The Paragon 28 class action lawsuit alleges that defendants throughout the Extended Class Period made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Complaint alleges Defendants misrepresented and concealed that Paragon: (a) understated its Adjusted EBITDA losses; (b) overstated its net inventories; (c) understated required provisions for excess and obsolete inventory; (d) understated its cost of goods sold; (e) overstated gross profit; (f) understated operating loss; (g) understated net loss; (h) lacked adequate disclosure controls and procedures and internal control over financial reporting; (i) would be required to restate its financial statements to conform with generally accepted accounting principles; and (j) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis
The truth began to emerge on April 4, 2024, when Paragon issued a press release announcing that Defendant Deitsch resigned, and the Company’s Audit Committee Chair (Kristina Wright) stepped in as interim CFO effective April 3, 2024. This news sent the price of Paragon shares down $1.86 (-15%) that day.
Then, after the market closed on August 8, 2024, Paragon announced that it had made errors in its financial statements and that its internal controls were inadequate. The company admitted to overstating its inventory and understating its cost of goods sold, which led to overstated profits. This news sent the price of Paragon shares down $1.67 (-20%) on August 9, 2024.
Finally, after the market closed on September 20, 2024, Paragon disclosed the abrupt departure of Defendant Erik Mickelson, the Company’s Chief Accounting Officer. This news sent the price of Paragon shares down $0.30 (-4.3%) on September 23, 2024.
CASE TIMELINE
