CLEVELAND, Dec. 9, 2005 (PRIMEZONE) -- Paragon Real Estate Equity and Investment Trust (AMEX:PRG) announced today that it would appeal the American Stock Exchange's notice to delist Paragon's common shares from the exchange.
Paragon received a letter from the exchange indicating that it would begin the delisting process because Paragon has not met the continued listing requirements of the exchange. Specifically, Paragon has not been in compliance with the American Stock Exchange Company Guide Section 1003(a)(i) because shareholders' equity was less than $2.0 million with losses from continuing operations and net losses in the past three years, Section 1003(a)(ii) because shareholders' equity was less than $4.0 million with losses from continuing operations and net losses in the past four years, Section 1003(a)(iii) because shareholders' equity was less than $6.0 million with losses from continuing operations and net losses in the past five years, and Section 1003(f)(v) because of the low selling price of Paragon's common shares.
Although Paragon has not been in compliance with the exchange's continued listing standards, it has been working on financing an acquisition for a portfolio of apartment communities with the intent of regaining compliance so that its common shares would remain listed on the American Stock Exchange. Therefore, Paragon will appeal the exchange's notice to delist its common shares. The exchange has not set a hearing date and there can be no assurances concerning the resolution from an appeal hearing.
As previously announced, Paragon entered into an agreement to acquire a portfolio of ten apartment communities in Texas and Ohio, consisting of 1,478 units. More recently, Paragon announced amending the acquisition agreement to extend the due diligence period to December 31, 2005, and then close the acquisition by January 31, 2006. In addition, the acquisition price was reduced to $62.6 million from $64.7 million.
James C. Mastandrea, Chairman, Chief Executive Officer and President of Paragon, commented, "We have been working with the American Stock Exchange since December of 2004 to meet its continued listing requirements. With the proposed acquisition of the apartment portfolio and the alternatives we are reviewing for financing the acquisition, our intent has been to regain compliance so that the exchange would continue to list our common shares."
Paragon is a real estate company with a value-added business plan to acquire well located, under-performing multifamily properties and reposition them through renovation, leasing, improved management and additional capital investment.
Forward-Looking Statements
Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Paragon Real Estate Equity and Investment Trust believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that Paragon will be able to retain its American Stock Exchange listing, the acquisition of the Texas and Ohio properties will be closed or if closed that it will be on the amended terms of the acquisition agreement, or Paragon's planned implementation of a national real estate acquisition, development and re-development strategy will be completed in whole or in part. Factors that could cause actual results to differ materially from Paragon's expectations include changes in local or national economic or real estate conditions, the ability to meet competition, loss of existing key personnel, ability to hire and retain future personnel and other risks detailed from time to time in Paragon's SEC reports and filings, including its annual report on Form 10-KSB, quarterly reports on Form 10-QSB and periodic reports on Form 8-K. Paragon assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.