SeaEnergy issued a statement to the stock exchange to say it is making losses, and trying to sell its assets.
It warned that if it cannot find a deal, it may not be able to keep trading beyond May.
The share price fell more than half following the news, but ended Friday 45% down on the day.
It had already fallen more than 90% in a year - from 30p a year ago to 2.24p at the start of Friday trading.
SeaEnergy was transformed from the oil explorer Ramco, and sought to find a niche in offshore renewable energy.
After being forced to change tack due to a lack of funding for its ambitious wind farm plans, the Westhill-based company has been selling specialist software and specialist shipping technology to the oil and gas industry.
It has also been seeking to diversify into other sectors.
In a trading update, SeaEnergy said progress towards profitability was good until the oil price started falling, in late 2014.
Clients cancelled or postponed orders. There were signs of improvement towards the end of last year, as budgets for 2016 were finalised. "But trading conditions deteriorated further," it has reported.
Costs have been cut, and Sea Energy has given up its ship management role.
"The loan facilities announced in November 2015, which were intended to bridge the gap to improved trading conditions, have proved to be insufficient and the company's cash position is becoming constrained," the company said in its statement.
"Any short term improvement in performance would require a rapid upturn in the oil and gas market."

The American, 28, hit eight birdies in a bogey-free 64 to lead Sung Kang, with Stewart Cink, Jhonattan Vegas and Kyle Stanley another shot back on six under.
England's Justin Rose shot a five-under 67, with 2015 Masters champion Jordan Spieth two more shots adrift.
England's Luke Donald carded a one-under 71, while compatriots Chris Wood and Andrew Johnston are one over.
"They've done a great job here with conditions around the greens and making it as similar as possible to next week," said Fowler, who will be aiming to win his first major at Augusta.
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The chairman of the House intelligence committee, Devin Nunes, told reporters that Paul Manafort had voluntarily offered to speak to the panel.
Mr Nunes also contradicted Mr Trump's claim that Barack Obama had wiretapped him before the US elections.
"There was no wiretapping at Trump Tower, that didn't happen," he said.
However, Mr Nunes said he was concerned that the names of members of Mr Trump's transition team were "unmasked" during the surveillance of foreign individuals.
Earlier this week, AP news agency reported that Mr Manafort had worked for a Russian billionaire to assist Russian President Vladimir Putin.
Mr Manafort has insisted that he never worked for Russian interests.
He had worked as Mr Trump's unpaid campaign chairman from March until August last year.
He resigned after AP revealed that he had co-ordinated a secret Washington lobbying operation on behalf of Ukraine's ruling pro-Russian political party until 2014.
The Trump administration has denied any collusion with Moscow, while Russia has always denied attempting to influence the US presidential election.
Speaking to reporters on Friday, Mr Nunes said that he had invited FBI director James Comey and National Security Agency (NSA) chief Adm Mike Rogers to provide further testimony at a closed intelligence committee session.
On Monday, Mr Comey told an open hearing that the FBI was investigating alleged Russian interference in the 2016 election, and said he saw no evidence that Mr Trump had been wiretapped by the Obama administration.
Mr Nunes said there were questions that Mr Comey and Adm Rogers "could not answer in a public setting", so he was asking them to return for a closed session.
However, Democrats have criticised Mr Nunes after he delayed a planned open hearing with ex Director of National Intelligence James Clapper, former CIA director John Brennan, and ex deputy Attorney General Sally Yates.
The top Democrat on the committee, Adam Schiff, said that was an attempt to "choke off" information to the public.
An Aberdeen firm which supplies specialist services to the oil and gas industry has warned that it is running out of cash.
[NEXT_CONCEPT]
Rickie Fowler warmed up for next week's Masters by taking a one-shot lead after the first round of the Houston Open.
[NEXT_CONCEPT]
US President Donald Trump's ex-campaign chief has agreed to be interviewed by a panel investigating alleged links between the Trump team and Russia.