Paragon Technologies News Release

Rhea-AI Summary

Paragon Technologies (OTCID:PGNT) released a shareholder update following significant management changes and the election of a new board with overwhelming support. The letter reveals concerning financial impacts from previous board actions, including approximately $3.7 million spent on entrenchment schemes and $1.2-$1.4 million in estimated remaining liabilities.

The company's cash and marketable securities declined from nearly $5 million to just above $1 million. However, there are positive developments, with SEDC posting its highest monthly sales of $13 million in July 2025. Under returning CEO Sham Gad's leadership, Paragon is focusing on rebuilding, expanding distribution and automation businesses, and implementing cost-cutting measures.

Positive

• SEDC achieved record monthly sales of $13 million in July 2025
• New management team elected with supermajority support
• Management now economically aligned with stockholders
• All three subsidiaries were profitable prior to previous management

Negative

• $3.7 million spent on entrenchment schemes by previous board
• Additional $1.2-$1.4 million in remaining liabilities from prior board decisions
• Cash and marketable securities declined from $5 million to just above $1 million
• Over $1 million in securities sold at market lows, resulting in significant losses
• Real estate assets sold hastily, potentially losing $100,000-$200,000 in value
• Significant increase in SI Systems operating costs without revenue gains

To the Shareholders of Paragon Technologies:

EASTON, PA / ACCESS Newswire / August 8, 2025 / It has been a busy few weeks since the conclusion of the annual meeting as we are hard at work restoring Paragon Technologies, Inc. (OTCID:PGNT) ('Paragon' or the 'Company') and I realize many of you have lots of questions. The purpose of this letter is to provide a brief overview of where our Company sits today given the events that have transpired over the past months.

Thanks to an overwhelming show of support, our slate was elected with a supermajority of the vote - a strong mandate for change, and for stewardship that reflects the values of ownership, discipline, and integrity.

Now that the campaign is behind us, Paragon is back again focused on doing the simple things that made the Company an enormous success for over a decade: delivering value to our clients, operating efficiently with a disciplined approach to expenditure, avoiding waste and bureaucracy, behaving with candor, being faithful stewards, and acting opportunistically.

For the past nine months, former directors Samuel Weiser, Tim Eriksen, Howard Brownstein and David Lontini, a group of directors who had no real economic interest in Paragon, were focused solely on perpetuating themselves in control and wasting millions of dollars of Paragon's capital to achieve that goal. We have now learned what we suspected all along: mindless tactics led to mindless waste. Based on an internal review, we have learned the following and feel our shareholders should be aware of these findings so shareholders are clearly aware of the substantial financial impact they will have on our upcoming financial results:

• Approximately $3.7 million spent on their entrenchment schemes.

• Another $1.2-$1.4 million in estimated remaining liabilities related to the prior Board decisions including passage of the poison pill, manipulating the Company's bylaws, and the pursuit of a costly and selfish proxy contest against significant shareholder support - rather than engage in a resolution, they wasted shareholder money. But these are the choices often made when management has no real economic stake in a business.

• The liquidation of over $1 million of Paragon's marketable securities in April and May when markets were volatile, selling securities during market lows resulting in meaningful realized losses for Paragon. Today those securities would have appreciated meaningfully.

• The quick sale of real estate assets without proper board approval on hastily negotiated terms that likely left $100,000 - $200,000 on the table.

• Mismanagement of SI Systems, leading to a significant increase in operating costs without achieving any meaningful revenue gains.

Prior to my removal as CEO, all three of Paragon's subsidiaries were profitable and Paragon's assets included nearly $5 million in cash and marketable securities, net of expenses associated with our previous corporate campaign. Today that figure sits just above $1 million. Some of the wasted resources may be recouped, but the timing and likelihood of any recoupment is uncertain at this time.

Certainly, these expenditures will have a significant financial impact on Paragon and its financial results for the remainder of the year as we clear out the debris left behind. However, this episode also reveals Paragon's underlying strength and resiliency - resiliency that was painstakingly built over years of stewardship by management that was economically aligned with stockholders. We will do it again.

Protecting the downside is the core of our philosophy at Paragon. By prioritizing protecting stockholder capital, we are prioritizing our commitment to enhancing all stakeholder value. Our customers and other partners can rest assured Paragon will continue to be committed to providing them with value in our products and we will serve you with the utmost reliability, quality, and service.

And that brings us to the future-where our energy is now fully focused. Our mood and outlook are positive. The right leaders are back at the Company, and we have quickly acted and are seeing some results. SEDC just posted its highest monthly sales of the year in July, exceeding $13 million. We are already hard at work executing on the plan we laid out to shareholders: re-engaging with our partners, setting the initial steps for the expansion of our distribution and automation businesses and cutting unnecessary costs. We are focusing on long-term value while also prioritizing the need to minimize future financial loss in the short term.

To the vast majority of shareholders who stood with us through this process, we thank you. We can never promise perfection, but you can once again rely on us to communicate candidly, conduct our business affairs with prudence and integrity, and make decisions through the lens of owners - a recipe that has produced a decade of tremendous achievement for Paragon. At Paragon, our vision has always been to build something that lasts - and nothing will shake our confidence in doing just that. We have some rebuilding to do and that will take time, but the Company again has management 100% economically aligned with stockholders. We will act boldly and opportunistically, but most of all carefully.

The 2025 annual letter to shareholders is forthcoming (that streak will not be broken!) and I look forward to providing a more detailed overview of Paragon towards the end of the third quarter.

Sincerely

Sham Gad
CEO
Paragon Technologies, Inc.

CONTACT:
ir@pgntgroup.com

SOURCE: Paragon Technologies Inc.

View the original press release on ACCESS Newswire

FAQ

What financial losses did Paragon Technologies (PGNT) report from previous management actions?

Previous management spent $3.7 million on entrenchment schemes, incurred $1.2-$1.4 million in remaining liabilities, and reduced cash and marketable securities from $5 million to just above $1 million.

What was SEDC's performance at Paragon Technologies (PGNT) in July 2025?

SEDC posted its highest monthly sales of the year in July 2025, reaching $13 million.

Who is the new CEO of Paragon Technologies (PGNT)?

Sham Gad has returned as CEO of Paragon Technologies, following the election of a new board with supermajority support.

What are Paragon Technologies' (PGNT) main priorities under new management?

The company is focusing on re-engaging with partners, expanding distribution and automation businesses, cutting unnecessary costs, and prioritizing long-term value while minimizing short-term financial losses.

How much did Paragon Technologies (PGNT) lose in securities sales during 2025?

The previous management liquidated over $1 million in marketable securities during market lows in April and May 2025, resulting in meaningful realized losses that would have appreciated significantly if held.