On October 2, 2013, Paragon Technologies, Inc. announced that it has filed a litigation against SED International Holdings, Inc. in Gwinnett County, Georgia to force SED to call and hold its 2013 annual meeting of shareholders, which SED is required under its by-laws and applicable law to hold by the end of December 2013. Paragon commented that existing SED board has failed to call its annual meeting in accordance with its historical practices, and Paragon believes the SED board is taking every action possible to avoid a shareholder vote, including ignoring Paragon's previous valid and lawful notice calling a special meeting of shareholders to remove and replace the SED board. Paragon calls on the existing SED board to allow shareholders their fundamental right to vote on the election of directors.

Paragon intends to hold the SED board responsible for not allowing shareholders to decide who will be the directors of SED. Paragon also restates its warning to the existing SED board that if it takes any action between now and the 2013 annual meeting of shareholders to thwart or impede Paragon's efforts to elect a new SED board, Paragon will immediately file suit against the SED directors to protect the SED business and its shareholders. If any third party is involved in any such actions, whether through the pretext of a corporate transaction or otherwise, Paragon will also file suit against such third party.