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Paradigm Biopharmaceuticals Limited (ASX:PAR), an Australian clinical-stage biopharmaceutical firm specializing in drug repurposing for inflammatory diseases, announced the issuance of 3,000,000 unquoted convertible notes on 13 July 2026, each priced at USD $1.00. This issuance is part of the company’s previously disclosed US$27 million financing arrangement revealed on 1 July 2025 under the headline "Paradigm secures US$27M to Advance Phase 3 OA Trial." The new tranche, identified by ASX security code PARAAD, is not intended for ASX quotation. Market participants will closely monitor whether additional tranches—potentially up to US$10 million—proceed pending shareholder approval as the Phase 3 osteoarthritis trial progresses.
Key Points
- Paradigm Biopharmaceuticals Limited (ASX:PAR) is an Australian clinical-stage biopharmaceutical company.
- On 13 July 2026, Paradigm issued 3,000,000 PARAAD convertible notes at USD $1.00 each, raising USD $3,000,000 in this tranche.
- This issuance is part of the US$27 million funding package announced on 1 July 2025 to finance the Phase 3 osteoarthritis clinical trial.
- Further purchases up to US$10,000,000 require shareholder approval before proceeding.
- Post-issuance, total PARAAD convertible notes outstanding amount to 8,447,185; ordinary fully paid shares total 584,843,595.
- Investors should watch for shareholder approval results on the remaining US$10 million tranche and updates on the Phase 3 OA trial.
Paradigm Biopharmaceuticals Issues 3 Million PARAAD Convertible Notes at USD $1.00 Each on 13 July 2026
On 13 July 2026, Paradigm Biopharmaceuticals Limited submitted an Appendix 3G update to the ASX confirming the issuance of 3,000,000 convertible notes under the PARAAD security code. Each note was priced at USD $1.00, with payment received in US dollars, totaling USD $3,000,000 for this tranche. These unquoted securities are not intended for ASX trading, differentiating them from the company’s ordinary shares (PAR) and listed options (PAROB) which are publicly traded.
The filing confirms the issue date as 13 July 2026 and links this tranche to a broader transaction initially disclosed in an Appendix 3B lodged on 1 July 2025. That earlier filing outlined a placement forming part of the US$27 million funding arrangement to support the Phase 3 OA trial, detailed in the announcement titled "Paradigm secures US$27M to Advance Phase 3 OA Trial." This cross-reference ensures transparency and traceability of the staged capital raising.
US$27 Million Funding Structure Designed to Advance Phase 3 Osteoarthritis Trial
The convertible note issuance on 13 July 2026 builds upon the US$27 million funding secured on 1 July 2025, earmarked to propel Paradigm’s Phase 3 osteoarthritis clinical trial. This milestone funding package provides a clear capital pathway for one of the company’s most advanced clinical programs. Utilizing convertible notes allows Paradigm to raise capital while deferring immediate dilution of ordinary shareholders compared to direct equity issuance.
The company disclosed that additional purchases totaling up to US$10,000,000 under this arrangement remain subject to shareholder approval. This indicates the full US$27 million facility has not yet been fully drawn, and future tranches depend on shareholder consent. No timing or status updates on the shareholder vote or Phase 3 trial progress were provided in this update.
Total PARAAD Convertible Notes Outstanding Reach 8,447,185 After Latest Issuance
Following the 3 million note issuance on 13 July 2026, the total PARAAD convertible notes outstanding increased to 8,447,185, as reported in Part 4 of the Appendix 3G. This cumulative figure reflects all PARAAD securities issued to date, evidencing the company’s ongoing drawdown on the financing facility established in mid-2025 to fund clinical development.
The filing notes that Part 4 figures are automatically generated and may not fully capture the current issued capital if other ASX forms are concurrently processed. Investors should verify the latest capital structure through Paradigm’s official disclosures or share registry data for accuracy. The filing did not reconcile cumulative drawdowns against the full US$27 million facility.
Paradigm’s Capital Structure Post-July 2026 Issue: Quoted and Unquoted Securities
Post-issuance, Paradigm’s capital structure includes 584,843,595 ordinary fully paid shares (PAR) and 117,069,101 listed options expiring 1 December 2026 (PAROB), both publicly traded on the ASX. The large volume of expiring options represents a near-term capital event that could impact share count and cash reserves.
Unquoted securities include 11,127,100 performance rights (PARAAC), 151,293 options expiring 11 February 2028 at $1.00 exercise price (PARAR), 3,000,000 options expiring 30 June 2027 at $0.65 exercise price (PARAAE), and 8,447,185 PARAAD convertible notes. These unlisted instruments represent potential dilution for ordinary shareholders. The filing did not elaborate on the convertible notes’ conversion terms.
Implications of PARAAD Convertible Notes for Existing Shareholders
Convertible notes are debt instruments convertible into equity under specified conditions. The outstanding 8,447,185 PARAAD notes present potential dilution risk if converted into ordinary shares, increasing the existing share base of 584,843,595. The filing did not disclose conversion ratios, triggers, or maturity terms for these notes.
For full economic terms—including interest rates, conversion prices, maturity dates, and covenants—investors should consult the original 1 July 2025 announcement and subsequent disclosures. The unquoted status of PARAAD notes means no secondary market exists, with their value closely tied to the progress and outcome of Paradigm’s Phase 3 osteoarthritis program.
Pending Shareholder Approval Required for Remaining US$10 Million Tranche
The update confirms that further issuances under the US$27 million facility, up to US$10,000,000, require shareholder approval before proceeding. This condition restricts full access to the committed funds without an affirmative shareholder vote. Such approvals are standard under ASX Listing Rules when issuances may dilute existing shareholders or exceed thresholds.
The company did not specify the timing, forum, or resolution details for the shareholder vote. Investors should monitor forthcoming disclosures for meeting notices, board recommendations, and any independent expert reports. The vote outcome will critically influence Paradigm’s ability to access the remaining funding and support its clinical development timeline.
Phase 3 Osteoarthritis Trial Drives Capital Raising Efforts
Paradigm’s Phase 3 osteoarthritis trial is central to its clinical strategy. Osteoarthritis affects millions worldwide with limited disease-modifying treatment options. Paradigm’s drug repurposing approach targets this unmet need and has been the focus of its R&D efforts. Funding through the convertible note facility is essential to advance this pivotal trial.
The US$27 million secured in July 2025 was explicitly designated to support the Phase 3 OA trial, linking the convertible note issuances—including the 13 July 2026 tranche—to clinical program expenditures. Maintaining funding through Phase 3 is critical given the high costs and duration of this development stage. No clinical updates were provided in the current filing.
Risks for Investors Related to Paradigm’s Convertible Note Issuances
Investment in clinical-stage biopharmaceuticals carries significant risks, particularly due to binary clinical trial outcomes. For Paradigm, key risks include reliance on successful Phase 3 OA trial completion. Failure to meet endpoints could materially impact company valuation and convertible note value. The company has yet to generate product revenue from this program and depends on external capital, as reflected by ongoing convertible note drawdowns.
Additional risks include the uncertainty of shareholder approval for the remaining US$10 million tranche, which may delay or limit funding access. The large volume of listed options expiring in December 2026 (117,069,101 PAROB) also represents a potential near-term capital event affecting share count and cash. Foreign currency risk is present since convertible notes are denominated in US dollars while Paradigm is listed in Australian dollars.
