Paragon Technologies: A New Dawn for Shareholders Amid Litigation Settlement and Leadership Shakeup

The saga of Paragon Technologies, Inc. has reached a pivotal moment. After months of legal battles and boardroom drama, the company’s largest stockholder and former CEO, Hesham “Sham” Gad, has issued a sharp rebuttal to the current board of directors, outlining a path forward that promises accountability and growth. The settlement of a high-stakes lawsuit—a victory for shareholder rights—has set the stage for a critical showdown at Paragon’s 2025 Annual Meeting. Let’s dissect what this means for investors.

The Settlement: A Win for Shareholders, a Loss for Entrenchment

The litigation settlement, finalized in April 2025, marks a turning point. Key terms include a ban on dilutive transactions that harm shareholders, a deadline for the 2025 Annual Meeting by June 30, and the suspension of a poison pill restricting shareholder coordination. Perhaps most significantly, CEO Samuel S. Weiser’s resignation was a condition of the deal—a stark acknowledgment of his leadership’s failures.

The Delaware Court of Chancery’s rejection of the board’s tactics underscores their weak legal footing. The court dismissed the board’s claims against Gad as “questionable” and noted their focus on personal attacks over governance issues. This ruling is a red flag for investors: a board so desperate to cling to power that it wasted millions on frivolous legal battles.

The Board’s False Narratives: Rubicon, Soccer Tickets, and Immigration

Gad’s letter methodically dismantles the board’s allegations, exposing them as politically motivated distractions. Take the Rubicon Technology investment: the board falsely claimed Gad acted without authorization. In reality, Gad disclosed the opportunity to Weiser, who supported it. When the board nixed the deal, Gad complied—but the investment later generated $700,000 in gains for Paragon, a fact the board omitted. A 2023 follow-up investment, capped at 4.9% by Gad himself, delivered a 40% annualized return.

The board’s fixation on $9,000 in annual soccer tickets (2018–2023) and $32,000 in 2023 Inter Miami tickets is similarly absurd. These expenses were pre-approved by the CFO, disclosed to auditors, and partially offset by resale revenue. Yet the board framed them as misconduct—a distraction from their own failures.

Perhaps most egregious is the baseless attack on Gad’s immigration status. A 2013 email from Paragon’s counsel confirmed his legal residency, and former director Jack Jacobs publicly vouched for his integrity in 2021. The board’s resurrection of this issue reeks of desperation.

Financial Decline Under Weiser: Cash, Assets, and Equity in Freefall

Since Weiser seized full control in August 2024, Paragon’s financial health has deteriorated rapidly. Cash reserves have dwindled, real estate assets were sold without replacement, and shareholder equity dropped in 2024. Contrast this with Gad’s tenure (2014–2024), which delivered an 11% annualized return—a benchmark Weiser’s regime has failed to match.

The board’s entrenchment tactics have also been costly. Legal expenses from their failed battles likely exceed prior shareholder campaigns, with costs borne by all investors. Worse, directors hold minimal equity—many received shares only after Weiser’s self-serving compensation fraud was exposed.

The Path Forward: Reviving Growth and Accountability

Gad’s slate of five independent directors offers a stark alternative to the current board’s incompetence. Key priorities include:
- Reinvigorating SEDC’s stalled international sales strategy.
- Restoring SI Systems, a subsidiary languishing under Weiser’s leadership.
- Prioritizing shareholder returns over boardroom power plays.

The court’s rejection of the board’s tactics—and its swift acceptance of the settlement—suggests they knew they couldn’t win. Shareholders now have a clear choice: vote for a leadership team focused on value creation, or let the current board’s self-dealing continue.

Conclusion: Vote with Your Wallet—The Data Speaks

The numbers tell the story. Under Gad, Paragon delivered an 11% annualized return over a decade—a track record the board has erased in months. The court’s dismissal of their legal arguments and the settlement’s terms further validate Gad’s claims of governance failure.

Investors should heed this: Paragon’s future hinges on accountability. Voting for Gad’s slate at the 2025 Annual Meeting isn’t just about rejecting Weiser’s cronyism—it’s about unlocking the company’s potential. With safeguards in place and a proven leader’s vision, Paragon could finally rise from its current slump.

The writing is on the wall. For Paragon to thrive again, its shareholders must choose transparency over entrenchment—and that choice is coming soon.

Data queries and visuals are placeholders for reader engagement. Actual stock performance and financial metrics would require access to Paragon’s SEC filings and market data.