<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 June 28, 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 July 18, 1997
----- -------------------------------
Common Stock, par value $ .01 11,002,469
<PAGE>
KOPIN CORPORATION
INDEX
-----
Page No.
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at
June 28, 1997 and December 31, 1996 3
Consolidated Statements of Operations for the
Three and Six months ended June 28, 1997 and
June 29, 1996 4
Consolidated Statements of Stockholders'
Equity for the Six months ended June 28, 1997
and June 29, 1996 5
Consolidated Statements of Cash Flows for the
Six months ended June 28, 1997 and June 29, 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 4. Submissions of Matters to a Vote of
Security-Holders 11
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
2
<PAGE>
KOPIN CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 28, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and equivalents $14,958,860 $ 16,511,291
Marketable securities 6,332,522 10,560,815
Accounts receivable, net
of allowance of $158,400
and $137,400:
Billed 2,609,775 3,650,075
Unbilled 1,611,600 2,933,863
Inventory 2,586,557 3,073,643
Prepaid expenses and
other current assets 1,010,056 1,257,781
----------- ------------
Total current assets 29,109,370 37,987,468
Equipment and improvements:
Equipment 22,088,747 20,862,918
Leasehold improvements 772,717 772,717
Furniture and fixtures 331,955 361,483
Equipment under
construction 998,434 636,255
----------- ------------
24,191,853 22,633,373
Accumulated depreciation
and amortization 13,307,200 11,731,828
----------- ------------
10,884,653 10,901,545
Other assets 3,555,390 2,962,149
Intangible assets 1,942,100 1,894,392
----------- ------------
Total assets $45,491,513 $ 53,745,554
=========== ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
- ---------------------
Current liabilities:
Note payable $ 450,000 $ 500,000
Accounts payable 4,024,365 6,945,053
Accrued payroll
and expenses 980,569 1,427,305
Unearned revenue 34,482 80,484
Current portion of
long-term obligations 1,206,662 1,347,636
----------- ------------
Total current
liabilities 6,696,078 10,300,478
Deferred rent 273,166 381,166
Long-term obligations,
less current portion 1,627,960 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 10,969,404
shares in 1997 and
10,931,408 shares in 1996 109,694 109,314
Additional paid-in capital 88,962,299 88,605,451
Deferred compensation (191,346) (227,706)
Marketable securities
valuation 65,145 44,933
Deficit (52,051,483) (48,261,143)
----------- ------------
Total stockholders'
equity 36,894,309 40,270,849
----------- ------------
Total liabilities and
stockholders' equity $45,491,513 $ 53,745,554
=========== ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 28 June 29 June 28 June 29
1997 1996 1997 1996
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenue:
Product sales $ 3,117,474 $ 2,582,490 $ 5,999,551 $ 5,626,256
Research and development 763,800 1,695,900 1,595,736 3,425,372
Interest and other income 385,844 445,785 700,741 1,006,181
------------- ------------- ------------- --------------
4,267,118 4,724,175 8,296,028 10,057,809
------------- ------------- ------------- --------------
Costs and expenses:
Cost of sales 1,971,820 2,225,152 4,083,185 4,933,070
Research and development 2,749,320 4,492,359 5,553,298 9,203,328
General, administrative and selling 1,102,102 1,966,955 2,188,146 3,910,611
Interest 56,986 93,309 110,515 217,518
Other 75,612 152,268 151,224 287,037
Non-recurring charge - - - 4,990,412
------------- ------------- ------------- --------------
5,955,840 8,930,043 12,086,368 23,541,976
------------- ------------- ------------- --------------
Loss before minority interest (1,688,722) (4,205,868) (3,790,340) (13,484,167)
Minority interest in loss of subsidiary - 312,829 - 870,075
------------- ------------- ------------- --------------
Net loss ($ 1,688,722) ($ 3,893,039) ($ 3,790,340) ($ 12,614,092)
============= ============= ============= ==============
Net loss per share ($ .15) ($ .36) ($ .35) ($ 1.16)
============= ============= ============= ==============
Weighted average number of common
shares outstanding 10,952,879 10,918,750 10,943,782 10,917,304
============= ============= ============= ==============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 28, 1997 AND JUNE 29, 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 3,813 38 6,987 -- -- -- 7,025
Amortization of compensation
relating to grant of stock options -- -- -- 23,388 -- -- 23,388
Net unrealized gain on marketable
securities -- -- -- -- 72,012 -- 72,012
Net loss for the six month
period ended June 29, 1996 -- -- -- -- -- (12,614,092) (12,614,092)
---------- -------- ----------- ------------ ---------- ------------ ------------
Balance, June 29, 1996 10,918,832 $109,188 $88,362,132 ($71,094) $209,195 ($39,278,871) $ 49,330,550
========== ======== =========== ============ ========== ============ ============
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 37,996 380 356,848 -- -- -- 357,228
Amortization of compensation
relating to grant of stock options -- -- -- 36,360 -- -- 36,360
Net unrealized gain on marketable
securities -- -- -- -- 20,212 -- 20,212
Net loss for the six month
period ended June 28, 1997 -- -- -- -- -- (3,790,340) (3,790,340)
---------- -------- ----------- ------------ ---------- ------------ ------------
Balance, June 28, 1997 10,969,404 $109,694 $88,962,299 ($ 191,346) $ 65,145 ($52,051,483) $ 36,894,309
========== ======== =========== ============ ========== ============ ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
KOPIN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
------------------------------
June 28 June 29
1997 1996
------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($ 3,790,340) ($ 12,614,092)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 1,726,596 1,796,893
Amortization of compensation
relating to grant
of stock options 36,360 23,388
Non-recurring charge - 4,990,412
Decrease in unearned revenue (46,002) (46,002)
Increase (decrease) in deferred rent (108,000) 17,000
Minority interest in loss of - (870,075)
subsidiary
Changes in assets and liabilities:
Accounts receivable 1,834,901 (1,568,923)
Inventory 126,411 (448,950)
Prepaid expenses and other 247,725 (243,257)
current assets
Intangible assets (207,981) (1,455,500)
Accounts payable and accrued (2,637,815) 1,867,122
expenses ------------- --------------
Net cash used in operating (2,818,145) (8,551,984)
activities ------------- --------------
Cash flows from investing activities:
Marketable securities 4,248,505 4,062,524
Other assets (593,241) 271,093
Capital expenditures (1,735,617) (2,108,722)
------------- --------------
Net cash provided by investing 1,919,647 2,224,895
activities ------------- --------------
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 - 1,503,025
Principal payment on long-term (961,161) (465,641)
obligations
Proceeds from exercise of stock 357,228 7,025
options ------------- --------------
Net cash provided by (used in) (653,933) 344,409
financing activities ------------- --------------
Net decrease in cash and equivalents (1,552,431) (5,982,680)
Cash and equivalents, beginning of 16,511,291 24,718,023
period ------------- --------------
Cash and equivalents, end of period $ 14,958,860 $ 18,735,343
============= ==============
Non-cash investing and financing
transactions:
Marketable securities valuation $ 20,212 $ 72,012
Supplementary information -Interest $ 110,515 $ 177,136
paid in cash
</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 six month periods ended June 28, 1997 and June
29, 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 (File No. 0-19882) 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 June 28, 1997 and June 29, 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>
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
development contracts with commercial companies and agencies of the federal
government, as well as from sales of its custom Wafer-Engineered materials and
flat panel display devices and products.
RESULTS OF OPERATIONS
The Company's research and development and product sale revenue was
$3,881,274 and $7,595,287 for the three and six months ended June 28, 1997
compared to $4,278,390 and $9,051,628 during the corresponding periods in the
prior year, a decrease of $397,116 or 9.3%, for the three months and $1,456,341,
or 16.0%, for the six months ended June 28, 1997. Research and development
revenue decreased 55.0% to $763,800 for the three months ended June 28, 1997
from $1,695,900 in the prior year and decreased 53.4% to $1,595,736 for the six
months ended June 28, 1997 from $3,425,372 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 20.7% to $3,117,474 during the
three months ended June 28, 1997 from $2,582,490 during the corresponding period
in the prior year and increased 6.6% to $5,999,551 for the six months ended June
28, 1997 from $5,626,256 during the corresponding period in 1996. The net
increase in product sales was primarily due to a $957,640, or 44.3%, increase in
sales of the Company's Wafer-Engineered materials and display products for the
three months ended June 28, 1997 and a $2,195,645, or 57.7%, increase in sales
of such materials and display products for the six months ended June 28, 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 $422,656 and $1,822,350 included in the Company's results for the three and
six months ended June 29, 1996.
Interest and other income was $385,844 and $700,741 for the three and six
months ended June 28, 1997 compared to $445,785 and $1,006,181 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 $5,955,840 for the three
months ended June 28, 1997 and $12,086,368 for the six months then ended
compared to $8,930,043 and $23,541,976, a decrease of $2,974,203, or 33.3%, and
$11,455,608, or 48.7%, over the corresponding periods in 1996. The six months
ended June 29, 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
six months ended June 29, 1996. Additionally, $1,688,808 and $5,316,641 of the
decrease is related to expenses incurred in the three and six months ended June
29, 1996 by Forte Technologies. 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 six months ended June 28, 1997. Cost of sales, which is comprised of
materials, labor and manufacturing overhead, was $1,971,820 and $4,083,185 for
the three and six months ended June 28, 1997, or 63.2% and 68.0% of product
sales, compared to $2,225,152 and $4,933,070, or 86.2% and 87.7% 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.
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 electronic imaging devices and
display products, Wafer-Engineered materials and head-mounted display systems,
circuit design costs, staffing, purchases of
8
<PAGE>
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 six months ended June 28, 1997, were $2,749,320 and $5,553,298
compared to $4,492,359 and $9,203,328 during the corresponding period in 1996, a
decrease of 38.8% and 39.7%, 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 $142,160 and $357,004 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 $1,102,102 for the three months ended
June 28, 1997 and $2,188,146 for the six months then ended compared to
$1,966,955 and $3,910,611, respectively, a decrease of $864,853 or 44.0% and
$1,722,465 or 44.0% 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 $876,203 and $1,745,106 incurred by Forte
Technologies in the three and six months ended June 29, 1996. In addition,
general and administrative expenses include non-cash charges for compensation
expense of $18,180 and $36,360 for the three and six months ended June 28, 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 imaging devices and display 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.
LIQUIDITY AND CAPITAL RESOURCES
As of June 28, 1997, the Company had cash and equivalents and marketable
securities of $21,291,382 and working capital of $22,413,292 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 $2,818,145, capital expenditures of $1,735,617 and
principal payments on long-term obligations of $961,161. The Company also has
approximately $1,300,000 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 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 June 28, 1997, long-
term debt obligations totaled $2,834,622, of which $1,206,662 is payable in
1997.
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 electronic imaging 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 $7,500,000 on
capital expenditures over the next 30 months. Of this amount, approximately
$6,000,000 is expected to be used for expansion of manufacturing equipment
9
<PAGE>
required for development and manufacturing of electronic imaging devices and
display 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 $1,500,000 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 electronic imaging devices and display
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 imaging 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 materials industry, 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, loss of
significant customers, acceptance of the Company's products, continuation of
collaborative agreements, and the risk factors 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.
10
<PAGE>
PART II. OTHER INFORMATION
Item 3. DEFAULTS UPON SENIOR SECURITIES
(a)The Company's majority owned subsidiary, Forte Technologies, Inc., which
has filed a voluntary petition seeking reorganization under Chapter 11 of the
U.S. Bankruptcy Code in March 1997, was in default in the payment of principal
and interest to Forte's 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 along with an
arrearage under these loans of approximately $41,000. Forte also is in default
in the payment under certain secured convertible debentures in the aggregate
principal amount of $1,912,000. The Company, which is the holder of $1,538,000
of such convertible debentures, wrote off the value of these loans as of
December 31, 1996.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
On May 22, 1997, the Company held an Annual Meeting of Stockholders to consider
and vote upon the following four proposals:
(1) A proposal to elect seven directors of the Company to serve until the next
Annual Meeting of Stockholders and until their successors are duly elected
and qualified.
(2) A proposal to ratify the amendment to the Company's 1992 Stock Option
Plan increasing the number of shares authorized for issuance under the
Plan.
(3) A proposal to ratify the amendment to the Company's Director Stock Option
Plan increasing the number of shares authorized for issuance under the
Plan.
(4) A proposal to ratify the appointment of Deloitte & Touche LLP as
independent accountants of the Company for the current fiscal year.
Results with respect to the voting on each of the proposals were as follows:
<TABLE>
<CAPTION>
For Withheld Authority
----- ------------------
<S> <C> <C>
Proposal 1: John C.C. Fan 9,611,244 455,180
David E. Brook 9,610,944 455,480
Andrew H. Chapman 9,610,744 455,680
Morton Collins 9,611,544 454,880
Chi Chia Hsieh 9,608,744 457,680
Michael A. Wall 9,608,644 457,780
Vallobh Vimolvanich 9,607,244 459,180
</TABLE>
Proposal 2: 7,094,830 votes for; 952,119 votes against;69,728 abstentions;
and 1,949,747 broker non-votes.
Proposal 3: 7,097,675 votes for; 953,522 votes against;65,480 abstentions;
and 1,949,747 broker non-votes.
Proposal 4: 9,959,484 votes for; 53,792 votes against; and 53,148
abstentions.
11
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.55 Amendment to 1992 Stock Option Plan
10.56 Amendment to Director Stock Option Plan
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: August 5, 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: August 5, 1997 By: /s/ Paul J. Mitchell
--------------------------------
Paul J. Mitchell
Treasurer and Chief Financial
Officer (Principal Financial
and Accounting Officer)
13
<PAGE>
EXHIBIT 10.55
KOPIN CORPORATION
1992 STOCK OPTION PLAN
AMENDMENT
Kopin Corporation the ("Company"), pursuant to authority reserved in
Section 18 of the 1992 Stock Option Plan, as amended, of the Company (the "1992
Plan"), hereby amends the 1992 Plan as follows:
Effective as of February 28, 1997, the date of the adoption by the Board of
Directors of the Company of the amendment provided hereby, the first sentence of
Section 5 of the 1992 Plan is deleted in its entirety and is replaced with the
following:
5. Stock Subject to the Plan. The Plan covers 2,700,000 shares of Stock;
----- ------- -- --- ----
provided, that the number of shares purchased pursuant to the exercise
--------
of Options granted under the Plan and options granted under the Old Plan
and the number of shares subject to outstanding Options granted under
---
the Plan and options granted under the Old Plan shall be charged against
the shares covered by the Plan; but shares subject to Options granted
under the Plan or options granted under the Old Plan which terminated
without being exercised shall not be so charged.
IN WITNESS WHEREOF, the Company has adopted this Amendment as of the 22/nd/
day of May, 1997 to be effective as hereinabove provided.
KOPIN CORPORATION
BY: /s/John C. C. Fan
-----------------------------
The following does not form part of this Amendment but is included solely
for information purposes:
Date of Board Approval: February 28, 1997
Date of Shareholder Approval: May 22, 1997
<PAGE>
EXHIBIT 10.56
KOPIN CORPORATION
DIRECTOR STOCK OPTION PLAN
AMENDMENT
Kopin Corporation the ("Company"), pursuant to authority reserved in
Section 9.2 of the Director Stock Option Plan of the Company (the "Plan"),
hereby amends the Plan as follows:
Effective as of February 28, 1997, the date of the adoption by the Board of
Directors of the Company of the amendment provided hereby, the first sentence of
Section 5.1 of the Plan is deleted in its entirety and is replaced with the
following:
5.1 The maximum number of Shares that may be issued under the Plan shall
be 175,000, subject to adjustment in accordance with the provisions
of Section 5.2.
IN WITNESS WHEREOF, the Company has adopted this Amendment as of the 22/nd/
day of May, 1997 to be effective as hereinabove provided.
KOPIN CORPORATION
BY: /s/John C. C. Fan
-----------------------------
The following does not form part of this Amendment but is included solely
for information purposes:
Date of Board Approval: February 28, 1997
Date of Shareholder Approval: May 22, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-28-1997
<CASH> 14,958,860
<SECURITIES> 6,332,522
<RECEIVABLES> 4,221,375
<ALLOWANCES> 0
<INVENTORY> 2,586,557
<CURRENT-ASSETS> 29,109,370
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<DEPRECIATION> 13,307,200
<TOTAL-ASSETS> 45,491,513
<CURRENT-LIABILITIES> 6,696,078
<BONDS> 1,627,960
0
0
<COMMON> 109,694
<OTHER-SE> 36,784,615
<TOTAL-LIABILITY-AND-EQUITY> 45,491,513
<SALES> 5,999,551
<TOTAL-REVENUES> 8,296,028
<CGS> 4,083,185
<TOTAL-COSTS> 9,636,483
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 36,000
<INTEREST-EXPENSE> 110,515
<INCOME-PRETAX> (3,790,340)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,790,340)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,790,340)
<EPS-PRIMARY> (.35)
<EPS-DILUTED> (.35)
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