KOPN - Kopin Corporation: Adverse Jury Verdict Likely To Cause Concern Warning - Sell

2024-04-23 18:05:57 ET

Summary

• On Tuesday, shares of microdisplay developer and producer Kopin Corporation sold off after the company disclosed a surprise court loss in its long-standing litigation with BlueRadios, Inc.
• In aggregate, BlueRadios was awarded almost $25 million in damages.
• The verdict leaves the company between a rock and a hard place, as Kopin lacks the funds for a settlement, while an appeal would result in further expenses and distractions.
• Adding insult to injury, the adverse ruling will likely require the inclusion of going concern language in the company's upcoming quarterly report on form 10-Q.
• Given the increased likelihood of a highly diluting near-term equity raise, investors should abstain from buying the dip and rather consider selling existing Kopin positions until the company has successfully addressed its near-term capital needs.

On Tuesday, shares of microdisplay developer and producer Kopin Corporation or "Kopin" ( KOPN ) sold off after the company updated investors on an unfavorable jury verdict in its long-standing litigation with BlueRadios, Inc. or "BlueRadios" (emphasis added by author):

On Monday, April 22, 2024, a jury verdict was entered in the U.S. District Court for the District of Colorado finding for the plaintiff, BlueRadios, Inc. and awarding approximately $5.1 million in damages as well as recommending $19.7 million in disgorgement and exemplary damages. The Court will take that recommendation under advisement and will rule on the final number after briefing on the issues in the matter of BlueRadios, Inc. v. Kopin Corporation, Inc.

“We are very disappointed in the outcome and do not believe the findings were justified by the facts presented,” said Michael Murray Kopin’s Chief Executive Officer. “We are reviewing our options at this time, including an appeal of any judgment that is ultimately entered by the Court.”

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