Paragon: Closing of Upsized USD 34.5 Mil Follow-On Public Offering

Paragon Shipping Inc. on Friday closed its previously-announced upsized public offering of 6,000,000 of its Class A common shares at $5.75 per share, including the full exercise of the over-allotment option granted to the underwriters to purchase up to 782,609 additional common shares. Following this offering, the Company has 17,441,442 shares of common stock outstanding.

The gross proceeds from the offering before the underwriting discount and other offering expenses payable by the Company amounted to approximately $34.5 million (including $4.5 million from the exercise of the over-allotment option). The net proceeds from the offering after the underwriting discount and other offering expenses payable by Paragon Shipping are expected to be approximately $32.0 million.

The majority of the net proceeds of the offering are expected to be used by Paragon Shipping to fund the initial deposits and other costs associated with the purchase of two Ultramax newbuilding drybulk carriers with scheduled delivery in May and July 2014, respectively. Paragon Shipping has agreed to acquire these vessels from an affiliated entity, subject to the closing of this offering, the receipt of refund guarantees from the shipyard, and customary closing conditions. The remainder of the net proceeds are expected to be used for general corporate purposes, which may include additional newbuilding and secondhand vessel acquisitions and/or the repayment of debt.

Maxim Group LLC acted as joint book-running manager and lead managing underwriter of the offering. Global Hunter Securities and National Securities Corporation, a wholly owned subsidiary of National Holdings Inc., acted as joint book-running managers of the offering.

Paragon Shipping, September 30, 2013

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