Troubled Nepean, Ontario data communications equipment firm Gandalf Technologies Inc came forth with a storm of bad news last week, saying it is currently running in the red and will be out of money soon if a cash infusion doesn’t materialize or its primary lender doesn’t raise the firm’s credit limit. Gandalf has been searching unsuccessfully for additional financing since February (CI No 3,085) and says it doesn’t expect to secure any within this quarter. The company says its anticipated cash requirements will exceed its credit facilities with the Royal Bank of Canada within the next few weeks. There is no indication from the bank as to what will happen when the limit is reached, and a spokesperson said although the bank has thus far been tolerant of Gandalf exceeding its margin amount, it can revoke that tolerance at anytime. When asked what the company would do if that happened, it seemed there aren’t any real options as the answer was We really need the bank to stick with us. For what it’s worth, the spokesperson said there was no indication that the bank will cut the company off in the near future. As far as the ongoing search for a strategic partner goes, there are several interested suitors and non-binding offers are currently being evaluated, but a deal doesn’t seem especially likely because Gandalf maintains that the offers are substantially below the current market trading volume of the company’s common stock. Since the news surfaced Thursday, Gandalf shares shed more than $4, or 78% of their value, to close at $1.156 on Friday.