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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Kopin Corporation    KOPN

KOPIN CORPORATION

(KOPN)
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KOPIN : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

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11/07/2019 | 05:17pm EST
Forward Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which are subject to the safe harbor created by
such sections. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "could," "would," "seeks," "estimates," and variations of such words
and similar expressions, and the negatives thereof, are intended to identify
such forward-looking statements. We caution readers not to place undue reliance
on any such "forward-looking statements," which speak only as of the date made,
and advise readers that these forward-looking statements are not guarantees of
future performance and involve certain risks, uncertainties, estimates, and
assumptions by us that are difficult to predict. Various factors, some of which
are beyond our control, could cause actual results to differ materially from
those expressed in, or implied by, such forward-looking statements. All such
forward-looking statements, whether written or oral, and whether made by us or
on our behalf, are expressly qualified by these cautionary statements and any
other cautionary statements that may accompany the forward-looking statements.
In addition, we disclaim any obligation to update any forward-looking statements
to reflect events or circumstances after the date of this report, except as may
otherwise be required by the federal securities laws.

We have identified the following important factors that could cause actual
results to differ materially from those discussed in our forward-looking
statements. Such factors may be in addition to the risks described in Part I,
Item 1A. Risk Factors; Part II, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations; and other parts of our Annual
Report on Form 10-K for the fiscal year ended December 29, 2018, as amended by
Amendment No. 1 thereto on Form 10-K/A filed on November 7, 2019 (the "2018 Form
10-K/A"). These factors include: our ability to continue as a going concern; the
material weakness management has identified in our internal control over
financial reporting, its conclusion that our disclosure controls and procedures
were not effective as of the fiscal year ended December 29, 2018, and our
ability to remediate that material weakness; the expected benefits to be derived
from our sale of our Solos product line and Whisper Audio technology, and the
lack of an impact the sale is expected to have on our liquidity or capital
resources; our ability to obtain raw materials and other goods as well as
services from our suppliers as needed; our intent to continue focusing our
development efforts on proprietary wearable computing systems; the potential for
customers to choose our competitors as their supplier; our expectation that we
will have negative cash flow from operating activities in 2019; our ability to
invest in research and development to achieve profitability even during periods
when we are not profitable; our ability to focus our research and development
expenditures in our display products, overlay weapon sights and organic light
emitting diode display technologies; our ability to continue to introduce new
products in our target markets; the degree to which our wearable technology is
embraced by consumers and commercial users; our ability to develop and expand
our wearable technologies and to market and license our concept systems and
components; our ability to generate revenue growth and positive cash flow, and
reach profitability; the strengthening of the U.S. dollar and its effects on the
price of our products in foreign markets; our ability to grow within our
targeted markets; the importance of small form factor displays in the
development of military, consumer, and industrial products such as thermal
weapon sights, safety equipment, virtual and augmented reality gaming, training
and simulation products and metrology tools; the material adverse effects on our
financial condition if we do not soon achieve and maintain positive cash flow
and profitability, which may include us being required to reduce expenses,
including our investments in research and development and/or raise additional
capital; our ability to support our operations and capital needs for at least
the next twelve months through our available cash resources; and our expectation
that we will incur taxes based on our foreign operations in 2019.

Overview

We were incorporated in Delaware in 1984 and are a leading inventor, developer,
manufacturer and seller of technologies, components and systems for the smart
headset wearable, military, thermal imager, 3D optical inspection system and
training and simulation markets.
Effective December 30, 2018, the Company adopted the requirements of Accounting
Standards Update ("ASU") 2016-02, Leases (Topic 842) using the modified
retrospective approach as discussed below. All amounts disclosed in this Form
10-Q reflect these changes.
The following discussion should be read in conjunction with our 2018 Form 10-K/A
and our unaudited condensed consolidated financial statements included in this
Form 10-Q.
 Results of Operations
As described in our "Forward-Looking Statements" on page 23 of this Form 10-Q,
our interim period results of operations and period-to-period comparisons of
such results may not be indicative of our future operating results.
Additionally,

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we use a fiscal calendar, which may result in differences in the number of
workdays in the current and comparable prior interim periods and could affect
period-to-period comparisons. The following discussions of comparative results
among periods, including the discussion of segment results, should be viewed in
this context.
Revenues.   For the three and nine months ended September 28, 2019 and
September 29, 2018, our revenues by display application, which include product
sales and amounts earned from research and development contracts, were as
follows:
                                                  Three Months Ended                             Nine Months Ended
                                         September 28,
(In thousands)                               2019           September 29, 2018      September 28, 2019       September 29, 2018
Military                               $         1,968     $             1,499     $             5,207     $              5,420
Industrial                                       2,625                   1,283                   7,262                    4,261
Consumer                                           360                     816                   1,510                    3,213
Other                                                2                      45                      25                      267
R&D                                              1,184                   1,483                   2,452                    3,563
License and royalties                                -                       -                   4,336                        -
Total Revenues                         $         6,139     $             5,126     $            20,792     $             16,724


Sales of our products for Military applications include systems used by the
military both in the field and for training and simulation. The increase in
Military applications revenues in the three months ended September 28, 2019 as
compared to the three months ended September 29, 2018 was primarily due to
deliveries on the Family Weapons Sight-Individual ("FWS-i") program. The
decrease in Military applications revenue in the nine months ended September 28,
2019 as compared to the nine months ended September 29, 2018 was primarily due
to the completion of military programs at our subsidiary NVIS, Inc. ("NVIS")
during the nine months ended September 29, 2018, partially offset by deliveries
on the FWS-i program in the nine months ended September 28, 2019.
Industrial applications revenues represents customers who purchase our display
products for use in 3D metrology equipment and headsets used for applications in
manufacturing, distribution and public safety. Our 3D metrology customers are
primarily located in Asia and sell to Asian contract manufacturers who use the
3D metrology machines for quality control purposes. The increase in Industrial
applications revenue for the three and nine months ended September 28, 2019 as
compared to the three and nine months ended September 29, 2018 was primarily due
to an increase in sales volume to customers who use our display components in
industrial headsets.
Our displays for Consumer applications are used primarily in thermal imaging
products, recreational rifle and hand-held scopes and drone racing headsets. The
decrease in Consumer applications for the three and nine months ended
September 28, 2019 as compared to the three and nine months ended September 29,
2018 was primarily due to decreased demand for displays and components used in
drone racing headsets.
Research and development ("R&D") revenues consist primarily of development
contracts with agencies or prime contractors of the U.S. government and
commercial enterprises. R&D revenue decreased in the three and nine months ended
September 28, 2019 as compared to the three and nine months ended September 29,
2018 primarily due to the completion of performance obligations on funded U.S.
military programs.
License revenue represents an arrangement with a customer where our performance
obligation is to license functional intellectual property ("IP"), which provides
the customer the right to use our IP as it exists at a point in time. The
satisfaction of the Company's performance obligation, and related recognition of
revenue, occurs when the IP is delivered to the customer, the license period has
begun and there are no additional performance obligations in the agreement.
Under certain license agreements, we may receive royalties based on the sales of
the licensed product. We recognize royalty revenue upon the later of when the
related sales occur, or when the performance obligation to which some or all of
the royalty has been allocated has been satisfied (or partially satisfied).
Under our current license agreements for which a royalty exists, we have
recorded revenue when the related sales by our customer occurs because the
performance obligation related to the delivery of the license to the customer
has been satisfied. The increase in license and royalties in the nine months
ended September 28, 2019 compared to the three and nine months ended
September 29, 2018 was due to the one-time license of functional IP to a
customer for $3.5 million and royalties earned under other functional IP license
agreements, all in the second quarter of 2019.
International sales represented 44% and 37% of total revenues for the three
months ended September 28, 2019 and September 29, 2018, respectively, and 59%
and 38% for the nine months ended September 28, 2019 and September 29, 2018,
respectively. Our international sales are primarily denominated in U.S. dollars.
Consequently, a strengthening of the U.S. dollar could increase the price in
local currencies of our products in foreign markets and make our products
relatively more expensive

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than competitors' products that are denominated in local currencies, which could
lead to a reduction in sales or profitability for us in those foreign markets.
We have not taken any protective measures against exchange rate fluctuations,
such as purchasing hedging instruments with respect to such fluctuations,
because of the historically stable exchange rate between the British pound (the
functional currency of our U.K. subsidiary) and the U.S. dollar. Foreign
currency translation impact on our results, if material, is described in further
detail under "Item 3. Quantitative and Qualitative Disclosures About Market
Risk" below.
Cost of Product Revenues. Cost of product revenues, which is comprised of
materials, labor and manufacturing overhead related to the production of our
products, for the three and nine months ended September 28, 2019 and
September 29, 2018 was as follows:
                                                    Three Months Ended                              Nine Months Ended

(In thousands, except for percentages) September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Cost of product revenues

               $          4,690        $           3,660       $           15,810     $           11,220
Cost of product revenues as a % of net
product revenues                                   94.6 %                  100.4 %                  112.9 %                 85.3 %


The increase in cost of product revenues for the three months ended
September 28, 2019 as compared to the three months ended September 29, 2018 was
primarily due to an increase in volume sales of our industrial products in the
three months ended September 28, 2019 compared to the three months ended
September 29, 2018. The increase in cost of product revenues for the nine months
ended September 28, 2019 as compared to the nine months ended September 29, 2018
was primarily due to an increase in volume sales of our industrial products and
a $2.7 million charge for inventory obsolescence in the nine months ended
September 28, 2019. The charges for inventory obsolescence primarily resulted
from the discontinuance of certain products and the write-off of materials as we
have found substitute materials that will provide for better long-term
manufacturing yields.
Research and Development. R&D expenses are incurred in support of internal
display development programs and programs funded by agencies or prime
contractors of the U.S. government and commercial partners. R&D costs include
staffing, purchases of materials and laboratory supplies, circuit design costs,
fabrication and packaging of display products, and overhead. For the remainder
of fiscal year 2019, we expect our R&D expenditures to be related to our display
products, overlay weapon sights and organic light emitting diode ("OLED")
display technologies. Funded and internal R&D expense are combined in research
and development expenses in the statements of operations. R&D expenses for the
three and nine months ended September 28, 2019 and September 29, 2018 were as
follows:
                                                  Three Months Ended                             Nine Months Ended
                                         September 28,
(In thousands)                               2019           September 29,
2018      September 28, 2019       September 29, 2018
Funded                                 $         1,161     $             2,006     $             2,471     $              3,640
Internal                                         1,229                   2,593                   8,216                    9,937
Total research and development expense $         2,390     $             4,599     $            10,687     $             13,577


Funded R&D expense for the three and nine months ended September 28, 2019
decreased as compared to the three and nine months ended September 29, 2018
primarily due to the completion of certain development programs that have moved
into the production phase. For the three and nine months ended September 28,
2019, internal R&D decreased as compared to the three and nine months ended
September 29, 2018 primarily due to the licensing of certain products and other
development programs being curtailed.
Selling, General and Administrative.   Selling, general and administrative
("S,G&A") expenses consist of the expenses incurred by our sales and marketing
personnel and related expenses, and administrative and general corporate
expenses. S,G&A expenses for the three and nine months ended September 28, 2019
and September 29, 2018 were as follows:
                                                    Three Months Ended                              Nine Months Ended

(In thousands, except for percentages) September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 Selling, general and administration expense

                                $          5,130        $           7,166       $           16,788     $           21,011
Selling, general and administration
expense as a % of revenues                         83.6 %                  139.8 %                   80.7 %                125.6 %


S,G&A decreased for the three and nine months ended September 28, 2019 as compared to the three and nine months ended September 29, 2018 primarily due to a decrease in compensation expenses, including stock-based compensation,

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amortization of intangible assets, use of information technology consultants, marketing expenses including product promotion and accretion of the NVIS earnout.


Other (Expense) Income, net. Other income, net, is primarily composed of gain on
investments, interest income, foreign currency transaction and remeasurement
gains and losses incurred by our U.K.-based subsidiary and other non-operating
income items. Other (expense) income, net, for the three and nine months ended
September 28, 2019 and September 29, 2018 was as follows:
                                                      Three Months Ended                              Nine Months Ended
                                                                                            September 28,
(In thousands)                           September 28, 2019        September 29, 2018           2019           September 29, 2018
Other (expense) income, net             $            (78 )       $                175     $           839     $             4,442


During the three months ended September 28, 2019 and September 29, 2018, we
recorded less than $0.1 million and $0.2 million of foreign currency losses,
respectively. During the nine months ended September 28, 2019 and September 29,
2018, we recorded less than $0.1 million and $0.3 million of foreign currency
losses, respectively. During the nine months ended September 28, 2019, the
Company recognized a gain of $0.8 million on the fair value adjustment due to an
observable price change on an equity investment. During the nine months ended
September 29, 2018, the Company recognized a gain of $2.9 million from the
transfer of intellectual property in exchange for equity interest in an
investment. During the nine months ended September 29, 2018, the Company
received $1.0 million of insurance proceeds related to the embezzlement at our
Korean subsidiary, which was discovered in 2016.
Tax Provision.  The Company recorded a provision for income taxes of less than
$0.1 million and a tax benefit of approximately $0.3 million in the three months
ended September 28, 2019 and September 29, 2018, respectively. The Company
recorded a provision for income taxes of less than $0.1 million and a tax
benefit of approximately $0.1 million in the nine months ended September 28,
2019 and September 29, 2018, respectively.
Net Loss (Income) Attributable to Noncontrolling Interest.  As of September 28,
2019, we owned 80% of the equity of eMDT America ("eMDT"). Net loss (income)
attributable to noncontrolling interest on our consolidated statements of
operations represents the portion of the results of operations of our
majority-owned subsidiary that is allocated to the stockholders of the equity
interests not owned by us. The change in net loss (income) attributable to
noncontrolling interest is the result of the change in the results of operations
of eMDT for the three and nine months ended September 28, 2019 and September 29,
2018.
Net Loss Attributable to Kopin Corporation.  The Company incurred a net loss
attributable to Kopin Corporation of $6.6 million during the three months ended
September 28, 2019 compared to a net loss attributable to Kopin Corporation of
$9.8 million during the three months ended September 29, 2018. The decrease in
the net loss attributable to Kopin Corporation during the three months ended
September 28, 2019 compared to the three months ended September 29, 2018 was
primarily due to a decrease in operating expenses and an increase in total
revenues, which is described above in Research and Development and Selling,
General and Administrative and Revenues. The Company incurred a net loss
attributable to Kopin Corporation of $22.2 million during the nine months ended
September 28, 2019 compared to a net loss attributable to Kopin Corporation of
$24.6 million during the nine months ended September 29, 2018. The decrease in
the net loss attributable to Kopin Corporation during the nine months ended
September 28, 2019 compared to the nine months ended September 29, 2018 was
primarily due to a decrease in operating expenses and an increase in total
revenues, which is described above in Research and Development and Selling,
General and Administrative and Revenues, partially offset by a decrease in other
income (expense), net, which is described above in Other (Expense) Income, net.
Liquidity and Capital Resources
At September 28, 2019 and December 29, 2018, we had cash and cash equivalents
and marketable securities of $26.0 million and $37.2 million, respectively, and
working capital of $24.6 million and $39.0 million at September 28, 2019 and
December 29, 2018, respectively. The change in cash and cash equivalents and
marketable debt securities was primarily due to net outflow of cash used in
operating activities of $16.8 million and the purchase of an equity investment
of $2.5 million, partially offset by the net proceeds from the sale of
registered securities of $8.0 million and the proceeds from the sale of
marketable debt securities of $6.0 million.

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On March 15, 2019, the Company sold 7.3 million shares of registered common
stock for gross proceeds of $8.0 million ($1.10 per share), before deducting
underwriting discounts and offering expenses paid by the Company of $0.7
million. This represented approximately 8.9% of Kopin's total outstanding shares
of common stock as of the date of purchase. The net proceeds from the offering
were used for general corporate purposes, including working capital. On April
10, 2019, the Company sold 0.7 million shares of registered common stock for
gross proceeds of $0.8 million ($1.10 per share), before deducting underwriting
discounts and offering expenses paid by the Company of less than $0.1 million,
pursuant to the partial exercise of the underwriters' overallotment option in
connection with its March 15, 2019 public offering. This represented
approximately 0.8% of Kopin's total outstanding shares of common stock as of the
date of purchase.
Cash and cash equivalents and marketable debt securities held in U.S. Dollars
at:
                                                                                  December 29,
                                                          September 28, 2019          2018
Domestic locations                                      $         24,780,062     $  36,182,663
International locations                                              800,901           418,339

Subtotal cash and cash equivalents marketable debt securities held in U.S. dollars

25,580,963 36,601,002 Cash and cash equivalents held in other currencies and converted to U.S. dollars

                                            435,240           643,361

Total cash and cash equivalents and marketable debt securities

                                              $         

26,016,203 $ 37,244,363



We have no plans to repatriate the cash and cash equivalents held in our foreign
subsidiary FDD, Ltd. and, as such, we have not recorded any deferred tax
liability with respect to such cash.
As part of the NVIS acquisition, additional payments by the Company to the
former owners of up to $2.0 million could be required if certain future
operating performance milestones are met and the former owners remain employed
with NVIS through March 2020. In March 2019, the Company paid approximately $1.3
million of additional payments to the former owners. Accordingly, if certain
milestones are met by March 2020, the Company may be required to pay an
additional $0.7 million. Such contingent payments have been and will be treated
as compensation expense because the milestone payments require recipients to
remain employed to earn the contingent payments.
We expect to expend between $0.1 million and $0.5 million on capital
expenditures in 2019.
The Company entered into an agreement in August 2017 to acquire an approximate
3.5% equity interest in Kunming BOE Display Technology Co., Ltd. ("BOE"), which
is located in China, for 35.0 million Chinese Yuan Renminbi (approximately $4.9
million). The purpose of the BOE equity offering is to raise funds to build an
Organic Light Emitting Diode ("OLED") manufacturing facility. The Company is
currently developing OLED products and its strategy is to use a fabless business
model. Accordingly, the Company intends to use the BOE facility to manufacture
its products. The Company's sole obligation under this agreement is to make this
capital contribution. The Company previously has been unable to make the
scheduled capital contribution due to Chinese laws, which had restrictions on
direct foreign investment. Per the agreement, if Kopin is unable to make the
scheduled capital contribution, it may be required to pay damages of 0.05% per
day based on the unpaid portion of the capital contribution until the obligation
is satisfied. The Company is currently assessing legal alternatives in
connection with its investment obligation. The Company has accrued $0.6 million
in penalties related to this agreement as of September 28, 2019. The Company and
BOE are in discussions to determine alternatives, including a reduction in
penalties, or to enable the Company to make the capital contribution.
On September 30, 2019 we entered into an Asset Purchase Agreement (the "Purchase
Agreement") with Solos Technology Limited (the "Buyer"). Pursuant to the
Purchase Agreement, we sold and licensed to the Buyer certain assets of our
SolosTM ("Solos") product line and WhisperTM Audio ("Whisper") technology. As
consideration for the transaction we received 1,172,000 common shares
representing a 20.0% equity stake in the Buyer's parent company, Solos
Incorporation ("Solos Inc."). Our 20.0% equity stake will be maintained until
Solos Inc. has raised a total of $7.5 million in equity financing. The Company
will also receive a royalty in the single digits on the net sales amount of
Solos products for a four-year period, after commencement of commercial
production. We will also receive a royalty in the single digits on the net sales
amount of Solos products for a four-year period, after commencement of
commercial production. Our Hong Kong employees have been offered employment with
the Buyer and most are expected to transition to the Buyer. If the employees do
not join the Buyer or are terminated within 90 days of joining the Buyer, we
will be liable for their statutory severance payment. Under the terms of the
Purchase Agreement, we also have a non-exclusive, limited, fully paid-up,
royalty-free worldwide license, including modification of or improvement or
enhancement to the Whisper technology, for enterprise and military customers.
This transaction is not expected to have an impact on our liquidity or capital
resources.
The accompanying condensed consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
incurred net losses of $34.5 million and net cash outflows from operations
of $28.1 million for the fiscal year ended 2018. The Comp

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any incurred a net loss of $22.1 million for the nine months ended September 28,
2019 and net cash outflows from operations of $16.8 million. In addition, the
Company has experienced a significant decline in its cash and cash equivalents
and marketable debt securities over the last several years, which was primarily
a result of funding operating losses, of which a significant component relates
to the Company's investments in the research and development of Wearable
products. The Company's historical and current use of cash in operations
combined with limited liquidity resources raise substantial doubt regarding the
Company's ability to continue as a going concern.
Item 3. Quantitative and Qualitative Disclosures about Market Risk


We invest our excess cash in high-quality U.S. government, government-backed
(e.g., Fannie Mae, FDIC guaranteed bonds and certificates of deposit) and
corporate debt instruments, which bear lower levels of relative risk. We believe
that the effect, if any, of reasonably possible near-term changes in interest
rates on our financial position, results of operations and cash flows should not
be material to our cash flows or income. It is possible that interest rate
movements would increase our unrealized gain or loss on debt securities. We are
exposed to changes in foreign currency exchange rates primarily through our
translation of our foreign subsidiaries' financial position, results of
operations, and transaction gains and losses as a result of non-U.S. dollar
denominated cash flows related to business activities in Europe, and
remeasurement of U.S. dollars to the British pound, the functional currency of
our U.K. subsidiary. We are also exposed to the effects of exchange rates in the
purchase of certain raw materials, which are in U.S. dollars, but the price of
future purchases is subject to change based on the relationship of the Japanese
yen to the U.S. dollar. We do not currently hedge our foreign currency exchange
rate risk. We estimate that any market risk associated with our international
operations or investments is unlikely to have a material adverse effect on our
business, financial condition or results of operation. Our portfolio of
marketable debt securities is subject to interest rate risk although our intent
is to hold securities until maturity. The credit rating of our investments may
be affected by the underlying financial health of the guarantors of our
investments. We use silicon wafers but do not enter into forward or futures
hedging contracts to mitigate against risks related to the price of silicon.
Item 4. Controls and Procedures


Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our
Chief Financial Officer (our principal executive officer and principal financial
officer, respectively), evaluated the effectiveness of our disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of September 28, 2019,
the end of the period covered by this Quarterly Report on Form 10-Q. The term
"disclosure controls and procedures" means controls and other procedures that
are designed to ensure that information required to be disclosed by the Company
in reports that we file or submit under the Exchange Act are recorded,
processed, summarized and reported within the requisite time periods and that
such disclosure controls and procedures were effective to ensure that
information required to be disclosed by the Company in the reports that we file
or submit under the Exchange Act are accumulated and communicated to our
management, including our principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. Based on this evaluation, in connection
with the filing of the Form 10-Q on November 7, 2019, the Company's Chief
Executive Officer and Chief Financial Officer have concluded that, because a
material weakness in the Company's internal control over financial reporting
existed at December 29, 2018 and had not been remediated by September 28, 2019,
the Company's disclosure controls and procedures were not effective as of the
end of the period covered by this Quarterly Report on Form 10-Q. This material
weakness in the Company's internal control over financial reporting and the
Company's remediation efforts are described below.

Material Weakness in Internal Control Over Financial Reporting
In September 2019, we identified certain misstatements arising from immaterial
errors we had identified in our previously-issued consolidated financial
statements and related financial information for the fiscal years ended December
29, 2018, December 30, 2017 and December 31, 2016 and the interim periods ending
March 30, 2019 and June 29, 2019. In connection with the misstatements in the
company's consolidated financial statements, the Company's management, including
our Chief Executive Officer and Chief Financial Officer, identified a material
weakness in the Company's internal control over financial reporting. A material
weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a
material misstatement of the Company's annual or interim financial statements
will not be prevented or detected on a timely basis. We did not design and
maintain effective controls related to management's monitoring and oversight of
accounting for non-routine transactions. Specifically, our internal controls
were not designed effectively to ensure appropriate and timely evaluation of the
accounting impact for non-routine transactions, including the accounting for
non-controlling interest and other investments.
Based on this assessment and the material weakness described above, management
concluded that the Company's internal control over financial reporting was not
effective as of December 29, 2018 and had not been remediated by the end of

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the period covered by this Quarterly Report on Form 10-Q. However, the Company
has concluded that the existence of this material weakness did not result in a
material misstatement of the Company's financial statements included in its
Annual Report on Form 10-K for the year ended December 29, 2018, as initially
filed on March 14, 2019, or in its Quarterly Reports on Form 10-Q for the fiscal
periods ended March 30, June 29, or September 28, 2019.

Management's Plan to Remediate the Material Weakness
We are committed to and are taking steps necessary to remediate the control
deficiencies that constituted the above material weakness by implementing
changes to our internal control over financial reporting. We are in the process
of designing and implementing measures to remediate the underlying causes of the
control deficiencies that gave rise to the material weakness. In addition, we
are providing in-house accounting personnel training to ensure that they have
the relevant expertise related to the monitoring and oversight of accounting for
non-routine transactions. We will continue to monitor the effectiveness of these
controls and will make any further changes management determines appropriate.

Changes in Internal Control over Financial Reporting
Except for the material weakness noted above, there have been no changes in the
Company's internal control over financial reporting that occurred during the
fiscal period ended September 28, 2019 that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.

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11/07KOPIN : Management's Discussion and Analysis of Financial Condition and Results ..
AQ
11/07KOPIN : 10-K/A - Management's Discussion and Analysis of Financial Condition and..
AQ
11/07KOPIN : 3Q Earnings Snapshot
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11/07KOPIN CORP : Results of Operations and Financial Condition (form 8-K)
AQ
11/07KOPIN : Provides Business Update and Third Quarter 2019 Operating Results
BU
10/29KOPIN CORPORATION : to Announce Third Quarter 2019 Business Update and Financial..
BU
10/07KOPIN CORP : Regulation FD Disclosure, Financial Statements and Exhibits (form 8..
AQ
10/07KOPIN : Reaches Agreement to Sell, License Certain Assets of SolosTM Products an..
BU
09/05KOPIN : Advanced Color LCD Microdisplay Designed in Pilot HMDs for US Army's Hel..
BU
08/26Kopin to Present at the 8th Annual Gateway Conference on September 5, 2019
GL
More news
Financials (USD)
Sales 2019 29,7 M
EBIT 2019 -27,2 M
Net income 2019 -26,2 M
Debt 2019 -
Yield 2019 -
P/E ratio 2019 -1,69x
P/E ratio 2020 -2,75x
Capi. / Sales2019 1,52x
Capi. / Sales2020 1,12x
Capitalization 45,1 M
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Technical analysis trends KOPIN CORPORATION
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 2
Average target price 2,10  $
Last Close Price 0,55  $
Spread / Highest target 300%
Spread / Average Target 282%
Spread / Lowest Target 264%
EPS Revisions
Managers
NameTitle
John C. C. Fan Chairman, President & Chief Executive Officer
Richard A. Sneider CFO, Treasurer & Head-Investor Relations
Hong K. Choi Chief Technology Officer & Vice President
David E. Brook Secretary & Director
Andrew H. Chapman Independent Director
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