CopyTele Gains on Narrowed Third-Quarter Loss (COPY)

The developer of thin flat displays and encryption products, CopyTele (OTC: COPY), reported a third-quarter net loss that narrowed in comparison to the previous two successive quarters, owing to considerably lower administrative and research & development expenses. From a low of $0.07 per share in the month of August 2012, the stock has risen over 200% to reach $0.24 per share with an impressive volume.
The New York-based company is engaged in the development, production and marketing of display and encryption products. Copy Tele’s thin flat phosphor-based display is the first of its kind in the world and matches the display characteristics of a cathode ray tube (CRT). Marketed under the brand name LVND, the product has a long operational life, achieves high-brightness and is a much more compact, energy-efficient, flat panel display. The company also produces a range of encryption products that provide information security for cellular, satellite, digital and ordinary telephone lines.

On September 12, 2012, the company announced that it had completed a private placement of $750,000 of 8% convertible debentures due September 12, 2016. The current Chairman and CEO and one other director of the company were among the accredited investors. The interest-paying debentures are convertible into shares of common stock at an exchange price of $0.092 per share on or before September 12, 2016.

To monetize the patent for the display products, the company announced the appointment of three former executives of Acacia Research (NASDAQ: ACTG) on September 19, 2012. The trio has extensive experience in turnarounds and intellectual property monetization. Commenting on the appointment, Lew Titterton, CopyTele’s chairman and interim CEO, stated, “We are pleased that Mr. Berman, Mr. Roop and Dr. Kumar have agreed to join the company. Their interest in joining CopyTele confirms our belief in the potential value of our patents and patent related technologies. This team has the skills, knowledge, and experience necessary to maximize the value of these assets for our shareholders.”

CopyTele registered a net loss of $629,000 in the third-quarter ended July 30, 2012, compared to $2.79 million in the quarter ended October 30, 2011. The 30-year-old company with more than 100 patents to its credit registered a net loss that narrowed in each of the past four successive quarters. The narrowed losses were soon reflected in the share price as well. The stock, which remained in a trading range of $0.10-$0.17 per share from October 2011 till January 2012, rose to $0.25 per share in the month of March 2012. After holding on to $0.25 per share until April, the stock slid downwards and re-entered the trading range of $0.10-$0.17 per share. However, the stock gained momentum in the 3rd week of August and again attained a price of $0.24 per share. With the annual shareholders meeting scheduled for October 31, 2012, the share price continues to gallop with the hope of better performance in the fourth consecutive quarter.

CopyTele ended the day at $0.235 per share, up $0.015 or 6.8% on a volume of 164,600 shares.

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.