Genesee County Employees’ Retirement System v. Kornit Digital Ltd.

This is a securities class action that was brought on behalf of all persons or entities that purchased or otherwise acquired ordinary shares of Kornit Digital Ltd. (“Kornit”) (i) during the period from February 17, 2021 through July 5, 2022, inclusive (the “Class Period”); and/or (ii) pursuant and/or traceable to Kornit’s secondary offering of ordinary shares in November 2021.

Lead Plaintiffs Have Reached a Proposed Settlement of the Action for $19.5 Million

Lead Plaintiffs Genesee County Employees’ Retirement System, Kranot Hishtalmut Le Morim Tichoniim Havera Menahelet LTD, Kranot Hishtalmut Le Morim Ve Gananot Havera Menahelet LTD, and Hachshara Insurance Company Ltd., on behalf of themselves and the Settlement Class, have reached a proposed settlement of the Action with Kornit and certain of its executives during the relevant time period—Chief Executive Officer, Ronen Samuel, and Chief Financial Officer, Alon Rozner (together, the “Individual Defendants”)—for $19,500,000 in cash that, if approved, will resolve the Action (the “Settlement”).

If you are a member of the Settlement Class, your rights will be affected and you may be eligible for a payment from the Settlement. The Settlement Class consists of:

all persons and entities who purchased or otherwise acquired ordinary shares of Kornit (i) during the period from February 17, 2021 through July 5, 2022, inclusive (the “Class Period”); and/or (ii) pursuant and/or traceable to Kornit’s secondary offering of ordinary shares in November 2021.

Certain persons and entities are excluded from the Settlement Class by definition (see paragraph 25 of the Notice) or may request exclusion (see paragraphs 59-61 of the Notice).

Please read the Notice to fully understand your rights and options. Copies of the Notice and Claim Form can be found in the Case Documents list on the right of this page. You may also visit the case website, www.KornitSecuritiesLitigation.com, for more information about the Settlement.

To be eligible to receive a payment under the proposed Settlement, you must submit a Claim Form postmarked (if mailed) or submitted on-line by no later than December 10, 2026.

Payments to eligible claimants will be made only if the Court approves the Settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing.  Please be patient, as this process will take some time to complete.

IMPORTANT DATES AND DEADLINES

December 10, 2026	Claim Filing Deadline.  Claim Forms must be postmarked (if mailed) or submitted on-line no later than December 10, 2026.
October 28, 2026	Exclusion Deadline.  To exclude yourself from the Settlement Class, you must submit a written request for exclusion so that it is received no later than October 28, 2026, in accordance with the instructions in the Notice.
October 28, 2026	Objection Deadline.  Any objection to the proposed Settlement, the proposed Plan of Allocation, or the motion for attorneys’ fees and expenses, must be submitted or postmarked no later than October 28, 2026, in accordance with the instructions in the Notice.
November 18, 2026 at 3:00 p.m. Eastern time	Settlement Hearing.  The Settlement Hearing will be held on November 18, 2026 at 3:00 p.m. Eastern time, before the Honorable Madeline Cox Arleo of the United States District Court for the District of New Jersey, either in person in Courtroom 4A of the Martin Luther King Building & U.S. Courthouse, 50 Walnut Street, Newark, NJ 07101, or by telephone or videoconference (in the discretion of the Court). The Settlement Hearing will be held by the Court to consider, among other things, whether the proposed Settlement is fair, reasonable, and adequate and should be approved; whether the proposed Plan of Allocation is fair and reasonable and should be approved; and whether Lead Counsel’s motion for attorneys’ fees and expenses should be approved.

Background

On February 15, 2023, Bernstein Litowitz Berger & Grossmann LLP (“BLB&G”) filed a class action lawsuit in the U.S. District Court for the District of New Jersey alleging violations of the federal securities laws by Kornit Digital Ltd. (“Kornit” or the “Company”), certain of the Company’s current and former senior executives and directors, and certain underwriters of a secondary offering conducted by Kornit (collectively, “Defendants”).

On August 30, 2023, the Honorable Madeline Cox Arleo appointed Genesee County Employees’ Retirement System, Kranot Hishtalmut Le Morim Tichoniim Havera Menahelet LTD, Kranot Hishtalmut Le Morim Ve Gananot Havera Menahelet LTD, and Hachshara Insurance Company Ltd. as Lead Plaintiffs and BLB&G as Lead Counsel for the potential class of investors who were harmed by Defendants’ fraud.

On October 27, 2023, Lead Plaintiffs filed a Consolidated Complaint in the action. The action is brought on behalf all persons or entities that purchased or otherwise acquired Kornit ordinary shares between February 17, 2021 and July 5, 2022, inclusive (the “Class Period”). To view the complaint, see the Case Documents section of this page.

Kornit’s Alleged Fraud

Kornit designs and manufactures industrial digital printing solutions for the garment, apparel, and textile industries. The Company generates revenue from sales of its printing systems as well as textile inks and other consumable products for use in its digital printers. Kornit also provides customer assistance and equipment services to end-users of its printers through customer support contracts, including technical support, maintenance, and repair. In addition, during the Class Period, Kornit expanded its business and began offering software services to its customers, including a suite of end-to-end fulfillment and production solutions called KornitX, through which the Company provides, among other things, automated production systems and workflow and inventory management.

Kornit’s largest customer is e-commerce company, Amazon.com, Inc. The Company’s other large customers during the Class Period included apparel and activewear brand, Delta Apparel, Inc. (“Delta Apparel”), as well as Fanatics, Inc. (“Fanatics”), a provider of licensed sports merchandise. Kornit generates more than 60% of its revenues from its ten largest customers. Because such a significant portion of Kornit’s revenues is concentrated among its largest customers, it was crucial that the Company maintain those major customers and continue to expand its customer base in order to achieve Kornit’s ambitious goal of generating $1 billion in revenue by 2026.

The complaint alleges that throughout the Class Period, Defendants made numerous materially false and misleading statements and omissions concerning Kornit’s business and operations. Specifically, Defendants repeatedly touted the competitive advantages provided by Kornit’s technology and assured investors that the Company faced virtually no meaningful competition in the “direct-to-garment” printing market. Defendants also assured investors that there was strong demand for Kornit’s digital printing systems, KornitX software and consumable products, such as textile inks, as well as for the services the Company provides customers to maintain and manage its digital printers, and to manage customer workflow. Defendants further assured investors that the strong demand for the Company’s products and services would enable Kornit to maintain its existing customer base and attract new customers that would limit the risks associated with a substantial portion of its revenues being concentrated among a small number of large customers.

In truth, Defendants knew, or at a minimum, recklessly disregarded, that the Company’s digital printing business was plagued by serious competition, severe quality control problems and customer service deficiencies. Those problems and deficiencies caused Kornit to cede market share to competitors, which, in turn, led to a decrease in the Company’s revenue as customers went elsewhere for their digital printing needs. As a result of Defendants’ misrepresentations, Kornit ordinary shares traded at artificially inflated prices throughout the Class Period.

On March 28, 2022, Delta Apparel and Fanatics—two of Kornit’s major customers—announced that 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.

On May 11, 2022, despite reporting revenues that exceeded expectations, Kornit reported a net loss of $5.2 million for the first quarter of 2022, compared to a profit of $5.1 million in the prior year period. The Company also issued revenue guidance for the second quarter of 2022 that was significantly below analysts’ expectations. Kornit attributed its disappointing guidance to a slowdown in orders from customers in the e-commerce market. In addition, the Company admitted that, for at least the previous two quarters, Kornit knew that Delta Apparel had acquired digital printing systems from a Kornit competitor. These disclosures caused the price of Kornit shares to decline by $18.78 per share, or 33%.

Then, on July 5, 2022, Kornit announced that it would report a significant revenue shortfall for the second quarter of 2022. Specifically, Kornit expected revenue for the second quarter to be in the range of $56.4 million to $59.4 million, well below the previous revenue guidance of between $85 million and $95 million that the Company provided less than two months earlier. Kornit attributed the substantial revenue miss to “a significantly slower pace of direct-to-garment (DTG) systems orders in the second quarter as compared to our prior expectations.” These disclosures caused the price of Kornit shares to decline by an additional $8.10 per share, or 25.7%.

Litigation History

Defendants filed their motion to dismiss the case on December 21, 2023. Lead Plaintiffs’ opposition to that motion was filed on February 16, 2024, and Defendants’ reply brief is due on April 1, 2024.

Following oral argument, on August 15, 2024, the Court entered an Order granting without prejudice the motion to dismiss.

On November 8, 2024, Lead Plaintiffs filed the Amended Consolidated Class Action Complaint (the “Complaint”). Among other things, the Complaint alleged false and misleading statements related to Kornit’s business and operations. The Complaint asserted claims under Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder, against all Defendants; claims under Section 20(a) of the Exchange Act, 15 U.S.C. § 78t(a), against the Individual Defendants; and claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, 15 U.S.C. §§ 77k, 77l, and 77o, against the Company, the Former Underwriter Defendants, and the Individual Defendants.

On January 24, 2025, Defendants filed a motion to dismiss the Complaint. Following oral argument, on September 4, 2025, the Court entered an Order granting in part and denying in part the motion to dismiss the Complaint.

Following the denial of Defendants’ motion to dismiss the Complaint, the Parties submitted a proposed scheduling order to the Court and began discovery, including the exchange of requests for the production of documents.

On December 4, 2025, Defendants filed an Answer to the Complaint and filed a motion for judgment on the pleadings, which was fully briefed and was still pending at the time the settlement was reached.

On March 6, 2026, the Parties filed a letter to the Court informing the Court of the Parties’ agreement to conduct a private mediation before Jed D. Melnick of JAMS. On March 11, 2026, the Court granted the Parties’ request to stay discovery pending the outcome of their private mediation.

The Parties engaged in pre-mediation document discovery, with Defendants making a production of documents directed at key liability issues in the case. Thereafter, the Parties exchanged mediation briefs and participated in an in-person mediation before Mr. Melnick on April 7, 2026.

The case did not settle at that session but the Parties continued to negotiate through Mr. Melnick. Following the mediation session, Mr. Melnick made a recommendation that the Action be settled for $19.5 million, which the Parties accepted on April 28, 2026. The terms of the Parties’ agreement to settle were memorialized in a Term Sheet executed on May 11, 2026.

On July 2, 2026, the Parties entered into a Stipulation and Agreement of Settlement (the “Stipulation”), which sets forth the terms and conditions of the Settlement.

On July 21, 2026, the Court preliminarily approved the Settlement, authorized that notice of the Settlement be disseminated to potential Settlement Class Members, and scheduled the Settlement Hearing to consider whether to grant final approval to the Settlement for November 18, 2026.