- Paragon Technologies (PGNT, Financial) faces allegations of concealing litigation details and improper legal expenditures.
- Largest shareholder, Hesham "Sham" Gad, calls for immediate transparency and release of litigation details.
- PGNT spent $1.1 million in Q1 2025 on legal fees, with an additional $3 million expected in the first half of the year.
Hesham "Sham" Gad, holding a 28.4% stake in Paragon Technologies (PGNT), has raised significant concerns over the company's governance practices, specifically pointing out issues of transparency within the Board of Directors. Gad criticizes a pattern of concealment, particularly the decision to keep details of new litigation against former legal counsel confidential from stockholders.
Key members of the Board, including Timothy Eriksen, Howard Brownstein, and David Lontini, are accused of withholding crucial information that affects stockholder interests. This includes the alleged concealment of a litigation complaint expected to incur $3 million in legal costs during the first half of 2025, following $1.1 million in legal expenses in Q1 2025. Gad argues that such actions have compromised the company's financial performance and transparency.
Gad further defends the company's HR practices against claims of unauthorized worker hiring, asserting a need for openness about corporate proceedings. As CEO Samuel Weiser plans to step down on June 30, 2025, Gad proposes a new slate of director candidates to enhance governance and restore Paragon's reputation.
The ongoing conflicts and governance challenges have reportedly led to one of the worst quarterly performances for Paragon in eight years. Gad insists that stockholders deserve to know all material information, posing critical questions about the Board's insistence on confidentiality.
