<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR l5(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 27, 1997
Commission file number 0-19882
KOPIN CORPORATION
-----------------
(Exact name of registrant as specified in its charter)
Delaware 04-2833935
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
695 Myles Standish Blvd., Taunton, MA 02780-1042
- ------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 824-6696
--------------
Not Applicable
--------------
Former name, former address, and former fiscal year, if changed since last
report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or l5(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of October 20, 1997
----- ----------------------------------
Common Stock, par value $ .01 11,117,328
<PAGE>
KOPIN CORPORATION
INDEX
-----
Page No.
-------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at
September 27, 1997 and December 31, 1996 3
Consolidated Statements of Operations for the
Three and Nine months ended September 27, 1997 and
September 28, 1996 4
Consolidated Statements of Stockholders' Equity for the
Nine months ended September 27, 1997 and September 28, 1996 5
Consolidated Statements of Cash Flows for the
Nine months ended September 27, 1997 and September 28, 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
2
<PAGE>
KOPIN CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 27, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and equivalents $ 14,733,666 $ 16,511,291
Marketable securities 5,130,911 10,560,815
Accounts receivable, net of
allowance of $170,200 and $137,400:
Billed 2,428,541 3,650,075
Unbilled 1,419,089 2,933,863
Inventory 2,573,034 3,073,643
Prepaid expenses and other current assets 878,577 1,257,781
------------ ------------
Total current assets 27,163,818 37,987,468
Equipment and improvements:
Equipment 22,554,729 20,862,918
Leasehold improvements 772,717 772,717
Furniture and fixtures 331,955 361,483
Equipment under construction 1,341,820 636,255
------------ ------------
25,001,221 22,633,373
Accumulated depreciation and amortization 14,094,886 11,731,828
------------ ------------
10,906,335 10,901,545
Other assets 3,677,985 2,962,149
Intangible assets 2,037,293 1,894,392
------------ ------------
Total assets $ 43,785,431 $ 53,745,554
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Note payable $ 450,000 $ 500,000
Accounts payable 2,797,085 6,945,053
Accrued payroll and expenses 1,222,281 1,427,305
Unearned revenue - 80,484
Current portion of long-term obligations 1,228,189 1,347,636
------------ ------------
Total current liabilities 5,697,555 10,300,478
Deferred rent 219,166 381,166
Long-term obligations, less current portion 1,312,716 2,793,061
Stockholders' equity:
Preferred stock, par value $.01 per share:
Authorized, 3,000 shares; none issued and
outstanding
Common stock, par value $.01 per share:
Authorized, 20,000,000 shares;
issued 11,091,204 shares in 1997 and
10,931,408 shares in 1996 110,912 109,314
Additional paid-in capital 90,167,369 88,605,451
Deferred compensation (173,166) (227,706)
Marketable securities valuation (8,500) 44,933
Deficit (53,540,621) (48,261,143)
------------ ------------
Total stockholders' equity 36,555,994 40,270,849
------------ ------------
Total liabilities and stockholders' equity $ 43,785,431 $ 53,745,554
============ ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------- -----------------
September 27 September 28 September 27 September 28
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Product sales $ 2,940,578 $ 2,784,910 $ 8,940,129 $ 8,411,166
Research and development 966,749 1,852,700 2,562,485 5,278,072
Interest and other income 304,349 457,326 1,005,090 1,463,507
------------- ------------- ------------- --------------
4,211,676 5,094,936 12,507,704 15,152,745
------------- ------------- ------------- --------------
Costs and expenses:
Cost of sales 1,891,218 2,331,662 5,974,403 7,264,732
Research and development 2,603,671 4,093,692 8,156,969 13,297,020
General, administrative and selling 1,068,636 1,393,977 3,256,782 5,304,588
Interest 61,677 49,408 172,192 266,926
Other 75,612 158,638 226,836 445,675
Non-recurring charge - - - 4,990,412
------------- ------------- ------------- --------------
5,700,814 8,027,377 17,787,182 31,569,353
------------- ------------- ------------- --------------
Loss before minority interest (1,489,138) (2,932,441) (5,279,478) (16,416,608)
Minority interest in loss of subsidiary - 205,189 - 1,075,264
------------- ------------- ------------- --------------
Net loss ($ 1,489,138) ($ 2,727,252) ($ 5,279,478) ($ 15,341,344)
============= ============= ============= ==============
Net loss per share ($ .13) ($ .25) ($ .48) ($ 1.41)
============= ============= ============= ==============
Weighted average number of common
shares outstanding 11,031,431 10,921,673 10,973,323 10,918,771
============= ============= ============= ==============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 27, 1997 AND SEPTEMBER 28, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additional
------------------ Paid-in Deferred Securities
Shares Amount Capital Compensation Valuation Deficit Total
--------- ------ ---------- ------------ ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 10,915,019 $109,150 $88,355,145 ($94,482) $137,183 ($26,664,779) $ 61,842,217
Exercise of stock options 9,258 93 32,377 -- -- -- 32,470
Amortization of compensation
relating to grant of stock
options -- -- -- 35,082 -- -- 35,082
Net unrealized gain on marketable
securities -- -- -- -- 130,012 -- 130,012
Net loss for the nine month
period ended September 28, 1996 -- -- -- -- -- (15,341,344) (15,341,344)
---------- -------- ----------- ---------- -------- ------------ ------------
Balance, September 28, 1996 10,924,277 $109,243 $88,387,522 ($59,400) $267,195 ($42,006,123) $ 46,698,437
========== ======== =========== ========== ======== ============ ============
Balance, December 31, 1996 10,931,408 $109,314 $88,605,451 ($227,706) $ 44,933 ($48,261,143) $ 40,270,849
Exercise of stock options 159,796 1,598 1,561,918 -- -- -- 1,563,516
Amortization of compensation
relating to grant of stock
options -- -- -- 54,540 -- -- 54,540
Net unrealized loss on marketable
securities -- -- -- -- (53,433) -- (53,433)
Net loss for the nine month
period ended September 27, 1997 -- -- -- -- -- (5,279,478) (5,279,478)
---------- -------- ----------- ---------- -------- ------------ ------------
Balance, September 27, 1997 11,091,204 $110,912 $90,167,369 ($ 173,166) ($ 8,500) ($53,540,621) $ 36,555,994
========== ======== =========== ========== ======== ============ ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
----------------
September 27 September 28
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss ($ 5,279,478) ($ 15,341,344)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 2,589,894 2,696,171
Amortization of compensation relating to grant of stock options 54,540 35,082
Non-recurring charge - 4,990,412
Decrease in unearned revenue (80,484) (69,003)
Increase (decrease) in deferred rent (162,000) 25,500
Minority interest in loss of subsidiary - (1,075,264)
Changes in assets and liabilities:
Accounts receivable 2,208,646 (1,599,988)
Inventory 139,934 812,425
Prepaid expenses and other current assets 379,204 (225,179)
Intangible assets (378,786) (1,519,441)
Accounts payable and accrued expenses (3,623,383) (293,161)
------------- --------------
Net cash used in operating activities (4,151,913) (11,563,790)
------------- --------------
Cash flows from investing activities:
Marketable securities 5,376,471 4,036,885
Other assets (715,836) (224,591)
Capital expenditures (2,544,985) (2,810,827)
------------- --------------
Net cash provided by investing activities 2,115,650 1,001,467
------------- --------------
Cash flows from financing activities:
Net proceeds from issuance of subsidiary
preferred stock - 1,800,000
Proceeds from notes payable 450,000 500,000
Principal payment on notes payable (500,000) (3,000,000)
Proceeds from long-term obligations - 1,692,326
Principal payment on long-term obligations (1,254,878) (681,402)
Proceeds from exercise of stock options 1,563,516 32,470
------------- --------------
Net cash provided by financing activities 258,638 343,394
------------- --------------
Net decrease in cash and equivalents (1,777,625) (10,218,929)
Cash and equivalents, beginning of period 16,511,291 24,718,023
------------- --------------
Cash and equivalents, end of period $ 14,733,666 $ 14,499,094
============= ==============
Non-cash investing and financing transactions:
Marketable securities valuation ($ 53,433) $ 130,012
Supplementary information -Interest paid in cash $ 172,191 $ 277,028
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
KOPIN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
---------------------
The financial statements for the nine month periods ended September 27, 1997 and
September 28, 1996 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. All such adjustments are of a normal recurring
nature. These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K filed with the Securities and Exchange Commission for the year
ended December 31, 1996.
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.
The consolidated financial statements include the accounts of the Company and
its wholly-owned and majority-owned subsidiaries. All intercompany transactions
and balances have been eliminated.
2. NET LOSS PER SHARE
------------------
Net loss per share is computed using the weighted average number of common
shares outstanding during the period. Common share equivalents have not been
included because the effect would be anti-dilutive.
In March 1997, the Financial Accounting Standards Board released Statement of
Financial Accounting Standards (SFAS) No.128, "Earnings Per Share," which the
Company will adopt in the fourth quarter of 1997. The adoption is not expected
to have an impact on the Company's reported loss per share for the quarters
ended September 27, 1997 and September 28, 1996.
3. INVESTMENT IN FORTE TECHNOLOGIES, INC.
--------------------------------------
During 1994, 1995 and 1996, the Company made a series of equity investments in
Forte Technologies, Inc. In May 1995, the Company obtained a controlling
interest in Forte and consolidated the financial statements of Forte with those
of the Company from that date through December 31, 1996. As a result of
declining sales and results of operations at Forte, the Company recorded in the
fourth quarter of 1996 a write-down of Forte's assets to their estimated net
realizable value and its remaining investment in Forte totaling $3,900,000. In
March 1997, Forte filed a voluntary petition seeking reorganization under
Chapter 11 of the U.S. Bankruptcy Code, and was in default in the payment of
principal and interest to its senior lender under certain secured loans in the
aggregate principal amount of $838,000. These loans, which had been guaranteed
by the Company and included in the Company's consolidated balance sheet as of
March 29, 1997, were paid in full by the Company in June 1997. As a result of
its Chapter 11 filing, Forte's financial statements are no longer consolidated
with those of the Company.
4. NON-RECURRING CHARGE
--------------------
On January 1, 1996 , the Company adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of ." This
Statement establishes accounting standards for the carrying value of long-lived
and certain identifiable intangible assets. In January 1996, the Company
incurred a non-recurring charge of $4,990,412 which included a write-down
associated with the initial adoption of SFAS No.121, the expensing of purchased
technology, and the write-off of certain previously deferred expenses.
7
<PAGE>
5. RECENT PRONOUNCEMENTS
---------------------
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income,"
which is effective for the Company for the period ended January 30, 1999. SFAS
No. 130 has no impact on net income and requires that certain components of
stockholders' equity from non-owner sources be reclassified and presented as
"other comprehensive income." Currently, the Company's consolidated balance
sheets contain no material components of stockholders' equity that would be
reclassified as "other comprehensive income."
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which is effective for the Company for the
period ended January 30, 1999. The impact of SFAS No. 131 on the Company has not
yet been determined.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS
-------------
Kopin Corporation and its subsidiaries (the "Company") are engaged in the
development, manufacture and sale of flat panel display devices and products,
and custom Wafer-Engineered electronic materials for commercial and consumer
markets, and the performance of related research and development under
contracts. To date, the Company's revenue has been derived primarily from sales
of its custom Wafer-Engineered materials and flat panel display devices and
products, and development contracts with commercial companies and agencies of
the federal government.
RESULTS OF OPERATIONS
The Company's research and development and product sale revenue was
$3,907,327 and $11,502,614 for the three and nine months ended September 27,
1997 compared to $4,637,610 and $13,689,238 during the corresponding periods in
the prior year, a decrease of $730,283 or 15.7%, for the three months and
$2,186,624, or 16.0%, for the nine months ended September 27, 1997. Research and
development revenue decreased 47.8% to $966,749 for the three months ended
September 27, 1997 from $1,852,700 in the prior year and decreased 51.5% to
$2,562,485 for the nine months ended September 27, 1997 from $5,278,072 during
the corresponding period in 1996. The change in 1997 research and development
revenue was primarily attributable to a decrease in contract revenue from
agencies of the federal government. The Company's product sales increased 5.6%
to $2,940,578 during the three months ended September 27, 1997 from $2,784,910
during the corresponding period in the prior year and increased 6.3% to
$8,940,129 for the nine months ended September 27, 1997 from $8,411,166 during
the corresponding period in 1996. The net increase in product sales was
primarily due to a $442,516, or 17.7%, increase in sales of the Company's Wafer-
Engineered materials and display products for the three months ended September
27, 1997 and a $2,638,161, or 41.9%, increase in sales of such materials and
display products for the nine months ended September 27, 1997 over the
corresponding periods in the prior year. The increases in sales of the
Company's Wafer-Engineered materials are primarily due to the increased use of
these materials in various wireless telecommunications products. The financial
results of Forte Technologies, Inc. are no longer included with those of the
Company in the 1997 period following the Company's write-off of its investment
in Forte at the end of 1996 and Forte's subsequent filing of a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code. Forte had product sales
of $286,848 and $2,109,198 included in the Company's results for the three and
nine months ended September 28, 1996 .
Interest and other income was $304,349 and $1,005,090 for the three
and nine months ended September 27, 1997 compared to $457,326 and $1,463,507
during the corresponding periods in 1996. The decrease in 1997 was primarily due
to lower cash balances during the period in comparison to balances in 1996.
The Company's total operating expenses were $5,700,814 for the three
months ended September 27, 1997 and $17,787,182 for the nine months then ended
compared to $8,027,377 and $31,569,353, a decrease of $2,326,563, or 29.0%, and
$13,782,171, or 43.7%, over the corresponding periods in 1996. The nine months
ended September 28, 1996 included a $4,990,412 non-recurring charge for the
write-down of certain intangible and long-lived assets in connection with the
Company's adoption of the provisions of Statement of Financial Accounting
Standards No. 121, the expensing of purchased technology, and the write-off of
certain previously deferred expenses. In addition, research and development
charges of $500,000 for subcontractor development work were expensed during the
nine months ended September 28, 1996. Additionally, $1,131,949 and $5,392,742 of
the decrease is related to expenses incurred in the three and nine months ended
September 28, 1996 by Forte Technologies, the expenses of which are no longer
included with those of the Company in the 1997 period (as described above). The
remainder of the decrease in operating expenses was primarily due to decreased
costs incurred for research and development programs funded by agencies of the
federal government for both the three and nine months ended September 27, 1997.
Cost of sales, which is comprised of materials, labor and manufacturing
overhead, was $1,891,218 and $5,974,403 for the three and nine months ended
September 27, 1997, or 64.3% and 66.8%, respectively, of product sales, compared
to $2,331,662 and $7,264,732, or 83.7% and 86.4%, respectively, of product
sales, during the corresponding periods in 1996. The higher cost of sales
percentage in 1996 was primarily due to the inclusion in the 1996 financial
results of shipments of head-mounted systems by Forte Technologies. Reducing
cost of sales as a percentage of sales for the Company's products is generally
dependent on achieving manufacturing economies of scale in order to manufacture
at a lower cost per unit basis.
9
<PAGE>
Research and development expenses include expenses incurred in support
of internal development programs and programs funded by agencies of the federal
government, including development programs for flat panel display devices and
products, Wafer-Engineered materials and head-mounted display systems, circuit
design costs, staffing, purchases of materials and laboratory supplies, and
fabrication and packaging of the Company's SMART SLIDE imaging devices. Total
research and development expenses for the three and nine months ended September
27, 1997, were $2,603,671 and $8,156,969 compared to $4,093,692 and $13,297,020
during the corresponding period in 1996, a decrease of 36.4% and 38.7%,
respectively. The decrease in research and development expenses in 1997 was
primarily due to a reduction in research and development expenses incurred in
support of programs funded by agencies of the federal government as well as the
inclusion of $101,478 and $458,482 of such expenses incurred by Forte
Technologies during the corresponding periods in 1996.
General, administrative and selling expenses consist of the expenses
incurred by the Company's business development and sales personnel, marketing
expenses, and administrative and general corporate expenses. General,
administrative and selling expenses were $1,068,636 for the three months ended
September 27, 1997 and $3,256,782 for the nine months then ended compared to
$1,393,977 and $5,304,588, respectively, a decrease of $325,341 or 23.3% and
$2,047,806 or 38.6% over the corresponding periods in 1996. The decrease in
general, administrative and selling expenses in the 1997 periods was primarily
due to the inclusion of costs of $488,332 and $2,233,438 incurred by Forte
Technologies in the three and nine months ended September 28, 1996. In addition,
general and administrative expenses include non-cash charges for compensation
expense of $18,180 and $54,540 for the three and nine months ended September 27,
1997, relating to the issuance of certain stock options. The Company expects to
incur increased general, administrative and selling expenses in the future as it
continues commercialization of its flat panel display devices and products and
Wafer-Engineered materials.
On January 1, 1996 , the Company adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of ."
This Statement establishes accounting standards for the carrying value of long-
lived and certain identifiable intangible assets. In January 1996, the Company
incurred a non-recurring charge of $4,990,412 which included a write-down
associated with the initial adoption of SFAS No.121, the expensing of purchased
technology, and the write-off of certain previously deferred expenses.
In March 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings Per Share," which will be effective during the fourth quarter
of 1997. The new pronouncement's requirements will not impact the Company's
previously reported loss per share.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," which is effective for the Company for the period ended January 30,
1999. SFAS No. 130 has no impact on net income and requires that certain
components of stockholders' equity from non-owner sources be reclassified and
presented as "other comprehensive income." Currently, the Company's consolidated
balance sheets contain no material components of stockholders' equity that would
be reclassified as "other comprehensive income."
In June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," which is effective for the
Company for the period ended January 30, 1999. The impact of SFAS No. 131 on the
Company has not yet been determined.
LIQUIDITY AND CAPITAL RESOURCES
As of September 27, 1997, the Company had cash and equivalents and
marketable securities of $19,864,577 and working capital of $21,466,263 compared
to $27,072,106 and $27,686,990, respectively, as of December 31, 1996. The
decrease in cash and equivalents and marketable securities was primarily due to
use of cash in operations of $4,151,913, capital expenditures of $2,544,985 and
principal payments on long-term obligations of $1,254,878, offset by proceeds of
stock option exercises of $1,563,516. The Company also has approximately
$1,400,000 of marketable securities held in escrow as equipment financing
collateral which is shown in other assets.
Revenue from long-term contracts is recognized on the percentage-of-
completion method of accounting as work is performed, based upon the ratio that
incurred costs or hours bear to estimated total completion costs or hours.
Amounts
10
<PAGE>
received under long-term contracts are recognized as revenue is earned, and
amounts earned on contracts in progress in excess of billings are classified as
unbilled receivables. Unbilled receivables are billed based on dates stipulated
in the related agreement or in periodic installments based upon the Company's
invoicing cycle.
The Company periodically enters into various long-term debt
arrangements to finance equipment purchases and other activities. As of
September 27, 1997, long-term debt obligations totaled $2,540,905, of which
$1,228,189 is payable in the next twelve months.
In October 1993, the Company entered into a five-year lease for a
74,000 square foot manufacturing facility. This facility, which includes 7,000
square feet of environmentally controlled clean rooms, is used primarily for the
Company's production of flat panel display devices. In 1997, the Company
exercised an option to extend the lease for an additional year. The Company will
make lease payments of approximately $1.0 million per year over the remaining
term of the lease.
The Company currently expects to expend approximately $6,850,000 on
capital expenditures over the next 27 months. Of this amount, approximately
$6,000,000 is expected to be used for expansion of manufacturing equipment
required for development and manufacturing of flat panel display devices and
products and Wafer-Engineered materials, and the balance is expected to be used
for the acquisition of laboratory and testing equipment and general facility
upgrades. The Company expects to use approximately $850,000 in the remainder of
1997, $3,000,000 in 1998, and $3,000,000 in 1999 for capital equipment and
expansion of the Company's manufacturing capabilities.
The Company expects to incur significant additional research and
development and other costs, including costs related to the continued
development and commercialization of its flat panel display devices and
products. The Company's future capital requirements will depend on many factors,
including the establishment of collaborative arrangements, the cost of
manufacturing facilities, commercialization activities and arrangements,
continued scientific progress in its flat panel display device and display
product development programs, the magnitude of these programs, the costs
involved in filing, prosecuting and enforcing patent claims, and competing
technological and market developments. From time to time, the Company may also
make equity investments in other companies engaged in certain aspects of the
flat panel display and electronics industries as part of its business strategy.
The Company believes that its present cash and equivalents and
marketable securities will be adequate to finance its anticipated operating and
capital requirements and to meet liquidity needs through at least fiscal 1998.
FUTURE OPERATING RESULTS
Certain of the statements contained in this Form 10-Q, including
Management's Discussion and Analysis of Financial Condition and Results of
Operations, are forward-looking statements that involve risks and uncertainties.
In addition to the risks and uncertainties set forth in this Form 10-Q, other
factors that could cause actual results to differ materially include the
following: general economic and business conditions and growth in the flat panel
display industry and the gallium arsenide integrated circuit and materials
industries, the impact of competitive products and pricing, availability of
third party components, availability of integrated circuit fabrication
facilities, cost and yields associated with production of the Company's SMART
SLIDE imaging devices and Wafer-engineered materials, loss of significant
customers, acceptance of the Company's products, continuation of strategic
relationships, and the other risk factors and cautionary statements listed from
time to time in the Company's periodic reports filed with the Securities and
Exchange Commission, including but not limited to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KOPIN CORPORATION
(Registrant)
Date: October 29, 1997 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: October 29, 1997 By: /s/ Paul J. Mitchell
---------------------------------
Paul J. Mitchell
Treasurer and Chief Financial
Officer (Principal Financial and
Accounting Officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-27-1997
<CASH> 14,733,666
<SECURITIES> 5,130,911
<RECEIVABLES> 3,847,630
<ALLOWANCES> 0
<INVENTORY> 2,573,034
<CURRENT-ASSETS> 27,163,818
<PP&E> 25,001,221
<DEPRECIATION> 14,094,886
<TOTAL-ASSETS> 43,785,431
<CURRENT-LIABILITIES> 5,697,555
<BONDS> 1,312,716
0
0
<COMMON> 110,912
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</TABLE>
