about $600,000.

In April, Genta agreed to a private placement of up to $12 million of senior secured convertible notes, and the agreement requires the company to effect a reverse stock split of its common stock within 105 days of April 2, the company said.

The notes and warrants are convertible into about 3.9 billion shares, but the company currently has about 3.4 billion shares outstanding, Genta said.

Genta, which had cut jobs in April and May to reduce expenses, said it has recommended that its stockholders authorize the company’s board to effect a reverse split in any ratio from 1-for-2 to 1-for-100.

Genta, whose rivals include Amgen Inc (AMGN.O) and Gilead Sciences (GILD.O), also reported a first-quarter loss of $11.1 million, or 1 cent per share, compared with a net loss of $9.7 million, or 29 cents per share, a year ago. (Reporting by Santosh Nadgir in Bangalore; Editing by Deepak Kannan)

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