KORNIT SHAREHOLDER ACTION REMINDER: Securities Litigation Partner James (Josh) Wilson Encourages Investors Who Suffered Losses Exceeding $100,000 In Kornit To Contact Him Directly To Discuss Their Options

NEW YORK, March 4, 2023 /PRNewswire/ — Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Kornit Digital Ltd. (“Kornit ” or the “Company”) KRNT It reminds investors about the April 17, 2023 Deadline for applying to be the lead plaintiff in a federal class action against the Company for securities violations

You suffered losses exceeding $100,000 Kornit options and stock can be purchased between February 17, 2021 And July 5, 2022 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson Direct at 877-247-4292 Or 212-983-9330 (Ext. 1310). Click here to get more information. www.faruqilaw.com/KRNT.

There are no costs or obligations.

Faruqi & Faruqi is a leading minority And Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.

Kornit develops and manufactures digital printing solutions for textile, garment, and apparel industries. The unique eco-friendly technology used by Kornit’s digital inkjet printers allows them to print directly on finished garments as well as large rolls of unfinished material.

The Company makes revenue through the sales of its printing equipment, textile inks, and other consumable products that can be used in its digital printers. Kornit offers customer support and equipment services to its end-users. This includes technical support, maintenance, repair, and technical support. Kornit began offering software services during the Class Period. These include a suite called KornitX that provides end-to–end fulfillment and production solutions.

Amazon.com, Inc. is Kornit’s largest customer. The Company had other major customers during the Class period, including Delta Apparel, Inc. (aka Delta Apparel) and Fanatics, Inc. (aka Fanatics), which are both apparel and activewear brands. Kornit makes more than 60% of its revenues through its ten largest customers. Kornit generates a large portion of its revenues from its largest customers. It was therefore crucial for the Company to maintain these customers and expand its customer base to reach its ambitious goal of generating 80% of its revenue. $1 Billion In revenue by 2026

The complaint claims that Defendants made a number of materially false and misleading statements about Kornit’s operations and business during the Class Period. In particular, the Defendants repeated the Company’s competitive advantages and assured investors that there was virtually no competition in the “direct to-garment” printing market. Investors were also assured by Defendants that Kornit’s digital printing system and consumable products (such as textile inks) are in high demand. They also provided services to customers to help them maintain and manage their digital printers and to manage customer workflows. Investors were also assured by Defendants that Kornit’s strong demand for its products and services would allow it to retain its existing customers and attract new ones. This would reduce the risk associated with a large portion of its revenues being concentrated in a few large customers.

In reality, the Defendants knew or at least recklessly ignored that the Company’s digital printer business was plagued with quality control issues and poor customer service. These issues and deficiencies caused Kornit’s market share to be ceded to competitors. In turn, this led to a decrease of revenue for the Company, as customers switched to digital printing services elsewhere. Due to Defendants’ misleading statements, Kornit ordinary stock shares traded at artificially elevated prices during the Class Period.

Investors started to realize the truth. March 28, 2022, when Delta Apparel and Fanatics—two of Kornit’s major customers—announced that for months they had collaborated with one of Kornit’s principal competitors to develop a new digital printing technology that directly competed with Kornit’s products and services. Kornit would lose revenue from two of the most important customers.

On May 11, 2022Kornit reported a net loss in spite of reporting revenue that exceeded expectations. $5.2 million Comparable to a profit in the first quarter 2022, $5.1 million In the previous year period. Revenue guidance was also issued by the Company for the second quarter 2022, which was significantly lower than analysts’ expectations. Kornit said that the Company’s disappointing guidance was due to slowdowns in orders from customers on the ecommerce market. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors. These disclosures led the Kornit shares price to fall by $18.78 Per share or 33%

Then, on July 5, 2022Kornit stated that it expected to report a significant revenue gap for the second quarter 2022. Kornit expects revenue to reach between $200,000 and $35,000 for the second quarter. $56.4 Million To $59.4 MillionThis is well below the revenue guidance of between $85 Million And $95 Million The Company provided less revenue than it had two months ago. Kornit stated that the significant revenue decline was due to “a substantially slower pace of direct to-garment (DTG), systems orders in quarter two than our expectations.” These disclosures caused Kornit shares’ price to fall by another $8.10 Each share is 25.7%

The court-appointed lead plaintiff, who has the greatest financial interest in the relief sought for the class and is typical of class members, directs and supervises the litigation on behalf the putative class. Any member of the putative group may request the Court to appoint a lead plaintiff through any counsel they choose, or can opt to remain an absent member of the class and do nothing. Your ability to share any recovery is not affected whether you serve as a leading plaintiff. 

Faruqi & Faruqi, LLP also encourages anyone with information regarding Kornit’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.

Attorney Advertising. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com). Precedent results are not indicative of a similar outcome in future matters. We are happy to discuss your individual case. All communications will be treated confidentially.

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