x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 04-2833935 | |
State or other jurisdiction of incorporation or organization | (I.R.S. Employer Identification No.) | |
125 North Drive, Westborough, MA | 01581-3335 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | x | ||
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Class | Outstanding as of July 29, 2016 | ||
Common Stock, par value $.01 | 66,769,502 |
Page No. | ||
Item 1. | ||
Condensed Consolidated Balance Sheets at June 25, 2016 (Unaudited) and December 26, 2015 | ||
Condensed Consolidated Statements of Operations (Unaudited) for the three and six months ended June 25, 2016 and June 27, 2015 | ||
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) for the three and six months ended June 25, 2016 and June 27, 2015 | ||
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) for the six months ended June 25, 2016 | ||
Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 25, 2016 and June 27, 2015 | ||
Notes to Unaudited Condensed Consolidated Financial Statements | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
Item 1: | Condensed Consolidated Financial Statements (Unaudited) |
June 25, 2016 | December 26, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | 25,812,429 | $ | 19,767,889 | |||
Marketable debt securities, at fair value | 65,709,596 | 60,942,891 | |||||
Accounts receivable, net of allowance of $169,000 and $153,000 in 2016 and 2015, respectively | 1,326,341 | 1,487,633 | |||||
Unbilled receivables | 82,535 | 87,340 | |||||
Inventory | 2,935,699 | 2,512,473 | |||||
Prepaid taxes | 119,543 | 437,586 | |||||
Prepaid expenses and other current assets | 895,741 | 920,410 | |||||
Note receivable | — | 15,000,000 | |||||
Total current assets | 96,881,884 | 101,156,222 | |||||
Property, plant and equipment, net | 2,728,951 | 2,677,103 | |||||
Goodwill | 887,512 | 946,082 | |||||
Other assets | 716,679 | 461,416 | |||||
Property and plant held for sale | — | 819,263 | |||||
Total assets | $ | 101,215,026 | $ | 106,060,086 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,327,008 | $ | 3,959,704 | |||
Accrued payroll and expenses | 1,791,883 | 1,631,292 | |||||
Accrued warranty | 516,000 | 518,000 | |||||
Accrued income taxes | 721,202 | — | |||||
Billings in excess of revenue earned | 1,254,694 | 1,407,566 | |||||
Other accrued liabilities | 2,662,518 | 2,553,282 | |||||
Deferred tax liabilities | 2,570,000 | 1,207,000 | |||||
Total current liabilities | 13,843,305 | 11,276,844 | |||||
Asset retirement obligations | 274,034 | 298,463 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, par value $.01 per share: authorized, 3,000 shares; none issued | — | — | |||||
Common stock, par value $.01 per share: authorized, 120,000,000 shares; issued 78,875,534 shares in 2016 and 78,271,659 shares in 2015; outstanding 64,039,260 shares in 2016 and 63,977,385 shares in 2015 | 761,415 | 760,796 | |||||
Additional paid-in capital | 327,754,462 | 326,558,527 | |||||
Treasury stock (12,102,258 shares in 2016 and 2015, respectively, at cost) | (42,741,551 | ) | (42,741,551 | ) | |||
Accumulated other comprehensive income | 1,766,202 | 771,774 | |||||
Accumulated deficit | (200,655,234 | ) | (190,608,671 | ) | |||
Total Kopin Corporation stockholders’ equity | 86,885,294 | 94,740,875 | |||||
Noncontrolling interest | 212,393 | (256,096 | ) | ||||
Total stockholders’ equity | 87,097,687 | 94,484,779 | |||||
Total liabilities and stockholders’ equity | $ | 101,215,026 | $ | 106,060,086 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
Revenues: | |||||||||||||||
Net component revenues | $ | 4,096,529 | $ | 9,486,723 | $ | 10,074,663 | $ | 16,615,093 | |||||||
Research and development revenues | 258,746 | 1,369,883 | 399,750 | 2,826,505 | |||||||||||
4,355,275 | 10,856,606 | 10,474,413 | 19,441,598 | ||||||||||||
Expenses: | |||||||||||||||
Cost of component revenues | 4,682,846 | 6,359,780 | 9,329,888 | 11,643,513 | |||||||||||
Research and development | 4,119,401 | 4,884,010 | 8,159,352 | 9,744,202 | |||||||||||
Selling, general and administration | 4,282,264 | 5,108,229 | 8,043,113 | 9,494,442 | |||||||||||
Gain on sale of property and plant | (7,700,522 | ) | — | (7,700,522 | ) | — | |||||||||
5,383,989 | 16,352,019 | 17,831,831 | 30,882,157 | ||||||||||||
Loss from operations | (1,028,714 | ) | (5,495,413 | ) | (7,357,418 | ) | (11,440,559 | ) | |||||||
Other income and expense: | |||||||||||||||
Interest income | 175,765 | 198,898 | 340,713 | 408,561 | |||||||||||
Other income, net | 3,718 | 25,758 | 41,626 | 45,269 | |||||||||||
Foreign currency transaction gains (losses) | 27,503 | 529,138 | (524,437 | ) | 349,549 | ||||||||||
Gain on sale of investments | — | 5,460,399 | — | 7,602,820 | |||||||||||
206,986 | 6,214,193 | (142,098 | ) | 8,406,199 | |||||||||||
(Loss) income before provision for income taxes, equity loss in unconsolidated affiliate and net (income) loss attributable to noncontrolling interest | (821,728 | ) | 718,780 | (7,499,516 | ) | (3,034,360 | ) | ||||||||
Tax provision | (1,963,000 | ) | (12,500 | ) | (2,104,000 | ) | (25,000 | ) | |||||||
(Loss) income before equity loss in unconsolidated affiliate and net (income) loss attributable to noncontrolling interest | (2,784,728 | ) | 706,280 | (9,603,516 | ) | (3,059,360 | ) | ||||||||
Equity loss in unconsolidated affiliate | — | — | — | (47,443 | ) | ||||||||||
Net (loss) income | (2,784,728 | ) | 706,280 | (9,603,516 | ) | (3,106,803 | ) | ||||||||
Net (income) loss attributable to the noncontrolling interest | (344,374 | ) | 74,690 | (443,047 | ) | 49,784 | |||||||||
Net (loss) income attributable to the controlling interest | $ | (3,129,102 | ) | $ | 780,970 | $ | (10,046,563 | ) | $ | (3,057,019 | ) | ||||
Net (loss) income per share | |||||||||||||||
Basic | $ | (0.05 | ) | $ | 0.01 | $ | (0.16 | ) | $ | (0.05 | ) | ||||
Diluted | $ | (0.05 | ) | $ | 0.01 | $ | (0.16 | ) | $ | (0.05 | ) | ||||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic | 64,011,571 | 63,066,031 | 63,994,809 | 63,074,842 | |||||||||||
Diluted | 64,011,571 | 63,300,781 | 63,994,809 | 63,074,842 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
Net (loss) income | $ | (2,784,728 | ) | $ | 706,280 | $ | (9,603,516 | ) | $ | (3,106,803 | ) | ||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation adjustments | (92,228 | ) | (569,644 | ) | 643,956 | (555,222 | ) | ||||||||
Unrealized holding gain on marketable securities | 92,596 | 500,602 | 410,106 | 1,325,524 | |||||||||||
Reclassification of holding gains in net loss | (38,360 | ) | (21,785 | ) | (34,192 | ) | (399,345 | ) | |||||||
Other comprehensive (loss) income | (37,992 | ) | (90,827 | ) | 1,019,870 | 370,957 | |||||||||
Comprehensive (loss) income | $ | (2,822,720 | ) | $ | 615,453 | $ | (8,583,646 | ) | $ | (2,735,846 | ) | ||||
Comprehensive (income) loss attributable to the noncontrolling interest | (337,788 | ) | (76,524 | ) | (468,489 | ) | (18,726 | ) | |||||||
Comprehensive (loss) income attributable to controlling interest | $ | (3,160,508 | ) | $ | 538,929 | $ | (9,052,135 | ) | $ | (2,754,572 | ) |
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Kopin Corporation Stockholders’ Equity | Noncontrolling Interest | Total Stockholders’ Equity | |||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, December 26, 2015 | 76,079,643 | $ | 760,796 | $ | 326,558,527 | $ | (42,741,551 | ) | $ | 771,774 | $ | (190,608,671 | ) | $ | 94,740,875 | $ | (256,096 | ) | $ | 94,484,779 | ||||||||||||||
Stock-based compensation | — | — | 1,198,054 | — | — | — | 1,198,054 | — | 1,198,054 | |||||||||||||||||||||||||
Vesting of restricted stock | 62,500 | 625 | (625 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 994,428 | — | 994,428 | 25,442 | 1,019,870 | |||||||||||||||||||||||||
Restricted stock for tax withholdings | (625 | ) | (6 | ) | (1,494 | ) | — | — | — | (1,500 | ) | — | (1,500 | ) | ||||||||||||||||||||
Net loss | — | — | — | — | — | (10,046,563 | ) | (10,046,563 | ) | 443,047 | (9,603,516 | ) | ||||||||||||||||||||||
Balance, June 25, 2016 | 76,141,518 | $ | 761,415 | $ | 327,754,462 | $ | (42,741,551 | ) | $ | 1,766,202 | $ | (200,655,234 | ) | $ | 86,885,294 | $ | 212,393 | $ | 87,097,687 |
Six Months Ended | |||||||
June 25, 2016 | June 27, 2015 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (9,603,516 | ) | $ | (3,106,803 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 651,687 | 1,190,413 | |||||
Accretion (amortization) of premium or discount on marketable debt securities | 78,261 | 302,466 | |||||
Stock-based compensation | 951,053 | 2,022,043 | |||||
Foreign currency losses (gains) | 563,548 | (280,173 | ) | ||||
Change in allowance for bad debt | (17,644 | ) | 74,500 | ||||
Deferred income taxes | 1,363,000 | — | |||||
Gain on sale of property and plant | (7,700,522 | ) | — | ||||
Gain on sale of investments | — | (7,602,820 | ) | ||||
Other non-cash items | 244,956 | 1,130,162 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 145,076 | (4,388,730 | ) | ||||
Inventory | (696,705 | ) | (110,325 | ) | |||
Prepaid expenses and other current assets | 295,257 | 177,843 | |||||
Accounts payable and accrued expenses | 1,682,820 | (1,351,835 | ) | ||||
Billings in excess of revenue earned | (152,872 | ) | 3,085,945 | ||||
Net cash used in operating activities | (12,195,601 | ) | (8,857,314 | ) | |||
Cash flows from investing activities: | |||||||
Other assets | (187,646 | ) | (8,486 | ) | |||
Capital expenditures | (305,059 | ) | (651,814 | ) | |||
Proceeds from sale of marketable debt securities | 30,488,413 | 12,000,622 | |||||
Purchase of marketable debt securities | (35,064,288 | ) | (7,777,277 | ) | |||
Proceeds from sale of investments | — | 7,330,203 | |||||
Proceeds from sale of property and plant | 8,106,819 | — | |||||
Proceeds from sale of III-V product line | 15,000,000 | — | |||||
Net cash provided by investing activities | 18,038,239 | 10,893,248 | |||||
Cash flows from financing activities: | |||||||
Proceeds from exercise of stock options and warrants | — | 86,048 | |||||
Settlements of restricted stock for tax withholding obligations | (1,500 | ) | (183,259 | ) | |||
Net cash used in financing activities | (1,500 | ) | (97,211 | ) | |||
Effect of exchange rate changes on cash | 203,402 | (97,023 | ) | ||||
Net increase in cash and equivalents | 6,044,540 | 1,841,700 | |||||
Cash and equivalents: | |||||||
Beginning of period | 19,767,889 | 14,635,801 | |||||
End of period | $ | 25,812,429 | $ | 16,477,501 | |||
Supplemental disclosure of cash flow information: | |||||||
Income taxes paid | $ | — | $ | 50,000 | |||
Supplemental schedule of noncash investing activities: | |||||||
Construction in progress included in accrued expenses | $ | — | $ | 228,000 | |||
Non cash proceeds from exercise of warrants | $ | — | $ | 1,330,000 |
1. | BASIS OF PRESENTATION |
2. | CASH AND EQUIVALENTS AND MARKETABLE SECURITIES |
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
U.S. government and agency backed securities | $ | 44,742,363 | $ | 46,586,224 | $ | 118,565 | $ | — | $ | — | $ | (121,561 | ) | $ | 44,860,928 | $ | 46,464,663 | ||||||||||||||
Corporate debt and certificates of deposit | 20,914,514 | 14,534,247 | — | — | (65,846 | ) | (56,019 | ) | 20,848,668 | 14,478,228 | |||||||||||||||||||||
Total | $ | 65,656,877 | $ | 61,120,471 | $ | 118,565 | $ | — | $ | (65,846 | ) | $ | (177,580 | ) | $ | 65,709,596 | $ | 60,942,891 |
Less than One year | One to Five years | Greater than Five years | Total | ||||||||||||
U.S. government and agency backed securities | $ | 17,582,380 | $ | 20,207,958 | $ | 7,070,590 | $ | 44,860,928 | |||||||
Corporate debt and certificates of deposit | 16,448,550 | 4,400,118 | — | 20,848,668 | |||||||||||
Total | $ | 34,030,930 | $ | 24,608,076 | $ | 7,070,590 | $ | 65,709,596 |
3. | FAIR VALUE MEASUREMENTS |
Fair Value Measurement June 25, 2016 Using: | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Cash and Equivalents | $ | 25,812,429 | $ | 25,812,429 | $ | — | $ | — | |||||||
U.S. Government Securities | 44,860,928 | 13,490,520 | 31,370,408 | — | |||||||||||
Corporate Debt | 7,133,346 | — | 7,133,346 | — | |||||||||||
Certificates of Deposit | 13,715,322 | — | 13,715,322 | — | |||||||||||
GCS Holdings | 377,724 | 377,724 | — | — | |||||||||||
$ | 91,899,749 | $ | 39,680,673 | $ | 52,219,076 | $ | — | ||||||||
Fair Value Measurement December 26, 2015 Using: | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Cash and Equivalents | $ | 19,767,889 | $ | 19,767,889 | $ | — | $ | — | |||||||
U.S. Government Securities | 46,464,663 | 16,381,152 | 30,083,511 | — | |||||||||||
Corporate Debt | 6,886,495 | — | 6,886,495 | — | |||||||||||
Certificates of Deposit | 7,591,733 | — | 7,591,733 | — | |||||||||||
GCS Holdings | 232,037 | 232,037 | — | — | |||||||||||
$ | 80,942,817 | $ | 36,381,078 | $ | 44,561,739 | $ | — |
4. | INVENTORY |
June 25, 2016 | December 26, 2015 | ||||||
Raw materials | $ | 1,113,639 | $ | 844,475 | |||
Work-in-process | 1,393,398 | 1,281,891 | |||||
Finished goods | 428,662 | 386,107 | |||||
$ | 2,935,699 | $ | 2,512,473 |
5. | NET LOSS PER SHARE |
Three Months Ended | Six Months Ended | ||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||
Weighted average common shares outstanding-basic | 64,011,571 | 63,066,031 | 63,994,809 | 63,074,842 | |||||||
Stock options and non-vested restricted common stock | — | 234,750 | — | — | |||||||
Weighted average common shares outstanding-diluted | 64,011,571 | 63,300,781 | 63,994,809 | 63,074,842 |
Three Months Ended | Six Months Ended | ||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||
Non-vested restricted common stock | 2,734,016 | 1,374,000 | 2,734,016 | 3,074,111 |
6. | STOCK-BASED COMPENSATION |
Shares | Weighted Average Grant Fair Value | |||||
Balance, December 26, 2015 | 2,192,016 | $ | 3.82 | |||
Granted | 604,500 | 1.86 | ||||
Forfeited | — | — | ||||
Vested | (62,500 | ) | 3.55 | |||
Balance, June 25, 2016 | 2,734,016 | $ | 3.39 |
Six Months Ended | |||||||
June 25, 2016 | June 27, 2015 | ||||||
Cost of component revenues | $ | 289,937 | $ | 461,094 | |||
Research and development | 248,848 | 503,523 | |||||
Selling, general and administrative | 412,268 | 1,057,426 | |||||
Total | $ | 951,053 | $ | 2,022,043 |
7. | OTHER ASSETS AND NOTE RECEIVABLE |
8. | GOODWILL AND INTANGIBLES |
Balance, December 26, 2015 | $ | 946,082 | |
Change due to exchange rate fluctuations | (58,570 | ) | |
Balance, June 25, 2016 | $ | 887,512 |
9. | ACCRUED WARRANTY |
Balance, December 26, 2015 | $ | 518,000 | |
Additions | 356,000 | ||
Claims | (358,000 | ) | |
Balance, June 25, 2016 | $ | 516,000 |
10. | INCOME TAXES |
11. | SEGMENTS AND GEOGRAPHICAL INFORMATION |
Three Months Ended | |||||||||||||||||||||||
June 25, 2016 | June 27, 2015 | ||||||||||||||||||||||
Kopin | FDD | Total | Kopin | FDD | Total | ||||||||||||||||||
Revenues | $ | 3,321 | $ | 1,034 | $ | 4,355 | $ | 10,177 | $ | 679 | $ | 10,856 | |||||||||||
Net loss attributable to the controlling interest | (3,075 | ) | (54 | ) | (3,129 | ) | 853 | (72 | ) | 781 |
Six Months Ended | |||||||||||||||||||||||
June 25, 2016 | June 27, 2015 | ||||||||||||||||||||||
Kopin | FDD | Total | Kopin | FDD | Total | ||||||||||||||||||
Revenues | $ | 8,469 | $ | 2,005 | $ | 10,474 | $ | 17,764 | $ | 1,678 | $ | 19,442 | |||||||||||
Net loss attributable to the controlling interest | (9,646 | ) | (401 | ) | (10,047 | ) | (2,519 | ) | (538 | ) | (3,057 | ) | |||||||||||
Total assets | 99,593 | 1,622 | 101,215 | 122,604 | 1,403 | 124,007 | |||||||||||||||||
Long-lived assets from continuing operations | 2,726 | 3 | 2,729 | 3,972 | 135 | 4,107 |
Three Months Ended | Six Months Ended | ||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||
United States | 28 | % | 77 | % | 28 | % | 75 | % | |||
Others | — | % | — | % | — | % | 1 | % | |||
Americas | 28 | % | 77 | % | 28 | % | 76 | % | |||
Asia-Pacific | 59 | % | 18 | % | 55 | % | 17 | % | |||
Europe | 13 | % | 5 | % | 17 | % | 7 | % | |||
Total Revenues | 100 | % | 100 | % | 100 | % | 100 | % |
12. | LITIGATION |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Consumer-oriented headsets which resemble typical eyeglasses but include voice and audio capabilities allowing the user to communicate with other users and a Pupil display module; |
• | Augmented reality health and fitness sunglasses, called Solos™, that have voice and audio capabilities, a Pupil display module which overlays situational information on the glasses, our Whisper Chip; and an |
• | Industrial headset reference design, which is essentially a complete head-worn computer that includes an optical pod with one of our display products, a microprocessor, battery, camera, memory and various commercially available software packages that we license. |
Three Months Ended | Six Months Ended | ||||||||||||||
Display Revenues by Application | June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | |||||||||||
Wearable | $ | 1.8 | $ | 6.0 | $ | 4.4 | $ | 7.1 | |||||||
Military | 0.9 | 2.4 | 2.4 | 7.0 | |||||||||||
Industrial | 1.0 | 0.7 | 2.2 | 1.7 | |||||||||||
Consumer | 0.4 | 0.4 | 1.1 | 0.8 | |||||||||||
Research & Development | 0.3 | 1.4 | 0.4 | 2.8 | |||||||||||
Total | $ | 4.4 | $ | 10.9 | $ | 10.5 | $ | 19.4 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
Cost of component revenues (in millions): | $ | 4.7 | $ | 6.4 | $ | 9.3 | $ | 11.6 | |||||||
Cost of component revenues as a % of net component revenues | 114.3 | % | 67.0 | % | 92.6 | % | 70.1 | % |
Three Months Ended | Six Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
Funded | $ | 0.2 | $ | 0.6 | $ | 0.3 | $ | 2.0 | |||||||
Internal | 3.9 | 4.3 | 7.9 | 7.7 | |||||||||||
Total research and development expense | $ | 4.1 | $ | 4.9 | $ | 8.2 | $ | 9.7 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
Selling, general and administration expense (in millions): | $ | 4.3 | $ | 5.1 | $ | 8.0 | $ | 9.5 | |||||||
Selling, general and administration expense as a % of revenues | 98.3 | % | 46.3 | % | 76.8 | % | 48.4 | % |
Three Months Ended | Six Months Ended | ||||||||||||||
June 25, 2016 | June 27, 2015 | June 25, 2016 | June 27, 2015 | ||||||||||||
Other income and expense (in millions): | $ | 0.2 | $ | 6.2 | $ | (0.1 | ) | $ | 8.4 |
Domestic | $ | 71,266,644 | |
Foreign | 8,986,555 | ||
Subtotal cash and marketable debt securities | 80,253,199 | ||
Cash and marketable debt securities held in other currencies and converted to U.S. dollars | 11,268,826 | ||
Total cash and marketable debt securities | $ | 91,522,025 |
Contractual Obligations | Total | Less than 1 year | 1-3 Years | 3-5 years | More than 5 years | ||||||||||||||
Operating Lease Obligations | $ | 6,666,601 | $ | 1,308,681 | $ | 3,179,209 | $ | 2,072,044 | $ | 106,667 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 6. | Exhibits |
Exhibit No. | Description | |
3.1 | Amended and Restated Certificate of Incorporation (1) | |
3.2 | Amendment to Certificate of Incorporation (2) | |
3.3 | Amendment to Certificate of Incorporation (2) | |
3.4 | Fourth Amended and Restated By-laws (3) | |
31.1 | Certification of John C.C. Fan, Chief Executive Officer, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) * | |
31.2 | Certification of Richard A. Sneider, Chief Financial Officer, filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) * | |
32.1 | Certification of John C.C. Fan, Chief Executive Officer, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) ** | |
32.2 | Certification of Richard A. Sneider, Chief Financial Officer, furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) ** | |
101.INS | XBRL Instance Document* | |
101.SCH | XBRL Taxonomy Extension Schema Document* | |
101.CAL | XBRL Taxonomy Calculation Linkbase Document* | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* | |
101.LAB | XBRL Taxonomy Label Linkbase Document* | |
101.PRE | XBRL Taxonomy Presentation Linkbase Document* |
* | Submitted electronically herewith |
** | Furnished and not filed herewith |
(1) | Filed as an exhibit to Registration Statement on Form S-1, File No. 33-57450, and incorporated herein by reference. |
(2) | Filed as an exhibit to Quarterly Report on Form 10-Q for the quarterly period July 1, 2000 and incorporated herein by reference. |
(3) | Filed as an exhibit to Current Report on Form 8-K filed on December 12, 2008 and incorporated herein by reference. |
KOPIN CORPORATION (Registrant) | ||||
Date: | August 3, 2016 | By: | /S/ John C.C. Fan | |
John C.C. Fan | ||||
President, Chief Executive Officer and Chairman of the Board of Directors | ||||
(Principal Executive Officer) | ||||
Date: | August 3, 2016 | By: | /S/ RICHARD A. SNEIDER | |
Richard A. Sneider | ||||
Treasurer and Chief Financial Officer | ||||
(Principal Financial and Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Kopin Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. |
(c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
By: | /S/ JOHN C.C. FAN | |
John C.C. Fan | ||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kopin Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. |
(c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
By: | /S/ RICHARD A. SNEIDER | |
Richard A. Sneider | ||
Chief Financial Officer |
Date: | August 3, 2016 | ||
By: | /S/ JOHN C.C. FAN | ||
John C.C. Fan | |||
President and Chief Executive Officer |
Date: | August 3, 2016 | ||
By: | /S/ RICHARD A. SNEIDER | ||
Richard A. Sneider | |||
Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
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Jun. 25, 2016 |
Jul. 29, 2016 |
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Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 25, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | KOPN | |
Entity Registrant Name | KOPIN CORP | |
Entity Central Index Key | 0000771266 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 66,769,502 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) |
Jun. 25, 2016 |
Dec. 26, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 169,000 | $ 153,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 3,000 | 3,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 120,000,000 | 120,000,000 |
Common stock, issued | 78,875,534 | 78,271,659 |
Common stock, outstanding | 64,039,260 | 63,977,385 |
Treasury stock, shares | 12,102,258 | 12,102,258 |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
Jun. 25, 2016 |
Jun. 27, 2015 |
|
Revenues: | ||||
Net component revenues | $ 4,096,529 | $ 9,486,723 | $ 10,074,663 | $ 16,615,093 |
Research and development revenues | 258,746 | 1,369,883 | 399,750 | 2,826,505 |
Total revenues | 4,355,275 | 10,856,606 | 10,474,413 | 19,441,598 |
Expenses: | ||||
Cost of component revenues | 4,682,846 | 6,359,780 | 9,329,888 | 11,643,513 |
Research and development | 4,119,401 | 4,884,010 | 8,159,352 | 9,744,202 |
Selling, general and administration | 4,282,264 | 5,108,229 | 8,043,113 | 9,494,442 |
Gain (Loss) on Disposition of Property Plant Equipment | (7,700,522) | 0 | (7,700,522) | 0 |
Total expenses | 5,383,989 | 16,352,019 | 17,831,831 | 30,882,157 |
Loss from operations | (1,028,714) | (5,495,413) | (7,357,418) | (11,440,559) |
Other income and expense: | ||||
Interest income | 175,765 | 198,898 | 340,713 | 408,561 |
Other income, net | 3,718 | 25,758 | 41,626 | 45,269 |
Foreign currency transaction gains (losses) | 27,503 | 529,138 | (524,437) | 349,549 |
Gain on sale of investments | 0 | 5,460,399 | 0 | 7,602,820 |
Total other income and expense | 206,986 | 6,214,193 | (142,098) | 8,406,199 |
(Loss) income before provision for income taxes, equity loss in unconsolidated affiliate and net (income) loss attributable to noncontrolling interest | (821,728) | 718,780 | (7,499,516) | (3,034,360) |
Tax provision | (1,963,000) | (12,500) | (2,104,000) | (25,000) |
(Loss) income before equity loss in unconsolidated affiliate and net (income) loss attributable to noncontrolling interest | (2,784,728) | 706,280 | (9,603,516) | (3,059,360) |
Equity loss in unconsolidated affiliate | 0 | 0 | 0 | (47,443) |
Net (loss) income | (2,784,728) | 706,280 | (9,603,516) | (3,106,803) |
Net (income) loss attributable to the noncontrolling interest | (344,374) | 74,690 | (443,047) | 49,784 |
Net (loss) income attributable to the controlling interest | $ (3,129,102) | $ 780,970 | $ (10,046,563) | $ (3,057,019) |
Net (loss) income per share | ||||
Earnings Per Share, Basic | $ (0.05) | $ 0.01 | $ (0.16) | $ (0.05) |
Earnings Per Share, Diluted | $ (0.05) | $ 0.01 | $ (0.16) | $ (0.05) |
Weighted average number of common shares | ||||
Weighted average common shares outstanding, basic | 64,011,571 | 63,066,031 | 63,994,809 | 63,074,842 |
Weighted average common shares outstanding, diluted | 64,011,571 | 63,300,781 | 63,994,809 | 63,074,842 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
Jun. 25, 2016 |
Jun. 27, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (2,784,728) | $ 706,280 | $ (9,603,516) | $ (3,106,803) |
Foreign currency translation adjustments | (92,228) | (569,644) | 643,956 | (555,222) |
Holding (loss) gain on marketable securities | 92,596 | 500,602 | 410,106 | 1,325,524 |
Reclassifications of gains in net (loss) income | (38,360) | (21,785) | (34,192) | (399,345) |
Other Comprehensive Income (Loss), Net of Tax | (37,992) | (90,827) | 1,019,870 | 370,957 |
Comprehensive (loss) income | (2,822,720) | 615,453 | (8,583,646) | (2,735,846) |
Comprehensive loss (income) attributable to the noncontrolling interest | (337,788) | (76,524) | (468,489) | (18,726) |
Comprehensive (loss) income attributable to controlling interest | $ (3,160,508) | $ 538,929 | $ (9,052,135) | $ (2,754,572) |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 25, 2016 - USD ($) |
Total |
Common Stock |
Additional Paid-in Capital |
Treasury Stock |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Stockholders' Equity, Total [Member] |
Noncontrolling Interest |
---|---|---|---|---|---|---|---|---|
Beginning Balance (in shares) at Dec. 26, 2015 | 76,079,643 | |||||||
Beginning Balance at Dec. 26, 2015 | $ 94,484,779 | $ 760,796 | $ 326,558,527 | $ (42,741,551) | $ 771,774 | $ (190,608,671) | $ 94,740,875 | $ (256,096) |
Stock-based compensation | 1,198,054 | 1,198,054 | 1,198,054 | |||||
Adjustments To Additional Paid In Capital Other Shares | 62,500 | |||||||
Adjustments to Additional Paid in Capital, Other | $ 625 | (625) | ||||||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax | 1,019,870 | 994,428 | 994,428 | 25,442 | ||||
Shares Paid for Tax Withholding for Share Based Compensation | (625) | |||||||
Settlements of restricted stock for tax withholding obligations | (1,500) | $ (6) | (1,494) | (1,500) | ||||
Net loss | (9,603,516) | (10,046,563) | (10,046,563) | 443,047 | ||||
Ending Balance (in shares) at Jun. 25, 2016 | 76,141,518 | |||||||
Ending Balance at Jun. 25, 2016 | $ 87,097,687 | $ 761,415 | $ 327,754,462 | $ (42,741,551) | $ 1,766,202 | $ (200,655,234) | $ 86,885,294 | $ 212,393 |
BASIS OF PRESENTATION |
6 Months Ended |
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Jun. 25, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting [Text Block] | BASIS OF PRESENTATION The condensed consolidated financial statements of Kopin Corporation (the Company) as of June 25, 2016 and for the three and six months ended June 25, 2016 and June 27, 2015 are unaudited and include all adjustments which, in the opinion of management, are necessary to present fairly the results of operations for the periods then ended. These condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 26, 2015. The results of the Company's operations for any interim period are not necessarily indicative of the results of the Company's operations for any other interim period or for a full fiscal year. In June 2016, the Company’s subsidiary Kowon sold its plant and the land on which the plant resided for 9.5 billion KRW (approximately $8.1 million on the closing date). Kowon had ceased its production activities at the facility in 2013. The plant and land had a cost basis of approximately $0.4 million. Accordingly, the Company recorded a gain on the sale of the plant and land of $7.7 million. Recently Issued Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, ASU 2014-09 provides guidance on accounting for certain revenue-related costs including, but not limited to, when to capitalize costs associated with obtaining and fulfilling a contract. The standard also requires certain new disclosures. The standard was effective for annual and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers. The amendments in this ASU defer the effective date of ASU 2014-09. Public companies should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the expected impact of this new guidance on its consolidated financial statements and available adoption methods. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This new standard requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet and aligns many of the underlying principles of the new lessor model with those in Topic 606, Revenue from Contracts with Customers. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach.The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities. The Company is currently evaluating the expected impact of this new guidance on its consolidated financial statements and available adoption methods. Compensation-Stock Compensation In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This guidance is intended to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, including interim periods within those annual periods, and early application is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the expected impact of this new guidance on its consolidated financial statements and available adoption methods. Statement of Comprehensive Income During the six months ended June 25, 2016, the change in the Company's accumulated other comprehensive income was net of $0.6 million foreign currency translation adjustments and $0.4 million unrealized holding gains on marketable securities. |
CASH AND EQUIVALENTS AND MARKETABLE SECURITIES |
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Cash and Equivalents and Marketable Securities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CASH AND EQUIVALENTS AND MARKETABLE SECURITIES | CASH AND EQUIVALENTS AND MARKETABLE SECURITIES The Company considers all highly liquid, short-term debt instruments with original maturities of three months or less to be cash equivalents. Marketable debt securities consist primarily of certificates of deposit, medium-term corporate debt, and U.S. government and agency backed securities. The Company classifies these marketable debt securities as available-for-sale in “Marketable Debt Securities”. The Company records the amortization of premium and accretion of discount on marketable debt securities in the results of operations. The Company uses the specific identification method as a basis for determining cost and calculating realized gains and losses with respect to marketable debt securities. The gross gains and losses realized related to sales and maturities of marketable debt securities were not material during the three and six months ended June 25, 2016 and the year ended December 26, 2015. Investments in available-for-sale marketable debt securities are as follows at June 25, 2016 and December 26, 2015:
The contractual maturity of the Company’s marketable debt securities is as follows at June 25, 2016:
The Company conducts a review of its marketable debt securities on a quarterly basis for the presence of other-than-temporary impairment (OTTI). The Company assesses whether OTTI is present when the fair value of a debt security is less than its amortized cost basis at the balance sheet date. Under these circumstances OTTI is considered to have occurred (1) if the Company intends to sell the security before recovery of its amortized cost basis; (2) if it is “more likely than not” the Company will be required to sell the security before recovery of its amortized cost basis; or (3) the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. The Company further estimates the amount of OTTI resulting from a decline in the creditworthiness of the issuer (credit-related OTTI) and the amount of non credit-related OTTI. Non credit-related OTTI can be caused by such factors as market illiquidity. Credit-related OTTI is recognized in earnings while non credit-related OTTI on securities not expected to be sold is recognized in other comprehensive income (loss). The Company did not record an OTTI for the three and six months ended June 25, 2016 and June 27, 2015. |
FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Financial instruments are categorized as Level 1, Level 2 or Level 3 based upon the method by which their fair value is computed. An investment is categorized as Level 1 when its fair value is based on unadjusted quoted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An investment is categorized as Level 2 if its fair market value is based on quoted market prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, based on observable inputs such as interest rates, yield curves, or derived from or corroborated by observable market data by correlation or other means. An investment is categorized as Level 3 if its fair value is based on assumptions developed by the Company about what a market participant would use in pricing the assets. The following table details the fair value measurements of the Company’s financial assets:
The corporate debt consists of floating rate notes with a maturity that is over multiple years but has interest rates which are reset every three months based on the then-current three month London Interbank Offering Rate (three month Libor). The Company validates the fair market values of the financial instruments above by using discounted cash flow models, obtaining independent pricing of the securities or through the use of a model which incorporates the three month Libor, the credit default swap rate of the issuer and the bid and ask price spread of the same or similar investments which are traded on several markets. The carrying amounts of cash and equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of their short-term nature. If accrued liabilities were carried at fair value, these would be classified as Level 2 in the fair value hierarchy. |
INVENTORY |
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Jun. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | INVENTORY Inventory is stated at the lower of cost (determined on the first-in, first-out) or market and consists of the following at June 25, 2016 and December 26, 2015:
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NET (LOSS) INCOME PER SHARE |
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Jun. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) Income per share | NET LOSS PER SHARE Basic net loss per share is computed using the weighted average number of shares of common stock outstanding during the period less any non-vested restricted shares. Diluted earnings per common share, if applicable, is calculated using weighted average shares outstanding and contingently issuable shares, less weighted average shares reacquired during the period. The net outstanding shares are adjusted for the dilutive effect of shares issuable upon the assumed conversion of the Company’s common stock equivalents, which consist of outstanding stock options and non-vested restricted stock units. Weighted average common shares outstanding used to calculate basic and diluted earnings per share are as follows:
The following were not included in weighted average common shares outstanding-diluted because they are anti-dilutive or performance or market conditions had not been met at the end of the period:
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STOCK-BASED COMPENSATION |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The fair value of non-vested restricted common stock awards is generally the market value of the Company’s common stock on the date of grant. The non-vested restricted common stock awards require the employee to fulfill certain obligations, including remaining employed by the Company for one, two or four years (the vesting period) and in certain cases also require meeting either performance criteria or the Company’s stock achieving a certain price. For non-vested restricted common stock awards which solely require the recipient to remain employed with the Company, the stock compensation expense is amortized over the anticipated service period. For non-vested restricted common stock awards which require the achievement of performance criteria, the Company reviews the probability of achieving the performance goals on a periodic basis. If the Company determines that it is probable that the performance criteria will be achieved, the amount of compensation cost derived for the performance goal is amortized over the anticipated service period. If the performance criteria are not met, no compensation cost is recognized and any previously recognized compensation cost is reversed. The Company recognizes compensation costs on a straight-line basis over the requisite service period for time-vested awards. Non-Vested Restricted Common Stock
Stock-Based Compensation The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock awards for the six months ended June 25, 2016 and June 27, 2015 (no tax benefits were recognized):
Unrecognized compensation expense for non-vested restricted common stock as of June 25, 2016 totaled $4.3 million and is expected to be recognized over a weighted average period of approximately two years. |
OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES |
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Jun. 25, 2016 | |
Other Assets and Related Party Transactions Disclosure [Abstract] | |
OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES | OTHER ASSETS AND NOTE RECEIVABLE In January 2016, the Company received the final $15.0 million payment resulting from the sale of its III-V product line and its investment in KTC. On February 25, 2015, the Company acquired approximately 251,000 shares of Vuzix Corporation (Vuzix) common stock through a cashless exercise of warrants. The Company received the warrants in August 2013 as part of a restructuring of debt owed by Vuzix to the Company. Upon receipt of the warrants, the Company should have recorded the value of the warrant of approximately $352,000 in its consolidated financial statements. Subsequently, the Company should have marked to market the warrants at the end of each reporting period. Had the Company recorded the warrants in its consolidated financial statements and marked to market the warrants as of December 28, 2013 and December 27, 2014, the Company would have recorded gains in its statement of operations of approximately $646,000 and $171,000, respectively. In the first quarter of 2015, the Company recorded the warrants in its consolidated financial statements and as a result recorded a gain of approximately $1.3 million with $817,000 attributed to prior periods. The value of the warrants as of August 2013, December 28, 2013 and December 27, 2014 was determined using the Black-Scholes pricing model. The Company does not believe the unrecorded gains were material to the consolidated financial statements as the loss from operations for the fiscal years ended December 28, 2013 and December 27, 2014 were $35.9 million and $28.5 million, respectively. |
GOODWILL AND INTANGIBLES (Notes) |
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Jun. 25, 2016 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] |
The Company’s goodwill balance is as follows:
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ACCRUED WARRANTY |
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Jun. 25, 2016 | |||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||
ACCRUED WARRANTY | ACCRUED WARRANTY The Company typically warrants its products against defect for 12 months. A provision for estimated future costs and estimated returns for credit relating to such warranty is recorded in the period when product is shipped and revenue recognized, and is updated as additional information becomes available. The Company’s estimate of future costs to satisfy warranty obligations is based primarily on historical warranty expense experienced and a provision for potential future product failures. Changes in the accrued warranty for the six months ended June 25, 2016 are as follows:
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INCOME TAXES |
6 Months Ended |
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Jun. 25, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s tax provision of approximately $2.0 million for the three months ended June 25, 2016 represents $0.7 million of income taxes on the gain of the sale of Kowon’s plant and land and $1.3 million of net movement in estimated foreign withholding on anticipated future remitted earnings of a foreign subsidiary. The Company's tax provision of approximately $2.1 million for the six months ended June 25, 2016 represents $0.7 million of income taxes on the gain of the sale of Kowon’s plant and land, $1.4 million of net movement in estimated foreign withholding on anticipated future remitted earnings of a foreign subsidiary, and $18,000 in state taxes. The Company’s tax provision of approximately $12,500 and $25,000 for the three and six month periods ended June 27, 2015 represents estimated state income taxes. As of June 25, 2016, the Company has available for tax purposes U.S. federal NOLs of approximately $98 million expiring through 2035. The Company has recognized a full valuation allowance on its domestic and certain foreign net deferred tax assets due to the uncertainty of realization of such assets. The Company has not historically recorded, nor does it intend to record the tax benefits from stock awards until realized. Unrecorded benefits from stock awards approximate $10 million. The Company’s income tax returns have not been examined by the Internal Revenue Service and are subject to examination for all years since 2001. State income tax returns are generally subject to examination for a period of 3 to 5 years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. |
SEGMENTS AND GEOGRAPHICAL INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENTS AND GEOGRAPHICAL INFORMATION | SEGMENTS AND GEOGRAPHICAL INFORMATION The Company’s chief operating decision maker is its Chief Executive Officer. The Company has determined it has two reportable segments, FDD, the manufacturer of its reflective display products for test and simulation products, and Kopin, which is comprised of Kopin Corporation, Kowon, Kopin Software Ltd. and eMDT. The following table presents the Company’s reportable segment results (in thousands):
The total assets of Kopin are net of $6.2 million and $5.3 million in intercompany loans to FDD as of June 25, 2016 and June 27, 2015, respectively. During the three and six month periods ended June 25, 2016 and June 27, 2015, the Company derived its sales from the following geographies (as a percentage of net revenues):
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LITIGATION |
6 Months Ended |
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Jun. 25, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | LITIGATION The Company may engage in legal proceedings arising in the ordinary course of business. Claims, suits, investigations and proceedings are inherently uncertain and it is not possible to predict the ultimate outcome of such matters and our business, financial condition, results of operations or cash flows could be affected in any particular period. |
CASH AND EQUIVALENTS AND MARKETABLE SECURITIES (Tables) |
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Cash and Equivalents and Marketable Securities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Cash Equivalents and Marketable Securities Table | Investments in available-for-sale marketable debt securities are as follows at June 25, 2016 and December 26, 2015:
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Marketable Debt Securities | The contractual maturity of the Company’s marketable debt securities is as follows at June 25, 2016:
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements of Financial Instruments | The following table details the fair value measurements of the Company’s financial assets:
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INVENTORY (Tables) |
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Jun. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Stated at the Lower of Cost or Market | Inventory is stated at the lower of cost (determined on the first-in, first-out) or market and consists of the following at June 25, 2016 and December 26, 2015:
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NET (LOSS) INCOME PER SHARE (Tables) |
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Jun. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding | Weighted average common shares outstanding used to calculate basic and diluted earnings per share are as follows:
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Weighted Average Common Shares Outstanding-Diluted | The following were not included in weighted average common shares outstanding-diluted because they are anti-dilutive or performance or market conditions had not been met at the end of the period:
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STOCK-BASED COMPENSATION (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NonVested Restricted Common Stock |
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Stock-Based Compensation Expense | The following table summarizes stock-based compensation expense within each of the categories below as it relates to non-vested restricted common stock awards for the six months ended June 25, 2016 and June 27, 2015 (no tax benefits were recognized):
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GOODWILL AND INTANGIBLES (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | The Company’s goodwill balance is as follows:
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ACCRUED WARRANTY (Tables) |
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Jun. 25, 2016 | |||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||
Accrued Warranty | Changes in the accrued warranty for the six months ended June 25, 2016 are as follows:
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SEGMENTS AND GEOGRAPHICAL INFORMATION (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following table presents the Company’s reportable segment results (in thousands):
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Percentage of Net Revenues by Geographies | During the three and six month periods ended June 25, 2016 and June 27, 2015, the Company derived its sales from the following geographies (as a percentage of net revenues):
|
INVENTORY (Details) - USD ($) |
Jun. 25, 2016 |
Dec. 26, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,113,639 | $ 844,475 |
Work-in-process | 1,393,398 | 1,281,891 |
Finished goods | 428,662 | 386,107 |
Inventory | $ 2,935,699 | $ 2,512,473 |
NET (LOSS) INCOME PER SHARE (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
Jun. 25, 2016 |
Jun. 27, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted average common shares outstanding, basic | 64,011,571 | 63,066,031 | 63,994,809 | 63,074,842 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0 | 234,750 | 0 | 0 |
Weighted average common shares outstanding, diluted | 64,011,571 | 63,300,781 | 63,994,809 | 63,074,842 |
Unvested Restricted Stock Awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, number of shares | 2,734,016 | 1,374,000 | 2,734,016 | 3,074,111 |
STOCK-BASED COMPENSATION - Summary of Activity for Nonvested Restricted Common Stock Awards (Details) - Unvested Restricted Stock Awards |
6 Months Ended |
---|---|
Jun. 25, 2016
$ / shares
shares
| |
Shares | |
Beginning Balance | shares | 2,192,016 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 604,500 |
Forfeited | shares | 0 |
Vested | shares | (62,500) |
Ending Balance | shares | 2,734,016 |
Weighted Average Grant Fair Value | |
Beginning Balance | $ / shares | $ 3.82 |
Granted | $ / shares | 1.86 |
Forfeited | $ / shares | 0.00 |
Vested | $ / shares | 3.55 |
Ending Balance | $ / shares | $ 3.39 |
STOCK-BASED COMPENSATION - Expense Related to Employee Stock Options and Nonvested Restricted Common Stock Awards (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated Share-based Compensation Expense | $ 951,053 | $ 2,022,043 |
Cost of product revenues | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated Share-based Compensation Expense | 289,937 | 461,094 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated Share-based Compensation Expense | 248,848 | 503,523 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated Share-based Compensation Expense | $ 412,268 | $ 1,057,426 |
OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
Jun. 25, 2016 |
Jun. 27, 2015 |
Dec. 27, 2014 |
Dec. 28, 2013 |
Dec. 29, 2012 |
Mar. 28, 2015 |
|
Other Assets and Related Party Transactions Disclosure [Abstract] | ||||||||
Proceeds from Divestiture of Businesses | $ 15,000,000 | $ 0 | ||||||
Class of Warrant or Right, Unissued | 251,000 | |||||||
Warrants and Rights Outstanding | $ 352,000 | |||||||
Prior Period Reclassification Adjustment | 1,300,000 | $ 171,000 | $ 646,000 | $ 817,000 | ||||
Net (loss) income | $ (2,784,728) | $ 706,280 | $ (9,603,516) | $ (3,106,803) | $ 28,500,000 | $ 35,900,000 |
GOODWILL AND INTANGIBLES (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 25, 2016 |
Dec. 26, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 887,512 | $ 946,082 |
Goodwill, Period Increase (Decrease) | $ (58,570) |
ACCRUED WARRANTY (Details) |
6 Months Ended |
---|---|
Jun. 25, 2016
USD ($)
| |
Product Warranties Disclosures [Abstract] | |
Product warranty term | 12 months |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Beginning Balance | $ 518,000 |
Additions | 356,000 |
Claim and reversals | (358,000) |
Ending Balance | $ 516,000 |
INCOME TAXES (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 25, 2016 |
Jun. 27, 2015 |
Jun. 25, 2016 |
Jun. 27, 2015 |
|
Income Taxes [Line Items] | ||||
State income and foreign tax expenses | $ 1,963,000 | $ 12,500 | $ 2,104,000 | $ 25,000 |
Gain (Loss) on Sale of Properties, Applicable Income Taxes | 700,000 | |||
Foreign Earnings Repatriated | 1,300,000 | 1,400,000 | ||
Net operating loss carryforwards available for tax purposes | $ 98,000,000 | 98,000,000 | ||
Unrecorded benefits from stock award | $ 10,000,000 | |||
Minimum | ||||
Income Taxes [Line Items] | ||||
State income tax returns examination period | 3 years | |||
Maximum | ||||
Income Taxes [Line Items] | ||||
State income tax returns examination period | 5 years | |||
The state impact of any federal changes, subject to examination by various states (in years) | 1 year |
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