CLEVELAND, Jan. 20, 2006 (PRIMEZONE) -- Pursuant to Rule 477 of the Securities Act of 1933, Paragon Real Estate Equity and Investment Trust (AMEX:PRG) withdrew its registration statement originally filed with the Securities and Exchange Commission on October 24, 2005. Paragon indicated that it is impractical to continue with the offering at this time because of market conditions. Paragon did not sell any of its shares pursuant to the registration statement.
Paragon filed the registration statement to raise $100 million in public equity. The net proceeds of the offering were planned to be used to acquire, for $62.6 million, ten apartment communities containing 1,478 units in Texas and Ohio. The balance of the funds was to be used for improvements to that portfolio and for future property acquisitions. The seller of the apartment properties has agreed to extend the due diligence period until February 15, 2006, with a closing date of no later than February 28, 2006. Paragon is reviewing and considering several financing alternatives to complete the acquisition but cannot give any assurance that the acquisition will be completed.
James C. Mastandrea, the Chairman and Chief Executive Officer of Paragon, stated, "At the outset of the public offering process we were encouraged by our investment advisors' belief that the market was ready for a value added apartment REIT. We spent significant time and cost pursuing a public offering to benefit our shareholders and are disappointed that we were not able to complete the offering as we had planned." Mastandrea noted, "We continue to believe that funds are available for value added investments in apartment properties. We are in discussions relating to financing the portfolio acquisition that we have under contract and are working to close next month."
Paragon met with the American Stock Exchange on January 19, 2006 to discuss the Exchange's decision to delist Paragon's common shares. As previously disclosed, Paragon's common shares have not been in compliance with continued listing standards of the Exchange. Paragon had relied on completion of the equity offering to comply with the Exchange's listing standards. Paragon expects to hear from the Exchange next week.
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 financing will be available to fund the acquisition of the Texas and Ohio properties, that the acquisition of the Texas and Ohio properties will be closed or if closed that it will be on the terms described in this press release, that Paragon's planned implementation of a national real estate acquisition, development and re-development strategy will be completed in whole or in part, or that Paragon will be able to continue operations without additional financing. Factors that could cause actual results to differ materially from Paragon's expectations include changes in local or national economic or real estate conditions, actual expenses exceeding projections, Paragon's ability to obtain financing for its operations and any acquisitions, 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.