Arizona Tribune - Mr. Gad Condemns Paragon Board's Concealment of Key Information Regarding the New Litigation and Seeming Abuse of Fiduciary Duty and Calls for Immediate Public Release of Complaint for Stockholder Transparency

NEW YORK CITY, NY / ACCESS Newswire / May 19, 2025 / Hesham "Sham" Gad, the largest stockholder of Paragon Technologies, Inc. (OTC PINK:PGNT) ("Paragon" or the "Company"), owning approximately 28.4% of the Company's outstanding shares, today issued the following statement to fellow stockholders addressing an alarming and ongoing pattern of concealment by the Company's directors:

Dear Fellow Stockholders:

An incredibly alarming pattern of behavior continues to emerge at Paragon Technologies, Inc. ("Paragon" or the "Company"), one that began with Samuel Weiser and has now been sustained by Tim Eriksen - a supposed beacon of stockholder transparency - and fellow Weiser-picked directors Howard Brownstein and David Lontini serving on the Company's Board of Directors (the "Board").

This pattern is evident in a series of deliberate decisions that reveal how this Board has prioritized self-preservation over transparency with stockholders. Two moments in particular stand out:

• First, nine months ago, Sam Weiser perpetuated a disingenuous campaign accusing me of concealing major claims from the Company, claims that the Delaware Court of Chancery (the "Court") has described as "questionable." Further, if proven true, these claims should have certainly been cause for the other directors to seek my removal. Yet, I remain a director, and, despite their accusations, these same directors later provided me with a full release of any alleged wrongdoing.

• Second, in December 2024, just days after his appointment to the Board by Weiser, I contacted Eriksen, naively believing that he would act independently and uphold basic principles of corporate governance and transparency. I urged him to look into Weiser's conduct. He did not. Instead, Eriksen chose to follow the same course, including withholding material information from stockholders. Eriksen, as a fiduciary to Paragon, along with the other directors, had a clear opportunity to act to protect the Company when they realized the serious potential risks Weiser's self-serving actions could have on the Company. They could have ended and settled the litigation. They did not. Instead, they chose to gamble with stockholder capital by pursuing a case they now claim was based on faulty legal advice.

In doing so, Eriksen and Weiser's other hand-picked directors allowed Paragon to expend $1.1 million in legal fees during the first quarter of 2025. Then in April, the Court DENIED the Board's request for confidentiality and affirmed that stockholders had a right to know about Weiser's fabrication of corporate documents. Rather than doing the right thing, Eriksen likely hoped that the Court would maintain confidentiality and so chose to support keeping valid information hidden from stockholders while blasting false accusations towards me.

And was the passage of the poison pill - one of most financially damaging acts they allowed Paragon to incur - based on "faulty" legal advice? Absolutely not.

In the Company's earnings press release, these directors attempt to paint lipstick on a disastrous financial result by holding themselves out as being so transparent regarding the Company's performance. However, I believe the most important statement in that press release was the one statement they made appear so vague and harmless:

"The board has initiated proceedings against the company's former legal counsel to recover the costs associated with the Gad litigation as it contends that the litigation was attributable to faulty legal advice provided by the company's former legal counsel."

This is an incredibly material statement, yet these directors apparently felt that stockholders - after being told that $3 million of stockholder resources is expected to be spent on their entrenchment litigation during the first 6 months of this year - should be kept in the dark about the relevant details of another potential piece of litigation, litigation filed on behalf of not only Paragon but Sam Weiser and Jack Jacobs, one who is no longer at Paragon and the other who is gone after June 30.

I urge stockholders to appreciate the significance of what these new directors are doing. They are now attempting to sue the Company's former legal counsel, claiming that the costly and damaging entrenchment actions taken by Weiser and supported by Eriksen, Brownstein, and Lontini were the result of flawed legal advice. These are the same directors who continued litigating those actions for months while fully aware of the consequences, and only now, after the damage is done, seek to shift the blame.

To be absolutely clear, what I do not support and never will, is the decision by these directors, namely Eriksen, Brownstein, and Lontini, to once again keep this significant litigation under seal and away from Paragon's stockholders ahead of the 2025 Annual Meeting of Stockholders.

I want stockholders to really ask themselves the following question: if this litigation is in the best interests of Paragon's stockholders, then why are these supposedly independent directors insisting that all material information remain hidden from stockholders? Why are they asking for your vote while simultaneously denying you access to important facts?

I also remind stockholders that the last time these directors enabled material information to be kept confidential from stockholders, it was evidence that Weiser has fabricated corporate documents for his own financial benefit.

Again, if this litigation is in the best interest of Paragon stockholders, then why is Tim Eriksen, who publicly proclaims to be an advocate of corporate governance best practices and stockholder transparency, and the other directors, keeping the litigation complaint under seal from Paragon's stockholders?

The answer is what any reasonable observer would expect. If stockholders were permitted to see what is being concealed, they would be appalled by what is revealed. They would see who the Company is seeking relief for, and they would question whether this litigation reflects their interests or someone else's. That is precisely why the directors are determined to keep it hidden, even if doing so results in a loss of stockholder trust.

As they continue to falsely accuse me of concealment on matters that they cannot prove, they are deliberately concealing key information on significant litigation that could have a material impact on the Company. Weiser may be stepping down as CEO on June 30, but his hand-picked directors have continued his approach. In their first four months on the Board, they have enabled and extended the same entrenchment campaign, which has now led to one of Paragon's worst quarterly performances in eight years. At the same time, they are initiating new litigation using stockholder money and refusing to provide stockholders with any information about it.

Yet, in their May 9^th press release, announcing that the Company has "self-reported" me to certain federal authorities, these directors state that "Paragon is committed to transparency…." Transparency for whom? Clearly not for Paragon stockholders, as these directors continue to abuse their position to manipulate the information they want stockholders to have. Even worse, through their desperate and vitriolic efforts to retain their board seats, they are seemingly willing to continue damaging Paragon with their actions. I will fully cooperate with any of the federal authorities to which the Company supposedly reported and provide them with the same information and evidence that these directors have known and had access to for years and from which it can clearly be shown that there was no concealment, my compensation structure was duly noted and known to the directors, CFO and auditors who raised no issues for ten years, and that I am lawfully authorized to work in the United States.

Stockholders should also be offended and alarmed about the statement in their prior press release that we "… hired an individual without proper work authorization and failed to disclose it." Not only is this statement false, as our HR Manager takes great pride and care in our hiring process, but it is also degrading and demoralizing to our talented associates who read these despicable vague comments and start to question whether or not they want to remain with our organization, an organization that had developed of reputation of promoting shared success, merit based advancement, and decency - a culture being infected by the cancer inserted by Weiser and allowed to grow under the oversight of Eriksen, Brownstein, and Lontini.

We are building a list of these false and potentially defamatory statements Weiser's hand-picked directors are allowing to be published and will take appropriate action at the appropriate time.

I know the reasons why they are making the complaint public and while I unfortunately cannot disclose them, there is absolutely no justification for keeping that information from stockholders.

If this litigation is truly intended to benefit the Company and its stockholders, then the path forward is clear.

The complaint must be made public immediately.

I believe the continued concealment of this complaint is not in the best interests of stockholders and urge the other members of the Board to do what is right. I will continue to do everything in my power to advocate for full transparency and to hold these directors accountable for their clear concealment of key information from stockholders.

Once these directors - who over the past nine months have done nothing but cause the Company significant loss and halted Paragon's progress - are no longer associated with Paragon, the future for Paragon will be brighter than ever. If elected, my slate of director candidates will be ready on day one to expeditiously execute our growth plan, with the experience and support of our team members, and together we will revitalize Paragon.

Sincerely,

Sham Gad

CONTACT:
[email protected]

SOURCE: Sham Gad

View the original press release on ACCESS Newswire

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