SecProbe.io

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                                 [PARAGON LOGO]

April 29, 2005

Kate Tillan
Assistant Chief Accountant
United States Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 03-06
450 Fifth Street, N.W.
Washington, DC 20549

Re:    Paragon Technologies, Inc.
       Form 10-K for the Fiscal Year Ended December 31, 2004
       Form 8-K Dated March 15, 2005
       File No. 001-15729

Dear Ms. Tillan:

In response to your letter dated April 19, 2005 (the "Comment Letter"), I am
transmitting via EDGAR this letter to respond to the Staff's comments regarding
the Form 10-K for the fiscal year ended December 31, 2004 (Comments Nos. 1-4)
and the Form 8-K dated March 15, 2005 (Comment No. 5).

Detailed responses to certain of the Staff's comments, with my responses (which
are numbered to correspond to the Comment letter) are set forth below.
Supplemental information is being provided in response to some of the Staff's
comments.

Form 10-K for the Fiscal Year Ended December 31, 2004
-----------------------------------------------------

Revenue Recognition -- Page 36
------------------------------

1.   We note your disclosure on page 34 that contract terms provide for progress
     payments and a portion of the purchase price is withheld by the buyer until
     the system has been accepted. Explain in more detail the nature of and
     accounting for the acceptance rights. Discuss the specific criteria used to
     determine when a contract is substantially completed and whether or not
     this policy is followed consistently. Circumstances to be considered in
     determining when a project is substantially completed include, for example,
     delivery of the product, acceptance by the customer, departure from the
     site, and compliance with performance specifications. See paragraph 52 of
     SOP 81-1.

     Supplemental information is provided as follows:

     Explanatory Note
     ----------------

         Revenue Recognition Using the Percentage of Completion Method of
         ----------------------------------------------------------------
         Accounting
         ----------

         The Company records revenue on systems contracts using the percentage
         of completion method, where revenue is recorded as work progresses on
         each contract. The Company does not utilize the completed contract
         method for any of its systems contracts.

  We Build Productivity                         [SI SYSTEMS LOGO] [ERMANCO LOGO]
--------------------------------------------------------------------------------
     PARAGON TECHNOLOGIES, INC. o 600 Kuebler Road o Easton, PA 18040-9295
                       o 610-252-3205 o Fax 610-252-3102
                                www.ptgamex.com
<PAGE>

Kate Tillan
Page 2
April 29, 2005

         The percentage of completion method is used because the following
         conditions exist:
          o  The Company is able to make reliable estimates of the degree
             of completion efforts;
          o  The Company is capable of meeting the requirements
             under the contracts;
          o  The Company's customers are capable of meeting their
             requirements under the contracts; and
          o  Contract terms are clear regarding the rights of each party
             and payment terms.

         There are several acceptable methods of measuring progress towards
         completion. The Company uses the ratio of costs incurred to date to
         total estimated contract costs to measure this progress. Total
         estimated contract cost is a critical accounting estimate because it
         can materially affect net income. The degree of the percentage of
         completion is not based on cash received or interim billings.

         The Company executes contracts with its customers that clearly describe
         the equipment, systems and/or services that it will provide and the
         amount of consideration that it will receive. Prior to entering into
         contracts with customers, the Company analyzes the specifications of
         the contract requirements and estimates total contract costs based on
         its experience with similar projects and then adjusts these estimates
         to address specific individual customer requirements associated with
         each project. After work on a project begins, assumptions that form the
         basis for the calculation of total project costs are examined on a
         monthly basis and estimates are updated to reflect new information as
         it becomes available. In the event that a loss is anticipated on an
         uncompleted contract, a provision for the estimated loss is made at the
         time it is determined.

         Systems contracts require customers to make progress payments for their
         purchases. Contract payment terms vary and are based on agreed upon
         milestones. Billings on contracts may precede or lag revenues earned,
         and such differences are reported in the balance sheet as current
         liabilities (customer deposits and billings in excess of costs and
         estimated earnings) and current assets (costs and estimated earnings in
         excess of billings), respectively. Customers do not return purchases
         related to sales of the Company's products. Acceptance typically
         coincides with commercial use of the system by the customer and
         remaining completion costs, if any, are insignificant. The Company
         follows a consistent policy to determine when contracts are
         substantially completed. This primary consideration for determining
         whether contracts are substantially completed is based upon the Company
         meeting the specifications of contract requirements, which may include,
         for example, some or all of the following criteria: delivery of a
         system, departure from a customer site, compliance with performance
         specifications, and acceptance by the customer.

         Revenue recognition on sales of parts and equipment
         ---------------------------------------------------

         Revenues on sales of parts or equipment are recognized when title
         transfers pursuant to shipping terms. There are no installation or
         customer acceptance aspects of these sales as performance is complete,
         no right of return exists, and pricing is fixed.

Note 8.  Contingencies -- Page 46
-------  ------------------------

2.   We note that you sold your Easton, Pennsylvania facility and entered into a
     sale leaseback arrangement. We also note that this arrangement resulted in
     a total gain of $2.2 million, of which $1.4 million was recorded as a gain
     in fiscal 2003 and the remaining was deferred. Tell us supplementally and
     revise future filings to describe how you measured and accounted for the
     gain and why. Cite the accounting literature upon which you relied. See
     paragraph 33 of SFAS 13 as amended by SFAS 28.

<PAGE>

Kate Tillan
Page 3
April 29, 2005

     Supplemental information is provided as follows:

     Explanatory Note
     ----------------

         SI Systems' principal office is located in a 173,000 square foot,
         concrete, brick, and steel facility in Easton, Pennsylvania. In
         connection with the February 21, 2003 sale of the Company's Easton,
         Pennsylvania facility to Triple Net Investments XIII (an independent,
         unrelated third party), the Company entered into a leaseback
         arrangement with Triple Net Investments XIII for 25,000 square feet of
         office space for five years. The leasing agreement requires fixed
         monthly rentals of $17,703 (with annual increases of 3%). The terms of
         the lease also require the payment of a proportionate share of the
         facility's operating expenses. The lease expires on February 21, 2008.
         In accordance with SFAS 13 and SFAS 28, the sale-leaseback resulted in
         a total gain of $2,189,000, of which $1,363,000 was recorded as a gain
         in 2003. The remaining gain of $826,000 was deferred and is being
         recognized in equal amounts as a reduction in rent expense over the
         five-year term of the lease. During 2004 and 2003, $165,000 and
         $138,000, respectively, of the deferred gain was recognized.

         Total rental payments related to the lease, in the years ended December
         31, 2004 and 2003 approximated $211,000 and $177,000, respectively.
         Future minimum rental commitments at December 31, 2004 are as follows
         (in thousands):

<TABLE>
<CAPTION>
                                                           Lease
                                                        ----------
                      <S>                                  <C>
                      2005............................     $ 218
                      2006............................       224
                      2007............................       231
                      2008............................        34
                      2009............................         -
                                                             ---
                       Total .........................     $ 707
                                                             ===
</TABLE>

         The supporting computations and discussion relating to the Company's
         footnote disclosure is as follows:

         Gain on the Sale of Building:
         -----------------------------

         The total gain of $2,189,000 on the sale of the building was computed
         as follows:

<TABLE>
            <S>                                                                 <C>
            Sales price......................................................   $2,925,000
            Real estate brokerage fees and other closing costs...............      191,000
                                                                                 ---------
            Sales price, net of closing costs................................    2,734,000

            Net book value (gross asset less accumulated depreciation).......      545,000
                                                                                 ---------

            Pre-tax gain on sale.............................................    2,189,000

            Present value of lease payments (see below)......................      826,000
                                                                                 ---------

            Gain recorded in 2003............................................   $1,363,000
                                                                                 =========
</TABLE>

         In accordance with SFAS 13 as amended by SFAS 28, the profit on the
         sale transaction has been deferred and is amortized in proportion to
         the related gross rental charged to expense over the term of the lease.
         The seller-lessee (Company) retains more than a minor part (25,000
         square feet) but less than substantially all of the use of the property
         (173,000 square feet) through the leaseback and realizes a profit on
         the sale in excess of the present value of the minimum lease payments
         over the lease term.

<PAGE>

Kate Tillan
Page 4
April 29, 2005

         Lease payments:
         --------------

         The annual rent to be paid by the Company during the term of the
         five-year lease is as follows:

<TABLE>
                 <S>                                  <C>
                 Year 1.............................  $   206,250.00
                 Year 2.............................      212,437.50
                 Year 3.............................      218,810.62
                 Year 4.............................      225,374.94
                 Year 5.............................      232,136.19
                                                        ------------
                   Total............................  $ 1,095,009.25
                                                        ============
</TABLE>

         The leaseback does not meet the criteria for classification as a
         capital lease; hence it is classified as an operating lease. The
         present value of the stream of lease payments utilizing the Company's
         incremental borrowing rate of 10.0% was $826,000. The $826,000 of
         deferred profit is amortized in equal amounts over the five-year lease
         term because the leaseback is classified as an operating lease.

         The Company's future filings will be revised to provide the requested
         disclosure as follows:

         SI Systems' principal office is located in a 173,000 square foot,
         concrete, brick, and steel facility in Easton, Pennsylvania. In
         connection with the February 2003 sale of the Company's Easton,
         Pennsylvania facility, the Company entered into a leaseback arrangement
         for 25,000 square feet of office space for five years. The leasing
         agreement requires fixed monthly rentals of $17,703 (with annual
         increases of 3%). The terms of the lease also require the payment of a
         proportionate share of the facility's operating expenses. The lease
         expires on February 21, 2008.

         In accordance with SFAS 13 and SFAS 28, the leaseback does not meet the
         criteria for classification as a capital lease; hence it is classified
         as an operating lease. The sale-leaseback resulted in a total gain of
         $2,189,000, of which $1,363,000 was recorded as a gain in 2003. The
         seller-lessee (Company) retained more than a minor part (25,000 square
         feet) but less than substantially all of the use of the property
         (173,000 square feet) through the leaseback and realized a profit on
         the sale in excess of the present value of the minimum lease payments
         over the lease term. The present value of the stream of lease payments
         utilizing the Company's incremental borrowing rate of 10.0% was
         $826,000. The $826,000 of deferred profit is amortized in equal amounts
         as a reduction in rent expense over the five-year term of the lease.
         During 2004 and 2003, $165,000 and $138,000, respectively, of the
         deferred gain was recognized.

<PAGE>

Kate Tillan
Page 5
April 29, 2005

Item 9A.  Controls and Procedures -- Page 53
--------  ----------------------------------

3.   We note your  disclosure  that your  "management,  including  [your]  Chief
     Executive Officer and Chief Financial Officer, concluded that the Company's
     disclosure controls and procedures are effective to ensure that information
     required to be disclosed by the Company in reports that it files or submits
     under the Exchange Act is recorded,  processed,  summarized and reported as
     specified  in the  Securities  and  Exchange  Commission  rules and forms."
     Revise future  filings to clarify,  if true,  that your officers  concluded
     that your  disclosure  controls and procedures are also effective to ensure
     that  information  required to be disclosed in the reports that you file or
     submit under the  Exchange  Act is  accumulated  and  communicated  to your
     management,  including  your chief  executive  officer and chief  financial
     officer,  to allow timely decisions regarding required  disclosure.  If you
     wish to include the definition of disclosure  controls and procedures after
     your  effectiveness  conclusion,  please  ensure the entire  definition  is
     consistent with the definition  included in Rule 13a-1 5(e) of the Exchange
     Act.

4.   With respect to your disclos