PRGNF Paragon Shipping Inc (CE)

PROSPECTUS SUPPLEMENT

(To Prospectus dated January 8, 2014)

$4,000,000

Common Shares

Paragon Shipping Inc.

This prospectus supplement relates to the issuance and sale of our Class A common shares, par value $0.001 per share, or the common shares, having an aggregate offering price of up to $4,000,000, from time to time solely through Maxim Group LLC ("Maxim"), who we refer to as the sales agent. Each common share sold in this offering includes a preferred share purchase right that trades with the common share. These sales, if any, will be made pursuant to the terms of an equity distribution agreement between us and the sales agent.

Our common shares are traded on the Nasdaq Global Market under the symbol "PRGN." On September 3, 2015, the last reported sale price of our common shares on the Nasdaq Global Market was $0.71 per share.

Investing in our common shares involves significant risks. See "Risk Factors" beginning on page S-7 of this prospectus supplement, as well as the accompanying prospectus and the documents we have filed with the Securities and Exchange Commission that are incorporated by reference herein for more information, before you make any investment in our common shares.

None of the Securities and Exchange Commission, any state securities commission, or any other regulatory body has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.

The compensation to the sales agent for sales of common shares will be 3.15% of the gross sales price of all common shares sold through the sales agent from time to time under the equity distribution agreement. Subject to the terms and conditions of the equity distribution agreement, Maxim will use its commercially reasonable efforts to sell on our behalf any common shares to be offered by us under the equity distribution agreement. The net proceeds from any sales under this prospectus supplement will be used as described under "Use of Proceeds" in this prospectus supplement.

.

Maxim Group LLC

The date of this prospectus supplement is September 4, 2015

TABLE OF CONTENTS

Page

IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS SUPPLEMENT	S-ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	S-iii
PROSPECTUS SUPPLEMENT SUMMARY	S-1
THE OFFERING	S-4
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA	S-5
RISK FACTORS	S-7
USE OF PROCEEDS	S-9
CAPITALIZATION	S-10
PRICE RANGE OF OUR COMMON SHARES	S-11
PLAN OF DISTRIBUTION	S-12
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION	S-13
LEGAL MATTERS	S-14
EXPERTS	S-14
WHERE YOU CAN FIND MORE INFORMATION	S-14
DOCUMENTS INCORPORATED BY REFERENCE	S-15

IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS SUPPLEMENT

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus supplement and the accompanying prospectus, including the information we incorporate by reference, include "forward-looking statements," as defined by U.S. federal securities laws, with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events. Words such as, but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "projects," "likely," "will," "would," "could" and similar expressions or phrases may identify forward-looking statements.

All forward-looking statements involve risks and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

In addition, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include: (i) the strength of world economies; (ii) fluctuations in currencies and interest rates; (iii) general market conditions, including fluctuations in charter hire rates and vessel values that may result in defaults in the covenants contained in our loan agreements; (iv) changes in demand in the drybulk shipping industry, including the market for our vessels; (v) changes in our operating expenses, including bunker prices, dry-docking and insurance costs; (vi) changes in governmental rules and regulations or actions taken by regulatory authorities; (vii) potential liability from pending or future litigation; (viii) general domestic and international political conditions; (ix) potential disruption of shipping routes due to accidents or political events; (x) the availability of financing and refinancing; (xi) vessel breakdowns and instances of off-hire; (xii) our inability to refinance existing debt, obtain additional financing on favorable terms or any financing which may result in our failure to take delivery of new vessels and default on our obligations; and (xiii) other important factors described from time to time in the reports filed by us with the Securities and Exchange Commission, or the SEC.

We have based these statements on assumptions and analyses formed by applying our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus supplement might not occur.

See the section entitled "Risk Factors," on page S-7 of this prospectus supplement, on page 10 of the accompanying prospectus and in our Annual Report on Form 20-F for the fiscal year ended December 31, 2014, filed with the Securities and Exchange Commission, or the SEC, on April 17, 2015, and incorporated by reference herein, for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These factors and the other risk factors described in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

PROSPECTUS SUPPLEMENT SUMMARY

This section summarizes some of the information that is contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus. As an investor or prospective investor, you should review carefully the more detailed information that appears later in this prospectus supplement and the information incorporated by reference in this prospectus supplement and the accompanying prospectus, including the section entitled "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2014, which was filed with the SEC on April 17, 2015.

Unless expressly stated otherwise, all references in this prospectus supplement to "we," "us," "our," the "Company" or similar references mean Paragon Shipping Inc. and its subsidiaries. In addition, we use the term deadweight, or dwt, in describing the size of vessels. Dwt expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.

Our Company

We are a global provider of shipping transportation services. We specialize in transporting drybulk cargoes, including such commodities as iron ore, coal, grain and other materials, along worldwide shipping routes.

As of the date of this prospectus supplement, we own and operate a modern and diversified fleet of 12 drybulk carriers consisting of seven Panamax drybulk carriers, one Supramax drybulk carrier and four Handysize drybulk carriers, with an aggregate capacity of 719,769 dwt and an average age of 9.3 years.

In addition, we have agreed to acquire two Ultramax drybulk carriers and three Kamsarmax drybulk carriers that are scheduled to be delivered from the third quarter of 2015 through the first quarter of 2016.

All of our vessels are currently employed on fixed rate time charters, with expirations ranging from September 2015 to May 2016, assuming the exercise of applicable extension options. Historically, we have employed our vessels primarily under short term time charters that we believe provide us with a stable cash flow base and high utilization rates, while limiting our exposure to charter rate volatility. We believe factors governing the supply and demand of drybulk carriers may cause charter rates for drybulk carriers to strengthen in the near term, thereby providing us opportunities to renew our time charters or enter into new time charters at similar or higher rates following the expiration of their respective terms.

Allseas Marine S.A., or Allseas, and Seacommercial Shipping Services S.A., or Seacommercial, are responsible for all commercial and technical management functions for our fleet, pursuant to long-term management agreements between Allseas, Seacommercial and each of our vessel-owning subsidiaries. Allseas and Seacommercial also provide commercial and technical management services for the fleet of Box Ships Inc. (NYSE:TEU), or Box Ships. Allseas and Seacommercial are controlled by our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, Mr. Michael Bodouroglou. In addition, Mr. Bodouroglou is the Chairman, President, Chief Executive Officer and Interim Chief Financial Officer of Box Ships. Technical management services include, among other things, arranging for and managing crews, vessel maintenance, drydocking, repairs, insurance, maintaining regulatory and classification society compliance and providing technical support. Commercial management services include, among other things, negotiating charters for our vessels, monitoring various types of charters, monitoring the performance of our vessels, locating, purchasing, financing and negotiating the purchase and sale of our vessels, obtaining insurance for our vessels and finance and accounting functions. In addition, we have entered into an accounting agreement with Allseas, pursuant to which Allseas provides us with financial accounting and financial reporting services. We have also entered in to an executive services agreement with Allseas, pursuant to which Allseas provides the services of our executive officers.

Our Fleet

The following table presents certain information concerning our fleet as of the date of this prospectus supplement:

Operating Drybulk Fleet

 

Recent Developments

On July 27, 2015, we sold all of the issued and registered shares for our vessel-owning subsidiaries of the M/V Dream Seas, the M/V Gentle Seas, the M/V Peaceful Seas and the M/V Friendly Seas, to an entity controlled by Mr. Michael Bodouroglou, our Chairman, President, Chief Executive Officer and Interim Chief Financial Officer, which we refer to as the Sale Transaction. The Sale Transaction was based on a mutually agreed value of $63.2 million for the four vessels transferred, net of a 1.00% commission payable to Seacommercial, an entity controlled by Mr. Bodouroglou. The Sale Transaction was negotiated and approved by a special committee consisting of the five independent directors of our board of directors. On July 27, 2015, following the conclusion of the Sale Transaction, we extinguished our then outstanding indebtedness with HSBC Bank Plc and HSH Nordbank AG that in the aggregate amounted to $56.4 million.

On July 31, 2015, we entered into a loan supplemental agreement and agreed, subject to certain conditions, to amended terms with the syndicate led by Nordea Bank Finland Plc, including the deferral of one and a portion of two of our scheduled quarterly installments due in the third quarter of 2015 through the first quarter of 2016. The deferred amounts will be settled along with the balloon installment. In addition, we agreed to waive or amend certain financial and security cover ratio covenants. We also agreed to cancel the available borrowing capacity of up to $78.0 million with respect to the undrawn portion of this credit facility for the partial financing of our outstanding newbuilding contracts.  In addition, we agreed to initiate this $4.0 million equity offering, in connection with which proceeds of at least $1.0 million must be received by December 31, 2015. For additional information regarding this supplemental agreement, see Note 5 and Note 9 of our unaudited interim condensed consolidated financial statements for the six months ended June 30, 2015, included in our Form 6-K filed with the SEC on September 4, 2015.

Corporate Structure

We were incorporated under the laws of the Republic of the Marshall Islands on April 26, 2006. Our executive offices are located at 15 Karamanli Ave, GR 166 73, Voula, Greece. Our telephone number at that address is +30 210 891 4600. We also maintain a website at www.paragonship.com. Information contained on our website does not constitute part of this prospectus.

We own our vessels through separate wholly-owned subsidiaries that are incorporated in Liberia or the Republic of the Marshall Islands.

THE OFFERING

Common shares offered by us (1)	Common shares with an aggregate sale price of up to $4,000,000.
Common shares outstanding prior to this offering (2)	24,909,142 common shares.
Nasdaq Global Market Symbol	PRGN
Manner of offering	Negotiated transactions or transactions deemed to be "at-the-market offerings" (including sales made to or through a market maker other than on an exchange) that may be made from time to time through Maxim, as sales agent, using commercially reasonable efforts. See "Plan of Distribution."
Use of Proceeds	We intend to use the net proceeds of this offering for general corporate purposes, which may include the payment of a portion of the outstanding contractual cost of our existing newbuilding vessels, and/or the repayment of debt.
Preferred share purchase rights	We entered into a Stockholders Rights Agreement, dated as of January 4, 2008, as amended, or the Rights Agreement, with Computershare Trust Company, N.A., as Rights Agent. Pursuant to this Rights Agreement, each of our common shares includes one right, or right, that entitles the holder to purchase from us a unit consisting of one one-thousandth of a preferred share at a purchase price of $75.00 per unit, subject to specified adjustments. Until a right is exercised, the holder of a right will have no rights to vote or receive dividends or any other stockholder rights.
Risk Factors	Investing in our common shares involves substantial risk. You should carefully consider all the information in this prospectus prior to investing in our common shares. In particular, we urge you to consider carefully the factors set forth in the sections entitled "Risk Factors" beginning on page S-7 of this prospectus supplement, as well as the accompanying prospectus and the documents we have filed with the Securities and Exchange Commission that are incorporated by reference herein for more information, before you make any investment in our common shares.

______________

(1) Excludes common shares to be issued to Loretto under the agreement we have entered into with Allseas and Loretto Finance Inc., or Loretto, a wholly owned subsidiary of Allseas and a Marshall Islands corporation that is controlled by Mr. Bodouroglou and members of his family, pursuant to which we have agreed, among other things, to issue at no cost to Loretto, additional common shares equal to 2.0% of the total number of common shares we issue pursuant to any equity offerings we make.

(2) Excludes 1,680,000 common shares reserved for issuance under our 2014 Equity Incentive Plan.

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

Our audited consolidated statements of operations, shareholders' equity and cash flows for the years ended December 31, 2012, 2013 and 2014, and the consolidated balance sheets at December 31, 2013, and 2014, together with the notes thereto, are included in our Annual Report on Form 20-F for the fiscal year ended December 31, 2014, filed with the SEC on April 17, 2015, or Form 20-F, and incorporated by reference herein. The following data should be read in conjunction with "Item 5. Operating and Financial Review and Prospects," the consolidated financial statements, related notes and other financial information included in our Form 20-F.  All amounts are expressed in United States Dollars, except for fleet and share data.

Following the 10-for-1 reverse stock split effectuated on November 5, 2012, pursuant to which every ten of our common shares issued and outstanding were converted into one common share, all share and per share amounts disclosed in the tables below have been retroactively restated to reflect this change in capital structure.

Based on our audited consolidated financial statements:

 

		Year Ended December 31,
		2010				2011				2012				2013				2014
STATEMENT OF COMPREHENSIVE INCOME / (LOSS) DATA
(Expressed in United States Dollars, except for share data)
Net revenue		$	111,700,109			$	86,907,967			$	50,300,679			$	56,256,756			$	54,763,678
Operating income / (loss)			34,121,346				(275,225,740	)			2,293,932				(2,954,345	)			(33,831,017	)
Net income / (loss)			22,895,280				(283,498,759	)			(17,557,125	)			(16,953,032	)			(51,796,181	)
Comprehensive income / (loss)			22,895,280				(283,498,759	)			(18,184,229	)			(16,585,739	)			(51,687,356	)
Earnings / (loss) per Class A common share, basic and diluted		$	4.43			$	(47.61	)		$	(2.84	)		$	(1.31	)		$	(2.18	)
Weighted average number of Class A common shares, basic and diluted			4,981,272				5,793,792				6,035,910				12,639,128				23,326,062
Dividends declared per Class A common share		$	2.00			$	0.50				—				—				—

 

		Year ended December 31,
		2010				2011				2012				2013				2014
OTHER FINANCIAL DATA
(Expressed in United States Dollars)
Net cash from / (used in) operating activities		$	60,613,801			$	45,467,429			$	13,376,809			$	4,563,696			$	(6,181,843	)
Net cash (used in) / from investing activities			(142,151,113	)			43,673,793				(15,702,244	)			(6,441,495	)			(104,546,565	)
Net cash (used in) / from financing activities			(17,634,931	)			(109,365,640	)			5,438,803				15,502,871				86,456,958

 

		As of December 31,
		2010				2011				2012				2013				2014
BALANCE SHEET DATA
(Expressed in United States Dollars)
Total current assets		$	55,503,278			$	37,457,564			$	31,333,204			$	44,220,084			$	26,688,017
Total assets			821,276,010				432,073,937				419,974,902				419,545,980				460,965,117
Total current liabilities			45,212,355				40,486,845				21,971,886				23,655,911				28,482,791
Long-term debt			282,757,012				169,096,000				181,114,926				162,857,176				210,064,414
Total liabilities			330,804,343				210,849,790				204,454,389				186,895,203				238,564,574
Capital stock			5,587				6,090				11,001				17,669				24,809
Total shareholders' equity / net assets			490,471,667				221,224,147				215,520,513				232,650,777				222,400,543

 

		Six Months Ended June 30,
		2014				2015
STATEMENTS OF COMPREHENSIVE LOSS DATA
Net revenue			27,252,998				19,380,009
Operating loss			(24,064,748	)			(77,251,366	)
Net loss			(35,536,894	)			(81,837,965	)
Loss per Class A common share, basic and diluted			(1.56	)			(3.29	)
OTHER FINANCIAL DATA
Net cash used in operating activities			(340,907	)			(2,670,511	)
Net cash (used in) / from investing activities			(63,927,472	)			11,382,380
Net cash from / (used in) financing activities			55,169,325				(11,525,662	)
Net decrease in cash and cash equivalents			(9,099,054	)			(2,813,793	)
		December 31,				June 30,
			2014				2015
BALANCE SHEET DATA
Total assets			456,604,166				365,309,776
Total liabilities			234,203,623				224,105,373
Total shareholders' equity			222,400,543				141,204,403

 

 

 

 

 

 

 

RISK FACTORS

An investment in our common shares involves a high degree of risk and uncertainty. You should carefully consider the risks described below and discussed under the caption "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2014, filed with the SEC on April 17, 2015, and incorporated by reference herein, as well as the other information included in this prospectus supplement and the accompanying prospectus before deciding to invest in our common shares. If any of the risks occur, our business, financial conditions or results of operations may be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of the risks below.

The drybulk shipping industry is cyclical and volatile, with charter hire rates and profitability currently at depressed levels, and the recent global economic recession has resulted in decreased demand for drybulk shipping, which may negatively impact our operations.

The drybulk shipping industry is cyclical with attendant volatility in charter hire rates and profitability. The degree of charter hire rate volatility among different types of drybulk carriers varies widely; however, the continued downturn in the drybulk charter market has severely affected the entire drybulk shipping industry and charter hire rates for drybulk vessels have declined significantly from historically high levels in 2008. Fluctuations in charter rates result from changes in the supply of and demand for vessel capacity and changes in the supply of and demand for drybulk cargoes carried internationally at sea, including coal, iron ore, grain and minerals. Because the factors affecting the supply of and demand for vessels are outside of our control and are unpredictable, the nature, timing, direction and degree of changes in industry conditions are also unpredictable. We cannot assure you that we will be able to successfully charter our vessels in the future or renew our existing charters, all of which are scheduled to expire by December 2015, assuming the earliest redelivery dates, upon their expiration or termination, at rates sufficient to allow us to meet our obligations or at all.

Factors that influence demand for vessel capacity include:

·

supply of and demand for energy resources, commodities and drybulk cargoes;

·

changes in the exploration or production of energy resources commodities, and drybulk cargoes;

·

the location of regional and global exploration, production and manufacturing facilities;

·

the location of consuming regions for energy resources, commodities and drybulk cargoes;

·

the globalization of production and manufacturing;

·

global and regional economic and political conditions, including armed conflicts and terrorist activities, embargoes and strikes;

·

developments in international trade;

·

changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;

·

environmental and other regulatory developments;

·

currency exchange rates; and

·

weather.

The factors that could influence the supply of vessel capacity include:

·

the number of newbuilding deliveries;

·

port and canal congestion;

·

the scrapping rate of older vessels;

·

vessel casualties; and

·

the number of vessels that are out of service, namely those that are laid-up, dry-docked, awaiting repairs or otherwise not available for hire.

A violation of the security cover ratio, unless cured as set forth under the applicable loan or credit facility, or a violation of any of the financial covenants contained in our debt agreements constitutes an event of default, which, unless waived or modified by our lenders, provides our lenders with the right to require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet and accelerate our indebtedness and foreclose their liens on our vessels, or may cause us to reclassify our indebtedness as current liabilities, which would impair our ability to continue to conduct our business. As a result of intense fluctuations in the drybulk charter market and the related fluctuation in vessel values, we were not in compliance with certain financial and security cover ratio covenants contained in certain of our loan and credit facilities in the past, and as such, we obtained waivers of the relevant covenant breaches, entered into amendments to the relevant facilities or refinanced the affected debt and deposited additional security to cure the shortfall in the security cover required to be maintained under the relevant facilities. See "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Long-Term Debt" of  our Annual Report on Form 20-F for the year ended December 31, 2014, filed with the SEC on April 17, 2015, and "Liquidity and Capital Resources" of our Form 6-K filed with the SEC on September 4, 2015, each incorporated by reference herein, for additional information regarding our loan and credit facilities.

As of June 30, 2015, we had $219.7 million of outstanding indebtedness, which includes the long-term debt associated with assets held for sale of $58.8 million, relating to the outstanding indebtedness of the M/V Dream Seas, the M/V Gentle Seas, the M/V Peaceful Seas and the M/V Friendly Seas. As of that date, we were not in compliance with the minimum liquid assets, the minimum market value adjusted net worth, the maximum leverage ratio, the minimum equity ratio, the minimum working capital and the security cover ratio covenants contained in three of our loan and credit facilities. These breaches were subsequently cured as we either extinguished the affected debt or obtained waivers and amendments for the affected covenants as of June 30, 2015, as discussed in "Liquidity and Capital Resources" of our Form 6-K filed with the SEC on September 4, 2015, incorporated by reference herein. However, given the current drybulk charter rates, it is probable that we will not be in compliance with several financial covenants contained in certain of our loan and credit facilities on the applicable measurement dates in 2016. We are planning to further negotiate with our lenders to extend the existing waivers of the affected covenants, but we may not be successful in obtaining additional waivers of covenant breaches or amendments to covenants contained in our debt agreements or refinancing the affected debt if we are not in compliance with the original covenants in our debt agreements when our existing waivers expire.

All of our debt agreements contain a cross-default provision that may be triggered by a default under one of our other debt agreements. Because of the presence of cross default provisions in all of our debt agreements, the refusal of any one lender to grant or extend a waiver could result in all of our indebtedness being accelerated even if our other lenders have waived covenant defaults under the respective debt agreements. As a result of the cross-default provisions included in our debt agreements, actual breaches existing under our debt agreements could result in defaults under all of our debt and the acceleration of such debt by our lenders and the foreclosure of their liens on our vessels, which would impair our ability to conduct our business and continue as a going concern. If our outstanding indebtedness is accelerated in full or in part, in the current financing environment we may not be able to refinance our debt or obtain additional financing. Moreover, any refinancing or additional financing may be more expensive and carry more onerous terms than those in our existing debt agreements. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our debt agreements.

As of the date of this prospectus supplement, our newbuilding contracts were comprised of two Ultramax drybulk carriers under construction at Yangzhou Dayang Shipbuilding Co. Ltd., or Dayang, scheduled for delivery between the third and fourth quarter of 2015, and three Kamsarmax drybulk carriers under construction at Jiangsu Yangzijiang Shipbuilding Co., or Yangzijiang, scheduled for delivery in the first quarter of 2016. The estimated total contractual cost of our newbuilding vessels amounted to $148.2 million, of which an aggregate of $101.7 million was outstanding as of the date of this prospectus and is due upon delivery of the vessels.

In order to complete the construction of our newbuilding vessels, we will need to procure additional financing. We plan to arrange new debt financing for our newbuilding vessels or extend the deliveries from the shipyards. If we are unable to do so, we may also consider selling the respective newbuilding contracts. If for any reason we fail to take delivery of the newbuilding vessels described above, we would be prevented from realizing potential revenues from these vessels, we may be required to forego deposits on construction, which amounted to an aggregate of $46.5 million as of the date of this prospectus supplement, and we may incur additional costs and liability to the shipyard under the construction contracts.

In addition, the actual or perceived credit quality of our charterers and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require in order to meet our capital commitments, or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing at all or at a higher level than the anticipated cost, may materially affect our results of operation and our ability to implement our business strategy, including our ability to take delivery of our vessels under construction. Should additional financing not be available on favorable terms or at all, this would have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our common shares could be delisted from the Nasdaq Stock Market, which could negatively impact the price of our common shares and our ability to access the capital markets.

On May 14, 2015, we received written notification from the Nasdaq Stock Market, indicating that because the closing bid price of our common shares for 30 consecutive business days was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Global Market, we were not in compliance with Nasdaq Listing Rule 5450(a)(1). Pursuant to the Nasdaq Listing Rules, the applicable grace period to regain compliance is 180 days, or until November 10, 2015. We intend to monitor the closing bid price of our common shares between now and November 10, 2015 and are considering our options in order to regain compliance with the Nasdaq Global Market minimum bid price requirement. We can cure this deficiency if the closing bid price of our common shares is $1.00 per share or higher for at least ten consecutive business days during the grace period. In the event we do not regain compliance within the 180-day grace period and we meet all other listing standards and requirements, we may be eligible for an additional 180-day grace period if the listing of our common shares is transferred to the Nasdaq Capital Market. We intend to cure the deficiency within the prescribed grace period. During this time, our common shares will continue to be listed and trade on the Nasdaq Stock Market. Our business operations are not affected by the receipt of this notification.  However, any failure to cure this deficiency could negatively impact the trading of our common shares and our ability to remain listed on the Nasdaq Stock Market.

The Public Company Accounting Oversight Board has been unable to inspect the audit work and practices of auditors operating in Greece, including our auditor.

Auditors of U.S. public companies are required by law to undergo periodic Public Company Accounting Oversight Board, or PCAOB, inspections that assess their compliance with U.S. law and professional standards in connection with the performance of audits of financial statements filed with the SEC. Certain European Union, or EU, countries, including Greece, do not permit the PCAOB to conduct inspections of accounting firms established and operating in EU countries, even if they are part of major international firms. Accordingly, unlike for most U.S. public companies, the PCAOB has been prevented from evaluating our auditor's performance of audits and its quality control procedures, and, unlike the shareholders of most U.S. public companies, our shareholders have been deprived of the possible benefits of such inspections. However, in August, 2015, the PCAOB has entered into a cooperative agreement with the Hellenic Accounting and Auditing Standards Oversight Board which may in the future permit inspections and investigations, including joint investigations, of accounting firms operating in Greece.

USE OF PROCEEDS

We intend to use the net proceeds of this offering for general corporate purposes, which may include the payment of a portion of the outstanding contractual cost of our existing newbuilding vessels, and/or the repayment of debt.

CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2015:

·

on an actual basis;

·

on an as adjusted basis to give effect to the following transactions, which occurred during the period between July 1, 2015 and the date of this prospectus supplement:

(i)

the scheduled repayment and the extinguishment of our indebtedness with HSBC Bank Plc and HSH Nordbank AG following the sale of all of the issued and registered share of the vessel-owning subsidiaries of the M/V Dream Seas, the M/V Gentle Seas, the M/V Peaceful Seas and the M/V Friendly Seas, that in the aggregate amounted to $58,828,800; and

(ii)

the scheduled repayment of $952,750 in outstanding indebtedness under our remaining secured loan agreements.

·

on an as further adjusted basis to give effect to:

(i)

the issuance and sale of $4,000,000 of our common shares pursuant to this public offering, or 5,633,803 common shares at an assumed offering price of $0.71 per share, the last reported sale price of our common shares on the NASDAQ on September 3, 2015, after deducting estimated underwriting discount of 3.15% and estimated expenses of $200,000; and

(ii)

our obligation to issue 112,676 common shares for no cash consideration to Loretto, representing 2% of the total number of common shares that may be issued and sold pursuant to this prospectus, assuming the issuance and sale of $4.0 million of our common shares pursuant to this offering, or 5,633,803 common shares at an assumed offering price of $0.71 per share, the last reported sale price of our common shares on the NASDAQ on September 3, 2015.

As of June 30, 2015, we had $8.2 million in total cash reserves that consist of our cash and cash equivalents including our current and non-current restricted cash. On an "as further adjusted" basis, as described above and taking into account the starting cash balance of June 30, 2015, our total cash reserves amounts to approximately $14.7 million, which includes the net proceeds from the sale of the vessel-owning subsidiaries, as discussed above.

There have been no significant adjustments to our capitalization since June 30, 2015, as so adjusted.

You should read the information below in connection with the section of this prospectus supplement entitled "Use of Proceeds", our Report on Form 6-K filed with the SEC on September 4, 2015 and the audited consolidated financial statements and related notes for the year ended December 31, 2014, included in our annual report on Form 20-F, filed with the SEC on April 17, 2015, and incorporated by reference herein.

		Actual				As Adjusted				As Further Adjusted
Long-term debt associated with assets held for sale:		$	58,828,800			$	—			$	—
Long-term debt, including current portion:			160,873,276				159,920,526				159,920,526
Total debt (1) (2):			219,702,076				159,920,526				159,920,526
Preferred shares, $0.001 par value; 25,000,000 authorized, none issued and outstanding, actual, as adjusted and as further adjusted			—				—				—
Class A common shares, $0.001 par value; 750,000,000 authorized, 24,909,142 issued and outstanding, actual and as adjusted, and 30,655,621 issued and outstanding as further adjusted (3)			24,909				24,909				30,655
Class B common shares, $0.001 par value; 5,000,000 authorized, none issued and outstanding, actual, as adjusted and as further adjusted			—				—				—
Additional paid-in capital (3)			535,724,312				535,724,312				539,472,566
Accumulated deficit			(394,544,818	)			(394,544,818	)			(394,624,818	)
Total shareholders' equity			141,204,403				141,204,403				144,878,403
Total capitalization		$	360,906,479			$	301,124,929			$	304,798,929

 

(1)	All of our indebtedness is secured, with the exception of our $25.0 million indebtedness relating to our Unsecured Notes.
(2)	Total debt does not include the fair value of our derivative liabilities, which was $0.3 million as of June 30, 2015.
(3)	Excludes 1,680,000 common shares reserved for issuance under our 2014 Equity Incentive Plan.

PRICE RANGE OF OUR COMMON SHARES

Our common shares commenced trading on the Nasdaq Global Market on August 9, 2007 under the symbol "PRGN." On March 24, 2010, our common shares stopped trading on the Nasdaq Global Market and commenced trading on the New York Stock Exchange under the symbol "PRGN." Effective with the open of trading on April 19, 2013, our common shares ceased trading on the New York Stock Exchange and commenced trading on the Nasdaq Global Market under the symbol "PRGN." The following table sets forth the high and low closing prices for each of the periods indicated for our common shares, as adjusted for the 10-for-1 reverse stock split effective November 5, 2012.

		High				Low
For the year ended December 31,
2010		$	51.60			$	33.90
2011		$	34.40			$	5.90
2012		$	9.50			$	1.97
2013		$	9.11			$	2.56
2014		$	8.09			$	2.31
		High				Low
For the quarter ended
March 31, 2013		$	5.44			$	2.56
June 30, 2013		$	5.35			$	3.54
September 30, 2013		$	9.11			$	4.00
December 31, 2013		$	7.51			$	4.58
March 31, 2014		$	8.09			$	6.03
June 30, 2014		$	6.90			$	4.96
September 30, 2014		$	5.96			$	3.99
December 31, 2014		$	3.81			$	2.31
March 31, 2015		$	2.66			$	0.95
June 30, 2015		$	0.90			$	0.68
		High				Low
For the month ended
February 2015		$	1.95			$	1.78
March 2015		$	1.78			$	0.95
April 2015		$	0.90			$	0.70
May 2015		$	0.83			$	0.68
June 2015		$	0.73			$	0.68
July 2015		$	1.15			$	0.60
August 2015		$	1.00			$	0.63
September 2015 (1)		$	0.76			$	0.69

(1) Through and including September 3, 2015.

PLAN OF DISTRIBUTION

We have entered into an equity distribution agreement with Maxim Group LLC pursuant to which we may issue and sell up to $4.0 million of our common shares from time to time solely through Maxim Group LLC acting as agent. A copy of the equity distribution agreement has been filed as an exhibit to the registration statement of which this prospectus supplement forms a part.

Upon delivery of a placement notice and subject to the terms and conditions of the equity distribution agreement, Maxim Group LLC may sell our common shares by any method permitted by law deemed to be an "at-the-market" offering as defined in Rule 415 promulgated under the Securities Act, including sales made directly on the NASDAQ Global Market, on any other existing trading market for our common shares or to or through a market maker. Maxim Group LLC may also sell our common shares by any other method permitted by law, including in privately negotiated transactions. We or Maxim Group LLC may terminate the equity distribution agreement and the offering of our common shares upon notice.

We will pay Maxim Group LLC in cash, upon each sale of our common shares pursuant to the equity distribution agreement, a commission equal to 3.15% of the aggregate gross proceeds from the sale of our common shares. Because there is no minimum offering amount required as a condition to this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. We have agreed to reimburse Maxim Group LLC upon request for its reasonable costs and out-of-pocket expenses incurred in connection with this offering, including the fees and disbursements of its legal counsel of up to $50,000, not to exceed $100,000 without our approval. Additionally, we have agreed to reimburse Maxim Group LLC $7,500 for its legal fees on each bringdown date while this offering is open.  We have also granted Maxim Group LLC a right of first refusal to act as our exclusive sales agent for the sale of up to an additional $6.0 million of common shares during the 12 month period following the date of this prospectus supplement.

Settlement for sales of common shares will occur on the third business day following the date on which any sales are made, or on some other date that is agreed upon by us and Maxim Group LLC in connection with a particular transaction, in return for payment of the net proceeds to us. There is no arrangement for funds to be received in an escrow, trust or similar arrangement. Sales of our common shares as contemplated in this prospectus supplement will be settled through the facilities of The Depository Trust Company or by such other means as we and Maxim Group LLC may agree upon.

Maxim Group LLC will act as sales agent on a commercially reasonable efforts basis consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the NASDAQ Global Market. In connection with the sale of the common shares on our behalf, Maxim Group LLC will be deemed to be an "underwriter" within the meaning of the Securities Act and the compensation of Maxim Group LLC will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to Maxim Group LLC against certain civil liabilities, including liabilities under the Securities Act.

The offering of our common shares pursuant to the equity distribution agreement will terminate upon the earlier of the (i) sale of all of our common shares provided for in this prospectus supplement, or (ii) termination of the equity distribution agreement as permitted therein. We may terminate the equity distribution agreement with 30 days of prior written notice. Maxim Group LLC may terminate the equity distribution agreement at any time upon written notice.

Maxim Group LLC and its affiliates may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services they may in the future receive customary fees. To the extent required by Regulation M, Maxim Group LLC will not engage in any market making activities involving our common shares while the offering is ongoing under this prospectus supplement.

This prospectus supplement in electronic format may be made available on a web site maintained by Maxim Group LLC and Maxim Group LLC may distribute this prospectus supplement electronically.

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

We estimate the expenses in connection with the distribution of our common shares in this offering, other than underwriting discounts, will be as set forth in the table below.

Printing and Engraving Expenses		$	15,000
Legal Fees and Expenses		$	125,000
Accountants' Fees and Expenses		$	45,000
Miscellaneous Costs		$	15,000
Total		$	200,000

LEGAL MATTERS

The validity of the common shares offered hereby and other matters relating to Marshall Islands and United States law will be passed upon for us by Seward & Kissel LLP, One Battery Park Plaza, New York, New York 10004. Ellenoff Grossman & Schole LLP, New York, New York, represented the underwriter in this offering.

EXPERTS

The consolidated financial statements of Paragon Shipping Inc. appearing in Paragon Shipping Inc.'s Annual Report (Form 20-F) for the year ended December 31, 2014 and the effectiveness of Paragon Shipping Inc.'s internal control over financial reporting as of December 31, 2014, have been audited by Ernst & Young (Hellas) Certified Auditors-Accountants S.A., independent registered public accounting firm, as set forth in their reports thereon (which contains an explanatory paragraph describing conditions that raise substantial doubt about the Company's ability to continue as a going concern as described in Note 3 to the consolidated financial statements), included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing. The address of Ernst & Young (Hellas) Certified Auditors-Accountants S.A. is 8B Chimarras, 151 25, Maroussi, Athens, Greece.

WHERE YOU CAN FIND MORE INFORMATION

As required by the Securities Act, we filed a registration statement relating to the securities offered by this prospectus with the SEC. This prospectus is a part of that registration statement, which includes additional information.

Government Filings

We have filed with the SEC a registration statement including exhibits and schedules thereto on Form F-3 under the Securities Act with respect to the common shares offered hereby. This prospectus supplement and the accompanying prospectus, which form a part of the registration statement, do not contain all of the information in the registration statement, as permitted by SEC rules and regulations. For further information with respect to the Company and the securities offered hereby, reference is made to the registration statement. In addition, we are subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, and file reports and other information with the SEC. You can read and copy any materials we file with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You can obtain information about the operation of the SEC's Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site that contains information we file electronically, which you can access over the internet at http://www.sec.gov. Our filings are also available on our website at www.paragonship.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus supplement and the accompanying prospectus.

Information Provided by the Company

We will furnish holders of our common shares with annual reports containing audited financial statements and a report by our independent registered public accounting firm. The audited financial statements will be prepared in accordance with U.S. GAAP. As a "foreign private issuer," we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. While we furnish proxy statements to shareholders in accordance with the rules of any stock exchange on which our common shares may be listed in the future, those proxy statements do not conform to Schedule 14A of the proxy rules promulgated under the Securities Exchange Act. In addition, as a "foreign private issuer," our officers and directors are exempt from the rules under the Securities Exchange Act relating to short swing profit reporting and liability.

DOCUMENTS INCORPORATED BY REFERENCE

The SEC allows us to "incorporate by reference" information that we file with it. This means that we can disclose important information to you by referring you to those filed documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC prior to the termination of this offering will also be considered to be part of this prospectus and will automatically update and supersede previously filed information, including information contained in this document.

This prospectus incorporates by reference the following documents:

·

our Annual Report on Form 20-F for the fiscal year ended December 31, 2014, filed with the SEC on April 17, 2015;

·

our Report on Form 6-K, filed with the SEC on April 24, 2015;

·

our Report on Form 6-K, filed with the SEC on April 30, 2015;

·

our Report on Form 6-K, filed with the SEC on May 19, 2015;

·

our Report on Form 6-K, filed with the SEC on May 26, 2015;

·

our Report on Form 6-K, filed with the SEC on July 17, 2015; and

·

our Report on Form 6-K, filed with the SEC on September 4, 2015.

We are also incorporating by reference all subsequent annual reports on Form 20-F that we file with the SEC and certain reports on Form 6-K that we furnish to the SEC after the date of this prospectus (if they state that they are incorporated by reference into this prospectus) until we file a post-effective amendment indicating that the offering of the securities made by this prospectus has been terminated. In all cases, you should rely on the later information over different information included in this prospectus or the prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus and any accompanying prospectus supplement. We have not, and any underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and any underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any accompanying prospectus supplement as well as the information we previously filed with the SEC and incorporated by reference, is accurate as of the dates on the front cover of those documents only. Our business, financial condition and results of operations and prospects may have changed since those dates.

You may request a paper copy of our SEC filings, at no cost, by writing to or telephoning us at the following address:

Paragon Shipping Inc.

15, Karamanli Avenue

Voula, 16673

Athens, Greece

(011) (30) (210) 8914 600 (telephone number)

These reports may also be obtained on our website at www.paragonship.com. None of the information on our website is a part of this prospectus.

S-15

---

PRELIMINARY PROSPECTUS

Subject to completion, dated November 22, 2013

$250,000,000

PARAGON SHIPPING INC.

Through this prospectus we may periodically offer:

 

We may also offer securities of the types listed above that are convertible or exchangeable into one or more of the securities listed above.

 

The aggregate offering price of all securities issued under this prospectus may not exceed $250,000,000.  The securities issued under this prospectus may be offered directly or through underwriters, agents or dealers.  The names of any underwriters, agents or dealers will be included in a supplement to this prospectus.

 

The prices and other terms of the securities that we will offer will be determined at the time of their offering and will be described in a supplement to this prospectus.

Our common shares are traded on the Nasdaq Global Market under the symbol "PRGN."

 

The aggregate market value of our outstanding common stock held by non-affiliates as of November 21, 2013 is $51,895,110, based on 17,441,442 shares of common stock outstanding, of which 10,879,478 are held by non-affiliates, and a closing price on the Nasdaq Global Market of $4.77 on that date.  As of the date hereof, we have not offered any securities pursuant to General Instruction I.B.5 of Form F-3 during the twelve calendar month period that ends on and includes the date hereof.

 

An investment in these securities involves risks. See the section entitled "Risk Factors" beginning on page 10 of this prospectus, and other risk factors contained in the applicable prospectus supplement and in the documents incorporated by reference herein and therein.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The date of this prospectus is              , 2013

Table of Contents

 

Unless otherwise indicated, all references to "dollars" and "$" in this prospectus are to, and amounts presented in, United States dollars and financial information presented in this prospectus that is derived from financial statements incorporated by reference is prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. We have a fiscal year end of December 31.

This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a shelf registration process. Under the shelf registration process, we may sell shares of common stock (including related preferred stock purchase rights), shares of preferred stock, debt securities (and related guarantees), warrants, purchase contracts, rights and units described in this prospectus from time to time in one or more offerings, up to a total of $250,000,000. This prospectus only provides you with a general description of the securities we may offer. Each time we offer securities, we will provide you with a supplement to this prospectus that will describe the specific information about the securities being offered and the specific terms of that offering. The supplement may also add, update or change the information contained in this prospectus. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the prospectus supplement. Before purchasing any securities, you should read carefully both this prospectus and any supplement, together with the additional information described below.

This prospectus and any prospectus supplement are part of a registration statement we filed with the SEC and do not contain all the information in the registration statement. Forms of the indenture and other documents establishing the terms of the offered securities are filed as exhibits to the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. For further information about us or the securities offered hereby, you should refer to the registration statement, which you can obtain from the SEC as described below under the section entitled "Where You Can Find Additional Information."

You should rely only on the information contained or incorporated by reference in this prospectus and in any prospectus supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and the applicable supplement to this prospectus is accurate as of the date on its respective cover, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates.

SUMMARY

This section summarizes some of the information that is contained in or incorporated by reference in this prospectus. As an investor or prospective investor, you should review carefully all of the information contained or incorporated by reference in this prospectus and any accompanying prospectus supplement, including the "Risk Factors" and our financial statements and related notes contained herein and therein, before making an investment decision.

Unless expressly stated otherwise, all references in this prospectus to "we," "us," "our," the "Company" or similar references mean Paragon Shipping Inc. and its subsidiaries. In addition, we use the term deadweight, or dwt, in describing the size of vessels. Dwt expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.

Our Company

We are a global provider of shipping transportation services. We specialize in transporting drybulk cargoes, including such commodities as iron ore, coal, grain and other materials, along worldwide shipping routes.

As of the date of this prospectus, our operating fleet encompasses 13 modern and diversified drybulk carriers consisting of eight Panamax drybulk carriers, two Supramax drybulk carriers and three Handysize drybulk carriers with an aggregate capacity of approximately 816,472 dwt and an average age of 7.8 years.

In addition, we have agreed to acquire one Handysize newbuilding drybulk carrier that we expect to take delivery of in the fourth quarter of 2013 (which will be fully financed under our existing credit facilities), two Ultramax newbuilding drybulk carriers, which we expect to be delivered in the second and third quarters of 2014, respectively, and two 4,800 TEU newbuilding containerships, which we expect to be delivered in the third quarter of 2014. We have granted Box Ships the option to acquire our newbuilding containerships by way of a novation of the relevant construction contract from us at any time prior to the applicable vessel's delivery to us or purchase of such vessel at any time after its delivery to us, so long as the vessel is owned by us at such time.

Prior to April 2011, we owned and operated three containerships. In the second quarter of 2011, we sold to Box Ships Inc., or Box Ships, our wholly-owned subsidiary at the time, our three containerships. Box Ships completed its initial public offering in April 2011, and we continue to own 3,437,500 common shares of Box Ships, which, as of the date of this prospectus, represented approximately 13.8% of the issued and outstanding common shares of Box Ships.

Allseas Marine S.A., or Allseas, provides commercial and technical management services for our fleet, pursuant to long-term management agreements between Allseas and each of our vessel-owning subsidiaries. Technical management services include, among other things, arranging for and managing crews, vessel maintenance, drydocking, repairs, insurance, maintaining regulatory and classification society compliance and providing technical support. Commercial management services include, among other things, negotiating charters for our vessels, monitoring various types of charters, monitoring the performance of our vessels, locating, purchasing, financing and negotiating the purchase and sale of our vessels, obtaining insurance for our vessels and finance and accounting functions. In addition, we have entered in to an accounting agreement with Allseas, pursuant to which Allseas provides us with financial accounting and financial reporting services.

Allseas also provides commercial and technical management services for Box Ships' fleet, as well as financial accounting and financial reporting services for Box Ships.

Allseas, a Liberian corporation based in Athens, Greece, was formed in 2000 as a ship management company and is wholly-owned by our Chairman, President and Chief Executive Officer, Mr. Michael Bodouroglou. We believe that Allseas has established a reputation in the international shipping industry for operating and maintaining a fleet with high standards of performance, reliability and safety.

Our Fleet

The following table presents certain information concerning our fleet as of the date of this prospectus:

Operating Drybulk Fleet

Handysize Drybulk Newbuildings we have agreed to acquire

Ultramax Drybulk Newbuildings we have agreed to acquire

Containership Newbuildings we have agreed to acquire

 

____________

(1)           We have granted Box Ships the option to acquire this containership by way of a novation of the construction contract from us at any time prior to the vessel's delivery to us, or purchase of the vessel at any time after its delivery to us, so long as the vessel is owned by us at such time. In addition, we have granted Box Ships a right of first offer on any proposed sale, transfer or other disposition of the vessel.

Recent Developments

Debt Restructuring and Loan Facilities

Due to the intense fluctuation in the drybulk charter market and related fluctuation in vessel values, we were not in compliance with several financial and security coverage ratio covenants contained in our loan and credit facilities during 2012, and as such, we have deposited additional security to cure the shortfall in the security cover required to be maintained under the relevant facilities, obtained waivers of the relevant covenant breaches, entered into amendments to or refinanced the affected debt, as discussed below.

In 2012, we entered into supplemental agreements and, subject to certain conditions, agreed to amended terms with (i) Unicredit Bank AG in respect of our loan agreement dated November 19, 2007, (ii) the Bank of Scotland plc in respect of our loan agreement dated December 4, 2007, (iii) The Governor and Company of the Bank of Ireland, or the Bank of Ireland, in respect of our loan agreement dated March 30, 2009, and (iv) HSBC Bank Plc in respect of our loan agreement dated July 2, 2010. Pursuant to these agreements, we obtained waivers of certain financial and security cover ratio covenant breaches and agreed to the relaxation of several financial and security coverage ratio covenants, the deferral of a portion of our scheduled quarterly installments and, in the case of the loan agreements with the Bank of Ireland and the Bank of Scotland, the extension of the loan agreements to the second quarter of 2017 and to the third quarter of 2015, respectively. In addition, in respect to the loan agreement with the Bank of Scotland, we agreed to a payment of $2.8 million in order to facilitate the full and final settlement of the portion of the loan of one of the syndicate members equal to $4.7 million. We refer to the amendments described above collectively as our debt restructuring program.

Several of the agreements in our debt restructuring program were subject to a number of conditions, including (i) the entry into definitive documentation, (ii) an equity increase of $10.0 million within 90 days after the signing of such definitive documentation and (iii) all lenders agreeing to similar restructuring terms and granting similar waivers of covenant breaches and terms.

Subsequent to December 31, 2012, we finalized the definitive documentation with the remaining of our lenders, Commerzbank AG, HSH Nordbank AG and Nordea Bank Finland Plc, relating to our debt restructuring program. In addition, we received the additional $10.0 million in equity required to finalize our debt restructuring program through the issuance of 4,901,961 common shares to Innovation Holdings S.A., or Innovation Holdings, a company controlled by our Chairman, President and Chief Executive Officer, in a private placement that closed on December 24, 2012.

Accordingly, subsequent to December 31, 2012, all conditions required to complete our debt restructuring program were satisfied with retroactive effect as of December 31, 2012 and thus, our debt restructuring program is finalized and effective from December 31, 2012.

On May 17, 2013, we signed an agreement with China Development Bank ("CDB") for a $69.0 million credit facility to partially finance our two 4,800 TEU containerships currently under construction, that are expected to be delivered in the third quarter of 2014. The CDB credit facility is available for drawdown upon the delivery of the vessels subject to certain contingencies and conditions. Box Ships will act jointly and severally as guarantor of the CDB credit facility, along with the Company, as approved by the shareholders of Box Ships on November 12, 2013, at Box Ships' 2013 Annual General Meeting of Shareholders. The CDB credit facility will be used to finance the lower of 60% of the construction cost of the vessels, or 80% of the vessels' market value at delivery. The facility matures ten years after the drawdown date. Under the terms of the credit facility, amounts borrowed will bear interest at LIBOR, plus a margin of 4.00%. In relation to the option we have granted to Box Ships to acquire the two 4,800 TEU containerships, the facility can be freely transferred to Box Ships in the event such option is declared.

 

On August 21, 2013, we agreed with HSBC Bank Plc to extend the existing waivers relating to the financial covenants of EBITDA coverage ratio and interest coverage ratio for two quarters. More specifically, the expiration date of the respective waivers was extended from January 1, 2014 to July 1, 2014.

On September 13, 2013, we agreed with Unicredit Bank AG to extend the expiration date of the existing waiver relating to the EBITDA coverage ratio for two quarters from January 1, 2014 to July 1, 2014, for a nominal fee and an advance payment of $1.5 million to partially prepay the upcoming three quarterly loan installments, starting with the installment due in the fourth quarter of 2013. The advance payment of $1.5 million was paid on September 13, 2013.

Following the finalization of our debt restructuring program and after giving effect to the respective supplemental and restating agreements, we regained compliance with all covenants with respect to our loan and credit facilities. As of September 30, 2013, we remain in compliance with each of the covenants with respect to which we were in breach as of December 31, 2012, as follows:

·

We obtained waivers of the requirement of certain of our credit facilities to maintain a maximum ratio of financial indebtedness to EBITDA of between 5.00:1.00 and 7.00:1.00. These waivers expire between July 1, 2014 and January 1, 2015. Upon expiration of these waivers, we will again be subject to the requirements of these covenants in place on December 31, 2012, unless we are able to obtain a further waiver or amendment of these covenants. The calculation of the EBITDA coverage ratio varies depending on its definition under our credit facilities. As of September 30, 2013, our EBITDA coverage ratio ranged between 7.14:1.00 and 9.74:1.00. Without the existence of such waivers, we would have been in breach of the respective covenant as of September 30, 2013.

·

Under an amendment to certain of our credit facilities, we are required to maintain a market adjusted net worth of a minimum of $75.0 million until December 31, 2013, and $100.0 million thereafter. As of September 30, 2013, our market adjusted net worth was $153.2 million.

·

We obtained waivers of the requirement of certain of our credit facilities to maintain a minimum ratio of EBITDA to net interest expense of 2.50:1.00 until December 31, 2015 and 3.00:1.00 thereafter. These waivers expire between July 1, 2014 and January 1, 2015. Upon expiration of these waivers, we will again be subject to the requirements of these covenants in place on December 31, 2012, unless we are able to obtain a further waiver or amendment of these covenants. The calculation of the interest coverage ratio varies depending on its definition under our credit facilities. As of September 30, 2013, our interest coverage ratio ranged between 2.79:1.00 and 2.90:1.00. Without the existence of such waivers, we would have been in breach of the respective covenant as of September 30, 2013.

·

Under an amendment to certain of our credit facilities, we are required to maintain positive working capital as defined in the respective loan agreement. As of September 30, 2013, our working capital was $51.9 million.

·

Under amendments to certain of our credit facilities, the minimum required security coverage ratio of the aggregate market value of the vessels securing the applicable loan to the principal amount outstanding under such loan was relaxed or waived for a certain period.

Without an improvement in charter rates and vessel values, we may not be able to maintain compliance with these financial covenants, as amended or upon the expiration of the applicable waivers. In July 2014, several of the waivers obtained following the completion of the Company's debt restructuring expire. Given the current drybulk market, it is probable that the Company will not be in compliance with the EBITDA coverage ratio contained in two of its loan and credit facilities, as of September 30, 2014, unless the chartering market experiences a significant improvement between now and then. As a result of the cross default provisions included in our loan agreements, actual breaches existing under our credit facilities could result in defaults under all of our debt and the acceleration of such debt by our lenders. These circumstances require the Company's total long-term debt to be classified as current. We are currently in discussions with our respective lenders with respect to the aforementioned covenants and, although there can be no assurance that a successful resolution will be reached with our lenders, we believe that these negotiations will be successful and that our lenders will not demand payment of the loans before their maturity. However, our lenders could accelerate our indebtedness and foreclose their liens on our vessels, which would impair our ability to conduct our business and continue as a going concern.

Loan to and Investment in Affiliate

On March 11, 2013, we agreed to amend the terms of our loan agreement with Box Ships relating to an unsecured loan of up to $30.0 million that we agreed to provide to Box Ships in May 2011 for the purpose of partly financing the acquisition of Box Ships' initial fleet and for general corporate purposes. Under the terms of the amended agreement, the maturity of the loan was extended from April 19, 2013 to April 19, 2014 and during the remaining term of the loan, Box Ships was required to make quarterly principal installment payments in the amount of $1.0 million each, commencing on April 19, 2013, with a final balloon payment of $9.0 million due on the maturity date. In consideration of the amendment of the loan agreement, Box Ships agreed to pay an amendment fee of $65,000 and to increase the margin from 4.0% to 5.0%. Pursuant to the amended loan agreement, on April 19, 2013 and on July 19, 2013, Box Ships proceeded with the first two quarterly principal installment payments of $1.0 million each. In addition, on August 5, 2013, Box Ships prepaid an amount of $5.0 million and reduced the outstanding balance of the respective loan to $6.0 million.  On October 18, 2013, Box Ships proceeded with the full repayment of the outstanding balance of the loan provided by the Company, plus accrued interest, in an aggregate amount of $6.1 million.

Based on the closing price of Box Ships' common share as of September 30, 2013, of $4.08, the fair value of the investment in Box Ships was $14.0 million. As of September 30, 2013, the Company considered the difference between the fair value and the book value of the investment in Box Ships as other than temporary and therefore the investment was impaired by $5.4 million, representing the difference between the fair value and the book value of the Company's investment in Box Ships as of September 30, 2013.

Transfer to Nasdaq Global Market

Effective April 19, 2013, our common shares ceased trading on the New York Stock Exchange and commenced trading on the Nasdaq Global Market under the symbol "PRGN." We voluntarily transferred the listing of our common shares to the Nasdaq Global Market, as we believe this action will help us achieve greater long-term flexibility and cost efficiency.

Fleet Employment

In July 2013, we agreed with Morgan Stanley Capital Group Inc., the previous charter of the M/V Coral Seas and the M/V Deep Seas, on the early termination of these time charter agreements for a total cash compensation of $2.3 million. The total cash compensation of $2.3 million, which was collected in July 2013, was agreed based on the difference between the vessels' gross time charter rates under the respective time charter agreements, and the existing equivalent market time charter rates.

Follow-On Public Offering

On September 27, 2013, we closed a public offering of 6,000,000 of our 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. The gross proceeds from the offering before the underwriting discount and other offering expenses payable by us 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 amounted to $31.9 million.

Newbuilding Program

Following the completion of our public offering of 6,000,000 common shares, on October 3, 2013, we completed the acquisition of shipbuilding contracts for two Ultramax newbuilding drybulk carriers from Allseas. The Ultramax newbuildings have a carrying capacity of 63,500 dwt each, and are currently under construction at Yangzhou Dayang Shipbuilding Co., Ltd., member of Sinopacific Shipbuilding Group, with scheduled delivery on May 31, 2014 and July 31, 2014, respectively.

The acquisition cost of these two newbuildings is $26.5 million per vessel, or $53.0 million in the aggregate. In October 2013, we paid an amount of $8.1 million per vessel, and the balance of the contract price, or $18.4 million per vessel, will be payable upon the delivery of each vessel.

 

Corporate Structure

We were incorporated under the laws of the Republic of the Marshall Islands on April 26, 2006. Our executive offices are located at 15 Karamanli Ave, GR 166 73, Voula, Greece. Our telephone number at that address is +30 210 891 4600. We also maintain a website at www.paragonship.com. Information contained on our website does not constitute part of this prospectus.

We own our vessels through separate wholly-owned subsidiaries that are incorporated in Liberia or the Republic of the Marshall Islands.

The Securities We May Offer

We may use this prospectus to offer our:

·

common shares, including related preferred stock purchase rights;

·

preferred shares;

·

debt securities, which may be guaranteed by one or more of our subsidiaries;

·

warrants;

·

purchase contracts;

·

rights; and

·

units.

We may also offer securities of the types listed above that are convertible or exchangeable into one or more of the securities listed above.

A prospectus supplement will describe the specific types, amounts, prices, and detailed terms of any of these offered securities and may describe certain risks in addition to those set forth below associated with an investment in the securities. Terms used in the prospectus supplement will have the meanings described in this prospectus, unless otherwise specified.

RISK FACTORS

An investment in our common shares involves a high degree of risk and uncertainty. You should carefully consider the risks described below together with these discussed under the caption "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2012, filed with the SEC on April 3, 2013 and incorporated by reference herein, as well as the other information included in this prospectus and the other documents we have incorporated by reference in this prospectus, including the section entitled "Risk Factors" in future Annual Reports before deciding to invest in our common shares. If any of the risks occur, our business, financial conditions or results of operations may be materially and adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of the risks below.

The continued downturn in the drybulk carrier charter market has had a significant adverse impact on the market price of our common shares and may affect our ability to maintain our listing on the Nasdaq Global Market or any other securities exchange on which our common shares may be traded.

Prior to April 19, 2013, our common shares traded on the New York Stock Exchange under the symbol "PRGN." Effective with the open of trading on April 19, 2013, our common shares ceased trading on the New York Stock Exchange and commenced trading on the Nasdaq Global Market under the symbol "PRGN." The continued weakness in the drybulk charter market has caused the price of our common shares to decline significantly since 2008. In November 2012, we conducted a 10-for-1 reverse stock split of our issued and outstanding common shares in order to continue to meet the minimum continued listing standards of the New York Stock Exchange.  Further declines in the trading price of our common shares may cause us to fail to meet certain of the continuing listing standards of the Nasdaq Global Market, which could result in the delisting of our common shares. If our shares cease to be traded on the Nasdaq Global Market or another national securities exchange, the price at which you may be able to sell your common shares of the Company may be significantly lower than their current trading price or you may not be able to sell them at all. The failure of our common shares to be listed on the Nasdaq Global Market or another national securities exchange may also result in defaults under our loan and credit facilities. We are currently in compliance with all applicable Nasdaq listing standards.

In order to incentivize Allseas' continued services to us, we have entered into a tripartite agreement with Allseas and Loretto, pursuant to which in the event of a capital increase, an equity offering, or the issuance of common shares to a third party or third parties in the future, other than common shares issued pursuant to our equity incentive plan, we have agreed to issue, at no cost to Loretto, additional common shares in an amount equal to 2% of the total number of common shares issued pursuant to such capital increase, equity offering or third party issuance, as applicable.

In addition, as of the date of this prospectus, our Chairman, President and Chief Executive Officer beneficially owns a total of 6,520,364 common shares, or approximately 37.4% of our outstanding common shares, all of which are held indirectly through Innovation Holdings or Loretto. The common shares beneficially owned by Mr. Bodouroglou are "restricted securities" within the meaning of Rule 144 under the U.S. Securities Act of 1933, as amended, or the Securities Act, and may not be transferred unless they have been registered under the Securities Act or an exemption from registration is available. Upon satisfaction of certain conditions, Rule 144 permits the sale of certain amounts of restricted securities six months following the date of acquisition of the restricted securities from us.

We have entered into a registration rights agreement, dated December 24, 2012, with Innovation Holdings, a Marshall Islands corporation controlled by Mr. Bodouroglou, pursuant to which we have granted Innovation Holdings the right, subject to certain terms and conditions, to require us to register under the Securities Act up to 4,901,961 common shares held by Innovation Holdings for offer and sale to the public, including by way of an underwritten public offering.

As our common shares become eligible for sale under Rule 144, or if Innovation Holdings exercises its registration rights pursuant to the registration rights agreement discussed above, the volume of sales of our common shares on the Nasdaq Global Market or such other securities exchange on which our common shares are listed may increase, which could reduce the market value of our common shares.

We cannot assure you that an active and liquid public market for our common shares will continue.

Our common shares trade on the Nasdaq Global Market under the symbol "PRGN." We cannot assure you that an active and liquid public market for our common shares will continue. Since 2008, the U.S. stock market has experienced extreme price and volume fluctuations. In addition, the seaborne transportation industry has been highly unpredictable and volatile. If the volatility in the market or the drybulk industry continues or worsens, it could have an adverse effect on the market price of our common shares and may impact a potential sale price if holders of our common shares decide to sell their shares.

The market price of our common shares may be influenced by many factors, many of which are beyond our control, including those described under the caption "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2012, filed with the SEC on April 3, 2013, and the following:

·

actual or anticipated variations in our operating results;

·

changes in our cash flow or earnings estimates;

·

publication of research reports about us or the industry in which we operate;

·

fluctuations in the seaborne transportation industry, including fluctuations in the drybulk market;

·

increases in market interest rates that may lead purchasers of common shares to demand a higher expected yield which, would mean our share price would fall;

·

changes in applicable laws or regulations, court rulings and enforcement and legal actions;

·

changes in market valuations of similar companies;

·

announcements by us or our competitors of significant contracts, acquisitions or capital commitments;

·

adverse market reaction to any increased indebtedness we incur in the future;

·

additions or departures of key personnel;

·

actions by institutional shareholders;

·

speculation in the press or investment community;

·

terrorist attacks;

·

economic and regulatory trends; and

·

general market conditions.

As a result of these and other factors, investors in our common shares may not be able to resell their shares at or above the price they paid for such shares. These broad market and industry factors may materially reduce the market price of our common shares, regardless of our operating performance.

We have not been in compliance with certain of the financial and other covenants contained in certain of our loan and credit facilities, for which we have obtained waivers or amendments or refinanced the affected debt. If we are not in compliance with the original covenants when our existing waivers expire and if we are not successful in obtaining additional waivers or amendments or refinancing the affected debt, our lenders may declare an event of default and accelerate our outstanding indebtedness, which would impact our ability to continue to conduct our business.

Our loan and credit facilities, which are secured by mortgages on our vessels, require us to maintain specified financial ratios mainly to ensure that the market value of the mortgaged vessels under the applicable credit facility, as determined in accordance with the terms of that agreement, does not fall below a certain percentage of the outstanding amount of the loan, which we refer to as a security cover ratio, and to satisfy certain other financial covenants. In general, these other financial covenants require us to maintain (i) minimum liquidity; (ii) a maximum leverage ratio; (iii) a minimum interest coverage ratio; (iv) a minimum market adjusted net worth; (v) a minimum debt service coverage ratio; and (vi) a minimum working capital.

A violation of the security cover ratio, unless cured as set forth under the applicable loan or credit facility, or a violation of any of the financial covenants contained in our loan and credit facilities constitutes an event of default under our loan and credit facilities, which, unless waived or modified by our lenders, provides our lenders with the right to require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet and accelerate our indebtedness and foreclose their liens on our vessels, or may cause us to reclassify our indebtedness as current liabilities, which would impair our ability to continue to conduct our business. As a result of intense fluctuation in the drybulk charter market and the related fluctuation in vessel values, we were not in compliance with certain financial and security cover ratio covenants contained in certain of our loan and credit facilities in the past, and as such, we obtained waivers of the relevant covenant breaches, entered into amendments to the relevant facilities or refinanced the affected debt and deposited additional security to cure the shortfall in the security cover required to be maintained under the relevant facilities. See "Prospectus Summary—Recent Developments—Debt Restructuring and Loan Facilities."

We may not be successful in obtaining additional waivers of covenant breaches or amendments to covenants contained in our loan and credit facilities or refinancing the affected debt if we are not in compliance with the original covenants in our loan and credit facilities when our existing waivers expire. For instance, given the current drybulk market, it is probable that we will not be in compliance with the EBITDA coverage ratio contained in two of our loan and credit facilities, as of September 30, 2014, unless the chartering market experiences a significant improvement between now and then. Accordingly, our lenders could accelerate our indebtedness and foreclose their liens on our vessels, which would impair our ability to conduct our business and continue as a going concern. Furthermore, all of our loan and credit facilities contain a cross-default provision that may be triggered by a default under one of our other loan or credit facilities. A cross-default provision means that a default on one loan would result in a default on all of our other loans. Because of the presence of cross default provisions in all of our loan and credit facilities, the refusal of any one lender to grant or extend a waiver could result in all of our indebtedness being accelerated even if our other lenders have waived covenant defaults under the respective loan and credit facilities. If our outstanding indebtedness is accelerated in full or in part, in the current financing environment we may not be able to refinance our debt or obtain additional financing and we could lose our vessels if our lenders foreclose their liens, which would adversely affect our ability to conduct our business. Moreover, any refinancing or additional financing may be more expensive and carry more onerous terms than those in our existing loan and credit facilities. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our loan and credit facilities.

We will need to procure significant additional financing in order to complete the construction of our newbuilding vessels, which may be difficult to obtain on acceptable terms or at all.

As of the date of this prospectus, our newbuilding program comprises of one Handysize drybulk carrier under construction at Zhejiang Ouhua Shipbuilding, or Ouhua, scheduled for delivery in the fourth quarter of 2013; two 4,800 TEU containerships under construction at Ouhua, scheduled for delivery in the third quarter of 2014; and two Ultramax drybulk carriers under construction at Yangzhou Dayang Shipbuilding Co. Ltd., scheduled for delivery in the second and third quarters of 2014. The estimated total contractual costs of our newbuilding vessels amounted to $191.3 million, of which an aggregate of $149.7 million was outstanding as of the date of this prospectus and is due upon delivery of the vessels.

In order to complete the construction of our newbuilding program, we will need to procure significant additional financing. In 2011, we entered into a syndicated secured loan facility led by Nordea to partially finance the construction of four newbuilding Handysize vessels, of which we used $28.9 million to partially finance the delivery of two Handysize vessels delivered in May 2012 and June 2012, the M/V Prosperous Seas and the M/V Precious Seas, respectively. As of the date of this prospectus, we had up to $25.4 million in available borrowing capacity under this facility, which is available to partially finance the M/V Priceless Seas that was delivered to us in January 2013 and our remaining Handysize newbuilding vessel discussed above, and no other available borrowing capacity. In addition, On May 17, 2013, we signed an agreement with CDB for a $69.0 million to partially finance our two 4,800 TEU containerships discussed above. The CDB credit facility, which is available for drawdown upon the delivery of the vessels subject to certain contingencies and conditions, will be used to finance the lower of 60% of the construction cost of these vessels, or 80% of the vessels' market value at delivery. We have not yet secured financing for our two Ultramax drybulk newbuildings. If for any reason we fail to take delivery of the newbuilding vessels described above, we would be prevented from realizing potential revenues from these vessels, we may be required to forego deposits on construction, which amounted to an aggregate of $41.6 million as of the date of this prospectus, and we may incur additional costs and liability to the shipyard under the construction contracts.

In addition, the actual or perceived credit quality of our charterers and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require in order to meet our capital commitments, or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing at all or at a higher level than the anticipated cost, may materially affect our results of operation and our ability to implement our business strategy, including our ability to take delivery of our vessels under construction. Should additional financing not be available on favorable terms or at all, this would have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may be required to recognize additional losses relating to our investment in KLC if the value of KLC's shares declines further.

As of September 30, 2013, the fair value of the 65,896 shares of KLC owned by us was $2.6 million, based on the latest publicly available information. We acquired these shares in May 2012 and in May 2013 as a result of a settlement agreement with KLC in relation to the early termination of our time charter with KLC for the M/V Pearl Seas. As of September 30, 2013, we considered the difference between the fair value and the book value of the investment in KLC as other than temporary and therefore, the investment was impaired and a loss of $1.0 million was recorded.

If the fair value of KLC's shares declines further due to other than temporary reasons, we will be required to recognize additional losses.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includes "forward-looking statements," as defined by U.S. federal securities laws, with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events. Words such as, but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "projects," "likely," "will," "would," "could" and similar expressions or phrases may identify forward-looking statements.

All forward-looking statements involve risks and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

In addition, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include; (i) the strength of world economies; (ii) fluctuations in currencies and interest rates; (iii) general market conditions, including fluctuations in charter hire rates and vessel values that may result in defaults in the covenants contained in our loan agreements; (iv) changes in demand in the drybulk shipping industry, including the market for our vessels; (v) changes in our operating expenses, including bunker prices, dry-docking and insurance costs; (vi) changes in governmental rules and regulations or actions taken by regulatory authorities; (vii) potential liability from pending or future litigation; (viii) general domestic and international political conditions; (ix) potential disruption of shipping routes due to accidents or political events; (x) the availability of financing and refinancing; (xi) vessel breakdowns and instances of off-hire; (xii) inability to refinance existing debt, obtain additional financing on favorable terms or any financing which may result in our failure to take delivery of new vessels and default on our obligations; and (xiii) other important factors described from time to time in the reports filed by us with the SEC.

We have based these statements on assumptions and analyses formed by applying our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur.

See the section entitled "Risk Factors," on page 10 of this prospectus and in our Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed with the SEC on April 3, 2013 and incorporated by reference herein, for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These factors and the other risk factors described in this prospectus are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth our unaudited ratio of earnings to fixed charges for each of the years ended December 31, 2008, 2009, 2010, 2011, and 2012 and for the nine months ended September 30, 2013 (1). For the years ended December 31, 2011 and 2012, as well as for the nine months ended September 30, 2013, we incurred losses and thus the following table sets forth the dollar amount of the coverage deficiency.

USE OF PROCEEDS

We intend to use net proceeds from the sale of the securities as set forth in the applicable prospectus supplement.

 

CAPITALIZATION

Each prospectus supplement will include information on our consolidated capitalization.

 

DILUTION

Information about the amount by which the offering price of our common shares issued pursuant to this prospectus exceeds the net tangible book value per share of our common shares following such issuance will be included in a prospectus supplement.

 

PRICE RANGE OF SHARES OF COMMON STOCK

Our common shares commenced trading on the Nasdaq Global Market on August 9, 2007 under the symbol "PRGN." On March 24, 2010, our common shares stopped trading on the Nasdaq Global Market and commenced trading on the New York Stock Exchange under the symbol "PRGN." Effective with the open of trading on April 19, 2013, our common shares ceased trading on the New York Stock Exchange and commenced trading on the Nasdaq Global Market under the symbol "PRGN." The following table sets forth the high and low closing prices for each of the periods indicated for our common shares, as adjusted for the 10-for-1 reverse stock split effective November 5, 2012.

_______________

(1) For the period from November 1, 2013 to November 21, 2013.

PLAN OF DISTRIBUTION

We may sell or distribute the securities included in this prospectus through underwriters, through agents, to dealers, in private transactions, at market prices prevailing at the time of sale, at prices related to the prevailing market prices, or at negotiated prices.

In addition, we may sell some or all of our securities included in this prospectus, through:

·

a block trade in which a broker-dealer may resell a portion of the block, as principal, in order to facilitate the transaction;

·

purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account; or

·

ordinary brokerage transactions and transactions in which a broker solicits purchasers.

In addition, we may enter into option or other types of transactions that require us or them to deliver our securities to a broker-dealer, who will then resell or transfer the securities under this prospectus. We may enter into hedging transactions with respect to our securities. For example, we may:

·

enter into transactions involving short sales of our shares of common stock by broker-dealers;

·

sell shares of common stock short themselves and deliver the shares to close out short positions;

·

enter into option or other types of transactions that require us to deliver shares of common stock to a broker-dealer, who will then resell or transfer the shares of common stock under this prospectus; or

·

loan or pledge the shares of common stock to a broker-dealer, who may sell the loaned shares or, in the event of default, sell the pledged shares.

We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.

Any broker-dealers or other persons acting on our behalf that participate with us in the distribution of the securities, may be deemed to be underwriters, and any commissions received or profit realized by them on the resale of the securities, may be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended, or the Securities Act. As of the date of this prospectus, we are not a party to any agreement, arrangement or understanding between any broker or dealer and us with respect to the offer or sale of the securities pursuant to this prospectus.

At the time that any particular offering of securities is made, to the extent required by the Securities Act, a prospectus supplement will be distributed, setting forth the terms of the offering, including the aggregate number of securities being offered, the purchase price of the securities, the initial offering price of the securities, the names of any underwriters, dealers or agents, any discounts, commissions and other items constituting compensation from us, and any discounts, commissions or concessions allowed or reallowed or paid to dealers. Furthermore, we, our executive officers, our directors and major shareholders may agree, subject to certain exemptions, that for a certain period from the date of the prospectus supplement under which the securities are offered, we and they will not, without the prior written consent of an underwriter, offer, sell, contract to sell, pledge or otherwise dispose of any of shares of our common stock or any securities convertible into or exchangeable for shares of our common stock. However, an underwriter, in its sole discretion, may release any of the securities subject to these lock-up agreements at any time without notice.

Underwriters or agents could make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an at-the-market offering as defined in Rule 415 promulgated under the Securities Act, which includes sales made directly on or through the Nasdaq Global Market, the existing trading market for our shares of common stock, or sales made to or through a market maker other than on an exchange.

We will bear costs relating to all of the securities offered and sold by us under this registration statement.

As a result of requirements of the Financial Industry Regulatory Authority, or FINRA, formerly the National Association of Securities Dealers, Inc., the maximum commission or discount to be received by any FINRA member or independent broker/dealer may not be greater than eight percent (8%) of the gross proceeds received by us for the sale of any securities being registered pursuant to Rule 415 promulgated by the SEC under the Securities Act.

ENFORCEABILITY OF CIVIL LIABILITIES

We are a Marshall Islands company, and our principal executive office is located outside of the United States in Greece. Some of our directors, officers and the experts named in this registration statement reside outside the United States. In addition, a substantial portion of our assets and the assets of certain of our directors, officers and experts are located outside of the United States. As a result, it may be difficult or impossible for U.S. investors to serve process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in United States courts against us or these persons in any action, including actions based upon the civil liability provisions of United States federal or state securities laws.

Furthermore, there is substantial doubt that courts in the countries in which we or our subsidiaries are incorporated or where our assets or the assets of our subsidiaries, directors or officers and such experts are located (i) would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries, directors or officers and such experts based upon the civil liability provisions of applicable U.S. federal and state securities laws or (ii) would enforce, in original actions, liabilities against us or our subsidiaries, directors or officers and such experts based on those laws.

DESCRIPTION OF CAPITAL STOCK

Purpose

Our purpose, as stated in our Amended and Restated Articles of Incorporation, is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Business Corporations Act of the Marshall Islands, or the BCA. Our amended and restated articles of incorporation and bylaws do not impose any limitations on the ownership rights of our shareholders.

Authorized Capitalization

Under our Amended and Restated Articles of Incorporation, our authorized capital stock consists of 780,000,000 registered shares of stock, of which:

·

750,000,000 shares are designated as Class A common shares, par value $0.001 per share;

·

5,000,000 shares are designated as Class B common shares, par value $0.001 per share; and

·

25,000,000 shares are designated as preferred shares, par value $0.001 per share, of which 1,000,000 shares are designated Series A Participating Preferred Stock in connection with the adoption of our Stockholders Rights Agreement described under "—Stockholders Rights Agreement."

As of the date of this prospectus, we had issued and outstanding 17,441,442 Class A common shares and no Class B common shares outstanding.

Our current amended and restated bylaws may be amended by holders of at least 70% our Class A common shares or by the vote of 66 2/3% of our entire board of directors.

Share History

In March 2010, we transferred the listing of our common shares from the Nasdaq Global Market to the New York Stock Exchange, where our common shares trade under the symbol "PRGN."  Effective April 19, 2013, our common shares ceased trading on the New York Stock Exchange and commenced trading on the Nasdaq Global Market under the symbol "PRGN."

On October 12, 2010, we entered into a Controlled Equity Offering Sales Agreement, or the Sales Agreement, with Cantor Fitzgerald & Co., as sales agent, and on the same date we filed a prospectus supplement to our shelf registration statement on Form F-3 (Registration No. 333-164370) relating to the offer and sale of up to 1,500,000 of our common shares (as adjusted to give effect to the 10-for-1 reverse stock split discussed below) from time to time through Cantor Fitzgerald & Co., as agent for the offer and sale of the common shares. We sold 691,990 common shares (as adjusted to give effect to the 10-for-1 reverse stock split discussed below) pursuant to the Sales Agreement, with net proceeds amounting to $23.2 million. In addition, we issued an aggregate of 13,839 of our common shares to Loretto (as adjusted to give effect to the 10-for-1 reverse stock split discussed below) pursuant to our agreement with Allseas and Loretto, dated as of November 10, 2009, as amended, in connection with the common shares we issued and sold under the Sales Agreement.

On November 19, 2010, we granted 150,000 non-vested common shares  to Innovation Holdings, a company controlled by our Chairman, President and Chief Executive Officer, Mr. Michael Bodouroglou, with a grant date fair value of $37.10 per share, which vested during the period ending September 30, 2012 (as adjusted to give effect to the 10-for-1 reverse stock split discussed below).

On November 19, 2010, we granted 4,000 non-vested common shares to non executive directors of the Company, with a grant date fair value of $37.10 per share, which vested ratably over a period of approximately three years, through December 31, 2012 (as adjusted to give effect to the 10-for-1 reverse stock split discussed below).

On January 31, 2011, we granted 4,000 non-vested common shares  to employees of Allseas, with a grant date fair value of $30.90 per share, which vest ratably over a period of approximately three years, through December 31, 2013 (as adjusted to give effect to the 10-for-1 reverse stock split discussed below).

On January 3, 2012, we granted an aggregate of 3,500 non-vested common shares to employees of Allseas, with a grant date fair value of $6.65 per share, which vest ratably over a two-year period commencing on December 31, 2012 (as adjusted to give effect to the 10-for-1 reverse stock split discussed below).

On February 3, 2012, we granted an aggregate of 6,300 non-vested common shares to employees of Allseas, with a grant date fair value of $6.10 per share, which vest ratably over a two-year period commencing on December 31, 2012 (as adjusted to give effect to the 10-for-1 reverse stock split discussed below).

Effective as of the close of trading on November 5, 2012, we effectuated a 10-for-1 reverse stock split of our issued and outstanding common shares. Our common shares commenced trading on the New York Stock Exchange on a split-adjusted basis upon the open of trading on November 6, 2012. The reverse stock split was approved by shareholders at our annual general meeting of shareholders held on October 24, 2012. The reverse stock split reduced the number of our issued and outstanding common shares from approximately 61.0 million to approximately 6.1 million and affected all issued and outstanding common shares, as well as common shares underlying stock options outstanding immediately prior to the effectiveness of the reverse stock split. The number of our authorized common shares was not affected by the reverse split. No fractional shares were issued in connection with the reverse stock split. Shareholders who would have otherwise held a fractional share of our common stock as a result of the reverse stock split received a cash payment in lieu of such fractional share. The reverse stock split was completed in response to a notification we received on November 25, 2011 from the New York Stock Exchange that we were no longer in compliance with the continued listing requirements of the New York Stock Exchange because the average closing price of our common shares had fallen below $1.00 for a consecutive 30-trading day period. Subsequent to the reverse stock split, the New York Stock Exchange notified us that we had regained compliance with its continued listing criteria on December 19, 2012.

On December 24, 2012, we entered into an agreement to sell 4,901,961 common shares to Innovation Holdings, an entity beneficially owned by the Company's Chairman, President and Chief Executive Officer, Mr. Michael Bodouroglou, for total consideration of $10.0 million. The transaction closed on December 24, 2012. In addition, we issued an aggregate of 98,039 of our common shares to Loretto pursuant to our agreement with Allseas and Loretto, dated as of November 10, 2009, as amended, representing 2.0% of the 4,901,961 common shares sold to Innovation Holdings in the private placement. In connection with the transaction, we were granted the right to repurchase the common shares issued to Innovation Holdings in the private placement for the same price at which the shares were sold, which expired without being exercised upon our execution of definitive documentation relating to the restructuring of our debt in February 2013. In addition, Innovation Holdings also received customary registration rights in respect of the common shares it received in the private placement. The documentation entered into in connection with the private placement was approved by the independent members of our board of directors.

On February 25, 2013, we granted 200,000 non-vested common shares to Innovation Holdings, a company wholly owned and controlled by our Chairman, President and Chief Executive Officer, Mr. Michael Bodouroglou, with a grant date fair value of $2.71 per share, which vest ratably over a two-year period commencing on December 31, 2013.

In addition, on February 25, 2013, we granted an aggregate of 22,000 non-vested common shares to our non-executive directors and employees of Allseas, with a grant date fair value of $2.71 per share, which vest ratably over a two-year period commencing on December 31, 2013.

On September 27, 2013, we closed a public offering of 6,000,000 of our 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. In addition, we issued an aggregate of 120,000 of our common shares to Loretto pursuant to our agreement with Allseas and Loretto, dated as of November 10, 2009, as amended, representing 2.0% of the 6,000,000 common shares sold in the public offering.

Description of Class A Common Shares

Each outstanding Class A common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding preferred shares, holders of Class A common shares are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available for dividends. Upon our dissolution or liquidation or the sale of all or substantially all or our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred shares having liquidation preferences, if any, the holders of our Class A common shares are entitled to receive pro rata our remaining assets available for distribution. Holders of Class A common shares do not have conversion, redemption or pre-emptive rights to subscribe to any of our securities. The rights, preferences and privileges of holders of Class A common shares are subject to the rights of the holders of any preferred shares we may issue in the future.

Class B Common Shares

All of our outstanding Class B common shares were converted into Class A common shares on a one-for-one basis following the consummation of our initial public offering in August 2007.

Preferred Shares

Under our Amended and Restated Articles of Incorporation, we are authorized to issue up to 25,000,000 of our preferred shares, par value $0.001 per share. Our Amended and Restated Articles of Incorporation authorize our board of directors to establish one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:

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the designation of the series;

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the number of shares of the series;

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the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or restrictions of such series; and

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the voting rights, if any, of the holders of the series.

Directors

Our directors are elected by a plurality of the votes cast by shareholders entitled to vote in an election. There is no provision for cumulative voting. Our Amended and Restated Articles of Incorporation provide that our board of directors must consist of at least three members, with the exact number to be fixed by a vote of at least two-thirds of the entire board of directors. Our board of directors currently consists of five members.  Directors are elected annually on a staggered basis, whereby each director is divided into one of three classes, Class A, Class B and Class C, which shall be as nearly equal in number as possible. Each director shall serve for a three-year term and until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. Our board of directors has the authority to fix the amounts which shall be payable to the members of our board of directors for attendance at any meeting or for services rendered to us.

Under our Amended and Restated Bylaws, no contract or transaction between the Company and one or more of our directors or officers, or between the Company and any other corporation, partnership, association or other organization of which one or more of our directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of our board of directors or a committee thereof which authorizes the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (i) the material facts as to his or her or their relationship or interest as to the contract or transaction are disclosed or are known to our board or directors or the applicable committee thereof and the board or directors or such committee, as applicable, in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the board of directors as defined under the BCA, then by unanimous vote of the disinterested directors; (ii) the material facts as to his or her or their relationship or interest as to the contract or transaction are disclosed or are known to the Company's shareholders, and the contract or transaction is specifically approved in good faith by vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified by our board of directors, a committee thereof or our shareholders.  Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee thereof that authorizes the contract or transaction.

Shareholder Meetings

Under our Amended and Restated Bylaws, annual meetings of shareholders will be held at a time and place selected by our board of directors. The meetings may be held in or outside of the Republic of the Marshall Islands. Special meetings may be called at any time by a majority of our board of directors, the chairman of the board of directors or the president of the Company. Our board of directors may set a record date between 15 and 60 days before the date of any shareholder meeting to determine the shareholders that will be eligible to receive notice and vote at the meeting. One or more shareholders representing at least a majority of the total voting rights of the total issued and outstanding shares present in person or by proxy at a shareholder meeting shall constitute a quorum for the purposes of the meeting.Dissenters' Rights of Appraisal and Payment

Under the BCA, our shareholders have the right to dissent from various corporate actions, including any merger or consolidation and the sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. In the event of any further amendment of our Amended and Restated Articles of Incorporation, a shareholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting shareholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting shareholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the high court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which our shares are primarily traded on a local or national securities exchange.

Shareholders' Derivative Actions

Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the shareholder bringing the action is a holder of common shares both at the time the derivative action is commenced and at the time of the transaction to which the action relates.

Limitations on Liability and Indemnification of Officers and Directors

The BCA authorizes corporations to limit or eliminate the personal liability of directors and officers to corporations and their shareholders for monetary damages for breaches of directors' fiduciary duties. Our Amended and Restated Articles of Incorporation provide that no director shall be personally liable to us or any of our shareholders for breach of fiduciary duty as a director except to the extent such exemption from liability or limitation thereof is not permitted under the BCA.

Our Amended and Restated Bylaws provide that we must indemnify our directors and officers to the fullest extent authorized by law. We are also expressly authorized to advance certain expenses (including attorney's fees and disbursements and court costs) to our directors and officers and carry directors' and officers' insurance providing indemnification for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.

The limitation of liability and indemnification provisions in our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws may discourage shareholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our shareholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought.

Anti-takeover Effect of Certain Provisions of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws

Several provisions of our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, which are summarized below, may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our board of directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of us by means of a tender offer, a proxy contest or otherwise that a shareholder may consider in its best interest and (2) the removal of incumbent officers and directors.

Blank Check Preferred Shares

Under the terms of our Amended and Restated Articles of Incorporation, our board of directors has authority, without any further vote or action by our shareholders, to issue up to 25,000,000 blank check preferred shares. Our board of directors may issue preferred shares on terms calculated to discourage, delay or prevent a change of control of us or the removal of our management.

Election and Removal of Directors

Our Amended and Restated Articles of Incorporation prohibit cumulative voting in the election of directors. Our Amended and Restated Bylaws require parties other than the board of directors to give advance written notice of nominations for the election of directors. Our Amended and Restated Articles of Incorporation also provide that our directors may be removed for cause upon the affirmative vote of not less than 662/3% of the outstanding shares of our capital stock entitled to vote for those directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Advance Notice Requirements for Shareholder Proposals and Director Nominations

Our Amended and Restated Bylaws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary. Generally, to be timely, a shareholder's notice must be received at our principal executive offices not less than 120 days nor more than 180 days prior to the date on which we first mailed our proxy materials for the preceding year's annual meeting of shareholders. Our Amended and Restated Bylaws also specify requirements as to the form and content of a shareholder's notice. These provisions may impede shareholders' ability to bring matters before an annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders.

Classified Board of Directors

Our Amended and Restated Articles of Incorporation provide for the division of our board of directors into three classes of directors, with each class as nearly equal in number as possible, serving staggered three year terms. Approximately one-third of our board of directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of us. It could also delay stockholders who do not agree with the policies of our board of directors from removing a majority of our board of directors for two years.

Business Combinations

Although the BCA does not contain specific provisions regarding "business combinations" between companies organized under the laws of the Marshall Islands and "interested shareholders," we have included these provisions in our articles of incorporation. Specifically, our Amended and Restated Articles of Incorporation prohibit us from engaging in a "business combination" with certain persons for three years following the date the person becomes an interested shareholder. Interested shareholders generally include:

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any person who is the beneficial owner of 20% or more of our outstanding voting stock; or

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person who is our affiliate or associate and who held 20% or more of our outstanding voting stock at any time within three years before the date on which the person's status as an interested shareholder is determined, and the affiliates and associates of such person.

Subject to certain exceptions, a business combination includes, among other things:

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certain mergers or consolidations of us or any direct or indirect majority-owned subsidiary of ours;

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any sale, lease, exchange, mortgage, pledge, transfer or other disposition of our assets or of any subsidiary of ours having an aggregate market value equal to 10% or more of either the aggregate market value of all of our assets, determined on a consolidated basis, or the aggregate value of all of our outstanding stock;

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certain transactions that result in the issuance or transfer by us of any stock of ours to the interested shareholder;

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any transaction involving us or any of our subsidiaries that has the effect of increasing the proportionate share of any class or series of stock, or securities convertible into any class or series of stock, of ours or any such subsidiary that is owned directly or indirectly by the interested shareholder or any affiliate or associate of the interested shareholder; and

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any receipt by the interested shareholder of the benefit directly or indirectly (except proportionately as a shareholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or through us.

These provisions of our Amended and Restated Articles of Incorporation do not apply to a business combination if:

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before a person became an interested shareholder, our board of directors approved either the business combination or the transaction in which the shareholder became an interested shareholder;

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upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than certain excluded shares;

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at or following the transaction in which the person became an interested shareholder, the business combination is approved by our board of directors and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of the holders of at least 662/3% of our outstanding voting stock that is not owned by the interest shareholder;

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the shareholder was or became an interested shareholder prior to the closing of this offering;

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a shareholder became an interested shareholder inadvertently and (i) as soon as practicable divested itself of ownership of sufficient shares so that the shareholder ceased to be an interested shareholder; and (ii) would not, at any time within the three-year period immediately prior to a business combination between us and such shareholder, have been an interested shareholder but for the inadvertent acquisition of ownership; or

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the business combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required under our articles of incorporation which (i) constitutes one of the transactions described in the following sentence; (ii) is with or by a person who either was not an interested shareholder during the previous three years or who became an interested shareholder with the approval of the board; and (iii) is approved or not opposed by a majority of the members of the board of directors then in office (but not less than one) who were directors prior to any person becoming an interested shareholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed transactions referred to in the preceding sentence are limited to:

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a merger or consolidation of us (except for a merger in respect of which, pursuant to the BCA, no vote of our shareholders is required);

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a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of us or of any direct or indirect majority-owned subsidiary of ours (other than to any direct or indirect wholly-owned subsidiary or to us) having an aggregate market value equal to 50% or more of either that aggregate market value of all of our assets determined on a consolidated basis or the aggregate market value of all the outstanding shares; or

o

a proposed tender or exchange offer for 50% or more of our outstanding voting stock.

Stockholders Rights Plan

We adopted a stockholders rights plan on January 4, 2008, and declared a dividend distribution of one preferred stock purchase right to purchase one one-thousandth of our Series A Participating Preferred Stock for each outstanding share of our common stock, par value $0.001 per share to shareholders of record at the close of business on February 1, 2008. Each right entitles the registered holder, upon the occurrence of certain events, to purchase from us one one-thousandth of a share of Series A Participating Preferred Stock at an exercise price of $75, subject to adjustment, or additional common shares. The rights will expire on the earliest of (i) February 1, 2018 or (ii) redemption or exchange of the rights. The plan was designed to enable us to protect shareholder interests in the event that an unsolicited attempt is made for a business combination with or takeover of us. We believe that the shareholder rights plan should enhance the Board of Directors' negotiating power on behalf of shareholders in the event of a coercive offer or proposal. We are not currently aware of any such offers or proposals and adopted the plan as a matter of prudent corporate governance. On December 16, 2009, we amended the plan to exclude Innovation Holdings, Michael Bodouroglou, and their affiliated entities, from the definition of "acquiring person."

Transfer Agent

The registrar and transfer agent for the common stock is Computershare Trust Company, Inc.

Listing

Our common shares trade on the Nasdaq Global Market under the symbol "PRGN."

Certain of our subsidiaries may guarantee the debt securities we offer.  Those guarantees may or may not be secured by liens, mortgages, and security interests in the assets of those subsidiaries.  The terms and conditions of any such subsidiary guarantees, and a description of any such liens, mortgages or security interests, will be set forth in the prospectus supplement that will accompany this prospectus.

Our statements below relating to the debt securities and the indenture are summaries of their anticipated provisions, are not complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of the applicable indenture and any applicable United States federal income tax considerations as well as any applicable modifications of or additions to the general terms described below in the applicable prospectus supplement or supplemental indenture. For a description of the terms of a particular issue of debt securities, reference must be made to both the related prospectus supplement and to the following description.

General

Neither indenture limits the amount of debt securities which may be issued, and each indenture provides that debt securities may be issued up to the aggregate principal amount from time to time.  The debt securities may be issued in one or more series.  The senior debt securities will be unsecured and will rank in parity with all of our other unsecured and unsubordinated indebtedness.  Each series of subordinated debt securities will be unsecured and subordinated to all present and future senior indebtedness of debt securities will be described in an accompanying prospectus supplement.

You should read the applicable indenture and subsequent filings relating to the particular series of debt securities for the following terms of the offered debt securities:

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the designation, aggregate principal amount and authorized denominations;

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the issue price, expressed as a percentage of the aggregate principal amount;

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the maturity date;

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the interest rate per annum, if any;

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if the offered debt securities provide for interest payments, the date from which interest will accrue, the dates on which interest will be payable, the date on which payment of interest will commence and the regular record dates for interest payment dates;

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any optional or mandatory sinking fund provisions or exchangeability provisions;

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the terms and conditions upon which conversion of any convertible debt securities may be effected, including the conversion price, the conversion period and other conversion provisions;

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the date, if any, after which and the price or prices at which the offered debt securities may be optionally redeemed or must be mandatorily redeemed and any other terms and provisions of optional or mandatory redemptions;

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if other than denominations of $1,000 and any integral multiple thereof, the denominations in which offered debt securities of the series will be issuable;

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if other than the full principal amount, the portion of the principal amount of offered debt securities of the series which will be payable upon acceleration or provable in bankruptcy;

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any events of default not set forth in this prospectus;

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the currency or currencies, including composite currencies, in which principal, premium and interest will be payable, if other than the currency of the United States of America;

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if principal, premium or interest is payable, at our election or at the election of any holder, in a currency other than that in which the offered debt securities of the series are stated to be payable, the period or periods within which, and the terms and conditions upon which, the election may be made;

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whether interest will be payable in cash or additional securities at our or the holder's option and the terms and conditions upon which the election may be made;

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if denominated in a currency or currencies other than the currency of the United States of America, the equivalent price in the currency of the United States of America for purposes of determining the voting rights of holders of those debt securities under the applicable indenture;

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if the amount of payments of principal, premium or interest may be determined with reference to an index, formula or other method based on a coin or currency other than that in which the offered debt securities of the series are stated to be payable, the manner in which the amounts will be determined;

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any restrictive covenants or other material terms relating to the offered debt securities, which may not be inconsistent with the applicable indenture;

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whether the offered debt securities will be issued in the form of global securities or certificates in registered or bearer form;

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any terms with respect to subordination;

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any listing on any securities exchange or quotation system;

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additional provisions, if any, related to defeasance and discharge of the offered debt securities; and

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the applicability of any guarantees.

Subsequent filings may include additional terms not listed above. Unless otherwise indicated in subsequent filings with the SEC relating to the indenture, principal, premium and interest will be payable and the debt securities will be transferable at the corporate trust office of the applicable trustee. Unless other arrangements are made or set forth in subsequent filings or a supplemental indenture, principal, premium and interest will be paid by checks mailed to the holders at their registered addresses.

Unless otherwise indicated in subsequent filings with the SEC, the debt securities will be issued only in fully registered form without coupons, in denominations of $1,000 or any integral multiple thereof. No service charge will be made for any transfer or exchange of the debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with these debt securities.

Some or all of the debt securities may be issued as discounted debt securities, bearing no interest or interest at a rate which at the time of issuance is below market rates, to be sold at a substantial discount below the stated principal amount. United States federal income tax consequences and other special considerations applicable to any discounted securities will be described in subsequent filings with the SEC relating to those securities.

We refer you to applicable subsequent filings with respect to any deletions or additions or modifications from the description contained in this prospectus.

Senior Debt

We may issue senior debt securities under a senior debt indenture.  These senior debt securities would rank on an equal basis with all our other unsecured debt except subordinated debt.

Subordinated Debt

We may issue subordinated debt securities under a subordinated debt indenture.  Subordinated debt would rank subordinate and junior in right of payment, to the extent set forth in the subordinated debt indenture, to all our senior debt (both secured and unsecured).

In general, the holders of all senior debt are first entitled to receive payment of the full amount unpaid on senior debt before the holders of any of the subordinated debt securities are entitled to receive a payment on account of the principal or interest on the indebtedness evidenced by the subordinated debt securities in certain events.

If we default in the payment of any principal of, or premium, if any, or interest on any senior debt when it becomes due and payable after any applicable grace period, then, unless and until the default is cured or waived or ceases to exist, we cannot make a payment on account of or redeem or otherwise acquire the subordinated debt securities.

If there is any insolvency, bankruptcy, liquidation or other similar proceeding relating to us or our property, then all senior debt must be paid in full before any payment may be made to any holders of subordinated debt securities.

Furthermore, if we default in the payment of the principal of and accrued interest on any subordinated debt securities that is declared due and payable upon an event of default under the subordinated debt indenture, holders of all our senior debt will first be entitled to receive payment in full in cash before holders of such subordinated debt can receive any payments.

Senior debt means:

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the principal, premium, if any, interest and any other amounts owing in respect of our indebtedness for money borrowed and indebtedness evidenced by securities, notes, debentures, bonds or other similar instruments issued by us, including the senior debt securities or letters of credit;

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all capitalized lease obligations;

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all hedging obligations;

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all obligations representing the deferred purchase price of property; and

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all deferrals, renewals, extensions and refundings of obligations of the type referred to above;

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but senior debt does not include:

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subordinated debt securities; and

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any indebtedness that by its terms is subordinated to, or ranks on an equal basis with, our subordinated debt securities.

Covenants

Under the terms of the indenture, a form of which is attached as an exhibit to the registration statement of which this prospectus forms a part, we covenant, among other things:

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that we will duly and punctually pay the principal of and interest, if any, on the offered debt securities in accordance with the terms of such debt securities and the applicable indenture;

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that so long as any offered debt securities are outstanding, we will (i) file with the SEC within the time periods prescribed by its rules and regulations and (ii) furnish to the trustee and holders of the offered debt securities all quarterly and annual financial information required to be furnished or filed with the SEC pursuant to Section 13 and 15(d) of the Exchange Act and with respect to the annual consolidated financial statements only, a report thereon by our independent auditors;

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that we will deliver to the trustee after the end of each fiscal year a compliance certificate as to whether we have kept, observed, performed and fulfilled our obligations and each and every covenant contained under the applicable indenture;

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that we will deliver to the trustee written notice of any event of default, with the exception of any payment default that has not given rise to a right of acceleration under the indenture;

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that we will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, which may affect the covenants or the performance of the indenture or the offered debt securities;

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that we will do or cause to be done everything necessary to preserve and keep in full force and effect our corporate existence and the corporate, partnership or other existence of certain of our subsidiaries whose preservation is determined to be desirable by our board of directors and material to the holders;

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that we will, and we will cause each of our subsidiaries to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by appropriate proceedings;

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that in the event we are required to pay additional interest to holders of our debt securities, we will provide notice to the trustee, and where applicable, the paying agent, of our obligation to pay such additional interest prior to the date on which any such additional interest is scheduled to be paid; and

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that we will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of the indenture.

Any series of offered debt securities may have covenants in addition to or differing from those included in the applicable indenture which will be described in subsequent filings prepared in connection with the offering of such securities, limiting or restricting, among other things:

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the ability of us or our subsidiaries to incur either secured or unsecured debt, or both;

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the ability to make certain payments, dividends, redemptions or repurchases;

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our ability to create dividend and other payment restrictions affecting our subsidiaries;

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our ability to make investments;

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mergers and consolidations by us or our subsidiaries;

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sales of assets by us;

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our ability to enter into transactions with affiliates;

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our ability to incur liens; and

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sale and leaseback transactions.

Modification of the Indentures

Each indenture and the rights of the respective holders may be modified by us only with the consent of holders of not less than a majority in aggregate principal amount of the outstanding debt securities of all series under the respective indenture affected by the modification, taken together as a class. But no modification that:

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changes the amount of securities whose holders must consent to an amendment, supplement or waiver;

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reduces the rate of or changes the interest payment time on any security or alters its redemption provisions (other than any alteration to any such section which would not materially adversely affect the legal rights of any holder under the indenture) or the price at which we are required to offer to purchase the securities;

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reduces the principal or changes the maturity of any security or reduces the amount of, or postpones the date fixed for, the payment of any sinking fund or analogous obligation;

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waives a default or event of default in the payment of the principal of or interest, if any, on any security (except a rescission of acceleration of the securities of any series by the holders of at least a majority in principal amount of the outstanding securities of that series and a waiver of the payment default that resulted from such acceleration);

·

makes the principal of or interest, if any, on any security payable in any currency other than that stated in the security;

·

makes any change with respect to holders' rights to receive principal and interest, certain modifications affecting shareholders or certain currency-related issues; or

·

waives a redemption payment with respect to any security or changes any of the provisions with respect to the redemption of any securities

will be effective against any holder without his consent. In addition, other terms as specified in subsequent filings may be modified without the consent of the holders.

Events of Default

Each indenture defines an event of default for the debt securities of any series as being any one of the following events:

·

default in any payment of interest when due which continues for 30 days;

·

default in any payment of principal or premium at maturity;

·

default in the deposit of any sinking fund payment when due;

·

default in the performance of any covenant in the debt securities or the applicable indenture which continues for 60 days after we receive notice of the default;

·

default under a bond, debenture, note or other evidence of indebtedness for borrowed money by us or our subsidiaries (to the extent we are directly responsible or liable therefor) having a principal amount in excess of a minimum amount set forth in the applicable subsequent filing, whether such indebtedness now exists or is hereafter created, which default shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such acceleration having been rescinded or annulled or cured within 30 days after we receive notice of the default; and

·

events of bankruptcy, insolvency or reorganization.

An event of default of one series of debt securities does not necessarily constitute an event of default with respect to any other series of debt securities.

There may be such other or different events of default as described in an applicable subsequent filing with respect to any class or series of offered debt securities.

In case an event of default occurs and continues for the debt securities of any series, the applicable trustee or the holders of not less than 25% in aggregate principal amount of the debt securities then outstanding of that series may declare the principal and accrued but unpaid interest of the debt securities of that series to be due and payable. Any event of default for the debt securities of any series which has been cured may be waived by the holders of a majority in aggregate principal amount of the debt securities of that series then outstanding.

Each indenture requires us to file annually after debt securities are issued under that indenture with the applicable trustee a written statement signed by two of our officers as to the absence of material defaults under the terms of that indenture. Each indenture provides that the applicable trustee may withhold notice to the holders of any default if it considers it in the interest of the holders to do so, except notice of a default in payment of principal, premium or interest.

Subject to the duties of the trustee in case an event of default occurs and continues, each indenture provides that the trustee is under no obligation to exercise any of its rights or powers under that indenture at the request, order or direction of holders unless the holders have offered to the trustee reasonable indemnity. Subject to these provisions for indemnification and the rights of the trustee, each indenture provides that the holders of a majority in principal amount of the debt securities of any series then outstanding have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee as long as the exercise of that right does not conflict with any law or the indenture.

Defeasance and Discharge

The terms of each indenture provide us with the option to be discharged from any and all obligations in respect of the debt securities issued thereunder upon the deposit with the trustee, in trust, of money or United States government obligations, or both, which through the payment of interest and principal in accordance with their terms will provide money in an amount sufficient to pay any installment of principal, premium and interest on, and any mandatory sinking fund payments in respect of, the debt securities on the stated maturity of the payments in accordance with the terms of the debt securities and the indenture governing the debt securities. This right may only be exercised if, among other things, we have received from, or there has been published by, the United States Internal Revenue Service a ruling to the effect that such a discharge will not be deemed, or result in, a taxable event with respect to holders. This discharge would not apply to our obligations to register the transfer or exchange of debt securities, to replace stolen, lost or mutilated debt securities, to maintain paying agencies and hold moneys for payment in trust.

Defeasance of Certain Covenants

The terms of the debt securities provide us with the right not to comply with specified covenants and that specified events of default described in a subsequent filing will not apply. In order to exercise this right, we will be required to deposit with the trustee money or U.S. government obligations, or both, which through the payment of interest and principal will provide money in an amount sufficient to pay principal, premium, if any, and interest on, and any mandatory sinking fund payments in respect of, the debt securities on the stated maturity of such payments in accordance with the terms of the debt securities and the indenture governing such debt securities. We will also be required to deliver to the trustee an opinion of counsel to the effect that the deposit and related covenant defeasance should not cause the holders of such series to recognize income, gain or loss for United States federal income tax purposes.

A subsequent filing may further describe the provisions, if any, of any particular series of offered debt securities permitting a discharge defeasance.

Subsidiary Guarantees

Certain of our subsidiaries may guarantee the debt securities we offer.  In that case, the terms and conditions of the subsidiary guarantees will be set forth in the applicable prospectus supplement.  Unless we indicate differently in the applicable prospectus supplement, if any of our subsidiaries guarantee any of our debt securities that are subordinated to any of our senior indebtedness, then the subsidiary guarantees will be subordinated to the senior indebtedness of such subsidiary to the same extent as our debt securities are subordinated to our senior indebtedness.

Global Securities

The debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depository identified in an applicable subsequent filing and registered in the name of the depository or a nominee for the depository. In such a case, one or more global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal amount of outstanding debt securities of the series to be represented by the global security or securities. Unless and until it is exchanged in whole or in part for debt securities in definitive certificated form, a global security may not be transferred except as a whole by the depository for the global security to a nominee of the depository or by a nominee of the depository to the depository or another nominee of the depository or by the depository or any nominee to a successor depository for that series or a nominee of the successor depository and except in the circumstances described in an applicable subsequent filing.

We expect that the following provisions will apply to depository arrangements for any portion of a series of debt securities to be represented by a global security. Any additional or different terms of the depository arrangement will be described in an applicable subsequent filing.

Upon the issuance of any global security, and the deposit of that global security with or on behalf of the depository for the global security, the depository will credit, on its book-entry registration and transfer system, the principal amounts of the debt securities represented by that global security to the accounts of institutions that have accounts with the depository or its nominee. The accounts to be credited will be designated by the underwriters or agents engaging in the distribution of the debt securities or by us, if the debt securities are offered and sold directly by us. Ownership of beneficial interests in a global security will be limited to participating institutions or persons that may hold interests through such participating institutions. Ownership of beneficial interests by participating institutions in the global security will be shown on, and the transfer of the beneficial interests will be effected only through, records maintained by the depository for the global security or by its nominee. Ownership of beneficial interests in the global security by persons that hold through participating institutions will be shown on, and the transfer of the beneficial interests within the participating institutions will be effected only through, records maintained by those participating institutions. The laws of some jurisdictions may require that purchasers of securities take physical delivery of the securities in certificated form. The foregoing limitations and such laws may impair the ability to transfer beneficial interests in the global securities.

So long as the depository for a global security, or its nominee, is the registered owner of that global security, the depository or its nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by the global security for all purposes under the applicable indenture. Unless otherwise specified in an applicable subsequent filing and except as specified below, owners of beneficial interests in the global security will not be entitled to have debt securities of the series represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of debt securities of the series in certificated form and will not be considered the holders thereof for any purposes under the indenture. Accordingly, each person owning a beneficial interest in the global security must rely on the procedures of the depository and, if such person is not a participating institution, on the procedures of the participating institution through which the person owns its interest, to exercise any rights of a holder under the indenture.

The depository may grant proxies and otherwise authorize participating institutions to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the applicable indenture. We understand that, under existing industry practices, if we request any action of holders or any owner of a beneficial interest in the global security desires to give any notice or take any action a holder is entitled to give or take under the applicable indenture, the depository would authorize the participating institutions to give the notice or take the action, and participating institutions would authorize beneficial owners owning through such participating institutions to give the notice or take the action or would otherwise act upon the instructions of beneficial owners owning through them.

Unless otherwise specified in applicable subsequent filings, payments of principal, premium and interest on debt securities represented by a global security registered in the name of a depository or its nominee will be made by us to the depository or its nominee, as the case may be, as the registered owner of the global security.

We expect that the depository for any debt securities represented by a global security, upon receipt of any payment of principal, premium or interest, will credit participating institutions' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global security as shown on the records of the depository. We also expect that payments by participating institutions to owners of beneficial interests in the global security held through those participating institutions will be governed by standing instructions and customary practices, as is now the case with the securities held for the accounts of customers registered in street name, and will be the responsibility of those participating institutions. None of us, the trustees or any agent of ours or the trustees will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in a global security, or for maintaining, supervising or reviewing any records relating to those beneficial interests.

Unless otherwise specified in the applicable subsequent filings, a global security of any series will be exchangeable for certificated debt securities of the same series only if:

·

the depository for such global securities notifies us that it is unwilling or unable to continue as depository or such depository ceases to be a clearing agency registered under the Exchange Act and, in either case, a successor depository is not appointed by us within 90 days after we receive the notice or become aware of the ineligibility;

·

we in our sole discretion determine that the global securities shall be exchangeable for certificated debt securities; or

·

there shall have occurred and be continuing an event of default under the applicable indenture with respect to the debt securities of that series.

Upon any exchange, owners of beneficial interests in the global security or securities will be entitled to physical delivery of individual debt securities in certificated form of like tenor and terms equal in principal amount to their beneficial interests, and to have the debt securities in certificated form registered in the names of the beneficial owners, which names are expected to be provided by the depository's relevant participating institutions to the applicable trustee.

In the event that the Depository Trust Company, or DTC, acts as depository for the global securities of any series, the global securities will be issued as fully registered securities registered in the name of Cede & Co., DTC's partnership nominee.

DTC, is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law and a registered clearing agency with the SEC. Established in 1973, DTC was created to reduce costs and provide clearing and settlement efficiencies by immobilizing securities and making "book-entry" changes to ownership of the securities. DTC provides securities movements for the net settlements of the National Securities Clearing Corporation, or NSCC, and settlement for institutional trades (which typically involve money and securities transfers between custodian banks and broker/dealers), as well as money market instruments.

DTC is a subsidiary of The Depository Trust & Clearing Company, or DTCC. DTCC is a holding company established in 1999 to combine DTC and NSCC. DTCC, through its subsidiaries, provides clearing, settlement and information services for equities, corporate and municipal bonds, government and mortgage backed securities, money market instruments and over the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's customer base extends to thousands of companies within the global financial services industry. DTCC serves brokers, dealers, institutional investors, banks, trust companies, mutual fund companies, insurance carriers, hedge funds and other financial intermediaries – either directly or through correspondent relationships.

To facilitate subsequent transfers, the debt securities may be registered in the name of DTC's nominee, Cede & Co. The deposit of the debt securities with DTC and their registration in the name of Cede & Co. will effect no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the debt securities. DTC's records reflect only the identity of the direct participating institutions to whose accounts debt securities are credited, which may or may not be the beneficial owners. The participating institutions remain responsible for keeping account of their holdings on behalf of their customers.

Delivery of notices and other communications by DTC to direct participating institutions, by direct participating institutions to indirect participating institutions, and by direct participating institutions and indirect participating institutions to beneficial owners of debt securities are governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect.

Neither DTC nor Cede & Co. consents or votes with respect to the debt securities. Under its usual procedures, DTC mails a proxy to the issuer as soon as possible after the record date. The proxy assigns Cede & Co.'s consenting or voting rights to those direct participating institution to whose accounts the debt securities are credited on the record date.

If applicable, redemption notices shall be sent to Cede & Co. If less than all of the debt securities of a series represented by global securities are being redeemed, DTC's practice is to determine by lot the amount of the interest of each direct participating institution in that issue to be redeemed.

To the extent that any debt securities provide for repayment or repurchase at the option of the holders thereof, a beneficial owner shall give notice of any option to elect to have its interest in the global security repaid by us, through its participating institution, to the applicable trustee, and shall effect delivery of the interest in a global security by causing the direct participating institution to transfer the direct participating institution's interest in the global security or securities representing the interest, on DTC's records, to the applicable trustee. The requirement for physical delivery of debt securities in connection with a demand for repayment or repurchase will be deemed satisfied when the ownership rights in the global security or securities representing the debt securities are transferred by direct participating institutions on DTC's records.

DTC may discontinue providing its services as securities depository for the debt securities at any time. Under such circumstances, in the event that a successor securities depository is not appointed, debt security certificates are required to be printed and delivered as described above.

We may decide to discontinue use of the system of book-entry transfers through the securities depository. In that event, debt security certificates will be printed and delivered as described above.

DTCC is industry-owned by its customers who are members of the financial community, such as banks, broker/dealers, mutual funds and other financial institutions. DTCC operates on an at-cost basis, returning excess revenue from transaction fees to its member firms. All services provided by DTC are regulated by the SEC.

The 2013 DTCC Board of Directors is composed of 19 directors serving one-year terms. Twelve directors are representatives of clearing agency participants, including international broker/dealers, custodian and clearing banks, and investment institutions; of these, two directors are designated by DTCC's preferred shareholders, NYSE Euronext and FINRA. Three directors are from non-participants.  The remaining two are the chairman, and the president and the chief executive officer of DTCC. All of the Board members except those designated by the preferred shareholders are elected annually.

DESCRIPTION OF WARRANTS

We may issue warrants to purchase any of our debt or equity securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent. The terms of any warrants to be issued and a description of the material provisions of the applicable warrant agreement will be set forth in the applicable prospectus supplement.

The applicable prospectus supplement will describe the following terms of any warrants in respect of which this prospectus is being delivered:

·

the title of such warrants;

·

the aggregate number of such warrants;

·

the price or prices at which such warrants will be issued;

·

the number and type of our securities purchasable upon exercise of such warrants;

·

the price at which our securities purchasable upon exercise of such warrants may be purchased;

·

the date on which the right to exercise such warrants shall commence and the date on which such right shall expire;

·

if applicable, the minimum or maximum amount of such warrants which may be exercised at any one time;

·

if applicable, the designation and terms of the securities with which such warrants are issued and the number of such warrants issued with each such security;

·

if applicable, the date on and after which such warrants and the related securities will be separately transferable;

·

information with respect to book-entry procedures, if any;

·

if applicable, a discussion of any material United States federal income tax considerations; and

·

any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.

DESCRIPTION OF PURCHASE CONTRACTS

We may issue purchase contracts for the purchase or sale of any of our debt or equity securities issued by us.

Each purchase contract will entitle the holder thereof to purchase or sell, and obligate us to sell or purchase, on specified dates, such securities, at a specified purchase price, which may be based on a formula, all as set forth in the applicable prospectus supplement. We may, however, satisfy our obligations, if any, with respect to any purchase contract by delivering the cash value of such purchase contract or the cash value of the securities otherwise deliverable, as set forth in the applicable prospectus supplement. The applicable prospectus supplement will also specify the methods by which the holders may purchase or sell such securities, and any acceleration, cancellation or termination provisions, provisions relating to U.S. federal income tax considerations, if any, or other provisions relating to the settlement of a purchase contract.

The purchase contracts may require us to make periodic payments to the holders thereof or vice versa, which payments may be deferred to the extent set forth in the applicable prospectus supplement, and those payments may be unsecured or prefunded on some basis. The purchase contracts may require the holders thereof to secure their obligations in a specified manner to be described in the applicable prospectus supplement. Alternatively, purchase contracts may require holders to satisfy their obligations thereunder when the purchase contracts are issued. Our obligation to settle such pre-paid purchase contracts on the relevant settlement date may constitute indebtedness. Accordingly, pre-paid purchase contracts will be issued under the senior indenture or the subordinated indenture.

The purchase contracts will be construed in accordance with and governed by the laws of the State of New York, without giving effect to any principles thereof relating to conflicts of law that would result in the application of the laws of any other jurisdiction.

DESCRIPTION OF RIGHTS

We may issue rights to purchase our equity securities. These rights may be issued independently or together with any other security offered by this prospectus and may or may not be transferable by the stockholder receiving the rights in the rights offering. In connection with any rights offering, we may enter into a standby underwriting agreement with one or more underwriters pursuant to which the underwriter will purchase any securities that remain unsubscribed for upon completion of the rights offering.

The applicable prospectus supplement relating to any rights will describe the terms of the offered rights, including, where applicable, the following:

·

the exercise price for the rights;

·

the number of rights issued to each stockholder;

·

the extent to which the rights are transferable;

·

any other terms of the rights, including terms, procedures and limitations relating to the exchange and exercise of the rights;

·

the date on which the right to exercise the rights will commence and the date on which the right will expire;

·

the amount of rights outstanding;

·

the extent to which the rights include an over-subscription privilege with respect to unsubscribed securities; and

·

the material terms of any standby underwriting arrangement entered into by us in connection with the rights offering.

The description in the applicable prospectus supplement of any rights we offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable rights certificate or rights agreement, which will be filed with the SEC if we offer rights. For more information on how you can obtain copies of any rights certificate or rights agreement if we offer rights, see "Where You Can Find Additional Information" of this prospectus. We urge you to read the applicable rights certificate, the applicable rights agreement and any applicable prospectus supplement in their entirety.

DESCRIPTION OF UNITS

As specified in the applicable prospectus supplement, we may issue units consisting of one or more of our rights, purchase contracts, warrants, debt securities, shares of preferred stock, shares of common stock or any combination of such securities. The applicable prospectus supplement will describe:

·

the terms of the units and of the rights, purchase contracts, warrants, debt securities, preferred stock and common stock comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately;

·

a description of the terms of any unit agreement governing the units;

·

if applicable, a discussion of any material U.S. federal income tax considerations; and

·

a description of the provisions for the payment, settlement, transfer or exchange or the units.

EXPENSES

The following are the estimated expenses of the issuance and distribution of the securities being registered under the registration statement of which this prospectus forms a part, all of which will be paid by us.

                                                                                                                                                                                                      

LEGAL MATTERS

The validity of the securities offered by this prospectus will be passed upon for us by Seward & Kissel LLP, New York, New York with respect to matters of United States, Marshall Islands and Liberian law.

EXPERTS

The consolidated financial statements of Paragon Shipping Inc. appearing in Paragon Shipping Inc.'s Annual Report (Form 20-F) for the year ended December 31, 2012 and the effectiveness of Paragon Shipping Inc.'s internal control over financial reporting as of December 31, 2012, have been audited by Ernst & Young (Hellas) Certified Auditors-Accountants S.A., independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. The address of Ernst & Young (Hellas) Certified Auditors-Accountants S.A. is 11th km National Road Athens-Lamia, 14451, Athens, Greece.

The consolidated balance sheet of Paragon Shipping Inc. and subsidiaries as of December 31, 2011, and the related consolidated statements of comprehensive income/(loss), shareholders' equity, and cash flows for each of the two years in the period ended December 31, 2011 have been audited by Deloitte Hadjipavlou, Sofianos & Cambanis S.A., an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The offices of Deloitte Hadjipavlou, Sofianos & Cambanis S.A are located at Fragoklissias 3a & Granikou Street, Maroussi, Athens 151 25, Greece.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

As required by the Securities Act of 1933, we filed a registration statement relating to the securities offered by this prospectus with the SEC.  This prospectus is a part of that registration statement, which includes additional information.

Government Filings

We file annual and special reports with the SEC.  You may read and copy any document that we file and obtain copies at prescribed rates from the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  You may obtain information on the operation of the Public Reference Room by calling 1 (800) SEC-0330.  The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.  Further information about our company is available on our website at http://www.paragonship.com.  The information on our website does not constitute a part of this prospectus.

Information Incorporated by Reference

The SEC allows us to "incorporate by reference" information that we file with it.  This means that we can disclose important information to you by referring you to those filed documents.  The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC prior to the termination of this offering will also be considered to be part of this prospectus and will automatically update and supersede previously filed information, including information contained in this document.

We incorporate by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act:

·

our Annual Report on Form 20-F for the fiscal year ended December 31, 2012, filed with the SEC on April 3, 2013, as amended on April 18, 2013; and

·

our Report on Form 6-K, filed with the SEC on April 5, 2013.

·

our Report on Form 6-K, filed with the SEC on September 6, 2013, containing our unaudited interim condensed consolidated financial statements for the six-month period ended June 30, 2013.

·

our Report on Form 6-K, filed with the SEC on September 25, 2013.

·

our Report on Form 6-K, filed with the SEC on September 27, 2013.

·

our Report on Form 6-K, filed with the SEC on October 3, 2013.

·

our Report on Form 6-K, filed with the SEC on October 22, 2013.

·

our Report on Form 6-K, filed with the SEC on November 7, 2013.

We are also incorporating by reference all subsequent annual reports on Form 20-F that we file with the SEC and certain reports on Form 6-K that we furnish to the SEC after the date of this prospectus (if they state that they are incorporated by reference into this prospectus) until we file a post-effective amendment indicating that the offering of the securities made by this prospectus has been terminated. In all cases, you should rely on the later information over different information included in this prospectus or the prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus and any accompanying prospectus supplement. We have not, and any underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any accompanying prospectus supplement as well as the information we previously filed with the SEC and incorporated by reference, is accurate as of the dates on the front cover of those documents only. Our business, financial condition and results of operations and prospects may have changed since those dates.

You may request a free copy of the above mentioned filing or any subsequent filing we incorporated by reference to this prospectus by writing or telephoning us at the following address:

Paragon Shipping Inc.

15, Karamanli Avenue

Voula, 16673

Athens, Greece

(011) (30) (210) 8914 600 (telephone number)

These reports may also be obtained on our website at www.paragonship.com. None of the information on our website is a part of this prospectus.

Information provided by the Company

We will furnish holders of our common shares with annual reports containing audited financial statements and a report by our independent registered public accounting firm. The audited financial statements will be prepared in accordance with U.S. GAAP. As a "foreign private issuer," we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. While we furnish proxy statements to shareholders in accordance with the rules of any stock exchange on which our common shares may be listed in the future, those proxy statements do not conform to Schedule 14A of the proxy rules promulgated under the Securities Exchange Act. In addition, as a "foreign private issuer," our officers and directors are exempt from the rules under the Securities Exchange Act relating to short swing profit reporting and liability.

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.

 Common Shares

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