Paragon Advanced Labs (PALS.V) has agreed to settle outstanding indebtedness, through the issuance of common shares of the company, it said on Friday.
Under the debt settlement, the company will settle the face value of US$2 million together with accrued amounts of the secured promissory note issued in connection with the Paragon Geochemical acquisition, through the issuance of around 1.35 million common shares at a deemed price of C$2.42 per share.
The conversion is being completed at the election of the creditor, said the company.
"Following the completion of the Debt Settlement (including existing common shares held), the creditor will hold approximately 6% of the Company's issued and outstanding common shares," added the company.
The debt settlement remains subject to the acceptance of the TSX Venture Exchange and to compliance with applicable securities laws.
"This proposed transaction further aligns a significant shareholder with our business and the reduction in debt removes a key balance sheet risk," said Peter Shippen, CEO of Paragon.
The company's shares were last seen down C$0.10 or 4% at C$2.40 on the TSX Venture Exchange.
Price: $2.40, Change: $-0.10, Percent Change: -4.00%