Paragon Technologies Inc Stock Price, News & Analysis

Paragon Technologies (OTC:PGNT) has mailed its definitive proxy statement for the upcoming annual meeting on June 30, 2025. The company's Nominating Committee is urging shareholders to vote "FOR" their proposed slate of directors on the WHITE proxy card, opposing former CEO Hesham Gad's proxy contest. The committee's proposed board includes five members: three independent directors (David Lontini, Howard Brownstein, and Tim Eriksen) added in December 2024, and two of Gad's nominees (Ronell Rivera and Elodie Leoni), representing 40% of the board.

The committee strongly criticizes Gad's leadership, citing alleged illegal residency, misclassification as a contractor, wasteful activism campaigns, and value-destroying litigation. They argue that despite owning only 28% of shares, Gad seeks 100% board control through his competing slate.

Hesham "Sham" Gad's nominated directors for Paragon Technologies (PGNT) have issued a statement to stockholders ahead of the company's 2025 Annual Meeting. The slate of nominees, consisting of David Duquette, James Kaufman, Elodie Leoni, and Ronell Rivera, emphasizes their commitment to enhancing corporate governance, transparency, and long-term value creation. The nominees express support for Gad's leadership, citing meaningful progress under his direction. They position their candidacy as an opportunity for stockholders to influence Paragon's future direction through a refreshed Board focused on operational discipline, innovation, and shareholder alignment.

Paragon Technologies (OTCPK:PGNT) has issued a strong rebuttal to former Chairman and CEO Hesham "Sham" Gad's recent statements. The company alleges that Gad worked illegally in the US for over 20 years while failing to disclose this information, exposing Paragon to legal and reputational risks. The board criticizes Gad for prolonging litigation after bylaws were repealed, potentially costing shareholders millions. The company refutes Gad's accusations of concealment and states that shareholders can request access to the complaint against former corporate counsel. The board emphasizes that legal filings demonstrate Gad's pattern of deceit and mismanagement, urging shareholders to rely on factual information rather than his distortions.

Hesham "Sham" Gad, Paragon Technologies' (PGNT) largest stockholder with 28.4% ownership, has issued a critical statement regarding the company's Board of Directors' alleged pattern of concealment and transparency issues. The controversy centers around several key points:

The Board, including Timothy Eriksen, Howard Brownstein, and David Lontini, is accused of withholding material information about new litigation against former legal counsel, which follows $1.1 million in legal fees during Q1 2025. The company expects to spend $3 million on entrenchment litigation in the first half of 2025. Gad criticizes the Board's decision to keep the litigation complaint sealed from stockholders ahead of the 2025 Annual Meeting.

Additionally, Gad refutes accusations about unauthorized worker hiring and defends the company's HR practices. He calls for immediate public release of the complaint and transparency, arguing that the current directors' actions have significantly damaged the company's performance and culture.

Paragon Technologies (OTC:PGNT) has issued a response to former CEO Hesham "Sham" Gad's claims regarding the company's Q1 2025 results. The company reports that its Q1 net loss was primarily due to legal and compliance costs stemming from Gad's actions. Operating expenses increased from $1.9 million to $3.2 million due to Gad-related legal costs. The company alleges that Gad initiated costly litigation, misappropriated corporate resources, mismanaged operations, and made poor investment decisions. Specifically, the litigation has cost shareholders $3 million in additional legal expenses. The board criticizes Gad's management of SI Systems and questions his motives regarding a Las Vegas real estate portfolio acquisition. The company is now pursuing recovery of legal costs from prior counsel and emphasizes its commitment to accountability and long-term value creation.

Hesham "Sham" Gad, Paragon Technologies' (PGNT) largest stockholder with 28.4% ownership, criticizes the company's Q1 2025 financial performance under the current board. The company reported a net loss of $790,000, marking its largest quarterly loss since 2017. Operating expenses surged 67% year-over-year to $3.2 million and 39% quarter-over-quarter. The company expects to incur over $3 million in legal costs within 6 months. Gad alleges that Samuel Weiser and his appointed directors (Howard Brownstein, Timothy Eriksen, and David Lontini) are responsible for value destruction through costly litigation and unnecessary entrenchment actions, including a poison pill. The company also increased shares outstanding by 25,000 via director compensation despite poor performance.

Paragon Technologies (OTC:PGNT) reported Q1 2025 financial results with revenues increasing 10% to $34.6 million, driven by growth at SI Systems and SEDC. However, the company posted a net loss of $790,000, down from a $53,000 loss in Q1 2024, primarily due to $1.1 million in legal expenses from litigation with former CEO Hesham Gad. The company expects additional litigation impact exceeding $2 million in Q2 2025. Notable developments include: operational improvements at SI Systems with new sales and software professionals, sale of one Ohana unit resulting in a $450,000 gain, and ongoing challenges with their investment portfolio showing a $165,000 decline. SEDC continues to show sales growth despite tight margins and currency fluctuation impacts. Management expects improved performance in H2 2025 following the resolution of litigation issues.

Hesham "Sham" Gad, Paragon Technologies' (OTC:PGNT) largest shareholder with 28.4% ownership, has issued a statement addressing what he claims are false accusations by board members Timothy Eriksen, Howard Brownstein, David Lontini, and Samuel Weiser. Gad presents data showing his track record, including an 11% annualized shareholder return during his CEO tenure. Under his management, SI Systems generated $5.7 million in aggregate earnings (2017-2024) compared to a $224,000 loss in the previous period (2011-2016). The company's Colombian subsidiary, SED International (SEDC), has shown consistent growth with $15.7 million in aggregate profits since acquisition. Gad proposes a strategic vision focusing on transforming SI Systems into a niche integrator, expanding SEDC beyond Colombia, and pursuing strategic acquisitions for revenue diversification.

Paragon Technologies (OTC:PGNT) has self-reported potential federal law violations to U.S. government authorities regarding former Chairman and CEO Hesham Gad's immigration and work authorization status. The company disclosed that it may have violated federal statutes by knowingly employing Gad as CEO of both Paragon and SI Systems when he lacked valid work authorization in the United States. The company has submitted detailed information about the circumstances to relevant federal agencies and committed to maintaining transparency with shareholders regarding any feedback, required disclosures, or potential penalties resulting from this matter.